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Fundamentals of Project Management: Part 1a

APEGGA Annual Conference April 24 & 25, 2003

Dr. George F. Jergeas PEng.University of Calgary

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Schedule

Day 1a Introduction 5-Step PM Planning and Definition

Day 1b Estimating cost and time Organize project team Selecting PM and team Effective teams

Day 2 c Project procurement Bidding process Building & sustaining project team Contract administration

Day 2 d Schedule control Cost control Project Close-out Claims and disputes

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References

This section is based on: The 5-Phased Project Management- A Practical

Planning and Implementation Guide by Joseph Weiss and Robert K. Wysocki

Project Management Institute: PMBOK Guide, http://www.pmi.org

Instructors’ notes

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Introduction

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What is a project?

A specific, finite task to be accomplished Can be of a long or short term

duration Can be large or small task

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Projects Vary in Size and Scope

NASA shuttle launchBuilding a boatBuilding a hospitalBuilding renovation and & space modificationPlanning a party or weddingOrganizing the Olympic gamesDeveloping a new software programGetting a university degreeCompany mergers

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Project Characteristics

Constant communication across organizational boundaries

Many people involved, across several functional areas

Sequenced eventsGoal orientedHas an end product or

service

Multiple prioritiesComplex and

numerous activitiesUnique, one-time set

of eventsDeadlinesStart and end datesIdentifiable

stakeholdersLimited resources and

budget

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When is a Project a Project?

A task or set of work assignments may be done by one or more persons using a simple “to do” list.

A task become a project when the characteristics of a project begin to dominate and overwhelm individuals Unable to meet deadlines, budgets and

corporate expectations

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Project Management

Project management is a method and/or set of techniques based on the accepted principles of management used for planning, estimating and controlling work activities to reach a desired result on time, within budget, and according to the project specifications.

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What is Project Management?

Tools/techniques Processes and methodology

More than time, cost and scope Hard and soft skills

A discipline evolving towards a profession

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Project Management

Projects and project management are about people and teamwork Who does what? Who takes what risk? Who else is involved or

interested/affected?

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Subprojects

Projects are frequently divided into more manageable components or subprojects

Subprojects are typically referred as projects and managed as such

Subprojects may be contracted to an external enterprise

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Program(me)

A program is a group of projects managed in a coordinated way to obtain benefits not available from managing them individually

Program management: Management of a coherent group of projects to deliver additional benefits

(PMBOK p.10, Turner p.345)

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Value of Project Management (Why are we doing this?)

Improve project/program/firm performance as measured by efficiency, effectiveness Add competitive advantage Be more “Successful”

Proactive vs. Reactive

Root out ill-conceived, directionless projects

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Major Causes of Project Success

A constructive goal-oriented cultureTechnically competent teamEffective (and committed) teamExcellent communicationTrust

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Major Causes of Project Success

Stakeholders are identifiedStakeholders expectations are

known and metSenior Management supportThere is a clearly stated purpose and

a sound plan Goal and objectives are understood and

communicated

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Major Causes of Project Failure

Projects fail for the following reasons: The project is a solution in search of a

problem Only the project team is interested in the

result No one is in charge There is no project structure The plan lacks detail

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Major Causes of Project Failure

Projects fail for the following reasons: The project has insufficient budget

and/or resources Lack of team communication Straying from original goal The project is not tracked against the

plan

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Project Lifecycle

Project management phases link the project to the firm’s operations

A project is a subset of the product lifecycle

The product lifecycle includes operation or production, decommissioning or closedown

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Sample Lifecycle (Conceive, Develop, Execute, Finish – C, D, E, F)http://www.maxwideman.com/papers/framework/lifecycle.htm

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5-Step Project Management

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5-Step Project ManagementPLANNING IMPLEMENTATION

DEFINE

Identifyproject activities

Estimate time and cost

Quality and Communication management

Write Project Proposal

ORGANIZE CONTROL PLAN CLOSE

State the Problem

Identify ProjectGoal

List theObjectives

Determine PreliminaryResources

Identify Risks and stakeholders

Success criteria

Determine Personnel Needs

Recruit Project Manger

RecruitProject Team

Organize Project Team

Bidding

Assign Work Packages

Define Management Style

Establish Control Tools

Prepare Status Reports

Review ProjectSchedule, cost,team reports

Issue Change Orders

Obtain ClientAcceptance

Install Deliverables andCommissioning

Document theProject

Issue Final Report

Conduct Post-ImplementationAudit

Project charter WBS Recruit Criteria Variance Reports Final Report Project network Define Work Packages Status Reports Audit Reports Project proposal Assign Work Packages

Decision

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Step 1- Define the Project

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Agenda

State the problem/need/opportunityDevelop project goalDevelop project objectivesDetermine preliminary resourcesIdentify assumptions and risksIdentify stakeholdersIdentify criteria for project successIssue Project Charter

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State the Problem/Need/ Opportunity

A need that must be addressed or opportunity to be explored

New product, service, process, facility, system or technology

It may involve opening a new market

Identify and define in detail the investment opportunity, need or problem

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State the Problem/Need/ Opportunity

Define client requirements and needs from the client’s original input

Review and enhance the client’s statement of needs: Identify appropriate policies, standards,

and jurisdictional requirements Identify and assess feasible

alternatives of satisfying the client’s statements

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State the Problem/Need/ Opportunity

Advise the client of potential technology-related constraints in areas such as ...

Establish consensus on the requirements of the client

Assemble information including any relevant designs, charts, or diagrams ...

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State the Problem/Need/ Opportunity

Short, crisp and to the point

Descriptor for those who although not directly involved on the project team are indirectly involved in supporting the project

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State the Problem / Need / Opportunity: Training Example

“Membership in PM Association has declined in the past four years and attendance at conference has declined in the past three years. The viability and financial stability of the Association depends on maintaining membership and successful annual conference.”

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State Project Goal

A statement of purpose and direction Initiates the project Serves as a point of reference for settling

misunderstandings Clarifies expectations Helps in justifying requests for resources

Action orientedShort and simpleUnderstandable

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Goal Statements

Prepare and launch the International Space Station on April 21, 2000, from Cape Canaveral, Florida

Connect France and England via a covered tunnel and railway under the English Channel, facility to be opened to traffic no later than September, 1996

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Goal Statement: Examples

Design and complete pilot testing by March 2002, a product accounting software package that performs basic financial analyses for the company

Obtain a BSc degree in engineering from U of C by spring, 2004

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Goal Statement: Training Example

Reverse the downward trend in membership and annual conference attendance by organizing a highly successful conference

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Develop Project Objectives

Objectives represent major scope components or milestones Objectives are sub-goals

Roadmap to aid decision makers understand the purpose of the project

Basis for determining project time line and resource requirements

To achieve the goal all objectives must be realized

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Objectives: Training Example

Develop the Program

Set the Conference Site and Date

Design and Implement the Marketing Plan

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Resourcing Strategy

For each objective:Determine which internal resources

are availableDetermine which external resources

will be required Take any preliminary steps required

to engage external resources Expression of interest

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RACI Chart

2

1

Informed

ConsultedAccountable

Responsible

Task

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Identify Criteria for Evaluating Project Success

Project expectations:Project on timeWithin budgetAccording to specificationsHappy client

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Success Criteria: Training Example

At least 200 of 450 PM Association membership will register to attend

At least 50 of previous years conferences attendees will attend

At least 1.5% of the non-members receiving conference brochure will attend

At least 5% of the non-member attendees will join PM Association

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Identify Assumptions and Risks

Each objective will have its own risks and assumptions

Helps think through the project process and issues associated with execution

Identifies resource needs and issues involving resource availability

Identifies potential delays and the impact of these delays

Potential cost overruns can be predicted and resolved

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Risk Management

Identify risks What could go wrong (harm, loss,

opportunities and threats) Consider ALL knowledge areas

Internal and external risksSources of risk: product technology, people

(misunderstandings, skills), project management etc.

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Risk Management

Quantify risks High, Medium, Low (HML) - qualitative Expected Monetary Value (EMV) -

quantitative

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Risk Quantification Technique: High, Medium, Low (HML)

Probability of occurrence and impactHigh, Medium, Low gridFocus on HHs and less on LLsKeep it simple

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Risk Quantification Technique: High, Medium, Low (HML)

H HHM Impact

L L M H Probability

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Risk Management

Develop risk response plan Opportunities and threats to respond to and

opportunities and threats to acceptAvoid – eliminate causeMitigate – reduce risk occurrenceAccept – contingency plans, accept losses

Its OK to do any of these Insurance, contingency plans, procurement,

alternative strategies, contracts Risk management template

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Risk Management Template

Monitoring Schedule

Response Plan

Ownerof risk

ImpactProbabilityRisk

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Assumption and Risks: Training Example

Interest in PM Association can be renewed through the annual conference

A quality professional program will attract members and non-members

Key speaker(s) fail to show up or submit written paper

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Identify StakeholdersIndividual or organisations actively involved

in the project or directly or indirectly affected by its execution or results. They can influence your success or decision makers. Roles must be identified at the start of the

project Needs and expectations must be communicated

and influenced in a positive and constructive manner so that the project will be success for all

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Identify Stakeholders

How to find them? Ask who will decide on the success

of your project

How to involve them? Ask for (appropriate) advice Get their buy-in to project plans

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Identify Stakeholders

How to work with them? Active listening Understand their interests and needs Keep everyone informed

How to keep them on side? Respond to concerns Manage expectations and make

adjustments

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STAKEHOLDER

Objective

How They Operate

Where they gain Support

Potential Impact

How to Manage them and plan for

mitigation

Stakeholder Analysis

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Stakeholders: Training Example

AttendeesSpeakersHotelPM AssociationOrganizing team

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Charter Document

The “define” phase focuses on producing a Project Charter document which is used as: Formally recognize the existence of the

project An early statement of the project goal

and direction A statement of the problems and

opportunities to be addressed by the project

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Charter Document

Include the business need and product description, constraints and assumptions

A tool in the initial “go/no go” decision by management

Approval to proceed Funding, authority, sponsor

A general information document for other managers

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Charter Document

Once the project is approved for go ahead, the Project Charter becomes the foundation for the detailed planning activities which follow and: Provides a control point for reporting

project progress and an audit point Reference base for addressing

questions and conflicts Tool for building the team

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Project Charter Project Name - PM Conference Project Manager:

Problem/OpportunityMembership in PM Association has declined in the past four years and attendance at conference has declined in past three years. The viability and financial stability of

the organization depends on maintaining membership and successful annual conference.

Goal Reverse the downward trend in membership and annual conference attendance

Objectives1. Develop the Program2. Set the Conference Site and Date3. Design and Implement the Marketing Plan

Success Criteria1. At least 50 of previous years conferences attendees will attend2. At least 150 of 450 members will attend3. At least 1.5% of the non-members receiving conference brochure will attend4. At least 5% of the non-member attendees will join PM

Assumptions and Risks1. Interest in PM can be renewed through the annual conference2. A quality professional program will attract members and non-members3. Key speaker(s) fail to show up or submit written paper.

Stakeholders Attendees, Speakers, Hotel, PM Association, Organizing team

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Step 2 - Plan the Project

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Agenda

Work Breakdown Structures (WBS)

Estimate Time and Cost

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5-Step Project ManagementPLANNING IMPLEMENTATION

DEFINE

Identifyproject activities

Estimate time and cost

Quality and Communication management

Write Project Proposal

ORGANIZE CONTROL PLAN CLOSE

State the Problem

Identify ProjectGoal

List theObjectives

Determine PreliminaryResources

Identify Risks and stakeholders

Success criteria

Determine Personnel Needs

Recruit Project Manger

RecruitProject Team

Organize Project Team

Bidding

Assign Work Packages

Define Management Style

Establish Control Tools

Prepare Status Reports

Review ProjectSchedule, cost,team report

Issue Change Orders

Obtain ClientAcceptance

Install Deliverables andCommissioning

Document theProject

Issue Final Report

Conduct Post-ImplementationAudit

Project charter WBS Recruit Criteria Variance Reports Final Report Project network Define Work packages Status Reports Audit Reports Project proposal Assign Work Packages

Decision

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Work Breakdown Structure (WBS)

Reduces complex projects to a series of tasks that can be planned

WBS represents the project in the form of a hierarchy of goal, objectives and activities Identifies activities to be done from

beginning to completion of the project

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Work Breakdown Structure

A c tivit ies an d D e live rab les

O b jec tive

A c tivites an d D e live rab les

O b jec tive

A c tivit ies an d D e live rab les

O b jec tive

G oa l

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Work Breakdown Structure

Activities in the WBS are broken-down until the entire project is displayed as separately identified activities

The breakdown of activities continues until there are no overlapping activities

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Work Breakdown StructureEach activity:

Status and completion are easily measured Of a specific time duration with defined

beginning and end Easy to derive time and cost estimates Of a single purpose and have clearly

understood deliverables Responsibility for completion clearly

assigned

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WBS Procedure: Training Example

1. Partition the project into its major objectives1.1 Develop the Program1.2 Set the Conference Site and Date1.3 Design and Implement the

Marketing Plan

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WBS Procedure: Training Example

2. Partition the objectives into activities 1.1 Develop the Program

1.1.1 Establish Theme and Topics1.1.2 Obtain Speakers1.1.3 Prepare Handout Materials

1.2 Set the Conference Site and Date1.2.1 Set Conference Date1.2.2 Select and Commit Conference Site1.2.3 Confirm Arrangements

1.3 Design and Implement the Marketing Plan1.3.1 Develop and Print Conference Brochure1.3.2 Obtain Label Sets for Direct Mail1.3.3 Mail Conference Brochures1.3.4 Receive and Acknowledge Registrations

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WBS Procedure: Training Example

3. Check each activity for compliance with activity characteristics and further partition any that do not comply 1.1.3 Prepare Handouts

•1.1.3.1 Obtain Handout Materials from Speakers

•1.1.3.2 Prepare and Print Conference Notebook

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WBS Worksheet -PM ConferenceWBS WORKSHEET Project Name

PPM Annual ConferenceProject Manager

Activity No. Activity Description Characteristics1 2 3 4

1.1. Develop Program Y N N N1.2 Set Conference Date Y Y Y N1.3 Design and Implement Marketing Plan Y N N N1.1.1 Establish Theme and Topics Y Y Y Y1.1.2 Obtain Speakers Y Y Y Y1.1.3 Prepare Handout Materials Y Y Y N1.1.3.1 Obtain Handout Materials from Speakers Y Y Y Y1.1.3.2 Prepare and Print Conference Notebook Y Y Y Y1.2.1 Set Conference Date Y Y Y Y1.2.2 Select and Commit Conference Site/Date Y Y Y Y1.2.3 Confirm Arrangements Y Y Y Y1.3.1 Develop and Print Conference Brochure Y Y Y Y1.3.2 Obtain Label Sets for Direct Mail Y Y Y Y1.3.3 Mail Conference Brochures Y Y Y Y1.3.4 Receive and Acknowledge Registrations Y Y Y Y

Prepared by Date

Approved by Date

Sheet 1 of 1

Activity Characteristics Legend

1 Status/completion measurable2 Clearly defined start/end events3 Time/cost easily estimated4 Single purpose and responsibilty for

completion clearly assigned

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Hierarchical RepresentationCONFERENCE PLANNING

SITE MARKETINGPROGRAM

DATE PLACETHEME MATERIALS SPEAKERS LISTS BROCHURE REGISTER

OBTAIN MATERIALS

PREPARE KITS

DESIGN BROCHURE

MAIL BROCHURE