UN0603 Unit 3

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UN0603Unit 3

• Project Management Processes

Dr. J. Michael Bennett, P. Eng.,
PMP UNENE McMaster University, UOIT, The
University of Western Ontario Version 2K6-IX-18
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Revisions

• 2K6-IX-14 Initial Creation
• 2K6-IX-18 minor corrections (48,56,87)

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UN0603 Road Map

• Unit 1 Introduction to Project Management
• Unit 2 The Project Management Context
• Unit 3 Project Management Processes
• Unit 4 Project Integration Management
• Unit 5 Project Scope Management
• Unit 6 Project Cost Management
• Unit 7 Project Time Management
• Unit 8 Project Quality Management
• Unit 9 Project Human Resource Management
• Unit 10 Project Communications Management
• Unit 11 Project Risk Management
• Unit 12 Project Procurement Management

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Unit 3 TOC

• 3.1 The PMI Approach
• 3.2 PM Processes
• 3.3 Informal Intro to the Project Plan
• 3.4 The Project Charter
• 3.5 Selecting the Project Manager

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3.1 The PMI Approach

• Project Management Institute
• HQed in USA
• Gives the PMP designation
• Huge multiple-choice test plus "points"
• Author of PMBOK

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The PMI View of Things

• Views Project Management as 9 key areas
• Project Integration is one
• Contract Management is another
• All interrelated

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The IPO Model
PROCESS
OUTPUT
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Process Groups Linkages
Controlling Processes
Executing Processes
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PMI Project Management (2K)
4 Project Integration Management 4.1 Project Plan
Development 4.2 Project Plan Execution 4.3
Overall Change Control
5 Project Scope Management 5.1 Initiation 5.2
Scope Planning 5.3 Scope Definition 5.4 Scope
Verification 5.5 Scope Change Control
6 Project Time Management 6.1 Activity
Definition 6.2 Activity Scheduling 6.3 Activity
Duration Est. 6.4 Schedule Development 6.5
Schedule Control
7 Project Cost Management 7.1 Resource
Planning 7.2 Cost Estimating 7.3 Cost
Budgeting 7.4 Cost Control
8 Project Quality Management 8.1 Quality
Planning 8.2 Quality Assurance 8.3 Quality Control
9 Project Human Resource Man. 9.1 Organizational
Planning 9.2 Staff Acquisition 9.3 Team
Development
12 Project Procurement Management 12.1
Procurement Planning 12.2 Solicitation
Planning 12.3 Solicitation 12.4 Source
Selection 12.5 Contract Administration 12.6
Contract Close-out
10 Project Communications Management 10.1
Communications Planning 10.2 Information
Distribution 10.3 Performance Reporting 10.4
Administration Closure
11 Project Risk Management 11.1 Risk
Identification 11.2 Risk Qualification 11.3 Risk
Response Dev. 11.4 Risk Response Control
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3.2 Overview of Project Management (3rd Ed)

• Includes the processes requires to coordinate all
  elements of the project
• Will require tradeoffs from stakeholders

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PDCA Cycle (see quality section)
Do
Plan
Control
Act
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PMP PDCA
monitoring controlling
planning
closing
initiating
executing
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Flow Chart Legend (PMBOK 3rd E)
Enterprise Environment
Planning Process
Risk Planning
Process Group
Process
External to Process
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Summary of Process Interaction
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Initiating Process Group
Org Culture PMIS Human Resource Pool
SOW Contract
Initiating Process
Charter Prelim Scope
Policies Procedures Historicals LessonsLearned
Closing Process
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Planning Process Group
Charter Prelim Scope
Initiating Process
Planning Process
Project Plan
Closing Process
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Executing Process Group
Project Management Plan
Initiating Process
Deliverables Requested Changes Implemented CRs
Implemented corr acs Implemented prevents Defect
repair Work performance info.
Executing Process
Closing Process
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Monitoring and Controlling Process Group
Deliverables Requested Changes Implemented CRs
Implemented corr acs Implemented prevents Defect
repair Work performan info
Initiating Process
Approved/Rejected CRs Approved corr, prev acs
Approved def repair PMP, Scope Stmt updates
Reccommed corr, prev acs Performance reports
ForecastsValidated defect repair approved delivs
Executing Process
MonCont Process
Closing Process
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Closing Process Group
Approved/Rejected CRs Approved corr, prev acs
Approved def repair PMP, Scope Stmt updates
Reccommed corr, prev acs Performance reports
ForecastsValidated defect repair approved
delivs
Initiating Process
Executing Process
MonCont Process
Admin/contract closure procedure
Closing Process
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The Five Process Groups

• These are NOT project phases
• Describe whole project
• Also distinct subprojects or phases will use the
  5 groups
• For example, feasibility study, design,
  prototype, etc.

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The Fab Five

• Initiating Process Group
• Planning Process Group
• Executing Process Group
• Monitoring and Control Process Group
• Closing Process Group

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The Fab Five

• Initiating Process Group
• defines and authorized the project/phase
• Planning Process Group
• defines/refines objectives builds the plan to
  do the work (plan the work)
• Executing Process Group
• integrates people and resources to do the work
  (work the plan)
• Monitoring and Control Process Group
• measures and monitors progress initiates
  corrective actions as necessary
• Closing Process Group
• formalizes acceptance of product (service).
  Brings phase/project to an orderly end (even in
  the face of failure)

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3.2.1 Initiating Process Group

• The formal authorization of the project
• Need to justify the project
• Need to specify its objectives
• Project manager assigned
• Charter written
• Preliminary scope statement

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Project Boundaries
Project boundaries
monitoring controlling
planning
closing
initiating
executing
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Initiating Process Group
Develop Charter
Develop Preliminary Scope
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Planning Process Group
MCP
Develop PMP
IPG
Activity Definition
Risk Identification
XPG
CPG
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Executing Process Group
Acquire Team
Direct Project X
MCP
Team Development
CPG
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MC Process Group

XPG
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Closing Process Group
Contract Closure
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Mapping Processes to Groups and KAs
PG
KA
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3.3 Informal Plans of the Project

• Ultimate goal is the Project Plan, the primary
  document for directing the project
• Will use other planning processes, especially the
  Strategic Plan
• Will need technical elaboration
• Normally will be baselined at the END of the
  design phase unless the process is well-known

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• Plan is developed iteratively
• At each level, more detail is exposed until all
  of the work is planned, estimated, scheduled and
  authorized

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Purposes of the Project Plan

• Guide project execution
• Document project planning assumptions
• Document project planing decisions regarding
  alternatives chosen
• Facilitate communication among stakeholders
• Define key management reviews as to content,
  extent and timing
• Provide a baseline for progress management and
  project control

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The Process
Inputs 1 Other planning inputs 2
Historical information 3 Organizational
policies 4 Constraints 5 Assumptions
Tools and Techniques 1 Project planning
methodology 2 Stakeholder skills and
knowledge 3 Project management information
system (PMIS) 4 Earned value
management
Output 1 Project plan 2 Supporting
detail
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Major Deliverables of the Project

• The Project Notebook
• Project Preliminary Proposal (PPP)
• Project Proposal (PP)
• Project Management Plan (PMP)
• Project Post Evaluation (PPE)

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The Project Notebook

• The Notebook is the total documentation of the
  Project
• The PPP, PP, PMP, PPE are here
• Note the following subplans are also embedded
  here
• 1 Communication Subplan
• 2 Risk Subplan
• 3 Quality Subplan
• 4 Implementation Subplan
• 5 Training Subplan
• 6 Installation Subplan
• 7 Acceptance Test Subplan
• 8 Maintenance and Support Subplan
• 9 Documentation Subplan

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The 3 Major Project Reports

• PPP Preliminary Project Proposal
• PP Project Proposal (charter scope)
• PMP Project Management Plan
• 110100 ratio

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Project Preliminary Proposal (PPP)

• Short, enthusiastic study of why do it at all?
• Rough cost, estimates (to about 100)
• State advantages to company
• Rough WBS to show feasibility
• Short, 5-10 pages
• PHB must be able to decide whether or not to
  allocate additional funds for next phase
• Measured in weeks
• Enough to get it pushed to the next stage

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Project Proposal (charter and scope)

• A detailed view for management of the objectives
  of the project
• A close (25) cost and time estimate
• A structural chart of the team
• Management will OK project start
• Good sized report (note 110100)
• Delivered near the end of the req phase
• Measured in months with lots of inputs

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Project Management Plan (PMP)

• Final carved-in-stone document
• Financial data to within 10
• Same for time, resource estimates
• Normally delivered at the end of the design phase
• PHB approval necessary for build phase
• Enormous document 500-2000 pages
• Time tied to reqs/design timings
• A cooperative effort by whole team

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Project Post Evaluation (PPE)

• Prepared 6-12 months after the end of the project
• Lessons learned, etc.
• Adjustments to pm database

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3.4 Selecting the Project

• 3.4.1 Scoring Methods
• 3.4.2 Analytical Methods
• 3.4.3 Economic Methods
• 3.4.4 Portfolio Selection
• 3.4.5 Real Options Approach

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3.4.1 Scoring Methods

• Idea here is to set up a model with which we can
  compare relevant criteria
• Typical would be cost, payoff, prob of success
• But could also be availability of people,
  equipment, perceived value to the PM
• (Paul Martin, that is! ? )

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Scoring Model

• Select Relevant Criteria
• Build the Model
• Rank Projects

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Some Good Ones

• Cost
• Prob of technical success
• Market size
• Availability of staff
• Strategic positioning
• Favourability of regulatory environment

• Payoff
• Prob of market success
• Market share
• Degree of org commitment
• Degree of competition
• Org policy considerations

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19 Criteria rolled into 6
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Building a Scoring Model

• Form of the model
• Value and important of criteria
• Measurement of criteria

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Form of the model
A(bBcCdD)(1eE)
Score
fF(1 gG)

• - A, B, C, D, E are benefits
• - F, G are disbenefits
• b,c,d,e,f,g are weights
• A,f,F are MANDATORY

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Simple Model
(Psxs 2Payoff)
SCORE
Cost
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Criterion Measurement skills set

• 10. All skills ample
• 9. All skills, no excess
• 8. All teks avail
• 7. Most teks avail
• 6. Some tek retraining needed
• 5. Some prof retraining needed

• 4. Extensive tek retraining
• 3. Extensive prof. retraining
• 2. All teks must be hired
• 1. All must be hired

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Rank Projects

• Must normalize to compare
• Standardize data by subtracting from each datum,
  the mean over all the projects, and divide that
  by the standard deviation
• In reality, hard to do

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Example (simple model)
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SM Advantages

• Conceptually simple
• Are transparent
• They have been validated
• Easy to use

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SM Disadvantages

• Imaginary precision
• Potential lack of efficiency of scarce resources
• Time-consuming

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3.4.2 Analytical Hierarchical Process

• Scoring model is one-level
• AHP incorporates subcriteria

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Example of AHP Decision Hierarchy
Score
Payoff
P(success)
Cost
Manufacturing Cost
Capital Cost
RD Cost
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AHP Advantages

• Simple procedure
• Visual hierarchies
• User friendliness

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AHP Disadvantages

• Subjective nature
• Complexity
• Difficulty of quantifying criteria

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3.4.3 Economic Methods

• NPV
• IRR
• Payback

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Net Present Value

• The value today of a future payment discounted at
  an assumed rate
• If that rate is positive, will make money
• Also called the Discounted Cash Flow

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Example cont

• NPV 100000/1.1 200000/(1.1)2 300000/(1.1)3
  909,090 165,289 225,394 481,593
• Project costs 500K and will only earn 482K
• CAN IT

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Assumptions

• The 10 economy! If we had 0 for the 3 years, we
  would have made 100K on our investment or 20
• The model assumes income projections. Where do
  they come from and how realistic are they?

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IRR

• For what economy does the NPV cost?
• Get out the ol spreadsheet

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Excel Example
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Payback (Breakeven) Time

• At what month does the total earned revenue equal
  the costs expended?

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The ROI Curve
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3.4.4 Portfolio Selection

• Past 3 methods treat projects in isolation
• PS considers all projects in the context of the
  org and its constraints (not just )
• Other constraints are
• Staff limitation
• Work space
• Computer time
• U-name-it

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Zero-Sum Game

• Have to allocate projects based on previous
  rankings but also on availability of the other
  scare resources
• Too complex to go into here

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Tips on PS

• Higher management sets the organizational
  criteria
• Responsible departments establish the temporal
  constraints
• Higher management establishes policies that must
  be satisfied

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3.4.5 Real Options Approach

• Idea here is to factor in the uncertainty of the
  estimates (either cost and/or payback)
• Use metaphor of put and call stock folks call
  this volatility. We call it RISK but the risk
  can also be beneficial.

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Real Options and Volatility
Payoff-to-Cost
1.0
0.0
gtgt1
Low
Probably Never
Consider Initiating Now
Volatility
Possibly Later
Probably Later
High
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3.5 Selecting the Project Manager

• 3.5.1 What do we need for the Team?
• 3.5.2 Some Questions to ask
• 3.5.3 Characteristics of a good PM
• 3.5.4 Where do we find the PM?
• 3.5.5 Detailed Skill set for the PM
• 3.5.6 Problem Situations
• 3.5.7 How NOT to Choose the PM

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Selecting the Project Manager

• 3.5.1 What do we need?
• We need
• A Project Manager
• An Assistant Project Manager
• A Project Office
• A Project Team

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3.5.2 Questions in PM HR

• What are the requirements to become a successful
  project manager?
• Who should be a member of the project team?
• Who should be a member of the project office?
• What problems can occur during recruiting?
• What can happen downstream to cause the loss of
  the PM?

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Leadership Styles

• The Dictator (authoritarian)
• The Best Friend (collegial)
• The Consensus Guy (team-oriented)
• The Emperor (military)
• The Democrat (interactive)
• The Parent

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Theory X and Theory Y

• X says that work is hell ands people will avoid
  it whenever they can. Therefore employees must be
  closely monitored and controlled
• Y says people are naturally inclined to work and
  only need favourable working conditions to blossom

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3.5.3 General Characteristics of a PM

• The personal attributes and abilities of the PM
  have the highest importance in the Project. Some
  important characteristics are
• trouble-liker but have honesty and integrity
• macro-micro focus ability (x16)
• understanding of people and technology
• business management competence
• alertness and quickness, stamina, toughness
• versatility, decision-making ability
• very thick skin
• able to live like a hermit for long periods of
  time
• possess a killer instinct

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3.5.4 Sources for the Project Manager

• What are the internal sources?
• What are the external sources?
• How do we select amongst the choices?
• How do we provide PM career development?
• How can we develop PM skills?
• How do we evaluate PM Performance?

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3.5 Ten Specific PM Skills

• 3.5.1 Team Building
• 3.5.2 Leadership
• 3.5.3 Conflict Resolution
• 3.5.4 Technical Expertise
• 3.5.5 Planning
• 3.5.6 Organization
• 3.5.7 Entrepreneurship
• 3.5.8 Administration
• 3.5.9 Management Support
• 3.5.10 Resource Allocation

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3.5.1 Team Building

• The PM must nurture a climate with
• Team members committed to the program
• Good interpersonal relations and team spirit
• The necessary expertise and resources
• Clearly defined goals and program objectives
• Involved and supportive top management
• Good program leadership
• Open group communication
• Low degree of interpersonal conflict

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3.5.2 Leadership

• Clear project leadership and direction
• Assistance in problem solving
• Facilitation of integration of new group members
• Ability to handle interpersonal conflicts
• Capability to plan and elicit commitments
• Ability to clearly communicate
• Presentation of the team to higher management
• Ability to balance technical solutions against
  human and economic factors

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3.5.3 Conflict Resolution

• Understand the interaction between organizational
  and behavioural elements
• Communicate effectively with all organizational
  levels
• Recognize the determinants of conflict and their
  timing on the project life cycle (such as the
  plans, contingency planning, securing of
  commitments)

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3.5.4 Technical Expertise

• The PM must have a solid understanding of
• Technology involved
• Tool and techniques employed
• Specific markets, their customers and
  requirements
• Product applications
• Technology trends and evolutions
• Relationship among supporting technologies
• People who are part of the technology community

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3.5.5 Planning

• PM needs skills in
• Information processing
• Communication
• Resource negotiation
• Securing commitments
• Incremental and modular planning
• Assuring measurable milestones
• Facilitating top management involvement

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3.5.6 Organization

• Must be a social architect
• Have to understand the ol patch
• Has to be plugged into networks

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3.5.7 Entrepreneurship

• Have to be aware of strategic alignment
• In NGOs, be aware of customer satisfaction

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3.5.8 Administration

• Have to be able to handle controls
• Need to understand corporate accounting
  procedures
• Have to understand the organizations standards
  (e.g. FedGovs TSB EMF
• (Treasury Boards Enhanced Management Framework
  see website))

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3.5.9 Maintaining Top Management Support

• PMs credibility
• Visibility of the project
• Priority of the project
• PMs accessibility

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3.5.10 Resource Allocation

• May be attached from areas beyond the PMs
  control
• Must detail needs in the WBS and ensure
  commitment
• Need to watch staff turnover

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3.5.6 Problem Situations

• Here are five interesting cases
• Part-time vs. Fulltime assignments
• Several projects assigned to one project manager
• Projects assigned to functional managers
• Project manager role retained by the general
  manager
• Multiple project managers

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3.5.7 Choosing the Wrong PM

• Here are some unwise yet common criteria
• Maturity
• Hard-ball persons
• Availability
• Technical expertise (a two edged sword)
• Customer orientation
• New exposure
• Company exposure

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3.8 Week ONE! (Youre in Charge- Now What?
Neff Critin 2005)

• Prepare yourself for the entrance
• Align expectations
• Shape your team (keepers, goners, watchers)
• Craft your strategic agenda
• Start transforming the culture
• Manage your handlers
• Communicate
• Avoid common pitfalls

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Common Pitfalls

• Setting unrealistic expectations
• Making rash decisions
• Suffering from the Hamlet Syndrome
  (analysis-paralysis)
• Being a know-it-all
• Being too chummy