Project Management: Structure, Milestones, and Control Charts

1. Chapter 10 Projects

2. Learning Objectives • Explain what project management is and why it is important. • Identify the different ways projects can be structured. • Describe how projects are organized into major subprojects. • Understand what a project milestone is. • Determine the “critical path” for a project. • Demonstrate how to “crash,” or reduce the length, of a project.

3. What is Project Management? • Project: a series of related jobs usually directed toward some major output and requiring a significant period of time to perform • Project management: the management activities of planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project LO 1

4. Types of Development Projects LO 2

5. Structuring Projects • Pure project • Functional project • Matrix project LO 2

6. Pure Project • Advantages • The project manager has full authority • Team members report to one boss • Shortened communication lines • Team pride, motivation, and commitment are high • Disadvantages • Duplication of resources • Organizational goals and policies are ignored • Lack of technology transfer • Team members have no functional area "home" LO 2

7. Functional Project LO 2

8. Functional Project Continued • Advantages • A team member can work on several projects • Technical expertise maintained in functional area • Functional area is “home” after project completed • Critical mass of specialized knowledge • Disadvantages • Aspects of the project that are not directly related to the functional area get short-changed • Motivation of team members is often weak • Needs of the client are secondary and are responded to slowly LO 2

9. Matrix Project LO 2

10. Matrix Project Continued • Advantages • Better communications between functional areas • Project manager held responsible for success • Duplication of resources is minimized • Functional “home” for team members • Policies of the parent organization are followed • Disadvantages • Too many bosses • Depends on project manager’s negotiating skills • Potential for sub-optimization LO 2

11. Work Breakdown Structure • Statement of work (SOW): a written description of the objectives to be achieved • Task: a further subdivision of a project • Usually shorter than several months • Performed by one group or organization • Work package: a group of activities combined to be assignable to a single organizational unit LO 3

12. Work Breakdown Structure Continued • Project milestones: specific events on the project • Work breakdown structure (WBS): defines the hierarchy of project tasks, subtasks, and work packages • Activities: pieces of work that consume time • Defined within the context of the WBS LO 4

13. An Example of a Work Breakdown Structure LO 3

14. Work Breakdown Structure, Large Optical Scanner Design LO 3

15. Project Control Charts • Charts are useful because their visual presentation is easily understood • Software is available to create the charts • Gantt chart: a bar chart showing both the amount of time involved and the sequence in which activities can be performed LO 3

16. Sample of Graphic Project Reports LO 3

17. Earned Value Management (EVM) • A technique for measuring project progress in an objective manner • Has the ability to combine measurements of scope, schedule, and cost in a project • Provides a method for evaluating the relative success of a project at a point in time LO 3

18. Essential Features of any EVM Implementation • A project plan that identifies the activities to be accomplished • A valuation of each activity work • Predefined earning or costing rules to quantify the accomplishment of work LO 3

19. Earned Value Management Charts LO 3

20. Project Tracking Without EVM • Chart A shows the cumulative cost budget for the project as a function of time • Blue line, labeled BCWS • Also shows the cumulative actual cost of the project • Red line • Appears project was over budget through week 4 and then under budget • What is missing is any understanding of how much work has been accomplished LO 3

21. Project Tracking With EVM • Chart B shows the BCWS curve along with the BCWP curve from chart A • Technical performance started more rapidly than planned but then slowed significantly and feel behind at week 7 • Chart illustrates the schedule performance aspect of EVM LO 3

22. Project Tracking With EVM Continued • Chart C shows the same BCWP curve with actual cost data • Project is actually under budget, relative to the amount of work accomplished • Chart D shows all three curves together • Typical for EVM line charts LO 3

23. Example: Earned Value Management LO 3

24. Example: Budgeted Cost of Work Scheduled (BCWS) • 100% of $18K = $18K • 100% of $10K = $10K • 80% of $20K = $16K • 15% of $40K = $6K BCWS = $18K+$10K+$16K+$6K = $50K LO 3

25. Example: Budgeted Cost of Work Performed (BCWP) • 100% of $18K = $18K • 80% of $10K = $8K • 70% of $20K = $14K • 0% of $40K = $0 BCWP = $18K+$8K+$14K+$0 = $40K LO 3

26. Example: Performance Measures LO 3

27. Network-Planning Models • A project is made up of a sequence of activities that form a network representing a project • The path taking longest time through this network of activities is called the “critical path” • The critical path provides a wide range of scheduling information useful in managing a project • Critical path method (CPM) helps to identify the critical path(s) in the project networks LO 3

28. Critical Path Method (CPM) • Identify each activity to be done and estimate how long it will take • Determine the requires sequence and construct a network diagram • Determine the critical path • Determine the early start/finish and late start/finish schedule LO 5

29. Example: Critical Path Method LO 5

30. Example: Activity Sequencing and Network Construction LO 5

31. Example: Finished Schedule LO 5

32. CPM with Three Activity Time Estimates • If a single time estimate is not reliable, then use three time estimates • Minimum • Maximum • Most like • Allows us to obtain a probability estimate for completion time for the project LO 5

33. Finding Activity Time and Variance LO 5

34. Example: Activity Expected Times and Variances LO 5

35. Example: Network with Three Time Estimates LO 5

36. Time-Cost Models and Project Crashing • Basic assumption: Relationship between activity completion time and project costTime cost models: Determine the optimum point in time-cost tradeoffs • Activity direct costs • Project indirect costs • Activity completion times LO 6

37. Procedure for Project Crashing • Prepare a CPM-type network diagram • Determine the cost per unit of time to expedite each activity • Compute the critical path • Shorten the critical path at the least cost • Plot project direct, indirect, and total-cost curves and find the minimum-cost schedule LO 6

38. Managing Resources • In addition to scheduling each task, must assign resources • Software can spot over-allocation • Allocations exceed resources • Must either add resources or reschedule • Moving a task within slack can free up resources LO 1

39. Tracking Progress • Actual progress on a project will be different from the planned progress • Planned progress is called the baseline • A tracking Gantt chart superimposes the current schedule onto a baseline so deviations are visible • Project manager can then manage the deviations LO 1