Project Management (Rutgers Business School New Brunswick) - Exam 2

CH9: Determining the Project Budget:

-The project budget is one of the key success factors for a project. It estimates all project costs and when they will occur.

-So why is budgeting becoming even more important these days?

--credit crisis

--recession

--banking crisis

CH9: Importance of Project Budget:

-PLANNING VALIDATION:

--Schedule is main driver for budget, cross-check

-PERFORMANCE MEASUREMENT:

--Measure project progress against costs

-MANAGING EXPECTATIONS:

--Initial budget sets stakeholder expectations

-CASH FLOW MANAGEMENT TOOL:

--Schedule drives resource/budget needs

-JUSTIFYING PROJECT INVESTMENT:

--Internal project selection process

CH9: Principles of an Effective Budget:

-ITERATIVE PROCESS:

--Inter-relation with schedule development

--Takes several cycles to fully develop budget

-TOTAL LIFE CYCLE

-TIME-PHASED:

--Not only "how much" but "when"

-COMPREHENSIVE

-INCLUDE A BUFFER:

--"management reserve" to cover known risks & uncertainty

-DOCUMENT ASSUMPTIONS

CH9: Sources of Project Costs:

-LABOUR COSTS:

--Key budget item

--Standard labour rate x work duration

-EQUIPMENT:

--expense vs. depreciation

-DEPRECIATION

CH9: Sources of Project Costs (cont.)

-MATERIALS:

--Costs, specifications

-LICENSES AND FEES

-TRAVEL

--Travel-related for project team

-TRAINING

--Internal and external

CH9: Sources of Project Costs (cont.) 2

-OPERATIONAL COSTS:

--Maintenance and support of project

-DISPOSAL COSTS:

--Disposing what was there previously

-OVERHEAD COSTS:

--Depends on organization / Finance

-COSTS of "CHANGE":

--Start-up costs, change management programs

CH9: Sources of Project Costs: (NIB)

STRAIGHT-LINE DEPRECIATION

-An equal amount of depreciation is taken every year

-Ann. Dep. = (Purchase Price - Salvage Value) / Usable Life

--Example: What is the depreciation for an item with a $250,000 purchase price, a $50,000 salvage value at the end of its life, and a 10-year life?

--Answer: ($250,000 - $50,000) / 10 = $20,000 / year

CH9: Sources of Project Costs: (NIB)

ACCELERATED DEPRECIATION:

Sum of the year's digits (PMP)

Double declining balance (PMP)

CH9: Developing the Initial Budget:

-USE BOTTOM-UP APPROACH

-USE A SPREADSHEET TOOL:

--Easier to capture all costs

--Allows flexibility in organizing, tracking

--Allows for easy analysis

CH9: Developing the Initial Budget - Estimates (NIB)

-ROM (ROUGH ORDER MAGNITUDE):

-- -50% to +50%

--Initiating phase

-DEFINITIVE ESTIMATE:

-- -10% to +10%

Planning phase

CH9: Developing the Initial Budget - Estimates (NIB) 2:

-ANALOGOUS ESTIMATING:

--Top-down estimating / history

-PARAMETRIC ESTIMATING:

--Multiplying the quantity of work to be performed by a known productivity rate

-THREE-POINT ESTIMATES (PERT & Triangular distribution)

CH9: Building a Budget - Key Inputs (NIB)

-ESTIMATING COSTS - THREE POINT ESTIMATES:

--CM (most likely)

--CO (most optimistic)

--CP (most pessimistic)

-MEAN (M) = average of the estimates (center of distribution)

-STANDARD DEVIATION (σ) = the standard error of the estimates

CH9: Building a Budget - Key Inputs (NIB)

THREE POINT ESTIMATE - PERT:

-MEAN OR CE = (CO + 4CM + CP) / 6

-STANDARD DEVIATION (σ) = (CP - CO) / 6

-Weighted average which requires three estimates per activity

-- +/- 1 standard deviation = 68.26%

-- +/- 2 standard deviations = 95.46%

-- +/- 3 standard deviations = 99.73%

CH9: Building a Budget - Key Inputs (NIB)

COST ESTIMATES EXAMPLE:

-EXAMPLE : The cost of a given work package is estimated to be $110,000 with a standard deviation of $5,000. What is the range of costs for this work package with a 95.4% confidence level?

-SOLUTION:

95.4% confidence level = 2 standard deviations

1 standard deviation = $5,000

2 standard deviations = $10,000

Cost range = $110,000 +/- $10,000

CH9: Developing the Initial Budget - Reserves (NIB):

-CONTINGENCY RESERVE (PMI)

--Used for known unknowns (PM control)

-MANAGEMENT RESERVE (PMI)

--Used for unknown unknowns (mgmt control)

CH9: Finalizing the Budget:

-Once the project schedule nears completion and actual resources have been identified, finalize the project budget

--Finalize the resource costs

--Finalize the reserves

CH9: Common Budget Challenges:

-BASED ON WEAK FOUNDATION:

--WBS, resource estimates, work effort, project schedule

-MISSING COST CATEGORIES

-BUDGET IS PRE-ALLOCATED:

--Organization sets budget from high-level estimate

-LABOUR COSTS NOT TRACKED:

--May treat internal labour as "sunk cost"

CH10: What is Project Control?

Those processes that ensure that project objectives are met by monitoring and measuring progress regularly to identify variances from plan so that corrective action can be taken if necessary (from PMI)

-Are we on track?

-Are we on budget?

-Are we on schedule?

-Are we delivering what we said we would?

-Are we meeting quality standards?

CH10: What is Project Control? 2

-Are we meeting stakeholder expectations?

-What have we accomplished?

-Will the project objectives be met?

-What deviations exist?

-What corrective actions are we taking?

-What caused these variances?

-What risks are we monitoring?

-What lessons have we learned?

CH10: The Principles of Project Control: PDA

(P) Prevention

(D) Detection

(A) Action

CH10: The Principles of Project Control: PDA

PREVENTION:

Keep your project on track by minimizing variances

--Planning, communicating effectively, monitoring risk factors continuously, resolve issues aggressively

CH10: The Principles of Project Control: PDA

DETECTION:

Sooner we act on variance, better the chance to get back on track

--Tracking systems, performance reporting, review meetings

CH10: The Principles of Project Control: PDA

ACTION:

Detection of a variance must trigger a timely response

-Corrective actions, change control procedures, lessons learned

CH10: Components of Project Control

-PERFORMANCE REPORTING:

--Measuring and communicating project status to stakeholders, focus on critical success factors

-CHANGE CONTROL MANAGEMENT:

--Process for reviewing, approving, and altering project scope, schedule or budget

-CONFIGURATION MANAGEMENT

--Process for controlling changes to project deliverables

-ISSUE MANAGEMENT:

--Process for identifying, tracking, resolving issues that could impact critical success factors

CH10: Components of Project Control (CONTINUED)

RISK MANAGEMENT:

--Process for identifying, monitoring, responding to project risks

QUALITY MANAGEMENT:

--Process for ensuring all work and deliverables meet quality expectations

PROCUREMENT MANAGEMENT:

--Process to control 3rd party vendors and suppliers

REQUIREMENTS MANAGEMENT:

--Process to ensure all requirements are identified correctly and tracked

CH10: Management Fundamentals for Project Control:

-FOCUS ON PRIORITIES:

--Project vs. organization

-SCALE TO PROJECT:

--Scope of project control vs. project budget/risk

-THINK "PROCESS":

--Establish a natural system of control

-EXPECT CHANGES:

--Expect, plan, manage changes

-INVEST IN THOROUGH PLANNING:

--Better planning = easier control

CH10: Management Fundamentals for Project Control (CONTINUED):

-CONSIDER ORGANIZATIONAL CULTURE:

--Organization often determines level of control

-SET EXPECTATIONS:

--Communicate to your team, expectations and accountability

-BE CONSISTENT:

--Measure and report consistently

-PAY ATTENTION EARLY:

--15% completion rule - almost no project recovers from a variance at the 15% completion point

CH10: Powerful Techniques for Project Control:

-SMALL WORK PACKAGES:

--More accurate estimates and better control

-BASELINES

--Manage to the baselines

-STATUS MEETINGS:

--Consistent and regular meetings

-COMPLETION CRITERIA:

--"how will we know when its done", increased focus

-REVIEWS

--Review-feedback-correction cycle, ensures quality

CH10: Powerful Techniques for Project Control (cont.):

-MILESTONES AND CHECKPOINTS:

--Pre-defined milestones and checkpoints are key for project sponsors and senior management

-TRACK REQUIREMENTS

-FORMAL SIGNOFFS:

--Key for change control management

-INDEPENDENT QA AUDITOR:

--Ensures project is accountable to quality criteria

-ESCALATION THRESHOLDS:

--When to escalate

CH10: Performance Reporting:

-ANSWER THE BIG THREE:

--Where do we stand?

--What variances exist and how are we solving them?

--Has the forecast changed?

-MEASURE FROM CURRENT BASELINE

-THINK "VISUAL"

-THINK "SUMMARY PAGE"

CH10: Performance Reporting (cont.):

-HIGHLIGHT ACCOMPLISHMENTS

-SHOW FORECASTS:

--Progress to-date plus remaining schedule

-HIGHLIGHT KEY ISSUES, RISKS, CHANGE REQUESTS

-AVOID SURPRISES

-AVOID TO MEET STAKEHOLDER NEEDS:

--What does stakeholder want to see?

-APPROPRIATE FREQUENCY:

--Judge size and scope of project

CH10: Variances Responses:

-TAKE CORRECTIVE ACTIONS:

--Understand root cause and correct

--Add resources, compress schedule, improve performance

-IGNORE IT:

--May be small enough to have no impact

-CANCEL PROJECT:

--One or more key assumptions haven't held

--Critical success factors have low tolerance for deviations

-RESET BASELINES:

--Change control process, measure against new baseline

-EARNED VALUE MANAGEMENT (skip)

CH10: Common Project Control Challenges:

-TIME AND COST ACCOUNTING LOGISTICS:

--Organization may not track time, costs

-PROJECT MANAGER RELUCTANCE, MULTI-TASKED:

--PM doesn't request WBS-level time reporting

-NO CHANGE CONTROL:

--Most problematic when scope has changed

-NO COMPLETION CRITERIA:

--"90% work done" phenomenon

-NO BASELINES:

--Can't measure variances

CH10: Common Project Control Challenges (cont.):

-NO REQUIREMENT TRACE-ABILITY:

--Issue for controlling scope & stakeholder expectations

-NOT CONSISTENT:

--Creates management difficulties with team

-MEASURING PROGRESS ACCURATELY

-IMPACT of HIDDEN WORK

-VIRTUAL / DISTRIBUTED TEAMS

CH10: Lessons from Project Recoveries:

-REVIEW PLANNING PRINCIPLES:

--Focus on establishing priorities and objectives, clarifying acceptance criteria, gaining consensus, and reviewing roles and responsibilities

-RESET BASELINE

-FREQUENT STATUS CHECKS

-AGGRESSIVE ISSUE RESOLUTION

-ENSURE CLARITY

-INCREASE VISIBILITY AND ACCOUNTABILITY

CH11: Managing Project Change:

WHAT EXACTLY IS A PROJECT CHANGE?

-A change in any of the critical success factors (scope, schedule, costs, quality and project acceptance criteria)

Project change vs. Uncontrolled change

-Expansion in scope ("scope creep")

-Project work

-Project schedule

-Project cost

-Stakeholder satisfaction

CH10: Types of Project Change:

-Expansion or reduction of project scope

-Expansion or reduction of product features

-Expansion or reduction in performance req's

-Expansion or reduction in quality req's

-Significant change in the target milestone dates

-Shift in the implementation strategy

-An increase in resource costs

CH10: Types of Project Change (cont.):

-Expansion or reduction in the project budget

-Change in any of the project objectives

-Change in any of the final acceptance criteria, including ROI

-Change in any of the assumptions, constraints, or dependencies

-Shift in project roles or responsibilities

-Decision to reset the performance baselines due to a variance

CH 11: Fundamentals for Managing Project Change

-PLAN FOR CHANGES:

--Don't prevent changes

--Expect, plan, manage

-SET UP CHANGE CONTROL SYSTEM:

--Protects baselines

--Ensures right people in decision-making process

--Manages stakeholder expectations

-EDUCATE STAKEHOLDERS:

--Explain change control system

-USE THE SYSTEM

CH 11: Fundamentals for Managing Project Change (cont)

-MINIMIZE SCOPE CHANGES:

--Balancing act

--Keep team focused on big picture objectives

--Limit/push-out unnecessary changes

--Educate stakeholders on impact of change request

-OVER-COMMUNICATE:

--Stakeholders

-BE A WATCHDOG:

--Be alert for anything that could impact critical success factors

CH11: Causes of Unplanned Scope Changes:

-SHIFT IN BUSINESS DRIVERS:

--Available budget/funding, new government regs

--Time to market pressures

--Changing customer priorities

--Unexpected market/world events

-SHIFT IN PROJECT ACCEPTANCE CRITERIA:

--Changes in targeted completion date, ROI, quality levels

-SHIFT IN TECHNOLOGY

-POOR SCOPE STATEMENT

-POOR REQUIREMENTS DEFINITION

CH11: Project Change Control System - Key Principles

-Any proposed scope change is documented, evaluated, and approved before implementation

-Appropriate stakeholders are involved in the evaluation and approval process

-Appropriate management level approves any change request before it is implemented

-All changes are documented & communicated to all stakeholders

CH11: Project Change Control System - Key Principles (Cont)

-Any change request is thoroughly assessed for impact to other project critical success factors, especially schedule and budget

-Any stakeholder is permitted to submit a project change request

-Roles and responsibilities are clearly defined

CH11: Project Change Control System - Key Components

-CHANGE REQUEST FORM:

--Capture all key change data/information

-UNIQUE IDENTIFICATION NUMBER:

--Facilitates communication and tracking

-CHANGE REQUEST TRACKING LOG:

--Manual or system

-CHANGE CONTROL BOARD:

--Include stakeholders

CH11: Techniques for Minimizing Project Changes

-CLEAR PROJECT DEFINITION:

--Agreement up front = fewer change requests

-SOLID REQUIREMENTS DEFINITION

-FORMAL ACCEPTANCE SIGN-OFFS

--Keeps expectations aligned and minimizes disputes

-ENGAGED STAKEHOLDERS

CH11: Techniques for Minimizing Project Changes (cont.)

-USE THE RIGHT PROJECT APPROACH:

--Emphasis on project definition and planning

--Shorter timeframes

--Phased implementations

--Go / no-go decision points

-USE WBS TO ILLUSTRATE IMPACT:

-Can illustrate impact on other work

-DEFER TO POST-IMPLEMENTATION:

-If possible

-TRACK ASSUMPTIONS AND CONSTRAINTS

CH11: Common Project Change Control Challenges

-THE OBVIOUS:

--Set up change control system as part of project plan

-CAN'T SAY "NO":

--Don't be afraid to use change control system

-CAN'T SAY "YES":

--Don't automatically shoot down requests - use system

-OVER-RELIANCE ON FORMAL SIGNOFFS

--Ensure real understanding

-NOT THE "GOLD" YOU WANT

--No gold plating - extras added by team not requested

CH11: Common Project Change Control Challenges (cont)

-IS IT REALLY A CHANGE?

--Ambiguity in specifications

-THE "IMPACT" OF THE IMPACT:

--Project team will be impacted to some degree

--Advise CCB accordingly

-INADEQUATE IMPACT ANALYSIS:

--Has total work effort been accounted for?

--Have implications been fully considered?

--Have all stakeholders been considered?

-BEWARE OF THE LITTLE GUYS:

--Small changes add up

CH12: Managing Project Deliverables:

-The process by which work products are controlled:

--Any project deliverable

--Any project document

--Any project management item

-Also known as "configuration management"

CH12: Importance of Managing Project Deliverables

-WHERE IS THE FILE AT?

--Timliness = effectiveness

-LOST PRODUCTIVITY:

--Duplicate efforts

-BASELINE? WHAT BASELINE?

--Forget to save baseline work

-WHO MADE THAT CHANGE?

-WHO APPROVED THAT CHANGE?

CH12: Importance of Managing Project Deliverables (cont.)

-THAT WILL NEVER HAPPEN TO US:

--No back-up copies

-WE SAID WE WOULD DO WHAT?

--No delivery tracking system

-I'VE GOT YOUR SIGN-OFF RIGHT...HERE?

--Protect key documents

-YOU HAVE NO CHOICE:

--Legal, regulatory, compliance

-THE ULTIMATE REASON-NEGOTIATING POWER?

--Sign-offs = power

CH12: The Principles of Managing Work Products

Identify

Protect

Track

CH12: The Principles of Managing Work Products

IDENTIFY:

Define all work products that need to be managed

CH12: The Principles of Managing Work Products

PROTECT:

-Protect integrity of work product

-Control who has access

-What changes can be made by each person

-Ensure that work is recoverable

CH12: The Principles of Managing Work Products

TRACK:

The ability to trace your steps and track changes

CH12: Managing Work Products - Best Practices

-ESTABLISH CENTRAL REPOSITORY

-DEFINE REVIEW/REVISION/APPROVAL PROCESS:

--Define which work products need to be reviewed and approved when changes are made

-DEFINE A GATEKEEPER:

--Designate an official project "librarian"

-IMPLEMENT ACCESS CONTROLS:

--Ensure that project repository is only accessible to authorized stakeholders

CH12: Managing Work Products - Best Practices (cont.)

-ESTABLISH FILE-NAMING CONVENTIONS:

--Better organization, communication

-ESTABLISH VERSION NUMBERING SYSTEMS:

--Better organization, communication

-ESTABLISH BASELINES:

--Effectively deal with quality issues and client expectations

-USE STANDARD DOCUMENT SECTIONS:

--Better organization, communication

CH12: Managing Work Products - Best Practices (cont.) 2

-USE A DELIVERABLE TRACKER:

--Develop mechanism to identify and track status of your project work products

-BACK IT UP:

--Ensure backup procedures exist

-LEVERAGE ARCHIVE FOLDERS

--Archive previous versions

-DEVELOP CONFIGURATION MANAGEMENT PLAN:

--Communicate procedures and rules that the project will follow

CH12: Common Challenges:

-NOT FOLLOWING THE PLAN:

--When the realities of project execution "hit the fan," configuration management is one of the first things to go

-TOOL DIFFICULTIES:

--Make sure project team members are properly trained in the configuration management tools

CH13: Managing Project Issues - Goal:

-Managing project issues is an example of proactive project management

GOAL OF PROJECT ISSUE MANAGEMENT:

"To detect issues as early as possible"

--The earlier an issue is identified, the greater the chance of resolving the issue before it impacts any of the project critical success factors.

CH13: PROACTIVE Project Management:

Managing Project Issues is an example of ___________

CH13: Managing Project Issues - Objective & Principles

THE OBJECTIVE OF PROJECT ISSUE MANAGEMENT:

"To identify, record, track, resolve, and communicate all issues that may adversely impact the project"

THE PRINCIPLES OF PROJECT ISSUE MANAGEMENT:

Administrative Process Principles

Project Manager Mindset Principles

CH13: Principles - Administrative Process Principles

-DOCUMENT THE ISSUES:

--Create an issue log

-TRACK UNTIL CLOSURE

-ALIGN WITH PROJECT NEEDS:

--Make sure approach fits overall communication plan

-COST-EFFECTIVE APPROACH:

--Keep things in perspective

CH13: Principles - Project Manager Mindset Principles

-"RINGMASTER"

--Focal point for tackling project issues

-"SMILING BULLDOG"

--Persistence with warm style

-"SWIVEL-HEAD"

--Be on constant lookout for potential trouble

-GOALTENDER

--Let no issue go unnoticed or unresolved

-DISCIPLINED

--Work the process, log and resolve

CH13: Key Features of Issue Management System:

-CLEAR PROCESS:

--Clearly define and communicate

--How will issues be submitted, resolved, reviewed, closed

-ESCALATION PROCEDURES:

--What kind of issues get kicked "up the ladder"

-ISSUE LOG:

--Spreadsheet, database, manual

-ISSUE LOG ADMINISTRATOR:

-ISSUE DATA POINTS (Table 13.1)

CH13: Managing Project Issues - Best Practices:

-Assign unique identification

-Assign one person responsibility

-Facilitate resolution to complex issues

--Must take ownership

-Resolve issues at the lowest level

--Faster and less costly

--Protects upper management

-Go after "root cause"

CH13: Managing Project Issues - Best Practices (cont.):

-Get buy-in on due date and ownership

--Make one-on-one time to ensure alignment

-Adapt process and data points

--Be flexible in your approach

-Review issues frequently

-Train project team on process tools

CH14: Managing Project Risks - Goal:

Managing project risks is the ultimate in proactive project management

GOAL OF PROJECT RISK MANAGEMENT:

"To identify and prepare for any potential threat to the project's critical success factors before it actually occurs"

--Risk management is the Project Manager's radar system!

CH14: Key Risk Management Principles:

-IT'S ALL RISK MANAGEMENT:

--All of project management is risk management

-"HEALTHY PARANOIA"

--Take responsibility for managing project risks

--Strike balance between paranoia and execution

-APPROPRIATE:

--Importance of project

--Cost of risk response vs. potential impact

-SYSTEMATIC:

--Identify any factors that could impact the project

CH14: Key Risk Management Principles (cont.):

-CONTINUOUS:

--Risk identification should be performed throughout the project life

-RELENTLESS:

--Organization should commit to risk management for the entire project lifecycle

-FOCUSED:

--Focus on risks you can control

--Start with highest priority risks first

CH14: Essential Process for Managing Project Risks:

-IDENTIFY:

--Identify project risks using risk profile / checklist

--Best risk profile is specific to your industry, organization

-DETERMINE PROBABILITY:

--Determine likelihood of occurrence / quantify

-ASSESS IMPACT:

--Determine potential impact on critical success factors / quantify

-PRIORITIZE

--Combine both values to come up with priority

CH14: Essential Process for Managing Project Risks (cont.):

-DEVELOP RESPONSES:

--Develop response plan for each risk

-GET BUY-IN

--Review response strategies with key stakeholders

--Generate awareness, CYA

-MONITOR:

--Continuously monitor for new risks

--Don't forget low-level risks

CH14: Project Risk Register / Matrix:

View Chapter 14 slides 9 and 10 for more information.

CH14: Risk Response Options

AVOIDANCE:

DESCRIPTION:

--Changing the project plan to avoid the risk

EXAMPLES:

--Reducing scope to remove high-risk tasks

CH14: Risk Response Options

ACCEPTANCE:

DESCRIPTION:

--Accepting the consequences of the risk

EXAMPLES:

--Active or passive acceptance

--Contingency allowance (reserves)

CH14: Risk Response Options

MONITOR AND PREPARE:

DESCRIPTION:

--Accept risk for now

--Develop alternative plan if event occurs

EXAMPLES:

--Contingency plan

CH14: Risk Response Options

MITIGATION:

DESCRIPTION:

--Taking action to reduce likelihood or impact of risk.

EXAMPLES:

--Taking action to reduce likelihood or impact of risk.

CH14: Risk Response Options

TRANSFERENCE:

DESCRIPTION:

--Transfer ownership or consequence of risk.

EXAMPLES:

--Insurance, outsourcing

CH14: Risk Management Tools:

-Risk profile

-Risk assessment

-Probability matrix

-Risk log

-Risk management plan

-Risk response plan

CH14: Common Sources of Risk:

-PROJECT SIZE AND COMPLEXITY:

--Effort / hours / calendar time

--Estimated budget, number of sites and systems

--Size of team

-REQUIREMENTS:

--Volatile, complex

--Unrealistic or aggressive performance standards

-STAKEHOLDER INVOLVEMENT / SPONSORSHIP

--All key stakeholders not identified

--Missing buy-in, stakeholders not fully engaged

--Lack of executive commitment, loss of political support

CH14: Common Sources of Risk (cont.):

-SCHEDULE:

--Timing estimates are not holding true

--Schedule contingency not accurate

-FUNDING:

--Reduction in capital, exchange rates, inflation

-TEAM:

--Location of team, ability to bond

--Lack of skills, experience, commitment

-TECHNOLOGY

--Use of unproven technology

CH14: Common Sources of Risk (cont.) 2:

-VENDORS AND SUPPLIERS:

--Reliability of suppliers

-EXTERNAL FACTORS:

--Weather issues

--Legal / regulatory requirements, political changes

-BUSINESS FACTORS:

--Mergers and acquisitions

--Economic events, market conditions

-ASSUMPTIONS:

--May create schedule, costs, resource or quality risks

CH14: Common Project Planning Sources of Risk

-PROJECT MANAGEMENT:

--Improperly defined deliverables

--Incomplete planning

--No clear roles and responsibilities

--Inadequate resource planning

-PROJECT DEFINITION:

--Unrealistic objectives

--Incomplete scope definition

-WBS

--Not reviewed by stakeholders

--Missing tasks, lack of team understanding

CH14: Common Project Planning Sources of Risk (cont.):

-PROJECT SCHEDULE:

--Tasks not clearly assigned

--Resources over-allocated

--Inadequate contingency

-PROJECT BUDGET:

--Poorly developed cost estimates

-REQUIREMENTS:

--Incomplete requirements

-ASSUMPTIONS:

--Not fully defined

CH14: Managing Project Risk - Typical Problems:

-UNDETECTED RISKS:

--Planning defects not detected

--Team doesn't raise awareness

--Project manager doesn't have proper risk mindset

-UNACKNOWLEDGED RISKS:

--Occurs in dysfunctional organizations, often political

-NOT ENOUGH PROCESS:

--No structure

-TOO MUCH PROCESS:

--Over-the-top risk avoidance, planning never gets completed

CH14: Powerful Risk Control Strategies:

-TACKLE HIGH RISKS FIRST:

--May help avoid investment and resources

-USE ITERATIVE, PHASED APPROACHES:

--Allows for frequent communication with stakeholders

--Biggest risk = stakeholder satisfaction

-QA THE PLANNING PROCESS:

--Helps identify planning defects that could become risks

-LEVERAGE INDEPENDENT QA AUDITS:

--Fresh set of eyes

CH15: Managing Project Quality:

WHAT IS PROJECT QUALITY:

-Quality audits

-Zero defects

-RFT (right-the-first-time)

-Six-Sigma

CH15: Managing Project Quality

PMI Project Quality Definition:

According to the PMI, project quality is:

"Conformance to requirements and fitness of use"

-The project produces what it said it would

-The project satisfies customer needs

CH15: Quality Theories - Deming (NIB)

-Widely considered the "father of modern quality**

-Suggested that 85% of the responsibility for the cost of quality rests with management

-DEMING'S FOURTEEN POINTS:

--What a company must do to bring about a positive transition from business-as-usual to world-class quality

-DEMING'S SEVEN DEADLY DISEASES:

--Factors that inhibit transition to world-class quality

-THE DEMING CYCLE - PLAN, DO, CHECK, ACT (PDCA)**

--Iterative focus on continuous improvement

CH15: Quality Theories - Juran (NIB)

-Main quality focus was on customer satisfaction**

-JURAN'S THREE BASIC STEPS TO PROGRESS:

--Continuous improvement, extensive training, and commitment from senior management

-JURAN'S TEN STEPS TO QUALITY IMPROVEMENT:

--Focus on goal setting, training and recognition

-THE JURAN TRILOGY:

--Quality planning, control, improvement

CH15: Quality Theories - Crosby (NIB):

-BEST KNOWN FOR ADVOCACY OF ZERO DEFECTS:**

--Goal is to prevent defects of occurring at all, saving the cost of non-conformance**

-Crosby simply defines quality as conformance

-THE CROSBY QUALITY VACCINE:

--Determination, education, implementation

-CROSBY'S 14 STEPS TO IMPROVEMENT:

--Focus on management responsibility and zero defects

CH15: Project Quality Processes (NIB)

As per PMI, there are three Project Quality Processes:

-Plan Quality process

-Perform Quality Assurance process

-Perform Quality Control process

CH15: Plan Quality Process (NIB)

Determines the quality standards that are applicable to the project and devising a way to satisfy them.

CH15: Perform Quality Assurance Process (NIB)

As per PMBOK Guide, the PERFORMANCE QUALITY ASSURANCE PROCESS is:

"the auditing of the quality requirements and the results of quality control measurements to ensure that appropriate quality standards and operational definitions are used."

OUTPUT:

--Project management plan updates

--Change requests

CH15: Perform Quality Control Process (NIB)

QUALITY CONTROL focuses on project results with the goal of:

1. Ensuring that they comply with the quality standards defined for the project

2. Eliminating causes of unsatisfactory performance

OUTPUT:

--Project management plan updates

--Change requests

CH15: Perform Quality Control Process - Tools (NIB)

-Cause and effect diagrams

-Control charts

-Histogram

-Pareto chart

-Run chart

-Scatter diagram

-Statistical sampling

CH15: Unique Aspects of Managing Project Quality:

-FOCUS ON QUALITY-BASED REQUIREMENTS:

--Ensure all quality & compliance standards are ID'd

-FOCUS ON VALUE-ADDED REQUIREMENTS:

--How can we create greater value for stakeholders?

-FOCUS ON PRODUCT AND PROCESS:

--Address product quality (goods & services) and process quality

-FOCUS ON VERIFICATION:

--Determine your own gameplan

CH15: Principles of Managing Project Quality:

-IDENTIFY TARGETS:

--Customers & key stakeholder quality expectations during requirement gathering

--Both internal & external compliance reg's

-PLAN IT:

--Quality management plan, quality is planned in - not inspected in

-RIGHT-SIZE IT:

--Don't go overboard if not needed

-SET EXPECTATIONS:

--Align customer quality expectations with critical success factors and negotiate changes if need be

CH15: Principles of Managing Project Quality (cont.)

-STAY CUSTOMER FOCUSED:

--Customer experience is key (perspective, communication)

-"TRUST, BUT VERIFY":

--Assume nothing

-IT'S UP TO YOU:

--Project manager owns project quality

CH15: Powerful Tools & Techniques for Project Quality:

-CHECKLISTS:

--Simple, powerful, clearly captures quality standards

-TEMPLATES:

--Communication & control of quality standards

-REVIEWS:

--Ensures quality & manages expectations

-COMPLETION CRITERIA:

--Answer up-front - how will we know when it's done