Unit Standard 119343: Apply operations research principles
and tools in the management of project activities and
resources
Group 4 & 5: Costing and Capital Planning;
Municipal IT Support and Project Management
Module 9: Capital Planning and Financing and
Costing Principles
Unit standard details continued
• Unit Standard Content:
– Unit 1: Project Management principles as they relate to
the public finance management and administration
context
– Unit 2: Project Management tool requirements for
managing project activities
– Unit 3: initiate and manage projects within the public
finance management and administration context
– Unit 4: Evaluate projects
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Unit 1: Project Management Principles
as they relate to the public finance management and administration context
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Stellenbosch University
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Unit 1: Project Management Principles
as they relate to the public finance management and administration context
01/04/2015
SPL School of Public Leadership
Stellenbosch University
10
Unit 1: Project Management Principles
as they relate to the public finance management and administration context
Unit 1: Project Management Principles
as they relate to the public finance management and administration context
Unit 1: Project Management Principles
as they relate to the public finance management and administration context
• Definitions of a Project:
– May refer to management environment created for
delivering one ore more “business product” according to
business case
– May refer to temporary organisation needed for unique
and predefined outcome or result at pre-specified time,
using predetermined resources
– May refer to temporary endeavour to create unique
product, service or result
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Stellenbosch University
16
Unit 1: Project Management Principles
as they relate to the public finance management and administration context
• Definitions of Project Management:
– Planning, organising, directing, controlling of
organisational resources for relatively short-term objective
established for completion of specific goals and objectives
– Application of knowledge, skills, tools, techniques to
project activities in order to meet project requirements
– Include identifying requirement; establishing clear and
achievable objectives; balancing competing demands of
quality, scope, time, cost
– Adapting specs, plans, approach to different concerns and
expectations of various stakeholders
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17
Unit 1: Project Management Principles
as they relate to the public finance management and administration context
• Every project inherently unique, not perfectly replicable
– project the investment of unique effort to create
unique output and outcome
• Multiple integrated projects – e.g. Housing
• Project management has three critical elements – time,
cost, deliverables according to client / beneficiary
requirements (expressed as scope and quality)
• Elements interactive – change in one affects others, also
other projects in interdependent “master project”
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18
Unit 1: Project Management Principles
as they relate to the public finance management and administration context
• Project management frameworks
• See PMBOK and PRINCE2
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19
Unit 1: Project Management Principles
as they relate to the public finance management and administration context
RESULT
DIRECT
NEED
Control sequence
START
Clarify need
CONFIRM
Frame project
STOP
CONTAIN
Close project
Manage framework
PLAN
DELIVER
The Project As Meticulous Process
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20
1
Changes in environment
create new needs
Determine need
2
Prepare project
framework
adjust
a
d
j
u
s
t
±
3
x
Appraise
√
Abandon/terminate/dispose
4
ñ
Prepare project output
x
7
Evaluate
5
Deliver output
6
Commission and avail
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Stellenbosch University
21
Unit 1: Project Management Principles
as they relate to the public finance management and administration context
• Project needs identification
– Municipal project management environment
– Project management cycle within organisational
environment
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22
Unit 1: Project Management Principles
as they relate to the public finance management and administration context
• Life-cycle of a project
Accumulative effort
Total project life-cycle
Plan
Phase 1
Conceptualisation
Conceive
Accomplish
Phase 2
Development
Develop
Phase 3
Implementation
Execute
SPL School of Public Leadership Stellenbosch University
Phase 4
Termination
Finish
01/04/2015
23
Phase 1: Concept: Needs Analysis
• Must demonstrate why particular project is required
• How the project or programme is aligned to (or
derived from) national and provincial goals,
strategies, policies
• Top down process – national and provincial
objectives
• Bottom-up process – integrated development
planning
• Needs analysis
Phase 1: Concept
• Initiation
–
–
–
–
–
Collect information on problem or opportunity
Define need
Define project goals and objectives
Identify stakeholders
Check viability (realistic, achievable, resources can
be obtained) and risk level
– Identify constraints
– Identify assumptions
– Do feasibility study (see pp 69 and 70 of learner
guide and NT MTEF Guidelines 2007)
Phase 1: Concept: Collect information
• What are statistical trends & key indicators in relevant area of service
delivery that point to the need or increased demand at this time and
location (if applicable)?
• Assess extent & urgency of need & consequences if need is not met
• What is rate of increase of pressure on the system, (both peak and
average) if this is applicable?
• By what systems are people/users currently coping etc, & what is impact
on them?
• What proportion of need is the intervention intended to fulfil & how far
into the future (at the current rate of increase of the need) will it be
operational & adequate?
• What are proposed outputs & outcomes, i.e. what will be built/ procured
and how many will it serve, how, and for how long?
• Demonstrate that intervention fits with your overall departmental
strategic plan or infrastructure delivery plan (supply this as well)?
NT MTEF Guidelines 2007
Phase 1: Concept
• Initial Planning
– Develop strategy
•
•
•
•
•
Clarify and analyse project objectives
Identify alternatives
Review alternatives
Do stakeholder analysis
Consider potential team
– Develop initial proposal
Phase 1: Concept
Principles to govern participation:
• Inclusivity
• Diversity
• Building community capacity
• Transparency
• Flexibility
• Accessibility
• Accountability
• Trust, commitment and respect
• Integration
Phase 1: Concept
• Request for proposal
– Solicit proposals from potential providers
– Solicitation letter, instructions to bidders, evaluation
criteria,
– Statement of work, system specification
• Service level agreement
– Specifies forwarding service to be received
– Contract between service provider and municipality
– Signing of agreement
1. Concept
Legislation &
regulations
Community needs
TASK
ENVIRONMENT Environmental
challenges
IDP vision & mission
STRATEGIC LEVEL
TACTICAL LEVEL
Programme
objectives
Design &
develop
Preliminary
capital project
schedule
OPERATIONAL
LEVEL Basis for
Strategies
Concept management Implement
Strategic
/
execute
& initiate of individual
focus areas
projects
Capital
Prioritised
Basis for
Commission
Expenditure
& selected
& review
Programme
projects
Basis for programme management
Basis for strategic management
Provincial policies &
strategies
Strategic
objectives
Economic
opportunities
National policies &
strategies
Municipal capital projects aligned with programming and strategic processes
Wrappers model
Vision /
Mission
Objectives
Business
case
Define &
plan
Strategies
Initiate
project
Basis for
Project
Management
Execute
plan
Review
Project
portfolio
Priority &
selection
Strategic
Objectives
Strategic
CSF’s
Unit 2: Project Management Tools
•
•
•
•
•
•
•
•
•
•
•
Problem Analysis
Wrappers Model
Cost benefit analysis; cost effectiveness analysis
Stakeholder analysis
Feasibility study
Software (Excel and MSProject)
Scope Description; Verification
Scope Statement
Define Scope Change Control
Project Charter
Work breakdown structure (WBS)
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32
Phase 1: Conceptualise: Problem Analysis
• Fishbone diagram:
– Head = need
– Top fish bones = Symptoms of problem
– Bottom = Causes of problem
Informal
settlements
Poor quality
housing
Overcrowding
Poor condition
of infrastructure
Housing
Urban
migration
01/04/2015
Population
growth
Budget
Budget
constraints;
constraints;
design criteria design criteria
SPL School of Public Leadership
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33
Phase 1: Conceptualise: Alternative analysis
• See Learner Guide pp63 to 65
Phase 1: Conceptualise: Alternative analysis
• All possible ways of meeting a need should be identified
and examined critically when considering project options
• A discussion is required on other options considered.
These should comprise a range of viable solution options
available for providing the specified outputs (e.g. service
to be provided as a result of capital project)
• Explain why the proposal under consideration was
selected as the preferred option and why other options
have been rejected
NT MTEF Guidelines 2007
Phase 1: Conceptualise: Alternative analysis
• Investment Appraisal
• Life-cycle assessment
• To determine…
– the most cost-effective alternative (cost
effectiveness analysis)
– Or the net benefit (return) or cost (loss) of an
intended initiative (Cost - benefit analysis)
• Considers benefits and costs for all
stakeholders, not only official sponsor
Phase 1: Conceptualise: Alternative analysis
• Determine amount & timing of all capital costs at
full opportunity cost
• Estimate annual operating cost over full life
• Estimate measurable return over full life
• Discount costs and benefits to NPV
• Describe non-quantified or price
Phase 1: Conceptualise: Alternative analysis
• Evaluate costs and benefits of alternatives
– Surrogate pricing by survey or existing behaviour
– Trace and price downstream effects
– Select discount rate
Example: Lungu community
Alternative 1: Surveillance Installation
Item
Year:
Costs
Installation
Monitoring &
maintenance
0
5 000 000
1
2
3
4
5
6
18 000 000
12 000 000
2 000 000
2 140 000
2 290 000
2 450 000
2 622 000
5 000 000
18 000 000
14 000 000
2 140 000
2 290 000
2 450 000
2 622 000
PV Factor:
9% discount
X 1.000
X 0.917
X 0.842
X 0.772
X 0.708
X 0.650
X 0.596
PV per year
5 000 000
16 506 000
11 788 000
1 652 080
1 621 320
1 592 500
1 562 712
TOTAL
COST
NPV: R39 722 612
Example: Lungu community
Alternative 2: Visible Municipal Police
Item
Year:
0
1
2
3
4
5
6
Costs
Recruit & train
Salaries &
equipment
8 500 000
TOTAL
COST
8 000 000
8 640 000
9 331 000
10 078 000
10 884 000
11 755 000
8 500 000
8 000 000
8 640 000
9 331 000
10 078 000
10 884 000
11 755 000
PV Factor: 9%
discount
X 1.000
X 0.917
X 0.842
X 0.772
X 0.708
X 0.650
X 0.596
PV per year
8 500 000
7 336 000
7 274 880
7 203 532
7 135 224
7 074 600
7 005 980
NPV: R51 530 216
Example: Lungu community
Total nondiscounted
Total
discounted
Option 1
R46 502 000
R39 722 612
Option 2
R67 188 000
R51 530 216
Phase 1: Conceptualise: Stakeholder analysis
• See Learner Guide pp66 to 68
Phase 1: Conceptualise: Stakeholder analysis
• These are the people who have a specific and clearly definable
interest in the project…anyone who potentially at some time
has an interest in the project
• Either affected by, or
• Can influence the impact of an activity
• Individuals, groups, community or an institution
• User groups, interest groups, winners and losers,
beneficiaries, those involved in or excluded from decisionmaking process
• Primary or secondary stakeholders
Phase 1: Conceptualise: Stakeholder analysis
1.
2.
3.
4.
5.
Draw up chart
List stakeholders
Estimate attitude and confidence
Plan strategies
Define involvement
Source of information
Consulted
Directly involved in decision-making
Directly involved as co-actor
Phase 1: Conceptualise: Stakeholder analysis
STAKEHOLDER ANALYSIS CHART
Goal:
Stakeholders
Attitude
Estimate
Confidence
Influence
WBS
Actions
Estimate Confidence Activity
Column 2: Your best estimate of the attitude of the stakeholder to the process, from supportive to opposing.
++
+
o
--
:
:
:
:
:
Strongly in favour
Weakly in favour
Indifferent or undecided
Weakly opposed
Strongly opposed
Column 3: How confident you are about your estimate in column 2. Here you can use the following symbols:

?
:
:
??
???
:
:
Fully confident
Reasonably confident (some missing
information, or some doubts about
interpretation)
An informed guess
Wild guess or sheer fantasy
One question mark is warranted, unless the group achieves immediate agreement.
Column 4: Your best estimate of the influence of the stakeholder. A three-category code is usually enough –
H
:
M
:
L
:
High; this person or group has power of
veto, formally or informally
Medium; you could probably achieve
your goals against the opposition of this
person or group, but not easily so
Low; can do little to influence the
outcomes of your action
Column 5: How confident you are about your estimates in column 4? Use the same codes as in Column 3.
Phase 1: Conceptualise: End product
•
Project charter the result (see pp 79, 80)
–
–
–
–
–
–
Project name
Purpose
Project manager
Project manager’s duties
Project manager’s authority
Official commitment
Unit 1: Project Management Principles
as they relate to the public finance management and administration context
• Life-cycle of a project
Accumulative effort
Total project life-cycle
Plan
Phase 1
Conceptualisation
Conceive
Accomplish
Phase 2
Development
Develop
Phase 3
Implementation
Execute
SPL School of Public Leadership Stellenbosch University
01/04/2015
Phase 4
Termination
Finish
48
Phase 2: Develop
• Appoint key team members
• Develop scope (see next slide and Learner Guide pp
72 to 80
• Develop Project Implementation Plan:
– Do WBS (see Learner Guide pp 80 to 84 and following
slides)
– Describe policies and procedures – code of conduct
– Further develop stakeholder analysis
– Do network analysis (see following slides)
• Do activity-based costing
• Analyse risks (see following slides)
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49
Project background
Phase 2:
Develop scope
Project Scope: pp 73, 74
Objectives
Product/ Service characteristics
Requirements
Boundaries
Constraints
Assumptions / Risks
Schedule milestones
Cost estimate and limitations
Project Scope Statement: pp 74
to 76
Title
Project description
Legislative Framework
Project governance
Project management
Implementers
Location
Timeframes
Importance of project
Finances
Business objectives
The logical
framework
Project objectives
Output definition
Scope description
Post-project
sustainability
Dependencies
Prerequisites
Sustainability
Institutional
Technological
Social
Economic
Ecological
Assumptions
Constraints
Stakeholder
analysis
Deliverables
Timescales
Implementation plan
Work
breakdown
structure
option analysis
Risk identification
Risk analysis
Phase 2: Develop
Work Breakdown Structure: A Hierarchy
(See pp 80 to 82)
• Master project / Portfolio / Programme
– Project (Output / Product)
• Deliverable (Component of output / product)
– Task / activity (Work, using resources)
• See also Product Breakdown Structure;
Organisational Breakdown Structure; Cost
Breakdown Structure; Location Breakdown Structure;
Project Life-cycle Structure
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51
Phase 2: Develop
BRAAI
Predecessors:
1.Buy ingredients: 40min
1. None
2.Make fire: 50min
2. None
3.Braai meat: 30min
3. 1,2
4.Make salad: 20min
4. 1
5.Make sandwiches: 15min 5. 1
6.Eat: 60min
6. 3,4,5
Phase 2:
Develop
40
0
55
40
5
15
65
80
40
60
4
20
1
40
6
60
10
50
60
80
0
50
50
80
2
50
0
3
30
50
50
140
80
80
80
140
Phase 2: Develop
Community Vegetable Garden Network
Analysis
Project Community Vegetable Garden
ACTIVITY
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
RESPON- DURATION
SIBILITY (DAYS)
IRRIGATION SYSTEM
SAMSON
Get water connection
Samson 20
Plan layout
Mondi
5
Procure material
Samson 14
Dig trenches
Samson 10
Install pipe network
Mondi
4
Install standpipes
Mondi
3
Link to connection & test
Samson 1
Fill up trenches
Samson 2
SAFEGUARDED GARDEN
SAMSON
Draw up fencing specification Mondi
3
Procure material
Samson 14
Recruit fencing team
Samson 4
Train fencing team
Samson 4
Do fencing
Mondi
15
Organise community guard Samson 3
COMPLETED GARDEN
MONDI
Do official handover
Mondi
1
Report completion
Mondi
0
PREDE- EARLY LATE EARLY LATE
SESSOR START START FINISH FINISH
3
3
4,5
6
2,7
8
DATES DETERMINED FROM
NETWORK DIAGRAM
11
13
12,14
9, 15,16
18
Each activity is indicated
Early finish of activity
as a block and for the purpose
of determining the project
Earlyduration
start of
it isactivity
accepted that all
activities will by default start
as
soon as possible.
Activities
Number
of activity
without predecessors can
start on time 0 and are placed
Duration of activity
on the left of the schedule.
0
network diagram:
forward pass to
determine project
duration
20
5
2
4
20
14
xx
0
xx
xx
23
5
15
6
5
3
(Occur in
sequence)
10
xx
xx
4
xx
5
Dependence
5
xx
19
xx
(Can occur
concurrently)
No dependence
19
xx
xx
Continue
forward
pass
process
0
20
2
5
20
xx
xx
0
5
3
5
xx
xx
0
3
11
3
xx
xx
0
4
13
4
xx
xx
0
3
19
4
14
3
xx
xx
19
23
23
xx
6
7
5
15
4
3
xx
5
xx
xx
27
27
8
26
xx
Project
duration
determined
from
forward
pass
9
1
xx
29
Completed
forward pass
2
xx
xx
xx
xx
10
xx
xx
3
17
32
14
17
32
xx
xx
15
4
8
15
14
4
xx
xx
xx
33
33
33
18
19
1
0
12
xx
16
26
xx
xx
xx
xx
27
From Activity 2
Continue
backward
pass
27
8
29
1
=
From Activity 7
xx
29
-
9
xx
30
2
=
From Activity 11
3
14
14
-
xx
3
xx
32
Transfer Late Start of 32 – 2 = 30
successive Activity
to preceding Activity
12
Continue
backward
pass
From Activity 13
xx
30
17
=
-
17
xx
17
=
successive Activity
to preceding Activities
xx
17
14
4
=
-
13
xx
17
xx
32
32
Transfer Late Start of
successive Activity
to preceding Activity =
15
4
8
Transfer Late Start of
network diagram:
backward pass to
determine project
critical path, and
activity float/slack
15
xx
32
-
xx
32
32 – 15 = 17
From Activity 16
Transfer Late Start of
successive Activity
to preceding Activity
33
3333
33
Take final early finish
(project duration) to
late finish position
26
19
18
1
-
xx
33
=
00
Late xx
Finish
33
of Activity
-
xx
33
33 – 0 = 33
33 – 1 = 32
Transfer Late Start of
successive Activity
to preceding
Activity
Late
Start
of Activity
26
27
From Activity 2
27
8
1
9
From Activity 7
From Activity 11
29
3
29
2
30
30
17
32
32
12
14
3
From Activity 13
17
17
4
8
14
4
13
network diagram:
backward pass to
determine project
critical path, and
activity float/slack
17
32
15
33
33
18
19
1
0
Critical path – indicated with red arrows –
goes through 32
Activities where
33Early Start33
and Late Start numbers are the same.
Obviously, Early Finish and Late Finish
17
32
Numbers will also be the same
The Float or Slack of non-critical path activities
– indicated with blue arrows – is determined by
subtracting the early finish from the late finish or
by subtracting the early start from the late start
15
From Activity 16
33
33
0
20
2
5
20
9
To Activity 8
19
4
29
14
0
5
network diagram: backward
pass where sequence
indicates more than one
dependent activities
19
8
22
=
3
5
-
8
15
22
5
23
26
Pass lowest late start back to
become late finish
3
5
5
23
6
7
4
3
26
26
10
0
3
12
11
3
0
To Activity 12
3
22
Do not pass highest late start
back to become late finish
29
To
Activity
8
0
20
2
5
20
9
29
0
5
3
5
3
8
0
3
11
3
0
3
0
4
13
4
9
13
0
3
19
4
14
3
29
32
19
23
23
22
6
7
5
15
4
3
22
5
26
26
27
27
8
26
8
9
1
29
29
2
30
30
32
completed
network
diagram
29
10
12
22
3
17
32
14
17
32
3
17
15
4
8
15
14
4
17
17
32
33
33
33
18
19
1
0
12
13
16
26
32
33
33
33
0
20
2
5
20
9
29
0
5
3
5
3
8
0
3
11
3
0
3
0
4
13
4
9
13
0
3
19
4
14
3
29
32
19
23
23
22
6
7
5
15
4
3
22
5
26
26
27
27
8
26
8
9
1
29
29
2
30
30
32
completed
network
diagram
29
10
12
22
3
17
32
14
17
32
3
17
15
4
8
15
14
4
17
17
32
33
33
33
18
19
1
0
12
13
16
26
32
33
33
33
Phase 2: Develop
To summarise...
• Five easy steps:
1. Draw activity blocks without
predecessors on left side of page
Phase 2: Develop
1
40
2
50
Phase 2: Develop
To summarise continued...
• Five easy steps
2. Draw activities with predecessors to the
right of their respective predecessors and
link with arrows
Phase 2: Develop
5
15
1
40
4
20
2
50
3
30
6
60
Phase 2: Develop
To summarise continued...
• Five easy steps
3. Do forward pass using arrows to guide
you. Where more than one predecessor,
transfer highest early finish
Phase 2: Develop
40 55
5
15
0
40
1
40
0
50
2
50
40 60
80 140
4
20
6
60
50 80
3
30
Phase 2: Develop
To summarise continued...
• Five easy steps
4. Do backward pass using arrows
backward to guide you. Where more
than one successor, transfer lowest late
start back
Phase 2: Develop
40 55
5
15
65 80
0
40
40 60
80 140
1
40
4
20
6
60
10 50
60 80
80 140
0
50 80
50
2
50
0
50
3
30
50 80
Phase 2: Develop
To summarise continued...
• Five easy steps
5. Identify and indicate critical path
(where ES = LS and EF = LF)
Phase 2: Develop
40 55
5
15
65 80
0
40
40 60
80 140
1
40
4
20
6
60
10 50
60 80
80 140
0
50 80
50
2
50
0
50
3
30
50 80
Phase 2: Develop
Project risk planning
Phase 2: Develop
Project risk
Project Deliverables Activities
Is this
the
Uncertainty right
thing to
do?
Likelihood
Impact
Are these the Are we
right things to doing it
do?
right?
How predictable is the risk?
How serious the consequences?
Phase 2: Develop
Project risk management
• Identify likely risks
• Assess the impact of identified risks
• Develop action plans to contain and deal with risks
• Control risks, i.e. remain constantly responsive to
risks
Phase 2: Develop
Risks during the project life-cycle
Accomplish
Increasing risk
Plan
Concept
Implement
Develop
time
Period of
highest risk
impact
Terminate
Increasing investment
Project life-cycle
Phase 2: Develop
Risk identification
• Contextual phase
–Risks in consultation –
identification and communication
• Conceptual phase
–Scope definition
Phase 2: Develop
Risk identification
• Development phase
–Vague or ambiguous definition
–Inappropriate specifications
–Poor planning
Phase 2: Develop
Risk identification
• Implementation phase
–Supply chain
–Weak links in execution
–Substandard equipment
–Inadequate funding
–Legal, technical, natural, political,
social, cultural
Phase 2: Develop
Risk identification
• Close out phase
–Commissioning of output
• Capacity building phase
– Sustainable use of benefits
Phase 2: Develop
Risk assessment
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•
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What and how to respond to each risk
Assess risks per activity
Do rating by means of risk rating matrix
Record on risk log and risk management
form
Phase 2: Develop
Risk rating matrix
IMPACT ON THE PROJECT
7-9
1-3 4-6
PROBABILITY
LOW
MEDIUM
HIGH
high
unaccep
table
low
high
unaccep
table
low
medium
high
medium
Phase 2: Develop
Risk actions
• Unacceptable (will seriously
compromise):
– Implement action plan immediately to
reduce risk or cancel project
Phase 2: Develop
Risk actions
• High (major impact on schedule or cost,
or serious consequences for other
projects):
– Reduce impact
– Prepare contingency plan
Phase 2: Develop
Risk actions
• Medium (significant impact on project
and possible impact on other projects):
– Prepare contingency plan
– Monitor and review
Phase 2: Develop
Risk actions
• Low (No serious impacts, but may affect
schedule):
– Monitor and review
Phase 2: Develop
Risk actions
Always assign all identified risk
actions
Phase 2: Develop
Risk action plans
• Avoid by modifying scope, schedule, budget and
specification
• Reduce probability by means of scope, schedule,
budget and specification adjustment
• Transfer by means of insurance or shifting it onto
shoulders of contractor
• Retain, but prepare contingency and constantly
monitor
Phase 2: Develop: End product
Project Baseline Plan / Project Plan /
Project Business Case / Whatever
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1. INTRODUCTION
1.1. Background
1.2. Purpose
1.3. Scope
2. GENERAL PROJECT INFORMATION
2.1. Core Project Data
2.2. Department Description
2.3. Project Size & Complexity
3. EXECUTIVE SUMMARY
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4. PROJECT SCOPE
4.1. Scope Statement
4.1.1. Specific IN Scope Items
4.1.2. Specific OUT of Scope Items
4.2. Scope Management Strategy
4.3. List of Project Deliverables
4.4. Work Breakdown Structure (WBS)
5. PROJECT GOVERNANCE &
ORGANISATION STRUCTURES
5.1. Project Governance Structure
5.2. Project Organisational Structure
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Phase 2: Develop: End product
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6. RESOURCE REQUIREMENTS
6.1. Project Team
6.2. Roles and Responsibility
Assignments
6.3. Human Resource Management
Strategies
6.4. Procurement Management
Strategies
6.5. Statement of Work (for each work
package)
6.6. Activity Duration and Cost
Estimates
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•
•
•
•
7. SCHEDULE AND BUDGET
7.1. Project Schedule
7.2. Project Schedule Management
Plan
7.3. Project Budget
7.4. Project Cost Management Plan
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Phase 2: Develop: End product
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8. COMMUNICATIONS AND QUALITY
MANAGEMENT
8.1. Communications Management
Plan
8.2. Performance Reporting Process
8.3. Quality Management Plan
8.4. Quality Assurance & Control
Processes
9. RISK MANAGEMENT
9.1. Risk List & Risk Matrix
9.2. Risk Analysis
9.3. Risk Response
9.4. Risk Management Plan
9.5. Risk Monitoring & Control
Process
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10. MONITORING & CONTROL
10.1. Project Issues Management
Process
10.2. Project Change Control Process
11. UPDATED LIST OF CONSTRAINTS
AND ASSUMPTIONS
11.1. Assumptions
11.2. Constraints
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Phase 2: Develop: End product
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12. APPENDICES
12.1. Scope Statement
12.2. IN/OUT of Scope Items
12.3. Scope Management Plan
12.4. List of Project Deliverables
12.5. Work Breakdown Structure
12.6. Activity Lists
12.7. Network Diagram
12.8. Organisational Structure
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•
12.9. Governance Structure
12.10. Project Team
12.11. Roles and Responsibility
Assignments
12.12. Human Resource Management
Plan
12.13. Statement of Work (for each
good or service)
12.14. Procurement Management
Plan
12.15. Activity Duration and Cost
Estimates (update to Activity Lists)
12.16. Project Schedule
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12.17. Project Schedule Management
Plan
12.18. Project Budget
12.19. Project Cost Management Plan
12.20. Updated List of Constraints
and Assumptions
12.21. Communications Management
Plan
12.22. Performance Reporting
Process
12.23. Quality Management Plan
12.24. Quality Assurance & Control
Processes
•
•
•
•
•
•
•
12.25. Risk List & Risk Matrix
12.26. Risk Analysis
12.27. Risk Response
12.28. Risk Management Plan
12.29. Risk Monitoring & Control
Process
12.30. Project Issues Management
Process
12.31. Project Change Control
Process
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Phase 2:
Develop scope
Project background
Business objectives
The logical
framework
Project objectives
Output definition
Project Scope: pp 73, 74
Objectives
Product/ Service characteristics
Requirements
Boundaries
Constraints
Assumptions / Risks
Schedule milestones
Cost estimate and limitations
Project Scope Statement: pp 74
to 76
Title
Project description
Legislative Framework
Project governance
Project management
Implementers
Location
Timeframes
Importance of project
Finances
Scope description
Post-project
sustainability
Dependencies
Prerequisites
Sustainability
Institutional
Technological
Social
Economic
Ecological
Assumptions
Constraints
Stakeholder
analysis
Deliverables
Timescales
Implementation plan
Work
breakdown
structure
option analysis
Risk identification
Risk analysis
Unit 3: Initiate and Manage within context
• Project Management Plan (Project Implementation
Plan / Baseline Plan)
– What must be done to achieve output and objectives of
project?
– How will it be done
– Who will do it
– When will it be done
Strategy (overall game plan), tactics (methods), logistics
(ingredients)
Effective planning: Plan to plan; ensure participation; be
prepared to re-plan; do risk analysis
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Unit 3: Initiate and Manage within context
• Time & planning
– Systematic process
– Link time to project plan
• Hourly cost of time
• Project specifications w.r.t. timescales , WBS, dependencies,
resources, milestones, task interdependence, realistic durations,
scheduling, task clarification
– Ability to monitor progress
– Use of Gantt chart in Project Management Plan
– Use of critical path method / network analysis
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Unit 3: Initiate and Manage within context
• Time & planning continued
– Plan for implementation
•
•
•
•
•
•
Set up cost accounts
Obtain facilities
Issue work orders
Contract vendors
Train personnel
Design monitoring system
– To be effective, team should: Clearly understand scope, quality,
cost, schedule; how individual work relates to bigger picture; be
committed to project; communicate openly
– Team should comprehend their interdependencies, conflict &
differences resolved through constructive, open communication
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Unit 3: Initiate and Manage within context
• Quality Management
– To satisfy needs through process and product
– Quality control refers to process specifications & process
review & evaluate, testing of product – develop per WBS
Activity
– Scope description must also contain quality conditions and
testing methods
– Compile quality control plan
– Linked to performance management
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Unit 3: Initiate and Manage within context
• Distribution of information
– Communication vital – generation, collection, dissemination,
storage, disposal of project information
– Use variety of communications methods
– Capturing and processing data through formal reporting structure
part of effective communication and knowledge management
– Reports: Status reports; variance reports; trend reports; earned
value reports; exception reports (threshold); periodic reports
– Well structured reports, easy to read
– Timing important
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Unit 3: Initiate and Manage within context
• Organising
– Team performance vital, requires right selection of members
– Identified after planning when skills needs are known –
ensure members know their roles
– Both roles and behaviour vital (dominant, critical, quiet,
clown)
– Project manager must be knowledgeable on industry and
project management
– Roles of project manager: Champion; facilitator; administrator
– Ground rules for team (code of conduct)
– Core team and support team
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Stellenbosch University
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Unit 3: Initiate and Manage within context
• Costing
– Activity Based Costing (bottom up)
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Stellenbosch University
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Unit 4: Monitor and Evaluate Projects
• Monitoring and Evaluation effectiveness dependent
on clarity of design
• Project performance measured regularly for
variances and areas requiring attention
• Evaluation a research-based process of examining
success in terms of objectives
• Project closure verifies that life-cycle has been
completed, therefore get feedback whether proximal
outcomes (purposes) have been achieved
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Unit 4: Monitor and Evaluate Projects
• Techniques for monitoring and evaluation to generate
credible information – also as knowledge management
exercise
• Measure against objectives / verifiable indicators, time,
quality, resources, information
–
–
–
–
–
–
–
–
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Level of achievement of results & reasons for variance
Assessment of causal contributions of activities to results
Examination of implementation process
Exploration of unintended results
Lessons, accomplishments, recommendations for improvement
Relevance of project to original needs
Efficiency and effectiveness
Impact and sustainability
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Unit 4: Monitor and Evaluate Projects
• Project must be rounded off with final project report
by project manager and team to assess the project.
• Techniques for internal evaluation:
–
–
–
–
Observations and involvement
Questioning and discussion
Routine statistics
Own statistics
• See reference to PERT
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Unit 4: Monitor and Evaluate Projects
• Scope deviation and corrective measures
– Changes caused by scope creep, inappropriate time
allocation, modifications, mistakes
– Change requests while execution is ongoing, may occur in
many forms
– Follow change control system, defines procedures to
change scope – Project Steering Committee / designated
authority to consider
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Scope change management
Modifications
Environment
Faults
Record need for change in change log
To next slide
Scope change management
From previous slide
Review need and assess impact
Yes
Amend
Is change
Conditional yes accepted No
?
To next slide
From previous slide
Yes
Scope change management
Is change
authorised No
?
Yes
Amend
Conditional yes
To next slide
No
Obtain financial authorisation
Record in change log & implement
change;
update project documentation &
inform stakeholders
No
From previous slide
Yes
Scope change management
Record in change log & inform stakeholders
Unit 4: Monitor and Evaluate Projects
• Project costs
– Must do costing to determine BAC (budget at completion)
and cash flow - BCWS (budgeted cost for work scheduled)
– Costing entails determining what resources, quantities,
when
– Cost estimating to determine amounts needed per resource,
per activity (pre-priced resource pools often used)
– Estimates developed from WBS, resource rates, activity
durations, historical information
– Top down (using information from similar projects
– Activity-based (broad)
– Bottom-up
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Unit 4: Monitor and Evaluate Projects
• Monitoring and progress control entails:
–
–
–
–
01/04/2015
Identifying cost variances
Identifying schedule variances
Implement scope changes
Identify and manage risks (see risk management form)
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Now... Progress Control
Cost
BAC
Earned
value
curve
BCWS
PC & ACWP
Progress
date
Time
Progress Control
•
•
•
•
BAC (Budget)
BCWS (Cash flow)
PC (Progress)
ACWP (Accounts)
R99 000 000
R4 000 000
3%
R5 000 000
Progress Control
•
•
•
•
BCWP = BAC x PC
EAC = ACWP / PC
BV = BAC - EAC
ETC = EAC - ACWP
R2 970 000
R166 666 667
-R67 666 667
R161 666 667
Progress Control
•
•
•
•
SV = BCWP - BCWS
SV% = (SV / BCWS) x 100
CV = BCWP - ACWP
CV% = (CV/BCWP) x 100
-R1 030 000
-26%
-R2 030 000
-68%
Progress Control
• SPI = BCWP / BCWS
• CPI = BCWP / ACWP
Progress control formulas
•
•
•
•
•
•
•
•
BCWP = BAC x PC
EAC = ACWP / PC
BV = BAC - EAC
ETC = EAC - ACWP
SV = BCWP - BCWS
SV% = (SV / BCWS) x 100
CV = BCWP - ACWP
CV% = (CV/BCWP) x 100
•
•
•
•
•
•
•
•
•
•
•
•
BAC (Budget at completion)
BCWS (Budgeted cost of work
scheduled - Cash flow)
PC (Percentage complete - Progress)
ACWP (Actual cost of work
performed - Accounts)
BCWP (Budgeted cost for work
performed)
EAC (Estimate at completion)
BV (Budget variance)
ETC (Estimate to complete)
SV (Schedule variance)
SV% (Schedule variance
percentage)
CV (Cost variance
CV% (Cost variance percentage)
Unit 4: Monitor and Evaluate Projects
• Monitoring project elements
–
–
–
–
–
–
Information management
Measure physical and financial resources
Time management
Quality control
HR performance
Achievement of deliverables and objectives
• Monitoring utilises various tools
– Terms of Reference; Gantt chart; Project and support
documents
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Unit 4: Monitor and Evaluate Projects
PROJECT CLOSURE
• Steps to complete:
–
–
–
–
–
–
–
Plan for handover
Attendance at handover
Debriefing
Agreement checklist
Corrective actions and Agreement of
Satisfactory Completion Form
Completion of handover
Asset disposal
Unit 4: Monitor and Evaluate Projects
PROJECT CLOSURE
– Historical data
– Closeout report
– Recommendations for future projects
– Project handover
(celebrate milestone again!)