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Chapter 3: Project Planning
Unit Name: International Project Management
Phạm Thị Mai Khanh (Ph.D.)
phamthimaikhanh.cs2@ftu.edu.vn
“Failing to plan is planning to fail”
by J. Hinze, Construction Planning and Scheduling
• Planning:
– “what” is going to be done, “how”, “where”,
by “whom”, and “when”
– for effective monitoring and control of complex
projects
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Two Extremes Approaches to
Planning
• “Ready, fire, aim”
– Tom Peters
• “Paralysis by analysis”
• There is a happy medium that everyone
would like to strike
Main Content
3.1. The action plan
3.2. The work breakdown structure (WBS)
3.3. Project schedule
3.4. Ressource allocation and leveling
3.5. Cost and Budget estimation
3.6. Risk management
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3.1. The Action Plan
From the Project Charter to the
Project Plan
• Primary function of a project plan is to
serve as a roadmap
• Should include the business case, financial
benefits, and strategic reasons for the
project
• Should contain sufficient information to
know the status of the project at any time
• Also needs the project’s history to date
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PROJECT PLAN (PP)
• The project management plan is the document
that describes HOW the project will be
executed, monitored, and controlled.
• It integrates and consolidates all of the
subsidiary plans and baselines from the
planning processes. (PMI 2013, 75)
PROJECT PLAN (PP) (2)
Baselines:
• Scope baseline
• Schedule baseline
• Cost baseline
(PMI 2013, 75-76)
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PROJECT PLAN (PP) (3)
Subsidiary plans:
•
•
•
•
•
•
•
•
•
•
•
Scope management plan
Requirements management plan
Schedule management plan
Cost management plan
Quality management plan
Process improvement plan
Human resource management plan
CommunicaIons management plan
Risk management plan
Procurement management plan), and
Stakeholder management plan
(PMI 2013, 75-76)
Project Planning Process
Project
Charter
Risk
Management
Step 1: Develop
WBS
Time EsImate
Step 3:
EsImate
Resources and
DuraIon
Step 2: Sequence
AcIviIes
Network diagram
Step 4: Develop
Schedule
GanW diagram
Resource
Constraints
Step 5:
Resource
allocaIon
Demand for Labor cost
equipment
Step 6:
BudgeIng
Material
Cost
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3.2. Work Breakdown Structure - WBS
- Tasks, Subtasks
- Work packages
Work Breakdown Structure (WBS)
The WBS is a hierarchical decomposition of the total scope
of work to be carried out by the project team to accomplish the
project objectives and create the project deliverables.
•
Each deliverable is decomposed, or broken down, into specific
“bite-sized” pieces representing work to be completed.
•
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Work Breakdown Structure Purpose
WBS serves six main purposes:
1. Echoes project objectives
2. Organization chart for the project
3. Creates logic for tracking costs, schedule, and
performance specifications
4. Communicates project status
5. Improves project communication
6. Demonstrates control structure
The Work Breakdown Structure (WBS)
• Inadequate up-front planning is a primary
contributor to the failure of a project
• A primary purpose of the WBS is to ensure
that no task is overlooked
• Every task, no maWer how small, should be
listed
– Along with material and human resources
• This is a non-trivial task
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A Sample (ParIal) WBS
Figure 3-1
WBS Hierarchy
• The logic of hierarchy for the WBS follows this form:
Level
WBS Term
DescripOon
Level 1 (Highest)
Project
The overall project under
development
Level 2
Deliverable
The major project components
Level 3
Subdeliverable
SupporIng deliverables
Level 4 (Lowest)
Work package
Individual project acIviIes
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Hierarchical Breakdown of
the WBS
* This breakdown groups work
packages by type of work within a
deliverable and allows assignment of
responsibility to an organizational unit.
This extra step facilitates a system for
monitoring project progress (discussed
in Chapter 13).
FIGURE 4.3
Source: Dr. Jim Marion, PMP, slide 2019
Defining a Work Package
4–17
• Lowest level in WBS
• Deliverable result
• One owner
• Miniature projects
• Milestones
• Fits organizaIon
• Trackable
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Figure 5.3 Partial Work Breakdown Structure
Work Breakdown Structure
Breakdown
Description
WBS
IT Installation Project
Code
1.0
Deliverable 1
Match IT to organizational tasks and problems
WP 1
WP 2
Conduct problem analysis
Develop information on IT technology
Deliverable 2
Identify IT user needs
WP 1
WP 2
WP 3
Interview potential users
Develop presentation of IT benefits
Gain user “buy-in” to system
Deliverable 3
Prepare informal proposal
WP 1
WP 2
Develop cost/benefit information
Gain top management support
Deliverable 4
Seek and hire IT consultant
WP 1
WP 2
WP 3
Delegate members as search committee
Develop selection criteria
Interview and select consultant
Deliverable 5
Seek staff and departmental support for IT
Deliverable 6
Identify the appropriate location for IT
WP 1
WP 2
WP 3
Consult with physical plant engineers
Identify possible alternative sites
Secure site approval
Deliverable 7
Prepare a formal proposal for IT introduction
Deliverable 8
WP 1
WP 2
WP 3
Solicit RFPs from vendors
Develop criteria for decision
Contact appropriate vendors
Select winner(s) and inform losers
Deliverable 9
Conduct a pilot project (or series of projects)
Deliverable 10
Enter a contract for purchase
Deliverable 11
Adopt and use IT technology
WP 1
WP 2
Initiate employee training sessions
Develop monitoring system for technical problems
1.1
1.1.1
1.1.2
1.2
1.2.1
1.2.2
1.2.3
1.3
1.3.1
1.3.2
1.4
1.4.1
1.4.2
1.4.3
1.5
1.6
1.6.1
1.6.2
1.6.3
1.7
1.8
1.8.1
1.8.2
1.8.3
1.9
1.10
1.11
1.11.1
1.11.2
Figure 5.4 Example of a Project WBS
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Figure 5.6 Sample WBS Development Using MS
Project 2016
Career Day
6-22
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Career Day
6-23
WBS – new home construcIon
24
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A Visual WBS
6-25
A Visual WBS
6-26
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A Visual WBS
6-27
A Visual WBS
6-28
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A Visual WBS
6-29
Extensions of the Everyday WBS
•
•
WBS generally oriented towards deliverables
Can be reshaped with some addiIonal data ocen
not included in the WBS
1.
2.
3.
4.
•
EsImates of resources for each task
EsImates of the Ime for each task
Who has responsibility for each task
Sequence informaIon for each task
Increases it orientaIon toward planning and
administraIon
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A schedule is the conversion of a project action plan
into an operating timetable.
Task Planning
Work Breakdown Structure
Schedule
Resource:
Technician 3
Task # Apr
28
Team Mission
Statement
5
Qtr2, 2003
May
12 19
Jun
26
2
9
16
23
30
7
Jul
14
21
28
4
Qtr3, 2003
Aug
11 18
Sep
25
1
8
1
2
3
4
Technician 3,Technician 2
Technician 3,Technician 2
5
Technician 3
6
7
8
Technician 3,Technician 2
Technician 3,Technician 2
Technician 3,Technician 2
9
10
11
12
13
Technician 3,Technician 2
Technician 3,Technician 2
Technician 3,Technician 2
14
Network Diagram
Page [ 1 , 1 ] of [ 1 , 1 ]
Project Scheduling
Sequence of acIviIes
Network diagrams
Detailed Plan for Work Package
Crashing a Project, Fast-Tracking a Project
GanW Diagram
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Sequence of AcIviIes
Task Planning
List of sequence acIviIes
EXAMPLE PROJECT (1)
34
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EXAMPLE PROJECT (2)
SERIAL SEQUENTIAL LOGIC
35
EXAMPLE PROJECT (3)
NON-SERIAL SEQUENTIAL LOGIC
36
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EXAMPLE PROJECT (4)
SEQUENCE OF ACTIVITIES
37
EXAMPLE PROJECT (5)
ACTIVITY NETWORK
38
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Network Diagram
PERT, CPM
AOA, AON
NETWORK DIAGRAM – SERIAL
SEQUENTIAL LOGIC
(FIGURE 9.2A)
9-40
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NETWORK DIAGRAM – NONSERIAL
SEQUENTIAL LOGIC
(FIGURE 9.2B)
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PERT and CPM Networks
• PERT and CPM developed independently in 1950’s
• Program EvaluaOon and Review Technique (PERT)
– U.S. Navy, Booz-Allen Hamilton, and Lockheed Aircrac
– ProbabilisIc acIvity duraIons
• CriOcal Path Method (CPM)
– Dupont De Nemours Inc.
– DeterminisIc acIvity duraIons
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The Language of PERT/CPM
• AcIvity
– A task or set of tasks
– Uses resources and Ime
• Event
– An idenIfiable state resulIng from compleIon of one or
more acIviIes
– Consumes no resources or Ime
– Predecessor acIviIes must be completed
• Milestones
– IdenIfiable and noteworthy events that mark significant
progress
The Language of PERT/CPM ConInued
• Network
– A diagram of nodes (acIviIes or events) and arrows (direcIonal arcs)
that illustrate the technological relaIonships of acIviIes
• Path
– A series of connected acIviIes between two events
• CriIcal path
– The set of acIviIes on a path that, if delayed, will delay the
compleIon date of the project
• CriIcal Time
– The Ime required to complete all acIviIes on the criIcal path
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Building the Network
•
There are two ways of displaying a project network
1. AcOviOes on arrows (AOA) network
•
•
The acIviIes are shown as arrows and events as nodes
Generally more difficult to draw but depicts the technical
relaIonships of the acIviIes well
2. AcOviOes on nodes (AON) network
•
•
•
Each task is shown as a node and the technological relaIonship
is shown by the arrows
AOA network usually associated with PERT
AON network usually associated with CPM
AOA Versus AON
The same mini-project is shown with activities on arrow
B
D
E
F
C
…and ac#vi#es on node.
E
D
B
F
C
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Arrow Diagraming Method
AOA (acOvity on arrow)
• AcIviIes are represented by arrows.
• Nodes or circles are the starIng and ending
points of acIviIes.
• Can only show finish-to-start dependencies.
AOA (acIvity on arrow) or ADM
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Sample AOA Network
Table 5-1
Figure 5-6 (a)
Precedence Diagram Method
AON (acIvity on node)
• Arrows show relaIonships between acIviIes.
• BeWer at showing different types of
dependencies.
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AON (acIvity on node)
Sample AON Network
Table 5-1
Figure 5-3
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Serial AcIviIes
(figure 9.5)
Serial activities are those that flow from one to
the next, in sequence.
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Concurrent acIviIes
(figure 9.6)
When the nature of the work allows for more than one
activity to be accomplished at the same time, these activities
are called concurrent, and parallel project paths are
constructed through the network.
9-15
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Merge AcIvity
(figure 9.7)
9-55
Burst AcIvity
(figure 9.8)
9-56
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Node Labels
(figure 9.3)
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Exercise 1 –
ACTIVITY PRECEDENCE DIAGRAM
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Exercise 1.b –
ACTIVITY PRECEDENCE DIAGRAM
59
CriIcal Path
ES, EF, LS, LF
Slack/Float
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CriOcal path
• A criIcal path for a project is the series of
acIviIes that determines the earliest Ime by
which the project can be completed.
• The criIcal path is the longest path through the
network diagram and has the least amount of
slack or float.
Finding the CriOcal Path:
• First develop a good project network diagram.
• Add the duraIons for all acIviIes on each
path through the project network diagram.
• The longest path is the criIcal path.
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Finding the CriIcal Path
• E.g. 1:
63
Finding the CriIcal Path and CriIcal Time
•
•
•
•
•
•
•
ES: Earliest start Ime
EF: Earliest finish Ime
LS: Latest start Ime
LF: Latest finish Ime
Displayed on node as shown
ES + compleIon = EF
LS + compleIon = LF
Figure 5-9
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Node Labels
(figure 9.3)
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ConstrucIng the CriIcal Path
• Forward pass – an additive move through the
network from start to finish
• Backward pass – a subtractive move through the
network from finish to start
• Critical path – the longest path from end to end
which determines the shortest project length
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A Sample Problem for Finding the
CriIcal Path and CriIcal Time
Table 5-2
The Complete Network
Table 5-2 and Figure 5-8
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The CriIcal Path and CompleIon Time for
Sample Project
Figure 5-10
Notes on Sample Project
• All acIviIes, and thus all paths, must be completed
to finish the project
• The shortest Ime for compleIon of the network is
equal to the longest path through the network
– In this case a-e-h-j
• If any acIvity on this path
is even slightly delayed,
the project will be delayed
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CalculaIng AcIvity Slack
•
•
•
•
•
•
•
ES: Earliest start Ime
EF: Earliest finish Ime
LS: Latest start Ime
LF: Latest finish Ime
Slack = LS – ES
Slack = LF – EF
Either method of calculaIng slack gives the same
results
Managerial ImplicaOons
• The primary aWenIon of the project manager
must be to acOviOes on the criOcal path
• If anything delays one of these acIviIes, the
project will be late
• Projects are easier to manage when there is
project slack
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ParIal project acIvity network with
task duraIons
(figure 9.16)
9-73
AcIvity Network with Forward Pass
(figure 9.18)
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AcIvity Network with Backward Pass
(figure 9.19)
9-75
PROJECT NETWORK WITH ACTIVITY
SLACK AND CRITICAL PATH
(FIGURE 9.20)
9-27
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Exercise 2 – Network Diagram
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Exercises 8 on page 375
(Meredith and Mantel, 2009)
79
Homework
• Exercise 1-7 on pages 374-375 (Meredith and
Mantel, 2009)
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EsImate AcIvity DuraIons
TE=(a+4m+b)/6
82
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83
84
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Three-Point EsImaIon
Thời gian dự kiến (TE)
Phương sai (Variance)
Độ lệch chuẩn (SD)
85
Exercise on page 360
(Meredith and Mantel, 2009)
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Homework:
Exercise on
page 380
(Meredith and
Mantel, 2009)
87
88
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Exercise 4 –
ACTIVITY DURATION TABLE
89
Exercise 4 – NETWORK DIAGRAM
90
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PERT case analysis
standard deviaIon
propability
Exercise 5 - PERT CASE ANALYSIS
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Three-Point EsImaIon
Thời gian dự kiến (TE)
Phương sai (Variance)
Độ lệch chuẩn (SD)
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To find the probability of project compleOon in a desired period of Ome
=> Probability
(Table 8.5, p. 358, Meredith and Mantel, 2009)
95
Exercise 6
(Meredith and Mantel 2009, p.360)
96
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Exercises 9 on page 375
(Meredith and Mantel, 2009)
97
A SHORT TEST
20 minutes
98
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Arrow Diagraming Method
AOA (acOvity on arrow)
• AcIviIes are represented by arrows.
• Nodes or circles are the starIng and ending
points of acIviIes.
• Can only show finish-to-start dependencies.
AOA (acIvity on arrow) or ADM
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Sample AOA Network
Table 5-1
Figure 5-6 (a)
AcIvity on Arrow Networks
ü Activities represented by arrows
ü Widely used in construction
ü Event nodes easy to flag
ü Forward and backward pass logic similar to AON
ü Two activities may not begin and end at common nodes
ü Dummy activities may be required
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NotaIon for AcIvity-on-Arrow (AOA)
Networks
(figure 10.18)
10-103
Sample Network Diagram Using AOA Approach
(figure 10.19)
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RepresenIng AcIviIes with Two or More
Immediate Successors (Wrong)
(figure 10.20a)
10-105
AlternaIve Way to Represent AcIviIes
with Two or More Immediate Successors
(Wrong)
(figure 10.20B)
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RepresenIng AcIviIes with Two or
More Immediate Successors Using
Dummy AcIviIes (BeWer)
(figure 10.20C)
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ParIal Project Delta Network Using
AOA NotaIon
(figure 10.21)
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Completed Project Delta AOA Network
(figure 10.22)
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Project Delta Forward Pass Using
AOA Network
(figure 10.23)
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Project Delta Backward Pass Using
AOA Network
(figure 10.24)
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Exercise 2 – AOA Diagram
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Exercise 8 - AOA diagram
113
Lags in Precedence RelaIonships
The logical relationship between the start and finish of one
activity and the start and finish of another activity.
Four logical relationships between tasks:
1. Finish to Start
2. Finish to Finish
3. Start to Start
4. Start to Finish
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Finish to Start Lag
•
•
Most common type of sequencing
Shown on the line joining the modes
– Added during forward pass
– Subtracted during backward pass
0 A 6
Spec Design
6
6
B 11
Design Check
5
the
not i t y
s
i
g
iv
s la act
Thi e as
samck.
sla
Lag 4
15 C 22
Blueprinting
7
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Finish to Finish
Two activities share a similar completion point (wiring and HVAC).
– The under construction cannot happen until wiring, plumbing, and
HVAC installation are complete.
30
R 36
Wiring
6
31 S 33
Plumbing
2
33 T 36
HVAC
3
36 U 42
Under construction
6
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Finish to Finish Lag
It may be appropriate for two or more activities to conclude at the same time. For
example, a contractor building an office complex cannot begin interior wall
construction until all wiring, plumbing, and HVAC have been installed; she may include
lag to ensure the completion of all preceding activities all occur at the same time.
30
R 36
Wiring
6
34 S 36
Plumbing
2
Lag 3
36 T 39
HVAC
3
39 U 45
Under construction
6
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Start to Start Lag
30
Logic must b
e
maintained b
y
forward and both
backward pass
.
R 36
Wiring
6
Lag 3
33
31 S 33
Plumbing
2
T 36
HVAC
3
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36 U 42
Under construction
6
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Start to Finish Lag
•
•
20
W
Least common type of lag relationship
Successor’s finish dependent on
predecessor’s start
26
6
Lag 3
18
X
2
20
20
Y
23
23
3
Z
29
6
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Controversies in the Use of Networks
1. Networks can be too complex.
2. Poor network construction creates problems.
3. Networks may be used inappropriately.
4. Networks pose special dangers because
contractors may create their own networks.
5. Positive bias exists in PERT networks.
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GANTT CHART
The GanW Chart
• Henry GanW developed the GanW chart
around 1917
• It displays project acIviIes as bars measured
against a horizontal Ime scale
• Most popular way of exhibiIng sets of related
acIviIes in the form of schedules
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The Chart
• GanW charts are easy to draw
• Problems arise when several tasks begin at the same
Ime and have the same duraIon
– Can make it hard to find criIcal path
– Only a problem on hand-drawn charts
• Socware shows criIcal path using some visual
method
• Even with socware, technical dependencies are
harder to see on a GanW chart
A GanW Chart of a Sample Project
Figure 5-19
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A GanW Chart Showing CriIcal Path, Path
ConnecIons, Other Data
Figure 5-20
Extensions to PERT/CPM
• ApplicaIon of fuzzy set theory to aid in
esImaIng acIvity duraIons
• Extensions to precedence diagramming
• GoldraW’s CriIcal Chain
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GanW Charts
ü Establish a time-phased network
ü Can be used as a tracking tool
Benefits of Gantt charts
1. Easy to comprehend
2. Identify the schedule baseline network
3. Allow for updating and control
4. Identify resource needs
5. Easy to create
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Completed GanW Chart for Project
Delta
(figure 10.8)
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GanW Chart for Project Delta with
CriIcal Path Highlighted
(figure 10.9)
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GanW Chart with Resources Specified
(figure 10.10)
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GanW Chart with Lag RelaIonships
(figure 10.11)
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Crashing a Project
Tăng thêm nguồn lực để đẩy nhanh
Oến độ
132
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ExpediIng a Project (Approaches)
1. The criIcal path method
2. Fast-tracking a project
3. Project expediIng in pracIce
1. OpportuniIes before the project begins
2. OpportuniIes when the project is underway
The CriIcal Path Method
•
•
•
•
•
Normal duraIon esImates
Normal costs
Crash duraIon esImates
Crash costs
Crash cost per day
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Crashing
The process of accelerating a project
Primary methods for crashing:
1. Improving existing resources’ productivity
2. Changing work methods
3. Compromise quality and/or reduce project scope
4. Institute fast-tracking
5. Work overtime
6. Increasing the quantity of resources
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Crash process
• Determine activity fixed and variable costs
• The crash point is the fully expedited activity
• Optimize time-cost tradeoffs
• Shorten activities on the critical path
• Cease crashing when:
– the target completion time is reached
– the crashing cost exceeds the penalty cost
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Time/cost trade-offs for
crashing acIviIes
(figure 10.14)
10-137
How to Crash
•
•
Start with the normal schedule
Select activities to crash, one at a time
1. Focus on the critical path(s)
2. Select least expensive activity to crash
•
Calculate slope information on activities to
crash
slope =
crash cost - normal cost
crash time - normal time
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Crashing a project (Exercise 1)
• Added more resources to expedite a project
Crash Ome
(day)
Crash cost
(USD)
Normal Ome
(day)
Normal cost
(USD)
a
3
500
4
300
b
1
325
3
250
AcOvity Predecessor
c
b
4
550
7
400
d
a,c
3
250
5
150
QuesIon
1. Calculate the crash cost per day.
2. Find the lowest cost to complete the project
in 13 days. ParIal crashing is possible.
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Example 9 - Project AcIviIes and Costs
(table 10.1)
10-141
Example 9- Fully crashed project
acIvity network
(figure 10.15)
10-142
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Example 9 -RelaIonship between cost
and days saved in crashed project
(figure 10.16)
10-21
Notes on Crashing
• Important to make sure the resources required to
crash the project are available
• Technology may be used to crash an acIvity
– Using Ditch Witch to dig a ditch rather than adding more
workers
• May have to expedite tasks not on criIcal path to
make resources available to other projects
• Some tasks cannot be crashed
72
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A PERT/CPM Example of Crashing a
Project, AOA Network Part 1
Figure 6-1 (Partial)
A PERT/CPM Example of Crashing a
Project, AOA Network Part 2
Figure 6-1 (Partial)
73
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CPM Crash Cost-DuraIon History
Figure 6-2
Exercise 2
(Meredith and Mantel, 2009, p.
392)
148
74
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• Exercise 3
(Meredith and Mantel, 2009, p.424)
• Exercise 6
(Meredith and Mantel, 2009, p.425)
75
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Homework
• Exercises 1 and 2 on p. 424, Meredith and
Mantel, 2009.
• 7 on p. 425
• 9 on p. 425
• 12 on p. 426
• 15 on p. 427
Fast-tracking
Cùng thực hiện nhiều công việc một
lúc, không tuân theo quy trình đã
được lập kế hoạch ban đầu
76
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Fast-Tracking a Project
• An expediIng technique in which one phase
of the project is started before preceding
phases are completed
• Used in the construcIon industry when the
building phase is started before the design
and planning phases are complete
• This technique is parIcularly appropriate
when large proporIon of work is rouIne
3.4. Resources AllocaOon and Leveling
77
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Resources AllocaOon and Leveling
why?
Resource constraints
A resource can be used simultaneously by mulI
projects
Resource shicing expenses
Allocate Resources to the Project
•
•
Projects compete with each other for resources
1. If resource is used but not consumed, which project
must wait to use resource
2. If resource is consumed during use, may not be available
for other projects or other projects must wait for
replacement
In either case, one project must wait
–
•
•
One project is delayed
Likewise, different acIviIes on the same project
may compete for resources
Trade-offs must be made
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The Basics of Resource Constraints
Time and Resource Scarcity
TABLE 12.1 AcOvity Precedence Table
Figure 12.2 Sample AcOvity Network with conflicts
157
The Basics of Resource Constraints
Time and Resource Scarcity
Figure 12.3 Resource Usage table DemonstraOng Over-allocaOon
158
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Resource Loading
• Refers to the amounts of specific resources
that are scheduled for use on specific
acIviIes or projects at specific Ime
• It is usually presented in the form of a list or
table
Construct a resource-loading chart
To construct a Ime-limited resource loading chart for
resource scheduling, there are six main steps to follow:
1. Create acIvity network.
2. Produce table for each acIvity, resource requirements,
duraIon, early start Ime, slack, and late finish Ime.
3. List acIviIes in order of increasing slack.
4. Draw an iniIal resource-loading chart with each acIvity
scheduled at its earliest start Ime.
5. Rearrange acIviIes within their slack to create a profile that
is as level as possible
6. Use judgment to interpret and improve acIvity leveling.
12-160
Copyright ©2016 Pearson Education,
Inc.
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Resource Loading Issues
• Most project management socware assumes
that any resource assigned to an acIvity will
work on that acIvity 100 percent of the Ime
available
– Can be resolved by allocaIng a specific
percentage of Ime to project
• It is easy to over uIlize human resources
– OverIme is expensive
Resource Leveling
A process that address the complex challenges of
project constraints
Objectives:
• To determine the resource requirements so that
they will be available at the right time
• To allow each activity to be scheduled with the
smoothest possible transition across resource usage
levels
12-164
Copyright ©2016 Pearson
Education, Inc.
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Resource Leveling
• Resource leveling aims to minimize the period-byperiod variaOons in resource loading by shi/ing task
within their slack allowances.
• To perform resource leveling, move acIviIes so that
resources do not exceed their capacity
– Using available slack first
– Extending project duraIon where using slack does not
work
• Project manager may not try to level all resources
• A working schedule may require more resources
• A more-or-less steady state demand for human
resources is highly desirable
Some Priority Rules
•
•
•
•
•
•
•
As soon as possible
As late as possible
Shortest task duraIon first
Minimum slack first
Most criIcal followers
Most successors
Most resources first
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PrioriIzaIon Rules for Leveling
1. Smallest amount of slack
2. Smallest duration
3. Lowest ID number (FCFS)
4. Greatest number of successor tasks
5. Requiring the most resources
12-167
Copyright ©2016 Pearson
Education, Inc.
General Procedure for Leveling
1.
Create a project activity network diagram.
2. Develop resource loading table.
3.
Determine activity late finish dates.
4. Identify resource overallocation.
5. Level the resource loading table.
12-11
Copyright ©2016 Pearson
Education, Inc.
84
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Sample project network
(figure 12.17)
4 B 5
Res = 2
5 D 9
Res = 7
9 E 11
Res = 3
0 A 4
Res = 6
11 F 12
Res = 6
4 C 7
Res = 2
12-169
CreaIng Resource Loading Charts
Activity
Resource
Duration
ES
Slack
LF
A
6
4
0
0
4
B
2
1
4
0
5
C
2
3
4
4
11
D
7
4
5
0
9
E
3
2
9
0
11
F
6
1
11
0
12
12-170
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Resource-loading chart
(figure 12.18)
12-171
Modified resource-loading chart when spliˆng
task C
(figure 12.19)
12-172
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173
174
87
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175
Managing resources in mulIproject
environments
Ø Schedule Slippage
Ø Resource Utilization
Ø In-Process Inventory
Ø Resolving Resource Decisions in Multiproject
Environments
Ø First In Line
Ø Greatest Resource Demand
Ø Greatest Resource Utilization
Ø Minimum Late Finish Time
Ø Mathematical Programming
12-176
Copyright ©2016 Pearson Education, Inc.
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Exercise 1
(Meredith and Mantel 2009, p.425)
177
Bài tập 2
Hoạt
động
Thời gian
(tuần)
Hoạt động
trước đó
A
2
--
Số giờ sử dụng 01
Nguồn lực nguồn lực mỗi tuần (h/
tuần/nguồn lực)
An, Bình
24
B
1
--
Bình, Minh
32
C
2
A
An, Minh
20
D
3
A
Minh
36
E
5
B, C
An, Bình, Minh
40
F
3
B, C, D
An, Minh
32
G
4
D, E
An, Bình, Minh
36
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Câu hỏi
1. Vẽ sơ đồ mạng lưới của dự án.
2. Xác định đường găng và thời gian tối thiểu thực hiện dự án.
3. Vẽ sơ đồ phân bổ các nguồn lực của dự án (giả thiết thời gian làm việc
của một lao động thông thường là 40 giờ/tuần, tối đa là 60 giờ/tuần lương làm thêm giờ cao hơn lương làm việc trong giờ thông thường).
4. Xác định các công việc, thời lượng quá tải và thời điểm quá tải so với
mức độ làm việc thông thường.
5. Cân đối lại các nguồn lực để tránh quá tải mà không cần yêu cầu các
nguồn lực làm thêm giờ. Đường găng của dự án có thay đổi không? Nếu có
thì đường găng mới là đường nào?
6. Chủ dự án muốn hoàn thành dự án càng sớm càng tốt và chấp nhận có
thể tăng thêm chi phí, hãy giúp chủ dự án làm việc đó (trình bày rõ có thể
rút ngắn những công việc nào, thời gian là bao lâu, đường găng mới là gì
nếu có, tổng thời gian thực hiện dự án sau khi rút ngắn) biết trật tự các
công việc không thay đổi.
3.5. Cost Estimation and Budgeting
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Common Sources of Project Cost
Ø Labor
Ø Materials
Ø Subcontractors
Ø Equipment & facilities
Ø Travel
181
Basics of a cost planning process
Elements of cost
•
•
•
•
•
•
Time
– Direct input of labour
Materials
– Consumables and other items
– At cost or cost + margin
Capital equipment
– The means of providing the conversion process plus maintenance, running, depreciation
– Entire cost when purchased specifically
– Possible residual value
Indirect expenses
– Transport, training, etc., not directly related to value-adding activities but considered
necessary
Overheads
– Office, financial and legal support, managers and non-direct staff
Contingency
– Margin or allowance, e.g. 10 percent
182
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Types of Costs
v Direct Vs. Indirect
v Recurring Vs. Nonrecurring
v Fixed Vs. Variable
v Normal Vs. Expedited
183
Types of Costs
v Direct Vs. Indirect
v Recurring Vs. Nonrecurring
v Fixed Vs. Variable
v Normal Vs. Expedited
184
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Types of Costs
v Direct Vs. Indirect
v Direct costs are those clearly assigned to the aspect of the project that
generated the cost.
E.g. labor that is hands-on in the producIon of the project and materials that are used and sold or consumed in the
creaIon of the project, etc.
v Indirect costs are generally linked to two features: overhead and
selling and general administraIon.
E.g. health benefits for the labor force, taxes, insurance, depreciaIon and repairs, etc.
185
Types of Costs
v Recurring Vs. Nonrecurring
v Recurring costs: costs are those that typically
continue to operate over the project's life cycle
v Nonrecurring costs might be those charges
applied once at the beginning or end of the
project
186
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Types of Costs
v Fixed Vs. Variable
v Fixed costs: do not vary with their usage
v Variable costs: accelerate through usage
187
Types of Costs
v Normal Vs. Expedited
vNormal costs: are those incurred through the rouIne
process of working to complete the project according
to the original schedule
v Expedited costs: are unplanned costs incurred when
steps are taken to speed up the project's compleIon.
188
94
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Cost ClassificaIons
(table 8.2)
189
Estimating techniques
• Parametric estimating
– Projects are rarely totally unique, often repetition of activities at
lower levels of WBS
– Break down project into units that can be readily estimated
based on considerable experience of a particular type of project
– Can be used at different levels of the product breakdown
• As…but…s
– Experience of similar projects
– Use previous cost as base line (assuming validity) and
proportion up or down
• Forecasts
– A ‘best guess’ when uncertainty (e.g. exchange rates)
– Use parametrics or proxies
– Differentiate between fixed (firm/known) and variable costs
(fluctuate, estimate)
– Provide series of estimates to see impact on budget
– Factor in element for risk
190
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Estimating techniques
• Synthetic estimation
– Based on practices of work measurement
– If large number of repetitive actions, work rate can be analysed
to provide generic actions, timings and costs
– Deconstruct new activities into similar actions and add timings
• Wishful thinking
– Optimism bias – over-optimistic on how much can be achieved
and how little it will cost
– Politics – large figures likely to be unacceptable, the objective is
placed above costs
– Improper use of estimates – ball park figures become official
without checking or further development
– Failure to be systematic about planning – complacency,
certainty will not have to do work, vagueness, unqualified
estimate to ‘get the request off the desk’
• The best techniques are still only estimates
• Errors at this stage can be multiplied many times
191
Cost EsImaIon
Ø Ballpark (order of magnitude) ±30%
Ø Comparative ±15%
Ø Feasibility ±10%
Ø Definitive ±5%
192
96
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Cost EsImaIon
Methods
Ballpark
Comparative
Feasibility
when either
information or
time is scarce;
historical data
can be used as
a frame of
reference
made after
the completion of
the preliminary
project design work
upon receiving quotes
from suppliers and sub
contractors
±30%
±15%
±10%
(order of
magnitude)
Definitive
upon the completion
of most design work,
at a point when the
scope & capabilities
of the project are
quite well understood
±5%
193
Problems with Cost EsImaIon
ü Low initial estimates
ü Unexpected technical difficulties
ü Lack of definition
ü Specification changes
ü External factors
194
97
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CreaIng a Project Budget
(figure 8.7)
WBS
Project
Plan
Scheduling
Budgeting
The budget is a plan
that identifies the
resources, goals, and
schedule that allows a
firm to achieve those
goals.
Top-down
BoWom-up
AcIvity-based cosIng (ABC)
195
IntroducIon
• A budget must be developed in order to obtain the
needed resources
• A budget is a plan for allocaIng organizaIonal
resources to the project acIviIes
• A budget Ies the project to the organizaIon’s aims
and objecIves through organizaIonal policy
• A budget acts as a tool for upper management to
monitor and guide the project
196
98
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Methods of BudgeIng
• BudgeIng is forecasIng what resources the project
will require, what quanIIes of each will be needed,
when they will be needed, and how much they will
cost
• Most businesses employ experienced esImators
who can forecast resource usage very well
• BudgeIng a project is more difficult than budgeIng
more rouIne acIviIes
197
BudgeIng/EsImaIng Problems
• Project are unique acIviIes
• No history to aid esImators
• Projects may be mulI-year with cost escalaIons
– Changes in technology, materials, prices
• OrganizaIon tradiIon impacts project budgeIng
– How overhead and indirect costs are charged
– Specific legal issues
– AccounIng idiosyncrasies
• Project managers see costs differently than accountants
– Accounts treat costs linearly
99
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EsImate Resources: Methodology
• Top-down CosIng
• BoWom-up CosIng
• Work Element CosIng (a combinaIon)
199
Top-Down BudgeIng
• Based on collecIve judgments and experiences of top and
middle managers
• Overall project cost esImated by esImaIng the costs of
major tasks
• Advantages
– Accuracy of esImaIng overall budget
– Errors in funding small tasks need not be individually idenIfied
• Disadvantage
– Allows budget to be controlled by people who play liWle role in
designing and doing the work required by the project
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BoWom-Up BudgeIng
• Work breakdown structure (WBS) idenIfies
elemental tasks
• Those responsible for execuIng these tasks
esImate resource requirements
• Advantage
– More accurate in the detailed tasks
• Disadvantage
– Risk of overlooking tasks
Work Element CosIng
• Determine resource requirements and then costs for each
task
–
–
–
–
–
Fixed costs
Labor Ime and labor rate
Equipment Ime and equipment rate
Overhead
General, sales, and administraIve
• Full cost budget is used by accounIng to esImate the profit
of the project
• Project manager may also construct a budget of direct costs
– This provides informaIon required to manage the project without
being confounded with costs over which he has no control
101
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AcIvity-Based CosIng
Projects use activities & activities use resources.
1. Assign costs to activities that use resources.
2. Identify cost drivers associated with this activity.
3. Compute a cost rate per cost driver unit or
transaction.
4. Multiply the cost driver rate times the volume of cost
driver units used by the project.
203
Sample Project Budget
(table 8.6)
204
102
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Sample Budget Tracking Planned and
Actual AcIvity Costs
(table 8.7)
205
Example of a Time-Phased Budget
(table 8.8)
206
103
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CumulaIve Budgeted Cost of the Project
(figure 8.8)
207
The Impact of Budget Cuts
•
Top-down budgets are usually lower than boWomup budgets
1. Job always looks easier, faster, and cheaper to the
manager
2. Managers are usually opImisIc
3. Subordinates are usually pessimisIc
•
To resolve difference…
1. Subordinate explains the reality of the task
2. Both parIes search for efficiencies
3. Resolving remaining difference depends on the type of
project
104
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Two Project Life Cycles
Figure 4-1
AcIvity Versus Program BudgeIng
• AcIvity oriented budgeIng are based on historical
data accumulated through an acIvity-based
accounIng system
– Expenses assigned to basic budget lines
– Lines are aggregated and reported by units
• With program budgets, each project is divided by
task and Ime period allows for aggregaIon across
projects
– Budget reports are shown both aggregated and
disaggregated by regular operaIons
– Each project has its own budget
105
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Typical Monthly Budget for a Real Estate
Project (ParIal)
Table 4-3
Project Budget by Task and Month
Table 4-4
106
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Improving EsImates and Forecasts
• Forms (pro-forma)
• Learning curves
Forms
• A form for project resource needs might include:
–
–
–
–
People – managers, technical and non-technical
Money
Materials – faciliIes, equipment, tools, space
Special services
• And might idenIfy:
–
–
–
–
Person to contact
When needed
How many/much needed
Whether available
107
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Form for Gathering Data on Project
Resource Needs
Figure 4-2
Learning Curves
• Humans learn when they repeat a task
• It has been found that unit performance
improves by a fixed percent each Ime total
producIon doubles
• Each Ime the output doubles, the worker
hours per unit decrease by a fixed percentage
of their previous value
– This percentage is called the learning rate
108
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Learning Curves
Each doubling of output results in a reducIon in Ime to
perform the last iteraIon.
Tn = T1n r
nr: learning curve coefficient
where
Tn = the time required to complete the nth unit
T1 = the time required to complete the first unit
r = log(learning rate)/log(2)
Unit Learning Curve
Log-Linear Model
(figure 8.5)
218
109
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Applying Learning Curves in Cost
EsImaIon
•
Learning curve rates can be used in a project if there is an activity that
remains fairly constant and is performed repeatedly.
• Rather than using a direct multiplier of the number of repetitions times the time
required to complete the first iteration, the project manager can use the
learning curve equation to calculate the time required for successive units as
long as the learning curve rate can be estimated.
•
The result will be a time estimate lower than by direct multiplication, which
might permit the project manager to more accurately gauge the amount of
labor and time required and prepare a more competitive bid.
219
Quiz
220
110
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Quiz
221
Budget ConIngencies
The allocation of extra funds to cover uncertainties and
improve the chance of finishing on time
Contingencies are needed because:
1.
2.
3.
4.
Project scope may change
Murphy’s Law is present
Cost estimation must anticipate interaction costs
Normal conditions are rarely encountered
222
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Benefits to conIngency funding
1. Recognizes future contains unknowns
2. Adds provision for company plans for an increase in
project cost
3. Applies contingency fund as an early warning signal
to potential overdrawn budget
223
Project Budget Component
224
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3.6. Risk Management
Project Risk Management
•
•
•
•
•
•
Projects are risky, uncertainty is high
Project manager must manage this risk
This is called “risk management”
Risk varies widely between projects
Risk varies widely between organizations
Risk management should be built on the results
of prior projects
• Increased interest in risk management
6-226
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Framework for risk management
Figure 10.1 Risk management schema
Four Stages of Risk Management
1. Risk identification
2. Analysis of probability and consequences
3. Risk mitigation strategies (risk response)
4. Control and documentation
Copyright ©2016 Pearson Education, Ltd.
7-22
8
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3.6.1. Risk Identification
Common Types of Risks
• Absenteeism
• Skills unavailable
• ResignaIon
• IneffecIve training
• Staff pulled away
• Specs incomplete
• Time overruns
• Change orders
229
Risk Identification
QualitaOve methods conducOng risk factor idenOficaOon:
Brainstorming
meeOngs
1 2
Past History
3 4
Expert
opinion
MulOple
(or team-based)
assessments
230
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Risk Identification
InformaOon Gathering Techniques
• Brainstorming
• Delphi technique
– Successive anonymous quesIonnaires on project
risks with responses summarized for further
analysis
• Interviewing
• Root cause idenIficaIon
Risk Identification
The Risk Register
• Important output of the risk idenIficaIon
process
– List of idenIfied risks and other informaIon needed
to begin creaIng a risk register
• Contains the results of various risk management processes
and that is ocen displayed in a table or spreadsheet format
• Tool for documenIng potenIal risk events and related
informaIon
– Risk events refer to specific, uncertain events that
may occur to the detriment or enhancement of the
project
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Risk Identification
The Risk Register
• Risk register/risk log:
– List identified risks
– Their occurrence
– Actions taken to mitigate them
– Results of the actions taken
– Add new risks as they become apparent
– Remove expired risks
– Beneficial as highlights ongoing process
Risk Identification
The Risk Register - Content
–
–
–
–
–
–
–
–
–
–
–
IdenIficaIon number for each risk event
Rank for each risk event
Name of each risk event
DescripIon of each risk event
Category under which each risk event falls
Root cause of each risk
Triggers for each risk; indicators or symptoms of actual risk events
PotenIal responses to each risk
Risk owner or person who will own or take responsibility for each risk
Probability and impact of each risk occurring
Status of each risk
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Risk Identification
The Risk Register - Focus
• List of
– IdenIfied risks
– PotenIal responses
– Root causes
• Updated risk categories (if required)
Risk Identification
The Risk Register - Sample
No
Rank
R2
1
R4
2
R7
3
Risk
DescripOon
Category
Root
Cause
Triggers
PotenOal
Responses
Risk
Owner
Probability
Impact
Status
Table 11-4 Sample risk register
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Risk Identification
The Risk Register
• Risk report contents
– Sources of overall project risk
– Important drivers of overall project risk exposure
– Summary informaIon on risk events
Risk Identification
Risk Breakdown Structure
Level 1
Level 2
Level 3
238
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Risk Identification
Risk Breakdown Structure
• Lists categories and subcategories where risks may arise
Project
Technical
OrganizaIonal
Project Management
Limited Design Time
Funding
EsImates
SpecificaIons Adherence
PrioriIzaIon
Scheduling
Resource Availability
CommunicaIon
3.6.2. Analysis of Probability and Consequences
QualitaOve Risk Analysis
•
•
The process of prioriIzing risks for further analysis or acIon by
assessing and combining their probability of occurrence and impact.
Key benefit: it enables project managers to reduce the level of
uncertainty and to focus on high-priority risks.
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Analysis of Probability and Consequences
QualitaOve Risk Analysis
• Risks in the pink boxes need to be actioned
Figure 10.2
Probability impact chart
Analysis of Probability and Consequences
QualitaOve Risk Analysis
• Define Probability Scale & Impact Scale
Impact Scale
Consequence
Extreme
Probability Scale
Health and Safety
Fatality or multiple fatalities
expected
High
Severe injury or disability likely; or
some potential for fatality
Moderate
Lost time or injury likely; or some
potential for serious injuries; or
small risk of fatality
Low
First aid required; or small risk of
serious injury
Negligible
No concern
Likelihood Class
Not Likely (NL)
Low (L)
Likelihood of Occurrence
(events/year)
<0.01% chance of
occurrence
0.01 - 0.1% chance of
occurrence
Moderate (M)
0.1 - 1% chance of
occurrence
High (H)
1 - 10% chance of
occurrence
Expected (E)
>10% chance of occurrence
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Using Probability/Impact Matrixes to
Calculate Risk Factors (1 of 3)
• Lists relaIve probability of a risk occurring on
one side of a matrix or axis on a chart and the
relaIve impact of the risk occurring
– List the risks and then label each one as high,
medium, or low in terms of its probability of
occurrence and its impact if it did occur
• Calculates risk factors
– Numbers that represent the overall risk of specific
events based on their probability of occurring and
the consequences to the project if they do occur
room use.
Using Probability/Impact Matrixes to
Calculate Risk Factors (2 of 3)
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Using Probability/Impact Matrixes to
Calculate Risk Factors
Qualitative Risk Analysis
Summary
•
•
•
•
•
Purpose is to prioritize risks
A sense of the impact is also needed
Each objective should be scaled and weighted
Construct a risk matrix
Same approach can be used for opportunities
6-246
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QuanOtaOve Risk Analysis
• State outcomes as probability distribuIon and use
distribuIons to evaluate the desirability of certain
decisions
• ObjecIve is to illustrate the risk profile of the
outcomes
• Risk profiles are one factor to consider in making the
decision
• Techniques for analysis include:
– Expected value
– SimulaIon
3.6.3. Risk Responses
Risk MiOgaOon Strategies
• NegaIve Risks (or Threats)
–
–
–
–
Avoid
Transfer
MiIgate
Acceptance
• PosiIve Risks (or OpportuniIes)
–
–
–
–
Exploit
Share
Enhance
Acceptance
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Risk Response
Planning
• Deciding on which risks to prepare for and which to
ignore
• Main preparaIon is a risk response plan
• Risk response plan includes conIngency plans and
logic charts detailing what to do
– ConIngency plan is a backup for some emergency or
unplanned event (“plan B”)
– Logic chart shows the flow of acIviIes once a backup plan
is iniIated
Risk Response
MiOgaOon Strategies
Accept
Minimize
Share
Transfer
ConIngency Reserves
Task conIngency
Managerial
conIngency
Insurance
Other MiIgaIon
Strategies
Mentoring
Cross training
Control and
DocumentaIon
Change management
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Risk Response
MiOgaOon Strategies
Use of ConIngency Reserves
N including financial and managerial
N served as the specific provision for unforeseen elements of cost within
the defined project scope.
Task
conOngency
the most common form of conIngency reserve, used to
offset budget cutbacks, schedule overruns, or other
unforeseen circumstances accruing to individual tasks or
project work packages => budget reserve (e.g: +/- 20%)
Managerial
conOngency
managerial conIngency is an addiIonal safety buffer
applied at the project level => buget reserve at higherlevel risks; or offset natural disasters
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Risk MiIgaIon Strategies
Risk Responses - example
Technical Risks
Cost Risks
Schedule Risks
Emphasize team support
and avoid stand-alone
project structure
Increase the frequency of
project monitoring
Increase the frequency of
project monitoring
Increase project manager
authority
Use WBS and CPM
Use WBS and CPM
Improve problem handling
and communicaIon
Improve communicaIon,
understanding of project
goals, and team support
Select the most experienced
project manager
Increase the frequency of
project monitoring
Increase project manager
authority
Use WBS and CPM
Table 11-6 General risk miIgaIon strategies for technical, cost, and
schedule risks. *Source: J. Couillard
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Risk MiIgaIon Strategies
Risk Responses – Notes
• It’s also important to idenIfy residual and
secondary risks
– Residual risks: risks that remain acer all of the
response strategies have been implemented
– Secondary risks: direct result of implemenIng a
risk response
Information Technology Project
Management, Ninth Edition. © 2019
Cengage.
3.6.4. Risk Control and documentaOon
• Developing a reporOng and
documentaOon system for
cataloging and future
reference, once project risk
analysis has been completed.
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Risk Monitoring and Control
• Monitoring and control are tasks for the
parent organizaIon
– As well as the project
• Must keep records for future projects
• Also must conInue to search for new risks
Risk Control & DocumentaOon
Helps managers classify and codify risks, responses, and
outcomes
Change management report system answers:
•
•
•
•
•
What?
Who?
When?
Why?
How?
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Copyright
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Risk Control and documentaOon
N Helps managers classify and codify risks,
responses, and outcomes
N Change management report system answers:
•
What—IdenIfy clearly the source of risk that has been uncovered.
•
Who—Assign a project team member direct responsibility for
following this issue and maintaining ownership regarding its
resoluIon.
•
When—Establish a clear time frame, including milestones if
necessary, that will determine when the expected miIgaIon is
to occur.
•
Why—Pinpoint the most likely reasons for the risk; that is,
idenIfy its cause to ensure that efforts toward its minimizaIon
will correspond appropriately with the reason the risk emerged.
•
How—Create a detailed plan for how the risk is to be abated/
miOgated.
257
Risk Control and documentaOon
N Helps managers classify and codify risks, responses, and outcomes
N Change management report system answers:
• What—IdenIfy clearly the source of risk that has been uncovered.
• Who—Assign a project team member direct responsibility for following this
issue and maintaining ownership regarding its resoluIon.
• When—Establish a clear time frame, including milestones if necessary, that
will determine when the expected miIgaIon is to occur.
• Why—Pinpoint the most likely reasons for the risk; that is, idenIfy its cause to
ensure that efforts toward its minimizaIon will correspond appropriately with
the reason the risk emerged.
• How—Create a detailed plan for how the risk is to be abated/ miOgated.
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Project Risk Analysis & Management
(PRAM)
PRAM presents a generic methodology that can be applied to
multiple project environments, and encompasses the key
components of project risk management.
Key Features of PRAM
Ø Risk management follows a life cycle.
Ø Risk management strategy changes over the
project life cycle.
Ø Synthesized, coherent approach
7-259 ©2016 Pearson Education, Inc.
Copyright
Project risk Analysis and Management (PRAM)
PRAM presents a generic methodology that can be applied to mulIple project
environments, and encompasses the key components of project risk management.
Key Features of PRAM:
Risk management follows a life cycle,
much as a project follows a life cycle
Risk management is integrated throughout the project’s enIre life cycle.
Risk management strategy changes over the project life cycle.
Different strategies are tailored for different project life cycle stages.
Synthesized, coherent approach.
All relevant risk management tools are applied as they are needed, rather than in a
“pick-and-choose” approach.
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Nine Phases of
Risk Assessment
1.
2.
3.
4.
5.
6.
7.
8.
9.
Define
Focus
Identify
Structure
Clarify ownership of risks
Estimate
Evaluate
Plan
Manage
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PRAM - 9 phases of Risk assessment process
Define
1
Make sure the project is well
defined, including all deliverables,
statement of work, and project
scope
EsOmate
6
Develop a reasonable esOmate of
the impacts on the project of both
the idenIfied risks and the
proposed soluIons. What are the
likely scenarios and their relaIve
potenIal costs?
Evaluate
7
CriIcally evaluate the results of the
esImate phase to determine the
most likely plan for miIgaIng
potenIal risks. Begin to prioriIze
risks and the project team’s
responses.
Focus
IdenOfy
2
3
Begin to plan the risk management
process as a project in its own right,
as well as determining the best
methods for addressing project risk,
given the unique nature of the
project being undertaken
Clarify ownership of risks
5
DisInguish between risks that the
project organizaIon is willing to
handle and those that the clients are
expected to accept as well as
allocate responsibility for managing
risks and responses
Plan
8
Produce a project risk management
plan that proacIvely offers risk
miIgaIon strategies for the project
as needed.
Assess the specific sources of risk at the
outset of the project, including the need
to fashion appropriate responses. This
step requires that we first search for all
sources of risk and their responses and
then classify these risks in some manner
to prioriIze or organize them
Structure
4
Review and refine the manner in which we
have classified risks for the project,
determine if there are commonaliIes
across the various risks we have uncovered
(suggesIng common causes of the risks
that can be addressed at a higher level),
and create a Manage
prioriIzaIon scheme for
addressing these risks
9
Monitor actual progress with the project
and associated risk management plans,
responding to any variances in these
plans, with an eye toward developing
these plans for the future
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