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Satheesh Kumar
MODULE 1
Introduction to SPM Stepwise overview of project planning Program management and project evaluation
What is a Project?
A planned activity
A project is a temporary endeavor undertaken to create a unique product, service or result
Project managers must not only strive to meet specific scope ,time, cost and quality goals of projects ,they must also facilitate the entire
Better control of financial, physical and human resource. Improved customer relations Shorter development times Lower costs Higher quality and increased reliability Higher profit management Improved productivity Better employee satisfaction Better internal co-ordination
Invisibility Process of making visible that which is invisible Complexity Per dollar spent software products contain more complexity Conformity S/W developers have to conform to the requirements of human clients.Humans and organizations can be in consistent. Flexibility Subject to a high degree of change
Usually there are three successive processes that bring a new system into
being.
Planning
Project execution
Stakeholders
These are the people who have a stake or interest in the project. It is important that they may be identified as early as possible.
Internal to the project team External to the project team but within the orgnzn External to both the project team and the organization.
Boem
Review
5.Estimate effort for each activity
9.Execute Plan
8.Review/publicize plan
Brightmouth College Payroll Brigette Off-the shelf Package Refer Exercise 1.2 & Page 21
I.O.E Group Maintenance Accounts Amanda Extension of Invoicing system Refer Page 21
objectives and measures of effectiveness in meeting them Establish a project authority Identify stakeholders Modify objectives in the light of stakeholder analysis Establish methods of communications with all parties
Refer case Study Examples on pages 24 and 25
relationship between project and strategic planning Identify installation standards and procedures Identify project team organization
Refer Case Studies on pages 26,27,28
Distinguish
driven Analyze other project characteristics Identify high-level project risks Take into account user requirements concerning implementation Select general life cycle approach Review overall resource estimates
Refer Case Study on page 29
Identify
and describe project products Document generic product flows Recognize product instances Produce ideal activity network Modify ideal to take into account need for stages and checkpoints
Refer
and quantify activity-based risks Plan risk reduction and contingency measures where appropriate Adjust plans and estimates to take account of risks Refer Case Study on page 36
7-Allocate Resources
Identify
and allocate resources Revise plans and estimates to take account of resource constraints. Refer Case Study on page 37 Refer Figure 2.6 Gantt Chart
8-Review/Publicize Plan
Review
This
Programme Management
Program is a Group of projects that are managed in a co-ordinated way to gain benefits that would not be possible were the projects to be managed independently
Important Terminologies
A cash flow forecast will indicate when expenditure and income will take place.
Net Profit of a project is the difference between the total costs and the total income over the life of the project.
Payback period is the time taken to break even or pay back the initial investment.
Normally ,the project with the shortest payback period will be chosen on
the basis that an organization will wish to minimize the time that a project is in dept
Return On Investment
ROI provides a way of comparing the net profitability to the investment required. ROI = average annual profit * 100
total investment
Exercise:
For project 1,the net profit is $50,000 and the total investment is $100,000.Calculate the ROI.
It takes no account of the timing of the cash flows Bears no relationship to the interest rates offered or charged by banks.
NPV is a project evaluation technique that takes into account the profitability of a project and the timing of the cash flows. This is based on the view that receiving $100 today is better than having to wait until next year to receive it ,because $100 next year is worth less than $100 now. If say that the present value of $100 in a years time is $91, that means the $100 in a years time is the equivalent of $91 now.
Present value = value in year t (1+r) t r - the discount rate t - the number of years into the future, the cash flow occurs Alternatively the present value of a cash flow may be calculated by multiplying the cash flow by the appropriate discount factor.
1
2 3 4 5
0.9254
0.9070 0.8638 0.8227 0.7835
0.9434
.8900 .8396 .7921 .7473
0.9259
0.8573 0.7938 0.7350 0.6806
0.9091
0.8264 0.7513 0.6830 0.6209
NPV for a project is obtained by discounting each cash flow and summing the discounted values.
It is assumed that any initial investment takes place immediately and is not discounted
Exercise:
Assuming a 10% discount rate, calculate the NPV for project1 . Using a 10% discount rate, calculate the NPVs for project2,3 and 4 and decide which on the basis of this ,is the most beneficial to pursue.
4
5
20,000
100,000
0.6830
0.6209
13,660
62,090
Net Profit
$50,000
NPV : $618
One disadvantage of NPV as a measure of profitability is that ,although it may be used to compare projects, it might not be directly comparable with earnings from other investments or the costs of borrowing capital.
The internal rate of return attempts to provide a profitability measure as a percentage return that is directly comparable with interest rate.
if the capital could be borrowed for less than 10% or if the capital could
not be invested elsewhere for a return greater than 10%
The IRR is calculated as that percentage discount rate that would produce an NPV
of zero.
It is most easily calculated using a spreadsheet ,like MS Excel ,provides IRR functions which provided with initial guess ,will return an IRR.
IRR may be estimated by plotting a series of guesses. Exercise: A discount rate of 8% gives a NPV of $7,898,a discount rate of 12% gives ve
NPV of $-5,829.The IRR therefore lies somewhere between these two values. Plot
a chart and find out the approximate IRR.
12
Investing in a project that has an IRR of 10% can produce exactly the same cash flow as lending the money to a bank at a 10% interest rate.
bank.
Risk Evaluation
Every project involves risks of some form. When assessing and planning a project, we are concerned with the risk that the project might not meet its objectives.
One common approach to risk analysis is to construct a project risk matrix utilizing a checklist of possible risks and to classify each risk according to its relative importance and likelihood.
,is very unlikely to occur than with something less serious that is
almost certain.
Where a project is relatively risky it is common practice to use a higher discount rate to calculate net present value.
The premiums ,even if arbitrary, provide a consistent method of taking risk into account.
Rather than a single cash flow forecast for a project, we will then have a set of cash flow forecasts, each with an associated probability of occurring.
The value of the project is then obtained by summing the cost or benefit for each possible outcome weighted by its corresponding probability.
Case Study
Buyright , a software house ,is considering developing a payroll application for use in academic institutions and is currently engaged in a cost-benefit analysis. Study of the market has shown that, if they can target it efficiently and no competing products become available, they will obtain a high level of sales generating an annual income of $ 80,000.They
Case Study
However ,a competitor might launch a competing application before their own launch date and then sales might generate only $100,000 per year. They estimate that there is a 30% chance of this happening. The most likely outcome, they believe ,is somewhere in between these two extremes-they will gain a market lead by launching before any competing
800,000
0.1
80,000
HIGH
MEDIUM 650,000 0.6 390,000
LOW
100,000
0.3
30,000
EXPECTED INCOME
500,000
The Disadvantage
benefit approach, by averaging out the negative and positive outcomes of the different scenarious,does not take
for the
evaluation of a portfolio of projects where more successful projects can offset the impact of less successful ones.
Construction of risk profiles using sensitivity analysis. This involves varying each of the parameters that
By studying the results of a sensitivity analysis we can identify those factors that are most important to the success of the project.
A risk analysis application can make use of this data and produce risk profiles (refer Figure 3.7 in the book)
In the earlier approaches , the best what we can do is,reject over risky projects or choose those with the best risk profile.
But in many situations we can evaluate whether a risk is important and if it is , indicate a suitable course of action.
Such decisions will limit or affect future options and ,at any point ,it is important to be able to assess how a decision will
A Decision Tree
Expansion 0.2 Extend 0.8 D Replace 0.2 0.8 No Expansion -50,000 75,000 NPV $ 100,000
250,000
decision point.(D)
The expected value of each path is the sum of the value of each possible outcome ,multiplied by its probability of occurrence.
(75,000*.8-100,000*.2).
MODULE II
PROCESS MODELS EFFORT ESTIMATION
Process Models
The word process is used to emphasize the idea of a system in action. In order to achieve an outcome, the system will have to execute one or more activities :this is its process. These activities can be organized in different ways and we can call them process models.
The limited scope for iteration is in fact the strength of the model. With a large project one want to avoid reworking tasks previously thought to be completed and thus slipping the dead lines.
Working
This is an elaboration of the waterfall model and stresses the necessity for validation activities .
Each step has a matching validation process which can, where defects are found ,cause a loop back to corresponding development stage and a reworking of the following steps.
Characteristics
In the waterfall model, it is possible to escape at the end of any activity in the sequence.
Software Prototyping
A prototype is the working model of one or more aspects of the projected system. It is constructed and tested quickly and inexpensively in order to test out assumptions. It can be classified as
away prototypes Evolutionary prototypes
Throw
Characteristics
Learning by doing Improved communication Improved user involvement Clarification of partially known requirement Demonstration of the consistency and completeness of a specification. Reduced need for documentation
Draw Backs
Users can misunderstand the role of the prototype Lack of project standards possible Lack of control Additional expense Machine efficiency Close proximity of developers required
Estimation Techniques
Algorithmic Models
Use effort drivers representing characteristics of the target system Advice of knowledgeable staff is solicited Similar, completed ,project is identified and its actual effort is used as the basis of the estimate for the new projects Identifies the staff effort for a project and use that as an estimate Estimate is a figure that appears to be sufficiently low to win a contract Overall estimate for the whole project is made and then broken down Component tasks are identified and sized and these are aggregated.
Expert Judgement
Analogy
Parkinson
Price to win
Top-down
Bottom-up
Bottom up Estimating
With the bottom-up approach the estimator breaks the project into its
component tasks and then estimates how much effort will be required to
carry out each task.
With a large project, the process of breaking down into tasks would be a repetitive one :each task would be analyzed into its component subtasks and these in turn would be further analyzed.
This process is repeated until you get to components that can be executed by a single person for a week or two.
The bottom-up part comes in adding up the calculated effort for each activity to get an overall estimate.
The
top
down
approach
is
normally
associated
with
parametric(algorithmic) models .
The effort needed to implement a project will be related mainly to variables associated with the characteristics of the final system.
Some parametric models ,such as that implied by function points ,are focused on system or task size ,while others ,such as COCOMO,are more concerned with productivity factors.
the functional
size of the
He developed the idea of function points(FPs). The basis of function point analysis is that computer-based information systems comprise five major components, or external user types that are of benefit to the users.
External input types Transactions which update internal computer files External output types Data is output to the user.Ex:Printed reports, screen display Logical internal file types
Equate to a data store May pass information to and from other computer applications Initiated by the user which provide information but do not update the internal files.
Albrecht FP Analysis
The analyst has to identify each instance of each external user type in the projected system.
Each component is then classified as having either high, average or low complexity.
The counts of each external user type in each complexity band are multiplied by specified weights to get the FP
The assumption is that an information system comprises transactions which have the basic structure as shown in the figure.
Model of a transaction
Datastore
Output
Analysis
Wi
We Wo
*
* *
From this it should be possible to work out the average hours of work generated by instances of each type of element.
The averages are then normalized into ratios, or weightings which add up to 2.5 Refer Example 5.3 on page 104
Estimation
If we have figures for the effort expended on past projects and also the system sizes in FPs,we should be able to work out a productivity rate as,
productivity = size /effort
For new projects ,the FPs can be counted and then the effort can be projected using the productivity rate
derived above
effort = size /productivity
The existing FPs suits only for business oriented information systems.
With a real time ,or embedded systems assessing the work content is not easy,
as its features might be well hidden.
COSMIC deals with this by requiring the analyst to break down the system
The software component to be sized can receive requests for services from layers above and can request services from those below it. Also peer-to-peer
This helps to identify the boundary of the software component to be assessed and thus the points at which it receives inputs and transmits output.
Data groups
Inputs and outputs are aggregated into data groups ,where each group brings together data items that relate to the same object of interest.
The overall FFP count is derived by simply adding up the counts for each of the four types of data movement.
Assignment
COCOMO MODEL
Submission
MODULE III
Activity Planning
Objectives Projects and activities, Sequencing and scheduling activities Network planning models Formulating a network model Forward pass, Backward pass, Identifying critical path
Detailed Costing
Motivation Co-ordination
Identifying Activiities
WBS
Project
Analyze
Design
Build
Data Design
Process Design
Physical Design
Risk Management
Categories Risk identification Assessment Planning Management Applying PERT technique Monte Carlo simulation Critical chain concepts
Risk
PM-BOK defines risk as an uncertain event or condition that ,if it occurs ,has a positive or negative effect on a projects objectives.
Categories of risk
Sociotechnical model
Actors
Structure
Technology
Tasks
Risk Identification
Checklists Brainstorming
Causal
Mapping
Represent
the chains of causes and effects that will influence the outcomes in a particular area of activity.
Risk Assessment
Risk exposure =(potential damage)*(probability of occurrence)
Risk Planning
Risk Acceptance Risk Avoidance Risk reduction and mitigation Risk Transfer
Risk Management
Contingency Deciding on the risk actions Creating and maintaining the risk register
PERT was developed to take account of the uncertainty surrounding the estimates of task durations.
Most likely time Optimistic time Pessimistic time Single expected time t = a+4m+b
6
C
D E
2
3.5 1
3
4 3
3
5 4
2.83
4.08 2.83
F
G H
8
2 2
10
3 2
15
4 2.5
10.50
3.00 2.08
Unlike the CPM method the PERT method does not indicate the earliest date by which we could complete the project but the expected (or most likely ) date.
An advantage of this approach is that it places an emphasis on the uncertainty of the real world.
Rather than being tempted to say the completion date for the
A quantitative measure of the degree of uncertainty of an activity duration estimate may be obtained by calculating the S.D s of an activity time ,using the formula. s= (b-a) / 6
Resource Allocation
Identifying resource requirements, Scheduling resources, Creating critical paths, Cost schedule
First step is to list the resources that will be required along with the expected level of demand . This will be normally done by considering each activity in turn and identifying the resources required.
Scheduling Resources
Having produced the resource requirement list, the next stage is to map this on to the activity plan to assess the distribution of resources required over the duration of
the project.
This is best done by representing the activity plan as a bar chart and using this to produce a resource histogram for each resource.
Scheduling resources can create new critical paths. Delaying the start of an activity because of lack of resources will cause that activity to become critical if this uses up its float.
Further more , a delay in completing one activity can delay the availability of a resource required for a later activity .
If the later one is already critical then the earlier one might
now have been made critical by linking their resources.
Cost Schedules
A detailed cost schedule showing weekly or monthly costs over the life of the project should be produced.
Staff costs
Overheads
Creating Framework
Exercising control over a project and ensuring that targets are met is a matter of regular monitoring, finding out what is happening and comparing it with current targets.
2.
3. 4. 5. 6. 7. 8.
9.
10.
Start Publish initial plan Gather project information Compare progress If not satisfied take remedial action Repeat from step2 End Project Review Project Document Conclusions End
in meeting target dates Shortfalls in quality Inadequate functionality Costs going over target
Responsibility
Steering Committee
Project Manager
Team Leader
Team Leader
Visualizing Progress:
A Gantt chart provides a graphical illustration of a schedule that helps to plan, coordinate, and track specific tasks in a project.
COST MONITORING
A cumulative expenditure chart such as that shown in figure provides a simple method of comparing actual and planned expenditure
Priority Monitoring
Path activities
Activities
Activities High
Activities
Change Control
1. 2. 3. 4. 5.
6. 7.
8.
Managing Teams
Organizational behavior, Oldham-Hackman job characteristics model, Becoming a team, Motivation, Decision making, Leadership, Organizational structures, Dispersed and virtual teams.
Theory Y Work is as natural as rest or play Commitment to objectives is a function of the rewards associated with their achievement. The average human can learn to accept and further seek responsibility.
The number of different skills that job holder has the opportunity to exercise
The degree to which your work and its results are identifiable as belonging to you The degree to which your work has an influence on others The discretion you have about the way that you do the job The information you get back about the results of your work
Task identity
Task significance
Autonomy
Feedback
Becoming a team
Simply throwing people together will not immediately enable them to work together as a team.
Forming Storming Norming Performing Adjourning
Valuable research has examined the best mix of personalities in a project team.
The
chair The plant The monitor-evaluator The shaper The team worker The resource investigator The complete-finisher The company worker
Group Performance
Some work yields better results carried out as a team while some things
Social Loafing
Leadership
Leadership is generally taken to mean the ability to
influence
others in a group to act in a particular way to achieve group goals
Position Power Coercive power Connection power Legitimate power Reward power Personal power Expert power Information power Referent power
Leadership Styles
autocrat
autocrat
Permissive Directive
democrat democrat
Permissive
Organizational Structures
Formal versus informal structures Hierarchical approach Staff versus line Departmentalization
Software Quality
Importance Defining ISO 9126 Quality measures Product versus process quality management External standards Techniques to enhance quality Quality plan
later in a project that an error is found the more expensive it will be to fix.
Quality is rather a vague term and is relative .For any s/w system there should be three specifications
A functional
Describes
specification
A quality
How
specification
specification
A resource
How
A quality specification
Definition/description
Scale
Test
Minimally acceptable
Target range
Now
ISO 9126
The ISO 9126 standard was first introduced in 1991 to tackle the question of the definition of software quality. It identifies six major external s/w quality characteristics
Judge the importance of each quality characteristic for the application . Select the external quality measurement within the ISO 9126 framework relebant to
An alternative approach is to scrutinize the quality of the processes through which the s/w product is developed Errors should be eradicated by careful examination of the deliverables of each stage before they are passed on to the next stage
External Standards
Standards like ISO 9000 series try to ensure that a monitoring and control system to check quality is in place They are concerned with the certification of the development process not of the end product.
Level 1: Initial
Level 2:Managed Organizations Level 3:Defined Level 4:Quantitatively Managed Level 5:Optimizing