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Unit 2
Unit 2
Structure: 2.1 Introduction Learning Objectives 2.2 Project Life Cycle and Process Flows 2.3 Characteristic 2.4 Project Planning and Scoping 2.5 Planning Tools and Estimation Planning tools Project organisation Project structure Project key personnel Project management team Key stakeholders Stage teams Key resources Work breakdown structure (WBS) Task duration Planning estimation Purpose of estimation Estimating tips 2.6 Estimation Approaches and Estimation Tools Estimation approaches Bottom up approach Top down approach Estimation tools 2.7 Risk Management Components Classification and categories 2.8 Summary 2.9 Terminal Questions 2.10 Answers to SAQs and TQs Answers to self assessment questions Answers to terminal questions
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2.1 Introduction
It is well known that organisations continue to grow year by year. As there is a need to grow, it becomes necessary for a growing organisation to resort to effective growth plan. The plan needs to be properly prepared. It is possible to prepare proper plans only if the manager has sufficient knowledge of the various processes of the project. The manager has to work on the various project life cycle stages and apply necessary planning tools to come out with a proper growth plan for the company. The project manager needs to be meticulously aware of the various techniques of identifying the project items, work break down structure of the project, task duration, and estimation. This unit deals with the various techniques and methodologies of project planning. Learning Objectives By the end of this unit, you should be able to: Explain the project life cycle and its process flows List the ways in which a project has to be planned and executed List the tools necessary to plan the resources Explain the estimation approaches in project management Recall the fundamentals of managing the risks involved in a project
Fig. 2.1: Project process flow Sikkim Manipal University Page No. 24
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Let us now try to understand the project life cycle with reference to the process flow mentioned above. In the preparation stage, the project manager, along with the associates and team members, draft the outline of the project. They identify the various factors required to be taken care of in the project. Based on their discussion, they formulate the plans and model the activities for execution. They prepare the budget. After the model is approved, they recommended it for implementation. During the planning stage, roles and responsibilities of the various members involved in the project are listed out. In addition, the project team works on the feasibility report to assess the project feasibility with respect to time, finance and technicalities. A thorough risk analysis is also performed to arrive at the uncertainty factors. The findings of the risk analysis are used to establish the control factors to be exercised during the execution of the project. Various monitoring tools are set to monitor the project progress. All the key issues found at the planning stage of a project are documented in a project plan. Project Plan A project plan is documented with the following key issues Key stages of the project Project logic diagram Key stages responsibility chart Estimates for all key stages Optimised project Gantt chart Updated and reviewed project risk log Risk management forms for new high risks Project operating budget Next stage is the implementation stage which involves the execution of the project as agreed in the project plan, while carefully monitoring progress and managing changes. The completion stage consists of the satisfactory delivery of all the deliverables to the customer.
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Project Deliverables A project is undertaken to deliver either a service or a product. Project deliverables could be a set of outputs that are expected during various stages of the project. It could be as simple as a new product or modification of an existing product. A project life cycle is not complete without a review to look into the various issues which affected the project during the course of its execution. This helps in listing the best practices and documenting the lessons learnt.
2.3 Characteristics
Any project may be considered to have the following characteristics: a) Resource requirement: During the course of executing the project, it is seen that the resource requirement increases from start to an intermediate stage of the project. It further increases at a rapid rate and becomes constant while the project is at its 80 to 95% progress stage. Thereafter the resources requirement decreases to zero bringing the project to a finish. Refer to the figure 2.2 for a chart. b) Funds: The requirement of funds for the complete execution of the project also follows the same trend as that of the resources. Both the requirements are more or less proportional. Refer to the figure 2.2 for a chart. c) Probability of completion: The probability of completing the project can be estimated based upon the normal distribution curve. In the initial stage of the project the probability of completing the project is low though not zero. It gradually increases and as the project approaches finish the probability of completing the project tends to become 100%. Refer to the figure 2.2 for a chart. d) Risk: The risks involved in the project affecting its completion time are high at the initial stages and low at the later stages of the project. Refer to the figure 2.2 for a chart. e) Design changes: The project during the course of its progress may be subjected to changes because of some external factors. The influence of such external factors on the project may result in changes in the design of the project though not very often. It is observed that such changes, if
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any, are normally high during the initial stages of the project and decreases as the project approaches finish. Refer to the figure 2.2 for a chart.
Self Assessment Questions True or False? 1. Any project is undertaken to deliver either a service or a product. 2. Project logic diagram, key stages responsibility chart, Gantt chart are the only key issues documented in a project plan. 3. The five characteristics of a project are resource requirement, funds, and probability of completion, risk and design changes.
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Let us now list the steps involved in each process of project planning. a) The identification process The main steps in the identification process of any project are: i) Identifying initial requirements ii) Validating them against the project objective iii) Identifying the criteria such as quality objectives and quantitative requirements for assessing the success of both the final product and the process used to create it iv) Identifying the framework of the solution v) Preparing a template of the frame work of solution to illustrate the project feasibility vi) Preparing relevant charts to demonstrate the techniques of executing the project and its different stages vii) Preparing a proper project schema of achieving the defined business requirements for the project viii) Identifying training requirement ix) Making a list of the training program necessary for the personnel working on the project x) Identifying the training needs of the individuals working in various functions responsible in the project xi) Preparing a training plan and a training calendar xii) Assessing the capabilities and skills of all those identified as part of the project organisation b) The review Process The main steps in the review process of any project are: i) Establishing a training plan to acquaint the project team members with the methodologies, technologies and business areas under study
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ii) Updating the project schedule to accommodate scheduled training activities iii) Identifying the needs for review and reviewing the project scope iv) Reviewing a project with respect to its stages and progress by preparing a plan for the review, fixing an agenda to review the project progress and keeping the reports ready for discussion about stage performance v) Reviewing the project scope, the objective statement, the non conformances in the project stages and identifying the need to use the project plan vi) Preparing a proper project plan indicating all the requirements from start to finish of the project and also at every stage of the project vii) Preparing a checklist of items to be monitored and controlled during the course of execution of the project c) The analysis process The main steps in the analysis process of any project are: i) Comparing the actual details with that in the plan with reference to project stages. ii) Measuring various components of the project and its stages frequently to control the project from deviating and also monitor the performance. iii) Deciding how the task, the effort and the defects are to be tracked, what tools to be used, what reporting structure and frequency will be followed at various stages. iv) Identifying the preventive and corrective steps to be taken in case of any variance v) Performing root cause analysis for all problems encountered. If all the above steps are performed, scoping and planning become effective and the ideal outcome are achieved. What is root cause analysis? Root cause analysis (RCA) is a problem solving method aimed at identifying the root causes of problems or events, as opposed to merely addressing the immediately obvious symptoms. This can minimise the likelihood of problem recurrence.
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Self Assessment Questions True or False? 4. The purpose of project planning and scoping is to first identify the areas of the project work and identifying the forces affecting the project and then to define the boundaries of the project. 5. Avoiding areas of problems which may affect the progress of the project is the only factor to be considered for scoping a project. 6. Assessing the capabilities and skills of all those identified as part of the project organisation is a step in the analysis process. 7. Comparing the actual details with that in the plan with respect to project stages is a task of the identification process.
Initiation
Planning
Execution
Control Close
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2.5.1.2 Project Structure Project structure consists of development plan, project tracking and oversight. Figure 2.4 shows the development plan of a typical software project.
Initiate planning
Record lessons learnt Fig. 2.4: Project development plan Sikkim Manipal University Page No. 32
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2.5.1.3 Project Key personnel It is crucial to identify those business areas that are within the scope or directly interface with the scope boundary. These areas are listed in the Business area column of the project assignment worksheet. The key personnel for each area should be identified and subsequently listed in the Person column of the project assignment worksheet. 2.5.1.4 Project management team A senior management team will be accountable for the project. They identify project sponsor, client representative and technical representative. A project management team consists of the following roles: Stage managers who will plan and manage the project on a day-to-day basis for this stage Project coordinators such as client coordinator and technical coordinator who will clearly define these coordination, control activities and identify the suitable personnel to carry them out 2.5.1.5 Key stakeholders It is important to identify management level personnel who are critical to the success of the project. The responsibilities of the key stakeholders must be documented. 2.5.1.6 Stage teams For each stage of project management life cycle, appropriate personnel should be identified. After allocation of staff to the stage, the team structure is defined and team leaders appointed. It is important to document the time commitment and responsibilities to be performed by the team members. 2.5.1.7 Key resources Individuals assigned to a key resource role may work towards gathering Business key resources and Technical key resources. They are project coordinators and team invitees. 2.5.1.8 Work Breakdown Structure (WBS) The entire process of a project may be considered to be made up on number of sub process placed in different stage called the Work Breakdown Structure (WBS).
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WBS is the technique to analyse the content of work and cost by breaking it down into its component parts. Project key stages form the highest level of the WBS, which is then used to show the details at the lower levels of the project. Each key stage comprises many tasks identified at the start of planning and later this list will have to be validated. WBS is produced by identifying the key elements, breaking each element down into component parts and continuing to breakdown until manageable work packages have been identified. These can then be allocated to the appropriate person. The WBS does not show dependencies other than a grouping under the key stages. It is not time based - there is no timescale on the drawing.
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What are Lead Time and Lag Time? Lead time: It is an amount of time, which a successor task can overlap with its predecessor task, i.e. the time before the completion of the predecessor at which the successor can start. Lag time: An amount of time, between a predecessor and a successor task, i.e. the time after the completion of the predecessor that the start of the successor is delayed. 2.5.1.9 Task duration Identifying lead and lag times helps in working out task duration. 2.5.2 Planning Estimation 2.5.2.1 Purpose of estimation Estimation is an integral part of project planning. Let us find out why. 2.5.2.2 Estimating tips Find below some tips to keep in mind when you estimate for a project. Base estimates on some analytical, quantitative process than on a number pulled out of thin air. Historical metrics data can help. Explain your estimating method to the stakeholders and compare with what they want. They may not really have an estimate; it may be a guess or a goal. If you cant provide an accurate estimate because there are no written requirements, offer to provide a more precise estimate after some initial exploration of the project scope and general user requirements. Why estimate? Estimations assist in defining the project functional requirements It prevents surprises on various fronts such as effort, schedule, cost and end result Reasonable estimates (even if not accurate) tend to become a selffulfilling prophecy. Present a range of estimates: best case, most likely case and worst case, with the approximate probability of meeting each one. Presenting a single estimate at the beginning of a sizable project sets an expectation that will
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persist in peoples minds long after the original requirements and assumptions have drastically changed. Negotiate for a larger team, fewer features, phased delivery or reduced quality as ways to achieve an aggressively accelerated schedule. Make sure the stakeholders understand these trade-offs. Redo your estimate with some different assumptions of project size, resources or other factors to see how close you can come to the managers shorter goal. Make sure the assumptions are clearly communicated to everyone involved in the decision-making. Make a counter offer in case your estimation does not meet your stakeholders expectation, showing them what fraction of the systems functionality could realistically be delivered in the time period expected. Self Assessment Questions Fill in the blanks 8. In the control process the progress is ________ and the ______ are managed. 9. The entire process of a project may be considered to be made up on number of sub process placed in different stage called the ____________. 10. _______ is the amount of time, which a successor task can overlap with its predecessor task, i.e. the time before the completion of the predecessor at which the successor can start.
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2.6.1.1 Bottom up approach The bottom up approach consists of the following steps. i) Project manager first divides the product under development into major modules. ii) Each module is subdivided into smaller units. iii) Project manager defines a standard for manufacturing and self-testing by Identifying modules in the system and classifying them as simple, medium or complex Using either the provided standard definitions or definitions from past projects as much as possible Getting the average build effort for simple/medium/complex (S/M/C) programs from the baseline if a project specific baseline exists 2.6.1.2 Top Down Approach The top down approach consists of the following steps. i) Getting the estimate of the total size of the product in function points ii) Fixing the productivity level for the project using the productivity data from the project specific capability baseline from the general process capability baseline, or from similar projects iii) Obtaining the overall effort estimate from the productivity and size estimates iv) Using effort distribution data from the process capability baselines or similar projects to estimate the effort for the various phases v) Refining the estimates taking project specific factors into consideration
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2.6.2 Estimation Tools The various estimation tools that may be used in managing a project are listed in figure 2.7.
Let us familiarise ourselves with each of these tools. a. Algorithmic model It consists of one or more algorithms that produce an effort estimate as a function of a number of variables or cost drivers. b. Expert judgment It relies on one or more people who are considered experts in some endeavour related to the problem at hand. For example, it can be a software application or effort estimation. c. Analogy It refers to the comparison of the proposed project to completed projects of a similar nature whose costs are known. The organisations process database is a source for historical cost data. d. Top down An overall cost estimate for the project is derived from global properties of the product. This estimate will usually be based on the previous projects and will include the costs of all functions in a project like integration, documentation, and quality assurance and configuration management. e. Bottom-up Each component of the software product is separately estimated and the results aggregated to produce an estimate for the overall job. f. Automated estimation models A number of computerised models are available which estimate cost and schedule from user inputs of size
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and environmental cost factors. Most of these are algorithmic models that use components as the measure of size. What if a project specific baseline does not exist? Use project type, technology, language and other attributes similar projects in process database. Use data from these define the build effort of S/M/C program. If no similar project process database and no project specific baseline exist estimates based on project specific factors. Self Assessment Questions True or False? 11. The estimation approaches are the logarithmic and sequential approaches. 12. Expert judgment and analogy are types of estimation tools that may be used in managing a project. to look for projects to exist in the refine the
Fig. 2.8: Risk management components Sikkim Manipal University Page No. 39
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Let us be familiar with the actions involved in each of the components. a) Risk Assessment Identify the possible risks and assess the consequences by means of checklists of possible risks, surveys, meetings and brainstorming and reviews of plans, processes and products. The project manager can also use the process database to get information about risks and risk management on similar projects. b) Risk Control Identify the actions needed to minimise the risk consequences. This is also known as risk mitigation. Develop a risk management plan. Focus on the highest prioritised risks. Prioritisation requires analysing the possible effects of the risk event in case it actually occurs. This approach requires a quantitative assessment of the risk probability and the risk consequences. For each risk, determine the rate of its occurrence and indicate whether the risk is low, medium or of high category. If necessary, assign probability values in the ranges as prescribed based upon experience. If necessary assign a weight on a scale of 1 to 10. c) Risk Ranking Rank the risk based on the probability and effects on the project; for example, a high probability, high impact item will have higher rank than a risk item with a medium probability and high impact. In case of conflict, use judgment. d) Risk Mitigation Select the top few risk items for mitigation and tracking. Refer to a list of commonly used risk mitigation steps for various risks from the previous risk logs maintained by the project manager and select suitable risk mitigation step. The risk mitigation step must be properly executed by incorporating them into the project schedule. In addition to monitoring the progress of the planned risk mitigation steps, periodically revisit the risk perception for the entire project. The results of this review are reported in each milestone analysis report. To prepare this report, make fresh risk analysis to determine whether the priorities have changed. 2.7.2 Classification and Categories Risk management may be classified and categorised as 1. Risk assessment and identification The assessment and identification focuses on enumerating possible risks to the project. Methods that can aid risk identification include checklists of possible
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risks, surveys, meetings and brainstorming and reviews of plans, process and work products. The project manager can also use the process database to get information about risks and risk management on similar projects. 2. Risk prioritisation Focus on the highest risk. Prioritisation requires analysing the possible effects of the risk event in case it actually occurs. This approach requires a quantitative assessment of the risk probability and the risk consequences. For each risk rate, the probability of its happening as low, medium or high. If necessary, assign probability values in the ranges given for each rating. For each risk, assess its impact on the project as low, medium, high or very high. Rank the risk based on the probability. Select the top few risk items for mitigation and tracking. 3. Risk Control: The main task is to identify the actions needed to minimise the risk consequences, generally called risk mitigation steps. Refer to a list of commonly used risk mitigation steps for various risks from the previous risk logs maintained by the PM and select a suitable risk mitigation step. The risk mitigation step must be properly executed by incorporating them into the project schedule. In addition to monitoring the progress of the planned risk mitigation steps periodically revisit the risk perception for the entire project. The results of this review are reported in each milestone analysis report. To prepare this report, make fresh risk analysis to determine whether the priorities have changed. A Caselet on Risk Management The cost of an oil refinery facility usually runs into billions of dollars. The budgeting for these enormous projects involves many complex engineering and materials considerations. Fluor Corporation - a multinational engineering, construction and project management firm in the oil and gas sector - has recently bought an expensive risk management solution from Palisade. The company feels the investment in risk management was necessary for them to deal with the billion dollar uncertainties in its estimates for clients.
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Self Assessment Questions True or False? 13. Risk management aims to identify the risks and then take actions to minimise their effect on the project. 14. Important components of risk are risk assessment, risk control, risk ranking and risk mitigation. 15. Identifying the actions needed to minimise the risk consequences, are generally called the risk development steps.
2.8 Summary
Now that you have gone through this unit you should have learnt the basics of the project life cycle and its process flows. You are now aware of the ways in which a project has to be planned and executed. You have also been familiar with the tools necessary for project planning. You have also learnt about the estimation approaches in project management and the fundamentals of managing the risks involved in a project.
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Monitored, changes WBS Lead Time True False True True False
2.10.2 Answers to Terminal Questions 1. 2. 3. 4. 5. Refer to section 2.4 Refer to section 2.5 Refer to section 2.5.1 Refer to section 2.6.1 Refer to section 2.8.2
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