4. Objectives
Decide criteria to select projects
Setting up process to select projects
Authorize the project & project manager to manage via project
charter
Challenges
Project Manager (PM) needs to:
Ensure a scope statement is created
Ensure everyone understands main objectives & deliverables
Ensure everyone understands constraints & assumptions
Ensure scope is managed in a standard & consistent fashion
5. Using Project Selection Matrix
The matrix based on Project Selection Criteria
Elements:
Financial return
Effect on employees/alignment with corporate culture
Technical advancement/innovation
Market value/share
Public perception
Alignment/advancement of corporate strategy
6. Project Justification Criteria
Select 5 to 7 main criteria to justify the projects
Assign a weighting factor to each criterion based on importance
For each criterion, select the benefit measurement to use
Create the list of all proposed projects
A written business case for informing project selection committee
Put projects in a matrix & rate each project based on method selected
Multiply weighting factor to each rating received
Eliminate any projects based on any minimum standards /thresholds
established prior to ranking
Rank remaining projects
Select projects to proceed from ranking
Make sure document justifications for each project selected (project charter,
scope statement, business case, or other supporting docs)
7. Official written acknowledgment & recognition that
a project exists.
Issued by senior management external to the project
Gives the PM authority to assign resources
Elements
Product description & project overview
Project goals & objectives
Project deliverables
Business case/business need
Resource & cost estimates
Feasibility study (optional)
8. Steps to write
Interview sponsor, product managers & any leaders to understand
product & purpose
Ask sponsor & other stakeholders about main goals & objectives
Ask sponsor & other stakeholders about tangible deliverables
Collect business case for the project & attach it to the plan
Estimate resource needs & costs
Write the project charter with all gathered info
Describe needed authority to PM
Ask sponsor or a senior leader to review & change the charter as
needed, have it signed & distributed to involved parties
Have a meeting to ensure concurrence with the charter for all
executives & identified team members
10. Steps to write
Review project charter for resued any items
Write a brief general statement about project purpose
Include a project justification
Rewrite/use a product/service description
Create list of major deliverables & high-level WBS to show scope of work
List the objective(s) or goals
List assumptions
List constraints
Include requirements in scope statement or produce them in another doc
Include major roles & responsibilities needed
Write the scope statement doc & deliver it to stakeholders for approval
Have a meeting to review the scope with team & stakeholders
11. Steps to create
Review scope statement & make informed judgments on stability
Provide in plan probability of scope changes & frequency
Describe how scope changes will impact the project
Document scope change process
▪ General info about change (date, brief description & requestor)
▪ Business, technical, or other need for the change
▪ Describe the resulting analysis of the change
▪ Socialize levels of review & approval for the change and communicate change
to everyone
▪ Integrate change into the scope; managed & tracked as part of project plan
Communicate scope management plan & scope change process to
team members
13. A tool and technique to decompose project scope
components into smaller and more manageable
components/work packages
Purposes
Identify project major deliverables
Create a common understanding of deliverables
Composition
Project name/major task, subcomponents/higher level
tasks (summary tasks) and work packages (work task)
14. Steps to Create
Determine format for WBS (tree/outline)
Determine appropriate levels of decomposition
Determine organization of WBS levels
Label level one the project name.
At level two, decompose into a set of deliverables
For each subsequent level, decompose the level above into smaller
components
Create the lowest level of decomposition (work package)
It should be small enough to easily assign to one person to complete.
Create a unique numerical identifier for each component on WBS
15. Components
Activity List
Lowest level of work on WBS
Dependencies
Determining dependencies of the work to be done
▪ Mandatory dependencies: Inherent in the work to be done
▪ Discretionary dependencies: Created by the project team
▪ External dependencies: Come from outside of the project
Diagramming Methods
Precedence diagramming method (PDM)/Activity on node (AON)
and Arrow diagramming method (ADM)
16. Tools and techniques
Expert judgment
Analogous estimating (top-down estimating)
Quantitatively based durations
Reserve time (contingency)
Steps to Create
Determine if WBS needs to be decomposed into smaller activities
Understand resource requirements for each activity
Determine whether best tools & techniques
Determine proper duration estimate for each activity
Analyze each activity for schedule risk
Determine type of reserve time (work unit/percentage)
Add reserve time to each activity where appropriate
17. The longest path through the project and has no float
(slack time)
Should be managed
If a task on critical path slips, end date slips
Use a mathematical analysis tool & technique of the
schedule development process called Critical Path Method
(CPM)
CPM types
Forward pass: Calculates early start & early finish for each task
Backward pass: Calculates late start & late finish for each task
Float: Subtracts early start from late start or subtracting early
finish from late finish
18. Another mathematical analysis tool and technique of the
schedule development process
Focuses on determining project’s duration
Uses expected values/weighted averages
Relies heavily on mathematics of probability & statistical bell
curves
Provide more confidence to duration estimates
Applied to every task, to certain risky tasks, or to critical path.
To Calculate PERT
Optimistic: If everything goes well, how long the task will take
Pessimistic: If everything goes poorly, how long the task will take
Most likely: Original estimate provided(best guess)
19. As schedule development tool & technique
First is crashing, second is fast tracking
Crashing
An analysis method looks at trade-offs between schedule
& cost.
Analyze critical path & determine to shorten it.
May fail or success; affect the budget
Fast Tracking
An analysis method to reduce duration of projects
To have tasks worked in parallel than sequentially
Look for opportunities on the critical path
20. Known as a bar chart
Graphic display of schedule related information
Depicts the project elements down left side of chart
(Y axis) & a time scale across top or bottom of chart
(X axis).
Tasks with a duration are shown as date-placed
horizontal bars
Most project managers use a project management
software system for creating this chart
To create: determine time scale to display the info;
determine level of tasks to display; draw chart &
place tasks
21. Steps to Control
Plan for change
▪ Who can request, approve and review the change
▪ Impact to the schedule
▪ Specific form for request
▪ Reason for the change
▪ Advantages/disadvantages for allowing the change
▪ If it is approved or denied, how to update the schedule, how to notify team & requestor
▪ How to log & track change
Determine if schedule has changed
▪ Planned on doing
▪ Status of existing process
▪ Variance between the two
Manage actual changes on the project
▪ Analysis, decisions, and corrective actions regarding changes and variances will help
manage to a successful completion
22. Foundation for creating and controlling the costs
of a project
Steps to Manage
Resource Planning
Types of Cost Estimates
Estimating Costs
Creating a Budget & Baseline
Controlling Changes
23. Resource Planning
A planning process done to establish the costs of a
project
Determine what resources needed on project
Determine how many of each type of needed resource
Three commonly known types of resources:
people, equipment, and materials
24. Order of Magnitude Estimates
▪ Done at the very beginning
▪ Derived from information for similar or previous projects
▪ Magnitude estimate fall between–25% and +75% of project actual cost
Budget Estimates
▪ Created during the Cost Budgeting process
▪ Cover all of the costs of a project (personnel, equipment, materials)
▪ More precise, falling in the range of –10% to +25% of project actual cost
Definitive Estimates
▪ The most detailed & most precise
▪ Derived from an expert /project team looking at a specific task and the
duration
▪ Falling in the range of –5% to +10% of project actual cost
25. Methods
▪ Analogous estimating
▪ Uses expert judgment and information from previous projects
▪ Top-down estimating to create an order of magnitude estimate
▪ Very subjective, not very accurate
▪ Parametric modeling
▪ Determine what elements should be placed in a mathematical model
▪ Can be used to create any of the three types of estimates
▪ Bottom-up Estimating
▪ Most precise method
▪ Estimating each individual task separately
▪ Look at the effort required to complete a task, not the duration
▪ To create definitive estimates
Determine the unit of measure
Create the estimates
26. Inputs
Cost estimates (analogous, parametric modeling, bottom-up)
May be very general/specific
WBS
Determine which tasks will have costs associated with them
Project schedule
Created in the Schedule Development process
Provides element of time to your budget
Determining Budget
Cost Estimating techniques (resource costs, material, equipment)
Prepare managerial reserves (unpredict situation)
Generate total project budget
Creating a Cost Baseline
A copy of the budget prior to work beginning on the project
Kept for comparison, analysis & future forecasts (planned value (PV))
Does not include the managerial reserve
27. The Cost Control process is very similar to the Schedule Control process
Differentiation is an output called estimate at completion (EAC)
EAC is a calculation done at any point that forecasts likely final costs of project
To calculate estimate
EAC = AC + ETC
Determine the estimate to completion (ETC).
ETC is the amount of money needed to complete the project
Actual cost (AC) to determine the estimate at completion
EAC = (AC + BAC) – EV
Total budget for the project (BAC) and add it to the actual cost (AC)
Subtract the work accomplished and the authorized budget for the work (EV)
EAC = (AC + (BAC – EV) ÷ CPI)
Take work accomplished & authorized budget for work (EV)
Subtract them by the total budgets for project (BAC)
Add that figure to the actual monies spent to date (AC)
Divide that figure by the cost performance index (CPI)
28. Quality Planning Tools
Calculating the Cost of Quality
Quality Assurance
Quality Control
29. Inputs
Quality policy
A statement regarding company’s beliefs around quality
A guiding light for people working on project
Scope statement
To verify project deliverables
Product description
Information about the desired level of quality that assist in quality
management planning
Standards and regulations
Outputs
Quality management plan.
Created by project manager & project team
Detail all quality planning activities & who will perform.
Essence: quality will be ensured & how to follow the quality policy
30. Cost of quality is the total amount of money required to ensure quality
3 different types of costs
Prevention costs
Cover all activities to keep errors out of process in creating the product
Including all quality planning, product validation and process validation activities
Appraisal costs
Cover all activities to keep errors out of customer’s hands
Including quality audits, evaluations, calibration, inspections & field testing
Failure costs
Including all costs incurred due to product failure (internal & external)
Internal failures : rework costs, product repairs, scrap & additional purchase for
inventory External failures : happened after product leaves organization
Including warranties, complaint handling, product recalls, legal suits, and harm done
to reputation
Computing cost of quality: adding the work effort estimate for each activity
that is preventative or appraisal in nature to the costs incurred because of any
type of failure (internal or external)
31. Process focuses on making certain planned
quality will be met
2 sets of tools & techniques
Quality planning tools: benchmarking, cost benefit
analysis, flowcharting, design of experiments, & cost
of quality
Quality audit: A review of the quality management
activities; In-depth review will produce findings to
identify lessons learned for improvement
32. Components of Quality Audit
▪ Determine the auditor (Internal vs External)
▪ Time frames to audit
Initial assessment
Conducted at the end of planning process & before project execution
Evaluate planned quality assurance work
Creates a quality baseline for project planning
Quality progress review
Planned at regular intervals/key milestones during project execution
Evaluating if the outlined quality activities performed
Inspect project quality processes & determine if they are sound
Quality completion review
Done at the end of the project & should recap the quality assurance
effectiveness in light of final project results
▪ Quality audit process
Include a review log that identifies points that will be reviewed during the audit
The reviewer should receive relevant materials (product description, quality policy, project
schedule, status reports)
Outcome: suggested actions for enhancement
33. A technical process on product quality
Tools and techniques
Inspection
Review/verify product quality; Done on a single component/part/entire product
Control chart
Graphic display shows measurements of a specific process over time
Shows an upper control limit, a lower control & middle line
Statistical sampling
Gathering a subset of the total set of units
Randomly selecting items to be inspected or reviewed
Flowcharting
Determine how problems occur
Trend analysis
A set of mathematical computations to determine future outcome
Pareto diagram/Histogram
Rank order problems from larger to smallest
Majority of defects caused by a few problems (the 80/20 rule)
34. Staffing management
plan
Inputs for a staffing
management plan
Contents of a staffing
management plan
35. Document project team how to assign human
resources, what to work on, and when to depart
from the project
Foundation to manage human resources during
the project
General vs very detailed
36. Project interfaces
Organizational: coordinating project work across multiple vendors,
departments, or both
Technical: The way work of project must be done
Interpersonal: Relationships among all personnel
Staffing requirements
Types of resources used on project tasks
A subset of created resource plans
Describes types of required competencies for each resource type
Constraints
Factors that limit team’s ability to use resources
Can be an organizational rules, team preferences, organizational
structures, union agreements
37. Organization charts
Graphical depiction of project team hierarchy
To depict reporting relationships of team members w/ PM
Resource assignment matrix (RAM)
A diagram merges an organization breakdown structure & WBS
How assignments are made
A section on assignments includes methodology for assigning
team members to specific tasks
Roles and responsibilities
A roles and responsibilities matrix would include each team
member or resource grouping & a list of their responsibilities
Attrition management
Cover how key personnel & team members are replaced
How all project personnel will be reassigned at end of project
38. Understanding Your Stakeholders
Stakeholder is anyone positively or negatively impacted by the project; individuals
and organizations
Including project manager, sponsor, team members, customers, organization
performing the work, functional managers providing team members, operations, and
others
Communicating with the Team
Effectively communicate with the team
Need to understand complexity of communication
Need to resolve differences using conflict resolution methods.
Deciding on Information Distribution
Decide on what to distribute and how to distribute
Creating a Communications Plan
Describe types & method to distribute communication
Describe strategy & tactics to communicate the plan
Create a communication matrix
39. Performance Reporting
Communicate status and progress
Provide the executives objective measurements
Measure progress based on cost, schedule, and quality
(performance)
Tools: Performance reviews, Variance analysis, Trend
analysis, Earned value analysis
Project Closing
Closing a phase/project, not just closing the project
down
40. A project management process that helps fend
off potential damaging events and identify
opportunities for the project
Steps
Identifying Risks
Analysis Methods
Types of Risk Responses
Creating a Risk Response Plan
41. Major Risks
Technical, quality, or performance
Major technical complexity/new technology
Project management
Undeveloped project management methodology,
inexperienced project manager, or lack of training
Organizational
Frequent changes in management, culture that does not
support the project, downsizing, or a project that does not fit
into the overall strategy can cause many risks
External
Legal changes, government regulations, market changes,
changes in political influences
42. Qualitative
Process to determine risk probability & impact
Quantitative
More detailed & objective than Qualitative
Tools are Interviewing (PERT & probability
distributions), Sensitivity analysis, Simulation
Decision tree analysis & expected value
43. Avoidance
Overcome risk event by trying to stray away from or
eliminate it altogether
Transference
Transfer risk responsibility to someone else
Mitigation
Reduce risk probability/impact to project/objectives
Acceptance
Take consequences if risk is occurred
Contingency planning
A plan of action if risk event occurs
Might have decided to accept risk
Plan to deal when happens
44. Need to set up a documented and living plan for
dealing with the risks
Possible items included
Risks & their categories
Owner
Response types
Actual response steps to take & response budget
Contingency plan & possible contingency actions
New risks identified based on risk response plans
45. A project management process to perform only if
procuring services or goods from someone outside of
your organization
First decide on the type of contract wanted for
project
Have a plan for procuring and managing contracts
Create a statement of work (SOW)
Document evaluation criteria to objectively select
vendors
Create contract to manage status and change and
handle disputes
46. Basic contract types
Fixed price/lump sum
Predetermined fee for goods/services agreed on
Cost reimbursable
Set incentives/penalties in addition to fixed price
Floating price contract based on costs the contractor
incurs
47. Creating a Procurement Management Plan
Creating a Statement of Work
Evaluating and Selecting the Vendor
Creating the Contract
48. A plan on how to manage processes and standards
for contracts & vendors
How to manage vendor solicitations (documents &
evaluation criteria)
How to obtain contract vendors
How to evaluate proposals & make final vendor
selection
How to negotiate contracts
How to manage & administer project’s contracts
How to manage procurement management items
49. Written to understand expectations of requested
work
Patterns
Objectives
Product/Service Description
Required Deliverables
Requirements/Specifications
Assumption & constraints
Time estimate
50. Elements
Roles and responsibilities
Security
Location of work
Milestones/deliverables
Quantities
Vendor payments
Progress reporting
Testing
Quality
51. Does vendor demonstrate the best value, lowest price, or other price
comparison advantage?
Make sure distinguish what is more important, and evaluate this for the
overall life cycle of the project
Does vendor demonstrate an understanding of expectations of product
& service, as well as how to expect vendor to work during the project?
Does vendor clearly demonstrate ability to carry out
technical/operational processes needed to perform the work? Judge this
on references, previous performance, skill sets of employees within
organization assigned to project, and any awards/technical
achievements vendor can demonstrate.
Will project team be able to work with the vendor management team?
Can vendor fulfill obligations of performing work based on the vendor’s
financial capabilities?
52. Start by using templates of organization’s contracts
/previous contracts as a basis
Collecting requirements to include in the contract,
Working with lawyers and procurement department
to put contract together
Include following details
Definitions
Define all technical & others terms particular to the
contract
Scope/statement of work
Expected work description/work product from vendor
53. Roles and responsibilities
Description of who does, approves work, administers contract & manages processes
Technical specifications and deliverables
Provides specific measurements, specifications & other technical requirements
Interpretation of requirements
Gives order of precedence for project requirements
Schedule
States milestones or deliverables expected from vendor
Quality assurance/control
Describes inspections/audits expected
Warranty/guarantee
How long product is expected to last
Include express warranties for equipment, workmanship, performance/process &
design
54. Contract administration
Describes processes, time frames, escalations for contract
administration
Price and terms of payment
Price information & a schedule of invoicing & payments
Laws, regulations, and taxes
Any legal regulations specific to state/project
Provisions
General and special terms and conditions negotiated with the
vendor
Provisions for early termination
How to dissolve contract & distribute payments
55. Liabilities and insurance
Liability if the project or product is disrupted, is delayed, or fails
Confidentiality, privacy, and security
Describes confidentiality requirements
Employee recruiting
Provisions protecting raiding each other’s employees for certain
period of time
Disputes
Escalations, arbitration & other ways to settle disputes
Contract completion
Cover several SOWs, or may be extended for new work
Closure should also center on formal acceptance of all
deliverables /contract
56. Overarching processes & concepts in project
management
Project plan
Development takes all info in previous planning processes
Integrates it into one comprehensive document
Serve as a guide during project execution and control.
Has the formal approval of the project stakeholders
8 knowledge areas: scope planning, schedule
development, cost budgeting, quality planning, staff
acquisition, communications & risk management &
procurement planning
57. Components
Project charter
The formal authorization to start a project
Scope statement
Work to be done to deliver product of the project
Work breakdown structure
A tool and technique to decompose project scope
components into smaller and more manageable
components
Project schedule
Include all of the major milestones and deliverables
58. Resource assignments
Resource assignments need to be included in the project
plan
Project costs
Including magnitude estimates, budget estimates, and
work estimates
Risks
Will be updated as new risks are identified, quantified, and
risk responses are created
Other management plans
Including Scope management plan and quality
management plan
60. Definition
Part of integration management knowledge area
Tools & techniques
General management skills
Communication, managing, and team development skills
Product skills and knowledge
Monitor level of expertise, train & retrain team accordingly
Work authorization system (WAS)
System to control sequence of tasks
Status review meetings
Meeting conducted to examine project progress
Project management information systems (PMIS)
Manual/Mechanized tool to helps PM collect, analyze, & integrate project
info
61. How to Control:
How to request & can request a change
How to document
System to record and archive changes
How to analyze & review change
How to make & prioritize change
How & Who to approve the request
Manage change within team & configuration control board
How to implement if approved
How to communicate changes
How to monitor project
62. Projectized organizations
Organized around project management
Provide complete authority to PM and provide
administrative support
Full-Time Personnel
Functional organizations
Established to perform certain functions (sales, marketing,
or accounting)
Matrix Organizations
Use functional & projectized organizations
3 levels of progression: weak matrix, balanced matrix, and
strong matrix
63. Work ethically, with regard for customer fairness, and with the
latest project management knowledge
Code of conduct
Adherence (supporting it and sharing it with others, acting ethically)
Disclosing conflict of interest/impropriety to customers
Advertising qualifications truthfully
Complying with applicable laws
Respecting intellectual property
Providing accurate cost & service estimates & expected results
Sticking to & satisfying scope of objectives
Protecting confidential information
Refraining from taking gifts or payments for personal gain
64. A Guide to the Project Management Body of
Knowledge, Third Edition (PMBOK Guides) by
Project Management Institute, USA, 2004, 140p
Information Technology Project Management,
Reprint (with Microsoft Project 2007) by Kathy
Schwalbe, Thomson Learning, Canada, 2000,
469p
Integrated Project Management by K.C. Chan,
Peter Ong, R. Eko Indrajit, Andi Publisher,
Indonesia, 212p