Copyright 2012 John Wiley & Sons, Inc.

Part II

Project Planning

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Project Management

Copyright 2012 John Wiley & Sons, Inc.

Chapter 6

Project Activity and Risk Planning

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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 client’s permission

Client may place budget constraints on the project

May be competing against other firms

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Project Charter Elements

PurposeObjectivesOverviewSchedulesResourcesPersonnelRisk management plansEvaluation methods

KnowledgeAreas

Project Management Process Groups

Initiating Planning Executing Monitoring & Controlling

Closing

Integration Develop Project Charter

Develop Project Management Plan

Direct & Manage Project Execution

Monitor & Control Project WorkPerform Integrated Change Control

Close Project or Phase

Scope Collect RequirementsDefine ScopeCreate WBS

Verify ScopeControl Scope

Time Define ActivitiesSequence ActivitiesEstimate Activity ResourcesEstimate Activity Durations Develop Schedule

Control Schedule

Cost Estimate CostDetermine Budget

Control Costs

Quality Plan Quality Perform Quality Assurance

Perform Quality Control

HR Develop HR Plan Acquire Project TeamDevelop Project Team

Manage Project Team

Communications

Identify Stakeholders

Plan Communications DistributeInformation

Manage Stakeholder ExpectationsReport Performance

Risk Plan Risk Management Identify RisksPerform Qualitative Risk AnalysisPerform Quantitative Risk AnalysisPlan Risk Responses

Monitor & Control Risks

Procurement Plan Procurements Conduct Procurements

Administer Procurements

Close Procurements

Develop Project CharterDevelop Project Management PlanDirect & Manage Project ExecutionMonitor & Control Project WorkPerform Integrated Change ControlClose Project or Phase

Integration Processes

What goes into your Project Charter?

Project Charter

• What goes into your Project Charter?– Title– Description– Who is the Project Manager? What is their authority?– What is the business need?– What is the justification?– What are the assigned resources?– Who are the stakeholders?– What are the known stakeholder requirements?– What are the deliverables?– What are the constraints?– What are the assumptions?

Project Charter

Where does all this information come from?

Primarily, the sponsor.Who is the sponsor? What is their role?

Project Charter

Inputs Tools & Techniques Outputs

Project Statement of Work

Expert Judgment Project Charter

Business Case

Contract

Enterprise Environmental Factors

Organizational Process Assets

Project Charter

Project Statement of Work– Created by the customer or sponsor– Gives the description of the project scope– Links the project to the strategic plan– Think of it as a high level “contract” between

the sponsor and the Project Manager

Project Charter

Business Case– What are some examples of a business

case?

Project Charter

Business Case– Market demand– Organizational need– Customer request– Technological advance– Legal requirement– Ecological impact– Social need

Project Charter

Contract– Many projects begin because a contract has

been signed– The contract will give us many details of what

we need to know– If this is the case, then include a copy of the

contract with the Project Charter

Project Charter

Enterprise Environmental Factors– “Company culture and existing systems that

the project will have to deal with or can make use of.”

– Could be positive or negativeCompany organizationStakeholder tolerancesRelevant standards

– Think of as “the baggage”

Project Charter

Enterprise Environmental Factors– Examples:

Company culture Government or industry standards

– Regulations, quality standards, etc Existing HR skills Personnel administration

– Hiring & firing guidelines– Past performance reviews of employees– Union contacts

PM Info Systems– Company ordering and scheduling tools, etc

Project Charter

Organizational Process Assets– Processes, procedures, policies, corporate

knowledge bases and historical informationLessons learnedHistorical recordsTemplates

– Learning the organization has done in the past to help the projects of today

– Best practices

Project Charter

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Starting the Project Plan: The WBS

What is to be doneWhen it is to be started and finishedWho is going to do it

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Starting the Project Plan: The WBS Continued

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 listedEach major task is broken down into

detailThis continues until all the activities to be

completed are listedNeed to know which activities “depend

on” other activities

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A Form to Assist Hierarchical Planning

Figure 6-2

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Career Day

Figure 6-4

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The Work Breakdown Structure (WBS)

A hierarchical planning processBreaks tasks down into successively finer

levels of detailContinues until all meaningful tasks or

work packages have been identifiedThese make tracking the work easierNeed separate budget/schedule for each

task or work package

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A Visual WBS

Figure 6-3

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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 an 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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The Responsibility (RACI) Matrix

Another approach is the Responsible, Accountable, Consult, Inform (RACI) matrix– Also known as a responsibility matrix, a

linear responsibility chart, an assignment matrix, a responsibility assignment matrix

Shows critical interfacesKeeps track of who must approve what

and who must be notified

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Sample RACI Matrix

Figure 6-7

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Agile Project Planning and Management

When scope cannot be determined in advance, traditional planning does not work

Agile project management was developed to deal with this problem in IT

Small teams are located at a single site Entire team collaborates Team deals with one requirement at-a-time with

the scope frozen

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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 coordinatedThe RACI matrix helps the project

manager accomplish this

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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 outputLots of feedback between disciplines

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Risk Management

Projects are risky, uncertainty is highProject manager must manage this riskThis is called “risk management”Risk varies widely between projectsRisk also varies widely between

organizationsRisk management should be built on the

results of prior projects

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Parts to Risk Management

Risk management planning Risk identification Qualitative risk analysis Quantitative risk analysis Risk response planning Risk monitoring and control The risk management register

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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 Identification

Risk is dependent on technology and environmental factors

Delphi method is useful for identifying project risks

Other 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 risksA sense of the impact is also neededEach objective should be scaled and

weightedConstruct a risk matrixSame approach can be used for

opportunities

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Risk Matrix

Figure 6-12

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Quantitative Risk Analysis

1. List ways a project can fail2. Evaluate severity3. Estimate likelihood4. Estimate the inability to detect5. Find the risk priority number (RPN)

(RPN = S L D)6. Consider ways to reduce the S, L, and

D for each cause of failure

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A FMEA Example

Table 6-1

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Decision Tree Analysis

Figure 6-13

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Risk Response Planning

Threats– Avoid– Transfer– Mitigate– Accept

Opportunities– Exploit– Share– Enhance– Accept

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Risk Monitoring and Control

Monitoring covered in detail in Chapter 10Control covered in Chapter 11

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The Risk Management Register

Environments that may impact projectsAssumptions madeRisks identifiedList of categories and key wordsEstimates on risk, states of project’s

environment, or on project assumptionsMinutesActual outcomes