PROJECT MANAGEMENT

Presented by:
John Rakos, MSc, PMP
President, John J. Rakos &
Associates Consultants Ltd.
John J. Rakos is available to teach or
consult in any topic presented in this
seminar.

Module 1 - Introduction

INTRODUCTION
Reference sources
A Guide to the Project Management Body of Knowledge (2003). The
Project Management Institute. http://www.pmi.org
Rakos, John J. et al, A Practical Guide to Project Management
Documentation, Wiley, 2004
Kerzner, Harold. Project Management: A Systems Approach to
Planning, Scheduling and Controlling. 6th ed. John Wiley & Sons,
1998.

Rakos, John J. Software Project Management for Small to Medium

Sized Projects. Prentice-Hall, 1990.

Module 1 - Introduction

INTRODUCTION
The Value of Project Management

Allows for excellent organization and tracking

Better control and use of resources
Reduces complexity of inter-related tasks
Allows measurement of outcome versus plans
Early identification of problems and quick
correction

Module 1 - Introduction

INTRODUCTION
PMBOKTM Knowledge Areas
Based on the Project Management Institutes Project
Management Body of Knowledge: PMBOK1
Nine knowledge areas:
This webinar:

Scope, Time, Cost, Risk, Integration

-- Next webinar:
Quality, Procurement,
Communications,
Human Resources, Integration
Module 1 - Introduction

INTRODUCTION
PMP Certification
Internationally accepted accreditation
Get certification
3 (5 without degree) years experience
35 hours training
4 hour, 200 questions, multiple choice exam!
Have to be re-certified every 3 years
60 PDUs
Attending a conference
Attending course
PMI membership
Publications
PM work

Module 1 - Introduction

INTRODUCTION
What is a Project?
A project is a temporary endeavor undertaken to create a
unique product or service
- A Guide to the Project Management Body of Knowledge
(PMBOK), Project Management Institute, 2003

One time
Limited funds/time
Specific resources utilized
Performed by people - Single or multi-person
team
Planned, controlled
Specific Deliverables
Module 1 - Introduction

INTRODUCTION
The Triple Constraint of Projects
On Time, Budget, Quality = Required Scope

Time

Cost

Quality

Integration
Trade Offs

Module 1 - Introduction

INTRODUCTION
Project Life Cycle
Concept Planning Execution/Control
Definition | Analysis
20%

Closing

|Design|Build|Test|Accept| Implement|
60%

5%

Operation

15%

Percentages and graph refer to the amount of effort (people)

In IT projects = 90-95% of cost!

Module 1 - Introduction

Project Planning
Write a Plan Containing
1. Steps required to accomplish the project objectives
2. Tasks needed to be done at each step (using Work Breakdown
Structures)
3. Estimate of how much effort each task requires
4. The resources required for each task
5. (Given 3. and 4.) Calculation of how long each task/step will take
6. (Given 4. and 5.) Calculation of task, step and project costs
7. The inter-dependencies of tasks
8. The schedule for each task and the whole project (Milstones,
Deliverables, payments)

Module 1 - Introduction

Project Planning: set expectations of Stakeholders

Stakeholders
Contractors

Project Sponsor

Users

Project Leader

Project
Manager
Finance

Procurement

Systems
Engineering

Support

Sales

Module 1 - Introduction

Maintenance

IM/
IT

10

Project Planning: Time and Cost Estimate

Iterative
Accuracy
Estimates become more accurate
Initiation
Definition

Planning
Analysis
+15

+25%

Execution
Design

Closing

+10

0
-50

-25

-75%
Preliminary Plan

Proposal Plan

Final Plan
Module 1 - Introduction

Revised Plan
11

Project Management
Module 2:
Scope Management

Module 1 - Introduction

12

Project Scope Planning

Scope Management
Ensuring that the project includes all the work
required, only the work required.
Dividing the work into major pieces, then
subdividing into smaller, more manageable
pieces.

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13

Work Breakdown Structure - Formats

1. Organization Chart Method
0.
Title

1.
2.
Major Phase 1 Major Phase 2

1.1
Section 1
of Phase 1

1.2
Section 2
of Phase 1

3.
Major Phase 3

1.3
Section 3
of Phase 1
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Work Breakdown Structure - Formats

2. Outline Method
0. TITLE
1.
1.1
1.2
1.3
2.
...
etc.

MAJOR PHASE 1
S1 OF PHASE1
S2 OF PHASE1
S3 OF PHASE1
MAJOR PHASE 2

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WBS - Typical Tasks

Detailed WBS Example

for procuring an
Equipment System
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Work Breakdown Structure

Summary (Top Level) WBS

Summary and Detail tasks, or

Parent and Child tasks (Work Package)
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Work Breakdown Structure

Using the Work Breakdown Structure
1. Estimate and schedule the work (Durations, precedences on WBS)
2. Organize and schedule resources (resource allocated WBS)
3. Assign responsibilities (Resource ramp-up, resource allocated
WBS)
4. Estimate and allocate costs and budgets (costed WBS)
5. Add up costs to different levels

Task
Levels on the WBS (phase, account/contract)
Cost account
Total project

6. Get resource commitments

7. Schedule start <--> end dates
8. Track expenditures, schedules and performance
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18

Project Management
Module 3:
Project Time Planning

Module 1 - Introduction

19

Project Time Planning

Estimating Effort: 3 Methods
1. Professional Judgment
Expert picks a number (out of the air!)
Requires an expert
Requires experience
Good memory
May ignore people
VERY RELIABLE FOR THEMSELVES

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20

Project Time Planning

Estimating Efforts (contd)
2. History

Look at tables of past actuals on major tasks

Interpolate
Requires professional judgment
Requires good history (which changes!)

3. Formula
3.1 Variables

Determine major variable factors (task, person)

Using measurement determine formula of factors
Interview and plug into formula

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21

Project Time Planning

Estimating Efforts (contd)
3.2 Function Points
Determine smallest pieces (function points) of project.
Using measurement establish time for each one.
For new project, break into
function points; add up
times, then multiply for worker productivity.

(Possibly: Junior x 2, Average x 1, Senior x 0.5)

FORMULA IS BEST (IN THEORY).
IN REALITY,____________ BEST.
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22

Estimating use of History

Ratios for Systems project
SYSTEMS ACTIVITIES

DUR

EFFORT

SYSTEM SPECIFICATIONS
SYSTEM DESIGN
SOFTWARE REQUREMENTS
SOFTWARE PRELIMINARY DESIGN
SOFTWARE DETAILED DESIGN
CODE AND UNIT TEST
SOFTWARE INTEGRATION & TEST
SOFTWARE QUALIFICATION
SYTEM INTEGRATION & QUAL.
WARRANTY AND SUPPORT

11-15%
8-12%
2-4%
5-7%
8-11%
20-28%
10-14%
5-7%
8-12%
N/A

6-10%
6-10%
3-5%
4-6%
9-12%
24-32%
11-15%
2-4%
8-12%
7-10%

MAKE YOUR OWN BASED ON THE MAJOR PHASES/PIECES!

Module 1 - Introduction

23

Scheduling

If Estimate was Effort, must convert it to Duration

Duration = Effort/Resources (sometimes)

Taking into account:

Resource availability
Desire
Skill
Productivity

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24

Scheduling: Requires Duration and Precedents

Two Graphical tools for Scheduling:

1. PERT Chart
Plan (from WBS)
Task Precedent
A
B
A
C
D
C
E
F
E
G
F

Duration
7d
3d
10d
5d
4d
6d
3d

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25

Scheduling
Ordering the Activities: PERT Chart
Arrow Diagramming Method (ADM)
2
B

A
3d
7d
C

10d

D
3

5d

G 3d

4d
4

6d

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26

Scheduling - Gantt Chart

Order of building the Gantt Chart:
Work Breakdown
Estimates (duration)
Dependencies
Resource use

Gantt shows:
Critical Path
Non Critical Path(s)
Early Start/Finish
Late Start/Finish
Slack
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27

Scheduling - Gantt Chart

Module 1 - Introduction

28

Scheduling - Gantt Chart

Gantt (Schedule) Drives
1. Milestones
Clear, concrete, binary events implying progress
For example: Review (with approval), Sign off of a
deliverable, Funds approved
Shown as 0 length task

Try for even frequency

Not too close
Not more than 2 - 3 months apart

Major Point to communicate with

Client
Outside world
Management
Module 1 - Introduction

29

Scheduling - Gantt Chart

Gantt (Schedule) Drives

Training
Meetings
Reviews
Reports
Site preparation
Delivery dates (date to order) for external items
Payment

Module 1 - Introduction

30

Project Management
Module 4:
Resource Assignment
and Cost Planning
Module 1 - Introduction

31

Assigning Resources
Availability
Skills

More experienced people

Less experienced people

Desire
Similar tasks to one person to use learning curve
Assign critical tasks to most reliable people
Tasks that need interaction or are similar
Same person
Two who communicate

Personality and team communication does matter

and again, Availability
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Resource Loading and Optimizing

Gantt with Resource Histogram

Module 1 - Introduction

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Resource leveling - possible rescheduling

Gantt with Resource Histogram

Manual resource leveling: fast vs good vs cheap

Automatic resource leveling: use only as suggestion

Module 1 - Introduction

34

Cost Estimating
Similar to Time Estimating (usually done by the same
person/group that does the Time Estimates)

Calculation of Cost for each WP:

If estimate was duration
Assign human resources

Example:
10 days
2 people

Need Effort = Duration x Resources

E=2x10=20pd

e.g., Resource Cost (RC) = Effort x Rate(includes overhead)

RC=20x$1,000=$20,000
(Possible) Plus Fixed Cost (FC)

e.g., FC = $5,000
Total cost (TC) = Resource cost + Fixed Cost
TC=20,000 + 5,000 = 25,000
Module 1 - Introduction

35

Costed WBS
Use Software to roll costs up the WBS
ID
36

Task Name

Account

Fixed Cost
$0.00

Final Submission

Payment
$0.00

$25,000.00

$0.00

$8,000.00

$0.00

37

Final Design Work

C14

38

Final Plan

C14

39

TB Submission

$0.00

$0.00

40

EPA

$0.00

$0.00

41
42

Software (Subcontract 50-B)

$5,000.00

Total Cost
$33,000.00

$0.00

$0.00

SW Design

$12,000.00

43

Do Preli m SW desig n

S21

44

PDR

45

Do Final SW design

46

CDR

47

SW Construction

48

Code CSC A

S31

49

Code CSC B

50

Integrate&Tst CSCI 1

$0.00
$0.00

S22

$0.00
$0.00
$12,000.00

$0.00
$40,000.00

$133,000.00

$0.00

$62,000.00

$0.00

$20,000.00

$0.00

$0.00
$30,000.00
$0.00

$0.00
$0.00
$70,000.00

$71,000.00

$0.00

$0.00

$6,000.00

$0.00

S31

$0.00

$8,000.00

$0.00

S32

$0.00

$20,000.00

$0.00

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36

Cost Ramp-Up
Use Software to report cash flow
1997
Q3

Q4

1998
Q1

Q2

Q3

Q4

Q1

$400,000.00

$300,000.00

$200,000.00

$100,000.00

Cumulativ e Cost:

$53,920.00

$127,160.00

$274,360.00

Filtered resources

Total:

CPM

Total:

$331,440.00

$349,920.00

Module 1 - Introduction

$368,400.00

$376,500.00

$376,500.00

37

Cost - Sanity checks

Cost Estimate Error Range same as Time Estimate
+75%
25
10
0

-8
-10

-25%
Indicative
PPA
Init Plan

Budget
EPA
Final Plan

Definitive
PDR
Design

PPA - Preliminary Project Approval

EPA - Effective
PDR - Preliminary Design Review
Module 1 - Introduction

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Project Management
Module 5:
Risk Management

Module 1 - Introduction

39

Risk Management
Planning and Control Processes
Risk: anything not in the project plan that may occur
and cause your project to be late, cost more or
compromise its quality/performance.
Risk is an opportunity as well as a threat:

You dont put power brakes on a car to slow it down - you

do so to allow it to go faster.
-Mark Davies, KPMG
We will concentrate on the threat.
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40

Four Steps of Risk Management

1. Identification
Anticipate the risk
List the risks, event triggers, symptoms

2. Analysis
Evaluate probability, impact
Qualitative vs Quantitative

3. Risk Response
Strategy Development to mitigate the risk:
Eliminate the risk or reduce impact
Contingency planning

4. Risk Control

Monitor
Update lists, strategies
Action the contingency plan
Fight the fires

Which is most important??

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Step 1: Risk Identification

Anticipate the Risk
Risk Checklist at Preliminary Planning Time (Risk Taxonomy)

Are we proposing the right solution?

Any risk in technical components?
Performance expectations reasonable?
Is the hardware standard?
How much experience do we have with it?
Is the operating software standard? Well documented?
How much experience do we have with it?
Is the development method standard? Well documented?
How much experience do we have with it?
Any component availability risks?
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Step 1: Risk Identification

Risk Checklist at Preliminary Planning Time (Risk Taxonomy)
(contd)

Does failure of this application affect the customers business?

Is the project over 6 months? 12 months? 24 months?
Does it need over 5 people?
Are we dependent on third party resources? Internal? External?
Who is the project manager?
Who is the project leader/architect?
Are the resources available when needed?
Who is the client?
Have we worked with this client? How is our relationship?
Is client available when needed?
Module 1 - Introduction

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Step 1: Risk Identification: Inputs

Risk Checklists, The WBS, Environment:
NATURAL
ENVIRONMENTS

SENIOR
MANAGEMENT

CORPORATE
POLICY
AND CULTURE

POLITICAL

CORPORATE
PROGRAMS

PROJECT/
PM

& FINANCIAL
TECHNOLOGY

ECONOMIC

REGULATORY
AND LEGAL

HUMAN FACTORS
HEALTH & SAFETY

History of past Similar Projects

Module 1 - Introduction

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Step 2: Risk Analysis

Evaluate Probability and Impact into three levels:
Low, Medium, High:
Probability Criteria:
Probability Rank

Description

High
Medium

Greater than 66% probability of occurring

Low

Less than 33% probability of occurring

34 to 65% probability of occurring

Module 1 - Introduction

45

Step 2: Risk Analysis

Impact Criteria:
Impact Rank
Schedule

Description
High

Medium

Low
Cost

High
Medium

Low

Could add over 25% delay to the completion

of the project
Could add over 10% delay to the completion
of the project
Could add less than 10% delay to the completion of
the project, or delays a non critical deliverable
Could add more than 25% to the project budget
Could add between 10 and 25% to the project budget
Could add less than 10% to the project budget

Quality
Determine a combined impact level based on which constraint is most affected.
Module 1 - Introduction

46

Step 2: Risk Analysis

Draw a Risk Table to Summarize
Wonderful Management Tool/Report
Prob.
Impact

Low

Medium

High

High

3. Lack of skilled staff,

organization slow to hire
adequate staff; may
delay implementation.

2. Time estimate and

funds inadequate for the
scope of this project;
may be late and over
budget.

1. Lack of commitment.
Headquarters may have to
assume more responsibility;
will result in project delay,
cost overruns.

Medium

6. Cannot get office space

for staff; may cause
communication problems,
delaying the execution
phase.

5. Expecting major scope

changes from clients;
may cause delay and
cost escalation.

4. Not enough time spent

planning, lack of
understanding of problem;
may take longer/
cost more than anticipated.

Low
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Step 3: Risk Response

Strategy Development:
Reduce the Probability and/or Impact of the Risk
Risk Mitigation: Reducing the probability and/or impact
Take immediate action. Can be risk avoidance (if
eliminated) or risk reduction (still there, but probability
or impact is reduced).
Contingency Plans
Take action only when the risk is imminent or has
occurred
Or Acceptance (do nothing), depends on Risk Tolerance

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Risk as a Monetary Value

Tempering the Estimate
Estimate range is
ESTIMATE
ESTIMATE + RISK
Try to work within the range, depending on how
crucial the accuracy has to be.

If you can get several estimates

Use the Standard Deviations to give you confidence
levels:
Expected estimate +/- 1 SD gives you 68% confidence
Expected estimate +/- 2 SD gives you 95% confidence
Expected estimate +/- 3 SD gives you 99% confidence

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49

Project Management
Module 6:
Scope/ Time/ Cost Control

Module 1 - Introduction

50

Project Control Scope Control

Scope Change Control
Formal change control
Evaluate cost/time impact
Renegotiate, set expectations
Implement or defer to next release

Configuration Management
Keep track of what changes were made to which
modules
Versioning
Interoperability of modules

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51

Project Control Schedule and Cost

Step 1 - Take a baseline.
Baseline plan: a copy of the plan (WBS with all dates,
assignments, costs).
Used to report progress against the baseline.
Taken at a mutually agreed upon planning point:
Proposal or Analysis completion
+25% to -10% stage
Baseline is (theoretically) not alterable
Unless major scope change occurs.

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Project Control Reporting Schedule using a Tracking Gantt

Double Gantt: Shows Project Schedule Progress vs baseline

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53

Project Control Cost Control/Reporting

Financial Report vs Baseline

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54

Project Management
Module 7:
Conclusions

Module 1 - Introduction

55

Resources Available
To help you Manage your Projects
Training & Learning
Universities
Project Management courses
Major/Masters in Project
Others public
Project Management Institute (PMI)
PMP Certification courses
PMI conferences
250,000 members worldwide
Your own Subject Matter Experts
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56

Resources Available
To help you Manage your Projects

Training & Learning

Internet
PMI.org
Many sites: search on Project Management
NASA
Software Engineering Institute
Software Productivity Center
DOD/Pentagon
Project Management Software (WBS, Schedule, Cost, Resource usage,
Multiple project roll-up, Internet reporting,...)
Microsoft Project
Primavera
Open source: OpenProj

John J. Rakos is available to teach or consult in any topic presented in this

seminar.

Module 1 - Introduction

57

Final Details
Can you be a good project manager?
Ask yourself:
Can I say 'NO'?
Can I attack problems as soon as/even before they
arise?
Can I live unloved?
If you do your job well,
people will wonder what you do!
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