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 (PMBOK™),
Project Management Institute, 2003

 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 Closing

Definition | Analysis |Design|Build|Test|Accept| Implement| Operation
20% 60%

5% 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

Procure- Systems IM/

Finance Support Sales Maintenance
ment Engineering IT

Module 1 - Introduction 10
Project Planning: Time and Cost Estimate
• Iterative
• Accuracy
– Estimates become more accurate
Initiation Planning Execution Closing

Definition Analysis Design

+25% +15
+10
0
-50
-25
-75%
Preliminary Plan Proposal Plan Final Plan Revised Plan

Module 1 - Introduction 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. 3.
Major Phase 1 Major Phase 2 Major Phase 3

1.1 1.2 1.3

Section 1 Section 2 Section 3
of Phase 1 of Phase 1 of Phase 1

Module 1 - Introduction 14
Work Breakdown Structure - Formats

2. Outline Method

0. TITLE
1. MAJOR PHASE 1
1.1 S1 OF PHASE1
1.2 S2 OF PHASE1
1.3 S3 OF PHASE1
2. MAJOR PHASE 2
...
etc.

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% 6-10%

SYSTEM DESIGN 8-12% 6-10%
SOFTWARE REQUREMENTS 2-4% 3-5%
SOFTWARE PRELIMINARY DESIGN 5-7% 4-6%
SOFTWARE DETAILED DESIGN 8-11% 9-12%
CODE AND UNIT TEST 20-28% 24-32%
SOFTWARE INTEGRATION & TEST 10-14% 11-15%
SOFTWARE QUALIFICATION 5-7% 2-4%
SYTEM INTEGRATION & QUAL. 8-12% 8-12%
WARRANTY AND SUPPORT N/A 7-10%

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 Precedent Duration
A - 7d
B A 3d
C - 10d
D C 5d
E - 4d
F E 6d
G F 3d

Module 1 - Introduction 25
Scheduling

Ordering the Activities: PERT Chart

Arrow Diagramming Method (ADM)

2
B
A
3d
7d
C D
1
10d 3 5d 6

E G
3d
4d
F
4 5
6d

Module 1 - Introduction 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
$400,000.00

$300,000.00

$200,000.00

$100,000.00

Cumulative Cost: $53,920.00 $127,160.00 $274,360.00 $331,440.00 $349,920.00 $368,400.00 $376,500.00 $376,500.00

Filtered resources Total:

CPM Total:

Module 1 - Introduction 37
Cost - Sanity checks
Cost Estimate Error Range – same as Time Estimate

+75%
25

10
0
-8
-25% -10

Indicative Budget Definitive

PPA EPA PDR
Init Plan Final Plan 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
SENIOR ENVIRONMENTS
MANAGEMENT

CORPORATE
POLICY
AND CULTURE
POLITICAL

PROJECT/ REGULATORY
CORPORATE PM AND LEGAL
PROGRAMS

& FINANCIAL
HUMAN FACTORS
TECHNOLOGY
ECONOMIC 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 Greater than 66% probability of occurring
Medium 34 to 65% probability of occurring
Low Less than 33% probability of occurring

Module 1 - Introduction 45
Step 2: Risk Analysis
Impact Criteria:

Impact Rank Description

Could add over 25% delay to the completion
Schedule High of the project
Could add over 10% delay to the completion
Medium of the project
Could add less than 10% delay to the completion of
Low the project, or delays a non critical deliverable
Cost High Could add more than 25% to the project budget

Medium Could add between 10 and 25% to the project budget

Low 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.
Low Medium High
Impact
3. Lack of skilled staff, 2. Time estimate and 1. Lack of commitment.
organization slow to hire funds inadequate for the Headquarters may have to
High adequate staff; may scope of this project; assume more responsibility;
will result in project delay,
delay implementation. may be late and over
cost overruns.
budget.
6. Cannot get office space 5. Expecting major scope 4. Not enough time spent
for staff; may cause changes from clients; planning, lack of
communication problems, understanding of problem;
Medium delaying the execution
may cause delay and
cost escalation. may take longer/
phase. 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

September October November
ID Task Name Duration Start 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
1 Session 7 - write Pm course 101.4 days '99 Sep 01

2 Initiation 8.4 days '99 Sep 01 99%

3 Interview client 3 days '99 Sep 01 100%

4 Write Proj Concept 2 days '99 Sep 09 100%

5 Concept approved 0 days '99 Sep 10 09-10

6 Planning 8 days '99 Sep 10 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

11 Development 61 days '99 Sep 22

12 Design 23 days '99 Sep 22 0%

13 Design coursware 10 days '99 Sep 22 0%

14 Design Case study 10 days '99 Oct 05 0%

15 Walk through design 1 day '99 Oct 19 0%

16 Revise design 2 days '99 Oct 20 0%

17 Design done 0 days '99 Oct 21 10-21

18 Write Course 22 days '99 Oct 21 0%

19 Write courseware 20 days '99 Oct 21 0%

20 Write case 10 days '99 Oct 21 0%

Module 1 - Introduction 53
21 Course material walkthrough 2 days '99 Nov 17 0%
Project Control – Cost Control/Reporting

Financial Report vs Baseline September October November December January

ID Task Name Fixed Cost Total Cost Baseline Variance 29 05 12 19 26 03 10 17 24 31 07 14 21 28 05 12 19 26 02 09 16 23
1 Session 7 - write Pm course $0.00 $74,920.00 $74,120.00 $800.00 7%

2 Initiation $0.00 $5,280.00 $4,480.00 $800.00 99%

3 Interview client $0.00 $2,400.00 $2,400.00 $0.00 100%

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

6 Planning $0.00 $12,320.00 $12,320.00 $0.00 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

11 Development $0.00 $52,800.00 $52,800.00 $0.00 0%

12 Design $0.00 $28,040.00 $28,040.00 $0.00 0%

13 Design coursware $0.00 $12,400.00 $12,400.00 $0.00 0%

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

18 Write Course $0.00 $21,880.00 $21,880.00 $0.00 0%

19 Write courseware $0.00 $12,000.00 $12,000.00 $0.00 0%

20 Write case $0.00 $4,000.00 Module $0.00

1 - Introduction
$4,000.00 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