Fundamentals of Project Management: Part 1a

1
Fundamentals of Project Management Part 1a

• APEGGA Annual Conference
• April 24 25, 2003
• Dr. George F. Jergeas PEng.
• University of Calgary

2
Schedule

• Day 1a
• Introduction
• 5-Step PM
• Planning and Definition
• Day 1b
• Estimating cost and time
• Organize project team
• Selecting PM and team
• Effective teams

• Day 2 c
• Project procurement
• Bidding process
• Building sustaining project team
• Contract administration
• Day 2 d
• Schedule control
• Cost control
• Project Close-out
• Claims and disputes

3
References

• This section is based on
• The 5-Phased Project Management- A Practical
  Planning and Implementation Guide by Joseph Weiss
  and Robert K. Wysocki
• Project Management Institute PMBOK Guide,
  http//www.pmi.org
• Instructors notes

4
Introduction
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What is a project?

• A specific, finite task to be accomplished
• Can be of a long or short term duration
• Can be large or small task

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Projects Vary in Size and Scope

• NASA shuttle launch
• Building a boat
• Building a hospital
• Building renovation and space modification
• Planning a party or wedding
• Organizing the Olympic games
• Developing a new software program
• Getting a university degree
• Company mergers

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Project Characteristics

• Constant communication across organizational
  boundaries
• Many people involved, across several functional
  areas
• Sequenced events
• Goal oriented
• Has an end product or service

• Multiple priorities
• Complex and numerous activities
• Unique, one-time set of events
• Deadlines
• Start and end dates
• Identifiable stakeholders
• Limited resources and budget

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When is a Project a Project?

• A task or set of work assignments may be done by
  one or more persons using a simple to do list.
  
• A task become a project when the characteristics
  of a project begin to dominate and overwhelm
  individuals
• Unable to meet deadlines, budgets and corporate
  expectations

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Project Management

• Project management is a method and/or set of
  techniques based on the accepted principles of
  management used for planning, estimating and
  controlling work activities to reach a desired
  result on time, within budget, and according to
  the project specifications.

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What is Project Management?

• Tools/techniques
• Processes and methodology
• More than time, cost and scope
• Hard and soft skills
• A discipline evolving towards a profession

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Project Management

• Projects and project management are about people
  and teamwork
• Who does what?
• Who takes what risk?
• Who else is involved or interested/affected?

12
Subprojects

• Projects are frequently divided into more
  manageable components or subprojects
• Subprojects are typically referred as projects
  and managed as such
• Subprojects may be contracted to an external
  enterprise

13
Program(me)

• A program is a group of projects managed in a
  coordinated way to obtain benefits not available
  from managing them individually
• Program management Management of a coherent
  group of projects to deliver additional benefits

(PMBOK p.10, Turner p.345)
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Value of Project Management (Why are we doing
this?)

• Improve project/program/firm performance as
  measured by efficiency, effectiveness
• Add competitive advantage
• Be more Successful
• Proactive vs. Reactive
• Root out ill-conceived, directionless projects

15
Major Causes of Project Success

• A constructive goal-oriented culture
• Technically competent team
• Effective (and committed) team
• Excellent communication
• Trust

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Major Causes of Project Success

• Stakeholders are identified
• Stakeholders expectations are known and met
• Senior Management support
• There is a clearly stated purpose and a sound
  plan
• Goal and objectives are understood and
  communicated

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Major Causes of Project Failure

• Projects fail for the following reasons
• The project is a solution in search of a problem
• Only the project team is interested in the result
• No one is in charge
• There is no project structure
• The plan lacks detail

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Major Causes of Project Failure

• Projects fail for the following reasons
• The project has insufficient budget and/or
  resources
• Lack of team communication
• Straying from original goal
• The project is not tracked against the plan

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Project Lifecycle

• Project management phases link the project to the
  firms operations
• A project is a subset of the product lifecycle
• The product lifecycle includes operation or
  production, decommissioning or closedown

20
Sample Lifecycle (Conceive, Develop, Execute,
Finish C, D, E, F)http//www.maxwideman.com/pap
ers/framework/lifecycle.htm

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5-Step Project Management
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5-Step Project Management PLANNING
IMPLEMENTATION
CONTROL

ORGANIZE
DEFINE
PLAN
CLOSE
Identify project activities
State the Problem
Determine Personnel Needs
Define Management Style
Obtain Client Acceptance Install Deliverables
and Commissioning Document the Project Issue
Final Report Conduct Post- Implementation Audit
Identify Project Goal
Estimate time and cost
Recruit Project Manger
Establish Control Tools
List the Objectives
Prepare Status Reports Review
Project Schedule, cost, team reports Issue
Change Orders
Recruit Project Team
Quality and Communication management
Determine Preliminary Resources
Organize Project Team Bidding
Identify Risks and stakeholders Success
criteria
Assign Work Packages
Write Project Proposal
Decision
Project charter WBS
Recruit Criteria
Variance Reports Final Report
Project network
Define Work Packages Status Reports
Audit Reports
Project proposal Assign Work Packages

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Step 1- Define the Project
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Agenda

• State the problem/need/opportunity
• Develop project goal
• Develop project objectives
• Determine preliminary resources
• Identify assumptions and risks
• Identify stakeholders
• Identify criteria for project success
• Issue Project Charter

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State the Problem/Need/ Opportunity

• A need that must be addressed or opportunity to
  be explored
• New product, service, process, facility, system
  or technology
• It may involve opening a new market
• Identify and define in detail the investment
  opportunity, need or problem

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State the Problem/Need/ Opportunity

• Define client requirements and needs from the
  clients original input
• Review and enhance the clients statement of
  needs
• Identify appropriate policies, standards, and
  jurisdictional requirements
• Identify and assess feasible alternatives of
  satisfying the clients statements

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State the Problem/Need/ Opportunity

• Advise the client of potential technology-related
  constraints in areas such as ...
• Establish consensus on the requirements of the
  client
• Assemble information including any relevant
  designs, charts, or diagrams ...

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State the Problem/Need/ Opportunity

• Short, crisp and to the point
• Descriptor for those who although not directly
  involved on the project team are indirectly
  involved in supporting the project

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State the Problem / Need / Opportunity Training
Example

• Membership in PM Association has declined in the
  past four years and attendance at conference has
  declined in the past three years. The viability
  and financial stability of the Association
  depends on maintaining membership and successful
  annual conference.

30
State Project Goal

• A statement of purpose and direction
• Initiates the project
• Serves as a point of reference for settling
  misunderstandings
• Clarifies expectations
• Helps in justifying requests for resources
• Action oriented
• Short and simple
• Understandable

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Goal Statements

• Prepare and launch the International Space
  Station on April 21, 2000, from Cape Canaveral,
  Florida
• Connect France and England via a covered tunnel
  and railway under the English Channel, facility
  to be opened to traffic no later than September,
  1996

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Goal Statement Examples

• Design and complete pilot testing by March 2002,
  a product accounting software package that
  performs basic financial analyses for the company
• Obtain a BSc degree in engineering from U of C by
  spring, 2004

33
Goal Statement Training Example

• Reverse the downward trend in membership and
  annual conference attendance by organizing a
  highly successful conference

34
Develop Project Objectives

• Objectives represent major scope components or
  milestones
• Objectives are sub-goals
• Roadmap to aid decision makers understand the
  purpose of the project
• Basis for determining project time line and
  resource requirements
• To achieve the goal all objectives must be
  realized

35
Objectives Training Example

• Develop the Program
• Set the Conference Site and Date
• Design and Implement the Marketing Plan

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Resourcing Strategy

• For each objective
• Determine which internal resources are available
• Determine which external resources will be
  required
• Take any preliminary steps required to engage
  external resources
• Expression of interest

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RACI Chart
38
Identify Criteria for Evaluating Project Success

• Project expectations
• Project on time
• Within budget
• According to specifications
• Happy client

39
Success Criteria Training Example

• At least 200 of 450 PM Association membership
  will register to attend
• At least 50 of previous years conferences
  attendees will attend
• At least 1.5 of the non-members receiving
  conference brochure will attend
• At least 5 of the non-member attendees will join
  PM Association

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Identify Assumptions and Risks

• Each objective will have its own risks and
  assumptions
• Helps think through the project process and
  issues associated with execution
• Identifies resource needs and issues involving
  resource availability
• Identifies potential delays and the impact of
  these delays
• Potential cost overruns can be predicted and
  resolved

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Risk Management
KA7

• Identify risks
• What could go wrong (harm, loss, opportunities
  and threats)
• Consider ALL knowledge areas
• Internal and external risks
• Sources of risk product technology, people
  (misunderstandings, skills), project management
  etc.

Risk management is a process
42
Risk Management

• Quantify risks
• High, Medium, Low (HML) - qualitative
• Expected Monetary Value (EMV) - quantitative

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Risk Quantification Technique High, Medium, Low
(HML)

• Probability of occurrence and impact
• High, Medium, Low grid
• Focus on HHs and less on LLs
• Keep it simple

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Risk Quantification Technique High, Medium, Low
(HML)

• H
• HH
• M Impact
• L
• L M H
• Probability

45
Risk Management

• Develop risk response plan
• Opportunities and threats to respond to and
  opportunities and threats to accept
• Avoid eliminate cause
• Mitigate reduce risk occurrence
• Accept contingency plans, accept losses
• Its OK to do any of these
• Insurance, contingency plans, procurement,
  alternative strategies, contracts
• Risk management template

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Risk Management Template
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Assumption and Risks Training Example

• Interest in PM Association can be renewed through
  the annual conference
• A quality professional program will attract
  members and non-members
• Key speaker(s) fail to show up or submit written
  paper

48
Identify Stakeholders

• Individual or organisations actively involved in
  the project or directly or indirectly affected by
  its execution or results. They can influence your
  success or decision makers.
• Roles must be identified at the start of the
  project
• Needs and expectations must be communicated and
  influenced in a positive and constructive manner
  so that the project will be success for all

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Identify Stakeholders

• How to find them?
• Ask who will decide on the success of your
  project
• How to involve them?
• Ask for (appropriate) advice
• Get their buy-in to project plans

50
Identify Stakeholders

• How to work with them?
• Active listening
• Understand their interests and needs
• Keep everyone informed
• How to keep them on side?
• Respond to concerns
• Manage expectations and make adjustments

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Stakeholder Analysis
STAKEHOLDER
Objective
Potential Impact
How They Operate
Where they gain Support
How to Manage them and plan for mitigation
Fundamentals of Project Management
Tool Kit
52
Stakeholders Training Example

• Attendees
• Speakers
• Hotel
• PM Association
• Organizing team

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Charter Document

• The define phase focuses on producing a Project
  Charter document which is used as
• Formally recognize the existence of the project
• An early statement of the project goal and
  direction
• A statement of the problems and opportunities to
  be addressed by the project

54
Charter Document

• Include the business need and product
  description, constraints and assumptions
• A tool in the initial go/no go decision by
  management
• Approval to proceed
• Funding, authority, sponsor
• A general information document for other managers

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Charter Document

• Once the project is approved for go ahead, the
  Project Charter becomes the foundation for the
  detailed planning activities which follow and
• Provides a control point for reporting project
  progress and an audit point
• Reference base for addressing questions and
  conflicts
• Tool for building the team

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Project Charter Project Name
- PM Conference Project
Manager
Problem/Opportunity Membership in PM
Association has declined in the past four years
and attendance at conference has declined in
past three years. The viability and financial
stability of the organization depends on
maintaining membership and successful annual
conference.
Goal Reverse the downward trend in membership
and annual conference attendance
Objectives 1. Develop the Program 2. Set the
Conference Site and Date 3. Design and Implement
the Marketing Plan
Success Criteria 1. At least 50 of previous
years conferences attendees will attend 2. At
least 150 of 450 members will attend 3. At
least 1.5 of the non-members receiving
conference brochure will attend 4. At least 5
of the non-member attendees will join PM
Assumptions and Risks 1. Interest in PM can be
renewed through the annual conference 2. A
quality professional program will attract members
and non-members 3. Key speaker(s) fail to show
up or submit written paper.
Stakeholders Attendees,
Speakers, Hotel, PM Association, Organizing team
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Step 2 - Plan the Project
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Agenda

• Work Breakdown Structures (WBS)
• Estimate Time and Cost

59
5-Step Project Management PLANNING
IMPLEMENTATION
CONTROL

ORGANIZE
DEFINE
PLAN
CLOSE
Identify project activities
State the Problem
Determine Personnel Needs
Define Management Style
Obtain Client Acceptance Install Deliverables
and Commissioning Document the Project Issue
Final Report Conduct Post- Implementation Audit
Identify Project Goal
Estimate time and cost
Recruit Project Manger
Establish Control Tools
List the Objectives
Prepare Status Reports Review
Project Schedule, cost, team report Issue
Change Orders
Recruit Project Team
Quality and Communication management
Determine Preliminary Resources
Organize Project Team Bidding
Identify Risks and stakeholders Success
criteria
Assign Work Packages
Write Project Proposal
Decision
Project charter WBS
Recruit Criteria
Variance Reports Final Report
Project network
Define Work packages Status Reports
Audit Reports
Project proposal Assign Work
Packages
60
Work Breakdown Structure (WBS)

• Reduces complex projects to a series of tasks
  that can be planned
• WBS represents the project in the form of a
  hierarchy of goal, objectives and activities
• Identifies activities to be done from beginning
  to completion of the project

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Work Breakdown Structure

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Work Breakdown Structure

• Activities in the WBS are broken-down until the
  entire project is displayed as separately
  identified activities
• The breakdown of activities continues until there
  are no overlapping activities

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Work Breakdown Structure

• Each activity
• Status and completion are easily measured
• Of a specific time duration with defined
  beginning and end
• Easy to derive time and cost estimates
• Of a single purpose and have clearly understood
  deliverables
• Responsibility for completion clearly assigned

64
WBS Procedure Training Example

• 1. Partition the project into its major
  objectives
• 1.1 Develop the Program
• 1.2 Set the Conference Site and Date
• 1.3 Design and Implement the
  Marketing Plan

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WBS Procedure Training Example

• 2. Partition the objectives into activities
• 1.1 Develop the Program
• 1.1.1 Establish Theme and Topics
• 1.1.2 Obtain Speakers
• 1.1.3 Prepare Handout Materials
• 1.2 Set the Conference Site and Date
• 1.2.1 Set Conference Date
• 1.2.2 Select and Commit Conference Site
• 1.2.3 Confirm Arrangements
• 1.3 Design and Implement the Marketing Plan
• 1.3.1 Develop and Print Conference Brochure
• 1.3.2 Obtain Label Sets for Direct Mail
• 1.3.3 Mail Conference Brochures
• 1.3.4 Receive and Acknowledge Registrations

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WBS Procedure Training Example

• 3. Check each activity for compliance with
  activity characteristics and further partition
  any that do not comply
• 1.1.3 Prepare Handouts
• 1.1.3.1 Obtain Handout Materials from Speakers
• 1.1.3.2 Prepare and Print Conference
  Notebook

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WBS Worksheet -PM Conference
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Hierarchical Representation
CONFERENCE PLANNING
SITE
MARKETING
PROGRAM
DATE
PLACE
THEME
MATERIALS
SPEAKERS
LISTS
BROCHURE
REGISTER
OBTAIN MATERIALS
PREPARE KITS
DESIGN BROCHURE
MAIL BROCHURE