1. Project Management A Short Introduction and History URBS 609 PERT, Unit 1

2. Urban and Regional Studies Institute2 About This Training Module T his training module was crafted using PowerPoint by Microsoft Corporation. It has been packaged with PowerPoint Viewer, a standalone Microsoft product that allows a user to view this module without use of PowerPoint. T his training module was crafted using PowerPoint by Microsoft Corporation. It has been packaged with PowerPoint Viewer, a standalone Microsoft product that allows a user to view this module without use of PowerPoint.  Left mouse-click or enter to go to next slide  Right mouse-click or backspace to go to previous slide  ESC to exit this module This Unit of Instruction was crafted by Robert Hugg For Minnesota State University, Mankato Urban and Regional Studies Institute - 2004

3. Urban and Regional Studies Institute3 Training Module Preview This module will provide: This module will provide: –A basic history of Project Management –Introduction to key terms –Introduction to key concepts –Introduction to traditional methodologies –Introduction to logical task sequence This module is constructed as the first block in a building block approach This module is constructed as the first block in a building block approach

4. Urban and Regional Studies Institute4 What Is Project Management? Management of resources & constraints to meet a goal in as efficient a manner as possible Management of resources & constraints to meet a goal in as efficient a manner as possible –Resources: Time, money, people, equipment –Constraints: preceding task completion A science or an art? Both A science or an art? Both –Science: based on statistical means & norms –Art: based on intuition into human behavior –Both: balancing the known and unknown to achieve a more predictable result

5. Urban and Regional Studies Institute5 The Unbroken Thread of Time Project Management (PM) is not new Project Management (PM) is not new –Used in some form for centuries Pyramids, sphinx, coliseum – intricate plans Pyramids, sphinx, coliseum – intricate plans Active management of resources to meet a goal Active management of resources to meet a goal –Value: listing and tracking complex tasks –Value: Provides a focus for project communication Based on a quest for efficiency Based on a quest for efficiency –Arranging tasks and resources for most efficient and productive result

6. Urban and Regional Studies Institute6 A Philosophy, not a Technique PM is a management philosophy PM is a management philosophy –Efficient management yields effective results Often mistaken as a technique Often mistaken as a technique –PM contains many techniques – flexible Adaptable techniques that are industry specific Adaptable techniques that are industry specific Techniques work in some industries and not others Techniques work in some industries and not others –PM techniques evolve within the philosophy Many techniques, many tools, one goal Many techniques, many tools, one goal

7. Urban and Regional Studies Institute7 Project Management Definitions There are several key PM terms There are several key PM terms –Critical Path: The longest time path through the task network. The series of tasks (or even a single task) that dictates the calculated finish date of the project (That is, when the last task in the critical path is completed, the project is completed) The "longest" path (in terms of time) to the completion of a project. If shortened, it would shorten the time it takes to complete the project. Activities off the critical path would not affect completion time even if they were done more quickly. –Slack Time: The amount of time a task can be delayed before the project finish date is delayed. Total slack can be positive or negative. If total slack is a positive it indicates the amount of time that the task can be delayed without delaying the project finish date. If negative, it indicates the amount of time that must be saved so that the project finish date is not delayed. Total Slack = Latest Start - Earliest Start. By default and by definition, a task with 0 slack is considered a critical task. If a critical task is delayed, the project finish date is also delayed. (Also known as float time ) critical task critical task

8. Urban and Regional Studies Institute8 Project Management Definitions More key PM terms: More key PM terms: –Crashing: Shifting resources to reduce slack time so the critical path is as short as possible. Always raises project costs and is typically disruptive – a project should be crashed with caution. –Dummy activity: An imaginary activity with no duration, used to show either an indirect relationship between 2 tasks or to clarify the identities of the tasks. In CPM, each activity must be uniquely defined by its beginning and ending point. When two activities begin and end at the same time, a dummy activity (an activity which begins and ends at the same time) is inserted into the model to distinguish the two activities.

9. Urban and Regional Studies Institute9 Project Management Definitions Even more key PM terms: Even more key PM terms: –Gantt Chart: A bar chart. While visually appealing on a task/duration basis, it is limited because it does not show task or resource relationships well. Strength: easy to maintain and read. –Network Diagram: A wire diagram, Also known as a PERT network diagram. A diagram that shows tasks and their relationships. Limited because it shows only task relationships. Strength: easy to read task relationships.

10. Urban and Regional Studies Institute10 Project Management Definitions Yet more key PM terms: Yet more key PM terms: Dependencies: Links between project tasks. There are 3 types of dependencies: Dependencies: Links between project tasks. There are 3 types of dependencies: –Causal, where 1 task must be completed before another can begin (have to bake bread before you can make a sandwich)  critical path schedules are based only on causal dependencies –Resource, where a task is limited by availability of resources (more bread can be baked by 2 bakers, but only 1 is available) –Discretionary, optional task sequence preferences that, though not required, may reflect organizational preferences –Milestone: A significant task which represents a key accomplishment within the project. Typically requires special attention and control.

11. Urban and Regional Studies Institute11 Project Management Definitions Yet more key PM terms: Yet more key PM terms: –WBS: a work breakdown structure (WBS) is a detailed, hierarchical (from general to specific) tree structure of deliverables and tasks that need to be performed to complete a project. –The purpose of a WBS is to identify the actual tasks to be done in a project. WBS serves as the basis for much of project planning. –Work breakdown structure is, perhaps, the most common project management tool, it was created by the US military in the 1960s as an extension to PERT.

12. Urban and Regional Studies Institute12 Project Management Definitions Yet more key PM terms: Yet more key PM terms: –Duration: The time it takes for an activity to be completed, given the planned amount of material, labor and equipment. –Effort: The amount (not duration) of work required to complete a task. Duration may decrease by adding resources but the effort required will remain the same. –Scope: A specific definition of what the project does and does not entail. Critical to managing expectations of customers and workers alike.

13. Urban and Regional Studies Institute13 Project Management Definitions Final key PM terms: Final key PM terms: –Constraints: Restrictions set on the start or finish date of a task. You can specify that a task must start on or finish no later than a particular date. Constraints can be flexible (not tied to a specific date) or inflexible (tied to a specific date) Flexible constraints such as As Soon As Possible (ASAP) and As Late As Possible (ALAP) do not have specific dates associated with them. Setting these constraints allows you to start tasks as early as possible or as late as possible with the task ending before the project finish, given other constraints and task dependencies in the schedule. Flexible constraints such as As Soon As Possible (ASAP) and As Late As Possible (ALAP) do not have specific dates associated with them. Setting these constraints allows you to start tasks as early as possible or as late as possible with the task ending before the project finish, given other constraints and task dependencies in the schedule. Inflexible constraints such as Must Start On (MSO) and Must Finish On (MFO) require an associated date, which controls the start or finish date of the task. These constraints are useful when you need to make your schedule take into account external factors, such as the availability of equipment or resources, deadlines, contract milestones, and start and finish dates. Inflexible constraints such as Must Start On (MSO) and Must Finish On (MFO) require an associated date, which controls the start or finish date of the task. These constraints are useful when you need to make your schedule take into account external factors, such as the availability of equipment or resources, deadlines, contract milestones, and start and finish dates. There are many more PM Terms, but these are the basics – it is important to know these concepts There are many more PM Terms, but these are the basics – it is important to know these concepts

14. Urban and Regional Studies Institute14 Project Management Assumptions PM makes several key assumptions PM makes several key assumptions –All tasks have distinct begin and end points –All estimates can be mathematically derived –Tasks must be able to be arranged in a defined sequence that produces a pre-defined result –Resources may be shifted to meet need –Cost and time share a direct relationship (Cost of each activity is evenly spread over time) –Time, of itself, has no value These assumptions make PM controversial These assumptions make PM controversial

15. Urban and Regional Studies Institute15 THE PM Concept Assumption A Critical Path Exists The Key Concept used by CPM/PERT is that a small set of activities, which make up the longest path through the activity network control the entire project. If these "critical" activities could be identified and assigned to responsible persons, management resources could be optimally used by concentrating on the few activities which determine the fate of the entire project. By contrast, non-critical activities can be re-planned, rescheduled and resources for them can be reallocated flexibly, without affecting the whole project. (Wiest, 1974) The Key Concept used by CPM/PERT is that a small set of activities, which make up the longest path through the activity network control the entire project. If these "critical" activities could be identified and assigned to responsible persons, management resources could be optimally used by concentrating on the few activities which determine the fate of the entire project. By contrast, non-critical activities can be re-planned, rescheduled and resources for them can be reallocated flexibly, without affecting the whole project. (Wiest, 1974)

16. Urban and Regional Studies Institute16 The Emergence of Standardized PM Organized as a formal Discipline in 1917 Organized as a formal Discipline in 1917 –Henry Gantt introduced standardized PM tools Gantt Chart – visual tracking of tasks and resources Gantt Chart – visual tracking of tasks and resources Depiction of relationships between tasks Depiction of relationships between tasks Depiction of constraints between tasks Depiction of constraints between tasks First Widespread acceptance of a single technique First Widespread acceptance of a single technique –Created out of need and frustration as industrialization became ever more complex Little change to PM for another 40 years Little change to PM for another 40 years

17. Urban and Regional Studies Institute17 The Birth of PM as We Know It Two main (complementary) techniques within PM Two main (complementary) techniques within PM –PERT (Program Evaluation and Review Technique) – introduced by US military in 1958 US Navy needed tools to control costs and schedules for Polaris Submarine construction US Navy needed tools to control costs and schedules for Polaris Submarine construction –CPM (Critical Path Method) – introduced by US industry in 1958 (DuPont Corporation and Remington-Rand) Industry needed to control costs and schedules in manufacturing Industry needed to control costs and schedules in manufacturing –Common weakness to both: ignores most dependencies Considers only completion of a preceding required task Considers only completion of a preceding required task Both rely on a logical sequence of tasks Both rely on a logical sequence of tasks –Organized visually (Charts), tabular or simple lists

18. Urban and Regional Studies Institute18 An Example of a Logical Sequence Making a simple list of tasks Planting trees with flowers and edging around them – tasks required to complete this project: Planting trees with flowers and edging around them – tasks required to complete this project: 1.Mark utilities 2.Dig Holes 3.Buy trees 4.Buy flowers 5.Plant trees 6.Plant flowers 7.Buy edging 8.Install edging This list does not reflect time or money This list does not reflect time or money This list does not reflect task relationships This list does not reflect task relationships This list is a simple sequence of logical events This list is a simple sequence of logical events This list does not provide an easy project “snapshot” This list does not provide an easy project “snapshot” Hard to see conflicts Hard to see conflicts

19. Urban and Regional Studies Institute19 An Example of a Logical Sequence Visual - Using a PERT Chart (Network Diagram) Planting trees with flowers and edging around them Visual – task relationships are clear – good snapshot Created using RF Flow or Visio

20. Urban and Regional Studies Institute20 An Example of a Logical Sequence Tabular – including time and cost data Task NameNormal Time (Days) Crashed Time (Days) Normal Cost ($) Crashed Cost ($) Mark Utilities3300 Dig Holes21100200 Buy Trees.5 50 Buy Flowers.5 50 Plant Trees21100200 Plant Flowers1.550100 Buy Edging.5 25 Install Edging1.52550 TOTALS 106400675 NOTE: Shaded areas are concurrent tasks that are completed along the timeline- they contribute to overall cost but not overall duration

21. Urban and Regional Studies Institute21 PERT and CPM – The Basics PERT PERT –Weighs and estimates task and project timing based on probabilistic norms and averages Optimistic, expected, pessimistic input estimates Optimistic, expected, pessimistic input estimates Derives probable completion dates based on a formula (does not consider constraints) Derives probable completion dates based on a formula (does not consider constraints) –(Optimistic x1 + expected x4 + pessimistic x1) / 6 The derived dates are estimates (educated guess) The derived dates are estimates (educated guess) The analysis yields a best-case date, worst-case date, and due (derived expected) date The analysis yields a best-case date, worst-case date, and due (derived expected) date

22. Urban and Regional Studies Institute22 PERT and CPM – The Basics PERT (continued) PERT (continued) Manipulating these estimates provides: Manipulating these estimates provides: –Likely (estimated) completion dates –Probability of meeting estimated dates Best case date Best case date Expected (due) date Expected (due) date Worst case date Worst case date ALL PERT dates are estimates (ALWAYS) ALL PERT dates are estimates (ALWAYS) Preferred choice in Social & Behavioral Sciences Preferred choice in Social & Behavioral Sciences

23. Urban and Regional Studies Institute23 PERT and CPM – The Basics CPM CPM –Unlike PERT, analyzes only the longest likely chain of activities The earliest time a project can be completed when using the longest possible task durations The earliest time a project can be completed when using the longest possible task durations –Deterministic, not probabilistic Events will be determined by preceding events, not probability Events will be determined by preceding events, not probability –Derives a “normal” completion time

24. Urban and Regional Studies Institute24 PERT and CPM – The Basics CPM (Continued) CPM (Continued) CPM assumes projects may be “crashed” CPM assumes projects may be “crashed” –Completing a task or project in a shorter amount of time by using extra resources –May be crashed for time but does not directly consider any impact other than cost/time Impact on shared resources (with other projects) Impact on shared resources (with other projects) Impact on other projects (resources, timing) Impact on other projects (resources, timing) Impact on quality or reliability Impact on quality or reliability Preferred choice in industry and construction – tasks and outcomes are more finite and tangible Preferred choice in industry and construction – tasks and outcomes are more finite and tangible

25. Urban and Regional Studies Institute25 PERT and CPM – The Basics PERT and CPM can be used Together PERT and CPM can be used Together –Provides benefits of each Time estimates – a range (PERT) Time estimates – a range (PERT) Time estimates – likely (CPM) Time estimates – likely (CPM) Cost estimates (CPM) Cost estimates (CPM) Time and cost if crashed (CPM) Time and cost if crashed (CPM) Probability of completion “on time” (PERT) Probability of completion “on time” (PERT) –Used together: valuable management tools –PERT and CPM have remained unchanged since 1958

26. Urban and Regional Studies Institute26 PERT and CPM – The Basics Valuable planning tools but: Valuable planning tools but: –Only consider logical (causal) dependencies Completion of a preceding required task Completion of a preceding required task –Does not consider resource or discretionary dependencies Availability of a worker, money, or machines Availability of a worker, money, or machines Task sequence that best fits the bigger picture Task sequence that best fits the bigger picture Relies on clearly defined tasks and goals Relies on clearly defined tasks and goals Provides estimates, not guarantees Provides estimates, not guarantees

27. Urban and Regional Studies Institute27 PM Today – Necessary? Frustration with cost & schedule overruns Frustration with cost & schedule overruns Frustration with reliability of production estimates Frustration with reliability of production estimates Management challenges exist today: Management challenges exist today: –Only 44% of projects are completed on time –On average, projects are 189% over-budget –70% of completed projects do not perform as expected –30% of projects are canceled before completion –On average, projects are 222% longer than expected PM has been shown to improve this performance PM has been shown to improve this performance These statistics were compiled by an independent monitoring group, The Standish Group, and represent the US national average for 1998

28. Urban and Regional Studies Institute28 PM Overview Valuable tools for planning and tracking Valuable tools for planning and tracking –A good way to explore “what if” before a project ever begins How much it could cost - money How much it could cost - money What it could entail – tasks What it could entail – tasks How long it could take - time How long it could take - time Probabilities of success - risks Probabilities of success - risks How much resource needed– people & equipment How much resource needed– people & equipment A good way to get and stay organized A good way to get and stay organized Provides estimates, not guarantees Provides estimates, not guarantees

29. Urban and Regional Studies Institute29 Resources Used in This Unit Dr. Anthony Filipovitch Dr. Anthony Filipovitch Goldratt, Eli, Dr., The Goal: A Process of Ongoing Improvement, Great Barrington: New River Press, 1996 Goldratt, Eli, Dr., The Goal: A Process of Ongoing Improvement, Great Barrington: New River Press, 1996 MS Project, by Microsoft Corporation MS Project, by Microsoft Corporation PM Body of Knowledge (PMBOK), Philadelphia: PMI, 2000 PM Body of Knowledge (PMBOK), Philadelphia: PMI, 2000 Project Management Institute (PMI) Resource Center Project Management Institute (PMI) Resource Center –Project Management Institute Website Project Management Institute WebsiteProject Management Institute Website Render, Barry and Stair Jr., Ralph M. - Quantitative Analysis for Management, Massachusetts: Allyn & Bacon Inc., 1982 Render, Barry and Stair Jr., Ralph M. - Quantitative Analysis for Management, Massachusetts: Allyn & Bacon Inc., 1982 US National Performance Survey, The Standish Group, 1998 US National Performance Survey, The Standish Group, 1998 Verma, Vijay K., Managing the Project Team: The Human Aspects of Project Management, Philadelphia: PMI, 1997 Verma, Vijay K., Managing the Project Team: The Human Aspects of Project Management, Philadelphia: PMI, 1997 Wiest, Jerome D., and Levy, Ferdinand K., A Management Guide to PERT/CPM, New Delhi: Prentice-Hall of India Private Limited, 1974 Wiest, Jerome D., and Levy, Ferdinand K., A Management Guide to PERT/CPM, New Delhi: Prentice-Hall of India Private Limited, 1974

30. Urban and Regional Studies Institute30 You have completed URBS 609 PERT Unit 1 Please proceed to URBS 609 PERT Unit 2 This Unit of Instruction was crafted by Robert Hugg For Minnesota State University, Mankato Urban and Regional Studies Institute - 2004