Schedule & Cost Development

“Show Them the Money”

Topics

• The ART of Forecasting

• Project Forecasting

• Duration + Units = Units

• Scheduling - Using MS Project

Fixed Work

Fixed Units

Fixed Duration

• Cost Estimation – Cost Management Workbook

• Scope – Impact Analysis2

Forecasting

Forecasting is based on a number of assumptions:

• The past will repeat itself. In other words, what has happened in the past will happen again in the

future.

• As the forecast horizon shortens, forecast accuracy increases. A forecast for next year will be more accurate than a forecast five years

in the future.

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Forecasting

• Forecasting in the aggregate is more accurate than forecasting individual items. The project manager can forecast the schedule and cost for the entire

project more accurately than individual tasks to develop a piece of the project deliverable.

• Forecasts are seldom accurate and are almost never totally accurate. While some are very close, few are "right on the money."

Therefore, it is wise to offer a forecast "range."

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The Art of Forecasting

Accurate (as possible)

Some degree of accuracy should be determined and state ????????

Reliable (as possible)

The forecast method should consistently provide a good forecast to establish some degree of confidence.

Timely (as possible)

The forecasting horizon must allow for the time necessary to make changes.

Should be easy to understand.

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Project Forecasting

Scheduling

Project Forecasting – Schedule (using MS Project)

Microsoft Project Terminology

Duration X Units = Work

• MS-Project expects two of the inputs and MS-Project will calculates the third.

• Can only be used when Auto Scheduling

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Microsoft Work Duration X Units = Work

Work• amount of effort a resource must expend on a task, • usually measured in units such as hours per week. • the total work for a task is the sum of all those time

units

Example• A task to develop a report is estimated at 80 hours

with one team member assigned. • The amount of work is fixed at 80 hours and the

duration changes depending on the team members’ availability.

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Units

The number of resources assigned to work on a task.

Example,• If a person is available 20 hours per week (assuming a

standard 40-hour week• The Units equal 50 percent.

Microsoft Units Duration X Units = Work

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IT IS!

• the effort the activity requires

• plus the amount of time it takes to obtain materials to the labor time it takes to complete the tasks.

• the length of a task measured in business or calendar day.

Microsoft Duration Duration X Units = Work

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DurationExercise: Starting at Kansas City, MO, how long will it take to drive to Orlando

Microsoft Estimates are predictions of task effort and duration using task Types.

• Fixed Duration

• Fixed Work

• Fixed Unit

Project Forecasting – Schedule (using MS Project)

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Project Forecasting – Schedule (using MS Project)

REMEMBER!!!

Duration X Units = Work

• MS-Project expects two of the inputs and MS-Project will calculates the third.

• Can only be used if Auto Scheduling

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Fixed Duration

Fixed Duration Tasks

Duration * Units = Work the Duration is fixed.

Use Fixed Duration tasks in situations such as:• When the duration is the first thing you estimate.

• If the duration stays the same when adding resources, such as training or backing up a computer system.

• When the deadline is so tight that it’s the primary driver for the duration of the task.

• When the workload isn’t your problem – Fixed Bids!!!!!!

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Fixed Duration

To create a Fixed Duration task:

• Insert the Type field into the Gantt Chart view

• Enter the task name

• Change the Type field to Fixed Duration

• Enter the Duration

• Enter the Resources

• Effort will be calculated by MS-Project

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Fixed Duration

Field Changed Field Calculated if task is Fixed Duration

Work Units are recalculated

Duration Work is recalculated

Units Work is recalculated

Fixed Units

Fixed Units Tasks

Fixed unit tasks means that in the formula Duration * Units = Work the Units are fixed.

Use Fixed Unit tasks in situations such as:• When you can’t get more resources to do the work —

your resources are fixed.• When you want to change the duration or the work on a

task while keeping the number of people working on the task the same (assignment units).

• When you want to keep the resource working on a task at a certain percentage of his or her available hours.

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Fixed Units

Field Changed Field Calculated if task is Fixed UnitsWork Duration are recalculatedDuration Units is recalculatedUnits Duration is recalculated

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• This Type usually isn’t used as much as fixed work and fixed duration.

Fixed Unit is Project’s Default

• Note! You should rarely, if ever use fixed units. Use fixed work and fixed duration.

Fixed Units

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Fixed Work

Fixed Work Tasks

In the formula Duration * Units = Work, the Work is fixed.

Use Fixed Work tasks in situations such as:• When the effort required is the first thing you estimate.

• When the effort required is the easiest thing to estimate.

• When your resources give you task estimates in work hours.

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Fixed Work

To create a Fixed Work task:

• Insert the Type field into the Gantt Chart view

• Enter the task name

• Change the Type field to Fixed Work

• Enter the Effort in the Work field

• Enter the Resources

• Duration will be calculated by MS-Project

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Fixed Work

Field Changed Field Calculated if task is Fixed WorkWork Duration are recalculatedDuration Units is recalculatedUnits Duration is recalculated

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Fixed Type Guidelines

Guideline #1:

• Enter the duration estimate or work estimate

• Fix that number by setting the Task Type accordingly.

• Fixing it prevents Project from changing it.

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Guideline #2:

• Provide the second value in the formula Duration * Units = Work and

• Let Project calculate the third value.

• Enter fixed duration task, assign the resources you need and let Project calculate the work.

• Enter fixed work task, assign the resources and let duration be calculated.

• If you entered the duration and work, Project only needs to know who will do the task and it will calculate the number of resources needed (units).

Fixed Typed Guidelines

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Summary of Task Types Calculations

In a If you revise unitsIf you revise

durationIf you revise work

Fixed units taskDuration is recalculated.

Work is recalculated.Duration is recalculated.

Fixed work taskDuration is recalculated.

Units are recalculated.

Duration is recalculated.

Fixed duration task Work is recalculated. Work is recalculated.Units are recalculated.

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Cheryl’s Guideline #3

Guideline #3:

• Don’t use the Resource (Units) column Use a Text Field instead to list your resources

• Don’t use the Work column Use my Cost Workbook or a facsimile

• Use Fixed Duration most of the time. You will be soooooomuch happier!!!

Task Name DurationScheduled

StartScheduled

FinishType Work Resource Names

Units Task 1 10 days Mon 9/14/15 Fri 9/25/15 Fixed Duration 80 hrs Person 125

Schedule Example

Fixed Duration Schedule

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Task Name Duration Scheduled StartScheduled Finish

Type My Resource

KC Mid-America PMI PDD 263 days Tue 1/5/16 Thu 1/5/17 Fixed Duration

Planning 12 days Tue 1/5/16 Wed 1/20/16 Fixed DurationEstablish Planning Deliverables 9 days Tue 1/5/16 Fri 1/15/16 Fixed Duration

Scope Document Complete 6 days Tue 1/5/16 Tue 1/12/16 Fixed Duration PM, BAInitial Resource Obtained 6 days Tue 1/5/16 Tue 1/12/16 Fixed DurationCost Mangement Workbook Started 6 days Tue 1/5/16 Tue 1/12/16 Fixed DurationProject Management Plan Complete 3 days Wed 1/13/16 Fri 1/15/16 Fixed Duration

RAID Log 2 days Wed 1/13/16 Thu 1/14/16 Fixed Duration

Communication Plan 1 day Fri 1/15/16 Fri 1/15/16 Fixed DurationStakeholder Register 1 day Fri 1/15/16 Fri 1/15/16 Fixed Duration

Conduct Project Kick-off Meeting 3 days Mon 1/18/16 Wed 1/20/16 Fixed Duration

Initial Planning Complete 0 days Wed 1/20/16 Wed 1/20/16 Fixed DurationAnalysis 50 days Thu 1/21/16 Wed 3/30/16 Fixed Duration

Define Detailed Business Requirements 20 days Thu 1/21/16 Wed 2/17/16 Fixed DurationOptimize / Document Business Process 10 days Thu 1/21/16 Wed 2/3/16 Fixed DurationIdentify Functional Requirements 0 days Thu 1/21/16 Thu 1/21/16 Fixed DurationConduct Business Requirements Walk Through 10 days Thu 1/21/16 Wed 2/3/16 Fixed DurationGain Approval on Business Requirements 1 day Thu 2/4/16 Thu 2/4/16 Fixed Units

Develop User Test Scenarios 10 days Thu 2/4/16 Wed 2/17/16 Fixed DurationDefine Enterprise Architecture Approach 5 days Thu 2/18/16 Wed 2/24/16 Fixed DurationDevelop Technical Requirements Package (Logical) 3 days Thu 2/25/16 Mon 2/29/16 Fixed Duration

Conduct High Level Design Walk Through 1 day Tue 3/1/16 Tue 3/1/16 Fixed DurationRequirements Package Complete 0 days Tue 3/1/16 Tue 3/1/16 Fixed DurationGain Approval on Requirements Package 0 days Tue 3/1/16 Tue 3/1/16 Fixed Duration

Cost Estimation

Project Forecasting – Estimation (Cost Management Workbook)

It Starts with Metrics

Summary DataTotal Project

Approved BaselineActuals to Date

(ATD)Est. at Complete

(EAC) Est. to Complete

(ETC)Variance

EAC - Baseline

Percent Complete(ATD/EAC)

Total Cost $545,000 $0 $81,245 $0 ($463,755) 0%

Internal Labor Cost $50,000 $0 $6,750 $0 ($43,250) 0%

External Labor Cost $300,000 $0 $24,495 $0 -$275,505 0%

Hardware Cost $45,000 $0 $25,000 $0 ($20,000) 0%

Software Cost $150,000 $0 $25,000 $0 -$125,000 0%

Contingency 0.00 $0 $0 $0 $0 0%

Project Hours 303.00 - 303.00 - - 0%

Project Summary

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Tracking Original and Revised Budget

CapEx

Enter Years====> 2016 Total

Internal Labor External Labor Hardware Software Internal Labor External Labor Hardware Software Grand Total Contingency Cumulative Total

Original Budget $ 50,000 $ 300,000 $ 45,000 $ 150,000 $ 50,000 $ 300,000 $ 45,000 $ 150,000 $ 545,000 $ 54,500 $ 599,500

PCR-01 $ - $ - $ - $ - $ - $ 599,500

PCR-02 $ - $ - $ - $ - $ - $ 599,500

PCR-03 $ - $ - $ - $ - $ - $ 599,500

PCR-04 $ - $ - $ - $ - $ - $ 599,500

PCR-15 $ - $ - $ - $ - $ - $ 599,500

PCR-16 $ - $ - $ - $ - $ - $ 599,500

PCR-17 $ - $ - $ - $ - $ - $ 599,500

PCR-18 $ - $ - $ - $ - $ - $ 599,500

PCR-19 $ - $ - $ - $ - $ - $ 599,500

PCR-20 $ - $ - $ - $ - $ - $ 599,500

PCR Total $ - $ - $ - $ - $ - $ - $ - $ - $ -

With

Contingency

Revised Budget $ 50,000 $ 300,000 $ 45,000 $ 150,000 $ 50,000 $ 300,000 $ 45,000 $ 150,000 $ 545,000 $ 54,500 $ 599,500

Baseline Tracking

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Establish Units Based on Project Schedule

(Auto-

Populated)

Project Name

(Auto-Populated)

Resource Role

(Select from

Dropdown)

Named

Resource

Team

(Auto-populated

based on Resource

Role)

Resource Manager

(Auto-populated

based on Resource

Role)

Resource

Status

(Active /

Inactive)

(Select)

Comment Expense

Type

(Select)

Resource

Type

(Select)

Bill Rate

(See

Blended

Rate)

PRJ-00100 KC Mid-America PMI PDD PM Cheryl Randle PMO Sharon Dester - CapEx Internal $ 75

PRJ-00100 KC Mid-America PMI PDD BA Business Analysis Sheila Watson - CapEx External $ 115

PRJ-00100 KC Mid-America PMI PDD _ _ _ - $ -

PRJ-00100 KC Mid-America PMI PDD _ _ _ - $ -

PRJ-00100 KC Mid-America PMI PDD _ _ _ - $ -

PRJ-00100 KC Mid-America PMI PDD _ _ _ - $ -

PRJ-00100 KC Mid-America PMI PDD _ _ _ - $ -

PRJ-00100 KC Mid-America PMI PDD _ _ _ - $ -

PRJ-00100 KC Mid-America PMI PDD _ _ _ - $ -

Resource Labor Entry

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Establish the Work

Named Resource

Cheryl Randle

Month 1 Hours MTD Dollars YTD Dollars

PL PL PL ANCapEx OpEx

CapEx OpEx CapEx OpEx

1/4/2016 1/11/20161/18/20161/25/2016 WEEK5 Total Total Internal External Internal External Internal External Internal External

10 10 10 10 - 40 -3,000 - - - 3,000 - - -

7 7 7 32 53 -- 6,095 - - - 6,095 - -

- - - - - - -- - - - - - - -

- - - - - - -- - - - - - - -

- - - - - - -- - - - - - - -

- - - - - - -- - - - - - - -

- - - - - - -- - - - - - - -

- - - - - - -- - - - - - - -

- - - - - - -- - - - - - - -

- - - - - - -- - - - - - - -

- - - - - - -- - - - - - - -

- - - - - - -- - - - - - - -

- - - - - - -- - - - - - - -

Resource Labor Entry

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Establish Hardware & Software Units/Costs

Software

/ Hardware

Expense Type

(Select)

Unit Price

QtyMTD

HardwareMTD

SoftwareMTDOther

MTDHardware

MTDSoftware

MTDOther

YTDHardware

YTDSoftware

YTDOther

YTDHardware

YTDSoftware

YTDOther

Hardware CapEx $ 25,000.00 - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ -

- $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ -

- $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ -

- $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ -

- $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ -

- $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ -

- $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ -

- $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ -

- $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ -

- $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ -

- $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -$ -

- $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Hardware Software Entry

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Record Actuals – Monthly

CapEx Actuals

H/W S/W Internal Labor External Labor Total Hours

January $ - $ - $ 1,500 $ 5,000 $ 6,500 -

February $ - $ - $ - $ - $ - -

March $ - $ - $ - $ - $ - -

April $ - $ - $ - $ - $ - -

May $ - $ - $ - $ - $ - -

June $ - $ - $ - $ - $ - -

July $ - $ - $ - $ - $ - -

August $ - $ - $ - $ - $ - -

September $ - $ - $ - $ - $ - -

October $ - $ - $ - $ - $ - -

November $ - $ - $ - $ - $ - -

December $ - $ - $ - $ - $ - -

Actuals $ - $ - $ 1,500 $ 5,000 $ 6,500 -

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Summary DataTotal Project

Approved BaselineActuals to Date

(ATD)Est. at Complete

(EAC) Est. to Complete

(ETC)Variance

EAC - Baseline

Percent Complete(ATD/EAC)

Total Cost $545,000 $6,500 $70,650 $14,150 ($474,350) 9%

Internal Labor Cost $50,000 $1,500 $5,250 $3,750 ($44,750) 29%

External Labor Cost $300,000 $5,000 $15,400 $10,400 ($284,600) 32%

Hardware Cost $45,000 $0 $25,000 $0 ($20,000) 0%

Software Cost $150,000 $0 $25,000 $0 ($125,000) 0%

Contingency 0.00 $0 $0 $0 $0 0%

Project Hours 303.00- 303.00 - -

0%

It Ends with Metrics

Fruits of Your Labor

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Scope & the Organizational Impact

Project Forecasting Scope, Schedule, Financials

What Is the Impact Analysis

Impact Analysis:

• Capture and evaluate the impacts, both positive and negative, of a given solution or change on a project.

• Understanding how a solution will impact

the business areas,

IT departments and

Affected systems

• Starts identification of the change management

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Why is it Useful?

Helps understand

• If there are other options

• More favorable solution.

• The impact of any changes

• Whether or not the change is feasible

• Whether or not it should be approved.

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How to Use It

• The Impact Analysis is performed in order to validate the (break out by phase: Analysis and Design) Requirements,

High Level Design,

Technical Alternatives

Recommended solution

• Each impacted group should substantiate the solution SMEs introduce any technical considerations not already

specified in the requirements,

Provide cost and schedule information.

Business stakeholders may identify business process change

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How to Use It

Requirements are the Baseline for the Impact Analysis

• Business Processes

• Business Functional Requirements, etc

• Enterprise Architectural Approach

• High Level Requirement

• Detailed Design

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How to Use It

• Conduct the analysis

• Evaluate the results.

• Assess and execute a Risk Assessment

• Finally, summarize your findings and develop a recommendation

Restate the scope Prepare Detailed Project Schedule Prepare Detailed Financial Forecast Prepare a Change Request as needed

(Review the Organizational Impact Analysis Example)

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Summary

Forecasting Schedule – Estimations- Scope

Schedule• In the Project Options = Schedule

• Change default Task Type = DURATION

• Change the default “New Tasks Created” = Auto Schedule

• Set “New task are effort driven” = Uncheck it

• Create your own “Resources” column so you don’t affect calculations

• Ignore the “Work” column use an equivalent of Cost Management Workbook. (see me if interested)

Cost Estimations• Know the metrics you need to track to stay

on budget

• Use an equivalent of the Cost Management Work and align with your project schedule.

• Focus on deliverable oriented cost forecasting

Scope• Perform an Organizational Impact Analysis at

the end of Analysis and Design

• Know the affect your project Solution will have on the Business, IT, Customers, Processes, etc.

• Perform a Risk Assessment

• Modify the Schedule and Cost Estimations with a deeper level of detail.

The Art of Forecasting

Accurate

• Some degree of accuracy should be determined and state

Reliable

• The forecast method should consistently provide a good forecast to establish some degree of confidence.

Timely

• The forecasting horizon must allow for the time necessary to make changes.

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