CCM Estimation Process Quiz

Optimizing the Plan

• Critical Path Method (CPM) focuses on duration, not risk or difficulty
• Activities outside the critical path can still delay the overall project if the delay is significant.
• Delays in non-critical activities can impact critical path activities and project timelines.
• Inputs for planning include activities, constraints, effort, team, and delivery dates.

Resource Allocation and Leveling

• Resource allocation assigns resources to tasks based on availability and needs.
• Over-allocation (exceeding maximum availability) is a constraint that must be managed.
• Resource leveling adjusts assignments to avoid over-allocation.
• If no solution is found, testing different hypotheses (e.g., increasing team size or relaxing constraints) can help.

Resource Allocation Examples

• Resource allocation examples show resource assignment percentages and hours per week.
• R1 is allocated 50% of time to Task 1 and 50% to Task 3; R2 is fully allocated to Task 2 and 50% to Task 3.
• R1 works 20 hours each week, while R2 works 40 hours per week.

Resource Usage

• Manpower usage refers to the time each resource is needed.
• Equipment usage counts the items of equipment needed.
• Material usage tracks the quantity of materials required.

How is Resource Usage Computed?

• Resource usage sums work allocated for each period, essentially taking a vertical total over the work assignments.

• Overallocation happens when resource use exceeds maximum capability.

Example

• R1 is overallocated in week 2 (T+1w) and week 3 (T+2w).

More Complete Example

• The provided example visually highlights constraints and shows two resources assigned to Task 2 to accommodate those constraints.

Example

• Task 1 and Task 3 require the same resource resulting in overallocation

Example

• Solution 1 involves resource leveling with soft constraints to prevent overallocation.
• Solution 2 discusses several compression techniques.

Goals of the Unit

• Learn techniques to shorten project plans.
• Understand risks associated with shortening project plans.

Change Control and Configuration Management

• This relates to quality, risk and resource management during the project execution.

Preliminary Consideration

• The initial plan often reveals the project won't meet the deadline given assumptions.
• If the plan is accurate, options include not starting the project or shortening it.
• Revising the estimations isn't a recommended approach.

Making your plan feasible

• Change project hypotheses (reduce scope, quality, outsource).
• Adjust the project logic; e.g., increase resources, change the process.
• Break constraints (e.g., fast tracking).
• Manage probability of delivering on time (e.g., critical chain management).

Project Crashing

• Project crashing shortens the project timeline by accelerating critical path activities within the project.
• It focuses on reducing duration while minimizing cost impact.
• More labor or resources are applied to critical path activities, which may increase the project cost.
• The decision to use crashing is based on a tradeoff between time and cost.

Project Crashing Example

• Project crashing examples illustrate cost/benefit analysis between increased costs and faster project completion timeline in scenarios

Project Crashing (Simple) Example

• Late projects incur delay costs.
• Activities (e.g., task 2 and 3) can be shortened by adding resources; the costs are given as example figures

Project Crashing (Simple) Example

• The best way to proceed depends on whether shortening project and increasing resulting costs are a preferred solution

Fast Tracking

• Overlapping activities in a project (that were sequential / finish to start) can shorten the project timeline.
• This method leverages the fact that some project deliverables/outcomes are incrementally produced/refined during the activity execution.

Fast Tracking, Issues and Rules

• Fast tracking carries risks, including rework. Evaluating dependencies' effects, such as intermediate outputs and stability, is critical.
• Rework in a subsequent activity might negatively impact the overall plan, and this is a risk that must be assessed

Fast Tracking, Pros and Cons

• Pros include no extra costs and shortened project time, while cons include increased risk due to more sensitive networks and greater need for communication.

Fast Tracking vs Resource Crashing

• Comparison of fast tracking and resource crashing is presented visually.

Critical Chain Management

• Critical Chain Management assumes that estimations are average guesses and thus projects are likely completed later than expected
• Attempts to manage contingencies via padding estimates to be a pessimistic / more likely completion times

CCM: Item 1 (Estimates)

• In CCM, project estimations focus on probable duration estimates rather than worst-case scenarios

CCM: Item 2 (Sum of Variances)

• Using chains for activities reduces the variance in overall time estimations compared to summing each individual activity uncertainty. Variance calculation of projects (consist of multiple activities) is less than the sum of individual activities variance.

CCM Basic Idea

• CCM emphasizes considering chains of activities, and the explicit allocation of contingency buffers to handle uncertainty in estimations.
• Statistical variation during project execution might cause delays, but having buffer time within the plan helps to manage that uncertainty

CCM: Managing Chains

• Identifying how chains of activities will be prioritized and how to adjust for contingency is crucial in project estimation models using CCM

Costing and Budgeting (from cost to value)

• Budgeting entails assessing financial needs and recording relevant expenditure and income data.

Goals of the Unit (Costing and Budgeting)

Understand software development costs. Determine whether a project stays on budget.

Some Definitions

• Costing defines the bare cost of the project (excluding profit)
• Budgeting/cost control addresses the project's financial needs and the recording of expenditure and income.
• Pricing estimates how much a product or project will cost
• LCC (Life Cycle Costs) examines the total cost anticipated for the entire project lifecycle

(Software) Project Costing

Project Cost Management

• Defines policies and procedures for cost planning, management, tracking and control. Summarizes associated processes.

Project Cost Management (Process)

• Highlighting all of the costing management input parameters, along with the Plan Cost Management process itself, as well as the output.

Project Cost Management (Process)

• Defines the various input components involved in the management process.

Project Cost Management

• Shows detailed definition of components that influence costing, including units of measure, cost levels, accounting relationships, acceptable thresholds for variance from budget, earned value, and reporting formats.

Estimate Costs

• This process uses inputs like a cost management plan and a project schedule to estimate the resources needed to complete the project.

Project Cost Management

• Defines the budget as the aggregate of the individual activity costs. Defines various inputs (Cost management plan, Scope baseline, Activity Cost Estimates, Basis of Estimates, Project Schedule, Resource calendars etc.) for the determination of the budget.

Project Costing (Software)

• Project cost is defined as total expenditures
• Cost element structure comprises direct and indirect costs

Direct Costs

• Direct costs include salaries of project personnel, materials, supplies, hardware, and software; travel, meetings and miscellaneous expenses.

Indirect Costs

• Indirect costs consist of general overheads, such as office space rent and utilities, materials, administrative staff, and project overhead expenses specific to the project.

Indirect Costs Computation

• Determining indirect costs may involve analysis of previous expenditure, projection of future costs, estimation of work output, and rate of overhead determination

Personnel Costs (Gross vs. Net)

• Gross pay excludes deductions, whereas net pay reflects salary after these deductions, including taxes, retirement, and other contributions.

Project Cost Formula

• Provides a mathematical and defined formula for calculating project costs

Project Cost

• Project costs can be viewed from several perspectives.

Managing Project Costs

• Project goals include ensuring funds are available for spending and that project expenditure adheres to the budget.
• Key means include defining a baseline/cash flow, expense authorization, and expenditure tracking.

Project Costs and Project Structure

• Illustrates a visual mapping (WBS, Work Breakdown Structure) of cost elements.

Project Costs and Time

• Depicts a financial status (of project costs and incomes) over various measurement periods (e.g., quarters), demonstrating project performance and financial need status.

Project Costs and Time

• Shows costs (e.g., expenses and incomes) across multiple time quarters (e.g., Q1, Q2). Provides a summary of financial status at points in time

Project Costs and Time (Banana Shape)

• Shows the ideal project cost trend over time graphically. Indicates typical and realistic cost profiles for projects.

Expenditure/Load Profile

• Workload distribution over time, not necessarily uniform, can be front-end loaded or back loaded as well as linear, and project planning may use this information.

Expense Authorization

• Project management/financial management teams usually operate in different structures.
• Authorizations for expenses and payments might be managed by the project managers or via workflow approvals requiring more complex procedures

Expense Authorization (Example)

• Example workflow diagram illustrating the step by step required expense authorization process

End of Period Reporting

• Documentation about project financial status is developed for each accounting period.
• Information includes budgeted expenditure vs. actual expenditure as well as expenditure recording for the project. This data is essential for monitoring budgets, analyzing variances and future predictions as well as reporting processes at the close of each accounting period

The Workflow

• Workflows are presented graphically, showing steps involved in budgeting, spending, and managing expenditures for projects

What information you are interested in

• Key information for managing budgets as well as associated variances and expenditure includes details such as budget, transfers, and actual expenditure amounts.

Test your understanding of the Critical Chain Method (CCM) estimation process. This quiz covers key concepts like resource overallocation, project duration calculations, and the implications of plan execution on project management timelines. Explore the important strategies for effective resource management in project planning.