Project management a managerial approach 8th edition meredith solutions manual

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition Chapter Overview Overview – This chapter introduces the process of project planning, which involves identifying the specific goals of the project and breaking them down into achievable tasks. The concepts of Work Breakdown Structure (WBS) and Linear Responsibility Chart (LRC) are also introduced.

1) Initial Project Coordination and the Project Charter – The project launch meeting is an excellent way to begin the planning process. At this meeting the team is gathered for the first time to allow them to develop a general idea about the requirements of the project. The intent is not to present fully developed plans and schedules but rather to present the project in general, so that the team members can develop detailed plans and schedules for themselves and present them at subsequent meetings. After the planning process is complete it is useful to have a postplanning review chaired by an experienced project manager not involved with this project previously. a). Outside Clients – When the project involves an outside client, the planning process must include the complete definition of the deliverables that will be provided. This can be accomplished efficiently by involving the design and marketing teams early in the planning process. The intent is to prevent later surprises. E.g: The previously ignored manufacturing group announces that they can’t build the design that has taken 10 months so far to be developed. b). Project Charter Elements – Project plans and their development vary from organization to organization, but they should all have the following elements: i) Purpose – A short summary of objectives and project scope. ii) Objectives – A more detailed statement of the general goals of the project.

This statement should include profit and competitive aims from the Business Case as well as technical goals based on the Statement of Work (SOW). iii) Overview – A description of both the managerial and the technical approaches to the work. iv) Schedules – This section outlines the various schedules and lists all milestone events and/or phase-gates. v) Resources – This element contains the budgets by task as well as the cost control and monitoring plans. vi) Personnel – This element contains a time phased plan for the people (or at least the skills) required for the project. vii) Risk Management Plans – This covers potential problems as well as potential lucky breaks that could affect the project. viii) Evaluation Methods – This section describes the methods used to monitor, evaluate, and collect the history of the project.

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition c). Project Planning in Action – Plans can be constructed by listing the sequence of activities necessary to complete the project. The nine segments of the project are: i) Concept evaluation ii) Requirements identification iii) Design iv) Implementation v) Test vi) Integration vii) Validation viii)

Customer test and evaluation

ix) Operations and maintenance 2) Starting the Project Plan a) The WBS – The work breakdown structure (WBS) is a tool used to capture the decomposition of activities and the assignment of personnel. The WBS is not one thing. It can take a wide variety of forms that, in turn, serve a wide variety of purposes. The text suggests the following steps for WBS development: i) Break the tasks down into sufficient detail so that they can be individually planned, budgeted, scheduled, monitored, and controlled. The tasks at the bottom of the structure are typically called work packages. ii) Identify the relevant supporting information needed for each work package and the people who will work them. iii) The work packages must be reviewed with the people involved to ensure their accuracy and adequacy in describing the tasks to be accomplished. iv) The WBS can be used to capture the direct costs estimated or budgeted for each task. v) The summary of the schedule information associated with each work package can be summarized into a project master schedule.

Both the planned schedule and budget for each work package can be used as the baseline to measure performance as the project is executed.

3) Human Resources: The RACI Matrix and Agile Projects Identifying and securing the right employees for project work is one of the most important PM tasks. One way to identify the HR needs is to create an Organizational Breakdown Structure (OBS). It shows the organizational units that are responsible for the various work elements of the project. By creating RACI matrixes and utilizing agile project methods, better management of human resources can be attained.

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition a) The Responsibility (RACI) Matrix – An approach to identify the human resources needed for the project is to use the RACI (Responsible, Accountable, Consult, Inform) matrix. The matrix shows critical interfaces between units that may require special managerial coordination. With it, the PM can keep track of who must approve what, who must be notified, and other such relationships. The RACI matrix displays the WBS items in the left-most column of a table. The individuals, groups, or units involved in the project are displayed in the top row. The project manager then uses the matrix to identify who is Responsible, who is Accountable, who should be Consulted, and who should be Informed. b) Agile Project Planning and Management – Traditional methods are insufficient, if an organization finds it difficult to define the project adequately in the shortest possible time. In situations like these agile project management (APM) may be effective. APM requires close and continual contact between the project team and the clients. Project requirements are a result of client/developer interaction, and the requirements change as the interaction leads to a better understanding on both sides of the project requirements, priorities, and limitations.

4) Interface Coordination Through Integration Management – Interface coordination is the task of coordinating work across multiple groups. Multidisciplinary teams (MTs) are often used to facilitate the coordination of technical issues. Techniques are available to assist this process by mapping the interdependencies between team members. a) Managing Projects by Phases and Phase-Gates – One way to facilitate interdisciplinary cooperation is to break the project into phases and require the team to have specific deliverables at each phase. Then an oversight process can evaluate the deliverables and decide whether the project is ready to pass onto the next phase.

This technique is applied in addition to the normal cost and schedule control techniques associated with projects.

5) Project Risk Management – This is the PMBOK knowledge area number 8. It defines risk management as the systematic process for identifying, analyzing, and responding to project risk. Seven processes exist: a). Risk Management Planning b). Risk Identification c). Qualitative Risk Analysis d). Quantitative Risk Analysis i) Failure Mode and Effect Analysis ii) Decision Tree Analysis iii) Monte Carlo Simulation iv) Dealing with Project Disasters e). Risk Response Planning

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition f). Risk Monitoring and Control g). The Risk Management Register Teaching Tips Like many subjects in project management, this topic will benefit from a good example.

One way to provide it is to do an in-class planning exercise. To prepare this exercise the instructor needs to select a project. Everyone in the class should be familiar with this project. If a specialized technical topic is chosen (e.g. refueling a nuclear power plant), then all the class members may not be able to fully participate due to their lack of knowledge in the subject. I have had success with picking smaller, more accessible topics that are familiar to a wide range of students. Specifically, I have used “Planning a company picnic” for the exercise. While it may not sound very interesting on the surface, the picnic has some surprising complications that the students will discover during the planning process.

To begin the exercise the instructor give the class some background information about their pretend company and a very brief description of the project. The description is deliberately brief to simulate the typically meager direction that management supplies in these circumstances. The students work in pairs to brainstorm the outline of the project plan trying to answer key questions like: What is the purpose of the project?

Who are its customers?

What constraints are imposed by the company?

The process of answering these questions forces students to ask a lot of questions which the instructor, as the “sponsor” should answer. This gives the instructor a lot of opportunities to emphasize the idea that the early project formation process is one dominated by questions intended to reveal the sponsor’s and customer’s true requirements.

As the authors of the text correctly point out, there are many formats available for project plan deliverables. If the instructor does not have a preferred format to use for this exercise, Martin and Tate describe a method, one that I have found useful, called the Project Management Memory Jogger™. This tiny book can be an excellent supplement to the text by presenting a number of specific formats for planning deliverables.

Material Review Questions Question 1: APM is distinguished by close and continuing contact between clients (users) and staff working on the project, and an iterative and adaptive planning process. This approach is best suited for situations in which the scope of the project cannot be sufficiently determined in advance. The scope is progressively determined as the project progresses.

Question 2: Refer to Section 6.1 in the text. The eight key elements of any project charter are:

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition 1) Purpose: The purpose contains a brief summary of the project’s scope and its objectives.

2) Objectives: The objectives should reflect how the project would satisfy requirements in the dimensions of performance, time, cost, and customer satisfaction. Objectives should also be set with respect to business impact and future growth potential.

3) Overview: This section will describe the managerial and technical approaches used to complete the project.

4) Schedules: The master schedule will be derived from the individual schedules for resources. Milestones will be used to indicate significant events in the project’s lifecycle.

5) Resources: The project’s budget will document both capital expenses and operating expenses by task. The procedures for cost monitoring and control will also be described.

6) Personnel: This section covers the types and quantities of human resources needed to complete the project. It should document unique requirements related to issues such as security clearances, skill sets, EOE, and local content issues related to hiring and ownership practices.

7) Risk Management Plans: This section describes how uncertainty will be managed in the project. Its intent is to identify opportunities and threats. Contingency plans are developed to respond to important risk events should they arise during the project’s lifecycle 8) Evaluation Methods: This section describes the monitoring and control procedures used to run the project and to assess its success.

Question 3: Refer to Sections 6.3 and 6.2 in the text. The general steps for managing each work package in a specific project are: 1) Decompose the work packages into the smallest work elements necessary to plan, budget, schedule, and control the work. When sequencing project activities, logical relationships and direct costs are often driven by the activities inside the work package.

2) Create a work statement that includes inputs, specification references, contractual stipulations, and expected performance results. It may prove useful to construct the Linear Responsibility Chart (LRC) to document which resource is responsible for each activity in the work package.

3) List contact information for vendors and subcontractors.

4) For work that is new, difficult, or important, establish detailed end-item specifications.

5) Establish cost centers to assign budget responsibilities and to track performance against plans. Assign the appropriate types and quantities of resources to each work center.

6) Establish the activity durations and logical relationships. Develop a preliminary project schedule.

7) Review the WBS, activity lists, budget, and schedules with the resources that will perform the work.

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition Question 4: The “even planning process” is a hierarchical approach to decompose deliverables during the processes of scope definition and activity definition. (See PMBOK® Guide Third Edition sections 5.3 and 6.1.). The goal is that each level of the hierarchy has elements at about the same level of detail. One purpose is to prevent overplanning the familiar, while under planning the unfamiliar parts of the project.

Question 5: The RACI matrix shows the tasks to be performed, the groups doing the work, and who should be responsible, accountable, informed, and consulted. With the RACI matrix the PM can keep up with who must approve what, who must be notified, and other such relationships.

Question 6: Refer to Section 6.1 in the text. The project’s launch meeting should accomplish the following goals: 1) The technical scope for the project is established.

2) Participants accept responsibility for specific areas of performance.

3) Tentative, high-level schedules, and budgets are established.

4) A risk management group is created for the project.

Question 7: Refer to Section 6.1 in the project. Involving functional areas in proposal development may help an organization to avoid promising deliverables and/or performance that cannot be delivered to the customer. This involvement is important in winning support for the project from the people who are likely to loan the resources. In many cases, those resources would like to provide input about what will be done, how it will be done, how it will be priced, and when it will be accomplished.

Question 8: Refer to Section 6.4 in the text. To design and use the WBS, the basic steps are: 1) Decompose the action plan in sufficient detail so that each activity can be individually planned, budgeted, scheduled, monitored, and controlled.

2) For each WBS work package, create a LRC. 3) Review the work packages with the responsible resources prior to aggregating the activities for the project.

4) Convert the WBS into a Cost Breakdown Structure (CBS) that includes budget data for direct costs, indirect costs, contingency reserves, and profit.

5) Create the master schedule.

6) Capture actual costs and schedule performance and track against the baselines for budget and schedule.

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition Question 9: Refer to Section 6.5 in the text. Interface management seeks to facilitate the process of coordinating dynamic relationships between the various elements to assist the project in meeting objectives for performance, time, and cost.

Question 10: Refer to the Introduction in the text. The Project Plan is the complete set of documents and data used to describe the project objectives, method, schedule and budget. The Project Charter is the subset of the overall plan that concentrates on the schedule and required resources. The Work Breakdown Structure (WBS) is the subset of the plan that displays a decomposition of the work to be executed by the project.

Question 11: Milestones are natural sub-project ending points where payments may occur, evaluations may be made, or progress may be reassessed. Phase-gates are preplanned points during the project where progress is assessed and the project cannot resume until reauthorization has been approved.

Question 12: A risk matrix is constructed by placing the impact of threats on one axis and the probability of those threats occurring on the other axis (see Figure 6-12). Threats in the upper-right quadrant are more “critical” than those in the other quadrants.

Question 13: A decision tree is useful to a project manager when sequential events happen over time.

In these cases, the PM can look at the probabilities that a certain sequence of events will occur and their potential impact on the project.

Question 14: FMEA tables can be more valuable than a risk matrix because they consider the inability to detect the risk in addition to the probability and impact. Because of this they provide more value.

Question 15: The cause-effect diagram should be broken down into as many subfactors as possible.

With more subfactors, a better understanding of the factors that affect a particular threat or opportunity can be achieved.

Question 16: The risk responses for threats (avoid, transfer, mitigate, and accept) are generally designed to minimize or eliminate the risk from the threats. Risk responses for opportunities (exploit, share, enhance, and accept) are generally designed to maximize the opportunity if it occurs.

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition Class Discussion Questions Question 17: The amount of planning should be proportionate to the degree of newness, importance, and difficulty associated with realizing the required solution for an unique need.E.g: Constructing a standard 1,800 square-foot residential home should require less planning than that required to build the same house from scratch in less than four hours. (The San Diego Builders Association did this feat as a promotional project. The four-hour execution of the project required almost nine months to plan.) Instead of using percentages, the basic concept is that plans should be as brief and simple provided that they adequately direct the team to what needs to be done each day to support the project.

Question 18: In the military, there is a saying that, “No plan survives its first encounter with the enemy.” Therefore, even the best of plans should be adjusted to the reality of the project as it unfolds. This juggling of activities and resources across groups is a real-time activity that is usually done without a lot of detailed information or analysis. The coordination is made more difficult by the inevitable problems in communication that occur in even the best-run projects.

Question 19: The areas of risk need to be relevant to the project. Unfortunately, we can think of many things that are “risky” in our lives, but they aren’t necessarily relevant to a particular project. The PMBOK® Guide Third Edition describes typical categories to consider risk in as: • Technical • External • Organizational • Project Management Question 20: The WBS is probably one of the most useful project planning tools. It identifies the work required to provide the project’s deliverables. It provides a framework for identifying direct costs and resource requirements. Rolling up individual budgets through the structure of the WBS can capture the total budget. The project schedule can be displayed as a Gantt chart where each line is mapped directly to the WBS. Actual data can be captured in project management software using the WBS table to enter actual cost and schedule performance data.

Question 21: Subdividing activities for a WBS involves a layer by layer breakdown of activities. PMs should first divide the project into the main-level set of activities and then break each of those levels down even further. This should continue until each activity is broken down into its smallest activity. It is important to get as much input as possible from stakeholders because getting the WBS built as well as possible can result in significant

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition dividends as the project progresses due to numerous other deliverables that evolve from it.

Question 22: Usually, the plan frames the project in a manner that helps the team prepare for the challenges that lay ahead. It is not so important that the team create the perfect project plan. However, it is important that the plan raises the level of understanding about what must be done to achieve a successful implementation that solves real needs. The plan should also provide a reference point that the team can use to make course adjustments as work progresses. Ultimately the plan must provide sufficient guidance so that every member of the team knows what they should be doing each day to contribute to the success of the project.

Something to think about: Have you ever taken a vacation without first deciding on a destination?

Question 23: Refer to Section 6.1 in the text.

Pros: Involving functional areas in proposal development may help an organization to avoid promising deliverables and/or performance that cannot be delivered to the customer. This involvement is important in winning support for the project from the people who are likely to loan the resources. In many cases, those resources would like to provide input about what will be done, how it will be done, how it will be priced, and when it will be accomplished.

Cons: It is conceivable that some otherwise qualified managers and technical specialists will not possess strong relationship management skills and/or a willingness to participate in interdisciplinary approaches to solving problems. Such people could sabotage negotiations in subtle ways by objecting to parameters or by using blocking techniques that create fear, uncertainty or doubt about a project’s success. It is also difficult to identify credibly the proper economic trade-off between early involvement and delayed participation of functional specialists.

Question 24: In general, this would be an unethical thing to do. The PM should demonstrate a little more maturity by confronting the problem head-on rather than trying to cover it up with tricks. An important consideration is Fred’s contribution to the project. If he is notified because, in spite of his difficult attitude, he has something to contribute, then the PM is not only unethical, he is stupid to bypass him. If he is difficult and does not add value (a dynamite combination!), then the PM should bypass him and have the courage to look Fred in the eye and tell him why he was ignored for that particular task. A manager, whom I respect, once told me when I was faced with a difficult team member, “You have got to talk to him. Maybe nobody ever told him that he was a jerk.”

Question 25: The simplest way to plan for an unknown risk is to add a buffer. This can be both for the schedule and the budget. This buffer should be visible to all concerned; not hidden as padding in individual activities. Eli Goldratt recommends establishing a project time buffer that is adjusted as the project unfolds (this is discussed at length in Chapter 9). The Page 9 of 23

Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition team knows that the buffer has gotten smaller if they are running behind, and larger if they are ahead. Similarly it is a common practice on large defense projects to establish a “Management Reserve.” This is a portion of the total project budget that is deliberately held in reserve against unknown scope variation. Another technique is the designation of selected experts to handle the problems as they arise. This can be coupled with a welldefined escalation process, in which the designated people at appropriate levels in the organization are notified based on the nature and severity of the problem.

Question 26: Milestones and phase-gates may occur at the same time in some instances because phasegates can be considered milestones. In other cases they can occur at different times because milestones can be used to see if the project is “on track” while phase-gates can be utilized to determine if the project should continue to the next phase.

Question 27: Agile project management was developed because of an increasing number of projects, in which the scope of the project was not sufficiently determined in advance and thus, the scope is progressively determined as the project progresses. I do believe that this approach will continue to be increasingly utilized in future projects due to the continuing number of projects where project scope cannot be accurately determined up-front.

Question 28: Risk matrices and FEMA tables are extremely useful in analyzing the impacts of threats.

Each one helps in identifying the threats that cause the most concern. In addition, they can be used to analyze the portfolio of projects in relation to their risk structure.

Question 29: Decision and probability trees are similar. If we are only interested in probabilities, we call the tree a probability tree. But if there are some actions we are considering anywhere along the tree—before the first probability event, say, or between events—and we want to evaluate which action(s) would be the best, then it is called a decision tree.

Each can be used by PMs to help determine the likelihood of certain events from occurring. The decision tree is generally more valuable because it has a broader value. can be used to analyze the portfolio of projects in relation to their risk structure.

Question 30: A cause-effect chart could be used for two risks concurrently. The end “problem” would be the result of both occurring concurrently.

Question 31: Risk responses to threats and opportunities are more important for a particular PM depending on their level of risk tolerance. For those who are risk-averse, they might be inclined to think the risk responses for threats are more important and vice versa for those PMs who are risk-seeking.

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition Beagle 2 Mars Probe a Planning Failure Question 32: The tasks and changes in the tasks facing the project team with a fast approaching launch window were extremely difficult. The PM should have recommended cancelling the project and substituting it with something else.

Question 33: The recommendations are all extremely important, certainly relevant to all projects, and makes common sense. The problem, however, was more difficult than these commonsense recommendations imply. If an expensive rocket launch is being readied for a particular date and the date can’t be changed, would you really want to cancel the probe? If so, why send up an empty rocket? Something needs to be added to the recommendations concerning a backup probe, or a de-scoped probe, in case of trouble.

Clearly there wasn’t sufficient time, so something about a long lead time might be added when the due date cannot be delayed.

Child Support Software a Victim of Scope Creep Question 34: Commonly, with the design of software systems, the customer wants changes as the software is being written, which requires extensive rework and checking for ramifications of each change throughout the system. This takes a lot of time and extra labor.

Apparently, this happened here as the customer kept requesting scope changes which the customer considered to be minor but the vendor considered them to be major changes.

Unfortunately, the vendor didn’t inform the customer about the difficulty of making changes during the project, or provide a process for handling such requested changes.

Question 35: It appears that the software has been completed but now operates slower than that was promised, possibly due to the scope changes. The customer and vendor need to talk about the possibility of making additional changes that would help the customer in the most efficient way, which may include disabling some of the options and scope changes requested previously.

Shanghai Unlucky with Passengers Question 36: Luck had nothing to do with it. The problem was that the train was accessible only from a difficult location for the customers in the business center. The system that was implemented did not meet the original need.

Question 37: We assume that there was an external reason for getting this exceptional train operational in a short time period and service for businesspeople was a minor consideration. It could

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition be that the original cost and time estimates were significantly wrong, so they were only able to get it as close as they did to the city center.

China is now extending the train to the downtown business center, but it will take much longer to complete.

Risk Analysis vs. Budget/Schedule Requirements in Australia Question 38: Meeting schedule and budget goals are certainly important, but other metrics are important as well when it comes to project success. Although many people do think primarily of schedule and budget goals, scope and quality goals can be just as important.

Specific to this example, had they considered quality issues, they would have created a better system. After learning about all nine of the project management knowledge areas as specified by the Project Management Institute, students will learn that each one is equally important in managing projects.

Question 39: An appropriate risk analysis approach would have been to use a quantitative method such as simulation. Had this been done properly, the officials would have seen what would happen with a significant increase in traffic beyond what was projected. This could have shown them what might happen and then forced them to develop a system to comfortably handle the increased traffic and/or to create a higher quality system.

Using Agile to Integrate Two Gas Pipeline Systems Question 40: The client was not on this team because it was an internal project.

Question 41: Aspects of agile used: 1) Frequent, stand-up meetings with subteams 2) Weekly meetings with the entire team 3) Iterative and adaptive planning throughout the project Aspects of agile not used: 1) A test case 2) Sprints Question 42: Agile management is not beneficial for most standard projects because agile projects cannot accurately predict cost and time estimates for the duration of the project. Since, most projects request funding in advance, agile processes would not be able to provide those estimates.

An Acquisition Failure Questions Recommended Practice Question 43:

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition Long project durations in all industries lead to conflicts and project problems. A good example is the Denver Airport Baggage Handling System. This project was so big and poorly managed that it took a significant amount of additional time and money to complete the project. In general, larger projects take much more planning and coordination efforts while also increasing the likelihood of project management related concerns.

Question 44: One of the main problems was that a decision wasn’t made early enough in the project regarding what to do. Had they determined that, all systems would have been merged into one of the existing company’s systems and they would have had a better chance of success. Too much time was spent analyzing the problem without ever getting to the design phase.

Question 45: The BMP solution worked because it eliminated the analysis phase of the decisionmaking and forced the teams into the development phase. A compromised system might have been possible, but the risk of continuing with the same problems they encountered after the initial merger could have occurred too.

Ignoring Risk Contrasted with Recognizing Risk in Two Industries Question 46: The reasons why BP took such a relaxed attitude toward the Gulf well compared to NASA is really a mystery. BP really should have been just as serious, perhaps even more, since the environmental damage caused by the leak was so extensive. In addition, it could have easily been prevented this with better planning.

Question 47: I don’t think the oil industry has funded significant research in this area because they believe the odds that it wouldn’t happen. Since, the R&D investment would be so significant for something that was just a possibility (not a certainty), then it must have been worth the risk.

Question 48: Again, there really isn’t a good reason why BP didn’t do this right either. With proper planning, a contingency plan could have been in place already that indicated what to do and what to say if something like this happened. Hopefully, all companies in the oil industry learned from this and will be more prepared next time.

Question 49: NASA’s approach to risk analysis is thorough as it should be. One component on the space shuttle that goes bad can cause an entire launch to be aborted or can cause the shuttle to explode, as we have seen. Thus, their approach is thorough and would include minimum techniques such as decision tree analysis and expert judgment. FMEA is a good example of what an organization can do to understand the risk levels associated with a project.

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition

Facebook Risks Interruption to Move a Terabyte Question 50: Although students may be able to make good arguments both ways, I would consider the completion of the first hardware phase a phase-gate review because if building the hardware took too long and/or was too costly, it may be necessary to stop the project before going any further. In addition, they could determine that it just isn’t technically feasible to progress any further.

Question 51: The risk responses Facebook used are as follows: 1) Avoidance: With regards to avoiding the problems associated with loading the data onto the equipment before the move 2) Mitigation: Selecting the option to transfer the data via a network as opposed to loading it on the equipment before the move 3) Acceptance: A certain amount of risk was assumed even before transferring the data across the larger network 4) Exploit: The move itself to the larger faster network 5) Enhance: The move itself to the larger faster network Question 52: Facebook could have also considered other approaches to handle the risks such as using all of the seven subprocesses related to risk. These include: 1) Risk management planning 2) Risk identification 3) Qualitative risk analysis 4) Quantitative risk analysis 5) Risk response planning 6) Risk monitoring and control 7) Creating a risk management register Trying to Install a Wind Farm in the Middle of the North Sea Question 53: The difficulties and risks in this case study were much less significant than with the NASA example. Although both cases highlighted major risks, they were different in each case. In this example (Wind Farms), many of the risks involved having everything ready before being shipped to location. In addition, if there were any problems, they had to come up with a solution as soon as possible and they did this by involving multidisciplinary teams.

Question 54: It was imperative to have the correct competencies and dependabilities on the teams.

Without these two criteria solving problems would have been much more painful and finding solutions would have been much more difficult.

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition Question 55: Students’ answers are expected to vary considerably based upon their background and the choice of the WBS method.

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition Problems Problem 1:

Problem 1:Problem 1:Probability

7 6

Threat 2

5

Threat 1

4

Threat 4

3

Threat 3

2 1 1

2

3

4

5

6

7

Impact Legend: Critical Monitor Ignore Threat 1: The threat of costs being excessive could occur. Actually, the probability is somewhat high. This can be transferred to an outsourcing provider to help reduce this threat.

Threat 2: The likelihood of the users resisting changes could cause major problems. This is somewhat likely to happen, but can be avoided if they are given an alternative and consulted in advance.

Threat 3: The project may run longer than expected. This isn’t highly likely, but this can be transferred by outsourcing the project.

Threat 4: The changes may reduce the quality of care in the hospital. The probability is satisfactory because the improvements brought about by the new system may not be significant. If the quality decreases, the impact could be fairly significant, thus the hospital may need to mitigate this threat by including more users in the planning.

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition Problem 2: Threat

Severity

Likelihood

#1 #2 #3 #4

3 5 4 7

5 6 3 4

Inability to detect 4 1 3 6

RPN 60 30 36 168

The main thing that changes when using this approach is that threat #2 drops significantly from “critical” to possibly “ignore.” This is mostly due to the lack of inability to detect.

Threat #2 is somewhat severe and the likelihood is great, but since the threat is relatively easy to detect, it can be mitigated early and possibly even removed. Thus, this is a much more realistic evaluation of the threats than just creating a risk matrix.

Problem 3:

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition Problem 4:

Based on the analysis, the manufacturer should approve the purchase of the high-quality, special equipment for $10,000. As a result, significant savings should occur.

Problem 5: a1, a3 decision = (0.7  $3,000) + (0.3  $2,000) – $500 = $2,200 a1, a4 decision = (0.7  $1,000) + (0.3  $2,000) – $500 = $800 a2, a5 decision = (0.4  $2,150) + (0.6  $3,000) – $1,000= $1,660 a2, a6 decision = (0.4  $2,150) + (0.6  $4,000) – $1,000= $2,260 Based on this analysis, the best option is a2, a6.

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition

Problem 6: P r o b a b i l i t y

5 4

3

3

1

2

2

1 1

2

3

4

5

Impact

Legend: Critical Monitor Ignore Opportunity 1: You could “accept” this risk and enjoy the benefits derived from it. To increase the potential for more impact, you could enhance the risk by providing more training.

Opportunity 2: You could “accept” this risk and enjoy the benefits derived from it. To increase the potential for more impact, you could further exploit the database.

Opportunity 3: You could “accept” this risk and enjoy the benefits derived from it. To increase the potential for more impact, you could share the data by increasing sales.

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition Incidents for Discussion Ringold’s Pool and Patio Supply This is a good opportunity to engage the class in a discussion of the importance of involving the team in developing plans and schedules. One way to do this is to engage the class in collectively creating the upper level or two of a WBS for the project. Chances are they will come up with several items that Junior missed in his, demonstrating the danger of working alone.

John Sr. is asking a reasonable question, but his son is giving him a defective answer.

Even though Junior’s WBS looks very precise, it would be dangerous to base any decision on it. Since, it has not been validated by anyone who has actual experience in installing pools, there is no way of knowing if the estimates are reasonable, or even if it has accounted for all the work. Junior has made no effort to evaluate the requirements of the job. For example, he doesn’t list in his WBS anything related to permitting, electrical or plumbing. In addition to these concerns, John Sr. must consider several business issues including whether his company has the staff, skills, and equipment to take on this new area. He needs to consider whether this expansion matches his long-term goals for the business.

Stacee Laboratories With adult professional students, this incident can lead to a lively discussion of the involvement of other areas in a highly technical project. There will no doubt be many opinions both pro and con on the involvement of areas, like marketing in a project that is primarily a technical one. The students will probably have stories that will illustrate that, in the long run, the involvement of other areas will make a project team stronger.

Ms. Tasha is only partially right. She is mixing together two different issues in her recommendations. One way to understand the issues involved would be to map the interfaces that would exist in this new environment. I suspect that mapping would show that her concerns about the involvement of the toxicity and efficacy group are well taken.

They need to participate in the project from early on to understand the nature of the drug being developed and to also allow them to pre-plan their part of the project. Advice from this group could be valuable in reducing the number of dead ends that the research group pursues. On the other hand, it could be a mistake to involve the marketing department early on in each project. While they could get a head start on analyzing potential markets, there is nothing to market until the end, and they cannot contribute to the identification of new drugs. Ms. Tasha has missed an opportunity, however, to recommend a better portfolio management process. Big Pharma does this quite well, as they have far more leads for new drugs than the resources to pursue them. In a portfolio management process, marketing’s involvement would be essential as they contribute to the decision of what areas to pursue new drugs in. Once the project has been launched, however, they should limit their involvement till the end.

Scope creep is probably more of a danger, if the researchers are working by themselves and others just participate. A good way to help prevent it is to insure that there is an adequate definition of the requirements at the beginning, and strong project planning and control during the process. Students will typically object to this notion because their

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition instinct is that a research project cannot be closely controlled. This is an opportunity to point out that the process can and should be controlled, even if the outcomes cannot.

Case: Heublein: Project Management and Control System Question 1: A number of the project planning aids described in the chapter are used in the case.

Among them are versions of the: •

Project Plan

•

Action Plans

•

Work Breakdown Structure

•

Project Master Schedule

•

Linear Responsibility Chart

Question 2: The Project Plan in this case was similar, but different, than the Project Charter in the chapter of the text. The sections of each are included below: Project Plan elements Project Charter elements (from case) (from chapter) Introduction Purpose Project Objectives Objectives Project/Program Structure Overview Project/Program Costs Schedules Network Resources Schedule Personnel Resource Allocation Risk Management Plans Organization and Accountability Evaluation Methods Control System Milestones or Project Subdivisions Question 3: The WBS in the case is in a different format than the one described in the chapter. The case WBS is in an indented (textual) format as opposed to the tree (graphical) format included in the chapter.

The accountability matrices differ as well. The matrix in the chapter uses different types of responsibilities (Responsible, Consult, Inform, and Accountable) than the matrix in the case (Initiate/Responsibility, Approve, and Provide input). It is important to note that organizations must choose the types of responsibilities that best fit the needs of their particular projects.

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition Question 4: This project and the Project Portfolio Process described in Chapter 2 are two different elements of the overall project management process. The Portfolio Process in Chapter 2 is a method for selecting which project should be executed. The project described in this case assumes that the project has already been selected. It is describing the implementation of a consistent methodology for the planning, scheduling and execution of all capital projects across the corporation.

Question 5: The previous focus on cost-benefit only addressed one aspect of the project management process and only in a limited way. The corporation used a cost-benefit analysis technique to select the capital projects to execute. It found, however, that even though they may have selected the right project, they did not achieve their goals because the execution of the project was poor. The case doesn’t say that cost-benefit analysis is no longer used for project selection, instead if focuses on the elements implemented after the project is selected. The new process insures that costs are collected during project execution so that they can be compared to the performance benefits of the project.

Question 6: Changes in the way depreciation is calculated would change the cost-benefit for the installation of capital equipment. Without knowing the exact changes in the law, it’s reasonable to assume that the changes were not favorable to the corporation, making the equipment relatively more expensive. This would increase the importance of success for each capital project and help justify the new system.

Reading: Planning For Crises in Project Management Question 1: Planning is an activity that consumes costly resources that are often overwhelmed by the need to perform prescribed tasks within a time-constrained schedule. In this constrained environment, it’s easy to drop tasks that involve thinking about something that probably won’t happen anyway. Task oriented people want to get started and figure that they will handle whatever comes up, just as they have in the past. Unfortunately, this is an expensive and risky way to manage, particularly as projects get larger and more complex.

Question 2: Yes, the tools would be of value because the Iceland example is talking about real threats to life and property. In particular, contingency planning, logic charts, and tabletop exercises would be quite useful.

Question 3: Scenario analysis is similar to risk analysis, but does not anticipate a preplanned response should a risk event occur. Nevertheless, if the outcome of a scenario is unfavorable, contingency plans could be developed to alter the expected outcome identified in the scenario analysis.

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Chapter 6 - Instructor’s Resource Guide to Project Management: A Managerial Approach, Eighth Edition Question 4: Contingency planning probably has the most value to the project management environment. The logic chart would probably be easiest to use, assuming that contingency plans had already been developed.

Question 5: The most important recommendation is to do risk analysis. The identification of risks relevant to the project coupled with their impact and probability is the gateway to all subsequent actions. Once these relevant risks have been identified, then the magnitude and necessity of subsequent risk related activities could be evaluated. However, people will only do what they have practiced, so tabletop exercises are mandatory as well.

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