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Chapter 4 The Project. Learning Objectives. Third phase starts after a contract is drawn up and ends when the project objective is accomplished; final phase involves terminating the project Elements involved in establishing a project plan steps in the project control process

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learning objectives
Learning Objectives
  • Third phase starts after a contract is drawn up and ends when the project objective is accomplished; final phase involves terminating the project
  • Elements involved in establishing a project plan
    • steps in the project control process
    • actions to take when a project is terminated


real world example
Real World Example
  • Vignette: Major Problems at AT&T Wireless
  • In 2003, AT&T assembled a team to upgrade its Customer Relationship Management (CRM) System
  • The upgrade would position AT&T as the leading mobile phone service provider in the US
  • The upgrade failed and the system crashed. AT&T lost customers and $100 million in revenue
  • Factors contributing to failure: low team morale due to layoff rumors, relaxed testing requirements, and lack of contingency plan in case of failure
  • Addressing rumors of layoffs directly, adhering to non-flexible deadlines and prioritizing projects, and having a back-up plan in case of failure would have prevented these major problems at AT&T


real world example1
Real World Example
  • Vignette: Hakalaoa Falls Emergency Bypass Tunnel Project
  • Project took place in Hawaii’s Waipio Valley, on the windward coast of the island of Hawaii, home to historic twin falls: Hakalaoa Falls and Hiilawe Falls
  • In 1989, a landslide destroyed a 30-foot section of the Lower Hamakua Ditch System. Farmers lost $11 million and their water supply, local ecosystem was damaged, and the beauty of twin falls no longer existed
  • Project team worked on a limited budget with a short time frame to restore the area. The bypass (300’ x 7’) was hand-mined because of its dangerous location, and the team had to carry construction materials miles on foot each day (1300 tons, ½ ton/load, 2 miles, 2 mph)
  • Team finished project with a good safety record, on budget, and on time. Project cost the government $17 million less than a proposed solution to build an entirely new tunnel system. Irrigation and beauty of twin falls was restored


planning the project
Planning the Project
  • Clearly define the project objective
  • Divide and subdivide the project
  • Define the specific activities to be performed
  • Graphically portray the activities in a network diagram
  • Determine which resources and how many are needed
  • Make a time estimate
  • Make a cost estimate for each activity
  • Calculate a project schedule and budget
  • This is the baseline plan


planning the project cont
Planning the Project (Cont.)

Keep in mind:

  • Projects overrun their budgets, miss completion dates, or only partially satisfy their technical specifications because there is no viable baseline plan .
  • The people involved in performing the project should participate in planning the work; they are most knowledgeable.
  • Participating in the planning helps individuals become committed to accomplishing it.


managing risk
Managing Risk
  • Risk is defined as the possibility that an unwanted circumstance will occur that can result in some loss.
    • Risk is part of project management.
    • Must be addressed proactively
  • Risk management consists of four components:
    • Risk Identification
    • Risk Assessment
    • Risk Response Planning
      • Contingency Plan
    • Risk Monitoring


managing risk cont
Risk Identificationconsists of:

determining which risks may adversely affect the project objective

the consequences of each risk

The most common approach to identifying risks is brainstorming

For each risk identified, the potential consequences should be listed

Risk Assessmentconsists of:

determining the likelihood that the risk event will occur

the degree of impact the event will have on the project objective

Based on the potential likelihood of occurrence and potential impact, the risks can be prioritized

Use a risk assessment matrix to organize risks. See Figure 4.2

Managing Risk (Cont.)


managing risk cont1
Managing Risk (Cont.)
  • Risk Response Planning:
    • Develop an action plan to reduce the impact or likelihood of each risk
    • Establish a trigger point to implement action plans for each risk
    • Assign responsibility to specific individuals
  • A risk response plan can be to avoid the risk, mitigate the risk, or accept the risk
  • Contingency Plan:set of actions that would be implemented if the risk event occurs
    • Needed when the risk is “accepted”
    • A contingency or management reserve should be included in the project prices and budgets to pay for the additional expenses of implementing contingency plans.
    • Implemented at the trigger point


managing risk cont2
Managing Risk (Cont.)
  • Risk Monitoring
  • Involves regularly reviewing the risk management matrix throughout the project
    • For each risk, look for:
      • Changes to the likelihood of occurrence
      • Potential impact
    • New risks may also be identified, and need to be added to the riskassessment matrix
  • The agenda for project status review meetings should include risk assessment
  • Particular attention should be given to the trigger points to determine of any risk response plans need to be implemented


performing the project
Performing the Project
  • Once the baseline plan has been developed, project work can proceed.
  • The project team, led by the project manager, will implement the plan and perform the activities or work elements.
  • The pace of project activity will increase as more and various resources become involved.


controlling the project
Controlling the Project
  • Monitor progress
    • Measure actual progress and compare it to planned progress
    • Track which activities have been started and/or completed, when, and how much money has been spent
  • Take corrective action to get back on track
  • Compare on a timely and regular basis and take corrective action


controlling the project cont
Controlling the Project (Cont.)
  • Aregular reporting period should collect:
    • Data on actual performance
    • Information on any changes in scope, schedule, and budget
  • Keep in mind:
    • Data should be collected in a timely manner and used to update the schedule and budget
    • Compare updated schedule and budget to the baseline and analyze


controlling the project cont1
Controlling the Project (Cont.)
  • Project management is proactive
  • This third phase ends when the requirements have been met, project objective has been accomplished, and the customer is satisfied


terminating the project
Termination activities should be identified in the baseline plan

Verify that all agreed-on deliverables were provided

Organize and file project-related documentation

The purpose of properly terminating a project is to learn from the experience in order to improve performance on future projects.

Terminating the Project


terminating the project cont
Terminating the Project (Cont.)
  • Assure that all payments have been collected from the customer
  • Assure that all payments for materials and subcontractors have been paid
  • Prepare a written performance evaluation of each member of the project team
  • Hold post-project evaluation meetings
  • Celebrate


internal post project evaluation
Internal Post-Project Evaluation
  • Have individual meetings with team members and a group meeting with the project team
  • Hold soon after the completion
  • Announce meeting in advance so people can be prepared
  • Individual meetings allow team members to give their personal impressions


internal post project evaluation cont
Internal Post-Project Evaluation (Cont.)
  • Develop an agenda for a group meeting
  • Group meeting should discuss performance and recommendations for improvement
  • Issue a brief written report to management with a summary and recommendations


internal post project evaluation cont1
Internal Post-Project Evaluation (Cont.)
  • Some topics that might be discussed:
    • technical performance
    • cost performance
    • schedule performance
    • project planning and control
    • customer relationships
    • team relationships
    • communications
    • problem identification and resolution
    • recommendations


customer feedback
Customer Feedback
  • Meet to discuss whether the project provided the customer with the anticipated benefits, assess the level of customer satisfaction, and obtain any feedback
  • Participants include the project manager, key project team members, and key representatives of the customer
  • Ask open-ended questions
  • Customers can express their level of satisfaction and provide detailed comments


customer feedback cont
Customer Feedback (Cont.)

If the customer is satisfied with the project:

  • Ask about other projects you could do—perhaps without going through a competitive RFP process
  • Ask permission to use the customer as a reference
  • Get feedback regarding satisfaction through a post-project customer evaluation survey


early project termination
Early Project Termination
  • May terminate a project before completion:
    • If research shows costs will be much more than originally anticipated
    • If there is a change in a company’s financial situation
    • Because of dissatisfaction of the customer
  • Avoid early termination due to customer dissatisfaction by monitoring customer satisfaction continually and taking corrective action