Tools and Techniques for Corporate Project Management

Tools and Techniques for Corporate Project Management Vladimir Liberzon Spider Management Technologies Session # PTA08

Introduction • In this presentation we will discuss proven tools and techniques that are used for the corporate project management by many companies. • The questions during the presentation are welcomed!

Introduction • Some of these tools, like PM Guidelines, Document and Contract templates, refer to implementation of standard approaches to typical processes, others refer to project computer modeling. In this presentation we will discuss corporate computer modeling tools and techniques.

Part 1 Requirements

Project and Portfolio Computer Model Requirements • Based on the corporate standards (dictionaries, databases and libraries), • Calculates resource constrained schedules taking into account all limitations including resource, financial and supply constraints,

Project and Portfolio Computer Model Requirements • Takes into account project priorities, • Simulates expenses and revenues that allow management of project and portfolio cash flows,

Project and Portfolio Computer Model Requirements • Is able to assign resources basing on their skills, • Calculates Resource Critical Path and feasible time, cost and material reserves, • Simulates project risks and uncertainties,

Project and Portfolio Computer Model Requirements • Supplies top management with the integrated information that reflects not only status data but also trends of project and portfolio performance that are necessary for timely decision making, • Keeps project and portfolio history.

Part 2 Data

Organizing data • Corporate project management systems have specific requirements that are vital for successful implementation. • It is necessary to be sure that:

Data Requirements • Project costs have the same structure in all projects (same cost components are used), • Cost Accounts are the same in all projects, • The same Project, Phase, Activity, Resource, and Department coding structures are used in all projects,

Data Requirements • Resources that are used in all projects belong to the corporate resource pool, • Resources of the same type share the same characteristics (like rate, material consumption per work hour),

Data Requirements • Activities of the same type have the same characteristics in all projects (like unit cost, material requirements per work volume unit, etc.), • Typical resource assignments have the same characteristics in all projects (like productivity, cost and material requirements),

Data Requirements • Typical processes are modeled in the same way in all projects. • These, and project performance simulation requirements, define the necessary data structures that have some distinctions described further.

Data Structure • The main elements of any project computer model are: • project activities, • activity dependencies, • resources and their assignments, • calendars, costs, • Work, Resource and Cost Breakdown Structures.

Activity Data • Usually project activities are characterized by their duration. Besides duration, it is frequently necessary to set the activity’s physical volume(quantity) of work. • Activity volume can be measured in meters, tons, function points, planned work hours, percents or any other units.

Activity Data • Unlike activity duration, activity volume does not depend on assigned resources. By introducing activity volumes, we will be able to use corporate databases that define: • cost and material requirements per typical activity volume unit. • Typical resource assignment productivity or production rate.

Dependency Data • Sometimes it is necessary to set more than one link between activities. • Besides the positive and negative time lags, it is useful to set volume lags, which is preferable in many cases.

Resource Data • Resources are divided into two classes: • renewable(human resources and mechanisms) and • consumable (materials). • This way we will be able to assign materials to resources defining their consumption per resource work hour or work volume unit. Example: a car consumes gas.

Resource Data • Besides the individual resources one may set resource crews (we call them multi-resources) and resource skills (roles). • Multi-resourcesare the settled groups of resources working together (e.g. a team, a crew, a car with a driver, etc.).

Resource Data • Resources sharing the same skills comprise Resource Assignment Role. Resources with the same skillsare interchangeable though they may have different productivities performing the same activities.

Assignment Data • Assigning resources to activities implies the notion of ateam - a group of resources working on an activity together. The team can include individual resources, multi-resources and skills.

Assignment Data • If more than one team is assigned then resources belonging to the different teams work on an activity independentlyof each other. • When the volume or duration of team assignment is not defined the team will continue working until the work on the activity is completed. This approach allows simulation of shift work.

Assignment Data • Resources can be assigned to activities part time. In this case one will set percentage of assigned resources utilization together with resource quantity(not just the total percentage calculated by multiplying percents and quantities, that leaves the necessary amount of resources unclear - two resource units with 50% utilization are equivalent to one resource unit used to its full capacity).

Assignment Data • Another useful option – variable resource assignments. • Example: You may define that the number of resources that may be used at some work is between 2 and 4, and their workload should be not less than 40% and not more than 80%. In this case activity will start if two units of assigned resource are available not less than 40% of their time, and the team may be increased if additional resources become available. Finishing other assignments resources may apply more of their time to the specified assignment but not more than 80%.

Assignment Data • Resources can consume materials in the process of their work. Besides, materials can be assigned to activities or resource assignments directly. In some projects it is necessary to simulate not only material consumption but also productionof resources and materials on activities and assignments.

Calendars • The calendars shall be set for all activities, resources and time lags. Availability of all these calendars is important for the proper project performance simulation.

Cost Data • Usually it is not enough just to define activity and resource costs. It is necessary to know project expenses and revenues, what will be spent on wages, on machinery and equipment, on taxes, etc. Sometimes it is necessary to allow for multiple currencies. So there is a need to define and assign cost components.

Cost Data • Besides setting the cost of an hour of renewable resource work and the cost of material unit, it is necessary to be able to set the cost directly for activities and assignments. People may be paid not only for the hours spent on the task but also by the quantity of work they have done. So it is necessary to set costs for resource assignments (fixed or per unit of volume). Cost of assignment is one example of setting contract costs for the project.

Material, Resource and Cost Centers • You may need to get different reports on the groups of cost components, materials and resources. That is why it is necessary to define Cost, Material and Resource Centers: • Material center can include any group of materials. • Resource center can include any group of resources. • Cost center includes selected cost components.

Multiple WBS • It is also very useful to have an opportunity to get project reports that aggregate project data different ways. Usually we use at least three Work Breakdown Structures in our projects: based on project deliverables, project processes and responsibilities.

Multiple RBS • Resource Breakdown Structures (RBS) are especially important in the corporate project management. Matrix organizational structure determines the necessity of obtaining the reports on both Project and Functional RBS. Portfolio computer model provides the information on resource usage (and corresponding costs) for the organization functional departments.

Cost Breakdown Structure • Cost Breakdown Structure defines organization cost accounts that will be used in all portfolio projects.

Project Archives • The planners should be able to store project versions and to analyze the progress in project execution, comparing current project and portfolio schedules not only with the baseline but also with any previous version. It enables to assess the progress in project execution for the last week, last month, last year, compared to the baseline, etc.

Corporate Databases(Reference-Books) • Corporate project management has to be based on the corporate standards. These standards will include not only processes and document templates but also estimates of the typical activity and assignment parameters. • Activities, resources and assignments belong to the same type if they share the same characteristics like unit costs, material consumptions per work volume unit, productivity, etc.

Corporate Databases(Reference-Books) • Corporate databases (Reference-books) should include at least: • Activity cost and material requirements per activity type volume unit, • Resource assignment cost and material requirements per assignment type volume unit, • Resource assignment productivity, • Assignment work load.

Fragnet Library • Project fragnets usually describe typical processes and technologies that are used more than once. Creating project computer models using the corporate library of typical fragnets will help to avoid inconsistencies and assures that the project model follows corporate standards. A library of typical fragnets is a very important tool for the development of corporate culture and management standards.

Part 3 Schedule

Tasks to solve • Project scheduling without the resource limitations taken into the consideration, • Project resource constrained scheduling (resource leveling), • Determination of critical path and time float for project activities,

Tasks to solve • Determination of the project requirements for finance, materials and equipment for any time period, • Determination of renewable resources utilization in time,

Tasks to solve • Risk analysis and development of the project schedule and other project parameters allowing for the risks, • Project performance measuring, • Project performance analysis and forecasting main project parameters.

Tasks to solve • The problem of project schedule development without allowing for resource constraints has a correct mathematical solution (Critical Path Method), which would be the same for all PM packages, provided that initial data are identical. All other problems are solved using different approaches and yielding different results.

Resource constrained scheduling • Resource constrained schedules produced by different PM software are different. The software that calculates shorter resource constrained schedules may save a fortune to its users. • That is why we pay most attention to resource-constrained schedule optimization.

Resource constrained scheduling • The schedule stability is no less important, especially at the project execution phase. • That is why our project management software Spider Project features an additional option - the support of the earlier project version schedule (keeping the order of activity execution the same as in selected earlier project schedule).

Resource Critical Path • Traditional notion of Critical Path works only in case of unlimited resources availability. • Let us consider a simple project consisting of five activities, presented at the next slide.

Sample Project before leveling • Activities 2 and 5 are performed by the same resource.

Sample Project after leveling • Please pay attention to activities that became critical. Now delaying each of the activities 1, 2 and 5 will delay the project finish date. We call these activities Resource Critical and their sequence comprises Resource Critical Path.

Resource Critical Path • In many projects it is necessary to simulate financing and production, and calculate project schedules taking into account all limitations (including availability of renewable resources, material supply and financing schedules). True critical path should account for all schedule constraints including resource and financial limitations.

Resource Critical Path • We call it Resource Critical Path (RCP) to distinguish it from the traditional interpretation of the critical path definition. • The calculation of RCP is similar to the calculation of the traditional critical path with the exception thatboth early and late dates (and corresponding activity floats) are calculated during forward and backward resource (and material, and cost) leveling.

Resource Constrained Floats • This technique permits to obtain resource constrained floats. • Activity resource constrained float shows the period for which activity execution may be postponed within the current schedule with the set of resources available in this project.

Tools and Techniques for Corporate Project Management