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Effective Project Management


What are the benefits of critical path analysis over Gantt charts? ... Why would critical chain be especially important in managing a ... Adrian ... – PowerPoint PPT presentation

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Title: Effective Project Management

Effective Project Management
  • Barbara Stone Jodie Mathies
  • October 11, 2007

  • Srini elevator speech
  • Questions on assignment?
  • Q A
  • Cost Baseline
  • Risk Management

  • What are the benefits of critical path analysis
    over Gantt charts?
  • Disadvantages?
  • What is Critical Chain theory?
  • What is a buffer?
  • Why would critical chain be especially important
    in managing a program vs. a project?
  • What is Parkinsons Law?

  • formally identifies tasks which must be completed
    on time for the whole project to be completed on
    time, and also identifies which tasks can be
    delayed for a while if resource needs to be
    reallocated to catch up on missed tasks
  • A further benefit of Critical Path Analysis is
    that it helps you to identify the minimum length
    of time needed to complete a project. Where you
    need to run an accelerated project, it helps you
    to identify which project steps you should
    accelerate to complete the project within the
    available time. This helps you to minimize cost
    while still achieving your objective
  • The disadvantage of CPA is that the relation of
    tasks to time is not as immediately obvious as
    with Gantt Charts.
  • Underlying the key differentiating aspects of
    Critical Chain-based project management are an
    appreciation for the impact of variation (the
    statistical nature of projects) and of human
    behavior (people's response to how their projects
    are managed) on the ability of a project to move
    with speed and reliability
  • Buffers are designed quantities of time, sized
    and applied to a project schedule to protect what
    is important to the success of that project. The
    Project Buffer protects the promised due date
    from variation in the critical chain.
  • By combining the ability of buffers to absorb
    variation with the synchronization (staggering)
    of project launches based on the availability of
    key (heavily and commonly used) resources or on
    the capacity of (common) major integration
    points, cross-project contention for resources is
    minimized. Doing so results in less pressure to
    multitask and its lead-time multiply effects.
  • "Work expands to fill the time available for its

When do you calculate Project financials?
  • Beginning create baseline budget
  • During track progress to baseline adjust
    budget as necessary
  • End success metric of project

As you go through the Planning Phase, cost
estimates accuracy increases
  • Class 1 - Variance /- 30 to 50 - High level
    estimate at the Phase level.
  • Class 2 - Variance /- 15 to 25 - As many
    details as possible.
  • Class 3 - Variance /- 10 - Completely filled
    out as applicable.

Cost Estimating Tools Techniques
  • Analogous we did more or less the same thing
    last year and it took us 6 months and cost 400K
  • Parametric new home construction 130/square
    foot Software Function (or Object) Point
  • Bottom-up estimating cost of individual tasks,
    then rolling up
  • etc

Cost Budgeting tip
  • Dont forget contingency for risk
  • Somewhat equivalent to safety in schedule
  • Apply to Cost Baseline at milestone points, not
    factor for every task

How do projects get funded?
  • What do I mean by funded?
  • Approval to use the resources required.
  • Projects can get funded
  • for entire project, at beginning
  • incrementally, at specified points

(No Transcript)
I can hear you saying

How does this relate to my project?
You have already been working on cost elements
for your project
  • Time estimates for team members
  • effort vs duration
  • Understanding purchases
  • Understanding time cost of risk mitigation plans

Your cost baseline
  • (Effort in hours of all tasks cost per
  • Other budgeted project expenses
  • Project cost baseline

MS ProjectProject Cost baseline development
Project Risk Management
Tom Sawyer vs Chicken Little
  • If you dont identify opportunities, they wont
    be in your field of view
  • If you dont actively attack risks, the risks
    will actively attack you
  • Opportunity management objectives are driven by
    the desire to excel while risk management
    objectives are driven by the desire to not fail.

Five steps
  • Plan and define the approach. Create a risk
    management plan. Take a high level approach which
    includes a recurring schedule for reviewing
  • Identify the risks that might be faced. Risks
    can have both positive and negative
    ramifications. For each risk look at the upside
    and downside by identifying both the threats and

5 steps - continued
  • Analyze and assess each risk to determine the
    severity of its potential impact on the project
    and the likelihood that it will occur. A simple
    scale of high, medium and low can be used.
    Ranking priority can be achieved by assigning a
    value to the scale. Categories can be added to
    differentiate the type of risk, for example
    technical vs. business. Risk responses can vary.

5 steps - continued
  • Assign actions and owners to each identified
    risk. The results of Steps 2, 3 and 4 lead to the
    creation of the projects risk register that logs
    each risk, the response(s) defined to deal with
    it, and the results when available.
  • Continuously review existing risks and add new
    potential risks, updating the risk management
    plan as needed to ensure that the project
    achieves its objectives. This is the most
    critical step and forms the closed loop process.

Risk identification
  • Include as many team members, sponsors, knowledge
    experts as possible
  • Concerted effort to visualize new risks
    determine if additional assumptions are being
    made unconsciously
  • Review scope, resources, environment, vacations,
    production freezes, travel, etc. in light of risk

risk sources
A Better UC-Wise - Meghalim
  • UC-Wise has been in existence since 2002 and
    there have been ongoing concerns with its
    usability and steep learning curve. Project goal
    is to provide a set of recommendations for
    building a new and better web-based teaching tool.

Illumobile Marketing - Bindiya
  • A broadcast outdoor advertising company that
    wants to expand its network from 10 to 50 within
    6 months AND
  • Develop a plan to turn the advertisement creation
    team into a revenue-generating department

Online Automobile Trading - Rob
  • Develop an online auction site that lowers the
    per-vehicle dealership-to-dealership trading cost
    of used automobiles

Produce a jazz CD - Katherine
  • Produce an outstanding and professional- looking
    jazz CD to promote the band and lead to paying

Reporting Tool - David
  • Build reporting tool function to use with
    existing internally-developed Capacity Management
  • Goal is to level resources across organization
    based on historical, current, and funnel

iNaturalist.org - Jessica
  • Create an online, interactive community for
    naturalists, such as bird watchers, fishermen,
    mushroom foragers, etc.

Personalized registration - Adrian
  • Improve customers experience with registration
    experience through customized responses

Bid site for labs - Jim
  • Online site to provide schedule, bid documents,
    etc. extending bidders who bid on Berkeley Lab

Key evaluation points
  • Project Definition
  • Detailed planning
  • Concept trade-offs
  • Development of system documentation
  • Manufacturing preparation
  • Supplier selection
  • Coding preparation
  • Test preparation
  • Shipping/handling
  • Deployment
  • Change evaluation

Options for action
  • Avoidance is the most direct response.
    Eliminating the risk or its ability to impact
    your project.
  • Mitigation means reducing the probability of
    the risk or minimizing its impact if it does
  • Contingency simply means having alternative
    plans in place to deal with a threat, should one
    occur or should a mitigation plan fail.
  • Transference shifts the risk to another party.
    This often involves a legal or contractual
  • Sharing involves two separate parties (i.e.,
    company and customer system developer and
    end-user) taking on the responsibility for
    dealing with the threat and the risk.
  • Acceptance could be active or passive.
  • Passive acceptance means nothing will be done to
    prepare for the risk in advance. Instead, it will
    be dealt with if and when it occurs.
  • Active acceptance usually means developing a
    contingency plan in case the event occurs later.
    This could involve holding money or resources in
    reserve. In either case, the project manager and
    the organization must be able to tolerate the
    consequences of the accepted risk event should it

Another view of options
  • Identify potential opportunities and their risks
  • Assess associated probabilities of occurrence and
    the impact (benefit or consequence of the
  • Decide to

Scope planninghigh-levelskills analysis
Charterbusiness casefeasibility studyproduct
Scope statement
Scope definitionassumptionsscope
Risk Mgmtplanning
Cost baselineTime-phased budget
Risk Mgmtplan
Schedule development
Project schedule
Project Plandevelopment
Project plan
Presentation of risk to management
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Triggers for risk review
  • Cost variance
  • Schedule variance
  • Changes in forecast project end date
  • Changes in schedule float
  • Changes in stakeholder attitude
  • Earned value variance

Risk/Opportunity handling
  • Identify risks
  • Quantify
  • Qualify
  • Rank by criticality
  • Identify options for managing
  • Assign owner
  • Establish trigger
  • Changes also change risks
  • Positive
  • Negative
  • Review, reprioritize, take action

Assignments for next class
  • Effective Project Management, Chapters 10
  • Real World Budget Tracking with MS Project
  • Read Who's afraid of EVA? (Gantthead)
  • Read Agile Estimating and Planning, chapter 10
  • For your project
  • Create a risk management plan using this template
  • Create a cost baseline for your project
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