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1 Fundamentals of Project Management Dr. George F. Jergeas Project Management Specialization University of Calgary.

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1 1 Fundamentals of Project Management Dr. George F. Jergeas Project Management Specialization University of Calgary

2 2 Schedule Day 1 Game Introduction PMI stuff Step 1 - Define phase Step 2 - Plan phase Sequence activities Time estimate Day 2 Cost estimate Step 3 - Organize phase Select team and PM Step 4 - Control phase Step 5 - Close out phase

3 3 5 Step Project Management PLANNING IMPLEMENTATION DEFINE Identify project activities Estimate time and cost Sequence Project Activities Identify Critical Activities Write Project Proposal ORGANIZE CONTROL PLANCLOSE State the Problem IdentifyProjectGoals List the Objectives DeterminePreliminaryResources Identify Identify Assumptions Assumptions and Risks and Risks Determine Personnel Needs Recruit Project Manger Recruit Project Team Organize Project Team Assign Work Packages Define Management Style Establish Control Tools Prepare Status Reports Review Project Schedule Issue Change Orders Obtain Client Acceptance Install Deliverables Document the Project Issue Final Report Conduct Post- Implementation Audit Project overview WBS Recruit Criteria Variance Reports Final Report Project network Define Work packages Status Reports Audit Reports Critical Path Assign Work Packages Staff Allocation Reports

4 4 Step 2 – Plan the project: Basics of Cost Estimating

5 5 Agenda Introduction What is an estimate Estimating process What constitutes a good estimate Basic types of cost estimates Order of Magnitudes Definitive Estimates

6 6 Introduction Cost estimates Key to successfully conceived, managed and completed projects Not limited to construction An approximation procedure Mistakes can be very costly!

7 7 What is a Cost Estimate? AACE Definition “A compilation of all the costs of the elements of a project or effort included within an agreed upon scope” To the contractor “To forecast cost required to complete a project in accordance with the contract, plans and specifications” To the owner cost includes: Administering the contract Contractor's charges, consultants and suppliers fees Price of land, financing and operating costs

8 8 What Constitutes a Good Estimate? A clear, sound basis An agreed upon realistic execution plan A sound plan for estimating development Good estimating methods and data base Well documented basis of estimate Good experienced estimator

9 9 Order - of - Magnitude Estimates A quick method of determining an approximate probable cost of a project due to the following specific situations: Time constraints High cost of a detailed estimate

10 10 Order - of - Magnitude Estimates Prepared without detailed engineering data Square feet of floor area Cubic feet of volume Plant capacity for input and output Km of road surface type Use: In feasibility studies of a project and screening several types of alternatives or proposals Accuracy: +/- 30%

11 11 Definitive Estimates Prepared from very defined engineering data Requires as a minimum: Plans and elevations Piping and instrument diagrams Single line electrical diagrams Equipment data sheets and quotations Architectural and structural details Soil data and sketches of major foundations A complete set of specifications Accuracy: +/- 5%

12 12 Components of a Cost Estimate Direct Cost Labor: actual amount paid to field personnel Materials: essential to constructing and operating a facility including equipment installed permanently Equipment: used to perform a contract Subcontracts

13 13 Components of a Cost Estimate Indirect Costs Overhead Home office overhead Job site overhead (general conditions) Taxes Risks Contingency Profit Escalation

14 14 Site Overhead (General Conditions) Cost of items that cannot be charged to a specific element of work: Supervision Temporary facilities Office trailers Toilets Utilities Permits Photographs Clean-up

15 15 Profit Is the amount of money included by the contractor in its price as compensation for risk, effort and endeavor in undertaking a project. It is the money left after a contractor has met all costs (both indirect and direct). Profit amount included is very subjective and depends on: Size of project Extent of risk involved Need for work Extent of competition

16 16 Contingency An amount added to cover any additional costs that may occur during construction. To determine the amount of contingencies desirable, an estimator should rely on: Personal judgment, or Through statistical analysis of past project costs

17 17 Estimated Conference Planning Budget CONFERENCE PLANNING $243,325 Program $41,100 Site $170,425 Marketing $31,800 Theme $600 Materials $13,300 Speakers $27,200 Date $1,000 Location $169,425 Lists $2,000 Brochure $29,800 Registration 3 conf calls with pgm comm Travel/expenses for 16 $500 per speaker Deposit 3 site $800/visit per person/day for 3 days for 1100 meeting $225/day/room for 3 days for 3 rooms 25,000 $80/1000 Obtain Speaker Materials $800 Prepare Conference Notebook $12,500 Design Brochure $12,800 Mail Brochure $17,000 $50/speaker 1100 $5/binder photocopy materials 350,000 $0.02/page Layout: 16 $50/page Printing: 30,000 $0.40/copy 25,000 $0.68/piece

18 18 PM ANNUAL CONFERENCE REVENUE & EXPENSE BUDGET Revenues Registrations - $335……………………………………………………………..$368,500 Expenses Salary Graphic artist……………………………………………………………………………………………… Total Salary……………………………………………………………………………………………..800 Non-Salary Travel……………………………………………………………………………………………………... 21,600 Printing……………………………………………………………………………………………………. 19,000 Postage…………………………………………………………………………………………………... 17,000 Mailing Lists………………………………………………………………………………………………. 2,000 Telephone……………………………………………………………………………………………………. 600 Supplies……………………………………………………………………………………………………. 6,300 Speaker Honoraria………………………………………………………………………………………. 8,000 Site Deposit……………………………………………………………………………………………….. 1,000 Food………………………………………………………………………………………………………1 65,000 Meeting Room Rental…………………………………………………………………………………..2,025 Total Non-Salary………………………………………………………………………………..242,525 Total Expenses………………………………………………………………………………………$243,325 Gross Profit…………………………………………………………………………………………$125,175 Indirect 40% of Total Expenses)……………………………………………………$97,330 Net Profit………………………………………………………………………………………………$27,845

19 19 Estimating Issues Underestimating Don’t be overly optimistic about time and costs Cause problems in the long run and produce unsatisfactory product Overestimating Danger that project will not get approval Over compensating for unexpected delays/problems

20 20 Estimating Issues Use your WBS: Define the lowest level of activities to estimate the time and dollars required Check activities costs on previous projects Take into account circumstances during implementation, weather, transportation costs, availability of materials and labour etc.

21 21 Summary There are different types of estimates Each type used for specific purpose but no substitute of definitive estimates An estimate information data base is essential Good estimates come from looking at the details

22 22 Important Points Order-of magnitude estimating important to owner: Owner examines the estimate before continuing with further development of project. Liability issue: based on the information contained in your estimate, major decisions are often made by the owner This places a responsibility and liability on you as an estimator

23 23 Important Points Acquaint yourself with terminology, elements of cost which include labor, equipment and material costs Develop habits of thoroughly reviewing contract documents Remember to document and maintain the data base

24 24 Step 2 - Plan the Project: Writing a Project Proposal

25 25 Agenda Writing a proposal The purpose Format Executive summary Background Project manager Activity Schedule Budget/project cost

26 26 5 Phase Project Management PLANNING IMPLEMENTATION DEFINE Identify project activities Estimate time and cost Sequence Project Activities Identify Critical activities Write Project Proposal ORGANIZE PLANCLOSE State the Problem Identify Project Goals List the Objectives Determine Preliminary Resources Identify Assumptions and Risks Determine Personnel Needs Recruit Project Manger Recruit Project Team Organise Project Team Assign Work Packages Define Management Style Establish Control Tools Prepare Status Reports Review Project Schedule Issue Change Orders Obtain Client Acceptance Install Deliverables Document the Project Issue Final Report Conduct Post- Implementation Audit CONTROL

27 27 Writing a Project Proposal Represents the transition from the planning (define, plan) to implementation (organising, control, close) Used as an information source to decide whether the project should proceed to the implementation phase Different terminology used DBM, Brief, Scope Definition Statement

28 28 Purpose The project proposal provides: A statement of the need, the approach being taken and the expected benefits Description of project activities, timelines and resources required Documentation for project control Briefing document for new team members and others in the organisation

29 29 Purpose Tool for decision making, managing, controlling, training and reporting Written for: Senior management Project team Other managers who are indirectly involved Consultants

30 30 The remainder of this section should be reviewed by attendees. Please go to slide #43

31 31 Format Executive summary States the fundamental nature of proposal and benefits that are expected Should deal with: Nature and approach to technical problem Plan for implementation of project if approved Plan for logistic support and administration Description of team that will complete the work and their experiences on other projects

32 32 Technical Approach General description of the problem to be undertaken Organisational approach Provides sufficient detail for the reader to understand what is intended Method for resolving critical problems outlined

33 33 Technical Approach Proposal to meet clients requirements identified Procedures for testing and inspections to assure performance, quality, reliability and compliance

34 34 Implementation Plan Contains estimate of time, cost and materials to be used Lists sub-systems of project in cost estimate Estimates of personnel, equipment and resources are provided by period Major milestones are indicated

35 35 Logistics Plan Description of how skills, facilities, equipment will be supplied Administration strategy Nature and timing of reports budget, progress, evaluations and audits Handling and costing of change orders

36 36 Past Experiences How the proposed team has performed? Who the key personnel are and their qualifications? Keep in mind - the purpose of the proposal is to convince the funder that the project should be supported

37 37 Format: Example Proposal components Project name Project manager responsible Activities Schedule Budget

38 38 Format Project Name Label to identify the project Should reflect uniqueness of the project Project Manager Person responsible for project Must be able to manage budgets, schedules, team and meet specifications

39 39 Format Activity Identified by number, description and name Method for team to refer to an activity Should be short, but reflect task to be undertaken Description states in precise terms the work to be done

40 40 Format Schedule Based on the analysis of the network Provides anticipated start and finish dates. Dates may change

41 41 Format Budget Information provided at an aggregated level Details attached if requested by senior management Includes: Labour cost estimates Financing costs Materials and equipment costs (See Figures )

42 42 Project Definition Report

43 43 Any Questions?

44 44 Step 3: Organize the Project Implement the Project and Organize the Team

45 45 Agenda Organize the team Determine the personnel requirement and skills Select the Project Manager Select the Project Team Characteristics of PM and team What makes teams work

46 46 5 Step Project Management PLANNING IMPLEMENTATION DEFINE Identify project activities Estimate time and cost Sequence Project Activities Identify Critical activities Write Project Proposal ORGANIZE PLANCLOSE State the Problem Identify Project Goals List the Objectives Determine Preliminary Resources Identify Assumptions and Risks DeterminePersonnelNeeds Recruit Project Manger Recruit Project Team Organise Assign Work Packages Define Management Style Establish Control Tools Prepare Status Reports Review Project Schedule Issue Change Orders CONTROL Obtain Client Acceptance Install Deliverables Document the Project Issue Final Report Conduct Post- Implementation Audit Obtain Client Acceptance Install Deliverables Document the Project Issue Final Report Conduct Post- Implementation Audit CLOSE

47 47 Implementation Phase Start once the project has been approved Project team for the implementation is formed/procured In-house and external Procurement procedures Work package assignments can commence Deliverables are agreed upon and clearly understood Control systems are established Time, Quality, Cost, Safety ….

48 48 Organising the Project Team Projects are only as successful as the project manager and team who implements them Building an effective team takes a lot of work Must consider more than just a person’s technical skills

49 49 Organising the Project Team The selection of team members is based on skills, availability and personality There needs to be a commitment and chemistry among the team members Team building is not a perfect art, there is always the risk of conflict

50 50 Organising the Project Team Organized and located to facilitates open continuous communication This does not mean they have to be physically located together Team members may be reallocated for the duration of the project or remain in their function areas

51 51 Organising the Project Team Large projects Dedicated core team Structured More defined roles Need for open and continuous communication lines Self contained

52 52 Organising the Project Team Small projects Part-time commitment from team members Team members remain in their functional units Conflicting priorities/demands exist Conflicts may arise from having more than one boss or more than one team involvement

53 53 Organising the Project Team Be sure all parties understand the need to: Build the team, What the priorities are within in the organisation and Their assistance is appreciated Project manager to ensure that the cross functional relationships are maintained and supported

54 54 Characteristics of an Effective Project Manager Understands purpose of the project Has the necessary background and experience Effective leader with proven managerial ability

55 55 Characteristics of an Effective Project Manager Has credibility with team and client Sensitive to project and corporate politics Excellent communication skills Consistent behaviour Facilitator rather than a dictator

56 56 Selection of Project Manager Key position on the project Selection of appropriate individual is essential to success of the project Selection criteria should be established based on the skills required to carry out project

57 57 Project Manager Selection Criteria 1. Background and Experience Should be consistent with the nature and needs of the project Education should be compatible with nature and expectations of the project Look for a individual with a mix of conceptual, analytical, operational and practical experience

58 58 Project Manager Selection Criteria 2. Leadership Ability to design, co-ordinate, control and implement project plan Stay the course until completion Ability to see the big picture and understand the details

59 59 Project Manager Selection Criteria 3. Technical expertise Ability to direct, evaluate, and make decisions on technical alternatives Does not and can’t be an expert in all areas of the project Should have expertise in project management, team management and training

60 60 Project Manager Selection Criteria 4. Interpersonal skills Should be able to: Motivate, inspire, and coach Actively listen, give and receive feedback Empathise, relate feelings, needs and concerns in a positive manner Prevent and resolve conflicts, negotiate Keep team, senior management and stakeholders informed through effective communication channels

61 61 Project Manager Selection Criteria 5. Proven Managerial Ability Good track record, excellent indicator of the future Knowledge of the organisation and its operation Ability to effectively interface with all levels of the organisation Ability to link project goals to corporate mission and goals

62 62 Selecting the Team Selection of team members depends on a number of factors: Nature of the technical work to be done Level and type of expertise required at each phase of the project Availability of staff in the organisation and reporting relationships

63 63 Team Selection Criteria Similar to those of the project manager More emphasis on the technical skills Interpersonal skills essential Ability to function as a team member with shared goals and objectives (us instead of me)

64 64 Effective Team Characteristics Commitment to the project goals and completion Ability to communicate, share responsibility and power Flexible willing to change or try some new methods Technically competent Willing to: Admit mistakes Admit not have all the answers Accept feedback

65 65 Effective Team Characteristics Politically astute Team players Creative and open to suggestions High self esteem, can do attitude Willing to work for more than one boss, across formal structure and authority system Results oriented

66 66 What Makes Teams Work Successful Projects: The team has fun Have the support of senior management Everyone understands the reason for the project Conflicts are addressed and dealt with The entire organisation is committed

67 67 What Makes Teams Work Successful projects: Team understands the organisation’s mission and how the project fits within that mission Team understands what is to be achieved and when it is achieved Trust and communication

68 68 Step 4 - Control the Project

69 69 5 Step Project Management PLANNING IMPLEMENTATION DEFINE Identify project activities Estimate time and cost Sequence Project Activities Identify Critical activities Write Project Proposal ORGANIZE PLANCLOSE State the Problem Identify Project Goals List the Objectives Determine Preliminary Resources Identify Assumptions and Risks DeterminePersonnelNeeds Recruit Project Manger Recruit Project Team Organise Assign Work Packages Define Manageme nt Style Establish Control Tools Prepare Status Reports Review Project Schedule Issue Change Orders CONTROL Obtain Client Acceptance Install Deliverables Document the Project Issue Final Report Conduct Post- Implementation Audit Obtain Client Acceptance Install Deliverables Document the Project Issue Final Report Conduct Post- Implementation Audit CLOSE

70 70 Project Control Schedule control Cost control Team performance evaluation Change control

71 71 Schedule Control

72 72 Incorporating Project Changes into the Schedule When a change is requested or needed, you should: Estimate the impact on the schedule by incorporating any additional tasks and revised duration estimates Add activities that were overlooked when the original plan was developed Add new activities due to unanticipated events Obtain client approval before proceeding A new baseline plan is established and used as the benchmark for comparison

73 73 Approaches to Schedule Control Schedule control involves four steps: Analyse the schedule to determine which areas may need corrective action Decide what specific corrective actions should be taken Revisit the plan to incorporate the chosen corrective actions Recalculate the schedule to evaluate the effects of the planned corrective actions

74 74 Approaches to Schedule Control If the planned corrective actions do not result in an acceptable schedule, repeat the previous steps

75 75 Approaches to Schedule Control Each time a schedule is recalculated: Identify the critical path Identify any activities that have a negative slack Compare paths where slippage have occurred (Slack got worse) with the previously calculated schedule Apply acceleration to the paths with negative slack: The most negative slack should be given top priority Focus on activities that are in progress or to be started in the immediate future Focus on activities that have long duration estimates

76 76 Acceleration To reduce schedule: Apply more resources to speed up an activity Add more people Increase hours per day or increase days per week Assign person(s) with greater expertise or more experience Reduce the scope or eliminate the activity if possible Increase productivity through improved methods or technology

77 77 Acceleration Trade-off in the form of an increase in costs or a reduction in scope This could jeopardise elements of the overall project objective: scope, budget, schedule, and/or quality There may be a dispute over who should absorb any increased cost to accelerate Bonus provision if project is completed early Liquidated damages Project meetings are a good forum for addressing schedule control issues

78 78 Evaluation of Delays in the Work Questions to determine that a delay in the work is compensable: Was the cause of the delay beyond the contractor’s control? Did the contractor fail to take normal precautions? Was the contractor ready and able to work?

79 79 Evaluation of Delays in the Work Did the contractor submit a detailed schedule projecting project completion within the allotted time? Was the schedule updated regularly? Did the updated schedule justify time extension? Did this schedule contain a critical path analysis or equivalent? Has the contractor maintained sufficient forces in those operations along the critical path where needed to meet target dates?

80 80 Evaluation of Delays in the Work How have causes, other than normal weather, beyond the control and without the fault or negligence of the contractor affected target dates along the critical path? Has the contractor proven “unusually severe weather” with such information as climatological data, return probability of severe storms, or flood depth data?

81 81 Evaluation of Delays in the Work Did the weather phenomenon actually delay operations along the critical path or in secondary operations? Was the contractor shut down for other reasons?

82 82 Cost Control

83 83 Cost Control System Any cost control system should enable a project manager to observe current perfomance (productivity) levels, compare them with budget levels and institute corrective actions to keep productivity, and ultimately costs, within acceptable range

84 84 Elements of Effective Cost Control System Observation Comparison of observation with budget Corrective action to take if necessary Can also serve as: A basis for a productivity improvement program A measure of productivity loss caused by adverse factors and changed conditions such as winter work, acceleration, design changes, etc.

85 85 Cost Control System Compares actual man-hours expended to earned hours Actual work hours come from contractor’s daily time sheets Earned hours are calculated by multiplying the completed quantities during a period by estimated man-hours per unit quantity See figure following as an example

86 86 Labour Productivity Report

87 87 Money Delay Budget Time Now Earned Value Time Actual Expenditure Cost overrun

88 88 Budget Time Actual Earned Value Ahead of schedule Making Money Money

89 89 Example: Activity Variance Report

90 90 Conclusion You can draw immediate attention to significant deviations from what was planned Indicate what corrective action is necessary and by whom Dependent on accurate reporting and correct allocation of hours expended

91 91 Performance Evaluation

92 92 Joint Evaluation Progress meeting Forum for identifying a problem Specific criteria to evaluate effectiveness Teamwork Timely problem resolution Periodic survey Comparisons of survey responses identify areas of improvement and potential problems

93 93 Measuring Success Met target price, quality and schedule Goals achieved Benchmarking Positive client feedback Great safety record Disputes resolved effectively

94 94 Joint Evaluation 1. Communications between the owner/contractor personnel are………… 2. Top management support of partnering process is……………………… 3. Problems, issues or concerns are…… 4. Cooperation between owner and contractor personnel is…………………… 5. Responses to problems, issues, or concerns frequently become………… Difficult, guarded Easy, open, up front Not evident Inconsistent Obvious, consistent Ignored Attacked promptly Cool, removed, detached, Genuine, unreserved, complete Personal issues Treated as project problems

95 95 Change Control: Changes and Extra Work

96 96 This Session Definition Impact costs Basic principles in handling change orders Types of changes Elements of a change order Recommendations for good practice

97 97 Change Order Is a written agreement to modify, add to, or otherwise alter the work from that set forth in the contract documents at the time of opening bids, provided that such alteration can be considered to be within the scope of the original project; otherwise, a contract modification may be required It is the only legal means available to change the contract provisions after the award of contract

98 98 Change Order Could be addition to or deletion from the work Changes in the method of execution or manner of work performance Change in owner-furnished materials or facilities Change in the contract time or order of the work Correct errors in the plans or specifications Direct results of contractor suggestions that are approved by the owner and its agents

99 99 Change Order Changes may involve A price change in the contractor’s favor Cash credit to the owner No price change at all Make sure payment covers Impact costs & Loss of productivity Time extensions

100 100 Basic Principles in Handling Change Orders No work should be included beyond the scope of the base contract The identity of the individuals authorized to request and approve change orders should be established early During the start up meeting the change order handling procedures must be established/discussed

101 101 Basic Principles in Handling Change Orders All changes in the work must be authorized in writing prior to the execution The scope of a change order must be clear A request for a change proposal should contain enough information to enable the contractor to make a realistic estimate

102 102 Basic Principles in Handling Change Orders The contractor should submit its proposal to execute a change order as soon as possible after receiving the request The owner’s approval or rejection should follow as soon as possible The Change Order should be fair. It should recognize the contractor’s right to include: Overhead and profit percentages Compensation for legitimate time-delay claims Compensation for legitimate impact costs if any

103 103 Types of Changes Directed changes Owner directs the contractor to perform work that differs from that specified in the contract Easy to identify and mutually recognized Disagreements tend to center on questions of financial compensation and the effect of change on the schedule

104 104 Types of Changes Constructive Changes Is an informal act authorizing or directing a modification to the contract caused by an act or failure to act Defective plans and specifications Engineer’s interpretation Higher standard of performance than specified Improper inspection and rejection Change in method of performance Owner nondisclosure Impossibility/impracticability of performance

105 105 Types of Changes Constructive Changes Must be claimed in writing within time specified in the contract Major source of disputes

106 106 Change Order Form Description of change Reason for change Change in contract price Change to contract time Statement that secondary impacts are included Approvals by owner’s and contractors representatives

107 107 Sample of a Change Order PROJECT TITLE PROJECT NO.CONTRACT NO.CONTRACT DATE CONTRACTOR The following changes are hereby made to the Contract Documents: Construction of access bridge abutment No. 1 drainage system; and Reset two penstock bearing plates. All in accordance with revised DWG S Revision 4, dated August 29, 2000 JUSTIFICATION: Unforeseen soil conditions CHANGE TO CONTRACT PRICE Original Contract Price: $ Current contract price, as adjusted by previous change orders: $ The Contract Price due to this Change Order will be (increased) (decreased) by: $ The new Contract Price due to this Change Order will be: $ CHANGE TO CONTRACT TIME The Contract Time will be (increased) (decreased)by calendar days The date for completion of all work under the contract will be Requested bydated Recommended bydated Ordered bydated Accepted bydated

108 108 Recommendation for Good Practice Percentages for overhead and profit to be applied Determination of the individual representative of the owner who is authorized to approve change orders Procedures to be followed in the submittal of change order proposals Change order forms to be used

109 109 Recommendation for Good Practice Time extensions required, if any The detail required of contractors when submitting change order proposals - Will a complete breakdown of all costs be required? Brief description - Descriptive drawings Overtime necessary due to change orders - consideration of decreased productivity Responsibility for record drawings brought about due to the change orders

110 110 Dealing with Disputes: Keys to Project Control

111 111 Agenda Causes Obstacles to resolution Successful settlement

112 112 Causes of Disputes Design changes, errors/omissions and extras Late owner-supplied equipment Lack of co-ordination Changed soil/site conditions Access to site

113 113 Causes of Disputes Delays and acceleration Insufficient bid preparation time Inadequate bid information Underestimation by contractors Inadequate management

114 114 Resolving Disputes Face to face by parties themselves By appointing a mutually acceptable third party By accepting the jurisdiction of the courts

115 115 Obstacle to Resolution Owner’s bias Contractor’s bias Total cost claims

116 116 Successful Settlement Get the facts Keep good records Know your contract Preserve your rights Show: Cause-Effect-Entitlement- Quantification

117 117 Settlement of Disputes The following options are available: Negotiation Mediation Dispute Resolution Board Mini-trial Arbitration Litigation

118 118 Mediation Voluntary Non-binding Economical Assist negotiation

119 119 Arbitration Binding 1 or 3 arbitrators Selection of arbitrators Each party selects one arbitrator Both select a chairperson Could be expensive

120 120 Dispute Resolution Board DRB consists of three members and is established at the beginning of project Non-binding

121 121 Mini-trial Presentation of both sides’ arguments before an advisory panel and executives of both sides. May include a judge Predict the likely outcome and the strength and weakness of the case Voluntary and non-binding

122 122 Litigation Adversarial Costly Voltaire: “I have only been ruined twice in my life. The first time was when I lost a lawsuit: the second, when I won one!”

123 123 Problem Resolution Lowest level with time limit Escalated to the next level of management No action is not an option

124 124 Problem Resolution

125 125 Problem Resolution Systematic approach Seek solutions Increased and higher quality discussion Win-win solutions Equality of rights among parties Agree on no adversarial relations

126 126 Problem Resolution: Negotiation Separate the people from the problem Focus on interests, not positions Invent options for mutual gain When possible, use objective criteria

127 127 Step 5 – Close the Project

128 128 Agenda Purpose Prerequisite activities Project termination process Final project report Rewarding successes and learning from failures

129 129 DEFINE Identify project activities Estimate time and cost Sequence Project Activities Identify Critical activities Write Project Proposal ORGANIZE CONTROL PLANCLOSE State the Problem Identify Project Goals List the Objectives Determine Preliminary Resources Identify Assumptions and Risks Determine Personnel Needs Recruit Project Manger Recruit Project Team Organise Project Team Assign Work Packages Define Management Style Establish Control Tools Prepare Status Reports Review Project Schedule Issue Change Orders ObtainClientAcceptanceInstallDeliverablesDocument the Project the Project Issue Final Report Conduct Post- ImplementationAudit Project overview WEBS Recruit Criteria Variance Reports Final Report Project network Define Work packages Status Reports Audit Reports Critical Path Assign Work Packages Staff Allocation Reports 5 Phase Project Management PLANNING IMPLEMENTATION

130 130 Purpose To ensure all deliverables are installed or implemented according to time, budget and specification

131 131 Purpose To ensure that the works have been completed as specified, and that all facilities work properly To provide a record of the actual execution, together with operating instructions To train staff in the use of the works

132 132 Purpose To formally close out contractual relationships Obtain sign off on final report to show contracted deliverables have been successfully implemented To formally terminate project team assignments To ensure adequate project documentation and baseline information for changes that may need to occur in the future To obtain client’s acceptance of project work and deliverables

133 133 Activities Test the engineering performance Search for non-operational defects, e. g. those that affect only the appearance Inspect the facilities thoroughly and have defects remedied Prepare as-built drawings and record Start up, test and adjust all services Prepare operational instructions and maintenance manuals Train staff Monitor performance of work against original requirements

134 134 Deficiency Lists These are lists of required repairs or completion of deficient/incomplete items. Schedule for completion of deficiencies. Need a sign-off procedure. Need a handover process to turn project over to Owner in organized way.

135 135 Records During implementation, difficulties may arise which result in changes to the original design. Records of these changes will be kept during implementation, mainly for financial reasons. These must be brought together to make a complete record of the actual execution.

136 136 As-built Drawings Mandatory on some projects. Should be provided on all projects. Reflect what was actually built. Contract documents must set a date for completion of as-built drawings. Make sure they are worked on as the project is built... do not wait for the end of the job.

137 137 Warranties, Spare Parts and Manuals Watch for differing warranty starts and durations. Recommended parts list. Operations and Maintenance Manuals. Service and warranty contacts and service agreements/expectations.

138 138 Termination Process Project termination can be complicated A systematic approach is required to successfully cover all bases in terminating contracts and relationships. Stay in close contact with the client and administration to ensure close down meets with the client’s satisfaction.

139 139 Termination Process Generally the termination phases include: 1. Prepare termination logistics 2. Document project 3. Conduct post implementation audit and prepare and submit final report 4. Obtain client approval 5. Close operation

140 140 Close Operation Prepare Termination Logistics Document The Project Project Termination Phases Conduct Post- Implementation Audit: Prepare and Submit Final Report Obtain Client Approval PROJECT TERMINATION PHASES

141 Prepare termination logistics Establish project termination design Assign a termination manager Assign a termination team to assist manager Conduct a termination meeting to review process Assign close-out tasks

142 Document the Project Prepare personnel termination reports Close down project office and reporting system Terminate all financial documents Complete all payments and expenses Collect all debts prepare the financial project close out report

143 Document the Project Terminate all work orders, contracts, assignments and outstanding supplier and customer obligations. Document completion and compliance with all vendors and contractors. Close all project sites and return all project equipment.

144 Conduct Post - Implementation Audit Complete Final Report Submit report to client Evaluation of project’s goals and activity achievement. Measured against the project plan, budget, time deadlines, quality of deliverables, specifications and client satisfaction.

145 145 Final Report Should answers the following questions: Was the project goal achieved? Was the project work done on time? Was it done within budget? Was it done by specifications? Was the client satisfied with the project results? Memory or history of the project. File others can refer to, study progress and impediments of the project. Can follow many formats.

146 146 Final Report Usually includes the following elements: Overall success and performance of the project Organisation and administration of the project Techniques used to accomplish project results Assessment of project strengths and weaknesses Recommendation of project manager and team for continuation or extinction of project

147 Client Approval Obtain Client approval. 5. Close Operation Close all physical sites and terminate remaining project staff.

148 148 Rewarding Successes and Learning From Failures Closing a project is a celebration of effort. Brings resolution to the process. Project manager should bring the team together to review their journey. Way of closing formal and informal relationships. Way to re-enforce learning that occurred. Final get together brings project full circle.

149 149 Summary All projects must be closed off. Project should meet with client acceptance. Provide installed deliverables. Document the process and achievements. Provide closure for the team and client.

150 150 Critical Factors in Successful Project Implementation Mission Senior Management Schedule Client Consultation Personnel Pinto, J. K. and D. P. Slevin (1987). IEEE Transactions on Engineering Management EM34(1): Technical Tasks Client Acceptance Monitoring & Feedback Communication Troubleshooting

151 151 Project Management Education / Training Online resources (websites and list servers) Each other (sharing knowledge and experiences) Balance experience with education Project Management Institute: PMBOK Guide,

152 152 Additional Online Resources in Project Management

153 153 Concluding Remarks Projects - an increasingly important way of working Project management is challenging, rewarding Keep it simple, use aspects of project management that make sense Don’t be an Accidental Project Manager Its OK to make mistakes…learn from them to improve project management practices

154 154 That’s all and thank you Good luck in managing your projects

155 155 Sample Templates and Forms

156 156 5-Step Project Management PLANNING IMPLEMENTATION DEFINE Identify project activities Estimate time and cost Sequence Project Activities Identify Critical activities Write Project Proposal ORGANIZE CONTROL PLANCLOSE State the Problem Identify Project Goals List the Objectives Determine Preliminary Resources Identify Assumptions and Risks Determine Personnel Needs Recruit Project Manger Recruit Project Team Organize Project Team Assign Work Packages Project overview WBS Recruit Criteria Variance Reports Final Report Project network Define Work packages Status Reports Audit Reports Critical Path Assign Work Packages Staff Allocation Reports Define Management Style Establish Control Tools Prepare Status Reports Review Project Schedule Issue Change Orders Obtain Client Acceptance Install Deliverables Document the Project Issue Final Report Conduct Post- Implementation Audit

157 157 Project Overview Project Name - PM Conference Project Manager Problem/Opportunity Membership in PM Association has declined in the past four years and attendance at conferences has declined in past three years. The viability and financial stability of the organization depends on maintaining membership and successful annual conference. Goal Reverse downward trend in membership and annual conference attendance. Objectives 1.Develop the Program 2.Set the Conference Site and Date 3.Design and Implement the Marketing Plan Success Criteria 1.At least 50 of previous years conferences attendees will attend 2.At least 150 of 450 PMI Canada members will attend 3. At least 1.5% of the non-members receiving conference brochure will attend 4.At least 5% of the non-member attendees will join PM Association Assumptions and Risks 1.Interest in PM can be renewed through the annual conference 2.A quality professional program will attract members and non-members 3.Key speaker(s) fail to show up or submit written paper. Prepared by Date Approved by Date Project Overview - Sample

158 158 Project Name Project Manager Problem/Opportunity Goal Objectives Success Criteria Risks and Assumptions Prepared by Date Approved by Date Project Overview Stakeholders

159 159 STAKEHOLDER and External Issues Their Objective/Purpose Their Strategy How They Operate Where they gain Support Their Potential Impact on the project How to Manage them and your plan for mitigation Stakeholder and External Issues Analysis

160 160 Risk Management Template Monitoring Schedule Response Plan OwnerImpactProbabilityRisk

161 161 CONFERENCE PLANNING SITEMARKETINGPROGRAM DATEPLACETHEMEMATERIALSSPEAKERSLISTSBROCHUREREGISTER OBTAIN MATERIALS PREPARE KITS DESIGN BROCHURE MAIL BROCHURE WBS - Sample

162 162 Estimated Project Planning Budget Cost __________ Description __________ Cost __________ Description __________ Cost __________ Description __________ Cost __________ Description __________ Cost __________ Description __________

163 163 Estimated Conference Planning Budget CONFERENCE PLANNING $243,325 Program $41,100 Site $170,425 Marketing $31,800 Theme $600 Materials $13,300 Speakers $27,200 Date $1,000 Location $169,425 Lists $2,000 Brochure $29,800 Registration 3 conf calls with pgm comm Travel/expenses for 16 $500 per speaker Deposit 3 site $800/visit per person/day for 3 days for 1100 meeting $225/day/room for 3 days for 3 rooms 25,000 $80/1000 Obtain Speaker Materials $800 Prepare Conference Notebook $125,500 Design Brochure $12,800 Mail Brochure $17,000 $50/speaker 1100 $5/binder photocopy materials 350,000 $0.02/page Layout: 16 $50/page Printing: 30,000 $0.40/copy 25,000 $0.68/piece

164 164 Project Schedule - Sample Project: ____________________Project Manager: ____________________Date: _____________

165 165 Project Schedule Project: ____________________Project Manager: ____________________Date: _____________

166 166 Deliverable:_____________________ Manager:___________________ Project:_________ ACTION DATES Activity Another activity Build something Another Item Yet another Design a bit Design more Sneeze Gesundheit Another thing Wait for item More stuff Finish A C G C F M J W B D M H F W L S W E R A A C I I - I C R C I A A I A R - A C I I - C ,500 - R C I A A I A R A A C I I - I C 90 9,000 R - A C I I - C ,700 - A R I C C A I I R C A A I C I ,785 - R I I C A C R - C I C ,000 - I C A A R I A I R A - I C I A A A 80 - A I C I I A A A R Budget Actual W/Hrs. W/Hrs. Cost Cost Major Element Amelia Drover Fred 2-5 RACI Charts (F.T Hartman)

167 167 RACI Charts Deliverable:_____________________ Manager:___________________ Project:_________ ACTION DATES People involved Other Info. (e.g., Cost)

168 168 RACI Chart 2 1 InformCoordinate with Accountable to Responsible party Task

169 169 PM ANNUAL CONFERENCE REVENUE & EXPENSE BUDGET Revenues Registrations - $335……………………………………………………………..$368,500 Expenses Salary Graphic artist……………………………………………………………………………………………… Total Salary……………………………………………………………………………………………..800 Non-Salary Travel……………………………………………………………………………………………………... 21,600 Printing……………………………………………………………………………………………………. 19,000 Postage…………………………………………………………………………………………………... 17,000 Mailing Lists………………………………………………………………………………………………. 2,000 Telephone……………………………………………………………………………………………………. 600 Supplies……………………………………………………………………………………………………. 6,300 Speaker Honoraria………………………………………………………………………………………. 8,000 Site Deposit……………………………………………………………………………………………….. 1,000 Food………………………………………………………………………………………………………1 65,000 Meeting Room Rental…………………………………………………………………………………..2,025 Total Non-Salary………………………………………………………………………………..242,525 Total Expenses………………………………………………………………………………………$243,325 Gross Profit…………………………………………………………………………………………$125,175 Indirect 40% of Total Expenses)……………………………………………………$97,330 Net Profit………………………………………………………………………………………………$27,845

170 170 Project Definition Report

171 171 Sample of a Change Order PROJECT TITLE PROJECT NO.CONTRACT NO.CONTRACT DATE CONTRACTOR The following changes are hereby made to the Contract Documents: Construction of access bridge abutment No. 1 drainage system; and Reset two penstock bearing plates. All in accordance with revised DWG S Revision 4, dated August 29, JUSTIFICATION: Unforeseen soil conditions CHANGE TO CONTRACT PRICE Original Contract Price: $ Current contract price, as adjusted by previous change orders: $ The Contract Price due to this Change Order will be (increased) (decreased) by: $ The new Contract Price due to this Change Order will be: $ CHANGE TO CONTRACT TIME The Contract Time will be (increased) (decreased)by calendar days. The date for completion of all work under the contract will be Requested bydated Recommended bydated Ordered bydated Accepted bydated


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