Unit III ACTIVITY PLANNING AND RISK MANAGEMENT Objectives of Activity planning – Project schedules – Activities – Sequencing and scheduling – Network Planning models – Forward Pass & Backward Pass techniques – Critical path (CRM) method – Risk identification – Assessment – Monitoring – PERT technique – Monte Carlo simulation – Resource Allocation – Creation of critical patterns – Cost schedules.

1. MG6088 SOFTWARE PROJECT MANAGEMENT
UNIT – III
Dr.A.Kathirvel, Professor and Head, Dept of CSE
M.N.M Jain Engineering College, Chennai

2. UNIT I
ACTIVITY PLANNING AND RISK MANAGEMENT
Objectives of Activity planning – Project schedules –
Activities – Sequencing and scheduling – Network
Planning models – Forward Pass & Backward Pass
techniques – Critical path (CRM) method – Risk
identification – Assessment – Monitoring – PERT
technique – Monte Carlo simulation – Resource
Allocation – Creation of critical patterns – Cost
schedules.
TEXT BOOK
Bob Hughes, Mike Cotterell and Rajib Mall: Software Project
Management – Fifth Edition, Tata McGraw Hill, New Delhi, 2012.

3. Objectives of Activity planning
 Activity planning is also the project management plan preparation. It
is called Software Project Management Plan(SPMP).
 Objectives
 Feasibility assessment
 Resource allocation
 Motivation to team
 Effective utilization of human resources
 Effective time management
 Project costing
 Project tracking
 RMMM activities
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4. Project schedules
‘Time is nature’s way of stopping everything
happening at once’
Having
 worked out a method of doing the project
 identified the tasks to be carried
 assessed the time needed to do each task
need to allocate dates/times for the start and end of
each activity
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5. Activity networks
These help us to:
 Assess the feasibility of the planned project
completion date
 Identify when resources will need to be deployed
to activities
 Calculate when costs will be incurred
This helps the co-ordination and motivation of the
project team
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6. Identifying activities
 Work-based: draw-up a Work Breakdown
Structure listing the work items needed
 Product-based approach
 list the deliverable and intermediate products of
project – product breakdown structure (PBS)
 Identify the order in which products have to be
created
 work out the activities needed to create the products
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7. Hybrid approach
A Work Breakdown Structure based on deliverables
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8. 8
The final outcome of the planning process
A project plan as a bar chart
ACTIVITIES SEQUENCING AND SCHEDULING

9. Risk management
 Definition of ‘risk’ and ‘risk management’
 Some ways of categorizing risk
 Risk management
 Risk identification – what are the risks to a project?
 Risk analysis – which ones are really serious?
 Risk planning – what shall we do?
 Risk monitoring – has the planning worked?
 We will also look at PERT risk and critical chains
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10. Some definitions of risk
‘the chance of exposure to the adverse consequences of
future events’ PRINCE2
 Project plans have to be based on assumptions
 Risk is the possibility that an assumption is wrong
 When the risk happens it becomes a problem or an issue
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11. Categories of risk
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12. A framework for dealing with risk
The planning for risk includes these steps:
 Risk identification – what risks might there be?
 Risk analysis and prioritization – which are the
most serious risks?
 Risk planning – what are we going to do about
them?
Risk monitoring – what is the current state of the
risk?
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13. Risk identification
Approaches to identifying risks include:
 Use of checklists – usually based on the
experience of past projects
 Brainstorming – getting knowledgeable
stakeholders together to pool concerns
 Causal mapping – identifying possible chains
of cause and effect
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14. 14
Boehm’s top 10 development risks
Risk Risk reduction techniques
Personnel shortfalls Staffing with top talent; job matching; teambuilding;
training and career development; early scheduling
of key personnel
Unrealistic time and cost
estimates
Multiple estimation techniques; design to cost;
incremental development; recording and analysis
of past projects; standardization of methods
Developing the wrong
software functions
Improved software evaluation; formal specification
methods; user surveys; prototyping; early user
manuals
Developing the wrong
user interface
Prototyping; task analysis; user involvement
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15. 15
Boehm’s top ten risk - continued
Gold plating Requirements scrubbing, prototyping,
design to cost
Late changes to
requirements
Change control, incremental development
Shortfalls in externally
supplied components
Benchmarking, inspections, formal
specifications, contractual agreements, quality
controls
Shortfalls in externally
performed tasks
Quality assurance procedures, competitive
design etc
Real time performance
problems
Simulation, prototyping, tuning
Development
technically too difficult
Technical analysis, cost-benefit analysis,
prototyping , training
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16. 16
Causal mapping
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17. Causal mapping - interventions
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18. Risk prioritization
❑ Risk exposure (RE)
= (potential damage) x (probability of occurrence)
❑ Ideally
❑ Potential damage: a money value e.g. a flood would
cause £0.5 millions of damage
❑ Probability 0.00 (absolutely no chance) to 1.00
(absolutely certain) e.g. 0.01 (one in hundred chance)
❑ RE = £0.5m x 0.01 = £5,000
❑ Crudely analogous to the amount needed for an
insurance premium
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19. Risk probability: qualitative descriptors
Probability
level
Range
High Greater than 50% chance of happening
Significant 30-50% chance of happening
Moderate 10-29% chance of happening
Low Less than 10% chance of happening
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20. 20
Qualitative descriptors of impact on cost and
associated range values
Impact level Range
High Greater than 30% above budgeted
expenditure
Significant 20 to 29% above budgeted
expenditure
Moderate 10 to 19% above budgeted
expenditure
Low Within 10% of budgeted
expenditure.
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21. 21
Probability impact matrix
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22. Risk planning
Risks can be dealt with by:
 Risk acceptance
 Risk avoidance
 Risk reduction
 Risk transfer
 Risk mitigation/contingency measures
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23. Risk reduction leverage
❑ Risk reduction leverage =
(REbefore- REafter)/ (cost of risk reduction)
❑ REbeforeis risk exposure before risk reduction e.g. 1%
chance of a fire causing £200k damage
❑ REafter is risk exposure after risk reduction e.g. fire
alarm costing £500 reduces probability of fire
damage to 0.5%
❑ RRL = (1% of £200k)-(0.5% of £200k)/£500 = 2
❑ RRL > 1.00 therefore worth doing
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24. Probability chart
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25. Using PERT to evaluate the effects of uncertainty
Three estimates are produced for each activity
 Most likely time (m)
 Optimistic time (a)
 Pessimistic (b)
 ‘expected time’ te = (a + 4m +b) / 6
 ‘activity standard deviation’ S = (b-a)/6
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26. 26
A chain of activities
Task A Task B Task C
Task a m b te s
A 10 12 16 ? ?
B 8 10 14 ? ?
C 20 24 38 ? ?
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27. A chain of activities
 What would be the expected duration of the chain
A + B + C?
 Answer: 12.66 + 10.33 + 25.66 i.e. 48.65
 What would be the standard deviation for A + B+ C?
 Answer: square root of (12 + 12 + 32) i.e. 3.32
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28. Assessing the likelihood of meeting a target
 Say the target for completing A+B+C was 52 days (T)
 Calculate the z value thus
z = (T – te)/s
 In this example
z = (52-48.33)/3.32 i.e. 1.01
 Look up in table of z values
– see next overhead
Graph of z values
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29. What is Monte Carlo (MC) method ?
The Monte Carlo method is a numerical method
for statistical simulation which utilizes sequences
of random numbers to perform the simulation
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30. What the meaning of MC simulation?
❑MC simulation is a versatile tool to analyze
and evaluate complex measurements
❑ Constructing a model of a system.
❑Experimenting with the model to
draw inferences of the system’s behavior
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31. A simulation model
Decision and
uncontrollable
variables
Simulation
model
Measures of
performance or
behaviour of the
system
Inputs outputs
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32. A simulation model cont..
 Model inputs capture the environment of the problem
 The simulation model
Conceptual model: set of assumptions that define
the system
Computer code: the implementation of the
conceptual model
 Outputs describe the aspects of system behaviour that we
are interested in
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33. Random numbers
❑ Uniform Random numbers or pseudo-random numbers
(PRN) are essentially independent random variables
uniformly Distributed over the unit interval (0,1).
❑ The PRNs are good if they are uniformly distributed,
statistically independent and reproducible.
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34. Linear congruential generator
 Generating a random sequence of numbers
{X1,X2,…….,Xk} of length M over the interval [0,M-1]
Xi=mod(AXi-1+C,M)
R=Xi/M
♠♠♠ mod(b,M)=b-int(b/M)*M
● Starting value X0 is called “seed”
●M,A and C are nonnegative integers known
Modulus, multiplier and increment, respectively
●M is must be prime number(2³¹-1,2 -1,…..)
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35. Classic Example



44
2
2
==


r
r
circleofarea
squareofarea
Find the value of ?
Use the reject and accept method
Or hit and miss method
The area of square=(2r)²
The area of circle = r²
squareofarea
circleofarea


= *4
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36. Cont…dotsofnumbertotal
circleinsidedotsof
squareofarea
circleofarea
...
...#.
..
..
=
Hit and miss algorithm
♣ Generate two sequences of N of PRN :: Ri,,Rj
♣ Xi=-1+2R i
♣ Yj=-1+2R j
♣ Start from s=zero
♣ If (X²+Y²<1) s=s+1
♣ # of dots inside circle=s
♣ total number of dots=N
NS /*4=
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37. Monte Carlo Integration
♥ Hit and miss method
♥ Sample mean method
♥ importance sampled method
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38. Critical chain approach
One problem with estimates of task duration:
 Estimators add a safety zone to estimate to
take account of possible difficulties
 Developers work to the estimate + safety zone,
so time is lost
 No advantage is taken of opportunities where
tasks can finish early – and provide a buffer
for later activities
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39. Critical chain approach
One answer to this:
 Base targets on midpoints (i.e. te)
 Accumulate 50% of the safety zones
(between te and b) into a buffer at the end
of the project
 Work backwards and start all activities at
their latest start dates
 During project execution use relay race
model
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40. Scheduling Resources and Costs
Resources and Priorities
 Project network times are not a schedule
until resources have been assigned.
◼The implicit assumption is that resources will be
available in the required amounts when needed.
◼Adding new projects requires making realistic
judgments of resource availability and project
durations.
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41. Resource-Constrained Scheduling
 Resource leveling (or smoothing) involves
attempting to even out demands on resources by
using slack (delaying noncritical activities) to
manage resource utilization.
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42. Types of Project Constraints
 Technical or Logic Constraints
 Constraints related to the networked sequence in which
project activities must occur.
 Physical Constraints
 Activities that cannot occur in parallel or are affected by
contractual or environmental conditions.
 Resource Constraints
 The absence, shortage, or unique interrelationship and
interaction characteristics of resources that require a
particular sequencing of project activities.
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43. Classifications
 Time Constrained Project
 A project that must be completed by an imposed date.
◼ Time is fixed, resources are flexible: additional resources are
required to ensure project meets schedule.
 Resource Constrained Project
 A project in which the level of resources available
cannot be exceeded.
◼ Resources are fixed, time is flexible: inadequate resources
will delay the project.
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44. Impact of Resource Constraint Scheduling
 Reduces delay but reduces flexibility.
 Increases criticality of events.
 Increases scheduling complexity.
 May make traditional critical path no longer meaningful.
 Can break sequence of events.
 May cause parallel activities to become sequential and
critical activities with slack to become noncritical.
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45. Assigning Resources to tasks
 Factors to Consider in Assigning Work:
 Don’t always pick the same people for the toughest
assignments.
 Choose people with an eye to fostering their
development through participation on the project.
 Pick people with compatible work habits and
personalities but who complement each other.
 Team-up veterans with new hires to share experience
and socialize newcomers into the organization.
 Select people who may need to learn work together on
later stages of the project or other projects.
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