Session16 17

PROJECT MANAGEMENT & ECONOMICS
SESSIONS 16 & 17
2. DEFINITION/PLANNING
PHASE
Refine goals & objectives Confirm scope Identify & assign resources Determine realistic time, cost and performance parameters Initial preparation of all documentation necessary to support the project Identification of areas of high risk and uncertainty
Confirm Investment Analysis

DR ASSEM AL-HAJJ, Univation, RGU Project Management and Economics. SITP-SPDC, NIGERIA
PLANNING: definitions
1
A process whereby Determining what procedures are laid needs to be done, down so that certain A predetermined by whom, and by objectives can be when in order to course of action achieved within a fulfil ones within a forecasted specific time at an responsibility. environment. optimum cost.
Planning does not happen by itself
That is why
Major & most important responsibility of a project manager
the key to successful project planning

(understanding of roles)
Involvement should be from conception through execution
Objectives of Project Planning

To define work required to be readily identifiable to project To eliminate or reduce uncertainty To improve efficienc y of the operation
participants
To obtain a better understanding of objectives
To provide a basis for monitoring & controlling work.
Effective Project Planning

Provides clear objectives Provides simplicity Provides flexibility Facilitates reviews and controls Utilises effective planning techniques and use of resources Based on known standards Systematic Performed throughout the life of the project
Some consequences of poor planning
Failing to plan is a plan to fail

Consequences
Project initiation Chaos Search for the guilty Punishment of the innocent Promotion of the non-participants
Components of the Planning Phase

Budget Schedule Policy Procedure
Objectives
Programme
Forecast
Standard Organisation
1. PROJECT OBJECTIVES
What makes a good objective?
1. Reduce wastage in some of the manufacturing processes.
2. Increase sales by 10000% by next month 3. Change all finance departments computer systems to Windows NT, by 30 October. 4. Try to improve productivity this year. 5. Redesign the invoice process to deliver a 20% faster response rate (4days) to invoice queries by 30 November. 6. Produce a report to outline options on improvement, to be presented by 1 November.
A good objective should be
Questions following objectives

What are the major elements of the work required to satisfy the objectives? How are these elements interrelated? Which functional divisions will assume responsibility for accomplishment of these objectives and the major-element work requirements? Are the required corporate and organisational resources available? What are the information flow requirements for the project?
2. PROJECT SCOPE
Commitment Resources control Involvement Benefits Constraints Budget
Organisational
Financial
Dimensions of Objectives project scope
Deliverable
End product Reports Milestones
Time
Start End Constraints
3. PROJECT
PROJECT SPONSOR Business manager who will exploit the deliverables of the project PROJECT MANAGER The person responsible for the day-to-day control of the project
EXECUTIVE SPONSOR Senior executive who is the ultimate beneficiary of the project
KEY USER Represents the people who will use the delivered product
Executive Sponsor
Management Team
Project Sponsor
Project Manager
IT Manager
Key user
Business Analyst
Specialists
Contractors
NECESSARY INFORMATION FOR PLANNING
Statement of Work (SOW)
or
Statement of Requirements (SOR)
Project Specifications
Milestone schedule
Project start and end date Other major milestones: review meetings, prototype, procurement, testing .. Data items (deliverables or reports)
Work Breakdown Structure (WBS)
Statement of Work (SOW) or Statement of Requirements (SOR)

A narrative description of the work required for the project. Should contain:
Purpose: business need (strategic) Scope: high level description Objectives: qualitative & quantitative measures
Prepared by the project office The Project Manager ensures adequacy of content by holding frequent reviews with project and functional specialists.
Used to ease control of projects
Work Breakdown Structure (WBS)

Project is broken down into small elements that should be:
Structured in accordance with the way

Project costs & data summaris ed and reported.
Work will be performe d
Manageable
specific authority and responsibility can be assigned
Independent
or with minimum dependence on other ongoing elements
Integratable
so that the total package can be seen
Measurable in terms of progress
Preparation of WBS considers scheduling, management, contract funding, and technical performance parameters
The Six-level Structure
Level 1 is for authorisation and release of all work level 2 Budgets preparation level 3 Schedules preparation
Note:
Level Managerial Normally specified for levels

reporting purposes. PM manages at these level
Description Total program Project Task
1 2 3
These levels reflect integrate d efforts
Technical levels
generated by the contractor for inhouse control
4 5 6
Subtask Work package Level of effort
WORK BREAKDOWN STRUCTURE

Total Programme
Project A
Project B
Project C
Project D
Task 1
Task 2
Task 3
Task 4
Subtask 1
Subtask 2
Subtask 3
Work package 1
Work pakage 2
Work package 3
Network
Risk Analysis
Co-ordination of objectives Organisational Structure
Responsibility Matrix
Costing
The critical level for managing a work breakdown
WBS levels characteristics

Summation of all elements in one level must be the sum of all work in all the next lower level. Each element of work should be assigned to only one level of effort e.g. House foundation should be one task. Project is managed at the work package level. WBS must be accompanied by a description of the scope of the effort required. (Reproduce SOW)
Tasks for setting up the WBS

In setting up the WBS, tasks should:
have clearly defined start and end dates be usable as a tool in which results can be compared with expectations be estimated be structured
Work Packages
Subdivisions of cost accounts and constitute the basic building blocks used by the contractor in planning, controlling, and measuring contract performance. A work package is a low-level task or job assignment with a definable end results. It describes the work to be accomplished It serves as a vehicle for monitoring and reporting progress of work. Ideal work packages are 80 hours. For large projects planning will be phased at the work package level of the WBS.
Work Package Characteristics

Represents units of work at the level where the work is performed.
Clearly distinguishes one work package from all others. Contains clearly defined start and end dates that are representative of physical accomplishment Specifies a budget in terms of currency, man-hours, or other measurable units Limits the work to be performed to relatively short periods of time to minimise the work-in-process effort.
WBS- EXERCISE
Evolve development concept Prepare existing data Establish subsurface development option Develop preliminary completion designs Model reservoir fluid mechanics Flow process analytical and numerical situation Investigate primary recovery mechanism Investigate secondary/GOR recovery mechanisms Formulate development concept Build hydrocarbon resource model Develop number of location of producing wells Evaluate subsurface options Quantify subsurface options Predict gross net production & injection forecasts
LEVEL 1
LEVEL 2
LEVEL 3
LEVEL 4
Prepare existing data Model reservoir fluid mechanics
Build hydrocarbon resource model
Evolve development concept
Establish subsurface development option
Evaluate subsurface options
Formulate development concept
Quantify subsurface options
Flow process analytical and numerical situation Investigate primary recovery mechanism Investigate secondary/GOR recovery mechanisms Develop number of location of producing wells Develop preliminary completion designs Predict gross net production & injection forecasts

Session16 17

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PROJECT MANAGEMENT & ECONOMICS

Confirm Investment Analysis

Planning does not happen by itself

the key to successful project planning

Involvement should be from conception through execution

Objectives of Project Planning

To obtain a better understanding of objectives

To provide a basis for monitoring & controlling work.

Effective Project Planning

Some consequences of poor planning

Failing to plan is a plan to fail

Components of the Planning Phase

A good objective should be

Questions following objectives

Dimensions of Objectives project scope

NECESSARY INFORMATION FOR PLANNING

Statement of Work (SOW)

Statement of Requirements (SOR)

Work Breakdown Structure (WBS)

Statement of Work (SOW) or Statement of Requirements (SOR)

Used to ease control of projects

Work Breakdown Structure (WBS)

Structured in accordance with the way

Work will be performe d

Measurable in terms of progress

The Six-level Structure

Level Managerial Normally specified for levels

Description Total program Project Task

These levels reflect integrate d efforts

Subtask Work package Level of effort

WORK BREAKDOWN STRUCTURE

Co-ordination of objectives Organisational Structure

The critical level for managing a work breakdown

WBS levels characteristics

Tasks for setting up the WBS

Work Package Characteristics

Prepare existing data Model reservoir fluid mechanics

Build hydrocarbon resource model

Evolve development concept

Establish subsurface development option

Evaluate subsurface options

Formulate development concept

Quantify subsurface options

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