PROJECT MANAGEMENT
Presented by:
John Rakos, MSc, PMP
President, John J. Rakos &
Associates Consultants Ltd.
John J. Rakos is available to teach or
consult in any topic presented in this
seminar.
Module 1 - Introduction
1
INTRODUCTION
Reference sources
A Guide to the Project Management Body of Knowledge (2003). The
Project Management Institute. http://www.pmi.org
Rakos, John J. et al, A Practical Guide to Project Management
Documentation, Wiley, 2004
Kerzner, Harold. Project Management: A Systems Approach to
Planning, Scheduling and Controlling. 6th ed. John Wiley & Sons,
1998.
Rakos, John J. Software Project Management for Small to Medium
Sized Projects. Prentice-Hall, 1990.
Module 1 - Introduction
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INTRODUCTION
The Value of Project Management
•
•
•
•
•
Allows for excellent organization and tracking
Better control and use of resources
Reduces complexity of inter-related tasks
Allows measurement of outcome versus plans
Early identification of problems and quick
correction
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INTRODUCTION
PMBOKTM Knowledge Areas
• Based on the Project Management Institute’s Project
Management Body of Knowledge: PMBOK1
• Nine knowledge areas:
– This webinar:
Scope, Time, Cost, Risk, Integration
-- Next webinar:
Quality, Procurement,
Communications,
Human Resources, Integration
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INTRODUCTION
PMP Certification
Internationally accepted accreditation
Get certification
3 (5 without degree) years experience
35 hours training
4 hour, 200 questions, multiple choice exam!
Have to be re-certified every 3 years
60 PDUs
 Attending a conference
 Attending course
 PMI membership
 Publications
 PM work
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INTRODUCTION
What is a Project?
A project is a temporary endeavor undertaken to create a
unique product or service
- A Guide to the Project Management Body of Knowledge
(PMBOK™), Project Management Institute, 2003
 One time
 Limited funds/time
 Specific resources utilized
 Performed by people - Single or multi-person
team
 Planned, controlled
 Specific Deliverables
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INTRODUCTION
The Triple Constraint of Projects
• On Time, Budget, Quality = Required Scope
Time
Cost
Quality
•Integration
•Trade – Off’s
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INTRODUCTION
Project Life Cycle
Concept Planning Execution/Control
Definition | Analysis
20%
Closing
|Design|Build|Test|Accept| Implement|
60%
5%
Operation
15%
Percentages and graph refer to the amount of effort (people)
In IT projects = 90-95% of cost!
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Project Planning
Write a Plan Containing
1. Steps required to accomplish the project objectives
2. Tasks needed to be done at each step (using Work Breakdown
Structures)
3. Estimate of how much effort each task requires
4. The resources required for each task
5. (Given 3. and 4.) Calculation of how long each task/step will take
6. (Given 4. and 5.) Calculation of task, step and project costs
7. The inter-dependencies of tasks
8. The schedule for each task and the whole project (Milstones,
Deliverables, payments)
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Project Planning: set expectations of Stakeholders
Stakeholders
Contractors
Project Sponsor
Users
Project Leader
Project
Manager
Finance
Procurement
Systems
Engineering
Support
Sales
Module 1 - Introduction
Maintenance
IM/
IT
10
Project Planning: Time and Cost Estimate
• Iterative
• Accuracy
– Estimates become more accurate
Initiation
Definition
Planning
Analysis
+15
+25%
Execution
Design
Closing
+10
0
-50
-25
-75%
Preliminary Plan
Proposal Plan
Final Plan
Module 1 - Introduction
Revised Plan
11
Project Management
Module 2:
Scope Management
Module 1 - Introduction
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Project Scope Planning
Scope Management
• Ensuring that the project includes all the work
required, only the work required.
• Dividing the work into major pieces, then
subdividing into smaller, more manageable
pieces.
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Work Breakdown Structure - Formats
1. Organization Chart Method
0.
Title
1.
2.
Major Phase 1 Major Phase 2
1.1
Section 1
of Phase 1
1.2
Section 2
of Phase 1
3.
Major Phase 3
1.3
Section 3
of Phase 1
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Work Breakdown Structure - Formats
2. Outline Method
0. TITLE
1.
1.1
1.2
1.3
2.
...
etc.
MAJOR PHASE 1
S1 OF PHASE1
S2 OF PHASE1
S3 OF PHASE1
MAJOR PHASE 2
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WBS - Typical Tasks
Detailed WBS Example
for procuring an
Equipment System
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Work Breakdown Structure
Summary (Top Level) WBS
Summary and Detail tasks, or
Parent and Child tasks (Work Package)
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Work Breakdown Structure
Using the Work Breakdown Structure
1. Estimate and schedule the work (Durations, precedences on WBS)
2. Organize and schedule resources (resource allocated WBS)
3. Assign responsibilities – (Resource ramp-up, resource allocated
WBS)
4. Estimate and allocate costs and budgets (costed WBS)
5. Add up costs to different levels
–
–
–
–
Task
Levels on the WBS (phase, account/contract)
Cost account
Total project
6. Get resource commitments
7. Schedule start <--> end dates
8. Track expenditures, schedules and performance
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Project Management
Module 3:
Project Time Planning
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Project Time Planning
Estimating Effort: 3 Methods
1. Professional Judgment
– “Expert” picks a number (out of the air!)
– Requires an expert
– Requires experience
– Good memory
– May ignore people
– VERY RELIABLE FOR THEMSELVES
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Project Time Planning
Estimating Efforts (cont’d)
2. History
–
–
–
–
Look at tables of past actuals on major tasks
Interpolate
Requires professional judgment
Requires good history (which changes!)
3. Formula
3.1 Variables
–
–
–
Determine major variable factors (task, person)
Using measurement determine formula of factors
Interview and plug into formula
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Project Time Planning
Estimating Efforts (cont’d)
3.2 Function Points
– Determine smallest pieces (function points) of project.
– Using measurement establish time for each one.
– For new project, break into
function points; add up
times, then multiply for worker productivity.
(Possibly: Junior x 2, Average x 1, Senior x 0.5)
• FORMULA IS BEST (IN THEORY).
• IN REALITY,____________ BEST.
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Estimating – use of History
Ratios for Systems project
SYSTEMS ACTIVITIES
DUR
EFFORT
SYSTEM SPECIFICATIONS
SYSTEM DESIGN
SOFTWARE REQUREMENTS
SOFTWARE PRELIMINARY DESIGN
SOFTWARE DETAILED DESIGN
CODE AND UNIT TEST
SOFTWARE INTEGRATION & TEST
SOFTWARE QUALIFICATION
SYTEM INTEGRATION & QUAL.
WARRANTY AND SUPPORT
11-15%
8-12%
2-4%
5-7%
8-11%
20-28%
10-14%
5-7%
8-12%
N/A
6-10%
6-10%
3-5%
4-6%
9-12%
24-32%
11-15%
2-4%
8-12%
7-10%
MAKE YOUR OWN BASED ON THE MAJOR PHASES/PIECES!
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Scheduling
If Estimate was Effort, must convert it to Duration
Duration = Effort/Resources (sometimes)
Taking into account:
Resource availability
Desire
Skill
Productivity
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Scheduling: Requires Duration and Precedents
Two Graphical tools for Scheduling:
1. PERT Chart
Plan (from WBS)
Task Precedent
A
B
A
C
D
C
E
F
E
G
F
Duration
7d
3d
10d
5d
4d
6d
3d
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Scheduling
Ordering the Activities: PERT Chart
Arrow Diagramming Method (ADM)
2
B
A
3d
7d
C
1
10d
D
3
6
5d
E
G 3d
4d
4
F
5
6d
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Scheduling - Gantt Chart
Order of building the Gantt Chart:
• Work Breakdown
• Estimates (duration)
• Dependencies
• Resource use
Gantt shows:
• Critical Path
• Non Critical Path(s)
• Early Start/Finish
• Late Start/Finish
• Slack
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Scheduling - Gantt Chart
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Scheduling - Gantt Chart
Gantt (Schedule) Drives
1. Milestones
• Clear, concrete, binary events implying progress
• For example: Review (with approval), Sign off of a
deliverable, Funds approved
• Shown as 0 length task
– Try for even frequency
• Not too close
• Not more than 2 - 3 months apart
– Major Point to communicate with
• Client
• Outside world
• Management
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Scheduling - Gantt Chart
Gantt (Schedule) Drives
•
•
•
•
•
•
•
Training
Meetings
Reviews
Reports
Site preparation
Delivery dates (date to order) for external items
Payment
Module 1 - Introduction
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Project Management
Module 4:
Resource Assignment
and Cost Planning
Module 1 - Introduction
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Assigning Resources
 Availability
 Skills




• More experienced people
• Less experienced people
Desire
Similar tasks to one person to use learning curve
Assign critical tasks to most reliable people
Tasks that need interaction or are similar
• Same person
• Two who communicate
 Personality and team communication does matter
 and again, Availability
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Resource Loading and Optimizing
Gantt with Resource Histogram
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Resource leveling - possible rescheduling
Gantt with Resource Histogram
Manual resource leveling: fast vs good vs cheap
Automatic resource leveling: use only as ‘suggestion’
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Cost Estimating
• Similar to Time Estimating (usually done by the same
person/group that does the Time Estimates)
Calculation of Cost for each WP:
If estimate was duration
Assign human resources
Example:
10 days
2 people
Need Effort = Duration x Resources
E=2x10=20pd
e.g., Resource Cost (RC) = Effort x Rate(includes overhead)
RC=20x$1,000=$20,000
(Possible) Plus Fixed Cost (FC)
e.g., FC = $5,000
Total cost (TC) = Resource cost + Fixed Cost
TC=20,000 + 5,000 = 25,000
Module 1 - Introduction
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Costed WBS
Use Software to roll costs up the WBS
ID
36
Ta sk Na me
Ac count
Fina l Submission
Fixe d Cos t
$0 .0 0
Pa yment
$0 .0 0
$2 5,000 .0 0
$0 .0 0
$8 ,0 00.00
$0 .0 0
37
Fi na l De si gn Wo rk
C1 4
38
Fi na l Pl an
C1 4
39
TB Su bmi ssi on
$0 .0 0
$0 .0 0
40
EPA
$0 .0 0
$0 .0 0
41
42
Softw are (Subcontrac t 50 -B)
$5 ,0 00.00
Tota l Cost
$3 3,000 .0 0
$0 .0 0
$0 .0 0
SW De sign
$1 2,000 .0 0
43
Do P re li m SW desi gn
44
PDR
45
Do Fin al S W d esig n
46
CDR
S2 1
$0 .0 0
$0 .0 0
S2 2
$0 .0 0
$0 .0 0
47
SW Construction
$1 2,000 .0 0
48
Co de CSC A
S3 1
49
Co de CSC B
50
Integrate& Tst CSCI 1
$0 .0 0
$4 0,000 .0 0
$1 33,00 0.00
$0 .0 0
$6 2,000 .0 0
$0 .0 0
$2 0,000 .0 0
$0 .0 0
$0 .0 0
$3 0,000 .0 0
$0 .0 0
$0 .0 0
$0 .0 0
$7 0,000 .0 0
$7 1,000 .0 0
$0 .0 0
$0 .0 0
$6 ,0 00.00
$0 .0 0
S3 1
$0 .0 0
$8 ,0 00.00
$0 .0 0
S3 2
$0 .0 0
$2 0,000 .0 0
$0 .0 0
Module 1 - Introduction
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Cost Ramp-Up
Use Software to report cash flow
1998
1997
Q1
Q4
Q3
Q3
Q2
Q4
Q1
$400,000.00
$300,000.00
$200,000.00
$100,000.00
Cumulative Cost:
$53,920.00
$127,160.00
$274,360.00
Filtered resources
Total:
CPM
Total:
$331,440.00
$349,920.00
Module 1 - Introduction
$368,400.00
$376,500.00
$376,500.00
37
Cost - Sanity checks
Cost Estimate Error Range – same as Time Estimate
+75%
25
10
0
-8
-10
-25%
Indicative
PPA
Init Plan
Budget
EPA
Final Plan
Definitive
PDR
Design
PPA - Preliminary Project Approval
EPA - Effective
PDR - Preliminary Design Review
Module 1 - Introduction
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Project Management
Module 5:
Risk Management
Module 1 - Introduction
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Risk Management
Planning and Control Processes
• Risk: anything not in the project plan that may occur
and cause your project to be late, cost more or
compromise its quality/performance.
• Risk is an opportunity as well as a threat:
“You don’t put power brakes on a car to slow it down - you
do so to allow it to go faster.”
-Mark Davies, KPMG
• We will concentrate on the threat.
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Four Steps of Risk Management
1. Identification
– Anticipate the risk
– List the risks, event triggers, symptoms
2. Analysis
– Evaluate probability, impact
– Qualitative vs Quantitative
3. Risk Response
– Strategy Development to mitigate the risk:
• Eliminate the risk or reduce impact
• Contingency planning
4. Risk Control
–
–
–
–
Monitor
Update lists, strategies
Action the contingency plan
Fight the fires
Which is most important??
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Step 1: Risk Identification
Anticipate the Risk
Risk Checklist at Preliminary Planning Time (Risk Taxonomy)










Are we proposing the right solution?
Any risk in technical components?
Performance expectations reasonable?
Is the hardware standard?
How much experience do we have with it?
Is the operating software standard? Well documented?
How much experience do we have with it?
Is the development method standard? Well documented?
How much experience do we have with it?
Any component availability risks?
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Step 1: Risk Identification
Risk Checklist at Preliminary Planning Time (Risk Taxonomy)
(cont’d)










Does failure of this application affect the customer’s business?
Is the project over 6 months? 12 months? 24 months?
Does it need over 5 people?
Are we dependent on third party resources? Internal? External?
Who is the project manager?
Who is the project leader/architect?
Are the resources available when needed?
Who is the client?
Have we worked with this client? How is our relationship?
Is client available when needed?
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Step 1: Risk Identification: Inputs
• Risk Checklists, The WBS, Environment:
NATURAL
ENVIRONMENTS
SENIOR
MANAGEMENT
CORPORATE
POLICY
AND CULTURE
POLITICAL
CORPORATE
PROGRAMS
PROJECT/
PM
& FINANCIAL
TECHNOLOGY
ECONOMIC
REGULATORY
AND LEGAL
HUMAN FACTORS
HEALTH & SAFETY
History of past Similar Projects
Module 1 - Introduction
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Step 2: Risk Analysis
Evaluate Probability and Impact into three levels:
Low, Medium, High:
Probability Criteria:
Probability Rank
Description
High
Medium
Greater than 66% probability of occurring
Low
Less than 33% probability of occurring
34 to 65% probability of occurring
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Step 2: Risk Analysis
Impact Criteria:
Impact Rank
Schedule
Description
High
Medium
Low
Cost
High
Medium
Low
Could add over 25% delay to the completion
of the project
Could add over 10% delay to the completion
of the project
Could add less than 10% delay to the completion of
the project, or delays a non critical deliverable
Could add more than 25% to the project budget
Could add between 10 and 25% to the project budget
Could add less than 10% to the project budget
Quality
Determine a combined impact level based on which constraint is most affected.
Module 1 - Introduction
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Step 2: Risk Analysis
Draw a Risk Table to Summarize
Wonderful Management Tool/Report
Prob.
Impact
Low
Medium
High
High
3. Lack of skilled staff,
organization slow to hire
adequate staff; may
delay implementation.
2. Time estimate and
funds inadequate for the
scope of this project;
may be late and over
budget.
1. Lack of commitment.
Headquarters may have to
assume more responsibility;
will result in project delay,
cost overruns.
Medium
6. Cannot get office space
for staff; may cause
communication problems,
delaying the execution
phase.
5. Expecting major scope
changes from clients;
may cause delay and
cost escalation.
4. Not enough time spent
planning, lack of
understanding of problem;
may take longer/
cost more than anticipated.
Low
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Step 3: Risk Response
Strategy Development:
Reduce the Probability and/or Impact of the Risk
Risk Mitigation: Reducing the probability and/or impact
• Take immediate action. Can be risk avoidance (if
eliminated) or risk reduction (still there, but probability
or impact is reduced).
Contingency Plans
• Take action only when the risk is imminent or has
occurred
Or Acceptance (do nothing), depends on Risk Tolerance
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Risk as a Monetary Value
Tempering the Estimate
• Estimate range is
– ESTIMATE
ESTIMATE + RISK
– Try to work within the range, depending on how
crucial the accuracy has to be.
• If you can get several estimates
– Use the Standard Deviations to give you confidence
levels:
• Expected estimate +/- 1 SD gives you 68% confidence
• Expected estimate +/- 2 SD gives you 95% confidence
• Expected estimate +/- 3 SD gives you 99% confidence
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Project Management
Module 6:
Scope/ Time/ Cost Control
Module 1 - Introduction
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Project Control – Scope Control
Scope Change Control
• Formal change control
• Evaluate cost/time impact
– Renegotiate, set expectations
– Implement or defer to next release
Configuration Management
• Keep track of what changes were made to which
modules
• Versioning
• Interoperability of modules
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Project Control – Schedule and Cost
Step 1 - Take a baseline.
• Baseline plan: a copy of the plan (WBS with all dates,
assignments, costs).
• Used to report progress against the baseline.
• Taken at a mutually agreed upon planning point:
• Proposal or Analysis completion
• +25% to -10% stage
• Baseline is (theoretically) not alterable
• Unless major scope change occurs.
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Project Control – Reporting Schedule using a Tracking Gantt
Double Gantt: Shows Project Schedule Progress vs baseline
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Project Control – Cost Control/Reporting
Financial Report vs Baseline
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Project Management
Module 7:
Conclusions
Module 1 - Introduction
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Resources Available
To help you Manage your Projects
• Training & Learning
– Universities
• Project Management courses
• Major/Masters in Project
• Others – public
• Project Management Institute (PMI)
• PMP Certification courses
• PMI conferences
• 250,000 members worldwide
• Your own Subject Matter Experts
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Resources Available
To help you Manage your Projects
•
•
Training & Learning
– Internet
• PMI.org
• Many sites: search on Project Management
• NASA
• Software Engineering Institute
• Software Productivity Center
• DOD/Pentagon
Project Management Software (WBS, Schedule, Cost, Resource usage,
Multiple project roll-up, Internet reporting,...)
– Microsoft Project
– Primavera
– Open source: OpenProj
•
John J. Rakos is available to teach or consult in any topic presented in this
seminar.
Module 1 - Introduction
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Final Details
Can you be a good project manager?
Ask yourself:
• Can I say 'NO'?
– Can I attack problems as soon as/even before they
arise?
• Can I live unloved?
If you do your job well,
people will wonder what you do!
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