Contemporary Project Management 4th Edition by Timothy Kloppenborg Solution Manual

Contemporary Project Management 4th Edition BY Timothy Kloppenborgedition

Email: Richard@qwconsultancy.com

CHAPTER 1 Introduction to Project Management LEARNING OBJECTIVES— This chapter presents a broad introduction to project management. After completing this chapter, each student should be able to perform the following: Core Objectives • Define a project and project management in your own words, using characteristics that are common to most projects, and describe reasons why more organizations are using project management.

• Describe major activities and deliverables at each project life cycle stage.

• List and define the ten knowledge areas and five process groups of the project management body of knowledge (PMBOK®).

• Delineate measures of project success and failure, and reasons for both.

• Contrast predictive or plan-driven and adaptive or change-driven project life cycle approaches.

Behavioral Objectives • Identify project roles and distinguish key responsibilities for project team members.

• Describe the importance of collaborative effort during the project life cycle.

TEACHING STRATEGIES •

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Each chapter starts with learning objectives stated in measurable form as shown above.

All chapters will have core objectives, which we believe any student of project management, should master. Chapters also include behavioral and/or technical objectives, which you can also use depending on what you wish to emphasize. If you start with slides that list the objectives, you can emphasize that the students need to be able to accomplish each. We find it helpful to paraphrase a few of them and pick one to ask the students why they think it is included.

Many students will not have read the first chapter before the first class. Mike’s introductory essay on how he successfully climbed Mount Aconcagua (second highest of the Seven Summits after Mount Everest) whereas others died in the attempt is a great attention getter.

We believe in active learning, so we include at least one breakout session every hour.

These are often preceded by an introduction of the material and we pose at least one question or framework for the students to follow. We find a few simple rules are fun for the students and encourage participation. Ask one person to record what the group discussed/decided. Ask a different person to be the group’s spokesperson – that way at least two people stay alert. Ask the spokesperson to state what they learned from the exercise and “ditto” does not count. That means they cannot take the easy way out and say another group took their idea. This encourages volunteers to report first and forces teams to think beyond the obvious lesson and think creatively. If there are points we

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especially want to emphasize, we will summarize by repeating the points (and crediting the groups who made them) or introducing them if no group mentioned them. The first example breakout session follows.

• Once we briefly cover what a project is (students in discussion will provide examples) and why project management is important, we ask the students to work in groups of four or five with large paper or sections of a chalk or white board. We ask them to describe project success and reasons for each for about 10 minutes. Alternatively, you can ask the students to describe project failure and the causes of it. Either way, you set the expectation that students will actively participate in every class. It also serves as in introduction to the need to develop both soft and hard skills.

• Since some students enjoy software, we mention MS Project early. An easy way to do this is to have the students look at the inside front cover on the left to see what MS Project is used for and where it is covered in the book.

• We like to cover the concept of project life cycles. It is easy to use a house-building project as an example since the walk-through to inspect the project result helps students envision the idea of an approval to pass from one stage to the next.

• The increasing popularity of the agile (adaptive or change-driven) approach to projects creates another opportunity for discussion. You can introduce the extremes of totally plan-driven versus totally adaptive project schedules and ask what type of projects might lend themselves to each and what are some of the advantages and disadvantages of each.

This discussion can culminate with the idea that contemporary project management can use parts of both and that we will explore differences throughout the course. An agile icon appears in the margin in many places in the text where either different methods and/or different terminology is used in agile versus plan-driven approaches. The corresponding text is in alternate color to call attention to it. There is also an agile appendix that lists all of the ways agile is emphasized differently than traditional project management and the chapter in which each point is covered in the text.

• An introduction to PMI® is useful. It sets the stage for discussing accreditation, process groups, knowledge areas, and glossary terms. We take this opportunity to encourage students to become student members at a greatly reduced cost.

• Several features of this text help a student to understand The Guide to the Project management Body of Knowledge65th ed. (PMBOK® Guide). This most current version of the guide is what students will need to completely understand if the wish to challenge a Project Management Professional (PMP) or Certified Associate in Project management (CAPM) certification exam.

1. You can ask the students to look at the inside front cover of the book on the right side to see both how the PMBOK® Guide is structured and exactly where each process is covered in the text.

2. You can also have the students turn to the back inside cover for a flowchart of the processes in the order in which they should be performed. This PMBOK® Guide flowchart emphasizes primarily the things students will need to learn to create the various planning and control documents that will help them plan and manage a project. At the start of each chapter, we include the portion of the flowchart that Instructor’s Manual Chapter 1 2 .

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is covered in that chapter. One slide is available in the PowerPoint deck of the overall flowchart and several smaller sections of the flowchart are available as slides also so when you introduce topics, you might also want to remind students visually where they are in the planning flow.

3. The PMBOK® Guide topics for each chapter are listed in the margins of the second chapter page.

4. Key terms consistent with the PMBOK® Guide and numerous other, more detailed PMI publications are listed immediately after the project summary.

5. At the end of each chapter we include study suggestions for the CAPM and PMP exams for the topics covered in the chapter. We also include one assessment section is PMBOK® Guide questions. These questions are very similar to CAPM and PMP exam questions. Correct answers to each of these questions along with page references from both this text and the PMBOK® Guide appear in this IM. 6. Finally, Appendix A starting on page 439, is a summary of study suggestions for anyone who wishes to take one of the certification exams. We have taught many exam preparation classes both for PMI and for private providers.

The Project Customer Tradeoff Matrix gives the opportunity to discuss how a project manager can make consistently better decisions by fully understanding the customer. It also is an early opportunity to discuss the challenges of honest, open communications and ethical challenges that can arise. We like to use two different projects in the same industry that made different trade-off decisions as an example. For us it is easy since one of our universities built our on-campus arena with a strong emphasis on cost control and had to play one more season in our old facility while one of the professional teams in town placed so much emphasis on playing their entire season in their new stadium that their overrun cost more than our entire arena!

Project roles are briefly introduced here, but described in much greater detail in Chapter 3. You may wish to tell your students that even though they are studying to be project managers, it is important for them to understand other roles that need to be accomplished.

Project managers spend a large percentage of their time communicating and these roles describe many of the people with whom they will communicate. One further point regarding project roles is that while all projects require planning and control work, when it is done, by whom, and the titles of the people involved often differ on agile vs. traditional projects and to make matters more confusing, often different departments in the same organization are more accepting of agile than others, so titles can vary dramatically.

We like to use real projects as teaching vehicles. The end of Chapter 1 is a good place to introduce the projects. See specific ideas in example project section below. Appendix D lists many of the project planning and control documents that are in common use. You will likely want to assign a variety of these as assignments. If it is the first time you are using real projects for class, you might start with just the most basic documents such as charter, communication plan, WBS, and schedule. As you gain more experience, you can assign quite a few of these. You can also use ones you do not assign as homework as inclass exercises so you can give the students very rapid feedback. Examples and

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instructions for all of these are in the text and grading suggestions appear in the appropriate chapter where each is covered.

Appendix C has answers to selected problems. In each case, at least one other structurally similar problem is in the text with the answers here in this IM, but not in the text.

SPECIFIC SUGGESTIONS FOR TEACHING PROJECT MANAGEMENT ONLINE •

Don’t assume anything specifically, about students that they understand about the course and your instructions.

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Spell out everything even if you repeat some of the instructions. Nothing should be ambiguous. Assignment instructions should be crystal clear. Like Murphy’s law, if something can be misunderstood, it will be. Online instructors should be aware of this.

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Develop clear policies and processes for course delivery. To the extent possible, appearance, features, and delivery of the learning management system such as Blackboard should be consistent and clear. While consistency in course delivery is important for quality assurance, each instructor can be creative within the defined boundaries to break monotony and to bring unique perspectives.

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Get acknowledgement from students – confirmation that they understand course policies.

Ask them to acknowledge in writing.

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Assignment instructors should be clear and unambiguous. Wherever possible, grading rubric should be shared with the students. Evaluation criteria must be spelled out.

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When assessing student submissions, provide a detailed individual feedback and wherever applicable, provide general feedback to the entire class. Feedback should be based on the assessment criteria defined for each assignment

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Student submissions reflect their understanding of the teaching material and learning modules. They help us to develop an understanding of the effectiveness of our teaching material. A critical analysis will give us ideas to improve pedagogy for future learning modules.

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Establish a friendly and conversational tone in writing lessons, feedback, and other communications with students. In communicating with students through discussion

forums or by email, informal and friendly tone will help in connecting with the students.

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A tone of positivity will help in encouraging students to focus on the subject. Teaching material should also provide intrinsic motivation. However, we must remember that most of the distance students are committed to studies and are motivated to do well.

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Assessment criteria for each assignment must be linked to learning objectives of the course.

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Make the distinction and a fine balance between “nice to know” and “necessary to know.”

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Provide illustrations for complex and difficult concepts. Technology must be employed to illustrate these concepts (synchronous conference meetings, phone calls, videos, and oneto-one online sessions).

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Share student submissions with the entire class (after obtaining permission from the student) as a good example.

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Teams are put together which represent diversity in qualifications and experience.

LECTURE AND WORKSHOP OUTLINE 1.1 What is a project?

A project is a new, time-bound effort that has a definite beginning and a definite ending with several related and/or interdependent tasks to create a unique product or service Each project has unique stakeholders people and groups who can impact the project or might be impacted by either the work or results of the project.

Project management is the art and science of using knowledge, skills, tools, and techniques efficiently and effectively to meet stakeholder needs and expectations.

1.2 History of Project Management All through history projects have been conducted Formal discipline starting 1950s – scheduling and control Recent years – more focus on communications, leadership, teamwork, and agile

1.3 How Can Project Work be Described?

Projects vs. operations Soft skills and hard skills Authority and responsibility Project life cycle Agile (adaptive) approach Initiating, planning, executing, closing Instructor’s Manual .

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1.4 Understanding projects Project Management Institute (PMI) Project Management Body of Knowledge (PMBOK®) Process groups Knowledge areas PMI Talent Triangle Selecting and Prioritizing Projects Project Goals and constraints Defining Project Success and Failure Using Microsoft Project to Help Plan and Measure Projects Types of projects Industry – PMI Special Interest Groups (SIGs) Size When project manager is able to clearly determine scope Application – organizational change, quality improvement, R&D, Information Systems (IS), construction Scalability of project tools

1.5 Project roles Traditional Roles Executive roles Sponsor, Customer, Steering Team, Project Management Office (PMO) Managerial roles Project Manager, Functional Manager, Facilitator, Associate roles Core Team Member, Subject Matter Expert (SME) Agile Roles Executive Roles Customer (product owner), Sponsor (product manager), Portfolio Team, Project Management/Scrum Office Managerial Roles Customer (product owner), Scrum Master, Functional Manager, Coach Associate Roles Team member 1.6 Overview of book PART 1

ORGANIZING PROJECTS

Chapter 1:

Introduction to Project Management

Chapter 2:

Project Selection and Prioritization

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© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 3:

Chartering Projects

PART 2: LEADING PROJECTS Chapter 4:

Organizational Capability: Structure, Culture, and Roles

Chapter 5:

Leading and Managing Project Teams

Chapter 6:

Stakeholder Analysis and Communication Planning

PART 3

PLANNING PROJECTS

Chapter 7:

Scope Planning

Chapter 8:

Scheduling Projects

Chapter 9:

Resourcing Projects

Chapter 10:

Budgeting Projects

Chapter 11:

Project Risk Planning

Chapter 12:

Project Quality Planning and Project Kick-Off

PART 4

PERFORMING PROJECTS

Chapter 13:

Project Supply Chain Management

Chapter 14:

Determining Project Progress and Results

Chapter 15:

Finishing Projects and Realizing the Benefits

CHAPTER REVIEW QUESTIONS 1.

What is a project? (objective #1, pp. 3-4) The narrow answer is: a project is a new, time-bound effort that has a definite beginning and a definite ending with several related and/or interdependent tasks to create a unique product or service.

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© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The broader answer is: a project is an endeavor that requires an organized set of work efforts that are planned in a level of detail that is progressively elaborated as more information is discovered. Projects are subject to limitations of time and resources such as money and people. Projects should follow a planned and organized approach with a defined beginning and ending. Project plans and goals become more specific as early work is completed. The output often is a collection of a primary deliverable along with supporting deliverables such as a house as the primary deliverable and warranties and instructions for use as supporting deliverables. Each project typically has a unique combination of stakeholders people and groups who can impact the project or might be impacted by either the work or results of the project. Projects often require a variety of people to work together for a limited time and each needs to understand that completing the project will require effort in addition to their other assigned work.

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What is project management? (objective #1, p. 4) Project management is the art and science of using knowledge, skills, tools, and techniques efficiently and effectively to meet stakeholder needs and expectations. This includes work processes that initiate, plan, execute, control, and close work.

Project management includes both administrative tasks for planning, documenting, and controlling work and leadership tasks for visioning, motivating, and promoting work associates.

3.

How are projects different than ongoing operations? (objective #1, pp. 6-7) Projects are temporary while operations are ongoing.

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What types of constraints are common to most projects? (Objective #1, pp. 14-15) Project performance, comprised of scope (size), quality (acceptability of the results) is constrained by cost, and schedule.

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What are the three components of the Talent Triangle? (pp. 11-14)

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Technical areas, leadership, and strategic business management.

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At what stage of a project life cycle are the majority of the “hands-on” tasks completed?

(Objective #2, p. 8) Executing.

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7. During which stage of the project life cycle are loose ends tied up? (Objective #2, p. 8) Closing.

8. What are the five process groups of project management? (Objective #3, p. 10) Initiating, Planning, Executing, Monitoring & Controlling, Closing 9. Which process group defines a new project or phase by obtaining authorization? (Objective #3, p. 10) Initiating 10. What are the ten project management knowledge areas? (Objective #3, p. 11) The ten knowledge areas as paraphrased from the PMBOK® Guide, pages 9 and 10 are: integration, scope, schedule, cost, quality, resources, communications, risk, procurement, and stakeholders.

11. What two project dimensions are components of project performance? (Objective #4, p. 14) Scope and quality.

12. How do you define project success? (objective #4, pp. 15-16) Project success is creating deliverables that include all of the agreed upon features (meet scope goals). The outputs should satisfy all specifications and please the project’s customers. The customers need to use the outputs effectively as they do their work (meet quality goals). The project should be completed on schedule and on budget (meet time and cost constraints).

Project success also includes other considerations. A successful project is one that is completed without heroics – that is, people should not burn themselves out to complete the project. Those people who work on the project should either learn new skills and/or refine existing skills. Organizational learning should take place and be captured for future projects. Finally, the parent organization should reap business level benefits such as development of new products, increased market share, increased profitability, decreased cost, etc.

Project success as summarized in Exhibit 1.4 include the following: ESS • Meeting Agreements – Cost, schedule, and specifications met • Customer’ Success – Needs met, deliverables used, customer satisfied • Performing Organization’s Success – Market share, new products, new technology • Project Team’s Success – Loyalty, development, satisfaction

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13. How do you define project failure? (objective #4, p. 16) Project failure is not meeting all of the success criteria listed above. Serious project failure is when some of the success criteria are missed by a large amount and/or when several of the success criteria are missed by even a small margin.

14. List four common causes of project failure. (objective #4, p. 16) • • • • • •

Not enough resources are available for project completion, Not enough time has been given to the project, Project expectations are unclear, Changes in the scope are not understood or agreed upon by all parties involved, Stakeholders disagree regarding expectations for the project, and Adequate project planning is not done.

15. What are three common ways of classifying projects? (objective #5, pp. 16-17) Projects can be classified by industry, size, when scope can be determined with confidence, and type such as organizational change, quality and productivity improvement, R&D, information systems (IS), and construction.

16. What is predictive or plan-driven planning and when should it be used? (Objective #5, p. 8) Predictive or plan-driven planning occurs when the majority of planning is done before any part of the project is executed. This is used when it is easy to estimate the amount of work required and, therefore, there is a high degree of certainty as to what the project scope will be.

17. What is adaptive or change-driven planning and when should it be used? (Objective #5, p. 9) Also known as iterative planning, this is used when there is a great degree of uncertainty at project inception as to what its overall scope will be. As the project moves forward and more details emerge, planning changes from general to specific. Agile is an example of adaptive or change-driven project management.

18. What makes someone a project stakeholder? (Objective #6, p. 4) Stakeholders are people or organizations that are actively involved in the project, or whose interests may be positively or negatively affected by either the process of performing the project or the project results.

19. What are four project executive-level roles? (objective #6, pp. 17-18) There are four project executive level roles in traditional project management: sponsor, customer, steering team, and project management office. The sponsor has a financial stake in the project, charters the project, reviews project progress, is often part of the steering team, and often mentors the project manager. The customer needs to ensure that a good contractor for external projects or project manager for internal projects is selected, make Instructor’s Manual .

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sure requirements are clear, and maintain communications throughout the project. A steering or leadership team for an organization is often the top leader (CEO or other) and his or her direct reports. The project management office (PMO) is the keeper, facilitator, and improver of the project management system.

The four project executive level roles in agile project management are customer (product owner), sponsor (product manager), portfolio team, and project management/scrum office.

The customer ensures that the needs and wants of the various constituents in the customer’s organization are identified and prioritized and that project progress and decisions continually support the customer’s desires. The sponsor controls the budget. The portfolio team often performs much of the work of a traditional steering team, and a similar office that may be titled differently such as Scrum office performs much of the work of a project office.

20. List and describe each of the managerial and associate roles. (objective #6, pp. 19-20) The three traditional project managerial level roles are the project manager, functional manager, and facilitator. The project manager: is directly accountable for the project results, schedule, and budget; is the main communicator; and often must get things done through the power of influence since his or her formal power may be limited. The functional managers are department heads that determine how the work of the project gets accomplished; often supervise that work and often negotiate with the project manager regarding which workers are assigned to the project. A facilitator is sometimes assigned to complex or controversial projects to assist the project manager with the process of running meetings and making decisions.

The two associate level project roles are core team members and subject matter experts.

Core team members are assigned to the project for its entire duration if possible and jointly make decisions with the project manager. Subject matter experts are brought in as needed to help with specific project activities.

In agile project management the four managerial roles are customer (product owner), scrum master, functional manager, and coach. As stated in the executive roles above, the customer ensures that the needs and wants of the various constituents in the customer’s organization are identified and prioritized and that project progress and decisions continually support the customer’s desires. We group customer as a managerial role also as this person needs to be closely involved on a daily basis and often performs some of the duties a project manager would on a traditional project. The Scrum Master serves and leads in a facilitating and collaborative manner. This is a more limited, yet more empowering role than the traditional project manager. The functional manager has a similar, but sometimes more limited, role than the traditional department head. Many organizations using Agile also have a coach who acts as a facilitator and trainer.

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DISCUSSION QUESTIONS 1.

Using an example, describe a project in terms that are common to most projects. (Objective #1, Understanding, p. 4) Answers vary. The example should include some reference to project goals (scope and quality), project constraints (budget and schedule), stakeholders, communication needs, and the project life cycle.

2. Why are more organizations using project management? If you were an executive, how would you justify your decision to use project management to the board of trustees?

(Objective #1, Creating, p. 5)

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Rapid growth and changes in industries – particularly information and communications technology.

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Increasing customer demands for rapid introduction of new products and technologies.

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Global competition driving down prices.

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Increasingly complex products and services

Explain how to scale up or down the complexity of project planning and management tools and what effect, if any, this might have on the project life cycle. (Objective #2, Evaluating, p. 17).

A very small project might be to build a garage. This could be accomplished with very simple description of the resulting garage (scope), a firm fixed price contract with few provisions, a schedule for construction, and exchange of contact information. All of the planning might be accomplished with a very few short, simple documents. A much larger and more complex project might use many more documents for planning and control and many of the documents could have considerably more detail.

4.

List and describe several issues that pertain to each stage of the project life cycle. (Objective #2, Remembering, pp. 7-8) • • • •

Initiating – when a project is proposed, planned at a high level, and key participants commit to it in broad terms; Planning – starts after the initial commitment, includes detailed planning, and ends when all stakeholders accept the entire detailed plan; Executing – includes authorizing, executing, monitoring, and controlling work until the customer accepts the project deliverables; and Closing – all activities after customer acceptance to ensure project is completed, lessons are learned, resources are reassigned, and contributions are recognized.

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5.

Put the five project management process groups in order from the one that generally requires the least work to the one that requires the most. (Objective #3, Analyzing, p. 10)

Answers will vary. Students should be able to defend their answers. 5 process groups: Probably the two that require less work are initiating and closing. While both should be done well, there are relatively fewer things to do on them.

• Initiating – defines and authorizes a project or a project phase; • Closing – formalizes acceptance of project outcomes and the project is brought to a conclusion.

An argument could be made for which of these three have the most work. There are more planning processes, but accomplishing the work and making sure it is done and reported correctly also require a substantial amount of time.

• Planning – defines and refines objectives and plans actions to achieve objectives; • Executing – directs, and manages people and other resources to accomplish project work; • Monitoring and controlling – collects data and checks progress to determine any needed corrective actions; and 6.

Name the ten project management knowledge areas and briefly summarize each. (Objective #3, Understanding, p. 11) • • • • • • • • • •

Integration management – unifying and coordinating the other knowledge areas by creating and using tools such as charters, project plans, and change control.

Scope management – determining all the work that is necessary for project completion and ensuring it is accomplished; Schedule management – defining, sequencing, and estimating duration, and resourcing work activities as well as developing and controlling the schedule; Cost management – planning, estimating, budgeting, and controlling costs; Quality management –planning, managing, and controlling quality; Resource management – acquiring, developing, managing and controlling the project team; Communications management – generating, collecting, disseminating, storing, and disposing of timely and appropriate project information; Risk management – risk identification, analysis, response planning, implementing risk responses, and monitoring risks; Procurement management – purchasing or acquiring product and services as well as contract management; and Stakeholder management—identifying all possible stakeholders, analyzing their various needs and expectations, communicating with stakeholders throughout life of project.

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7. Discuss how a project could be successful by some measures yet unsuccessful by others.

(Objective #4, Analyzing, pp. 15-16).

A project may end on time but over budget or under budget but of lower quality than planned.

8. What does project failure mean? What are some examples? (Objective #4, Understanding, p.

16) Project failure is not meeting all of the agreed-upon success criteria in the project plan. Serious project failure is when some of the success criteria are missed by a large amount and/or when several of the success criteria are missed by even a small margin. An example could be a project that is has to end prematurely due to being severely over budget or an IS project whose deliverable is unhelpful to the client.

9.Compare and contrast advantages and disadvantages of predictive/plan-driven and adaptive/change-driven project life cycle approaches. (Objective #5, Creating, pp. 7-10) Predictive—more time spent upfront on planning; clear idea of scope early in project, more likely to change plan at later stages Adaptive—allows for greater flexibility on unknown projects, may be harder for team to have common understanding of project early in life cycle, more easily changed.

10. You are given a project to manage. How do you decide whether to use a predictive or adaptive approach? (Objective #5, Applying, pp. 7-10) First you need to get an idea of what the project requires. Is the deliverable(s) and process needed to achieve it/them easy or difficult to understand? In other words, how much certainty is there about your project scope? If its certainty is high because it is a small and/or routine project, predictive planning is probably the way to go. If there are lots of variables outside your control and/or a great deal of uncertainty, perhaps an adaptive approach is favorable.

11. Contrast project managers and functional managers. (Objective #6, Understanding, p. 7) The project manager is normally directly accountable for the project results, schedule, and budget. This is the person who is the main communicator, who is responsible for the planning and execution of the project, and who has to be working on the project from start to finish. The project manager often must get things done through the power of influence since his or her formal power may be limited Functional managers are the department heads – the ongoing managers of the organization.

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supervising that work and they are likely to negotiate with the project manager regarding which workers are assigned to the project.

12. List as many project roles as you can, and identify what each one is responsible for in terms of the project. (Objective #6, Remembering, pp. 17-20) Core team members are ideally assigned to the project for its entire duration. They work with the project manager to make decisions, perform hands-on work, and sometimes supervise the work of subject matter experts.

Subject matter experts are brought onto the project when needed to perform specific activities. They are not normally involved in making project-wide decisions or in supervising the work of others.

A steering or leadership team for an organization is often the top leader (CEO or other) and his or her direct reports. The chief projects officer is the keeper, facilitator, and improver of the project management system. The sponsor has a financial stake in the project, charters the project, reviews project progress, is often part of the steering team, and often mentors the project manager.

The four project managerial level roles are the project manager, functional manager, facilitator, and senior customer representative. The project manager: is directly accountable for the project results, schedule, and budget; is the main communicator; and often must get things done through the power of influence since his or her formal power may be limited.

The functional managers are department heads that determine how the work of the project gets accomplished; often supervise that work and often negotiate with the project manager regarding which workers are assigned to the project. A facilitator is sometimes assigned to complex or controversial projects to assist the project manager with the process of running meetings and making decisions. The senior customer representative ensures that the needs and wants of the various constituents in the customer’s organization are identified and prioritized and that project progress and decisions continually support the customer’s desires.

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PMBOK ® Guide Questions The purpose of these questions is to help visualize the type of questions on PMP and CAPM exams. The correct answer is shown and the page references from this book are shown below each question. Remember, this text is designed to help teach students how to plan and manage projects and it complements the PMBOK ® Guide which is designed to define the “what” of

project management. Therefore, some of the questions have rather full answers in the text, others have rather full answers in the PMBOK ® Guide, and some have rather full answers in both. Each source has something useful for the student to understand about each question, but by design they are not identical.

1) Which project role provides resources or support for the project, promotes and protects the project at higher levels of management, and takes an active role in the project from the chartering stage through project closure? a) Functional manager b) Project manager c) Project team member d) Project sponsor Answer: d CPM p. 18, PMBOK p. 68 2) Which PMBOK® Guide Knowledge Area includes those processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully? a) Cost management b) Scope management c) Risk management d) Quality management Answer: b CPM P. 11, PMBOK p. 129 3) In order to be successful, the project team must be able to assess the needs of stakeholders and manage their expectations through effective communications. At the same time they must balance competing demands among project scope, schedule, budget, risk, quality, and resources, which are also known as project _____? a) Plan elements b) Deliverables c) Constraints d) Targets Answer: c CPM p. 14-15, PMBOK p. 503

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4) Projects pass through a series of phases as they move from initiation to project closure. The names and number of these phases can vary significantly depending on the organization, the type of application, industry, or technology employed. These phases create the framework for the project, and are referred to collectively as the ________. a. project life cycle b. project management information system (PMIS) c. product life cycle d. Talent Triangle Answer: a CPM pp. 7-8, PMBOK pp. 18-19 5) Based on PMI’s definition, which of these is a good example of a project?

a. b. c. d.

manufacturing a standard commodity following policies and procedures for procuring an item designing and launching a new website using a checklist to perform quality control

Answer: c CPM p. 6, PMBOK p. 13 6) When would a predictive project life cycle be the preferred approach?

a. when the high-level vision has been developed, but the product scope is not well defined b. when the environment is changing rapidly c. when the product to be delivered is well understood d. when the product will be created through a series of repeated cycles Answer: c CPM p. 8, PMBOK p. 19 7) To be effective, a project manager needs to possess all of the following competencies except ____. a. personal effectiveness—attitudes, core personality traits, leadership b. authority—power or right granted by the organization c. performance—what project managers can accomplish while applying their project management knowledge d. knowledge of project management—understanding of project management tools and techniques

Answer: b CPM p. 7, PMBOK pp. 56-60 8) In Adaptive Life Cycles (change-driven or agile methods) ___. a. the overall scope of the project is fixed, and the time and cost are developed incrementally b. the overall cost is fixed, and the project scope and schedule are developed iteratively

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c. the time and cost are fixed, but the scope is developed iteratively d. change control is very important Answer: c CPM p. 9, PMBOK p. 131 9) The two traditional project management associate-level roles are different in each of the following ways except ____. a. duration of time spent on project b. ability to work within project constraints c. degree of input contributed to project planning d. skill set Answer: a CPM p. 20, PMBOK, p. 90 10) A freelance project manager is brought in by Company X to lead a large, expensive project.

This project manager has excellent leadership skills and a strong technical understanding of the project. In order for her to optimize every component of the Talent Triangle, what might be a good activity for the project manager at the start of her time with Company X? a. familiarize herself with the long-term objectives of Company X b. host an icebreaker for all team members c. attend a seminar on advanced leadership techniques d. send an email including her résumé to all SMEs to ensure they are aware of her technical background Answer: a CPM p. 14, PMBOK p. 90

INTEGRATED EXAMPLE PROJECTS We are using two example projects throughout all 15 chapters of this book. Suburban Homes is a construction project suited to mostly traditional project planning and management. Casa de Paz is a development project suited more toward agile project planning and management. In this chapter, we introduce both of them. In subsequent chapters, we choose one to demonstrate techniques and concepts from the chapter and ask leading questions of the other one. Suggested answers will be in the Instructor’s Manual. We alternate chapters so professors can choose to use the questions as assignments if they wish.

SUBURBAN HOMES CONSTRUCTION PROJECT Before introducing and formalizing project management practices, Adam should consider an exhaustive study of the existing project management practices and their strengths and weaknesses. The study must include review of project documents, project performance Instructor’s Manual .

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information, and historical data of past projects. It is important to learn about the organization’s success strategies and stories as well as failures and causes of failures.

Furthermore, Adam should try to assess the understanding of project management and capabilities of individuals who are managing projects in the organization. This information gathering exercise must also include having formal and informal conversations with people at all levels within the organization. Based on both the existing practices and capabilities of people who are working on projects, a plan must be devised to introduce appropriate project management tools, techniques, and processes, and then develop training programs to develop competencies of individuals working in the organization. The key message is to develop and implement standards and promising processes, tools, and techniques that are appropriate for the organization.

SEMESTER PROJECT We like to use real projects as teaching vehicles. The end of Chapter 1 is a good place to introduce the projects. On a two or three days a week schedule, this can be the last day. On a one day per week schedule, this can be the last hour. We cover this in three parts. We ask a person from each agency or organization that will have a student project to attend this. That person can be called the project sponsor.

First, we tell the students a tiny bit about each project such as it is a fund raising or information systems project. We like to ask the students what criteria will be useful in deciding on project teams. This operationalizes the need for both soft and hard skills. It also gets the students thinking about practical issues of meetings (available time and locations). Once we have brainstormed a few ideas for team assignments, we ask the students to provide brief inputs regarding their background on those ideas. The students can also list a preference for which project – but we tell them if they list one preferred project; they must list at least a first and second choice. It is easy to give most students first or second choice, but difficult to give all students first choice.

Second, we spend about 10 minutes communicating common expectations to the student teams as well as the project sponsors. We tell both that we want them to initiate an effective working relationship and then we itemize the student assignments with due dates. We give everyone a hard copy. We spend a bit more time explaining the charter since that is the first deliverable.

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Third, we ask each sponsor to give an elevator speech (a very brief introduction to their organization and then tell very briefly what their project is and why it is important). While these sponsors are talking, we make project assignments. We base these on a combination of their preferences and the information they tell me about themselves. We try to make diverse teams when possible. Once all have been presented, We tell the students who will be on which project.

We allow them the opportunity to trade projects if they wish, but very few do. We ask the students to exchange information with their sponsors and arrange for their first meeting.

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CHAPTER 2 Project Selection and Prioritization LEARNING OBJECTIVES This chapter presents a broad introduction to project management. After completing this chapter, each student should be able to perform the following: Core Objectives • Explain in your own words the strategic planning and portfolio management processes.

• Describe how to select, prioritize, and resource projects as an outgrowth of strategic planning.

• From a contractor’s viewpoint, describe how to secure projects.

Technical Objectives • Compare the strengths and weaknesses of using financial and scoring models to select projects.

• Given organizational priorities and several projects, demonstrate how to select and prioritize projects using a scoring model.

Behavioral Objectives • Explain the strengths an organization might possess that could improve its ability to perform projects.

TEACHING STRATEGIES • Generally, the first thing we do in this chapter is ask the students about their example projects. Most of the student teams will not have met with their sponsors yet. We encourage them to do so as soon as possible. We ask them to tell us why the agency or organization selected this particular project. Often they are not aware. We use that uncertainty as the basis for this chapter.

• Remind the students that while the concepts behind many project management techniques are the same for all organizations, the mechanics of how they are performed can vary widely. Project selection, for example, can be very simple in a small organization or highly structured in a larger organization. Nevertheless, all organizations should use the idea of starting with strategic planning, identifying potential projects, using appropriate criteria, and choosing the set of projects that help the organization best to achieve its goals. In practice, however, some organizations decide one project at a time without looking at the big picture.

• Tell the students that in many cases they may have limited involvement in project selection and prioritization decisions, but those decisions will have a major impact on their projects, so they need to understand both how the decisions were made and the rationale behind them.

• One topic that lends itself to a quick breakout session is SWOT analysis. We like to give a scenario for a local government organization, sports organization, or company that is in the news and challenge the students to brainstorm a few strengths, weaknesses, opportunities, and threats. We ask each team to report on one of those four areas. We Instructor’s Manual .

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then ask the students how this knowledge can help them decide which projects they want to pursue. This introduces the concept of multiple criteria decision-making.

Next we introduce the mission statements for both our university and our college of business. We ask the students what they can tell us about the mission or vision statements for their present organizations (Many of our MBA students work full time and many of our undergraduates work part time.). We then discuss how this knowledge can be helpful in selecting projects that will help achieve the vision and mission. Often, students do not claim to know their organizational vision and mission. We encourage them to find those statements and try to understand how they should guide behavior.

Show Exhibits 2.5 through 2.8 to get students thinking about what a portfolio really means. We relate a project portfolio for an organization to a personal financial portfolio since most students have had finance and can remember diversifying. Either to follow-on one of the earlier breakouts, or as a standalone breakout, ask students to brainstorm potential projects of each type shown in Exhibit 2.8 for a particular company or other organization. You can even use your own university.

Since our entrepreneurship majors need to take project management, we remind them that a vast majority of work in young organizations is project based.

Quickly present Exhibit 2.8 to emphasize that net present value (NPV) is the most commonly used financial model in project selection, but that other methods are available.

For another breakout, give a scenario faced by an organization (real or fictitious). Ask students to first brainstorm potential criteria for selecting projects in that situation. The students then weight the projects on each criterion. When they report out, ask them to give the rationale behind their decisions.

Ask the students to use a scoring model to select and prioritize projects. Demonstrate with Exhibits 2.10, 2.11 and 2.12. Exercise 1 or 2 could be used for this breakout.

Alternatively, with some prior setup of generating several possible projects, a continuation of the scenario of the local organization described in the previous bullet could be used to add authenticity. Yet another alternative is to have the students in groups select a type of car to buy. They will need to decide on the selection criteria first.

We like to point out Exhibit 2.13 (Alternative Breaks Project Site Selection). Emphasize both how this is an example of selecting projects based upon multiple criteria and that we will have numerous places throughout the course where we will demonstrate points with this same integrated project.

If your course emphasis is on preparing students for the PMP and/or CAPM exam, be sure to emphasizes the study tips.

You might choose to use either Suburban Homes Construction Project (to create a scoring model to select from the six alternatives) and/or Casa de Paz Development Project (to create an elevator pitch) as in-class workshops or homework assignments.

LECTURE AND WORKSHOP OUTLINE 2.1 Strategic planning process The company’s leadership performs strategic planning to set direction.

Strategic analysis Instructor’s Manual .

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Internal and external analysis using SWOT. Guiding principles Vision (preferred future state) and mission (what we stand for and how we will operate) statements, perhaps purpose and values also.

Strategic objectives Annual goals to help achieve vision and mission.

Flow-down objectives In larger organizations an expansion on strategic objectives.

2.2 Portfolio management Since projects are investments, we must ensure the best set of projects is selected.

Portfolio A collection of projects or programs and other work that are grouped together to facilitate effective management of that work to meet strategic business objectives.

Program A group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually.

Subproject A smaller portion of the overall project created when a project is subdivided into more manageable components or pieces.

Assess organization’s ability to perform projects Understanding the type and amount of projects the organization can successfully perform.

Identify potential projects Systematically and entrepreneurially by everyone in the organization.

Methods for project selection Based upon organizational priorities, including financial and other considerations.

Using a cost-benefit analysis model to select projects Comparing expected project costs with benefits often by using net present value analysis.

Using a scoring model to select projects Used when multiple criteria such as timing, risk, and resource needs are important in selection decisions.

Prioritizing projects Once selected, determining when each project will start and how conflicts will be resolved.

Resourcing projects After the priorities of each project has been determined, leaders should start assigning resources from the highest priority project down until resource availability limits additional projects.

2.3 Securing projects Client company perspective of finding contractors to perform and contractor company perspective of finding projects to perform.

Identify potential project opportunities Contractor companies use many methods to uncover possible projects.

Determine which opportunities to pursue Decide whether to pursue all projects or only select projects.

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Prepare and submit project proposal Proposals often include technical, management, and financial considerations.

Negotiate to secure the project Both parties need to agree to terms that make sense.

CHAPTER REVIEW QUESTIONS – SUGGESTED ANSWERS 1.

List and describe each step in the strategic planning process (objective #1, pp.33-37) • Strategic analysis – analyze strengths and weaknesses within the organization and opportunities and threats external to the organization.

• Guiding principles – create statements of organizational vision, mission, purpose and/or values to guide decision-making.

• Strategic objectives – often annual planning to establish short and long term results that will support guiding principles.

• Flow-down objectives – optional for large or complex organizations to ensure that appropriate goals are established.

• Portfolio alignment – selecting a set of projects to support organizations’ goals.

2.

Name at least four things a mission statement should include. (objective #1, pp.35-36) The mission statement should include the organization’s purpose, beliefs, core values, culture, primary business, and primary customers.

3.

What does the strategic analysis acronym SWOT stand for? (objective #6, p.35) Strengths, weaknesses, opportunities, and threats.

4.

What is the most widely accepted financial model for selecting projects? (objective #4, p.

44) Net present value (NPV) is the most widely accepted model as all the other models, though offering additional perspective, have more weaknesses.

5.

What are some advantages and disadvantages of using a financial model for selecting projects? (objective #4, pp.44-45) Financial models are useful in ensuring that selected projects make sense from a cost and return perspective, but they do not take into account a company’s strategic goals, so objectives, timing, resource needs, and risk should often be considered also.

6.

What are some advantages and disadvantages of using a scoring model for selecting projects? (objective #5, pp.45-48) Scoring models allow leadership teams to perform sensitivity analyses—that is, to examine what would happen to the decision if factors affecting it were to change. They are more time-intensive than financial models.

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7.

What are some common reasons for project failure? (objective #6, p.33) • Not enough resources • Not enough time • Unclear expectations • Changes to the project • Disagreement about expectations

8.

Who should be involved in the second part of aligning projects with the firm’s goals, which is identifying potential projects? (objective #2, p.42) All parts of the organization should help identify potential projects.

9.

If there is a conflict between resource needs for two projects, who decides which one gets the needed resources first? (objective #2, p.48) Generally this is determined by the project sponsor; under especially important circumstances, the decision may require the leadership team.

10. In a project scoring model, why is each decision criteria given a weight? (objective #5, p.46) The weights are assigned according to each criterion’s relative importance. Therefore, the more important criteria will have a greater effect on the outcome than criteria deemed less important.

11. What purpose do sensitivity analyses serve in using scoring models to choose projects? (objective #2, p.47) Allows decision makers to examine what would happen to the decision if factors affecting it were to change.

12. If several projects have close scores as the result of a scoring model, what can be done to break the virtual tie? (objective #5, p.47) The group can use other criteria or discussion to break a tie.

13. Why might a contractor company perform a SWOT analysis prior to bidding on a potential project? (objective #3, p.50) A quick SWOT analysis could be used to decide whether to pursue a potential project.

Decision makers can also ask how well a potential project will help achieve their objectives. If they determine a project will help achieve their objectives, the next considerations are the cost to pursue the work and the probability of successfully securing the project given the likely competition. A company frequently considers risks both of pursuing and not pursuing a potential project. Finally, does the company have the capability to perform the work if it is awarded?

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14. Why is it important for a contractor to understand the source selection criteria a client uses to decide to whom they will award a project? (objective #3, p.51) By understanding what a client is looking for, a contractor can demonstrate his company’s capabilities in terms of the specific job proposed, thus increasing his chances of being selected for the work.

15. Name five things that may be negotiated between a client company and a contractor company. (objective #3, p.51) • • • • • •

Amount of money to be paid Contractual terms Schedule Personnel Quality Standards Reporting Mechanisms

DISCUSSION QUESTIONS – SUGGESTED ANSWERS 1.

How might the internal and external parts of a SWOT analysis affect one another? (objective #1, Analyzing, pp. 34-35) The internal analysis (elements within the project team’s control) consists of asking what strengths and weaknesses the organization possesses in itself. The external analysis (elements over which the project team has little or no control) consists of asking what opportunities and threats are posed by competitors, suppliers, customers, regulatory agencies, technologies, and so on. Together, these two can give a company an idea of what its competitive advantage is relative to others in the market and where they should go from here.

2.

Describe the interaction between vision and mission statements. (objective #1, Applying, pp.

34-36) The vision is normally a description of a desired future state of the organization that may take multiple years of effort to achieve. The mission statement should evolve from the vision and be a means to achieve it.

3.

How is a company’s portfolio similar to and different from a financial portfolio? (objective #1, Evaluating, 37-39) A portfolio is “projects, programs, subportfolios, and operations managed as a group to achieve strategic business objectives.” Project portfolios are similar to financial portfolios.

In a financial portfolio, efforts are made to diversify investments as a means of limiting risk.

However, every investment is selected with the hope that it will yield a positive return. The returns on each investment are evaluated individually, and the entire portfolio is evaluated as a whole.

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4.

What is the best way for an organization to prioritize among selected projects? Does it vary among organizations? (objective #2, Analyzing, p. 48) There are several ways to prioritize among selected projects, and the method(s) used may vary from organization to organization. If using a scoring model, further discussion and/or additional criteria can be used to prioritize among projects with similar scores. Executives may have pet projects, despite the scoring model results. And sometimes a single consideration (such as timing the debut of a new system) outweigh other criteria and lead to project prioritization.

5.

Why is aligning potential projects with the parent organization’s goals the first step in avoiding project failure? (objective #3, Analyzing, p. 39) Aligning potential projects with the parent organization’s goals makes it far likelier that a project will receive support from company decision makers. This buy-in or good will can greatly impact the likelihood of a project succeeding.

6.

Why is it good practice for organizations to identify twice as many potential projects as they plan to implement? (objective #5, understanding, p. 42) Some potential projects may not be a good fit. Any company that accepts practically every potential project will probably waste some of its resources on projects that do not support its organizational goals.

7. Suppose you are purchasing a new car, and you decide to use a scoring model to decide among four options. What would be your top three criteria and what would be each criteria’s relative weight? (objective #5, evaluating, p. 46) Example: Appearance—5 (on 1-5 scale of importance) MPG—3 Cost—2 8. Under what circumstances should a selected project take precedence over other selected projects? (objective #4, analyzing, p. 48) If a project is urgent, its delay would be extremely costly either financially or in terms of hoped-for benefits, or it is mandated by the government or other controlling body.

9. If you are a contractor looking for project work, why might you decide not to pursue a particular project opportunity? (objective #3, synthesis, pp. 50-51) You might decide not to pursue an opportunity if your company had no strategic advantage and/or was likely to be outbid by a competitor; you do not have the resources to complete the project according to its performance criteria; or if being awarded this contract would inhibit your chances at other work that is a better fit for your company.

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10.

What are the four main areas of competency a client company is looking for in a project manager? How can you best demonstrate these competencies to a potential client? (objective #6, applying, p. 51) Technical, Management, Financial, Operational; show examples/references for previous work; come up with a risk management plan, etc.

PMBOK ® Guide Questions 1) A collection of projects, programs, and operations managed as a group to achieve strategic objectives are called a: a) Process b) Portfolio c) Subprogram d) Life cycle Answer: b Page 37 in textbook Page 52 PMBOK 6th Edition 2) Projects may be undertaken as a result of any of the following strategic reasons except: a) Social need b) Market demand c) Need to keep workers busy during slow times d) Environmental considerations Answer: c Pages 41-42 in textbook Page 31 PMBOK 6th Edition 3) A narrative description of products, services or results to be delivered by the project is a: a) Request for information b) Business case c) Project statement of work d) Elevator pitch Answer: c Page 42 in textbook Page 481 PMBOK 6th Edition 4) All of the following are true except: a) A portfolio may contain multiple programs and projects b) A project manager has the discretion to make trade-offs in regard to which programs to

pursue.

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c) A program manager has the discretion to make trade-offs in regard to which projects to

pursue. d) Projects have a finite timeline, while programs may exist as long as the parent organization

does.

Answer: b Page 38 in textbook Page 11 PMBOK 6th Edition 5) Which of the following is a financial analysis tool that an organization may use to determine the costvalue of potential projects? a) Payback Period (PP) b) Internal Rate of Return (IRR) c) Net Present Value (NPV) d) All of the above Answer: d Page 35 in textbook Page 34 PMBOK 6th Edition 6) All projects should be aligned with their organization’s strategic plan, which includes the organization’s vision, goals, and objectives. Which of these describes an organization’s vision? a) Conveys a larger sense of organizational purpose, and is both inspiring and guiding. b) Describes short and long term results along with measures to determine if they have been achieved. c) Includes the organization’s core purpose, core values, beliefs, culture, primary business, and primary customers. d) Is SMART: specific, measurable, achievable, results-based, and time-specific.

Answer: a Pages 34-35 in textbook Page 7 PMBOK 6th Edition 7) The __________________ best describe(s) why a project is being undertaken. a) statement of work b) business case c) subprojects d) source selection criteria Answer: b Pages 42-43 in textbook Page 29 PMBOK 6th Edition 8) The document that includes the necessary information to determine whether a project is worth the required investment, and is used for decision making by upper management, is called the:

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a) Project Scope Statement b) Project Charter c) Business Case d) Case Study Answer: c Pages 42-43 in textbook Page 29 PMBOK 6th Edition 9) An organization’s vision often includes reference to its social, environmental, and economic health, collectively referred to as the: a) triple bottom line b) business case c) statement of work (SOW) d) net present value (NPV) Answer: a Page 35 in textbook Page 7 PMBOK 6th Edition 10) A business case typically contains information regarding the business need and a financial analysis. Which financial model divides the cash flow by the initial cash outlay? a) Benefit-Cost Ratio (BCR) b) Internal Rate of Return (IRR) c) Net Present Value (NPV) d) Payback Period (PP) Answer: a Page 44 in textbook Page 34 PMBOK 6th Edition

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EXERCISES – SOLUTIONS 1.

Complete the following scoring model. Show all your work. Tell which project you would pick first, second, third, and last. How confident are you with each choice? If you lack confidence regarding any of your choices, what would you prefer to do about it?

Project\Criteria & Weight

Criteria 1

Criteria 2

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Criteria 3

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Project B Project C Project D

Project\Criteria & Weight

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Project B Project C Project D

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Select Project A first. We are quite confident about that selection since Project A scored considerably higher than all others. The second project to be selected is Project B, but Project C is in a virtual tie, so we would prefer to discuss the relative merits of each, perhaps considering additional “tie-breaking” criteria, before making the final selection. Project D is

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a distant fourth, so if given the ability to perform three projects, I would be very comfortable with A, B, and C. 2.

Complete the following scoring model. Show all your work. Tell which project you would pick first, second, third, and last. How confident are you with each choice? If you lack confidence regarding any of your choices, what would you prefer to do about it?

Project\Criteria & Weight

Criteria 1

Criteria 2

10 Project A

Criteria 3

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Weighted Total Score

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1

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Criteria 1

Criteria 2

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Project B Project C Project D

Project\Criteria & Weight

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Project C Project D

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We would pick Project C first and Project B second. We feel confident in those selections as the scores are quite different than the others. We would be hard pressed to select a third project without additional information. Projects A and D are in a virtual tie.

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3.

Pretend you are the leadership team for a pharmaceutical company that is in a difficult financial situation due to patents that have expired on two of your most profitable drugs.

Brainstorm a list of criteria by which you would select and prioritize projects. Weight the criteria.

Answers will vary. The criteria developed would apply to projects that either are starting with a new compound (entirely new drug which may take a long time to get to market), a variation on a compound that is already partially studied (getting a variation of a drug to market sooner), or the purchase of a drug another company has fully or partially developed (perhaps getting the drug to market much quicker). Some criteria might include: speed in getting a new pharmaceutical to market, probability of success, cost of the project, and similarity with the company’s existing products (alignment). The weightings can also vary, but students should be prepared to explain the logic behind why they chose the weights they did. Speed in getting a drug to market should be one of the highly rated criteria.

4.

Pretend you are the leadership team of a manufacturing company that is currently challenged by low-cost competition. Brainstorm a list of criteria by which you would select and prioritize projects. Weight the criteria.

Answers will vary. Projects may include cost reduction improvement projects and new product development projects. Cost will certainly be one of the higher rated criteria. Others may include probability of success and alignment with current products and/or organizational strategy.

SUBURBAN HOMES CONSTRUCTION PROJECT Students must be encouraged to follow the process outlined in the Exhibit 2.1. Before using this process, the students must be encouraged to review all the information provided about the Suburban Homes case study in Chapters 1 and 2. After reviewing the information, first task is to define vision and mission of the Suburban Homes. The vision and mission must include two aspects: first, its ambitious business expansion plan in different regions of the US and second, developing and retaining the brand image of quality construction and quality homes. The third and an indirect aspect is the business growth and resultant profits. Students must be encouraged to develop strategic objectives based on the vision and mission statements and we must ensure that these objectives are directly derived from the mission statement. All these strategic objectives can be considered for the project selection model. Finally, the selection model, similar to Exhibit 2.10, is recommended for translating these strategic objectives into project selection criteria. Further, the construction company must maintain a balance portfolio of six options outlined in the case

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study. This balance portfolio would, to a large extent, depend on the SWOT analysis as described in Exhibit 2.2.

CASA DE PAZ DEVELOPMENT PROJECT Look for an elevator pitch for the website development that is just a few sentences long, but tells what the students propose to include and why it will be useful. There is no textbook answer, but rather an easy to follow description and compelling logic.

SEMESTER PROJECT The primary thing students can do in this chapter regarding their example project is to discover why the organization selected the project. This involves learning enough about the organization’s vision and mission to understand how the project will help achieve both. Remind students that executives consider projects to be investments (of money, workers’ time, or both) and they want to have confidence they will get a good return on their investment. We generally have a class discussion about this, rather than an assignment. We tell the students we want them to be able to articulate how the project will be of value to the organization. This not only gives the students a great start on writing the business case section in the project charter (Chapter 3, but it also starts to help the students develop a strong attachment to their project. This can lead to more student work on the project and to discussions regarding passion for a project and how that helps when projects go through difficult periods.

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CHAPTER 3 Chartering Projects LEARNING OBJECTIVES This chapter covers project charters: What they are, why they are necessary, and how to construct them. After completing this chapter, each student should be able to perform the following: Core Objectives: • Describe what a project charter is and why it is critical to project success.

• List the various elements of a charter and why each is used.

• Create each section of a charter for a small sample project using given project information.

Technical Objectives: • Initialize a project in Microsoft Project and set up a milestone schedule.

Behavioral Objectives: • Work with a team to create a complete charter for a real project and present it to a sponsor for ratification.

• Negotiate with a sponsor to develop a realistic and achievable project charter.

TEACHING STRATEGIES •

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This is the first chapter with a great deal of technique for the student to learn. We start by discussing what charters are and why they are important and then rapidly turn our attention to how charters are constructed. We emphasize that charters are like informal contracts. Like contracts, they set expectations for behavior and can be modified if both parties agree and if there is consideration for both parties. Unlike a formal contract, they have no fine print and people commit to the spirit of the project, not the letter of a formal contract.

We prefer to teach this project with students creating charters for new and real projects.

Student teams work on one project each for the duration of the semester. At the end of the term, we like to get a panel of PMPs from the local PMI chapter to judge all of the student deliverables. This gives the students “real world” feedback on their documents.

You can have breakout sessions for some or all of the sections of a charter. We generally try to have students spend at least a bit of time on most of the sections. We tell them they will not have time to really polish each section in class, but that we want them to get a feel for each.

One interesting variation on having the students draft charter sections is to then have one student team present that section to another student team who are role-playing as sponsor and other stakeholders. Encourage them to ask those questions that they feel some of the stakeholders may ask. This helps the students visualize the different expectations of various stakeholders.

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Another variation is to have a student team present the section they have been composing and then to ask a student in another group (we suggest you ask a specific student, rather than ask for volunteers at this point) to paraphrase what the first student said. We make the point that if the second student could paraphrase it well, the team was probably getting close on their description. On the other hand, if the student could not describe it very well, the team still needs to work on their clarity. This is a good, low stress way for students to understand how clear they are. We make sure each team gets a chance to present at least once with a couple of teams presenting each charter section.

We also like to have the students turn in a draft of their charters for our suggestions without a grade. We give them lots of specific suggestions. The revised charters are often quite good, but not always.

We post copies of several charters from previous semesters on Blackboard. We encourage the students to look at several and choose the parts of each that they feel they can adapt to their project. We warn them that none of the examples is perfect in every way, so they need to be thoughtful in what they emulate. This may be difficult to do the first time you teach, so encourage the students to look at the partial examples within the chapter and the full example at the end.

We teach scope overview and business case together. Many student teams will get the two mixed up. By clearly stating what and why as two different sections, students really develop a better understanding of the project. The person whose project it is (if it is a student project – otherwise the person who seems to know most about the project) will start to tell about the project. One person will serve as scribe writing down anything that sounds as if it might be important. Each of the other team members should ask questions about the project and make sure the scribe captures any idea that may be of importance.

If in doubt, capture the idea. When we do this in class, we usually continue for 10 minutes or so until a flip chart is filled with ideas. Then we ask the scribe to use 2 different colors of markers and mark any idea that sounds like a “what” in one color and any idea that sounds like a “why” in another color.

Next, we subdivide into two smaller teams with each team taking the ideas of what or why and drafting a statement of perhaps 2 to 4 sentences. Then they show their statements to each other to make sure they fit together. Finally, one person from the team presents the two statements, in their own words and not necessarily verbatim, to the rest of the class. At that point, as the instructors, we turn to someone randomly in another group and ask them to paraphrase what was just said. If they understood the majority of what was said, we tell the team they are close. If not, we tell them they need to clarify. We also like to add a few points about what the team did well and where they can improve.

The milestone schedule and acceptance criteria are much more powerful together than they are individually. The six-step format works well because if students start at the beginning and try to generate milestones before they know the final point, they may end up using too much detail. The detail will come later in the planning stage. Some students have a hard time understanding that the stakeholder is the person who judges the acceptance criteria, not the person who creates the deliverable. We remind students of the old suggestion that a trial attorney should know the answer to a question before

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asking it. By the same token, a project manager should know if a stakeholder will like a deliverable before submitting it because he/she understands how the deliverable will be judged.

When creating the milestone schedule, it is helpful to tell the students the project they are planning may be part of something larger like in Exhibit 3.6. If so, the second step in the six-step process is to identify both the ultimate goal to be achieved someday and the interim future state when the project is complete. Remind the students of rolling wave planning – we can see the first wave on a beach clearly but can only see the second one when we can see over the top of the first one. Planning a project that is part of something larger is like studying the first wave with expectations that we will then study the next wave when we can. To that end, the last deliverable in the first phase of a multi-phase project is sometimes a rough plan for the next wave.

Risks are a fun part of charters to teach since most students enjoy brainstorming. One key is to get the student group (and not just an individual) to rate each risk according to both probability of occurrence and impact if it happens. Tell the students the diagonal line is used to separate the major risks that will each have a contingency plan from all other risks that we will just keep watching. Many students tend to rate the majority of risks as major risks. However, they often reconsider when they discover each major risk needs one or more contingency plan. Each contingency plan should be designed to either reduce the probability of occurrence or impact. It is also helpful to tell the students the line represents the risk tolerance level of their sponsor and/or other key decision-makers. If their sponsor is willing to accept quite a bit of risk, the line can be rather high – and if the sponsor wants little risk the line would be lower. Asking the sponsor about their risk tolerance is good practice. The goal of risk management is not to eliminate all risk as that would be too expensive – it is to reduce risk to a level acceptable to the sponsor.

Resources needed estimates will vary widely from one organization to another. In some organizations, a budget is critical while in others staff time is the big issue. Sometimes space, key machines, or other resources that are in scarce supply are important. Note how this is shown differently in Exhibit3.10 and in the Project Management in Action Feature at chapter end.

We like to tell students that stakeholder lists are vital since many projects have communication lapses with various stakeholders that affect project success. The students will often not list much in this section. That is acceptable since the stakeholder identification and prioritization will be expanded in the following chapter and that will be essential for developing the project communication plan. The key is to get the students to start thinking about the project stakeholders.

Lessons learned tend to be easy with MBA students since many have been on at least one project that has experienced difficulties. Intuitively students understand the idea of learning from both successes and failures. However, when you ask them to actually list specific lessons, many will give very general suggestions. These are better than none, but try to get them to be specific. Remember, one starter list of lessons learned are in Exhibit 15.4 and a somewhat longer one is in the preface section of this instructor’s manual.

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Commented [KW1]: ?? I don’t have Ch. 15 copyedit to check this against

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If the students are planning a project for an organization that is not very savvy concerning projects, the sponsor may be tempted to just say OK. We try to head that off proactively by having the sponsors attend class early in the term and laying out common expectations. One of those expectations is that the sponsors will ask many questions when the students present the charters. The questions can be both for clarification and for negotiating changes.

Point out that Exhibit 3.6 is an example of using a milestone schedule for the Alternative Breaks Project. There is no detail developed yet, but we start the scheduling process at a high level.

This chapter has a detailed introduction to MS Project. Depending on the time available, you can just do a quick show and explain with either MS Project or Power Point slides for this introduction or you can go to a computer lab. We prefer to do the show and explain now and go a couple of times to the lab later.

LECTURE AND WORKSHOP OUTLINE 3.1 What is a project charter?

A project charter is like an informal contract between the project team and the sponsor.

3.2 Why is a project charter used?

The project charter is used to authorize PROJECT MANAGER to proceed, help develop common understanding, help team and sponsor to commit, and screen out poor projects.

3.3 When is a charter needed?

A question often asked is if an initiative is large enough to warrant a charter. Exhibit 3.2 may prove useful in making that decision and if a full charter or an abbreviated mini-charter will be enough.

3.4 Typical elements of a charter While charters in practice vary widely, the following sections are found in many charters. Most are kept quite short for easy reading.

• Title A meaningful title helps people understand the project quickly.

• Scope overview The “what” of the project. The project in a nutshell: what needs to be delivered and what work is involved in creating it.

• Business case The “why” of the project. How the project will benefit the organization – how it supports the organization’s strategy.

• Background Optional. More details under business case if needed.

• Milestone schedule with acceptance criteria Powerful visual summary of high-level schedule combined with how key stakeholder will evaluate progress at each point.

• Risks, assumptions, and constraints Risks are uncertain events, assumptions are factors believed to be true, and constraints are limitations. Each can influence the project.

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Resource estimates Preliminary project budget or at least pre-approval to cover minor expenses, plus estimates for staff time and any resource that is in short supply.

• Stakeholder list Table with stakeholders identified along with what each cares about.

• Team operating principles Guidelines to enhance team functioning. Often include meetings, decisionmaking, accomplishing work, and showing respect.

• Lessons learned How the current project will be better because of learning on previous project(s).

• Signatures and commitment Public and personal commitment to the project.

3.5 Constructing the project charter Ideally sponsor and project team work together. In practice, often the team prepares the first draft and then discusses with sponsor.

• Scope overview and business case instructions This is the “elevator speech” – a half minute summary of the project. Ideally, sponsor provides a rough draft or at least input. Each of these sections should be about two to four sentences.

• Background instructions If team wants more detail than four sentences in either of the previous sections, the extra details can be included in this optional section.

• Milestone schedule with acceptance criteria instructions Can use a table with four columns, one each for milestones; dates; stakeholder (who will judge); and acceptance criteria. Six-step process includes describing current situation, describing desired end state (along with ultimate goal if project is the part of something bigger), describing end state stakeholder and acceptance criteria, determining milestones, identifying stakeholder and acceptance criteria for each milestone, and finally determining expected completion dates for each milestone, • Risks, assumptions, and constraints instructions This section can vary. At a minimum, brainstorming is done about risks and one risk is noted per Post-It® Note, determining by group consensus the likelihood and the impact of each risk, and creating contingency plans and assigning ownership for each major risk.

• Resource estimates instructions Listing any preliminary budget or authorization to spend minor amounts of money without further approval and estimates for staff time and other limited resources.

• Stakeholder list instructions A two-column table is created listing stakeholders and the interest each has in the project. If the list is long, a sponsor may wish for the team to begin prioritizing the stakeholders now rather than wait until it is covered in the next chapter. A simple prioritization at this point is just primary stakeholders and all other stakeholders.

• Team operating principles instructions Either existing team principles are discussed or new ones are formulated.

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Lessons learned instructions Useful practices are identified to copy or tailor from previous projects and/or less useful practices to be avoided.

• Signatures and commitment instructions Signature blocks are created to be signed after ratifying charter.

3.6 Ratifying the project charter Project manager and team present draft charter to sponsor (and sometimes team of executives). After interactive discussion, often leading to adjustments, ideally everyone is satisfied and sponsor, project manager, and core team sign charter.

Everyone feels committed to the project.

3.7 Starting a project using Microsoft Project 2013 MS Project 2016 introduction This section tells where MS Project is presented in the text and what some of the major capabilities include.

Setting up your first project Define your project Construct a milestone schedule

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CHAPTER REVIEW QUESTIONS – SUGGESTED ANSWERS 1.

What is a charter? (objective #1, p.62) • Informal contract between sponsor and project team (core team and project manager).

2.

Describe what an effective charter should accomplish. (objective #2, pp.62-63) •

3.

How is a charter like a contract? How is it different from a contract? (objective #1, p.62) •

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4.

A typical charter is about 1 to 4 pages.

Signing the charter marks the transition between which two project stages? (objective #1, p.84) •

6.

It is an agreement entered into by the two parties through consensus and one of them cannot arbitrarily change it. It is a living document that can be changed if both parties agree and both receive something of value. This means that if a sponsor needs to change the terms of the project such as to make a demand for earlier completion, the sponsor then needs to work with the team to determine how to accomplish it – not just demand more overtime with no compensation A charter is different from a contract in that the parties are agreeing to the “spirit” of the project. The details are not worked out yet, so there is no “fine print” as in many contracts. The schedule, budget, exact deliverables, etc. may change, but all parties agree to keep working hard to help make the project successful.

How long should a typical charter be? (objective #1, p.65) •

5.

An effective charter should authorize the project manager to proceed. It should also help the project manager, core team, and sponsor develop common understanding. It should further help the project manager, core team, and sponsor commit to the project. Finally, it should quickly screen out obviously poor projects.

From the high-level project initiating into the more detailed project planning stage.

Who generally writes the rough draft of a charter? (objective #1, p.62) •

The team usually writes the rough draft, but an executive team or a sponsor could write the first draft.

7.

Give three reasons for using a charter. (objective #1, p.63) • Authorize the project manager to proceed.

• Help project manager, team, and sponsor develop common understanding.

• Help project manager, team, and sponsor to commit, and • Quickly screen out obviously poor projects.

8.

What are some typical elements in a charter? (objective #2, p.65) Element

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Scope overview – Determine how big the project will be Business case – Why the project is needed Background – Optional – if more details are needed Milestone Schedule – When each intermediate point needs to be done Acceptance criteria – How will the quality of work be judged along the way?

Risks – Identify what could go wrong and include in planning Spending approvals – How much can the project manager spend without further approval?

Stakeholder list– Who cares about the project and what are their interests?

Team principles – How will we work together?

Lessons learned – Let’s learn from the success/failure of other projects Signatures – Commitment to the project.

What is scope creep and how can it be prevented? (objective #2, p.66) Scope creep is “uncontrolled expansion to product or project scope without adjustments to time, cost, and resources.” It can be avoided by establishing clear understanding among everyone involved in the project exactly what is and what is not included in the project scope as soon as possible and by utilizing a formalized change control system whenever a change is proposed to the project.

When would a background section be helpful? (objective #2, p.66) • If scope overview and business case do not provide enough information about the project to satisfy important stakeholders and secure buy-in

11. On most small to medium sized projects, how many intermediate milestones should be identified in the charter? (objective #2, p.66) • About three to eight.

12. What types of resources might be included in a resources-needed section of a charter? (objective #2, p.69) • People • Equipment • Space

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13. Name three reasons project managers and teams should look at risk. (objective #2, pp. 6768) • .First, any negative risk that is a threat that may inhibit successful project completion (to the satisfaction of stakeholders, on time, and on budget) needs to be identified. If it is a major risk, a plan must be developed to overcome it. Second, a positive risk is an opportunity to complete the project better, faster, and/or at lower cost or to capitalize upon the project in additional ways, and a plan should be developed to capitalize upon it.

Third, sometimes there is more risk to the organization if the project is not undertaken— and this provides additional rationale for doing the project.

14. Why should each contingency plan have an “owner” who is responsible for it? (objective #2, p. 68) • This helps to ensure it will be accomplished if the risk event happens.

15. What are the four columns of the milestone schedule? (objective #2, pp. 66-67) • Milestone, • Date, • Stakeholder judge, and • Acceptance criteria.

16. With whom might the project manager and project team need to negotiate with when creating the charter? (objective #6, p.79) • Sponsor 16. What is the primary difference between “Auto” and “Manually” scheduled settings in Microsoft Project? (objective #4, pp. 81-82) With Auto Scheduled selected, MS Project automatically calculates a schedule as previous versions have, using a set of schedule drivers to calculate the start and finish dates for all tasks and summaries. The Manually Scheduled mode ignores those drivers (as per option settings), instead using manually entered data. (Manually Scheduled is the default for all new projects.)

DISCUSSION QUESTIONS – SUGGESTED ANSWERS 1.

Identify the purpose of each element in a project charter. (objective #2, Analyzing, p. 65) Element Purpose • Scope overview – Determine how big the project will be • Business case – Why the project is needed • Background – Optional – if more details are needed • Milestone Schedule – When each intermediate point needs to be done • Acceptance criteria – How will the quality of work be judged along the way?

• Risks – Identify what could go wrong and include in planning

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• • • • • 2.

Spending approvals – How much can the project manager spend without further approval?

Stakeholder list– Who cares about the project and what are their interests?

Team principles – How will we work together?

Lessons learned – Let’s learn from the success/failure of other projects Signatures – Commitment to the project.

Explain how a charter helps secure both formal and informal commitment. (objective #1, Evaluating, p. 63) The charter is the official form that formally authorizes the project manager to proceed, but it is also good at informally developing commitment by fostering agreement, trust, and communication.

3.

How are risks, assumptions, and constraints related? (objective #2, Analyzing, pp. 67-68) Taken together, risks, assumptions, and constraints are what could cause a project problems. If an assumption turns out to be false, it becomes a risk. A constraint that limits the amount of money, time, or resources needed to successfully complete a project is also a risk. Some organizations group all risks, assumptions, and constraints together, while others handle each as a separate charter section. The most important point is not how each is handled, but that each is handled.

4.

If you are a project manager and have the choice of forming your core team either before or after charter approval, which would you do and why? (objective #1, Applying, p. 63) •

5.

List and describe at least four lessons you have learned from previous projects. Relate how each is valuable in planning a new project. (objective #3, Evaluating) •

6.

Before charter approval since members who participate in writing and ratifying the charter tend to understand more about the project and also feel more committed to it.

Answers vary. Look for specific examples – the more specific, the better. Also look for logical reasoning about how each will enable the team to plan better and/or manage the current project.

In your opinion, what are the three most important items in your project charter? How did each help you plan your project better? (objective #2, Analyzing) •

Answers vary. Look for how the student feels each will help the project. Most frequent answers include scope overview, business case, and milestone schedule with acceptance criteria. However, any section is an acceptable answer if accompanied by a compelling reason why it is helpful.

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7.

Give an example of how an incorrect assumption could become a risk. (objective #2, Applying, pp. 65-66) If an assumption turns out to be false, it becomes a risk. Examples will vary.

8.

Briefly summarize the process of creating a milestone schedule. (pp.72-74, Understanding) Step 1 Describe (in three or four words) the current situation that requires the project Step 2 Once the current state is agreed upon by the project manager and team, skip to the desired future state. Describe the project (or phase if there will be future phases) at its successful completion in three or four words. Put this description in the last row of the milestone column.

Step 3 Next, describe the acceptance criteria for the final project deliverables (at the future state). What stakeholder(s) will judge the deliverables, and on what basis?

Step 4 Now, go back to the milestone column. Determine the few key points where quality needs to be verified. On most small to medium-sized projects, approximately three to eight intermediate points are satisfactory. Start by identifying the three most important intermediate points, and add more if necessary.

Step 5 Now for each milestone, determine who the primary stakeholder(s) is and how he or she will judge the resulting deliverable.

Step 6 Finally, determine expected completion dates for each milestone.

9.

How are project scope and product scope similar and different? (objective #1, Evaluating) The product scope refers to the features and/or characteristics of the main deliverable— whether that is an actual product, service, or other result. The project scope includes all the work that is necessary in order to achieve project success and create acceptable deliverables.

10.

Upon seeing the rough draft of your charter, your project sponsor asks you to move the finish date up by two months. What do you do? (objective #6, Applying, pp. 79) Answers will vary but should NOT include agreeing to this change without utilizing one of more of the following: negotiating tradeoffs in either quality or budget to offset this schedule change; discussing feasibility with project team and/or subject matter experts; reducing project scope.

11.

What are the greatest advantages to using a computerized scheduling program like Microsoft Project? (objective #4, Evaluating) Opinions will vary but should be supported. See pages 79-87 as reference.

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PMBOK® Guide Questions 1) Which of the following is NOT a purpose of an approved project charter? a) formally authorizes the existence of a project b) provides detailed information about financial resources c) helps the team and sponsor develop a foundational understanding of project requirements d) provides project manager with authority to apply organizational resources to the project Answer: b Page 63 in textbook Page 34 PMBOK 6th Edition 2) Adding to the project after it has already begun without making adjustments to time, cost, or resources, is known as: a) b) c) d)

scope creep risk milestones acceptance criteria

Answer: a Page 66 in textbook Page 168 PMBOK 6th Edition 3) “It is inconvenient and time-consuming for employees to walk across campus every day to eat lunch, which is why we need an employee lunch room in our building” is an example of: a) b) c) d)

project scope business case milestone schedule constraint

Answer: b Page 66 in textbook Page 30 PMBOK 6th Edition 4) What information does the project charter contain that signifies how the customer or user of the final product, service or result will judge the deliverables, in order to determine that they have been completed satisfactorily? a) b) c) d)

high-level project risks measurable objectives and acceptance criteria high level project boundaries project assumptions

Answer: b Pages 66-67 in textbook Page 155 PMBOK 6th Edition

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5) The project charter should include “factors that are considered to be true, real or certain without proof or demonstration.” These are known as _____: a) b) c) d)

risks assumptions high-level requirements objectives

Answer: b Pages 67-68 in textbook Page 72 PMBOK 5th Edition 6) The signing of the project charter represents all of these EXCEPT: a) a formal acknowledgement of the sponsor’s commitment to the project b) the formal approval of the detailed project schedule c) authorization to transition from high-level project initiation stage into the more detailed project planning stage. d) the organization’s commitment to apply resources to the project Answer: b Page 84 in textbook Page 33 PMBOK 6th Edition 7) What project charter component documents significant points or events in the project, and per the author may be developed most effectively when combined with other information such as acceptance criteria? a) b) c) d)

network diagram Gantt chart stakeholder management strategy summary milestone schedule

Answer: d Pages 66-67 in textbook Page 180 PMBOK 6th Edition

8) You are the project manager. Upon presenting your charter to your sponsor, she requests several changes. What do you do? a) agree to all the changes in order to make your sponsor happy. b) refuse to change the charter, since that would be unfair to your team. c) have your team vote on whether or not to make the changes and go with the will of the majority. d) negotiate with your sponsor to see how you can best accommodate her requests without agreeing to unreasonable expectations.

Answer: d Page 63 in textbook Page 77 PMBOK 6th Edition

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9) The charter is the primary deliverable of a project’s ______________ phase. a) b) c) d)

Selecting Initiating Planning Executing

Answer: b Page 62 in textbook Pages 75-77 PMBOK 6th Edition 10) According to the PMBOK, the rough order of magnitude for the summary budget within the project charter is _____________________. a) -100% to +200% accuracy b) -25% to + 75% accuracy c) -5% to +10% accuracy d) none of the above Answer: b Page 75 in textbook Pages 241 PMBOK 11) After identifying potential project risks, the project team should then ____ _____: a) develop risk response plans for all identified risks. b) wait for the sponsor to conduct a risk assessment. c) move on to other components of the charter, since identifying risks is the only riskrelated activity in the initiating phase. d) assess each risk based on probability and likely impact, and then create a risk response plan for each major risk.

Answer: d Page 75 in textbook Page 411, PMBOK 6th Edition

EXERCISES – SOLUTIONS 1.

Consider a major team assignment for a class. Write the scope overview and business case sections of a charter.

•

Answers vary depending on the assignment. Look for a clear description of exactly what the student team will do and why it is important. Each of those statements should be of one to four complete sentences and should be easy to understand.

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2.

Write the business case and scope overview sections of a project charter for a project in which your company is considering buying out another company.

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3.

You are part of a student team that is going to host a picnic-style party as a fund raiser event for a deserving local nonprofit. Develop a milestone schedule with acceptance criteria for this event. Include between four and eight milestones.

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4.

Answers vary. This can be shown in two parts. The first part should be listing each possible risk and showing how likely it is to occur and the impact should it occur like in Exhibit 4.8. The second part should be a table like Exhibit 4.9 in which each risk that is above the line in the first part, has a line in the table with one or more contingency plan and an owner. Make sure the students have identified a reasonable number of risks – perhaps at least about 8 to 10. Also make sure the contingency plans sound plausible.

You are part of a student team that is hosting a number of inner-city junior high and high school students from several nearby cities at your campus for a weekend. The primary purpose is to encourage them to attend college and second, to attend your college. Identify as many stakeholders as possible for this project, prioritize them, and list the interests each has in your project.

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6.

Answers vary. Look for the four-column format of Exhibit 4.4. Both the current and future state descriptions should be very brief – about 3 or 4 words. The future state is likely to be something like “satisfying, profitable picnic.” The milestones need to make sense and enable a stakeholder to judge each with easily measurable acceptance criteria that would accompany each.

You are part of a student team that has volunteered to host an alumni event at a recently reopened museum in the downtown part of your city. The event has the twin purposes of establishing contacts with long-lost alumni and raising awareness of the newly reopened museum. Brainstorm the potential risks for this, quantify them both according to probability and impact, assign responsibility for each major risk, and create one or more contingency plans for each major risk.

•

5.

Answers vary. Look for a clear description of exactly what the student team will do and why it is important. Each of those statements should be of one to four complete sentences and should be easy to understand.

Answers vary. Several stakeholder groups should be identified such as the students, their parents, community leaders of the student’s home communities, university leaders, etc. The students should create a stakeholder list such as shown in Exhibit 3.11. Each stakeholder should be classified as key or other and one or more interests they have in the project should be shown.

You have started a project working with your peers at your rival college to create a “crosstown help-out.” You want to encourage many people in the community to contribute a day’s work on a Saturday for various community projects. You have a rather heated rivalry with this other college. Create a comprehensive set of team operating principles to use on this project. Which of these principles is most important and why? Do you expect any of

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them to be difficult to enforce and why? What do you plan to do if some of them do not work?

•

Answers vary. The key is to have students envision who they will need to work with on the project and how to work effectively together. Operating principles should include how they will conduct meetings, make decisions, and treat each other with respect.

SUBURBAN HOMES CONSTRUCTION PROJECT Project charter is provided in the book for this case study. Instructors may introduce changes to this case study. instead of single-family home, students may be asked to develop a project charter for residential complex or a commercial complex or a business complex in a city. instruct students to develop a project charter using the example provided in the chapter.

Students must demonstrate understanding of the purpose of the chapter,

inaccuracies associated with it specifically in terms of cost and duration estimates. Project charter is the document that gives consent to move forward with development of the project plan. The charter provides a little and high-level information about the project.

Using this information as basis, project manager and the team would work to develop details of the project plan.

CASA DE PAZ DEVELOPMENT PROJECT See following examples/suggestions: 1. Scope overview and business case sections of charter: Scope Overview Example We wish to secure a building for Casa de Paz to use to use to house up to eight Latina women who have been traumatized and their children for up to six months each. This includes performing any needed upgrades to the facility to make it useable. We will include hiring a director, creation of services such as nursing, occupational training, English as a Foreign Language, tutoring, and others that are needed to help these women and their children be ready to live on their own.

Business Case Example This community will provide the support and stability needed for a few families who have fled violence as they prepare for a new life. Casa de Paz will be an investment in these families so they can become contributing members of society and enrich our communities. The graduates of this program can, in turn, help others who follow after them on their journey to hope and stability.

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2. As project manager, here are examples of what I would like to find in a sponsor, stakeholders, and core team members in terms of abilities and experiences. Ideally some of the members would speak Spanish. Some should have business background so we could create a realistic time line with full consideration of the challenges of fixing up what may be an old building. We would like to have some experience in social services to understand what services need to be created, who to contact, how much time each might take, etc. Ideally at least one person would have good contacts and understanding of local government and zoning.

3. Many risks might be identified. Some could be: paying too much for the building, not having security for the building, too many problems in fixing up the building, difficulty in fund raising, not getting zoning changes needed for the building, not effectively engaging local stakeholders such as community and church members, busy volunteers who are well-intentioned, but who cannot perform in a timely manner. The list could be much longer. Look for students to logically determine which risks really put the project into jeopardy versus those that are an inconvenience. For each major risk, look for one or more strategies to either avoid the risk in the first place or to mitigate the impact if it materializes.

4. A few key stakeholders and their interests include: Stakeholder Interest in Project Potential residents safe place with good preparation to be self-sufficient Potential donors confidence we will be successful and our mission is vital Neighbors impacts on community Members of churches value of this cause vs. others to get involved in Regulators appropriate zoning and adequate construction

SEMESTER PROJECT An example of an entire student team’s project charter is in the Project Management in Action feature at the end of the chapter. Note that in addition to a complete charter, comments are included in the margins to assist the students in putting together the charter and the instructor in grading the charter.

Grading suggestions for example project: Business Case • Clear, concise reasoning for why the project is being performed • Clear understanding on the student’s part of the project’s intent • Clear description of the project’s objectives Scope Overview • Clear, concise definition of what the project’s activities will entail • Brief description of primary deliverable(s) • Description of what will be performed during the course of the project • Clear description of what is included in the project and what is not included Background (Optional) Instructor’s Manual

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• •

Brief description of any supporting information Supplementary information that supports the project’s objectives

Milestone Schedule and Acceptance Criteria • Identification of specific factors against which the project can be compared to determine success/failure • Identification of specific deliverables not only for class, but for the project as a whole • Agency (client)-specific deliverables • Inclusion of due dates for the deliverables • Clear identification of milestones and milestone exit points Risks • • • •

Identification of potential risk factors that could impact the project Identification of the project area that the risk could impact Identification of risk owners Description of strategies to avoid or mitigate major risks

Stakeholder List • • •

Identification of long list of people or groups including some who are for the project and some who are against it Prioritization of some stakeholders as key and the rest as other Plausible list of concerns (interests) of each stakeholder

Lessons Learned • Identification of pitfalls to be avoided, based on the student’s past experience • Identification of good practice to help the project, based on the student’s past experience • Evidence of thought as to what can and cannot affect the project in terms of how the project will run Team Operating Principles • Clear statements of how the team will function • Communication and meeting statements • Statements of how the team will make decisions Another way to consider grading some of the deliverables is using a scale that was jointly developed by members of the local PMI chapter and me. The local chapter sends a panel of PMPs to review various student deliverables at the end of the term both at our university and several other local universities. The criteria on the following page pertain to the charter. The PMPs judge each component on a five-point scale.

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Charter Component

1

2

3

4

5

Business Case

Not Considered

Business case is defined but unclear.

Business case is defined but does not cover business need.

Business case is defined and limited to business need.

Business case is defined including need, ROI, benefits to stakeholders and success factors.

Stakeholde r list

Not Considered

Only Student team is covered.

Student team and Customer are covered.

Student team, Customer and Sponsoring agency are covered.

Student team, Customer, Sponsoring agency and other stakeholders (e.g.

Vendors) for the project are covered.

Milestone schedule

Not Considered

High-level Milestone schedule is defined.

High-level Milestone schedule is defined with dependencies.

High-level Milestone schedule is defined with dependencies including interim deliverables.

High-level Milestone schedule is defined with interim deliverable dates and status tracking process.

Acceptanc e Criteria

Not Considered

Check-list is defined but unclear

Check-list criteria are defined but do not cover signoff process

Check-list criteria are defined with signoff process

Check-list criteria are defined with signoff process including template/ forms/approvals.

Constraints / Assumptions

Not Considered

Defined but unclear.

Only Assumptions or only Constraints are defined.

Few Assumptions and Constraints are defined, but not detailed enough.

Most Assumptions and Constraints are defined with required details.

Charter Signoff

Not Considered

Lessons learned

Not Considered

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Defined Charter signoff process but unclear.

Only considered personal experiences.

Considered lessons learned from past projects / best practices.

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Defined Charter signoff process with forma/templates / approvals In addition to past projects, on-going learnings from current project have been considered.

Considered lessons learnt / best practices and applied to project appropriately & developed contingency plan.

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CHAPTER 4 Organizational Capability: Structure, Culture, and Roles LEARNING OBJECTIVES This chapter describes how organizational structure, organizational culture, project life cycles, and role definitions create organizational capability to manage projects. After completing this chapter, each student should be able to perform the following: Core Objectives: • Compare and contrast the advantages and disadvantages of the functional, project, strong matrix, balanced matrix, and weak matrix methods of organization; describe how each operates and when to use each.

• Relate how an organization’s structure influences the implementation of its strategic plan.

• Describe organizational culture elements that are helpful in planning and managing projects and demonstrate how to overcome organizational culture elements that hinder project success.

• Describe different project life cycle models and distinguish when each is appropriate.

Behavioral Objectives: • Describe the duties, motivations, and challenges of each of the executive, managerial, and team roles in projects and list important attributes for selecting each.

• Given a project situation, explain ethical behavior consistent with PMI’s Code of Ethics and Professional Conduct.

• Predict the impact of organizational structure and associated culture on individual and team behaviors.

• Predict the impact of organizational structure and associated culture on individual and team performance.

TEACHING STRATEGIES • Tell the students this chapter is about understanding the various ways in which an organization is capable of handling projects.

• When covering organizational structures you can either have the slides describing the structures one by one or have the first slide showing only the first of the structures. With each structure, we like to ask students how many of them work in that type of organization. Many will say functional, some will say matrix, very few will say project.

Have the students offer examples of advantages or disadvantages from their experience.

• It’s good practice to have a short breakout regarding organizational culture. One possibility is to have student teams identify specific (real or made up) examples to demonstrate each of the four culture types. You can assign one type per team and give them a very short time – such as 5 minutes to develop their example. Alternatively, you could give them 10 minutes and ask each team to create an example of every one of the four types.

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• A different type of breakout is to assign one of the four types of cultures (power, role, task, or personal) to each student team, give them a scenario, and ask how the organization is likely to respond. A variation of this is to give each team a primary culture that the organization mostly uses and a secondary one they sometimes use and see how the students feel the organization would respond to various situations.

• We like to go to the PMI website to look at their Code of Ethics and Professional Conduct. You can pull it up at http://www.pmi.org/PDF/ap_pmicodeofethics.pdf. We generally paraphrase several sections and ask the students why each is important. MBA students often have a few more answers than undergraduates at this point, but all should have some. We supplement when important points are not brought up by the students.

• Alternatively, you can assign one of the code values of responsibility, respect, fairness, and honesty to each student in a group asking the person to start a conversation regarding how a project manager could use the assigned value to accomplish the processes of one of the knowledge areas.

• Ask students what are the company values that exist where they work. Many often cannot say, so we encourage them to find out. This is a good opportunity to point out that if they do not understand the company values, it is hard to practice them!

• We spend a few minutes on project life cycles. Primarily we focus on the generic life cycle model, but depending on the students’ backgrounds, we may spend more time on one of the industry-specific models. We like to talk about how the charter (Chapter 3) is the culmination of selecting and initiating, all the planning chapters (5–11) that occur before kickoff, how customers want a demonstration that the project deliverables will work at the end of the executing stage (talking about a house walk-through before closing works well here), how we will create transition plans at the end since we want to have capable, satisfied customers, and how leading organizations measure project benefits after the deliverables have been used for weeks or months. This is a good time to remind students that projects are investments and executives may want to verify that the project delivered the benefits it was selected to create.

• A recent trend in project management is use of agile. This is a good time to provide an extended introduction to agile. Exhibit 4.12 illustrates the idea of agile. We like to describe briefly how agile often plans quick “sprints”, executes that portion of the work, and then plans the next sprint. This leads to a discussion of rolling wave planning.

• Remind students that we cover all project roles since they will be more effective project managers when they understand everyone’s responsibilities. Also, many students will be team members before they become project managers.

• Another breakout we enjoy asks the students how they will help their project’s sponsor understand and perform his or her stage specific behaviors. Since the behaviors are grouped by project life cycle stage, we often ask each student team to tackle one stage and then report to the class as a whole. Having teams attempt to operationalize a few behaviors seems to be making better use of teaching time than trying to lecture each in turn. This also reinforces the life cycle (stage gate) approach that is so common in project management these days.

• When we cover the Project Management Office (PMO)/Chief Projects Officer (CPO) role, we remind them that capturing and using lessons learned prevents every team from Instructor’s Manual

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Commented [KW1]: ???

having to learn the same lessons from scratch. A starter set of lessons learned you may find useful is on page 429. This set is by no means comprehensive and other groups may organize the lessons differently, but it can be a useful start.

• We remind them that is why we have copies of previous project team deliverables on Blackboard (this is a good idea for you to save from one semester to the next) and why we insist that lessons learned are explicitly stated in a charter. Remember, a two-page starter set of lessons learned are included in the preface section of this instructor’s manual.

• Project manager behaviors, skills, and judgment calls are another good place to have a short breakout session. Give each team a limited number of issues and ask them to describe specific behaviors (real if possible, fictitious if necessary) to demonstrate each.

Good examples of how each is positively performed and also poor examples in which a behavior is not performed or is performed poorly are useful here. Get the students to describe the impact each has (or might have) on a project.

• If there are a few minutes left, ask the students to turn to the Project Management in Action feature at the chapter end and ask how the role definitions at the example company are similar to and different from those at their own companies.

LECTURE AND WORKSHOP OUTLINE 4.1 Types of organizational structures Companies can choose how to organize themselves with respect to work assignment, reporting relationships, and decision-making responsibility.

Functional Traditional approach with clear lines of authority according to type of work.

Advantages: “one boss”; all work in a discipline reports to same person; job for worker when project is done; knowledge is retained.

Disadvantages: slow communication; technically challenging if multiple disciplines are needed.

Projectized Opposite of functional – project manager has full authority; no departments.

Advantages: “one boss”; fast communication and decision-making; project identity; effective integration on project.

Disadvantages: potential for idle time, prioritizing project norms and culture over that of the parent company, and/or failing to keep up with discipline-specific competencies.

Matrix Intermediate strategy; project and functional managers share responsibility.

Advantages: Shared resources; cooperation; high-quality decisions; knowledge is retained; effective integration on project; flexible.

Disadvantages: “two bosses”; slow decision-making; conflict; meetings.

A matrix can be weak (with the project manger having little decision-making authority), balanced, or strong 4.2 Organizational culture and its impact on projects Instructor’s Manual

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Formal and informal practices and values of parent organization impact projects.

Project managers need to understand the organizational culture.

Culture of the Parent Organization Types of Power Organizations can exert power through motivators of power, role, task, or personal cultures. Each impacts projects.

Project Cultural Norms Impacted by parent organization’s culture, influenced by sponsor and project manager. An ethical culture should define how people should act and encourage them to actually act that way – especially in challenging circumstances.

4.3 Project Life Cycles A project life cycle model guides project planning and execution.

Generic project life cycle Selecting & Initiating, Planning, Executing, Closing & Realizing Benefits Define, Measure, Analyze, Improve, Control (DMAIC) For improvement projects.

Research and Development (R&D) Unique demands of R&D – varies by industry Construction For major construction projects.

Agile Project envisioning, requirements gathering, multiple sprints, production release 4.4 Agile Project Management Agile is an approach that has gained wide popularity in projects whose scope is difficult to define early on and much change is expected over the project’s lifecycle. It consists of performing a bit of the work and then planning the next bit rather than planning the entire project at the outset.

The Agile mindset (4 key ideas): Satisfy the customer by emphasizing outputs that fulfill their needs Engage all participants through empowerment, cooperation, and knowledge sharing Facilitate engagement through servant leadership and continual communication Keep things simple with reasonable pace and emphasis on process improvement Key roles in Agile projects Customer representative (a.k.a. product owner)—similar to sponsor on a traditional project Scrum master—facilitates and leads; similar to but more empowering than traditional project manager Team members—full-time, co-located, self-governing How do you start an Agile Project?

Use same chartering process as you would on a traditional project First iteration often determines product to be built and prioritizes work for the next iteration.

How to continue Agile project Use four types of meetings: Instructor’s Manual

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Commented [KW2]: I took this out (see next edit) because it seemed redundant

Iteration planning meetings—project team plans and commits to what it will deliver in the next iteration Daily stand-up meetings—review yesterday’s accomplishments, plan for current day, and discuss any issues Demonstration meetings—shows completed, usable product Retrospective meetings—held at end of each iteration with goal of improving work processes What is needed for Agile to be successful Experienced and motivated team members Commitment of product owner or customer Trust 4.5 Traditional Project Executive Roles Project managers tend to be more successful if they understand all roles involved in projects.

Steering team Overall priority setting, project selection and prioritization, sponsor selection, general guidance, encouragement.

Sponsor Financial and decision-making authority, behaviors change with demands or project stage, for example, very hands-on during initiating, less so later.

Customer Represented by and works with sponsor and project manager to ensure clear requirements and control.

CPO/PMO Keeper of project management system within parent organization 4.6 Traditional Project Management Roles Project managers work effectively when they understand the four management level roles.

Functional manager Department heads who often control resources and make many decisions.

Project manager Responsible for delivering expected project results on time and on budget.

Flexible, facilitating type leader who spends much time communicating and must exhibit integrity and judgment.

Facilitator Optional role to assist in process on some complex and/or controversial projects.

4.7 Traditional Project Team Roles Associate level roles Core team members On project entire duration when possible, make decisions, carry out tasks, and supervise subject matter experts.

Subject matter experts (SME) Specific and temporary help as needed.

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4.8 Role Differences on Agile Projects Refer to Exhibit 4.23 Customer representative (a.k.a. product owner)—has both executive and managerial-level duties Scrum master—similar to project manager, but with emphasis on facilitating and leading in a collaborative fashion Coach—often included on Agile projects to act as trainer and facilitator

CHAPTER REVIEW QUESTIONS – SUGGESTED ANSWERS 1.

Describe how a strong (project) matrix is different from a weak (functional) matrix. (objective #1, p. 106) The strength of a matrix refers to how much decision-making power project managers have vs. how much power functional managers have. In a strong matrix, project managers have relatively more power, in a weak matrix functional managers have more power and project managers are weaker.

2.

Which organizational structure is often used for small projects that require most of their work from a single department? (objective #1, pp. 102-104) Functional

3.

List advantages and disadvantages of functional, projectized, and matrix forms of organization. (objective #1, p.107) Functional

Advantages

Matrix

● Good discipline specific knowledge ● Easy for central control ● Effective for shared resources ● "one boss" ● clear career path for professionals

Disadvantages

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● Slow communication between departments ● Slow response to change

● Flexible ● Easy to share resources ● Good cooperation between departments ● More input for decisions ● Wide acceptance of decisions ● Good discipline specific knowledge ● Effective integration on project ● Increased knowledge transfer between projects

● "Two bosses" ● Many sources of conflict

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Projectized ● Break down department barriers ● Shorter response time ● Quicker decisions ● "One boss" ● Enhanced project team identity ● Customer focus ● Effective integration on project

● Duplication of resources ● Rules not always respected

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●Slow decision-making

● More meetings ● Slow reaction time ● Hard to monitor and control

4.

● Potential lessons learned can be lost ● Discipline specific knowledge can slip ● Less career continuity for project team members

What is co-location, and why is it used? (objective #1, p.105) Co-location is a placement strategy that puts the project team members within close proximity of one-another. It is often used in projectized structural settings to enhance the project team’s identity, improve customer focus, and assist in integration of efforts on the project.

5.

What are organizational values, and why should a project manager be aware of them? (objective #2, pp.108-109) Organizational values are shared beliefs that are taught to new members to provide a moral compass and frame of reference in deciding what is right. A project t manager needs to learn the values of the parent organization, those of the customer organization, and meld the two into a cohesive set that will help to motivate ethical action and establish effective communication and behavior.

6.

List and describe four different types of corporate culture. (objective #3, p.110) • • • •

7.

Power culture – getting the job done Role culture – formal authority Task culture – worker development Personal culture – designations of responsibility

If more than one parent company is involved in a project, why is it important for the project manager to understand the culture of each? (objective #3, p.109) In order to facilitate effective project communications and decision making.

8.

The project manager and sponsor need to act in the best interest of which three constituencies? (objective #5, p.111) 1. the project itself—attempting to deliver what is promised; 2. the project team—encouraging and developing all team members; and 3. the other project stakeholders—satisfying their needs and wants

9.

According to the PMI Code of Ethics and Professional Conduct, project managers need to exhibit which four behaviors? (objective #6, p.111) • • •

Responsibility—take ownership for decisions.

Respect—show high regard for ourselves, others, and resources.

Fairness—make decisions and act impartially.

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• 10.

Honesty—understand the truth and act in a truthful manner In your own words, describe an ethical project culture. (objective #6, p.111)

An ethical project culture is one in which people know how to act and have the courage to do so. A spirit of mutual trust prevails and everyone participates with their ideas and effective partnering relationships within and beyond the project team.

11. What are some characteristics of almost all project life cycles? (objective #4, p.111) • They all have definite starting and ending points.

• They involve a series of phases that need to be completed and approved before proceeding to the next phase.

• The phases generally include at least one initiating, one planning, one closing, and one or more executing phases.

• The various life cycle models are all frequently adapted by the companies, where they are used to better fit with the organizational culture and language.

12. What does the DMAIC model acronym stand for? When is this type of model used? (objective #4, p.112) Define-Measure-Analyze-lmprove-Control; to plan and manage quality and productivity improvement efforts.

13. What distinguishes an Agile project life cycle model from other types of life cycle models? (objective #4, pp.113-114) These models may start like other project life cycle models, but they provide short bursts of planning and delivery of benefits in multiple increments during project execution.

14. For what five activities is the project steering team responsible? (objective #5, pp.65-66) Overall priority setting, project selection and prioritization, sponsor selection, general guidance, and encouragement 15. Who should select the project manager and the core team? (objective #5, p.116) Project manager is selected by sponsor with help or at least approval of steering team.

Depending on the norms of an organization, the same may be true for the core team, but the project manager also often provides input into team member selection.

16. Who is responsible for ensuring that the steering team completes its tasks? (objective #5, p.121) Chief Projects Officer

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17. What types of control systems should a customer and contractor work together to set up and utilize? (objective #5, p.120) Communications plan, change control system, and risk management system.

DISCUSSION QUESTIONS – SUGGESTED ANSWERS 1.

Marissa Mayer, former CEO of Yahoo!, sparked a national debate when she insisted that all her employees be physically present for work. Debate the merits of co-location, including its advantages and disadvantages. (objective #7, Evaluating, p. 105) Answers will vary. Possible advantages: co-location often results in enhanced project team identity, strong customer focus, and effective integration of effort on the project. Possible disadvantages: Team members who are co-located often do not keep up their disciplinespecific competence and sometimes worry about what they will do when the project is completed.

2.

Identify each of the four organizational culture types with respect to power, and the strongest motivator for each type. In which organizational cultures do you feel most and least comfortable working? Why? (objectives #3 & 8, Applying, p. 110) Power cultures exist when the supervisor exerts a great deal of economic and political power and everyone tries to please the boss. Those in formal authority control competition, conflict resolution, and communication.

Role cultures motivate everyone to understand and closely follow their appointed roles.

Reliable workers follow formal designations of responsibility with utmost respect for regulations and laws.

In task cultures, it is more important to get the job done than to worry about who does the work or who gets credit. Hallmarks of task cultures are skill-based assignments, selfmotivated workers, and more deference paid to knowledge than to formal authority.

In personal cultures, people show genuine interest in the needs of workers, consider worker development as critical to the organization’s success, and display an attitude that collaboration is satisfying and stimulating.

Opinions will vary but rationale should be as specific as possible.

3.

List and describe at least four organizational culture characteristics that increase the likelihood of project success. Why is each characteristic helpful? (objectives #7 & 8, Remembering, p. 110) Answers will vary. A few example answers follow.

• Support for cross-functional teams – many projects require effective work from various disciplines.

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• Open communication with stakeholders – many stakeholders can support or undermine project success.

• Respect for individuals – people who feel valued often work harder.

• Innovation – many projects require fresh approaches.

4.

Explain multiple methods through which project managers can lead by example. (objective #5, Creating, p. 122).

Use integrity – always living by the organization’s values – especially when challenged, communicate openly and honestly, take appropriate risks, do the extra little bit to be wellprepared, encourage and reward publicly while reprimanding privately.

5.

Define your personal project code of ethics. (objective #6, Applying, p. 122) Answers will vary. Each should include statements regarding honesty, communications, and methods of dealing with all stakeholders fairly and openly.

6.

Brainstorm techniques that effective project leaders can use to resolve ethical conflicts on projects. (objective #3, Analyzing) This is a situational question. Pose a scenario and see how the students respond.

7.

You work for a software company. What benefits do you achieve by utilizing an Information Systems project life cycle model as opposed to other project life cycle models? (objective #4, Evaluating, p. 111-114) Answers will vary. By using an Information Systems project life cycle (agile), a company is planning small increments of time and work iteratively. Since there is often a good deal unknown when developing software, this prevents you from wasting time on a plan that is not functional in the long-run.

8.

If a project will be divided into many phases, which life cycle model would you recommend using to plan it? Why? (objective #4, Applying, p. 111-114) Answers will vary but should be supported. Possible answers include Agile (since it allows for incremental planning and benefits realized) and R&D since these are often complex and multi-phased.

9.

Describe a possible imbalance between a project manager’s authority and responsibility.

What impact might it have on a project? (objective #5, Understanding, p. 123) Answers vary – here is one example. If the functional managers retain most of the authority for deciding which workers will work on the project, a project manager will be at their mercy with the schedule.

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10. Is it important to choose a member from every impacted function of a project for the core team? Explain why or why not (objective #5, Evaluating, p. 126) No. Ideally the core team collectively can learn to understand each of the stakeholders and each technology, but there is no need to have each on the team. Having representatives from each area on core teams can make large, unwieldy teams that have a difficult time communicating, arrange meetings, and making decisions. Having a representative from each area also tends to encourage people to defend their discipline instead of considering what is best for the project as a whole.

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PMBOK® Guide Questions 1) All of the following are characteristics of a projectized organization EXCEPT: a) Decision making is streamlined b) Coordination is the responsibility of project managers c) Functional managers have the majority of authority d) Focus is on the customer Answer: c Pages 104-105 in textbook Page 47 PMBOK 6th Edition 2) Characteristics of an organizational culture can have a major impact on a project’s success.

All of these are attributes of an organizational culture EXCEPT: a) b) c) d)

Motivation and reward systems Risk tolerance Code of conduct Financial control procedures

Answer: d Page 109 in textbook Pages 885-886 PMBOK 6th Edition 3) ____ organization structures can be classified as weak, balanced, or strong depending on the relative level of influence between the functional manager and the project manager: a) b) c) d)

Silo Matrix Composite Projectized

Answer: b Page 106 in textbook Page 47 PMBOK 6th Edition 4) A hierarchical organization where each employee has one clear superior and staff are grouped by areas of specialization and managed by a person with expertise in that area is known as a: a) Composite organization b) Functional organization c) Projectized organization d) Weak matrix organization Answer: b Page2 102-104 in textbook Page 47 PMBOK 6th Edition 5) In an Agile life cycle model _____:

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a) b) c) d)

The scrum master controls the team Detailed planning precedes execution Customer requirements are gathered early in the project The team is self-directed

Answer: d Pages 115-116 in textbook Pages 851-852 PMBOK 6th Edition 6) The project sponsor’s responsibilities during the executing stage include: a) Reviewing and signing the project charter b) Signing off on the detailed project plan c) Ensuring communications with key stakeholders d) Producing project status reports Answer: c Page 118 in textbook Page 29 PMBOK 6th Edition 7) Group phenomena that evolve over time and include established approaches to initiating and planning projects, the acceptable means for getting the work done, and recognized decision-making authorities are referred to as: a) b) c) d)

Organization structures Roles and responsibilities Project culture (norms) Vision and mission

Answer: c Page 111 in textbook Page 67 PMBOK 6th Edition 8) Customer responsibilities on a project might include all of the following EXCEPT: a) Perform the work of the project to achieve its objectives b) Advise on project requirements c) Review and accept project deliverables d) Participate in status or kick-off meetings Answer: a Pages 119-120 in textbook Page 131 PMBOK 9) The Chief Projects Officer’s or PMO’s responsibilities might include: a) b) c) d)

Signing the project charter Ensuring enough resources are available to perform the project Working with the team to create a project schedule and budget Promoting the project at the executive level of the organization

Answer: b Page 121 in textbook

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Page48 PMBOK 6th Edition 10) PMI’s Code of Ethics and Professional Conduct is a guide for project management practitioners that describes the expectations that they should hold for themselves and others. Which of these is not one of the desired behaviors and basic obligations referenced by the code of conduct? a) b) c) d)

Fairness Honesty Authority Respect

Answer: c Page 111 in textbook Page 3, PMBOK 6th Edition

EXERCISES – SOLUTIONS 1.

Given a scenario, select a preferred organizational structure and justify your selection.

Answers will vary depending on the scenario you assign. Be sure to look for rationale for the chosen structure. An example scenario might be an R&D organization that started many projects, canceled many early, but the remaining projects typically grew to be very large. In this situation, the student teams might suggest a matrix structure. They would need to tell why – such as resource-sharing needs among the many start-ups, yet need for specific attention to the large projects that survive.

2.

Describe examples of ethical (or nonethical) behavior as outlined in PMI’s Code of Ethics and Professional Conduct exhibited on a project in the news.

Answers will vary, but should include at least the mandatory standard of some of the four areas of responsibility, respect, fairness, and honesty. Better answers will include how one or more of those areas are approaching the aspirational standard.

2.

Describe, with examples, how your project manager did or did not exhibit desirable project manager behaviors as described in Exhibit 4.17.

Answers will vary. Each needs to detail specific behaviors and determine which category from Exhibit 4.17 each represent.

3.

Briefly describe how the sponsor of your project is or is not displaying appropriate life cycle specific behaviors as described in Exhibit 4.15.

Answers will vary. Specific actions and decisions of the sponsor need to be listed, described, and categorized according to Exhibit 4.15. Since this is a descriptive question, merely listing the behaviors is not enough.

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SUBURBAN HOMES CONSTRUCTION PROJECT An organization like Suburban Homes operates in the construction industry, which is fragmented and localized industry. Most of the construction work is usually carried out by small contracting companies, sub-contractors, and individual contractors. With this in mind, the Suburban Homes may set up a functional organization at its corporate office with functions such as architecture, civil, land acquisition, HVAC, procurement, marketing, finance, and project management departments. However, it is preferable to adopt a projectized organization structure at the construction locations and at different regions of operations. Concept, design, and detailed engineering (scope development) must be carried out uniformly for all the projects at the corporate office. This gives the company the ability to maintain similar standards and maintain quality in all their projects. The project management and procurement departments at the corporate office must devise a detailed project management plan and procurement plan for all the projects to ensure that quality of construction is assured and projects are completed within budget and schedule.

CASA DE PAZ DEVELOPMENT PROJECT Students will speculate on who key stakeholders are. Some examples may include: Stakeholder Interest in Project Potential residents safe place with good preparation to be self-sufficient Potential donors confidence we will be successful and our mission is vital Neighbors impacts on community Members of churches value of this cause vs. others to get involved in Regulators appropriate zoning and adequate construction

SEMESTER PROJECT For your example project, describe the organizational structure of the agency or company for which you are planning the project. Describe as many of the organizational culture attributes as you can. List, by name, as many of the project executive, management, and team roles as you can identify. Be sure to assign roles to yourselves. How do you anticipate that the organizational structure, culture, and role assignments help or hurt your ability to successfully plan this project?

Describe the project life cycle model that is used in the organization—and if one is not currently used, describe the life cycle model you plan to use and tell why it is appropriate.

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Answers vary. You can assign as much or as little of this as you prefer. We tend to tell the students in one class period that we will be asking them some of these questions during the next class period. We often select only one or two of these questions to ask and let the students know in advance what they will be. We then expect the students to have at least partial answers.

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CHAPTER 5 Leading and Managing Project Teams LEARNING OBJECTIVES This chapter describes many issues a project manager faces when developing and leading a project team. After completing this chapter, each student should be able to perform the following: Core Objectives: • Describe stages of team development and strategies to move teams through the project life cycle.

• Describe characteristics of a high-performing project team; assess your individual and team capability; and describe how your team can improve.

• Describe methods of project team decision making and the circumstances in which each is likely to be most effective.

Behavioral Objectives: • Explain how to utilize the project team relationship and process ground rules to improve it.

• Describe types of project manager power and when each is appropriate.

• Describe typical sources of project conflict along with the steps in a conflictresolution process, styles of handling conflict, and steps in a negotiation process.

• Summarize how to develop high-performance traditional and virtual teams.

TEACHING STRATEGIES •

•

Sometimes we start this chapter with scenario questions and asking the students what they would do. This is a good way to introduce the internal project issues. Examples of scenario questions include: o The project is 50% complete, and the marketing department changes its specifications. o The marketing department has promised a delivery date we cannot meet. o A new product has been announced by our No. 1 competitor, which threatens the future of our existing project. o Your electrical building contractor, although cheap, is the worst contractor you’ve ever seen. You’re at the 25% complete point of construction… o You have just started the software programming effort, which is on the critical path. Randy, the matrix manager, has reassigned your key resource to another project that is in trouble…

This chapter has a large amount of conceptual material. There are a variety of places where you can have either discussions or breakouts, asking either the question “why is this important” or “give me an example of this on your project.”

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Sometimes it helps to ask the students in advance to be ready with certain material. We tell them two or three general areas we will use (in the following bullet points) and that we will apply these to their projects. Therefore, they should in advance of class think about how those topics were covered on their projects and how successful the results were.

One possible breakout session includes the effective team behavior methods for enhancing personal values, communication methods for enhancing personal values, and project management methods to further team development. You can use one, two, or all three of these. Ask the student teams to select an item or two from one of those groups and explain how to do it.

We like to ask students for examples of personal rewards they have experienced by working on projects. When most of the students are traditional undergraduates, we remind them that class projects count.

We use the dozen ground rule topics for project teams for another breakout session. We tell the students while all of these are important, perhaps some are more important on certain projects. Ask them to select two or three of the ground rules that they feel are most important on their project and explain why each is so important.

Types of project management power are also a good topic for either discussion or a breakout. One difference is that in using the student projects, it is often helpful to ask for examples both for how the project manager (student teams sometimes name a project manager and sometimes share the duty) and the sponsor have exhibited various forms of power.

Yet another possible breakout topic is managing stakeholder expectations. We ask the students two questions: how they actually have handled this and how they will handle it better on future projects because of what they learned on this project. To pull off the second question, you need to convince the students you are more interested in what they learned than whether they did everything right the first time. You also may need to encourage them to perform a plus-delta exercise to identify improvement areas.

A two-part discussion or breakout can be conducted regarding project conflict. The first part is to identify and categorize the conflicts that actually happened on the student projects. The second part is to have the students describe how the conflict was resolved and to determine whether they could have used a different style of conflict resolution.

One final potential breakout is the negotiation process. We like to create a little scenario concerning a local project and divide students into two teams. One team represents the contractor and one represents the owner. We describe the scenario and give the student teams a few minutes to prepare. Then they conduct a mock negotiation while the remaining students watch. Finally, we ask the student observers what style of negotiation was used, was it effective, what could have made it better, and was a different style more appropriate in this situation.

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LECTURE AND WORKSHOP OUTLINE This chapter deals with the people side of ensuring project performance. The more technical issues regarding project performance are in the next chapter. In the contemporary approach to projects, the project manager largely works collaboratively with the team.

5.1 Acquire the project team This deals with both the core team and subject matter experts (SMEs).

Preassignment of project team members It is helpful to have those who will do the work help plan it, but this is sometimes impractical.

Negotiation for project team members Project managers often cannot just name who they want for their project.

However, they should not accept an entire team of inexperienced members.

On-boarding project team members Ideally involve team members in chartering so that they understand and are committed. Otherwise, bring them up to speed quickly and make sure they understand the charter.

5.2 Develop project team This major section includes all of the activities a project manager uses to mold a project team into an effective force.

Stages of project team development There are five stages for project teams: forming, storming, norming, performing, and adjourning. Project managers can move more easily and productively through the stages if they understand relationship issues and team member tendencies and if they employ strategies to promote organization, project, and individual needs.

Characteristics of high-performing project teams Project managers can use behavior, communication, and project methods to improve upon the personal values individuals bring to a project team. This leads to team members developing feelings for each other, which leads to both personal rewards and project results. Agile teams are often self-managed and able to make quick decisions. This requires trust between sponsor and team and often leads to both good project results and team member satisfaction.

Assessing individual member capability 1. Activity-specific knowledge and skills 2. Personal planning and control 3. Personal learning 4. Organizational understanding 5. Interpersonal skills and sensitivity Assessing project team capability Many interrelated factors (Exhibit 5.7) contribute to project team capability.

Building individual and project team capability To build individual and project team capability, project managers can use personal leadership, project management tools, situational leadership, desirable

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team identity, personal responsibility, a learning cycle, understanding, and respect.

Establishing project team ground rules Ground rules help teams operate effectively. They may include: Relationship topics 1. Encourage participation 2. Discuss openly 3. Protect confidentiality 4. Avoid misunderstandings 5. Develop trust 6. Handle conflict Process topics 1. Manage meetings 2. Establish roles 3. Maintain focus 4. Consider alternatives 5. Use data 6. Make decisions 5.3 Manage project team Managing and leading the project team consists of keeping tabs on what is happening, assessing human performance in comparison with plans, taking action to get the team back (or keep it) on track, motivating both individual members and the team as a whole, and continually improving the capability and satisfaction of both the project participants and the methods they use.

Project manager power and leadership Since project managers often rely on people who do not report directly to them to perform some of the project work, they need to use various forms of power to encourage people to perform. Types of power available to project managers are: Legitimate power Reward and coercive power Referent power Expert power Information power Connection power Assessing performance of individuals and project teams Goals of performance assessments include administrative uses such as rewards and promotions and developmental uses such as determining areas for improvement. Project managers often provide input for functional mangers to make assessments.

Project team management outcomes Morale changes “Quarter mile stones” to “inch stones” Staff changes Training needs Discipline Role clarification Instructor’s Manual .

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Issues Lessons learned 5.4 Relationship Building within the Core Team Project managers need to understand individual and team motivations, skills, and aspirations. Involving the team members in project and meeting planning helps secure buy-in. Small successes should be celebrated, and everyone should have a common understanding of how decisions will be made during the project.

5.5 Managing project conflicts Since projects have many opportunities for conflict, project managers need to understand the sources of conflict; become capable in using a variety of conflict resolution methods and styles; and learn how to negotiate effectively.

Sources of project conflict (Exhibit 5.12) Relationship Sources Task Sources Roles and responsibilities Stakeholder expectations Lack of commitment Unique project demands Communications failure Money and other resources Different personalities Technical approach Stakeholder relationships Priorities Personal motives of participants Differing goals of stakeholders Energy and motivation Task interdependencies Next project assignment Schedule Individual rewards Risks Conflict resolution process and styles 1. Understand the conflict.

2. Agree on conflict resolution goals.

3. Identify causes of conflict.

4. Identify potential solutions for conflict.

5. Pick desired conflict solution.

6. Implement chosen solution.

Negotiation Negotiation styles Forcing/Competing Withdrawing/Avoiding Smoothing/Accommodating Compromising Collaborating/Problem solving Negotiation process steps (Exhibit 5.14) Prepare for negotiation Know your walk away point Clarify both parties’ interests Consider multiple options Work toward a common goal Clarify and confirm agreements 5.6 Virtual Teams

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Also known as a distributed team; rarely meet in person but rely on communications technology. Often team members are physically dispersed, time boundaries are crossed, and a great deal of diversity exists among the team.

Cultural differences Pose additional challenges for project managers and project team members, especially in regards to clear communication (see Exhibit 5.15).

Countries and Project Communication Preferences Extremely helpful for a project team to meet face to face at least once, if possible.

Also, beneficial to include team members—virtual or not—in writing charter

CHAPTER REVIEW QUESTIONS – SUGGESTED ANSWERS 1.

What is the potential downside to bringing in workers too early in the project? (Objective #1, p.139) •

2.

Why is it often necessary for project managers to persuade workers to be part of the project team? (Objective #5, p.349) •

3.

Forming, storming, norming, performing, and adjourning

During which stage do team members often feel close to one another and have a good understanding of how to work together? (Objective #1, p.142-144) •

6.

Initiating (when the charter is being written)

What are the five stages of team development? (Objective #1, pp.142-144) •

5.

Project managers often lack formal authority to compel workers, and they must negotiate for workers with functional managers

When is the best time to on-board core team members? (Objective #1, pp.139-140) •

4.

It is costly and they may still be working on other projects

Performing

List two personal values of individual team members that contribute to a high-performing team. List two team behaviors that can enhance these personal values. (Objective #2, p.146) Individual values: • High need for achievement • Understanding and acceptance of personal responsibility • Commitment to self-development and self-directed behavior • Ability to put project needs before their own needs within reason • Willingness to consider alternative views and to change

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• Personal commitment to the project

Team behaviors: • Team members are selected to have the right skill mix.

• Team members help each other.

• Team members demonstrate a constant focus on improvement.

• Team members use effective time and meeting management.

• Team members strive for innovation with a minimum of formal procedures.

• Team members capture, share, and use lessons learned.

7.

What are the two favorable outcomes of fostering a high-performing project team?

(Objective #2, pp.145-146) Individual: • Enjoyment of their work • High spirit and team morale • Pride in being part of the team • Satisfaction in project accomplishments

Project Results: • Persevering despite challenges • Producing high-quality results • Consistently meeting or exceeding stakeholder expectations

8.

During all five stages of team development, it is important that the project manager keep in mind the needs of which three groups? (Objective #1, p.142) • The organization, the project, and the team members

9. Why might it be helpful to bring out the charter when people are arguing over a decision?

(Objective #4, pp. 161-162) • The charter can remind the team what they are really trying to accomplish and why.

10. What is meant by the term ground rules? Give examples. (Objective #4, pp. 153-157) •

A list of acceptable and unacceptable behaviors adopted by a project team to improve working relationships, effectiveness, and communication; examples will vary (see p.361 for ideas)

11. Under which circumstances might a project manager or sponsor retain the right to make a project decision? (Objective #3, pp. 156-157) •

When a decision needs to be made quickly or requires higher authority

12. What are the benefits of delegating a decision to one or two team members? (Objective #3, p.156) •

Does not tie up time in a meeting (assuming the team members can make the decision between meetings) and allows the team members to get to know one another better

13. When might consensus be the best decision-making strategy? (Objective #3, p.156) •

When significant commitment is necessary to implement the decision

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14. _________________ power is the ability to persuade others based upon the project manager’s personal knowledge and skills. (Objective #5, pp. 157-158) •

Expert

15. __________________ power should be used by a project manager when she is asking her team members to perform a task within their job description. (Objective #5, pp.157-158) •

Legitimate

16. __________________ power should only be used in instances in which it is necessary to maintain discipline. (Objective #5, pp.157-158) • Coercive 17. In order to manage stakeholders’ expectations, a project manager needs to understand the stakeholders’ assumptions. Which document(s) can help with this? (Objective #2, p.155) •

Charter

18. The collaborative style for handling conflict has a(n) ___________________ concern for self and a(n) ________________ concern for others. (Objective #6, p.162) • High, High 19. Why is it important for project managers to have one-on-one discussions with their core team members? (Objective #7, p. 140 ) • There are several beneficial purposes at having these meetings. One is to ensure that the core team members understand the project and are excited to be a part of it. The second reason for this meeting is to learn about the team members’ personal motives. By knowing these motives, the manager can understand what unique strengths the team members process as well as what they are looking to gain from this work. The third reason for these meetings is to assign the core team members specific tasks to work on.

20. What is a virtual team? (Objective #7, p. 166) • A team that is not co-located; also known as a distributed team; may be globally dispersed and seldom meet in person, but rather rely on communications technology 21. Name three increased challenges for a global and/or virtual team. (Objective #6, pp.166-167 ) See Exhibit 5.15 22. Why is it helpful for a virtual team to meet in person at least once? (Objective #7, p.166167 ) • When team members have met each other at least once, they are more likely to give one another the benefit of the doubt and to be motivated to help one another out.

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Commented [KW1]: Is someone able to insert this here?

DISCUSSION QUESTIONS – SUGGESTED ANSWERS 1.

You are a project manager leading an IT development project. Halfway through your project, you realize that you need to hire an additional worker in order to complete the project on time. How will you convince your project sponsors to authorize the hire? How will you on-board your new worker? (Objective #7, Evaluating, p.141) •

2.

Answers will vary. However, remembering that projects are investments, showing both the cost and expected value of bringing the new person on board will likely be part of the answer. For on-boarding, sharing the charter and recent meeting agendas and minutes for the new hire to read first and then talking with that person one-on-one to explain and answer questions is a good start. Then introducing the person to both the team and to key stakeholders.

Describe how to use project documents to help a team progress through stages of development. (Objective #1, Applying, pp. 142-144) Answers vary, but look for: • When a team works together to create a good project charter, they rapidly work through the project norming stage and often begin to develop the openness, understanding, and trust that will help make their storming stage faster and easier • Getting team involved in creating WBS, activity, schedule and risk register definition, helps the team progress through the storming stage • Setting ground rules and establishing a communication plan helps the team through the storming stage • Work authorization system and clearly defined roles and responsibilities are very helpful in norming stage • Clearly defined change management procedures and change control board are one of the factors that lead to project team achieving performing stage

3.

How can a project manager promote the needs of the organization during the norming phase? (Objective #1, Applying, p.143) •

4.

A project manager can promote the needs of the organization during the norming phase by managing tradeoffs based on the stakeholders’ desires. It is also important to include the project sponsors in talks and to conduct an audit to measure and report the progress/success of the project.

How can a project manager promote the team members’ needs during the forming phase?

(Objective #1, Applying, p.143) •

A project manager can promote the team members’ needs during the forming phase by including operating and communication methods in the charter. This sets the tone for how the team will work together. The project manager can also help build relationships by hosting activities and “ice-breaker” exercises.

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5.

Describe, in your own words, what a high-performing project team can do. (Objective #2, Understanding, pp. 144-147) Answers vary, but look for: • Team members feel close to each other and have a sense of a team • Team members take proactive role in issue prevention and expand beyond their official role • Team members share lessons learned with each other and the rest of the organization • Team members understand project scope and change control and follow proper change management and control processes • Team members help enforce team ground rules to optimize communications and meeting management

6.

Describe, in your own words, what you believe are the four most important characteristics of high-performing project teams. Tell why you believe each is so critical, explain how they are related to each other, and give at least two specific suggestions for each. (Objective #2, Creating, pp. 144-147) Answers vary, but could include: • Understanding and acceptance of personal responsibility • Commitment to self-development and self-directed behavior • Put project needs before their own needs within reason • A willingness to consider alternative views and to change • Personal commitment to the project • Team members are selected to have the right skill mix. Team members help each other.

• Team members demonstrate a constant focus on improvement.

• Team members use effective time and meeting management.

• Team members strive for innovation with a minimum of formal procedures.

• Team members capture, share, and use lessons learned.

• Conflict over approaches is valued but personal conflict is discouraged.

• Potential problems are proactively reported.

• Barriers to communication are overcome.

• Agree on common goals and objectives for the project.

• Jointly plan the project.

• Use the charter to guide joint decision-making.

• Work together to accomplish activities.

• Proactively identify and solve problems.

• Hold each other mutually accountable.

• Recognize how interdependent they are.

• Be willing to be flexible on how each contributes to the project.

• Be willing to share risks with teammates.

• Understand, appreciate, like, and trust each other.

• Share in strong project leadership.

• Enjoyment of their work.

• High spirit and team morale.

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• • 7.

Pride in being part of the team.

Satisfaction in project accomplishments.

Assess your individual capability for project team work. Tell why you feel you are strong in certain capabilities and give strategies for improving in areas you feel you need to develop.

(Objective #2, Evaluating, pp. 147-148) •

Answers vary. Look for reasons why the individual feels capable in certain ways and also for specific ideas on how to improve.

8.

What is meant by the term situational leadership? How can you apply this as a project manager? (Objective #3, Applying, p.151) • Each member may have both a leadership role in certain circumstances and followership roles in other situations. Where a junior team member has specific knowledge, he or she should ensure that everyone understands the situation. Even a junior team member is often expected to lead in certain situations.

9. Describe the three responsibilities of project team members. (Objective #2, Understanding, p.151) •

The team members’ first responsibility is to complete their individual work on time, on budget, and correctly. The team member’s second responsibility is to work in collaboration with other team members to complete joint work on time, one budget, and correct. The third responsibility of team members is to improve the work methods of both themselves and the project as a whole.

10. Pick the four ground rule topics for project teams that you believe are the most important.

Tell why you believe each is so critical, explain how they are related to each other, and give at least two specific suggestions for each. (Objective #4, Creating, pp. 153-157) Answers vary, but examples could look like these: Adhere to certain meeting and workday schedule. Meeting management. Rules for team communications • Set certain time every day for quick standup meeting or conference call to identify issues and risks • Define who gets what information and how information is communicated (email, knowledge management portal, file-server, bulletin board, etc.)

• Define meeting rules – send agenda in advance, start and end of time, keep meetings as short as possible Set team expectations • It is important that team members make and meet commitments.

• When you've made a commitment you can’t keep, let the team know as soon as possible.

• Be willing to ask for help • Be willing to help others • Listen to what others are saying.

• Strive to understand each other's perspectives, rather than jumping to conclusions.

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• Resolve problems without blaming.

• Respect “do not disturb” signs on people’s cubicles.

• If you don’t understand something, ask for clarification.

• If you see a problem that others haven’t noticed, bring it to someone’s attention.

Optimize requirements and change management processes • Use an iterative methodology to deliver functionality • Allow only one representative from each stakeholder group to submit requirements and change requests • Differentiate among change requests • Process local changes within subsystem teams • Avoid temporary, manual workarounds Standardize on organizational processes and tools • Standardizing on a single process and toolset allows an organization to scale up to larger projects and achieve greater process integration by reducing complexity and eliminating a great deal of waste. The end results are reduced time-to-market, higher quality, and lower costs.

• Disparate processes and tools lead to increases in complexity and waste in a number of ways. When different teams use different processes, collaborating teams must struggle with each other's terminology, artifact and diagram structure, and ways of performing common tasks. For instance, one team might express functional requirements as use cases, whereas another might express them as traditional “shall” statements. These teams would have to struggle to express functionality that crosses system boundaries.

Establish one leader for each key project role • Two or more individuals competing for a key leadership position – commonly happens when two large organizations must collaborate on a larger-scale integration project. Leaders from the different organizations fight for turf • For the sake of timely and definitive decision-making, the project should identify a single leader in the following key project roles – lead architect, lead systems analyst, test manager, etc. These leaders should gather input from other team members, but ultimately, they must have the authority to make decisions that will optimally benefit the project.

11. Using examples, describe how a project manager can use active listening. Why is this useful? (Objective #5, Applying, p.154) •

•

By listening actively, a project manager creates an opportunity to build a relationship with another person – at a deeper level. What people like most is the sound of their own voices; to give them an opportunity to talk while we fully engage in listening is to give them a gift they rarely receive.

By listening actively, a project manager has an opportunity to learn. When we listen half-heartedly, we miss opportunities to learn – about subjects, people, nuances of conversation, body language, etc. By really listening – and suspending our desire and compulsion to multitask with our brains – we just might learn something we can use later on.

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By listening actively, we separate ourselves from the majority of the population. Active listening is a skill. Not many people have the skill, and too few use it if they do have it.

12. Describe each method of decision making a project team may use. Using examples, tell when each is most appropriate. (Objective #3, Analyzing, pp. 156-157) • • • • •

One method is to have the project manager make the decision. This is appropriate when decisions need to be made quickly.

The sponsor may make the decision if it requires that level of authority.

It is also possible to have one or two team members make the decision. This is useful when they can research the decision between meetings and make the decision before the next meeting.

Another method is to use group consensus to reach a decision. Consensus is useful when significant buy-in will be essential for success.

The final method is to take a team vote. This is least preferred since losers of votes are often not enthusiastic.

13. In your opinion, why is it necessary for the project manager to assess the performance of both individual team members and the project team as a whole? (Objective #2, Applying, pp. 147-150) •

A project’s success relies on both individual and collaborative efforts

14. List several characteristics of a project that can often result in creating conflict. (Objective #6, Understanding, pp. 162-163) • • • • •

diverse stakeholders, team members from various functions оr companies, time pressure, scarce resources, unique deliverables

15. Give an example of when conflict would be beneficial to a project and an example of when conflict would be harmful to a project. (Objective #6, Applying, pp.162-163) Beneficial: o conflict over ideas on how to proceed with a project can lead to more creative approaches o conflict over how to complete project on a tight schedule o conflict over ideas on how to best handle a project activity Harmful: o Personal conflicts 16. You are working for a multinational organization and need to relay information to Japan.

Which communication method would you choose to use and why? (Objective #7, Evaluating, pp.166-167 )

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This is an opinion question, so answers will vary but should be supported (in terms of cultural preferences, time differences, etc.)

17. Give as many examples of cultural differences as you can, using information from this text and your own experiences. (Objective #7, Evaluating, pp.166-167 ) • This question is intended to start a discussion and opinions will vary. Encourage students to share personal examples but don’t let them digress to negative stereotypes and overgeneralizations.

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PMBOK® Guide Questions 1) ____ is the process of “confirming human resource availability and obtaining the team necessary to complete project activities”. a) b) c) d)

Plan Human Resource Management Acquire Project Team Develop Project Team Manage Project Team

Answer: b Page 138 in textbook Page 328 PMBOK 6th Edition

2) All of these are stages of team development EXCEPT: a) b) c) d)

Adjourning Storming Learning Performing

Answer: c Page 143 in textbook Page 338 PMBOK 6th Edition 3) ______ establish(es) clear expectations regarding acceptable behavior by project team members, and may cover topics such as protecting confidentiality, establishing trust and handling conflict. a) b) c) d)

The employee handbook Ground rules Management by objectives Personnel directives

Answer: b Page 153 in textbook Page 528 PMBOK 6th Edition 4) The objective of the ______ process is to improve competencies, team member interaction, and overall team environment to enhance project performance. a) b) c) d)

Plan Human Resource Management Acquire Project Team Develop Project Team Manage Project Team

Answer: c Page 141 in textbook Page 326 PMBOK 6th Edition

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5) All of these are techniques for managing project conflicts EXCEPT: a) b) c) d)

Smooth / Accommodate Withdraw / Avoid Collaborate / Problem Solve None of the above

Answer: d Pages 162-163 in textbook Page 349 PMBOK 6th Edition 6) A document used to manage points of discussion or dispute that arise during projects, in order to monitor them and ensure that they are resolved and add them to lessons learned, is called a(n) _____: a) b) c) d)

Risk register Stakeholder register SWOT analysis Issue log

Answer: d Page 156 in textbook Page 96 PMBOK 6th Edition 7) Which of these is not a challenge of working on global and virtual teams? a) b) c) d)

competencies language time zones culture

Answer: a Page 167 textbook Page 311 PMBOK 6th Edition 8) An output of the process Develop Project Team, an evaluation of the team’s success in achieving project objectives for schedule, budget and quality levels, is called team ____. a) b) c) d)

Project performance review Performance assessments Annual review Work performance reporting

Answer: b Page 159 in textbook Page 342 PMBOK 6th Edition 9) Which of the following steps is not part of the six-step project conflict-resolution process?

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a) b) c) d)

Identify causes of conflict Identify potential solutions Determine which teammate was in the wrong Understand the conflict

Answer: c Page 165 in textbook Page 348-349 PMBOK 6th Edition

10) The sources of most project conflicts can be grouped into those related to ___________ and those related to __________. a) b) c) d)

relationships; tasks technical skills; budget personalities; deadlines schedule; risks

Answer: a Page 163 in textbook Page 348-349 PMBOK 6th Edition

SUBURBAN HOMES PROJECT Students must be guided to identify training needs for managers and project team members. Refer to some of the team selection and team development issues discussed in the chapter. Negotiation skills for acquiring team members with required skills, communication, and conflict management skills are essential for project managers. Project manager is responsible to ensure that negative emotions in team are controlled during initial stages of the team development. Project team members, with specific skills, are team members first and must learn to work in teams effectively and efficiently.

It is not necessary to include all the team charter elements listed in the Exhibit 5.5; however, students must be encouraged to address all the six categories listed in this exhibit. The team charter is an instrument that is used specifically to develop collaborative culture, improve communication, and reduce conflicts among the team members. Desirable approach to manage conflicts is to recognize and address it (confront strategy). Hopefully, team development processes and team charter would minimize the incidence of conflicts.

While defining roles and responsibilities of all the team members during the team development process, delegation of decision-making authority, responsibility, and Instructor’s Manual .

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accountability of all team members must be defined and specified. Any issue that impact project’s goals must be deferred to the project manager for taking appropriate decision.

Work culture plays an important role in improving the performance of the project team.

Wherever possible, aligning individuals’ personal and professional goals with project goals would improve commitment and cooperation. Also, trust plays an important role in improving project performance, which can be nurtured by having open and transparent communication, and clearly communicating what is expected of each project team member.

CASA DE PAZ DEVELOPMENT PROJECT See following examples/suggestions: 1. Suggestions to help the Casa de Paz project team through stages of team development might include: •

•

•

•

•

Forming Stage: o Have each team member express why they are involved and what they hope to accomplish o Have potential residents tell team of their struggles to help team members emotionally commit to project o Have team members work together to draft scope overview and business case statements o Develop team operating methods and roles for each team member o Team members sign charter and publicly commit to project Storming Stage: o Clarify each team member’s role o Create assignments for team members to work together o Respectfully explore different approaches and then coalesce around an agreed upon approach o Strive to better understand stakeholders and create communication plan with responsibilities for each team member Norming Stage: o Personalize each member’s role o Discuss progress and why project will succeed o Ensure discussions are open and respectful with promises of confidentiality outside of project team o Include sponsor in various discussions Performing Stage o Capture applied learnings including how to improve team meetings o Encourage team members to help each other beyond their specified roles o Openly report progress and act upon suggestions from sponsor and others o Encourage team member learning Adjourning Stage

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o Hopefully the Casa de Paz project will not adjourn as much as evolve. Therefore, restructuring the team to maintain the house that was built and perform the services that were designed is in order. o Create a transition plan to help use the outputs of the project o Celebrate the successful launch o Share lessons with other communities to encourage the development of similar projects in other cities o Consider if and when the time is right to build a second facility and/or expand the services of the current facility.

2. A team charter might include a variety of items listed in Exhibit 5.5.

3. Types of decisions with who should make them and how include: Decision type: Who Makes it: Method Used: Building choice Steering team (Board) Consensus Terms of lease 2 assigned members with board OK Negotiation Schedule Team Consensus Fund raising goal Steering team Consensus Approach to donor Individual team member Individual decision

SEMESTER PROJECT Assess your project team’s capability. Develop a strategy to improve your team’s capability.

As a team, audit one of the other project team’s in your class and have them audit your team.

Develop an improvement strategy for that team based upon the audit results.

Identify what you have done to manage stakeholder expectations and how you know the current level of satisfaction your stakeholders feel.

•

Answers will vary. For each of these, look for the students to apply ideas from this chapter.

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CHAPTER 6 Stakeholder Analysis and Communication Planning LEARNING OBJECTIVES This chapter introduces the need for and the methods of both stakeholder analysis and communication planning. After completing this chapter, each student should be able to perform the following: Core Objectives: • Enumerate, describe, and prioritize each set of stakeholders for a project.

• List each section of a project communications plan and describe the role each plays.

• Build a communications matrix for a real project.

• Develop strategies for stakeholder management.

Behavioral Objectives: • Tell how to build project relationships and why they are important for communications.

• Develop a project communications management plan for a real project.

• Plan, conduct, and improve project meetings.

TEACHING STRATEGIES •

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An interesting Segway between chapters 5 and 6 is the introductory essay. Arthur Shelly has developed the organizational zoo. Using this or another instrument like StrengthsFinders from Gallup can give the students more understanding of themselves, their team, and their stakeholders. Students may enjoy creating their own profiles now (early in the course) and having their teammates create profiles for them later in the course.

We like to use projects that are in the news as examples to demonstrate points in this chapter. Controversial, local projects that are either under way or are under consideration work very well since they typically have many stakeholders with communication needs.

One breakout is to have students identify and categorize as many stakeholders as they can for an upcoming project. We often assign four groups of students, respectively, to identify internal stakeholders affected by the process, external stakeholders affected by the process, internal stakeholders affected by the results, and external stakeholders affected by the results. We tell them bragging rights go to the group that identifies the most stakeholders like in Exhibit 6.1. If any of the stakeholders identified are unexpected, we ask the group to explain the way in which they are stakeholders. It often takes the students by surprise how many people could have an interest in some of the projects.

A follow-up break out session is to have the students then prioritize the stakeholders and to justify their decisions. They can prioritize in accordance with Exhibit 6.2.

Another breakout can be for the communication matrix. Show them Exhibit 6.9 as the communication matrix for the Modular Courses Project. We usually let the student teams begin the communication matrix for their class project. Giving them 10 minutes of class time to start and to discuss gets them off to a good start. They need to be careful looking at other projects for ideas – not with an eye toward just copying.

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When introducing the subject of managing the meetings, ask if anyone has ever wasted time in a meeting. That is so obviously a rhetorical question that students will actually laugh. At any rate, explaining the need for a meeting agenda and having the students plan a meeting for their project illustrates the point. We tell them we will want to see copies of their agenda, minutes, and evaluation for one of their meetings.

LECTURE AND WORKSHOP OUTLINE A good place to start detailed planning (after the charter is accepted) is with understanding who the stakeholders are and how to communicate with them.

6.1 Identify Stakeholders It is imperative to understand the various stakeholders and their sometimes-conflicting desires.

Find stakeholders Anyone impacted positively or negatively by the process of performing the project or the results of the project is a stakeholder that needs to be identified.

Analyze Stakeholders Prioritizing among the many stakeholders is vital to ensuring the most important project needs are addressed.

Document Stakeholders The stakeholder register is a document for recording all information pertaining to stakeholders.

6.2 Plan Stakeholder Engagement Creating Stakeholder Engagement Assessment Matrix Create stakeholder management plan to define how to engage and manage stakeholders throughout project lifecycle Primary tool that comprises stakeholder management plan is the stakeholder engagement matrix (see Exhibit 6.5) Planning to Build Relationships with Stakeholders Project manager and team should engage stakeholders throughout life of project and beyond Team-building and involving key stakeholders is especially important during planning phase Since PMs often do not have enough formal authority to command, developing relationships to influence others is critical.

6.3 Manage Stakeholder Engagement Involves communicating and working with stakeholders to satisfy their needs, address issues, and encourage participation throughout Understanding stakeholder assumptions was performed when creating charter and will be elaborated on during the creation of the requirements matrix (Chapter 7).

Clarified assumptions lead to expectations regarding project deliverables and should be documented and verified by stakeholders prior to project execution 6.4 Monitor Stakeholder Engagement Stakeholder relationships, communications, and lessons learned must be continually monitored Instructor’s Manual Chapter 6 2 © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

6.5 Plan Communications Management Purposes of a project communications plan A PM must use effective communications to set and manage expectations from all stakeholders as well as to ensure that project work is completed properly.

Communications plan considerations Purpose Project communications need to be clear, concise, courteous, consistent, confidential, and compelling.

Structures Projects can use existing organizational communication forms if they are satisfactory, but need to create their own to supplement.

Methods Communications can be pushed to recipients, or pulled by them, or interactive with them.

Timing Communications can be tied to the project life cycle, be routine, or as needed.

Communications matrix o Who does the project team need to learn from? o What does the team need to learn from this stakeholder? o Who does the project team need to share with? o What does this stakeholder need to know? o When do they need to know it? o What is the most effective communications method for this stakeholder to understand? o Who on the project team is responsible for this communication? (the owner) Manage Project Knowledge If lessons-learned are captured and shared, a project can learn from previous projects.

6.6 Manage Communications Determine project information needs All information needs should be handled accurately, promptly, and effectively.

Stakeholders will have different information needs at different stages of the project.

Establish Information Retrieval and Distribution System Target your communication to only the people who need it.

Many methods of communicating are available. Use newer technologies if helpful, but don’t discard proven methods without reason.

Use your communication management plan and constantly keep asking who needs to know what?

Project Meeting Management Projects require many meetings and can benefit from having them well-run.

Improving project meetings Meetings are a process that can be studied and improved.

PDCA model (see Exhibit 6.10) This quality approach to process improvement can be applied to the meeting process.

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Project meeting agenda template Well-run meetings require planning. A clear agenda helps.

Project meeting minutes template Decisions made, issues surfaced or resolved, action items agreed to, and evaluation of the meeting should be concisely captured.

Issues management An issues log is a living document adding new issues and removing resolved issues.

Decisions and Issues All decisions made should be documented. An issue is something that does not need to be resolved immediately, but will need to be resolved in time.

Action items For each agreed upon action, capture who will do it and by when.

Evaluation Meetings can be evaluated using a plus-delta. Evaluations on agile projects are called retrospectives.

CHAPTER REVIEW QUESTIONS – SUGGESTED ANSWERS 1.

List three reasons why understanding stakeholders is important to successful project management. (objective #4, pp. 180-181) By determining who the stakeholders are and what each group wants, project managers effectively: • Set clear direction for further project planning, negotiating, and execution • Prioritize among competing objectives • Learn to recognize complex tradeoffs and the consequences of each • Make and facilitate necessary decisions • Develop a shared sense of risk • Build a strong relationship with their customers • Lead associates, customers, and suppliers with an empowering style • Serve as good stewards of the resources of both the parent and customer organizations

2.

What is the difference between an internal and external stakeholder? (objective #1, p.179) Internal stakeholders are within the organization performing the project; external stakeholders are not.

3.

Which three criteria should you consider when prioritizing stakeholders? (objective #1, pp.180-181) • • •

Proximity to the project – those that are closest are often the most important.

Power they have over the project – more powerful stakeholders need to be prioritized higher.

Urgency of their need – stakeholders who need something very quickly need to be given priority.

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4.

When should relationship building between the project manager/other core team members and important stakeholders occur? (objective #5, pp.185-186) Throughout the life of the project

5. What are some ways to build relationships within the core team? (objective #5, p.186) • Acknowledging individual motives • Encouraging open communication • Jointly establishing project meeting agendas • Sharing in meaningful project learning • Frequently celebrating small successes 6.

What are some ways to build relationships with key stakeholders? (objective #5, p.185-186) The sponsor, project manager, and core team can establish powerful relationships with key stakeholders by delivering on all promises, always providing fair treatment, creating a sense of pride by association, and even helping the stakeholder develop a passion for the project.

7.

What are some important functions of communication from stakeholders? (objective #2, pp.

191-192) Communications from stakeholders are necessary in authorizing work, determining requirements, uncovering and resolving issues, and receiving feedback on project progress and results.

8. What are some important functions of communication to stakeholders? (objective #2, pp.

191-192) Communications to stakeholders are necessary to help them make good decisions (by understanding options and risks), assure them of adequate understanding and progress, enable them to more fully commit to the project, and be ready to accept project deliverables.

9. In order to manage stakeholders’ expectations, a project manager needs to understand the stakeholders’ assumptions. Which document(s) can help with this? (objective #3, p.187) Assumptions are first discussed in the project charter, then elaborated on with the stakeholder register, stakeholder engagement assessment matrix, and requirements matrix.

10. What is the difference between “push” and “pull” methods of communication? (objective #6, p. 191) Projects rely on “push” methods in which communications are sent or pushed; “pull” methods where communications are posted either on paper or in electronic form and interested stakeholders need to take the initiative to receive the communication.

11. What are three types of project communications timing schedules? (objective #3, pp.190191) Instructor’s Manual

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First is the project life cycle, with communications typically needed at the end of each major stage in the project and at the end of each major project deliverable. The second timing schedule follows a more formal organizational structure. Project progress is often reported at regularly scheduled meetings. Meetings at the frontline level are usually more frequent than reports to higher levels within the organization. The third timing scheme is an as-needed basis.

12. What six columns should a communication matrix contain? (objective #3, pp.191-192) 1. STAKEHOLDER 2. LEARN FROM 3. SHARE WITH 4. TIMING 5. METHOD 6. OWNER 13. Why is it so important to capture lessons learned in a knowledge database? (objective #7, pp. 192-193) In order to keep developing and utilizing strengths but avoid repeating failures.

14. List the items that go into a project team meeting agenda and tell the purpose of each. (objective #7, pp.195-197) Meeting logistics such as people, date, time, and place – so that all can attend.

Purpose – so that people know what the meeting needs to accomplish and not hold the meeting if there is no good purpose.

Topics in order – so that people know what to expect and to prepare for.

Person responsible for each topic – so that they will be prepared and so any stakeholder can communicate with that person in advance.

Estimated time for each topic – to stay on track.

Summary – so that people remember what decisions were made, issues raised or resolved, and what are the items on which they agreed to take action, and the deadline for each.

Evaluation – so that future meetings can repeat what worked and avoid what did not.

15. Describe an AGILE “stand-up” meeting. (objective #7, p.194) These short (15 minute or less) meetings are often held at the start of each day with no coffee or chairs to be comfortable. Each project team member briefly states what she accomplished the previous day, what she plans to accomplish this day, and what obstacles may challenge her.

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DISCUSSION QUESTIONS – SUGGESTED ANSWERS 1.

A new grocery store is being erected that will demolish a neighborhood basketball court.

Who would be some internal stakeholders? Who would be some external stakeholders? (objective #1, Analyzing, pp. 179-180) Internal stakeholders include anyone working on the project. External stakeholders could include neighborhood residents and/or anyone affected by either the project execution or the results of the project.

2.

With a few of your classmates, conduct an Agile stand-up meeting and briefly discuss the three meeting components mentioned in this chapter. (objective #7, Creating, p. 194) This short, informal meeting should include what everyone did the previous day, what they plan to accomplish today, and any foreseeable obstacles.

3.

Think of a recent project you completed and choose three stakeholders. Prioritize them, using the six-criteria model. (objective #1, Creating, pp. 180-183) Answers will vary.

4.

In your opinion, what is the single most important component of building relationships within a project team? Why? (objective #5, Evaluating, pp. 185-186) Answers will vary but should be supported.

5.

In your opinion, what is the greatest benefit of having good communication between the project team and project stakeholders? Why? (objective #5, Evaluating, pp. 187-188) Answers will vary but should be supported.

6.

Imagine you are the project manager of a team tasked with building a new hotel. When brainstorming project communication plan considerations, what would you list under “purposes”? (objective #2, Applying, pp. 189-190) Answers will vary and may include: authorization, status reporting, information seeking, etc.

7.

Using the same scenario as Question 6, which timing schedule would you choose to use for each communication? Why? (objective #3, Evaluating, pp. 189-190) Answers will vary among the three timing schedules listed (periodically, as needed, or at milestones) but should be supported.

8.

Create a project meeting agenda for an upcoming project (or class) meeting you have. (objective #7, Creating, pp. 195-197) Student examples should use template given on p.196.

9.

Give an example of a time you have used push, pull, and interactive communication methods. Why did you choose the method you did based on the circumstances? (objective #6, Analyzing, pp. 190-191) Answers will vary but should be supported (see Exhibit 6.8).

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10.

Betty, a project manager, sent out agendas before an upcoming meeting to everyone involved. During the meeting, she got a team member to take minutes. After the meeting, Betty followed up with team members to check their progress.

Evaluate Betty’s actions using the PDCA model. What, if anything, could she have done better? (objective #7, Evaluating, pp. 194-199) Betty neglected the “Check” step of the PDCA model, which entails having the team members evaluate the meeting itself.

PMBOK® Guide Questions 1) The “component of the project management plan that describes how project communications will be planned, structured, monitored and controlled” is the: a) Communication model b) Communications management plan c) Stakeholder register d) Organizational breakdown structure Answer: b Page 188 in textbook Page 377 PMBOK 6th Edition 2) In order for a new grocery store to be erected, a neighborhood basketball court located on the building site will have to be demolished. The neighborhood children who liked to play basketball there could be considered as _________: a) Subject matter experts b) Internal stakeholders c) External stakeholders d) Customers Answer: c Page 179 in textbook Page 361 PMBOK 6th Edition 3) A common method of prioritizing stakeholders is based on the stakeholders’: a) legitimacy b) power c) urgency d) all of the above Answer: d Page 180 in textbook Page 513 PMBOK 6th Edition

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4) The components of a project communications management plan should typically include the purpose of the communication, structure (format, content etc.), methods or technologies to be used, and _______: a) work performance data b) time frame and frequency c) stakeholder priorities d) lessons learned Answer: b Pages 188-191 in textbook Page 377 PMBOK 6th Edition

5) Most project meetings are formal, planned events between project stakeholders. Effective meetings typically have a purpose, a prearranged time and place, a list of attendees and their roles, and an agenda with topics and issues to be discussed. After the meeting, _______ are circulated. a) refreshments b) business cards c) meeting minutes d) lessons learned Answer: c Page 197 in textbook Page 381 PMBOK 6th Edition 6) The “project document that includes the identification, assessment, and classification of project stakeholders” is called the _____________. a) stakeholder engagement matrix b) organizational breakdown structure c) stakeholder register d) weighted scoring model Answer: c Page 183 in textbook Page 514, PMBOK 6th Edition 7) A document used to manage points of discussion or dispute that arise during projects, in order to monitor them and ensure that they are eventually resolved and added to lessons learned, is called a(n) __________________. a) risk register b) stakeholder register c) SWOT analysis d) issue log Answer: d Pages 197-198 in textbook

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Page 96, PMBOK 6th Edition

8) One of the key responsibilities of a project manager is to manage stakeholder expectations. It is important for the project manager to have interpersonal or “soft” skills that include: overcoming resistance to change, resolving conflict, active listening, and _____: a) displaying confidence b) subject matter expertise c) ability to command and control d) building trust Answer: d Pages 187-188 in textbook Page 527 PMBOK 9) The process of communicating with stakeholders and working with them to meet their expectations, address issues as they occur, and obtain their continued commitment to the success of the project is called ___________________. a) b) c) d)

Manage Stakeholder Engagement Monitor Stakeholder Engagement Monitor Communications Manage Project Team

Answer: a Page 187 in textbook Page 523, PMBOK 6th Edition

10) The communication method that is used for large audiences or large volumes of information and requires recipients to access the content at their own discretion, is called __________ communication. a) push b) pull c) synchronous d) interactive Answer: b Page 191 in textbook Page 374, PMBOK 6th Edition

SUBURBAN HOMES PROJECT The key issue is identifying all the key stakeholders. Once all the key stakeholders are identified, students are required to develop stakeholder engagement plan (Exhibit 6.5) and a comprehensive stakeholder management plan after developing the stakeholder Instructor’s Manual

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prioritization matrix and Stakeholder Matrix as shown in Exhibits 6.2 and 6.4 respectively.

Using the stakeholder management plan, students are asked to develop communication plan that makes use of exhibits 6.8 and 6.9. These exhibits are self-explanatory. Description about these exhibits in the chapter help students to develop a reasonable stakeholder management plan. It must be ensured that all the plans developed using these exhibits are coherent, consistent, and there are no contradictions.

SEMESTER PROJECT Develop a stakeholder analysis for your example project. Identify as many stakeholders as you can using Exhibits 6.1. List stakeholders by name and title when possible. Then prioritize the listed stakeholders as in Exhibit 6.2. Be very specific regarding what each stakeholder is interested in. Recognize some stakeholders may have an interest in multiple aspects of the project process or results. Create a Stakeholder Matrix (register) like exhibit 6.4.

Answers will vary, but students should have identified quite a few individuals, groups, or organizations as stakeholders, prioritized them as key or other, listed their interests, and have at least an idea for support and/or mitigation strategies for each.

Describe the activities you are using to build relationships both within your core team and with other stakeholders. Create a project decision-making guide for your project like Exhibit 5.7.

List specific examples of decisions to the extent you can.

Commented [KW1]: ??

Again, answers will vary, but the more specific the students are, the better.

Create a stakeholder engagement assessment matrix like Exhibit 6.5.

The students may struggle with this initially, but try to get them to realistically assess what the various stakeholder groups think about their project and how to improve those attitudes.

Develop a communications matrix for your project like Exhibit 6.9. Be sure to use considerations in Exhibit 6.8 for ideas regarding purpose, structure, method, and timing for each communication need.

This is the primary deliverable from Chapter 6. Most of the other work leads up to this. Since many projects experience problems due to poor communication, a workable communication matrix is quite valuable. The matrix should have all six columns shown in Exhibit 6.9. One big lesson for students is that many stakeholders need to learn certain things from the project team, but need to supply the project team with very different information. Hence, check the learn from and share with columns for logic carefully.

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Commented [KW2]: This is the second time we reference this, but the exhibit (6.9) only has five columns!

Document a project meeting with an advance agenda, meeting minutes, issues log, and Plus Delta form of evaluation like Exhibits 6.11 through 6.14.

This can be a major assignment in itself or part of a communications plan assignment. We try hard to get the students to plan at least one meeting effectively, run it according to the agenda, capture minutes and issues, and then evaluate the meeting. If you only talk about this but do not require it, many students will not do it. The learning comes from the practice, not being lectured.

Communication Plan Grading Suggestions 1. Plan purpose – A brief description of why and how the plan was developed, and an overview of the overall team communication philosophy. Also states types of communications planned, for lateral, downward, and upward communication.

2. Identification of stakeholders – The “who” in the project that requires information, (i.e. team members, project sponsor, class professor, etc.) and also the responsible parties to receive and/or communicate information.

3. Information to be shared – The “what” in terms of project information communication.

Describes types of information that the team uses to communicate amongst its own team members, and also to the agency sponsor and the class professor.

4. Frequency of information exchange – The “when” describes how often communications will be held (i.e. daily, weekly, monthly, as needed, etc.)

5. Location of information exchange – The “where” states the location of the meeting or other interactions 6. Purpose of communication – The “why” description assures that communications are held effectively.

7. Mechanism for communication – The “how” describes the media for communication (i.e. physical meeting, email, phone, message group, etc.)

8. Change management – Description on how the team will handle changes in the project, whether it is in terms of project scope, schedule, or resources. This includes how the team plans to communicate changes as well as how the team plans to make decisions about changes.

9. Meeting agenda – Gives a brief overview of what the team plans to accomplish in each of its meetings, how it documents goals and objectives for meetings, and defines and assigns actions for the team to accomplish project objectives.

PMP judges use the following criteria when evaluating communication plans.

Communication Deliverable

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Team Meetings

Not Considered

Defined but unclear.

Communicatio n Plan (Who, When, How, What, inbound, outbound)

Not Considered

Defined but unclear.

Issue Escalation Methods

Not Considered

Escalation method is defined but unclear

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Internal team meetings are planned and conducted as per a schedule.

Defined Who and When communication will take place.

Meetings are planned, conducted followed by Minute of the Meetings Defined Who, When and How (method) communication will take place.

Meetings are planned, conducted followed by Minute of the Meetings and Action items.

Escalation method is defined, but without process documentation

Escalation method is defined including process documentation.

Escalation method is defined including process documentation & Issue log template

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Defined Who, When, How, What communication will take place. Forms / Templates are covered.

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CHAPTER 7 Scope Planning LEARNING OBJECTIVES This chapter shows how to determine how large a project will be by defining scope and creating the work breakdown structure (WBS). After completing this chapter, each student should be able to perform the following: Core Objectives: • Describe the planning of scope management, collecting requirements, and defining scope processes.

• Create a requirements traceability matrix, project scope statement, and change request form.

• Describe a work breakdown structure (WBS) and its importance to project planning and control.

• Compare different methods of developing a WBS. Technical Objective: • Create a WBS, including work packages and a numbering system for the code of accounts, both by hand and using MS Project.

TEACHING STRATEGIES •

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•

This is a good chapter to use the opening example to introduce the chapter (if you have not started doing this already). In the Teradata example, the following concepts or tools that will be covered in this chapter are introduced: project deliverables, business parameters (constraints), requirements, customer needs, scope definition, statement of work, traceability matrix, testing, customer acceptance, WBS, and change control. You could have all of these terms on a slide and ask the students to tell what each means to Teradata. Be prepared to supplement their guesses.

On small, simple projects the information in the scope statement may already be developed in the charter. However, it may prove helpful to get the students to elaborate.

One possible breakout session is to gather stakeholder input using a requirements matrix such as exhibit 7.2. For this, we like to choose a project in which the students are one group of customers – such as development of a new service or building a new building on campus. Generally, when that happens, the students are able to articulate more requirements from their own perspective than from that of others. This leads to a discussion about how we need to understand each stakeholder’s perspective.

A second breakout session we like is to use an upcoming project in your area to have the students list potential deliverables. Be sure to get them to list intermediate and final deliverables. For each deliverable, have the students list acceptance criteria as in exhibit 7.4. When each team reports, challenge the other students to suggest additional deliverables. The purpose is to convince the students it is worth some degree of effort to make sure their list of potential deliverables is complete. Remind them that when it comes to estimating time and cost, if they do not have a consistent bias, the items they

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•

•

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overestimate will somewhat offset the items they underestimate. However, when they forget an item, they underestimate it by 100%.

Exclusions, constraints, and assumptions can all help to define a project’s boundaries.

Project boundaries can be either a short break-out session or a discussion. Again, we like to use either a community project or the student’s semester project to guide the discussion on identifying what is included and what is not included. Remind the students that one way to envision scope is to think as if it as a field of play for a game and that we are trying to define the out-of-bounds lines. These are described in exhibit 7.4.

A great breakout is creating the WBS. We like to show all three possible formats and then ask the students to create a small WBS. We give them a simple scenario such as a campus fund raiser. This can be done in one or more breakout sessions. Eventually we want them to have the WBS in indented outline form since that is the way they will enter information into MS Project. If different groups choose to use different methods, discussion can follow as to the advantages and disadvantages of each. We do want them to have each line numbered. We also ask the students to create a category for project management – composed of the various deliverables they will need to plan and manage the project.

Talk about the change request forms. One thing that is an issue on many projects is getting people to actually use a change control system. Discussion of how much people like additional paperwork when they are already busy drives home the point. We want the students to come away thinking that a very simple but suitable change request form is needed. We insist they use one on their semester project.

If you did not already go to a computer lab to give your students a chance to start using MS Project, this is a good time. We like to encourage the students to print the Power Point slides for note taking but to tell them we will primarily use MS Project to demonstrate. After we demonstrate each item for this chapter, we pass out a small sample output (such as the one below) for a project and ask them to recreate it.

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Source: Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.

LECTURE AND WORKSHOP OUTLINE This chapter deals with understanding what work will be involved in the project both by defining the scope and the WBS. 7.1Plan Scope Management This is how the scope will be defined, developed, and verified; how the WBS will be created; and how scope will be controlled. Product scope is features and functions of deliverables while project scope is the work that must be accomplished to produce the results.

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7.2 Collect Requirements The process of defining and documenting stakeholders’ needs to meet the project objectives, so first the project team must understand the objectives Gather stakeholder input With many stakeholders and many possible methods for understanding their desires, the mechanics of this varies widely.

7.3 Define Scope Define scope is “the process of developing a detailed description of the project and product.”

Reasons to define scope Basis for other planning and method of avoiding scope creep How to define scope 1. List deliverables and acceptance criteria for each 2. Establish project boundaries What is included vs. not included, what are constraints and assumptions?

3. Create a scope description – a sentence or two to summarize project work.

Defining Scope in Agile Projects At beginning of project, overall scope is only defined at high level, and a backlog of possible work is identified Customer representative (aka “owner”) prioritizes the scope based upon business need, value, cost, and risk.

7.4 Work Breakdown Structure (WBS) What is a WBS? Tool to progressively divide project into smaller pieces until the team feels every deliverable is identified. While the WBS identifies deliverables, teams may define activities and milestones at the same time for use in the project schedule.

Why use a WBS? To ensure all parts of the project are considered and as a basis for other planning – such as schedule, budget, resources, risk, and quality.

WBS Formats Each has advantages and disadvantages.

• Indented outline Useful when typing WBS into scheduling software.

• Org chart Org chart is a familiar form – easy to understand and somewhat flexible.

• Free form Totally flexible – especially useful for project with structure initially unclear.

Work packages They are the lowest level of WBS – smallest deliverables identified. Work packages for the basis for continued planning and much of the project control.

How to construct a WBS Include appropriate subject matter experts (SMEs).

• Identify major deliverables Use a top-down approach identifying deliverables from scope statement.

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and later ones at a high level. Organize in systematic manner such as by phase or design component.

• Decompose deliverables Include both interim and final deliverables – use Post-it® Notes for flexibility.

• Continue until deliverables are the right size – small enough for control, not so small as to micro-manage.

• Review – ensure completeness.

– make sure each level is the summary of next lower level.

– ensure each item has unique name and number.

7.5 Establish Change Control Procedures to make sure all potential changes are considered, accepted or rejected, and their impact is factored into revised plans.

7.6 Using MS Project for WBS Set Up the WBS – in five steps 1. Understand WBS definitions and displays.

2. Enter project deliverables and work package elements.

3. Create the outline of your WBS. 4. Insert a WBS code identification column.

5. Hide (or show) the desired amount of detail in the WBS.

CHAPTER REVIEW QUESTIONS – SUGGESTED ANSWERS 1. What is the first step in developing a project scope management plan? (objective #1, p.212) Developing a project scope statement.

2.

What three tasks comprise the “define scope” process? (objective #1, pp.216-217) list deliverables & acceptance criteria; establish project boundaries; create a scope description

3.

For a construction project, the house is the ______________ deliverable, and how-to instruction sheets are ___________________ deliverables. (objective #1, p.226) Primary, additional/secondary

4.

Why is scope definition important? (objective #1, p.217) a) helps estimate project cost, resources, duration, risks, and quality standards b) helps prevent scope creep.

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5.

What are two common causes of scope creep? (objective #1, p.217) 1. the scope is not clearly defined and agreed upon 2. the project is modified to please the customer

6.

What does the acronym WBS stand for? (objective #3, p.211) Work Breakdown Structure

7.

What are the advantages of using a WBS? (objective #3, pp.221-222) a) b) c) d)

guides project execution is baseline for change control serves as basis for all future planning enhances communication.

8.

List three ways of organizing a WBS. (objective #4, p.227) By project phase, design components, or work functions (see Exhibit 7.10)

9.

The lowest-level of the WBS is known as a _____________________. (objective #3, p.224) Work package

10.

What is a WBS dictionary used for? (objective #1, p. 225) to give extra information about each work package, including details about the associated deliverable, activity, scheduling information, predecessor, successor, person responsible, resources required, and associated risks.

11. What is rolling wave planning? (objective #1, p.227) Rolling wave planning is “an iterative planning technique in which the work to be accomplished in the near term is planned in detail, while the work in the future is planned at a higher level.” (PMBOK) 12. What is uncontrolled change known as? (objective #1, p.231) Scope creep.

13. Why do project teams use change control systems? (objective #3, pp.229-232) To prevent the negative impacts of scope creep.

14. List the major sections that should be included in a change request form, and tell why each is important. (objective #1, pp.231-232) The top section lists basic information to track the change request to the project and to the person who submitted it. The second section contains two simple statements describing the change and why the change is needed. The third section details the impact expected from the potential change. Finally, there should be a space for the change to be approved.

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15. What is a project baseline? (objective #1, p. 229) the approved project plan; any proposed changes to this must go through the change control system

DISCUSSION QUESTIONS – SUGGESTED ANSWERS 1.

Are the product scope and project scope ever the same? Cite examples if possible.

(Analyzing, p.212) Product scope focuses on the features of the product/service that is to be delivered while project scope focuses on the work that is needed to complete and deliver the product/service.

It is possible but unlikely that they would be the same.

2.

Create a template of a change request form. What sections did you include and why?

(Creating, pp.229-232) Templates will vary. Possible sections to include: • “Basic project information” section to track to requestor • “Impact of change” section – to understand how proposed change will affect project • “Why the change is needed” section – to understand reason for the proposed change • “Description of the change” section – to understand the extent of the proposed change • An “approval/signature” section – to document approval or disapproval.

3.

Compare the strengths and weaknesses of the three formats of constructing a WBS: indented outline, organizational chart, and free format. (Evaluating, pp.236-237) • Indented outline WBS is easier to produce using software.

• Org chart WBS is easy to grasp visually and is extremely effective up to the certain number of levels and work packages.

• Free-form WBS is easy for brainstorming ideas with space to add new elements.

4.

Give an example of scope creep from one of your own projects or from a project that has made the news in recent years. (Applying, p.231) Answers will vary.

5.

What are the advantages of completing the “define activity” process after creating the WBS? (Analyzing, p.221) It is easier to define the activities needed once the deliverables have been itemized.

6.

Describe the roles various executives, managers, and associates play in scope planning.

(Understanding, pp.212-216) • Executives: define objectives, constraints, help manage scope boundaries

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• Managers: develop scope statement, create WBS, define verification and acceptance criteria, and control changes • Associates: define work to create each deliverable.

7.

You are the project manager in charge of expanding a popular restaurant. How could you use the voice of the customer (VOC) techniques to gain insight into your stakeholders?

(Applying, p.214) Answers will vary but should be based on the team members putting themselves in the customers’ position.

8.

Identify two projects your company or school will be performing in the future. Which one do you think would have a more detailed WBS? Why? (Analyzing, pp.220-225) Answers will vary but should be supported.

9.

The sponsor for a project you have been managing sends you an email that he would like to make a small change to the project. What is your response and why? (Applying, pp. 229232) If this request is made after the scope has been defined and the WBS approved, no changes can be made without going through—and receiving approval from—a formal change request process.

10.

A potential client wants you to be project manager for the construction of a new house, but she is vague about the details. List a few questions you could ask her to gain a better understanding of the scope of the project. ( Creating, pp.217-220) Answers will vary. Examples: How big is the house? What is the deadline? How many workers are authorized? What is the estimated budget?

EXERCISES – SOLUTIONS 1) Create a requirements traceability matrix like Exhibit 7.2 for a project in which you plan an event for your campus.

Answers vary. Make sure there is a clearly articulated business need for each requirement, that each has one or more stakeholders, and that each is assigned a priority. Logic and reasonableness will be required in grading this. If you as the professor have a hard time understanding it, the project team probably does not understand it either.

2.

Create a scope statement like Exhibit 7.3 for a project in which you plan an event on your campus.

Answers vary. Items to look for include

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• • • • • • • • • • • • • • 3.

Event name Event date and duration Event venue Event rationale Event objectives Event deliverables Event preparation timelines and milestones Event WBS and who will do which task Issues and constraints Resources Team membership and roles Campus rules Event budget Understand event expectations from future participants

Construct a WBS in indented outline format like Exhibit 7.11 for a project in which you plan an event on your campus. Be sure to number each row. Also, construct the same WBS in MS Project, like Exhibit 7.18.

Answers vary. Here is a typical WBS:

1

Campus Event 1.1. Site 1.1.1.Selection 1.1.2.Environment 1.1.3.Neighbors 1.1.4.Preparation 1.1.5.Cleaning after 1.1.6.Handover 1.2.Promotion 1.2.1.Campus newspapers 1.2.2.Internet 1.2.3.Other 1.3.Finance 1.3.1.Sponsorship 1.3.2.Tickets 1.3.3.Budget 1.3.4.Audit 1.4.Human Resources 1.4.1.Marketing 1.4.2.Security 1.4.3.Ticket sales 1.4.4.Management 1.5.Entertainment 1.6.Staging

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PMBOK ® Guide Questions 1) The process where project deliverables and project work are subdivided into smaller and smaller pieces is called ______: a) b) c) d)

collect requirements define scope plan scope management create WBS

Answer: d Page 220 in textbook Page 129 PMBOK 6th Edition 2) The project scope baseline consists of the approved versions of three of the four documents listed below. Which of these documents is NOT included in the project scope baseline? a) b) c) d)

project scope statement project charter work breakdown structure (WBS) WBS dictionary

Answer: b Page 212 in textbook Page 87 PMBOK 6th Edition 3) Which of the following statements about a work package is true? a) b) c) d)

It requires the work of the entire project team.

It is the responsibility of the project manager.

It is the lowest level of the WBS. It consists of a single activity.

Answer: c Page 224 in textbook Page 157 PMBOK 6th Edition 4) During WBS creation on a large, complex project, the product and project deliverables are broken down into progressively lower levels of detail. Once the WBS has been defined at the second or third level of detail, whose input is essential in order to break down the work further? a) b) c) d)

sponsor subject matter experts internal stakeholders external stakeholders

Answer: b Page 228 in textbook Pages 158 -161 PMBOK 6th Edition

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5) Which of the following is NOT a common method for organizing a WBS? a) b) c) d)

free format indented outline hierarchical web

Answer: d Pages 222-224 in textbook Pages 159 - 160 PMBOK 6th Edition 6) A “component of the project management plan that describes how the scope will be defined, developed, monitored, controlled and verified” is the _______. a) b) c) d)

project statement of work requirements management plan scope management plan WBS Dictionary

Answer: c Page 211 in textbook Page 129 PMBOK 6th Edition 7) A grid that links product requirements from their origins (e.g. business reason needed, stakeholder who requested them) to the deliverables that satisfy them is referred to as a _______. a) b) c) d)

network diagram Gantt chart requirements traceability matrix stakeholder register

Answer: c Pages 215-216 in textbook Pages 148 - 149 PMBOK 6th Edition 8) Which of these is NOT a component of a Project Scope Statement? a) b) c) d)

summary budget project deliverables acceptance criteria project exclusions or boundaries

Answer: a Pages 216-217 in textbook Pages 154 – 155 PMBOK, 6th Edition 9) The key output of the scope planning process is an approved version of the scope baseline.

After this baseline is established, it can be referenced during project execution in order to:

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a) b) c) d)

staff the project properly with the right skill sets. link requirements back to their origins. communicate with stakeholders effectively. identify changes in scope that will go through formal change control procedures.

Answer: d Page 229 in textbook Pages131-132 PMBOK, 6th Edition 10) The process of breaking the WBS into smaller and smaller deliverables is called: a) b) c) d)

decomposition functional design detailed specifications value engineering

Answer: a Page 220 in textbook Page 157 PMBOK 6th Edition

CASA DE PAZ DEVELOPMENT PROJECT See following examples/suggestions: An answer to the question about what details should be considered for each feature in this project is shown in the graphic in the next chapter with the five features (website, location/building, etc.) listed in top in orange cards and some proposed details listed in yellow cards below each.

SEMESTER PROJECT For your example project, create the following: 1. Scope management plan to direct your efforts.

2. Customer-needs worksheet to identify customer desires.

3. Project scope statement including each of the sections in Exhibit 7.4 (be sure to state specifically what items are included and what items are excluded).

4. Change request form. (Determine what level of changes you as an individual can make without further approval, what changes you as a student team can make, and what changes your sponsor needs to approve.)

5. WBS first using either the free-form or the org chart format.

6. WBS in MS Project.

Work Breakdown Structure (WBS) Grading Suggestions •

The first major section (1.0) should be project management and include the various project

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• •

• • • • •

management deliverables such as charter, WBS, schedule, progress reports, etc.

Deliverables should match those in the charter.

Each item on the WBS should have a unique name. If there is possible confusion between two items, add an extra adjective to differentiate them. For example, two items could be “first draft report” and “second draft report.”

Each line should be numbered, with major sections being 1.0 then 2.0, etc.

Each major section should be broken down into between three and twelve subsidiary sections. If further breakdown is needed, more levels should be used.

All items on WBS are deliverables-oriented (they are the “whats” of the project). Activities are defined as an outgrowth of the WBS and will appear in the schedule.

The WBS can be submitted in free-form, org-chart, or indented-outline format.

The WBS should appear to be complete with all interim and ending deliverables included.

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Criteria the local PMI chapter uses when judging the change request process, scope detail, and work breakdown structures for student projects include: Change Request Process

Not Considered

Considered CR process but unclear

Reasonable CR process is defined.

CR process includes approvals from appropriate stakeholders.

CR process includes approvals from appropriate stakeholders & forms / templates.

Scope Detail

Not Considered

Defined inscope but ambiguous / incomplete.

Clear description of in-scope items.

Clear description of in-scope items and out-ofscope items.

Clear description of project scope, including named deliverables. Scope verification/ acceptance is also defined.

Work Breakdown Structure (WBS)

Not Considered

WBS is mentioned with some breakdown of Project Scope.

WBS is structured, having detailed coverage for Project scope / Phase of project.

WBS is well structured, having logical and complete coverage for Project Execution

WBS is structured, having logical and complete coverage for Project Execution and integrated into Project Schedule and Resource Matrix.

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Commented [KW1]: Can we assume this is unchanged?

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CHAPTER 8 Scheduling Projects LEARNING OBJECTIVES This chapter demonstrates how to construct project schedules. After completing this chapter, each student should be able to perform the following: Core Objectives: • Describe five ways in which a project’s schedule is limited and how to deal with each.

• Use the activity on node (AON) method to develop a project schedule.

• Identify the critical path using both the two-pass and enumeration methods, and identify all float.

• Depict a project schedule on a Gantt chart by hand, showing the critical path and all float.

Technical Objectives: • Describe how to adjust a project’s sequence logic using leads, lags, and alternative dependencies.

• Build and display the logical network diagram showing critical path and all float with MS Project 2016.

• Depict a project schedule on a Gantt chart using MS Project 2016.

Behavioral Objectives: • Describe potential problems estimating time accurately and how to overcome them.

• Resolve potential scheduling conflicts.

TEACHING STRATEGIES •

•

This is a critical chapter that has many opportunities for “hands-on” work. After a short introduction, much of this chapter can be well-covered by demonstration and practice.

Be sure to include in your opening remarks the five ways in which project schedules are limited and that they will be covered collectively in this and the next two chapters. For each breakout, we first demonstrate using the examples from the book.

A nice breakout to start can be defining activities. This can be accomplished by using a WBS (or partial WBS) and asking the students to define activities required to create all of the deliverables on the WBS. Be sure to emphasize that some work packages may require one activity while others may require multiple activities. Alternatively, you can just give a little scenario – such as you want to build a garage next to your house. Ask the students to define the required activities. This works best with at least around 12 activities so that students can see the power of using a network for schedules (below) and not more than about 20 activities (since it will take more time with more activities). For another alternative, you can have the students use the WBS from their example projects to practice defining activities in the first scheduling breakout session. The emphasis here is to have the students start with the deliverables (things, worded as nouns with adjectives) and ask the question “what work activities will we need to perform to create

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•

• •

•

•

•

each of these deliverables?” the activities should be stated in verb-noun format with adjectives to describe and clarify as needed. There may be one or several activities for any given deliverable.

You can use the activities identified above to have the students practice sequencing the activities in a network. Alternatively, you can use the example Wolf Creek Farms case that follows these teaching strategies. Have them write one activity per Post-it® Note and then have them arrange the notes in what they believe to be a logical order. Have them draw arrows connecting predecessors with successors. Encourage the students to have someone on their team play “Devil’s Advocate” both in challenging the order and in ensuring that no activities are “dead-ends” with no successors. Tell the students if they have more than one starting activity to make up another Post-it® and call it “start.” This can serve as the predecessor to as many activities as necessary. If they have more than one ending activity, make up another Post-it® and call it “end,” making it the successor to as many activities as necessary. When the network is complete, there should be one start and one end. All intermediate activities need to have at least one in arrow and at least one out arrow.

Another breakout you might use is to have the students estimate the duration for each activity. This could be combined with either the previous or the next breakout.

The next breakout is to develop the project schedule. We first model this, then have students do this using the two-pass method. Be sure to have them identify the critical path(s) and to calculate the amount of slack for every non-critical activity. Again, the Wolf Creek Farms case or a project of your choice work well for this.

We like to show the students how to find the critical path using the enumeration method also so that they will be able to crash the schedule (next chapter). It also helps for them to compare the two-pass and enumeration method results.

Once the students have identified the critical path, ask them how easy it is to read the schedule. Of course, it is often quite difficult, so this paves the way to introduce Gantt charts. Ask the students to show their schedule on a Gantt chart. Also ask them to identify the critical path and the slack.

When presenting MS Project, we like to furnish the students with Power Point files and encourage them to use them for taking notes. While we often present a few of the Power Point slides, we generally try to use a small project such as the one shown below to demonstrate using MS Project. We pass out a hard copy for the students, then demonstrate with a couple examples of how to perform each portion of the technique.

Wolf Creek Farms Case You have inherited a century old farm house and acreage in Montana. You have visited the site and made an inspection. The house needs a great deal of repair work to get it marginally livable. You have itemized the most important things that need to be done and estimated the time required as shown below.

The total estimated time is 160 work hours.

You and your spouse want to use this house for vacations and as a rental property. However, just buying the supplies to fix it up will max out your budget. Therefore, if it is to be fixed up, the two of you

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will need to do the work. The two of you can arrange to take a two-week vacation. You have each committed to working 80 hours (160 hours total) over your vacation to fix up the house.

This is a multi-part exercise. For the first part, sequence the activities by developing an AON network with Post it Notes. Each activity is to be done by one person. Start with the activity(ies) that can begin immediately and continue to ask “when this is done or when these 2 or 3 activities are done, what can we do now?” For this step, you are only considering the logical order. In later steps, you will consider who will perform each step. It is expected that you will have some “burst activities” after which there are multiple things that can start. It is also expected that you will have some “merge activities” that can only start once multiple other activities are complete.

Est. Hours

WBS Summaries and Activities 1 Purchasing 1.1Purchase supplies 1.2Purchase curtains 2 Shutters and porch 2.1 Repair shutters 2.2 Paint shutters 2.3 Rehang shutters 2.4 Repair porch 3 Floor 3.1 Repair floor 3.2 Sand floor 3.3 Refinish floor 4 Paint 4.1 Paint ceilings 4.2 Paint wood trim 4.3 Paint walls 5 Windows 5.1 Wash exterior windows 5.2 Wash interior windows 5.3 Hang curtains

2 2 12 12 4 16 8 10 24 10 22 20 8 8 2

Answers will vary for this case, but one possible schedule is shown below.

For the schedule shown in the network diagram and Gantt chart below, the enumeration method yields the following paths and times.

Time Path 30

1.1

2.1

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18 44 72 64 10 4

1.1 1.1 1.1 1.1 1.1 1.2

2.4 3.1 3.1 4.1 5.1 5.2

3.2 3.2 4.2

3.3 4.2 4.3

4.3 5.2

5.2 5.3

5.3

Wolf Creek Farm Case Network

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Wolf Creek Farm Case Gantt Chart The students must first create the network diagram so they understand the logical order, can determine the critical path, and understand how much float each non-critical activity has. Point out it is typical to identify the critical path in bright red. Once the network is complete, the schedule can be transferred to a Gantt chart. It is typical to show the critical path in red and noncritical activities in blue. It is also typical to show the amount of float in a muted color and/or narrow lines. It is helpful to write on the Gantt chart the start and finish times of each activity.

Sometimes a student team will attempt to put all activities into two lines since they know there will be only two workers. This defeats the purpose of project scheduling. Remind them that of the five things that can delay a project schedule, the number of resources (people) is only one.

They must first understand the logical order, the critical path, and the float. We also remind them that this is a tiny project with two workers and 15 activities. Ask them if they were scheduling a project with 200 workers and 1500 activities would they still insist on drawing 200 rows. Of course not! We are teaching them a process that is scalable to any size of project.

They would use software on a big project, but it drives home the point.

It will be purely by chance if a student team has their schedule take exactly the 80 hours available (2 workers are available 80 hours each for a total of 160 hours). If their first attempt took more than 80 hours, they will need to evaluate their logic. This is a good opportunity to introduce alternative dependencies and lead and lag times. If their first attempt took less than 80 hours, they will have some periods when more than two activities are scheduled at once. This leads into resource leveling in chapter 8. We ask the students to bring their schedules back to class when we cover resource overloads so they can practice on their projects.

If you are using Microsoft Project in your class, you can also ask the students to bring their Wolf Creek Farms project schedule to the computer lab and recreate their schedule using the software. Ask them to inspect it very carefully. If there are any inconsistencies, they probably either had an error inputting, or an error in their by-hand calculations.

In Chapter 8 we will learn how to identify resource overloads. A fourth step in this case is to identify any overloads and adjust your schedule accordingly by delaying non-critical activities.

Another example project, the eBay Project has a schedule shown below.

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Source: Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.

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LECTURE AND WORKSHOP OUTLINE 8.1

8.2

8.3

8.4

8.5

8.6

8.7

Plan Schedule management PMI has identified the following seven time management processes: Plan schedule management Define activities Sequence activities Estimate activity resources Estimate activity durations Develop schedule Control schedule Purposes of a project schedule In addition to the primary question of when will the project be complete, many other questions can be answered with a schedule.

Historical development of project scheduling PERT and CPM were developed in the 1950s. The AOA and AON methods were used through the years, but AON is the primary method today. The basic logic remains, but many advancements have been incorporated into software scheduling systems.

How project schedules are limited and created Project schedules are limited by the logical order of activities, the duration of each activity, availability of key resources, imposed dates, and cash flow. Schedules are often developed by considering each of these five limits in order – that is, first consider logical order, then activity duration, etc.

Define activities The activities are outgrowths of the work packages (lowest level) of the WBS. On small projects, they are frequently defined concurrently with constructing the WBS. Focus on developing a complete list of activities and make sure they have action words (verbs).

Sequence activities This is often done by Post-it® Notes with each note representing one activity.

Leads and lags While basic logic says when the predecessor is complete, the successor can start, if the successor can start before the predecessor ends, there is an overlap or a “lead” and if the successor must be delayed before it can start, there is a gap or “lag.”

Alternative dependencies Finish-to-Finish, Start-to-Start, and Start-to-Finish Relationships are three types of alternative relationships, which used in software scheduling systems. They allow more realism to be shown in predecessor–successor relationships.

Estimate activity duration Estimate using normal circumstances first and only then ask what is unique that may allow quicker or cause slower performance.

Problems and remedies in duration estimating Potential Activity Duration Estimating Problem

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Remedy

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Omissions

General uncertainty in estimate

Special cause variation Common cause variation

Merging (multiple predecessors)

Queuing

Multitasking

Student Syndrome (starting late) Not reporting early completion of rework

8.8

Refine scope and WBS Checklists, templates, Devil's Advocate Lessons learned Rolling wave planning Reverse phase schedule Learning curve Identify and reduce sources of uncertainty Manage schedule aggressively Risk analysis Resolve risk events PERT Monte Carlo Project buffer Milestones Reverse phase schedule Feeding buffer Manage float Staggered project start dates Resource leveling Resource buffer Prioritizing projects Carefully authorize start of non-critical activities Float Critical path meetings Project culture Project communications Contract incentives Progress reporting

Learning Curves Take into account when estimating that the more times a person performs an activity, the faster they tend to get.

Develop project schedules After completing the scheduling processes discussed to this point, it is time to identify the critical path. This can be done by using software such as MS Project or by using the two-pass or enumeration method by hand.

Two-pass method You make two logical passes through the network.

First or forward pass This is to calculate the early start (ES) and early finish (EF) for each activity.

Second or backward pass This is to calculate the late start (LS) and late finish (LF) for each activity.

Float and the critical path Activities on the critical path have zero float. More than one path can be critical, and if the project is behind schedule, critical path activities can have negative float.

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Enumeration method This method, by which you list or enumerate all of the paths through the network, provides necessary information for crashing the schedule (a topic in the following chapter).

8.9 Uncertainty in project schedules If it is difficult to estimate activity durations with confidence, the following may be used to deal with the uncertainty.

Program Evaluation and Review Technique (PERT) The estimated time for each activity is calculated by the formula optimistic plus 4 times the most likely plus pessimistic divided by 6.

Monte Carlo Simulation This flexible technique allows multiple duration estimates for any of the project activities.

8.10 Show the project schedule on a Gantt chart The network analysis described above is needed to calculate the schedule, but a simple bar (Gantt) chart is far better for communicating the schedule.

8.11 Using MS Project for Critical Path Schedules This powerful tool can be used to automate many of the schedule, budget, and resource calculations on projects and for communicating effectively.

Set up the project schedule Set (or update) the project start date Define your organization’s holidays Build the logical Network Diagram 1. Enter tasks and milestones 2. Edit the timescale 3. Understand and define task dependencies, 4. Assign task duration estimates 5. Identify the critical path 6. Understand the network diagram view Display and print schedules Since many people do not have personal copies of MS Project, emailing schedules is often not an option. Therefore, it is imperative to be able to print easy to read schedules.

CHAPTER REVIEW QUESTIONS – SUGGESTED ANSWERS 1.

When can the first draft of a project schedule be constructed? (objective #1, p.246) •

After the WBS is completed

2.

What is the difference between an activity and a work package? (objective #2, p.246) A work package is a deliverable and may require more than one activity to produce it.

3.

What is another name for activity on node diagramming? (objective #2, p.248) Precedence diagramming method (PDM)

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4.

What purpose do project milestones serve? (objective #2, pp. 250-251) Serve as project checkpoints

5.

Describe the relationship between a predecessor activity and a successor activity. (objective #5, pp. 253-254) The initial activity is the predecessor activity, which is “an activity that logically comes before a dependent activity in a schedule.” The following activity is the successor activity, which is “a dependent activity that logically comes after another activity in a schedule.”

(Quotations from PMBOK)

6.

Describe the four most common types of logical dependency. (objective #4, p. 255) 1. Finish-to-start (FS) is “a logical relationship in which a successor activity cannot start until a predecessor activity has finished.”

2. Finish-to-finish (FF) is “a logical relationship in which a successor activity cannot finish until a predecessor activity has finished.” For example, perhaps the graphics could be designed while the marketing campaign is being designed, but could not be completed until the marketing campaign is completed.

3. Start-to-start (SS) is “a logical relationship in which a successor activity cannot start until a predecessor activity has started.” For example, perhaps the graphics design could not start until the design marketing campaign started 4. Start-to-finish (SF) is “a logical relationship in which a successor activity cannot finish until a predecessor activity has started.” This is the least used relationship.

An example is for a project to replace an old system where the new capability must be started before the old one is completely discontinued.

(Quotations from PMBOK)

7.

One potential problem that can occur with activity duration estimating is having omissions.

What are three potential remedies for this problem? (objective #8, p.250) 1.

2.

3.

8.

What two methods can be used to determine the critical path of a schedule? (objective #3, p.259) 1.

2.

9.

Refining the WBS Making checklists Having someone play the Devil’s Advocate

Two-Pass Method and Enumeration Method

If an activity on the critical path falls behind schedule, what effect will this have on the entire project? (objective #5, p.259) •

The end-date for the project will change. Its completion will occur at a later date.

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10. If a painted wall must dry for four hours before work can continue, the result is a delay in the successor activity. The wait for the paint to dry is an example of a(n) ___________. (objective #5, p.254) • lag.

11. A professor cannot grade his students’ exams until the students have completed taking the test. This is an example of a __________________ relationship. (objective #2, p.255) •

finish-to-start

12. What is one advantage and one disadvantage of Monte Carlo analysis for predicting a project schedule? (objective #8, pp. 266-267) One advantage of Monte Carlo analysis is the flexibility it provides. This allows more realistic estimates. Another advantage is the extent of information it can provide regarding individual activities, the overall project, and different paths through the project that may become critical.

A disadvantage of Monte Carlo is the amount of time necessary to estimate not just a most likely duration for each activity, but an entire range of possible outcomes. Another disadvantage is that special software and skill are necessary to effectively use Monte Carlo.

13. How can a Gantt Chart be helpful in project planning? (objective #4, p. 268) A Gantt chart can easily show which activities will be done when, how long they will last, and which activities are critical.

14. A lead is a change in the logical relationship that results in the ____________________ of the successor activity. (objective #5, p.254) • acceleration 15. How do you calculate float? What is the difference between free float and total float? (objective #3, pp. 262-263) • Float is calculated by the equation Float = Late start – Early start (Float = LS – ES).

• Total float is the amount of time an activity can be delayed without delaying the overall project, whereas free float refers to the amount of time an activity can be delayed without delaying its successor activity(ies).

DISCUSSION QUESTIONS – SUGGESTED ANSWERS 1.

Describe the five factors that may limit how fast a project can be completed. Give an example of each. (objective #1, Applying, pp. 248-249) The logical order of the activities, the duration of each activity, the number of key resources available when needed, any imposed dates, and cash flow (students should supplement with examples of each)

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2.

Think of one thing you have to do this week. Does it meet all five parts of the definition of an activity? (objective #2, Evaluating, p.250) Answers should be based upon the following five criteria: • Clear starting and ending points • Tangible output that can be verified • Scope small enough to understand and control without micromanaging • Labor, other costs, and schedule that can be estimated and controlled • A single person who can be held accountable for each activity

3.

Discuss at least four potential problems in creating accurate duration estimates for activities and two methods for dealing with each potential problem. (objective #8, Understanding, p.257) Answers vary, but look for: Omissions

General uncertainty in estimate

Special cause variation Common cause variation

Merging (multiple predecessors)

Queuing

Multitasking

Student syndrome (starting late) Not reporting early completion of rework

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Refine scope and WBS Checklists, templates, Devil's Advocate Lessons learned Rolling wave planning Reverse phase schedule Learning curve Identify and reduce sources of uncertainty Manage schedule aggressively Risk analysis Resolve risk events PERT Monte Carlo Project buffer Milestones Reverse phase schedule Feeding buffer Manage float Staggered project start dates Resource leveling Resource buffer Prioritizing projects Carefully authorize start of noncritical activities Float Critical path meetings Project culture Project communications Contract incentives

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Project leadership Progress reporting

4. Describe how a WBS and a schedule work together. (objective #1, Analyzing, pp. 246-247) • Answers vary, but look for: - The last row of WBS represents work packages.

- Each work package is composed of one or more activities.

- To generate a schedule from a list of activities o Sequence activities o Assign resource(s) to each activity o Estimate duration of each activity o Generate draft project schedule o Apply schedule compression methodologies to optimize project schedule 5.

You are the project manager assigned to build and decorate a model home. What might be an example of a lead you encounter when scheduling work activities? A lag? (objective #5, Evaluating, p. 254) Answers will vary. Examples: lead—begin painting before laying carpet; lag—waiting for foundation to dry

6.

Describe the process used to calculate float. Describe how you can tell if it is total float or free float. (objective #3, Applying, pp. 262-263) Float = Late start – Early start If the float only affects its successor activity, it is free float. If it could impact the overall project’s end date, it is total float.

EXERCISES – SOLUTIONS 1.

Label the box below to create a two-pass schedule legend.

ES

EF Activity Name

Slack Duration LS

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LF

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2.

If the learning rate is 60 percent and the first time the activity was performed took 200 minutes, the second time performing the activity should take __________minutes and the fourth time should take ________ minutes.

120, 72

3.

In the example below, label which activities are predecessors and which activities are successors.

A

C

B

• 4.

A and B are predecessors while C is a successor

Create a logical network using the activities listed below.

Planting a Flower Bed • Purchase flowers, potting soil, and tools • Water flowers • Prepare soiling by weeding and adding fertilizer • Plant flowers • Dig hole Answer: Purchase flowers, etc.

Prepare soil

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Dig hole

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5.

Calculate early start, early finish, late start, late finish, and slack for each of the activities in the network below. The duration of each activity is given.

B 4

C 1

A 12

E 3

D 7

6.

early start

A 0

B 12

C 16

D 12

E 19

early finish

12

16

17

19

22

late start

0

14

18

12

19

late finish

12

18

19

19

22

float

0

2

2

0

0

Identify the critical path for the network in Exercise 5. How long should the project take?

• A – D – E; 22

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7.

Display the schedule from Exercise 5 on a Gantt chart showing the critical activities, noncritical activities, and float.

8. Given the information below, create the project schedule network. Then, using the two-pass method, calculate and show the early and late starts and float for each activity and the critical path. Show the schedule on a Gantt chart showing critical and noncritical activities and float.

Activity

Days

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Immediate Predecessor

ES

LS

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EF

LF

Slack

CP?

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A B C D E F G

9.

5 2 4 7 3 6 8

A A A B B,C D,E,F

0 5 5 5 7 9 15

0 7 5 16 12 9 15

5 7 9 12 10 15 23

5 9 9 23 15 15 23

0 2 0 3 5 0 0

yes no yes no no yes yes

Given the information below, create the project schedule network. Then, using the enumeration method, calculate and show all of the paths through the network. Show how long each path will take. Identify the critical path. Show the schedule on a Gantt chart showing critical and noncritical activities and float. (See Gantt chart under exercise 13 below.)

• • •

BACFHI 26 days BADGI 23 days BEHI 20 days

Critical Path

10. Using the data below, schedule the problem in MS Project. Display and print the schedule in a Gantt chart showing the critical path and the predecessors. (The screen capture from MS Project is below.)

Source: Microsoft product screen shot reprinted with permission from Microsoft Corporation.

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11. Using the data below, schedule the problem in MS Project. Display and print the schedule in a Gantt chart showing the critical path and the predecessors. (The screen capture from MS Project is below.)

Source: Microsoft product screen shot reprinted with permission from Microsoft Corporation.

12. Using the information for Exercise 8.8, input the data into MS Project. Display and print the schedule in Gantt chart format as shown in Exhibit 8.19. (The screen capture from MS Project is below.)

Source: Microsoft product screen shot reprinted with permission from Microsoft Corporation.

13. Using the information for Exercise 8.9, input the data into MS Project. Display and print the schedule in Gantt chart format as shown in Exhibit 8.19. (The screen capture from MS Project is below.)

Source: Microsoft product screen shot reprinted with permission from Microsoft Corporation.

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PMBOK® Guide Questions 1) The Midlands Company is eager to develop a project schedule. They have already completed the scope statement, work breakdown structure and schedule management plan. What is the next thing they should do in order to start creating a project schedule? a) define activities b) nothing; they are ready to proceed c) sequence activities d) estimate activity durations Answer: a Page 249 in textbook Page 183 PMBOK 6th Edition 2) Which of the following is NOT a characteristic of an activity? a) It is a distinct, scheduled portion of work performed during a project b) It has clear starting and ending points c) It is defined using a verb / noun format d) It is one of the deliverables at the lowest level of the WBS Answer: d Page 250 in textbook Page 186 PMBOK 6th Edition 3) Another term for “activity on node,” the most commonly used technique for constructing a schedule model is: a) precedence diagramming method (PDM) b) arrow diagramming method (ADM) c) activity on arrow (AOA) d) activity attribute method (AAM) Answer: a Page 248 in textbook Page 189 PMBOK 6th Edition 4) You are planning the schedule and come to an activity you are unfamiliar with. Your SMEs give you the following time estimates: most likely = 5 hours; optimistic = 2 hours; pessimistic = 14 hours.

Using PERT, which activity duration do you use in your plan? a) 6 hours b) 2 hours c) 5 hours d) 10 hours Answer: a Page 265 in textbook

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Page 201 PMBOK 6th Edition 5) A critical path activity has ________ float during the planning process. a) the most b) zero c) negative d) positive Answer: b Page 262 in textbook Page 210 PMBOK 6th Edition 6) The Bluestar Creative Agency is developing a new marketing campaign for a client. They have determined that the client’s marketing plan must be completed before the graphic design can begin. This situation describes what type of dependency? a) start-to-start (SS) b) start-to-finish (SF) c) finish-to-start (FS) d) finish-to-finish (FF) Answer: c Page 255 in textbook Page 190 PMBOK 6th Edition 7) What is an advantage of using Monte Carlo analysis when estimating the duration for an activity? a) It uses historical data from a similar activity or project to calculate the duration. b) It uses brainstorming techniques to reach a team consensus for the duration. c) It can provide a great deal of information about how activity times may vary. d) It is less costly and time consuming than other estimating techniques Answer: c Page 266 in textbook Page 213 PMBOK, 6th Edition 8) A Gantt chart represents project schedule information in an easy-to-read, graphical format.

Which of these is NOT a component of this type of Gantt chart? a) activities b) budget data c) start and end dates d) durations Answer: b Page 268 in textbook Page 217 PMBOK 6th Edition

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9) As a project manager, which of the following situations would concern you the most? a) a three-day delay on an activity with five days total float b) realizing that an activity on your critical path only took two days instead of the four you assigned it using the PERT method c) a one-day delay to an activity with 0 total float d) a two-day delay to a noncritical path activity with two predecessor activities Answer: c Pages 262-263 in textbook Page 210 PMBOK 6th Edition

10) How do you calculate Late Start, using the two-pass method? a) Late Finish-Duration b) Duration-Early Start c) Early Finish-Early Start d) Late Finish-Early Finish Answer: a Pages 261=262 in textbook Page 210 PMBOK 6th Edition

SUBURBAN HOMES CONSTRUCTION PROJECT As stated in Chapter 7 and 8, a project schedule is developed at the lowest level of the WBS where activities or work packages are defined. This is where we explore predecessor and successor relations, and those which can done in parallel. Students must be encouraged to expand the WBS that was developed in Chapter 7 case study submission. It is a good idea to set a minimum number of activities for the lowest level of the WBS and the consequent project schedule. This minimum for this project could be 25. Students must be encouraged to develop the schedule without the assistance of MS Project or any similar software.

Duration estimates can be determined by talking to a construction company or a contractor in the area. If this is not possible, students may be encouraged to estimate the duration based on optimistic, pessimistic, and most likely duration estimates for each work activity or work package at the lowest level. Again, students must be encouraged to compute forward pass and backward pass durations and determine the critical path manually, without the assistance of any software.

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CASA DE PAZ DEVELOPMENT PROJECT Planners need to use considerable judgment rather than technical detail to attempt to lessen the chance of delays due to overwork. Team leaders should regularly engage in open discussions about how things are going and upcoming plans. There should also be ongoing discussions about who else can be brought on-board to help and when it makes sense. The board needs to discuss when the finances will permit hiring a director and whether this will initially be a parttime or full-time role. If it is a part-time role, how could it transition into full-time and would it be the same person. Key stakeholders should be approached for informal conversations regarding help – who they know and when they envision more help is needed. One more continuing topic of conversation is the hoped for opening date as a more aggressive date would likely lead to increased work overload. The purpose of the questions in this chapter on Casa de Paz is to help students understand that sometimes judgment is more important than technique.

SEMESTER PROJECT Take the WBS you have already developed. Define all of the activities that will be necessary to create each deliverable in your WBS. Create a schedule for your sample project. First create the schedule by hand using Post-it® Notes, and then put the information into MS Project. Create a printed copy of the schedule on a Gantt chart with no more than 40 lines per page. Do not use more pages than necessary. Sponsors do not like to flip pages. Be sure to include all of the summary rows (including the first row for the project title) and any key milestones. Make sure the critical path is easy to see.

Schedule Grading Suggestions • • • • • • • • • • • • •

The schedule should appear to be complete given the charter and WBS. The schedule should appear to be reasonable without requiring heroics to complete on time.

Include WBS column to left of task name column.

Include overall project name as top row.

Have all summaries stated in noun only format (or adjective noun – but on present tense verbs).

Have all tasks (activities) stated in present tense verb-adjective-noun format.

Have all milestones stated in noun and past tense verb format.

All tasks should have dependencies shown – no loose ends.

Display Gantt portion of schedule as large as possible.

Show critical path in red (or distinctive hash marks if printer is only black).

Show arrows with dependencies.

Include no more than 40 lines per page – ensure it is large enough to read easily.

Include no more pages than necessary so there is little need to align multiple pages for reading unless it is a large schedule.

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CHAPTER 9 Resourcing Projects LEARNING OBJECTIVES This chapter deals with assigning people and other resources to a project, looking for overloads, and making necessary adjustments to schedules. After completing this chapter, each student should be able to perform the following: • Core Objectives: Show resource assignments on a RACI chart, Gantt chart, and resource histogram.

• Develop an effective project schedule, considering resource constraints.

• Describe methods of resolving resource overloads.

Behavioral Objectives: • Create a Human Resources Management Plan including role descriptions and staffing management plan.

• Assign roles and responsibilities based on strengths.

Technical Objectives: • Compress a project schedule using crashing and fast tracking, and describe the advantages and disadvantages of both.

• Compare various alternative scheduling methods.

• Using MS Project, assign resources, pinpoint overloads, and describe methods of dealing with them.

TEACHING STRATEGIES •

•

•

This is the second of two chapters that deal with scheduling topics, but we turn our attention more to the people side of scheduling. This chapter deals with resourcing projects – that is identifying and securing the necessary resources, dealing with resource overloads, and making adjustments to schedules. Start by reminding the students that schedules are limited by a combination of logical order and activity duration (covered in the previous chapter) along with resource limits (covered extensively in this chapter) and imposed dates (covered in this chapter– mostly with MS Project) and partly by cash flow (covered in the next chapter).

Two conceptual points can be made early in this chapter. One is that project managers need to develop both technical and behavioral skills when resourcing a project. The other is that most project schedules are partially limited by activities and partially limited by resources. A key is to determine which tends to dominate for a particular project.

One of the first breakout sessions we like to have is for the students to work on a RACI chart. We either give them a few minutes to start this for their example project or we will use an example of a list of project activities for a small project and tell them who is involved. You can continue the use of a sample project you have used in previous chapters here. Simple examples you may use include building a garage or planning a party. A key to making this work is to have three or four distinct people (resources) and to make sure the students only assign primary responsibility to one person.

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•

•

•

•

•

•

•

•

We next show the Power Point slides that depict resource assignments on a Gantt chart, summarize resource responsibilities on a histogram, and then combine them with a partial schedule and resource histogram on one slide. This helps the students visualize how the various tools work together to discover overloads.

We like the students to develop an understanding of how all of the tools fit together in a “by hand” manner before using MS Project. Exercise 5 (at the end of this chapter) is a very small problem that allows students to make this connection. We will use this problem for a breakout session and tell the students that we are the department head to whom Alcides (one of two resources on this project) reports and want to understand his involvement in the project. That forces the students to create the project schedule (it is very small and is quickly accomplished), translate the schedule to a Gantt chart, and then total the commitments of this resource by time period.

The next breakout session topic is resource leveling. Exercise 5 can give the students an understanding of how to do this by simply shifting one of the two activities that overload Alcides early in the project within the amount of slack available.

An alternative breakout session is to continue the Wolf Creek case from the previous chapter. The resource demands and leveled resources are shown below, captured from a flip chart.

The topic of critical chain project management (CCPM) has its share of advocates and detractors. Regardless of how you feel about it, students should be aware that it exists and understand the basic tenants. With an MBA class, you may have a student who has experienced it and can help generate discussion. More frequently it is simply a topic to cover at a basic level.

Compressing the project schedule has two major topics: fast tracking and crashing. We cover fast tracking at a conceptual level and tell our students that some of our friends in construction say they almost always fast track schedules.

Crashing is a good topic for a breakout session. We like to show the students how to crash a day at a time. The slides are busy, but the information on them is very helpful for the students to keep track of things. They need to keep track of each path, as additional paths can become critical. It is also helpful to keep track of how much each activity has been crashed already to determine if it can still be crashed further. It is also helpful to keep a running log for each reduction in time along with which activity or activities were crashed and at what cost. Once we have gone through the example on Power Point slides, we leave the last slide up and have the students do a problem such as that in Exercise 2. We encourage them to work in twos or threes and to ask us any questions as they work. The majority of students pretty quickly learn this challenging technique.

The MS Project coverage in this chapter consists of four steps: defining resources, assigning resources, identifying over-allocated resources, and dealing with the over allocations. The first two steps are the most important and are covered by the first dozen or so slides. As with other MS Project coverage, we encourage the students to print the slides before class for taking notes, show them on MS Project, and then summarize by quickly going through the slides. If there is time and you wish to emphasize this, a little hands-on time in a lab is useful.

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•

If you wish to take the next logical step and use MS Project to identify overloads in a simple manner, the view with resource usage in the top pane and detailed Gantt in the lower pane shows the exact overloads, critical path, and amount of slack that help a project manager pinpoint problems. For most people, that is enough. However, included in the description and Power Point slides is a bit of guidance for dealing with the overloads. We like to have class discussion on various things that a project manager might do to remedy the overloads and emphasize that while software may help a bit, this becomes a management decision.

Wolf Creek Case Gantt chart and original resource demands shown in histogram

Wolf Creek original resource histogram and leveled resource histogram

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LECTURE AND WORKSHOP OUTLINE This chapter deals with securing resources and making schedule adjustments based upon both resource availability and other issues.

9.1 Abilities needed when resourcing projects Project managers need both technical and behavioral skills when staffing projects.

The science and art of resourcing projects Complement each other in order to develop a workable resource-based schedule that people will accept.

Considerations when resourcing projects Tradeoffs often must be made to secure resources; Project managers need to understand resource limits to avoid over promising, and resources comprise a large amount of total project cost.

Activity- vs. Resource-dominated schedules While almost all project schedules are partly limited by activities and partly by resources, it is helpful to understand which has the bigger impact on a particular schedule.

9.2 Estimating resource needs Understanding resource needs is the first part of securing the needed resources.

9.3 Plan resource management This describes how resource needs will be met.

Identify potential resources You may not get the specific people you prefer to work on your project, so it makes sense to identify all possible resources.

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A resource breakdown structure (RBS) can help, by depicting resource needs by either function or skill level (see Exhibit 9.3) Determine resource availability Many times, the best resources are very busy, so confirming their availability is needed.

Decide timing issues with resourcing projects Project life cycles create issues on when to bring people onboard, how to motivate them when the project lags, and how to release them at the end.

9.4 Project team composition issues Project teams often have people both from inside and outside the parent organization.

Cross-functional teams Many team members may look at issues differently based upon training, education, experience, and personality.

Co-located teams Despite communication technologies that allow people to work together from long distance, locating closely together is useful since many small decisions are made that people often do not feel are important enough for formal communications.

Virtual teams The opposite of co-located teams is virtual teams, in which the teams rarely meet face to face. Many people report that if they get a chance to meet at least once in person, it helps communication and trust.

Outsourcing Many times, if all of the necessary resources cannot be found within the organization, additional resources are hired from outside. The entire project can be outsourced or some activities on it can be outsourced.

9.5 Assign a resource to each activity This may require negotiation and flexibility.

Show resource responsibilities on RACI chart RACI stands for responsible, approve, consult, and inform and is one type of responsibility assignment matrix (RAM). While just one person should be accountable for an activity, others will be involved in the other capacities (see Exhibit 9.5).

Show resource assignments on Gantt chart Showing responsibilities on a schedule is a simple visual way to communicate responsibilities.

Summarize resource responsibilities by time period with histogram This allows the project manager to pinpoint the timing and specific activities assigned that contribute to resource overloads.

9.6 Dealing with resource overloads MS Project helps identify overloads, but the project manager must decide how to overcome them.

Methods of resolving resource overloads

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Some of the methods used include assigning work to other resources, splitting an activity, reordering the activities, securing additional resources, reducing scope, informing the sponsor, and leveling the resource demands.

Resource leveling First try to delay noncritical activities that are part of an overload within the amount of slack they have. If that is not enough, then either the schedule needs to be delayed, the resource needs to perform overtime, or one of the methods of resolving overloads mentioned above needs to be used.

9.7 Compress the project schedule Actions to reduce the critical path Reduce the project scope and/or quality, Overlap sequential activities using FF, SS, or SF relationships, Partially overlap sequential activities by using time leads, Increase the number of work hours per day, Schedule activities that are normally in sequence at the same time, Shorten the duration of critical activities, Shorten activities by assigning more resources, Shorten activities that cost the least to speed up, and Shorten the activity with the least probability of increasing project risk.

Crashing This is trading cost for time (paying more to get critical path activities completed more quickly). The first activities selected are those that cost the least per day to speed up. See Exhibits 9.11-9.14.

Fast-tracking This is trading risk for time (performing activities concurrently that would often be performed in sequence).

9.8 Alternative Scheduling Methods Critical chain project management (CCPM) CCPM considers limits based simultaneously upon traditional critical path (logical order and activity duration) and limits of the bottleneck resource to form the sequence of activities called the critical chain. Advice given includes avoiding multitasking, estimating aggressively, buffering critical chain activities, putting all time for uncertainty at the end of the project rather than assigning it to individual activities, finishing activities early when possible, and communicating openly.

Reverse Phase Schedules (also known as Last Planner System) This method, often used in construction projects, starts logically at the end and asks what is needed right before the end, then what is needed before that, etc.

Rolling Wave Planning This simply means planning a short amount in detail while using placeholders for the further out portions of the project. Agile is one form of rolling wave planning, and planning a project in phases is another example.

Agile Project Planning In recent years more projects are planned in short (as little as 2 week) increments called sprints. At the end of one sprint, the next sprint is planned, and so on.

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Microsoft Project allows users to show a schedule without building in the predecessor-successor relationships, but merely show about when each task needs to be accomplished. While similar to Excel and useful on some projects, if there are many logical relationships, it may be a poor choice.

9.9 Using MS Project for resource allocation (see detailed instructions in text book) Define resources Each person is defined as a resource with maximum available time.

Set up a resource calendar A unique calendar, costs, and other information can be included if needed.

Assign resources Activate the Gantt chart view (with entry table) Put the resources and predecessors form in the lower pane by right clicking on the Gantt chart (right pane) and choosing split.

In the upper pane, select the activity for resource assignment.

Select resource name column in the lower pane.

Pick the resource from the drop-down list.

Add additional resources (if any).

Enter a Units value if the Max Units value is not correct for any assignment.

Click the OK button – no assignment is made until the OK button is clicked.

Finding over allocated resources The resource allocation view and resource management toolbar are helpful in identifying resource over allocations.

Dealing with over allocations The project manager is responsible for dealing with over allocations, but MS Project can illustrate the impact of actions such as replacing the over allocated resource with someone else, reducing the unit assignment, reducing scope, or using leveling delay to delay the start of an activity.

Crashing a Critical Path Activity One way of shortening overall project duration by adding resources.

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CHAPTER REVIEW QUESTIONS – SUGGESTED ANSWERS 1.

In addition to technical skills, what other skills must a project manager have in order to successfully resource a project? (objective #4, p.288) •

2.

Why is it important to involve workers in the planning phase of a project when possible? (objective #2, p.292) •

3.

Behavioral skills

To help ensure project support and develop project culture

What does a staffing management plan address? (objective #4, p.290) •

How the project planners identify potential people for the project, how they determine which people are available and secure their services, and how to deal with timing issues of building up and then releasing the project workforce.

4.

What are the three “r” activities that take place near the end of the project, regarding team members and timing issues? (objective #2, p.294) • Rewarding, recognizing, & releasing

5.

What does RAM stand for and what is its purpose? (objective #1, p.297).

•

6.

Responsibility assignment matrix; used to show who is responsible for each work package

What does each column of a RACI chart depict? (objective #1, p.297) (i). Responsible, (ii). Accountable, (iii). Consult, and (iv). Inform

7.

Why is it necessary to only have one person assigned primary accountability for an activity? (objective #5, p.297) •

8.

What can a project manager use to help determine if workers are overloaded? (objective #8, pp.297-299) •

9.

If more than one person has accountability, it is too easy for them to blame each other if something goes wrong.

Histogram

Whom should the project manager consult when performing resource leveling? (objective #3, p.301) •

The project sponsor

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10. What will happen to a project’s schedule if an activity on the critical path is delayed? (objective #2, p.301) • The schedule will slip and the completion date will be pushed back 11. In regards to resource leveling, why are noncritical path activities generally the first to be delayed? (objective #3, p.301) • So, the overloads can be resolved without lengthening the project schedule 12. What are two techniques used to compress a project schedule? (objective #6, pp. 303-304) • Crashing and • Fast-tracking 13. When crashing a project, what two criteria are considered when deciding which activities to speed up? (objective #6, pp.304-307) • Is it on the critical path?

• What is the cost per time period to crash each activity?

14. In addition to predecessor-successor relationships, what does critical chain project management (CCPM) factor into its scheduling? (objective #7, pp. 309-310) • Resource availability 15. Who develops the schedule when using Reverse Phase Scheduling? (objective #7, p.310) • the people closest to the work (often either the hands-on workers or the forepersons who directly supervise work)

DISCUSSION QUESTIONS – SUGGESTED ANSWERS 1.

Identify three examples of when a project manager uses technical skills and three examples of when she uses behavioral skills. (objectives #2 & 5, Applying, p.288) •

2.

Technical: (i). Estimating resource demands, (ii). Compressing a project schedule, and (iii). Identifying when an employee is overworked or underutilized.

• Behavioral: 1. Selecting the appropriate workers, 2. Working with a diverse team, and 3. Developing capability in workers.

Compare a project you’ve worked on that was limited mostly by activities with another project you’ve worked on that was limited mostly by resources. Which did you find more challenging? Why? (objective #2, Evaluating, p.290) Answers will vary but should be supported.

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3.

List at least four factors a project manager should consider when identifying individuals to work on a project. Why is each important? (objective #4, Understanding, p.291) (i). Skill level, (ii). Physical location, (iii). Work function, and (iv). Professional discipline. All are important to ensure that the assigned workers will have the necessary ability to perform their work correctly.

4.

Describe a potential timing issue that can occur early in a project and a potential timing issue that can occur at the end of a project. How would you address each of these issues in your project? (objective #2, Analyzing, pp. 292-295) •

5.

Answers vary. A timing issue that occurs early in a project is when to bring project workers on board. Doing so too early can be costly, but it is often helpful to bring them on as soon as possible to ensure that the person is available to work on the project. A timing issue that occurs at the end of the project is how to release and reward the team.

Ensuring the project work is complete, celebrating success, providing positive (if earned) feedback to functional managers regarding the team members’ performance are all helpful when releasing and rewarding individuals.

Describe two ways a project manager can resolve resource overloads. Under what circumstances should each be used? (objective #3, Understanding, p.222) Answers vary, but look for: • One method is to reassign certain activities to other project workers to free-up one worker from being overloaded. This should be used when the work demands vary substantially from worker to worker.

• Another method is to delay one or more of the activities that comprise the overload.

This can be used when it is more important to use a specific resource on an activity than it is to complete the project by a certain time.

6.

Describe how to perform resource leveling. (objective #3, Understanding, pp.300-301) • define critical path • “front-load” the schedule (schedule activities as soon as possible) • generate resource histogram to visually determine time periods when each resource is overloaded and by which activity • any activities not on critical path can be moved within their slack • apply other techniques – reassign activities, crash or fast-track

7.

Give an example of what is given up in a project when it is crashed and when it is fasttracked and an appropriate time to use each. (objective #6, Applying, pp.303-308) • When a project is crashed, the budget is often given up as it will cost more to have the activities performed faster. When a project is fast-tracked, the level of risk is often given up as fast-tracking results in increasing the level of risk in a project.

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8.

Cite problems with traditional project scheduling techniques and why some organizations might opt to use critical chain project management. (objective #7, Remembering, pp.309310) Answers vary, but look for: • Many people make conservative duration estimates. Often, people are punished for completing work late, so they give themselves plenty of time in their estimates.

• Durations of some activities vary greatly. The part of this variation that is due to specific possible events taking place can be managed by risk management techniques as discussed in Chapter 10. The other part of the variation, known as common cause or random variation sometimes is just difficult to accurately estimate.

• Many project workers tend to use all of the time available to them. Instead of finishing early and getting the work to the next person, they keep fine-tuning their work and turn it in just on time.

• To keep multiple projects moving, many workers are asked to multitask. Up to a point, multitasking is helpful in keeping multiple projects moving and keeping the workers stimulated. However, many people are asked to multitask far beyond that point; by not focusing on a limited number of things, they sometimes cannot give adequate attention to any.

9.

List three common problems that can occur when traditional critical path scheduling is used.

How would you address each? (objective #7, Evaluating, pp.309-310) Answers vary, but look for: • First, people typically make conservative duration estimates so that they have plenty of time to complete their portion of the project.

• Second, workers typically use all the time that is given to them instead of finishing early.

• Third, people are often asked to multitask and therefore, are unable to give the needed attention to the project. To overcome each, open and honest communication needs to be established, people should be encouraged to work exclusively on critical path activities to the extent possible, and people should be encouraged to complete as quickly as practical regardless of what the schedule states (early completion is encouraged).

10. As a project manager, how can you ensure that your activity and resource estimates are as accurate as possible? (objective #2, Analyzing, pp. 297-298) Answers will vary. Some good rules of thumb are as follow: • Secure input from those closest to the work and subject matter experts (SMEs) • Ask for input from your sponsor • If there is a great deal of uncertainty, consider using the PERT method of estimating (see Chapter 8) • Look for lessons learned from previous similar projects 11. Give an example of a project on which you might expect to see Reverse Phase Scheduling. (objective #7, Applying, p. 310) Answers will vary, but a construction project would be one good example.

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EXERCISES – SOLUTIONS 1.

A certain project has three activities on its critical path. Activity A’s normal completion time is five days. It can be crashed to three days at a cost of $500. Activity B’s normal completion time is six days, and it can be crashed to four days at a cost of $50. Activity C’s normal completion time is eight days. It can be crashed to three days at a cost of $1,000.

Which activity should the project manager crash first and by how many days? How much will it cost?

Normal

Crash Cost

Crash Time

A

5 days

$500

3 days

B C

6 days 8 days

$50 $1000

4 days 3 days

• 2.

Crash activity B, by two days, for a total cost of $50.

Using the data below, create the project schedule using normal times. Determine the order in which you would crash the project one day, two days, and so on until it is in an all-crash mode. Identify how much it would cost for each day you crash the schedule.

Duration 39 (normal) 38 37 36 35 34 33 32 31 3.

Crash Cost Per Day $500/ 2days = $250/day $25 $1000/5 days=$200/day

Activity(ies) Crashed Incremental Crash Cost

Cumulative Crash Cost

A A A C C F G G

50 100 150 250 350 500 750 1000

50 50 50 100 100 150 250 250

Using the data below, create the project schedule using normal times. Determine the order in which you would crash the project one day, two days, and so on until it is in an all-crash mode. Identify how much it would cost for each day you crash the schedule.

Duration Activity(ies) Crashed Incremental Crash Cost 42 (normal) 41 F 150 40 C 200 39 G 250 38 G 250 37 A&C 350 Instructor’s Manual Chapter 9

Cumulative Crash Cost 150 350 600 850 1200 12

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36

E

400

1600

4. Using the data below, create the project schedule in MS Project. Be sure to use both the predecessor relationships and the resource assignments. Use a split screen to show both the Gantt chart with critical path and resource assignments with overloads. (The screen capture from MS Project is below.)

Source: Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.

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5.

Using the data below, create the project schedule in MS Project. Be sure to use both the predecessor relationships and the resource assignments. Use a split screen to show both the Gantt chart with critical path and resource assignments with overloads. (The screen capture from MS Project is below.)

Source: Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.

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PMBOK ® Guide Questions 1) Crashing the following activity chains would save time and cost extra money as follows: AGJQ—2 days $300 CDIL—3 days $400 Which sequence of activities would you, as a project manager, choose to crash? a) b) c) d)

AGJQ CDIL neither AGJQ nor CDIL depends on which, if either, is on the critical path

Answer: d Pages 304-308 in textbook Page 215 PMBOK 6th Edition 2) A ______ addresses when and how project team members will be acquired and how long they will be needed. a) b) c) d)

resource histogram staffing management plan project organization chart responsibility matrix

Answer: b Page 290 in textbook Page 307 PMBOK 6th Edition 3) The process “Estimate Activity Resources” involves identification of the ___ and ___ of resources required for each activity within a work package. a) b) c) d)

types; quantities costs; quantities names; locations types; costs

Answer: a Page 290 in textbook Pages 320-322 PMBOK 6th Edition 4) Recognition and rewards _____________. a) b) c) d)

should be used on rare occasions, for exceptional performance are the responsibility of the functional manager should be included in the project’s Staffing Management Plan are perquisites reserved for the project manager and project sponsor

Answer: c

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Page 290 in textbook Pages 341-342 PMBOK 6th Edition 5) A “schedule compression technique in which activities or phases normally done in sequence are performed in parallel for at least a portion of their duration” is referred to as ______. a) b) c) d)

critical path critical chain crashing fast tracking

Answer: d Pages 303-304 in textbook Page 215 PMBOK 6th Edition 6) In a RACI chart, the single individual who will have to provide an explanation if something goes wrong is indicated with a(n) ___: a) b) c) d)

R - Responsible A - Accountable C - Consult I - Inform

Answer: b Page 297 in textbook Page 317 PMBOK 6th Edition 7) The “process of identifying and documenting project roles, responsibilities, required skills, reporting relationships, and creating a staffing management plan” is called: a) b) c) d)

Identify Stakeholders Create Stakeholder Management Strategy Plan Resource Management Acquire Project Team

Answer: c Page 290 in textbook Page 312 PMBOK, 6th Edition 8) After creating a Staffing Management Plan, the project manager and team might create a chart that provides a visual representation of project resource needs by type of resource and time period (weeks, months etc.) This chart is called a(n) ____________. a) b) c) d)

project Gantt chart resource histogram network diagram organization chart

Answer: b Page 299 in textbook Page 220 PMBOK 6th Edition

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9) An iterative planning technique where “the work to be accomplished in the near term is planned in detail, while the work in the future is planned at a higher level”, is referred to as _______: a) b) c) d)

three-point estimating rolling wave planning parametric estimating analogous estimating

Answer: b Page 310 in textbook Page 185 PMBOK, 6th Edition 10) When the demand for resources is greater than the available supply, the project manager can use a scheduling method that adjusts the start and finish dates of activities in order to address resource limits or constraints. This technique is called: ___________: a) b) c) d)

fast tracking crashing resource leveling critical path method

Answer: c Pages 302-303 in textbook Page211 PMBOK 6th Edition

SUBURBAN HOMES CONSTRUCTION PROJECT To identify resources (people, materials, equipment, etc.) required for each element in the project schedule, students may go back to the same construction company or the contractor as mentioned in Chapter 8 case study discussed above. If they did not consult any external source, students must do an independent research (Internet or a visit to Lowes or Home Depot) and determine all the resources required for each work element included in the project schedule and associated costs for each work element. Student must be advised to follow guidelines outlined in section 9.1 of the chapter for selecting appropriate resources.

It is quite possible that a resource may be employed for two activities that are scheduled in parallel. Further, analyze resource constraints for all the work elements as same resource may be required for two or more activities and at the same time. Resource constraint could

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also be due to its availability of resources. Students must demonstrate an understanding of how these constraints would impact the project schedule developed earlier.

It is also possible that resources for certain activities may not be available and those activities or a group of them will have to be outsourced. In that case, resources will not be allocated for that work element but the project schedule will not be altered.

Developing the responsibility assignment matrix (RAM) and RACI table are explained in the chapter. Resource histogram for the entire project can be developed using Excel or MS Project. This will help in identifying resource overloads and students propose resolutions to address them by resource leveling. MS Project example provided at the end of the chapter can be used for illustration purpose. If estimated time required to complete each work element by considering resource constraints is altered, students are expected to reevaluate the project schedule, compute forward pass and backward pass to determine project duration, and critical path for the project.

If the new project duration exceeds the committed deadline, develop schedule compression strategies to complete the project on time. These strategies are explained in the chapter. If required, WBS and project schedule must be updated. Monte Carlo simulation using Excel is a good idea for estimating time.

CASA DE PAZ DEVELOPMENT PROJECT See following suggestions: Planners need to use considerable judgment rather than technical detail to attempt to lessen the chance of delays due to overwork. Team leaders should regularly engage in open discussions about how things are going and upcoming plans. There should also be ongoing discussions about who else can be brought on-board to help and when it makes sense. The board needs to discuss when the finances will permit hiring a director and whether this will initially be a parttime or full-time role. If it is a part-time role, how could it transition into full-time and would it be the same person. Key stakeholders should be approached for informal conversations regarding help – who they know and when they envision more help is needed. One more continuing topic of conversation is the hoped for opening date as a more aggressive date would likely lead to increased work overload. The purpose of the questions in this chapter on Casa de Paz is to help students understand that sometimes judgment is more important than technique.

Commented [KW1]: It looks like we include grading suggestions for numbers 2 and 3. Do we need more?

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For your example project, create the following: 1. Staffing management plan.

2. RACI chart.

3. Schedule with resource assignments.

4. Histogram of demands on each key participant’s time.

5. Plan for resolving resource overloads.

RACI Chart Evaluation Suggestions •

Clearly state tasks according to the WBS o Tasks are defined with clear completion exit points o Tasks are clearly defined with no ambiguity

•

Thoroughness of tasks to be completed

•

Clear role assignments o Appropriate parties identified to be responsible for, consulted on (i.e., help), informed, or approve results on a RACI chart o Involved parties are appropriately identified

Resources on Schedule Evaluation Suggestions Show clearly the overall project, the individual tasks, which are critical and which are not, and who is assigned to each in the upper pane. In the lower pane, a resource who has multiple tasks is shown with any overloads identified. The scale is easy to read and includes the entire project.

Columns may be hidden to allow as much room as possible for the detailed Gantt chart and the resource graph.

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CHAPTER 10 Budgeting Projects LEARNING OBJECTIVES This chapter deals with various issues and techniques involved in estimating project costs and establishing project budgets. After completing this chapter, each student should be able to perform the following: Core Objectives: • Define project cost terms and tell how each is used in estimating project cost.

• Compare and contrast analogous, parametric, and bottom-up methods of estimating cost.

• Create a time-phased, bottom-up budget for a project.

Technical Objectives: • Show both summary and bottom-up project budget information with cumulative costs using MS Project.

Behavioral Objectives: • Describe issues in project cost estimating and how to deal with each.

TEACHING STRATEGIES •

•

• •

•

We like to start the discussion on budgeting projects with a look at ethics. It is often tempting to underestimate (or at least optimistically estimate) the cost of a project in order to obtain approval. Both for the practical reason of not being able to live up to your promises and ethical reasons, it is important to be completely honest first with yourself in understanding what you are proposing and also to be honest with others.

Depending on the background of your students, this is a chapter that can be covered in more or less detail. Many of the topics might be familiar to a student who has had accounting and finance and unfamiliar to others. We do a quick review of some of the points for the sake of those who may not have really learned them. We strongly encourage the students to read the chapter since even things we cover in passing are fair game on the test if they are described in the chapter objectives.

Remind students that many of the project costs are assigned to the work package level.

Others may be allocated as overhead at the project level.

Project cost estimate comparisons are unique to projects, so we always cover them fully.

We want students to understand that at different points in a project, different types of estimates are used depending on the amount of data available at that time and what the estimate will be used for. Remind the students it is good practice to describe the method used and the range of confidence in the estimate so that people do not hold you to an early and not very accurate estimate.

One way to help the students envision the different types of estimates is to first describe each with an example, and then present a different type of project and ask the students what each type of estimate for that project might look like. You can also ask them what they would need in terms of data, experience, ability, etc. to perform each type of estimate.

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•

•

A good place for a break out session is on aggregating the project budget. We like to use either Exercise 10.2 or 10.3 for this. For simplicity, tell the students that you are the boss of one of the resources and that you are only interested in the budget for that person.

Use the slide of Exhibit 10.9 to talk the students through the following steps: o first construct a project schedule with a network, o then show the schedule on a Gantt chart front-loaded, o then delay a task if there is a conflict, o then identify the cost per time period for that worker, o and finally, show the cumulative costs for that worker and how they grow through the project.

Students working in groups of two or three often initially grumble at this breakout session, but they usually discover they can do it, and it reinforces what they learned in Chapters 8 and 9 and allows them to see how project budgets are constructed. We tell them we will use this when we perform earned value in Chapter 14. I tell the students that if they understand all parts of this example, they really understand the flow of project planning and control.

This is yet one more chapter where you can demonstrate MS Project. If you have been using MS Project on earlier chapters, you can probably just demo the additional use in budgeting.

LECTURE AND WORKSHOP OUTLINE Different methods of estimating costs and creating project budgets make sense in different circumstances. This chapter describes various methods and when each is appropriate.

10.1 Plan Cost Management This is developing the cost management plan to document how you will plan, structure, and control project costs. Cost and schedule are closely related.

10.2 Estimate Cost This process of determining the approximate project costs is an outgrowth of scope, schedule, and resource planning.

Types of cost Fixed vs. Variable costs Project managers sometimes can choose between alternative methods, and the relative fixed and variable costs of each method along with expected volume can help determine the most cost-effective approach.

Direct vs. Indirect costs Direct costs only occur because of the project, but other costs of running the company are allocated as indirect costs to projects. Project managers need to understand how these costs are allocated.

Recurring vs. Nonrecurring costs One-time or nonrecurring costs tend to occur near project start and conclusion, while repetitive or recurring costs occur during project execution.

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On projects where time is critical, extra charges may be incurred to speed up work.

Other cost classifications Several other cost classifications that most students know are listed.

Accuracy and timing of cost estimates Projects often need preliminary (and perhaps not very accurate) estimates early and more accurate estimates later to support various decisions.

Order of magnitude estimates These initial estimates are often made quite early in the project when there is little detail, and therefore little expectation of accuracy. They help screen out impractical projects.

Budget and definitive estimates As more detailed planning occurs, estimates can become more accurate. These can serve as a basis for budgets.

Methods of estimating costs Methods for estimating costs vary from highly aggregated approximations to highly detailed estimates. Each has a time and purpose.

Analogous estimating This compares the proposed project to a previous one on an overall basis and adjusts for differences in factors such as size and complexity to quickly estimate total project costs.

Parametric estimating This is a bit more detailed and relies on one or more statistical relationships to estimate.

Bottom-up estimating This highly detailed method estimates the costs of each individual part of a project. It is vital to make sure all portions of the project are included in this estimate, as those not included are underestimated by 100%.

Project cost estimating issues Supporting detail By identifying the scope, estimating methods, assumptions, constraints, and range of possible outcomes for the estimate, people will know how much confidence to place in it.

Causes of variation All projects have variation. Those with a high percentage of novel work and human interaction have more variation. Variation can be normal or expected given the work methods or it can be special – meaning something unusual might happen. Understanding the type of variation helps to explain and reduce it.

Vendor bid analysis This involves determining how reasonable a vendor’s bid is. On projects with substantial expense in purchased products and services, this becomes more important.

Value engineering This is double-checking of all the methods used and features included in a project, which often uncovers ways to save money and still deliver necessary results.

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This is a modern method of allocating indirect costs more accurately based upon four different types of cost drivers: number of units produced, number of batches run, number of product variations, and amount of facility utilized.

Life cycle costing This method seeks to understand full costs of producing the project and also using the results of the project for its entire useful life, including final disposition.

Time value of money and international currency fluctuations These are issues on some projects that are large either in terms of lengthy time and/or multiple locations.

10.3 Determine budget This is the process of establishing a cost baseline of when each cost is expected to occur. This approved budget is part of the overall project management plan and is used for project control.

Aggregating costs The budget is aggregated based upon when each work package is scheduled.

Analyzing reserve needs Known knowns are estimated directly and do not require reserves. Known unknowns are discovered during risk identification and are covered by contingency reserves. Unknown unknowns (unk unks) are totally unexpected and are covered by management reserves.

Determining cash flow Cash outflow on projects often occurs almost continuously (although not necessarily evenly). Cash inflows often occur in increments – with those from customers often occurring long after expenses are incurred. Project managers need to understand both to ensure that at no time the project is without cash to handle expenses.

10.4 Establishing cost control The approved project budget serves as a baseline for cost control. Milestones serve as useful intermediate points to measure progress both in terms of cost and schedule.

10.5 Using MS Project for project budgeting MS Project supports both bottom-up and summary level cost modeling.

Developing a bottom-up project budget estimate Assignment costs Assignment costs are calculated by multiplying assignment work hours by resource rates (standard and possibly overtime).

Task costs An activity or task cost is the sum of assignment costs plus any activity fixed cost.

Project total costs This is the sum of all underlying costs.

View costs from a different perspective Cost can be viewed as summaries of WBS elements or as summaries of resource costs by using the Resource Usage View.

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Develop summary project budget Either for an entire project, or portions of a project, summary level estimates can be inserted. As details become known, these summary estimates can be replaced with detailed estimates.

CHAPTER REVIEW QUESTIONS – SUGGESTED ANSWERS 1.

What type of cost does not depend on the size of a project? (objective #1, p.331) •

2.

During which phase of a project do recurring costs typically occur? (objective #3, p.332) •

3.

Overtime pay, overnight delivery

What is the purpose of an order of magnitude cost estimate? (objective #2, pp. 333-334) •

5.

Order of magnitude cost estimates and the parallel high-level looks at each of the other planning areas can quickly give enough information to decide whether to approve the project charter and begin to invest time and money into detailed planning.

Under which conditions can analogous estimating be effective? (objective #2, pp. 334-336)

•

6.

Project execution

What are some examples of expedited costs? (objective #1, p. 332) •

4.

Fixed

First, the organization needs to have experience in performing similar projects and know how much each of those projects actually cost (not just what they were estimated to cost).

Second, the estimator needs to know how the proposed project differs from the previous project. Third, the estimator needs to have experience with the methods by which the project will be performed.

Which method of estimating can produce the most accurate estimate: parametric or bottomup? (objective #2, p. 337) •

Bottom up

7.

What are some examples of supporting detail pertaining to cost estimates? (objective #1, pp.338-339) • Describing the scope, method used to create the estimate, assumptions, constraints, and range of possible outcomes

8.

Is it possible to completely avoid variation in a project? Why or why not? (objective #5, p.339) •

No; variation is inherent to all work processes

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9.

What can be used to determine whether a vendor’s bid is reasonable? (objective #1, p.340) •

Vendor bid analysis

10. Define value engineering. (objective #1, p.340) •

“An approach used to optimize project life cycle costs, save time, increase profits, improve quality, expand market share, solve problems, and/or use resources more effectively.” (PMBOK) What is the “time value of money” and why is it relevant to project management? (objective #1, p.341)

11.

•

One dollar today is presumably worth more than one dollar next year. Discounting the value of future revenue and cost streams to account for this enables better project decisions. Project managers need to discount future dollars by the appropriate factor. The rate depends upon the underlying inflation rate plus the cost of capital. On international projects, it can also depend upon international currency fluctuations.

12. For a routine project, what is a typical percentage of total project costs that should be put into contingency reserves? For an unusual project? (objective #3, pp. 342-344) •

5, 30

13.

What is used to compare actual project spending with planned expenditures to determine if corrective action is needed? (objective #1, p.342) • Cost baseline

14.

What three types of data does Microsoft Project use to compute each assignment’s cost value? (objective #4, pp. 345-346) • Assignment work hours—calculated when the work assignment is made (Assignment units × Resource calendar hours per each day of the activity duration) • Resource standard rate • Resource overtime rate (only if modeling overtime)

15.

Explain the importance of creating a cost management plan. (objective #5, p.330) •

The cost management plan shows how you will ensure accurate estimates are made, secure funding, and develop cost reporting procedures to ensure money is spent correctly. It helps various stakeholders have confidence that the project costs will be well managed.

16. Why is it important for project managers to understand the fixed and variable costs of a project? (objective #5, p.331) •

Understanding the various costs allows them to structure the work in the most costeffective manner – for example, choosing a work method with higher fixed and lower

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variable costs if the project volume of work is large enough for that to be the lower total cost alternative.

17.

Describe the difference between direct and indirect project costs. (Objective #1, pp.331332) •

18.

During which phase(s) of a project do nonrecurring costs typically occur? Give an example of a nonrecurring cost. (objective #3, p.332) •

19.

Direct costs only occur because the project is being undertaken. Indirect costs occur within the organization so that it can run properly. They are not directly attributable to one specific project.

Nonrecurring costs typically happen during the planning and closing phases of a project.

Examples will vary.

The project manager at a software company predicts her project’s costs based on previous projects she has worked on that were similar. (She takes into account the differences between her current and previous projects, as well.) What type of cost estimating is she using? (Objective #2, pp. 335-336) • Analogous estimating

10. Why is it important for assumptions to be listed in the cost estimate? (Objective #5, pp.338339) •

Helps to ensure that everyone who looks at the estimate is on the same page.

Assumptions also help to give readers of the estimate a basis for the cost. Also, if any of the assumptions prove to be untrue, it signals that the cost estimates may need to be reconsidered.

DISCUSSION QUESTIONS – SUGGESTED ANSWERS 1.

A rockslide closes down a major highway on your delivery route and leads to unforeseen costs. Does the extra money needed come from contingency reserves, management reserves, or elsewhere? Why? (Objective #3, Analyzing, pp. 342-343) •

If this was completely unforeseen—an unknown unknown—the money will likely come from the management reserve. However, if it was identified as a potential risk ahead of time—known unknown—then it will come from the contingency reserve.

2.

You are the project manager in charge of construction of a new school building. Give one possible example each of a known known, known unknown, and unknown unknown you might encounter. (Objective #3, Creating, p.343) • Examples will vary. Possible examples: known known—project team discovers during planning that proposed building site is on low-lying land that may flood so Instructor’s Manual Chapter 10 7 © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

they plan to either change locations or bring in several tons of soil to build up the original site; known unknown—it will rain during the building phase, but no one knows far in advance how much or how often it will rain; unknown unknown— Congress cannot pass a budget and the federal government shuts down, which in turn freezes the portion of your budget that comes from federal funding 3.

Using the same project described in question 2 what are a few examples of milestones at which you might measure cost control? (Objective #3, Evaluating, p.345) • Answers will vary. Possible examples: pouring foundation, erecting frame, installing utilities, etc.

4.

Using the same project described in questions 2 and 3, which method(s) of estimating cost would you use in order to establish a baseline budget? Why? (Objective #2, Applying, pp.

335-337) • Answers will vary but should be supported (i.e. an analogous estimate may work well if the building’s plans are very similar to others that have been built recently)

5. Give an example of how a project manager could run into problems with cash flow, even when he is within budget on the overall project. (Objective #3, Applying, p. 344) •

Examples will vary. Any example in which the project manager needs to outlay a large portion of his or her budget prior to taking in money will suffice.

6.

Describe a few normal causes and special causes of variation on a project you have worked on. How did you address the variations? (Objective #3, Applying, pp. 339-340) • Answers will vary but should be supported.

7.

What is the purpose of dummy tasks, and on what types of project would you use them for budgeting purposes? (Objective #3, Understanding, p.345) • Used as fillers to hold the place of activities yet-to-be –decided, since not accounting for the activities at all would mean you are underestimating them by 100%. These are often used on agile or other rolling-wave projects.

8.

The order of magnitude budget estimate you created during chartering is deemed by your sponsor to cost far more than your organization is willing to spend on your project. What are your options as a project manager? (Objective #2, Evaluating, pp. 334-335) • Answers will vary but may include: reduce scope of proposed project, find other sources of money (perhaps another organization to partner with), or cancel the project

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EXERCISES – SOLUTIONS 1.

A baker has a contract to bake 3 dozen chocolate chip cookies for a customer’s party.

Create a bottom-up estimate which includes both items needed for the project and their cost.

According to your estimate, how much should the baker charge for the cookies?

•

2.

Answers will vary. Should list out various ingredients such as eggs, flour, sugar, chocolate chips etc. with their corresponding cost. Answer should also include the cost of the baker’s time and indirect costs.

Using the data from Exercise 2 in the textbook, create a time-phased budget for the project.

Show how much the daily and cumulative costs for the project are, just as the monthly and cumulative costs are shown in Exhibit 10.9.

•

Students can calculate the answers to this on MS Project, on Excel, or by hand. They first need to create the project schedule, create resource assignments, assign costs to each resource, and assign resources to each task. They will discover Alcides has a conflict right away, but one of the activities can be delayed within its slack. Joan has a conflict late that will force the noncritical task to be delayed, which will delay the entire project.

The cumulative costs for the entire project are $7970. In the Gantt chart and budget aggregation table below, it may be noted that the final task, conduct regulatory review was delayed since it conflicted with the previous task, conduct ROI analysis. The total budget for the project remains unchanged, but the project is now scheduled to take a bit longer and the cash flow corresponds to the schedule.

Source: Microsoft product screen shot reprinted with permission from Microsoft Corporation.

3.

Using the data from Exercise 10.3 in the textbook, create a time-phased budget for the project. Show how much the daily and cumulative costs for the project are, just as the monthly and cumulative costs are shown in Exhibit 10.9.

•

Students can calculate the answers to this on MS Project, on Excel, or by hand. They first need to create the project schedule, create resource assignments, assign costs to each

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resource, and assign resources to each task. They will discover several places where resources are overloaded and the project schedule will be delayed a bit. The total budget remains unchanged. The screenshot below shows the individual week cost and cumulative costs for each resource. The screen capture from MS Project is below.

Source: Microsoft product screen shot reprinted with permission from Microsoft Corporation.

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PMBOK® Guide Questions 1) The “process that establishes the policies, procedures, and documentation for planning, managing, expending, and controlling project costs” is referred to as: a) b) c) d)

Determine Budget Estimate Costs Plan Cost Management Control Costs

Answer: c Page 329 in textbook Page 235 PMBOK 6th Edition 2) Activity cost estimates, the basis of estimates and other supporting detail, are outputs of which process? a) b) c) d)

Determine budget Estimate Costs Plan Cost Management Control Costs

Answer: b Pages 330-331 in textbook Pages 240-241 PMBOK 6th Edition 3) As the project progresses from initiation through planning and executing, and additional detail is gathered, the range of values for the project cost estimate will: a) b) c) d)

Broaden Stay the same Narrow Be replaced with a single number

Answer: c Pages 334-335 in textbook Page 241 PMBOK 6th Edition 4)

_____________ is “the process of aggregating the estimated costs of individual activities or work packages to establish an authorized time-phased project budget or cost baseline”. a) b) c) d)

Determine cash flow Determine budget Determine cost estimates Determine funding requirements

Answer: b Page 342 in textbook Page 248 PMBOK 6th Edition

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5) A(n) ______is used to compare actual project spending with planned expenditures over time to determine if corrective action is needed. a) b) c) d)

Cost baseline Funding limit reconciliation Reserve analysis Activity resource estimate

Answer: a Page 342 in textbook Pages 248 PMBOK 6th Edition 6) Jason, a project manager, is working with his team to estimate the total cost of developing a web-based CRM system. After reviewing the planned scope of work with Jason, his sponsor suggests that Jason use the budget from a previous, similar project as the basis for his project budget. The estimating process that Jason’s sponsor is using is called _____________ a) b) c) d)

Three-point estimating Parametric estimating Analogous estimating Single-point estimating

Answer: c Pages 335-337 in textbook Page 244 PMBOK 6th Edition 7) One of the principle benefits of creating a bottom-up estimate during planning is that the estimate: a) b) c) d)

Can be created quickly Is very accurate Matches the high level estimate in the project charter Will not change once the project is in flight.

Answer: b Pages 337-338 in textbook Page 244 PMBOK, 6th Edition 8) The amount of project budget reserved for unforeseen project work that addresses the “unknown unknowns” that can affect a project is the _____. a) b) c) d)

Project buffer Funding limit Contingency reserve Management reserve

Answer: d Pages 342-344 in textbook Page 202 PMBOK 6th Edition

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9) Ellen is estimating how much it will cost to re-carpet the executive conference room. After selecting the grade and pattern of carpet, Ellen multiplies the carpet price per square yard times the number of square yards in the conference room to derive the total price of the material. This estimating method is called ______. a) b) c) d)

Expert judgment Analogous estimating Parametric estimating Three-point estimating

Answer: c Page 337 in textbook Page 324 PMBOK, 6th Edition 10) The budget within the cost baseline that is allocated for identified risks, for which mitigating responses are developed, is called the ______. a) b) c) d)

Contingency reserve Management reserve Control account Activity cost estimate

Answer: a Pages 342-344 in textbook Page 245 PMBOK 6th Edition

SUBURBAN HOMES CONSTRUCTION PROJECT For this exercise, bottom-up estimating will be employed and other methods of estimating are not considered as they are supposed to be used for initial cost estimates and they require historical data. As such, bottom-up estimating is the best approach to learn about cost estimating. Bottom-up estimate uses the following approach: •

The resource expenditure of each lowest level WBS activity is estimated

•

Resource effort (duration and cost) in monetary term is estimated for all the resources.

•

Costs for all the activities under the same WBS element at next higher level is rolled up

•

This process is continued for all the WBS element to determine overall project estimate

Students may be advised to review the MS Project example at the end of the chapter to understand the bottom-up estimating method and develop their submissions based on the example provided.

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SEMESTER PROJECT Create a time-phased budget for your example project using bottom-up estimating. To the extent your sponsor will supply rates for workers, use those. Approximate rates for ones you cannot get. Ask your sponsor how they treat indirect costs. Be sure to include direct labor costs for you and your team mates. Budget your costs at the starting salary you expect to receive when you graduate (or your current salary if you are employed). Divide your annual salary by 2080 hours and add 20% for fringe. State all assumptions and constraints you have used when creating your budget. State how confident you are in your estimates and what would make you more confident. Give examples of known knowns and known unknowns on your project. Tell how you have budgeted for both of them plus how you have budgeted for unknown unknowns.

•

Most organizations are reluctant to share cost information, so examples are hard to get.

Additionally, if you are using service projects with nonprofit organizations, there is often no cash for a traditional budget – rather resource demands serve as a surrogate for a budget. One thing to look for if you make a budget assignment is consistency with the other project planning documents such as WBS, schedule and resource plans.

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CHAPTER 11 Project Risk Planning LEARNING OBJECTIVES This chapter deals with identifying, assessing, and responding appropriately to all types of project risks. After completing this chapter, each student should be able to perform the following: Core Objectives: • Describe how to plan for risk management, identify risks, analyze risks, and create response plans for identified risks.

• Identify and classify risks for a project and populate a risk register.

• Describe various risk assessment techniques and tell when each is appropriate to use.

• Prioritize each risk on a project using an appropriate assessment technique and develop and defend at least one strategy for each of the high-priority risks.

• Compare and contrast the various strategies for dealing with risks.

Behavioral Objectives: • Determine an individual’s propensity to accept risk and use that to strategize about which risks to accept.

• Determine an organization’s propensity to accept risk and use that knowledge to strategize about which risks to accept.

Technical Objectives: • Select and utilize an appropriate quantitative risk analysis tool if qualitative risk analysis is not sufficient.

TEACHING STRATEGIES •

• • •

We like to start this chapter discussing project success measures and priorities, as those will highlight the importance of various risks. You can ask the students how their sponsors look at success and what they prioritize highest.

It is important for students to understand that we consider both negative risk (threats) and positive risk (opportunities), with a variety of strategies used for dealing with each.

Encourage students to consider how they can categorize risk, both to understand each risk better and to increase the likelihood of identifying more relevant risks.

Make sure students think about “known knowns,” “known unknowns,” and “unknown unknowns (unk unks).” You can have a short breakout session or a discussion asking students to identify risks of each of these three kinds. It may be hard for them to think of unk unks because by their very definition, they are things people do not think about. You can introduce this by talking about an IT project in which the sponsor decided late in the project to change the programming language or a construction project in which someone sat on a sink and destroyed it or something else that happens which may not have been considered in risk identification. Here is an easy example: We just completed our new business school building. A known known is that on a two year construction project it will rain at some point and workers will not be able to work outside. A known unknown

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•

•

• •

•

•

is that in Ohio we might get a major blizzard in a given year and we might not. And, finally, a weather-related unknown unknown happened – we had the tail end of a hurricane disrupt construction. It was over a century since that had happened here, so nobody thought of it.

This is a good chapter in which to remind students that the various project documents relate to each other. One way to do this is to encourage the students to review the documents they have already completed with an eye toward identifying as many potential risks as they can.

Risk triggers make for interesting discussion. Try to get students to think about what they can observe before a risk event happens, so they can better manage their project is insightful. An obvious risk trigger for construction projects is a weather report.

Encourage the students to discover triggers for risks on their projects by asking many questions of various stakeholders.

We generally have a short breakout session in which students start to prepare their risk register.

If you did not already cover qualitative risk analysis in your charter (with probability and impact for each risk), this is a good time to do so. You can add when in the project the risk is likely to occur and how easy it will be to identify the risk event (think visible trigger).

We usually mention quantitative risk analysis techniques but do not teach the mechanics of how to perform each method. You might prefer to cover one or more of the methods in more depth.

Risk response strategies make another easy and enjoyable breakout session for students.

First, quickly review the eight common strategies so the students are familiar with them.

Then choose a real project in your community that has just been announced, for which there has not yet been much discussion of details. Challenge groups of students to see how many of the common strategies they can employ, and insist that they be specific.

You can even let the different groups of students determine whether a strategy is good enough to count and tell them that bragging rights go to the students who come up with the most useful strategies.

LECTURE AND WORKSHOP OUTLINE The approach to risk is the same on any project – identify, assess, and respond.

However, the level of depth and energy spent varies considerably from one project to another. The purpose of risk management is to reduce overall project risk to an acceptable level.

11.1 Plan risk management Upon understanding the success measures and priorities for a project, a project manager develops a risk management plan to decide how to approach, plan, and execute risk management activities for the project.

Roles and responsibilities Involve as many people as practical in risk planning to get all points of view and good buy-in. Identify who is responsible for each risk.

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Categories and definitions Projects have many risks. By categorizing them, it is less likely to overlook some. Some industries have typical categories of project risks.

11.2 Identify risks Project managers, while responsible for identifying risks, often rely on subject matter experts (SMEs).

Information gathering This can occur via brainstorming, SWOT analysis, structured interviews, and other means.

Reviews Reviewing documents developed for the project and for other uses helps identify risks.

Understanding relationships Flow charts, root cause analysis, and triggers are tools that help understand risk relationships.

Risk register This is the primary output of risk identification. It is a living document with much information regarding risks.

11.3 Risk Analysis This is understanding enough about each risk to be able to determine how fully and formally it will be handled.

Perform qualitative risk analysis Project managers consider probability of occurrence and impact if realized for each risk. Qualitative risk analysis is performed on all projects.

Differentiating between major and minor risks Using probability and impact, possibly with additional criteria, the project manager decides which risks need to be considered major and which are minor.

The major risks will have contingency plans and an owner responsible for each plan.

Cause and effect relationships These relationships are important because one way to assess the magnitude of an effect is to understand its cause. By changing the cause, sometimes the effect can be indirectly impacted.

Cause and effect diagram This helps a team understand the cause and effect relationships.

Perform quantitative risk analysis These numerical techniques are often used on larger, more complex projects to more clearly determine the extent of certain risks.

Risk register updates Probabilities, impacts, and priorities for each risk should be added to the register.

11.4 Plan risk responses This is the process of developing options and actions to reduce the impact of negative risks (threats) and to capitalize on positive risks (opportunities).

Strategies for responding to risks

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Eight types of strategies exist for responding to risks. Many projects will use multiple strategies depending on the unique combination of risks to be faced (see Exhibit 11.12).

Avoid risk Sometimes a project plan can be altered to avoid a particular risk.

Transfer risk This does nothing to reduce a risk – it just pays some other organization to assume it. Insurance is a common form of this.

Mitigate risk These strategies are undertaken to lower the probability of the risk event, the impact if it does happen, or both.

Accept risk Project managers accept many minor risks.

Research risk Sometimes by learning more about a risk, it can be dealt with better.

Exploit opportunity This is increasing the probability, impact, or both of a favorable opportunity.

Share opportunity This variation of exploiting opportunities is appropriate if the opportunity is too large for the project team to fully exploit on their own.

Enhance opportunity Again, this is a variation of exploiting opportunities, but is more proactive.

Risk register updates Keep the risk register updated with any results from risk response planning.

CHAPTER REVIEW QUESTIONS – SUGGESTED ANSWERS 1.

A negative impact is known as a(n) _______________, while a positive impact is known as a(n) ___________________. (objective #2, p.361) •

2.

Who should be involved in identifying potential risks for the project? (objective #1, p.

366) •

3.

Threat, opportunity

As many people as possible! At least the entire project team, including SME’s

List and describe the four different categories of project success measures. (objective #1, Exhibit 11.1, p. 360) Meeting Agreements, Customer’s Success, Performing Organization’s Success, Project Team’s Success

4.

During which stage of a project are most risks typically uncovered? (objective #3, p.363) •

Initiating

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Relative to the project’s life cycle, when is the cost per risk discovered typically highest? (objective #1, p.363)

5.

•

Closing

6. When a project manager is gathering information about risks, is it a good idea for her to set a limit on the number of risks that will be considered? Why or why not? (objective #5, p.365) •

No; it is better to identify more risks and mitigate against them than to ignore risks that could turn out to be detrimental to the project.

7. What does a SWOT analysis examine? (objective #3, p.366) • Strengths, weaknesses, opportunities, & threats to a project 8.

What is root cause analysis? (objective #3, p.368) •

9.

An analytical technique used to determine the basic underlying reason that causes a risk.

Name three different ways to categorize project risk. (objective #2, pp. 362-366) •

Answers will vary but may include some of the following: external versus internal to the project; during which project phase the risk would occur; special versus normal cause, etc.

10. A key supplier for your project has not been returning your calls or responding to your emails. This is an example of a(n) _________________, which indicates that a risk is likely to occur. (objective #1, p.368) •

Trigger

11. What two main criteria are used when evaluating risks during qualitative risk analysis? (objective #4, p.368) • Probability and impact of risks 12. Should every risk, no matter how major or minor, have a contingency plan created to address it? Why or why not? (objective #5, p.368) •

No; this would be a waste of time and would draw attention away from the most important risks

13. Are both qualitative and quantitative risk analyses used on all projects? Why or why not? (objective #5, pp. 368-369) •

No; qualitative risk analyses are performed on all projects but quantitative risk analyses are only used when necessary (generally on bigger, more complex, more expensive, and/or riskier projects)

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14. What is an example of transferring risk? (objective #4, p.375) •

Buying insurance

15. Describe the various types of information often contained in the risk register. Why is each included? (objective #2, pp. 368-370) • • • • • • • • •

A list of all identified risks, Description of the risk, Category, Potential causes, Probability, Impact, Potential responses, Owners, and Current status.

16. In the risk register, why should only one person be assigned “owner” of a risk? (objective #2, pp.368-370) •

By making one person responsible for each risk, there is a greater chance that if the risk occurs it will be addressed according to the risk response plan.

17. Which three risk strategies are used specifically for dealing with opportunities? (objective #3, p.375) • Exploit, enhance, & share

DISCUSSION QUESTIONS – SUGGESTED ANSWERS 1. Give one example each of a known known, known unknown, and unknown unknown you have encountered on previous projects (objective #2, Evaluating, pp. 364-366) • 2.

Describe trade-offs that may need to be made among project stakeholders’ priorities. How will you address these tradeoffs as a project manager? (objective #1, Analyzing, pp.360361) •

3.

Answers will vary

Answers will vary, but students should aim for win-win situations and prioritize the needs/wants of the key stakeholders.

List three methods that can be used for categorizing project risks. For a fund raising project, give examples of risk using each categorizing method. (objective #2, Evaluating, pp.362366) •

When the risk occurs in the project life cycle,

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• What project objective the risk may impact, and • What is known about the risk Examples will vary.

4. To help identify risks, what are some helpful questions a project manager could ask when reviewing the project charter and WBS? (objective #2, Creating, pp.366-367) Examples will vary, but keep in mind: • •

For the charter, it is helpful for the project manager to make sure that there is clarity and total understanding in each of the charter’s sections.

For the WBS, it is helpful if the project manager looks for potential risks in each item of the WBS.

5. You are hosting a large dinner party. What are two possible risks you would encounter?

Identify at least one trigger for each. (objective #2, Applying, p366-368) • Examples will vary. They may deal with the refreshments, weather, attendance, conflict with guests, or any number of other items. The key here is to identify at least one trigger for each risk. For example, if you ask people to RSVP and very few reply, that may be a trigger indicating you will have low attendance.

6.

What is the difference between a major risk and minor risk? How do you determine which risks are major versus minor? (objective #4, Understanding, p.368) • Major risks require contingency plans, whereas minor risks do not; see pp.368-372 for method of differentiating major and minor risks based on probability of occurrence and likely impact. Keep in mind that different sponsors and parent organizations have different tolerances for risk, which may in turn, affect these categorizations.

7.

List and describe at least three common quantitative risk analysis techniques. Under what circumstances would you find each one useful? (objective #3, Evaluating, pp. 372-373)

Technique Decision Tree Failure Modes and Effects Analysis (FEMA) Fault Tree Analysis Financial Engineering Simulation or Monte Carlo Simulation

8.

Name the eight common risk responses that are used and describe how you might use two or three of them together on a project. (objective #5, Applying, pp. 373-377) •

Avoid (Change the project plan so that the risk is less likely to occur),

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Description Breaks a complex problem down by mapping alternatives and states of nature to calculate expected monetary value of decisions Used primarily in product development projects. Quantifies severity, occurrence, and detection for each risk to aid in deciding on controls.

Tree diagram that depicts patterns of events and calculates probability of project failure.

Calculates net present value (NPV) of current project (or approach) in comparison to NPV of abandoning approach or project.

Selects values of controllable inputs and randomly generates values of probabilistic inputs to calculate probability of outputs.

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Transfer (Pass the risk onto someone such as purchasing insurance or hiring an outside firm), Mitigate (Lower the likelihood that the risk will occur), Accept (Know that the risk is likely to happen and proceed on with the project), Research (Get more and better information about the situation), and Exploit (Used when there is an opportunity in order to increase the probability of it happening or its impact).

Share (Opportunities only) Enhance (Opportunities only)

You are the project manager of a construction project for a large organization and will be relying mostly on independent contractors to execute the project work. Which type of contract would you prefer to use to procure their services? Why? (objective #7, Applying, pp. 373-377) • While specific types of contracts are covered in detail in other chapters, the key takeaway here is that students should be thinking about the risk inherent to their project and what strategies they will use to mitigate it. How much of the risk they plan to transfer to or share with the independent contractors will directly affect the type of contract they choose to use.

10. Give an example of a risk you have chosen to accept on a previous project. How did you make the decision to accept it? In retrospect, was that the right decision to make? (objective #6, Analyzing, pp. 373-377) • Examples will vary but should be supported. Did the student make the decision alone or with help (and from whom)?

EXERCISES – SOLUTIONS 1.

For a project in which you are planning a campus event with a well-known speaker, identify and quantify risks and develop contingency plans for the major risks.

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Answers vary. An example follows.

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Major Risks

Counter Measures

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2.

No back up plan Security

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Write a back up plan Continuous internal communication w/security

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Refer to back up plan

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Presidential candidate unavailable Date not available

5.

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Important donor not invited Low attendance

7.

8.

9.

10.

No or low media interest Issue with speaker Loss of money Over extending staff and resources

2.

For the same campus event project, perform a literature review to identify risks.

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Answers vary. Expect students to use more web sites, but articles and books are fine also.

Answers vary. Look for insightful comments.

For one of the risks identified in Exercises 1 through 3 above, construct a cause-and-effect diagram to determine possible root causes. Determine which of the possible root causes are probable. Describe how you would test each probable root cause to determine if it really is a root cause.

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Answers vary. Look for many possible ideas. Quantity is more important than quality of ideas at this point.

For the risks identified in Exercises 1 through 3 above, identify trigger conditions that indicate each risk may be about to happen.

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Answers vary. Look for logical relationships and triggers should be something easily observable that occurs before the risk event. For example, major risk 6 in exercise 1 above (low attendance) could have a trigger of low response to RSVPs that are sent out two weeks before the event.

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Find different venue/renegotiate contract 5. Ensure updated accurate list 6. Invitations/Adv./PR in timely manner 7. Have and execute media plan 8. Establish crisis plan 9. Budget/forecasting 10. Set realistic expectations and stick to them

Engage another student team to perform a peer review of project risks for your project. In turn, you perform a peer review for theirs.

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Brainstorm and group at least twelve risk factors (as shown in Exhibits 11.5, 11.6, and 11.7) for risks in one of the following types of projects: research and development, organizational change, or quality improvement.

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Answers vary. Look for logical groups and realistic sounding specific risk factors.

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PMBOK ® Guide QUESTIONS 1) A SWOT analysis is an information-gathering tool that helps increase the range of identified risks by examining strengths, weaknesses, _______ and threats to a project. a) b) c) d)

Opportunities Options Origins Organizations

Answer: a Page 366 in textbook Page 415 PMBOK 6th Edition 2) The ______ is a living document in which the results of risk analysis and risk response planning are recorded. a) b) c) d)

Root cause analysis Risk register Risk management plan Cause-and-effect diagram

Answer: b Page 368 in textbook Page 417 PMBOK 6th Edition 3) While all projects use ____ risk analysis, _____ risk analysis is only used when it is needed and there is sufficient data to develop appropriate models. a) b) c) d)

Quantitative, qualitative Quantitative, opportunity Opportunity, qualitative Qualitative, quantitative

Answer: d Page 372 in textbook Pages 420-421 PMBOK 6th Edition 4)

A team’s attempt to list, on individual sticky notes, all of the possible threats and opportunities that could occur to an upcoming project might be used during the _____________ process. a) b) c) d)

Plan risk responses Perform qualitative risk analysis Identify risks Perform quantitative risk analysis

Answer: c Page 366 in textbook Page 409 PMBOK 6th Edition

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5) Avoid risk, mitigate risk, accept risk, and ______ are all strategies for responding to negative risks, also known as threats. a) b) c) d)

Enhance risk Prevent risk Transfer risk Share risk

Answer: c Pages 374-375 in textbook Pages 442-443 PMBOK 6th Edition 6) An analytical technique used to determine the basic underlying source of a variance, a defect, or a risk is called _________. a) b) c) d)

Qualitative risk analysis Monte Carlo analysis SWOT analysis Root cause analysis

Answer: d Page 368 in textbook Page 415 PMBOK 6th Edition 7) The Risk Management Plan describes the methodology, roles and responsibilities, budgeting, timing, and risk categories for potential causes of risk. These risk categories can be structured into a hierarchical representation called a(n): a) b) c) d)

Organizational Breakdown Structure (OBS) Risk Breakdown Structure (RBS) Work Breakdown Structure (WBS) Threats Breakdown Structure (TBS)

Answer: b Page 364 in textbook Pages 405-406 PMBOK, 6th Edition 8) Risks that have been identified and may or may not happen are referred to as known unknowns, and a ______ should be established to cover them if they are triggered. a) b) c) d)

Contingency reserve Management reserve Funding reserve Risk buffer

Answer: a Pages 364-366 in textbook Page 202 PMBOK 6th Edition

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9) _______ is a quantitative risk analysis modeling technique used to help determine which risks have the most powerful impact on the project. Using a tool such as a tornado diagram, it “examines the extent to which the uncertainty of each project element affects the objective being studied when all other uncertain elements are held at their baseline values”. a) b) c) d)

Fishbone diagram Monte Carlo technique Expected Monetary Value analysis Sensitivity analysis

Answer: d Page 373 in textbook Page 434 PMBOK, 6th Edition 10) Expected Monetary Value (EMV) is commonly used within this type of analysis: a) b) c) d)

Root cause Decision tree Monte Carlo Cost/Benefit

Answer: b Page 372 in textbook Page 435 PMBOK 6th Edition

SUBURBAN HOMES CONSTRUCTION PROJECT A review of assumptions and constraints in the scope statement would be the first step to identify risks. If an assumption goes wrong, it can become a risk. As stated in the case study, students must be advised to use WBS lowest level elements to examine what can go wrong with that work package or activity. Furthermore, students can look at the project and assess what can go wrong with the project for external or internal reasons. Another important approach is assessing risks associated with all the stakeholders.

The next step is to develop risk register as discussed in the chapter. For each risk, we need to assess probability of its occurrence and the impact it would have on project goals (scope, cost, time, quality, and customer satisfaction). All the risks identified in the risk register can be classified into a structure similar to WBS (basis of division could be project goals) for ease of understanding, presenting, monitoring, and control. Based on the prioritization of these risks, student must develop risk response strategies for the top ten risks in the prioritized list of risks. For illustration purpose, students may be advised to choose a critical risk and develop a greater understanding of the risk by employing a comprehensive Instructor’s Manual .

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quantitative analysis and these methods are outlined in the chapter. Monte Carlo simulation using Excel is a good idea for estimating impact on time and cost.

CASA DE PAZ DEVELOPMENT PROJECT See following examples/suggestions: Risks

Big Risk?

Fail to secure building Yes! Zoning denied Yes

Response Plan(s)

Trigger

Consider multiple buildings Negative discussions Seek expert opinions Negative opinion Informal advance talks

SEMESTER PROJECT Create a risk register for your example project. Categorize each risk, list potential impact, and list potential responses (as in Exhibit 10.9).

Describe what each project success measure (from Exhibit 10.1) looks like on your example project. Identify at least three risks to each success measure, determine which are major risks, and for each major risk develop one or more contingency plan. Identify whether the contingency plan is an avoidance plan (reducing the probability of the risk event), a mitigation plan (reducing the impact of the event), or both.

Facilitate a discussion with the sponsor and other key stakeholders of your project. Have them determine the relative importance of their priorities and document them as in Exhibit 10.2.

Perform a risk review for your example project. Use at least three types of review as shown in Exhibit 10.8. Which of these types gave you the most useful information? Why? •

Answers will vary. Look for students to use the exhibits as models, but to have inputs that sound realistic for their various projects.

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CHAPTER 12 Project Quality Planning and Project Kickoff LEARNING OBJECTIVES This chapter is the last planning chapter. It covers project quality planning as well as baselining the project management plan and formally kicking off the project. After completing this chapter, each student should be able to perform the following: Core Objectives: • Define each core project quality concept and explain why each is vital in planning and managing projects.

• Explain what may be included in a project quality management plan.

• Compile a complete project management plan, including all parts covered in the last several chapters.

Technical Objectives: • Baseline your complete project plan in Microsoft Project.

Behavioral Objectives: • Describe the major contributions to contemporary project quality made by each of the quality gurus and by TQM, ISO, and Six Sigma.

• Kick off a project with effective pre-meeting preparation, a kickoff meeting, and documentation.

• Develop a quality-conscious approach to managing project activities and decisions.

TEACHING STRATEGIES •

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There is a great deal of conceptual material behind understanding the modern approach to quality planning and management on projects. We want the students to operationalize these ideas, not merely memorize them. Therefore, we conduct breakout sessions in which they identify both good and bad examples.

The first breakout session we sometimes conduct is to have the students identify good and bad (or missing) examples of the suggestions from the various gurus. When we do this breakout session, we tell the students they can use examples from any organization or any project with which they are familiar. The key is to get them to think about what the practice of these ideas looks like. It is easy to do this in three groups with one taking Deming, one taking Juran, and the final group taking others. You can divide the other guru group into two or three groups if you wish to have four or five total breakout groups.

For the second breakout, we divide the students into groups dealing with Malcolm Baldrige, ISO, and Lean Six Sigma. Again, you can divide some of these into subgroups if you want more than three breakout groups. For this breakout, ask the students to focus on an organization. For MBA students or undergrads with significant work experience, it can be an employer. In those cases, one student often contributes more and the other students are encouraged to ask questions and group the answers. We always ask a different student to report out than the student who best knows the organization. That encourages better questions. Another approach is for the students to address the

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organization in which they are performing their example project. One potential disadvantage of this is they sometimes do not know that organization in depth. A way to overcome that is to assign the groups in advance and ask them to research the organization so that they can provide meaningful comments.

Briefly cover the DMAIC model, then tell students that other organizations sometimes use the PDCA model or some other model to guide their efforts. We tell them all of the better models are based upon the scientific method and make sure they can explain what that is.

Everything in this chapter to this point serves as a background for understanding the core project quality concepts. These concepts are based on a synthesis and an application of the ideas developed by many gurus and summarized in the various frameworks. The core project quality concepts are structured to help students to know not just the theory of what they should do, but also serve as roadmaps for how to perform. We like to go through each in turn by first presenting the material (and tying as much of our presentation as possible to things the students said in their previous breakout sessions).

Then we ask leading questions about where and how they have seen these things or how they could envision them.

The SIPOC is a useful tool in understanding processes. You can use Exhibit 12.7 as an example. If we have the students construct one, we usually only let them have enough time to start it and encourage them to complete it on their own. Just as in all our breakout sessions, we like to ask what the students learned. One of the most common statements is that they had no idea how complex it is.

Sometimes we will conduct another breakout session at the end of the coverage of the four core project quality concepts. We assign one of the core concepts to each group and ask them what specific guidance within that concept they feel is most critical and why.

We also ask them to tell us how they would use it on their project.

Discuss project quality management plans by reminding the students these are subsidiary plans and will need to be fully integrated into the project management plan. Tell them that many small projects do not have separate quality management plans. Ask them how they would address the specific topics that are often included if they do not have a separate plan.

Especially with MBA classes, we like to ask what the quality policy of their company is.

When few if any students can answer, we ask how they are guided by something they do not know. We then remind them that top management has an obligation to communicate their policy, and everyone has an obligation to seek it out and understand it. We also tell them that a project needs to have a quality policy. When the project is internal, using the parent organization’s policy often makes sense. However, when the project is external, the project manager needs to understand the policies of both contractor and customer organizations and be consistent with both – even if they are somewhat different. You might find it interesting to point out common words in quality policies in Exhibit 12.13 and ask why certain words are common and others are not. It might also be interesting to ask why some trends have changed such as sustainable/reliable/dependable is so much more common now.

Students need to understand the difference between quality control and assurance. We emphasize the word control means looking at a specific measurement while assurance

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means giving someone a comfortable feeling you are capable. Quality control is technical and reactive; while quality assurance is managerial and proactive. Both are important.

The last part of this chapter deals with successfully transitioning the project from primarily planning to primarily executing. On most projects, some long lead items are performed during planning and some re-planning occurs during executing. On agile projects, the transition between planning and performing occurs repeatedly.

Nevertheless, students should consider the formal project kickoff as a transition and should think about how to conduct it. Ask the students when a good trial attorney asks a question (when she already knows the answer). Similarly, a good project manager works individually with various stakeholders in advance so she knows what each will say during the kickoff meeting.

Finally, you can demonstrate how to baseline a project plan in MS Project.

LECTURE AND WORKSHOP OUTLINE Many concepts in the modern approach to managing quality are the same as those in the modern approach to managing projects. This is the final planning chapter and it ends with kicking off the project.

12.1 Development of contemporary quality concepts A number of well-known individuals (often called quality gurus) and also a number of established frameworks offer ideas and techniques used in contemporary quality management.

Quality gurus Deming developed a system of profound knowledge composed of systems thinking, understanding variation, identifying cause and effect, and dealing with motivation.

Juran’s trilogy of quality planning, control, and improvement serve as a basis for PMI’s quality planning, control, and assurance.

Many other gurus have also made significant contributions. (See Exhibit 12.3) Total Quality Management (TQM)/Malcolm Baldrige The core concepts of TQM, dating from the 1980s, evolved into criteria for the Malcolm Baldrige National Quality Award. This includes concepts such as leadership, customer focus, learning, partnership, innovation, and managing by facts.

ISO 9001:2015 A European approach to quality, called ISO, originated in technical standards and evolved into a comprehensive set of many of the same principles.

Lean Six Sigma This approach started with rigorous statistical analysis. While retaining that, it also now is a complete system (DMAIC). This five-step method of define, measure, analyze, improve, and control guides improvement efforts.

12.2 Core project quality concepts These concepts are common to each of the gurus and frameworks noted above, but are specifically tailored to use in projects.

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Stakeholder satisfaction Developing quality standards based upon stakeholder requirements Steps in developing the standards for a project include: identifying all stakeholders, prioritizing among them, understanding their prioritized requirements, developing standards to ensure the requirements will be met, and making appropriate tradeoff decisions. Project managers frequently facilitate a process by which the more important stakeholders use the quality standards to judge the project process as well as deliverables.

Stakeholder satisfaction sayings Measure twice, cut once.

Meet requirements, exceed expectations.

A smart project manager develops capable customers.

Process management A process is a set of related activities to achieve a specific outcome. The three aspects of process management are understanding, control, and improvement.

Process understanding with a SIPOC model Supplier Input Process Output Customer (SIPOC) models help project managers visualize the entire process of the work that needs to be performed and all the people involved.

Process control On projects this is establishing standards, measuring actual performance, calculating any difference between the two as a variance, and striving to reduce unwanted variances.

Process improvement with a PDCA model Processes can be improved using a continuous or a breakthrough approach.

Improvement models are based upon the scientific method and are frequently either the DMAIC used by Six Sigma or the Plan Do Check Act (PDCA) used by other approaches. They are essentially variations of the same general approach.

Fact-based management Projects are fast-paced and decisions often need to be made quickly.

Nevertheless, taking just enough time to get facts—instead of only using opinion—often yields better decisions.

Understanding variation Understanding if variation originates from a common cause (inherent in the system) or special cause (something specific) helps a project manager decide on the best method of reducing the unwanted variation or capitalizing upon the wanted variation.

Determining what to measure This is a balancing act of measuring enough of important characteristics, but not spending more time or money to do so than necessary. Acceptance criteria in the milestone schedule of project charters are a great place to start defining what to measure, but are often not enough.

Working correctly with data Devise simple methods of collecting and analyzing data. These may be enough for small projects, though other projects may require more involved methods.

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The project communications plan outlines how information will be shared in a truthful and transparent way. When making decisions based upon facts, people sometimes need to confront unpleasant facts.

Empowered performance The goal is to have capable and willing workers at every level and for all needed functions.

Recognize individuality Projects benefit in so many ways from an inclusive and diverse workforce.

Project managers are wise to ask in a one on one setting of each member what he or she hopes to get out of working on the project (in addition to helping the project succeed).

Capitalize on individual strengths People feel good when they get to use their strengths, so project managers can often find creative ways to capitalize upon this as they utilize talents and interests of participants.

Emphasize individual responsibilities Empowered performance requires that people understand and accept their responsibilities.

Use appropriate collaboration Shared learning is an effective strategy to get people to work more effectively together.

12.3 Plan quality management This subsidiary plan describes how the project will perform in accordance with the quality policy.

Quality policy This brief statement includes top management’s principles of achieving quality and the benefits they hope to achieve. Quality policies vary substantially.

Quality management plan contents These may include deliverables and standards to evaluate each for completeness and correctness from the customer perspective; quality control activities such as processes and standards to review them; quality assurance activities; and quality responsibilities.

Quality baseline Just like other baseline plans, this clearly describes what a project is expected to achieve (in this case the quality standard to be achieved).

Process improvement plan This details how to analyze work processes with an eye toward improving them.

12.4 Manage Quality Using the quality plan and policy to perform tasks most likely to lead to customer satisfaction Perform quality assurance These management activities of quality audit and improvement are designed to give stakeholders confidence in the project.

Quality audits often lead to change requests for one of more of the following: preventive actions, corrective actions, and/or defect repair.

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Process analysis is a way of breaking down the phases of a process to a step-bystep level in order to gain understanding and enhance efficiency.

Control Quality This is more specific – checking on specific results to see if they comply with standards.

Quality control terms (see Exhibit 12.14 and accompanying descriptions).

12.6 Cost of Quality Sum of the cost of conformance of quality and cost of nonconformance of quality (see Exhibit 12.15).

12.7 Develop project management plan This is bringing all of the subsidiary plans discussed in Chapters 6–12 into one comprehensive project plan that is practical.

Resolve conflicts Sometimes when different people develop different sections of the project plan, the individual parts may each look good, but they may not go well together.

Establish configuration management This is to identify, document, control, and track all of the characteristics of the project deliverables.

Apply sanity tests to all project plans Before finally accepting the complete project plan, it makes sense to just ask – is this practical?

12.8 Kickoff project Projects are formally kicked off so that various stakeholders can see how everything fits together, so they can understand the desires of other stakeholders, and so everyone can become excited about the project.

Preconditions to meeting success These are things the project manager, team, and sponsor do to enhance the probability of a successful kickoff.

Meeting activities The sponsor, project manager, and core team will each make some presentation at this meeting to ensure that everyone knows enough about the project and to enhance the status of participants, in the hopes that will enable them to perform better.

12.9 Baseline and communicate project management plan Formal acceptance of the project plan is called baselining. Actual performance will be compared to this baseline for project control. Baselining marks the transition from primarily planning to primarily executing the project.

12.9 Using MS Project for project baselines Before using MS Project to automate and communicate the baseline, a number of planning items (covered in Chapters 6–12) should be verified.

Baseline the project plan MS Project’s baseline includes five activity metrics: planned values for project duration, start, finish, work, and cost. Now that project work is underway, you will need to continuously compare actual results to the planned baseline.

Create the First-time baseline (See textbook for detailed instructions.)

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Subsequent baselines Sometimes with a major change, management will instruct the project manager to manage to a revised baseline.

Viewing Baselines and Variances Gantt Chart view can be formatted to show graphics of difference between planned and actual schedule of each task.

CHAPTER REVIEW QUESTIONS – SUGGESTED ANSWERS 1.

What is the name of the process that identifies which quality standards are relevant to the project and how to comply with them? (objective #1, p.2401 •

2.

Plan quality management

Who was the influential thought leader in the area of quality who created the Profound Knowledge system? (objective #5, p.388) •

3.

Who is best known for creating the Quality Trilogy? (objective #5, pp.388-389) •

4.

5.

Total Quality Management; emphasis on Total (see Exhibit 12.4) What does the name Six Sigma refer to? (objective #5, pp. 390-391)

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6.

The number of standard deviations which differentiates a process from being “in-control” versus “out of control” Define the term project quality. (objective #1, pp. 392-393)

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The degree to which a set of inherent characteristics fulfills a requirement.

Give some examples of external stakeholders. (objective #7, p.393) •

8.

Joseph Juran

What does the acronym TQM stand for? How does it apply to project management? (objective #5, p.389) •

7.

Deming

Customers, suppliers, public

What are the four core project quality concepts? (objective #1, p.392) • • •

Stakeholder satisfaction, Empowered performance, Fact-based management, and

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Process management.

What are three main reasons it is better to design quality into a process than to find problems upon inspection? (objective #7, p.395) • It costs more to make junk and then remake to obtain good outputs.

• Having to rework anything aggravates time pressure that already exists on many projects • Even the best inspectors do not find every mistake, and some of the mistakes are likely to reach customers

10. Identify and describe the steps of the PDCA model. (objective #2, p.396) • • • •

Plan: select needed improvement, understand process and reasons for trouble, and create plan Do: Try the change on a small scale and collect data Check: compare the results after the change with those before to see if there was an improvement Act: if results are good enough, implement the improvement, otherwise try again.

11. What is the difference between common and special causes of variation? (objective #1, pp.

396-397) • •

Common cause is “a source of variation that is inherent in a system and predictable. On a control chart, it appears as the part of the random process variation … and would be considered normal or not unusual.”

Special cause is “a source of variation that is not inherent in the system, is not predictable, and is intermittent. It can be assigned to a defect. …

12. Define quality assurance and the primary methods that can be used to achieve it. (objective #2, pp.404-405) •

Quality assurance is “the application of planned, systematic quality activities to ensure that the project will employ all processes needed to meet requirements.” Primary methods are quality audit and process improvement.

13. Define quality control and the primary methods that can be used to achieve it. (objective #2, pp. 406-408) •

Quality control is “monitoring specific results to determine whether they comply with relevant quality standards and identifying ways to eliminate causes of unsatisfactory results.” The primary method is an inspection of inputs, activities and deliverables.

14. What activities are typically included in a project kickoff meeting? (objective #6 pp. 411412) • The sponsor and project manager describing the importance of the project • The customer(s) describing their acceptance standards, sense of urgency, and budget concerns • The project manager outlining the project goals • The project manager and the core team describing work expectations Instructor’s Manual .

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• The project manager unfolding the project plan and its current status (if work has commenced) • The core team explaining the communications, risk, and quality plans • Everyone asking questions and making suggestions • The project manager authorizing appropriate changes to the project plan • Everyone concurring with the overall plan and to his or her individual action items 15.

What marks the transition between the planning and executing project phases? (objective #6, p. 413) • The stakeholders committing to the details and baseline of the plan

DISCUSSION QUESTIONS – SUGGESTED ANSWERS 1.

What did Deming mean when he said that organizations operate as systems? Give examples. (objective #5, Understanding, p.388) • • • •

All parts of the system (or project) need to work together toward certain goals and cannot operate in isolation.

Managers need to be aware of variation – both common and special causes of variation.

The managers then need to work to reduce this variation.

Managers should learn from past experiences and understand the cause and effect relationships between behaviors.

Leaders need to understand how to motivate individuals and how to work with diverse groups.

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Identify similarities and differences among TQM, ISO, and Six Sigma. What strengths and weaknesses are inherent in each of these approaches? (objective #5, Analyzing, pp.389-392) •

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TQM is the development, deployment, and maintenance of systems related to qualityproducing business processes. TQM is a strategic approach that focuses on encouraging a continuous flow of incremental quality improvements. It encourages the establishing of a culture of collaboration among different departments within organization. TQM is mainly a cultural initiative and a style of management toward increased quality.

Six Sigma is complementary to TQM initiatives such as ISO 9000 registration, which is mainly procedural; Total Quality Management (TQM) is mainly cultural. All of these initiatives attempt to improve quality levels but typically reach a plateau. The Six Sigma approach goes to the next level.

Six Sigma is not about quality in the strict traditional sense. Quality, defined traditionally as conformance to internal requirements, is not the focus of Six Sigma.

True, Six Sigma focuses on improving quality by helping organizations produce products and services better, faster and cheaper. However, it accomplishes that by reducing waste. In traditional terms, Six Sigma focuses on defect prevention, cycle time reduction, and cost savings. Six Sigma is about helping the organization make more

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money. Unlike cost-cutting programs that reduce value and quality, Six Sigma identifies and eliminates costs that provide no value to customers: the costs incurred due to waste.

The focus of TQM initiatives differs from the focus of Six Sigma programs. One, TQM programs focus on improvement in individual operations with unrelated processes. Six Sigma focuses on making improvements in all operations within a process. Two, Six Sigma involves dedicated, full-time resources – the “black belts” - – versus TQM, which is usually a part-time activity of non-dedicated managers.

The breadth and depth and the precision of Six Sigma and TQM also differ. Six Sigma has a well-defined project charter that outlines the scope of a project, financial targets, anticipated benefits, milestones, etc. It is based on hard financial data and savings. In TQM, organizations go into a project without fully knowing what the financial gains might be. Six Sigma has a solid control phase (DMAIC – Define-Measure-AnalyzeImprove-Control) that makes specific measurements, identifies specific problems, and provides specific solutions that can be measured.

Rank the seven quality management areas of ISO from most to least important. What rationale is your list based upon? (objective #5, Analyzing, p. 391) Answers will vary but should be well-reasoned. See Exhibit 12.5.

4.

Describe the process of achieving stakeholder satisfaction. How would you address a situation in which two stakeholders have mutually exclusive goals for the project? (objective #7, Analyzing, p.393) • Identify all stakeholders.

• Prioritize that group.

• Seek to understand the prioritized stakeholders’ requirements.

• Develop standards to ensure that their requirements are met.

• Make any necessary tradeoff decisions.

Answers to the second question will vary, but students need to keep in mind who their key stakeholders are and to prioritize their needs.

5.

Give examples of how a single company might use continuous process improvement and/or breakthrough process improvement. (objective #7, Applying, pp.395-396) •

6.

Answers will vary. Look for specifics. Get the students to describe what model (if any) is being used to guide the improvement.

Give some examples of common and special cause variation that you have witnessed.

Which of these causes of variation can be addressed through continuous improvement? (objective #7, Evaluating, pp. 396-397) Answers will vary. Examples may include: • Common causes - poor working conditions – noise, dirt, temperature - poor quality of input materials - employee qualifications

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•

Special causes - poor installation of particular piece of equipment - input materials are of unacceptable quality - power surge

Common causes of variation can be addressed through continuous improvement.

7.

Discuss the four areas of fact-based decision making. In your opinion, what is the greatest obstacle to using fact-based decision making? (objective #1, Applying, pp.396-399) • •

The first area involves understanding the different causes of variation.

The second area involves measurement as managers need to determine what to measure within the process.

• The third area is how data will be collected.

• The final area of fact-based management is how the information collected will be used and communicated to important stakeholders and project participants.

Opinions may vary but will likely include something about time pressure and/or not knowing which metrics are most important.

8.

Discuss the costs of conformance versus nonconformance and how they both factor into the overall cost of quality. What percentage of your budget would you put toward conformance-related tasks compared to nonconformance-related tasks? Why? (objective #5, Understanding, p.409) •

The key takeaway is that the overall cost of quality is comprised of both the cost of conformance and the cost of nonconformance, so to de-emphasize one may lead to problems with the other. See Exhibit 12.5.

9. In your own experience, have you seen companies integrate quality within their project planning processes? If so, how and when have they done so? If not, do you think it would have been more beneficial to address quality in one area of the overall project plan or continuously throughout the plan? (objective #7, Evaluating) •

Answers vary. A few students may be able to give examples from their experience.

More students will speculate. The answer is not as important as the rationale.

EXERCISES – SOLUTIONS 1.

Create a SIPOC for an everyday activity (i.e. paying bills, parallel parking, or making cookies).

•

Answers vary. Look for an ability to trace backward from each customer. Do the outputs seem like the only things that customer needs? For each output, ensure that it seems like the process is complete, etc.

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2.

Identify key quality project plan steps that you feel should be included within a typical overall project plan. Be sure to include quality items throughout the project plan life cycle.

Within a quality management plan, some or all of the following topics should be addressed with the supporting documentation and definitions: • the mission and quality policy of the organization; • roles and responsibilities of management and staff with respect to audit, and/or quality activities; • quality system description • personnel qualifications and training; implementation of work processes • corrective actions procedures • standard operating procedures • quality improvement description • procurement of items and services • documentation and records • computer hardware and software

Adapted from http://www.state.il.us/idns/html/radon/availpub/exampleQMP.htm 3.

Create a SIPOC model for a project where your university is modernizing its student center to include space for on-campus student-run businesses. Be sure to include all relevant stakeholder groups. Describe how you will use this information to help you design quality into your project.

•

4.

Improve a work process using either the DMAIC or the PDCA model to guide your actions.

What project quality tools did you use and why did you select each?

•

5.

Answers vary. Look for an ability to trace backward from each customer. Do the outputs seem like the only things that customer needs? For each output, ensure that it seems like the process is complete, etc. Also look for specific ideas regarding how the students will use this information to help design quality into the project.

Answers vary. Look for either the DMAIC or PDCA model with tools shown at each step. Look for the students to describe why they used each tool. More detail on a number of the tools is included in Exhibit 14.9.

Identify the quality policy for a local company. Speculate how the policy focuses the efforts on a project in that company. Find a project manager at that company and ask his or her opinion of the quality policy’s impact.

•

Answers vary. Look for the students to have the policy included. Most quality policies are short, so they should have the entire policy. Expect that the students will articulate how the policy will guide a project. The students may have both specific ideas on how the policy may help and some questioning from the project manager. An example from Colgate follows.

Colgate Quality Policy: Our goal is to provide consumers with the highest-quality products by assuring their performance, consistency, safety, and value. This commitment Instructor’s Manual .

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is rooted in our corporate values and is essential to our continued growth and success. We will meet our comprehensive “Global Colgate Quality Standards” in the design, manufacturing, and distribution of our products as well as meet or exceed all government requirements and consumer expectations worldwide. We will maintain these highquality standards as we design and manufacture our products by the most efficient means possible to ensure they are affordable to the greatest number of consumers throughout the world. Our commitment to quality is vital to all we do.

Performance, consistency, and safety are all dimensions of quality that are stressed.

Value is also mentioned. Time is not. This would suggest that quality is the most important variable for their projects, followed by cost. Schedule then might take a backseat.

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PMBOK® Guide Questions 1) An important input to the Plan Quality Management process is requirements documentation.

This is because: a) The organization will have a uniform set of specific quality requirements that every project must adhere to. b) Requirements include the schedule and cost information that must be balanced against quality needs for the project. c) Requirements documentation captures the stakeholder expectations that the project should meet. d) The sponsor’s directives for the project’s level of quality are expressed in the requirements.

Answer: c Pages 401-404 in textbook Page 277 PMBOK 6th Edition

2) Which of the following is part of a Configuration Management System? a) b) c) d)

process for identifying and uniquely naming items that need to be controlled recording and reporting all changes verifying the correctness of all deliverables and components of them all of the above

Answer: d Page 410in textbook Page 115 PMBOK 6th Edition

3) What cycle is the basis for Six Sigma quality planning and improvement? a) b) c) d)

DMAIC PDCA DOE TQM

Answer: b Page 395 in textbook Page 275 PMBOK 6th Edition 4) All of these are components of a work flow diagram called the SIPOC model EXCEPT : a) b) c) d)

Customer Process Input Support

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Answer: d Pages 394-395 in textbook Page 284 PMBOK 6th Edition

5) The PMBOK® Guide defines quality as: a) b) c) d)

Exceeding customer expectations by delivering more than they requested.

Achieving the highest possible level of value using objective measures.

The degree to which a set of inherent characteristics fulfills requirements.

A category used to distinguish items that have the same functional use.

Answer: c Page 392 in textbook Page 271 PMBOK 6th Edition 6) During quality management planning, the project manager and team determine what will be measured during the Control Quality process. Project or product attributes such as on-time performance, defect frequency, and costs vs. budget are known as ________. a) b) c) d)

Quality metrics.

Quality thresholds.

Quality tolerances.

Quality boundaries.

Answer: a Page 397 in textbook Page 287 PMBOK, 6th Edition 7) Preventive action ____________. a) is primarily addressed in the Control Quality process. b) realigns the performance of the project work with the project management plan. c) seeks to ensure the future performance of the project work is aligned with the project management plan. d) modifies a nonconforming product or product subcomponent.

Answer: c Page 405 in textbook Page 227 PMBOK, 6th Edition 8) According to the PMBOK®, which of the following is not a quality management process? a) b) c) d)

Plan Quality Management Monitor Quality Perform Quality Assurance Control Quality

Answer: b Page 387 in textbook Page 271 PMBOK 6th Edition

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© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

9) Once the project management plan is complete and accepted by the stakeholders, the approved plan is __________. a) b) c) d)

Reviewed.

Baselined.

Followed.

Documented.

Answer: b Page 413 in textbook Page 83 PMBOK 6th Edition 10) Who came up with the four-part Profound Knowledge System? a) Deming b) Juran c) Maslow d) Ford Answer: a Page 388 in textbook Page 275 PMBOK 6th Edition

SUBURBAN HOMES CONSTRUCTION PROJECT Purchasing a new home is the single largest investment most of us will make in our lifetime. Additionally, it is likely to provide one of the most satisfying experiences. One will get an opportunity to see the results of choices made in building the home. With lifetime investment at stake, quality of home assumes great importance. Unless Suburban Homes maintains a high quality in its construction, it cannot sustain growth and customer satisfaction. Quality of a home is the single most important criterion for choosing a builder.

Students must be made to understand the importance of this issue.

After assessing quality expectations of a typical home-buyer who is the primary stakeholder, the sales executive must spend a good amount of time to identify all their needs and requirements within the scope and present all possible options for the home buyer. This is the first step towards for developing a stakeholder satisfaction plan for home buyers. Due to the nature of construction work, the design and quality requirements must

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be frozen well before the actual project plan is finalized.

Other key stakeholders are legal and regulation agencies, and suppliers of construction materials. It is important to implement and adhere to local construction laws and standards. Further, the project manager must facilitate access to these agencies for periodic inspection. Construction company like Suburban Homes must establish long-term relations with all the suppliers and develop a rapport that amounts to treating them as team members. It is mutually beneficial to work together to construct high quality homes at an affordable cost.

Students must be encouraged to do research to Identify relevant standards of quality for construction that are applicable and enforced in their local communities. These standards must be used to define and develop quality measures for monitoring project performance.

Using these measures and standards, a quality management plan must be defined and developed as described in this chapter.

Non-conformance of quality standards would result in project risks and additional costs. As discussed in the previous chapter, a similar method must be adopted to identify and assess risks qualitatively.

Developing a quality policy is desirable for uniform awareness and implementation of quality management from project inception to the closure of the project. This statement should clearly state the organization’s values, professional ethics, and responsibilities that individuals must adhere to. Using this quality policy as a reference document, quality process improvement plan must be developed that reflects values and ethics outlined in the policy statement. Student are expected to expand and explain the Plan-Do-Check-Act process for quality assurance.

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SEMESTER PROJECT Talk with your sponsor to determine if the organization for which you are planning your example project has a quality policy. If it does, determine whether you will adopt it as is, or ask to augment it. Tell why you wish to either accept or modify it.

• Answers vary. Often smaller nonprofit organizations do not have a formal quality policy. If there is one, expect the students to tell why they either want to adopt or modify it. Do not let them just say they will accept it.

With your sponsor, determine the quality baseline for your project. What standards will you use?

•

Answers vary. The key point here is to get the student team and sponsor to jointly decide what quality standards they will use. This may be new for the sponsor if it is a small organization. The student team may need to research standards.

Perform a stakeholder analysis. After completing the tool, are there any stakeholders that you didn’t think of before? Are there any that are opponents? What actions could you take to try to change those that are opponents into enthusiasts?

• Answers vary. Look for them to recognize that not everyone in the customer’s organization may be equally excited about the project and to develop ideas on how to deal with various stakeholders.

Create a SIPOC for your project. What did you learn that surprised you? How will your project plan be different because of what you learned?

• Answers vary. The keys here are to have a SIPOC with many entries (not just a fill in the square mentality) and to suggest how the team will do something differently on their project because of what they learned.

Create an agenda for a kickoff meeting for your project. Conduct the kickoff meeting and capture minutes for it. Tell what went as you expected and what went differently than you expected.

• Answers vary. Be sure to compare the agenda with the minutes to see if they actually covered what they said they would. Typical activities included in a kickoff meeting might include: • The sponsor and project manager describing how important the project is, • The customer describing their acceptance standards, sense of urgency, and budget concerns, • The project manager outlining the project goals, • The project manager and the core team describing work expectations, • The project manager unfolding the project plan and its current status (if work has commenced), • The core team explaining the communications, risk, and quality plans, • Everyone asking questions and making suggestions, Instructor’s Manual .

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• •

The project manager authorizing appropriate changes to the project plan, and Everyone concurring with the plan and to his or her individual action items.

Baseline your project management plan with the activity baseline start, activity baseline finish, activity baseline duration, activity baseline cost and activity baseline work shown in MS Project. Also show in your project management plan the agreed upon quality and scope targets, risk and communication plans.

• Answers vary. Look for MS Project baseline and for agreement on all subsidiary plans.

Pick one work process related to your example project. Use the DMAIC model to improve the process. Perform the define and measure steps. Tell what you learned. Identify what project quality tools you expect to use on the remaining steps and tell why.

• Answers vary. Keys include the description of what the students learned along with the tools and rationale for their use.

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CHAPTER 13 Project Supply Chain Management LEARNING OBJECTIVES This chapter deals with securing the services and materials that are needed to perform the project. After completing this chapter, each student should be able to perform the following: Core Objectives: • Identify the role of supply chain management in project management and its importance for ensuring project success.

• Describe how to plan, conduct, control, and close project procurements.

Behavioral Objectives: • Explain how to use the contemporary approach to project partnering and collaboration.

Technical Objectives: • Describe the various formats for supply contracts and when each type is appropriate.

• Given a project situation, determine which activities, supplies, or service should be purchased, create bid documents for one of them, determine the criteria you would use to select a seller, and then determine and justify the type of contract to be used.

TEACHING STRATEGIES •

•

•

The Project Management in Action feature at the end of this chapter is a great place to start. You can use it in different manners. You could ask the students to read it before class and have a discussion. You could ask them to map how ideas from it match up to ideas in the chapter or elsewhere in the book. You could ask your students if the companies where they work do things in a similar or different fashion. Students often find it interesting that a large, successful company does so many of the things mentioned in the book – even if a few use slightly different names.

A variation of the first strategy is to compare and contrast how a fledgling company in the introductory essay and a global powerhouse in the Project Management in Action example exhibit similarities and differences with respect to their project management supply chain and how they deal with their partners.

This chapter lends itself very well to using a local project that is about to start. You can use each of the exercises at the end of the chapter for excellent class discussions. Make sure the students bring their books to class, as to do this well, you want the students to refer to the chapter at several points. You can ask them to: o Use the ideas in Exhibit 13.2 to speculate what activities, supplies, or services needed could be contracted out. o Create a request for information (RFI) for one portion of the project work that could be contracted out. o Use ideas from Exhibits 13.4 and 13.5 to determine criteria you would use to select sellers for the portion of contract work under consideration. o Determine what type of contract you would use for this work and tell why.

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•

•

•

•

o Describe the extent to which any partnering makes sense for this project. What are the challenges and benefits to this partnering? What would prevent any further partnering?

We try to make sure we at least mention each of the procurement management processes. This chapter has all 3 of the PMBOK® processes pertaining to procurements (plan, conduct, and control procurements).

If you choose not to use a local project as described above, several of the topics such as reasons to make or buy, factors used in assessing potential suppliers, and types of contracts can still be used for either discussion or a small breakout session. Encourage students to offer specific examples and to justify their recommendation.

In either an MBA class or an undergraduate class with several students who have significant work experience, it may be easy to generate a brief discussion on where to look for potential suppliers – again look for specific ideas to help students visualize.

Role play can help students envision why partnering has the potential to reduce conflict and work to both parties’ benefit. You could divide the class into four teams. Create a scenario with probable conflict. Instruct one team to be contractor and one to be the customer using traditional methods. Have the other two teams use partnering and have all teams then report back to the class. Alternatively, you could have all pairs of teams use traditional methods, have a class discussion on the results, then have all pairs of teams use partnering in the same scenario, and finally discuss how it was different.

LECTURE AND WORKSHOP OUTLINE This chapter includes both planning and executing topics and helps with the transition from planning into executing.

13.1 Introduction to Project Supply Chain Management (SCM) Since the vast majority of projects require goods and/or services from outside the organization, understanding how to best secure them is vital. Thinking in terms of SCM allows us to consider the ultimate customer better.

SCM components Make-or-buy decision, contract types, collaboration and cooperation, and system integration SCM factors The formalization of SCM varies according to factors such as the value of outsourced products and services, timing, and number of suppliers.

SCM decisions Many decision need to be made regarding the project supply chain.

Project procurement management processes 1. Plan procurement management 2. Conduct procurements 3. Control procurements 13.2 Plan procurement management This is the process that documents how project purchasing decisions will be made and identifies potential sellers.

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Outputs of planning These include the procurement management plan and the procurement statement of work.

Make or buy decisions Reasons to buy or sell Many firms determine their major strengths, decide how to build upon them, and try to outsource many other functions.

Outsourcing issues Outsourcing needs to be done carefully because the firm can lose control and have skills diminish if it is done poorly.

13.3 Conduct procurements This is the process of obtaining seller responses, selecting a seller, and awarding a Contract.

Sources for potential suppliers There are many ways to identify potential sellers.

Approaches used when evaluating prospective sellers There are multiple methods to determine if the potential seller has the technical, managerial, and financial capability of performing the needed work.

Supplier selection process Once one or more potential sellers have passed the evaluation, a request for proposal is often issued. The potential sellers respond, the project team decides which they prefer, and a negotiation is conducted with the goal of signing a contract.

13.4 Contract types Project managers can choose from several contract types depending on the risk level and other factors.

Fixed-price contracts These are primarily for well-understood projects.

Firm-fixed price contracts This simple contract states that the buyer will pay the seller an agreed-upon sum for performance regardless of seller’s cost.

Fixed price-incentive fee contracts The basic contract is for a set sum, but seller can earn more depending on how well certain performance criteria are met.

Fixed-price-economic-adjustment contracts The basic contract price is fixed, but inflation and/or commodity price fluctuations can be factored into the final settlement.

Cost-reimbursable contracts Buyer agrees to pay sellers cost plus some amount toward profit.

Cost-plus-fixed-fee contract All allowable costs are covered plus an agreed-upon amount of profit.

Cost-plus-award-fee contract All allowable costs are covered plus an award that can be made at the sole discretion of a named executive at the customer organization based upon customer satisfaction criteria.

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All allowable costs are covered plus seller can earn additional more depending on how well certain performance criteria are met.

Time and material contracts Hybrid style contract where unit rates are set, but not the amount of work, so value of contract can grow.

13.5 Control procurements This includes managing the contractual relationship between buyer and seller, reviewing and documenting how the seller is performing, and managing changes.

13.6 Improving Project Supply Chains This is a perspective of a managerially-coordinated initiative to increase customer satisfaction, overall efficiency, continuous improvement, and competitiveness.

Project partnering and collaboration Many companies realize they can greatly expand their capabilities by collaborating with others who are very good at something that is not their core competence.

Sources of conflict during project purchasing Money, misunderstandings, apparent conflicts of interest, litigation, and many other sources of potential conflict exist in project purchasing. It is best to bring potential conflicts out early and try to resolve them.

Resolving project purchasing conflicts Shared responsibilities, shared resources, shared information, shared rights, and shared risks can contribute to heading off conflicts in the first place and to resolving them more easily.

Mutual goals in project partnerships There are many advantages to both parties in a partnership; some advantages primarily to vendors; and other advantages primarily to clients.

Effective project partnering approaches Organizations can use a variety of purchasing approaches on their projects depending on the extent of partnering that is desired.

Securing commitment to partnering This can often be facilitated through a team building event with the primary goal of securing approval from top management of each partnering organization and subsidiary goals of developing mechanisms to resolve problems, improve processes, jointly assess, and continuously stress collaboration.

Third parties Through specializing, many times a third party can improve the supply chain performance.

Lean purchasing Through reducing cost and time of purchasing, projects can enhance customer satisfaction.

Sourcing Sensible sourcing improves project performance in many ways.

Logistics This often requires a tradeoff between responsiveness and transportation costs so that project managers need to remember which project objectives their stakeholders find most important.

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Information For information to help supply chain partners make good decisions, it needs to be accurate, accessible in a timely manner, and of the right kind.

CHAPTER REVIEW QUESTIONS – SUGGESTED ANSWERS 1.

Do small businesses often outsource project work? Why or why not? (objective #1, p.431) •

2.

Yes because they do not have the capacity to do everything “in house”

Name the three processes that make up project procurement management? (objective #2, p.431) • Plan procurement management, Conduct procurements, & Control procurements

3.

In supply chain management, what are some other names for the seller? What are some other names for the buyer? (objective #3, p.432) •

4.

List three functional areas that are frequently outsourced by business organizations. (objective #4, p.432) •

5.

Supplier, contractor; customer, service requestor, or purchaser

IT, accounting, legal functions, logistics

What is the difference between a request for quotation (RFQ) and a request for proposal (RFP)? (objective #2, p.433) • Request for Quotation (RFQ) is “a type of procurement document used to request price quotations from prospective sellers of common or standard products or services.” (PMBOK) An RFQ is used to compare prices from various vendors of standards items.

• Request for Proposal (RFP) is “a type of procurement document used to solicit proposals from prospective sellers of products and services.”(PMBOK) An RFP is often used to compare different approaches for nonstandard items.

6.

After an organization has developed a list of potential suppliers, how should the organization evaluate each supplier individually? (objective #2, pp.435-436) • Supplier surveys that provide sufficient knowledge of the supplier to make a decision to include or exclude the firm from further consideration • Financial condition analysis that reveals whether a supplier is clearly incapable of performing satisfactorily • Third-party evaluators such as Dun and Bradstreet that can be hired for obtaining relevant information • Facility visits to allow the project team to obtain first-hand information concerning the adequacy of the firm’s technological capabilities, manufacturing or distribution

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capabilities, and managerial orientation • Quality ability analysis that examines the potential supplier’s quality capability • Delivery ability analysis that estimates the supplier’s capability to deliver the required product or services on time; backup solutions can also be considered 7.

What are four potential information sources that organizations can use to identify potential sellers? (objective #2, pp. 432-433) • Supplier websites • Supplier information files • Supplier catalogs • Trade journals • Phone directories • Sales personnel • Trade shows • Professional organizations and conferences

8.

Describe two methods that can be used to evaluate potential sellers. (objective #5, pp.435436) • Supplier surveys that provide sufficient knowledge of the supplier to make a decision to include or exclude the firm from further consideration • Financial condition analysis that reveals whether a supplier is clearly incapable of performing satisfactorily • Third-party evaluators such as Dun and Bradstreet that can be hired for obtaining relevant information • Facility visits to allow the project team to obtain first-hand information concerning the adequacy of the firm’s technological capabilities, manufacturing or distribution capabilities, and managerial orientation • Quality ability analysis that examines the potential supplier’s quality capability • Delivery ability analysis that estimates the supplier’s capability to deliver the required product or services on time; backup solutions can also be considered

9.

What items are generally included in a request for proposal? (objective #4, p.435) • Purchasing overview • Basic supplier requirements • Technical requirements • Managerial requirements • Pricing information • Appendices

10. In a fixed-price contract, who assumes the greatest level of risk? (objective #4, p.439) •

Seller

11. What type of contract is good to use if it is necessary for both parties to share the risk? (objective #4, pp 440-441) • Time and Materials contract

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12. In what type of contract does the buyer assume the greatest level of risk? (objective #4, p.441) •

Cost-plus-fixed-fee

13. What is the name of a single insurance policy that is used to provide coverage for all project participants? (objective #3, p.441) •

Wrap-up or owner-controlled insurance program

14. What is meant by logistics and how does it relate to project management? (objective #1, p.

447) •

The work required to move and position inventory throughout a supply chain; a project manager needs to make trade-off decisions in regard to responsiveness versus transportation costs and needs to factor shipping speed into the project timeline (with an emphasis on keeping critical path activities on-time)

15. _______________________ is a method for transforming contractual arrangements into a cohesive, collaborative project team with a single set of goals and established procedures for resolving disputes. (objective #3, p.442) •

Partnering

DISCUSSION QUESTIONS – SUGGESTED ANSWERS 1.

Why does the project team require a project scope statement prior to planning procurements? (objective #2, Understanding, p. 431) •

2.

The team needs to fully understand the project and product requirements in order to make decisions about procurement such as whether to make or buy.

List three reasons an organization might choose to make a product or service in-house and three reasons why an organization might choose to buy or outsource the work. (objective #5, Understanding, p.432) • Answers will vary as there are more than three reasons listed for each area in the chapter text. Possible answers include: Reasons to make – Making gives the organization more control over quality and time. An organization might also choose to make because there are no suppliers available that meet its requirements. A third reason an organization might choose to make is so that it protects proprietary knowledge. Reasons to buy – Outsourcing gives the project team more time to focus on other aspects of the project.

An organization might also choose to buy because they do not have the capacity or ability to produce the product/service itself. Another reason an organization might but is so it can utilize the knowledge and expertise of specialized suppliers.

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3.

Should activities on the critical path be outsourced? Why or why not? (objective #5, Analyzing, p.433) •

Probably not because when a company outsources, it often loses the ability to control the time it takes to complete the project task and the activities on the critical path cannot be delayed without setting back the entire project.

4.

Which of the three competitive advantages do you think companies are most willing to outsource for? List any examples you can think of. (objective #5, Evaluating, pp. 432433) • Answers will vary but may include cost, quality, and/or fast delivery

5.

Your company is hoping to outsource some of its work constructing a new development of condominiums. What would you use as selection criteria to narrow down your list of potential sellers? (objective #2, Creating, p. 438) • Answers will vary. See Exhibit 13.5 for ideas.

6.

You decide to board your dog at the vet’s office while you are on vacation and sign papers saying you will pay $25 per day plus $15 for a bath every third day. What type of contract have you entered into? (objective #4, Evaluating, p.439) • Fixed-price contract (more specifically, a firm fixed-price or FFP contract)

7.

What would be your top two considerations when selecting a type of contract to enter into? (objective #4, Applying, pp.438-441) • Answers will vary. Possible criteria include: overall cost and degree of risk associated with the product/service, urgency of the requirements established as well as the performance speed that is needed, the contractor’s responsibility level, the type of accounting system they use, and the extent that subcontracting will be used to successfully complete the objectives.

8.

Describe three differences between a partnering relationship and a traditional seller-buyer arrangement. (objective #3, Remembering, pp. 432-436) • • •

In a partnering relationship, there is mutual trust and shared goals. This differs from a traditional practice where there is often suspicion and distrust as each party is thought by the other to be looking out for their own best interests.

Another difference between the two types is that in a partnership, each organization shares its resources whereas in a traditional practice access to resources in limited and most follow a very structured process.

In partnering relationships, there is open communications between the groups. This differs from traditional practices where communications tend to be very structured and guarded.

Advantages of Project Partnerships Advantages to Both Parties Shared motivation

Advantages to Clients Risks more effectively

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Advantages to Vendors Expected outcome clearly stated

8

Flexibility Reduce administration of frequent bids Improve project execution Explore new technologies Improve communication Make better decisions Improve resource utilization

managed Upfront project cost reduced Potential of lower cost Allows focus on core capabilities

Greater potential profit More dependable stream of work Opportunity to prove oneself

Sources: Adapted from Tom Chaudhuri and Leigh Hardy, “Successful Management of Vendors in IT Projects,” PM Network 15 (6) (June 2001): 48 and He Zhang and Peter C. Flynn, “Effectiveness of Alliances between Operating Companies and Engineering Companies,” Project Management Journal 34 (3) (September 2003): 49.

Differences between Traditional and Partnering Project Procurement Type of Issue Atmosphere

Relationship

Barriers

Traditional Project Procurement Project Partnering Win-lose attitude Equal partner attitude Adversarial problem solving Joint problem solving Formal, contractual relations Cooperative, teamwork environment Frequent contract claims Few contract claims Project-by-project contracts Long-term contracts Independent project teams Joint project teams Risks transferred Risks shared Continuous improvement Continuous improvement required (or discouraged by short-term contracts at least encouraged) Only essential information shared All useful information shared Limited cost discussions due to competitive advantage Costs and profits freely discussed

Sources: Adapted from Robinson Sezar and Afonso Aguilar, “Procurement Management in a TQC Environment,” PMNetwork 11 (11) (November 1997): 41 and Charles Cowan, C. F. Gray, and E. Larson, “Project Partnering,” Project Management Journal 12 (4) (December 1992): 6.

9.

What are some potential issues related to outsourcing? How could you mitigate these issues? (objective #5, Applying, p.433) • Loss of time control for completing project activities • Lack of cost control for outsourced activities • Gradual loss of special skills for doing some specific activities • Loss of project focus and a potential conflict of interest • Ineffective management as a result of complicated business interactions • Loss of confidentiality and double outsourcing when a third party is used Answers to the second question will vary but may involve assigning an owner to any identified risk created through outsourcing; spending extra money for insurance and/or expedited delivery; creating a partnership with the selling company, etc.

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10. You are the project manager in charge of renovating a large apartment building, and your team has decided to outsource the installation of a new septic system. Do you put out an RFQ or RFP to interested contractors? Why? (objective #4, Analyzing, p. 433) The answer will come down to whether this is a request for a rather standard system (in which case an RFQ makes the most sense) or something more specialized (in which case an RFP would be more practical.) As long as students understand this distinction, they could conceivably give either answer.

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PMBOK ® Guide QUESTIONS 1) The Project Procurement Knowledge Area includes all of the following processes EXCEPT: a) b) c) d)

Plan Procurement Management Conduct Procurements Close Procurements Control Procurements

Answer: c Page 431 in textbook Page 459 PMBOK 6th Edition 2) In order to plan for procurements, the project team uses a project document that includes a list of deliverables, acceptance criteria, project assumptions and constraints, and a description of the product, service or result. This document is called the _________. a) b) c) d)

Work Breakdown Structure (WBS) Project Charter Project Contract Project Scope Statement

Answer: d Page 431in textbook Page 460 PMBOK 6th Edition 3) One output of the Plan Procurement Management process is the ________, a document that describes the item to be procured “in sufficient detail to allow prospective sellers to determine if they are capable of providing the products, services, or results”. a) b) c) d)

Request for proposal Procurement statement of work Scope statement Procurement management plan

Answer: b Page 431 in textbook Page 360 PMBOK 6th Edition 4) Which of the following contracts is riskiest for a buyer? a) b) c) d)

time and material cost reimbursable firm-fixed-price fixed-price-economic-price-adjustment

Answer: b Page 440 in textbook Page 472 PMBOK 6th Edition

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© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

5) A ____________ analysis is a technique that results in a decision about whether particular work can best be accomplished by the project team or should be purchased from external sources. a) b) c) d)

Make-or-Buy SWOT Sensitivity Vendor

Answer: a Page 432 in textbook Page 473 PMBOK 6th Edition 6) Which contract type puts the most risk on the seller? a) b) c) d)

Time and material Cost reimbursable Firm-fixed-price Fixed-price-economic-price-adjustment

Answer: c Page 439 in textbook Page 471 PMBOK 6th Edition 7) What is a hybrid type of contract that is often used for staff augmentation or any outside support in which a precise statement of work cannot be defined, and which often includes a not-to-exceed value and time limit to prevent unlimited cost growth? a) b) c) d)

Time and material Cost reimbursable Fixed Price Incentive fee

Answer: a Pages 440-441 in textbook Page 472 PMBOK 6th Edition 8) The type of procurement document that might be used to request prices for standard products or services is called a(n) _____: a) b) c) d)

Request for Proposal (RFP) Request for Information (RFI) Invitation for Negotiation (IFN) Request for Quotation (RFQ)

Answer: d Page 433 in textbook Page 477 PMBOK, 6th Edition 9) During which of the following processes is evaluation criteria developed, in order to evaluate potential sellers?

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a) b) c) d)

plan procurements conduct procurements control procurements plan communication management

Answer: a Page 431 in textbook Page 466 PMBOK, 6th Edition 10) Procurement performance reviews, contract change control system, payment systems, and performance reporting are all tools and techniques for which procurement process? a) b) c) d)

Plan Procurement Management Conduct Procurements Close Project Control Procurements

Answer: d Page 441 in textbook Page 492 PMBOK 6th Edition

EXERCISES – SOLUTIONS Answers vary for all exercises in this chapter depending on the project chosen. They will also vary depending upon assumptions the students make since the story in the newspaper will often not have much detail.

1.

Using the ideas in Exhibit 13.2, speculate on what activities, supplies, or services could be contracted out.

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2.

Create a request for information for one portion of the project work that could be contracted out.

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3.

The two sections that should be included in this are an overview of the requirements and a description of how the potential sellers will be judged.

Using ideas from Exhibits 13.4 and 13.5, determine criteria you would use to select sellers for the portion of contract work under consideration.

•

4.

Expect the students to justify their make vs. buy suggestions based upon the parent organization keeping in house the activities that contribute toward their core competency and outsourcing others.

This should be specific enough that a potential seller could determine if they have much of a chance of being selected.

Determine what type of contract you would use for this work and explain why.

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The most important part of this answer is the justification of choice.

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5.

Describe the extent to which any partnering makes sense for this project. What are the challenges and benefits to this partnering? What would prevent any further partnering?

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Look for practical considerations with regard to whether the partnering is likely to work.

SUBURBAN HOMES CONSTRUCTION PROJECT The criteria for selecting suppliers and partners are defined in the case study. They are: collaboration, reliability, value engineering (higher quality at a competitive price), performance, trust, and transparency in commercial deals and communication. Keeping these values in mind, it is imperative to compare them with the market situation and perform SWOT analysis. If required and if this analysis prompts a change in these criteria, students should not hesitate to make changes to the list of criteria. Using the redefined criteria, a second SWOT analysis is performed on all prospective partners and suppliers for construction. Those who are aligned with the organization’s criteria are chosen for a longterm relationship. Then agreements must be formally documented.

For activities that require material and labor supply, time and material plus incentive contracts are used. As most of the other construction work is well defined and scope is not ambiguous, fixed-price contracts are preferred. Contract terms can be of two types: general and specific. General terms of contract are same for all the suppliers and these terms are generic in nature and aligned with the organization’s quality policy, contractor selection criteria, and other terms related to working together during normal and emergency situations. Specific terms are explicit and they are different for each supplier or contractor.

These general terms and conditions are the basis for developing a procurement policy of the organization.

The factors – financial stability, technical capabilities, operational management practices and stability, and general management philosophy – related with all the suppliers and contractors would determine risks associated with them. Qualitative risk assessment method is like the one outlined in chapter 13.

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The answers to these questions depend heavily on decisions that were made in earlier chapters.

Therefore, there are no textbook solutions. However, there is logic to look for in the student answers. Do they sound well considered and complete? In many cases, students will want to “fill the square” on questions like these. You need to determine if you were a key stakeholder, would their answer give you confidence?

SEMESTER PROJECT Answers will vary considerably depending on the project. However, look for similar logic to that in the exercises above.

1.

Using the ideas in Exhibit 12.2, determine what activities, supplies, or services needed on your example project could be contracted out.

2.

Create a request for information for one portion of the project work that could be contracted out.

3.

Using ideas from Exhibits 12.4 and 12.5, determine criteria you would use to select sellers for the portion of contract work under consideration.

4.

Determine what type of contract you would use for this work and tell why.

5.

Describe the extent to which you are partnering on your example project. Describe the extent to which any other person or group may be partnering on the project. What are the challenges and benefits to any partnering that is occurring? What is preventing any further partnering?

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CHAPTER 14 Determining Project Progress and Results LEARNING OBJECTIVES This chapter covers multiple ways in which project managers seek to ensure the project results they planned to make and promised to deliver. After completing this chapter, each student should be able to perform the following: Core Objectives: • Develop and demonstrate use of a change control system.

• Demonstrate how to monitor and control project risks with various resolution strategies.

• Create and present a project progress report.

Behavioral Objectives: • Describe the importance of formal reporting and communications.

• Demonstrate negotiating skills.

• Manage conflicts during the project execution.

Technical Objectives: • Describe project quality control tools, including how and when to use each.

• Calculate current project schedule and budget progress, and predict future progress, using earned value analysis.

• Document project progress using MS Project.

TEACHING STRATEGIES •

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The methods of Chapters 13, and 14 are performed largely in a concurrent fashion. All deal with executing and monitoring the project. You should continually reinforce to the students how the last four chapters are related. It is easy for them to get lost in detail otherwise.

Chapter 14 deals with most of the balanced scorecard issues except in the growth/innovation area. Participant development is covered in Chapter 13 and knowledge management is in Chapter 15.

We like to cover internal project issues first since they really form the “nerve center” of the project. We ensure students think about integration, risk and communications when they are performing detailed cost and schedule control using earned value and MS Project.

Tell the students that depending on how extensive any differences may be between their plans and their actual results, changes could be made to the project execution, plan, or even charter.

If you have the students planning a real project, there are quite a few questions you can assign in the Semester Project section of the chapter. Almost any major topic of the chapter can come alive through discussion of how it applies to a real project. We often choose just two or three of those questions instead of all eight. That is because we want to make sure there is time for the large amount of content in this chapter.

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Commented [KW1]: Are these the correct numbers still?

Commented [KW2]: Correct?

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Give the students a few minutes to work with the change request form. Ask them to document either a real (if they have one) or potential change to their project and to describe any impact it may have. Emphasize how even small changes add up, so it is important to document them, but that in the haste to complete a project many people do not like added paperwork. Therefore, a change control system needs to be simple but enforced.

Time horizons for reporting project performance in Exhibit 14.6 help the students understand what to include in progress reports.

Students who are preparing for the CAPM or PMP will want to have a clear distinction in their minds between quality control and quality assurance. We find that spending some time differentiating the quality control terms helps them make this distinction.

Two very important techniques in this chapter are Earned Value Analysis and showing progress using MS Project 2016.

Earned Value makes a very good breakout session. The language PMI has adopted recently for this makes it easier to understand than it was with the old terminology.

Exhibit 14.17 can be used to further clarify. We like to bring in an example. We first encourage the students to duplicate our graph using an entire page to be able to see small differences. We draw the graph for the example similar to that in Exhibit 14.18 and make sure our example is somewhat different (with either favorable cost or schedule results).

We talk the students through one portion of it at a time, then assign one of the first three problems for students to do in groups of two or three in class, and we discuss the results.

• Go through some of the conceptual ideas with Microsoft Project before showing steps 1 through 6 of the process of updating a schedule. We generally have Power Point slides for students to take notes, but we demonstrate on MS Project and then summarize by going through the slides.

LECTURE AND WORKSHOP OUTLINE During project execution, a project manager needs to give direction, re-plan, influence, guard the scope, make decision, and follow-up to ensure proper results are delivered.

14.1 Project balanced score-card approach Project progress needs to be evaluated considering customer, internal business, financial, and growth/innovation perspectives (see Exhibit 14.1).

14.2 Internal project issues The project’s nerve center consists of integration, risk, and communications issues. Integration includes making choices to ensure project results are delivered. It is covered first in this chapter to encourage proactive integrated decision-making. Project manager needs to understand priorities and make decisions accordingly.

Direct and manage project work Empower others as possible, yet control as necessary when authorizing and performing project work.

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Monitor and control project work Continually measure and observe to understand actual work accomplishments and to return to desired performance when needed due to variance.

Types of project control Steering control is used to guide work, while go/no go control is used to approve work (or not).

Perform integrated change control Insist that all changes are formally proposed, accepted or rejected, impact is considered and factored into revised plans.

Monitoring project risk The risk management plan and risk register will be used to monitor project risks and to resolve them when they occur.

This includes tracking and resolving previously-identified risks and understanding their impact, as well as identifying unexpected risks as soon as possible, recognizing the extent of control project manager has over each, and resolving them accordingly.

Implement risk responses When a risk event occurs or is about to occur, the risk “owner” executes the strategy identified in the risk management plan.

Manage communications Execute according to communications plan and determine any additional information needs not already uncovered.

Collect information on executed work and work-in-progress PMs need to understand current situation so they can re-plan if needed.

Report performance Report actual progress on past period, current time period, and future time period.

Monitor communications The project manager and core team judge whether communications are following the plan and if they are effective.

Communicating in an agile environment Communication is frequent and rapid in agile projects with core team meetings almost every day. The primary emphasis is on the near term.

Agile projects use a Burndown Chart to show amount of work remaining (see Exhibits 14.7 and 14.8) 14.3 Customer issues Customers want everything to work correctly. They want the results to be useful (quality) and complete (scope).

Manage and Control quality Manage quality is forward looking and revolves around using and improving the quality plan and policy (also known as quality assurance).

Control quality compares measurements of specific project outputs with standards. Quality control is technical and reactive.

Monitor the project quality This involves determining both what and when to measure quality.

Quality management and control tools (see Exhibit 14.9) Instructor’s Edition .

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Commented [KW3]: I took out a chunk here on quality audits that I think we covered in Chapter 13, but you can un-do the change if you disagree

Flow chart ..............................A visual model showing work flow Check sheet ...........................A simple, structured form to gather data Pareto chart ............................A vertical bar graph to show frequency of problems Cause and effect diagram .......A visual outline showing possible causes Histogram ...............................A vertical bar chart showing average and variation Run chart ................................A special type of scatter diagram showing time Control chart ..........................A run chart with process average and control limits Control scope Limit scope changes to those that really help better achieve project objectives and insist all changes go through the integrated change control system.

Variance analysis is the process of determining the cause and amount of difference between planned and actual performance.

On Agile projects, success of the product is predicted by having team members, including the product owner, use the product before users do.

14.4 Financial issues Control of scope, cost, and schedule is highly interrelated.

Control resources The process in which all physical resources needed for the project are planned and monitored, with changes being made if necessary. This occurs throughout the project.

Control schedule and cost Comparing actual cost and schedule to baselines.

Earned value management for controlling schedule and costs Management method of measuring schedule and cost performance.

Currently known values How much work should be done?......................... Planned value (PV) How much work is done? ..................................... Earned value (EV) How much did the “is done” work cost? .............. Actual cost (AC) How much was the project supposed to cost? ...... Budget at completion (BAC) Variances How much is the schedule ahead or behind? .......... Schedule variance (SV) How much is the project over or under budget? ..... Cost variance (CV) Indexes How efficient is the schedule? ...........Schedule performance index (SPI) How efficient is the budget? ..............Cost performance index (CPI) Estimates How much more do we expect to spend? .......... Estimate to complete (ETC) What do we think the total will cost?................. Estimate at completion (EAC) How efficient do we need to be to finish on budget? …To-complete performance index (TCPI) 14.5 Using MS Project 2016 to monitor and control projects MS Project 2016 is especially helpful for monitoring and controlling cost, schedule, and resources.

What makes a schedule useful?

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Accurate and timely baseline, actual, and predicted future data concerning cost, schedule, and resources enable project managers to make good and timely decisions.

How MS Project recalculates the schedule based on reported actuals Actual data replaces planned data and recalculates with it.

Current and future impacts of time and cost variance Comparisons can be made between baseline, actual, and estimated cost and schedule data.

Define the performance update process The performance update process is defined by stating who needs to report, what is in each report, when each report needs to be filed, and the manner (how) each report is submitted.

Steps to update the project schedule The process of updating the project schedule includes seven steps.

Step 1: Acquire the performance data Step 2: Set the status date (as of) Step 3: Display the status date line on the Gantt chart Step 4: Enter the duration-based performance data Step 5: Reschedule remaining work Step 6: Revise future estimates 14.6 Replanning if necessary What kinds of changes might we make in response to the problems, and does the approval for a change need to be escalated to higher management?

CHAPTER REVIEW QUESTIONS – SUGGESTED ANSWERS 1.

What five aspects of project success are evaluated in the balanced scorecard approach? (objective #3, p.458) •

Customer, internal business, financial, growth, and innovation perspectives.

2.

Give three categories of internal project issues and an example of each. (objective #6, p.459) • The work that needs to be accomplished, communications issues, and risks; examples will vary.

3.

In addition to the WBS, what might trigger project work to be authorized and performed? (objective #1, p.459) • approved corrective actions, preventive actions, and defect repairs

4.

• 5.

What is an advantage of letting workers self-control their work? (objective #5, p.461) Adds to their enthusiasm

What are two types of control frequently used on projects? (objective #2, pp. 461-462) •

Steering & go/no-go control

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6.

What members of the project team should serve on the change control board? (objective #1, p.463) •

7.

Project manager, sponsor, core team members

What is the difference between work performance data and work performance information? (objective #8, pp.465-466) •

8.

9.

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Work performance data is “the raw observations and measurements identified during activities being performed to carry out the project work.” Work performance information is “the performance data collected from various controlling processes, analyzed in context and integrated based on relationships across areas.” (PMBOK) Which time periods are discussed in Agile project meetings? (objective #3, pp. 467-468) Yesterday (past) and today (current)

What three sets of data should a project manager have after completing a project audit? (objective #2, p.470) • Documentation of how the work is supposed to be done (the standards either developed or adopted in quality planning), • Descriptions of how the work is actually done, and • Documentation to verify how the work was completed.

10. Give some examples of times in the project lifecycle when an inspection might be especially useful. (objective #2, p.469) • Before a critical or expensive process to make sure the inputs are good before spending a large amount of money or time on them.

• Process steps where one worker hands off work to another • Milestones identified in the project charter 11.

12.

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Why is prevention preferable to inspection? (objective #7, p.469) Prevention is cheaper, and inspection does not ensure that all defects will be found prior to reaching the consumer

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What is the difference between an attribute and a variable? (objective #7, p.470) An attribute is determined with a yes-or-no test, while a variable is something that can be measured.

13. The highest bar on a Pareto chart often becomes the “head of the fish” in the ___________. (objective #2, pp. 469-470) • 14.

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Cause and effect diagram

What three types of variation should one look for in a Run Chart? (objective #3, p.474) Up or down trends, repeating patterns, and abrupt change(s)

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15. How does one calculate schedule variance? (objective #8, pp.477-478) • Earned value (EV) – planned value (PV) 16.

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What does cost performance index (CPI) measure? (objective #8, pp. 477-479) “Cost efficiency of budgeted resources expressed as the ratio of earned value (EV) to actual cost (AC)” (PMBOK)

17. What should your initial response be if a customer asks for a change to your project? (objective #5, p.463) •

To tell the customer you want to understand the impact of the proposed change on the schedule, budget, quality, and other stakeholders before you are ready to recommend either accepting or rejecting the proposed change.

18. What is the main purpose of monitoring and controlling a project? (objective #2, p.460) •

The main purpose of monitoring and controlling a project is so that the project manager is informed of the project’s process and is able to take corrective or preventive steps to keep the project on track.

19. Describe the purpose of using an integrated change control system. (objective #1, pp. 462463) •

By using change control, a project manager has an established process for reviewing all proposed changes to the project. It also gives the project manager a process for approving and controlling changes. Having this allows the project to stay on track with the objectives established for the project baseline. It results in the project better staying on time, on budget, and to the level of quality expected

20. Describe the three time horizons for project performance reporting, what should be reported in each, and why. (objective #4, pp. 466-467) • • •

One of the time horizons is the past time period. This covers the time between the previous report and now.

The second time period covers the time between now and when the next performance report is due.

The final time horizon covers the time after the next established reporting period.

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The items to be reported in each period are shown below.

Past time period

Current time period

Future time period

Approved plan

Current plan

Actual progress

Current risks

Plan to completion

Variances

Current issues

Future Risks

Reasons

Changes

Future Issues

Previous Report

Current Report

Next Report

Project End

DISCUSSION QUESTIONS – SUGGESTED ANSWERS 1.

Describe how a project manager can determine project progress for each element in the project balanced scorecard. (objective #3, Applying, pp.458-459)

Internal project Integration Risk Communications

•

Finance Schedule Cost

Growth/Innovation Participant Development Knowledge Management

Answers vary. Possibilities may include: o Integration – Makes tradeoff decisions, authorizes work to be accomplished, monitors and controls the project work, and controls changes. o Risk – Tracking identified risks, monitoring residual risks, identifying new risks, executing risk response plans, and evaluating their effectiveness throughout the project o Communications – Project communications plan must be in place, determine any additional information needs not already uncovered, establish an information retrieval and distribution system, collect information on executed work and work in progress, and then report progress to all stakeholders. o Stakeholder satisfaction – Understand stakeholder assumptions; clarify stakeholder expectations; achieve according to stakeholder expectations; reconfirm stakeholder expectations; all while continuously managing relationships, communications, and lessons learned. o Scope – Attempt to understand what might cause changes to either the product scope (the features of the project deliverables) or the project scope (the work that must be done to create the deliverables); attempt to head off unwanted changes; propose scope changes through the integrated change control system to determine

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what impact each might have on other aspects of the project; approve or reject changes; document impact; and incorporate into project plan.

Quality – Perform quality assurance to include ensuring that work is performed correctly and that key stakeholders are convinced that the work is performed correctly and perform quality control to include: ▪ monitoring the project to ensure that everything is proceeding according to plan; ▪ identifying when things are different enough than plan to warrant preventive or corrective actions; ▪ repairing defects; ▪ determining and eliminating root causes of problems; ▪ providing specific measurements for quality assurance; ▪ providing recommendations for corrective and preventive actions; and ▪ implementing approved changes directed by the project’s integrated change control system.

Schedule – Start with the approved schedule baseline; determine the current status of the schedule; if the schedule has changed by at least a pre-agreed amount, formally recommend changes and manage them through the integrated change control system to ensure any impacts on other areas are accounted for.

Cost – Start with the approved cost baseline; determine the actual status of the cost; if the cost has changed by at least a pre-agreed amount, formally recommend changes and manage them through the integrated change control system to ensure any impacts on other areas are accounted for.

Participant development – ▪ Understand stages of project team development, ▪ Understand characteristics of high performing project teams, ▪ Assess individual member capability, ▪ Assess project team capability, ▪ Build both individual and team capability, ▪ Establish team ground rules.

Knowledge Management – Capture, disseminate, and effectively use lessons so as to repeat what works well and avoid what does not work well.

2. In your opinion, under what conditions should the sponsor approve a project change, and when is it okay for the project manager to authorize a change? Give an example of each. (objective #1, Analyzing, pp. 462-463) • Answers will vary, but as a general rule, substantial changes need to be signed off on by the sponsor 3.

Give specific examples of risks on a project that are within the team’s control, partially within the team’s control, and outside the team’s control. Tell how you would deal with each. (objective #2, Evaluating, pp. 463-464) •

Answers vary. Examples can fit in the categories shown below. Look for specific examples. Also look for practical ideas for dealing with each.

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Risks within project control Understand and control WBS Closely monitor and control activity progress Closely manage all project changes

Risks partially within project control

Risks outside project control Understand project context and Establish limits to customer expectations environment Build relationships by understanding Actively monitor project project from client's perspective environment Understand willingness or Use honesty in managing client reluctance of stakeholders to expectations agree to changes Work with client to reprioritize cost, schedule, scope and/or quality

Document all change requests Increase overtime to stay on schedule Carefully escalate problems Isolate problems and reschedule other activities Build team commitment and enthusiasm Research challenging issues early

4.

As project manager, what would your reaction be to learning that, as of the last audit, your project’s SPI was 120% and your CPI was 115%? Why? (objective #8, Understanding, pp.

477-479) A project manager would likely be happy with this news, since it means the project is running ahead of schedule and under budget.

5.

What is the difference between efficiency and effectiveness? Give an example of something that is one but not the other. (objective #3, Applying, pp.467 and 479) • •

6.

Efficiency is the ratio of outputs to inputs. This is a measure of how much value is being obtained for the resources spent.

Effectiveness is the extent to which a process is creating the desired deliverables. This is a measure of stakeholder satisfaction; examples will vary.

In your own words, what is the difference between Manage Quality and Control Quality on a project? (objective #7, Understanding, p. 469) Specific answers will vary but should point out that Manage Quality is mostly forwardlooking, while Control Quality is more back-ward looking/reactive.

7.

List and give an example of when to use each of the seven project quality control tools described in this chapter (objective #7, Applying, pp. 469-474).

1. Flow chart to show the order of actions, decisions, and movement 2. Check sheet to capture useful data for decision-making 3. Pareto chart to prioritize problems 4. Cause and effect diagram to explore causes of problems 5. Histogram to understand the average, shape, and variation in a process 6. Run chart to see how something changes over time 7. Control chart to distinguish between special and common causes

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8. Give an example of a common cause and a special cause, and describe how you would address each. (objective #7, Applying, pp. 396-397) • Examples will vary; Special causes are statistically unlikely events that usually mean something is different from normal. Common causes are normal or random variations that are considered part of operating the system at its current capability. Special causes are identified by individual points outside of the control limits or unusual patterns within the limits. Common causes need systematic change for improvement—perhaps new methods or better training or tools that would allow workers to more consistently produce excellent quality. Special causes, on the other hand, require specific interventions that include identifying the root causes and making changes so those same root causes do not happen again.

9. If you were sponsoring a project, would you want to be updated in terms of cost and schedule variance or cost and performance indexes? Why? (objective #8, Evaluating, pp. 477-479 • Answers will vary but should be supported.

10. When it comes to monitoring progress, which parts of Microsoft Project schedule do you find most useful? Why? (objective #9, Evaluating, pp.481-487) •

Answers will vary, but keep in mind the following: to be sufficiently useful, three sets of data must exist for comparison purposes. Each set includes dates, duration, work and cost. Approved changes (scope, risk response activities, corrective action within contingency and management reserve limits…) must be included. The three sets are: o The Baseline set (Baseline Start, Baseline Finish, Baseline Duration, Baseline Work and Baseline Cost). This set is a copy of the stakeholder approved Scheduled values. This baseline information is sometimes called the Planned Schedule. o Past actual time and cost results—the Actual set (Actual Start, Actual Finish, Actual Duration, Actual Work and Actual Cost.) This actual set, sometimes called Performance data, is what actually happened as reported by the resources assigned to activities. o Future estimated time and costs—the Scheduled set (Start, Finish, Duration, Work, and Cost fields). These scheduled values are used or calculated by Project. They are continuously recalculated as activities and estimates are entered, as the project network is defined, as resources are assigned and balanced, and as Actuals are entered.

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PMBOK ® Guide Questions 1) In regard to Project Work, which activity refers to “reviewing the progress and capturing project performance data with reference to the project pan, developing performance measures, and communicating performance information?” a) b) c) d)

Controlling Monitoring Executing Closing

Answer: b Page 461 in textbook Page 613 PMBOK 6th Edition 2) Juan is a project manager for a project that has been baselined and is now under way.

When a customer approaches Juan and asks him to increase the project’s scope, Juan’s response should be to __________: a) b) c) d)

Comply with the customer’s request if it seems reasonable Determine the schedule performance index (SPI) Perform integrated change control Calculate the Estimate to Complete (ETC)

Answer: c Pages 462-463 in textbook Page 113 PMBOK 6th Edition 3) Which of the following formulas represents the schedule performance index (SPI)? a) b) c) d)

EV/PV EV - PV EV - AC EV/AC

Answer: a Page 479 in textbook Page 263 PMBOK 6th Edition 4) If your sponsor asks for an estimate as to how much more money your team needs to complete all project work as scheduled, which of the following formulas might you use? a) b) c) d)

BAC - EAC EV/PV (BAC – EV)/CPI (BAC – EV)/(EAC – AC)

Answer: c Page 479 in textbook Page 267 PMBOK 6th Edition

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5) What is the final step in the Perform Integrated Change Control process? a) b) c) d)

Review Change Proposals Manage changes to deliverables and Project Management Plan Estimate impact of proposed changes on project goals Approve or Decline change requests

Answer: b Page 463 in textbook Pages 113-115 PMBOK 6th Edition 6) Which quality control tool is a special type of vertical bar chart that is used to identify the primary (vital few) sources that are responsible for causing most of a problem’s effects, often referred to as the 80/20 rule? a) b) c) d)

Cause-and-effect diagram Pareto Diagram Control Chart Force Field Analysis

Answer: b Pages 469-473 in textbook Page 304 PMBOK 6th Edition 7) Which quality control tool is sometimes referred to as a “fishbone diagram” because it places a problem statement at the head of the fishbone and uses each “big bone” in the fish’s skeleton as a category of probable cause, in order to determine the root cause of the problem? a) b) c) d)

Ishikawa diagram Pareto Diagram Control Chart Force field Analysis

Answer: a Pages 471-473 in textbook Page 293 PMBOK 6th Edition 8) Good project management practice suggests a need to include a _______ within the cost baseline in order to cover identified risks that are accepted, and for which responses have been developed. a) b) c) d)

Contingency reserve Project buffer Control account Management reserve

Answer: a Page 464 in textbook Page 202 PMBOK, 6th Edition

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9) The “methodology that combines scope, schedule, and resource measurements to assess project performance and progress” is called ______________. a) b) c) d)

Cost management (CM) Funding limit reconciliation Triple constraint management Earned value management (EVM)

Answer: d Page 476 in textbook Page 263 PMBOK, 6th Edition 10) The “To-Complete Performance Index” (TCPI) is a measure of the cost performance required in order to finish the outstanding work within the remaining budget. The formula for this index is: _________ a) b) c) d)

BAC - EAC AC + BAC - EV EV / AC (BAC – EV) / (BAC – AC)

Answer: d Page 480 in textbook Page 266 PMBOK 6th Edition

EXERCISES – SOLUTIONS 1.

Use the following information to answer parts (a) through (h). Describe what the results of each calculation mean to you as a project manager. What do you propose to do?

PV = $500,000 EV = $350,000 AC = $550,000 BAC = $1,200,000 a. Calculate the schedule variance (SV).

• EV-PV = -$150,000. This project is behind schedule. b. Calculate the cost variance (CV).

• EV-AC = -$200,000. This project is over budget. c. Calculate the schedule performance index (SPI).

• EV/PV = 70% d. Calculate the cost performance index (CPI).

• EV/AC = 64%

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e. Calculate the estimate to complete (ETC)—first method.

• (BAC – EV)/CPI = $1,328,125 f. Calculate the estimate to complete (ETC)—second method.

• BAC – EV= $850,000 g. Calculate the Estimate at completion (EAC).

• AC + ETC = $1,878,125 – first method • AC + ETC = $1,400,000 – second method h. Calculate the To-complete performance index (TCPI).

• (BAC-EV)/(BAC-AC) = 1.31 or 131% 2. Use the following information to answer parts (a) through (h). Describe what the results of each calculation mean to you as a project manager. What do you propose to do?

PV = $25,000 EV = $30,000 AC = $29,000 BAC = $100,000 a. Calculate the schedule variance (SV).

• SV=EV-PV $30K-$25K=$5K Project is ahead of schedule. b. Calculate the cost variance (CV).

• CV=EV-AC $30K-$29K=$1K

Project is under budget.

c. Calculate the schedule performance index (SPI).

• SPI=EV/PV $30K/$25K=1.2 Project is ahead of schedule. d. Calculate the cost performance index (CPI).

• CPI=EV/AC $30K/$29K=1.034 Project is under budget. e. Calculate the estimate to complete (ETC)—first method.

• ETC=(BAC-EV)/CPI($100K-$30K)/1.034=$67.67K f. Calculate the estimate to complete (ETC)—second method.

• ETC= BAC – EV = $70K g. Calculate the estimate at completion (EAC).

• EAC=AC+ETC $29K+$67.67K=$96.67K first method - less than original budget.

• EAC+AC+ETC $29K+$70K= $99K second method - less than original budget. h.

Calculate the To-complete performance index (TCPI).

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•

3.

A project manager has just learned that the schedule performance index (SPI) for his project is 85 percent. The calculation of the cost performance index (CPI) is 107 percent. How would you describe this project both in terms of budget and schedule?

•

4.

Answers vary. Look to ensure it seems complete.

Create a check sheet to gather data regarding a step in the process flow chart you constructed in Exercise 4 above.

•

6.

Since the SPI is under 100%, the project is behind schedule. Only 85% of the work that should have been completed actually has been done. The project is under budget since the calculation is over 100%.

Document the flow of a project work process. Be sure to identify the starting and ending points.

•

5.

(BAC – EV) / (BAC – AC) = (100k-30k)/ (100k-29k) = .986 They can work at a very slightly less productive pace than originally planned for the rest of the project and still finish on time and budget.

Answers vary. Look to see that the data being collected makes sense given the step they claim to be collecting data for. Make sure you understand how they can use the data.

For a cost savings project, you have captured data that show the following costs: delays between operations = $900; broken/missing tools = $1200; water losses = $3,700; poor seals = $1,500; other = $2,000. Construct a Pareto chart. What would your next course of action be?

Costs $4,000 $3,000 $2,000 $1,000 $0

Other

Delays between operations

Broken/missi ng tools

Poor Seals

Water losses

Series1

Causes

• 7.

The next course of action would be to investigate the top issue—water losses.

For a productivity improvement project, you discover the most frequent cause of delays in receiving payment is incorrect invoices. Construct a fishbone diagram to identify possible

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reasons for this problem. What action do you recommend with the results of your fishbone diagram?

•

8.

Answers vary. Look for many possible causes and logical reasons why the ones identified as likely really appear to be likely.

Using the data provided in the text, construct a run chart to visualize how the number of customer complaints is changing over time. Describe what you find in terms of trends, repeating patterns, and/or outliers.

Customer Compaints 40 35 30 25 20 15 10 5 0

Series1

on M

•

9.

e d Tu We

u Th

i Fr

on M

e d Tu We

u Th

i Fr

on M

e d Tu We

u Th

i Fr

There is an upward trend. Tuesday of the final week appears to be an outlier (it is considerably below others near it). There does not appear to be a strong repeating pattern.

Using the data in the text, construct a schedule in MS Project. Show where the project is ahead and/or behind schedule. Be specific. Which activities did the best? Which had the most problems?

Below are the screenshots from MS Project for both the original schedule and the updated schedule.

•

Original schedule:

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Source: Microsoft product screen shot reprinted with permission from Microsoft Corporation.

•

Updated schedule:

2 Source: Microsoft product screen shot reprinted with permission from Microsoft Corporation.

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© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

10. Find a company (or other organization) that has a reputation for excellence in some aspect of project work. Benchmark their methods and determine how you can use the results to help your team improve.

•

Answers vary. Look for practical and specific ideas.

11. Create a process improvement plan using the DMAIC model in Exhibit 4.9 to improve a project work process either for your own project or for another one.

•

Answers vary. Look for realism.

SUBURBAN HOMES CONSTRUCTION PROJECT Students are expected to develop templates and formats for various important functions of the project execution, which are communication plan, change management plan, risk response plan, and quality assurance plan. However, this exercise should be viewed differently if your students are undergraduate or graduate level.

If students are at undergraduate level, we cannot expect them to understand the intricacies of these deliverables. We can expect them to follow guidelines provided in the chapter and develop these templates. However, students may be asked to explain their rationale in including or excluding items in each template. Graduate students are expected have a better understanding of these concepts as they are assumed to have work experience and understand these issues better. Also, it is also acceptable if you do not assign this case study to students at undergraduate level.

For both the groups of students, it is important to justify their selection of quality assurance tools, why they were chosen, how they will be used, and what will be the expected outcome. Communication plan is similar and level of difficulty in developing a communication is not high.

Change management plan requires a well-defined approach; a step-wise approach to decision making, exceptions to rule (change does not impact project goals or change impact is very low in terms of cost), decision making authority, and the responsible party for including the accepted changes to the project baseline must be clearly identified and

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defined.

SEMESTER PROJECT For your example project, complete the following at a minimum: 1.

Document the change requests and their disposition (if you have had any changes proposed to your project).

•

2.

Identify any changes to your risk register with new changes added and/or old ones removed.

•

3.

Very few teams that plan projects for nonprofit organizations will have this opportunity.

Create one key deliverable for your project. This should be one deliverable that your sponsor asked your team to create when you wrote the charter. Gather information regarding your process of creating the deliverable.

•

7.

This could be similar to the answer in Problem 14.9.

If you are tracking cost on your project, show the most current status of the 10 earned value management terms.

•

6.

Look for specific knowledge from the tool that will help make better project decisions.

Show your progress updates on MS Project.

•

5.

This can be composed of previously identified risk events that actually happened and what the team did about each and new risks that happened that were not predicted.

Show any quality control tools you have used and explain how you interpret and act upon the results from them.

•

4.

Look for at least one change request on most of the projects. Look for the expected impact and make sure their plans are updated to reflect the change.

One key thing to consider with this is how satisfied the customer is with the deliverable.

You might want to have a brief phone call with that person to understand their feelings.

Describe tradeoff issues on your project. These can include tradeoffs between the needs of your sponsor’s organization, the project, and your project team. The tradeoffs can also be within the project objectives and constraints of scope, quality, time, cost, other resources, and stakeholder satisfaction.

•

Look for realism and lesson learned.

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8.

Show the information you have collected using the information retrieval and distribution system you set up (introduced in Chapter 6).

•

Compare this to the communication plan. If it is different, ask why.

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CHAPTER 15 Finishing the Project and Realizing the Benefits LEARNING OBJECTIVES This chapter deals with all of the processes and issues involved in finishing a project either on time or prematurely. After completing this chapter, each student should be able to perform the following: Core Objectives: • Describe how to determine when a project should be terminated early and the process for terminating a project in normal completion time.

• Describe the importance of the project closing activities and how to perform them.

• Create and present a transition plan for the project, including a plan for ongoing support and sharing lessons learned.

• Capture and share project lessons learned.

Behavioral Objectives: • Secure customer feedback and acceptance of the project.

• Assist senior management in managing talent and managing resources for upcoming projects.

Technical Objectives: • Close your projects administratively using MS Project.

TEACHING STRATEGIES •

• •

•

• • •

This is a short, concluding chapter that can be covered quickly, but should be covered.

This can be used to teach students that it is important to end projects well. We also remind them that on many projects, some people leave before the project concludes for other opportunities, so it is often a challenge to finish well.

One important point is that projects can either be terminated before their planned completion or upon completion.

Three main things to consider when closing a project are transitioning the project deliverables successfully to the users, knowledge management, and administrative closure—generally with a closeout report.

Knowledge management includes securing feedback from all stakeholders, documenting lessons learned, and determining how to best share the learning so other projects can benefit. One weakness many organizations have is they do not effectively share lessons.

This chapter has several templates. One way to have a breakout session is to ask the students to create one of the forms specifically for their project.

Another breakout is for students to determine some lessons learned and share them with the class.

Celebration is very useful. Students will enjoy hearing that in addition to being fun, it serves the purposes of motivating people to finish the current project and to consider future projects.

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•

Remind the students that for them to be successful, they need to consider future projects, not just the one they are currently performing. To that end, providing ongoing support helps clients to successfully use the results delivered to them. The satisfied and capable clients then become powerful selling agents for our futures projects.

LECTURE AND WORKSHOP OUTLINE Whether a project is terminated—whether early or after successfully accomplishing its goals—there are several things to consider in wrapping things up.

15.1 Validate Scope This is the process of formalizing acceptance of the completed project deliverables. Validating scope can be accomplished by comparing promises made in the charter, WBS, and schedule to what was actually delivered. Project managers need to obtain approval from their customers that the project is complete to their satisfaction. This is the transition from executing to closing the project.

Terminate projects early Projects terminated before successful conclusion are stopped by mutual agreement, for default, or for convenience of the customer.

Mutual Agreement When both parties agree to stop a negotiated settlement takes place.

Terminations for default This is when cost, schedule, or performance is not satisfactory or the customer has lost confidence that the contractor can deliver.

Terminations for convenience of buyer This is for the buyer’s convenience – often due to changing conditions. It often requires a payment to the contractor.

15.2 Close Project The remainder of the chapter deals with issues included in successfully finishing a project.

Write transition plan Project teams need to remember the reason for their project is that someone (a customer or user) wishes to use the resulting project deliverables to accomplish their desires. The transition plan includes whatever actions are needed to help the customer be successful using the project deliverables.

Knowledge management This helps the parent organization improve. It pertains to the fourth area of the balanced scorecard – growth and innovation.

Capture lessons learned Identifying what worked well and what worked poorly helps future projects.

Disseminate and use lessons Learned This is the key to knowledge management. Lessons that are captured but not used are of little value. Finding administratively easy ways to “close the loop” helps an organization improve rapidly.

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Create the closeout report This formal report is a summary of the project’s original justification, ultimate status, and lessons learned.

15.3 Post-Project Activities Reassign workers Dealing promptly, openly, and ethically with workers will enable them to prosper on their next assignment and make it easier to recruit for the next project.

Celebrate success and reward participants Celebrations energize and reward workers and provide a transition from the project.

Provide ongoing support The ultimate goal of a project is to provide results to capable customers so they will be successful and tell others how good you are. This frequently requires support after the project is complete.

Ensure project benefits are realized This may include following up with customers weeks or months after the project to ensure the deliverables are serving their purpose and the customers are successful.

15.4 Using MS Project for Project Closure Creating Project Progress Reports Create a customizable canned report Sharing reports—can be printed or saved as a PDF Export report to MS Excel Archiving project work

CHAPTER REVIEW QUESTIONS – SUGGESTED ANSWERS 1.

When does a project move into the closing stage? (objective #1, p.4500) • When stakeholders formally accept the project deliverables

2.

What is validate scope? (objective #5, p.500) •

The process of formalizing acceptance of the completed project deliverables

3.

What is the purpose of a “punch list”? (objective #3, pp.500-501) • A list that contains all remaining items that need to be completed on the project

4.

What should a project manager refer back to in order to make sure that all planned work has, in fact, been completed? (objective #1, p.501) • Charter, scope statement, WBS, schedule, communication plans

5.

Under what conditions can a project be terminated early? (objective #1, pp.501-502) • Mutual agreement between the contractor and buyer, because one of the parties has defaulted (for cause), or for convenience of the buyer.

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6.

If both parties agree to stop the project before its planned completion but cannot reach an agreement via direct negotiation, what may be done? (objective #1, p.503) • Legal action or alternative dispute resolution

7.

Terminations for default often result from a problem with the project’s _________________, ________________, or _________________. (objective #1, p.501) • Cost, schedule, performance

8.

When might a contract clause be invoked? (objective #1, pp.501-502) • If a customer decides to terminate a project early for convenience

9.

During project closing, customers are asked both to accept the project deliverables and to ____________________. (objective #5, p.503) • Provide feedback

10. What should be done with any activities that remain incomplete at the time of project closure? (objective #2, p.503) • They should be itemized, and responsibility for each should be clearly identified 11. What is the first step in capturing lessons learned at the end of a project? (objective #4, pp.504-505) • For the project manager to send an email asking the participants to identify major project issues 12.

How is a project transition plan similar to an instruction manual? (objective #3, p.503) • It describes to the customer how to use the project deliverables

13. What does a typical closeout report include? (objective #1, p.508) • Summary status of the project, lessons learned, and a review of the project’s original justification 14. How can Microsoft Project be useful during the closing stage of a project? (objective #7, pp.511-514) • It can complete and archive the schedule and capture lessons learned specific to the scheduling process

DISCUSSION QUESTIONS – SUGGESTED ANSWERS 1.

Give two examples of why a project might be terminated early for cause and two examples of why a project might be terminated early for convenience. (objective #1, Creating, p.501) •

Answers vary. For example, early terminations due to cause typically happen because of problems with the project’s cost or the project’s schedule. Early termination due to convenience can happen because the buyer is facing different priorities within his organization. A convenience termination might also result from the needing the resources for another more pressing issue.

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2.

How can a project manager help to prevent a project from being terminated early? (objective #1, Analyzing, p. 503) •

There are two possible methods that a project manager can use. First, if the project manager has been successful in maintaining stakeholder relationships, he could look for another of the project’s stakeholders to found the remaining work of the project.

Second, the project manager can look within his own organization to find funds to complete the project.

3.

If early termination of a project seems likely, what two avenues can a project manager explore to increase the likelihood of being able to continue the project? (objective #1, Remembering, p. 503) • Find other stakeholders to help with funding and/or look internally to find ways of continuing the project but at a lower cost.

4.

A project manager is in the finishing stage of her project. It is apparent that one of the project’s deliverables will not be completed before the project is wrapped up. What options does the project manager have for this uncompleted deliverable? (objectives #1 &5, Applying, p.503) •

5.

Provide an example of how poor escalation of a project problem can create additional problems. (objective #1, Applying, p. 501) •

6.

Examples will vary. Different levels of problems need to be passed to and handled by various members of the project. Deciding who can handle what problems and when problems should be sent upward in the chain of command can be difficult. If a project worker escalates a problem too quickly, they look like they are weak and unable to make decisions. However, if a project member takes too long to send the problem to upper management and the problem worsens, it says to others that they have poor judgment.

How does celebrating the completion of a project benefit the project manager? (objective #6, Analyzing, pp.509-510) •

7.

There are three options the project manager can use. First, she could integrate the remaining uncompleted deliverable into another project. Second, the uncompleted deliverable can be stopped. Third, the uncompleted deliverable can become a new small project.

By celebrating the completion of the project, the project manager can persuade teammates to complete the few remaining administrative components of the project.

Also, by recognizing the efforts of his team, a project manager can gain a good reputation. Others may be more willing to work with him and past teammates might be more willing to work together again if they know that their efforts are appreciated and rewarded.

Why is it important to go through the process of closing even for projects that are terminated early? (objective #2, Understanding, p.503)

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•

Many of the same activities are needed—sometimes even more so—when a project is terminated early. These include capturing and disseminating lessons learned, closing contracts, reassigning workers, etc.

8.

Why is it important as a project manager to help your team members secure follow-up work toward the end of your project? (objective #6, Applying, p.509) • In addition to being ethical, this practice makes it much more likely that project team members will want to work for you again in the future (thus making recruiting a project team much easier!)

9.

Imagine you are creating a lessons learned database for a recent project you have completed. What would you list as your top issues? Your top successes? (objective #4, Creating, pp.504-507) • Answers will vary.

10. The sponsor of a large multi-phased project you are managing suddenly decides to terminate the project early. How do you respond? How and when do you notify your team members? (1, Applying, pp.501-503) • Answers will vary; among other things, team members should be told honestly and quickly.

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PMBOK ® Guide Questions 1) The process of meeting with customers and / or key stakeholders to formalize acceptance of completed project deliverables is called __________. a) b) c) d)

Validate scope Control scope Close procurements Manage stakeholders

Answer: a Page 500 in textbook Page 131 PMBOK 6th Edition 2) During which project management process would a company auditor verify that all contracts have been completed and all required purchasing standards and methodologies have been followed for the project? a) b) c) d)

Validate scope Close contracts Close project or phase Conduct procurements

Answer: c Page 503 in textbook Page 121 PMBOK 6th Edition 3) Terminations for _____ often result from a problem with the project’s cost, schedule or performance. a) b) c) d)

Convenience Completion Default Confidence

Answer: c Page 501 in textbook Page 128 PMBOK 6th Edition 4) At the end of the project or phase, lessons learned are finalized and transferred to the company knowledge base for future use. These lessons learned can include all of the following EXCEPT: a) b) c) d)

Project issues log Individual performance reviews Project risk register Which techniques did and did not work well

Answer: b Pages 504-508 in textbook Page 104 PMBOK, 6th Edition

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5) If the buyer decides to terminate a project early, his or her responsibilities to the contractor are laid out in the project’s _________. a) b) c) d)

Work breakdown structure (WBS) Communications plan Scope statement Procurement agreement

Answer: d Pages 501-503 in textbook Pages 488-489 PMBOK 6th Edition 6) During the “close project or phase” process, the team and project manager may wish to review the _______. a) b) c) d)

Project charter WBS Risk register All of the above

Answer: d Page 503 in textbook Pages 123 PMBOK 6th Edition 7) What key input is required before a project or project phase can move to the closing stage? a) b) c) d)

Accepted deliverables Change requests Updated Issues Log Work Performance Reviews

Answer: a Page 503 in textbook Page 121 PMBOK 6th Edition 8) The new management team at a large company has reevaluated ongoing initiatives and has identified new goals and objectives for the year. They direct that all contracts in progress be terminated immediately. This is an example of ________. a) b) c) d)

Management by objectives Termination for cause Termination for convenience Termination by consensus

Answer: c Pages 501-502 in textbook Page 5 PMBOK, 6th Edition

9) What serves as an instruction manual in order to help the customer use the project deliverables as intended?

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a) b) c) d)

lessons-learned database transition plan executed work contract issues log

Answer: b Page 503 in textbook Page 127 PMBOK, 6th Edition

10) Contracts can be terminated early for any of the following reasons except: a) b) c) d)

default mutual agreement convenience of the buyer convenience of the seller

Answer: d Pages 501-503 in textbook Page 128 PMBOK 6th Edition 11) During administrative closure of the project or phase, the organizational process assets that are updated include all of the following EXCEPT: a) b) c) d)

Project files Formal documentation of project / phase completion Historical information and lessons learned Project charter

Answer d Page 503 in textbook Page 123 PMBOK 6th Edition

EXERCISE – SOLUTIONS 1.

Utilizing the ideas in Exhibits 15.1 and 15.3, create a project closeout checklist for a project of one of the following types: • • • •

Information systems Research and development Quality improvement Organizational change

•

Answers vary. Look for a list of tasks to be completed with a person assigned to each and both target and completion dates assigned.

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© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Existing practices of the closeout process are: take stock of entire project, tie up loose ends, write final report, ensure that documentation is in good order, account for and reassign resources, meet with customers to ensure their needs are addressed, and prepare for handover with warranty documentation.

These existing practices are familiar with some of the graduate students and one cannot expect undergraduate students to understand these processes. It is also acceptable if you do not assign this case study to students at undergraduate level.

Graduate students may be asked to explore existing practices in their organizations and compare them with the contents of the chapter as a first step in this case study. Then, based on their understanding of the concepts presented in the chapter, students should refine and redesign these processes to:

• • • • •

Improve morale and a sense of achievement for the project team Enhance customer is satisfaction Close the contract properly to avoid future legal implications Provide Suburban Homes with detailed project cost Capture lesson learned for easy retrieval and use to improve performance of future projects

CASA DE PAZ DEVELOPMENT PROJECT See following examples/suggestions: The transition plan should help the people who are managing Casa de Paz. It should include suggestions on how to effectively use the building and services.

There could be a large number of lessons learned. These may include topics such as establishing and prioritizing the work, deeply understanding the stakeholders and how useful it is to have them involved in a meaningful manner, working with government and neighborhood officials, empowering both the team who are performing the project and the Latina women and families who are the residents using the building and services, etc. Look for meaningful lessons and feel free to engage the students in conversation about how they could use these lessons on other projects and how they can share them with various stakeholders from this project.

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SEMESTER PROJECT For your example project, complete the following: 1.

Capture customer feedback concerning your project using the questions from Exhibit 15.2 or other questions of your choice.

•

2.

Answers vary. Look for the client to provide feedback both on the project process and results. When the local PMI sends a panel of PMPs to judge student projects at our university, they want the agency sponsor (the client) to speak briefly right after the students present and before Q&A. The PMPs listen for both how the student team was to work with during the semester and how the agency is already or expects to be able to use the results of the project. If the project is only partially completed, they also want to hear how the student team expects to successfully transition the remaining project work to the agency (see 3 below).

Capture lessons learned from your project to date using questions and ideas from Exhibits 15.2, 15.3, and 15.4 or other questions of your choice. Show how you will use these lessons both to improve the remainder of your project and how you will use them for the next project on which you may work.

Answers vary. Recent examples from my classes include: • • • • • • • • • • • •

Implementation should be a cross-functional effort across the organization.

The company should share expertise and knowledge of previous strategies and successes.

Understanding roles and responsibilities facilitates smooth teamwork and timely completion.

Use weekly progress reports to prevent crisis.

Openness to new ideas is critical to develop the best outcomes. With every decision there must be critical analysis to ensure the overall goals and purpose of the project are being met.

Early deadlines set by the team allow additional time to improve our work and obtain approval from the sponsor to produce the best results.

Identification with the purpose and goals of the project and the desire to look beyond the project to the best interest of the sponsor will create more enthusiasm and dedication to the project.

Communication with sponsor: Frequent feedback and updates from the project sponsor is essential for the project’s success.

All parties are responsible for defining and following the project scope to avoid scope creep.

Identify any possible changes as soon as possible.

Review previous milestones for specific lessons.

Aligning team roles to sponsor expectations is critical to ensuring project success.

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• • • • • • • • • • • • • • • •

3.

It is important to keep all project team members well informed of changes and developments in the project.

It is important to inform the group immediately of any developing risk to avoid project failure.

Team members will share strengths and weaknesses to better utilize team capacity.

Maintaining the project timeline requires open lines of communication between all parties and is necessary to meet project goals.

Understanding the project scope and objectives is necessary for the project to be successful.

Frequent feedback from the project sponsor is necessary for the team to meet the sponsor’s needs.

Making sure the team and sponsor our on the same page regarding the timeline of goals and the criteria by which they are measured is vital to the process.

Effective communication within the group regarding our expectations of one another is critical.

Rushing to complete tasks in order to meet the timeline will reduce the quality of work and could compromise the project as a whole.

All documents and deliverables will be shared with the sponsor to ensure accuracy and comprehensive understanding.

Getting a better understanding of the company and the project as a whole, by learning about the history and makeup of the organization will aid in project management.

Sometimes money/capital is not available (especially in nonprofit organizations), and brainstorming for funding can be a vital step in the process.

Communication is key. The more ideas the group has, the better the outcome will be.

Also, sometimes the most peculiar or stretched ideas can be the solution.

Along with communication, setting due dates for each step of the project helps to make sure each task is completed.

Everyone in the group should be encouraged to give their thoughts. The more ideas that are given, the better chance we can better our project.

The group must make sure they know what exactly is being asked of them. Any questions should be brought up to the group sponsor so the groups roles are more clearly defined.

Create a transition plan so that the recipients of your project deliverables will be capable and enthusiastic users. Secure client acceptance of your project.

•

Answers vary. An example follows.

Purpose: This transition plan will enable the Xavier Project Team (XPT) to turn over management of this project to Dawn Rothe (project sponsor, Hamilton County Board of MRDD). This plan will allow the Hamilton County Board of Mental Retardation and Developmental Disabilities (MRDD) to effectively utilize all deliverables provided during the project execution phase. The plan will provide a summary of the scope of the project, tasks completed, tasks remaining to be completed, risks and lessons learned.

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Background MILESTONE

DATE

DATE COMPLETED

Current status: ineffective resource listing Signed charter

9-20-07

9-20-07

Data collection

9-26-07

9-26-07

Present process for “user friendly” system of individuals with Disabilities Network

11-1-07

11-1-07

Testing of aforementioned process

11-15-07

11-15-07

Transition and handoff to MRDD

11-29-07

11-29-07

Future Status: Useable, visible and sustainable resource list

12-6-07

STAKE HOLDER

SUCCESS FACTORS

9-9-07

XPT and Dawn

MRDD accepted, signed and committed to implementation of project.

XPT XPT with Dawn’s assistance gathered Housing Resource information into an excel spreadsheet from various sources.

Dawn Sponsor signoff. The XPT created an integrated updatable intranet website with a process for its future usability, visibility and sustainability.

Dawn and Service facilitators (SF) Service performed Final Facilitators review/QA/usability test and (SF) then signoff.

From XPT XPT submitted recommendation to Dawn with input, participation, and MRDD documentation, training and approval from project sponsor.

SF judges All milestones are complete and future processes in place to meet status organization objectives. reports to Dawn

Individuals with disabilities in Hamilton County need to connect socially with their communities. These individuals and their caregivers did not have a visible, useable and sustainable solution for finding resources (housing, employment, etc.) that are “disability friendly.” The information needed to be collected, centralized and made accessible to everyone in the network to better serve their clients.

Project Scope In conjunction with a team from Hamilton County MRDD, the Xavier Project Team (XPT) created a strategic duplicative model to institute a visible, useable and sustainable listing of community housing resources for individuals with disabilities in the Central region (7 zip codes, 45202, 45217, 45220, 45223, 45225, 45229, 45232) of Hamilton County. XPT designed a networking website to create inclusive opportunities for individuals with disabilities.

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Additionally, XPT created a process to expand the website use in both geographical area and in community resource scope.

Milestone Schedule with Acceptance Criteria: Next Steps: Deliverable

Task

Demographic data collection tools

Continue to capture information from surveys

Asp.Net intranet web application

Provide source code and detail steps to deploy the website

Admin Guide: “How to use the webpage”

Step by step guide

Admin Guide: How to extend the web Page to search for <something other than housing> data

Step by step guide

Resources

Volunteer IT person: • Microsoft Access certified • Able to design queries to pull valid information for statistical analysis Volunteer IT person: • Basic knowledge of Asp.Net application • Can advise on all aspects of website maintenance Volunteer IT person: • Basic knowledge of web design and uploading Volunteer IT person: • Basic knowledge of web design and uploading

Future Web site design and maintenance o Expand information and content available on site. o Update the software as newer versions become available. o Utilize area nonprofit organizations for volunteer resources. o Add search criteria and functionality. o Add new features such as enabling content authoring on the website.

Future demographic data collection and maintenance o Collect demographic data from a larger area of facilitators and other industries. We focused on housing but data from other areas need to be gathered and input into the Web site o Utilize volunteers to verify accuracy of listed information on a regular basis (contact information current). o Use information to demonstrate need of services to funding institutions like United Way, Local/City/State/Federal Governments, etc. o Hone database capabilities to use information more effectively

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Risks Risk

Contingency Plan

Responsibility

MRDD’s IT infrastructure and IT resources to continue Website functionality development Web site is not utilized to utmost functionality

This is an internal issue and they will correct it as it develops. They can greatly benefit from additional training.

Dawn and the IT team need to expand what we have started for optimum user acceptance, sustainability and usefulness.

The Web site is on an intranet and cannot be published or shared with untrustworthy individuals.

Dawn needs to maintain an understanding of the need for a centralized information repository.

MRDD IT

Security of Web site information SF will return to their decentralized methods of information

MRDD IT

MRDD

Dawn Rothe, MRDD

Lessons learned: o Maintaining the project timeline requires open lines of communication between all parties and is necessary to meet project goals. o Understanding the project scope and objectives is necessary for the project to be successful. o Frequent feedback from the project sponsor and MRDD is necessary for the team to meet the sponsor’s needs. o Communicating with the project stakeholders is crucial and essential in fulfilling project goals. Deadlines help promote a timely completion of action items. o In order to successfully complete the project, all group members must keep open and impeccable lines of communication. Members should also be motivated and project a positive attitude. o The project scope overview and objectives must be clearly defined and agreed upon by all members including the sponsor. The group must be aware of where it is going, and what it will avoid by reviewing milestones and risk/assumptions periodically. o All team members should discuss his or her opinions regarding the project so that all ideas are considered, and if necessary, implemented.

Success measurement This project will be considered successful if the Web site is increased in functionality, utilized and kept up to date (sustained) for a period of three years.

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