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2- Microsoft Project Lectures in Powerpoint Files

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					A Scenario
• You with your two friends are going to have a one-week vacation at another friend‟s house, who will not be at her house. • This house is in Çamlıhemşin, and none of you have been there before. • You have just parked your car in front of a supermarket in Rize;
– There is half an hour before it closes. – There is no such supermarket in Çamlıhemşin, and it is an arduous journey from there to Rize and back. – You do not expect to find many of your needs in small “bakkals” in Çamlıhemşin.
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Questions About the Scenario
• How is this shopping different from your regular weekly trips to your favorite supermarket in Istanbul?

• What should you do now?

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Napolyon‟s 1812 March to Moscow

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Defining a Project
• One needs to understand why projects are different from other operations in order to see the reason for having a different management process for projects.

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Some Examples of Projects
• Traditional application areas of project management
– construction – U.S. defense contracts (weapon development, …) – Movie making

• Now
– new product development – business process restructuring – information systems upgrade
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New Product Development
New Automobile Development Performance (1980‟s) Japanese American Average development time (months) 46.2 60.4 Average project team size 485 903 Proportion of late products 1/6 1/2 Prototype development time (months) 6.2 12.4 Time to reach normal quality level (months) 1.4 11

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Defining a Project
• What are the special characteristics of project?

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The Project Life Cycle
• The project life cycle:
– A generic one: definition, planning, execution, delivery – Software development project: definition, design, code, integration/test, maintenance

• Life cycle of a project recognizes that projects have a limited life-span and that there are predictable changes in level of effort and focus over the life of the project.

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The Project Life Cycle
Definition Planning
Level of effort

Execution

Delivery

Definition: 1.Goals 2. Specifications 3. Tasks 4. Responsibilities 5. Teams
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Planning: 1.Schedules 2. Budgets 3. Resources 4. Risks 5. Staffing

Execution: 1.Status reports 2. Changes 3. Quality 4. Forecasts

Delivery: 1. Train customer 2. Transfer documents 3. Release resources 4. Reassign staff 5. Lessons learned
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Importance of Planning
Locked Total Cost

Incurred Total Cost Time
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The Project Manager
– Is unique because she/he manages temporary, nonrepetitive activities. – Frequently acts independently of the formal organization. – Provides direction, coordination and integration to the project team, which is often made up of part-time participants loyal to their functional departments. – There is potential risk of responsibility with too little authority. – Usually has limited technical knowledge. – Works more like a conductor of an orchestra.
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Modern Project Management
• Integrated Management of Projects
– Selection and management of projects must support the strategic plan of the firm. – Strategies are often implemented through projects. – There are often more project proposals than can be handled by the available resources.
• Thus must select the set of projects that make the largest and most balanced contribution to the objectives and strategies.

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Modern Project Management
• The process of project management has two dimensions (“science” and “art” of project mgmt):
– technical: defining, planning and controling – sociocultural:
• • • • • • stimulating teamwork and personal motivation identifying and resolving problems shaping customer expectations sustaining political support of top management monitoring subcontractors negotiating with functional managers
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The Technological and Sociocultural Dimensions
Sociocultural Leadership Problem solving Teamwork Negotiation Politics Customer expectations

Technical Scope WBS Schedules Resource allocation Baseline budgets Status reports

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Barriers to Success
• Based on a survey done by Gobeli and Larson (1986) barriers identified by project managers:
BARRIERS TO PROJECT SUCCESS Activity Planning %32 Barrier Unclear definition Poor decision making Bad information Changes Tight schedule Not meeting schedule Not managing schedule Poor followup Poor monitoring No control system No recgonition of problems Frequency %16 %9 %3 %4 %4 %5 %3 %3 %2 %1 %1
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Scheduling %12 Controlling %7

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Barriers to Success

Objectives in Project Selection
Barrier Inadequate personnel Incompetent project manager Porject member turnover Poor staffing process Organizing Lack of responsibility or accountability %11 Weak project manager Top management interference Directing Poor coordination %26 Poor communication Poor leadership Low commitment Activity Staffing %12 Frequency %5 %4 %2 %1 %5 %5 %1 %9 %6 %5 %6

• Value maximization • Balance • Strategic direction/fit

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Project Closure
• Conditions for project closure.
– Normal – Premature: early completion due to some parts of the project being eliminated. – Perpetual: never-ending – Failed – Changed priority: often results in termination. “termination by murder”.
• Not easy to terminate a project due to reduced priority. • Reasons for change of priority?
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Project Closure
• As the completion time of the project nears people and equipment are directed to other activities or projects. • Wrap-up activities (e.g. accounting, writing final reports, etc.) are perceived as boring. • Some other reasons for lack of enthusiasm
– next assignment (project) is not known; looking for new projects
• cannot focus on closing activities. • Delay the completion until a new assignment is found
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Project Closure
• Closure has the following six major activities:
– – – – – Getting delivery acceptance from the customer. Shutting down resources and releasing for new uses. Reassigning project team members. Closing accounts and paying all bills. Evaluating the project team, team members and project manager (postmortem and possibly an audit).

• It is customary to arrange a party to celebrate the completion of a project.
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Postmortem Analysis
• A postmortem is both a process and a document. • Primary purpose:
– Identify what aspects of the project went well, what went poorly and what needs improvement, so that future projects are run better.

• Typical duration: Less than 4 hours • Who should attend: anyone involved in the project. • Facilitator: A neutral person, someone not involved in the project.
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Postmortem Analysis
• Facilitator should make sure that
– People stay on the topic – No one is personally attacked (keep comments constructive). – The agenda items are covered. – Everyone is equally involved in the discussion. – Time is watched closely.

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Postmortem Analysis
• For a postmortem to be effective a visual recording of the discussion must be kept.
– One person should be the recorder. – A flipchart or a whiteboard should be used so that everyone can focus on the recorded information. – Can use colors to represent type of comment
• Black: bad Green: good Red: warning flag Purple: idea Brown: neutral observation

– Can use symbols to reflect tone
• !!! : feels strongly about this * : everyone agreed with this, ? : not everyone agreed lll : 3 people mentioned this
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Guidelines for Participants
• Be self-critical: Check your ego at the door. • Be professional: Discussions should cover a broad range of team issues and dynamics, from process to product issues. However, it should not become personal. • Be factual: Documentation and data should be included in both the discussions and the final report. • Be brief: Suggestions and commentary in the final report should be brief and agreed to by broad consensus. Although dozens of issues will surface in the postmortem process, the next project will benefit more from a small number of very specific suggestions.
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Running a Postmortem Meeting
• Topic 1 - Timeline and resources:
– who was involved and how long.

• Topic 2 - What went poorly/should be done differently?
– Identify a list of everything that went wrong. – After the list is complete, prioritization can be done by everyone voting for top 3 issues.

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Running a Postmortem Meeting
– Three techniques for creating the list:
• Brainstorm • Nominal technique: participants list individually then facilitator asks each person to say one time from their list until everyone‟s lists are recorded. • Storyboarding: participants write their lists on index card (one item per card) which are then combined and sorted by topic.

– For the prioritized issues discussion should cover:
• Why was this a problem? What went wrong? • What were the signs that should have warned us? • What should we have done differently?
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Running a Postmortem Meeting
• Topic 3 – What went well? • Topic 4 – Recommendations.
– Summarize what the group would recommend for future projects (write-up can be done after the meeting).

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Postmortem Summary Document
• Documenting postmortem is critical for creating a “learning organization”. • To maintain accuracy very little should be deleted from the information recorded during the meeting. • In addition to the information from the meeting, a summary of project metrics and analysis of project tracking data should be included. • Before the document is published, everyone involved should have a chance to review and propose changes as appropriate.
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Project Audit
• As in postmortem, the objective is to learn and not to repeat same mistakes in future projects. • Project audit is typically carried out by independent audit groups. • Project audits should be part of the normal process.
– Don‟t want the perception of witch hunt.
• Either an automatic audit of all projects. • Or well-defined criteria used to select projects to be audited.

• Audit team leaders should have
– No direct involvement or direct interest in the project. – Independence and authority to report results
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Postmortem vs. Audit
• Since the result of an audit might tarnish a career or lead to a career enhancement (depending on the outcome), they can be affected by internal politics.
– Hence, many firms use outside consulting firms for audit. – Usually, post-project audits teams do have some people from the project team.

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SAVE your existing MS Project File at the end of PART3 as <username>_PART4 WITH BASELINE. Make sure you keep the original file without a baseline.
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If “Save with a baseline option” does not appear,

1.Choose “Tools”

3.Click on “SaveBaseline...”

2.Select “Tracking”

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Monthly Cost Schedule Report-1

1.Select “View” 2.Choose “Report”

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Monthly Cost Schedule Report-2
1.Choose “Cost”

2.Click on “Select”

3.Select “CashFlow”

4. Click on “Edit” icon.
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Monthly Cost Schedule Report-3

1.Select “Definition”

3.Click “OK”
2.Select “Month”

You can change the format and details of cost schedule report by changing the items within “Crosstab Report” view. For the monthly cost report change the time unit to months.
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Monthly Cost Schedule Report-4

Click on “Select” icon.

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Monthly Cost Schedule Report-5
Monthly Cost Schedule Report

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Update the Progress of the Project-1
Update data provided in Projectinfo_4.xls.

1.Select the activity that you will update
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2. From “Tools” select “Tracking”

4.Update Tasks...
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Update the Progress of the Project-2

Change the durations using the data provided in the Excel file. Note: Although we changed the actual and remaining durations, baseline dates are not affected by changes you made.
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Update the Progress of the Project-3
If a number of tasks started and finished on time, you can set the actual finish information for all those tasks at once. Procedure as follows;

Select the tasks that you want to update (press CTRL key and click on Task Name).
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Update the Progress of the Project-4
1.Go to “Tool” bar

2.Select “Tracking”

2.Choose “Update Project...”

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Update the Progress of the Project-5

Choose “selected tasks” then click “OK”

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Seeing the Effects of Update-1

1.Go to “View”

2.Click “More Views”
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3.Select “Tracking Gantt”
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Seeing the Effects of Update-2

Dark Blue Bar shows the completion percentage of the tasks.
Light Blue Bar shows the remaining percentage of the tasks. Gray Bar shows the base line of the tasks.
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Seeing the Effects of Update on Critical Path

Select “Critical”

As you can see Tracking Gantt Chart does not show the completed tasks on the critical path. Therefore we have only remaining critical activities as indicated by the Red Bar.
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Earned Value Analysis Report-1 What is earned value analysis?
Earned value analysis is a method for measuring project performance. It indicates how much of the budget should have been spent, in view of the amount of work done so far, and the baseline cost for the task, assignment, or resource. Earned value is also referred to as budgeted cost of work performed (BCWP).

In our example we use the beginning of each month as a control date for the earned value analysis.
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Earned Value Analysis Report-2

1. From “Project” select “Project Information”
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2.Set “Status date” to 5/1/2002
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Earned Value Analysis Report-3

1.Select “View”

2.Choose “Report”
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3.Click on “Costs...”

4.Click “Select”
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Earned Value Analysis Report-4

1.Select “Earned Value”

2.Click on “Select”

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Fields in the Earned Value Table
Field Description

BCWS BCWP ACWP
SV

Budgeted cost of work scheduled, through the project status date Budgeted cost of work performed, through the project status date Actual cost of work performed, through the project status date
Earned value schedule variance, through the project status date

CV BAC EAC
VAC

Earned value cost variance, through the project status date Budgeted at completion (the baseline cost of the task/project) Estimate at completion, (estimated cost of the task/project)
Variance at completion, (=BAC – EAC)
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Earned Value Analysis Report-5-1

Cost calculations for activity 5: Uses 100% of resource B whose fixed cost is $450 & variable cost is $12/hr. BCWS = 450 + 13 (12*8) = $1698 BCWP = 450 + 13 (12*8)*(13/14) = $1608.86
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Earned Value Analysis Report-5-2

•If BCWS is larger than BCWP, then that task is behind schedule. Hence there is a negative schedule variance.
•Total ACWP is larger than BCWP; that is money spent on tasks performed has been larger than the budgeted amount.
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Earned Value Analysis Report-5-3

• EAC for activities that are not yet started (7, 8, 9, and 11) is set equal to BAC. • It is presumed that the fact that there has been deviations in the started activities does not necessarily mean that there will be deviations in the

future activities.

•EAC for activity 5 is calculated as follows: 450 + 14(12*8) = $1794
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Save as your project as <username>-Part4-1

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Monitoring Progress
How does a project get one year late? … One day at a time
– Frederick P. Brooks

• MBWA: Management by Walking Around
– informal method, works fine in small projects but for large projects a formal control mechanism is necessary.

• Project control system should alert management to potential problems before it is too late to correct them.
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Monitoring Progress
• A project control system should be “ an information system that measures project progress and performance against a project plan that supports completion of the project on time, on budget and in the form requested by the customer. • Control has negative connotations for many people, thus it is frequently resisted. • Control holds people accountable, allows for traceability and keeps focus.
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Monitoring Progress
• Control process has four steps:
– Setting a baseline plan.
• Time-phased cost and resource schedules.

– Measuring progress and performance.
• We will discuss the Earned Value approach.

– Comparing plan against actual.
• Status reports.

– Taking action.

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Monitoring Time Performance
• Project network schedule works as a baseline. • Gantt chart is used to visualize schedule status.
A B Now scheduled

B A

D

actual completed

F C
E
slack remaining duration expected actual

C D E F 1 2 3 4 5 6 7 8 9 10 11

12

13

14

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Monitoring Time Performance
• Project Schedule Control chart
– At pre-specified points in time (reporting periods) calculate the difference between scheduled duration on the critical path and actual time on the critical path.
10 8 6 4 2 0 -2 -4 -6 -8 -10
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2

3

4

5

6

7

8

9 10 11 12 13 14

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Change Control Management
• Details of project plans may not materialize as expected. • Generally speaking there are three types of changes:
– Scope changes – Implementation of contingency plans – Improvement changes

• A well defined change review and control process must be developed in the planning stage.
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Change Control Management
• Change control systems report, control and record changes to the project baseline. • Steps of a change control system
– – – – – – – identify proposed changes list expected effects of changes on cost and schedule review and approve/disapprove changes negotiate and resolve conflicts of change communicate changes to affected parties assign responsibility for implemting change track all changes to be implemented
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Scope Creep
• Large changes in scope of the project is easy to notice. It is the “minor adjustments” that can create a problem.
– Such minor adjustments are called scope creep.

• Although scope creep is viewed negatively, there are situations where it might have benefits.
– E.g. new product development, especially early on during the project.

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Scope Creep
• Possible negative effects of scope creep
– – – – – changes cash flow. wears down team motivation. team might become less focused. upsets project rhythm increase costs.

• Every approved change must be reflected on the project WBS.
– A key to success is documentation.
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Change Control Management
• The key to managing scope creep is change control.
– Original baseline must be well-defined and agreed upon with the project customer. – Clear procedures must be developed for authorizing and documenting scope changes. – Impact of scope change on the baseline (budget and schedule) must be clearly documented. – Scope changes must be communicated to all project stakeholders.
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Change Control Management
• Benefits of change control systems
– inconsequential changes are discouraged by the formal process – costs of changes are recorded in a log – integrity of WBS is maintained – allocation and use of budget and management reserve funds are tracked – effects of changes are visible to all parties – scope changes are quickly reflected in baseline and performance measures
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Earned Value System
• Pioneered by U.S. Department of Defence to track schedule and cost in large projects in 1960s. • Widely used by private sector around the world.
– NCR, Levi Strauss, Disney etc.

• System depends on a well-developed plan and schedule. • System is based on an accounting system called “earned value”.
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Earned Value System
• Consider the following example:
– R&D project planned to last 10 months and cost $200,000 per month. – After 5 months, top management assesses the status of the project
• Actual cost for the 5 month period: $1.3 million

– Would it be accurate to conclude that the project has $300,000 cost overrun?

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Earned Value System
• Earned value system is an integrated cost/schedule system. System overview:
– Develop a project plan and schedule as discussed earlier in this course. – Develop a time-phased budget. The cumulative values of these budgets will the baseline and called budgeted cost of the work scheduled (BCWS). – Collect actual costs for the work performed at the work package level. These costs will be called actual cost of work performed (ACWP).
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Earned Value System
– Collect the budgeted values of work actually performed. These will be called budgeted cost of work performed (BCWP). – Compute schedule variance as
• SV = BCWP - BCWS

– Compute cost variance as
• CV = BCWP - ACWP

– Prepare hierarchical status reports for each level of management.

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Earned Value System
WBS Element BCWS

BCWP 100 50 20
170

Cost Variance Schedule Variance ACWP BCWP - ACWP BCWP - BCWS

A B C

100 56 28
184

110 48 30
188

-10 2 -10

0 6 58

BAC: Budgeted cost at completion CPI (Cost Performance Index) = BCWP/ACWP =170/188 = 0.904 SPI (Schedule Performance Index) = BCWP/BCWS =170/184 = 0.924
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Earned Value System
Cumulative cost
$370

BAC
BCWS

$184

ACWP

BCWP (earned value)
Time
today
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Scheduled end
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Earned Value System
• The main reason for creating a baseline is to monitor and report progress. Hence it is absolutely necessary that costs are time-phased in the baseline exactly as managers expect them to be “earned”. • Three common rules
– 0/100 percent rule: 100% of the budget is earned when the workpackage is complete.

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Earned Value System
– 50/50 percent rule: 50% of the value earned when the workpackage is started and 50% is earned when the workpackage is completed. – Percent complete rule: Establish frequent checkpoints over the duration of the work package and assign completion percentages in terms of dollars.
• This is the method used most frequently. • During monitoring the measure percent complete, it is common practice to limit amount earned by 80% until the work package is 100% complete.

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Earned Value System
• After the current status of the project is determined, one would want to revise the project‟s total cost. This is referred to as EAC (Estimated cost at completion).
– EAC: is equal to actual cost to-date plus revised estimated cost of the remaining work).

• EAC = ETC + ACWP
– ETC: Estimated cost to complete – Typically ETC is determined by making use of the CPI.
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Earned Value System
ETC = (BAC - BCWP)/CPI
= (370 - 170) / 0.904 = 221.24

EAC = ETC + ACWP = 221.24 + 188 = 409.24

• VAC (Variance at Completion) = EAC - BAC
VAC = 409.24 - 370 = 39.24

• TCPI (To Complete Performance Index) = (BAC - BCWP) / (EAC - ACWP)
– Performance index of the remaining work for a given EAC.
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Earned Value System
– Let‟s say we want EAC = 370, then TCPI = (370 - 170) / (370 - 188) = 1.099

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Earned Value System - Example
• Some simplifying examples
– Each cost account has only one work package and each cost account is represented by a single activity. – Project network early start times will serve as the basis for assigning the baseline values. – Except when the 0/100 rule or 50/50 rule is used, baseline values will be assigned linearly, unless stated differently. – From the moment work on an activity begins, some actual costs will be incurred each period until the activity is completed.
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Earned Value System - Example
Project $137 Deliverable Deliverable Y Deliverable Z X $26 $70 $41 Department A $22 Department A $22 Department A $22 Department A $22 CA-1 $6 CA-3 $30 CA-4 CA-2 $20 CA-5 $24 $16 CA-8 $15 CA-6 $16 CA-7 $10

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Earned Value System - Example
3 8
10 6

A2, 3
5 3

6

10 10 10 10

10

12 12

0

3
3

A3, 3
3 3 6 7
7 5

A6, 3
6 7

A8, 3
10

A1, 3
0

A4, 3
3 3

A7, 3
7

A5, 3
5
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Earned Value System - Example
Project baseline budget
Schedule Information EV rule 1 2 2 3 1 3 1 1 Act / W.P. 1 2 3 4 5 6 7 8 Dur 3 5 3 4 2 4 3 2 Total BCWS 0 3 0 6 3 10 2 20 3 6 0 30 3 7 0 24 3 7 2 16 6 10 0 16 7 10 0 10 10 12 0 15 Total BCWS by period Cumulative BCWS by period ES LF Slack 1 2 3 6 4 10 15 6 Baseline Budget Needs 5 6 7 8 10 6 16 15 6 6 4 4 4 4 10 14 122 0 122 15 15 137 9 10 11 12

0 0

0 0

6 6

31 37

22 59

21 80

10 90

14 104

4 108

EV Rules: 1) 100 percent of budget when completed 2) 50/50 percent when started and finished 3) observed percent complete
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Earned Value System - Example
Status report at the end of period 4
Status end of period 4 complete in-process in-process %66 complete in-process not started not started not started EV Act / Dur. Total Actual & earned value 2 3 4 rule W.P. BCWS 1 1 1 3 6 1 3 4 6 2 2 5 20 4 10 2 3 3 30 6 5 15 3 4 4 24 12 5 16 1 5 2 16 2 0 3 6 4 16 1 1 7 8 3 2 10 10 15 1 1 0 0 3 4 0 0 4 8 6 6 24 32 41 47 15 20 11 21 25 5 5 15 5 0 15 52 63 84 109 114 119 134 139 139 154 CV = 47-32=15 SV = 47-37=10 15 154 10 ACWP BCWP 8 6 4 10 6 15 12 16 2 0 5 6 Revised cost estimate to complete 7 8 9 10 11 12 13 14 EAC 8 11 4 5 6 16 5 5 5 5 10 3 10 12 18 35 30 18 20

ACWP totals Cumul. ACWP total BCWP totals Cumul. BCWP total

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Project Management Organization Structures
• Organization of project teams and their leadership structures differ according to certain characteristics of projects.
– Some of the important differences are:
• who the project leader is, • who has certain responsibilities and • who makes the decisions.

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Project Management Organization Structures
• Three main types organization structures used in projects:
– Functional project organization – Pure project organization – Matrix project organization

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Functional Project Organization
General Manager

Project Coordination Functional Manager Worker Worker
Worker
83

Functional Manager
Worker Worker

Functional Manager Worker Worker
Worker

Worker
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Functional Project Organization
Key Characteristics
– Project teams formed within the functional units. – Nobody responsible for the entire project. – Leadership occurs within functional units (expertise centers).
• Leadership belongs to technical experts.

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Functional Project Organization
• Characteristics of projects suitable for this organization structure:
– Solution of technical problems is important. – Integration of different functional units‟ work is not necessary. – Stable environment. – Success depends on application of narrow technical know-how. – Usually one functional unit is dominant (due to technical reasons).
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Pure Project Organization
• Characteristics
– Project requiring major changes. – Hence, a small, self-sufficient and full-time team is set up. – The team leader is like an entrepreneur. – Leader has full responsibility over the project. – Functional units are stable, provide support to project teams.

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Pure Project Organization
Project Coordination Project Manager Worker Worker
Worker
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General Manager Project Manager Worker Worker Worker

Human Resources Marketing Finance Legal
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Pure Project Organization
• Projectitis
– a strong divisiveness occurs between the project team and the parent organization. – Project team members have difficulty in going back to their functional units when the project is over.

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Matrix Project Organization
• A hybrid form that combines both some characteristics of functional and pure project organization forms. • Project manager and functional managers share responsibility.
– Project manager decides what tasks will be done, and when they will be done. – Functional manager decides who will work in the project and which technologies will be used. – Members of the project team have two “bosses” that they report to.

• Team members could be working on multiple projects.
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Matrix Project Organization
• Characteristics of projects suitable for this organization structure :
– Integration of work done by different functional units is very important. – Changes (instability) both inside and outside the company. – Success does not depend on application of a narrow expertise.

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Matrix Project Organization
• Matrix structures differ according to the “weight” of the project manager (relative to functional managers) :
(1) “Lightweight” (2) “Middleweight” - the traditional one (3) “Heavyweight”

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Lightweight Matrix Project Organization
General Manager Functional Manager Worker Worker
Worker
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Functional Manager Worker Worker Worker

Functional Manager Worker Worker Worker
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Project coordination

Lightweight Matrix Project Organization
• In lightweight structures ...
– Representatives from each functional unit
• perform coordination and support.

– Functional managers have real power.
• They provide functional input.

– Project coordinator
• Is responsible for the coordination/intergration of inputs from different functional units. • Does not have direct authority over the workers.

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Heavyweight Matrix Project Structure
General Manager Functional Manager

Functional Manager Worker Worker
Worker

Manager of Project Managers

Worker Worker Worker
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Project Manager Project Manager
Project Manager
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Project Coordination

Heavyweight Matrix Project Structure
• In heavyweight structures ...
– Integration is very important and is the key responsibility of the project leader. – Objective is to provide a perfect system solution, not technical excellence within a narrow functional area. – Project leader works with a core team of functional leaders. They have power to get things done within their units.

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Heavyweight Matrix Project Structure
• Characteristics of the project leader
– A effective manager who is experienced in more than one functional area. – Works like a general manager (CEO) within the project. Can influence details. – Works like the conductor of an orchestra:
• Keeps track of how certain critical tasks are done and coordinated as a whole.

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Evaluating Alternative Organizational Structures
• Use of (human) resources
– Efficiency, flexibility, motivation

• Performance measurement
– Career paths, performance reviews

• Focus
– project vs. regular tasks

• Cross-functional integration • Build-up and use of functional expertise and know-how.

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Evaluating Functional Organization
Strengths Skill development Technology transfer Low talent duplication High personal loyalty Technology development Weaknesses Customer interface unclear Project priority unclear Confused communication Schedule/cost controls are difficult

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Evaluating Pure Project Organization
Strengths Accountability clear Customer interface clear Controls strong Communications strong Balances technical, cost and schedule Weaknesses Talent duplication Technology development Tehnical sharing Career development Hire/fire

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Evaluating Matrix Organization
Strengths
Single point accountability Customer interface clear Rapid reaction Duplication reduced Technology development Career development Disbanded easily

Weaknesses
Manager skill level high Competition for resources Employee recognition Management cooperation required

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Before starting this section
SAVE AS YOUR EXISTING MS PROJECT FILE AS <username>-part3-1
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Entering Resources-1

1.Click on “View”

2.Select “Resource Sheet”

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Entering Resources-2

1.Click on the Resource Name cell to enter the resource name.

2.There are two types of resources. One is labor, the other one is material. In this example project we just have workers as a resource.
103

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Entering Resources-3

1.Write the label of material here. In this project there is no material.
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2.Write the initials of workers.

3. Enter the number of units in this cell. 100% means that resource or department is used fully.50% means that half capacity of that resource is used.
104

Entering Resources-4

1.Standard Rate: Write the standard hourly wage rate of resources.

2.Overtime Rate: Write the hourly overtime rate. If a resource is used overtime, this rate is used to calculate the cost of overtime work.

3.Cost per use: A set fee for the use of a resource.(e.g. Travel cost, insurance) It is not related with the working hours.
105

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Entering Resources-5
This cell is used for accounting purposes. There are 3 types of entering the cost of resources.In this example we will use “Prorated”
Start: Cost at the beginning of the work.
Prorated: Cost accrues while activity progress. If 30% of the work is finished, 30% of the cost related with that work accrued. End:Cost is accrued at the end of the work.
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Entering Resources-6
Through “Base Calender” cell, you can assign different calendars to different resources. In this example, Standard calendar is used: 5 working-days in a week, 8 hours a day.
There are 2 more default base calendars which are 24 Hours and Night Shift. Other than these, you can create resources’ own calendars from “Tools”, “Change Working Time...”. In the appeared dialog box choose “New...” icon.
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Resource Information Dialog Box
1.Double-click on the resource name cell.

Resource Information box will appear
You can also enter resourse details using this dialog box instead of “Resource Sheet”. There are lots of details in this dialog box, Do Not Be Lost in these details.
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Assigning Resources to Tasks
1.Double click on an activity 2.From “Task Information” dialog box, click on “Resources” 3.Enter the resources which are needed for this activity.
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100% means that this resource, “A” in this case, is used at full capacity.
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Now Enter the Resources of Example Project which is given in the Excel file Projectinfo_2.xls

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Identify which resources are overloaded-1

1.Go to “View” menü

2.Click on “Resources Usage”
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Identify which resources are overloaded-2

The resources in red are overloaded on at least one day.

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Identify which resources are overloaded-3

By scrolling to the right, you can see when each resource is used, how much it is used and whether it is overloaded (indicated with red colour)
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Graphical Display of the Load Distribution of Each Resource Over Time-1

1.Go to “View” menu.

2.Select “Resource Graph”
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Graphical Display of the Load Distribution of Each Resource Over Time-2

By scrolling this cursor to the right, you can see other resources.
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By scrolling this cursor to the right, you can see resource load over time.
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Graphical Display of the Load Distribution of Each Resource Over Time-3

Red area indicates that this resource is overallocated at these times

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Resolve over-allocation problems-1

1.Go to “Tools”

2.Select “Resource Leveling”

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Ways of Leveling Resources
leveling levels resources instantaneously when you change a task or resource. If your project is large, automatic leveling might slow down your work in the schedule. Manual:Manual leveling allows you to control when Microsoft Project levels resources.
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Automatic: Automatic

Resolve over-allocation problems-2

1.Check “Manual”

2.Select “Week by Week”

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Time-Unit Used in Leveling
• Example:
– Resource A has a weekly capacity of 40 hours, and daily capacity of 8 hours. – His workload on Monday of his 1st week is 10 hours. – His workload for the entire 1st week is 38 hours. – Then, “week-by-week” leveling will not perform any leveling for resource A in week 1.
• “Day-by-day” leveling would change the schedule.

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Resolving Methods Available in MS Project
Level only within available slack: Select this check box if you want to prevent the finish date of your project from being delayed. In many projects, however, unless there is a lot of built-in slack, with this setting you might not see a significant change after leveling. Leveling can adjust individual assignments on a task: Select this check box to allow leveling to adjust when a resource works on a task independent of the other resources working on the same task. Leveling can create splits in remaining work: Select this check box if you want leveling to interrupt tasks by creating splits in the remaining work on tasks or assignments.
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Resolve over-allocation problems-3

1.Select “Standart” option

2.Check “Level only within available lack”

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Resolve over-allocation problems-4

2.Do not check others. 2.Click on “Level now”

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Save Your Results
SAVE AS YOUR RESULTS AS <username>-part3-2

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Seeing the Effects of Leveling in the Leveling Gantt Chart

1.Go to “View” 2.Select “More Views”

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Seeing the Effects of Leveling in the Leveling Gantt Chart

1.Select “Leveling Gantt”

2.Click on “Apply”

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Seeing the Effects of Leveling in the Leveling Gantt Chart

1. Effects of leveling seen as green lines
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Seeing the Effects of Leveling in Summary Report -1

1.Go to “Toolbar”

2.Select “Resource Leveling”

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Seeing the Effects of Leveling in Summary Report -2
1.Select “View” 2.Select “Reports”

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Seeing the Effects of Leveling in Summary Report -3
1.Select “Overview” 2.Enter “Select”

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Seeing the Effects of Leveling in Summary Report -4
1.Select “Project Summary”
2.Enter “Select”

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Seeing the Effects of Leveling in Summary Report –5
Duration of the project project did not change. This is because we selected “Level only within available slack” in the leveling dialog box.

There is still an overallocated resource
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Seeing the Effects of Leveling on The Critical Path-1
1.Click on “More Views...”

2.Select “Leveling Gantt” 3.Click on “Apply”
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Seeing the Effects of Leveling on The Critical Path-2

1.Firstly, Choose “Critical” from the menu
There is delay at one of the critical activities. This has not caused any delay in the project’s completion, because this critical activity was not a critical activity before leveling, it became critical due to delaying.
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Compare After-leveling and Pre-leveling Reports
Leveling only within available slack means that we are keeping the duration of the project constant. If we look at the both reports we can easily see that duration of the project in each case is the same.
What difference did leveling make? Leveling reduces the amount of overallocation. At the pre-leveling stage resourse B was overallocated for 13 days, after leveling resource B is overallacated for 8 days.

At the end with Leveling only within available slack did not solve overallocation problem due to limited slack time.
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Leveling Not Limited to Available Slack-1

1.Do not check “Level only within available slack”

2.Select “Level Now”

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Leveling Not Limited to Available Slack-2
 Get the project overview report... Duration of the project is increased

All overallacotion problem is solved.
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Comparison of These Two Leveling Methods
Leveling only within available slack time reduces the overallocation problem but not solve the whole overallocation problem. But on the other hand the project time is kept constant.
The other method solved the overallocation problem completely, but the project duration is prolonged.

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Save Your Results as <username>-part3-3

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Resource Management-1
1.Click on an empty area in the tool bar

2.Select “Resource Management”

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Resource Management-2

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Ways of reducing over-allocations: Delaying a task-1
• Delaying an assigned task until the resource has time to work on it is a simple way to resolve a resource over allocation.

• You can add delay to a task or assignment, check the effect on the resource's allocation, and then adjust the delay further if necessary. • If you want to add delay without changing the finish date of other tasks or the project finish date, review available slack and add delay only within that slack time.
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Ways of reducing over-allocations: Delaying a task-2

1.Double-click on the relationship between activities which you want a delay.

2.Set how many days will you delay.
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Ways of reducing over-allocations: Splitting a task-1

• In addition to reducing over-allocations, splitting a task is useful when you need to interrupt work on a task.
• For example, your project may include a task that requires materials that are ordered but that won't be received for two weeks.

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Ways of reducing over-allocations Spliting a task-2
2. Move pointer on the Gantt Chart view, and split the task which is needed to be interrupted

1.First Click on “Split Task” icon

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Resource Planning
• Resources affect the schedule, cost and performance of a project. • Resources are
– Individual people, departments/teams, machines/tools, material. – There could be many of these, how do we know which ones to plan for?

• Resource planning covers:
– Assigning resources to activities; – Understanding the effects of limited resources on the project schedule. – Seeing the contribution of resource costs to the overall cost.
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Resource Planning
• Almost always there are more project proposals than can be handled by the available resources. • Schedules created without taking resource limitations into account are bound to be wrong. • There is always a need to determine the impact of starting a new project on the availability of resources.

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Resource Planning
• A useful tool for assigning specific project responsibilities to personnel is the project responsibility matrix
Tasks Identify target customers Develop draft questionaire Pilot-test questionaire Finalize questionaire Print questionaire Prepare mailing labels Mail questionaires Receive & monitor returned questionaires Input response data Analyze results Prepare draft of report Prepare final report
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R.B. R R R

Project Team D.A. K.A. L.Q. S S S S R S S S S

E.R.

R R R R S S S S S

R R R S

S R

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Resource Planning
• In more complicated projects R.M. can have more detail.
– In addition to Responsible and Support, as above, there could be Consult, Notify, Approval.

• Thus, R.M.s outline, responsibility, authority and communication within the organization.

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Cost Planning
• Types of costs in a project:
– Direct costs: labor, materials, equipment, etc.
• chargeable to a work package. • Represent actual cash outflows that are paid as the project progresses. • These are costs of resources. The cost of an activity (work package) the sum of the costs of resources it uses.

– Project overhead costs
• Cannot be tied to any specific deliverable but serve the entire project. • Examples: project manager, consultants, training, travel.
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Scheduling Resources
• Time estimates for work packages (thus the entire project) is done by the implicit assumption that resources would be available.
B

A D

B C

D

A

C

A
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B

D
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Scheduling Resources
• The scheduling problem of the project can be formulated in two different ways:
– Minimize the duration of the project subject to resource constraints that can not be violated. (a resourceconstrained project model) – Minimize the resource use subject to an imposed duedate constraint. (a time-constrained project model)

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Scheduling Resources
• Some simplifying assumptions to tackle the resource scheduling problem.
– Activities can not be split (no preemption). – Level of resource used by an activity is given and cannot be changed.

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Scheduling Resources
• For a time-constrained project a common scheduling objective is resource leveling.
– Reducing peaks and valleys of resource requirement to obtain a more or less even resource use throughout the project. – The general approach
• Create an early-start schedule • Delay some activities to even out the resource use.

– Drawback: loss of flexibility due to reduction in slack.

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Scheduling Resources
• Consider the following example where there is only a single resource. Given resource requirement is per period. Project deadline is 12.
B(6,2) E(2,1)
A(2,2) C(4,2)

G(2,1) F(4,1) Legend: Act. (dur‟n, res. req)
155

D(2,1)
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Scheduling Resources
• Early-start schedule and resource profile
Act RES ES LF TS A B C D E F G 2 2 2 1 1 1 0 2 1 2 2 2 2 2 1 2 2 1 1 1 2
6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9 10 11 12

3

4

5

6

7

8

9

10

11

12

2 10 2 6

2 2

2 2

2

2

2 10 6 10 6 10 2

1 1 4 4 1 1 1 1 1 1 1 1

1 10 12 Total Resource Load

5

5

4

4

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Scheduling Resources
• Levelled resource schedule (any other alternative?)
– maximum resource requirement down to 4 from 5 (20% decrease) – resource utilization increased to 34/(12*4)=71% from 34/*12*5)=57%
Act RES ES LF TS A B C D E F G 2 2 2 1 1 1 0 2 1 2 2 2 2 2 1 2 1 1 1 2 2 3 3 4 4 4 1 1 4 1 3 1 1 3 1 1 1 2 2 2 2 2 2 2 3 4 5 6 7 8 9 10 11 12

2 10 2 6

2 10 6 10 6 10

1 10 12 Total Resource Load

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Scheduling Resources
• For the previous example, let‟s assume there are only 3 units of the resource available.
– To obtain a schedule for which maximum resource requirement is less than or equal to 3 for all time periods, we will have to accept a delayed project. – Resource-constrained project scheduling problem is a combinatorial problem. Hence, even medium-sized problems have too many feasible solutions. – Algorithms to find optimum schedules exist but are very technical and can solve problems with around 50 activities.
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Scheduling Resources
– A common approach for solving such complicated problems is to use heuristics (algorithms that generally give good solutions, but not necessarily the optimum). – One heuristic type for resource scheduling is “forward scheduling”.
• Define: an activity is startable if all its predecessors are complete. • Idea: Schedule startable activities as early as possible without resulting in a resource constraint violation. • Problem: If there is a set of startable activities which cannot all be started without violating the resource constraint, at least one of them must be delayed. Question: which one(s)?
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Scheduling Resources
• The answer to the above question is the use of priorities.

– Some scheduling priorities
• Minimum slack • Shortest duration • Lowest activity identification number

– If there is a tie in one priority, the next one is used to break the tie.

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Scheduling Resources
B(6,2)
A(2,2) C(4,2) D(2,1)

Startable tasks: A
E(2,1) F(4,1) G(2,1)

Act RES ES LF TS A B C D E F G 2 2 2 1 1 1 0 2

1

2

3

4

5

6

7

8

9

10

11

12

2 10 2 6

2 10 6 10 6 10

1 10 12 Total Resource Load Resource available

2
3

2
3 3 3 3 3 3 3 3 3 3
161

3

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Scheduling Resources
B(6,2)
A(2,2) C(4,2)

E(2,1) F(4,1) G(2,1)

Time = end of period 2 Startable tasks: B; C; D Slacks: (10 – 8) = 2; (6 – 6) = 0; (4 – 4) = 0
4 5 6 7 8 9 10 11 12

D(2,1) Act RES ES LF TS

1

2

3

A B C D E F G

2 2 2 1 1 1

0

2

2 10 2 6

2 10 6 10 6 10

1 10 12 Total Resource Load Resource available

3

2

2

3

3

3

3

3

3

3

3

3

3

3
162

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Scheduling Resources
B(6,2)
A(2,2) C(4,2) D(2,1)

E(2,1) F(4,1) G(2,1)

Time = Startable tasks: Slacks:
4 5 6 7 8 9 10 11 12

Act RES ES LF TS A B C D E F G 2 2 2 1 1 1 0 2

1

2

3

2 10 2 6

2 10 6 10 6 10

1 10 12 Total Resource Load Resource available
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2
3

2
3 3 3 3 3 3 3 3 3 3 3
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Scheduling Resources
B(6,2)
A(2,2) C(4,2) D(2,1)

E(2,1) F(4,1) G(2,1)

Time = Startable tasks: Slacks:
4 5 6 7 8 9 10 11 12

Act RES ES LF TS A B C D E F G 2 2 2 1 1 1 0 2

1

2

3

2 10 2 6

2 10 6 10 6 10

1 10 12 Total Resource Load Resource available

2

3

2

3

3

3

3

3

3

3

3

3

3

3
164

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Critical Chain Approach
• Eliyahu Goldratt‟s approach (the author of The Goal) • People have a tendency to overestimate the time required for an activity. They usually report 80 to 90th percentile to increase their chances of ontime completion. • Paradox: Then why are so many projects late?

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Critical Chain Approach
• Goldratt‟s claims the reasons to be:
– Work fills available time. – Organizational disincentives for reporting activities finished early. – Early finished activities may not lead to early start of successors because resources (people etc.) may not be available for an early start. – Excessive multi-tasking delays the completion of individual activities.
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Critical Chain Approach
• Goldratt‟s solution
– make sure people use the 50th percentile as activity time estimates. – Insert “time buffers” (or safety time) at parts of the schedule where there might be problems. – Three types of time buffers are recommended:
• Project time buffer: to deal with the delay of the activities on the critical path. • Merge time buffer: added where non-critical paths merge the critical path. • Resource time buffer: to account for the delay of an activity due to a scarce resource required not being available.
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Critical Chain Approach
Schedule A (with 50th percentile durations)

Schedule B (after inserting buffers to Schedule A)

resource buffer

merge buffer

project buffer

Schedule C (50th percentile durations inflated by approx. 30% to 40%)

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Defining Risk
• Risk is
– the undesirable events, their chances of occurring and their consequences.

• Some risk can be identified before the project starts, whereas some others cannot be imagined. • Risks can have negative effect on the main objectives of the project:
– cost, schedule and performance (quality)

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Risk Planning
• Risk Planning involves
– Identification of risks. – Analysis and assessment of risks. – Contingency planning.

• One advantage of risk planning:
– Helps project manager to take risks when there is a potential advantage.

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Risk Information
• For each risk the following information must be developed
– – – – – The event forming the risk. All outcomes of the event. The magnitude (severity) of the event‟s impact. Probability of the event occurring. The time(s) at which the event might occur.

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Risk Information
• Example:
– Activity „A‟ might take twice as long., – Outcomes: project delayed, cost increased, a critical resource will be overburdened for some time. – Magnitudes: delay could be anywhere between 5% to 10% of total planned project duration. Total project cost can go up by 4%. – Chances: 10% probability estimated.

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Managing Risk – Identification of Risks
• Identification of risks:
– The entire management team should be involved. – First focus on macro risks that might affect the entire project. Some useful questions:
• Are the core competencies of the firm adequate for the challenges of the project? • What is the degree of novelty in the project? • Which one is the biggest risk: cost, time or performance?

– After the macro risks, more specific risks can be identified using the WBS. – Risks can be classified based on their source
• External and internal risks
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Risk Analysis and Assessment
• Risk analysis attempts to quantify the severity of the impact of an identified risk event. • By doing risk analysis, you can select potential risk events that need attention because there is a high chance of occurrence and/or large impact. • Developing a “Risk Assessment Matrix” is a useful first step.

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Risk Analysis and Assessment
• Risk assessment matrix for “switching to a new email software.
D e te c ti o n R i sk e v e n t S y s t e m fre e z in g U s e r c o m p la in t H a rd w a re fa ilu re Ch a n ce - L M H Low H ig h Low S e v e r i ty - L M H H ig h M e d iu m H ig h d i ffi c u l ty - L M H H ig h M e d iu m H ig h W hen S t a rt u p P o s t -in s t a lla t io n In s t a lla t io n

• Assessments could either be subjective or quantitative.
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Semi-quantitative Scenario Analysis
• Obtain three estimates (the team members must be 90% confident that the three estimates will be accurate):
– Baseline duration: there is 50% chance of project being complete in this time. – Best-case duration: there is 10% chance of project being complete in this time. – Worst-case duration: there is 90% chance of project being complete in this time.

• Once the three estimates are made, it would be very useful to
– Graph the three schedules – Document time estimates, costs and assumptions
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Probabilistic Risk Analysis Techniques
• Decision trees to assess alternative courses of action, using expected value criterion.
– Covered in OPSM 632 Management Science

• Monte Carlo simulation
– Covered in OPSM 633 Business Simulation – Some applications:
• NPV calculations with statistical variations. • PERT simulation to identify project schedule risk.

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Sensitivity Analysis
• Sensitivity Analysis:
– Main idea: see the effect of changing values for project parameters on the outcomes. – For example:
• Effect of changing project durations on total project time. • Effect of changing certain cost categories (or variables that affect cost) on total project cost.

– Easily done by Monte Carlo simulation.

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Establishing Contingency Reserves
• Because plans seldom materialize as estimated, it is common practice to have a contingency funds.
– These should be agreed upon before the project starts.

• The amount typically depends on the uncertainty and risk of schedule and cost estimates.
– A low risk project might have a contingency reserve of 1 to 2% of the total cost. – This percentage might be up to 20% in high risk projects.
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Responding to Risk
• After a risk is identified and assessed there are four types of actions:
– Reduce risk:
• In software development parallel innovation processes are used in case one fails.

– Transfer risk
• Passing risk to another party (almost always results in paying a premium). • Examples:fixed price contracts; insurance.

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Responding to Risk
– Retain risk
• Some very large risks (e.g. earthquake) cannot be reduced or retained. The chances are quite lowç so you accept it. • Sometimes you accept the risk and place a budget reserve for it, in case it materializes. • Sometimes you just ignore the risk.

– Share risk
• Allocate portions of risk to different parties. • Example: Airbus R&D is done by several countries.

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Responding to Risk
• Contingency planning
– Without a contingency plan, a manager cannot react to a risk event quickly. This results in
• Panic • Crisis mismanagement • Acceptance of first solution suggested.

• Conditions for activating (or triggering) a contingency plan must be decided and documented.

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Responding to Risk
• Risk response matrix
Experiment with a prototype
A c c e p t, r e d u c e , R i sk e v e n t sh a r e , tr a n sfe r C o n ti n g e n c y p la n R e in s t a ll O S In c re a s e s t a ff s u p p o rt H a rd w a re fa ilu re Tra n s fe r O rd e r d iffe re n t b ra n d T rig g e r F ro z e n fo r 1 h r C a ll fro m t o p m anagem ent R e p la c e m e n t d o e s n 't w o rk

S y s t e m fre e z in g R e d u c e U s e r c o m p la in t Reduc e

Use a supplier with a warranty
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Managing Risk – Schedule Risks
• Use of slack
– Recall that total slack is shared by multiple activities. – A manager should not use the slack available for his activity irresponsibly. It may be needed by activities later on the path. – Managing slack can reduce schedule risks!
• Incentive systems to report early completion of activities?

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Managing Risk – Schedule Risks
• Problem with imposed deadlines
– Since imposed by upper management, typically too tight for the normal activity durations. – Results in increased cost, higher probability of being late. – Fundamental question: Are these deadlines due to poor planning or are they really necessary?

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Managing Risk – Schedule Risks
• Compressed project schedule
– Increases the number of critical paths. – The more the number of critical (or near critical) paths, the higher the chance of a late project.
• Much harder to manager and control a large number of critical activities.

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Managing Risk – Cost Risks
• Most cost risks are due to errors in schedule and technical estimates. • Other issues: exchange rate and inflation risks. • An objective of minimizing net present value of costs would make a late-start schedule more attractive.
– This would reduce slacks and increase schedule risks.

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Example: Cost Risk Analysis
• File: CostEstimating.xls

• Using Excel‟s • Data-Subtotal functionality, which creates an outline automatically. • @RISK for performing simulation.
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Example: Cost Risk Analysis
• Some questions:
– Will the contingency funds be enough? – What is the expected cost of the project?
Minimum $69,361,820.00 Maximum $82,174,300.00
Mean $74,655,740.00 Std Dev $2,570,983.00

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Example: Cost Risk Analysis
• To which cost component is the total project cost most sensitive?
– In other words, how much of the variance in total project cost is due to variance of cost components.
Regression Sensitivity for PROJECT TOTAL/L40
CONSTRUCTION/L26 ENGINEERING/L12 OTHER PROJECT COST/L31 PROJECT MANAGEMENT/L5 SAFETY & ENVIRONMENTAL/L38 CENRTC/L17 ,119 ,083 ,083 ,04 ,243 ,96

@RISK Student Version

-1

-0,75

-0,5

-0,25

0

0,25

0,5

0,75

1

Std b Coefficients

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Example: Schedule Risk Analysis
• Filename: CriticalPath.xls • We will determine the probability distribution for the project duration and probability of each activity being on the critical path for the following project network.

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Example: Schedule Risk Analysis

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Example: Schedule Risk Analysis

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Example: Schedule Risk Analysis
CriticalActs (N5 to N24)
1,00

0,75

0,50

@RISK Student Version
For Academic Use Only

0,25

Cell:

0,00 N5

N6

N7

N8

N9 N10 N11 N12 N13 N14 N15 N16 N17 N18 N19 N20 N21 N22 N23 N24 = Mean,+1/-1SD = +95%,-5%

The yellow line gives the estimated probability of each activity being on the critical path.
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OPSM 639 Project Management
Introduction to Microsoft Project - Part 2: Developing a Network Plan

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Developing a Network Plan
• Steps
1. 2. 3. 4. 5. 6. 7. Network Diagram view (AoN network). Customizing Network Diagram view. Identifying critical path(s). Overview Report. Current Activities Report. Printing a Gantt chart. Creating a Milestone.

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Developing an Activity-On-Node (AoN) Project Network
Select “Network Diagram”

These make up the summary task. You can hide them by clicking on the minus sign.
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Customizing Network Diagram
You may want to see different information on the nodes.

Right-click on the background, then select “Box Styles”

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Customizing Network Diagram
Click “More Templates...”

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Customizing Network Diagram
Select “New...””

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Customizing Network Diagram
1.Give a name to your template
Info: You may folllow the changes in your template
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2.You may change the cell layout (# rows & # columns) by clicking this icon.
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Customizing Network Diagram
1.Select the activity Property such as “Late finish”

2.Check Show label in cell.

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Identifying the Critical Path
Critical path indicated by RED boxes To see the details, move the pointer on to boxes

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Viewing Only the Critical Path
Select Critical

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Getting an Overview Report

1.Select “View”

2.Select “Reports”

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Getting an Overview Report
2.Enter “Select”

1.Select “Overview”

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Getting an Overview Report
1.Select “Project Summary”

2.Enter “Select”

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Getting an Overview Report
Project Summary Report

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Print out ES-LS-EF-LF-Slack Times
1.From “View” menu Select “Reports”

2.Select 3. Select Current Activities

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Print out ES-LS-EF-LF-Slack Times
1.Select “Unstarted Tasks”

2.Edit...

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Print out ES-LS-EF-LF-Slack Times
1.From Table option, select “Schedule”

2. “OK”

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Print out ES-LS-EF-LF-Slack Times
1. Choose “Unstarted Tasks” 2. “Select”

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Print out ES-LS-EF-LF-Slack Times
Report with ES,LS,EF,LF and Slack

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Print out a Gantt Chart
Or alternatively, 1.Go to View , then 2. Select Gantt Chart 1.Click on “Gantt Chart”

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Print Out a Gantt Chart: Obtaining A Printable Timescale
1.Right click mouse, when your pointer is on the timescale 2.Select “Timescale”

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Print Out a Gantt Chart: Obtaining A Printable Timescale
1.Click on “Major Scale”

2.Select “Months”

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Print Out a Gantt Chart: Obtaining A Printable Timescale
1.Click on “Minor Scale”

2.Select “Days”

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Print Out a Gantt Chart: Obtaining A Printable Timescale
1.Arrange the Size of timescale by increasing or decreasing this number.

You can follow the changes in the timescale by observing this area.
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2.Click OK.
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Print Out a Gantt Chart
1.Select “Print Preview”

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Print out a Gantt Chart - 7
Click on “Page Setup...” to set the printoutput styles

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Creating a Milestone

1.Right-click on the activity where you want to put a milestone.

2.Click on the “New Task”

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Creating a Milestone

1.Double-click on this new activity

2.Select Advanced.
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Creating a Milestone
1.Give a name to your milestone

2. Give zero duration.

3. Check Mark task as milestone.
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Creating a Milestone
1.Click on Predecessors.

2.Choose necessary activities to link your milestone to the network

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Creating a Milestone

NOTE: Pay attention to Predecessors column. When you add any new task these numbers are changed automatically; therefore you do not need to change predecessors of each activity.

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Creating a Milestone

1.Select “Network View”. Milestone 1 is in the network. Note that its shape is different from regular activities.
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Do NOT forget

to save your file as
<username>-PART2.
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Network Planning
• Purposes of network planning
– – – – – Determine the intended timing of activities Determine the estimates of resource requirements Develop of comprehensible “picture” of the project. Take a proactive approach in order to prevent errors Minimize the effects of uncertainties on the project‟s success factors.

• Note that timing and resources interact.

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Network Planning
• The fundamental element of time planning is developing a project network. • The network depicts the tasks and the logical precedence structure between these activities.

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Time Planning
Types of precedence relations between activities:
A B
A

Finish - Start: One task cannot start until the other has finished.

Start - Start: Unless one of the tasks has started the other cannot start.
B

A B
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Start- Start with time lag: A certain time has to pass after one task has started until the other starts.
230

Time Planning
• Let‟s assume the following represent finish-start precedence relation:
Task A B C D E F Immediate predecessors A B, D D E

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Time Planning
• The following is called an activity-on-node network diagram (or PERT diagram)
A Start D E F B C Finish

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Time Planning
Bar (Gantt) chart: A A, 3

B C
D

B, 5

C, 3 D, 2
E, 2

E F

F, 5
11

Time
233

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Developing Project Network
• Developing a network takes time (thus costs money). Is it worth it?
– Provides a graphic display of the flow and sequence of work that is easy to understand. – Provides the basis for scheduling and resource planning. – Yields a realistic estimate for total project time. – Easy to update when unexpected events occur. – Helps identify critical activities (whose delay will most probably delay the entire project).
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Developing Project Network
Level 1 - Milestone Plan
A B C D E
M1 M2 M3 M4

Level 2 - Plans

Time

Level 4
WP1 WP2 WP3 WP4
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Level 3 - Plans

235

Developing Project Network
• Integrating WBS and the network is crucial. • The hierarchical nature of WBS allows different levels of managers to “visualize” the project plan at different levels of detail.
– The milestone plan, in the form of a bar chart, shows the level of detail useful for top management, showing only the major deliverables. – Work-packages are used to develop a detailed network for the first-line managers.
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Developing Project Network
• Not only time, but also cost and resource plans can be “rolled up” from the work-package level to the top level.
– Deliverables and sub-deliverable in WBS must be designed so that after roll-up managers at different levels can obtain plans/reports that can be useful for them.

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Developing Project Network
• Network terminology
– Activity: Element of a project that takes time. Usually one or more work packages. – Merge activity: Activity with more than one immediate predecessor activity. – Burst activity: Activity with more than one immediate successor activity. – Parallel activities: Activities that can take place simultaneously. – Path: A sequence of connected activities. – Critical path: Longest path(s) through the network – Event: Represents a point in time.
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Developing Project Network
1
0

3

5 7 8

9 11 10
•Loops (cycles) are not allowed.
•Conditional statement (e.g. if this happens then …) are not allowed. •If there are multiple start or finish activities, a common start or finish node is used.
239

2
Rules:

4

6

•draw networks from left to right •Each activity has a unique identification number •An activity‟s identification nbr should be larger than the activities‟ preceding it.
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Developing Project Network
• Laddering
– Consider a pipe laying project. Three basic activities:
• dig a trench, lay the pipe, refill the trench

– Let‟s say the pipeline is 5 km long: You cannot dig the entire trench before laying the pipe.
Trench Lay pipe Refill

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Developing Project Network
– Instead:break activities into segments and “ladder” them Trench 1/3 Trench 1/3 Trench 1/3

Lay pipe 1/3

Lay pipe 1/3
Refill 1/3

Lay pipe 1/3
Refill 1/3 Refill 1/3
241

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Developing Project Network
• Calculating the earliest and latest times (numbers in the nodes represent activity durations):

A,3 Start D,2

B,5

C,3 Finish

E,2

F,5

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Developing Project Network
A
Start

B

C Finish

Total slack (float) for an activity = LS - ES (or LF - EF)

D

E

F Free slack: Amount an activity can be delayed without delaying early-start (ES) of activities following it.
11 Time
243

A, 3

B, 5

C, 3

D, 2 E, 2

F, 5

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Using Time Lags
• A lag is the minimum amount of time a dependent activity must be delayed to begin or end. • Uses for start-to-start time lags
– Instead of using laddering. – Concurrent engineering practice that compresses the total product development time.

• Uses for finish-to-start time lags
– Modelling ordering of parts: 1 day takes to place to order, 14 days to receive it.

• Uses for finish-to-finish time lags
– Painting multiple layers.
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Using Time Lags
• It is possible to have multiple time-lags attached to a pair of activities.
– Usually an start-to-start and finish-to-finish

• Network calculations with time lags
– forward and backward pass procedures are the same as the ones for finish-to-start case with no time lags.
• Difference is in checking the time lag relationships‟ effects on the activities‟ times.

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Forward Pass with Time Lags
Would be 0 with no lag.

Lag 10
2 5 5 10 2 ?

Would be 5 with no lag.

A,3
0

B,5

C,3
Finish

Start

Lag 2
0 2 2 4 4 10

D,2

E,2

F,5
Would be 9 with no lag.

Lag 6
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Backward Pass with Time Lags
Lag 10
2 5 5 5 10 2 ?

A,3
0
2 5

B,5
10 12
Would be ? with no lag.

C,3
15

Start
?

Lag 2
0 2 2 4

Finish
10
15

4

D,2
? 7 7

E,2
9 10
Would be ? with no lag.

F,5
15

Lag 6
247

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Estimating Activity Times
• Guidelines
– Responsibility:
• at the work-package level estimates should be made by person(s) most familiar with the task. • Those responsible for getting the job done on schedule should determine the estimated times.
– They will have less bias due to imposed deadlines. – Their judgement will be based on experience. – They will do their best to materialize their estimates.

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Estimating Activity Times
– Normal conditions:
• Estimates should be based on normal conditions, efficient methods and a normal level of resources. • A consensus is required in the organization as to what “normal conditions” mean.

– Time Units:
• All task time estimates need consistent time units. • In practice “workday” is the most frequent choice. Other alternatives:
– calendar days, workweeks, minutes, shifts
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Estimating Activity Times
– Independence:
• Estimators should treat the task as independent of other tasks in the WBS. • Top managers tend to aggregate many tasks into one estimate and “deduce” the durations of individual tasks from this aggregate. It is better to obtain estimates from first-line managers who consider tasks independently. • If tasks are in a chain, opportunity should not be given to modification of estimates so that total chain time meets an arbitrary schedule (imposed).
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Estimating Activity Times
– Contingencies
• Work package estimates should not include allowances for contingencies.

– Estimate errors
• The project management culture should allow estimate mistakes and errors to occur.
– Punishment leads to future estimates being inflated. – Trust in the project management culture will results in more realistic estimates.

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OPSM 639 Project Management
Introduction to Microsoft Project - Part 1: Creating the Work Breakdown Structure and Entering Activity Information

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A Simple Project

project 1 2.1
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2 2.2

3 2.3

4

5

6

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Defining A Project in MS Project
• 1. 2. 3. Steps Create a new project file. Define WBS code structure. Entering activity information.

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Create an MS Project File
1.Click on White Document Icon 2. Fill in the Project Information and click OK. You can access Project Information later from the Project menu.

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Getting Specific Help
1.Click on question mark icon

2. Move the cursor onto the Option and click.

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Defining WBS Code Structure
1.Click on Project 2.Select WBS, then Define Code...

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Defining WBS Code Structure
Level of WBS depends on complexity of the project. In this project there are 2 levels.

Code Structure, changes made below settings can be followed by this preview.

• Generally, for complex projects with many levels, letters are used for upper levels of the WBS hierarchy. • It is very important that you set the WBS structure correctly in the beginning : • Once you set the it, it it would be difficult to change it. • Clearly defined WBS means that the project is already solved in the mind.
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Defining WBS Code Structure
Length of the codes can be set here. Click on Length, the box below will be opened. Select 1, since there are not too many activities in this WBS.

Click on Separator. Select “.”

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Entering Activity Information
To add activity double click on the any field (e.g. Task Name). … or you can right-click on any field and select Task Information.
… or if you right-click on the row header you get access to a wider set of actions..

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Entering Activity Information
1.Task Name

2.Duration

3.WBS Code
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Entering Activity Information
2. Enter Predecessors 1.Click Predecessors

Now enter work packages (not the summary tasks) which are given to you in the Excel file.
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Displaying WBS Code
Select the column header where you want the new WBS column. Right-click and select Insert Column. Choose WBS as the Field name of the new column.

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Displaying WBS Codes
These codes can be automatically (re)generated using the WBS code structure you have defined earlier.

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Defining Summary Tasks
First insert a task right above the tasks that will make up the summary task, by right-clicking on the row header.

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Defining Summary Tasks
Note how initially a WBS code of 9 is automatically assigned. This will change when Indent operation is complete.

Select the tasks that will make up the summary task, right-click and select Indent.
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Defining Summary Tasks
After the Indent operation is complete, and WBC codes are renumbered as described in slide 13, we obtain the structure displayed below.

You can hide a summary task by clicking on the minus sign.
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Summary task duration is calculated automatically.
267

Do NOT forget

to save your file as
<username>-PART1.

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Overview Planning Models
• Project planning determines what happens, when and how they happen. • Since planning takes time and consumes resources, first an overview plan is developed.
– If this overview plan shows that basic performance criteria (feasibility, cost, quality, etc.) can be met, then detailed plans are developed. – Complexity of the project also influences amount of detail in planning.
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Overview Planning Models
• The main output of the overview modeling process is the definition of the project. • The most important element of this definition is a structured list of fundamental activities of the project. These fundamental activities must be,
– comprehensible – manageable (typically can be handled by one person or department)

• This structure of activities is called the Work Breakdown Structure.
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Defining the Project
• Steps of defining the project 1) Defining the scope 2) Establishing project priorities 3) Creating the work breakdown structure (WBS) 4) Integrating WBS with the organization 5) Coding the WBS for the information system

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Defining the Scope
1) Definining the scope • Primary purpose: define clearly the deliverable(s) for the end user and to focus project plans. • This step is frequently overlooked. • Poorly defined scope is the most frequently mentioned cause for project failure. • Project scope would be published as a document and customers and project participants would measure success relative to it.
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Defining the Scope
• Project scope checklist
– project objectives:
• must include time and cost objectives

– deliverables
• expected outputs over the life of the project

– milestones
• a significant event in the project that serves as a natural and important control point.

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Defining the Scope
– technical requirements
• of the product/service that will be developed in the project

– limits and exclusions
• for each objective and deliverable must clarify its limits • set up a “what is/what is not” list.

– reviews with customer
• with both internal and external customers, go through the project scope checklist.

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Establishing Project Priorities
2) Establishing project priorities • One of the primary jobs of a project manager is to manage trade-offs among time, cost and performance.
•Can reduce time by increasing costs
•Can reduce performance by reducing costs Performance

Quality Cost Time
275

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Establishing Project Priorities
• Performance ~ Quality
– A generic definition of quality: “Meeting and exceeding the expectations of customers.”
• Must understand customer‟s expectations. • Must translate them to technical attributes of the project.

– Customer‟s expectations and requirements might change during the life-cycle of the project. – The ability of the project system to handle such changes is referred to as flexibility.
• In many cases, flexibility is an objective defined at the outset. • For example: development of MS Internet Explorer
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Designing a Project for Flexibility
Objectives

Integration

Source: Iansiti and MacCormack, “Developing products on internet time”, Harvard Business Review, Sept-Oct 1997.
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Establishing Project Priorities
• For each of these criterion there are three potential actions/reactions through the life of the project:
– Constrain: The original parameter is fixed. – Enhance: Which criterion should be tried to be optimized if there is an opportunity to do so. – Accept: For which criterion is it tolerable not to meet the original parameter.
Time Constrain Enhance Accept
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Performance Cost

The Work Breakdown Structure
3) Creating the work breakdown structure (WBS) • Once the scope and deliverables have been defined, one can subdivide the project work in a hierarchical process. • Having WBS ensures that project managers have identified all products and work-elements of the project. • Without WBS it would be impossible to plan, schedule and budget the project.
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The Work Breakdown Structure
1. House 1.3 Interior Design 1.2.1 Piping WP-P1 WP-P2 WP-P3
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1.2 Heating System 1.2.2 Furnace WP-F1 WP-F2

1.1 Building/ Structure 1.2.3 Fuel Tank WP-FT1 WP-FT2 WP-FT3

1.4 Garden/ Parking 1.2.4 Solar Panels WP-SP1 WP-SP4 WP-SP2 WP-SP5 WP-SP3
280

The Work Breakdown Structure
• Hierarchical breakdown of WBS
Level 1 2 3 4 Hierarchical Breakdown Project Deliverable Subdeliverable Lowest subdeliverable Description Complete Project Major deliverables Supporting deliverables Lowest management responsibility level Grouping of work packages for monitoring progress and responsibility Identifiable work activities
281

5

Cost Account

6
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Work Package

The Work Breakdown Structure
• Work packages
– – – – – have short duration have definite start and stop points consume resources represent cost are as independent from other work packages as possible

• For each work package a single person must be responsible.
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The Work Breakdown Structure
• Practical guidelines:
– Workpackage duration should not exceed 10 days – Check points should be setup every 3 days to identify progress and problems.

• Difference between the last subdeliverable and work package
– Subdeliverable includes outcomes of more than one work package, from perhaps two or more departments. – Subdeliverable does not have a duration of its own, and does not consume resources or cost money directly.
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The Work Breakdown Structure
• Thus, work package is the basic unit used for planning, scheduling and control. • The higher elements are used to identify deliverables at different phases in the project and to develop status reports during the execution of the project.

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The Work Breakdown Structure
• Lowest level subdeliverable is small enough to be manageable and where one person can be responsible. • Lowest subdeliverable contains several work packages. These workpackages are grouped by type of work. These groupings are called cost accounts.
– Budgeted and actual costs could be summed up so that performance can be measured.
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The Work Breakdown Structure
Lowest Manageable subdeliverables 1.2.1 Piping 1.2.1.1 Cost Account 1.2.2.1 Cost Account 1.2.2.2 Cost Account 1.2.4.2. Cost Account Work Packages WP 1.2.4.2.1 WP 1.2.4.2.2 WP 1.2.4.2.3
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1.2.2 Furnace

1.2.3 Fuel Tank

1.2.4 Solar P.

Department A Department B Department C Department D

1.2.3.1 1.2.4.1 Cost Account Cost Account

The Work Breakdown Structure
• Cost accounts are the intersection of Organizational Breakdown Structure (OBS) and WBS. • Determining a cost estimate for each workpackage. These costs can then be used to calculate
– total estimated cost for a cost account – total estimated cost for a subdeliverable (then for deliverables, and then for the entire project) – total estimated cost for organizational units.
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The Work Breakdown Structure
• What are the pros and cons of having a too long work package?

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The Work Breakdown Structure
• It is important to get the level of detail in WBS to match the management needs (at different levels). • The level of detail depends on
– complexity of the project – the need for control – the project size, cost and duration.

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Objectives in Project Selection
• Value maximization • Balance • Strategic direction/fit

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Prioritizing and Selecting Projects
• If there is a lack of consensus and understanding of organizational strategy among top and middlelevel managers
– Some projects would not contribute to the main objectives and strategies of the firm. – Many projects would not be complete on time or within budget.

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Strategy and Project Management
Internal environment: strengths & weaknesses Review/ revise mission
New goals & objectives Portfolio of strategic choices

III
Strategy formulation

External environment: opportunities & threats

Strategy implementation

IV
II
Projects
292

I
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Prioritizing and Selecting Projects
• Power politics in an organization can have a significant influence on whether a project receives funding and high priority. • Political behaviour is more likely to occur when:
– Decision-making procedures are uncertain. – Performance measures are uncertain. – Competition among people for scarce resources is high.

• So, politics might have a role in project selection.
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Prioritizing and Selecting Projects
• A project sponsor is typically a high-ranking manager who endorses and lends political support for the completion of a specific project. • A typical result of a survey of projects in process and proposed projects accepted:
1) Repetitive operations that are not projects (e.g. quarterly financial reports) ………………………………………………... …. 90 2) Projects less than $40,000 or less than 500 labor hours. …..50 3) “real” projects …………………………………………25 Total …….165

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Prioritizing and Selecting Projects
• There are potentially a large variety of models for prioritizing and selecting projects. • In the past these were exclusively financial models, but now multi-objective models are widely used as well.
– Some factors /objectives
• • • • new technology core competencies public image improving customer loyalty
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Prioritizing and Selecting Projects
– Some financial models:
• IRR (internal rate of return) model • The net present value model • Real options approach.

• A project priority team (or project office) selects and prioritizes projects.
– Priority must be published and the process must be open and free of power politics.
• A intranet web site could publish priority, current status and issues relating to projects.
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Prioritizing and Selecting Projects
• A very important question with no universal answer:
– How many projects can an organization undertake at any one time?

• From queuing theory we know that if we push for more utilization the waiting time in queues increases exponentially!

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Prioritizing and Selecting Projects
Project proposal idea Data collection

Project Screening Process
Hold for resources
Assign priority Assign resources Assign project manager Evaluate progress
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Abandon

Self-evaluation of project

Periodic reassessment of priorities

Priority team evaluates proposal & reviews portfolio for risk balance Reject

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Prioritizing and Selecting Projects
Mortality of New Product Development Project: (Vonderembose & White p. 175) Vertical axis:Nbr of projects 60 Horizontal axis :Time a: preliminary evaluation b: design & economic analysis c: development & test d: final planning e: production f: survival in the market g: success
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0a b c d
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e

f

g

Funnels not Tunnels
• Companies use a “gate” system, where projects are allowed to pass, delayed, revised or killed. • In many companies, people tend not to kill projects, although they are going nowhere!

projects

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Prioritizing and Selecting Projects
• A key concern of the priority team is the risk associated with the portfolio of projects. • A project might be rejected just because the current project portfolio has too many projects with the same characteristics, such as
– – – – risk level use of key resources non-revenue producing long duration
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Prioritizing and Selecting Projects
• Use of project scoring matrix:
Stay within core competencies Achieve sixsigma quality ROI >= 15% Stategic fit Improve Customer Loyalty Weighted score
50 64 83 71 70
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Criteria Weight Project 1 Project 2 Project 3 Project 4 Project n

2 1 8 0 4 2

3 2 3 9 5 1

2 7 3 4 6 3

2 4 9 5 6 8

3 2 1 10 6 9

Urgency

2 7 6 4 3 7

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A Project Prioritizing Example
• Determining weights of objectives
Analyze objective independently in three dimensions
1. Seriousness - What is the current impact of 0 the results of the objective on the organization? Small impact 10 Large impact

2. Urgency - Time factor. What will be the relative0 consequences of not taking action over the next 12Can defer months? 3. Future seriousness - What is the chance of the 0 Decrease or objectives seriousness changing over time? remain same

10 Must take action 10 Dramatically increase

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A Project Prioritizing Example
Seriousness Urgency
Improve external customer service 10% decrease in production costs All activities meet current legal, safety, and environmental standards Create $5 million in neew sales Provide immediate response to field problems Develop/document policies, systems, procedures 5 7 4 6

Future Seriousness
6 4 15 17 M UST

8 10 7

4 10 10

6 10 6

18 30 23

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Must objectives All activities meet current legal, safety, and environmental standards All new products will have a complete market analysis

Must meet if impacts Yes-Meets objective No-Does not meet ofj N/A-No impact Yes-Meets objective No-Does not meet ofj N/A-No impact

…26 n/a

27

28

29

yes

Want objectives Provides immediate response to field problems 30 Create $5 million in new slaes by 199x 15 Improve external customer service

Relative importance 1-100 99

Single project impact definitions 0 < Does not address 1 = Opportunity to fix 2 > Urgent problem 0 < $100,000 1 = $500,000 2 > $500,000 0 < Minor impact 1 = Significant impact 2 > Major impact

Weighted Weighted Weighted Weighted score score score score

99

88

0

83
18

166

Total weighted score Priority

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Date _______

Project Proposal

Number _______

Project Title ______________________________________________________ Responsible Manager ________________Project Manager _______________ • _______• General Support • _______• _____________ • _______• _____________ YES • • NO YES • • NO YES • • NO • Quality • Legal • Cost reduction • Replacement • ___________ • __________ • New product • Capacity • __________

The project will take more than 500 labor hours? The project is a one-time effort? (will not occur on a regular basis) The project proposal was reviewed by the product manager? Problem definition

Describe the problem/opportunity.

Goal definition
Describe the project goal.

Objective definition
Performance: Quantify the savings/benefits you expect from the project.

Cost: Labor hours, materials, methods, equipment?
Schedule: Overall duration in months

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What are the three major risks for this project?

1.
2. 3. Risk 1 above Risk 2 above Risk 3 above Risk 1 above Risk 2 above Risk 3 above

What is the probability of the above risks occurring?

0 none

to

1.0 high

What is the impact on project success if these risks do occur?

0 none

to

1.0 high

Resources available? ____________ Yes _______________ No Current project status Start date ____________ Estimated finish date __________________ Status: Active On-hold

Update:

Priority team action:

Accepted

Returned Duplicate to: ____________

Discovery--project not defined

Operational--proposal not a project
Need more information--to prioritize project

Project #
Completed project

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Managing New Product Development Project Portfolios
• Idea similar to business portfolio planning. • It is about
– Resource allocation
• Which project will get funding?

– Corporate strategy
• Future products/markets depend on current projects

– Balance
• Risk vs return, maintenance vs growth, short-term vs longterm.

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Balanced Portfolio
• Most common tool:
– Risk-reward bubble diagram – One axis: a measure of reward
• Qualitative or quantitative

– The other axis: a measure of risk
• E.g. Probability of success (technical and/or commercial).

– Size of the bubble: annual resources spent on each project
• E.g. Dollars, person-hours etc.

– Shading: product line – Color: timing (hot red: imminent launch; dark blue: an early-stage project)
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Risk-Reward Bubble Diagram
Prob. Tech. success

Pearls

high

Bread and butter

NPV
high low

Oysters
low OPSM 639, C. Akkan

White elephants
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Risk-Reward Bubble Diagram
• Pearls: Potential star products • Oysters: Long-shot projects; technical breakthroughs will give solid payoffs. • Bread and Butter: small, “no-brainer” project • White Elephants: difficult to kill

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Risk-Reward Bubble Diagram
• In the previous example, the business risk is accounted for by using risk-adjusted discount rates in calculating NPV. • What if reward is just evaluated qualitatively as excellent, modest, low etc?

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Risk-Reward Bubble Diagram
• 3M uses a variation of the diagram where ellipses are used instead of circles:
– Each project as low, likely and high estimates are given for NPV and technical success probability. P(success)

NPV
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Other Portfolio Balancing Approaches
• P&G uses Monte Carlo simulation and a three dimensional model where the axes are
– NPV – Time-to-launch – Probability of success

• Simulation gives a distribution of NPVs, showing projects as spheres in this three dimensional graph.

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