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Project Management PPT Word
Project Management PPT Word
Project Management PPT Word
Course Objectives
• Describe project management and discuss key elements of the project management framework.
• Explain the scope planning process and describe the contents of a scope management plan.
• Explain the importance of good human resource management on projects, including the current
state and future implications of human resource management, especially on information technology
projects.
• Define project human resource management, understand its processes and summarize key concepts
for managing people.
• Describe the work involved in planning purchases and acquisitions for projects, the contents of a
procurement management plan and contract statement of work, and calculations involved in a
make-or-buy analysis.
• Discuss what is involved in planning contracting, including the creation of various procurement
documents and evaluation criteria for sellers.
• Understand what risk is and the importance of good project risk management.
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Chapter One: Overview of Project Concepts
CHAPTER OBJECTIVES
❖ The objective of this training is to introduce the basic concepts of project and project
management. It covers the project management framework, characteristics of project
and Project life cycle models
Introduction
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Measure 1994 Data 2002 Data Result
Successful projects 16% 34% Doubled
Failed projects 31% 15% Halved
Money wasted on $140 B out $55 B out of More than
challenged and of $250 B $255 B halved
failed projects
*The Standish Group, “Latest Standish Group CHAOS Report Shows Project Success Rates
Have Improved by 50%” (March 25, 2003).
Why the Improvements?
Better tools have been created to monitor and control progress and skilled project managers with
better management processes are being used.
What is a Project?
• A project is a temporary endeavor undertaken to create a unique product, service, or result (PMI)
• Project management is “the application of knowledge, skills, tools and techniques to project
activities to meet project requirements.” (PMI)
• A project ends when its objectives have been reached, or the project has been terminated.
• Projects can be large or small and take a short or long time to complete.
• A project is a unique, complex, and non-routine endeavor or effort to produce a set of unique
deliverables within clearly specified time, cost and quality constraints to meet customer needs.
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The Triple Constraint
Every project is constrained in different ways by its:
Characteristics of a project
• A project involves a single, definable purpose, end-item, or result, usually specified in terms of
cost, schedule, and performance requirements.
• Every project is unique in that it requires doing something different than was done previously.
Even in “routine” projects such as home construction, variables such as terrain, access, zoning
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laws, labor market, public services, and local utilities make each project different. A project is a
one-time activity, never to be exactly repeated again.
• Projects are temporary activities. An ad hoc organization of personnel, material, and facilities is
assembled to accomplish a goal, usually within a scheduled time frame; once the goal is achieved,
the organization is disbanded or reconfigured to begin work on a new goal.
• Projects cut across organizational lines because they need the skills and talents from multiple
professions and organizations. Project complexity often arises from the complexity of advanced
technology, which creates task interdependencies that may introduce new and unique problems.
• Project is the process of working to achieve a goal; during the process, projects pass through
several distinct phases, called the project life cycle. The tasks, people, organizations, and other
resources change as the project moves from one phase to the next. The organization structure and
resource expenditures slowly build with each succeeding phase; peak; and then decline as the
project nears completion.
• Flexibility: Change and projects are synonymous. Always a project witnesses multiples of
modifications and changes in its original plans, programs and budgets.
Why project?
Projects are typically initiated for one or more of the following reasons:
▪ When starting a new business/job/ any activity
▪ In order to develop/modify a product or service/Responses to competition/Desire to
be more competitive
▪ For relocating and/or closing a facility
▪ For regulatory mandate/ New laws and regulations
▪ In order to re-engineer the process so as to reduce complaints, reduce cycle time,
and eliminate errors /For implementing a new system or process
▪ To introduce new equipment, tools or techniques
▪ Market demand/At the request of a customer
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Project Management Framework
Project Stakeholders
Stakeholders are the people involved in or affected by project activities.
Key Stakeholders
• Project Manager/s
• Customers/ End Users
• Performing Organization
• Project Management working on the Project
• Project Team Members
• Sponsors
• Influencers
Stakeholders are important to a project because:
• They can be critical in its success or failure
• They can have a much better understanding of the feasibility of different actions and the resources
required to reach certain objectives than an outsider to the project
• Their expectations need to be managed
• They can provide important information on the progress of the project
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Nine Project Management Knowledge Areas
Knowledge areas describe the key competencies that project managers must develop.
• Core knowledge areas lead to specific project objectives
✓ scope, time, cost, and quality
• Facilitating knowledge areas are the means through which the project objectives are achieved
✓ human resources, communication, risk, and procurement management
• Project integration management- affects and is affected by all of the other knowledge areas.
✓ All knowledge areas are important!
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Specific Suggested Skills for Project Managers include:
Communication skills: Listens, persuades.
Organizational skills: Plans, sets goals, analyzes.
Team-building skills: Shows empathy, motivates, promotes esprit de corps.
Leadership skills: Sets examples, provides vision (big picture), delegates, positive, energetic.
Coping skills: Flexible, creative, patient, persistent.
Technology skills: Experience, project knowledge.
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PROJECT LIFE CYCLE – MODELS
It is the cycle that defines distinct but interdependent phases through which a project passes from its
point of initiation to its completion.
There are many valid ways based on which the project cycle may be classified. Various models deal
with the project cycle. However, here we give more emphasis on the basic models:
▪ Baum’s model of project cycle
▪ UNIDO Project cycle
▪ DEPSA’s cycle
Baum’s model of project cycle: Initiated by Baum in 1970, was improved in 1978 and has been
adopted by the World Bank ever since. Initially recognized four main stages, namely:
• Identification
• Preparation
• Appraisal and Selection
• Implementation
At later stage (1978) the author has added an additional stage called “evaluation.”
Identification: the first stage in the cycle which deals with finding potential project ideas. Project
ideas can be originated from:
• Resources
• Market
• Need
• Well-experienced technical specialists
• Existing projects
Preparation (Pre-feasibility and feasibility studies):
is a key process that justifies whether to go ahead with a certain or particular project idea or to
disregard it. In other words, a feasibility study is an analysis of the viability of an idea from
different dimensions like:
▪ Market analysis, ▪ Environmental analysis
▪ Technical analysis, ▪ Organization and management
▪ Financial analysis, analysis.
▪ Socio-economic analysis
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Project appraisal:
• involves a careful checking of the basic data, assumptions and methodology used in project
preparation, an in-depth review of the work plan, cost estimates, and proposed financing, an
assessment of the project's organizational and management aspects, and finally the viability of
project.
It provides an opportunity to re-examine every aspect of the project plan to assess whether the
proposal is appropriate and sound before large sums are committed. should cover at least seven
aspects: technical, financial, commercial, incentive, economic, Managerial and organizational .
Implementation
• a critical stage of project work & perhaps the most important part of the project cycle.
• funds are actually disbursed to get the project started and keep running.
• Priority is to ensure that the project is carried out in the way and within the period that was planned.
• Is where many of the real problems of projects are first identified.
Evaluation
• compares actual progress with the plans, and judges whether the decisions and actions taken were
responsible and useful.
• The main purpose is to learn lessons for the design of future projects and help ensure
accountability.
• provides a comprehensive and detailed review of the elements of success and failure of the project
for enhancing the impact of project work.
• may take place at several times in the life of a project.
Who handles evaluation?
o Project management
o The sponsoring agency,.
o the project's administrative structure
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General opportunity studies (sector approach)
Specific Project Opportunity Studies (enterprise approach)
b) Pre-feasibility studies
• a further assessment of the project idea might be made in a pre-feasibility study. This is to see if:
• All possible project alternatives are examined
• The project concept justifies detail study
• All aspects are critical and need in-depth investigation
• The project idea is viable and attractive or not.
• its structure should be the same as that of a detailed feasibility study.
c) Support (functional) studies
• prerequisite for, or in support of, a pre-feasibility and feasibility studies, particularly large-scale
investment proposals. They include:
▪ Market studies of products
▪ Raw materials and factory supplies studies
▪ Laboratory and pilot plant tests
▪ Location studies
▪ Environmental impact assessment
▪ Economies of scale studies
▪ Equipment selection studies
d) Feasibility studies
▪ defines and critically examines the commercial, technical, financial, economic, and
environmental prerequisites for an investment project on the basis of alternative solutions
already reviewed in the pre- feasibility study. It should provide all data necessary for an
investment decision.
e) Appraisal report
• It is considered as an independent stage of the pre-investment phase, marked by the final investment
and financing decisions taken by the project promoters.
• It is carried out when a feasibility study is completed, where various parties will handle their own
appraisal of the investment project in accordance with their individual objectives and evaluation of
expected risks, costs, and gain.
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2) The investment (construction or implementation) phase
• Negotiations and contracting
• Technology acquisition and transfer
• Engineering and contracting
• Construction
• Pre-production marketing
• Recruitment and Training personnel
• Plant commissioning and start-up
3). The operational (normalization) phase
objective: to produce goods and services for which a project is established.
Problems: of this phase need to be considered from both a short-term & long-term viewpoint.
• Pre-investment
• Investment and
• Operation
Each of these three phases may be divided into stages. The guideline has divided the cycle into 6 stages.
o Identification
o Preparation pre-investment phase
o Appraisal/decision
o Implementation investment phase
o Operation operation phase
o Ex-post Evaluation
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CHAPTER TWO
Project Identification, Feasibility Study and Project Appraisal
CHAPTER OBJECTIVES
To discuss project identification, and identify sources of project ideas
• To define project feasibility studies and appreciate their services in the effective management of
projects.
• To build the structure of project analysis
• To discuss and practice the process and techniques of project analysis focusing on the marketing,
technical, financial, socio-economic, environmental, and human resources/organizational factors.
• To discuss project proposal, its part in project appraisal, and how to organize the proposal document.
Project Identification
Definition and meaning project identification
Project identification is the systematic process for finding or locating and screening promising
project ideas from their respective sources.
In other words, project identification is the first stage in any project cycle which is concerned
about generation or incubation of promising project ideas using appropriate method.
• First stage in any project cycle
o Project identification is the systematic process for finding or locating and screening promising
project ideas from their respective sources.
Sources of project idea
▪ Macro level
▪ Micro level
Macro-level Project Ideas
At the macro-level, project ideas emerge from:
• National policies, strategies & priorities as may be enunciated by government from time to time;
• National, sectoral, sub-sectoral or regional programs supplemented by special studies, sometimes
called opportunity studies, conducted with the explicit aim of translation of national and sectoral, sub-
sectoral and regional programs into specific projects;
• Constraints on the development process
• Government decision to correct social and regional inequalities
• A possible external threat
• Unusual events such as droughts, floods, earthquakes, hostilities, etc.
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• At the macro-level, project ideas can also originate from multilateral or bilateral development agencies
At the micro-level, the variety of sources is equally broad. Project ideas emanate from:
• The existence of unsatisfied demand or needs.
• The existence of unused or underutilized natural or human resources and the perception of
opportunities for their efficient use.
• Analyze the performance of existing industries;
• Review imports and exports;
• Attend Trade fairs, exhibitions and conferences.
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PEST Analysis
Porter model
• Michael Porter has argued that the profit potential of an industry depends on the combined strength of
the following five basic competitive forces:
o Threat of new entrants
o Industry rivals
o Threat of substitute products
o Bargaining power of buyers
o Bargaining power of sellers
• According to this model, project ideas that favorably live up to these forces should be passed to the
preparation phase.
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Project idea screening
For project idea screening mostly we use project rating index. To work with project rating index the
analyst should follow the following steps.
• Assign weights to these factors (the weights are supposed to reflect their relatives
importance).
• Rate the project proposal on various factors, using a suitable rating scale. (Typically a 5-
point scale of a 7-point scale is used for this purpose).
• For each factor multiply the factor rating with the factor weight to get the factor score.
• Add all the factor scores to get the overall project-planning index.
• Project idea screening
Once potential project ideas have been identified and before they are placed into a detail project
preparation, they should be subjected for preliminary screening. With project idea screening, those
ideas are evaluated in terms of :
▪Their compatibility with the promoter
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▪Their consistency with government development plan and priority
▪Availability of Inputs
▪Adequacy of Reasonableness of costs
▪Acceptability of risk level.
At the end of the preliminary screening, the analyst should eliminate project ideas that:
▪ Are technically unsound and risky;
▪ Have no market for the output;
▪ Have inadequate supply of inputs;
▪ Are very costly in relation to benefits;
Activity
Generate your Project own Idea (for profit or non-profit) and make preliminary screening)
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CONSEQUENCES OF POOR FEASIBILITY STUDIES
• Overstatement of returns, market share, sales volume, etc.
• Underestimated costs, resources, risk, etc.
• Omission of a necessary component
• Failure to consider the variability of environment
• Optimistic calendar for implementation,
• Low capacity utilization, Heavy costs overruns, hence deteriorated financial profitability,
i. Payback Period
considers is the time taken to gain a financial return equal to the initial investment.
The period is usually expressed in years and months.
Payback period = Initial Investment
Accumulated annual cash flows
The initial investment outlay includes all capital investments made before the plant starts
operation as well as during the plant operation.
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a company wishes to buy a new machine for a 5-year project. The manager has to choose
between machine A and machine B, so it is mutually exclusive solution.
Although both machines have the same initial cost (Birr 700,000), their cash flows perform
differently over the 5-year period.
Cash-Flow (Birr)
Year Initial investment cost 700,000, - for each machine
Machine A Machine B
0 (700,000) (700,000)
1 200,000 100,000
2 380,000 300,000
3 240,000 150,000
4 100,000 300,000
5 150,000 400,000
Payback period 2 and half years 3 and half years
ii. Return on Investment (ROI)
is a measure of profitability that relates income to investment.
This method first calculates the average profit, which is simply the project initial outlay
deducted from the total gains or cash flows, divided by the number of years the investment
will run.
The profit is then converted into percentages of the total outlay using the following equations:
Average Annual Profit = (Total NCF) – (Total investment outlay)
Number of years
Return on Investment = Average Annual Profit x 100%
Original investment
Illustration
Consider the machine selection example introduced earlier. Using this example compute the
Return on Investment.
Solution
Machine A
Total Profits = $1,070,000 – 700,000 = 370,000
Average Profit = $370,000/5 years = $74,000 per year
Return on Investment = (74,000 x 100)/ 700,000 = 10.58%
Machine B
Total Profits = $1,250,000 – 700,000 = 550,000
Average Profit = $550,000/5 years = $110,000 per year
Return on Investment = (110,000 x 100)/ 700,000 = 15.71%
Note
Selection criteria for ROI
All independent projects having a ROI equal to or greater than a pre-specified ROI are
accepted.
For mutually exclusive projects, we will accept a project with higher ROI.
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Selection decisions
Machine A realizes its payback period earlier than machine B, meaning it has a better chance
getting selected than B.
Machine B has larger rate of ROI than machine A, meaning it has a better chance getting
selected than B.
DISCOUNTED TECHNIQUES
1. Net Present Value (NPV)
can be defined as the present worth of cash flow streams generated by an investment.
is calculated by adding the values obtained by discounting the annual cash flows
occurring throughout the life of a project as follows:
NPV= ∑ NCF
(1 + r)n
Where: NCF = is net cash flow
n = is the period for which the PV is calculated
r = is the interest rate
Illustration
Consider a 5 year agricultural investment project. Assume the discount rate to be
18%.
The steps to calculate NPV are:
setting up the NPV format/table
writing the corresponding years of in the project life in column 1
writing the net cash flows in column 2
writing the corresponding discount factors of each year at the specified discount rate in
column 3
writing the present value of the net cash flow of each year in column 4 by multiplying net
cash flow by the corresponding discount factor.
aggregating the present values to give the NPV
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4 100,000 0.5158 51,580
5 150,000 0.4371 65,565
T.NPV Birr 5,625
Economic Analysis
• Create fair employment opportunities
• Transform the site it uses for the project
• Deliver its outputs on time to the target users
• Pay taxes
• Transfer technology to the economic system
• Create capital [foreign or domestic] for investment
• The Balance between the requirements vs returns from a project is the basis of project’s
economic appraisal.
Organization/ Human Recourse Management Analysis
o Skill, knowledge, expertise, and experience related requirements against the availability.
o Project staff size and composition
o Distribution of project responsibilities and authority
o Flow of communication in and out of the project
o Decision making system in the allocation and use of resources.
o The management skills requirements.
Environmental impact appraisal
o Magnitude of use of raw material inputs
o Degree of hazards related to pollution and wastage
o Product safety and friendliness to users
o Safety risks of the technology used
o Socio economic impacts on the conformity to environmental laws and regulations set by
the government opinions on environment related issues.
Activity
Assess the feasibility of your project in based on the criteria outlined in the previous discussions
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ROJECT PROPOSAL
Meaning
It is highly condensed report that briefly summarizes the findings of the feasibility study.
Structure and Contents
The executive summary should have the same structure as the body of the feasibility study and
cover, but not limited to, the following areas:
1. Summary of the project background and history
• Name and address of project promoters
• Project objectives and outline of the proposed basic project strategy including the selected
geographic area and expected market share
• Project location: orientation towards the market or towards resources (raw materials)
• Economic and industrial policies supporting the project
2. Summary of market analysis
• Raw materials and supplies
• Location, site and environment
• Engineering and technology
3. Summary of market analysis
4. Raw materials and supplies
5. Location, site and environment
6. Engineering and technology
7. Organization and Human Resources Issues
8. Financial analysis and investment appraisal
9. Economic analysis/evaluation
10. Project Implementation Schedule
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PROJECT APPRAISAL AND SELECTION
Definitions and Descriptions
1. It is a systematic and comprehensive review of the economic, environmental, financial, social,
technical and other such aspects of a project to determine if it will meet its objectives.”
2. the process of assessing and questioning proposals before resources are committed.
• a means by which partnerships can choose the best projects to help them achieve what they
want for their neighborhood.
Features: Appraisal involves
• a careful checking of the basic data,
• assumptions and methodology used in project preparation,
• an in-depth review of the work plan, cost estimates, and proposed financing,
• an assessment of the project's organizational and management aspects,
• finally the viability of project.
Objectives of Project Appraisal
1. To help stakeholders
• to be consistent and objective in choosing projects, make sure its programme benefits all sections
of the community, including those from ethnic groups who have been left out in the past, provide
documentation to meet financial and audit requirements and to explain decisions to local people.
2. To justify spending money on a project.
3. To serve as an important decision making tool.
• helps ensure that projects selected for funding will help a partnership, achieve its objectives for
its area, are deliverable, involve local people, and take proper account of the needs of people
from minorities, are sustainable, and have sensible ways of managing risk.
4. To lay the foundations for delivery.
• helps ensure that projects will be properly managed, by ensuring appropriate financial and
monitoring systems are in place, that there are contingency plans to deal with risks and setting
milestones against which progress can be judged.
NB. Components in appraisal are same as components in feasibility study. It is rechecking of the
results of feasibility study.
Activity
• Appraise your project to recheck the accuracy of the result of your feasibility study
• Based on the result of your feasibility study develop a proposal (business Plan) for your project
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Chapter III
Project Planning and Implementation (Project Management Framework)
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Creating the WBS: Subdividing the major project deliverables into smaller, more
manageable components.
Scope verification: Formalizing acceptance of the project scope.
Scope control: Controlling changes to project scope.
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Scope Definition and the Project Scope Statement
The preliminary scope statement, project charter, organizational process assets, and
approved change requests provide a basis for creating the project scope statement.
As time progresses, the scope of a project should become clearer and more specific.
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Figure: Sample Intranet WBS Organized by Phase
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Approaches to Developing WBSs
Guidelines: Some organizations provide guidelines for preparing WBSs.
Analogy approach: Review WBSs of similar projects and tailor to your project.
Top-down approach: Start with the largest items of the project and break them down.
Bottom-up approach: Start with the specific tasks and roll them up.
Mind-mapping approach: Write tasks in a non-linear, branching format and then create the
WBS structure.
Figure: Sample Mind-Mapping Approach
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Advice for Creating a WBS and WBS Dictionary
A unit of work should appear in only one place in the WBS.
The work content of a WBS item is the sum of the WBS items below it.
A WBS item is the responsibility of only one individual, even though many people may be
working on it.
The WBS must be consistent with the way in which work is actually going to be performed; it
should serve the project team first, and other purposes only if practical.
Project team members should be involved in developing the WBS to ensure consistency and buy-in.
Each WBS item must be documented in a WBS dictionary to ensure accurate understanding of
the scope of work that is included and not included in that item.
The WBS must be a flexible tool to accommodate inevitable changes while properly
maintaining control of the work content in the project according to the scope statement.
Scope Verification
It is very difficult to create a good scope statement and WBS for a project.
It is even more difficult to verify project scope and minimize scope changes.
Many projects suffer from scope creep and poor scope verification.
Scope creep/feature creep or “kitchen sink syndrome” (as in, including everything and the kitchen
sink), is basically where, over the course of the project, more and more features are added to the
point where the allotted budget, time, and resources can no longer cover the workload and the
project starts to flounder.
It happens for various reasons, but the two main causes are:
Clients asking for more features.
“Gold plating” – the situation where the development team decides to add more features in
order to impress the client (or themselves).
Examples
FoxMeyer Drug filed for bankruptcy after scope creep on a robotic warehouse.
Engineers at Grumman called a system “Naziware” and refused to use it.
Macdonald
21st Century Insurance Group wasted a lot of time and money on a project that could have
used off-the-shelf components.
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Scope Control
Scope control involves controlling changes to the project scope.
Goals of scope control are to:
Influence the factors that cause scope changes.
Ensure changes are processed according to procedures developed as part of integrated
change control.
Manage changes when they occur.
Variance is the difference between planned and actual performance.
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Activity
Create your own project and develop a WBS for the project. The WBS should include
Project Charter
• project title
• Project manager
• Project objective
• Approaches of implementation
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Project Time Planning/Management
Project Schedules
Importance of Project Schedules
Managers often cite delivering projects on time as one of their biggest challenges.
Schedule issues are the main reason for conflicts on projects, especially during the second half of
projects.
Time has the least amount of flexibility; it passes no matter what happens on a project.
Project Time Management Processes
Activity definition: Identifying the specific activities that the project team members and
stakeholders must perform to produce the project deliverables.
Activity sequencing: Identifying and documenting the relationships between project activities.
Activity resource estimating: Estimating how many resources a project team should use to
perform project activities.
Activity duration estimating: Estimating the number of work periods that are needed to
complete individual activities.
Schedule development: Analyzing activity sequences, activity resource estimates, and activity
duration estimates to create the project schedule.
Schedule control: Controlling and managing changes to the project schedule.
1. Activity Definition
An activity or task is an element of work normally found on the WBS that has an expected
duration, a cost, and resource requirements.
Project schedules grow out of the basic documents that initiate a project.
✓ The project charter includes start and end dates and budget information.
✓ The scope statement and WBS help define what will be done.
Activity definition involves developing a more detailed WBS and supporting explanations to
understand all the work to be done, so you can develop realistic cost and duration estimates.
Activity Lists and Attributes
An activity list is a tabulation of activities to be included on a project schedule. The list should
include:
The activity name
An activity identifier or number
A brief description of the activity
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Activity attributes provide more information about each activity, such as predecessors, successors,
logical relationships, leads and lags, resource requirements, constraints, imposed dates, and
assumptions related to the activity.
Milestones
A milestone is a significant event of the project
It often takes several activities and a lot of work to complete a milestone.
Milestones are useful tools for setting schedule goals and monitoring progress.
Examples include completion and customer sign-off on key documents and completion of
specific products.
2. Activity Sequencing
Involves reviewing activities and determining dependencies.
A dependency or relationship relates to the sequencing of project activities or tasks.
You must determine dependencies in order to use critical path analysis.
Network Diagrams
Network diagrams are the preferred technique for showing activity sequencing.
A network diagram is a schematic display of the logical relationships among, or sequencing of,
project activities.
Two main formats are the arrow and precedence diagramming methods.
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Figure: Sample Activity-on-Arrow (AOA) Network Diagram for Project X
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Figure: Task Dependency Types
Three-Point Estimates
Instead of providing activity estimates as a discrete number, such as four weeks, it’s often helpful to
create a three-point estimate:
An estimate that includes an optimistic, most likely, and pessimistic estimate, such as three weeks for
the optimistic, four weeks for the most likely, and five weeks for the pessimistic estimate.
Three-point estimates are needed for PERT estimates.
5. Schedule Development
Uses results of the other time management processes to determine the start and end dates of the
project.
Ultimate goal is to create a realistic project schedule that provides a basis for monitoring project
progress for the time dimension of the project.
Important tools and techniques include Gantt charts, critical path analysis, critical chain scheduling,
and PERT analysis.
Gantt Charts
Gantt charts provide a standard format for displaying project schedule information by listing
project activities and their corresponding start and finish dates in a calendar format.
Symbols include:
Black diamonds: Milestones
Thick black bars: Summary tasks
Lighter horizontal bars: Durations of tasks
Arrows: Dependencies between tasks
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Figure: Gantt Chart for Project X
SMART Criteria
Milestones should be:
Specific
Measurable
Assignable
Realistic
Time-framed
Figure. Sample Tracking Gantt Chart
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Slack or float is the amount of time an activity can be delayed without delaying a succeeding
activity or the project finish date.
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Program Evaluation and Review Technique (PERT)
PERT is a network analysis technique used to estimate project duration when there is a high degree
of uncertainty about the individual activity duration estimates.
PERT uses probabilistic time estimates:
Duration estimates based on using optimistic, most likely, and pessimistic estimates of activity
durations, or a three-point estimate.
PERT Formula and Example
PERT weighted average = optimistic time + 4X most likely time + pessimistic time
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Example:
PERT weighted average = 8 workdays + 4 X 10 workdays + 24 workdays = 12 days
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Where:
o Optimistic time= 8 days
o Most likely time = 10 days
o Pessimistic time = 24 days
Therefore, you’d use 12 days on the network diagram instead of 10 when using PERT for the above
example.
6. Schedule Control
Perform reality checks on schedules.
Allow for contingencies.
Don’t plan for everyone to work at 100 percent capacity all the time.
Hold progress meetings with stakeholders and be clear and honest in communicating schedule
issues.
Goals are to know the status of the schedule, influence factors that cause schedule changes,
determine that the schedule has changed, and manage changes when they occur.
Activity-2
Develop a time plan for the project activities you have create before.
o Estimate activity duration of each activities
o Identifying the specific activities of the project
Identifying and documenting the relationships between project activities.
Estimating resources a project team uses to perform project activities.
Estimating the number of work periods that are needed to complete individual activities
Create the project schedule using activity sequences, activity resource estimates, and activity
duration estimates.
o Develop the network diagram depicting activities
o Develop Gantt Chart depicting activities
o Calculate the critical path of the project
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Project Cost Management
1. Resource planning
• What resources (people, equipment, and materials)
• Quantities of each resource
• The nature of the project affect resource planning
2. Cost Estimating
• Estimating costs of the resources needed
• Outputs of the cost estimating process are:
✓ Cost estimates
✓ Supporting detail
The ground rules and assumptions used in creating the estimate
Basis for the estimate: scope statement, WBS, and so on
Details on the cost estimation tools and techniques used to create the estimate.
A cost management plan: a document that describes how the organization will
manage cost variances on the project.
Cost Estimation Tools & Techniques
Top-down estimates
• Using the actual cost of a previous, similar project as the basis for estimating the cost of the
current project
• Requiring much of expert judgment
• Being generally less costly but less accurate than others are
Bottom-up estimating
• Estimating individual work items and summing them to get a project total
• Being more accurate with smaller work items
• Being usually time-intensive and therefore expensive to develop
Parametric modeling
• Using project characteristics (parameters) in a mathematical model to estimate project costs
• Being most reliable when:
The historical information that was used to create the model is accurate
The parameters are readily quantifiable
The model is flexible in terms of the size of the project
3. Cost Budgeting
Allocating the overall project cost estimate to individual work items to prepare budgetary estimates
and to establish a cost baseline for measuring project performance.
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These work items are based on the WBS (a required input to the cost budgeting process) for the
project.
4. Cost Control
Cost control involves controlling changes to the project budget.
Project cost control includes:
Monitoring cost performance
Ensuring that only appropriate project changes are included in a revised cost baseline
Informing project stakeholders of authorized changes to the project that will affect costs.
The inputs to the cost control process are:
the cost baseline
performance reports
change requests
the cost management plan.
The main outputs of the cost control process are:
revised cost estimates
budget updates
corrective action
revised estimates for project completion
lessons learned.
Activity-3
• Identify resources needed to implement the project
• Estimate cost of each of the resources needed for the project
• Allocate the overall project cost estimate to individual work items and prepare budgetary
estimates
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Project Quality Management
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1. Planning Quality
• Implies the ability to anticipate situations and prepare actions to bring about the desired
outcome
Important to prevent defects by:
Selecting proper materials
Training and indoctrinating people in quality
Planning a process that ensures the appropriate outcome
3. Controlling Quality
The main outputs of quality control are:
Acceptance decisions
Rework
Process adjustments
There are Seven Basic Tools of Quality that help in performing quality control
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Cause-and-Effect Diagrams
Cause-and-effect diagrams trace complaints about quality problems back to the responsible
production operations
They help you find the root cause of a problem
Also known as fishbone or Ishikawa diagrams
Can also use the 5 whys technique where you repeated ask the question “Why” (five is a good
rule of thumb) to peel away the layers of symptoms that can lead to the root cause
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When a process is out of control, variations in the results of the process are caused by non-random
events; you need to identify the causes of those non-random events and adjust the process to correct
or eliminate them
The Seven Run Rule
You can use quality control charts and the seven run rule to look for patterns in data
The seven run rule states that if seven data points in a row are all below the mean, above the
mean, or are all increasing or decreasing, then the process needs to be examined for non-random
problems
Check sheet
A check sheet is used to collect and analyze data
It is sometimes called a tally sheet or checklist, depending on its format
In the following figure, most complaints arrive via text message, and there are more complaints
on Monday and Tuesday than on other days of the week
This information might be useful in improving the process for handling complaints
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Figure: Sample Check sheet
Scatter diagram
A scatter diagram helps to show if there is a relationship between two variables
The closer data points are to a diagonal line, the more closely the two variables are related
Figure: Sample Scatter Diagram
Histograms
A histogram is a bar graph of a distribution of variables
Each bar represents an attribute or characteristic of a problem or situation, and the height of the
bar represents its frequency
Figure: Sample Histogram
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Pareto Charts
A Pareto chart is a histogram that can help you identify and prioritize problem areas
Pareto Analysis is a statistical technique in decision-making used for the selection of a limited
number of tasks that produce significant overall effect.
Pareto analysis is also called the 80-20 rule, meaning that 80 percent of problems are often due
to 20 percent of the causes
Or by doing 20% of the work you can generate 80% of the benefit of doing the entire job.
Flowcharts
Flowcharts are graphic displays of the logic and flow of processes that help you analyze how
problems occur and how processes can be improved
They show activities, decision points, and the order of how information is processed
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Figure: Sample Flowchart
Run Charts
In addition to flowcharts, run charts are also used for stratification, a technique that shows data
from a variety of sources to see if a pattern emerges
A run chart displays the history and pattern of variation of a process over time.
We can use run charts to perform trend analysis and forecast future outcomes based on historical
results
Figure. Sample Run Chart
Statistical Sampling
Statistical sampling involves choosing part of a population of interest for inspection
The size of a sample depends on how representative you want the sample to be
Sample size formula:
Sample size = .25 X (certainty factor/acceptable error)2
Be sure to consult with an expert when using statistical analysis
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Table: Commonly Used Certainty Factors
Six Sigma
Six Sigma is “a comprehensive and flexible system for achieving, sustaining, and maximizing
business success.
Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts,
data, and statistical analysis, and diligent attention to managing, improving, and reinventing
business processes
Basic Information on Six Sigma
The target for perfection is the achievement of no more than 3.4 defects per million
opportunities
The principles can apply to a wide variety of processes
Six Sigma projects normally follow a five-phase improvement process called DMAIC
DMAIC
DMAIC is a systematic, closed-loop process for continued improvement that is scientific and
fact based
DMAIC stands for:
Define: Define the problem/opportunity, process, and customer requirements
Measure: Define measures, then collect, compile, and display data
Analyze: Scrutinize process details to find improvement opportunities
Improve: Generate solutions and ideas for improving the problem
Control: Track and verify the stability of the improvements and the predictability of the solution
How is Six Sigma Quality Control is Unique?
It requires an organization-wide commitment.
Training follows the “Belt” system
Six Sigma organizations have the ability and willingness to adopt contrary objectives, such as
reducing errors and getting things done faster
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It is an operating philosophy that is customer focused and strives to drive out waste, raise levels
of quality, and improve financial performance at breakthrough levels
Six Sigma and Project Management
Joseph M. Juran stated, “All improvement takes place project by project, and in no other way”*
It’s important to select projects carefully and apply higher quality where it makes sense;
companies that use Six Sigma do not always boost their stock values
As Mikel Harry puts it, “I could genetically engineer a Six Sigma goat, but if a rodeo is the
marketplace, people are still going to buy a Four Sigma horse.”
Six Sigma projects must focus on a quality problem or gap between the current and desired
performance and not have a clearly understood problem or a predetermined solution
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Figure: Normal Distribution and Standard Deviation
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Six 9s of Quality
Six 9s of quality is a measure of quality control equal to 1 fault in 1 million opportunities
In the telecommunications industry, it means 99.9999 percent service availability or 30 seconds
of down time a year
This level of quality has also been stated as the target goal for the number of errors in a
communications circuit, system failures, or errors in lines of code
Leadership
As Joseph M. Juran said in 1945, “It is most important that top management be quality-minded.
In the absence of sincere manifestation of interest at the top, little will happen below”
A large percentage of quality problems are associated with management, not technical issues.
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External failure cost: Cost that relates to all errors not detected and corrected before delivery to
the customer
Measurement and test equipment costs: Capital cost of equipment used to perform prevention
and appraisal activities
Activity-4
Identify quality assurance standards and quality control tools of your Project
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Project Human Resource Management
Learning Objectives
◦ Explain the importance of good human resource management on projects, including the
current state and future implications of human resource management, especially on
information technology projects.
◦ Summarize key concepts for managing people by understanding the theories of motivation
and on how people and teams can become more effective.
Project HRM is making the most effective use of the people involved with a project.
Processes include:
◦ Human resource planning: Identifying and documenting project roles, responsibilities, and
reporting relationships.
◦ Acquiring the project team: Getting the needed personnel assigned to and working on the
project.
◦ Developing the project team: Building individual and group skills to enhance project
performance.
◦ Managing the project team: Tracking team member performance, motivating team
members, providing timely feedback, resolving issues and conflicts, and coordinating
changes to help enhance project performance.
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◦ Motivation
◦ Effectiveness
Motivation
Performance = f(A x M x O)
What is Motivation?
Components of Motivation
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Motivation: Intrinsic and Extrinsic
Intrinsic motivation causes people to participate in an activity for their own enjoyment.
Extrinsic motivation causes people to do something for a reward or to avoid a penalty.
Theories of Motivation
Hierarchy of Needs Theory
Theory-X and Theory-Y
Two-Factor Theory (Motivation-Hygiene Theory)
McClelland’s Theory of Needs
Cognitive Evaluation Theory
Goal-Setting Theory
Equity Theory
Expectancy
Maslow developed a hierarchy of needs, which states that people’s behaviors are guided or
motivated by a sequence of needs.
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Managerial Implication: Specify the level of need of each employee
Examples:
◦ Physiological needs: Provide lunch breaks, rest breaks, and wages that are sufficient to
purchase the essentials of life.
◦ Safety Needs: Provide a safe working environment, retirement benefits, and job security.
◦ Social Needs: Create a sense of community via team-based projects and social events.
◦ Esteem Needs: Recognize achievements to make employees feel appreciated and valued.
Offer job titles that convey the importance of the position.
Managerial Implication
If Theory Y holds true:
➢ Decentralization and Delegation
➢ Job Enlargement - Broadening the scope of job
➢ Participative Management
➢ Performance Appraisals – self & peer
If Theory X holds true:
People may not have reached the level of maturity assumed by Theory Y and therefore may need
tighter controls that can be relaxed as the employee develops.
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Herzberg’s Motivational and Hygiene Factors
Frederick Herzberg’s Two factor theory states there are certain factors in the work place that cause
job satisfaction while a separate set of factors cause dissatisfaction.
He distinguished between:
Motivational factors: Achievement, recognition, the work itself, responsibility, advancement, and
growth. These factors produce job satisfaction.
Hygiene factors: Larger salaries, more supervision, and a more attractive work environment. These
factors cause dissatisfaction if not present, but do not motivate workers to do more.
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Hygiene factors are needed to ensure an employee does not become dissatisfied. They do not lead
to higher levels of motivation, but without them there is dissatisfaction.
Motivation factors are needed in order to motivate an employee into higher performance. These
factors result from internal generators in employees. They create Satisfaction. Without them there is
a state of “no satisfaction”.
Managerial Implication:
If objective is to bring satisfaction: provide motivators
If objective is to avoid dissatisfaction: provide hygiene factors
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McClelland’s Acquired-Needs Theory
Specific needs are acquired or learned over time and are shaped by life experiences. The following
are the main categories of acquired needs:
◦ Achievement (nAch): People with a high need for achievement like challenging projects with
attainable goals and lots of feedback.
Provide challenging jobs with frequent feedbacks
◦ Affiliation (nAff): People with high need for affiliation desire harmonious relationships and need
to feel accepted by others
So managers should try to create a cooperative work environment for them.
◦ Power (nPow): People with a need for power desire either personal power (not good) or
institutional power (good for the organization).
Provide institutional power seekers with management opportunities.
Managerial Implications
Achievers:
• Provide them challenging jobs with frequent feedbacks
• Focus on intrinsic motivation
• High achievers are not necessarily good managers.
Affiliation:
• Managers should create a cooperative work environment.
Power:
• Provide institutional power seekers with management opportunities.
• Affiliation and power closely related to managerial success.
• Successful managers are high in need for power and low in need for affiliation.
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Cognitive Evaluation Theory
Providing an extrinsic reward for behavior that had been previously only intrinsically
rewarding tends to decrease the overall level of motivation.
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Communicate an inspiring vision and explain how individual goals relate to accomplishing the vision.
Allow employees to participate in setting the goals.
Behave supportively rather than punitively.
Break a long-term goal (i.e., a yearly goal) into short-term sub-goals
Ensure that employees have the resources required to accomplish the goal.
Equity Theory
Individuals compare their job inputs and outcomes with those of others and then respond to
eliminate any inequities.
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Justice and Equity Theory: Perceived organization justice affects feeling of equity or
Inequity
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Responses to Perceptions of Equity and Inequity
Managerial Implication
➢ Equity is relative
➢ Understanding the role of comparison people is especially crucial.
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Expectancy Theory (Victor Vroom)
The strength of a tendency to act in a certain way depends on the strength of an expectation that the
act will be followed by a given outcome and on the attractiveness of that outcome to the individual.
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IMPLICATIONS OF EXPECTANCY THEORY
Clarify expectancies about effort and levels of performance
Help employees attain desired level of performance, be a coach
Clearly link rewards and performance
Know what types of rewards are desired.
Raise employees’ self-efficacy about meeting goals by:
1. Providing adequate training
2. Role modeling desired behaviors and actions
3. Persuasively communicating confidence in the employees ability to attain the goal
Have employees make a public commitment to the goal.
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Five Bases or Power
Reward
Referent Coercive
Expert Legitimate
1. Formal/positional Power
It is established by an individual’s position in an organization; conveys the ability to coerce or
reward, from formal authority, or from control of information
a. Coercive Power
A power base dependent on fear of negative results
b. Reward Power
Compliance achieved based on the ability to distribute rewards that others view as valuable
c. Legitimate Power
The power a person receives as a result of his or her position in the formal hierarchy of an
organization
2. Personal Power
Stems from an individual’s unique characteristics:
a. Expert Power
Influence based on special skills or knowledge
b. Referent Power
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Based on identification with a person who has desirable resources or personal traits - charisma
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Thamhain and Wilemon’s Ways to Have Influence on Projects
1. Authority: The legitimate hierarchical right to issue orders.
2. Assignment: The project manager's perceived ability to influence a worker's later work
assignments.
3. Budget: The project manager's perceived ability to authorize others' use of discretionary funds.
4. Promotion: The ability to improve a worker's position.
5. Money: The ability to increase a worker's pay and benefits.
6. Penalty: The project manager's ability to cause punishment.
7. Work challenge: The ability to assign work that capitalizes on a worker's enjoyment of doing a
particular task.
8. Expertise: The project manager's perceived special knowledge that others deem important.
9. Friendship: The ability to establish friendly personal relationships between the project manager
and others.
Ways to Influence that Help and Hurt Projects
Projects are more likely to succeed when project managers influence people using:
Expertise
Work challenge
Projects are more likely to fail when project managers rely too heavily on:
Authority
Money
Penalty
Improving Effectiveness: Covey’s Seven Habits
Project managers can apply Covey’s seven habits to improve effectiveness on projects.
Be proactive.
Begin with the end in mind.
Put first things first.
Think win/win.
Seek first to understand, then to be understood.
Synergize.
Sharpen the saw.
Empathic Listening and Rapport
Good project managers are empathic listeners, meaning they listen with the intent to understand.
Before you can communicate with others, you have to have rapport, which is a relation of
harmony, conformity, accord, or affinity.
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Mirroring is the matching of certain behaviors of the other person, and is a technique used to
help establish rapport.
Acquiring the Project Team
Acquiring qualified people for teams is crucial.
The project manager who is the smartest person on the team has done a poor job of
recruiting!
Staffing plans and good hiring procedures are important, as are incentives for recruiting and
retention.
Developing the Project Team
The main goal of team development is to help people work together more effectively to
improve project performance.
It takes teamwork to successfully complete most projects.
General Advice on Teams
Be patient and kind with your team.
Fix the problem instead of blaming people.
Establish regular, effective meetings.
Allow time for teams to go through the basic team-building stages.
Limit the size of work teams to three to seven members.
Plan some social activities to help project team members and other stakeholders get to know
each other better.
Stress team identity.
Nurture team members and encourage them to help each other.
Take additional actions to work with virtual team members.
Project managers must:
Treat people with consideration and respect.
Understand what motivates people.
Communicate carefully with people.
Focus on your goal of enabling project team members to deliver their best work.
Activity - 5
Identify and document project roles, responsibilities, and reporting relationships. Motivation and
reward systems of employees of the project.
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Project Procurement Planning/Management
Learning Objectives
Understand the importance of project procurement management and the increasing use of
outsourcing for information technology projects.
Describe the work involved in planning purchases and acquisitions for projects, the contents of a
procurement management plan and contract statement of work, and calculations involved in a
make-or-buy analysis.
Discuss what is involved in planning contracting, including the creation of various procurement
documents and evaluation criteria for sellers.
Why Outsource?
To reduce both fixed and recurrent costs.
To allow the client organization to focus on its core business.
To access skills and technologies.
To provide flexibility.
To increase accountability.
Contracts
• A contract is a mutually binding agreement that obligates the seller to provide the specified
products or services and obligates the buyer to pay for them.
• Contracts can clarify responsibilities and sharpen focus on key deliverables of a project.
• Because contracts are legally binding, there is more accountability for delivering the work as
stated in the contract.
• A recent trend in outsourcing is the increasing size of contracts.
Types of contracts
Different types of contracts can be used in different situations:
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Fixed price or lump sum contracts: Involve a fixed total price for a well-defined product or service.
Cost reimbursable contracts: Involve payment to the seller for direct and indirect costs.
Time and material contracts: Hybrid of both fixed price and cost reimbursable contracts, often
used by consultants.
Unit price contracts: Require the buyer to pay the seller a predetermined amount per unit of
service.
A single contract can actually include all four of these categories, if it makes sense for that
particular procurement.
Procurement management: Acquiring goods and services for a project from outside the performing
organization.
Project Procurement Management Processes Project
1.
Planning Purchases and Acquisitions
Identifying which project needs can best be met by using products or services outside the
organization.
If there is no need to buy any products or services from outside the organization, then there is no
need to perform any of the other procurement management processes.
Make-or-Buy Example
Assume you can lease an item you need for a project for $800/day. To purchase the item, the cost
is $12,000 plus a daily operational cost of $400/day.
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How long will it take for the purchase cost to be the same as the lease cost?
I. Scope of Work: Describe the work to be done to detail. Specify the hardware and
software involved and the exact nature of the work.
II. Location of Work: Describe where the work must be performed. Specify the location of
hardware and software and where the people must perform the work
III. Period of Performance: Specify when the work is expected to start and end, working
hours, number of hours that can be billed per week, where the work must be performed,
and related schedule information.
IV. Deliverables Schedule: List specific deliverables, describe them in detail, and specify
when they are due.
V. Applicable Standards: Specify any company or industry-specific standards that are
relevant to performing the work.
VI. Acceptance Criteria: Describe how the buyer organization will determine if the work is
acceptable.
VII. Special Requirements: Specify any special requirements such as hardware or software
certifications, minimum degree or experience level of personnel, travel requirements,
and so on.
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2. Planning Contracting
Involves preparing several documents needed for potential sellers to prepare their responses and
determining the evaluation criteria for the contract award.
• Request for Proposals: Used to solicit proposals from prospective sellers.
A proposal is a document prepared by a seller when there are different approaches
for meeting buyer needs.
• Requests for Quotes: Used to solicit quotes or bids from prospective suppliers.
A bid, also called a tender or quote (short for quotation), is a document prepared by
sellers providing pricing for standard items that have been clearly defined by the
buyer.
Evaluation Criteria
It’s important to prepare some form of evaluation criteria, preferably before issuing a formal
RFP or RFQ.
Beware of proposals that look good on paper; be sure to evaluate factors, such as past
performance and management approach.
Can require a technical presentation as part of a proposal.
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Figure: Sample Proposal Evaluation Sheet
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6. Closing the Contract
Involves completing and settling contracts and resolving any open items.
The project team should:
Determine if all work was completed correctly and satisfactorily.
Update records to reflect final results.
Archive information for future use.
The contract itself should include requirements for formal acceptance and closure.
Activity - 7
Set supplier evaluation and selection criteria for your project
Develop make or buy decision of your project
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Project Communications Management
Learning Objectives
o Understand the importance of good communications in projects.
o Explain the elements of project communications planning, including how to create a
communications management plan and perform a stakeholder communications analysis.
o Describe various methods for distributing project information
Communications Planning
o Every project should include some type of communications management plan, a
document that guides project communications.
o Creating a stakeholder analysis for project communications also aids in communications
planning.
Communications Management Plan Contents
o Stakeholder communications requirements.
o Information to be communicated, including format, content, and level of detail.
o The people who will receive the information and who will produce it.
o Suggested methods or technologies for conveying the information.
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o Frequency of communication.
o Escalation procedures for resolving issues.
o Revision procedures for updating the communications management plan.
o A glossary of common terminology.
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Importance of Face-to-Face Communication
Research says that in a face-to-face interaction:
▪ 58 percent of communication is through body language.
▪ 35 percent of communication is through how the words are said.
▪ 7 percent of communication is through the content or words that are spoken.
▪ Pay attention to more than just the actual words someone is saying.
▪ A person’s tone of voice and body language says a lot about how he or she really feels.
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Personal Preferences Affect Communication Needs
▪ Introverts like more private communications, while extroverts like to discuss things in public.
▪ Intuitive people like to understand the big picture, while sensing people need step-by-step
details.
▪ Thinkers want to know the logic behind decisions, while feeling people want to know how
something affects them personally.
▪ Judging people are driven to meet deadlines while perceiving people need more help in
developing and following plans.
Performance Reporting
Performance reporting keeps stakeholders informed about how resources are being used to achieve
project objectives.
▪ Status reports describe where the project stands at a specific point in time.
▪ Progress reports describe what the project team has accomplished during a certain period of
time.
▪ Forecasts predict future project status and progress based on past information and trends.
Managing Stakeholders
▪ Project managers must understand and work with various stakeholders.
▪ Need to devise a way to identify and resolve issues.
▪ Two important tools include:
▪ Expectations management matrix
▪ Issue log
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Expectations Management Matrix
Issue Log
Activity- 6
Identify the communication tools of your project
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Project Risk Management
Learning Objectives
Understand what risk is and the importance of good project risk management.
Discuss the elements involved in risk management planning and the contents of a risk
management plan.
List common sources of risks in information technology projects.
Describe the risk identification process, tools, and techniques to help identify project risks, and
the main output of risk identification, a risk register.
Discuss the qualitative risk analysis process and explain how to calculate risk factors, create
probability/impact matrixes, apply the Top Ten Risk Item Tracking technique, and use expert
judgment to rank risks.
Definition
▪ A dictionary definition of risk is “the possibility of loss or injury”
Definition of Project Risk
• An uncertain event or condition that, if it occurs, has a positive or negative effect on the
project objectives.
▪ The goal of project risk management is to minimize potential negative risks while maximizing
potential positive risks
▪ Risk management helps to improve project success by helping select good projects, determining
project scope, and developing realistic estimates.
Risk Utility
Risk utility or risk tolerance is the amount of satisfaction or pleasure received from a potential
payoff.
• Utility rises at a decreasing rate for people who are risk-averse.
• Those who are risk-seeking have a higher tolerance for risk and their satisfaction increases when
more payoffs are at stake.
• The risk-neutral approach achieves a balance between risk and payoff.
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Figure: Risk Utility Function and Risk Preference
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Risk Identification Tools and Techniques
Risk identification is the process of understanding what potential events might hurt or enhance a
particular project.
Risk identification tools and techniques include:
• Brainstorming
• The Delphi Technique
• Nominal Group Technique
• Interviewing
• SWOT analysis
• Cause and Effect Diagram
• Influence Diagram
Brainstorming
Brainstorming is a technique by which a group attempts to generate ideas or find a solution for a
specific problem by amassing ideas spontaneously and without judgment.
An experienced facilitator should run the brainstorming Chapter.
Be careful not to overuse or misuse brainstorming.
Psychology literature shows that individuals produce a greater number of ideas working alone than
they do through brainstorming in small, face-to-face groups.
Group effects often inhibit idea generation.
Delphi Technique
The Delphi Technique is used to derive a consensus among a panel of experts who make
predictions about future developments. It provides independent and anonymous input regarding
future events.
It uses repeated rounds of questioning and written responses and avoids the biasing effects possible
in oral methods, such as brainstorming.
Interviewing
Interviewing is a fact-finding technique for collecting information in face-to-face, phone, e-mail, or
instant-messaging discussions.
Interviewing people with similar project experience is an important tool for identifying potential
risks.
SWOT Analysis
SWOT analysis (strengths, weaknesses, opportunities, and threats) can also be used during risk
identification. It helps identify the broad negative and positive risks that apply to a project.
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Influence Diagram
It is a simple visual representation of a decision problem.
This simple influence diagram shows how decisions about the marketing budget and product price
influence expectations about its uncertain market size and market share. These, in turn, influence
costs and revenues, which affect the overall profit.
The diagram provides a high-level qualitative view under which the analyst builds a detailed
quantitative model.
Risk Register
The main output of the risk identification process is a list of identified risks and other information
needed to begin creating a risk register.
A risk register is:
• A document that contains the results of various risk management processes and that is often
displayed in a table or spreadsheet format.
• A tool for documenting potential risk events and related information.
Risk events refer to specific, uncertain events that may occur to the detriment or enhancement of the
project.
• Risk Register Contents
• An identification number for each risk event.
• A rank for each risk event.
• The name of each risk event.
• A description of each risk event.
• The category under which each risk event falls.
• The root cause of each risk.
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• Triggers for each risk; triggers are indicators or symptoms of actual risk events.
• Potential responses to each risk.
• The risk owner or person who will own or take responsibility for each risk.
• The probability and impact of each risk occurring.
• The status of each risk.
Table. Sample Risk Register
No. Rank Risk Description Category Root Triggers Potential Risk Probability Impact Status
Cause Responses Owner
R44 1
R21 2
R7 3
Risk Analysis
Qualitative Risk Analysis
Assess the likelihood and impact of identified risks to determine their magnitude and priority.
Tools and techniques include:
• Probability/impact matrixes
• The Top Ten Risk Item Tracking
• Expert judgment
Probability/Impact Matrix
A probability/impact matrix or chart lists the relative probability of a risk occurring on one side of
a matrix or axis on a chart and the relative impact of the risk occurring on the other.
List the risks and then label each one as high, medium, or low in terms of its probability of
occurrence and its impact if it did occur.
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Figure: Sample Probability/Impact Matrix
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Table: Example of Top Ten Risk Item Tracking
Monthly Ranking
Risk Item This Last Number Risk Resolution
of Months Progress
Month Month
Inadequate 1 2 4 Working on revising the
planning entire project plan
Poor definition 2 3 3 Holding meetings with
of scope project customer and
sponsor to clarify scope
Absence of 3 1 2 Just assigned a new
leadership project manager to lead
the project after old one
quit
Poor cost 4 4 3 Revising cost estimates
estimates
Poor time 5 5 3 Revising schedule
estimates estimates
Expert Judgment
• Many organizations rely on the intuitive feelings and past experience of experts to help
identify potential project risks.
• Experts can categorize risks as high, medium, or low with or without more sophisticated
techniques.
• Can also help create and monitor a watch list, a list of risks that are low priority, but are still
identified as potential risks.
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Sensitivity Analysis
Sensitivity analysis is a technique used to show the effects of changing one or more variables on an
outcome.
For example, many people use it to determine what the monthly payments for a loan will be given
different interest rates or periods of the loan, or for determining break-even points based on different
assumptions.
Spreadsheet software, such as Excel, is a common tool for performing sensitivity analysis.
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Table: General Risk Mitigation Strategies for Technical, Cost, and Schedule Risks
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Project Integration Management
Many new project managers have trouble looking at the “big picture” and want to focus on too many
details
Project Integration Management Processes
– Develop the project charter
– Develop the project management plan
– Direct and manage project execution
– Monitor and control project work
– Perform integrated change control
– Close the project or phase
Figure: Project Integration Management Summary
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Monitoring and Controlling Project Work
• Changes are inevitable on most projects, so it’s important to develop and follow a process to
monitor and control changes
• Monitoring project work includes collecting, measuring, and disseminating performance
information
• A baseline is the approved project management plan plus approved changes
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Table: Suggestions for Performing Integrated Change Control
Activity-9
Summarize your project plan Micro Soft Project Software
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Chapter 4: Project Termination and Evaluation
❖ Project Termination
Project termination (sometimes called project closeout) is the last phase in the project lifecycle.
Closeout begins when the user accepts the project deliverables and the project oversight authority
concludes that the project has met the goals established.
❖ Project Evaluation
What is Project Evaluation?
Evaluation is judging, appraising, or determining the worth, value, or quality of a project, whether it
is proposed, on going, or completed. This is done in terms of its relevance, effectiveness, efficiency,
and impact. (Relevance refers to the appropriateness and importance of goals and objectives in
relation to assessed needs. Effectiveness refers to the degree to which goals have been achieved.
Efficiency refers to the cost-effectiveness of activities. And impact refers to the broad, long-term
effects of project.)
There are many different reasons why evaluations are carried out. Some good reasons are:
- To measure progress and effectiveness;
- To look at costs and efficient use of resources;
- To find out if it is necessary to change the way things are being done; and
- To learn from what has happened in order to make plans for the future.
Uses of evaluation
o To improve performance
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o To make choices and decisions
o To learn lessons
o To increase accountability
✓ Appraisal or ex-ante evaluation- before a project starts, or in the very early stages
✓ On-going evaluation
✓ Mid-term evaluation
✓ Ex-post evaluations
These happen some time after a project has finished. They look at impact and sustainability.
They also consider broader 'policy' issues.
Evaluation Criteria
The criteria that are commonly used as a focus for shaping evaluation questions are:
Detailed planning should start well in advance. Check that the plans for evaluation made at the
assessment stage of the project are still valid; it may be that the passage of time and the development
of the project, or the quality of monitoring, make the original plans redundant.
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Many different people will use the findings of the evaluation exercises. It is therefore necessary to
determine at the beginning how the results will be used. This will help to determine the objectives of
the exercise, what information is needed, what approach should be used, how the information should
be gathered, what degree of accuracy is needed, and how and to whom the results will be presented.
An internal evaluation is used within the organization to bring about improvements in project
implementation. An external evaluation is undertaken by outside evaluators, often at the request of
donor agencies, because they are usually considered to be reliable, objective, and unbiased.
Step 3: Preparation
In this step, the ground preparations are made for the monitoring or evaluation exercise. This
includes finalizing the objectives of the exercise, looking at information already gathered, and
deciding on data collection and analysis methods.
• Objectives
For any monitoring or evaluation exercise, objectives should be set depending on the overall purpose
of the exercise, and for whom it is being conducted. The objectives should always be SMART.
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• Are the objectives of the project still relevant?
• Is the project cost-effective?
• Is the project sustainable?
Key questions
Next, key questions to be answered during the exercise should be developed. Key questions should
focus the exercise on the objectives of the project or the part of the project being analyzed.
Key questions must always be realistic. Therefore, when formulating the questions for the exercise,
it is important to take into account the resources available to answer the question, the importance to
the project of answering the question, and what is already known about the issue.
Indicators are integral to the formulation of key questions and how they will be answered.
Indicators, which should be developed during the project planning stage, are very useful for the
evaluation of the project. These indicators can measure project processes, progress made in
achieving the objectives and the project’s impact.
• Background information
Background information about the project is useful when planning evaluation exercise. Worthwhile
information to examine includes: a) details about the issue, such as information about the local
context, services and resources that already exist, and how the issue affects the target group; and b)
details about the project, such as its history, its progress and process, and its impact thus far.
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• What sort of communication skills and language abilities are needed for interviewing
people?
• What equipment will be needed, and how will it be obtained?
The TOR set out the formal agreements about the evaluation, its scope, purpose, and the methods to
be used, and outline the specific tasks of the evaluation team leader. Those managing the evaluation
process are responsible for drawing up the TOR.
Good TOR pave the way for a good evaluation, acting as a point of reference throughout. They
should be drawn up well in advance of the date of the evaluation, in order to allow adequate time for
planning, selecting and employing evaluators, sorting out the logistics, and briefing everyone
involved. The TOR should reflect both the needs of staff and others involved to learn from their
experience, and the need of the organizations to improve performance and accountability. Evaluators
may help to draw up the TOR and should be asked to review and comment on them before beginning
the evaluation. A good evaluator is likely to raise questions about the initial TOR.
Sample Contents of the TOR
Terms of reference should cover:
1. Background: purpose and objectives of activity, work, project or program to be evaluated.
2. Objectives: major issues to be addressed, what the evaluation is expected to find out, the
questions to be answered.
3. Methods: visits, review of documentary material, data collection, interviews, workshops.
4. Timetable: schedule for the major activities (e.g. pre-visits, field work, writing, feedback) of the
evaluation and its completion date.
5. Products: the products required from the evaluation exercise, (e.g. report, workshop), who is
responsible for producing them, who will present them, who the reports are for. The length,
format and language of the main report and executive summary should be indicated. The team
leader is usually the person responsible for the completion of the formal report. The process of
follow-up should be noted.
6. The evaluation team: the person specifications (mandatory and desired) of each team member,
the number of team members, the ideal combination of skills and experience at team level
(including language requirements, gender balance, and understanding of gender issues).
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7. Budget and logistics: details of the main expenses (e.g. salaries, expenses, travel, lodging,
communications). Financial reporting requirements (e.g. reimbursement for actual, or perdiems).
Logistical support being offered (e.g. vehicles, office space, computer facilities, secretarial help),
and how, where and by whom this will be made available.
8. Use of information: extent of confidentiality, ownership of the report.
9. Terms of reference: for evaluation leader the team leader of the evaluation must be given an
individual TOR outlining his/her specific tasks and responsibilities, particularly any writing and
managerial tasks.
It should be noted that there is no single correct way of conducting evaluation exercise. Ideally, use
more than one method for collecting data. Two or three methods that complement each other can
provide the most complete picture possible.
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Recommendations should:
• Propose a course of action
• Demonstrate how, when, and by whom the actions should be taken
• Mention the inputs and resources required for the action
• Discuss obstacles that may be faced in implementation
• Propose follow-up and monitoring systems necessary for ensuring that action is taken
Front cover
• Name of organization, name of project, location
Summary page
• Name of organization, project, and location
• Who carried out the evaluation
• Purpose of the exercise
• Dates it was undertaken
• Date of report completion
• Acknowledgments of those who contributed
Table of contents
Executive summary
• A brief summary of the report, including the goal and objectives of the exercise, who it
was for, and how it was undertaken. In addition, conclusions and recommendations
should be listed.
Background information
• Information about the local context (political, economic, social) as well as project history,
objectives, etc.
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Purpose and methodology of the evaluation
• Objectives and key questions
• Data collection methods chosen
• Data collection process, including who was interviewed, where, the duration, etc.
• Any data collection constraints and how they were overcome
Results
• What the findings were (categorized into subheadings)
• Utilization of case studies and quotes
Conclusions
• Based on the results, draw main conclusions which reflect the original objectives and key
questions
Recommendations
• What should be done and how it should be undertaken
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