CH 6

1. CH 6 Project Time Planning - Project Cost Planning

2. Project TimePlanning- Cost Planning As you read this chapter, you will: • Understand the process of activity decomposition • Understand the level of detail required for activities • Understand the process of sequencing activities and the four types of activitydependencies

3. Project TimePlanning- Cost Planning Define and understand key cost management terms Understand all the components of a project budget

4. Chapter Review-Objectives The Work Breakdown Structure (WBS) must now be broken down into finer and finer levels of detail so that work canbe estimated, budgeted, and assigned to the right resource to complete. This chapterdefines the other two parts of the triple constraint: time and cost. This chapter alsodescribes the processes needed to build a thorough list of activities needed tocomplete the entire scope of the project, sequence them, and cost them.

5. Objectives • Understand the process of activity decomposition • Understand the level of detail required for activities • Understand the process of sequencing activities and the four types of activity dependencies • Understand how to estimate effort • Define and understand key cost management terms • Understand all the components of a project budget

6. Chapter Review-Objectives Time is a critical commodityand usually in short supply during IT projects. A project manager must learn to plan timeaccurately to avoid major problems later, during project execution

7. Importance of Project Schedules • Managers often cite delivering projects on time as one of their biggest challenges • Average time overrun from 1995 CHAOS report was 222%; improved to 63% in 2001 study; up to 82% in 2003 study • Time is the most precarious element of the triple constraint: • Time has the least amount of flexibility;it passes no matter what!

8. Project TimePlanning- Cost Planning The job of a project manager is filled with "time robbers"- activities that at first seem to beshort and unobtrusive but when they are all added together can completely fill an entire workday. Project managers must become adept at spotting time robbers and dealing with them effectively. Each one will require a slightly different approach to control.

9. Time Robbers Those activities that at first seem to be short and unobtrusive but when they are all added together can completely fill an entire work day • Task rework • Telephone calls, e-mail • Land mail • Incomplete work • Lack of needed authority • Inefficient change procedures • Waiting on people • Day-to-day administration • Too many levels of review • Casual office conversations • Poorly run meetings

10. Time Robbers continued • Executive meddling or micro-management • Poorly motivated or educated customers • Vague goals and objectives • Poor time management • Ill defined project scope • Company politics • Working on under-funded projects

11. Project Time Management Processes The project management body of knowledge (PMBOK) includes the Time Management knowledge area, which contains the following processes: define activities sequence activities, estimate activity resources, estimate activity durations, and developproject schedule.

12. Project Time Management Processes On many projects, these steps can happen all at the same time, especiallywhen the WBS was created for a project using a WBS from previous similar project because many of the activities are already defined. The following sections cover themone at a time

14. Project Time Management Processes • Project time management describes the processes and methods required to create and manage appropriate schedules to complete the project: • Activity Definition – identifies the lowest level of work on the WBS, “work packages”, that needs to be performed to create the finished product deliverable • Activity Sequencing – identifying and documenting the logical and sometimes physical relationships among schedule activities

15. Where Do Schedules Come From? • Step 0. Build the WBS • Step 1. Define Activities (work packages) • Step 2. Sequence Activities and Assign proper activity dependencies

16. Step 1. Defining Activities • Depending on the technique used to create the WBS (refer to chapter 5), typically the work packages are built by decomposing parent activities down into smaller and smaller units of work. • Each activity is decomposed into smaller and smaller units until the deliverable can be: • 1) assigned to one person who is held responsible for the completion of the task, • 2) a time and cost estimate can be accurately generated • 3) schedule created • 4) metrics tracked

17. Helpful Reminders • The 100% rule is in affect; all of the work packages defined must add up to 100% of the total scope of the project • Not all of the work packages will be defined at the same level of detail

18. Activity Characteristics • Status and/or completion is measurable and can be reported easily at any time • Start and end events are clearly defined and easily communicated • Each activity has a single deliverable • Time and cost is easily estimated

19. Activity Characteristics • Activity duration is within acceptable limits no longer than 10 work days. This is not a hard unbreakable rule but a suggested guideline that no activity be defined with an effort longer than two weeks • Work assignments are independent, you shouldn’t need to interrupt the work in the middle of an activity due to another activity not working as planned

20. Step 2. Activity Sequencing • involves identifying and documenting the logical and sometimes physical relationships among schedule activities • Mandatory dependencies: inherent in the nature of the work; write software and then test • Discretionary dependencies: defined by the project team offer the most flexibility; • External dependencies: based on work being performed by an entity outside of the organization • You must determine correct dependencies to create a realistic schedule

21. Benefits from Proper Scheduling • Provides a consistent framework for repeatable project successes • Effectively illustrates the interdependence of all tasks • Clearly denotes the dates that resources need to be available • Determines milestone and project completion dates • Identifies critical path activities that if delayed will delay the project completion date

22. Benefits from Proper Scheduling • Identifies which activities are not on the critical path and thus can be delayed if needed without affecting the project completion date • Identifies resource availability • Shows which tasks can or are being done in parallel

23. Schedules • Regardless of which scheduling method is chosen, they all strive to graphically demonstrate the sequential relationships between activities • The two techniques of activity sequencing are the precedence diagram method and the activity on arrow diagramming method

24. Arrow Diagramming Method (ADM) • Also called activity-on-arrow (AOA) project network diagram • Activities are represented by lines with arrows • Nodes or circles are the starting and ending points of activities • Key Drawback: Can only show finish-to-start dependencies

25. Sample Activity-on-Arrow (AOA) Network Diagram • Lines with arrows represent tasks • Circles with words or numbers represent the begin or end of a task

26. Process for Creating AOA Diagrams • You draw the first Begin circle or node and then proceed with the tasks that do not have a predecessor, usually the first tasks to be done on the project. These are shown in the diagram as lines A, K, and F • Then you move to the next tasks listed in the WBS in order of precedence. Activity B has a predecessor of A and Activity C has a predecessor of B and so on. Tasks M, G, and L have no successors so we draw their arrows to the End node • You add circles at the end of each arrow as an end point. At the end of the process you then number each circle • Be prepared as you draw this diagram to draw and then erase and redraw as you work your way down the task list • You may need to add dummy activities to complete the diagram

27. Precedence Diagramming Method (PDM) • uses boxes to represent activities (nodes) and lines with arrows to represent the dependencies see example next slide • The task names are for this example shortened to just letters. The lines with arrows are not labeled • Notice that some of the activities (C, F, G, and H) have more than one predecessor; some only have a successor (Begin) and some only have a predecessor (End)

28. Sample PD

29. Microsoft Project Sample PD

30. Activity Dependency Types • Finish-to-start • Finish coding module before unit testing • Start-to-start • Start on Training Model after Use cases started • Finish-to-Finish • Can’t complete training model until User Interface model complete • Start-to-Finish • Phase out legacy system can’t finish until x days after New system starts acceptance testing

31. Information available from Network Analysis of AOA or PDM • Interdependencies of activities • Project completion time • Impact of late starts • Impact of early starts • Trade-offs between resources and time • “What if” exercises • Cost of a crash program • Slippages in planning/performance • Evaluation of performance

32. Estimate Activity Resources • Before estimating activity durations, you must have a good idea of the quantity and type or level of resources that will be assigned to each activity. • Consider important issues in estimating resources: • How difficult/complex will it be to complete specific activities on this project? • What is the organization’s history in doing similar activities? • Are the required resources available? Internal or External? • Very important to match the right person with the right task!

33. Estimate Activity Resources • Process Activities: • Activity resource requirements • Resource calendars • Assigned resources

34. Techniques for Resource Estimating • Expert judgment • Analogous • Alternatives analysis

35. Hints to Remember • Never create an initial schedule that requires resources to work overtime, you are already planning for problems • Be careful of what Ed Yourdon calls the “Marine Corps mentality: Real Programmers Don’t Need Sleep”. Many IT resources especially the new young ones trying to impress their new colleagues and bosses will not readily admit when they are overwhelmed and need help

36. Activity Duration Estimating • After defining activities, determining their sequence, assigning appropriate resources, the next step in time management is duration estimating • Duration includes the effort (actual amount of time worked on an activity) plus elapsed time

37. Typical Problems with Estimates • Developing an estimate for a large technology project is a complex task requiring a significant amount of effort. • Remember that estimates are done at various stages of the project “Progressive Elaboration” • ROM (-25% to + 75%) or SWAG • Budget (-10% to + 25%) • Definitive (-5% to 10%)

38. Typical Problems continued • Many people doing estimates have little experience doing them. Try to provide training and mentoring • People have a bias toward underestimation. Review estimates and ask important questions to make sure estimates are not biased • Management wants a number for a bid or just to look good to superiors, not a real estimate. Project managers must negotiate with project sponsors to create realistic estimates

39. The Mythical Man-Month author Fredrick Brooks • Techniques used by most to do estimates are poorly developed. Many are based on a flawed assumption that all will go well. Problems and changes are sure to happen to the project and need to be considered • Many techniques confuse effort with progress, assuming that a person and time are interchangeable

40. The Mythical Man-Month author Fredrick Brooks • “Adding manpower to a late software project makes it later.” Just putting more people on a task does not necessarily reduce the time it takes to complete it • A man-month in estimating refers to how much work can be done by a worker in a given month, referred to today as “person-month” - “time-robbers” keep this from being 160 hours

41. Cone of Uncertainty

42. Activity Duration Estimating Methods • Analogous • Top-down • Bottom-up • Three-point • Simulation • COCOMO

43. Activity Duration Estimating • To arrive at an estimate of time, you first determine which estimate of work size is needed. • As Capers Jones, a noted author in this area, points out, the first step in accurately estimating an IT application is determining its size. • Over the years, many different techniques have been used, including lines of code, function points, feature points, and so on. • After the effort has been sized using one of these methods, time estimates can be applied

44. Task Sizing – Lines of Code • Has been one of the most used methods • Based on historical results • Effort, dollars, documentation, software bugs, and number of resources • Advantages • Can be very quick and inexpensive to generate • Can be done early in the process • Universal metric • Can be generated easily, in most environments automatically • Facilitate a lessons-learned process

45. Lines of Code - Disadvantages • Must compensate for technology differences • Can’t be done well unless relevant history exists • Must determine what counts as a line of code • What level of resource is generating the code • No industry standards • Need to distinguish between auto-generated code and original work • Needs to be continually updated

46. Function Points • used to estimate time and dollars based on the generated system requirements specification • A function point measures the size of a business function that the new system needs to have such as an input screen or a report • Function Point analysis can be done at any point in the project but are not considered accurate until late in the planning phase

47. Process of Function Points Step 1: Count the number of business functions within each of the following categories: user inputs, user outputs, inquiries, data structures, and external interfaces Step 2: Determine the complexity level of each function as simple, medium, or complex. For example output complexity is determined by the number of elements involved, any complex calculations or complex process logic and the number of data structures. Step 3: Assign weights for each level of complexity within each category Step 4: Multiply each function by its weight and then sum each product to obtain the total unadjusted function points. Step 5: Compute the Value Adjustment Factor (VAF) Step 6: Compute adjusted function point total using the formula [Unadjusted total x (0.65 + 0.01 x VAF)]

48. Example

49. Next Step: compute the value adjustment factor based on the following table 0 = no effect 1 = incidental 2 = moderate 3 = average 4 = significant 5 = essential

50. Function Points • Next: calculate the total adjusted function points: Unadjusted total x (0.65 + 0.01 x VAF) or • 1050 x (0.65 + 0.01 x 40) = 1102.50 • Results • Effort = (1.49 hrs effort per f/point) (1102.50) = 1,642.7 hrs • Documentation (.25 pages per f/point) (1102.50) = 275.63 pages • Bugs (.025 bugs per f/point) (1102.50) = 27.5 bugs • User Instructed Rework(.04 per f/point) (1102.50) = 44.1 • Dollars ($105.10 per f/point) (1102.50) = $115,872.75