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Lesson 7: Fast-Track Planning: Steps 6

Through 10
Introduction

Planning for a fast-paced project must be a methodical but quick step-by-step process. As
you saw in Lesson 6, the rst ve steps of building a project (charter development, scope
development, team selection, WBS development, and team nalization) build a foundation
for the next ve. Each step adds an important and valuable element that serves your goal
of successfully managing a high-speed project.

In this lesson, the ve planning steps you’ll examine are:

6. Task Planning

7. Time Estimating

8. Cost Estimating

9. Schedule Planning

10. Budget Planning

If you establish solid task planning that leads to accurate time and cost estimates, then you're well on your
way to a realistic schedule and budget. A well-planned schedule, supported by a practical budget, allows
you to manage your project from a position of strength. The objective in this lesson is to learn how to carry
out these planning steps quickly and decisively.

There are volumes of information on the theory and practice of both time and cost estimation. You could
spend years devoted to the science of time management alone. But as the manager striving to reach and
maintain a fast-paced speed, you don't have the luxury of an in-depth study. You must be prepared to
understand and apply abbreviated techniques to get to the point of accurate, usable estimates.

Steps 6 Through 8: Task Planning, Time Estimating, and Cost Estimating

Step 6, Task Planning, is the starting point that leads to realistic estimates of time (Step 7) and cost (Step
8). In Lesson 6, you and your project team identi ed the tasks needed to produce your project's end
product. You added these to the work breakdown structure, and probably included some preliminary
estimates for performing each task. Now it's time to estimate with more accuracy.

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An estimate is not the same as a guess. A guess is a prediction you o er without su icient information to
back it up. An estimate, on the other hand, is a calculated approximation. Project managers must always
estimate and never guess. If you give an estimate on time, cost, quality, risk, or any other project
component, it must be substantiated. If it isn't, it's an unreliable guess.

Developing the calculations to support your time and cost estimates is not di icult. The use of them will
save you a great deal of time. The team members who will actually do the work must create the estimates.
They are in a much better position to make these estimates based on their experiences.

In your role as project manager, you provide the information and leadership they may need to make their
calculations. You'll also conduct a sanity check on their estimates and discourage the natural tendency to
in ate the estimates. You'll be the one who determines any reserve time and money that's formulated.

Task Planning

Tasks have relationships with other tasks. These relationships lead to the sequence process. When you
sequence tasks, you arrange them in the order that they will be performed. For example, in the
development of a software application, the twin tasks of code generation and testing that code are
closely related. You cannot test until you develop code to test. If you're on a project to build a fence, you
cannot start the task of putting the posts into the ground until you've dug the holes. To begin the
estimation process, the tasks must be arranged in the sequence that they will be worked on.

Before you can sequence the tasks, you must determine any task dependencies. There are three types of
dependencies.

Three Dependencies

1. Absolute dependency. A task cannot be started until another task is nished. In the example above,
the fence posts cannot be put into the ground until the holes are dug.

2. Preferred dependency. This usually means that the team members prefer to perform the tasks in a
certain order. This is usually based on their experience, and most times it is the best way to perform
one or more tasks.

3. External dependency. The sequence is dictated by an outside source, such as a government regulation
or a delivery date set by a vendor.

Critical Path

The critical path is the longest in terms of elapsed time through a network diagram. Finding the critical
path is crucial to a successful project. Here's how to do it.

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Assemble the sequenced tasks and document them in a network diagram as shown in Figure 7.1. When
you use a network diagram to show the sequence, you'll have a visual depiction of how the tasks will ow
from the start of the project to the nish. Some tasks will be worked on concurrently and others will only
start when their predecessors nish. Once you have time estimates for all of the tasks, you'll be able to
nd the critical path. As a part of your planning process, you must determine the critical path that your
project will take from start to completion.

When you know the critical path, you know the earliest time that a project can be completed. Another
advantage you gain when you know the critical path is knowing which tasks you must monitor more
closely if the project is to nish on time. See Figure 7.1 for a basic diagram.

Figure 7.1. Critical Path Network diagram

As you can see in the diagram above, Task A is the rst to start. Then di erent team members work Tasks
B and D concurrently after Task A is nished. With the addition of time estimates on these tasks, you'll see
your project's critical path.

Task Duration

Note how Tasks B through D are dependent upon Task A's completion. This means it's important to plan
for each task duration in order to keep your project on schedule. The duration of a task is the total elapsed
time that it takes from the start to the nish of a task.

Sometimes there are anomalies that can cause confusion or delay. For instance, a speci c task may be
estimated to take your team two hours to accomplish, but the duration may be one or more days. How
does that happen? If you estimate that you need two hours to apply three coats of paint to a wall, the
duration of the task is two hours plus the amount of time required for the wall to dry between each new
coat of paint. Keep this in mind as you make your estimates.

You have several methods available to you and your team to estimate the duration of a project. But the
PERT method and Monte Carlo Simulation program are the most often used with any consistent success.

PERT Method

PERT is an acronym for Program Evaluation and Review Technique. This method requires three time
estimates per task and uses the distribution's mean to arrive at a nal estimate. The three time estimates
are referred to in the formulas below as P for pessimistic, O for optimistic, and M for most likely. Let's take
a more in depth look at each of these estimates.

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Figure 7.2. PERT/Standard Deviation/Variance Formulas

You rst make a pessimistic estimate of the task duration. This will be the longest amount of time needed
for the task to nish. Next, give an optimistic estimate, or the shortest amount of time needed to complete
the task. Finally, make a most likely estimate. You should make all your estimates in hours.

Once you have your estimates in place, then your next move is to use the distribution's mean to nd the
standard deviation variance of a task. Don't worry; I know this looks like a lot of heavy-duty math, but
you'll see that this is really simple. These formulas are very straightforward and I'll walk you through each
of them.

The PERT formula is your pessimistic estimate added to four times the most likely estimate, and added
again to the optimistic estimate. Then divide that amount by six.

The standard deviation is your pessimistic estimate minus your optimistic estimate. Then divide that
amount by six.

The variance is pessimistic minus optimistic. Divide that by six. Then that amount is squared. To square a
number, you multiply it by itself.

Take a look at Figure 7.3, called the Project PERT Chart, and you'll see that I've already worked the math
for you. I told you not to worry, right? Try out the formulas and see how easy it is to come up with the
same numbers.

Figure 7.3. Project PERT Chart

Assume that the tasks listed above in the Project PERT Chart are all of the tasks that are on the critical path
(the longest path) for your project. Now see if you can estimate how long the project will take you to
complete.

The answer is 131.999 hours plus or minus 10.281 hours. Somewhere between 121.718 hours and 142.280
hours, the project will be complete. You nd 131.999 by adding all the hours in the PERT estimates column.
You determine the plus or minus 10.281 hours by adding all the task variances, and then you take the
square root of that number. Don't bother to add the standard deviations to get to this number. The
statistics rule is that you must add the variances and take the square root to reach this number.

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Monte Carlo Simulation Program

The Monte Carlo Simulation is a computer-based program that does not use the PERT formula. However,
Monte Carlo does use the PERT time estimates of pessimistic, optimistic, and most likely. The program
simulates the outcome of a project and provides predictions on the probability of a task actually being on
the critical path, and of completion of the project on any speci ed date. You'll only be able to evaluate this
method if you have access to the software program.

If you're interested in exploring this computer program and other project estimation methods and tools,
please be sure to check out the Supplementary Material section for this lesson.

Step 9: Set the Schedule

Now you’re ready to examine the ends and outs of scheduling. We’ll start by looking at ways to view your
schedule whether its via the Network Diagram, the Milestone Chart, or a Bar Chart. Then we’ll focus on
crashing the schedule, fast tracking the schedule and working with scheduling software.

At this point, you have created a network diagram. You've estimated the time each task will take to
complete, and now it's time to enter this information into a formal schedule. This is a calendar-based
system used by all scheduling software programs on the computer to track your project tasks and
resources.

Select a way to display your schedule. You'll share the schedule with your project stakeholders, so use a
view that is meaningful and easy to understand. Basically, there are three ways to depict a project
schedule.

Three Schedule Displays

1. Network Diagram. The network diagram displays interdependencies between tasks, and shows the
ow of work. This method is a good tool to use when you need to e ectively plan and organize
project work. See Figure 7.4 for an example that has the scheduled dates for each task, starting with 3-
1 and ending with 7-18.

2. Milestone Chart. This display shows only major events. This is an excellent tool to use when you
report to management or the customer and you want a strong visual that is very high-level and
uncluttered by detail. See Figure 7.5 for an example.

3. Bar Chart. The bar chart is sometimes called a Gantt chart. The bar chart works well when you need to
track progress and when you meet with your team. But the bar chart is a weak choice for building
e ective project plans, because it doesn't show interdependencies. Some software packages provide
a method of drawing lines between tasks to re ect relationships, but I nd them to be confusing and
time consuming to decipher. Figure 7.6 is an example of a simple bar chart.

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Figure 7.4. Scheduled dates example

Figure 7.5. Milestone Chart example

Figure 7.6. Bar chart example

The choice is yours when it comes to a decision about the way to display your schedule. It depends on my
audience and what my objective is, but I use all three of the above displays. As a project manager, you'll
often nd yourself in a position where you need to sell the schedule to your customer, team members, and
management. The best way to get your point across is to use a simple, well-designed visual. I highly
recommend that you learn to develop all three of these displays and use them.

You'll nd that the schedule you've developed is under constant pressure to change. Most times, the
customer or management shortens the time frame of the project due to business demands. For you, a
shortened schedule means an increase in project speed. Two ways to meet this challenge are called
crashing and fast tracking.

Crashing the Schedule

Now that you’ve developed your schedule and selected a workable view that you prefer, it’s time to look
at two ways of managing your schedule (crashing and fast tracking).

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In previous lessons, you learned how to use your project adjustment zones to handle a shortened
schedule. Crashing is another technique used to make an adjustment. It means that you add more
resources to the tasks that are in the critical path. This usually requires you to take team members o of
non-critical tasks and reassign them to those on the critical path.

Before you decide to do this, remember that it will result in increased costs. Con rm that your budget can
handle this. Also, beware of what happens when you assign too many resources to the critical path. Some
of the resources will not have the right skills. Other resources will require too much time to become
productive. Who will make certain that the new resources know what needs to be done? If you turn this
over to someone who is currently productive on the critical path tasks, you dilute his or her productivity. To
successfully crash a schedule requires you to be a manager who is skilled at this balancing act.

Fast Tracking the Schedule

When you choose to fast track your schedule, you must ask your team to perform more tasks in parallel.
This requires that you work closely with those team members who were involved in the original time
estimates. They have insider knowledge of how the estimates were reached and which tasks can be
worked on at the same time.

When you start to fast track, pay close attention to which tasks are interrelated. This will help you avoid
trouble as you increase the project speed. If you fast track a task only to nd out later that another task
you did not fast track provides crucial input to the rst task, you have made a negative impact on your
project.

Fast tracking is an e ective method to use when you need speed. But don't start the process blindly. You
must realize at the outset that fast tracking often results in a reduction in quality. It causes additional
rework because team members are focused more on speed than on quality. And, it increases project risk
on several fronts, such as decreased functionality, team morale issues, and lost productivity on non-critical
tasks. Get together with your team members and develop a realistic plan that makes this adjustment work
for you.

Schedule with Software

There are numerous project management software packages available that will assist you in the
development of a schedule. But the management of the schedule is your responsibility, not the
responsibility of any software package. It's to your advantage to understand what you need from any
project management tool, including software, and to make certain that your needs are met. The best way
to do this is for you to understand, in detail, each step involved in the quick and e icient construction of a
workable schedule.

First, identify tasks and their relationships, sequence the tasks, and then estimate time and duration. Use
the tools available to you to produce sound and realistic estimates. Aim for your target and don't settle for
anything less than a success.

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Some project managers intentionally overestimate the timeline, and then nish the project well ahead of
the schedule. They seem to think this enhances their reputation as a professional manager who gets
things done. I can tell you from my own experience that this tactic is not a bright idea. When this happens
to projects I'm involved with, I always ask the project manager three questions: Why was your estimate so
far o target? What tools did you use to arrive at your estimate? Do you realize that by in ating your
estimate and reserving resources you delayed the start of other important projects?

The smart project manager makes every e ort to arrive at estimates based on realistic, defensible
calculations. If you are able to develop a dependable, practical project plan, you'll be another step closer
to the degree of control needed on your fast-paced project. That's how you enhance your reputation as a
professional manager of high-speed projects.

Step 10: Build the Budget

When you nish the estimates for the amount of time each task will take, you'll have most of the
information needed as you start to build a budget. But you want to make certain that you construct a
budget that is functional, and one that works hand-in-hand with your overall project plan. How you arrive
at the actual numbers that feed into your budget determines the validity of the budget.

What all goes into the budget? If you know what tasks need to be performed and how long each takes to
complete, all you have to do is multiply the number of total hours by the cost of labor, right? That's your
budget, isn't it?

Actually, it's only part of the total budget. You'll also need to consider some other costs.

Budget Items

Internal labor. If your project depends on the help of anyone who is internal to your organization, but
not a project team member, he or she is a budget item. For example, administrative personnel,
security personnel, technical support, messengers, and cleaning services are needed, but are not
usually team members. Many project managers view these as free resources, but they are not and
must be counted.

Burdened labor cost. This applies to all internal labor. Burdened labor cost refers to the total cost of a
resource. It consists of wages, bene ts, and overhead (such as facilities, power supplies, and water)
that make up the total cost. Most organizations have a burdened labor rate already calculated if you
inquire about it.

Equipment costs. Some equipment is reusable over and over on projects. But any equipment that is
for a one-time use you must enter in the budget. For instance, leased computers and o ice machines
are budget items.

Material costs. This can be a lengthy and costly list of items, such as o ice supplies that include paper,
pens, printer cartridges, le folders, and dozens of other items. Materials used in the construction of a
house, bridge, garden, or any other physical structure must appear in the budget.

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External costs. Training, outside consultants and contractors, and special equipment are in this
category of the budget. You must be attentive to the details of any contract you have with an external
vendor to be certain that all budget items are recognized. For example, if you hire a consultant to
provide special expertise on your project, do his or her costs include travel, lodging, and food? Does it
include hardware and software, or other tools?

Unlike a schedule, which changes throughout the life cycle of a project, your budget is not as changeable.
Customers and management are typically not very open to increases in your original budget. Project
managers who develop a record for miscalculation of their budgets are not well regarded by those who
have to fund their mistakes. It's to your bene t to ensure that your budget estimation process is well
thought out and executed using the best tools available. Basically, there are four methods you can use to
estimate your budget.

Four Budget Estimate Methods

1. Ballpark. Unfortunately, far too many project managers use this method. Many times, managers are
put in a position where they have to pull a cost out of thin air, and then they are stuck with it. If this
method even gets close to what the actual costs will be, it falls into the lucky guess category. The only
time a ballpark method is valid is when management is trying to decide if a project should be created
in the rst place. Always try to avoid ballpark estimates because they will inevitably come back to
haunt you.

ROM method. ROM means rough order of magnitude. This is a slightly better way than the ballpark
method to estimate costs. But it can be far o target, too. The ROM depends on past project histories for a
baseline estimate. For example, a new project will require the generation of one million lines of computer
code. The ROM method locates a previous project that generated code and determines how much each
line of code cost on that project. ROM would then estimate the new costs at one million times the per line
of code amount. This requires a little more time to research than the ballpark method, but it is far from the
best way to estimate your budget.

Parametric. This is a positive step towards accuracy when compared to the ballpark and ROM methods
of estimating. The parametric method uses mathematical formulas to arrive at an estimate. For example,
how much does it cost to develop an instructional manual? A manual developed on a past project was
developed in 10 days. This new manual is 50% larger and has 25% more graphics. By using these
numbers, and any other elements that a ect the cost, a mathematical formula can be applied to arrive at a
fairly accurate cost.

Bottom-Up Detail. This is the most accurate method to use when you build a production budget. It
also consumes the most development time. To use this method, you must estimate each task at its lowest
level, then roll up the estimates to the highest level. For example, you need to estimate the cost to test
your end product. You determine that task can be broken down into six smaller tasks. You would estimate
the cost of each smaller task, and then add them up to reach a total cost for the overall testing task. The
degree of accuracy is very high if you use this method. As the manager of a fast-moving project, you'll
need to balance the need for speed with the need for accurate budget estimates. I always vote for
accurate budget estimates. In the end, it will save you time, e ort, and headache.
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Budget by Phases

You'll nd that estimating the budget for a lengthy project is a real challenge. Too many variables come
into play when a project is developed over a longer period of time. Team members come and go.
Resources can become scarce and cost more than you anticipated. Prices of materials increase,
sometimes at an alarming rate.

How do you meet this challenge?

Try to arrange an agreement with your customer or management to build a budget based on project
phases. There are advantages to all of the stakeholders if you do it this way. In the rst phase, you have a
good estimation of what your costs will be for that phase based on the detailed estimates you and your
team developed. But for later phases, your estimates will not be as accurate.

Budgets developed for an entire long-term project usually deliver unpleasant surprises to the
stakeholders. Mostly these are in the nature of cost overruns. But if you develop your budget in phases,
the customer and/or management will get the bene t of a more accurate budget. They'll also have the
opportunity at the end of each phase to see the actual cost and decide if the project will continue.

As the manager of a fast-paced project, you must be prepared to develop a budget with speed and
con dence. It's very important that your nal budget estimate be a close match to your schedule
requirements. Successful projects take time to develop, and that time is supported by a well-planned
budget.

Conclusion

In this lesson, you learned how to use task planning to develop time and cost estimates. You've seen the
value from analysis of task relationships to help you make more accurate estimates. As you increase your
skill at time and cost estimates, you'll nd that you have a new ally in your attempt to reach and maintain
top speed.

Now you know which tools to use to locate the critical path that your project must take to cross the nish
line. Your knowledge of the critical path will guide you as you select speci c tasks to monitor. This brings
you a higher level of control over your project.

The steps you've taken put you in a good position to create a schedule that is realistic and manageable.
The schedule is a visual depiction that you can use to explain and justify your management decisions.
Display a version of the schedule where everyone can see it. It will be a communication source that
bene ts you and your project team.

Your schedule also reinforces your budget estimates, just as all the other steps do that have gone into your
project plan. You've now developed the nancial details that will support you and your team as the project
continues to gain speed. In a very short time, you've moved from project inception into the budget phase.
You have the funds needed to drive your project to success, and you've gotten to this point by the use of
good tools and smart decisions.

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