Planning Projects

Module 4
 Crashing project time
• In CPM, two activity times and two costs were often
specified for each activity.
• The first time/cost combination was called normal, and
the second set was referred to as crash.
• Normal times are “normal” in the same sense as the m
time estimate of the three times used in PERT.
• Crash times result from an attempt to expedite the
activity by the application of additional resources—for
example, overtime, special equipment, and additional
staff or material.
Resource Loading and Levelling

Resource loading and resource leveling are both

important concerns when analyzing a project’s
resource utilization and its impact on project
scheduling
 Resource Loading
• It estimation of the cost and quantity of
resources is very essential at the time of
making a budget for the project.
• Resource loading is basically allocating
resources to the activities at the right time.
• Project Manager, with the help of resource
loading can calculate the employee working
hours and do the allocation of various tasks
 Resource Loading
• Based upon these calculations, the project
manager can also predict if he needs to add
any employees to the project team for the
completion of the project
• Example: If a company has 2 ongoing software
projects, and a headcount of 25 technical
employees, then based upon the requirements
& priority of either of the project, human
resource is allocated at every required stage
 Resource Levelling
• Resource leveling aims to minimize the
period-by-period variations in resource loading
by shifting tasks within their slack allowances
• The purpose is to create a smoother
distribution of resource usage.
• There are several advantages to smoother
resource usage
 Resource Levelling
• It deals with time and project resources which
includes the project budget and manpower.
• It balances the needs of the project with
respect to the available resources at every
stage of the project
• Time and available resources are the two main
components of the resource leveling phase.
 Resource Levelling
• Project with higher priorities will be completed
first with the available resources.
• In technical words, we can say that the tasks
on the critical path are completed first with the
available resources.
• Example: Let’s take the same example where
there are 2 software projects. Resources are
allocated to the project which needs to be
completed first or which is on the critical path
 Goldratt's critical chain
• Previously, we saw CPM , which helped project managers develop
and manage the schedule in the project. However, there were many
issues with the schedules developed by critical path methods.

• Unlimited Resources
• Float Misuse
• Activity Completion Gain/Loss
• Student Syndrome

• There was a need to develop a pragmatic approach to developing a

realistic schedule that can help project managers complete on time
with minimal obstruction.
• Hence, the Critical Chain Method (CCM) came into existence.
 Goldratt’s Critical Chain
• that the problem of constrained resource
scheduling of multiple projects could be
reduced to the problem of scheduling activities
using scarce resources in the case of a single
project.
• However, the best-known attack on the
resource constrained scheduling problem is
Goldratt’s Critical Chain
 What is the Critical Chain Method
(CCM)?
• Before discussing the Critical Chain Method,
let’s understand the critical chain.
• CCM expands on the notion of a critical path
and help determine where buffers should be
placed to prevent project delayes

• The critical chain is “the longest path in the

network diagram considering activity
interdependence and resource constraints.”
 Project Buffer

• This buffer is placed between the last task and

the project completion date as a non-activity
buffer, and it acts as a contingency for the
critical chain activities.
• Any delay on the critical chain will eat this
buffer and the project completion date will not
change.
 Feeding Buffers

• This buffer is added to the non-critical chain so

that any delay on the non-critical chain does
not affect the critical chain.
• Feeding buffers are inserted between the last
task on a non-critical chain and the critical
chain
 Resource Buffer

• Resource buffers are kept alongside the critical

chain to ensure that they are available when
required. These buffers can be human
resources or equipment.
 Goldratt's critical chain
• In addition to the problems of multitasking,
thoughtless optimism, the student syndrome, and
the other things we have mentioned, Goldratt adds
several more common practices (e.g., “safety
time”) and argues that all of these lead to a
vicious cycle that makes projects substantially
late.
• Using the logic of his Theory of Constraints,
Goldratt recommends that new projects should be
scheduled based on the availability of scarce
resources.
 Project Stakeholders and
Communication plan
• Stakeholders(both internal and external) are
person’s having an interest in making the
project a success.
• The stakeholder for a project are
– client,
– parent organization,
– project team,
– and the public
 Project Stakeholders and
Communication plan
• Stakeholder communication plans are important.
• Once you've defined your stakeholders, you need
to develop a good communication plan.
• Sending too many details to a stakeholder who
only wants bottom line results could raise
questions or concerns that can delay milestones.
• Likewise, a lack of clarity in regular project
communications can spike the number of meeting
requests and live information sessions, sending
productivity spiraling.
 Project Stakeholders and
Communication plan
Keep in mind that you will need to identify:
• Who the stakeholders are and at what level do
they need to be involved?
• What are the needs and interests of each
stakeholder?
• Make an analysis of each stakeholder's interests.
• How will you effectively communicate with each
stakeholder; what method?
• Determine the frequency of communication.
 Risk Management in projects
• Dealing with uncertainty has come to be known as risk
management
• Project risk is an uncertain event or condition that if
occurs, has a positive or negative effect on one or more
project objectives viz: scope, schedule or budget
• Six sub processes are
– Risk Management Planning
– Risk Identification
– Qualitative Risk Analysis
– Quantitative Risk Analysis
– Risk Response Planning
– Risk Monitoring and Control and
– Create and Maintain a Risk Management Data Bank
 Risk Management in projects
• According to Project Management Institute’s
(PMI) , risk management is stated as “the
systematic process of identifying, analyzing,
and responding to project risk” and consists of
six sub processes, as given above.
• To ensure against , the risk management
system should maintain the following:-
Risk Management in projects
 Risk management planning
• The risk management plan for the project must
be started at the launch meeting so that further
risk identification can be extended to include
the technology of the process/product, the
project’s schedule, resource base, and a myriad
of other risks facing the project but not really
identifiable until the project plan has begun to
take form.
 Risk management planning
• In addition to the matters discussed below,
one of the outcomes of the project planning
process will be the formulation of the project’s
risk management group and the initial risk
management plan that the group develops
during the process of planning the project.
 Risk management planning
• The outcome of the meeting is :-
(1) technical scope is established (though perhaps
not “cast in concrete”);
(2) basic areas of performance responsibility are
accepted by the participants;
(3) any tentative delivery dates or budgets set by
the parent organization are clearly noted; and
(4) a risk management group is created
Risk identification and risk register
• Identify Risks is the process of determining which risks
may affect the project and documenting their
characteristics.
• The key benefit of this process is the documentation of
existing risks and the knowledge and ability it provides
to the project team to anticipate events.
• Participants in risk identification activities may include
the following: project manager, project team members,
risk management team (if assigned), customers, subject
matter experts from outside the project team, end users,
other project managers, stakeholders, and risk
management experts.
 Risk Register
• The Risk Register is a formal process that
identifies, quantifies, and categorizes the risks,
develops cost-effective methods to control
them, and positions the company to achieve its
stated goals.
• The system continually assesses new risks,
generates information for decision-making and
supports employees at all levels.
 Risk Register
• Risk Register process has five phases:
[Link] analysis,
[Link] development,
[Link] selection,
[Link], and
[Link].
 Qualitative risk assessment
• Perform Qualitative Risk Analysis is the process
of prioritizing risks for further analysis or action
by assessing and combining their probability of
occurrence and impact.
• The key benefit of this process is that it enables
project managers to reduce the level of
uncertainty and to focus on high-priority risks
• Risks can be prioritized for further quantitative
analysis and planning risk responses based on
their risk rating.
 Probability and impact matrix
• Ratings are assigned to risks based on their
assessed probability and impact.
• Evaluation of each risk’s importance and
priority for attention is typically conducted
using a look-up table or a probability and
impact matrix.
• Such a matrix specifies combinations of
probability and impact that lead to rating the
risks as low, moderate, or high priority
 Probability and impact matrix
• Each risk is rated on its probability of
occurrence and impact on an objective if it
does occur
• The organization should determine which
combinations of probability and impact result
in a classification of high risk, moderate risk,
and low risk
• In a black-and-white matrix, these conditions
are denoted using different shades of gray.
 Probability and impact matrix
• Dark gray area (with the largest numbers)
represents high risk: the medium gray area
(with the smallest numbers) represents low
risk, and the light gray area (with in-between
numbers) represents moderate risk.
• Usually, these risk-rating rules are specified by
the organization in advance of the project and
included in organizational process assets
Probability and impact matrix
 Quantitative risk Analysis

• Perform Quantitative Risk Analysis is the process

of numerically analyzing the effect of identified
risks on overall project objectives.
• The key benefit of this process is that it produces
quantitative risk information to support decision
making in order to reduce project uncertainty
• Perform Quantitative Risk Analysis is performed
on risks that have been prioritized by the Perform
Qualitative Risk Analysis process as potentially
and substantially impacting the project’s
competing demands
 Quantitative risk Analysis

• Tool to perform quantitative risk analysis is data

gathering and representation techniques which
include
Interviewing
Probability distributions
• Modelling techniques include
Sensitivity analysis
Expected monetary value analysis
Modeling and simulation
 Risk response strategies for positive
and negative risks
• Risk Responses is the process of developing
options and actions to enhance opportunities
and to reduce threats to project objectives.
• The key benefit of this process is that it
addresses the risks by their priority, inserting
resources and activities into the budget,
schedule and project management plan as
needed
 Risk response strategies for positive
and negative risks
• Three strategies, which typically deal with threats
or risks that may have negative impacts on project
objectives if they occur, are: avoid, transfer, and
mitigate.
• The fourth strategy, accept, can be used for
negative risks or threats as well as positive risks
or opportunities
• These strategies should be chosen to match the
risk’s probability and impact on the project’s
overall objectives.
 Risk response strategies for positive
and negative risks
• The four strategies for dealing with negative risks
or threats are further described as:
1. Avoid
2. Transfer
3. Mitigate
4. Accept
• Three of the four responses are suggested to deal
with risks with potentially positive impacts on
project objectives.
 Risk response strategies for positive
and negative risks
• These strategies are
1. Exploit
2. Share
3. Enhance
4. Accept.