IT Project Management PM Knowledge Areas :

1. IT Project ManagementPM Knowledge Areas: Quality, HR, Communications, Risk & Procurement

2. Topics • PMI Knowledge Areas: • Quality Management • Human Resource Management • Communications Management • Risk Management • Procurement Management 2

3. Project Management Knowledge Areas • Core • Scope management • Time management • Cost management • Quality management • Facilitating • Human resource management • Communication management • Risk management • Procurement management • Integration Management

4. Project Quality Management

5. What Is Quality? • The International Organization for Standardization (ISO) defines quality as “the degree to which a set of inherent characteristics fulfils requirements” (ISO9000:2000). • Other experts define quality based on: • Conformance to requirements • Fitness for use

6. What Is Project Quality Management? • Project quality management ensures that the project will satisfy the needs for which it was undertaken. • Processes include: • Quality planning: Identifying which quality standards are relevant to the project and how to satisfy them. • Quality assurance: Periodically evaluating overall project performance to ensure the project will satisfy the relevant quality standards. • Quality control: Monitoring specific project results to ensure that they comply with the relevant quality standards.

7. The Cost of Quality • The cost of quality is the cost of conformance plus the cost of nonconformance. • Conformance • Cost of nonconformance • A 2002 study reported that software bugs cost the U.S. economy $59.6 billion each year and that one third of the bugs could be eliminated by an improved testing infrastructure.* *RTI International, “Software Bugs Cost U.S. Economy $59.6 Billion Annually, RTI Study Finds,” July 1, 2002.

8. Project Quality Management • Software bugs account for about 40% computer systems failure • Software horror stories • www.risks.org • http://www.cs.tau.ac.il/~nachumd/horror.html • In 2008, software glitch was the reason for London Stock Exchange (LSE) failure • In 2003, software failure caused blackout in the Northeast corridor of the U.S. and parts of Canada • On June 3, 1980, the North American Aerospace Defense Command (NORAD) reported that the U.S. was under missile attack. The report was traced to a faulty computer circuit that generated incorrect signals. If the developers of the software responsible for processing these signals had taken into account the possibility that the circuit could fail, the false alert might not have occurred. 8

9. Costs/Hour of Downtime Due to Software Defects

10. Quality Assurance (QA) • Quality assuranceincludes all the activities related to satisfying the relevant quality standards for a project • Approaches to Quality Assurance: • Benchmarking generates ideas for quality improvements by comparing specific project practices or product characteristics to those of other projects or products within or outside the performing organization • Quality Audit is a structured review of specific quality management activities that help identify lessons learned that could improve performance on current or future projects 10

11. Quality & Testing - Types of Tests • Unit testing tests each individual component (often a program) to ensure it is as defect-free as possible. • Integration testing occurs between unit and system testing to test functionally grouped components. • System testing tests the entire system as one entity. • User acceptance testing is an independent test performed by end users prior to accepting the delivered system.

12. Five Cost Categories Related to Quality • Prevention cost: Cost of planning and executing a project so it is error-free or within an acceptable error range. • Appraisal cost: Cost of evaluating processes and their outputs to ensure quality. • Internal failure cost: Cost incurred to correct an identified defect before the customer receives the product. • External failure cost: Cost that relates to all errors not detected and corrected before delivery to the customer. • Measurement and test equipment costs: Capital cost of equipment used to perform prevention and appraisal activities.

13. Project Risk Management

14. The Importance of Project Risk Management • Project risk management is the art and science of: • Identifying • Analyzing • Responding • Risk management is often overlooked in projects, but it can help improve project success by helping select good projects, determining project scope, and developing realistic estimates.

15. Risk Management Activities • Risk management planning • Risk identification • Risk analysis (Qualitative & Quantitative) • Risk response planning • Risk monitoring and control 15

16. Risk Identification • Risk identification is the process of understanding what potential events might hurt or enhance a particular project. • Risk identification tools and techniques include: • Brainstorming • The Delphi Technique • Interviewing • SWOT analysis

17. Risk Analysis • Assess the likelihood and impact of identified risks to determine their magnitude and priority • Risks may be assessed qualitatively or quantitatively • Qualitative tools and techniques include: • Probability/impact matrixes • The Top Ten Risk Item Tracking • Expert judgment • Quantitative techniques include: • Decision tree analysis • Simulation • Sensitivity analysis

18. Figure 11-4. Sample Probability/Impact Matrix

19. High-, Medium-, and Low-Risk Technologies

20. Potential Responses to a Given Risk • Ignore the Risk (Appropriate for low-level risks) • Avoid the Risk (e.g. Avoiding unproven technology) • Transfer the Risk (e.g. Insurance, using a bonded contractor) • Accept the Risk • Prevention Plans (e.g. Moving up delivery date) • Mitigation Plans (e.g. Contractual penalties for missed delivery) • Contingency Plans (e.g. Plans for working around missed delivery)

21. Project Human Resource Management

22. Project Human Resource Management • Making the most effective use of the people involved with a project • Activities include: • Human resource planning • Acquiring the project team • Developing the project team • Managing the project team 22

23. Involves Intrinsic and Extrinsic Motivation • Intrinsic motivation causes people to participate in an activity for their own enjoyment. • Extrinsic motivation causes people to do something for a reward or to avoid a penalty. • For example, some children take piano lessons for intrinsic motivation (they enjoy it) while others take them for extrinsic motivation (to get a reward or avoid punishment).

24. Ways to Influence that Help and Hurt Projects • Projects are more likely to succeed when project managers influence people using: • Expertise • Work challenge • Projects are more likely to fail when project managers rely too heavily on: • Authority • Money • Penalty

25. The Importance of Project Phases and Management Reviews • A project should successfully pass through each of the project phases in order to continue on to the next. • Management reviews, also called phase exits, kill points, or stage gates should occur after each phase to evaluate the project’s progress, likely success, and continued compatibility with organizational goals.

26. Project communication Management

27. Information Distribution • Getting the right information to the right people at the right time and in a useful format is just as important as developing the information in the first place. • Important considerations include: • Using technology to enhance information distribution. • Formal and informal methods for distributing information.

28. Stakeholder Analysis for Project Communications

29. Communicating in an Effective and Timely Manner • Don’t bury crucial information. • Don’t be afraid to report bad information. • Oral communication via meetings and informal talks helps bring important information—good and bad—out into the open.

30. Setting the Stage for Communicating Bad News Dear Mom and Dad, or should I say Grandma & Grandpa, Yes, I am pregnant. No, I’m not married yet since Larry, my boyfriend, is out of a job. Larry’s employers just don’t seem to appreciate the skills he has learned since he quit high school. Larry looks much younger than you, Dad, even though he is three years older. I’m quitting college and getting a job so we can get an apartment before the baby is born. I found a beautiful apartment above a 24-hour auto repair garage with good insulation so the exhaust fumes and noise won’t bother us. I’m very happy. I thought you would be too. Love, Ashley P.S. There is no Larry. I’m not pregnant. I’m not getting married. I’m not quitting school, but I am getting a “D” in Chemistry. I just wanted you to have some perspective.

31. Performance Reporting • Performance reporting keeps stakeholders informed about how resources are being used to achieve project objectives. • Status reports describe where the project stands at a specific point in time. • Progress reports describe what the project team has accomplished during a certain period of time. • Forecasts predict future project status and progress based on past information and trends.

32. Project Procurement Management

33. Project Procurement Management Processes • Project procurement management: Acquiring goods and services for a project from outside the performing organization. • Processes include: • Planning purchases and acquisitions: Determining what to procure, when, and how. • Planning contracting: Describing requirements for the products or services desired from the procurement and identifying potential sources or sellers (contractors, suppliers, or providers who provide goods and services to other organizations).

34. Project Procurement Management Processes (cont’d) • Processes Continued: • Requesting seller responses: Obtaining information, quotes, bids, offers, or proposals from sellers, as appropriate. • Selecting sellers: Choosing from among potential suppliers through a process of evaluating potential sellers and negotiating the contract. • Administering the contract: Managing the relationship with the selected seller. • Closing the contract: Completing and settling each contract, including resolving any open items.

35. Techniques for Planning Purchases and Acquisitions • Make-or-buy analysis: General management technique used to determine whether an organization should make or perform a particular product or service inside the organization or buy from someone else. • Often involves financial analysis. • Experts, both internal and external, can provide valuable inputs in procurement decisions.

36. Why Outsource? • To reduce both fixed and recurrent costs. • To allow the client organization to focus on its core business. • To access skills and technologies. • To provide flexibility. • To increase accountability.

37. Types of Contracts • Different types of contracts can be used in different situations: • Fixed price or lump sum contracts: Involve a fixed total price for a well-defined product or service. • Cost reimbursable contracts: Involve payment to the seller for direct and indirect costs. • Time and material contracts: Hybrid of both fixed price and cost reimbursable contracts, often used by consultants. • Unit price contracts: Require the buyer to pay the seller a predetermined amount per unit of service. • A single contract can actually include all four of these categories, if it makes sense for that particular procurement.

38. Planning Contracting • Involves preparing several documents needed for potential sellers to prepare their responses and determining the evaluation criteria for the contract award. • Request for Proposals: Used to solicit proposals from prospective sellers. • Proposal Documents • Requests for Quotes: Used to solicit quotes or bids from prospective suppliers. • Bid (a tender or quote)