information technology project management buyang cao school of software engineering

Information Technology Information Technology Project ManagementProject Management

Buyang CaoBuyang Cao

School of Software EngineeringSchool of Software Engineering

Information technology project managementInformation technology project management

Topics CoveredTopics Covered

IntroductionIntroduction Project management Project management

Techniques BriefingTechniques Briefing Case study (AT&T wireless Case study (AT&T wireless

case)case)

IntroductionIntroduction

What is a project:What is a project:A temporary endeavor undertaken to create a A temporary endeavor undertaken to create a

unique product or serviceunique product or service In 2001, US spent $2.3 trillion on projects, ¼ of its In 2001, US spent $2.3 trillion on projects, ¼ of its

GDP, the world spent $10 trillion of its $40.7 GDP, the world spent $10 trillion of its $40.7 trillion GDP.trillion GDP.

Examples of IT projects:Examples of IT projects: A small software development team adds a new A small software development team adds a new

feature to an internal SW applicationfeature to an internal SW application A company develops a new system to increase sales A company develops a new system to increase sales

force productivityforce productivity The automobile industry develops a web site to The automobile industry develops a web site to

streamline procurementstreamline procurement ……..

IntroductionIntroduction

SW project attributesSW project attributes

A unique purposeA unique purpose TemporaryTemporary Progressive elaborationProgressive elaboration Resource requirements (various)Resource requirements (various) Having primary customer or sponsor Having primary customer or sponsor

(one or more stakeholders)(one or more stakeholders) UncertaintyUncertainty

Project manager

Who is project manager?Who is project manager?

A person works closely with the project A person works closely with the project sponsors, the project team, and the sponsors, the project team, and the other people involved in the project other people involved in the project to meet project goals.to meet project goals.

A good project manager is crucial to A good project manager is crucial to the success of a project.the success of a project.

The triple constrains for a The triple constrains for a projectproject

Scope: what will be done as part of Scope: what will be done as part of the project? What unique result is the project? What unique result is expected from the project?expected from the project?

Time: how long should it take to Time: how long should it take to complete the project? What is the complete the project? What is the schedule?schedule?

Cost: What should it cost to Cost: What should it cost to complete the project? What is the complete the project? What is the budget?budget?

Software Project SuccessSoftware Project Success

It actually is measured by more than It actually is measured by more than triple constraints:triple constraints:

On-timeOn-time Within budgetWithin budget As expectedAs expected Good qualityGood quality

AndAnd Stronger organizationStronger organization

Project ChallengesProject Challenges

Think about it! Scope management (scope creep)Scope management (scope creep) Underestimate effortsUnderestimate efforts Uncertainty/riskUncertainty/risk (Mis)commuications(Mis)commuications Personnel changesPersonnel changes Constrained by the current technologyConstrained by the current technology Insufficient planningInsufficient planning ……

Typical Project OutcomesTypical Project Outcomes

Schedule overrunsSchedule overruns Budget overrunsBudget overruns Quality under runsQuality under runs Functionality under runsFunctionality under runs Cancelled projectsCancelled projects

proj ect outcome

On- t i me 26%Cancel l ed 29%More than 200% l ate 6%101- 200% l ate 16%51 - 100% l ate 9%21 - 50% l ate 8%Less than 20% l ate 6%

Causes of Software Project Causes of Software Project FailureFailure1.1. Incomplete requirements (13%)Incomplete requirements (13%)2.2. Lack of user involvement (12%)Lack of user involvement (12%)3.3. Lack of resources(11%)Lack of resources(11%)4.4. Unrealistic expectations (10%)Unrealistic expectations (10%)5.5. Lack of executive support (9%)Lack of executive support (9%)6.6. Changing requirements (9%)Changing requirements (9%)7.7. Lack of planning (8%)Lack of planning (8%)8.8. Didn’t need software any longer (8%)Didn’t need software any longer (8%)9.9. Lack of technical management (6%)Lack of technical management (6%)10.10. Technology illiteracy (4%)Technology illiteracy (4%)

1 to 4 (related to requirement 44%)1 to 4 (related to requirement 44%)3 to 9 (related to management 34%)3 to 9 (related to management 34%)

Project ManagementProject Management

What is project management?What is project management?

The application of specific knowledge, The application of specific knowledge, skills, tools, and techniques to skills, tools, and techniques to achieve project goals while achieve project goals while balancing the competing demands of balancing the competing demands of scope, time, and cost.scope, time, and cost.

Project Management Knowledge Project Management Knowledge Areas IAreas I

Scope managementScope management Required workRequired work

Time managementTime management How long, scheduleHow long, schedule

Cost managementCost management Budget control and monitorBudget control and monitor

Risk managementRisk management Uncertainty, response to risksUncertainty, response to risks

Project Management Knowledge Project Management Knowledge Areas II (not covered at seminar)Areas II (not covered at seminar)

Quality managementQuality management Quality assuranceQuality assurance

Integration managementIntegration management Overarching all functionsOverarching all functions

Human resource managementHuman resource management Effective use of peopleEffective use of people

Communication managementCommunication management Generating, collecting, disseminating Generating, collecting, disseminating

(distributing), and storing project information(distributing), and storing project information

Procurement managementProcurement management Acquiring or procuring goods/servicesAcquiring or procuring goods/services

Project Management “Soft Project Management “Soft Skills”Skills” CommunicationCommunication Influencing the organizationInfluencing the organization LeadershipLeadership MotivationMotivation Negotiation and conflict managementNegotiation and conflict management Problem solvingProblem solving

These are personality related issues!These are personality related issues!

Advantages of Good Project Advantages of Good Project ManagementManagement

Better control of financial, physical, and Better control of financial, physical, and human resourcehuman resource

Improved customer relationshipImproved customer relationship Shorter development timeShorter development time Lower costLower cost Higher quality and increased reliabilityHigher quality and increased reliability Higher profit marginHigher profit margin Improved productivityImproved productivity Better internal coordinationBetter internal coordination Higher work moralHigher work moral

The most notorious project The most notorious project ever in the human historyever in the human history

Iraqi warIraqi war False goal: to find WMD (weapon of mass False goal: to find WMD (weapon of mass

destruction)destruction) False or faked information, lies basedFalse or faked information, lies based Cost: $415 billion and mountingCost: $415 billion and mounting Casualties: US soldiers, > 3500Casualties: US soldiers, > 3500 Iraqi civilians, > 100000Iraqi civilians, > 100000 Time: unknownTime: unknown

Project managers:Project managers: Bush and his administrationBush and his administration

Project Management Project Management Techniques BriefingTechniques Briefing

Project InitiationProject Initiation

The project initiation includes:The project initiation includes: Project charterProject charter Risk assessmentRisk assessment Asset assessmentAsset assessment


Project CharterProject Charter

A A project charterproject charter is a document that formally recognizes the is a document that formally recognizes the existence of a project and provides direction on the projecexistence of a project and provides direction on the project’s objectives and management.t’s objectives and management.

The project plan is a response to the charterThe project plan is a response to the charter

It identifies: Authority Agent(s) Completion criteria Resources Constraints Priorities assumptions

Project Charter (cont)Project Charter (cont) Measure of success are Measure of success are

organization-centricorganization-centric Define how everyone will know the Define how everyone will know the

project is completed (SMART)project is completed (SMART) SSpecificpecific MMeasurableeasurable AAttainablettainable RRelevantelevant TTimelyimely

Completion criteria must be unambiguousCompletion criteria must be unambiguous

Sample of a project charter:Sample of a project charter:


Risk assessmentRisk assessment

A software risk is:A software risk is:

The probability of unwanted (bad) The probability of unwanted (bad) consequences of an event or consequences of an event or decision.decision.

When Do Problems Appear?When Do Problems Appear?

More than 50% of projects show More than 50% of projects show their problems during initial their problems during initial developmentdevelopment

About 25% show their problems About 25% show their problems during initial planningduring initial planning

Visibility into runaway project came Visibility into runaway project came first (72% of the time) from project first (72% of the time) from project team, not managementteam, not management

The “unwanted consequence” is for the The “unwanted consequence” is for the project to be seen as unsuccessfulproject to be seen as unsuccessful

Risk as Cause-Effect PairsRisk as Cause-Effect Pairs

Cause Cause (Probability)(Probability)

EffectEffect(Unwanted results)(Unwanted results)

Uncontrolled

Requirements

creep(50% Probability)(50% Probability)

For instance:

Overrun schedule

(3 weeks later)

Cause-Effect ChainsCause-Effect ChainsRequirements developer doesn’t have adequate Software Engineering education

Requirements developer doesn’t know good requirement techniques

Requirements developer doesn’t use good requirement techniques

Requirements specification has missing, ambiguous, contradictory, and wrong requirements

Requirements specification is misunderstood by designers

Product is effected with late-discovered defects

Cost and schedule goals missed due to unplanned defect rework

Multiple Causes and EffectsMultiple Causes and Effects

The same cause may have multiple The same cause may have multiple unwanted effectsunwanted effects Inattention to up-front quality can cause:Inattention to up-front quality can cause:

Low quality productLow quality product Overrun scheduleOverrun schedule Overrun budgetOverrun budget

The same effect may be caused by The same effect may be caused by multiple causesmultiple causes Overrun schedules result from:Overrun schedules result from:

Poor estimation practicesPoor estimation practices High staff turn overHigh staff turn over Uncontrolled requirements creepUncontrolled requirements creep Inadequate project trackingInadequate project tracking Inattention to up-front qualityInattention to up-front quality

Risk management techniques will be discussed in detail later

Typical SW Project RisksTypical SW Project Risks

Requirements risksRequirements risks Unrealistic expectationsUnrealistic expectations Lack of user input: incompleteness, ambiguityLack of user input: incompleteness, ambiguity Feature creepFeature creep

Project management risksProject management risks Overly optimistic schedulesOverly optimistic schedules Inadequate planningInadequate planning Insufficient trackingInsufficient tracking

Quality risksQuality risks Inadequate attention to upstream qualityInadequate attention to upstream quality


Asset AssessmentAsset Assessment

Project initiation needs to assess the Project initiation needs to assess the asset.asset.

AssetAsset: an inverse risk: an inverse risk A positive impact instead of a negative impactA positive impact instead of a negative impact

Typical SW Project AssetsTypical SW Project Assets

PeoplePeople Motivation and moralMotivation and moral TeamworkTeamwork Skill alignmentSkill alignment environmentenvironment

Domain expertiseDomain expertise Previous experiencePrevious experience Exiting systems and documentationExiting systems and documentation

ProcessesProcesses Established, well understoodEstablished, well understood Standards (ISO 9000, etc.)Standards (ISO 9000, etc.) Effective in the problem spaceEffective in the problem space

TechnologyTechnology Well known, stableWell known, stable

Asset Assessment MethodsAsset Assessment Methods

Probability:Probability: how likely are we to lose this how likely are we to lose this opportunity if we don’t do anything about it?opportunity if we don’t do anything about it? Almost certain, probable, even, remote, extremely Almost certain, probable, even, remote, extremely

remote ( 5 – 1)remote ( 5 – 1)

Severity:Severity: how big would the missed opportunity be? how big would the missed opportunity be? Catastrophic, critical, serious, marginal, negligible (5 – Catastrophic, critical, serious, marginal, negligible (5 –

1)1)

Priority:Priority:

Asset exposure = f (probability, severity)Asset exposure = f (probability, severity)

Order the assets in the decreasing order of exposure Order the assets in the decreasing order of exposure to prioritize themto prioritize them

Asset Assessment Methods Asset Assessment Methods (cont)(cont) Ordinal-scaled asset prioritizationOrdinal-scaled asset prioritization

For each asset creating the following table:For each asset creating the following table:

ExtremelyExtremely

remoteremote

RemoteRemote EvenEven probableprobable AlmostAlmost

CertainCertain

catastrophiccatastrophic 1515 1919 2222 2424 2525

criticalcritical 1010 1414 1818 2121 2323

seriousserious 66 99 1313 1717 2020

marginalmarginal 33 55 88 1212 1616

negligiblenegligible 11 22 44 77 1111

Probability

Severity

Project Management Knowledge AreasProject Management Knowledge Areas

Project Management knowledge areasProject Management knowledge areas

Scope ManagementScope Management

Definitions:Definitions: Scope: Scope: all work involved in the projectall work involved in the project Deliverable: Deliverable: a product produced as a part of a projecta product produced as a part of a project WBS: WBS: work breakdown structure.work breakdown structure.

Scope managementScope management consists of consists of processes involved in defining and processes involved in defining and controlling what is or is not included controlling what is or is not included in the project.in the project.

It consists of five processes:It consists of five processes:

Scope managementScope management

5 Main Processes5 Main Processes

Scope planningScope planning Deciding how the scope will be defined, Deciding how the scope will be defined,

verified, and controlled and how WBS verified, and controlled and how WBS will be created.will be created.

Scope definitionScope definition Reviewing the project charter, making Reviewing the project charter, making

required modifications and developing required modifications and developing the project scope statement (some the project scope statement (some people may call it requirement people may call it requirement document).document).

5 Main Processes (cont)5 Main Processes (cont) Creating WBSCreating WBS

Subdividing the major project deliverables into smaller, more manageable component and creating WBS and scope baseline.

Scope verificationScope verification Formalizing acceptance of the project Formalizing acceptance of the project

scope (acceptance of biz requirement scope (acceptance of biz requirement document).document).

Scope controlScope control Controlling changes to project scope (an Controlling changes to project scope (an

on-going process).on-going process).


Scope definition and Project Scope Scope definition and Project Scope StatementStatement

Scope statement at least contains:Scope statement at least contains: A description of the projectA description of the project

Overall objectivesOverall objectives JustificationsJustifications

Detailed project deliverablesDetailed project deliverables Characteristics and requirements of Characteristics and requirements of

products and services produced as part of products and services produced as part of the projectthe project

Note: “Note: “requirements will generally have less detail requirements will generally have less detail in the early stages, and more details in later in the early stages, and more details in later phases as the product characteristics are phases as the product characteristics are progressively elaboratedprogressively elaborated”. ”.

Scope definition and the Project Scope definition and the Project Scope Statement (cont)Scope Statement (cont)

Some tools to help defining scope better:Some tools to help defining scope better: Use case analysesUse case analyses PrototypingPrototyping GUI mock-upGUI mock-up Quick developmentQuick development

Proving the customer or stakeholders Proving the customer or stakeholders of the project with the Look-and-feel of of the project with the Look-and-feel of the system to be builtthe system to be built


Creating WBSCreating WBS

WBS: deliverable-oriented grouping of the

tasks involved in the project dividing the work for a project into logic

parts based on how the work will be performed

a foundation document in project management

a task-oriented family tree of activities Including all tasks necessary to

complete the project

Simple WBS in Tabular Simple WBS in Tabular FormForm My Software ProjectMy Software Project

Construct Software [big task 1]Construct Software [big task 1] Requirements [small task 1.1]Requirements [small task 1.1]

Part A Requirements [tiny task 1.1.1]Part A Requirements [tiny task 1.1.1] Part B Requirements [tiny task 1.1.2]Part B Requirements [tiny task 1.1.2] ……

Design [small task 1.2]Design [small task 1.2] Part A design [tiny task 1.2.1]Part A design [tiny task 1.2.1] ……

Construction [small task 1.3]Construction [small task 1.3] Part A coding [tiny task 1.3.1]Part A coding [tiny task 1.3.1] ……

Software quality assurance [big task 2]Software quality assurance [big task 2] Peer review [small task 2.1]Peer review [small task 2.1] Testing [small task 2.2]Testing [small task 2.2] ……

WBS in Gantt ChartWBS in Gantt ChartWBS Schedule

Approaches to Create WBSApproaches to Create WBS

Using guidelinesUsing guidelines Standard processes, guidelines Standard processes, guidelines

for developing WBSfor developing WBS Analog approachAnalog approach

Similar project’s WBSSimilar project’s WBS Top-down approachTop-down approach

Starting largest items, and Starting largest items, and breaking them into smaller itemsbreaking them into smaller items


Scope controlScope control

Scope control is an on-going processScope control is an on-going process It involves controlling changes to the It involves controlling changes to the

project scopeproject scope Goals:Goals:

To influence the factors that cause To influence the factors that cause scope changesscope changes

To assure changes are processed upon To assure changes are processed upon pre-defined procedurepre-defined procedure

To manage changes when they occurTo manage changes when they occur


Project Time ManagementProject Time Management

Delivering projects on time is Delivering projects on time is “challenging”“challenging”

Schedule issues cause the most Schedule issues cause the most conflicts on projectsconflicts on projects

Time is has the least amount of Time is has the least amount of flexibility (if it is gone, it is really flexibility (if it is gone, it is really gone)gone)

Team member’s working style and Team member’s working style and culture differences may cause culture differences may cause schedule conflictsschedule conflicts

Project Time Management Project Time Management (cont)(cont) Project time management involves Project time management involves

the processes required to ensure the processes required to ensure timely completion of a project.timely completion of a project.

It is composed of six processes:It is composed of six processes:

Project Time ManagementProject Time Management

Six ProcessesSix Processes Activity definitionActivity definition

Identifying the specific activities Identifying the specific activities performed by team members and performed by team members and stakeholders to produce the deliverablesstakeholders to produce the deliverables

Activity sequencingActivity sequencing Identifying and documenting the Identifying and documenting the

relationships between project activitiesrelationships between project activities Activity resource estimatingActivity resource estimating

Estimating how many resources Estimating how many resources (people, equipment, and materials) to be (people, equipment, and materials) to be used for performing the activitiesused for performing the activities

Six Processes (cont)Six Processes (cont)

Activity duration estimatingActivity duration estimating Estimating the number of work periods Estimating the number of work periods

needed to complete each activityneeded to complete each activity Schedule developmentSchedule development

Using activity sequence, resource Using activity sequence, resource estimates, and duration estimates to estimates, and duration estimates to create the project plancreate the project plan

Schedule controlSchedule control Controlling and managing changes to Controlling and managing changes to

the project schedulethe project schedule

Six ProcessesSix Processes Activity definitionActivity definition

Activity definition process will create:Activity definition process will create: Activity listActivity list

Activities to be included in the project scheduleActivities to be included in the project schedule Activity name, ID, and brief descriptionActivity name, ID, and brief description

Activity attributesActivity attributes Predecessors, successors, logic relationshipPredecessors, successors, logic relationship Resource requirements, constraints, imposed dates, Resource requirements, constraints, imposed dates,

and assumptionsand assumptions Milestone listMilestone list

Milestone is an activity with zero durationMilestone is an activity with zero duration Milestone is used to monitor the project scheduleMilestone is used to monitor the project schedule

Goal of the process: to ensure the team has the Goal of the process: to ensure the team has the fully understanding of all work to be donefully understanding of all work to be done

Six ProcessesSix Processes

Activity SequencingActivity Sequencing

Activity sequencing process is to Activity sequencing process is to create:create:

Dependency or relationship between Dependency or relationship between activitiesactivities

Activity networkActivity network Activity ID and durationActivity ID and duration DependencyDependency

Finish-to-startFinish-to-start Finish-to-finishFinish-to-finish Start-to-startStart-to-start Start-to-finishStart-to-finish

Critical path can be find in an activity Critical path can be find in an activity networknetwork


Activity Resource EstimatingActivity Resource Estimating

Important questions to answer:Important questions to answer: How difficult to do activitiesHow difficult to do activities Anything unique in the project scope Anything unique in the project scope

impacts on resourcesimpacts on resources Any similar activities done beforeAny similar activities done before Available people, equipment, and materials Available people, equipment, and materials

for the workfor the work Acquiring resource, outsourcingAcquiring resource, outsourcing

Output:Output: A list of activity resource requirementsA list of activity resource requirements Requested changesRequested changes Updated activity attributes and resource Updated activity attributes and resource

calendarscalendars


Activity Duration EstimatingActivity Duration Estimating

Duration includes the actual amount of time Duration includes the actual amount of time worked on an activityworked on an activity plusplus elapsed time. elapsed time.

Factors impacting duration:Factors impacting duration: Required skillsRequired skills Available skill sets and skill levelAvailable skill sets and skill level Number of people availableNumber of people available Resource availabilityResource availability

Three-point estimate can be used:Three-point estimate can be used: OptimisticOptimistic Most likelyMost likely pessimisticpessimistic


Schedule DevelopmentSchedule Development

Goal:Goal: to create a realistic schedule to to create a realistic schedule to provide the base for monitoring the provide the base for monitoring the project progress in time dimension project progress in time dimension

Gantt chart can be used to display Gantt chart can be used to display the project schedulethe project schedule

Critical path method may be used to Critical path method may be used to control project schedulescontrol project schedules

Milestones are important for Milestones are important for monitoring the project progressmonitoring the project progress


Schedule ControlSchedule Control

Goal: to know the status of the Goal: to know the status of the schedule, influence the factors schedule, influence the factors that causes schedule changes, that causes schedule changes, determine that the schedule has determine that the schedule has changed, and manage changes changed, and manage changes when they occurwhen they occur

It is an on-going processIt is an on-going process

Schedule Control (cont)Schedule Control (cont)

Tools and techniques for Tools and techniques for schedule control:schedule control: Progress reportProgress report Project management software such Project management software such

as MS project 2003, etc.as MS project 2003, etc. Schedule comparison charts, such Schedule comparison charts, such

as tracking Gantt chartas tracking Gantt chart Variance analysis such as Variance analysis such as

analyzing float or slack in CPManalyzing float or slack in CPM Performance management, such as Performance management, such as

earned value (will be discussed earned value (will be discussed later)later)


Project Cost ManagementProject Cost Management

““Budget overrun is about 43% of all information Budget overrun is about 43% of all information technology projects in US in year 2003”technology projects in US in year 2003”

Cost management includes the processes Cost management includes the processes required to ensure required to ensure a projecta project is is completed within an completed within an approved budgetapproved budget. . There are three processes:There are three processes:

Cost estimatingCost estimating Cost budgetingCost budgeting Cost controlCost control

Project Cost ManagementProject Cost Management

Three ProcessesThree Processes Cost estimatingCost estimating

Developing an approximation or estimate of the Developing an approximation or estimate of the costs of the resources needed to completed a costs of the resources needed to completed a projectproject

Output: activity cost estimatesOutput: activity cost estimates Cost budgetingCost budgeting

Allocating the overall cost estimate to individual Allocating the overall cost estimate to individual work items to set up a baseline for measuring work items to set up a baseline for measuring performanceperformance

Output: cost baseline and funding requirementsOutput: cost baseline and funding requirements Cost controlCost control

Controlling changes to the project budgetControlling changes to the project budget Output: performance measurements, forecasted Output: performance measurements, forecasted

completion information, recommended corrective completion information, recommended corrective actionsactions

Three ProcessesThree Processes

Cost EstimatingCost Estimating

Type of Type of EstimateEstimate

When DoneWhen Done Why DoneWhy Done How How AccurateAccurate

Rough Rough Order of Order of Magnitude Magnitude (ROM)(ROM)

Very early in Very early in the project life the project life cyclecycle

Provides Provides estimate of cost estimate of cost for selection for selection decisionsdecisions

-25% to -25% to +75%+75%

BudgetaryBudgetary Early, 1-2 Early, 1-2 years outyears out

Creates budget Creates budget planplan

-10% to -10% to +25%+25%

DefinitiveDefinitive Later in the Later in the project, < 1 project, < 1 year outyear out

Provides details Provides details for purchases, for purchases, estimates actual estimates actual costscosts

-5% to -5% to +10%+10%

Types of Cost Estimates:

Cost Estimating (cont)Cost Estimating (cont)

Cost estimating tools and techniquesCost estimating tools and techniques Analogous estimates: using the previous Analogous estimates: using the previous

similar projects as the basissimilar projects as the basis bottom-up estimates: estimating individual bottom-up estimates: estimating individual

work items or activities and summing them work items or activities and summing them up to the project levelup to the project level

Parametric modeling: using math model and Parametric modeling: using math model and project characteristics (parameters) to project characteristics (parameters) to estimate the cost. It is more reliable if the estimate the cost. It is more reliable if the historical information that is used to create historical information that is used to create the model is more accurate.the model is more accurate.

Example of it: constructive cost model: Example of it: constructive cost model: estimating cost based parameters such as estimating cost based parameters such as lines of source code or functions to be lines of source code or functions to be createdcreated

Cost Estimating (cont)Cost Estimating (cont)

#Units/#Units/HrsHrs

Cost/Cost/Unit/HrUnit/Hr

SubtotalsSubtotals WBS level WBS level totalstotals

% of % of totaltotal

WBS ItemWBS Item

1.Project 1.Project ManagementManagement

$306,300$306,300 20%20%

Project Project managermanager

960960 $100$100 $96,000$96,000

Project team Project team membersmembers

19201920 $75$75 $144,000$144,000

ContractorsContractors $66,300$66,300

2. Hardware2. Hardware $76,000$76,000 5%5%

2.1 Device2.1 Device 100100 $600$600 $60,000$60,000

2.2 Servers2.2 Servers 44 $1400$1400 $16,000$16,000

…………

6. Reserves 6. Reserves (25% of total (25% of total estimate)estimate)

$235,540$235,540 $253,540$253,540 17%17%

Total Total estimateestimate

$1,521,240$1,521,240

Sample Cost Estimates


Cost BudgetingCost Budgeting

Cost budgeting allocates the Cost budgeting allocates the project cost estimate to project cost estimate to individual work items (WBS) individual work items (WBS) over (project) time.over (project) time.

Goal: to produce a cost baseline Goal: to produce a cost baseline for measuring project for measuring project performance and project funding performance and project funding requirements.requirements.


Cost ControlCost Control

Purpose: monitoring cost performance, Purpose: monitoring cost performance, ensuring that only proper project changes ensuring that only proper project changes are included in the revised cost baseline, are included in the revised cost baseline, and informing project stakeholders of and informing project stakeholders of

authorized changes impacting on the costsauthorized changes impacting on the costs.. Output: project plan updates, corrective Output: project plan updates, corrective

actions, revised estimates.actions, revised estimates. Tools:Tools:

Performance review meetingPerformance review meeting Earned value management (EVM)Earned value management (EVM)

Cost ControlCost Control

Earned Value ManagementEarned Value Management

Uses ratios of the planned costs and Uses ratios of the planned costs and the actual costs of work completed to the actual costs of work completed to quantify project cost and schedule quantify project cost and schedule performanceperformance Conveniently expresses the relationship Conveniently expresses the relationship

between cost and functionality-between cost and functionality-completed as well as schedule and completed as well as schedule and functionality-completedfunctionality-completed

Accurate predictions of overall cost and Accurate predictions of overall cost and schedule performance can be made schedule performance can be made with as little as 15% to 20% of the work with as little as 15% to 20% of the work completedcompleted

Earned Value ExplainedEarned Value Explained Planned Value (PV)Planned Value (PV)

““How much did we plan to have spend by nowHow much did we plan to have spend by now?”?” Sum of the Sum of the planned costsplanned costs of each task that of each task that should should

have beenhave been completed by the status date. completed by the status date. Earned Value (EV)Earned Value (EV)

““How much did we plan to spend for the work that has How much did we plan to spend for the work that has been finished to farbeen finished to far?”?”

Sum of the Sum of the planned costsplanned costs of each task that of each task that has beenhas been completed by the status datecompleted by the status date

Actual Cost (AC)Actual Cost (AC) ““How much did we actually spend for the work that How much did we actually spend for the work that

has been finished so farhas been finished so far?”?” Sum of the Sum of the actual costsactual costs of each task that of each task that has beenhas been

completed up to now.completed up to now.

Earned Value Explained (cont)Earned Value Explained (cont) Schedule Performance Index (SPI)Schedule Performance Index (SPI)

““What is the ratio of the estimated value of the work What is the ratio of the estimated value of the work that we have that we have actually completedactually completed to the estimated to the estimated value of the work value of the work expected to have completedexpected to have completed?”?”

SPI = Earned value (EV) / Planned Value (PV)SPI = Earned value (EV) / Planned Value (PV) SPI < 1 delay in projectSPI < 1 delay in project

Cost Performance Index (CPI)Cost Performance Index (CPI) ““What is the ratio of the estimated value of the work What is the ratio of the estimated value of the work

we we actually completedactually completed to the to the actual costactual cost of the work of the work that has been completedthat has been completed?”?”

CPI = Earned Value (EV) / Actual Cost (AC)CPI = Earned Value (EV) / Actual Cost (AC) CPI < 1 over budgetCPI < 1 over budget

Example: PV = 250 Hr, EV = 200 Hr, AC = 225 hrExample: PV = 250 Hr, EV = 200 Hr, AC = 225 hrSPI = 200 / 250 = 0.8SPI = 200 / 250 = 0.8CPI = 200 / 225 = 0.89CPI = 200 / 225 = 0.89


Project Risk ManagementProject Risk ManagementThe purpose of risk management is to identify, The purpose of risk management is to identify,

analyze, and respond to project risks.analyze, and respond to project risks.

(some of them were discussed in the project initiation)(some of them were discussed in the project initiation)

Four strategies to deal with risks:Four strategies to deal with risks: Risk avoidance: Risk avoidance: to eliminate a specific threat by to eliminate a specific threat by

eliminating its causes. For instance, a project team eliminating its causes. For instance, a project team continues using known hardware or software to continues using known hardware or software to conduct a project in order to avoid uncertainty in conduct a project in order to avoid uncertainty in new version of HW or SW.new version of HW or SW.

Risk acceptance: Risk acceptance: to accept the consequences to accept the consequences should a risk occur. For instance, a project team should a risk occur. For instance, a project team planning a big project review meeting could take an planning a big project review meeting could take an active approach to risk by having a contingency or active approach to risk by having a contingency or back up plan and reserves in case they could not back up plan and reserves in case they could not get approval for the specific location.get approval for the specific location.

Project Risk ManagementProject Risk Management

Four Strategies (cont)Four Strategies (cont)

Risk transference: Risk transference: to shift the negative to shift the negative consequence and its responsibilities to the third consequence and its responsibilities to the third party. For instance, a project team may sign party. For instance, a project team may sign warranty for an acquisition of specific hardware warranty for an acquisition of specific hardware needed for a project. Another example is to buy needed for a project. Another example is to buy insurance.insurance.

Risk mitigation: Risk mitigation: to reduce the impact of a risk to reduce the impact of a risk event by reducing the probability of its occurrence. event by reducing the probability of its occurrence. For instance, a project team uses proven For instance, a project team uses proven technologies, hire more competent personnel, and technologies, hire more competent personnel, and buy service agreement from subcontractors, etc.buy service agreement from subcontractors, etc.

Project Risk ManagementProject Risk Management

Benefits of Risk ManagementBenefits of Risk Management

Anticipate/avoid problemsAnticipate/avoid problems Prevent surprisesPrevent surprises Improve ability to negotiateImprove ability to negotiate Meet customer commitmentsMeet customer commitments Reduce schedule slipsReduce schedule slips Reduce cost overrunsReduce cost overruns

Project Close OutProject Close Out Final check on the project completion Final check on the project completion

criteriacriteria Return any customer-owned Return any customer-owned

equipment and suppliesequipment and supplies Project reportProject report

Learning – and growing – from the experienceLearning – and growing – from the experience Formal acceptance or sign-offFormal acceptance or sign-off Package and submit project records to Package and submit project records to

the corporate archivethe corporate archive Party to celebrate a job well doneParty to celebrate a job well done

Case Study?Case Study?

Home work (1 to 2 pages)Home work (1 to 2 pages) Case study: AT&T Wireless Self-DestructsCase study: AT&T Wireless Self-Destructs

What went wrong?What went wrong? What would you do if you were the project What would you do if you were the project

manager?manager?

information technology project management buyang cao school of software engineering

Documents

project team

project goals

project managementwhat

project sponsors

software project successit

project outcomesheet1ontime

good project manager

lack of technical management