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CE 4101W-01 Project Management and Economics

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

2 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

3 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

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

5 What’s The Point of This Class?
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)

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

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

8 Why PM? Increases sales Improved quality Ability to be a price leader
Differentiates your company “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

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

10 Why Is PM Important? Close to half of the projects started were
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

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

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

13 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

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

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

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

17 What You Can Expect… 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

18 What You Can Expect… 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

19 What You Can Expect… 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 1st and CE second…I will not be evaluating you on your CE prowess

20 I Expect of You… Be An Active Learner 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

21 Syllabus Review 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

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

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

24 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

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

26 Teaching Team – Tim Eiler
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

27 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

28 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)

29 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.

30 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

31 Contract Grading To Receive an A To Receive a B To 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 NOTE: In cases of conflict between these slides and the syllabus, the syllabus will have precedence

32 Grading – Cont’d Assignments Quality Exams  3 Quantity
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

33 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…

34 Class Groups 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

35 Breaks 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?

36 General Course Organization
PM Planning PM Execution PM Leadership and Ethics Project Closure

37 What Is Project Management?
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) Project Management is the intersection of: Tools People Systems (Lewis, James P Project Planning, Scheduling & Control, 3rd ed. McGraw‑Hill)

38 Why Is PM Important To You?
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.

39 Why Is PM Important To You?
Employer’s Checklist C: Boeing Company[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]ASEE Prism, December 1996, p. 11.

40 Why Is PM Important To You?
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]A Manifesto for Global Engineering Education, Summary Report of the Engineering Futures Conference, January 22-23, The Boeing Company & Rensselaer Polytechnic Institute.

41 Why Writing In this Course?
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

42 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: <http://www.abet.org/images/Criteria/E001% %20EAC%20Criteria% pdf>

43 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 Writing a Proposal in a Collaborative Team

44 Writing as a Process - Your writing assignments are graded pass/fail
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

45 Why Engineering Economics?
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

46 Engineering Econ - Examples
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

47 What Is Project Management?
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) So, if Project Management (PM) “focuses on a project,” what is a project?

48 What Is A Project? “A temporary endeavor undertaken to create a unique product or service” A Guide to the Project Management Body of Knowledge, Project Management Institute 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)

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

50 Defining a Project - Old
TRIPLE CONSTRAINT

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

52 Is PM Art, Science, or Both?
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

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

54 PM Process at the High-Level
Planning Customer Request Execution customer internal Closure

55 The PM Process – Detail Level
SOW Project Charter Requirements Document WBS Stakeholder Analysis customer internal Network Diagram Critical Path Assessment Duration Estimation Resource Assignment Schedule Comm Plan Budget Quality Plan Admin Plan Project Plan

56 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

57 Project Management Project Function 1 Function 2 Function n Other

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

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

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

61 Project Life Cycle

62 PM Attention/Methods over PLC
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

63 PM’s Role Over PLC • Planning • Organizing • Staffing • Directing
• Controlling

64 PM Role Over PLC - 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 1Oberlender, G.D Project management for engineering and construction. New York: McGraw-Hill.

65 PM Role Over PLC – Organizing/Staffing
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

66 PM Role Over PLC – Directing/Controlling
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

67 The PM Process – Planning Detail
SOW Project Charter Requirements Document WBS Stakeholder Analysis customer internal Network Diagram Critical Path Assessment Duration Estimation Resource Assignment Schedule Comm Plan Budget Quality Plan Admin Plan Project Plan

68 The Process Steps - Overview
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)

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

70 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.

71 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

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

73 Statement of Work (SOW)
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 User-level requirements

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

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

76 Where Do Projects Come From?
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 All projects are not created equal.  Every project contributes differently.  In is not in the company's best interests to treat projects equally. 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. 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!

77 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

78 Case Study Used In Course
Statement Of Work Parts Depot 333 W 78th St Bloomington, MN Avanti Motor Corporation of America 19740 Inglewilde Dr Norcross, Georgia Mark Ross, Customer Representative

79 Case Study Used In Course
General Requirements Not Applicable Site work 2.1 Excavation Flat and compacted to support slab foundation and building 2.2 Landscaping Turf 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

80 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)

81 Homework 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

82 Homework 1 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)

83 Statement of Work (SOW)
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 User-level requirements

84 User-Level Requirements
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 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

85 The Project Charter Who is accountable for creating project charter?
The Project Sponsor What does charter tell the project team & others? 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 <name> The project manager has accountability & responsibility The project will have listed constraints & assumptions

86 Project Charter 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

87 Requirements 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

88 Requirements 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

89 Requirements Semantics
Will: Shall: Should: 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”

90 Statement of Work (SOW)
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 

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

92 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?

93 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?

94 Small Team Kickoff Meeting
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

95 Goals, Objectives (and Tasks)
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

96 Defining Requirements
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

97 Defining Requirements
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)

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

99 Reflective Listening 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?

100 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

101 Reflective Listening Example
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?

102 Organization Types 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

103 Organization Types - Functional
CEO Engineering Manufacturing Human Resources Finance Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Project control

104 Organization Types - Functional
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

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

106 Organization Types - Matrix
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

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

108 Organization Types - Projectized
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

109 Organization Types - PMO
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 Central Concept - Innovation Dominant Project Characteristics - Overlapping, Fewer boundaries Main Thrust - Modifying and Adapting Demands Metaphor - Designing Means - Creativity, Higher Technology Ability

110 Organization Types - Summary
Functional Weak Matrix Balanced Matrix Strong Matrix Projectized PM Authority Little/None Limited Low/Moderate Moderate/High High/Total % assigned personnel full-time on project work Virtually None 0-25% 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 Project Management Institute, 2000, PMBOK, p. 19

111 Organization Types - Selection
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 Central Concept - Innovation Dominant Project Characteristics - Overlapping, Fewer boundaries Main Thrust - Modifying and Adapting Demands Metaphor - Designing Means - Creativity, Higher Technology Ability

112 Organization Types - Selection
Why would an organization choose functional form over projectized form? Why would an organization choose strong matrix from the matrix options? Central Concept - Innovation Dominant Project Characteristics - Overlapping, Fewer boundaries Main Thrust - Modifying and Adapting Demands Metaphor - Designing Means - Creativity, Higher Technology Ability

113 Project Plan 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?

114 Elements of a Project Plan
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

115 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).

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

117 Work Breakdown Structure
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

118 Work Breakdown Structure
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

119 Work Breakdown Structure
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

120 Create a WBS using this information
WBS Exercise 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 Scrub Walls Paint Walls Install New Carpet Move in New Furniture Create a WBS using this information

121 WBS Exercise 1. Create a WBS
1.0 Office Remodel Project 1.1 Procure 1.1.1 Procure Paint 1.1.2 Procure New Carpet Request Bids Purchase Receive Carpet 1.1.3 Procure New Furniture 1.2 Prepare 1.2.1 Remove Old Furniture 1.2.2 Remove Old Carpet 1.2.3 Scrub Walls 1.3 Install 1.3.1 Paint Walls 1.3.2 Install New Carpet 1.3.3 Move in New Furniture 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?

122 1.0 Office Remodel Project
WBS Exercise 1.0 Office Remodel Project 1.1 Procure 1.2 Prepare 1.3 Install 1.1.1 Procure Paint 1.1.3 Procure New Furniture 1.1.1 Remove Old Furniture 1.1.3 Scrub Walls 1.1.1 Paint Walls 1.1.3 Move In New Furniture 1.1.2 Procure New Carpet 1.1.2 Remove Old Carpet 1.1.2 Install New Carpet Request Bids Purchase Receive Carpet

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

124 Network Diagrams How does PM put activities in logical order? Purpose
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

125 Network Diagrams 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

126 Network Diagrams Dependencies AON vs AOA
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)

127 Network Diagram Example - AON

128 Network Diagram Example - AOA

129 Sticky Note Project Planning
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

130

131 Network Diagram Example
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 Scrub Walls Paint Walls Install New Carpet Move in New Furniture

132

133 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: 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…

134 Estimating Activity Duration
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?

135 Responsibility Assignment
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

136 Network Diagrams - CPM CPM = Critical Path Method Critical Path
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

137 Network Diagrams - CPM 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

138 Find the critical path and the critical time
CPM Example Find the critical path and the critical time

139 CPM - Practice Bus Shelter Construction Example Job Name Duration
Resources Predecessor(s) 1 Shelter Slab 2 2 5 2 Shelter Walls 1 1 1 3 Shelter Roof 2 2 2,4 4 Roof Beam 3 2 2 5 Excavation 2 3 6 Curb and Gutter 2 3 5 7 Shelter Seat 1 2 4,6 8 Paint 1 1 7 9 Signwork 1 2 2,6

140 1 2 1 1 2 2 1 3 2

141 Bus Shelter Construction
Critical Path Method Results ACT NAME DUR RES EARLY LATE FLOAT CUR start CRIT PATH ST FN TOT FREE 1 Shelter Slab 2 4 YES Shelter Walls 5 3 Shelter Roof 8 10 Roof Beam Excavation 6 Curb and Gutter NO 7 Shelter Seat 9 Paint Signwork

142 Slack BUT – only within limits.
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. BUT – only within limits.

143 Slack 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. 3 3 Task 1 Task 2 Start End 3 Task 3

144 Slack Displayed by: Forward Pass Backward Pass Calculated by: Task
LST – EST = LFT – EFT = slack Where: LST = Latest Start Time EST = Earliest Start Time LFT = Latest Finish Time EFT = Earliest Finish Time Task LST LFT EFT EST Displayed by: Forward Pass S T A R Task A Task B Task C END 5 6 5 5 11 5 5 11 6 Backward Pass 5 11 Number Convention 1 2 3 4 5 6 7 10 11 12 1 2 3 4 5 6 7 8 9 10 11

145 PERT 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)

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

147 Network Diagrams - PERT
MS Project PERT representation

148 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?

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

150 Scheduling 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

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

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

153 Scheduling 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?

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

155 Scheduling 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?

156 Responsibility Assignment
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

157 Milestone Chart 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

158 Milestone Chart CE 4101W-01: Spr 2005 Class start Exam 1 Exam 2 Exam 3
Grades posted Jan Feb Mar Apr May

159 Milestone Chart CE 4101W-01: Fall 2003 Labor Day 9/3 Class start 9/4
Exam 1 10/7 Exam 2 11/4 Exam 3 12/9 Grades posted 12/19 Sep Oct Nov Dec Jan

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

161 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)

162 Gantt Schedules Task 1 Task 2 10/7 Task 3 Task 4 Task 5 t1 t2 t3

163 Gantt Schedules Project progress is marked by filling in a task bar Task 1 75% Task 2 10/7 Task 3 Task 4 Task 5 t1 t2 t3

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

165 Modified Gantt Chart Better way to do task ID notation

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

167 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

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

169 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

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

171 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

172 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

173 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.

174 Theory Of Constraints How does it work?
Identify the System's constraints. Analyze process to identify task/activity limiting system productivity Decide how to exploit the system's constraints. Modify/redesign task/activity to perform work more effectively/efficiently 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 Elevate the system's constraint. Add capacity to increase (elevate) output of constraining task/activity 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

175 Theory Of Constraints How to identify constraints?
Look for bottlenecks 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

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

177 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

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

179 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

180 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?

181 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?

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

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

184 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!

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

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

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 - Example
Project: Student going to school Stakeholder n 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?

189 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

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

191 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?

192 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

193 Make or Buy Analysis Expert Judgment Lease vs. Buy Analysis
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

194 Opportunity Cost What is it? Why is important?
The cost of making a trade-off 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

195 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 |

196 Buy vs. Lease Lessor: The one who owns the capital
Lessee: The one receiving 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

197 Main Types of Contract Who has the risks in each type?
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?

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

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

200 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. Qualify the risks you face related to management of the contract. Qualify the risks the buyer faces.

201 Quality For Project Managers
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)

202 Quality For Project Managers
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

203 Quality For Project Managers
Management’s Role: Ask questions: What is next? What 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

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

205 Total Quality Management
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)

206 Fourteen Points of Quality
Create constancy of purpose toward improvement Adopt the new philosophy Cease dependence on inspection. Minimize total costs Constant and perpetual improvement Institute training Institute leadership Drive out fear Break down internal barriers Eliminate slogans, targets etc. Eliminate management by objective Remove barriers Institute program of education and self-improvement. Everybody’s job is to accomplish the transition. - W. Edwards Deming

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

208 Continuous Quality Improvement
Four Basic Principles 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)

209 Six Sigma Six Sigma Objective: Method:
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

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

211 Six Sigma Mc-Graw Hill, 2000

212 Identify core processes & key customers
Six Sigma Roadmap Identify core processes & key customers Define customer Requirements Measure current Performance Prioritize, analyze & implement improvements Expand & integrate six sigma system DMAIC: Define, Measure, Analyze, Improve, Control

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

214 ISO Standards ISO standards (900x, 1400x, etc.) Objective: Method:
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

215 Quality Circles Objective: Method:
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.

216 Quality Tools 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

217 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?

218 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

219 Make or Buy Analysis Expert Judgment Lease vs. Buy Analysis
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

220 Opportunity Cost What is it? Why is important?
The cost of making a trade-off 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

221 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 |

222 Buy vs. Lease Lessor: The one who owns the capital
Lessee: The one receiving 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

223 Main Types of Contract Who has the risks in each type?
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?

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

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

226 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. Qualify the risks you face related to management of the contract. Qualify the risks the buyer faces.

227 Quality For Project Managers
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)

228 Quality For Project Managers
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

229 Quality For Project Managers
Management’s Role: Ask questions: What is next? What 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

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

231 Total Quality Management
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)

232 Fourteen Points of Quality
Create constancy of purpose toward improvement Adopt the new philosophy Cease dependence on inspection. Minimize total costs Constant and perpetual improvement Institute training Institute leadership Drive out fear Break down internal barriers Eliminate slogans, targets etc. Eliminate management by objective Remove barriers Institute program of education and self-improvement. Everybody’s job is to accomplish the transition. - W. Edwards Deming

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

234 Continuous Quality Improvement
Four Basic Principles 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)

235 Six Sigma Six Sigma Objective: Method:
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

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

237 Six Sigma Mc-Graw Hill, 2000

238 Identify core processes & key customers
Six Sigma Roadmap Identify core processes & key customers Define customer Requirements Measure current Performance Prioritize, analyze & implement improvements Expand & integrate six sigma system

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

240 ISO Standards ISO standards (900x, 1400x, etc.) Objective: Method:
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

241 Quality Circles Objective: Method:
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.

242 Quality Tools 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

243 ISO Standards ISO standards (900x, 1400x, etc.) Objective: Method:
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

244 Quality Circles Objective: Method:
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.

245 Quality Tools 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

246 Inspection YOU CAN’T INSPECT QUALITY INTO A PRODUCT 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. 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?

247 Benchmarking Systematized, planned method of looking at processes other than the one in which you’re interested to Compare the process in question to the comparable processes 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.

248 Flowcharting 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 Start Step A Step B No Pass? Yes Step C End

249 Pareto Analysis 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 Process step A Process step B Defects Process step C Process step D

250 Ishikawa Diagram 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 Major Cause 1 Major Cause 2 May also be situation desired Minor Cause Minor Cause Minor Cause Minor Cause Minor Cause Problem to solve Major Cause 3 Major Cause 4

251 Fault Tree Analysis/FMEA
“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 A.0 A.1 A.2 A.3 A.3.1 A.3.2

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

253 Statistical Process Control
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 Upper Control Limit (UCL) Average Measurement (# defective, etc) Lower Control Limit (LCL) time 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

254 Process Auditing 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!

255 Simulation 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).

256 Quality Function Deployment
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 Design Requirements Component Characteristics Key Processes Control Methods Customer Requirements Design Requirements Component Characteristics Key Processes Product Planning Product Design Process Planning Process Control Planning

257 Quality For Project Managers
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)

258 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?

259 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?

260 Zero Base Budgeting 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

261 Zero Base Budgeting Non ZBB: 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

262 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

263 Project Budgeting How Top-Down Budgeting works (a very, very basic example): WBS Task Cost 2.0 Design $50,000 3.0 Concrete $500,000 4.0 Frame $200,000 5.0 Electrical $ 75,000

264 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

265 Project Budgeting How Bottom-Up Budgeting works (a very, very basic example): WBS Task Resource Duration (day) Cost 2.0 Design $44,160 2.1 Site Survey $ 7,680 2.2 Architectural Design $24,000 2.3 Drafting $12,480 3.0 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

266 Work Element Costing 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)

267

268 Work Element Costing 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.

269

270 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). YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC AVER 1978 1609 1617 1620 1621 1652 1663 1696 1705 1720 1721 1732 1734 1674 1979 1740 1750 1749 1753 1809 1829 1849 1900 1901 1909 1819 1980 1895 1894 1915 1899 1888 1916 1950 1971 1976 2000 2017 1941 1981 2015 2016 2014 2064 2076 2080 2106 2131 2154 2151 2181 2178 2097 1982 2184 2198 2192 2197 2199 2225 2258 2259 2263 2262 2268 2297 2234 1983 2311 2348 2352 2347 2351 2388 2414 2428 2430 2416 2419 2406 2384 1984 2402 2407 2412 2422 2417 2418 2424 2421 2408 1985 2410 2405 2411 2429 2448 2442 2441 2446 2439 1986 2440 2447 2458 2479 2493 2499 2498 2504 2511 2483 1987 2515 2510 2518 2523 2524 2525 2538 2557 2564 2569 2589 2541 1988 2574 2576 2586 2591 2592 2595 2598 2611 2612 2616 2617 1989 2615 2608 2623 2627 2637 2660 2662 2665 2669 2634 1990 2664 2668 2673 2676 2691 2715 2716 2730 2728 2720 2702 1991 2709 2723 2733 2757 2792 2785 2786 2791 2784 2751 1992 2775 2799 2809 2828 2838 2845 2854 2857 2867 2873 2875 2834 1993 2886 2915 2976 3071 3066 3038 3014 3009 3016 3029 3046 2996 1994 3106 3116 3127 3125 3115 3107 3109 3110 3111 1995 3112 3103 3100 3096 3095 3114 3121 3117 3131 3128 1996 3135 3148 3161 3178 3190 3223 3246 3284 3304 3311 3203 1997 3332 3333 3323 3364 3377 3396 3392 3385 3378 3372 3350 3370

271 Estimating Expertise 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),

272 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

273 Future Value (FV) Find FV of $1 today invested for n years at i%/year
Timeline Method FV1 = PV1 (1 + i) 5 4 3 2 1 $PV i% FV1 FV2 FV5 FV4 FV3 FV = PV (1 + i)n Generic Case Equation

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

275 Compounding What is it? Why is important?

276 Group Work 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 How would the situation change if you had a second investment of $250 in the third year? How would the formulaic calculation change? Think of 3 specific examples when you might need to know the concept of PV/FV and how to calculate it.

277 Annuity What is it? How is it calculated?
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

278 Annuity Example Why is it important?
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? 3 2 1 i% $1000 i = t = n = PMT = Are we solving for PV or FV? Answer? 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?

279 Net Present Value (NPV)
NPV = Σ (FVt / (1+i)t) - I t=1 FVt = 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)

280 Depreciation Paying the equipment Methods
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… Depreciation actually increases cash flow!!! Methods Straight Line Double declining balance Sum of the years’ digits Accelerated Cost Recovery System (ACRS) Modified Accelerated Cost Recovery System (MACRS)

281 Depreciation Straight Line Method
(Purchase Amount – Salvage Value) / Depreciation life 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 1 Year 2 Year 3 Year 4 Purchase Value Salvage Value What is the effect on cash flow of changing the salvage value?

282 Modified Accelerated Cost Recovery System
MACRS Sum of purchase price for any year x the depreciation % for that year Depreciation Life determined by Asset Class rules Class Asset Type 3 year Computers & research equipment 5 year Automobiles, tractors, light duty trucks, computers 7 year Industrial equipment, furniture, fixtures 10 year Certain long-lived equipment 27.5 year Residential rental property 31.5 year Non-residential property

283 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 3 5 7 10 1 33% 20% 14% 10% 2 45 32 25 18 15 19 17 14 4 12 13 11 9 6 8

284 MACRS Continued 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) Depreciable basis: Purchase price + shipping and installation costs [NOTE: NO classes allow salvage value as part of depreciable basis] 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

285 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?

286 Baselines What is a baseline? When are the “snapshots” taken?
“snapshot” of project schedule, cost (budget), or scope When are the “snapshots” taken? When the plan (schedule, scope (budget), scope) is considered feasible technically and in terms of resources How are they used? 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”)

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

288 Simulation 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).

289 Risk Management 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

290 Risk Management 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

291 Risk Management 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)

292 The RMP Table 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)

293 Risk Management 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?” Critical person lost time injury Fire damages structure Rain delay to critical path task Critical person lost time injury Fire damages structure

294 Risk Management 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

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

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

297 Risk Management 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)

298 Risk Management 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?

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

300 Risk Management Response Strategy Accept Mitigate Avoid
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 Accept Mitigate Avoid

301 Who is responsible for keeping the Risk Management Plan (RMP)?
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)?

302 Risk Management 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

303 Risk Management 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

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

305 Schedule Compression 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

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

307 Schedule Compression Crashing
Add more resources to shorten time required to do the work (1+1=2) Not always feasible/viable option – why not? 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

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

309 Schedule Compression 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?

310 Configuration Management
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

311 Configuration Management
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

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

314 Compounding What is it? Why is important?

315 Future Value (FV) Find FV of $1 today invested for n years at i%/year
Timeline Method FV1 = PV1 (1 + i) 5 4 3 2 1 $PV i% FV1 FV2 FV5 FV4 FV3 FV = PV (1 + i)n Generic Case Equation

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

317 Group Work 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 How would the situation change if you had a second investment of $250 in the third year? How would the formulaic calculation change? Think of 3 specific examples when you might need to know the concept of PV/FV and how to calculate it.

318 Annuity What is it? How is it calculated?
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

319 Annuity Example Why is it important?
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? 3 2 1 i% $1000 i = t = n = PMT = Are we solving for PV or FV? Answer? 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?

320 Net Present Value (NPV)
NPV = Σ (FVt / (1+i)t) - I t=1 FVt = 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)

321 Depreciation Paying the equipment Methods
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… Depreciation actually increases cash flow!!! Methods Straight Line Double declining balance Sum of the years’ digits Accelerated Cost Recovery System (ACRS) Modified Accelerated Cost Recovery System (MACRS)

322 Depreciation Straight Line Method
(Purchase Amount – Salvage Value) / Depreciation life 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 1 Year 2 Year 3 Year 4 Purchase Value Salvage Value What is the effect on cash flow of changing the salvage value?

323 Modified Accelerated Cost Recovery System
MACRS Sum of purchase price for any year x the depreciation % for that year Depreciation Life determined by Asset Class rules Class Asset Type 3 year Computers & research equipment 5 year Automobiles, tractors, light duty trucks, computers 7 year Industrial equipment, furniture, fixtures 10 year Certain long-lived equipment 27.5 year Residential rental property 31.5 year Non-residential property

324 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 3 5 7 10 1 33% 20% 14% 10% 2 45 32 25 18 15 19 17 14 4 12 13 11 9 6 8

325 MACRS Continued 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) Depreciable basis: Purchase price + shipping and installation costs [NOTE: NO classes allow salvage value as part of depreciable basis] 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

326 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?

327 Baselines What is a baseline? When are the “snapshots” taken?
“snapshot” of project schedule, cost (budget), or scope When are the “snapshots” taken? When the plan (schedule, scope (budget), scope) is considered feasible technically and in terms of resources How are they used? 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”)

328 Earned Value 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).

329 Earned Value 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

330 Earned Value Planned Value (PV – aka BCWS) Actual Cost (AC – aka ACWP)
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)

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

332 Communications During Execution
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

333 Storytelling for Communication
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

334 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

335 Managing Iterate! 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!

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

337 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.”

338 Seven Habits Of Highly Effective People
Be Pro-Active: Take initiative & the responsibility to make things happen. 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: Manage yourself. Organize & execute around priorities. 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: Understand then be understood to build the skills of empathic listening that inspires openness and trust. Synergize: Apply the principles of cooperative creativity and value differences. Renewal: Preserving and enhancing your greatest asset, yourself, by renewing the physical, spiritual, mental and social/emotional dimensions of your nature. Steven Covey, 1989

339 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

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

341 Leadership vs Management
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 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

342 Leadership vs Management

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

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

345 New Leadership Competencies
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)

346 Ten Commandments of Leadership
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 (Kouzes & Posner, 1987)

347 8 Crucial Elements of System Leadership
Quality information must be used for improvement, not to judge or control people Authority must be equal to responsibility There must be rewards for results Cooperation, not competition, must be the basis for working together Employees must have secure jobs There must be a climate of fairness Compensation should be equitable Employees should have an ownership stake

348 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?

349 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

350 Managing Project Teams
What it takes to be a good project manager (Posner, 1987) 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 Percentages represent the percentage of respondents to a Posner survey who included the skill in the list of importance

351 Managing Project Teams
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 Pinto and Kharbanda (1995):

352 Characteristics of Admired Leaders
1 Characteristic 1993 U.S. Percentage of People Selecting 1987 U.S. Honest 87 83 Forward-looking 71 62 Inspiring 68 58 Competent 67 Fair-minded 49 40 Supportive 46 32 Broad-minded 41 37 Intelligent 38 43 Straightforward 34 Courageous 33 27 Dependable Cooperative 30 25 Imaginative 28 Caring 26 Mature 14 23 Determined 13 20 Ambitious 10 21 Loyal Self-controlled 5 Independent James M. Kouzes & Barry Z. Posner Credibility: How leaders gain and lose it, why people demand it. San Francisco: Jossey-Bass.

353 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

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

355 Power Tools Situational!! 5 Types of Power for Leaders and Managers
People do what you ask because… Formal Organization tells them to Expert You are perceived as an expert in “x” Referent They like or trust you Reward You can give them something in return Coercive You can take something from them/hurt them Situational!!

356 Keys For PM Success •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)

357 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

358 Meetings and More Meetings
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

359 Guidelines for Holding Meetings
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

360 Meetings – The Right Way
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.

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

362 Meetings and More Meetings
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?

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

364 Avoiding Groupthink 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

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

366 Controversy 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.

367 Vernon Felton, Frame of Mind -- Bike, 8 (4), May 2001
Controversy “. . . 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

368 Managing Conflict “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.

369 Mitigating The Bad Effects of Controversy
Managing Controversy 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

370 Rules for Constructive Controversy
Managing Controversy Rules for Constructive Controversy I am critical of ideas, not people. I challenge & refute the ideas of the opposing group, but I do not personally reject them. I remember that we are all in this together, sink or swim. I focus on coming to the best decision possible, not on winning. I encourage everyone to participate & to master all relevant info. I listen to everyone’s ideas, even if I don’t agree. I restate what someone has said if it is not clear. 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. I try to understand all sides of the issue. I change my mind when evidence clearly indicates I should

371 BOEING Code of Cooperation
•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 listen 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

372 FORD Code of Cooperation
• 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

373 Strategies for Dealing With Conflict
Managing Conflict 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.

374 Managing Conflict 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?

375 Blake & Mouton Conflict Model
Managing Conflict Blake & Mouton Conflict Model - Importance of the Goal - Importance of the Relationship

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

377 Managing Conflict 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 1st to understand: accurately & fully comprehend opponent's views of the feelings about the conflict. A successful confrontation sets up opportunity to negotiate.

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

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

380 Managing Conflict 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.

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

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

383 Promoting Controversy
Managing Conflict Promoting Controversy Present Viewpoints. Highlight Disagreements. Be Impartial and Rational. Require Critical Evaluation. Assign Devil’s Advocate Role. Use Advocacy Subgroups Have “Second Chance” Meetings

384 Star Tribune 12/3/98 Star Tribune 12/3/98

385 Health & Safety Job-related fatalities up in '04 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. 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 2002. Transportation incidents accounted for 29 of the 80 work-related deaths in That compares to 30 in 2003 and 44 in 2002. 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 2004. 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 2004.

386 Causes of Constr. Deaths
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

387 Health & Safety 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 6th floor of the Piper Jaffray Center under construction at S. 8th 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 8th story of a 30 story tower. They had laid decking, sheets of corrugated steel 1/16th of an inch thick, that will have concrete poured on them to make floors.

388 Health & Safety 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

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

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

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

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

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

394 Why Is Ethical Behavior Important??
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

395 Systems of Ethics 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?)

396 Ethics – What Guides Your Choices?
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?

397 Fundamentals – Moral Development
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.

398 Fundamentals – Moral Development
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.

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

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

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

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

403 Ethics – The Dilemma 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.

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

405 Ethics in Practice 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)

406 University of MN Honor Code
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)

407 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.

408 PM Ethics 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: 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

409 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)

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

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412 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?

413 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)?

414 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?

415 Politely refuse to accept the gift.
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? Accept the thoughtful gesture – since the gift is valued under $50, there is no need to report it. 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. Accept the gift, if declining puts you or the company in a awkward position. Then, immediately consult the Ethics Office for disposition. Politely refuse to accept the gift. (Ethics Challenge -- Case 6)

416 Do nothing. It’s the manager’s decision to make.
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? Do nothing. It’s the manager’s decision to make. Discuss it with your manager. Call the Ethics HelpLine. Ask the engineers who are responsible for the specification to clarify the situation. (Ethics Challenge -- Case 18)

417 Tell the employees to just do their work & mind their own business.
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? Tell the employees to just do their work & mind their own business. Tell the employees that you don’t want to risk your job by becoming involved. Suggest that your fellow employees contact the Ethics Officer or another company official. Raise the issue directly with your supervisor. (Ethics Challenge -- Case 24)

418 Put the word out to your fellow workers as to who really did the work.
In a department meeting, your supervisor takes credit for some excellent work done by an absent colleague. What do you do? Put the word out to your fellow workers as to who really did the work. Seek a private meeting with the supervisor in order to make sure your colleague gets proper credit. 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. Inform your colleague as to what took place, and let him take whatever action he desires. (Ethics Challenge -- Case 29)

419 Contact the injured co-worker and offer to testify on her behalf.
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? Don’t get involved Contact the injured co-worker and offer to testify on her behalf. Report what you saw to the company. Protect the company by refusing to testify as a witness for the injured person. (Ethics Challenge -- Case 30)

420 Nothing, since no one has complained.
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? Nothing, since no one has complained. 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. Order the supervisor to call an all-hands meeting to discuss the company policy on sexual harassment. 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)

421 If a deal sounds too good to be true, it probably is.
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? 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. Say “I work for a different division of the XYZ Company – am I still eligible for the discount?” Ask for clarification – “Is that special discount available to all XYZ employees?” If a deal sounds too good to be true, it probably is. (Ethics Challenge -- Case 44)

422 A subordinate (direct report) on one of your projects has trouble getting along with others. What do you do? Don’t get involved. 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. Report what you saw to your manager. Protect the company by documenting the problem.

423 Review the paper, provide objective comments and return it promptly.
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? 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. Let Christmas holidays “conveniently” delay the review, then provide negative review comments, knowing that this will delay publication. With the editor’s permission, contact the other author to see if you might combine efforts and produce an even better paper. Review the paper, provide objective comments and return it promptly. (Ethics Challenge -- Case 47)

424 Ethics Summary 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

425 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?

426 Project Closure Closure activities? Closure results/outputs?
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

427 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? Partly subjective judgment What might make customer dissatisfied even though the objective evidence says it was good?

428 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?

429 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

430 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

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

432 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

433 Project Management Office
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 Central Concept - Innovation Dominant Project Characteristics - Overlapping, Fewer boundaries Main Thrust - Modifying and Adapting Demands Metaphor - Designing Means - Creativity, Higher Technology Ability

434 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

435 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

436 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.

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438 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

439 My PM Words To Live By 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 cheating or only playing against drastically inferior opponents, the sole, honest remaining other way to score more is to make more attempts!

440 My PM Words To Live By Be honest, always Be straightforward, always
Don’t be afraid to admit you’re wrong Take your work seriously, not yourself Don’t let your fears get in the way of progress Learn to understand and be proficient at politics Remember *everyone* on your team – even a small, innocuous thing like a piece of foam can destroy a complex machine like the space shuttle


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