PROJECT MANAGEMENT 641

1. PROJECT MANAGEMENT 641 Paper 5 THE PROJECT LIFE CYCLE David Baccarini

2. PROJECT MANAGEMENT 641 Paper 5 THE PROJECT LIFE CYCLE (PLC) • 1.0 INTRODUCTION • 2.0 PROJECT PHASES • 3.0 CHARACTERISTICS OF THE PLC

3. PROJECT LIFE CYCLEINTRODUCTION • All projects have a life cycle: • ”To achieve the desired project objective one must go through a process known as the PLC” • The PLC can be defined as: • “aggregation of events that occur from conceptualisation of an idea, through achievement of the project objectives, & subsequent finalisation of work associated with the project • “Collection of generally sequential project phases whose name & number are determined by the control needs of the organisation involved in the project”

4. PROJECT LIFE CYCLEINTRODUCTION (cont’d) PLC highlights changing PM processes • "the emphasis of project managers & the way they apply the management processes changes as the project progresses through its phases" • As a project progresses from 1 phase to the next, these change points are dramatically different - in mission, size, technology, scale, rate of change. These differences create their own characteristics of work, behavior, direction & control needs. So,the management of each of the phases is significantly different"

5. PROJECT LIFE CYCLEPhase, Stages, Tasks, Interfaces • Phases • Phase = collection of logically related activities, culminating in completion of major deliverable • No agreement on number or content • Deliverables: outputs of 1 = inputs to next • Stages & Tasks • Each phase has stages & each stage has tasks • Phase Interfaces • Key decision points & review of deliverables • Rarely definable unless formal authorisation

6. Project Life Cycle - Phases • Unwarranted enthusiasm • Uncritical acceptance • Agonising delays • Growing concern • Utter confusion • Total disaster • Search for the guilty • Punish the innocent • Resignation of the disgusted • Promote the uninvolved

7. Phases - Software Industry

8. Phases - Defence Industry

9. PROJECT LIFE CYCLEGeneric 4-Phase PLC • Phases based on technical processes - how project’s product specified & made • So Phases deal with product being produced by the project, rather than process of managing the project • Stretton found 75 PLCs - 14 generic, typically 4-Phase • Phase 1: CONCEPT • Phase 2: DEVELOPMENT • Phase 3: IMPLEMENTATION • Phase 4: TERMINATION

10. PROJECT LIFE CYCLEGeneric 4-Phase PLC (cont’d) • Concept + Development = plan/soft section • Implement + Terminate = accomplish/hard section • Between these 2 = major go/no-go decision • Concept to Development = “economically most important step in project’s life”, • Development to Implementation = “less clear-cut, ...(and) is also much broader in scope and involves much fuller management attention”.

11. 4-phase generic PLCExample

12. Generic 4-Phase PLCCONCEPT • Preliminary evaluation - need, opportunity, problem • Project internally or externally procured ? • Type of organisational structure ( & appoint PM ?) • Feasibility of proposal & alternatives evaluated. • Preliminary analysis of risk . • Decision - whether to proceed • This phase forms “the key to the later success of the project”

13. Generic 4-Phase PLCDEVELOPMENT • Development of work undertaken in Concept phase. • Key team appointments esp. project manager • Develop - scope, tasks, resources, budget, cashflows, schedules, specification, risks. • Re-confirm feasibility • “Last chance the sponsor has to decide whether to proceed with the project before committing scarce resources to execution”

14. Generic 4-Phase PLCIMPLEMENTATION • Major work authorised, assigned & accomplished. • Majority of project expenditure • Set up project organisation • produce detailed documentation • procure goods and services • directing & controlling project activities • problem solving • reporting

15. Generic 4-Phase PLCTERMINATION • Checklists of outstanding work • closing contracts • transfer project’s product & responsibility to client • post-completion review, evaluation and feedback • divest project team and resources • Initial operation, testing, and debugging.

16. PROJECT LIFE CYCLE • QUESTION Plot the following PLC CHARACTERISTICS • Amount of Effort (non-cumulative) • Potential to add value & Cost of making changes • Financial outlays & Level of uncertainty

17. CHARACTERISTICS OF PLCLevel of Effort / Resources / Activity / Cost • PLC typically have slow-rapid-slow activity structure • Resourcing & cost relatively low at beginning • Maximum effort during Implementation • Projects may have major activity early – eg market research project • Level of Effort profile: • cumulative - progressive "S" curve; or • non-cumulative - peak in Implementation • Implication - Control process increases in intensity particularly during Implementation Phase

18. CHARACTERISTICS OF PLCLevel of Effort / Resources / Activity / Cost

19. CHARACTERISTICS OF PLCPotential to Add Value • Most expenditure during Implementation, but • Greatest influence over final cost & characteristics of project’s product in Concept • 0.1% of costs incurred early but “perhaps 90% of the expenditure has actually been determined” • Ability to influence costs & add value to project's output greatest during Concept • "Potential for adding value” = reverse "S" curve. • Implication - Allocate time & effort in Concept for proper deliberation of project’s purpose & evaluation of alternatives.

20. CHARACTERISTICS OF PLCPotential to Add Value

21. CHARACTERISTICS OF PLCCost of Changes or Errors • Cost of making changes increases through PLC • Concept/Development = potential to add value, minimise costs & cost of effecting changes • The earlier errors detected, cheaper to correct. • Construction- cost to make a change increases by 10-fold in each succeeding phase • Shipbuilding - $1 to correct mistake in design, $3 during construction, $8 during commissioning • Software - cost of correcting error when software in use = 250 times correcting at design stage

22. CHARACTERISTICS OF PLCCost of Changes or Errors (cont’d] Implications: • Scope & quality management critical • Proper planning in Concept/Development gives best potential to: • add value, • minimise cost of effecting changes, • Intersection of ‘value-adding’ &‘cost to change` = constructive opportunity / destructive intervention"

23. CHARACTERISTICS OF PLCCost of Changes or Errors (cont’d]

24. CHARACTERISTICS OF PLCRisk & Financial Commitment • Uncertainty highest during Concept/Development • As more known, uncertainty falls through PLC • Conversely, $$ commitment low in early PLC but rises steeply during Implementation. • So impact of risk is probably highest at beginning of Termination • Implication - Impact of risk occurrence highest during later phases & PRM most effective in early phase

25. CHARACTERISTICS OF PLCRisk & Financial Commitment

26. CHARACTERISTICS OF PLC Project Objectives

27. CHARACTERISTICS OF PLCLeadership EARLY PHASES • Interaction amongst stakeholders to get project started off right, the PM must become a leader • Leadership = ‘doing the right thing.’ IMPLEMENTATION PHASE • ‘Management’ more important than ‘Leadership. • Management = ‘doing the things right’. • Implication - PM fit style to phase

28. CHARACTERISTICS OF PLCLeadership

29. CHARACTERISTICS OF PLC

30. PROJECT LIFE CYCLEOrganisational Context • PLC often part of product life cycle • Output typically becomes part of operational activities of product life cycle • “project cost generally a small proportion of life cycle cost of product” • Product life cycle derived from business life cycle which identifies need for a facility/product/service. • Business & product life cycles focus on product of business, not process of managing a project.

31. PROJECT LIFE CYCLEOrganisational Context

32. PLC - SUMMARY • All projects have a life cycle. • Understanding PLC gives clearer view of PM needs • Many organisations have PM manuals based on PLC • PM should be appointed early - in reality, unusual • Importance of PLC - "PLC provides a major baseline for all practical, presentation and educational purposes"

33. PROJECT MANAGEMENT 641Paper 5 - Contents • 1.0 INTRODUCTION • 1.1. PLC - Project Management • 1.2. PLC - Phase, Stages, Tasks, Interfaces • 1.3. PLC - Organisational Context • 2.0 PROJECT PHASES • 2.1 The Four Phases • 2.2 Phases for Different Industries • 3.0 CHARACTERISTICS OF THE PLC

34. Project MANAGEMENT 641 PAPER 5 PROJECT LIFE CYCLE PLC