Project Management Final

Verzuh Ch 10.3, 12, 13, 19, 11, 24

3 types of resources in project management

1. Work resources

2. Material resources

3. Cost resources

Work resources

People, equipment - assign by time

Material resources

Materials (concrete, bricks, boxes) - assign by quantity

Cost resources

Other (Airfare, lodging, training) - assign $ every time it occurs

Overallocation

Overallocation happens when you have more assigned to a resource than you have of a resource

Examples of overallocation

* One person assigned to do a full day’s work on two different tasks, whether in the same project or different projects

* Five people assigned as programmers when you only have two available to the project

* One equipment assigned to two different tasks for a full day on the same day

How to find overallocations in a project?

Gantt chart indicators column displays red icons beside tasks with overallocated resources

• To identify specific overallocated resources, refer to the 'Resource Usage' view

Resource leveling

Delaying or splitting tasks so resources are no longer overallocated

• focuses only on people and equipment resource types

• materials needed are dictated by specifications

4-step process to level resources

1. Forecast resource requirements for initial schedule

2. Identify resource peaks

3. At each peak, delay noncritical tasks within their float

4. Eliminate remaining peaks by reevaluating work package estimates

Benefits of resource leveling include

• Make resources be used at a consistent, reasonable rate

• Requires less management, avoiding repeatedly adding and removing resources

• Improves morale via job stability, avoiding underallocation

• Enables use of just-in-time inventory policies for subcontractors or other expensive resources

3 types of cost estimates include:

1. Ballpark estimate

2. Order of magnitude estimate

3. Detailed estimate

Ballpark estimate (Idea evaluation)

Results of a gut feeling from an expert

• Used to evaluate whether it would be useful to get a more accurate estimate

Order of magnitude estimate (Project selection)

Few hours of effort comparing proposed project to past projects

• Used to formally initiate a project

Detailed estimate (Project management)

Includes all schedule and resource information + a forecast of a project’s budget and cash flow

• Used to manage the project and evaluate its success

4 common estimating techniques include:

• Phased estimating

• Apportioning

• Parametric estimates

• Bottom-up estimating

Phased estimating

Eliminate cost and schedule for only one phase of the project at a time

Apportioning

A top-down estimate dividing the total project estimate into smaller pieces using similar past projects to derive a formula

• Good for project selection (order of magnitude estimate)

Parametric estimate

quantitative technique which seeks basic unit of work to act as a multiplier to size the entire project

• Good for project selection (order of magnitude estimate)

Bottom-up estimating

All tasks are estimated and then combined

• Good for managing project (detailed estimate)

How to build the Detailed Budget Estimate?

a bottom-up estimating technique where individual project tasks are estimated and then aggregated into a total project estimate;

- sources of data

- internal labor cost

- use burdened labor rate

- don't leave out staffing cost

- internal equipment cost

- estimating resources used

- estimating resources used on multiple projects

- external labor and equipment costs

- material costs

3 levels of authority a project can be balanced

1. Project level authority

2. Business case level authority

3. Enterprise level authority

Project level authority

Needs authorization from PM and team

• Keep project on track

Business case level authority

Needs authorization from all the stakeholders

• Reevaluate business case for project (cost, schedule, quality goals)

Enterprise level authority

Needs authorization from the firm

• Confronts constraints of insufficient equipment, personnel, and budget

3 techniques for shortening project schedules

1. Crashing

2. Fast tracking

3. Reducing scope

Crashing activities

Obtaining the greatest amount of schedule compression for the least incremental cost

• Reduce duration of critical path tasks

Fast tracking activities

Overlapping tasks that are traditionally done in sequence.

• Fast-track tasks on critical path because the length of critical path = project duration

Reducing scope

Cutting tasks associated with delivering that scope

• Reducing project scope is a last resort - if product functionality is reduced, value is reduced.

Primary Focus of measuring project status

• Measuring schedule performance

• Measuring cost performance

Earned Value Analysis (EVA)

Industry standard way to measure a project’s progress, most helpful for cost management

• Provide schedule & budget variances along the way

• Forecast its final cost

How EVA is performed?

EVA offers an integrated view of a project with 3 fundamental measures in terms of monetary values:

1. Planned Value (PV)

2. Earned Value (EV)

3. Actual Cost (AC)

Derived Measures of EVA (current progress)

• Cost Variance (CV) = EV - AC

  • difference between budgeted cost & actual cost for completed work by status date.

• Cost Performance Index (CPI) = EV / AC

  • measure of cost efficiency expressed as the ratio of budgeted cost to actual cost for completed work

• Schedule Variance (SV) = EV - PV

  • difference between work completed & work planned to be completed by status date.

• Schedule Performance Index (SPI) = EV/PV

  • measure of schedule efficiency expressed as the ratio of earned value to planned value.

Cost Variance (CV)

EV - AC

• The difference between the budgeted cost & actual cost for completed work by the status date

  • negative = over budget

Cost Performance Index (CPI)

EV / AC

• A measure of cost efficiency

  • <1 = over budget

Schedule Variance (SV)

EV - PV

• The difference between work completed & work planned to be completed by the status date

  • negative = behind schedule

Schedule Performance Index (SPI)

EV / PV

• A measure of schedule efficiency

  • <1 = behind schedule

Derived Measures of EVA (forecasting)

• Budget at Completion (BAC)

• Estimate at Completion (EAC)

• Estimate to Completion
  (ETC) = EAC - AC

• Variance at Completion
  (VAC) = BAC - EAC

Budget at Completion (BAC)

Approved budget for the project

Estimate at Completion (EAC)

Revised estimate of total project cost

• If the CPI is expected to be the same for the remainder of the project:

  • EAC = BAC/CPI

• If future work will be accomplished at the planned rate:

  • EAC = AC + (BAC-EV)

• If the initial plan is not valid:

  • EAC = AC + Bottom-up ETC

Estimate to Completion (ETC)

EAC - AC

• Expected cost to finish all remaining project work

Variance at Completion (VAC)

BAC - EAC

• Estimated difference in cost at completion of project

  • negative = over budget

3 fundamental measures of EVA

1. Planned Value (PV)
   “How much work should be done?”

2. Earned Value (EV)
   “How much work was actually done?”

3. Actual Cost (AC)
   “What did the work that was actually done actually cost?”

Planned Value (PV)

“How much work should have been done?”

• Budgeted cost of work that should have been completed by the status date

Earned Value (EV)

“How much work was actually done?”

• Budgeted cost of work that has been completed (earned) by the status date

Actual Cost (AC)

“What did the work that was actually done actually cost?”

• The actual cost of work completed by the status date

Baseline

A comparison point

• Cost and schedule baselines determined

• Important for measuring project status demonstrating variance from baselines by status date

Cost and schedule baselines

Represent the original project plan as approved by the stakeholders

Status date

A date that is set for reporting the project progress

• Important for measuring project status by demonstrating variance from baselines on the status date

Waterfall development process

A sequential, one-way development process

• Establish a clear project scope early in the life cycle

• Each phase must be fully completed before the next one can begin

Agile

Umbrella term for iterative and incremental delivery

Agile development process

Emphasizes collaboration between development teams & business experts

• Scrum is an agile framework

• Agile is more iterative than the waterfall process

Manifesto for Agile Software Development

• Individuals and interactions over processes and tools

• Working software over comprehensive documentation

• Customer collaboration over contract negotiation

• Responding to change over following a plan

Twelve Principles of Agile development (1-4)

1. Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.

2. Welcome changing requirements, even late in development. Agile processes harness change for the customer's competitive advantage.

3. Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.

4. Business people and developers must work together daily throughout the project.

Twelve Principles of Agile development (5-8)

5. Build projects around motivated individuals. Give the environment and support needed, trust them to get the job done.

6. The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.

7. Working software is the primary measure of progress.

8. Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.

Twelve Principles of Agile development (9-12)

9. Continuous attention to technical excellence and good design enhances agility.

10. Simplicity – the art of maximizing the amount of work not done – is essential.

11. The best architectures, requirements, and designs emerge from self-organizing teams.

12. At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.

Scrum framework

An agile framework for managing project or product development effort

• Consists of roles, artifacts, activities/events and guidelines

• Helps teams deliver products in short cycles, enabling fast feedback, continual improvement, and rapid adaptation to change

3 Scrum team roles

1. Product owner

2. Development team

3. Scrum master

Product owner (Scrum)

Maximizing the value of the product and the work of the development team

• Clarify what the product should do (knows requirements)

• Prioritize the list of potential improvements

Development team (Scrum)

Building the actual product, contains skills required to perform:

• requirement definition, design, development, and testing (cross-functional team)

• Team chooses how to best accomplish work, rather than being directed externally (self-organizing)

• Make + keep commitments to product owner and members are accountable to each other (accountable as a team)

Scrum Master (Scrum)

Ensuring Scrum is understood and used skillfully by the team:

• Understand and promote Scrum roles and practices within the Scrum team and the organization

• Protect the team from being distracted or losing focus

Scrum Activities / Events

• Sprint

• Sprint planning

• Daily Scrum

• Sprint review

• Sprint retrospective

Sprint

The Scrum Team delivers a new iteration of the working product every Sprint

• Each Sprint lasts between 1-4 weeks

• A sprint has an established scope

Sprint planning

A meeting at the beginning of each sprint to decide what can be delivered in this sprint and plan how to achieve this delivery

• Product owner: establishes priority of product backlog, decides what to be produced

• Development team: Decides scope to be taken on during sprint & plans work

• Scrum master: Facilitation & coaching development team and product owner

Output: sprint goal, sprint backlog

Daily Scrum

Daily 15-minute meeting, where each member addresses 3 topics:

1. Accomplishments since previous meeting

2. Task focus for the coming day

3. Any impediments encountered

Scrum master can leave with a list of impediments to resolve

Sprint review

A meeting at the end of each sprint in review

1. Scrum team: delivers result of sprint to customer

2. Customer: accepts or rejects result, providing feedback to team to shape product

Output: revised product backlog

Sprint retrospective

An end-of-sprint meeting for the Scrum team to reflect on effectiveness and make adjustments prior to the next sprint

• Interpersonal communication, tools, team processes

• How much of sprint product commitment was reached? What factors contributed to or impeded productivity?

Output: a list of changed behaviors to adapt in the next sprint

Scrum Artifacts

• User story

• Product backlog

• Sprint backlog

• Task board

• Sprint burndown chart

User Story

Agile requirements are defined by user stories

• Describes specific interaction or activity the user will have with the product

• Product owner is the only person who has the authority to add user stories or change the priority of user stories

Product Backlog

List of requirements related to the product

• Constantly evolving based on what is known at a particular time

• Collaborative refinement (by product owner and development team)

Sprint Backlog

List of requirements related to current sprint

• Collaboratively created by development team

• Regularly updated during sprint

• Real-time picture of all work in current sprint

Task Board

shows task status - updated at daily scrum

3 types of task status:

1. Not started

2. In Progress

3. Completed

Sprint Burndown Chart

Visual chart to show whether the development team is on track to meet the goal of a sprint

• Constructed at sprint planning session

• Shows effort vs. time

Key Factors for Effective Scrum

• A product that can be delivered incrementally

• Self-managing teams are mature

• Scrum must be embraced by everyone

Project Management Institute (PMI)

The Project Management Institute (PMI) is an international professional society for project managers founded in 1969

• PMI is the governing body for both PMP and CAPM

PMP & CAPM

The Project Management Professional (PMP) and Certified Associate in Project Management (CAPM) are professional certifications by PMI.

PMP (Project Management Professional)

An internationally recognized professional certification similar to the CPA license within the accounting field.

CAPM (Certified Associate in Project Management)

A professional designation that is meant to bridge one’s entrance into the PMP designation.

• Students can join PMI at a reduced fee and earn the CAPM certification

PMBOK Guide

The Project Management Body of Knowledge (PMBOK) published by PMI is a guide reflecting how project management is best practiced today.

PMI Infinity

PMI offers an AI personal assistant for project professionals that helps embrace AI in daily project management needs.