Managing Projects
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A complex, non-routine, set of activities, undertaken by an individual or group with the purpose of producing a defined and unique, non-repetitious result.
What is a project
1. Introduction
A project has a defined scope, with a finite life span, an agreed cost and quality.
The result or product can be both tangible or intangible.
Usually involves several departments or professionals and always involves a level of risk.
What is project management?
What is the role of a project manager?
What is the typical project life-cycle?
Create mission statement
Review and Define the Organisations Mission
Communicate mission statement throughout organisation
Must be company specific
Set at all levels of organisation
Outline direction of organisation
Specific
Set Long-Range goals and objectives
Measurable
Objective must be SMART
Assignable
Realistic
Time Related
Strategic Management Process
Answers questions on 'what' needs to be done
Evaluate alternatives
Customers perspective is important
Analyse and formulate strategies to reach objectives
Strengths
SWOT Analysis
Weaknesses
Opportunities
Threats
Answers question of 'how' it will be done
Implement these strategies through specific projects
Includes the allocation of resources
Requires organisational structure that complements strategy
Include planning, control and measurement tools
No change
Advantages
Functional
Flexibility
In-depth expertise
Easy post project transition
Lack of focus
Disadvantages
Poor integration
Slow
Lack of ownership
Coordinated Matrix
Efficient
Advantages
Organisational Structure
Matrix
Flexible
Strong project focus
Relativly easy post project transition
Dysfunctional conflict
Disadvantages
Infighting
Stressful
Slow
Seconded Matrix
Simple
Advantages
2. Organisational Strategy, Structure and Culture
Pure Project - Integrated Project Teams
Fast
Cohesive
Cross functional integration
Expensive
Disadvanteges
Internal strife
Limited technological expertise
Difficult post-project transition
Critical To Effective Project Management
Interface result whenever work is divided and allocate to teams or individuals
Personal
Types of Interface
Organisational
System
Main issue is ensuring effective communication
Interfaces and Communications
Interface Management
Be aware of both formal and informal channels
External interfaces usually managed formally in the form of reporting
Reports
Faxes
Specifically Designed Forms
Interface Management Tools
Change Control
Equipment Lists
Meeting Minutes
Information Management Systems
Responsibility Matrices
Plan the project
Organise to carry out the plan
Implement the plan
Control to follow the plan
PM The Role
Motivate staff
Keep perspective
Lead the project team
Encourage group decision making
Maintain group behaviour
Aim for win-win outcomes
Provides integration
PM The Person
The Project Manager
Varying level of authority depending on org structure
Always has responsibility for project
Does not need to be technical hot-shot but requires understanding for decision making
Intelligence
Energy and Drive
Self-assuredness
PM The Traits
Perspective
Communications ability
Ability to persuade and negotiate
Management skill and specialist knowledge (HR, Legal, Resource Management)
Democratic
Autocratic
PM The Styles
Bureaucratic
Laissez Faire
See Managing People Map, Leadership Section
To clarify the deliverables
Purpose of Scope Statement
To focus the project on these goals
Used by the project owner and planner a tool for measuring progress and success
Project Objective
Deliverables
Checkpoints in the project
Describes what the project should achieve, not how
Activities are carried to achieve milestones
Define the Project Scope
Scope Statement
Develop from project objectives
Milestones
Agree with customer
Milestone plan
Identify dependencies
Form logical network
Identify results path
Technical Requirements
Limits and Exclusions
Reviews with Customer
Scope Statement
Terms and Definitions
Project Charter
Project Creep
Causes Project Trade-offs
Constrain
Establish Project Priorities
Managing Priority Trade-offs
3. Defining the Project
Enhance
Accept
The parameter is a fixed requirement
Will affect performance
Optimising a parameter over others
Will affect time
Reducing (or not meeting) a parameter requirement
Will affect cost
Hierarchal outline (map) that identifies the work elements of the project
Hierarchal
Defines the relationships of the final deliverables to the sub-deliverable and their work packages
Best suited for design and build projects with tangible outcomes
Identify products
Identify work needed for products
Process of Defining
Identify work needed to integrate products
Identify any management or testing work
Construct Hierarchy
Lowest Level of WBS
Create Work Breakdown Structure (WBS)
Provides dictionary of work involved
Used to measure Progress
WBS Element name and number
Work definition
Work Package
Inputs / predecessors
A Good Work Package has:
Responsible groups
Explicit spec of outputs
Budgets, schedules and cost estimate
Labour and Resource Requirements
Example
Provides framework to summarise organization work unit performance
Integrating WBS with the Organization
Organisational Breakdown Structure (OBS)
Identifies organizational units responsible for work packages
Ties organizational units to cost control accounts
Coding the WBS for the information system
Subtopic
There is inherent uncertainty in all project costs
Introduction
Estimating the cost of a project is required for tender application
Estimating costs money, the more accurate the estimation the more expensive it will be
Labour
Subcontractors & Consultants
Materials
Elements for cost estimation
Travel
Equipment
Facilities Rental
Items to Consider when Making Estimates
Other items specific to type of project
Planning Horizon
Project duration
Factors that influence quality of estimation
People
Project structure & organisation
Padding
Organisational culture
Material Take-Offs (MTO)
Involves high detail
Obtaining quotes for specific work
Based on historical data and existing projects
Less detail and accuracy than MTO
Each industry has documented factors
Methods
4. Managing Project Time and Costs
Time Factor
Factoring
Scale Factor
List of factors
Complexity Factor
Location Factor
Exchange Rates
Contingencies
Screening Estimate
Feasibility Study
Estimate Types
Budget Estimate
Control Estimate
Purpose
Project initiation, earliest economic appraisal, used for ranking of project and selecting which projects should be done.
Accuracy
Around 40%
Estimate Method
Factoring
Purpose
More detailed techno-economic analysis of preferred alternative project schemes
Accuracy
Around 25%
Estimate Method
Factoring
Purpose
Preparation of project development plan; approval of budget for further front-end engineering
Accuracy
Around 15%
Estimate Method
Factoring and some MTO
Purpose
For use in project implementation plan, checking bids, cost control and reporting, performance appraisal, trend analysis, forecasting and budget revisions
Accuracy
Between 8% and 10%
Estimate Method
Full MTO
Ommision of scope
Misinterpretation of scope
Estimate Problems
Poorly defined or over optimistic schedule
Over optimistic estimating
Risk and uncertainty not adequately condidered
Escalation not considered
Used for planning, scheduling and monitoring project progress
Developed from the WBS
Introduction
Project Networks
Shows the logical sequence, and interdependencies of the tasks
Gives the task durations, longest path is known as the 'critical path'
Gives a good overview of the project that the PM uses for decisions in cost, time, quality
Do not show relationships and dependencies well
Gantt Charts
Limitations
Do not indicate slack well
Do not show resource requirements well
Show relationships and dependencies well
Show slack well
5. Developing a Project Plan
Network Diagrams
Limitations
Provide Analysis information
Do not show time graphically
Do not show resource requirements
Can be very large and complex
One of the most useful tools
Critical Path
Any event with zero float is critical
Any
Project Network is very useful tool
Easily understood by others
Summary
Can provide estimate of project duration
It provides the basis for budgeting and cash flow
It identifies the critical path and critical activities
Due to the unique nature of a project, there is an inherent level of risk.
In project environment risk is an uncertain event
Introduction
No amount of planning can remove risk entirely, but only manage it
Definitions
Risk Management: The culture, processes and structures that are directed towards the effective management of potential opportunities and adverse effects.
Risk: The chance of something happening that will have an impact on the objectives. Measured in terms of consequence and likelihood
Risk Management Plan
Analyse the project and identify the possible risks
Risk Identification
Create a list as comprehensive as possible, be creative and imaginative. These are filtered at the next stage
A useful tool is the WBS, as a guide for the cause of a risk to the project
Some professionals may be needed depending on the technical nature of the project, or particular area of expertise
The list created in the previous stage is assessed by the project manager. A useful methods are Scenario Analysis and Risk Response Matrix
Severity and outcome
Scenario Analysis
Likelyhood
When in the project the event may occur
The effect on other aspects of the project
Risks are listed in a table
Risk Assessment
Likelihood and Consequence are graded 1 - 5
Risk Response Matrix
Risk Exposure is calculated by multiplying these two measures
Detection Difficulty
Ratio/Range Analysis
6. Managing Risk
Probability Analysis
Scenario Analysis
The Risk Management Process
Develop strategy to minimise damages
Mitigating
Avoiding
Impossible to avoid all risk
Good for small problems, early in project
Very common
Will cost more
Risk Response Development
Transferring
Fixed price contracts
Suitable selection of third party is required
Communicate risk
Sharing
Large risks with low likelihood
Retaining
Contingency plan is vital
Risk should be planned in the budget so it can be absorbed if it does occur
Implement risk strategy
Risk Response Control
Monitor and adjust for new risks
Risk reporting should be part of all progress reports.
Document responsibility, of risk, 'owner' and response
Risk Process Diagram
Alternative plan to be used if a risk become a reality, the best alternative plan
Contingency Planning
Should answer questions of what, where, when, and how much action should be taken
The conditions under which the contingency plan must be clearly documented. As well as the source of funding
Introduction
Technical or Logic Constraints
Project Constraints
Common
Unavoidable
Parallel tasks
Resource Constraints
Add more resources
Take priority over technical constraints but do not violate them
Physical Constraints
Rare
People
7. Scheduling Resources
Types of Resource
Materials
Equipment
Working Capital
1. Minimum Slack
Rules for Resource Levelling
2. Minimum Duration
3. Task ID
Resource availability is huge problem for PMs
Summary
Resource bottlenecks must be identified as early as possible.
Resource levelling ALWAYS reduced total slack, increasing risk!!
Crashing projects increases risk
Introduction
The amount a project can be crashed depends on the sensitivity
A sensitive network has many critical paths
Changed duration times
Time to market considerations
Reasons for reducing project duration
Incentive contract
Key resource needs
High overhead costs
Unforeseen delays
Overheads such as administration, consultants and loan interest
Can not be associated with any work package or activity
Indirect Costs
Vary directly with time
Are a large part of total project cost
Changing duration can have a big effect
Costs related to work, materials, equipment
Direct Costs
Assigned to specific work packages
Vary indirectly with time
Relationship Between Costs Graph
Most common method for shortening project time
Adding resources
Doubling resources will not halve duration
Depends on the complexity of the task
Training may be needed
Another common method
Outsourcing project work
Contractors may be more experienced
Also frees the resource for something else
Costs more
Easiest way to add more resources
8. Reducing Project Duration
Scheduling overtime
Avoids additional costs of coordination
Intangible costs to staff lifestyle
Motivational problems
Establishing a core project team
Do it twice - fast and correctly
Options for Accelerating Project Completion
Fast-tracking
Assigning specialists full-time deduces the
They will devote all their attention
Short term solutions to critical paths
Can re-visit later when pressure is on
Re-arrange the project network so that critical activities are done in parallel
Change relationships to start-start
Method of management to reduce project duration
Critical-chain
Critical chain is the longest sting of dependencies that run through the project.
Depends on resources and technical constraints
See stand alone topic
Brainstorming time savers
Use entire team for ideas
Tap different experience and skills
Another widely used method
Reduce project scope
Leads to a reduction in the functionality of the project
Required careful consideration and communication with client
Split the deliverables into smaller items
Phase project delivery
Something useful is achieved earlier
Some value has already been recovered
As long as the client wants it
Compromise quality
Last option
Use on tasks that are on critical path
There is always the need to reduce project duration
Summary
Time spent on during the definition and planning
Contingency plans and alternatives are valuable
9. Leadership: Being an Effective Project Manager
Legally enforceable document
Either between
Principle and Contractor
Contractor and Subcontractor
Risk sharing
Contracts
Responsibility assignment
Provides
Objectives
Administrative procedures
Rewards
Penalties
Lump Sum
Schedule of Rates
Types of Contract
Cost plus Fixed Fee
Cost plus Percentage Fee
Percentage Fee
Novated Contracts
Special Forms of Contract
Design and Construction
Assigned to specialists in initial stages
Then transfers to other contractors during later stages
Turnkey'
Involves setting up dispute resolution procedures
Partnering and Alliance
Parties undertake work cooperatively
Long term partnering contracts
A meeting of the minds
Agreement
Usually a response to tender documents
Acceptance must be without qualification
Elements of a Contract
Consideration
Intention
Gives the value of the transaction
Usually financial reward on completion
Parties mus be intent on filling the agreement
Including the rights and responsibilities
Genuine Consent
Action must be taken in 6 years
Other Legal Elements
Unless 'under seal', which then increases to 12 years
Waiver and Estoppel
Waiver
Describes the circumstances where one party indicates that the contract is no longer valid
Estoppel
Arises from the conduct of a party and usually results in a waiver
Stage in the contract when the product can taken over by the principle and used safely
The defect liability period will still apply
10. Project Management Contract Law
Practical Completion
Final payment, less security is released
Ownership is formally transferred
Responsibility for insurance is transferred
Final certificate is issued once defect removed and remedial work is complete
The 'duty of care' of an organisation
Breach of duty of care
Injury or damage following from the act
Tort Law
Ingredients to per sue action in a Tort case
A reasonable connection between act and injury
Injured party must not have contributed to the loss
The injured pary has the duty to mitigate the loss
Tort in Contracting
Different methods used
Variations
Different equipment used
Changes to planned layout
Contractor must show that additional costs were incurred even though the final result is the same
Changing quantity of work
Wrongly rejecting work, increasing cost
Extras
Changing quality of work
Having to demolish or re-do work
Job Changes
Usually more identifiable than variations
Changes to sequence of work
Program Changes
Acceleration of contract prgram
Prolongation of contract program
Usually increases the cost of contract
Most common job change
Extension of Time
Depend on situation and type of contract
Events resulting in extensions usually listed in contract
Formal extensions are required
Keep al forms
Correspondence files
Daily diaries
Good Practise Legal Tips
Progress reports
Photographs
Records of meetings
Emails
Checklists of remaining work
Planning and Controlling at low levels of WBS
Finishing the Work
Planned run-down of project team
Use task forces
Changing the PM
Closing contracts with suppliers
Planning the transition
Ensureing the user acceptance
Transferring the Product
Training the user
Recording the 'as-built' design
Ensuring the maintenance is planned
Setting a measure
11 Project Audit and Closure
Obtaining the Benefits
Monitoring performance against measure
Calculate variancies
Taking action to correct large variances
Must maintain motivation
Returning resources to line managers
Hold a wrap party - success or failure
Disbanding the Team
Hold debriefings
Rewarding achievement
Disciplining under-achievement
Counselling staff
Record 'as built' design
Post-Completion Review
Compare achievement to plan
Record technical data
Learn successes and failures for future
Critical Chain Project Management
PERT: Program Evaluation and Review Technique
Third factor: Detection Difficulty can be used.
This gives the Risk Priority, and gives the order in which the risks should be handled
