PROJECT MANAGEMENT Presented by: John Rakos, MSc, PMP President, John

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 2

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 Module 1 - Introduction 3

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 Module 1 - Introduction 4

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 Module 1 - Introduction 5

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 Project Management Institute, 2003 (PMBOK ), One time Limited funds/time Specific resources utilized Performed by people - Single or multi-person team Planned, controlled Specific Deliverables Module 1 - Introduction 6

INTRODUCTION The Triple Constraint of Projects On Time, Budget, Quality Required Scope Time Cost Quality Integration Trade – Off’s Module 1 - Introduction 7

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! Module 1 - Introduction 8

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) Module 1 - Introduction 9

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 12

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. Module 1 - Introduction 13

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 Module 1 - Introduction 14

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 Module 1 - Introduction 15

WBS - Typical Tasks Detailed WBS Example for procuring an Equipment System Module 1 - Introduction 16

Work Breakdown Structure Summary (Top Level) WBS Summary and Detail tasks, or Parent and Child tasks (Work Package) Module 1 - Introduction 17

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 Module 1 - Introduction 18

Project Management Module 3: Project Time Planning Module 1 - Introduction 19

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 Module 1 - Introduction 20

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 Module 1 - Introduction 21

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. Module 1 - Introduction 22

Estimating – use of History Ratios for Systems project SYSTEMS ACTIVITIES DUR EFFORT SYSTEM SPECIFICATIONS 11-15% SYSTEM DESIGN 8-12% SOFTWARE REQUREMENTS SOFTWARE PRELIMINARY DESIGN 5-7% SOFTWARE DETAILED DESIGN CODE AND UNIT TEST SOFTWARE INTEGRATION & TEST 10-14% SOFTWARE QUALIFICATION SYTEM INTEGRATION & QUAL. WARRANTY AND SUPPORT N/A 6-10% 6-10% 2-4% 4-6% 8-11% 20-28% 11-15% 5-7% 8-12% 7-10% 3-5% 9-12% 24-32% 2-4% 8-12% MAKE YOUR OWN BASED ON THE MAJOR PHASES/PIECES! Module 1 - Introduction 23

Scheduling If Estimate was Effort, must convert it to Duration Duration Effort/Resources (sometimes) Taking into account: Resource availability Desire Skill Productivity Module 1 - Introduction 24

Scheduling: Requires Duration and Precedents Two Graphical tools for Scheduling: 1. PERT Chart Plan (from WBS) Task A B C D E F G Precedent A C E F Module 1 - Introduction Duration 7d 3d 10d 5d 4d 6d 3d 25

Scheduling Ordering the Activities: PERT Chart Arrow Diagramming Method (ADM) 2 B A 3d 7d C 1 10d 3 D 6 5d E G 4d 4 F 6d Module 1 - Introduction 3d 5 26

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 Module 1 - Introduction 27

Scheduling - Gantt Chart Module 1 - Introduction 28

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 Module 1 - Introduction 29

Scheduling - Gantt Chart Gantt (Schedule) Drives Training Meetings Reviews Reports Site preparation Delivery dates (date to order) for external items Payment Module 1 - Introduction 30

Project Management Module 4: Resource Assignment and Cost Planning Module 1 - Introduction 31

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 Module 1 - Introduction 32

Resource Loading and Optimizing Gantt with Resource Histogram Module 1 - Introduction 33

Resource leveling - possible rescheduling Gantt with Resource Histogram Manual resource leveling: fast vs good vs cheap Automatic resource leveling: use only as ‘suggestion’ Module 1 - Introduction 34

Cost Estimating Similar to Time Estimating (usually done by the same person/group that does the Time Estimates) Calculation of Cost for each WP: Example: If estimate was duration 10 days Assign human resources 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 35

Costed WBS Use Software to roll costs up the WBS Module 1 - Introduction 36

Cost Ramp-Up Use Software to report cash flow 1997 1998 Q3 Q4 Q1 Q2 Q3 Q4 Q1 53,920.00 127,160.00 274,360.00 331,440.00 349,920.00 368,400.00 376,500.00 400,000.00 300,000.00 200,000.00 100,000.00 Cumulative Cost: Filtered resources Total: CPM Total: Module 1 - Introduction 376,500.00 37

Cost - Sanity checks Cost Estimate Error Range – same as Time Estimate 75% 25 10 0 -10 -25% Indicative PPA Init Plan Budget EPA Final Plan -8 Definitive PDR Design PPA - Preliminary Project Approval EPA - Effective PDR - Preliminary Design Review Module 1 - Introduction 38

Project Management Module 5: Risk Management Module 1 - Introduction 39

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. Module 1 - Introduction 40

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? Module 1 - Introduction 41

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? Module 1 - Introduction 42

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? Module 1 - Introduction 43

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 44

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 Module 1 - Introduction 45

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 46

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 Module 1 - Introduction 47

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 Module 1 - Introduction 48

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 Module 1 - Introduction 49

Project Management Module 6: Scope/ Time/ Cost Control Module 1 - Introduction 50

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 Module 1 - Introduction 51

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. Module 1 - Introduction 52

Project Control – Reporting Schedule using a Tracking Gantt Double Gantt: Shows Project Schedule Progress vs baseline ID Task Name 1 2 Duration Session 7 - write Pm course Start 101.4 days '99 Sep 01 8.4 days '99 Sep 01 Initiation September October November 31 03 06 09 12 15 18 21 24 27 30 03 06 09 12 15 18 21 24 27 30 02 05 08 11 14 17 20 99% 3 Interview client 3 days '99 Sep 01 4 Write Proj Concept 2 days '99 Sep 09 100% 5 Concept approved 0 days '99 Sep 10 09-10 8 days '99 Sep 10 6 Planning 100% 0% 7 Interview users 5 days '99 Sep 10 0% 8 Interview managers 5 days '99 Sep 10 0% 9 Write plan 3 days '99 Sep 17 0% 10 Funds approved 0 days '99 Sep 22 09-22 61 days '99 Sep 22 23 days '99 Sep 22 11 12 Development Design 0% 13 Design coursware 10 days '99 Sep 22 14 Design Case study 10 days '99 Oct 05 15 Walk through design 1 day '99 Oct 19 16 Revise design 2 days '99 Oct 20 0% 17 Design done 0 days '99 Oct 21 10-21 22 days '99 Oct 21 18 Write Course 19 Write courseware 20 days '99 Oct 21 20 Write case 10 days '99 Oct 21 21 Course material walkthrough 2 days '99 Nov 17 0% 0% 0% 0% 0% Module 1 - Introduction 0% 53 0%

Project Control – Cost Control/Reporting Financial Report vs Baseline ID Task Name 1 Session 7 - write Pm course 2 Fixed Cost Initiation Total Cost Baseline Variance 0.00 74,920.00 74,120.00 800.00 0.00 5,280.00 4,480.00 800.00 September October November December January 29 05 12 19 26 03 10 17 24 31 07 14 21 28 05 12 19 26 02 09 16 23 7% 99% 3 Interview client 0.00 2,400.00 2,400.00 0.00 4 Write Proj Concept 0.00 2,880.00 2,080.00 800.00 100% 5 Concept approved 0.00 0.00 0.00 0.00 09-13 0.00 12,320.00 12,320.00 0.00 6 Planning 100% 0% 7 Interview users 0.00 5,200.00 5,200.00 0.00 0% 8 Interview managers 0.00 4,000.00 4,000.00 0.00 0% 9 Write plan 0.00 3,120.00 3,120.00 0.00 0% 10 Funds approved 0.00 0.00 0.00 0.00 09-23 0.00 52,800.00 52,800.00 0.00 0.00 28,040.00 28,040.00 0.00 11 12 Development Design 0% 0% 13 Design coursware 0.00 12,400.00 12,400.00 0.00 14 Design Case study 0.00 12,400.00 12,400.00 0.00 0% 15 Walk through design 0.00 2,040.00 2,040.00 0.00 0% 16 Revise design 0.00 1,200.00 1,200.00 0.00 0% 17 Design done 0.00 0.00 0.00 0.00 10-26 0.00 21,880.00 21,880.00 0.00 0.00 18 Write Course 19 Write courseware 0.00 12,000.00 12,000.00 20 Write case 0.00 4,000.00 4,000.00 Module 0.00 1 - Introduction 0% 0% 0% 0% 54

Project Management Module 7: Conclusions Module 1 - Introduction 55

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 Module 1 - Introduction 56

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 57

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! Module 1 - Introduction 58