Importance of Project Management

2. Importance of Project Management

3. Management of IT Projects

4. What Defines a Project? • • • • • • •

5. Project Management versus Process Management “Ultimately, the parallels between process and project management give way to a fundamental difference: process management seeks to eliminate variability whereas project management must accept variability because each project is unique.” Elton, J. & J. Roe. “Bringing Discipline to Project Management” Harvard Business Review, March-April, 1998.

6. Measures of Project Success • • • • • • •

8. IT Project Outcomes

9. Why do Projects Fail?

10. Why do IT Projects Fail?

11. Have You Ever Lost Sight of the Project Goals?

12. Not all Projects Are Alike…

13. Shenhar’s Taxonomy of Project Types

14. Project Life Cycle

15. Life Cycle Models: Pure Waterfall

16. Life Cycle Models: Code & Fix

17. Design, Cost, Time Trade-offs

18. Optional Scope Contracts

19. Importance of Project Selection

20. Project Initiation & Selection

21. Payback Period

22. Net Present Value (NPV) Discounted Cash Flow (DCF)

23. Internal Rate of Return (IRR)

24. DCF Project Example*

25. DCF Project Example (cont’d)

26. DCF Example Continued

27. DCF Example Continued

28. Criticisms of NPV/DCF

29. Expected Commercial Value (ECV)

30. DCF Example Revisited

31. Ranking/Scoring Models

32. Scoring Attributes

33. Ranking/Scoring Example

35. Analyzing Project Portfolios: Bubble Diagram

36. Analyzing Project Portfolios: Product vs Process

37. Key Elements of Project Portfolio Selection Problem

38. “Stage-Gate” Approach

39. Project Selection Example

40. Phases of Project Management Project formulation and selection Project planning Summary statement Work breakdown structure Organization plan risk management Subcontracting and bidding process Project scheduling Time and schedule Project budget Resource allocation Equipment and material purchases Monitoring and control Cost control metrics Change orders Milestone reports

41. Project Planning Summary Statement Executive summary: mission and goals, constraints Description and specifications of deliverables Quality standards used (e.g., ISO) Role of main contractor and subcontractors Composition and responsibilities of project team Organization Plan Managerial responsibilities assigned; signature authority Cross impact matrix (who works on what) Relationship with functional departments Project administration Role of consultants Communication procedures with organization, client, etc.

42. Importance of Project Planning

43. Work Breakdown Structure (WBS)

44. Work Packages/Task Definition

45. Design of a WBS

46. Two-Level WBS

47. Three-Level WBS

48. Estimating Task Durations (cont’d) • Benchmarking • Modular approach • Parametric techniques • Learning effects

49. Beta Distribution

50. Beta Distribution

51. Estimating Task Durations: Painting a Room

52. Estimating Task Durations with Incentives Task: Consider the painting job that you have just estimated. Now, however, there are explicit incentives for meeting your estimated times. If you finish painting the room before your specified time, you will receive a $10 bonus payment. HOWEVER, if you finish the painting job after your specified time, you will be fined $1000. Revised estimated time =

53. Estimating Task Durations with Incentives Task: Consider the painting job that you have just estimated. Now, however, there are explicit incentives for meeting your estimated times. If you finish painting the room before your specified time, you will receive a $10 bonus payment. If you finish the painting job after your specified time, there is no penalty. Revised estimated time =

54. Role of Project Manager/Team

55. Responsibilities of a Project Manager

56. Project Team

58. Intra-team Communication

59. Number of Intra-team Links

60. Importance of Communication

61. Project Performance and Group Harmony

62. Project Performance and Group Harmony (cont’d)

63. Group Harmony: High vs Low Performing Groups

64. Extent of Individual Contribution: High vs Low Performing Groups

65. Decision Making Effectiveness: High vs Low Performing Groups

66. Project Organization Types

67. Project Organization Continuum

68. A Business School as a Matrix Organization

69. Matrix Organizations & Project Success

70. Organizational Structure & Project Success

71. Study Data

72. ANOVA Results by Organizational Structure

73. Summary of Results

74. Subcontracting = Business Alliance When you subcontract part (or all) of a project, you are forming a business alliance....

75. Communication and Subcontractors

76. Personality Compatibility

77. Subcontracting Issues

78. Basic Contract Types Fixed Price Contract Client pays a fixed price to the contractor irrespective of actual audited cost of project Cost Plus Contract Client reimburses contractor for all audited costs of project (labor, plant, & materials) plus additional fee (that may be fixed sum or percent of costs incurred) Units Contract Client commits to a fixed price for a pre-specified unit of work; final payment is based on number of units produced

79. Incentive (Risk Sharing) Contracts

80. Why Use Incentive Contracts?

81. Washington State Bid Code (WAC 236-48-093) WAC 236-48-093: A contract shall be awarded to the lowest responsible and responsive bidder based upon, but not limited to, the following criteria where applicable and only that which can be reasonably determined: 1) The price and effect of term discounts...price may be determined by life cycle costing if so indicated in the invitation to bid 2) The conformity of the goods and/or services bid with invitation for bid or request for quotation specifications depicting the quality and the purposes for which they are required. 3) The ability, capacity, and skill of the bidder to perform the contract or provide the services required. 4) The character, integrity, reputation, judgement, experience, and efficiency of the bidder. 5) Whether the bidder can perform the contract with the time specified. 6) The quality of performance on previous contracts for purchased goods or services. 7) The previous and existing compliance by the bidder with the laws relating to the contract for goods and services. 8) Servicing resources, capability, and capacity.

82. Competitive Bidding: Low-Bid System “In the low-bid system, the owner wants the most building for the least money, while the contractor wants the least building for the most money. The two sides are in basic conflict.” Steven Goldblatt Department of Building Construction University of Washington The Seattle Times, Nov 1, 1987

83. Precedence Networks

84. Precedence Networks: Activity-on-Node (AON)

85. Precedence Diagramming

86. Critical Path Method (CPM): Basic Concepts

87. Critical Path Method (CPM): Basic Concepts

88. AON Precedence Network: Microsoft Project

89. Critical Path Method (CPM): Example 2

90. Example 2: Network Paths

91. Example 2: CPM Calculations

92. Example 2: Calculating Total Slack (TSi)

93. Slack (Float) Definitions (for task i)

94. Example #2: LP Model

95. Example #2: Excel Solver Model

96. Gantt Chart

97. Project Budgeting

98. Project Budgeting (cont’d)

99. Issues in Project Budgets

100. Critical Path Method (CPM): Example 2

101. Project Budget Example

102. Project Budget Example (cont’d)

103. Cumulative Costs

104. Weekly Costs (Cash Flows)

105. Managing Cash Flows

106. Cash Flow Example

107. Cash Flow Example: Solver Model

108. Material Management Issues

109. Material Management Example

110. Lot-Sizing Decisions in Projects

112. Time-Cost Tradeoff Example

113. Time-Cost Tradeoff Example (cont’d)

114. Linear Time-Cost Tradeoff

115. Balancing Overhead & Direct Costs

116. Time-Cost Tradeoff (Direct Costs Only)

117. General Time-Cost Tradeoffs

118. Software Project Schedules “Observe that for the programmer, as for the chef, the urgency of the patron may govern the scheduled completion of the task, but it cannot govern the actual completion. An omelet, promised in ten minutes, may appear to be progressing nicely. But when it has not set in ten minutes, the customer has two choices--wait or eat it raw. Software customers have the same choices. The cook has another choice; he can turn up the heat. The result is often an omelet nothing can save--burned in one part, raw in another.” F.P. Brooks, “The Mythical Man-Month”, Datamation, Vol 20, No 12 (Dec, 1974), pp. 44-52.

119. Coordination Costs (Software Development Project) Assume you want to develop program that will require (approximately) 50,000 lines of PERL code A typical programmer can write approximately 1500 lines of code per week Coordination time is M (M-1)/2 weeks

120. Brook’s Law “Adding manpower to a late software project makes it later.” F.P. Brooks, “The Mythical Man-Month”, Datamation, Vol 20, No 12 (Dec, 1974), pp. 44-52.

121. Compressing New Product Development Projects

122. New Product Development Process

123. Issues and Tradeoffs

124. Classic PERT Model Defined

125. Classic PERT Model (cont’d)

126. PERT Example #1

127. PERT Example #1 (cont’d)

128. PERT Example #2

129. Example #3: Discrete Probabilities

130. Example #3 (cont’d)

131. Example #3 (cont’d)

132. Monte-Carlo Simulation (PERT Example 1)

133. Calculating Confidence Intervals

134. New Product Development Projects

135. New Product Development Projects (cont’d)

136. Critical Chain and the Theory of Constraints (TOC)

137. Project Buffer Defined

138. Calculating Project Buffer Size

139. Implications of Project Uncertainty

140. Uncertainty and Worker Behavior

141. Parkinson’s Law (Expanding Work)

142. Procrastinating Worker

143. Schoenberger’s Hypothesis

144. Schoenberger’s Hypothesis Illustrated

145. Schoenberger’s Hypothesis Illustrated

146. Risk Management

147. Risk Analysis

148. How to Manage Project Risks?

149. Risk and Contracts

150. Tornado Diagram

151. Sensitivity Chart

152. Van Allen Company

153. Resource Allocation & Leveling Resource Leveling: Reschedule the noncritical tasks to smooth resource requirements Resource Allocation: Minimize project duration to meet resource availability constraints

154. Resource Allocation & Leveling Three types of resources: 1) Renewable resources: “renew” themselves at the beginning of each time period (e.g., workers) 2) Non-Renewable resources: can be used at any rate but constraint on total number available 3) Doubly constrained resources: both renewable and non-renewable

155. Resource Leveling

156. Resource Leveling: Early Start Schedule

157. Resource Leveling: Late Start Schedule

158. Resource Leveling: Microsoft Project

159. Renewable Resource Allocation Example (Single Resource Type)

160. Resource Allocation Example: Early Start Schedule

161. Resource Allocation Example: Late Start Schedule

162. Resource Allocation Heuristics Some heuristics for assigning priorities to available tasks j, where denotes the number of units of resource k used by task j 1) FCFS: Choose first available task 2) GRU: (Greatest) resource utilization = 3) GRD: (Greatest) resource utilization x task duration = 4) ROT: (Greatest) resource utilization/task duration = 5) MTS: (Greatest) number of total successors 6) SPT: Shortest processing time = min {tj} 7) MINSLK: Minimum (total) slack 8) LFS: Minimum (total) slack per successor 9) ACTIMj: (Greatest) time from start of task j to end of project = CP - LSj 10) ACTRESj: (max) (ACTIMj) 11) GENRESj: w ACTIMj + (1-w) ACTRESj where 0 = w = 1

163. Resource Allocation Problem #2

164. How to schedule tasks to minimize project makespan?

165. Resource Allocation Example (cont’d)

166. Microsoft Project Solution (Resource Leveling Option)

167. Critical Chain Project Management

168. Critical Chain Buffers

169. Critical Chain Illustrated

170. Non-Renewable Resources

171. Non-Renewable Resources: Graphical Solution

172. Resource Allocation Problem #3

173. How to Assign Project Teams?

174. Bob and Barb: Configuration #1

175. Bob and Barb: Configuration #2

176. Bob and Barb: Configuration #2

177. Parallel Tasks with Random Durations

178. Project Monitoring and Control “It is of the highest importance in the art of detection to be able to recognize, out of a number of acts, which are incidental and which are vital. Otherwise your energy and attention must be dissipated instead of being concentrated.” Sherlock Holmes

179. Status Reporting?

180. Control System Issues What are appropriate performance metrics? What data should be used to estimate the value of each performance metric? How should data be collected? From which sources? At what frequency? How should data be analyzed to detect current and future deviations? How should results of the analysis be reported? To whom? How often?

181. Controlling Project Risks

182. Project Control & System Variation

183. Control System Example #1 Project plan: We estimate that a task will take 4 weeks and require 1600 worker-hours

184. Control System Example (cont’d)

185. Control System Example (cont’d)

186. Earned Value Analysis

187. Schedule Variance (SV)

188. Cost Variance (CV)

189. Earned Values Metrics Illustrated

190. Relative Measure: Schedule Index

191. Relative Measure: Cost Index

192. Example #2

193. Example #2 (cont’d)

194. Example #2 (cont’d)

195. Example #2 (cont’d)

196. Using a Fixed 20/80 Rule

197. Using a Fixed 20/80 Rule

198. Updating Forecasts: Pessimistic Viewpoint

199. Updating Forecasts: Optimistic Viewpoint

200. Multi-tasking with Multiple Projects

201. Due-Date Assignment with Dynamic Multiple Projects

202. What Does the Research Tell Us?

203. Experimental Results

204. Project Management Maturity Models

205. PM Maturity Model Example*