Project Life Cycle
Phases of Project Life Cycle
• Phase 1: Need/Problem/Opportunity identification
• Phase 2: Development of Proposed solution
• Phase 3: Implementation of Proposed solution
• Phase 4: Terminating the project
Phase I - Needs Identification
Project Life Cycle (Phase I)
Time
Perform the Project
Develop a Proposed Solution
Identify a Need
Terminate the ProjectEffort
* * *
* * ** * ** * ** * ** * ** * ** * ** * ** * ** * *
* * ** * *
Project Life Cycle - Phase I
• Involves Need Identification. Results in Request for Proposal. Will detail on
1. Process of Identifying needs and Selecting projects.
2. Developing a request for proposal
3. Process of proposal solicitation.
• Recognize a need, problem, or opportunity & clearly define the same
• Quantify the problem • Determine the budget• Prepare a Request For Proposal• Select the project(s) with the
greatest benefit for the cost expended
Identifying Needs, Problems, or Opportunities
Project Selection
• Develop a set of criteria against which each opportunity will be evaluated
• List the assumptions• Gather data and information for each
opportunity• Evaluate each opportunity against the
criteria
Preparing a Request for Proposal
• Why RFP?
• State, comprehensively and in detail, what is required, from the customer’s point of view
• Enable contractors or a project team to understand what the customer expects so that they can prepare a thorough proposal
• The need may be communicated informally—and sometimes only orally
Preparing a Request for Proposal (Cont.)
• Guidelines for drafting a formal RFP to external contractors:– statement of work (SOW)– customer requirements– deliverables – customer-supplied items– approvals required by the customer– type of contract
Preparing a Request for Proposal (Cont.)
– the payment terms– the required schedule for completion – instructions for the format and
content of the contractor proposals– due date for proposals– evaluation criteria – occasionally will indicate the funds the
customer has available
Soliciting Proposals
Methods:
• Identify a selected group of contractors in advance and sending each an RFP
• Advertise in certain business newspapers
• Process considered a competitive situation
Soliciting Proposals (Cont.)
• Don’t provide information that is not provided to all contractors
• May hold a bidders’ meeting to explain the RFP and answer questions
• Not all use RFP
Phase II - Developing a Proposed
Solution
Project Life Cycle (Phase II)
Time
Perform the Project
Develop a Proposed Solution
Identify a Need
Terminate the Project
Effort
* * *
* * ** * ** * ** * ** * ** * ** * ** * ** * ** * *
* * ** * *
Phases II of Project Life Cycle
• Phase 2: Involves development of Proposed solution and results in submission of Proposal
Proposed Solutions - Exceptions
In many situations an RFP does not
involve soliciting competitive proposals
from external contractors, and the
second phase of the project life cycle
may be completely bypassed.
Pre-RFP/Proposal Marketing
• Should not wait until formal RFP solicitations are announced before starting to develop proposals
• Develop relationships with potential customers
• Maintain frequent contacts with past and current customers
Pre-RFP/Proposal Marketing (Cont.)
• Be familiar with a customer’s needs and requirements
• Consider this marketing or business development; no cost to the customer
• May prepare an unsolicited proposal
• Efforts are crucial to the foundation for winning a contract
Bid/No-Bid Decision
• Factors to consider:– competition – risk – mission– extension of capabilities– Reputation with the customer – customer funds – proposal resources– project resources
Bid/No-Bid Decision (Cont.)
– Be realistic about probability of winning the contract
– A lot of non-winning proposals can hurt a contractor’s reputation
• Exercise to be submitted on 4th Jan:A company that is providing training in HR, on page 52 of the book, there is Bid/No Bid check-list which lists down the deliberations over whether to bid or no bid. Individually submit your assessment
How do you prepare a a Winning Proposal?
• A selling document – not a technical report
• Convince the customer that you are the best one to solve the problem
• Highlight the unique factors that differentiate you from competing contractors
• Emphasize the benefits to the customer• Write in a simple, concise manner• Address requirements as laid out in the
RFP• Be realistic in scope, cost, and schedule
Proposal Preparation
• Can be a straightforward task performed by one person or it could be a resource-intensive effort requiring a team
• May designate a proposal manager • Schedule must allow time for review and
approval by management • Can be a few pages or hundreds of
pages• Customers do not pay contractors to
prepare proposals
Proposal Contents
Proposals are organized into three sections:
• Technical Section
– understanding of the problem
– proposed approach or solution
– benefits to the customer
Proposal Contents (Cont.)
• Management Section
– description of work tasks
– deliverables
– project schedule
– project organization
– related experience
– equipment and facilities
Proposal Contents (Cont.)
• Cost Section – labor– materials– subcontractors and consultants– equipment and facilities rental– travel– documentation– overhead– escalation– contingency or management reserve– fee or profit
Pricing Considerations
• Be careful not to overprice or underprice the proposed project
• Consider:– reliability of the cost estimates – risk– value of the project to the contractor – customer’s budget– competition
Proposal Submission and Follow-Up
• Submit proposals on time • Hand deliver expensive proposals or
send 2 sets by different express mail services, if necessary
• Continue to be proactive even after submission
Customer Evaluation of Proposals
• Some look at the prices and select only from the three lowest-priced proposals
• Some screen out prices above budget or whose technical section doesn’t meet all the requirements
• Some create a proposal review team that uses a scorecard
• May submit a best and final offer (BAFO)
Customer Evaluation of Proposals (Cont.)
• Criteria that might be used in evaluating:– compliance with SOW– understanding of the problem or need– soundness of the proposed approach – contractor’s experience and past
success – experience of key individuals– management capability– realism of the schedule– price – reasonableness, realism, and
completeness
A contract is:• A vehicle for establishing customer-
contractor communications and arriving at a mutual understanding and clear expectations
• An agreement between the contractor, who agrees to provide a product or service, and the customer, who agrees to pay
• Must clearly spell out the deliverables• Two types of contracts: fixed price and
cost reimbursement
Types of Contracts
Types of Contracts (Cont.)
Fixed-price contract
• Price remains fixed unless the customer and contractor agree
• Provides low risk for the customer
• Provides high risk for the contractor
• Is most appropriate for projects that are well defined and entail little risk
Types of Contracts (Cont.)
Cost-reimbursement contract
• Provides high risk for the customer
• Provides low risk for the contractor
• Is most appropriate for projects that involve risk
• Customer usually requires that the contractor regularly compare actual expenditures with the proposed budget and reforecast cost-at-completion
Contract Provisions
Miscellaneous provisions that may be included in project contracts:• Misrepresentation of costs• Notice of cost overruns or schedule
delays• Approval of subcontractor • Customer-furnished equipment or
information• Patents
Contract Provisions (Cont.)
• Disclosure of proprietary information • Termination• Bonus/penalty payments• Changes
Phase III & IV (Performing the Project)
Phases of Project Life Cycle
• Phase 3: Performing the Project
– Involves implementation of Proposed solution.
– Results in accomplishing Project Objective.
• Phase 4: Terminating the Project
– Involves certain closure activities.
– Results in feedback from all concerned
Project Life Cycle (Phase III & IV)
Time
Perform the Project
Develop a Proposed Solution
Identify a Need
Terminate the Project
Effort
* * ** * ** * ** * ** * ** * ** * ** * ** * ** * *
* ** *
*********
**
******
********
*******
*****
******
Performing the Project
Performing the Project (Phase III)
Time
Perform the Project
Develop a Proposed Solution
Identify a Need
Terminate the Project
Effort
* * ** * ** * ** * ** * ** * ** * ** * ** * ** * *
* ** *
*********
**
******
********
*******
*****
Performing the Project
1. Planning the Project
2. Implementing the project
3. Controlling the Project
Planning the Project
• Clearly define the project objective• Divide and subdivide the project • Define the specific activities to be
performed• Graphically portray the activities in a
network diagram• Determine which resources and how
many are needed• Make a time estimate • Make a cost estimate for each activity• Calculate a project schedule and budget • Develop a baseline plan
Planning the Project (Cont.)
Keep in mind:• Projects overrun their budgets, miss
completion dates, or only partially satisfy their technical specifications because there is no viable baseline plan
• The people involved in performing the project should participate in planning the work; they are most knowledgeable.
• Participating in the planning helps individuals become committed to accomplishing it
7
Implementing the Project
• Once the baseline plan has been developed, project work can proceed.
• The project team, led by the project manager, will implement the plan and perform the activities or work elements.
• The pace of project activity will increase as more and various resources become involved.
• Monitor progress • Measure actual progress and compare it
to planned progress• Track which activities have been started
and/or completed, when, and how much money has been spent
• Take corrective action to get back on track
• Compare on a timely and regular basis and take corrective action
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Controlling the Project
Controlling the Project (Cont.)
A regular reporting period should collect:• Data on actual performance • Information on any changes in scope,
schedule, and budgetKeep in mind:• Data should be collected in a timely
manner and used to update the schedule and budget
• Compare updated schedule and budget to the baseline and analyze
Controlling the Project (Cont.)
• Project management is proactive • Phase III ends when
– the requirements have been met, – project objective has been
accomplished, and – the customer is satisfied
Terminating the Project
Project Life Cycle (Phase IV)
Time
Perform the Project
Develop a Proposed Solution
Identify a Need
Terminate the Project
Effort
******
Terminating the Project
• Termination activities should be identified in the baseline plan
• Verify that all agreed-on deliverables were provided
• Organize and file project-related documentation
Purpose: To learn from the experience in order to improve performance on future projects.
Terminating the Project (Cont.)
• Assure that all payments have been collected from the customer
• Assure that all payments for materials and subcontractors have been paid
• Prepare a written performance evaluation of each member of the project team
• Hold post-project evaluation meetings• Celebrate
Internal Post-Project Evaluation
• Have individual meetings with team members and a group meeting with the project team
• Hold soon after the completion • Announce meeting in advance so people
can be prepared• Individual meetings allow team members
to give their personal impressions
Internal Post-Project Evaluation (Cont.)
• Develop an agenda for a group meeting• Group meeting should discuss
performance and recommendations for improvement
• Issue a brief written report to management with a summary and recommendations
Internal Post-Project Evaluation (Cont.)
• Some topics that might be discussed:– technical performance– cost performance– schedule performance– project planning and control– customer relationships– team relationships– communications– problem identification and resolution– recommendations
• Meet to discuss whether the project provided the customer with the anticipated benefits, assess the level of customer satisfaction, and obtain any feedback
• Participants include the project manager, key project team members, and key representatives of the customer
• Ask open-ended questions• Customers can express their level of
satisfaction and provide detailed comments
Customer Feedback
Customer Feedback (Cont.)
If the customer is satisfied with the project:• Ask about other projects you could do—
perhaps without going through a competitive RFP process
• Ask permission to use the customer as a reference
• Get feedback regarding satisfaction through a post-project customer evaluation survey
Early Project Termination
• If research shows costs will be much more than originally anticipated
• If there is a change in a company’s financial situation
• Because of dissatisfaction of the customer – Avoid early termination due to
customer dissatisfaction by monitoring customer satisfaction continually and taking corrective action
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