Effective Project Management

1. Effective Project Management Barbara Stone & Jodie Mathies October 11, 2007

2. Agenda • Srini – elevator speech • Questions on assignment? • Q & A • Cost Baseline • Risk Management

3. Questions • What are the benefits of critical path analysis over Gantt charts? • Disadvantages? • What is Critical Chain theory? • What is a buffer? • Why would critical chain be especially important in managing a program vs. a project? • What is Parkinson’s Law?

4. Answers • formally identifies tasks which must be completed on time for the whole project to be completed on time, and also identifies which tasks can be delayed for a while if resource needs to be reallocated to catch up on missed tasks • A further benefit of Critical Path Analysis is that it helps you to identify the minimum length of time needed to complete a project. Where you need to run an accelerated project, it helps you to identify which project steps you should accelerate to complete the project within the available time. This helps you to minimize cost while still achieving your objective • The disadvantage of CPA is that the relation of tasks to time is not as immediately obvious as with Gantt Charts. • Underlying the key differentiating aspects of Critical Chain-based project management are an appreciation for the impact of variation (the statistical nature of projects) and of human behavior (people's response to how their projects are managed) on the ability of a project to move with speed and reliability • Buffers are designed quantities of time, sized and applied to a project schedule to protect what is important to the success of that project. The Project Buffer protects the promised due date from variation in the critical chain. • By combining the ability of buffers to absorb variation with the synchronization (staggering) of project launches based on the availability of key (heavily and commonly used) resources or on the capacity of (common) major integration points, cross-project contention for resources is minimized. Doing so results in less pressure to multitask and its lead-time multiply effects. • "Work expands to fill the time available for its completion."

5. When do you calculate Project financials? • Beginning: create baseline budget • During: track progress to baseline; adjust budget as necessary • End: success metric of project

6. As you go through the Planning Phase, cost estimates’ accuracy increases ’Class 1’ - Variance +/- 30% to 50% - High level estimate at the Phase level. ‘Class 2’ - Variance +/- 15% to 25% - As many details as possible. ‘Class 3’ - Variance +/- 10% - Completely filled out as applicable.

7. Cost Estimating Tools & Techniques • Analogous: ‘we did more or less the same thing last year and it took us 6 months and cost $400K” • Parametric: ‘new home construction = $130/square foot’ Software: Function (or Object) Point Analysis • Bottom-up: estimating cost of individual tasks, then rolling up • etc

8. Cost Budgeting tip: Don’t forget contingency for risk Somewhat equivalent to ‘safety’ in schedule Apply to Cost Baseline at milestone points, not factor for every task

9. How do projects get funded? • What do I mean by ‘funded’? • Approval to use the resources required. • Projects can get funded: • for entire project, at beginning • incrementally, at specified points

11. I can hear you saying: How does this relate to my project?

12. You have already been working on cost elements for your project • Time estimates for team members ‘effort’ vs ‘duration’ • Understanding purchases • Understanding time & cost of risk mitigation plans

13. Your cost baseline (Effort in hours of all tasks * cost per hour) + Other budgeted project expenses Project cost baseline

14. MS ProjectProject Cost baseline development

15. Project Risk Management

16. Tom Sawyer vs Chicken Little • If you don’t identify opportunities, they won’t be in your field of view • If you don’t actively attack risks, the risks will actively attack you • Opportunity management objectives are driven by the desire to excel while risk management objectives are driven by the desire to not fail.

17. Five steps • Plan and define the approach. Create a risk management plan. Take a high level approach which includes a recurring schedule for reviewing risks. • Identify the risks that might be faced. Risks can have both positive and negative ramifications. For each risk look at the upside and downside by identifying both the threats and opportunities.

18. 5 steps - continued • Analyze and assess each risk to determine the severity of its potential impact on the project and the likelihood that it will occur. A simple scale of high, medium and low can be used. Ranking priority can be achieved by assigning a value to the scale. Categories can be added to differentiate the type of risk, for example technical vs. business. Risk responses can vary.

19. 5 steps - continued • Assign actions and owners to each identified risk. The results of Steps 2, 3 and 4 lead to the creation of the project’s risk register that logs each risk, the response(s) defined to deal with it, and the results when available. • Continuously review existing risks and add new potential risks, updating the risk management plan as needed to ensure that the project achieves its objectives. This is the most critical step and forms the closed loop process.

20. Risk identification • Include as many team members, sponsors, knowledge experts as possible • Concerted effort to visualize new risks & determine if additional assumptions are being made unconsciously • Review scope, resources, environment, vacations, production freezes, travel, etc. in light of risk

21. risk sources

22. A Better UC-Wise - Meghalim UC-Wise has been in existence since 2002 and there have been ongoing concerns with its usability and steep learning curve. Project goal is to provide a set of recommendations for building a new and better web-based teaching tool.

23. Illumobile Marketing - Bindiya A broadcast outdoor advertising company that wants to expand its network from 10 to 50 within 6 months AND Develop a plan to turn the advertisement creation team into a revenue-generating department

24. Online Automobile Trading - Rob Develop an online auction site that lowers the per-vehicle dealership-to-dealership trading cost of used automobiles

25. Produce a jazz CD - Katherine Produce an outstanding and professional- looking jazz CD to promote the band and lead to paying gigs

26. Reporting Tool - David Build reporting tool function to use with existing internally-developed Capacity Management tool Goal is to level resources across organization based on historical, current, and funnel information

27. iNaturalist.org - Jessica Create an online, interactive community for naturalists, such as bird watchers, fishermen, mushroom foragers, etc.

28. Personalized registration - Adrian Improve customer’s experience with registration experience through customized responses

29. Bid site for labs - Jim Online site to provide schedule, bid documents, etc. extending bidders who bid on Berkeley Lab projects

30. Srini

31. Key evaluation points • Project Definition • Detailed planning • Concept trade-offs • Development of system documentation • Manufacturing preparation • Supplier selection • Coding preparation • Test preparation • Shipping/handling • Deployment • Change evaluation

32. Options for action • Avoidance – is the most direct response. Eliminating the risk or its ability to impact your project. • Mitigation – means reducing the probability of the risk or minimizing its impact if it does occur. • Contingency – simply means having alternative plans in place to deal with a threat, should one occur or should a mitigation plan fail. • Transference – shifts the risk to another party. This often involves a legal or contractual relationship. • Sharing – involves two separate parties (i.e., company and customer; system developer and end-user) taking on the responsibility for dealing with the threat and the risk. • Acceptance – could be active or passive. • Passive acceptance means nothing will be done to prepare for the risk in advance. Instead, it will be dealt with if and when it occurs. • Active acceptance usually means developing a contingency plan in case the event occurs later. This could involve holding money or resources in reserve. In either case, the project manager and the organization must be able to tolerate the consequences of the accepted risk event should it occur.

33. Another view of options • Identify potential opportunities and their risks • Assess associated probabilities of occurrence and the impact (benefit or consequence of the occurrence) • Decide to:

34. Scope planninghigh-levelskills analysis Charterbusiness casefeasibility studyproduct description Scope statement Scope definitionassumptionsscope in/outalternatives WBS Risk Mgmtplanning ActivityDefinition Costbudgeting Resourceplanning Costestimating Cost baselineTime-phased budget Risk Mgmtplan Resourcerequests Activitydurationestimating Activitysequencing CommunicationPlan Schedule development Networkdiagram Project schedule Project Plandevelopment Project plan

35. Presentation of risk to management ..\..\Desktop\ presentation.ppt

36. Triggers for risk review • Cost variance • Schedule variance • Changes in forecast project end date • Changes in schedule float • Changes in stakeholder attitude • Earned value variance

37. Identify risks Quantify Qualify Rank by criticality Identify options for managing Assign owner Establish trigger Changes also change risks Positive Negative Review, reprioritize, take action Risk/Opportunity handling

38. Assignments for next class • Effective Project Management, Chapters 10 • Real World Budget Tracking with MS Project(Gantthead) • Read Who's afraid of EVA? (Gantthead) • Read Agile Estimating and Planning,chapter 10 • For your project: • Create a risk management plan using this template (xls) • Create a cost baseline for your project