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MGT 550: Introduction to Project Management

March 31, 2002 1For academic use only.

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, PMPDavid Keeney, PMP, CQM, CPDT





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 endeavorsassociated 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.





5.2Scope

Planning

5.2Scope

Planning

5.3ScopeDefinition

5.3ScopeDefinition

7.1ResourcePlanning

7.1ResourcePlanning

6.1 Activity

Definition

6.1 Activity

Definition

6.2 Activity Sequencing

6.2 Activity Sequencing

6.3 Activity DurationEstimating

6.3 Activity DurationEstimating

6.4Schedule

Development

6.4Schedule

Development

7.3Cost Budgeting

7.3Cost Budgeting

4.1Project PlanDevelopment

4.1Project PlanDevelopment

Core Processes

Facilitating Processes

8.1QualityPlanning

8.1QualityPlanning

9.1Organizational

Planning

9.1OrganizationalPlanning

10.1CommunicationsPlanning

10.1CommunicationsPlanning

9.2Staff

Acquisition

9.2Staff Acquisition

Planning Process Group

12.2Solicitation

Planning

12.2SolicitationPlanning

7.2Cost Estimating

7.2Cost Estimating

11.3QualitativeRisk Analysis

11.3QualitativeRisk Analysis

12.1Procurement

Planning

12.1ProcurementPlanning

11.2RiskIdentification

11.2RiskIdentification

11.1Risk ManagementPlanning

11.1Risk ManagementPlanning

11.5Risk ResponsePlanning

11.5Risk ResponsePlanning

11.4QuantitativeRisk Analysis

11.4QuantitativeRisk Analysis

PMBOK, p 33





Module 5: Project Planning

Purpose: prepare students to identify andunderstand some important elements in a

project plan.





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





Module 5 Objectives

• Scope Definition

– Describe the WBS and its importance as a planningtool

– 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





5.3 Scope DefinitionInitiating

Process Group

Charter

• Businessneed

• Productdescription

• Constraints

• Assumptions

Planning Process Group

Scope

•Justification• Productdescription

• Deliverables• Objectives for

• Cost• Schedule• Quality

• Constraints

• Assumptions

ScopeManagement

Plan

5.3 Scope

Definition

5.1Initiation

5.3.3.1WBS

5.1

Initiation

5.3.3.2ScopeStatementUpdates

6.1 Activity

Definition

5.1Initiation

6.1.3.1Activity List

7.1 ResourcePlanning

5.1Initiation

7.1.3.1Resource

Requirements

11.1 Risk Mgmt Plan

5.1

Initiation

11.1.3.1 Risk

Mgmt. Plan

5.1 Initiation

5.2 Scope Planning

Keeney, PMBOK





WBS - Typical Branches

Project

TestingDesign Pre-Production

Production Logistics Management

3 to 6 Levels

Other structures:

Project phase, Organization, Client structure, etc.Shenhar





WBS Rules

• Work breakdown structure is deliverable oriented

• Each set of boxes dropping down from a givenelement completely describes the box above it

• Lowest elements must be

– assignable

– independent

– measurable

– schedulable

– budgetable

– suitable size

Desmond, 2001





WBSDecomposition

1. Deliverable 1 from Scope Statement

1. Component 1 of Deliverable 11. Element 1 of Component 1

1. Work Package 1 of Element 1

1. Task 1 of Work Package 1


3. Task n of Work Package 1


3. Work Package n of Element 1

2. Element 2 of Component 1



3. Work Package n of Element 22. Component 2 of Deliverable 1

1. Work Package 1 of Component 2

2. Work Package 2 of Component 2

3. Work Package n of Component 2

2. Deliverable 2 from Scope Statement

1. Work Package 1 of Deliverable 21. Task 1 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

Project Outputs include:

• Deliverable• Components of Deliverable• Elements of Component

Project Activities include:• Work Packages

• Tasks in Work Package

Milestones include:

• Event started• Event completed

The WBS indents arow entry if it is new,

difficult, or important.Keeney, 2002





WBS Sample

from MS-

Project

Milestones filtersare used to find key

project outputshidden in thedetails of the

WBS hierarchy.

Keeney, 2002





Cards-On-the-Wall Method

Software Development System Test

Easel Paper

Yarn

Masking

Tape

Post-It Notes

FMC, p 164





Gantt

ChartView





Module 5 Objectives

• Resource Planning

– Describe the role of resource planning in thedevelopment of bottom-up cost estimates





WBS, OBS, RBS, and CBS

DirectCosts

IndirectCosts

CBS

•Direct

Labor

• DirectMaterial

•Period

Expenses

•Overhead•Burden

1.0

1.1 1.2 1.31.2.1 1.2.2

A 5

D 1

D 3

D 7

S 3

S 4

O B S

W

B S

Income

Statement

Cashflow

Statement

Balance

Sheet

Imputed Costs

Keeney, 2000

MGT 0 I d i P j M





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 projectobjectives

MGT 550 I t d ti t P j t M t





Project Quality8.1

Quality Planning8.2

Quality Assurance8.3

Quality Control

Competitive Benchmarking Statistical Quality Control

QFD 6σ Quality

Robust Design, Taguchi Methods

Continuous Improvement

Deming’s Fourteen Points, Juran’s Trilogy

Total Quality Management (TQM)

Keeney, 2001





5.4 Scope Verification

WorkResults

5.4.1 Inputs

Product

Documentation

WBS

FormalAcceptance

5.4.3 Outputs

Inspection

5.4.2 Tools & Techniques

Scope

Statement

Project Plan

PMBOK, p 52






Module 5 Objectives

• Risk Management Planning

– Describe the need to ensure that the type, level andvisibility 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






Dealing with Risk

Project Managers prepare for the potentialoccurrence of known unknowns by building:

– Contingency plans

– Contingency budget – Contingency time

Project Managers prepare for the potential

occurrence of unknown unknowns bybuilding:

– Managerial reserve account






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)

PMBOK, p 140






Avoidance

• “Eliminating a specific threat, usually byeliminating 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

Desmond, 2001






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 anexperienced alliance partner rather than takingthe “dangerous” road

• Could do this via – tighter project controls

– further investigation

– etc.Desmond, 2001






Transfer

• Passing the responsibility for dealing withthe risk and the impact to another party

– via insurance

• pay premium – via contracting

• pay risk premium to contractor • transfer risk back to customer

Desmond, 2001



j g


Risk Response PlanningDepends 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

Desmond, 2001




j g


Risk Management Matrix ExampleInitial Risk Impact Risk Description

Management

StrategyResidual Risk

H H

Human Interactionand Interfaces

Extensive and

Unknown

Prototype User Interface Early

Involve Real

Users (Prototype)

M/L

M H ProjectCommunications

Set Up ProjectReview Meetings

and Newsletter

L

H L Any High Risk ELIMINATE NONE

H H/M Any High RiskNO MATTER

WHAT

STRATEGY

H

Desmond, 2001





Reading Assignments

• From Chapter 5

– Text

• Pp 182 – 209

• For Chapter 6

– Text

• Pp 226 – 248

• Pp 252 – 257

05 - project plannig

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