Chapter 3 Project Activity and Risk Planning

Two Extremes Approaches to Planning “Ready, fire, aim” Tom Peters “Paralysis by analysis” There is a happy medium that everyone would like to strike

The Basis of a Project Plan-the “Project Charter” Primary function of a project plan is to serve as a roadmap Should include the business case and strategic reasons for the project Should contain sufficient information to know the status of the project at any time Also needs the project’s history to date

Categories of Elements Required in the Project Charter Purpose Objectives Overview Schedules Resource requirements Personnel and stakeholders Risk management Evaluation methods Slide on each

Purpose Business case for the project Strategic reasons for the project Expected profitability Competitive effects Desired scope Any other technical results Intent is to communicate to stakeholders the reasons for the project

Objectives Another name is project mission statement More detailed description of the… Scope Deliverables Outcomes Communicate to project team members what will be done to achieve the overall project objectives

Overview Intended for senior management Brief description of project Deliverables Milestones Expected profitability and competitive effects Technological and managerial approaches Agreements with the client or any third party

Schedule Summary of schedules and milestones Work breakdown structure (WBS) Time to complete each task

Resource Requirements Estimates of project expenses Capital and operating Costs associated with each task Overhead and fixed charges Appropriate account numbers Project budget

Personnel and Stakeholders Stakeholders, sponsor, project manager, and some team members Special skill requirements Necessary training Special legal arrangements Such as non-disclosure agreements

Risk Management Listing of potential disasters Major and minor Late subcontractor deliveries, bad weather, unreasonable deadlines, equipment failure, changes in project scope Contingency plans are described Does not stop disasters Softens the impact

Evaluation Methods Evaluation procedures and quality standards Procedures for monitoring, collecting, and storing data on project performance

The Planning Process-Overview Develop and evaluate the concept of the project Carefully identify what project deliverables must have to be successful Create a system Test the prototype Integrate the deliverable into target system Validate the deliverable Let client test it Make sure client understands operating and maintenance requirements

The Planning Process-Nuts and Bolts Once approved, project should have a launch meeting New project manager should review project objectives Make sure they understand Identify important senior managers Determine if anything is atypical Senior manager introduces project to group Project manager chairs launch meeting

Results of the Launch Meeting The project’s scope is understood Various functional managers understand their responsibilities and have committed to develop an initial task and resource plan Any potential benefits to the organization outside the scope are noted

Sorting Out the Project-The Work Breakdown Structure (WBS) Inadequate up-front planning is a primary contributor to the failure of a project A primary purpose of the WBS is to ensure that no task is overlooked Every task, no matter how small, should be listed Along with material and human resources This is a non-trivial task

A Sample (Partial) WBS Figure 3-1

Notes on WBS Microsoft Project (MSP) will make a WBS list at the touch of a key But not a tree-chart At any given level, the “generality” or “degree of detail” of the tasks should be roughly at the same level The breakdown of level 1 tasks should be delegated to someone who will carry out the level 2 tasks The job of planning should be delegated to the lowest competent level

Extensions of the Everyday WBS WBS generally oriented towards deliverables Can be reshaped with some additional data often not included in the WBS Estimates of resources for each task Estimates of the time for each task Who has responsibility for each task Sequence information for each task Increases it orientation toward planning and administration

A Modified WBS for Improving Staff Orientation Table 3-2 (Partial)

More on the Work Breakdown Structure and Other Aids RACI Matrix is a table Project tasks derived from the WBS listed in rows and departments and individuals in the columns Helps organize the project team

The RACI Matrix Figure 3-5

A Whole-Brain Approach to Project Planning Mind mapping is a visual approach that closely mirrors the way the human brain records and stores information In addition to its visual nature, this methodology has the advantage of tapping in to the creative potential of multiple team members Mind mapping is an entertaining approach that helps generate enthusiasm and involvement

Sample Mind Map Figure 3-9

Risk Management Risk identification Risk analysis Response to risk

Breakdown into Sub-processes Risk management planning Risk identification Qualitative risk analysis Quantitative risk analysis Risk response planning Risk monitoring and control Slide on each

Risk Management Planning Like any other planning process Must ensure that the necessary resources can be applied in a timely manner It is a continuous process The factors that cause uncertainty change over time

Risk Identification and Qualitative Risk Analysis Steps 2-3 often carried out together Scenario analysis Well-known method for identifying risk Involves envisioning likely scenarios and resulting outcomes Failure mode and effect analysis (FMEA) List ways project might fail List consequences and evaluate its severity List cause and likelihood Estimate the ability to detect each failure Calculate the risk priority number Sort the potential failures by their risk priority number

Quantitative Risk Analysis State outcomes as probability distribution and use distributions to evaluate the desirability of certain decisions Objective is to illustrate the risk profile of the outcomes Risk profiles are one factor to consider in making the decision Techniques for analysis include: Expected value Simulation

Risk Response Planning Deciding on which risks to prepare for and which to ignore Main preparation is a risk response plan Risk response plan includes contingency plans and logic charts detailing what to do Contingency plan is a backup for some emergency or unplanned event (“plan B”) Logic chart shows the flow of activities once a backup plan is initiated

Risk Monitoring and Control Monitoring and control are tasks for the parent organization As well as the project Must keep records for future projects Also must continue to search for new risks

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