Part II

Project Planning

Copyright 2015 John Wiley & Sons, Inc.

Project Management

6-2
 Chapter 6

Project Activity
and Risk
Planning

Copyright 2015 John Wiley & Sons, Inc.

Initial Project Coordination and the
Project Charter

Early meetings are used to decide on

participating in the project
Used to flesh out the nature of the
project
Outcomes include:
Technical scope
Areas of responsibility
Delivery dates or budgets
Risk management group
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Outside Clients

When it is for outside clients,

specifications cannot be changed without
the clients permission
Client may place budget constraints on
the project
May be competing against other firms

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Project Charter Elements

Purpose
Objectives
Overview
Schedules
Resources
Stakeholders
Risk management plans
Evaluation methods

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The Project Plan Addresses:
The process for managing change
A plan for communicating with and managing stakeholders
Specifying the process for setting key characteristics of
the project deliverable (technically referred to as
configuration management)
Establishing the cost baseline for the project and
developing a plan to manage project costs
Developing a plan for managing the human resources
assigned to the project
Developing a plan for continuously monitoring and
improving project work processes

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The Project Plan Addresses: (cont)
Developing guidelines for procuring project materials and
resources
Defining the projects scope and establishing practices to
manage the projects scope
Developing the Work Breakdown Structure
Developing practices to manage the quality of the project
deliverables
Defining how project requirements will be managed
Establishing practices for managing risk
Establishing the schedule baseline and developing a plan
to manage the projects schedule

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A Whole-Brain Approach to Project
Planning

Project managers typically use left side of

brain- logical and analytical
Should also use right side creative
A whole-brained approach is mind
mapping

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Mind Mapping Advantages

It is a visual approach that mirrors how

human brain records & stores information
It helps tap the creative potential of the
entire project team
helps increase quantity and quality of ideas
Team members find it enjoyable
Helps generate enthusiasm
Helps obtain buy-in from team members

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The WBS: A Key Element

What is to be done
When it is to be started and finished
Who is going to do it

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The WBS: A Key Element (cont)

Some activities must be done

sequentially
Some activities may be done
simultaneously
Many things must happen when and how
they are supposed to happen
Each detail is uncertain and subjected to
risk
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Hierarchical Planning

Major tasks are listed

Each major task is broken down into
detail
This continues until all the activities to be
completed are listed
Need to know which activities depend
on other activities

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The Work Breakdown Structure (WBS)

A hierarchical planning process

Breaks tasks down into successively finer
levels of detail
Continues until all meaningful tasks or
work packages have been identified
These make tracking the work easier
Need separate budget/schedule for each
task or work package
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A Visual WBS

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Steps to Create a WBS

1. List the task breakdown in successive

levels
2. Identify data for each work package
3. Review work package information
4. Cost the work packages
5. Schedule the work packages
6. Continually examine actual resource use
7. Continually examine schedule
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Human Resources

Useful to create a table that shows staff

needed to execute WBS tasks
One approach is a organizational
breakdown structure
Organizational units responsible for each
WBS element
Who must approve changes of scope
Who must be notified of progress
WBS and OBS may not be identical
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Interface Coordination Through
Integration Management

Managing a project requires a great deal

of coordination
Projects typically draw from many parts of
the organization as well as outsiders
All of these must be coordinated
The RACI matrix helps the project
manager accomplish this

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The RACI matrix

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Integration Management

Coordinating the work and timing of

different groups
Interface coordination is the process of
managing this work across multiple
groups
Using multidisciplinary teams to plan the
project
Requires structure

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Managing Projects by Phases and
Phase-Gates

Break objectives into shorter term sub-

objectives
Project life cycle is used for breaking a
project up into component phases
Focus on specific, short-term output
Lots of feedback between disciplines

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Project Risk Management

Projects are risky, uncertainty is high

Project manager must manage this risk
This is called risk management
Risk varies widely between projects
Risk varies widely between organizations
Risk management should be built on the
results of prior projects
Increased interest in risk management

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Risk Management Planning

Need to know the risk involved before selecting

a project
Risk management plan must be carried out
before the project can be formally selected
At first, focus is on externalities
Track and estimate project survival
Project risks take shape during planning
Often handled by project office

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Risk Management Planning

Types of risks
1. Preventable
2. Strategy
3. External

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Risk Identification

Risk is dependent on technology and

environmental factors
The methods include brainstorming,
nominal group techniques, checklists and
attribute listing.
May also use cause-effect diagrams, flow
charts, influence charts, SWOT analysis

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Qualitative Risk Analysis

Purpose is to prioritize risks

A sense of the impact is also needed
Each objective should be scaled and
weighted
Construct a risk matrix
Same approach can be used for
opportunities

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International Project Risk Categories

Cultural
Political
Regional
Virtual

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Quantitative Risk Analysis

More precise than qualitative

Typically more accurate
Three techniques:
1. Failure Mode and Effect Analysis
2. Decision Tree Analysis
3. Simulation

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Failure Mode and Effect Analysis

1. List ways a project can fail

2. Evaluate severity
3. Estimate likelihood
4. Estimate the inability to detect
5. Find the risk priority number (RPN)
(RPN = Severnity Likehood Detection)
6. Consider ways to reduce the S, L, and
D for each cause of failure

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A FMEA Example

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Decision Tree Analysis

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