Project Management 5 Project Management Domain 5 Champion Jane Hunter, Ph.D., PMP, PEM, ACP Rafael E, Landaeta, Ph.D., PMP, CSM | Introduction to Project Management 5.2 Initiating 5.3 Planning 5.3.1 Project Management Plan 5.3.2 Scope 5.3.3 Work Breakdown Structure (WBS) 5.3.4 Network Diagrams and Critical Path 5.35 Estimating Resources 5.3.6 Scheduling 5.3.7 Cost Estimating and Budgeting 5.3.8 Risk Identification, Assessment, Response Planning, and Risk Register 5.4 Executing 5.5 Monitoring and Controlling 5.6 Closing 5.7 Introduction to Agile Project Management 135[A Guide to the Engineering Management Body of Knowledge (ath Edition) Domain 5: Project Management Key Words and Concepts Agile Project ‘An icerative and incremental framework that allows project manager, Management ‘teams, and organizations to adapt to the changing conditions of ‘uncertain project environments Cause and Effect Used in root cause analysis to help uncover factors that may be the Diagram source of problems. Also called Ishikawa or fishbone diagram, Critical Path Represents the longest path through the neework and includes all of the tasks that have zero slack. Delays in the tasks on the critical path ‘will result in increased projece duration. | Earned Value ‘An analysis technique used to integrate the scope, time, and cost Management (EVM) Performance on a project. The three key dimensions of earned value | ‘are: planned value (PV), earned value (EV) and actual cast (AC), Knowledge Areas ‘The PMBOK® Guide defines nine Knowledge Areas for project ‘management: integration, scope, time, cost, quality, human resource, ‘communications, risk,and procurement, which are mapped into the five process groups, defining 42 project management processes, Network Diagram Graphical representation of the work to be completed on a project created during the planning phase to provide guidance for the ‘execution of the work Represents the sequence of the tasks or activities to be performed based on the information in the WBS. PMBOK® Guide ‘A Guide to the Project Management Body of Knowledge (PMBOK® Guide) is. 4 recognized standard for project management provided by the Project Management Institute (PMI) The PMBOK® Guide establishes a common ‘vocabulary and identifies the gonerally accepted best practices for the project management profession, Process Groups ‘The PMBOK® Guide defines the five project management Process Groups (Initiating, Planning, Executing, Monitoring and Controlling, and Closing) that are essential co effective project management. | Project Aemporary endeavor undertaken to create a unique product, service, | or result | Project Charter A document that specifies the initial requirements that satisfy the stakeholder’s needs and expectations. When the project charter is finalized and approved, the project becomes offically authorized and project planning begins. Project Management The application of knowledge, skills, tools, and techniques to project Activities to meet the project requirements, Risk ‘An uncertain future event or condition thar, fit occurs, has a positive or negative effect on at ieast one project objective, 136Risk Register Scope Statement Stakeholders Project Management ‘The preferred tool for managing risks and documenting the characteristics of the risks for the project, which includes thelist ‘of identified risks risk category, risk owner, risk causes and triggers, Probability of occurrence, impact, risk response plans, and status. A document that defines the project deliverables and the work required to create the deliverables. Identifies what is included in the project as well as what is not included in the project. All of the people and organizations that are impacted by the project, both positively and negatively. ‘Three-Point Estimate The variability of activity time estimates are approximated and used to estimate the probability of completing the project by a specific time. Time-Phased Budget ‘The aggregated estimated costs of the individual activities are placed fon schedule as they are expected to occur aver the life of the project. ‘Tracking Gantt Chart ‘A bar chare that represents schedule-relaced information to. communicate project schedule status by comparing actual start and finish times to the baseline schedule. wes ‘[Link] breakdown structure (WS) Is a deliverable-oriented hierarchical decomposition of the work to be executed by the project ‘team to accomplish the project objectives and create the required deliverables, WEBS Dictionary Provides detailed information about the components in the WBS, such as description of work, responsible organization, milestones, resource requirements, acceptance criteria, and so forth, Work Package ‘The deliverable at che lowest level of the WBS, which is the level at which the durations and costs can be reliably estimated and reasonably managed. 137A Guide to the Engineering Mancgement Body of Knowledge (4th Edition) 5.1 Introduction to Project Management A project isa temporary endeavor undertaken to create a unique product, service, or result. The opera- tive words in this definition are remporary and unique. TEmpontry indicates a definitive beginning and end. A project begins when an organization recognizes a need and develops a project charter, which formally authorizes the project and documents the initial requirements. A project ends when the objectives are met or when the project is terminated for reasons other than successful completion. Although the project itself is temporary the products, scrvices, or results created by the project typically are not temporary and ‘ormally have a lasting outcome. The second important term in the definition fora project, unigue, indie cates that che requirements, the tasks chat the project team performs or the products, services, or results created by the project, are not routine. Although some repetitive clements may be present in some of the deliverables, many aspects are unique. For example, when a heavy civil firm andertakes a new highway- onscruction project, the location, design, circumstances, and stakeholders typically differ from previous projects, generating a fundamental uniqueness for cach project. Organizations often use projects to achieve their strategic goals and objectives. In some cases, related. projects are grouped together in programs to achieve benefits that would not be ralized if che projects were managed individually The collection of individual projects and programs that an organization undertakes is known as the porsfalo. Unlike the projects within a program, the projects and programs “within a portfolio might not be related or interdependent. However, all projects and programs within a portfolio should be consistent wich an organizations scrategic goals Project management is a work structure in which knowledge, skills, cools, and techniques are applied to project activities to mect the project requirements. Because the number of projects undertaken by organizations has increased dramatically, project management has become a critical sill for most companies. A Guide to the Project Management Body of Knowledge, also known as the PMBOK" Guide, is a recognized standard for project management provided by the Project Management Instieute (PMI). The PMBOK™ Guide establishes a common vocabulary and identifies the generally accepted best practices for the project-management profession, The PMBOK" Guide defines the five project management process groups (Iniciating, Planning, Executing, Monitoring, and Controlling, and Closing) that are essential to ‘fective project management. The process groups are not distinct phases but rather integrated processes that overlap considerably: Figure 5-1 illustrates the integrative nature of project management, Figure 5-1. Project Management Process Groups. From A Guide to the Project Management Body of Knowledge, Sth ed,,2013, p49, Newcown Square, PA: Project Management Institute, Int isting In addition, the PMBOK™ Guide defines the following ten knowledge areas for project management: integration, scope, time, cost, quality, human resource, communications, risk, procurement, and stake- holders, which are mapped into the five process groups, defining 47 project management processes, as shown as: 138Project Management Ppping of Pl Knowldge Ares Process Grovps Process Groups Kowal | tatng | Paming | Encutng | MEMENMEET Cosy Integration x x x x x Scope x x : Time x x Cost ee x [ Qualicy Hee pee eee +m i HR x x Communicadons x x x Rsk x x Roamenae x x x x Stakeholders x x x x A project is managed by the project manager, who is the ultimate individual accountable for the performance of the project. A project manager can be seen as the CEO of a temporary organization (Le, the project) in which he or she makes decisions throughout the life cycle of the project (i.e. from initiating to closing) co meer the project requirements. These project-management decisions are made based on knowledge, information, and data chat are processed through a rellection process creating an understanding of where the project is, where it was, and where it has to be. The project manager uses this understanding co analyze the situations, to assess and manage project risks, o generate and evaluate alternatives, and to make decisions to move the project towards the desired future situation, Project managers go through this decision-making process consciously and unconsciously every single day as they make operational, actical, and strategic decisions. Figure 5-2 represents the project manager decision-making model Figure 5-2. Project Manager Decision-Making Model roe T Trowledar on ‘ection doen a ng eocs ‘ate tion T atetion Project managers perform several key roles in a project. For example, they facilitate project work by casing project communication, creativity, conflict resolution, and decision-making, They administer the project by planning, collecting, allocating, protecting, and controlling project resources, as well as by assessing and controlling project performance. They lead the stakeholders of the project by articulating the vision and current state ofthe project, providing soft suppor, developing a high-performance 940 neering Management Sody of K edge {ath Edition) project culture, and inspiring the key stakeholders of the project, especially che members of the project team. They coach and mentor the stakeholders of the project through continuous feedback and focus on the development of the next generation of project managers. Finally they exert constant personal- reflection processes that enable them to continuously improve their project-management performance (og. becoming a better facilitator, a better leader, better learner) through active learning, Figure 5-3 represents these key project manager's roles. Figure 5-3. Key Roles of Project Managers Facilitator Administrator Coach, Leader fren Active Learner 5.2 Initiating ‘The initiating process group involves those processes necessary to define a new project or project phase and ‘0 authorize the project manager co begin using organizational resources to perform the subsequent proj- ect activities. Often, the decision ro undercake a project i established through strategic planning in which alternatives are evaluated. These activities may be performed outside of the project boundaries buc should include key project personnel, such as the project manager, whenever possible. Once a project is selected, the project manager is assigned, a clear description of the project activities is developed, and the justfica- tion for the project is documented, noting the selection criteria and comparison to alternative projects considered ¢o satisfy the requitements, An important step in the initiating process is the identification of all of the people and organizations that are impacted by the project, both positively and negatively known as the stakeholders. Duzing initiation, the stakeholders interests, involvement, and impact on project success are documented, A project charter, which isa de 1 that specifies quirements thae satisly the stakeholders’ needs and expectations, is created. Expert judgment is often used to assess che inputs used co develop the project charter. The customers and other key stakeholders should be involved in the development of the project charter to improve the probability of stakeholder buy-in throughout the project and customer satisfaction ar completion. ‘The project charter normally includes the following: + Project purpose and deseription Sponsor or individual(s) auchorizing the projece Project manager name, responsibiliey and authority level Project objectives and success criceria High-level requirements Identification of major risks Summary milestone schedule and budget Project-approval requiternents Generally, projects are authorized by someone external to the project ata sufficiently high level to appropriate che Funds for the project. This may be the project sponsor ot a high-level steering committee, ‘When the project charter is finalized and approved, the project becomes officially authorized and project planning begins.Project Management 5.3 Planning ‘The planning process group consists of all of the processes necessary to define the requirements and establish the scope for the project, outline the work required to meet the project objectives with the desired quality determine the resource (human and other) requirements, assess the project risks, plan the . tons, and led schedule and cime phased budget based on the amount ‘of work required and the availability and cost of the required resources. Appropriate stakeholders, particularly che customer, should be involved in the planning process. The planning process is erative, ‘with continuous refinements as mote information becomes available. When the project plans contain a satisfactory level of detail, the initial planning effort ends and the execution phase begins. parchasing 5.3.1 Project Management Plan “The project management plan—a compilation of subsidiary plans addressing the scope, time, cost, quality communication, human resources, risk, procurement, and stakeholders’ concerns of the project—is the ‘major output of the planning process. Development of che project management plan is an ongoing and iterative process. The plan is progressively elaborated and becomes more refined and precise as additional details about the project ave gathened. The prnject- management plan guides how the is executed, ‘monitored, controlled, and closed. Once a baseline of the project management plan is established, changes are made to the plan only when a formal change request is generaced and approved through the integrated change-control process. 5.3.2 Scope ‘The sco 3 proces all of the work req x work requ complete the project is performed. Collecting requirements is the firs step in the scope-management process and provides the necessary information to define the project scope. The process of collecting re- quirements may be formal or informal and might include interviews, focus groups, surveys, and so forth. Many sophisticated tools are available for documenting requirements for large projects. The baseline requirements must be unambiguous, traceable, complete, consistent, and acceptable to key stakeholders. ‘The scope statement defines the project deliverables and the work required to create the deliverables. Ie is important thac the scope statement identify what is included in the project as well as what is not includ- ed in the project, The detailed scope statement typically includes the following elements: Scope description Acceptance criteria Deliverables Exclusions Constraints Assumptions ‘The project scope statement is an important input for the process of subdividing the project de- liverables work sore manageable components mown 2s the svork breakdown structure (WBS). 5.3.3 Work Breakdown Structure (WBS) According to the PMBOK" Guide, the WS is a “deliverable-oriented hicrarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required deliverables” (p. 116). The deliverables at the lowest level of che WBS are called work packages, which is the level at which the durations and costs can be reliably estimated and reasonably managed. A WBS with major deliverables atthe highest level of che structure is shown in Figute 5-4, 1aA Guide to the Engineering Management Body of Knowledge Figure 5-4. Work Breakdown Structure (WBS). From A Guide to the Project Management Body of Knowledge, Sch ed, 2013, p. 130, Newtown Square, PA: Project Management Institute ee | Meee | Lee eae | sae eee | | eee | ff oe eas | Fast won| |] ame | [[eeecm wees] [fier] [| aman site| Fete | tener | rc | Hee oe | SS te ee (See eae epee meee wene [| com | [omen | | “soe | | “Seen ‘WES He on tr eso ep of ay pi ‘ero tt ae ny pw gene 3 WBS ns oe te WBS dictionary provides detailed information about the components in the WBS, such as description of work, responsible organization, milestones, resource requirements, acceptance criteria, and s0 forth, Work packages are decomposed into smaller components, often called activities, which define the tasks required to complete the work package. In many cases, ic is not possible to define the activities required for many of the work packages until later in the project. This progressive claboration planning is known as rolling wave planning, Activity atcributes describe the detailed information abou and might include resource requirements, responsibilities, and predecessor and successor relationships. 5.3.4 Network Diagrams and Critical Path Newwork diagrams are graphical representations of the work co be completed on a project. These diagrams are created duting che planning phase and provide guidance for the execution of the work. They represent the sequence of the tasks or activities to be performed based on the information in the WBS and generally do not consider resource constraints. To create a network diagram, itis necessary to know the set of tasks for the project and the duration of the tasks, as well a the interdependencies of the tasks to be performed. ‘The network-diagramming process provides information about the earliest and latest start and finish dates for cach of the tasks and the critical path for the project. The critical path represents the longest path work and includes all ofthe taske that have vera slack. Delays in the ical path will result in inereased project duration Activity on Node (AON), also known as Precedence Diagramming Method (PDM), is used co illus: trate the complex dependency relationships between elements in the WBS. The types of possible relation- ships in PDM include the following: + Finish-to-Scart (FS) Successor task may begin when the predecessor task is finished. + Finish-to-Finish (FF) ~ Successor task may fnish when the predecessor task finishes. + Start-co-Start (SS) ~ Successor task may begin when the predecessor task begins. + Scart-ro-Finish (SF) ~ Successor task may finish when the predecessor task begins theowgh the m Because FS relationships are most common, the default relationship used by project-management sofiware packages is FS. However. other types of relationships, such as FE SS, and SFas wel as lag and Jead times, are possible. Figure 5-5 shows a simple PDM network diagram, a2Figure 5-5. Precedence Diagramming Method (PDM).From A Guide to the Project Manogement Body of Knowledge, Sth ed.,2013,p. 160, Newzown Square, PA:Project Management Institute tos LT F = wa me 7} A forward and backward pass through the network shows the Early Stare (ES), Late Start (LS), Early Finish (EF), Late Finish (LF), and slack (amount of time a task can be delayed without delaying the project duration) for the project tasks. The tasks with 2ero slack, also called float, represent the critical path, Once the total float for a path is calculated, the fre float, or amount of time a task can be delayed ‘without impacting any successor activities, can be determined. ‘constraints and uses activity-time estimates that represent 50% likelihood of completion. A new criti- ‘al path is calculated and often differs from the original critical path, which does not consider limited resources and typically includes “padded” time estimates. The new eritical path is called the critical chain A project buffer, based on the uncertainty of the tasks on the critical chain, is added at the end of the critical chain to prevent project slippage. Feeding buffer are placed along paths that are not critical but that feed into the critical path to prevent the critical chain from being delayed. Once the buffers are inserted, all project activities are delayed ro their latese possible planned start and finish dates. In cheory productivity will be increased as individuals ery to meet tighter deadlines. 5.3.5 Estimating Resources Project resources inchide people, equipment, and materiale, Recanse Ishor represents a significant portion of the cost for most projects, much of the efforc in the planning stage focuses on estimating the human sesources required for a project. An important input for estimating the resource requirements isthe list of| activities and cheir atribuces that results from the decomposition of che work packages, the lowest level of the Work Breakdown Structure (WBS). The activity ist and the resource calendas, which specifies when, and how long identified resources are available, are used to estimate the activity resource requirements. The activity resource requirements can be aggregated for cach work package and provide the basis for estimat- ing the requirement for each resource. Once the resource requirements are established, the activity dura- tions are esimated using a variety of techniques, inchuding che following: + Expert judgment ~ Estimates are guided by historical information and estimators experience. ‘Analogous estimating ~ Parameters from previous, similar projects are used as a basis for estimating the same parameter for a fucure project. Parametric estimating ~ Statistical relationship between historical data and other variables are used to calculate estimates for activity durations. Three-point estimates — Three estimaces are used to define an approximace range for an activity durs- tion to improve the accuracy of the estimate (see below). Reserve analysis ~ Contingency reserves are included to account for schedule uncertainty 143144 ent Body of Knowledge {4th Edition} ‘Three-poin: estimating originated with the Program Review Evaluation Technique (PERT) and is used when there isa great deal of uncertainey Thce time estimates, optimistic o), pessimistic (G) and mos likely (¢,) are used to calculate the expected time (t,) using a weighted average according to the following equation: tes tot Att ty 6 ‘The expected duration for the project is the sum of the weighted durat crtctcal path, Thc varia probability of completing the project by a specifi 5.3.6 Scheduling ‘To develop the project schedule and the milestone schedule, che list of activities, durations, predeces- sor and successor cclationships, resource requirements, and schedule constraints are analyzed. Often this information is entered into project management software, which generates the project schedule show- ing the planned dates for completing project activities. Gantt charts, which are bar charts that represent schedule-related information, are frequently used to illustrate project schedules. Figure 5-6 is an example of a planning Gante chart generated using Microsoft Project ™ 2010. Figure 5-6. Gantt Chart Created Using MS Projece ™ 2010 From [Link]-us/templaces/ Most prajerts ate [Link] andlie seoweersconstrsined As rails, schedule development is often an iterative process. When resources have been over-allocated or shared resources have limited availability, resource leveling may be necessary. Leveling techniques delay noncritical activities to reduce peak demands for resources. Mosc project management packages have autto-resource leveling Functions, which should be used with caution. The critical path and the total projecc duration can change when resources are leveled. IF the project duration must be reduced, crashing or fast tracking may be required. Crashing, or adding additional resources ro reduce project time, is the most common method for shortening project time and focuses on tasks that are on the citical path. Project managers strive to obtain the greatest schedule compression with the least amount of additional cost. Fast tracking is a schedule compression technique in which activities that would normally be performed in sequence are performed in parallel. Project risks often increase when these strategies are used to reduce project duration. When the planned project and milestone schedules become firm, the schedule is saved as a baseline, which is a specific version of the schedule used co compare actual results to the planned schedule,5.3.7 Cost Estimating and Budgeting Dating project planning, it is essential to develop an accurate estimate of the activity costs that are che basis for the time-phased budgec. Inthe initiating stage, rough order of magnitude (250%) estimates are suificiens, bur as the project progresses, estimates may narrow to a range of «10%. Cost estimates, mor mally expressed in some type of currency are based on what is known about the casks chat must be com- pleted on the project and the resources requited to complete chose tasks and the volume of the resources required. Costs for resources such as labor, materials, equipment, services, and facilities ate estimated. Like ‘ime estimating, a number of techniques can be used for cost estimating, including expert judgment, anal- ‘ogous estimating, parametric estimating, bottom-up estimating, and three-point estimates. Itis important 10 carefully document the supporting detail for the cost estimates, including basis for the estimate, as- sumptions made, known constraints range of possible estimates, and confidence level of final estimate Once the cost estimates are complete, the cost-budgeting phase begins, which is simply the agerega- tion of the estimated costs of the individual activities and che development of a time-phased budger of the costs over the life of the project. The costs should be placed on the time-phased budget as they are Figure 5-7, Time-Phased Budget. From Project Manogement:The Monogerial Process, 6th ed.,2014,by Clifford F. Gray and Erik W. Larson, p. 278, New Yorks MeGraw-Hil Irwin. pass See ha eS ‘When finalized, che time-phased budget is saved as the project-cost baseline. Funding requirements ate derived from che cost baseline, The project-cost baseline is used to measure, monitor, and control overall cost performance on the project. 5.3.8 Risk Identification, Assessment. Response Planning, and Risk Register ‘Risk isan uncertain future event or condition that, iit occurs, has a positive or negative effect on atleast ‘one project objective. Risk identification is the process of identifying the tisks chat may have an effect on the project. A SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is often used to iden- tify risks, The project team and all key stakeholders should be involved in the risk-identification process, ‘which is an iterative process, because new risks may become apparent ot anticipated risks may not occur 14sA Guide to throughout the project life cycle. Once the risks are identified, risk analysis is performed to assess the probabiliey of che risk occutring and the impact of the risk should it occur. In some cases, sophisticated methods such as sensitivity analysis, modeling, and simulation are employed to predict the probability and impact of idemified risks. A Probability and impacc iacrix should be used to prioritize risks. As shown in Figure 5-8, the matrix specifies the combination of probability and impact, and rates the risks as low, medium, or high prioriey Figure 5-8. Probability and Impact Matrix. From A Guide tothe reject Menagement Body of Knowledge, Sth e 2013,p. 331, Newtown Square, PA: Project Management Institute, Probabilty and impact Mati. Prosaity Theat pperuntes o0 | 005 | ooo [Evens or 8 By] om [oo oro [004 | oor | ox om eso | 00a | 0s | 010 eo 0:0 | 06 | aos o20_[ ose | eas | oo | oxo EOI) a2 | 000 [eae | one oso | eo | aos | on | 904 | ove | ove | dox'| 02 | act | om 005 | aso | 020 | o40 | a9 | os | 040 | 020 | o10 | ove mast rumencl eae) cj ost, sae oe Ech i aeons obey of ecring ar inp neji Wt does osc Te orgs’ ‘treo weer eh os ae shown nb mare Glemine whats hh Pee hgh moses bw brat Sete, ‘The PMBOK" Guide includes risks chat have the potential for both positive outcomes (opportunities) and negative outcomes (threats) in the risk-analysis process. Risk responses arc developed to take advantage of the opportunities and reduce threats to the project objectives. The four most common responses for negative risks include the following: + Avoid ~ Risk avoidance involves modifying the project to climinare the threar entirely ‘+ Transfer ~ Risk transference involves shifting the negative impact and he responsibility for che risk response to a third party. + Migue~ Rit idysoninvoes reducing the probably and/or impac ofa rik alee level. © Accept— Risk acceptance involves dealing with che manager: impact of risk events as they occur ‘The four most common responses for positive risks include the following: ‘© Exploit In this stracegy, che project team attempts to eliminace the uncertainty to ensure chat the ‘opportunity is realized. ‘© Share ~ In this strategy, some of the ownership and che gains resulting from the opportunity are urausferred'w w third parry who is bewer able w Uapuute the opportunity. © Enhance ~ In this strategy, attempts are made to increase the probabilicy and the positive impacts of the opportunicy Accept In this serategy, the organization is willing to cake advantage of che opporcunity if the posi- tive risk event oceurs, bur the opportunity is not actively pursued. The risk register is the preferred tool for managing risks and documenting the characteristics of the tisks for the project. The risk register should include the list of identified risks, risk category, risk 145‘owner, risk causes and triggers, probability of occurrence, impact, tisk-response plans, and status. The sick register should be reviewed and updated on a regular basis throughout the project life cycle. As risk events occur, it may be necessary to create and submie formal change requests. 5.4 Execut rf “The executing: process group includes all of the processes necessary to complete the activities defined in the project-management plan, This involves managing the resources, particularly human resources, to create the project deliverables as described in the scope statement. Typically; mare expenditures occur during the project during project execution, Like the planning-process group, execution is an iterative process and say include changes to the expected duration of activities and resource requirements, leading to change requests that might result in modifications to the project-management plan. As the project progresses, identified risks might be realized, potential risks might not occu, and unanticipated risks might be identified. Each of these events will necessitate modifications to the risk-management plan, which is an important subsidiary plan of the project-management plan, ‘The acquisition, development, and management of the project team are essential activities of project ‘execution and are driven by the human-resourees plan, The human-resource plan identifies and docu- ments roles, responsibilities, and required skills and establishes staffing plans. A hierarchical-cype or satrix-based chart defines the reporting relationships. A responsibility assignment matrix (RAM) is commonly ised for illustrating the connections herween work packages and [Link] members, An example of a RAM, known as a RACI (responsible, accountable, consult, inform) chart, is shown in Figure 5-9. Figure 5-9. RACI Matrix. From A Guide to the Project Mangement Body of Knowledge, Sth ed., 2013, p. 262, Newtown Square, PA: Project Management Institute, RACK Chae Person Aesivigy ‘Amn | Ben_| Carlos [ Dina] Ed Bene 4a [ok to t t Desi 1 A | Ree Develop v A [TR |e] Test A 1 i R T and accountabilities when external as well as internal resources are used on a project. ‘The staffing management plan details when and how human resource requirements will be met. Ac- quiting human resources is the process by which the appropriate people are identified to accomplish the ‘work that must be completed on the project. Many questions must be answered, such as are the resources available internally, or will ic be necessary to employ external resources? Can the team members work vir- tually, or must they be co-located? What are the costs of the required resources, and is training required? Developing the project team involves training of individuals to enhance the competencies of the project, team members, as well as team-building activities to enhance the overall performance of the team. In 1965, Bruce Tickman defined the four stages of ream development. Later a fifth stage, Adjourning, was added: + Forming — Individuals are nrienerd ta the penjeer and learn ahr thei Formal roles and responsibilc ties on the projec. + Storming ~ The team begins to address the project work and he technical decisions. Differing ideas and perspectives can lead to conflicts. + Noring —Teain members begin to trust one another and work together effectively. Behavior and work habits ate adjusted to support che tear. 187‘A Guide to the Engineering Management Body af Knowledge (4th Edition) 148 + Performing ~ The team functions as a well-organized unit, Team members ate interdependent and. work through issues smoothly and effectively + Adjourning ~The team completes the project work, and team members move on as the project closes. ‘Team ground rules should be developed to establish clear expectations regarding acceptable behavior by project team memb: ‘mance in terms of technical success of project objectives, performance on project schedule, and budget. Desirable behavior should be recognized and rewarded when appropriate. Due to the high-intensity nature of projects, conflicts are a common occurrence. The following five techniques ae used for resolv- ing conflicts: + Avoiding — retreating from an actual or pocential conflict Accommodating ~ emphasizing arcas of agreement rather than areas of difference Compromising — searching for solutions that bring some degree of satisfaction to all parties Forcing — insisting on one partys viewpoint at the expense of others Collaborating — incorporating multiple viewpoints from differing perspectives to lead to consensus and commitment. Ic is usually considered the preferred technique for conflict resolution. Issues that arise during the course ofa project should be documented and managed in a project-issties log. Effective communication is essential to successful project execution. Project managers spend the majority of cher time generating, collecting, analyzing, and distributing project information. Efective commu- nication creates a bridge between the project team and diverse stakeholders. Its important to remember that stakeholders include all individuals and organizations that are impacted by the project, both posi- tively and negatively Procurement management involves all aspects of acquiring products and services from external orga- nizations. Procurement processes range from simple order placement ro complex acquisitions thar involve evaluation of formal competitive bids from prospective contractors. Typically ordering standard parts and services is handled by a purchasing department. For more costly items, a make-ot-buy analysis may be performed co determine whether particular work can best be accomplished by the project team or should bbe purchased from outside sources. When a buy decision is made for complex acquisitions, a Request for Proposal (RFP) is often issued in order co identify the vendor who can provide the best salution ae che ‘most competitive price, A bidders conference is a meeting between the buyer and all perspective sellers that is intended to provide equal and fair access to information. Once proposals are received, a vender evaluation is performed to select the vendor of choice. Next a procurement contract is awarded. The aymene terms, and acceptance criteria, among other things. Contract management is an important function within procurement management and includes the establishment and administration of contracts related to the selling of the products o services that are produced by the project teams, as well as che contracts for products ot services that arc acquired by the project team. Most organizations have specialists in purchasing and/or contract law who will assist the project team in contract management. The type of contract affects the level of risk for the buyers and the sellers. Generally the following three types of contracts are used: ‘+ Firm-fixed price ~ type of contract that establishes a fixed total price for the products and/or services to be purchased, Sellers are legally obligated to deliver che products or services regardless of the costs incurred to complete the work. Therefore, sellers assume greater tisk for this eype of contract. + Cost-rimbuirshle~ rype af contract that involves payments to sellers For al legitimate actual casts incurred for completed work plus fees representing seller profit, Cost-reimbursable contracts give greater flexibility to the project team when the scope cannot be precisely defined atthe beginning of the project ot the risks associated with the project are significant. Therefore, buyers assume greater risks for this eype of contract. + Time and materials —a hybrid type of contract that contains aspects of firm-fixed price concracts and cost-reimbursabie contracts. This type of contract is often suitable when a precise statement of work ‘might not be feasible. Unie labor or material rates may be cleanly defined bu the full value of the agree-Project Management iment or the exact quantity of products or services to be delivered might not be defined when the con- tract is established. Often, not-co-exceed values and time limits are included in these types of contracts Once contracts are established, che procurement relationships and contract performance must be manage Buse to the legal ‘actual relationship, the individual responsible for administering contracts may report co an organiza- tion outside of the project team. Administering procurement involves directing, managing, and reporting performance, performing quality and change control, and monitoring and controlling risks, ce tl obligat! 5.5 Monitoring and Controlling be be -ments, Project performance in general terms is dependent on the level at which performance is measured (€4g lowest level of the WBS) and at the moment at which performance is measured (e., a any mo- ‘ment during the execution phase, at the end of the project). Project performance is a complex construct confortned of different sets of project metries that can be organized into two groups: technical and human project-performance metrics. Different sets of metrics are used, depending on the nature of the project andlor of the needs of the stakeholders of the project. Projets that excel at both the human and the tech- nical aspects of project performance are commonly labeled as high-performance projects. Following are a common set of metrics used to assess project performance * Technical project performance - Cost performance, Schedule performance, Quality performance. These are commonly known as the triple constraints of project management. In addition, technical performance alen includes the exrent ro which a projert has mer enviranmental canst ors + Human project performance - Stakcholder satisfaction (e.g, members ofthe team, customer, project manager), Learning, and the Image of the project and of its organization. Monitoring and controlling include those processes necessary to track, review, and regulate the progress of a projec and to identify, initiae, and manage required changes. Project monitoriag and controlling occurs throughout he project life cycie. An essenial process within this process group is controlling the project scope, ‘which ensures that all requested changes to the scope and recommenced preventative or corrective actions are processed through the Formal change-control system. [Fscope is nat controled properly, phenomenon known a ope creep occu. Scope creep refers to the tendency fo project scope to expand overtime due to small changes cha are not formally processed through the change-control system but add up to significantly mote work than the original scope baseline. Ifa scope change is deemed necessary, the impact on the project schedule, budget, and quality must be assessed to determine whether the change i justified. Ii is deermined thatthe change must be made, modifications to the scope, schedule, and budget baselines may be required However, bassline modifications are reserved for significant changes and should only be made when all project. stakeholders approve. Other changes reflect the normal variations with projects and should be processed through the change-control system to ensure that all concerned parties understand the impact of the chang. = typically project x "y comparing actual start and finish times to the baseline schedule. When the actual schedule differs from the planned sched- ule, corretive actions may be necessary such as increasing the number of resources, requiring the project team to work additional hours, or completing tasks in parallel rather than sequentially. If criticalchain scheduling is employed, che amount of buffer used is compated to the amount scheduled when evaluat- ing schedile status. Tacking Gantt charts can be used to predict he time it will rake to complete the project based on performance to date ‘Actual project costs, as wel as the value of the work performed, are compared to the cost baseline to ‘monitor and control costs. For many projects, Earned Value Management (EVM) is used co integrate the scope, time, and cost performance on the project. The three key dimensions of earned value follow: + Planned value (PV) ~ the authorized budget for the work that is scheduled to be completed ata spe- iB point in rime + Bamed value (EV) ~ the planned cost, in terms of the authorized budget, for the work that has actu ally been compleced ata specific point in time 14s150 + Actual cost (AC) ~ the total cost incurred for the work that has actually been completed (as ‘opposed to the work that was planned to be completed) at a specific poine in time Figure 5-10 shows atypical S-curve fora project via is belsind schedule and over badget. Figure 5-10, Planned Value, Earned Value and Actual Costs, From A Guide to the Project Management Body of Knowledge, Sth ed.,2013,p. 219, Newtown Square, PA: Project Management Institute, Parnes Nae vy In EVM, the following indices are used to indicate the variance of actual pertormance compared to the baseline schedule and budget: + Schedule Variance (SV) ~ difference between carned value (EV) and planned value (PV). An SV greater than 2ero indicates chat the project is ahead of schedule and an SV less than zero indicates that che proj- ect is behind schedule. + Cost Variance (CV) — difference between eamed value (EV) and acrual costs (AC). A CV above zero indicates char che project spending is below budget and a CV less than 2ero indicates that che project is over budget, + Schedule Performance Index (SPI) ~ ratio of earned value (EV) to planned value (PV). A value above 1 indicates good project health with regard to the schedule and a value below I indicates poor project health with regard to the schedule. Com Rerforreance Index (CPD ~ rai of eaied vatae EV} w Accaal Cem (AC). A-value above 1 ind ‘ates good project health with regard to the budget and a value below 1 indicates poot project health with regard co the budget. EVM includes methods for estimating the total cost of the project at completion, referred ro as Estimate at Completion (EAC). Ideally, the EAC is calculated as the sum of the actual costs (AC) to date and updated estimates of the cost for the work that remains to be completed on the project, known as Estimate to Completion (ETC). However, in some cases, it is not practical to re-estimate the remain ing costs, so strategies for forecasting have been developed. The method for predicting EAC depends on whether the project is expected co progress as originally planned or as it has progressed thus fac. Many believe chat is prudent to assume that the project will continue to progress similarly to the way it has progressed thus fas par the Budget at Completion (BAC) and the cumulative Cost Performance Index (CPI). The equation used is: EAC = BAC/Cumulative CPI. The estimate to complete (ETC) is calculated as the difference between the calculated EAC and the actual costs (AC) to date. Figure 5-11 summarizes che earned value management equations.Figure 5-11. Earned Value Analysis Formulas Indicator/Predictor Equation Interpretation Positive number indicates ahead of schedule; Schedule Variance (SV) SV =EV—PV ae : negative number indicaues behind schedule. a Positive number indicates under budget; CostVartanee (CY) CV=EVAC | negative number over budget. ‘Number greater than one indicates head Schedule Performance Index (SPI) | SPI = EV/PV ‘of schedule; number less than one indicates zt behind schedule, Number greater than one indicates under Cost Performance Index (CPI) CPI = EVIAC ‘budget; number less than one indicates over budget Estimate at Completion (EAC) | EAC= BACICAY | ON® of several methods for estimating the total cost of the project at completion, leez Method used when itis not praeteal to re- Escimate to Complete (ETC) | ETC= EAC ac | Mathes whet not acta ‘When variances are identified, project team members must provide explanations for the variances to the stakeholders and must develop preventative or corrective actions, which should be processed through the Formal change-control system. ‘Quality assurance and quality control of the project-management processes, as well asthe project deliverables, are important considerations for all projects. During the planning stages of the project, the quality standards and the methods for ensuring that the standards are met must be defined 50 that project requirements are satisfied, Policies and procedures for continuous improvement must be ‘established. The methods, policies, and procedures for project quality are compatible wich the Interna- ‘wonai Organization for Standardization (ISO) approach to quality The tools and techniques for quality management include cost-benefit analysis, cost of quality, control charts, benchmarking, design of experi- ments, statistical sampling, and flow charting, among others. Quality metrics define a project or product attribute and how the quality-control process will measure it. The allowable variations, known as toler- ances, must be established for all metrics. Quality assurance isthe process of auditing the quality requite- ‘ments and che data generated through the quality-control procedutes to ensure proper aualicy standards ate in place and continuous process-improvernent strategies ate employed. Quality control is the process of monitoring, documenting, and analyzing performance to detect poor process ot product quality and to identify causes in order to recommend and/or take action to eliminate the causes. The seven basic quality tools, sometimes referred to as the 7QC Tools are illustrated in Figure 5-12. Some of the most frequently used tools are described below: + Cause wid effect dingranis (also called Issikawa ov fisteboue diagriaus) wwe used (0 help uncover factors that may he the source of problems. Control charts illustrate how a process behaves over time and help determine if variations are within acceptable limits Visiations from che schedule and cost baselines are often evaluated using control charts. Pareto charts are a specific type of histograms that are used to rank the causes of defects or problems related to a specific process and identify the defects or problems that occur most frequently. The Pareto Principle, also known as the 80/20 rule, suggests that, in many cases, relatively few causes (20%) produce a large percentage (80%) of the problems or defects. Project teams should address the causes creating the greatest number of defects frst. Scatter diagrams show the relationship between two variables. Correlations of variables might help to ran yur-cause analysis 151182 Figure 5-12. Storyboard Iilutrating a Conceptual Example of Each ofthe Seven Basie Quality Tools. From A Guide to the Project Management Body of Knowledge (Sth ed), 2013, p.239, Newtown Square, PA: Project Manage- ment Institute. 5.6 Closing ‘The closing-process group includes the activites necessary to formally complete all aspects of the project or phase. For successful projects, the closing activities culminate in the single most important activity of the dosing process, which is securing writen acceptance of the deliverables fiom the custome. Ad~ ministrative closure includes all actions and activities necessary co satisfy exi¢ criteria and to transfer the products or services to the cust ner oF the next phase of actions to collect records, audit project success or failure, gather lessons learned, and archive project in~ formation. Tb ensure that performance criteria are met, the project manager reviews al ofthe information from previous phase closures. An important aspect of closing isthe collection of lessons learned and best practices generated during che project in order to make them available co future projects. Each contract applicable to the project or project phase must be addressed during project or phase closure. Ofien, contract terms and conditions prescribe specific procedures for contract closure. Ie is es- sential to verify that all work and deliverables are acceptable and that all open claims are finalized, In some cases, projects are terminated prematurely, which requires investigation and documentation. Barly termination of a contract can occur by mutual agreement, due to the defuule of one party or for the convenience of the buyer, if provided for in the contract. Early terminations typically equire spectal actions tg be ben, When lement cannot he achieved through negotiation, come form of alte dispute resolution may be necessary such as mitigation or arbicration, Unresolved open claims may be subject Co litigation after closure. ‘As projects progress, personnel may be released when they complete the activities to which they were assigned or when their services are no longer required. Its important to gather information and update project documentation, such as lessons learned, before team members are released from the project. Plans to facilitate a smooth transition from one project to another for all project personnel, whether at the end of a phase or at the end of the project, significantly improve morale.