Q 1. Citing relevant examples, discuss the following elements of estimating activity durations:

(a) Methods of estimating activity duration

Six Methods for the Estimation of Activity Duration in Project Management

The aim of effective project management is to bring the project to completion on time and on

schedule. Estimating project duration is a key function of scheduling. Individual activities make

up the schedule, and the estimates of their duration determine the project timetable. The accuracy

of the overall schedule depends on the accuracy of these estimates. Accurately estimating that

activity’s duration requires you to describe its different aspects and determine the effect of each

one on the activity’s length. While project managers can't know the actual time it will take to

complete an activity, there are six methods they can use to obtain reliable estimates.

i. Work Breakdown

Sometimes an activity is too large or complex for a reliable duration estimate. Project guidelines

state that an individual activity that takes up more than 10 percent of the project schedule has to

be broken down. A project manager uses a work breakdown technique to reduce the activity to

smaller tasks. Ideally, the project manager can estimate the duration of tasks that individual

workers perform more accurately than the whole activity.

ii. Historical/ Past experience

An effective way of estimating activity duration is to use historical data. If data on the duration

of the same activities is available, project managers take the average duration of the historical

records and use that in the project schedule. For small businesses which have not completed

many projects, other methods are preferable.

iii. Analogy

Use of analogous activities can generate reliable estimates. If the company has carried out a

similar activity, it may be possible to adapt the duration to the current case. Project managers

have to study the similarities of the two activities and adjust for any features that may result in

differences in duration. Even small businesses can often find such similar activities on which to

base estimates.

iv. Expert Judgment/Opinion

If expert judgment is available at reasonable cost, a project manager will often use such duration

estimates as superior to internally generated ones. Expert judgment means using specialists who

have a reputation for knowledge of the particular field and experience in estimating activity

duration within it.

v. Delphi technique

This is a group technique that extracts and summarizes the knowledge of the group to arrive at an

estimate.

vi. Three point technique

In order to use the method we will need three estimates of activity duration: optimistic,

pessimistic and most likely. The optimistic time is defined as the shortest duration one has had or

might expect to experience given that everything happens as was expected. The pessimistic time

is that duration that would be experienced (or has been experienced) if everything that could go

wrong did not go wrong and yet the activity was completed. Finally the most likely time is that

time usually experienced.

vii. Effort

A project manager who knows what resources are necessary for an activity may calculate the

effort the activity requires and arrive at duration. He adds the amount of time it takes to obtain

materials to the labor time it takes to complete the tasks. Such an estimate has the advantage that

it allows the project manager to track resource use and compare it to the estimate.

viii. Units

Calculation based on units of activity is a method available to both the largest and smallest

businesses. Typical units are numbers of products or size of the product. Project managers can

calculate how much time it took to produce a certain number or a certain size and adjust for the

number or size they want to produce. Project managers have to adjust for economies of scale for

these calculations.

(b) Causes of variation in activity duration

Activity duration is a random variable because we cannot know exactly how long it will take.

One of your goals in estimating activity duration is to define the activity to a level of granularity

so that your estimates have a narrow variance.

There are several causes of variation in the actual activity duration-

i. Varying skill levels

ii. Unexpected events

iii. Efficiency of work time

iv. Mistakes and misunderstandings

Common cause variation (the reality is that durations will vary for no reason other than

the statistical variation that arises because the duration is in fact a random variable)

c) Elapsed time versus planned time

Time is a terrible resource to waste. This is the most valuable resource in a project.

Every delivery that you are supposed to make is time-bound. Therefore, without proper time

management, a project can head towards a disaster.

When it comes to project time management, it is not just the time of the project manager, but it is

the time management of the project team.

Scheduling is the easiest way of managing project time. In this approach, the activities of the

project are estimated and the durations are determined based on the resource utilization for each

activity.

In addition to the estimate and resource allocation, cost always plays a vital role in time

management. This is due to the fact that schedule over-runs are quite expensive.

Elapsed time is the time between designating a resource to a task to the completion of the task. In

simple terms, it is the passage of calendar days. This time can be traced by milestones that have

been set on the schedule of the project.

Example- you work on a construction project for eight days. You work from Monday to the next

Wednesday. There is a Saturday and Sunday in between. Your elapsed time is ten days since the

holidays are also counted.

Elapsed Time includes holidays and weekends.

Table:

Duration Elapsed Time

What it is

The entire time taken to

complete the activity that you

are assigned which is based

on the resources allocated to

the project

Time between designating a

resource to a task to the

completion of the task

What it is measured in

Work Hours, Work Days and

Work Weeks

(does not cover weekends or

holidays)

Work Hours, Work Days and

Work Weeks

(covers weekends and holidays)

Example

House Painting :

You work 6 hours a day for 9

days

Duration is 9 days

House Painting :

You work 6 hours a day for 9

days’ Time Elapsed is 11 days.

Q2. Citing relevant examples, discuss the following elements in resource scheduling

Resources

Resources are assets such as people, knowledge, equipment, physical facilities, or inventory that

have limited availabilities, can be scheduled, or can be leased from an outside party. Some are

fixed; others are variable only in the long term. In any case, they are central to the scheduling of

project activities and the orderly completion of the project.

For systems development projects, people are the major resource. Another valuable resource for

systems projects is the availability of computer processing time (mostly for testing purposes),

which can present significant problems to the project manager with regard to project scheduling.

a) Managing resources

The resources of an organization consist of people, materials, equipment, knowledge and time.

Organizations typically have limited resources; therefore, tradeoffs on what project resources are

expended and when are made every day within organizations. A resource allocation plan is an

important tool in effective management of scarce resources.

The timing of the need of those resources can be and should be determined within the project

schedules. A resource plan, which describes the type of resource needed and the timing of that

need, is critical to effective resource management. As the project schedule changes, the resource

plan must also be flexible enough to adjust as these changes occur.

b) Budgeted vs Actual Costs

Budget - an estimate of revenues and expenses for an account for a fiscal year. A budget is a

projection of your costs for all business activities. A single cost is the amount you expend for

materials, products, services, fees or any other business activity. Accurate budgeting is important

so you can avoid costs that exceed revenue.

Actuals - the actuals reflect how much revenue an account has actually generated or how much

money an account has paid out in expenditures at a given point in time during a fiscal year.

The phrase "budget vs. actual" or "budget to actual" refers to the process of comparing estimated

results to actual results. Budget to actual costs are studied to evaluate their performance, forecast

future income and identify any operational centers that are performing differently than expected.

Cost

When you receive bills, pay salaries or make debt payments, you have costs. Costs are necessary

in operating a project, but controlling them is important to earning favorable project objectives.

If costs exceed budget or revenue projections, one might need to consider opportunities to reduce

costs. Negotiating with suppliers, paying off debt and improving operational efficiency are ways

to minimize project costs.

Budget vs. Actual Costs

To make effective use of a budget, one must periodically compare budgeted costs to actual costs.

Some owners modify budgets during the year if initial projections are way off or if opportunities

emerge that require increased investments. In setting the next year's budget, it is helpful to

compare previous period’s budget to actual costs. You may find that you over-budgeted or

under-budgeted for certain activities. Budgeting also helps you projected expected earnings,

which is the difference between your projected revenue and costs.

Budget to actual variance

The difference between the budgeted amount for a figure and the actual result in a report is

referred to as the budget variance. A budget variance can be displayed as a hard number or it

can be put in a percentage format.

Example, say that a project task is estimated to cost Kshs500,000 but only Kshs400,000 is

actually spent. The budget variance could be expressed as (Kshs100,000). A Project manager

could also express the percentage change of the actual figure by dividing the difference by the

budgeted amount. In this example, the budget variance as a percentage is (Kshs100,000) divided

by Kshs500,000 or (20 percent). This means that the project costs were 20 percent lower than

expected.

c) Drawing resource plans

Every organization has a limited number of resources to perform tasks. A project manager’s

primary role is to find a way to successfully execute a project within this resource constraints.

Resource planning is comprised of establishing a team that possesses the skill required to

perform the work, as well as scheduling the non-labor resources (tools, equipment and processes)

that enable the staff to complete the project.

i) Determining the size of the team

The optimal size of a project team is driven by two principal factors. One is the total number of

tasks to be performed, and the other is the effort need to perform the tasks.

In developing the schedule and assigning the resources, the project manager determines the

optimal mix of staff to activities. Doubling resources doesn’t necessarily double productivity.

For example 365 engineers could not complete in a day a project estimated at one person per

year. At some point people begin to get in each other’s way. The significance of the project

duration, as well as each major activities duration, need to be clearly understood and documented

as part of the scheduling process.

Adding more people to an activity creates the need for additional communication and may also

increase the need for equipment or tools. Large teams require a significant amount of

coordination and teamwork. Sometimes a smaller team can accomplish much more than a larger

one in a short period of time. The optimal selection also depends on the personalities of the team

members and the communication and organizational skills of the project manager.

Adequate and timely personnel planning contain cost overruns. Having personnel n-board when

they are not essential is extremely costly. It is important for the project manager to understand

the size of the required team need to perform the weekly scheduled work. For this reason,

significant effort needs to be made in the planning phase to identify the resources required to

complete each task.

ii) Determining Required Skills

Finding available staff with the skills required to perform a task is critical to project success. For

example, some assumptions about the skills of the person performing the task are made by the

project manager. The skill of the people performing the work is directly related to the time it

takes to perform a task.

It is helpful in the planning process to develop a list of skills required, first for execution of the

project, and then for execution of each task. This skills list may then be used to determine the

type of personnel required for the task.

The project manager pragmatically assesses the skills of the available people on the project. The

project manager is job is to determine the risks associated with the available skills and to build a

plan that realistically accounts for those skills. Unfortunately, skill level is not a yes/no factor.

People have varying degrees of skill, and the manager needs to determine the level of schedule

adjustment that should be made based upon the staff skill level.

Where staffs with the necessary skills are largely unavailable for assignment on the project, the

project manager has an option to hire the necessary talent or contract services to perform the

work.

ii) Identifying Required Non-Labor Assets

All project teams require the tools necessary to successfully perform the tasks assigned. In

scheduling resources, the project manager must ensure that both people and necessary equipment

to support those people are available simultaneously.

The need for adequate work space is often overlooked when planning a project. If a 15-person

project team is going to start work, there needs to be a facility to house the staff. Ideally, the

team should be placed in contiguous space to facilitate interaction and communication. By

having everyone working in close proximity, team spirit is enhanced and chances for project

success are increased. While this may not always be feasible, it is a goal worth striving for. In

addition to workspace, equipment for the team should be included in the plan. Assuring the

availability of equipment at critical points in the project is key in planning a successful project.

Efficiency and morale are negatively affected by non-availability of equipment needed to

perform a task.

iii) Define Resource Profiles

A staffing plan is developed for each project. The staffing plan may be as simple as identifying

one person to develop a simple database. For more significant projects, the staffing plan

identifies when and how staff is brought onto and taken off the project team. For small projects,

this may be simply stated as the assignment of three people full time to the project throughout its

six month duration.

For large projects, the problem is much more complex, and the creation of a detailed plan is a

requirement.

iv) Forming the team

Project organization is used to coordinate the activity of the team and to define the roles and

responsibilities of team members. Project organization is needed for every IT project, and a

project manager must always be identified.

Confusion and lack of productivity are the result of poor project organization. This is where

many projects run into trouble. A good organization facilitates communication and clearly

defines roles and responsibilities.

There are numerous ways to organize a project, and many projects require a unique

organizational structure. There are no standard organizational methodologies that every project

should use.

The larger the project, the more critical the organizational structure becomes. In a small project,

a single team member may be responsible for several functions, whereas in a large project the

functions might require full-time attention. A very large project, for instance often requires a

deputy project manager. A small project might have the senior technical staff member serving as

a development manager. Definition of the project organization is a critical part of the planning

process.

d) Types of resources

Resources are commonly thought of as sources of supply or support, such as money, people,

materials, technology, and space. For information system projects, more specific resources may

include system developers, project managers, system analysts, stakeholders, development

environments and information.

There are two primary types of resources used in information system projects namely:

i.) Human Resources

Is personnel pool available to an organization? The most important resources in any organization

it’s human resources. Appropriate human resources assure an organization that the right number

and kind of people are available at the right time and place so that organizational needs can be

met.

Human Resources include all project stakeholders, such as customers, project team members,

support staff, project suppliers and end users. In Information Technology, human resources

consist of System Analysts, System Developers, and System Programmers Etc.

Human Resource Management is the strategic function performed in an organization that

facilitates the most effective use of people (employees) to achieve organizational and

individual goals.

The person that manages Human resources is called Human Resource Manager or

Personnel Manager.

ii) Capital Resources

Capital Resources can be defined as the tools and infrastructure used to produce other goods and

services. While the range of assets that can be considered to be a capital resource is very broad, it

is important to note that not all assets are capital resources. There are a few basic qualifications

that govern what assets can properly be referred to as a capital resource. One of the basic criteria

for an asset to be considered a capital resource relates to the long-term use of the asset in the

production of goods and services. A capital resource will be anticipated to aid in the creation of

products for an extended period of time.

Bibliography

A Guide to the Project Management Body of Knowledge (2003). The Project Management

Institute. http://www.pmi.org

Rakos, John J. et al, A Practical Guide to Project Management Documentation, Wiley,

2004

Kerzner, Harold. Project Management: A Systems Approach to Planning, Scheduling and

Controlling. 6th ed. John Wiley & Sons, 1998.

Rakos, John J. Software Project Management for Small to Medium Sized Projects.

Prentice-Hall, 1990.