project life cycle phases 169

Project Life Cycle

Phases of Project Life Cycle

• Phase 1: Need/Problem/Opportunity identification

• Phase 2: Development of Proposed solution

• Phase 3: Implementation of Proposed solution

• Phase 4: Terminating the project

Phase I - Needs Identification

Project Life Cycle (Phase I)

Time

Perform the Project

Develop a Proposed Solution

Identify a Need

Terminate the ProjectEffort

* * *

* * ** * ** * ** * ** * ** * ** * ** * ** * ** * *

* * ** * *

Project Life Cycle - Phase I

• Involves Need Identification. Results in Request for Proposal. Will detail on

1. Process of Identifying needs and Selecting projects.

2. Developing a request for proposal

3. Process of proposal solicitation.

• Recognize a need, problem, or opportunity & clearly define the same

• Quantify the problem • Determine the budget• Prepare a Request For Proposal• Select the project(s) with the

greatest benefit for the cost expended

Identifying Needs, Problems, or Opportunities

Project Selection

• Develop a set of criteria against which each opportunity will be evaluated

• List the assumptions• Gather data and information for each

opportunity• Evaluate each opportunity against the

criteria

Preparing a Request for Proposal

• Why RFP?

• State, comprehensively and in detail, what is required, from the customer’s point of view

• Enable contractors or a project team to understand what the customer expects so that they can prepare a thorough proposal

• The need may be communicated informally—and sometimes only orally

Preparing a Request for Proposal (Cont.)

• Guidelines for drafting a formal RFP to external contractors:– statement of work (SOW)– customer requirements– deliverables – customer-supplied items– approvals required by the customer– type of contract

Preparing a Request for Proposal (Cont.)

– the payment terms– the required schedule for completion – instructions for the format and

content of the contractor proposals– due date for proposals– evaluation criteria – occasionally will indicate the funds the

customer has available

Soliciting Proposals

Methods:

• Identify a selected group of contractors in advance and sending each an RFP

• Advertise in certain business newspapers

• Process considered a competitive situation

Soliciting Proposals (Cont.)

• Don’t provide information that is not provided to all contractors

• May hold a bidders’ meeting to explain the RFP and answer questions

• Not all use RFP

Phase II - Developing a Proposed

Solution

Project Life Cycle (Phase II)

Time

Perform the Project

Develop a Proposed Solution

Identify a Need

Terminate the Project

Effort

* * *

* * ** * ** * ** * ** * ** * ** * ** * ** * ** * *

* * ** * *

Phases II of Project Life Cycle

• Phase 2: Involves development of Proposed solution and results in submission of Proposal

Proposed Solutions - Exceptions

In many situations an RFP does not

involve soliciting competitive proposals

from external contractors, and the

second phase of the project life cycle

may be completely bypassed.

Pre-RFP/Proposal Marketing

• Should not wait until formal RFP solicitations are announced before starting to develop proposals

• Develop relationships with potential customers

• Maintain frequent contacts with past and current customers

Pre-RFP/Proposal Marketing (Cont.)

• Be familiar with a customer’s needs and requirements

• Consider this marketing or business development; no cost to the customer

• May prepare an unsolicited proposal

• Efforts are crucial to the foundation for winning a contract

Bid/No-Bid Decision

• Factors to consider:– competition – risk – mission– extension of capabilities– Reputation with the customer – customer funds – proposal resources– project resources

Bid/No-Bid Decision (Cont.)

– Be realistic about probability of winning the contract

– A lot of non-winning proposals can hurt a contractor’s reputation

• Exercise to be submitted on 4th Jan:A company that is providing training in HR, on page 52 of the book, there is Bid/No Bid check-list which lists down the deliberations over whether to bid or no bid. Individually submit your assessment

How do you prepare a a Winning Proposal?

• A selling document – not a technical report

• Convince the customer that you are the best one to solve the problem

• Highlight the unique factors that differentiate you from competing contractors

• Emphasize the benefits to the customer• Write in a simple, concise manner• Address requirements as laid out in the

RFP• Be realistic in scope, cost, and schedule

Proposal Preparation

• Can be a straightforward task performed by one person or it could be a resource-intensive effort requiring a team

• May designate a proposal manager • Schedule must allow time for review and

approval by management • Can be a few pages or hundreds of

pages• Customers do not pay contractors to

prepare proposals

Proposal Contents

Proposals are organized into three sections:

• Technical Section

– understanding of the problem

– proposed approach or solution

– benefits to the customer

Proposal Contents (Cont.)

• Management Section

– description of work tasks

– deliverables

– project schedule

– project organization

– related experience

– equipment and facilities

Proposal Contents (Cont.)

• Cost Section – labor– materials– subcontractors and consultants– equipment and facilities rental– travel– documentation– overhead– escalation– contingency or management reserve– fee or profit

Pricing Considerations

• Be careful not to overprice or underprice the proposed project

• Consider:– reliability of the cost estimates – risk– value of the project to the contractor – customer’s budget– competition

Proposal Submission and Follow-Up

• Submit proposals on time • Hand deliver expensive proposals or

send 2 sets by different express mail services, if necessary

• Continue to be proactive even after submission

Customer Evaluation of Proposals

• Some look at the prices and select only from the three lowest-priced proposals

• Some screen out prices above budget or whose technical section doesn’t meet all the requirements

• Some create a proposal review team that uses a scorecard

• May submit a best and final offer (BAFO)

Customer Evaluation of Proposals (Cont.)

• Criteria that might be used in evaluating:– compliance with SOW– understanding of the problem or need– soundness of the proposed approach – contractor’s experience and past

success – experience of key individuals– management capability– realism of the schedule– price – reasonableness, realism, and

completeness

A contract is:• A vehicle for establishing customer-

contractor communications and arriving at a mutual understanding and clear expectations

• An agreement between the contractor, who agrees to provide a product or service, and the customer, who agrees to pay

• Must clearly spell out the deliverables• Two types of contracts: fixed price and

cost reimbursement

Types of Contracts

Types of Contracts (Cont.)

Fixed-price contract

• Price remains fixed unless the customer and contractor agree

• Provides low risk for the customer

• Provides high risk for the contractor

• Is most appropriate for projects that are well defined and entail little risk

Types of Contracts (Cont.)

Cost-reimbursement contract

• Provides high risk for the customer

• Provides low risk for the contractor

• Is most appropriate for projects that involve risk

• Customer usually requires that the contractor regularly compare actual expenditures with the proposed budget and reforecast cost-at-completion

Contract Provisions

Miscellaneous provisions that may be included in project contracts:• Misrepresentation of costs• Notice of cost overruns or schedule

delays• Approval of subcontractor • Customer-furnished equipment or

information• Patents

Contract Provisions (Cont.)

• Disclosure of proprietary information • Termination• Bonus/penalty payments• Changes

Phase III & IV (Performing the Project)

Phases of Project Life Cycle

• Phase 3: Performing the Project

– Involves implementation of Proposed solution.

– Results in accomplishing Project Objective.

• Phase 4: Terminating the Project

– Involves certain closure activities.

– Results in feedback from all concerned

Project Life Cycle (Phase III & IV)

Time

Perform the Project

Develop a Proposed Solution

Identify a Need

Terminate the Project

Effort

* * ** * ** * ** * ** * ** * ** * ** * ** * ** * *

* ** *

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******

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*****

******

Performing the Project

Performing the Project (Phase III)

Time

Perform the Project

Develop a Proposed Solution

Identify a Need

Terminate the Project

Effort

* * ** * ** * ** * ** * ** * ** * ** * ** * ** * *

* ** *

*********

**

******

********

*******

*****

Performing the Project

1. Planning the Project

2. Implementing the project

3. Controlling the Project

Planning the Project

• Clearly define the project objective• Divide and subdivide the project • Define the specific activities to be

performed• Graphically portray the activities in a

network diagram• Determine which resources and how

many are needed• Make a time estimate • Make a cost estimate for each activity• Calculate a project schedule and budget • Develop a baseline plan

Planning the Project (Cont.)

Keep in mind:• Projects overrun their budgets, miss

completion dates, or only partially satisfy their technical specifications because there is no viable baseline plan

• The people involved in performing the project should participate in planning the work; they are most knowledgeable.

• Participating in the planning helps individuals become committed to accomplishing it

7

Implementing the Project

• Once the baseline plan has been developed, project work can proceed.

• The project team, led by the project manager, will implement the plan and perform the activities or work elements.

• The pace of project activity will increase as more and various resources become involved.

• Monitor progress • Measure actual progress and compare it

to planned progress• Track which activities have been started

and/or completed, when, and how much money has been spent

• Take corrective action to get back on track

• Compare on a timely and regular basis and take corrective action

8

Controlling the Project

Controlling the Project (Cont.)

A regular reporting period should collect:• Data on actual performance • Information on any changes in scope,

schedule, and budgetKeep in mind:• Data should be collected in a timely

manner and used to update the schedule and budget

• Compare updated schedule and budget to the baseline and analyze

Controlling the Project (Cont.)

• Project management is proactive • Phase III ends when

– the requirements have been met, – project objective has been

accomplished, and – the customer is satisfied

Terminating the Project

Project Life Cycle (Phase IV)

Time

Perform the Project

Develop a Proposed Solution

Identify a Need

Terminate the Project

Effort

******

Terminating the Project

• Termination activities should be identified in the baseline plan

• Verify that all agreed-on deliverables were provided

• Organize and file project-related documentation

Purpose: To learn from the experience in order to improve performance on future projects.

Terminating the Project (Cont.)

• Assure that all payments have been collected from the customer

• Assure that all payments for materials and subcontractors have been paid

• Prepare a written performance evaluation of each member of the project team

• Hold post-project evaluation meetings• Celebrate

Internal Post-Project Evaluation

• Have individual meetings with team members and a group meeting with the project team

• Hold soon after the completion • Announce meeting in advance so people

can be prepared• Individual meetings allow team members

to give their personal impressions

Internal Post-Project Evaluation (Cont.)

• Develop an agenda for a group meeting• Group meeting should discuss

performance and recommendations for improvement

• Issue a brief written report to management with a summary and recommendations

Internal Post-Project Evaluation (Cont.)

• Some topics that might be discussed:– technical performance– cost performance– schedule performance– project planning and control– customer relationships– team relationships– communications– problem identification and resolution– recommendations

• Meet to discuss whether the project provided the customer with the anticipated benefits, assess the level of customer satisfaction, and obtain any feedback

• Participants include the project manager, key project team members, and key representatives of the customer

• Ask open-ended questions• Customers can express their level of

satisfaction and provide detailed comments

Customer Feedback

Customer Feedback (Cont.)

If the customer is satisfied with the project:• Ask about other projects you could do—

perhaps without going through a competitive RFP process

• Ask permission to use the customer as a reference

• Get feedback regarding satisfaction through a post-project customer evaluation survey

Early Project Termination

• If research shows costs will be much more than originally anticipated

• If there is a change in a company’s financial situation

• Because of dissatisfaction of the customer – Avoid early termination due to

customer dissatisfaction by monitoring customer satisfaction continually and taking corrective action