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1 © 2008 – 2013 Project Masters, Inc. All Rights Reserved.

Presented by

Project Masters, Inc.

Fundamental Contract & Project Management


Agenda

• Introductions

• Administrative Information

• Case Study Approach & Overview

• Project Charter / Statement of Work

• Stakeholder Register

• Requirements

• Scope Statement & WBS


Agenda

• Schedule, Budget, Resources

• Risk Register

• Baseline Plan

• Kick off Meeting

• Monitor and Control Project

• Execute work

• Close out

•


Learn Steps to Managing a Contract using the following

Tools:

• Stakeholder Register

• WBS

• Scope

• Schedule

• Risk Register

• Budget

• EVM


Learning Activities & Assessments

• Case Study Activities

• Exam

• Course

• Survey


Case Study Activities – MS Project Server 2013 Production

Environment

1. Stakeholder Register

2. Scope Statement

3. Resource Plan & Cost Estimate

4. WBS

5. Schedule

6. Build Risk Register

7. Monitor and Control (EVM)

Project Management Overview


Value Proposition

• Project management practices and processes help an organization meet its strategic goals more effectively and efficiently by maintaining a focus on meeting targets for scope, cost, schedule, and quality during the development and implementation of products and services.


The Project Manager Skills

Meeting Skills, Presentation Skills, Negotiating Skills

ART

Team Management Behavioral intervention Management

Style

Resource Mgt Communication

Management Integration Mgt Contract Mgt

SCIENCE Scope Management Risk Management Quality Management

Cost Management Time Management

Listening Skills, People Skills, Leadership Skills


Project Management Overview

Quality

Time Cost

Scope

Scope Creep


Project Management Processes for a Project


Project Boundaries

Project

Initiator/

Sponsor

Initiating

Processes

Monitoring & Controlling Processes

Planning

Processes

Executing

Processes

Closing

Processes

Project

Deliverables

Project

Records

End

Users

Process

Assets

Project

Inputs

Project

Boundaries


High Level Summary of Process Groups’ Interactions Organization’s culture Project management information system Human resource pool

Enterprise Environmental Factors

Customer

Project Initiator or Sponsor

Organizational Process Assets

Initiating Process Group

Planning Process Group

Executing Process Group

Monitoring and Controlling

Process Group

Closing Process Group

Policies, procedures, standards, guidelines Defined processes, Historical information Lesson learned

Statement of work

Contract

Project charter Stakeholder Register

Project Management Plan

Deliverables Requested changes Implemented change requests Implemented corrective actions Implemented preventive actions Implemented defect repair Work performance information

Approved change requests Rejected change requests Approved corrective actions Approved preventive actions Approved defect repair Project management Plan (updates) Project Scope Statement (updates) Recommended corrective actions Recommended preventive actions Performance reports Recommended defect repair Forecasts Validated defect repair Approved deliverables

Administrative closure procedure Contract closure procedure

Organizational process assets (updates)

Final produce, Service, result


Process Group Interaction in a Project

Level of Process Interaction

Initiating Process Group

Planning Process Group

Executing Process Group

Monitoring and Control Process Group

Closing Process Group

TIME

Start Finish


Managing Project Stakeholders


Project Stakeholders

• Anyone with a vested interest in the project and/or its completion.

• Person or organization that is actively involved in the project or whose interests may be affected as a result of project execution of the completion of the project

• Can exert influence over your project’s objectives and outcomes.


Relationship between Stakeholders and the Project

Users

Customer

Supplier/

Vendors

Project

Team

Influen-

cers

Project

Managem-

ent (PMO)

Project

Sponsor

Project

Manager


Key Stakeholders

• The Project Manager • The Customer/User • The Performing Organization • The Project Team Members • The Project Management Team • The Sponsor • Influencers • The PMO


Identify Stakeholders



The process of identifying all people or organizations impacted by the project, and documenting relevant information regarding their interests, involvement, and impact on project success (The PMBOK® Guide: Fifth Edition)



• The project manager must identify all of the stakeholders in order to ascertain their involvement, interest, expectations, importance, and influence.

• By doing this early in the life cycle, a strategy can be developed for communicating with all concerned.



• In General, projects will have more stakeholders than are obvious

– Who is in favor of the project/who is not?

– Who is in power/ who is not?


Documents Used to Identify Stakeholders

1. Project Charter

− Contains information on sponsors, customers, team members

2. Procurement Documents

− Contracts, suppliers agreements, etc.

3. Enterprise Environmental Factors

− Company culture, structure, Government/industry standards


Documents Used to Identify Stakeholders

4. Organizational Process Assets

− Stakeholder register templates, lessons learned, prior stakeholder registers



1. Stakeholder Analysis

− Stakeholder Defined – Person or organization (customer, sponsor, performing organization, or the public) that is actively involved in the project, or whose interests may be positively or negatively affected by the completion of the project

− Also, they may exert influence over the project and its deliverables



1. Stakeholder Analysis (Cont’d)

− The process of systematically gathering and analyzing quantitative and qualitative information to determine whose interests should be taken into account throughout the project.




− Steps involved in stakeholder analysis

a. Step 1: Identify all stakeholders and relevant information, e.g. role, department, interests, knowledge levels, expectations, and level of influence, (interview the ones you know)




b. Step 2: Identify the potential impact each stakeholder could generate to develop a “handling strategy”

• Now prioritize the key stakeholders to establish the most efficient use of communications to manage their expectations.

• Think - Interest/Concern, Authority Level/Involvement, Influence/Impact, Power/urgency/legitimacy

c. Step 3: Assess reactions or response to situations



2. Expert Judgment

− Use the Above, Below, and Sideways model

− Upper management

− Team members – not management

− Peers

− Don’t forget suppliers/contractors



3. Stakeholder Register is the result of the Analysis

− Identification Information Name, organization, position, etc.

− Assessment Information Requirements, expectations, influence

− Stakeholder Classification Internal/external, supporter/detractor/neutral



4. Stakeholder Management Strategy – The Approach

− Key Stakeholders Impact People

− Participation Level Desired

− Their groups and management


Stakeholder Register Example Stakeholder Data Stakeholder Interest(s) in Project

Stakeholder Classification

Name Org. Position

Location Contact Data

Role in Project

Main Expectations

Potential Influence

Life Cycle Most Interest In Project

Internal/ External

Supporter Neutral Resistor

April Wennerberg

President Columbia, MD

Sponsor Successful and keeps staff informed

High All Internal Supporter

Joy O’Koren

Project Manager

Columbia, MD

Project Manager

On time, budget and within scope

High All Internal Supporter

Karl Wennerberg

Designer Columbia, MD

Approves Requirements

Well defined requirements

Medium Initiating and Planning

Internal Supporter

Employees Part of Org. Columbia, MD

Reads Newsletter

Help them perform job better

Medium Product Internal Neutral

Kyunghee Designer Columbia, MD

Designer Layout is easy to read Medium Execution Internal Supporter

Bill, Robert, Solomon, Jim

Consultants Columbia, MD

Writers To get recognition for articles from peers and management

High Execution Internal Neutral


Stakeholders Exercises

• Use MS Project Server 2013 statement of work

• Who are your project stakeholders? Complete the Project Stakeholders Register.

• Why is it important for the Project Manager to know who the stakeholders are, and their influence, on the projects they are managing?


Stakeholder Register Example Stakeholder

Data

Name Org.Position

LocationContact

Data

Role in Project

Stakeholder Interest(s)in Project

MainExpectations

PotentialInfluence

Life CycleMost Interest

In Project

Stakeholder Classification

Internal/External

SupporterNeutralResistor


Review RFP Statement of Work (SOW)

Stakeholder Register

Scope Statement + Requirements

WBS + WBS Dictionary

Proposal

Baseline Scope, Budget, Schedule

Performance Measure + Reporting + Variance Reporting

Monitor and Control

HRPlan

BudgetRisk

Register + Risk Plan

Schedule QualityPlan

TeamingPlan

Change Control System

Project Kick-off Meeting

Project Close out

Deliverable Acceptance

Win Contract

UpdateApprove

Changes

UntilProject isAccepted


Collect Requirements



• The process of determining, documenting, and managing stakeholder needs and requirements to meet project objectives

• (The PMBOK® Guide: Fifth Edition)



• Requirements include the quantified and documented needs and expectations of the sponsor, customer, and other stakeholders.

• Requirements become the foundation of the WBS.



• Cost, schedule, and quality planning are all built upon these requirements.

– The development of requirements begins with an analysis of the information contained in the following project documents:

1. Statement of Work

2. RFP

3. The Stakeholder Register


Collect Requirements Tools

• Interviews – interview your stakeholders to gather detailed requirements

• Focus Groups – bring together prequalified stakeholders and subject mater experts to learn about their expectations and attitudes about a proposed product.

• Brainstorming – used to generate and collect multiple ideas related to project and product requirements.


Requirements Relationships

Constraints

Business

Requirements

User

Requirements

Functional

Requirements

Other

Nonfunctional

Requirements

Quality

Attributes Vision / Feasibility Document

Use-Cases

Requirements Specification

Sys

tem

s

Req

uir

em

en

ts


Business Requirements Documentation

• Business and project objectives for traceability

• Business rules for the performing organization

• Guiding principles of your organization.


Stakeholder Requirements Documentation

• Impacts to organizational areas

• Impacts to entities inside or outside your organization

• Communication and reporting requirements


Solution Requirements Documentation

• Functional and nonfunctional requirements

• Technology and standard compliance requirements

• Support and training requirements

• Quality requirements

• Reporting requirements


Project Requirements Documentation

• Levels of service, performance, safety compliance, etc.

• Acceptance criteria

• Assumptions

• Dependencies and constraints


Define Scope


Define Scope

• The process of developing a detailed description of the project and product. (The PMBOK® Guide: Fifth Edition)

• The preparation of a detailed project scope statement is critical to project success and builds upon the major deliverables, assumptions, and constraints that are documented during project initiation.


Define Scope

• During planning, the project scope is defined and described with greater specificity as more information about the project is known.

– Existing risks, assumptions, and constraints are analyzed for completeness.

– Additional risks, assumptions, and constraints are added as necessary.


Documents used to Define Scope

• Statement of Work

• Requirements Documentation

• Lessons Learned

• Previous Project


Tools used to Define Scope

• Expert Judgment

• Product Analysis

• Facilitated Workshops

• Team Brain Storming


Documentation Defining Scope

• Product scope description

• Product acceptance criteria

• Project deliverables

• Project exclusions

• Project constraints

• Project assumptions


Scope Exercise

• Create Scope statement using newsletter Scope statement and MS Project Server 2013 Statement of work






Proposal



Monitor and Control

HRPlan

BudgetRisk



TeamingPlan



Project Close out


Win Contract

UpdateApprove

Changes



Create WBS


Create WBS

• The process of subdividing project deliverables and project work into smaller, more manageable components. (The PMBOK® Guide: Fifth Edition)

• The WBS is a deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required deliverables. (The PMBOK® Guide: Fifth Edition)


The WBS

• By beginning with the WBS, the Project Manager can get a clear understanding of the work involved in the project.


The WBS

• The Work Breakdown Structure constitutes the first in-depth analysis of the work content of the undertaking.

• By developing the WBS, the Project Manager can get a clear understanding of the work involved in the project.


Create the WBS

• The scope statement contains what might be termed ‘high-level’ information about the proposed project.

• Preparing the scope statement helps the project team to gather key information


The WBS

• The analysis of the WBS focuses on the work to be carried out, to the exclusion of budget or resource requirements, in order to determine what must be done before attempting to deal with scheduling or cost issues.


Staffing

Budget Risk

Schedule

Network Diagrams

Activity List

Project Control

WBS

Communication


The WBS

• Development of the WBS involves deconstructing the work involved in the project into sets of deliverables and the work packages that produce those deliverables, so that the work can be more efficiently and effectively planned for and carried out.


Create WBS

• Each descending level of the WBS represents an increasingly detailed definition of the project work.

• The WBS organizes and defines the total scope of the project, and represents the work specified in the current approved project scope statement.


Create WBS

• The lowest level WBS components are called work packages.

− A work package can be scheduled, cost estimated, monitored, and controlled.

− In the context of the WBS, work refers to work products or deliverables that are the result of effort and not to the effort itself.


• The WBS, as approached in this course, is considered to be the fundamental tool for Project Planning.

The WBS


The WBS is Derived from:

• The Scope

• Requirements

• Contracts

• Specifications

• Deliverables


Sample WBS – New Home Construction

Survey land

Layout house location

Layout driveway & sidewalks

Identify power hook-up location

Identify water hook-up location

Identify Sewer Hook-up location

Obtain site survey Inspection sign off

Install all drain lines

Install all cold water lines

Install all hot water lines

Connect drain line to main sewer column

Connect water lines to main water feed

Obtain plumbing inspection

Frame floor

Frame walls

Frame roof

Install roof sheathing

Install outside wall sheathing

Obtain framing inspection

Develop house plan

Get owner sign off

Obtain builder sign off

Finalize plans

Obtain building permit

Lay out foundation

Excavate foundation

Pour concrete

Obtain foundation inspection

Install main electrical box

Install all duplex electrical outlet boxes

Install all ground fault outlet boxes

Install all lighting boxes

Install all switch boxes

Obtain initial electrical inspection

Install all duplex outlets

Install all GFI outlets

Install all lighting fixtures

Install all switches

Obtain final electrical inspection

New Home

Construction Project

Deliverable #1

House Plans

Deliverable #2

Construction

Site Survey

Deliverable #3

Foundation

Deliverable #4

Framing

Deliverable #5

Plumbing

Deliverable #6

Electrical

Deliverable #7

ETC


DBS/WBS Name of Project(Training Manual)

Deliverable # 2(Chapter 1)

Nouns

Deliverable # 1(Outline of Manual)

Nouns

Deliverable # 3(Chapter 2)

Nouns

Work-package # 2.1Organize Material

Nouns

Work-package # 1.1Research the Topic

Nouns’’’’’’’’’

Sub-Deliverable # 2.2First Draft of Chapter 1

Nouns

Work-package # 1.2Write Outline

Nouns

Work-package # 2.2.1Write 1st Draft of Chpt. 1

Nouns

Work-package # 1.3Edit Outline

Nouns

Work-package # 2.2.2Edit 1st Draft

Nouns

MilestoneFinalize Outline

By 4-3-2012

MilestoneFinalize First Draft

By 4-15-2012

Sub-Deliverable # 2.3Second Draft of Chpt.1

Nouns

……

This set of activitiescould be considered

a work-package

Sample of DBS / WBS


Work-Package

• Deliverable

• Project work component

• At lowest level of each branch of the WBS

• Management control point where scope budget, actual cost, and schedule are integrated and compared to earned value for performance measurement.


Questions for Preparing a WBS

• What are the project goals? • What work can be divided up in to sub-

projects? • What are the major parts of the finished

product? • What are the important elements that

should remain visible in the project?



• Elements that are appropriate for this level of project planning: – Project constraints – Project deliverables – Test milestones



• What is the workflow – Between top level deliverables – Between project work packages at lower levels

• What initial work precedes all other work? • What are long lead-time elements? • What final effort follows all or most of the other

work? • What efforts do not fall into the above because

they integrate or test the above pieces?


Steps For Preparing the WBS

1. Outline the major processes of the project

2. Identify the deliverables to be produced during each process

3. Define the individual work packages required to produce the deliverables of each process

4. Assign each work package a place in the hierarchy of all project work package having its own distinct WBS-code


5. Persons responsible for the work should have

input into the planning process (It is often helpful to carry out a "Brainstorming Session" involving Project Team Members to facilitate capture and elaboration of information relevant to the project.)

6. In cases where the Project Team is unfamiliar with

the type of work involved, subject matter experts should be consulted

Steps For Preparing the WBS


WBS Activities are

the Building

Blocks of

the Project

WBS

Element 1

WBS

Element 2

WBS

Element 3

WBS

Element 5

WBS

Element 4

WBS

Element 6


Newsletter WBS Example

Newsletter Project

Volunteers Newsletter Distribution

Newsletter Assembly

Newsletter Layout Article Topics

Hardware Upgrades

Software Upgrades

Network Upgrades

Internet/Intranet Capabilities


WBS Exercises

Develop a work breakdown structure (WBS) using the Scope you just created. Show all the work packages needs to accomplish the MS Project Server 2013 Project. (You are required to develop a three-level WBS)






Proposal



Monitor and Control

HRPlan

BudgetRisk



TeamingPlan



Project Close out


Win Contract

UpdateApprove

Changes



Project Scheduling

Project Schedule: an outline of the deliverables and work packages (from WBS) as well as the activities (identified during Project Time Management) of the project plotted along the timeframe within which they are expected to occur • Development requires a clear understanding of

what needs to be accomplished and the timeframe available for completion.

• Includes estimated durations for activities as well as anticipated dates of completion for each activity.


Schedule ( with Tracking Gantt Chart)

Task Name Act. Start

Project Go-Live Mail

Order Business Mon. 2/22

Start Project N/A

Manage Project Mon. 2/22

Training - Sales Reps. Fri. 2/26

Complete Training

Material Fri. 2/26

Train the Trainer Wed. 3/10

Have Tran the Reps.

Classes Mon. 3/22

Complete Training Fri. 3/26

Inventory Tues. 3/23

Place Current Inv. In

A-Frame Tues. 3/23

Pull in Product from

Warminister

Make Decision to

Order Inventory

Receive Inventory

Thurs. 5/13

Fri. 5/14

Mon. 5/17

February

7 14 21 28

March

7 14 21 28

April

4 11 18 25

May

2 9 16 23 30

June

6 13 20 27

2/24

Anderson

Stewart

Stewart

Stewart

Goers

Goers

Goers

Goers


Scheduling Terminology

• Work Package – A deliverable or work component at the lowest level of each branch of the WBS.

• Activity – A component of work performed during the course of a project. Activities are a further breakdown of work packages and are identified during Scheduling.

• Task – Same as an activity. • Milestone – A significant point or event in the project.

(An activity with zero duration) • Event – Same as a milestone. (A term used in Activity-

on-Arrow diagramming technique). • Dependency – A relationship between two project

schedule activities (Four Types: F/S, S/S, F/F, S/F)



• Constraint – An applicable restriction or limitation, either internal or external to a project, which will affect the performance of the project or a process.

• Duration – The total number of work periods (not including holidays and other nonworking periods) required to complete an activity or WBS component)

• Resource – Skilled human resources, equipment, services, supplies, commodities, materials, budgets or funds.

• Level of Effort – An activity that does not produce definitive end products and is measured by the passage of time.

• Baseline –An approved plan for a project, plus or minus approved changes. The baseline is compared to actual performance to determine if performance is within acceptable variance thresholds



• GANTT (Bar) Chart – A graphical display of schedule-related information.

• Crashing – Schedule compression technique involving reducing activity durations and increasing assignment of resources on activities. The goal is to get maximum schedule duration compression for the least additional cost.

• Fast Tracking – Schedule compression technique that changes network logic to overlap phases / activities that would normally be done in sequence. (Increases risk.)


Scheduling Techniques

• Critical Path – Generally, the sequence of activities that determines the duration of the project. (Critical activities are those such that if they are delayed, the project schedule will be extended.)

• Program Evaluation & Review Technique (PERT)

• PERT uses past performance data and expert judgment to calculate a weighted average estimate of task durations and resource requirements.

• PERT Formula: (Optimistic +Pessimistic+ (4*Most Likely)) / 6


Scheduling Techniques

• Schedule Compression – Crashing (add more resources or add more-costly but more

efficient resources)

– Fast Tracking (overlap tasks that would normally be carried out sequentially)

– Concurrent Engineering (carry out tasks in parallel)

• What-If Scenarios – Used to analyze impacts of delays, resource changes, etc.

• Resource Leveling – Adjust schedule to meet resource constraints

– Min/max on utilization


Scheduling Exercises

Create a schedule use the WBS you created for the Server Project.


12 Steps to Entering and Managing a Project in MS Project

1. Create a WBS for your project 2. Enter project start date in MS Project 3. In project go to ribbon tab ribbon group

make sure project summary task is 4. Enter the WBS in to project 5. Enter your resources in resource table 6. Create links between tasks 7. Assign resources to tasks 8. Assign durations to tasks 9. Get schedule signed off by management and customer 10. Baseline schedule 11. Track schedule 12. Close out schedule

format show/hide


Project Do’s and Don’ts

• Don’t use SS (Start-to-start) without adding a predecessor • Don’t have more than 15% of your tasks hard coded • Don’t link summary tasks • Don’t manually enter the start and finish date for a task • Do use the 8/80 rule of thumb when dividing up tasks • Do change “Work” to “Resource-hours” • Do use the same unit of measure through out your schedule.

Use work-days, not work-hours, work-weeks, months, etc. • Do use “Duration = work/units” • Don’t ask the expert “How long will this task take?”

Instead “How many of your resource hours would this task use if you could work on it full-time with no interruptions?”

• Do use the when assigning resources • Don’t use elapsed-days for expressing duration

task entry view


Cost Estimating Process

1. Develop the Work Breakdown Structure (WBS)

2. Schedule the work elements

3. Retrieve and organize historical data

4. Develop and use cost estimating relationships

5. Develop and use production learning curves

6. Identify skill categories, skill levels, and labor rates

7. Compute labor-hour and material estimates

8. Compute overhead and administrative costs

9. Apply inflation and escalation (cost growth) factors

10. Compute the estimated costs

11. Analyze, adjust and support the estimate

12. Publish and present the estimate


Cost Estimating Exercises

1. What would be the best way to estimate the picnic project?

2. How can you estimate the picnic project better next year?

3. What cost estimating method(s) are you using your current projects?

4. Use the cost estimating sheet to do a bottom-up planning cost estimate at the work package level?


Newsletter Project Estimating Worksheet

Project:

WBS Segment:

WBS#

Description Immediate Predecessors

Duration Hr/dy/wk or Number of Items

Resources Type (labor, material, equipment)

% of Time

Unit Cost Hr/Dy/Wk or Use

Resource Descripti

on Total Cost Assumptions/Completion Criteria

1.1 Newsletter Layout Start Project 5 days labor 50% $50 Hr Designer $2000

During the 2 WK duration the Designer will work a total of 40 Hours

1.1 4 reams materials $4 paper $16. Need paper for design

1.1 40 hrs Equipment $1 Hr Computer $40

Need to use the computer for three 8 hour days and this shows the overhead cost for computer

1.2 Article Topics Start Project 6 days Labor 20% $40 4 Writers $1,536 Would be 1.6 hours a day per person,

38.4 Hrs Equipment $1 Hr Computer $38.40 Since there are 4 writes you would need the computer or computers for 38.4 hours

1.3 Volunteers Start Project The resources are included under the other WBS items.

1.4 Newsletter Distribution

Complete Newsletter Assembly 2 days Labor 20% $50 Hr 1 Designer $160

Assuming it should take 3.2 hours in a 2 day duration

3.2 Hrs Equipment $1 Hr Computer $3.20 Would need the computer or computers for 3.2 hours

1.5 Newsletter Assembly

Approve Articles 2 days Labor 100% $50 Designer $800

Take 16 hour to assemble Newsletter by paper and web page

16 Hrs Equipment $1 Hr Computer $16 Would need the computer or computers for 16 hours

Total $4,609.60 Total cost for the Newsletter Project


Project Estimating Worksheet Project:

WBS Segment:

WBS#

Description Immediate Predecessors

Duration Hr/dy/wk or Number of Items

Resources Type (labor, material, equipment)

% of Time

Unit Cost Hr/Dy/Wk or Use

Resource Description

Total Cost

Assumptions/Completion Criteria

1.2 Design House

House location 2 WK labor 50% $50 Hr Designer $2000

During the 2 WK duration the Designer will work a total of 40 Hours

1.2 4 reams materials $4 paper $16. Need paper for design


Risk

• Risk is “an uncertain event or condition which, if it occurs, has a positive or negative effect on a project’s objectives.” (PMBOK® Guide)

• Project Risks are expressed as:

– Name of Risk Event

– Area of impact (cost, schedule, quality)

– Probability of occurrence

– Severity of impact (may be expressed as cost)


Risk Response Strategies for Negative Risks

• Accept

– The “do nothing” option. Costs = (probability * impact).

– Strategy used when costs of other options exceed costs of occurrence.

• Avoid

– Requires advance action and funds expenditure.

• Mitigate

– Actively take steps to prevent occurrence or limit/lessen impact. Requires plan and funds.

• Transfer

– Shifts responsibility for risk response to a third party. Requires funds.

– Strategies include: outsourcing, buying insurance, etc.


Risk Response Strategies for Positive Risks

• Accept

– If the opportunity presents itself, take advantage of it. Otherwise, take no action.

• Enhance

– Identify root causes / drivers of the opportunity and take steps to improve the likelihood of occurrence.

• Exploit

– Stronger response than enhance … take steps to remove uncertainty and ensure that the opportunity will occur.

• Share

– Allocate the opportunity to a third party who is better able to take advantage it (and who will share benefits).


Project Risk Management Step-by-Step



1. Plan for how risk will be managed on the project and who will be responsible for the various aspects of managing risk. This is the Risk Management Planning process and the outcome of this process is the Risk Management Plan document.



2. Identify and list events and factors that represent threats or opportunities relative to the project goals of scope, time, budget, etc. This is the risk identification process. The information gathered from carrying out the risk identification process is recorded in the Risk Register documentation.



The Risk-Identification Environment

Risk Events

That Correspond

to Work

Packages

Listed

on the WBS

Risk Events

Resulting from the

“Larger” Project

Environment

Risk Events that

are Implied by Work

Packages

Listed on the

WBS


Risk Categories

1. Technical, quality, performance risks

– Reliance on unproven technology

– Unrealistic performance goals

– Changes to industry standards

– Changes to the technologies used in the project


Risk Categories

2. Project Management Risks

– Poor allocation of time

– Poor allocation of resources

– Poor quality of the project plan

– Poor use of project management disciplines


Risk Categories

3. Organizational Risks

– Cost, schedule, scope, quality objectives that are inconsistent

– Failure to properly prioritize projects

– Inadequate funding

– Interruption of funding

– Resource conflicts


Risk Categories

4. External Risks

– A shifting legal or regulatory environment

– Labor issues

– Changing priorities

– Country risks

– Force Majeure, e.g., floods, earthquakes, etc.



3. Once the risks have been identified, the next step is to carry out the Risk Analysis processes. The Qualitative Risk where you calauate the probility and impact of risk as it relates to time and money.



4. The outcome of the above analyses is a prioritized list of project risks listed in a Risk Probability and Impact Matrix which shows the probability of occurrence for each risk, the potential impact for each risk as well as the Risk Score for each risk . Risk Score / Expected Monetary Value (EMV)= (Probability * Impact)



5. The risks are rank ordered in terms of their Risk Score, which will serve as a major input for negotiating the cost and schedule contingencies.



• 6. Quantitative Analyses is started at the end of the Qualitative Analysis,on the top 20% of the risks (as measured by their Risk Scores and taking other factors into account) are subjected to a Quantitative Analysis.



7. The results of the Risk Analyses are recorded in the Risk Register



8. Following the risk analyses, the next step is to develop strategies for the threats and opportunities that have been identified. – During this process the objectives are to a) Eliminate appropriate risks by changing the project plan b) Take steps to reduce the probability and / or impact of

threat c) Increase the probability and / or impact of opportunities d) Make contractual arrangement to share / shift the risk

Note: These steps fall under Risk Response Planning and they are documented in the Risk Register.



• The process of Risk Monitoring and Control involves: – Keeping track of the identified risks

– Monitoring residual risks

– Identifying new risks

– Ensuring execution of risk response plans

– Evaluating effectiveness of risk response plans in handling risks



• The purpose of Risk Monitoring and Control is to determine whether: – Risk responses have been implemented as planned – Risk response actions are as effective as expected,

or if new responses should be developed – Project assumptions are still valid – Risk exposure has changed from its prior state

(analysis of trends) – Which risk triggers have occurred – Proper policies and procedures are being followed


Evaluating Risk Management Systems

• Some of the questions the Project Manager should ask include: – How were unknown risks handled once they were

uncovered? – Were the management reserves (contingency

monies) sufficient to cover the cost of unknown risks?

– Were plans for handling risk events adequate to handle such events once they occurred?


Evaluating Risk Management Systems

• The Project Manager will evaluate the following aspects of the Risk Management System: – Risk assessment

– Risk identification

– Risk budget

– Risk impact

– Risk factors

– Risk database

– Risk management procedures


Risk Exercises

1. Identify all possible risks you could encounter on the Server Project using the Brainstorming technique.

2. Perform Qualitative Risk Analysis on possible risks identified. Identify a probability (high, medium, Low) for each risk.

3. Perform Quantitative Risk Analysis on the possible risks, using sensitivity analysis.

4. Create a plan risk response for each risk with a high probability and high impact. Include in the plan if you’re going to Avoid, Transfer, Mitigate, or accept each risk.

5. How will you monitor each risk?


Newsletter Project Risk Register – Contingency Reserve = $2,900

Identification: Quantification: Mitigation

Risk Status Work

package Description

of Risk

Probability (%) Impact Estimate Money/Ti

me

Risk Response Owners

Risk Triggers

Contingency Plan

Risk Mitigation Strategies

Contingency Reserves

Dollars/Time

Low Medium High

0 - .35 .36 - .65 .66 - 1.0

Newsletter Layout

Layout Hard to follow X 20 hours Kyunghee

Complain they can’t understand

Ask input from readers Mitigate

$1000 and add in 1 extra day Green

Complete late X Kyunghee

Pass ½ way point and it has not started

Accept – because this is not her primary job Green

Article Topics

Wrong Information X 8 hrs Robert No one reads

Make sure writers have knowledge in areas they are writing in Mitigate $400 Green

Volunteers

Never write assigned articles. X 10 hrs April

No articles are turned in

Hire some outside writer to help internal writers Mitigate $500 Green

Newsletter Distribution

Computers crash X $1000 April

Computer has a blue screen

Hire company to handle computer problems Transfer $1000 Green

Key for Risk Status

Green Risk triggers have not happened

Yellow Risk triggers have been tripped

Red Process of handling Risk


Project Risk Register

Identification: Quantification: Mitigation

Risk Status Work

package Description

of Risk

Probability (%) Impact Estimate

Money/Time

Risk Response Owners

Risk Triggers

Contingency Plan

Risk Mitigation Strategies

Contingency Reserves

Dollars/Time Low Medium High

0 - .35 .36 - .65 .66 - 1.0


Baseline

• A baseline is created once the project’s scope, work breakdown structure, schedule, and budget have been approved by the project manager and the project sponsor.

• Changes to the baseline require strict management to ensure that the project meets cost, schedule, and quality requirements.

• The baseline is used to guide execution and serves as the basis for monitoring & control.


Step One is provide for Team a Work Plan

1. Providing them information On: – Roles

– Responsibilities

– Organization Charts

– Staffing Management Plan for start/end dates, etc


Step One is provide for Team a Work Plan

1. Helpful Charts to distribute at Kick-off Meeting • Organizational culture and structure

• Position Descriptions


Tools Used for Kick-off Meeting

1. Document team member positions and responsibilities

• Hierarchical-type charts

• Matrix-based charts

• Text-oriented formats

• Other sections of the project management plan


Organization Charts and

Position Descriptions

Hierarchical-type

Organization Chart

Matrix-based

Responsibility Chart Text-oriented

Format

PM

RAM Role

Responsibilities

Authority


Matrix-based Charts

PERSON

PHASE

A B C D E F …

Design S P P R A P

Development P A P R

Functional S P P A

Requirements S R A P P P

Testing P R A P

A= Accountable, I= Input Required, P= Participant,

R= Review Required, S= Sign-off Required


Sample Organizational Chart

CEO

Product

A

Product

B

Logistics

Research Develop. Product

A

Product

B

Product

A

Product

B DP Budget

Production Marketing Accounting Engineering


Newsletter Project Organizational Chart

VP Operations

Project Manager

Graphic Designer

VP Instructions

IT Expert Editor Consultant

VP MIS

Karl Wennerberg

Joy O’Koren

Kyunghee Kwon

RobertJim Marty Bill Solomon

April Wennerberg

President


Newsletter Project Organizational Chart

Deliverables Person Responsible

April Joy Karl Robert Kyunghee Bill Jim Solomon Marty

Chapter P, S A, P I, R

Scope Baseline P, S P,S R, I

I I I I I I I

Requirements I, S P A,S R, I

I I I I I I

Project Plan P, S P,S R, I

I I I, P I, P I, P I, P I, P

Newsletter Articles R, S P, A P, A P, A P, A R

Format Newsletter R P, A, S

Design Newsletter R P, A, S

Newsletter Distribution R P, A, S

Proof Newsletter R P, A, S

Newsletters Ram

A = Accountable

I = Input required

P = Participant

R = Review Required

S = Sign Off Required

© Copyright 2009 Project Masters Inc. All rights reserved. Project Masters Inc.

Running an Effective Meeting

Make sure you use the S.P.A.C.E.R. rule

for each of your meetings

• Safety: Keep safety involved in every

meeting

• Purpose: Have a clear purpose for the

meeting.

• Agenda: Outline the topics to be covered

and the times to be spent on each topic. 136



Make sure you use the S.P.A.C.E.R. rule

for each of your meetings

• Code of Conduct: Setup the rules for the

group.

• Expectations: What results should be

achieved?

• Roles: Who does what in the meeting?

137



Roles for Meeting attendees:

• Team Leader

• Scribe

• Recorder

• Spokesperson

• Timekeeper

• Process Monitor

• Facilitator

138


Newsletter Project Team Meeting

Date: September 2, 2013

Location: Project Masters Conference Room

Time: 9am – 11am

139

Time Topic Speaker

9 – 9:30am Review Newsletter Status Joy

9:30 – 10am Update on Newsletter Design Kyunghee

10 – 10:30am Review purposed Newsletter

articles

Robert

10:30 – 11am Review Action items & due dates Gina



Meeting Minutes – Gina

Meeting minutes will be distributed within

2 business days following the meeting.

Meeting minutes will include the status of

all items from the agenda along with new

action items and the Parking Lot list.

140



Action Items – Gina

Action Items are recorded in both the meeting agenda and minutes. Action items will include both the action item along with the owner of the action item. Meetings will start with a review of the status of all action items from previous meetings and end with a review of all new action items resulting from the meeting. The review of the new action items will include identifying the owner for each action item.

141



Meeting Chair Person – Joy

The Chair Person is responsible for distributing the meeting agenda, facilitating the meeting and distributing the meeting minutes. The Chair Person will ensure that the meeting starts and ends on time and that all presenters adhere to their allocated time frames.

142



Note Taker – Gina

The Note Taker is responsible for documenting the status of all meeting items, maintaining a Parking Lot item list and taking notes of anything else of importance during the meeting. The Note Taker will give a copy of their notes to the Chair Person at the end of the meeting as the Chair Person will use the notes to create the Meeting Minutes.

143



Time Keeper – Karl

The Time Keeper is responsible for helping the

facilitator adhere to the time limits set in the

meeting agenda. The Time Keeper will let the

presenter know when they are approaching the

end of their allocated time. Typically a quick

hand signal to the presenter indicating how

many minutes remain for the topic is sufficient.

144



Newsletter Action Plan Example

145

Goals Action Steps Respon-

sibility Priority Check Point Due Date

Complete Newsletter

Design

Create Layout Kyunghee H Draft 9-15-12

Approve Layout April H 9-16-12

Review Article Topics

Write Summary for each

Topic Robert H finished 10-20-12

Approve article topics April H 10-30-12

Create Graphics

Identify Graphics Karl H finished 10-24-12

Create Graphics Kyunghee H 11-20-12


Action Plan Meetings

The Project Manager should have a table

that tracks the action, person responsible,

and when the action will be complete

146


Team Exercise

Create a Meeting Kick-off Agenda plus

a RAM for the Server Project.

Use the newsletter Meting Kick-off

Agenda and RAM as an example to help

you create the Server Project exercise.


Execution

• Project Management Plan guides execution

“plan your work and work your plan” (Anonymous)

• PM’s Focus Areas:

– Project Status Oversight & Reporting

– Project Change Control

– Stakeholder Management

• Leadership and communication skills are key to the success of this phase in the project lifecycle.


Monitoring Execution

• Variance Measurement

– Quantitative techniques used to measure progress against plan (baseline).

• The most commonly used measures are:

– Cost Variance (above / below budget)

– Schedule Variance (ahead / behind)

– Number of changes (requested, approved)


Variance Monitoring

• Strict monitoring of variance measures can be used as an early warning system.

• Scope creep (unplanned work) and quality problems (rework) are two important sources of variance.

• Communications breakdowns are the most frequently cited root cause for failure to identify small changes that become big variances.


Controlling Project Execution: Formal Change Control

• Identify changes from the original scope.

• Forecast the cost of changes and their effects on performance and schedule

• Analyze proposed changes

• Make decisions regarding how to handle recommended changes

• Implement changes

• Record actual information pertaining to changes made to the project

• Resolve disputes


Types of Change Control Systems

• Configuration (Baseline) Control – Configuration control is a system of procedures

that monitors emerging project scope against the scope baseline. Configuration control requires documentation and management approval on any change to the baseline

• Design Control – Design control is a system for monitoring project

scope, schedule and cost during the project’s design stage


Types of Change Control Systems

• Document Control - a system for controlling and executing project documentation in a uniform and orderly fashion.

• Acquisition Control - a system for acquiring project equipment, material and services in a uniform and orderly fashion.

• Specification Control - a system for assuring that project specifications are prepared in a uniform fashion and only changed with proper authorization.






Proposal



Monitor and Control

HRPlan

BudgetRisk



TeamingPlan



Project Close out


UpdateApprove

Changes



The Earned Value Concept


Main Areas the PM Is Expected to Control

• Scope

• Time

• Cost


Cost Variance

• The Cost Variance compares deviations only from budget and provides no comparisons of work scheduled and work accomplished.


Schedule Variance

• The Schedule Variance compares planned work versus the work that has actually completed


Earned Value Management

• Earned Value Management is a project management tool that measures the progress of complex and changeable projects against a baseline



• Define The Work

• Schedule and Resource the Work

• Baseline the Budget and Schedule

• Monitor and Status The Work

• Re-Plan the Work



• Earned Value Management (EVM)

– A commonly used form of performance measurement

• Integrates scope, cost, and schedule to measure project performance

• Must have a baseline to measure against

• Monitors three key dimensions for each work package and control account



• EVM Key dimensions defined Planned Value (PV) The authorized budget assigned to the work to be

accomplished for an activity or WBS component.

• This would be the team’s estimate of the cost assigned to a task/work package/deliverable during planning, and then approved as part of the budget.

• If the team estimated a task/work package/deliverable to cost $1000, then that PV is equal to $1000



• EVM Key dimensions defined (cont’d)

Earned Value (EV) The value of the work performed expressed in terms of

the approved budget assigned to that work for an activity or WBS component.

• What is the value of the work that has been accomplished on a task/work package/deliverable ?

• If 50% of a task costing $1000 is completed, the EV is equal to $500.



• EVM Key dimensions defined (cont’d)

Actual Cost (AC) The total cost actually incurred and recorded in

accomplishing work performed for an activity or WBS component.

• This is what the work (on a task/work package/deliverable ) actually costs the project.

• If (due to efficiencies achieved) a contractor bills you for $500 for a task that was estimated to cost $600, then the AC is equal to $500.



• Formulae required to perform EVM calculations

Schedule Variance: SV = EV-PV A measure of schedule performance against the

baseline on a project

– Measures work performance against the schedule baseline (will equal zero at completion)

– Interpretation:

• SV = “0”, on schedule

• SV = Negative value, behind schedule

• SV = Positive value, ahead of schedule



• Formulae required for EVM calculations (cont’d)

Cost Variance: CV = EV-AC A measure of budget performance against the time-

phased cost baseline on a project – Measures work performance against the time-phased

cost baseline. At project completion the CV will be the difference between BAC and money actually spent.


Control Costs Tools and Techniques


Cost Variance: CV = EV-AC (cont’d) – Interpretation:

• CV = “0” on budget

• CV = Negative Value, over budget

• CV = Positive value, under budget




Schedule Performance Index: SPI = EV/PV A measure of schedule progress achieved compared to

progress planned performance on a project

– Interpretation

• SPI = “1”, the rate at which the work is being performed is at the rate it was planned

• SPI = less than “1”, the rate at which the work is being performed is less than was planned

• SPI = greater than “1”, the rate at which the work is being performed is greater than was planned



• Formulae required for EVM calculations (cont’d) Cost Performance Index: CPI = EV/AC A measure of the value of work completed compared

to the actual cost or progress made on the project. – Interpretation

• CPI = “1” work performed to-date is costing what it was planned to cost

• CPI = less than “1”, work performed to-date is costing more than planned

• CPI = greater than “1”, work performed to-date is costing less than planned


Questions that PV, EV, AC, BAC, EAC Answers

Question Answer Acronym

How much work should be

accomplished?

Budgeted cost for work

scheduled (planned value) PV

How much work is executed? Budgeted cost for work

performed (earned value) EV

How much did the executed

work cost?

Actual cost of work performed

(actual cost) AC

What was the total job

estimated cost? Budget at completion BAC

What do we now expect the

project to cost? Estimate at completion EAC


Reported Variances

SV = 100-125 = -25

CV = 100-140 = -40

VAC = 300-400 = -100

EAC Reporting

Budgeted Cost Actual Cost

of Work

Performed

At Completion

Work

Scheduled

Work

Performed Budgeted

Latest

Revised

Estimate

PV EV AC BAC LRE

125 100 140 300 400 -25 -40 -100


Charting Earned Value

2004 2005 2006 2007 2008

0

100

200

300

400

NOW AT COMPLETION

Schedul

e Slip

EAC

BAC

Ove

rru

n


Forecasting Methods for a New EAC

• Forecasting

– Developing a new Estimate at Completion (EAC) that may differ from the original Budget at Completion (BAC).

• The EAC is based upon a new Estimate to Complete because of events that are occurring, or have occurred during the execution of the project work.

• The revised EAC, when approved, becomes the new BAC.


Benefits of Using Earned Value

• Allows for continuous detail planning • Gives an objective measure of:

– Cost – Schedule – Technical scope

• Provides the ability to: – Design Risk Mitigation Plans for a project – Monitor Risk Mitigation Plans for a project – Modify Risk Mitigation Plans for a project


Benefits of Using Earned Value (cont’d)

• Increases the effectiveness of status reporting

• Earned Value provides a tool to help manage the project’s performance


Earned Value and the WBS

• WBS plays a large role in the Earned Value Management System.

• Essential that the project’s WBS be correctly set up in order to capture costs.


Summary of Earned Value

Contract Budget Baseline

Actuals

Plan

Earned

Value

Cost Variance

Schedule

Variance

ETC

BAC

MR

25

20

15

10

5

Period 1 Time Period 2


EVM Example SV + CV = Amount of Spent Activity in Units

SPI + CPI = Ration Based on 1 Unit =

Resource A = $ 100 per hourActivity A = 50 HoursBAC = $ 5000

CV = EV – AC = 1000 – 2600 = – 1600(Over budget)

SV = EV – PV = 1000 – 2000 = – 1000(Behind schedule)

SPI = EV / AC = 1000 / 2600 = .38Unit Value = $ 1You are receiving $ 0.38Worth of work on a $ 1

SPI = EV / PV = 1000 / 2000 = .50Unit Value = 100 %You’ve completed 50 %Of planned work to date

Project Start End of week 2

EV = $ 0 $ 1000PV = $ 0 $ 2000AC = $ 0 $ 2600

Cost = Resource A x Activity A

Schedule = Cost / Hours / Week

Week

Cost

Hours

1

$ 1000

10

2

$ 1000

10

3

$ 1000

10

4

$ 1000

10

5

$ 1000

10

ETC

EAC

*(Estimate To Complete)

(Estimate At Complete)

Project Manager shall Investigate, by talking to the resource assigned to the activity.*


Exercise:

PERFORMANCE MEASUREMENT PROBLEM:

Scenario:

A contractor is tasked to lay five sections of track in five weeks for a cost of

$5,000.00.

BAC = $5000

PV = $ 1000 per week per section

EV (At start of task) = $0

Status: After two weeks, one section of track has been laid for a cost of $2,600.

Problem: Based on the provided information, calculate the following Values:

PV = $2000.00

EV = $1000.00

AC = $2600.00

CV = (EV- AC) = (1000 – 2600) = - $1600

SV = (EV – PV) = (1000 – 2000) = - $1000

CPI = (EV / AC) = (1000 / 2600) = .38

SPI = (EV / PV) = (1000 / 2000) = .50

ETC = ((BAC – EV) / CPI) = ((5000 – 1000) / .38) = $10,526.32

Chapter 0 EAC = (AC + ETC) = (2600 + 10,526.32) = $13,126.32

= (BAC/CPI) = 5000/ .38 = 13157.89

Chapter 1 How long will it take to complete this project based on current performance?

= (Original est. duration / SPI) = (5wks / .5) = 10 wks.


Exercise:

Discussion Items:

1. What are the advantages of using Earned-Value measures and Cost and Performance Indices to monitor and control projects?

2. What are some of the potential problems in using these approaches to project control?


Closing the Project

• Closeout is the formal process of bringing a project - or phase of a project - to completion and shutting it down.

• Proper Closeout of projects and phases of projects provides benefits to the organization with respect to ensuring success of future projects.


Closeout Actions

• Obtain customer acceptance / sign-off.

• Closeout contract / procurement actions.

• Review and update all project documents to reflect as-built or as-delivered product(s), schedule, WBS, and cost data.

• Conduct after action or lessons learned analysis and review(s)

• Archive project documents and artifacts.


Benefits from Lessons Learned Analysis

• Reduction in the Project Life Cycle

• Reduction in costs associated with performing projects

• Reduction in project redundancy


Case Study Activity: Lessons Learned

Project Area (e.g. scope, cost, etc.)

Lesson Learned

Impact on Quality (high, medium, low)

Time: 00:20


Celebrate !

186


Course Review


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