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MODULE V Project Planning Objectives

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Title: MODULE V Project Planning Objectives


1
MODULE V Project Planning Objectives
  • In this module you will learn
  • Chapter 1 - The concept of a Project Management
    Plan
  • Chapter 2 - How to define a Projects Scope
  • Chapter 3 - How to develop a Project Schedule
  • Chapter 4 - How to plan Project Procurements
  • Chapter 5 - How to determine Project Cost
  • Chapter 6 - How plan Project Quality
  • Chapter 7 - How to schedule and apply resources
    to a project
  • Chapter 8 - How to plan Project Communications
  • Chapter 9 - How to plan the management of
    Project Risks
  • Note We have nine (9) chapters and nine (9)
    Knowledge Areas. This is not a coincidence.

2
MODULE V Project Planning Chapter 1 Develop
Project Management Plan
  • A Project Management Plan is a concept more than
    it is a thing.
  • A Project Management Plan states how a Project
    Manager will define, plan, manage, and control a
    project. Remember the nine (9) Knowledge Areas?
    During Project Planning a management plan is
    developed for each Knowledge Area
  •  

3
MODULE V Project Planning Chapter 1 Develop
Project Management Plan
  • Wait!
  • There are only eight (8) Knowledge Areas listed
    in the previous matrix showing plans. What
    happened to the Integration Knowledge Area?
  • A Project Management Plan is the plan associated
    with the Integration Knowledge Area for it
    integrates all the Knowledge Area plans into a
    comprehensive entity.
  •  

4
MODULE V Project Planning Chapter 1 Develop
Project Management Plan
  • Project Management Plan
  • As a project progresses in time things will
    occur which cause the project Manager to deviate
    from the original plans created for each
    Knowledge Area.
  • Consequently plans need to be updated on a
    continual basis to reflect the projects current
    going forward position.
  • Thus a Project Management Plan is not a cast in
    stone schedule, but rather a series of plans and
    baselines.

5
MODULE V Project Planning Chapter 1 Develop
Project Management Plan
  • A Project Management Plan includes
  • The Project Management processes which will be
    used on the project
  • Management Plans for the other eight (8)
    Knowledge Areas
  • Scope, schedule, and cost baselines
  • A Requirements Management Plan
  • A Change Management Plan
  • A Configuration Management Plan
  • A Process Improvement Plan

6
MODULE V Project Planning Chapter 1 Develop
Project Management Plan
  • Scope, Schedule, and Cost Baselines
  • The Scope Baseline consists of
  • Project Scope Statement
  • The projects Work Breakdown Structure (WBS)
  • The projects WBS Dictionary
  • Schedule Baseline - This is the agreed upon
    schedule of the project with the initial start
    and end times
  • Cost Baseline - The initial time-phased budget
    for the project

7
MODULE V Project Planning Chapter 1 Develop
Project Management Plan
  • Scope, Schedule, and Cost Baselines
  • Together these three (3) baselines are known as
    the Performance Measurement Baseline.

8
MODULE V Project Planning Chapter 1 Develop
Project Management Plan
  • Requirements Management Plan
  • This plan describes how the projects
    requirements will be identified and managed.
  • Change Management Plan
  • This plan describes how proposed changes to the
    project will be managed and controlled.
  • The plan may include
  • Change Control Procedures
  • Who may propose a change
  • How a change may be requested
  • Approval levels for authorizing changes
  • Creation or use of an existing Change Control
    Board
  • Tools used to record and track changes

9
MODULE V Project Planning Chapter 1 Develop
Project Management Plan
  • Configuration Management Plan
  • This plan describes how the various versions of a
    projects components (e.g., scope and schedule)
    will be recorded and managed. Think of this as
    document version control.
  • Process Improvement Plan
  • This plan describes how the Project Manager plans
    to improve the processes he/she is doing on the
    project.

10
MODULE V Project Planning Chapter 2 Project
Scope
  • Requirements
  • Simply put a requirement is something needed or
    wanted. A project requirement is thus something
    the project is required to provide or fulfill.
    Requirements can be either functional or
    technical in nature.
  • What is the difference between a Requirement and
    an Objective?
  • One may need to fulfill several Requirements to
    meet an Objective.
  • Example If the Objective is to financially
    close the books by the third working day of
    each month, the following Requirements may need
    to be met
  • All Travel Entertainment expenses must be
    submitted on a weekly basis
  • All invoices submitted to Accounts Payable must
    be paid within 24 hours of receipt

11
MODULE V Project Planning Chapter 2 Project
Scope
  • The Requirements Management Plan states
  • How requirements will be identified and tracked
  • Who will track the progress of fulfilling the
    requirements
  • How will changes to requirements be managed
  • Who has the authority to change a requirement

12
MODULE V Project Planning Chapter 2 Project
Scope
  • Collect Requirements
  • There are numerous ways of collecting Project
    Requirements
  • Interviewing Stakeholders are interviewed
    (either individually or in a group).
  • This can be done via email, phone calls,
    or face-to-face meetings.
  • Focus Groups A specific set of Stakeholders or
    Subject Matter Experts (SMEs) get together
  • to discuss their opinions on project
    scope. The conversation is directed by a
  • facilitator.
  • Facilitated A group of Stakeholders or
    Subject Matter Experts (SMEs) who have different
  • Workshops viewpoints in regard to the
    project get together to discuss their opinions on
  • project scope. E.g., Accounts Payable
    Supervisor and a Data Base Designer.

13
MODULE V Project Planning Chapter 2 Project
Scope
  • Collect Requirements
  • There are numerous ways of collecting Project
    Requirements
  • Brainstorming A set of Stakeholders or
    Subject Matter Experts (SMEs) are led by a
  • facilitator using a structured
    methodology for the generation of ideas.
  • Delphi A request for information is
    sent to Stakeholders or Subject Matter Experts
  • Technique (SMEs) who participate
    anonymously. Their responses are consolidated
    and sent back to them for review and
    agreement.
  • Affinity Requirements gathered by
    using various techniques are grouped based
  • Diagrams upon similar characteristics.
  • Questionnaires This technique is usually used
    with large groups of people.
  • Surveys

14
MODULE V Project Planning Chapter 2 Project
Scope
  • Collect Requirements
  • There are numerous ways of collecting Project
    Requirements
  • Observation This technique uses the
    concept of job shadowing watching a person
  • at work or even doing the work with
    them.
  • Prototypes This technique is to model
    the projects proposed outcome. The
    Prototype can be updated numerous times to
    include feedback from
  • Stakeholders and SMEs.

15
MODULE V Project Planning Chapter 2 Project
Scope
  • Requirements Documents
  • What requirements information is captured and how
    it is recorded is unique to each organizations
    business analysis practices and procedures.
  • We will only discuss one such document, the
    Requirements Traceability Matrix.

16
MODULE V Project Planning Chapter 2 Project
Scope
  • Requirements Traceability Matrix
  • In a large scale project it can be difficult to
    remember the source of an identified requirement.
    Knowing who is associated with a given
    requirement is needed from a quality assurance
    standpoint to ensure that the requirement is
    being met by the project. The Requirements
    Traceability Matrix is a tool to track
    requirements over the life of a project.
  • The matrix contains such information as
  • Identification Number
  • Source of Requirement
  • Person assigned to manage (i.e., own it) the
    requirement
  • Status of fulfillment
  • Assigning a person to manage a requirement is
    similar to assigning a person to drive
    resolution to an issue or risk.

17
MODULE V Project Planning Chapter 2 Project
Scope
  • Lets Review Brainstorming Techniques

18
MODULE V Project Planning Chapter 2 Project
Scope
  • Lets Storm Some Brains!

19
MODULE V Project Planning Chapter 2 Project
Scope
  • Define Scope
  • In defining the scope of a project one states
    what is and what is not included in the project.
    The high level information found in the Project
    Charter along with the collected list of project
    requirements is used as input to this definition
    process.
  • The primary result of this process is the Project
    Scope Document. This document contains
  • Executive Summary
  • Description of Scope (what is and not included in
    the project)
  • Acceptance Criteria
  • Project Deliverables
  • Constraints
  • Assumptions
  • The Project Scope Document may also contain
    Planned Schedule and Budget, resource needs, and
    identified Risks.

20
MODULE V Project Planning Chapter 2 Project
Scope
  • Note
  • Just as many organizations look at the Business
    Case and the Project Charter as one document, so
    do many organizations look at the Project Charter
    and the Project Scope Document as one document.
  • This would indicate that the Collect Requirements
    process would be done outside of the Planning
    Process Group not exactly following the PMBOK
    Guide.

21
MODULE V Project Planning Chapter 2 Project
Scope
  • Create WBS
  • A Work Breakdown Structure (WBS) is a
    decomposition of the work needed by a project to
    meet the projects Objectives and provide the
    expected Deliverables.
  • A WBS
  • Identifies and displays all Deliverables to be
    provided by a project in a hierarchical fashion
  • Does not show dependencies of any kind
  •  

22
MODULE V Project Planning Chapter 2 Project
Scope
  • A generic exampled of a WBS
  •  

23
MODULE V Project Planning Chapter 2 Project
Scope
  • Rules and tips for creating a WBS
  • A WBS is created by the project Manager with the
    help of others
  • All Deliverables are present in a WBS (not there,
    not part of the project)
  • The first level of a WBS is completed before
    breaking the project down further
  • Each level of a WBS is smaller in nature than the
    level above it
  • Levels within a WBS are numbered for ease of
    reference
  • There is no limit to the number of levels a WBS
    may have
  • A WBS does not indicate time a WBS only defines
    work that needs to be done
  • Deliverables within a WBS are to be decomposed
    (i.e., broken down) to a level where
  • Costs can be properly estimated
  • Duration of time can be properly estimated
  • Acceptance criteria associated with the
    Deliverable can be properly measured
  • This level (which is the lowest level of a WBS)
    is called a Work Package
  •  

24
MODULE V Project Planning Chapter 2 Project
Scope
  • Create WBS
  • Work Book Time
  •  

25
MODULE V Project Planning Chapter 2 Project
Scope
  • Work Package
  • The amount of detail associated with a Work
    Package varies with the size and complexity of
    the project.
  • On small projects, the work needed may be
    decomposed into Work Packages requiring 40 hours
    of effort or less.
  • On large projects the Work Packages may need to
    be further decomposed into Activities.
  • One may further define the work needed by listing
    the Tasks within the Activities.

26
MODULE V Project Planning Chapter 2 Project
Scope
  • Work Package

27
MODULE V Project Planning Chapter 2 Project
Scope
  • WBS Dictionary
  • The WBS Dictionary describes the work visually
    depicted by a WBS. It contains an entry for
    element within the WBS.
  • Information found in a WBS Dictionary may
    include
  • Description of the work to be performed
  • Organization responsible for the work
  • Number of resources required
  • Cost estimates
  • Quality requirements
  • Acceptance criteria
  • Technical references
  • Chart of Accounts information

28
MODULE V Project Planning Chapter 2 Project
Scope
  • WBS Dictionary
  • We use the term may include for not all WBS
    elements may contain all of the aforementioned
    information.
  • For a large project, you may not wish to record
    and track all that information down to the lowest
    level in a WBS.
  • You may wish to record and track such information
    as costs and Chart of Accounts data at a level
    higher than the lowest level within the WBS.
  • The element within the WBS that is used for this
    purpose and the WBS elements subordinate to it
    are called a Control Account. The Control
    Account is associated with a Code of Accounts in
    an organizations General Ledger.

29
MODULE V Project Planning Chapter 2 Project
Scope
  • Control Account

Designated as a Control Account
30
MODULE V Project Planning Chapter 2 Project
Scope
  • Rolling Wave Planning
  • Although the photo above is very serene, a better
    pictorial of Rolling Wave Planning is the
    following Vision of Scope chart

31
MODULE V Project Planning Chapter 2 Project
Scope
  • Rolling Wave Planning

Do Later
Do Later
Do Now
Time
32
MODULE V Project Planning Chapter 2 Project
Scope
  • Rolling Wave Planning
  • The easiest way to define Rolling Wave Planning
    is as a two (2) step process
  • Plan the work which needs to be done now at a
    low, detailed level.
  • Plan the work which needs to be later at a
    higher, less detail level.
  • As time passes, start again at Step 1.
  • Thus one can see that planning is done much like
    a series of waves hitting a beach.

33
MODULE V Project Planning Chapter 3 Project
Time
  • Define Activities
  • The PMBOK Guide defines an Activity as
  • A component of work performed during the course
    of a project.
  • Not exactly a robust definition. However, we
    will work with it because it applies whether or
    not you actually perform the Define Activities
    process as shown in the PMBOK Guide.
  • Many Project Managers embed the results of this
    process in their WBS by taking their WBS down to
    an activity level rather than the Work Package
    level. Whether a Project Manager takes this
    approach or breaks down their Work Packages into
    Activities outside of the WBS, the PMBOK Guides
    definition of the term Activity is valid.
  • This definition is taken from the Glossary of the
    project Management Institute, A Guide to the
    project Management Body of Knowledge (PMBOK
    Guide) Fourth Edition, Project Management
    Institute, Inc., 2008

34
MODULE V Project Planning Chapter 3 Project
Time
  • Milestones
  • A Milestone is a significant event within a
    projects schedule.
  • Something has been completed, delivered, or
    reviewed.
  • A Milestone is not a work activity. It has no
    duration associated with it, only a specific
    point in time on the projects schedule.
  • A Milestone may depend upon the completion of
    many work activities, but it is not a work
    activity.

35
MODULE V Project Planning Chapter 3 Project
Time
  • Milestones
  • Give Some Examples of Project Milestones

36
MODULE V Project Planning Chapter 3 Project
Time
  • Sequence Activities
  • Once a Work Packages Activities and Milestones
    have been defined
  • they need to be sequenced into how the work will
    be done.
  • The resultant sequence is a Network Diagram. In
    its purest form, a Network Diagram just shows
    logical relationships between Activities.
  • The sequence of Activities is based upon
  • Mandatory Dependencies Inherent to the nature of
    the work
  • Discretionary Dependencies Decided by the Project
    Team
  • External Dependencies Based upon the needs
    outside of the project

37
MODULE V Project Planning Chapter 3 Project
Time
  • Sequence Activities
  • The most commonly used method of constructing a
    Network Diagram is the Precedence Diagramming
    Method (PDM). PDM is also known as
    Activity-on-Node (AON). In this diagram method
    Activities are shown as boxes/rectangles and
    dependencies as arrows.
  • For example

Activity A
Activity B
38
MODULE V Project Planning Chapter 3 Project
Time
  • Sequence Activities
  • There are four (4) types of logical relationships
    between Activities
  • Finish-to-Start (FS) An Activity must Finish
    before another can Start
  • Start-to-Start (SS) An Activity must Start before
    another can Start
  • Finish-to-Finish (FF) An Activity must Finish
    before another can Finish
  • Start-to-Finish (SF) An Activity must Start
    before another can Finish

39
MODULE V Project Planning Chapter 3 Project
Time
  • Estimate Activity Resources
  • For each Activity the type and amount of
    resources is estimated.
  • Resources are defined to be
  • People
  • Materials
  • Equipment
  • Supplies
  • Note At this time, only the Project Manager and
    possibility a few Core Members of the Project
    Team are available to do this process.

40
MODULE V Project Planning Chapter 3 Project
Time
  • Estimate Activity Resources
  • The Estimate Activity Resources involves
  • Reviewing the WBS and list of Activities
  • Identify potential resources
  • Reviewing resource availability
  • Solicit input from Subject Matter Experts (SMEs)
    on what type of resources are needed
  • Analyze alternative ways of performing the work
  • Make a Make-or-Buy decision
  • Break the Activities down further if you cannot
    estimate the resources needed
  • Review organizational policies regarding use of
    resources
  • Create a hierarchical structure of the identified
    resources by category and type, i.e., a Resource
    Breakdown Structure (RBS)
  • Update project documents

41
MODULE V Project Planning Chapter 3 Project
Time
  • Estimate Activity Duration
  • In estimating how long a given Activity will
    take, it is best to have the person who will be
    doing the work estimate the Activity.
  • However, this is not always possible.
    Regardless of who does the estimating, estimating
    can be done using one or more of the following
    techniques
  • One-Point Estimating The person doing the
    estimating submits one estimate per Activity
  • Analogous Estimating The type of estimating uses
    expert judgment and
  • (Top Down) historical information (from previous
    projects). If an Activity is analogous to a
    previously completed Activity, then its
    duration is analogous also.

42
MODULE V Project Planning Chapter 3 Project
Time
  • Estimate Activity Duration
  • Parametric Estimating This type of estimating
    estimates duration of an Activity based upon
    historical information which can be
    established as measures, e.g., lines of
    computer code number of installs.
  • Heuristics A heuristic is a rule of thumb,
    e.g., the infamous 80/20 Rule.
  • Padding Padding is inflating ones estimate to
    allow for uncertainty. This is a No No.

43
MODULE V Project Planning Chapter 3 Project
Time
  • Estimate Activity Duration
  • Three-Point Estimating
  • This technique is also known as the Program
    Evaluation and Review Technique (PERT). The
    person doing the estimating submits three (3)
    estimates for each Activity
  • Optimistic (Ot) The maximum amount of time
    the Activity could take
  • Pessimistic (Pt) The minimum amount of time
    the Activity could take
  • Most Likely (ML) The Most Likely amount of
    time the Activity could take

44
MODULE V Project Planning Chapter 3 Project
Time
  • Estimate Activity Duration
  • Three-Point Estimating
  • These three (3) estimates are then entered into a
    simple equation to determine the Expected
    Duration of the Activity

45
MODULE V Project Planning Chapter 3 Project
Time
  • Estimate Activity Duration
  • Three-Point Estimating

46
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • A Project Schedule is calendar based showing how
    work activities start and stop over a period of
    time.
  • To develop a project schedule we need
  • An understanding of the work needed along with
    any assumptions and constraints related to the
    project
  • Defined Activities
  • Network Diagram showing the sequence of how the
    work will be performed
  • Time estimates for the Activities
  • An estimate of the resources needed
  • The availability of the resources needed
  • A calendar identifying working and nonworking
    days

47
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • We need to take into consideration
  • The impact our project has on other projects and
    vice versa
  • Diminishing project risks
  • Negotiating (internally) for project resources
  • Obtaining formal buy-in and approval of the
    schedule by key stakeholders and members of the
    Project Team

48
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • Once an initial draft of the Project Schedule has
    been developed, further analysis can begin to
    finalize the schedule using such techniques as
  • Network Analysis (Critical Path Float)
  • What-If Analysis
  • Resource Leveling
  • Milestone Charts
  • Plan-on-a-Page (POAP)
  • Re-Estimating

49
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • Network Analysis

Possible Paths 1) A-C-E-F (14341031) 2)
B-D-E-F (3741024) 3) B-C-E-F (3341020)
A
C
14
3
F
E
Start
Finish
10
4
D
B
3
7
Critical Path the longest path from start to
finish
50
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • Network Analysis There are four (4) times
    associated with an Activity

ES Early Start
EF Early Finish
LS Late Start
LF Late Finish
51
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • Network Analysis
  • Forward Pass through the Network
  • Work from left to right on top of boxes (i.e.,
    Activity)
  • Preceding Earl Finish is the next Earl Start
  • Add duration to Early Start to get Early Finish

52
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • Network Analysis

0 14
14 17
21 31
17 21
31
Start
Finish
0 3
3 10
53
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • Network Analysis
  • Backward Pass through the Network
  • Work from right to left on bottom of boxes (i.e.,
    Activity)
  • Succeeding Late Start is the next Late Finish
  • Subtract duration from Late Finish to get Late
    Start

54
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • Network Analysis

0 14
14 17
21 31
17 21
31
0 14
14 17
Start
Finish
0 3
3 10
31
21 31
17 21
7 10
10 17
55
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • Network Analysis
  • Critical Path and Float
  • Float is the amount of time the beginning or
    ending of a task may be delayed without affecting
    the overall project length
  • Float can be determined by subtracting the early
    start from the late start (or by subtracting the
    early finish from the late finish)
  • The critical path is the path with the least
    amount of float

56
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • Network Analysis

0 14
14 17
Fl 0
Fl 0
21 31
17 21
31
Fl 0
0 14
Fl 0
14 17
Start
Finish
0 3
3 10
31
21 31
17 21
Fl 7
Fl 7
7 10
10 17
57
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • What-If Analysis
  • One way of finalizing a project schedule is to
    see the effects of changing the assumptions for
    each Activity within the Network Diagram.
  • Changing an Activitys assumptions will change
    the Activitys duration. Performing what if
    this changed scenarios may result in a shorter
    project schedule or a project schedule with less
    risks.
  • This type of analysis is best done using computer
    software to simulate the outcome of a project.
    Such software uses the concepts of Monte Carlo
    Analysis.
  • Monte Carlo Analysis uses Three-Point Estimating
    and takes into account the probability of certain
    events occurring during the project.
  • What-If Analysis is labor intensive and
    consequently usually not done.

58
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • Resource Leveling
  • The Project Manager needs to ensure that the
    project schedule does not look like a roller
    coaster ride, i.e., the amount of resources goes
    up drastically one month, then plummets down a
    steep slope the next.
  • The leveling of resources across the duration of
    the project is an important constraint when
    finalizing the schedule.
  • The use of project management software on a
    computer assists the Project Manager in
    performing this leveling exercise.

59
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • Milestone Charts
  • Remember a Milestone is a significant event
    within a projects schedule. Something has been
    completed, delivered, or reviewed.
  • A Milestone is not a work activity. It has no
    duration associated with it, only a specific
    point in time on the projects schedule.
  • A Milestone Chart is simply shows a projects
    Milestones and associated dates.

60
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • Milestone Charts

61
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • Bar Charts (a.k.a., Gantt Charts)
  • A Bar Chart/Gantt Chart lists a projects
    Activities and their associated durations, start,
    and finish dates. Dependencies between
    Activities are not shown. Example

62
MODULE V Project Planning Chapter 3 Project
Time
  • Develop Schedule
  • Bar Charts (a.k.a., Gantt Charts)
  • A POAP combines the Milestone Chart and Bar
    Chart formats together.
  • Re-Estimating
  • It is good practice to re-estimate the remaining
    parts of a project at least once over the life
    time of the project.

63
MODULE V Project Planning Chapter 3 Project
Time
  • Quiz Time

64
MODULE V Project Planning Chapter 4 Plan
Procurement
  • Make-or-Buy Decision
  • A decision needs to be made as to whether or not
    a project will be developed
  • Totally in-house using existing personnel (Make)
  • Partially in-house and partially using outside
    personnel (Make Buy)
  • Totally using outside personnel (Buy)

65
MODULE V Project Planning Chapter 4 Plan
Procurement
  • Make-or-Buy Decision
  • Main reasons to buy
  • Decrease project risks
  • May be more effective
  • Main reasons to make
  • You have idle resources
  • You to maintain tight control over the project
  • The work involves proprietary information or
    practices

66
MODULE V Project Planning Chapter 4 Plan
Procurement
  • Procurement Management Plan
  • Once a decision has been made on what and how to
    procure outside resources the Project Manager
    creates a plan to manage those procurements.
  • Remember this plan is a component of the Project
    Management Plan.
  • It could be a separate, physical document or
    documented elsewhere.

67
MODULE V Project Planning Chapter 4 Plan
Procurement
  • Procurement Statement of Work
  • Just as the project has a Statement of Work so
    does the Procurement process.
  • The Procurement Statement of Work clearly defines
    and delimits the work to be done on the project
    by a Seller of services or product.
  • The Statement needs to be concise and complete
    for it serves as the basis for a contract with
    the provider of outside services/product.

68
MODULE V Project Planning Chapter 4 Plan
Procurement
  • Procurement Statement of Work
  • There are various types of Procurement Statements
    of Work. Which type to be used will depend upon
    the nature of the work being described. Three
    (3) types are
  • Performance This Statement type states what the
    results of the work performed should
    accomplish. It may or may not state how or what
    is to be done.
  • Functional This Statement states the
    purpose or expected results of the work to be
    performed.
  • Design This Statement states precisely what
    work is to be done, e.g., build a garage using a
    provided blueprint.
  • Both Performance and Functional Statement types
    are used in Information Technology projects. The
    Design Statement type is commonly used in the
    Engineering and Construction industry.

69
MODULE V Project Planning Chapter 4 Plan
Procurement
  • Seller/Vendor Selection Criteria
  • Based upon the Procurement Statement of Work
    (regardless of type) selection criteria for
    choosing a Seller/Vendor may be derived.
  • The identifying of such criteria is similar to
    identifying project requirements in that the
    following techniques are used
  • Interviewing Stakeholders
  • Facilitated Workshops
  • Brainstorming

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MODULE V Project Planning Chapter 4 Plan
Procurement
  • Seller/Vendor Selection Criteria
  • Some general categories of criteria are a
    Seller/Vendors
  • Knowledge of Requirements
  • Technical Capabilities Approach
  • Management Approach
  • Warranty
  • Financial Stability
  • Business Size and Type
  • Past Performance
  • References
  • Training Support Capabilities
  • Intellectual Property Rights
  • Initial Cost and Overall Cost

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MODULE V Project Planning Chapter 4 Plan
Procurement
  • Request for Information (RFI)
  • Once the selection criteria have been
    established, the Project Team can ask prospective
    Sellers/Vendors how they stack up against the
    criteria via the form of questions.
  • The intent of this request is to quickly
    eliminate certain Sellers/Vendors from possible
    final selection they do not meet certain
    minimum requirements established by the Project
    Team.
  • The Sellers/Vendors who remain in contention may
    be asked to provide additional information in
    person.
  •  

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MODULE V Project Planning Chapter 4 Plan
Procurement
  • Request for Information (RFI)
  • Work Book Time Discussion Only

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MODULE V Project Planning Chapter 4 Plan
Procurement
  • Contracts
  • So, what is a Contract?
  • It is
  • an agreement between persons or organizations to
    do something in exchange for some kind of
    compensation
  • Contracts can involve agreements for
  • Purchase goods or services
  • Doing research
  • Leasing property
  • Sponsoring an event
  • ..

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MODULE V Project Planning Chapter 4 Plan
Procurement
  • Contracts
  •  
  • There are several types of contracts that may be
    used with Sellers/Vendors
  • Fixed Price (FP, Lump Sum)
  • Time and Material (TM)
  • Cost Reimbursable (CR)

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MODULE V Project Planning Chapter 4 Plan
Procurement
  • Contracts
  • Fixed Price (FP) Contracts
  • The price paid for a service or product is firm.
  • If the Seller/Vendors costs are greater than the
    price in the contract, he/she loses money.
  • Consequently a Seller/Vendor usually only enters
    into such a contract when the specifications/requi
    rements are well established and will not be
    changed.

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MODULE V Project Planning Chapter 4 Plan
Procurement
  • Contracts
  •  Fixed Price (FP) Contracts
  • A Purchase Order is a simple Fixed Price
    contract. Example Contract 1,000,000
  • A Fixed Price contract may be a Fixed Price
    Incentive Fee (FPIF) Contract. A Seller/Vendors
    contract income is adjusted if the Seller/Vendor
    a specified requirement.
  • Example Contract 1,000,000 and 10,000 if
    finished ahead of schedule
  • A Fixed Price contract may be a Fixed Price Award
    Fee (FPAF) Contract. A Seller/Vendor is given a
    bonus whenever he/she meets a specified
    requirement.
  • Example Contract 1,000,000 and 10,000
    for each month ahead of schedule

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MODULE V Project Planning Chapter 4 Plan
Procurement
  • Contracts
  • Fixed Price (FP) Contracts
  • A Fixed Price contract may be a Fixed Price
    Economic Price Adjustment (FPEPA) Contract. A
    Seller/Vendors contract is adjusted based upon
    the U.S. Consumer Price Index.
  • Example A Two year contract will be adjusted in
    the second year for certain increases in the
    cost of materials.
  • Time and Material (TM) Contracts
  • In this type of contract the Buyer pays the
    Seller/Vendors expenses and a pre-defined labor
    rate. It is used often when the level of effort
    needed cannot be totally defined.
  • Example Contract 40 per hour for labor
    and the cost of expenses and materials

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MODULE V Project Planning Chapter 4 Plan
Procurement
  • Contracts
  • Cost Reimbursable (CR) Contracts
  • This type of contract is used when the scope of
    work is uncertain. Since the total costs are not
    known, this type of contract has the most cost
    risk to the Buyer.
  • There are several kinds of Cost Reimbursable
    Contracts.
  • In a Cost Contract the Seller/Vendor receives no
    profit. This contract is sued when the
    Seller/Vendor is a nonprofit organization.
  • Example
  • Contract Cost, i.e., no profit for
    Seller/Vendor

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MODULE V Project Planning Chapter 4 Plan
Procurement
  • Contracts
  • In a Cost Plus Fee (CPF) Contract the Buyer pays
    the Seller/Vendor all costs plus a fee which is
    adjusted if the Seller/Vendor meets a specified
    requirement.
  • Example
  • Contract Cost plus 12 of costs
  • In a Cost Plus Fixed Fee (CPFF) Contract the
    Buyer pays the Seller/Vendor all costs plus a
    predefined amount.
  • Example
  • Contract Cost plus 150,000

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MODULE V Project Planning Chapter 4 Plan
Procurement
  • Contracts
  • In a Cost Plus Incentive Fee (CPIF) Contract the
    Buyer pays the Seller/Vendor all costs plus a
    predefined amount.
  • Example
  • Contract Cost and 10,000 if finished ahead
    of schedule
  • In a Cost Plus Award Fee (CPAF) Contract the
    Buyer pays the Seller/Vendor all costs plus a
    bonus whenever he/she meets a specified
    requirement.
  • Example
  • Contract Cost and 10,000 for each month
    ahead of schedule

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MODULE V Project Planning Chapter 4 Plan
Procurement
  • Contracts
  • Fixed Price

Advantages Disadvantages
   
Easier to manage for the Buyer Seller/Vendor may use Change Orders to compensate for underpricing the work
Incentive for the Seller/Vendor to control costs Seller/Vendor may cut corners to stay within fixed price
Buyer knows total price before work is started Buyer needs to be precise in defining work requirements
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MODULE V Project Planning Chapter 4 Plan
Procurement
  • Contracts
  • Time and Material

Advantages Disadvantages
Contract is quick to create The Seller/Vendor has no incentive to control costs
Good choice when hiring contract personnel Buyer needs to be hands on to control costs
83
MODULE V Project Planning Chapter 4 Plan
Procurement
  • Contracts
  • Cost Reimbursable

Advantages Disadvantages
Contract allows for simpler work definition Need to audit Seller/Vendors invoices
Generally lower cost than Fixed price due to less risk for Seller/Vendor Seller/Vendor has only moderate incentive to control costs
84
MODULE V Project Planning Chapter 4 Plan
Procurement
  • Quiz Time

85
MODULE V Project Planning Chapter 5 Develop
Human Resources Plan
  • The Human Resources Plan consists of
  • Roles and Responsibilities
  • Project Organization Chart
  • Staffing Management Plan

86
MODULE V Project Planning Chapter 5 Develop
Human Resources Plan
  • Roles and Responsibilities
  • RACI Chart

87
MODULE V Project Planning Chapter 5 Develop
Human Resources Plan
  • Roles and Responsibilities
  • RACI Chart
  • Work Book Time

88
MODULE V Project Planning Chapter 5 Develop
Human Resources Plan
  • Project Organization Charts
  • Three types of project Org Charts are
  • Organizational Breakdown
  • Resource Breakdown
  • Position Description

89
MODULE V Project Planning Chapter 5 Develop
Human Resources Plan
  • Project Organization Charts
  • Organizational Breakdown Project Org Charts

Project
Marketing
Accounting
IT
WBS Activity
WBS Activity
WBS Activity
90
MODULE V Project Planning Chapter 5 Develop
Human Resources Plan
  • Project Organization Charts
  • Resource Breakdown Project Org Charts

Project
Systems Analyst
Tax Accountant
Programmer
WBS Activity
WBS Activity
WBS Activity
91
MODULE V Project Planning Chapter 5 Develop
Human Resources Plan
  • Project Organization Charts
  • Position Description Project Org Charts

Phil Menard PM
Mary Moat VP - Markets
Tom Terry Tax Advisor
Dan Diddle DB Admin
Trey Tanner CPA
Matt Mills Telemarketer
Don Data DB Analyst
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MODULE V Project Planning Chapter 5 Develop
Human Resources Plan
  • Staffing Management Plan
  • The Staffing Management Plan includes
  • The plan to acquire Project Staff
  • Resource Calendars
  • Staff Release Plan
  • Staff Training Needs
  • Recognition and Awards

93
MODULE V Project Planning Chapter 5 Develop
Human Resources Plan
  • Staffing Management Plan Resource Calendars

94
MODULE V Project Planning Chapter 5 Develop
Human Resources Plan
  • Staffing Management Plan Resource Calendars

95
MODULE V Project Planning Chapter 5 Develop
Human Resources Plan
  • Staffing Management Plan Recognition and
    Rewards
  • Lets Discuss

96
MODULE V Project Planning Chapter 5 Develop
Human Resources Plan
  • Quiz Time

97
MODULE V Project Planning Chapter 6 Project
Cost
  • Estimate Cost
  • The cost associated with all the things needed to
    complete the project need to be estimated.
  • Lets Discuss What They Are

98
MODULE V Project Planning Chapter 6 Project
Cost
  • Estimate Cost
  • A cost can be either
  • Variable Cost changes with the amount of work
    performed, e.g., labor
  • Fixed Costs do not change and are not aligned
    with the amount of work performed, e.g.,
    rentals
  • A cost can be either
  • Direct Costs directly attributable to the work
    performed on a project, e.g., labor
  • Indirect Indirect costs are overhead costs,
    e.g., fringe benefits

99
MODULE V Project Planning Chapter 6 Project
Cost
  • Estimate Cost
  • Things you need to know to properly estimate
    costs
  • Scope Baseline
  • Project Schedule
  • Human Resources Plan
  • Procurements Plan
  • Risk Register
  • Policies on Estimating
  • Environment Factors

100
MODULE V Project Planning Chapter 6 Project
Cost
  • Estimate Cost
  • The tools and techniques
  • used to estimate
  • Costs
  • are the same used to estimate
  • time duration.

101
MODULE V Project Planning Chapter 6 Project
Cost
  • Estimate Cost
  • Contingencies
  • Risk Contingency
  • Monies estimated to handle known risks
  • Management Reserve
  • Lump sum estimated to handle unidentified risks

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MODULE V Project Planning Chapter 6 Project
Cost
  • Determine Budget
  • Remember the term Performance Measurement
    Baseline?
  • Establishing our projects Cost Baseline
    completes the Pyramid

103
MODULE V Project Planning Chapter 6 Project
Cost
  • Determine Budget

104
MODULE V Project Planning Chapter 7 Plan
Quality
  • Definition of Quality
  • Quality is the degree to which a project fulfills
    its defined requirements.
  • Quality Plan
  • What needs to be measured
  • How and when will it be measured
  • What variances are allowed
  • Best practice Place quality into the
    process of doing something and test at the end.
  • Example Baking a cake

105
MODULE V Project Planning Chapter 7 Plan
Quality
  • Tools and Techniques
  • The following is a list of tools and techniques
    that can be used in the Plan Quality process
  • Cost of Quality (COQ)
  • Cost-Benefit Analysis
  • Control Charts
  • Benchmarking
  • Design of Experiments

106
MODULE V Project Planning Chapter 7 Plan
Quality
  • Tools and Techniques
  • Cost of Quality (COQ)
  • The Cost of Quality includes all costs associated
    with a project caused by
  • Investments made to prevent nonconformance to a
    preset standard
  • Appraising the projects end result for
    conformance to requirements
  • Failing to meet predefined requirements, i.e.,
    rework

107
MODULE V Project Planning Chapter 7 Plan
Quality
  • Tools and Techniques
  • Cost Benefit Analysis
  • Cost Benefit Analysis is the weighing of benefits
    versus the costs of meeting quality requirements.
  • The costs of conformance should be lower than the
    cost of nonconformance. Why?

108
MODULE V Project Planning Chapter 7 Plan
Quality
  • Tools and Techniques
  • Control Charts
  • Control Charts are mostly used to track
    repetitive activities used for producing
    manufactured product.
  • Inspections are made over a period of time and
    recorded on a chart. Each inspection is allowed
    to vary a preset amount from a preset standard.
    If an inspection is greater or less than the
    preset amount (Upper and Lower Control Limits),
    that inspection (i.e., a manufactured product) is
    out of spec indicating poor quality. This
    technique uses statistical sampling.

109
MODULE V Project Planning Chapter 7 Plan
Quality
  • Tools and Techniques
  • Benchmarking
  • Benchmarking is using another project or two as a
    basis for measuring quality.
  • Design of Experiments (DOE)
  • DOE is a statistical method to change all the
    important factors of a process and identify what
    combinations of change has the lowest impact on a
    project. This is faster than changing one factor
    at a time to identify project impacts.

110
MODULE V Project Planning Chapter 7 Plan
Quality
  • Gold Plating
  • On the surface this term sounds to be a good
    thing.
  • Gold Plating is providing more than what was
    specified in the Project Charter, i.e., giving
    extras.
  • The PMBOK Guide specifically states that Gold
    Plating is forbidden.

111
MODULE V Project Planning Chapter 8 Plan
Communications
  • Communications Plan
  • A Communications Plan describes
  • To whom we should communicate project related
    information
  • Why we should communicate to a certain person
    (e.g., influence over project)
  • What should be communicated
  • The format the communications should take
  • When and how often someone should receive
    communications

112
MODULE V Project Planning Chapter 8 Plan
Communications
  • Communications Plan
  • Remember back in the Initiation Process we
    created a Stakeholder Register

113
MODULE V Project Planning Chapter 8 Plan
Communications
  • Communications Plan
  • A Communications Plan is merely an extension of
    that Stakeholder Register

114
MODULE V Project Planning Chapter 8 Plan
Communications
  • Communications Plan
  • Work Book Time

115
MODULE V Project Planning Chapter 8 Plan
Communications
  • Communication Methods
  • Communication methods can be segregated into
    three (3) categories
  • Interactive Communication
  • Push Communication
  • Pull Communication

116
MODULE V Project Planning Chapter 8 Plan
Communications
  • Communication Methods
  • Interactive Communication Bidirectional exchange
    of information between two parties
  • Push Communication Information sent to specific
    recipients, e.g., memos, reports
  • Pull Communication Recipients access information
    at their own discretion

117
MODULE V Project Planning Chapter 8 Plan
Communications
  • Communication Channels
  • The number of Communication Channels between a
    group of people depends upon the number of
    people in the group.
  • The formula for the number is N (N-1)
  • 2

118
MODULE V Project Planning Chapter 8 Plan
Communications
  • Communication Blockers
  • What gets in the way of good communications?
  • Lets Discuss

119
MODULE V Project Planning Chapter 8 Plan
Communications
  • Communication Guidelines
  • During the Planning Process it is beneficial to
    establish certain guidelines in regard to
    communications. Possible things to consider
  • Lead times in calling meetings
  • Use of all Capital letters in correspondence
  • Email Chains
  • Size of email attachments
  • Taking and distributing meeting minutes

120
MODULE V Project Planning Chapter 8 Plan
Communications
  • Meetings
  • What are good habits to have in conducting
    effective meetings?
  • Lets Discuss

121
MODULE V Project Planning Chapter 9 Project
Risk
  • Risk Management Plan
  • The Risk Management Plan describes how the
    handling of project risk will be structured and
    performed.
  • It can consist of
  • Defining the tools used to record and track risk
  • Identifying the sources of risk
  • How often risks need to be reviewed
  • Placing risks into categories
  • Defining probability and impact of risks
  • Identifying Stakeholder tolerances

122
MODULE V Project Planning Chapter 9 Project
Risk
  • Definition of Risk vs. Issue
  • Risk
  • An uncertain event or condition that, if it
    occurs, has a positive or negative effect on a
    projects objectives.
  • Issue
  • A point or matter in question or in dispute, or
    a point or matter that is not settled and is
    under discussion or over which there are opposing
    views or disagreements.
  • An event or condition that exists that has a
    negative effect on a project.
  • These definitions are taken from the Glossary of
    the Project Management Institutes A Guide to the
    Project Management Body of Knowledge (PMBOK
    Guide) Fourth Edition, Project Management
    Institute, Inc., 2008

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MODULE V Project Planning Chapter 9 Project
Risk
  • Differences between Risks Issues
  • Risk
  • An event or condition that could exist which
    requires a plan to mitigate or increase the
    possibility of the event or condition ever
    happening.
  • Issue
  • An event or condition that currently exists
    which requires a plan to resolve the impact the
    event or condition has on the project.

124
MODULE V Project Planning Chapter 9 Project
Risk
  • Identify Risk
  • Similar to Collecting Requirements, there are
    numerous ways of identifying project risks
  • Brainstorming A set of Stakeholders or
    Subject Matter Experts (SMEs) are led by a
  • facilitator using a structured
    methodology for the generation of ideas.
  • Delphi A request for information is
    sent to Stakeholders or Subject Matter Experts
  • Technique (SMEs) who participate
    anonymously. Their responses are consolidated
    and sent back to them for review and
    agreement.
  • SWOT Look at the project to
    identify its Strengths, Weaknesses,
    Opportunities, and Analysis
    Threats thus consequently identifying possible
    risks

125
MODULE V Project Planning Chapter 9 Project
Risk
  • Perform Qualitative Risk Analysis
  • Qualitative Risk Analysis is a subjective review
    of the risks identified.
  • The following two (2) items are determined for
    each risk identified
  • The probability of the risk occurring
  • The impact of the risk occurring

126
MODULE V Project Planning Chapter 9 Project
Risk
  • Risk Register

127
MODULE V Project Planning Chapter 9 Project
Risk
  • Risk Register
  • Work Book Time

128
MODULE V Project Planning Chapter 9 Project
Risk
  • Perform Quantitative Risk Analysis
  • Quantitative Risk Analysis involves an objective
    review of the risks identified via numerical
    analysis.
  • While Qualitative Analysis may rate a risk to be
    5, Quantitative Analysis may rate the risk to
    be 50,000 of additional costs to the project.
  • Techniques used in this analysis include
  • Expected Monetary Value analysis (EMV)
  • Monte Carlo analysis
  • Decision Trees

129
MODULE V Project Planning Chapter 9 Project
Risk
  • Perform Quantitative Risk Analysis
  • Expected Monetary Value (EMV) Analysis
  • Formula EMV P x I
  • Example The probability (P) of Risk 1
    occurring is 10.
  • The impact of Risk 1 occurring is 20,000 of
    additional cost
  • EMV 2,000

130
MODULE V Project Planning Chapter 9 Project
Risk
  • Perform Quantitative Risk Analysis
  • Monte Carlo Analysis
  • Monte Carlo Analysis is usually done with a
    computer based software program
  • Evaluates the overall risk in a project
  • Translates uncertainties to impacts affecting a
    project
  • Monte Carlo Analysis uses Three-Point Estimating
    and takes into account the probability of certain
    events occurring during the project.
  • This What-If Analysis is labor intensive and
    consequently usually only done on exceptionally
    projects, e.g., creation of the Space Shuttle.

131
MODULE V Project Planning Chapter 9 Project
Risk
  • Perform Quantitative Risk Analysis
  • Decision Tree Example

Failure 30 Probability and 150,000 Impact
Prototype Setup Cost 200,000
Pass No Impact
Failure 50 Probability and 550,000 Impact
No Prototype Setup Cost 0
Pass No Impact
132
MODULE V Project Planning Chapter 9 Project
Risk
  • Plan Risk Responses
  • Once risks have been identified and analyzed, an
    Action Plan needs to be developed for each risk
    to either handle or promote its occurrence.
    These plans are based upon the following response
    strategies
  • Avoid
  • Mitigate
  • Transfer (Deflect, Allocate)
  • Exploit
  • Enhance
  • Share
  • Accept

133
MODULE V Project Planning Chapter 9 Project
Risk
  • Plan Risk Responses
  • Threat Related Risks
  • Avoid Eliminate the root cause of the risk
  • Mitigate Reduce the probability or the impact of
    the risk
  • Transfer Make another party responsible for the
    risk, e.g.,
  • Buy Insurance, performance bonds, warrantees, and
    guarantees
  • Outsource the work

134
MODULE V Project Planning Chapter 9 Project
Risk
  • Plan Risk Responses
  • Opportunity Related Risks
  • Exploit Add work or change project to ensure the
    opportunity happens
  • Reverse of Avoid
  • Enhance Increase the likelihood the risk event
    will occur
  • Reverse of Mitigate
  • Share Allocate ownership of the opportunity to a
    third party who is likely to achieve the
    opportunity

135
MODULE V Project Planning Chapter 9 Project
Risk
  • Plan Risk Responses
  • Threat Opportunity Related Risks
  • Accept Do nothing. If it happens, it
    happens.
  • Work Book Time

136
MODULE V Project Planning Chapter 9 Project
Risk
  • Plan Risk Responses
  • Lets Discuss

137
MODULE V Project Planning Chapter 9 Project
Risk
  • Quiz Time
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