Fundamentals of Project
Management: Part 1b
APEGGA Annual Conference
April 24 & 25, 2003
Dr. George F. Jergeas PEng.
University of Calgary
1
Schedule
Day 1a
Day 2 c
 Introduction
 Project procurement
 5-Step PM
 Bidding process
 Planning and definition  Building & sustaining project
Day 1b
team
 Estimating cost and  Contract administration
time
 Video
Day 2 d
 Organize project team
 Schedule control
 Selecting PM and
 Cost control
team
 Project Close-out
 Effective teams
2
 Claims and disputes
5-Step Project Management
PLANNING
IMPLEMENTATION
DEFINE
PLAN
ORGANIZE
CONTROL
State the
Problem
Identify
project
activities
Determine
Personnel
Needs
Define
Management
Style
Obtain
Client
Acceptance
Estimate
time and
cost
Recruit
Project
Manger
Recruit
Project Team
Establish
Control Tools
Install
Deliverables and
Commissioning
Organize
Project Team
Review
Project
Schedule, cost,
team report
Identify
Project
Goal
List the
Objectives
Determine
Preliminary
Resources
Identify
Risks and
stakeholders
Success criteria
Project charter
Quality
and
Communic
ation
manageme
nt
Bidding
Assign Work
Packages
Write
Project
Proposal
Decision
Recruit Criteria
WBS
Project network
Project proposal
Define Work packages
Assign Work Packages
Prepare
Status Reports
Issue Change
Orders
Variance Reports
Status Reports
CLOSE
Document the
Project
Issue Final
Report
Conduct PostImplementation
Audit
Final Report
Audit Reports
3
Project Charter
Project Name - PM Conference
Project Manager:
Problem/Opportunity
Membership in PM Association has declined in the past four years and attendance at
conference has declined in past three years. The viability and financial stability of the
organization depends on maintaining membership and successful annual conference.
Goal
Reverse the downward trend in membership and annual conference attendance
Objectives
1.
2.
3.
Develop the Program
Set the Conference Site and Date
Design and Implement the Marketing Plan
Success Criteria
1.
At least 50 of previous years conferences attendees will attend
2.
At least 150 of 450 members will attend
3.
At least 1.5% of the non-members receiving conference brochure will attend
4.
At least 5% of the non-member attendees will join PM
Assumptions and Risks
1.
Interest in PM can be renewed through the annual conference
2.
A quality professional program will attract members and non-members
3.
Key speaker(s) fail to show up or submit written paper.
Stakeholders
Attendees, Speakers, Hotel, PM Association, Organizing team4
Risk Quantification Technique:
High, Medium, Low (HML)
H
HH
Impact
M
L
L
M
H
Probability
5
Stakeholder Analysis
STAKEHOLDER
Objective
Potential Impact
How They Operate
Where they gain Support
How to Manage them
and plan for
mitigation
6
Hierarchical Representation
CONFERENCE PLANNING
PROGRAM
THEME
MATERIALS
OBTAIN
MATERIALS
SITE
SPEAKERS
PREPARE
KITS
DATE
PLACE
MARKETING
LISTS
BROCHURE
DESIGN
BROCHURE
REGISTER
MAIL
BROCHURE
7
Estimating Time and Cost
Once the WBS is completed then time and
cost estimates for each activity can be
started.
With experience this becomes an easier
task.
8
Time Management
Purpose: Create a realistic schedule with
the team
Identify the activities (tasks)
Use the WBS and scope statement
Develop activity lists and revise the
WBS
Sequence activities
Consider dependencies
9
Time Management
Estimate durations (time)
Top down, bottom up estimates, Monte Carlo
simulations
Estimating formulae (PERT estimates)
Expert opinion
Consider resource capabilities
Look at similar projects
Develop the schedule (Gantt chart)
Document assumptions and decisions
Use project management scheduling software e.g.
MS Project
10
Estimating formulae
PERT Estimate (weighted average)
[Pessimistic + (4 x Likely) + Optimistic]/6
Pessimistic time to get to work = 30 min
Optimistic time to get to work = 10 min
Likely time to get to work = 15 minutes
PERT Estimate = 30 + (4x15) + 10/6
100/6=16.6 = 17 min
Quick and dirty formula
[Worst + best + most likely]/3
55/3=18.3 min
11
Estimating Activity Time
Optimistic Completion Time - is the time the
activity will take if everything goes right
Pessimistic Completion Time - is the time
the activity will take if everything that can go
wrong does go wrong but the project is still
completed
Most Likely Completion Time - is the time
required under normal circumstances. It can
also be the completion time that has occurred
most frequently in similar circumstances
12
Estimating Activity Time
Time to complete a task is uncertain:
Skill levels and knowledge of the
individuals
equipment variations
Material availability
Unexpected events
Illness
Employee turnover and accidents
13
Estimating Activity Time
We know unexpected events and
occurrences will happen but are unable to
predict the likelihood with any confidence
We must however account for the possibility
of the occurrence of these events
14
Estimated times for
conference planning
ACTIVITY
 A
 B
 C
 D
 E
TIME IN WEEKS
(O)
(M)
(P) (E)
Set conference date
1.0
2.0
3.0 2.0
2.0
5.0
8.0 5.0
4.0
5.0
6.0 5.0
4.0
6.0
8.0 6.0
3.0
10.0
11.0 9.0
Establish theme & program
Select conference site
Obtain mailing labels
Develop brochure
15
Estimated Times for
Conference Planning
ACTIVITY
 F
 G
 H
 I
 J
 K
TIME IN WEEKS
(O)
(M)
(P) (E)
Obtain mailing labels
3.0
4.5
9.0 5.0
1.0
2.0
3.0 2.0
3.0
3.5
7.0 4.0
4.0
6.0
8.0 6.0
0.5
1.0
1.5 1.0
1.0
2.0
3.0 2.0
Mail brochure
Obtain speaker materials
Receive registrations
Confirm arrangements
Prepare conference kits
16
Scheduling Activities
Bar chart and RACI
Produce a Logical Network
Critical Path Method
Arrow Diagrams
Precedence Diagrams
Identify Critical Activities
Locate the Critical Path
Floats
17
Bar Charts/Gantt Chart
Most projects, however complex, start by being
depicted on a bar chart. The principles are very
simple:
Prepare list of project activities
Estimate the time and resources needed
Represent each activity by a bar
Decide logical sequence
Plot activities on a chart with horizontal time scale
showing start and end
18
Project Schedule - Sample
Project: ____________________ Project Manager: ____________________
Date: _____________
19
RACI Charts
Responsible - Accountable - Consulted
- Informed
Identify the roles of participants in each
element of a project
Effective communications road map
4 to 8 weeks look ahead
20
RACI Charts
Update weekly to:
Reset expectations
Ensure right people involved in
detailed planning
Ensure everyone knows what
needs to be done by whom
21
RACI Chart
Task
Responsible Accountable Consulted
Informed
1
2
22
RACI Charts
(F. T. Hartman, 2000)
2.4.5 Major Element Manager:___________________
Amelia Drover
Fred 2-5
Deliverable:_____________________
Project:_________
ACTION
Activity
Another activity
Build something
Another Item
Yet another
Design a bit
Design more
Sneeze
Gesundheit
Another thing
Wait for item
More stuff
Finish
DATES
AC G C F M J W B
DM
RA
- R
R - R
RA
R -
H F
A C
C I
A C
C I
A C
A C
- A R
RC A
- R I
AC R
- I C
R A A I C
I
A
I
A
I
I
W
I
A
I
A
I
I
L
I
A
I
A
I
I
C C
I C
C C I
A R
C I
I A
S
I
I
-
Budget Actual
W/Hrs. W/Hrs.
Budget Actual
Cost Cost
W
I
A
C
A
I
C
E
C
C
-
120
50
345
127
90
55
400
50
1,500
9,000
1,700
A I
I - C I A
A A
AA
I
I
A
R
455
200
65
20
655
80
12
875
7,785
100,000
100
23
CPM: Critical Path Method
Graphic network based scheduling technique
Arrow Diagrams
Precedence Diagrams
Use activities created by the WBS process
Analysis of timing and sequencing logic
Aids in identifying complex interrelationship of
activities
24
CPM: Critical Path Method
Allows for easy revision of schedule and
simulation and evaluation of the impact of
changes
Also used as a control tool during
execution of the project
25
Producing a Logical
Network
The sequencing identifies activities that must be
completed before another activity can start and
which activities can occur simultaneously.
Different methods:
1. “Low-tech” approach: use post-it labels
Each label has one activity written on it
Through iterative process the labels can be arranged
and rearranged
26
Producing a Logical
Network
2. Ask yourself the following:
Which activities must be completed before
this activity starts?
Which activity cannot start until this activity
is completed?
Which activities have no logical relationship
with this activity and therefore take place at
the same time (concurrent activities)?
27
Producing a Logical
Network
3. Identify immediate predecessor activities,
which are activities that must be
completed before another activity can
begin
28
Activity Sequencing:
Training Example
ACTIVITY
A
B
C
D
E
F
G
H
I
J
K
Set conference date
Establish theme/program
Select conference site
Obtain speakers
Develop brochure
Obtain mailing labels
Mail brochure
Obtain speaker materials
Receive registrations
Confirm all arrangements
Prepare conference kits
IMMED.
TIME(WEEKS)
PREDECESSOR
(E)
2.0
5.0
A
5.0
B
6.0
C,D
9.0
C,D
5.0
E,F
2.0
D
4.0
G
6.0
H,I
1.0
J
2.0
29
Activity Sequencing:
Training Example
a
c
e
g
start
i
j
k
end
f
b
d
h
30
Activity Sequencing:
Training Example
0
2
2
a2
4
7
11
e9
c5
6 6
11
20
11
20 22
20
g2
Start
11 16
0
5 5
b5
0
11
d6
5 5
f5
15
11
22 28
i6
20 22 22 28
11 15
20
28 29 29 31
j1
k2
End
28 29 29 31
h4
24 28
31
Critical Path
The longest path is the Critical Path
Critical path is where there is zero slack
time
If an activity takes longer than estimated
on the critical path then the project will be
delayed
The critical path can change if there is a
delay that make an alternative path longer
32
Float (Slack)
Slack or float time is amount of delay that could
be tolerated in the start or completion time
without causing a delay in completion of the
project
Total float or calculations to determine how long
each activity could be delayed without delaying
the project
Total float = LF - ES - duration
33
Should be able to:
Develop a complete project plan:
WBS listing all activities
Project organization and communication
Project schedule using Post-it notes and bar
charts
RACI Chart(s)
34
Video
The Power of scheduling
35
Plan the Project: Basics of
Cost Estimating
36
5-Step Project Management
PLANNING
IMPLEMENTATION
DEFINE
PLAN
ORGANIZE
CONTROL
State the
Problem
Identify
project
activities
Determine
Personnel
Needs
Define
Management
Style
Obtain
Client
Acceptance
Estimate
time and
cost
Recruit
Project
Manger
Recruit
Project Team
Establish
Control Tools
Install
Deliverables and
Commissioning
Organize
Project Team
Review
Project
Schedule, cost,
team report
Identify
Project
Goal
List the
Objectives
Determine
Preliminary
Resources
Identify
Risks and
stakeholders
Success criteria
Project charter
Quality
and
Communic
ation
manageme
nt
Bidding
Assign Work
Packages
Write
Project
Proposal
Decision
Recruit Criteria
WBS
Project network
Project proposal
Define Work packages
Assign Work Packages
Prepare
Status Reports
Issue Change
Orders
Variance Reports
Status Reports
CLOSE
Document the
Project
Issue Final
Report
Conduct PostImplementation
Audit
Final Report
Audit Reports
37
Introduction
Cost estimates:
Key to successfully conceived,
managed and completed projects
An approximation procedure
Mistakes can be very costly!
38
What is a Cost Estimate?
AACEI Definition
“A compilation of all the costs of the elements of a
project or effort included within an agreed upon
scope”
To the contractor
“To forecast cost required to complete a project in
accordance with the contract, plans and
specifications”
To the owner cost includes:
Administering the contract
Contractor's charges, consultants and suppliers
fees
Price of land, financing and operating costs
39
What Constitutes a Good
Estimate?
A clear, sound basis
An agreed upon realistic execution
plan
Good estimating methods and data
base
Good experienced estimator
40
Order - of - Magnitude
Estimates
A quick method of determining an
approximate probable cost of a
project due to the following specific
situations:
Time constraints
High cost of a detailed estimate
41
Order - of - Magnitude
Estimates
Prepared without detailed engineering data
Square feet of floor area
Cubic feet of volume
Plant capacity for input and output
Km of road surface type
Use: In feasibility studies of a project and
screening several types of alternatives or
proposals
Accuracy: +/- 30%
42
Definitive Estimates
Prepared from very defined engineering data
Requires as a minimum:
Plans and elevations
Piping and instrument diagrams
Single line electrical diagrams
Equipment data sheets and quotations
Architectural and structural details
Soil data and sketches of major foundations
A complete set of specifications
Accuracy: +/- 5%
43
Components of a Cost
Estimate
Direct Cost
Labour: actual amount paid to field
personnel
Materials: essential to constructing and
operating a facility including equipment
installed permanently
Equipment: used to perform a contract
Subcontracts
44
Components of a Cost
Estimate
Indirect Costs
Overhead
Home office overhead
Site overhead
Taxes
Risks
Contingency
Profit
Escalation
45
Profit
Is the amount of money included by the
contractor in its price as compensation for risk,
effort and endeavor in undertaking a project.
It is the money left after a contractor has met all
costs (both indirect and direct).
Profit amount included is very subjective and
depends on:
Size of project
Extent of risk involved
Need for work
Extent of competition
46
Contingency
An amount added to cover any additional
costs that may occur.
To determine the amount of contingencies
desirable, an estimator should rely on:
Personal judgment, or
Through statistical analysis of past project costs
47
Training Example: Estimated Conference Planning Budget
CONFERENCE PLANNING
$243,325
Program
Site
Marketing
$41,100
$170,425
$31,800
Theme
Materials
Speakers
Date
Location
Lists
Brochure
$600
$13,300
$27,200
$1,000
$169,425
$2,000
$29,800
3 conf calls
with pgm
comm
Obtain
Speaker
Materials
$800
Edit/format @
$50/speaker
Travel/expenses
for 16 speakers
@ $500 per
speaker
Prepare
Conference
Notebook
$12,500
1100 binders @ $5/binder
photocopy materials
350,000 pages @
$0.02/page
Deposit
3 site visits @
$800/visit food
@$50 per
person/day for 3
days for 1100
meeting rooms @
$225/day/room
for 3 days for 3
rooms
Registration
25,000
labels @
$80/1000
Design
Brochure
$12,800
Layout: 16 pages @
$50/page
Printing: 30,000
copies @ $0.40/copy
Mail
Brochure
$17,000
25,000 pieces @
$0.68/piece
48
Writing a Project Proposal
49
5-Step Project Management
PLANNING
IMPLEMENTATION
DEFINE
PLAN
ORGANIZE
CONTROL
State the
Problem
Identify
project
activities
Determine
Personnel
Needs
Define
Management
Style
Obtain
Client
Acceptance
Estimate
time and
cost
Recruit
Project
Manger
Recruit
Project Team
Establish
Control Tools
Install
Deliverables and
Commissioning
Organize
Project Team
Review
Project
Schedule, cost,
team report
Identify
Project
Goal
List the
Objectives
Determine
Preliminary
Resources
Identify
Risks and
stakeholders
Success criteria
Project charter
Quality
and
Communic
ation
manageme
nt
Bidding
Assign Work
Packages
Write
Project
Proposal
Decision
Recruit Criteria
WBS
Project network
Project proposal
Define Work packages
Assign Work Packages
Prepare
Status Reports
Issue Change
Orders
Variance Reports
Status Reports
CLOSE
Document the
Project
Issue Final
Report
Conduct PostImplementation
Audit
Final Report
Audit Reports
50
Writing a Project Proposal
Represents the transition from the planning
(define, plan) to implementation (organising,
control, close)
Used as an information source to decide
whether the project should proceed to the
implementation phase
Different terminology used
DBM, Brief, Scope Definition Statement
51
Purpose
The project proposal provides:
A statement of the need, the approach
being taken and the expected benefits
Description of project activities, timelines
and resources required
Project costs
Documentation for project control
Briefing document for new team members
and others in the organisation
52
Purpose
Tool for decision making, managing,
controlling, training and reporting
Written for:
Senior management
Project team
Other managers who are indirectly involved
Consultants
53
Step 3. Organising the
Project Team
Projects are only as successful as the
project manager and team who
implements them
Building an effective team takes a lot of
work
Must consider more than just a person’s
technical skills
54
Organising the Project
Team
The selection of team members is based
on skills, availability and personality
There needs to be a commitment and
chemistry among the team members
Team building is not a perfect art, there is
always the risk of conflict
55
Organising the Project
Team
Organized and located to facilitates open
continuous communication
This does not mean they have to be
physically located together
Team members may be reallocated for the
duration of the project or remain in their
function areas
56
Organising the Project
Team
Large projects
Dedicated core team
Structured
More defined roles
Need for open and continuous
communication lines
Self contained
57
Organising the Project
Team
Small projects
Part-time commitment from team members
Team members remain in their functional
units
Conflicting priorities/demands exist
Conflicts may arise from having more than
one boss or more than one team involvement
58
Organising the Project
Team
Be sure all parties understand the need
to:
Build the team
What the priorities are within in the
organisation and
Their assistance is appreciated
Project manager to ensure that the
cross functional relationships are
maintained and supported
59
Opening a Project
Owner schedule a kick-off meeting:
Meet contractor and other key personnel
Identify areas of responsibility
Establish job philosophy (set the ground rules)
Set up requirements for on-or off-site meetings
and set the frequency of such meetings, who
should attend
Discuss problems anticipated in execution
Discuss special sequence of operations or
scheduling limitations
Issue written Notice to Proceed
Set precise start date - good practice
60
Characteristics of an
Effective Project Manager
Understands purpose of the project
Has the necessary background and
experience
Effective leader with proven
managerial ability
61
Characteristics of an
Effective Project Manager
Communication skills
Consistent behaviour
Has credibility with team and client
Sensitive to project and corporate
politics
Excellent Facilitator rather than a
dictator
62
Selection of Project
Manager
Key position on the project
Selection of appropriate individual is essential
to success of the project
Selection criteria should be established
based on the skills required to carry out
project
63
Project Manager Selection
Criteria
1. Background and Experience
 Should be consistent with the nature and
needs of the project
 Education should be compatible with nature
and expectations of the project
 Look for a individual with a mix of
conceptual, analytical, operational and
practical experience
64
Project Manager Selection
Criteria
2. Leadership
Ability to design, co-ordinate, control and
implement project plan
Stay the course until completion
Ability to see the big picture and understand
the details
65
Project Manager Selection
Criteria
3. Technical expertise
Ability to direct, evaluate, and make
decisions on technical alternatives
Does not and can’t be an expert in all areas
of the project
Should have expertise in project
management, team management and training
66
Project Manager Selection
Criteria
4. Interpersonal skills
Should be able to:
Motivate, inspire, and coach
Actively listen, give and receive feedback
Empathise, relate feelings, needs and concerns in a
positive manner
Prevent and resolve conflicts, negotiate
Keep team, senior management and stakeholders
informed through effective communication channels
67
Project Manager Selection
Criteria
5. Proven Managerial Ability
Good track record, excellent indicator of the
future
Knowledge of the organisation and its
operation
Ability to effectively interface with all levels
of the organisation
Ability to link project goals to corporate
mission and goals
68
Selecting the Team
Selection of team members depends on a
number of factors:
Nature of the technical work to be done
Level and type of expertise required at each
phase of the project
Availability of staff in the organisation and
reporting relationships
Sometimes you cannot always choose
69
Team Selection Criteria
Similar to those of the project manager
More emphasis on the technical skills
Interpersonal skills essential
Ability to function as a team member with
shared goals and objectives (us instead of
me)
70
Effective Team
Characteristics
Commitment to the project goals and
completion
Ability to communicate, share responsibility and
power
Flexible willing to change or try some new
methods
Technically competent
Willing to:
Admit mistakes
Admit not have all the answers
Accept feedback
71
Effective Team
Characteristics
Politically astute
Team players
Creative and open to suggestions
High self esteem, can do attitude
Willing to work for more than one boss,
across formal structure and authority
system
Results oriented
72
What Makes Teams Work
Successful Projects:
The team has fun
Have the support of senior management
Everyone understands the reason for the
project
Conflicts are addressed and dealt with
The entire organisation is committed
73
What Makes Teams Work
Successful projects:
Team understands the organisation’s
mission and how the project fits within
that mission
Team understands what is to be achieved
and when it is achieved
Trust and communication
74
Human Resources
Management Tips
Listen to understand
Be responsive
Provide positive feedback
Act on problems in a timely manner
Deal with problems
They won’t go away, but will get BIGGER
Provide constructive criticism
Document appropriately
Take time to have FUN
75