Hard skills of Project

Management
Applied Project
Management

Shifaza Mohamed
MBA (Project Management)
Objectives
Utilize the relationship between project dimensions of scope, time and cost to establish
the optimal project profile to meet the requirements and expectations of the key
stakeholders.

Define the scope of work that comprises the project, and to clearly define the scope of
work that is outside the project so there is no misunderstanding about what is to be
delivered.

Define the criteria by which successful project outcomes can be measured and
confirmed.

Create a simple breakdown structure to aid in defining the project scope.

Relate the responsibility for project activities to appropriate organizational resources.

Identify the strategic aspects of the project time frame which impact on starting times,
milestones and project completion.

Define the implications on the duration of the project resulting from changes to scope
and cost.
Objectives
Create a simple bar chart and network to define the likely project schedule for approval
by higher authorities.

Identify key issues impacting on the likely cost of the project.

Select an appropriate methodology and technique for estimating project costs.

Give appropriate consideration to the through-life costs of the project.

Estimate the value of the project achieved at any specific point in time during delivery.
Introduction
This module basically looks at the critical areas
of scope, time and cost management related
to projects which are regarded as hard skills in
project management.

Project success is mostly determined by the

success in management of the three
dimensions mentioned above.
Hard skills and soft skills of Project
Management
The hard skills may be seen as process-related and the use of tools, or they may
also be seen as those knowledge areas defined in the Guide to the Project
Management Body of Knowledge (PMI 2013) comprising scope, time and cost
management which are more quantitative or measurable.
Scope management looks at what is delivered and what is not. Each major
stakeholder has different expectations about what will be delivered and some
are bound to be disappointed.
Time management considers the resource of time what is the likely duration of
this project, when could it possibly start, and what time constraints exist?
Cost management is on the top of most stakeholders list of concerns. What is
the estimate of financial resources that are required, how likely are we to exceed
that estimate, and how do we manage the costs to meet stakeholder
expectations?
In a simplistic diagram, we can show a relationship between these three elements
of a project. It is difficult to vary one of these three dimensions of a project
without impacting on one or both of the other two dimensions.
The three constraints in projects
Scope management
The Australian Institute of Project Management (AIPM) (Australian
Institute of Project Management 2010, p. 3) defines project scope
and scope management as follows:

The scope of a project comprises a combination of the business

planning process and its outcomes, the end products of the project
and the work required to deliver the project deliverables using
systems thinking, to ensure the definition and delivery of the
required project outcomes.
Scope management involves the initial justification of the project
through the strategic planning process, the development of the
business case, management of the initial project start-up activity
followed up by the ongoing definition of the deliverables within
project objectives and constraints.
Project scope forms the foundation of the project plan, the basis
from which all other project specific plans are developed and is the
focus for an overall systems approach to project management.
Importance of scope planning
To manage scope of a project, a project manager has to first
establish the projects objectives and deliverables and decide
what measurable benefits and outcomes can be used to
evaluate project performance.
The project manager must decide how scope changes that are
proposed during project implementation are to be managed.
Upon decision on the above aspects, the project manager has
to get approval from the projects sponsor or client .
Establishing a scope management plan, the sponsor is
accepting that the plans scope will lead to the achievement of
the objectives and is agreeing to make appropriate resources
available to the project.
Importance of scope planning
Planning is a cornerstone of project management and
planning activities can vary considerably, depending on the
type of project and the management environment in which
the project originates and develops.
Turner (2009) argues that, of the five project objectives, scope
management is the principal one as it is through scope
management that the clients requirement is met. That is to
say, without careful scope management, there can be no
confidence that the projects outcome will satisfy the clients
needs.
Importance of scope planning
Success criteria are defined by statements which can be used
at project completion to identify what has been achieved and
to confirm that we have delivered what we promised to.
Obviously they should match the objectives, reflect the scope
and fit within the constraints. The traditional criteria include
schedule, budget and performance (or more precisely,
specification).
These are at least measurable. Turner (2009) proposes a
successful project is one that achieves its business purpose;
provides satisfactory benefit to the owner; satisfies the owner,
user and stakeholder needs; meets its pre-stated objectives;
meets the traditional criteria above; and provides satisfaction
to the project team and their supporters.
Breakdown structures
Breakdown structure is a decomposition technique used to
breakdown the project results/deliverables required and
actions/works to achieve those results in an aligned and
structured manner.
It is used as a tool for management, communication and
control of the overall project scope by allowing containment
of risk and coherent delegation of responsibility and resources
in a logical structure.
However, excessive decomposition may not be effective as it
can lead to inefficiency and non-productive efforts to manage
and control the breakdown structures.

(Project Management Institute 2013).

Breakdown structures
Scope definition may be expressed by designated, clearly
defined boundaries, such as:

Product breakdown structure (a cascade of products, sub-products,

assemblies and components)
Organization breakdown structure (a cascade of resource types, skill
types or activities)
Work breakdown structure (a cascade of the products and work
activities),and/or
Some other form which comprehensively defines products and
activities

(Australian Institute of Project Management 2010, p. 6)

Work breakdown structure (WBS)

The WBS is an established tool for structuring a large

project so that all the individual component
elements are identified according to some
established functional, physical or organizational
hierarchical basis.

It consists of various layers, like an organization

chart, each increasing the detailed content, until at
the lowest level a single task or work package can
be evident.
WBS
WBSs are used because they:

provide a framework for the organization and management of

the project
provide a framework for planning and control of cost, schedule,
scope of work and risk
break the project down into manageable components (work
packages)
provide a means of ensuring that all work is covered and well
defined, or alternatively, that some work is not left out
are a very convenient means of allocating and tracing costs
are useful as a quantitative basis for pricing
are useful for allocating responsibility for the achievement of
the various elements of the total project
WBS

Figure: WBS using contract deliverables breakdown

WBS

Figure: WBS for marketing a new product

Time management
Project management success is also determined by
completion of projects based on timeline required by
the stakeholders.

The management of time during project

implementation includes four performance criteria.
First, the tracking of actual time; second, the
identification of variances and the analysis of their
impact; third, schedule changes are made to cater
for changes; and finally new schedules are
developed.
Time-cost-resources are interrelated

Figure: The three primary factors of project management

Time-cost-resources are interrelated

Figure: Inter-relationship between time, cost and resource factors

Causes of poor estimates
External:
o External factors are those factors which are the cause of events,
situations or actions of people or organisations not connected to the
project, and over which the project manager has no control or
influence.
o The most important of the external influences that can cause poor time
estimates is the imposition of date constraints - Perhaps due to legal
requirements/ political reasons
Internal:
o Internal factors are those over which the project manager or staff could
reasonably be expected to have some control or influence.
o They can include:
initial estimates not being changed, even though the project concept
phase takes some years
practicalities in the work place causing minor delays in many activities;
these accumulate into a large over-run on the initial estimate
changes to the project during execution
Probability factors in time estimates
The PERT three-time estimate methods
The original PERT concept was designed around its use on development
projects where new technology was being employed and new
manufacturing techniques were being continually improved. The time
estimates had elements of risk and uncertainty. To cope with this situation
the creators of the PERT methodology called for three time estimates to
be used to calculate the expected time estimate.
The three time estimates were determined as follows:
o How long would it take to do the activity with a 99% probability if everything
went extremely well (optimistic estimate).
o How long would it take to do the activity with a 99% probability if things went
in a fairly normal fashion relating to an average performance (most likely
estimate).
o How long would it take to do the activity with a 99% probability if everything
went wrong (pessimistic estimate).
Time management tools and
techniques
Milestone chart chart to represent significant
events (those with zero duration)

Gantt chart bar chart to show visual relationships

between multiple tasks or resources

Network logic network (CPM and PERT) charts and

reports
Milestone Chart
Gantt Chart
Network Diagram CPM/PERT
Types of networks
As indicated previously, the following two well-known network systems
were developed in the 1950s:
o The Critical Path Method (CPM), which is used for optimizing time-cost
problems where known activity times could be shortened but at a cost.
o The Program Evaluation and Review Technique (PERT), which is used in
complex situations where activity duration is not known with any degree of
certainty, adding network analysis and probability theory to program
scheduling. This type of network analysis would normally be carried out by
specialist experts in project scheduling and does not form a significant part of
this course.

The terms CPM and PERT tend to be used interchangeably, which is not
correct. PERT only applies to network analysis where multiple time
estimates are utilized. Although Microsoft Project software refers to PERT
diagrams, that is not correct. They are simple networks using Critical Path
methods.
Scheduling of activities
What is scheduling?
o Scheduling is part of the management decision-making
process that provides the transition of a draft project plan
into a firm and practical course of action.
o It involves management considering the data provided in
the activity network and resolving any time or resource
conflicts which may be present in that data, so that the
resulting start and finish dates are considered to be
feasible and achievable.
Cost management
Project Manager should be involved in all aspects of cost
management and funding as it is a key concern for all
stakeholders in a project.
The management of project cost involves two separate
phases; First phase is strategic and focuses on the
management of cost up to the time a decision is made to
proceed with the implementation of a project
Second phase is operational and relates to the management
of cost after such a decision is made.
The first phase examines the estimating of project costs
during project initiation and planning, and the second phase
examines the monitoring and control of cost during
implementation using project management tools.
The nature of cost and its
importance
Cost over-runs are unpopular because they usually
create serious payment scheduling problems, changing
the expenditure requirements in one or a number of
budget periods.
This can delay the start of new projects which may be
almost ready for approval and may force other current
projects to revise delivery and payment schedules.
Cost variations by factors

Figure: Analysis
of total cost
variation by
factor

(Source: National
Audit office
2004, p. 13)
Project Manager Cost Management
The nature of the project managers task is divided into two distinct
areas in the progress of the projects life cycle:

Prior to commitment: The period where the conceptual and definition

phases lead the project from ideas, schemes and glossy brochures to a
clear and unambiguous description of what is needed. The project
manager is involved with estimates and evaluation of alternative
solutions to the sponsors needs.

Post-commitment: The period where the project is brought into

reality deliverables are delivered and benefits are realized. The focus
of the project managers role changes to that of a cost monitor and
expenditure authorizing delegate.
Cost estimating methodology
Two basic methods:-
Top down or analysis approach a project component is
sub-divided only to a level which can be specified with
sufficient detail such that a cost estimating technique can be
used to produce a cost estimate.

Bottom up or synthesis approach breaks down the task

into its constituent smaller tasks, each of which is separately
estimated on the best assessment possible at the time,
having due regard to past recorded performance, preferably
in terms of the effort, material, and facilities required. It
involves a lot of time and cost to be accurate.
Cost estimating techniques
Within the described two methodology, the following cost estimating
techniques are applied:-

Subjective technique: In the subjective technique reliance is placed on personal

experience, recollection and judgement of the magnitude and nature of the task
with limited reference to recorded and analyzed data from previous projects.
Cost is low and accuracy is low.

Parametric estimating technique: The Parametric technique relates some form of

parameter (size, speed, area, etc.) of the project under consideration to the
known costs of that parameter in previous projects, e.g. a cost estimate of a
particular type of ship based on a typical cost per unit of displacement, or an
estimate of the cost of a power generator based on a typical industry cost of
manufacture per KW. The cost is slightly higher but so is the level of accuracy.

Comparative technique: This is similar to the parametric technique, but detailed

records from previous projects are used to make direct comparisons between the
actual costs of similar activities or products and the current project.
Accuracy of cost estimates
Project cost monitoring and control
The responsibilities of the project manager in cost
management during the delivery phases of the project
will be influenced by the type of contracts and sub-
contracts in the capital procurement.

Fixed price contracts: require a focus on both parties

meeting their well-defined obligations which are set out in
comprehensive documentation.
Variable price contracts: require a greater degree of
monitoring of what is actually delivered and confirming a
revised cost to reflect changes to the scope of the project
over the period of the contract.
Cost reimbursement contracts: require considerable
measurement and confirmation of what has been carried
out so the contractor can be reimbursed for expenses
incurred in delivery of the project.
Earned value and data analysis

(Source: Standards Australia 2003, p. 14)

Conclusions
In this module we looked at some important
aspects of managing projects scope, time and
cost and the relationship between them.
They have been grouped because they are similar
in some regards.
They are highly visible (as compared to
procurement management for example) and are
quantitative in nature more so than other aspects
such as quality management, organizational
management and risk management.