MGT 550: Introduction to Project Management

MGT 550 Introduction to Project Management

Chapter 5 Project Planning

Wesley J. Howe School of Technology Management

Course Development Team Members: Michael Poli Celia Desmond, PMP David Keeney, PMP, CQM, CPDT
March 31, 2002 For academic use only. 1

MGT 550: Introduction to Project Management

Copyright Information
The slides in this file are provided to faculty instructing MGT 500 on behalf of the Stevens Institute of Technology. Use is restricted to academic endeavors associated with the delivery of MGT 550 to students properly enrolled at the Stevens Institute of Technology. All other rights are reserved by the original owners of materials contained in this program. The slides contain copyrighted material that has been reproduced and/or adapted to the course syllabus under the doctrine of fair use for academic purposes. All slides in this course are copyrighted by the original source. Requests to reproduce materials for other purposes should be directed to the copyright owner identified in the bibliography that will be made available to faculty.

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MGT 550: Introduction to Project Management

Planning Process Group
Core Processes
5.2 5.2 Scope Scope Planning Planning 5.3 5.3 Scope Scope Definition Definition 6.1 6.1 Activity Activity Definition Definition 7.1 7.1 Resource Resource Planning Planning 6.2 6.2 Activity Activity Sequencing Sequencing 6.3 6.3 Activity Activity Duration Duration Estimating Estimating 7.2 7.2 Cost Cost Estimating Estimating 11.1 11.1 Risk Risk Management Management Planning Planning 6.4 6.4 Schedule Schedule Development Development 7.3 7.3 Cost Cost Budgeting Budgeting 4.1 4.1 Project Project Plan Plan Development Development

Facilitating Processes
8.1 8.1 Quality Quality Planning Planning 9.1 9.1 Organizational Organizational Planning Planning 10.1 10.1 Communications Communications Planning Planning 9.2 9.2 Staff Staff Acquisition Acquisition 11.2 11.2 Risk Risk Identification Identification 11.3 11.3 Qualitative Qualitative Risk Risk Analysis Analysis 12.1 12.1 Procurement Procurement Planning Planning 11.4 11.4 Quantitative Quantitative Risk Risk Analysis Analysis 12.2 12.2 Solicitation Solicitation Planning Planning 11.5 11.5 Risk Risk Response Response Planning Planning

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PMBOK, p 33

MGT 550: Introduction to Project Management

Module 5: Project Planning

Purpose: prepare students to identify and understand some important elements in a project plan.

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MGT 550: Introduction to Project Management

Module 5 Objectives
Scope Planning
Describe the scope planning process Emphasize the scope statement and the scope management plan as important outputs of this process Describe the elements of a scope statement Describe the elements of a scope management plan Explain why it is important to understand scope stability before planning how the scope will be accomplished

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MGT 550: Introduction to Project Management

5.2 Scope Planning

Initiating Process Group Project Charter Business need Product description Constraints Assumptions Planning Process Group
5.2 Scope Planning 5.2.3.1 5.1 Scope Statement Initiation 5.2.3.2 5.1 Supporting Initiation Detail 5.2.3.3 5.1 Scope Management Initiation Plan 5.3 Scope Definition 5.3.3.1 5.1 WBS Initiation 5.3.3.2 5.1 Scope Statement Initiation Update

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For academic use only.

PMBOK, p 52

MGT 550: Introduction to Project Management

Documented basis for making future project decisions and confirming a common understanding among stakeholders of the projects scope.

Scope Statement

Scope Statement Project justification Product description Project deliverables Project objectives for Cost Schedule Quality Constraints Assumptions
March 31, 2002 For academic use only.

Broad view of what is in the project and not in the project.

PMBOK, p 56

MGT 550: Introduction to Project Management

Defining Objectives
Project objectives must be S.M.A.R.T.
Specific Measurable Attainable Realistic Time bound

Tools and techniques

Product analysis Benefit/cost analysis Identification of alternatives Expert judgement

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Desmond, 2001

MGT 550: Introduction to Project Management

Scope Management Plan

Document describes how the scope will be managed And how changes will be integrated into the project. Assessment of Project Scope Stability Identification and Classification of Scope Changes
As product uncertainty rises, this becomes increasingly important.
PMBOK, p 56
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Probability of change Frequency of change Size of change

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For academic use only.

MGT 550: Introduction to Project Management

Module 5 Objectives
Scope Definition
Describe the WBS and its importance as a planning tool Define and describe decomposition Use decomposition to illustrate the elements of a WBS, including the summary task, work package, milestone, activity, and level-of-effort

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For academic use only.

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MGT 550: Introduction to Project Management

5.3 Scope Definition

Initiating Process Group
5.1 Initiation Charter Business need Product description Constraints Assumptions Scope Justification Product description Deliverables Objectives for Cost Schedule Quality Constraints Assumptions

Planning Process Group

5.2 Scope Planning 5.3 Scope Definition
5.3.3.1 5.1 WBS Initiation 5.3.3.2 5.1 Scope Initiation Statement Updates

6.1 Activity Definition

6.1.3.1 5.1 Activity List Initiation

7.1 Resource Planning

7.1.3.1 5.1 Resource Initiation Requirements 11.1 Risk Mgmt Plan 11.1.3.1 Risk 5.1 Initiation Mgmt. Plan
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Scope Management Plan

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Keeney, PMBOK

MGT 550: Introduction to Project Management

WBS - Typical Branches

Project

Design

Testing

PreProduction

Production

Logistics

Management

3 to 6 Levels Other structures: Project phase, Organization, Client structure, etc.

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Shenhar

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MGT 550: Introduction to Project Management

WBS Rules
Work breakdown structure is deliverable oriented Each set of boxes dropping down from a given element completely describes the box above it Lowest elements must be
assignable independent measurable schedulable budgetable suitable size
Desmond, 2001

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MGT 550: Introduction to Project Management

1. Deliverable 1 from Scope Statement 1. Component 1 of Deliverable 1 1. Element 1 of Component 1 1. Work Package 1 of Element 1 1. Task 1 of Work Package 1 Project Outputs include: 2. Task 2 of Work Package 1 3. Task n of Work Package 1 Deliverable 2. Work Package 2 of Element 1 Components of Deliverable 3. Work Package n of Element 1 2. Element 2 of Component 1 Elements of Component 1. Work Package 1 of Element 2 Milestones include: 2. Work Package 2 of Element 2 3. Work Package n of Element 2 Event started 2. Component 2 of Deliverable 1 Event completed 1. Work Package 1 of Component 2 2. Work Package 2 of Component 2 Project Activities include: 3. Work Package n of Component 2 Work Packages 2. Deliverable 2 from Scope Statement Tasks in Work Package 1. Work Package 1 of Deliverable 2 1. Task 1 of Work Package 1 2. Task 2 of Work Package 1 3. Task n of Work Package 1 2. Work Package 2 of Deliverable 2 3. Work Package n of Deliverable 2 3. Deliverable n from Scope Statement

WBS Decomposition

The WBS indents a row entry if it is new, difficult, or important.

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Keeney, 2002

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MGT 550: Introduction to Project Management

WBS Sample from MSProject

Milestones filters are used to find key project outputs hidden in the details of the WBS hierarchy.

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For academic use only.

Keeney, 2002

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MGT 550: Introduction to Project Management

Milestone View
Milestones filters and the indentation hierarchy can be used to quickly find specific items in the WBS.

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Keeney, 2002

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MGT 550: Introduction to Project Management

Cards-On-the-Wall Method
Easel Paper Software Development Yarn System Test

Masking Tape

Post-It Notes

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FMC, p 164

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MGT 550: Introduction to Project Management

Gantt Chart View

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MGT 550: Introduction to Project Management

Module 5 Objectives
Resource Planning
Describe the role of resource planning in the development of bottom-up cost estimates

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MGT 550: Introduction to Project Management

WBS, OBS, RBS, and CBS

1.0

WBS

CBS
1.3 Direct Costs Direct Labor Direct Material
Income Statement

1.1 1.2.1

1.2 1.2.2

OBS

A5

D3

S4

Indirect Costs Period Expenses Overhead Burden

Cashflow Statement

D7 S3

Balance Sheet

D1

Imputed Costs
March 31, 2002 For academic use only. Keeney, 2000 20

MGT 550: Introduction to Project Management

Module 5 Objectives
Project Quality Planning
Describe the differences between quality assurance, quality control, and scope verification Reinforce the need to have measurements that can be used to predict and to confirm success against project objectives

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For academic use only.

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MGT 550: Introduction to Project Management

Project Quality
8.1 Quality Planning 8.2 Quality Assurance 8.3 Quality Control

Competitive Benchmarking
QFD Robust Design, Taguchi Methods

Statistical Quality Control 6 Quality

Continuous Improvement Demings Fourteen Points, Jurans Trilogy Total Quality Management (TQM)
March 31, 2002 For academic use only.

Keeney, 2001

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MGT 550: Introduction to Project Management

Project Quality Vocabulary

Quality Planning
Identifying which quality standards are relevant to the project and determining how to satisfy them.

Quality Assurance
Evaluating overall project performance on a regular basis to provide confidence that the project will satisfy the relevant quality standards.

Quality Control
Monitoring specific project results to determine of they comply with relevant quality standards and identifying ways to eliminate causes of unsatisfactory performance.

Quality Management
Determining and implementing the quality policy.
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MGT 550: Introduction to Project Management

5.4 Scope Verification

5.4.1 Inputs
Work Results Product Documentation WBS Scope Statement Project Plan

5.4.2 Tools & Techniques

Inspection

5.4.3 Outputs
Formal Acceptance

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For academic use only.

PMBOK, p 52

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MGT 550: Introduction to Project Management

Module 5 Objectives
Risk Management Planning
Describe the need to ensure that the type, level and visibility of risk management activities are commensurate with the risk and importance of the project

Risk management is the process of systematically identifying, assessing, and providing for risks

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MGT 550: Introduction to Project Management

Dealing with Risk

Project Managers prepare for the potential occurrence of known unknowns by building: Contingency plans Contingency budget Contingency time Project Managers prepare for the potential occurrence of unknown unknowns by building: Managerial reserve account
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MGT 550: Introduction to Project Management

Risk Response Development

Enhancement steps for opportunities Responses to threats Avoidance (elimination of threat) Mitigation (reduce probability) Transference (buy insurance, use contract) Acceptance (active or passive)

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PMBOK, p 140

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MGT 550: Introduction to Project Management

Avoidance
Eliminating a specific threat, usually by eliminating the cause Change technology?
If risk is due to new technology, use the old, or vice versa.

Remove the risky deliverable Perhaps even decline the project

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Desmond, 2001

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MGT 550: Introduction to Project Management

Mitigation
Reducing the expected monetary value of a risk event by:
lowering the probability of occurrence, or reducing its effect e.g. Choosing a known technology or an experienced alliance partner rather than taking the dangerous road

Could do this via

tighter project controls further investigation etc.
March 31, 2002 For academic use only.

Desmond, 2001

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MGT 550: Introduction to Project Management

Transfer
Passing the responsibility for dealing with the risk and the impact to another party via insurance pay premium via contracting pay risk premium to contractor transfer risk back to customer

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Desmond, 2001

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MGT 550: Introduction to Project Management

Transfer by Contracting
Select contractors carefully. Ask yourself or the team
What is the source of the risk? Who can best manage it? Does the client want to retain involvement by managing the risk? Can the recipient withstand consequences? Is the risk premium reasonable? Will the risk transfer lead to other risks?
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Desmond, 2001

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MGT 550: Introduction to Project Management

Acceptance
Proceed with the project or activity, recognizing that the risk(s) might occur
Passive acceptance (ignore it) Active acceptance of the consequences

In this case the team must prepare for some risk events to occur, by:
Contingency planning, or Contingency allowances in the budget and schedule
March 31, 2002 For academic use only.

Desmond, 2001

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MGT 550: Introduction to Project Management

Risk Response Planning Depends Upon:

Probability of risk event Impact ($$) Visibility of consequences, such as publicity Amount of information available Manageability of risk Importance or benefit of the project or deliverable Risk tolerance of the various stakeholders
March 31, 2002 For academic use only.

Desmond, 2001

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MGT 550: Introduction to Project Management

Risk Management Matrix Example

Initial Risk Impact Risk Description Management Strategy Residual Risk Human Interaction Prototype User Interface Early and Interfaces Involve Real Extensive and Users (Prototype) Unknown Set Up Project Project Review Meetings Communications and Newsletter Any High Risk ELIMINATE NO MATTER WHAT STRATEGY

M/L

NONE

H/M

Any High Risk

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Desmond, 2001

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MGT 550: Introduction to Project Management

Reading Assignments
From Chapter 5
Text
Pp 182 209

For Chapter 6
Text
Pp 226 248 Pp 252 257

March 31, 2002

For academic use only.

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