KULeuven Project Management Part 2 v4.0 PDF

Project Management Dries Vandevyvere (Proj3ctS BV) KU Leuven © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Course Content Part 1: Intro, stakeholders, change & scope management What is a project? How does project management work? Why does it matter?...

Project Management Dries Vandevyvere (Proj3ctS BV) KU Leuven © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Course Content Part 1: Intro, stakeholders, change & scope management What is a project? How does project management work? Why does it matter? Stakeholder management + change + communication + team motivation How to define and manage the scope of the project Part 2: Estimating, scheduling & resources Reliable project estimates Project Scheduling done right Optimize resource scheduling Part 3: Risks, progress & Agile Project Risk Management Tracking progress and keeping your project on track + Earned value management Project management in an Agile world Hybrid project management: the best of both worlds © Proj3ctS - Dries Vandevyvere - 2024 Agenda - Covered in these slides Reliable project estimates Introduction & the basics The estimation process Diving into the numbers: estimation techniques The little secrets: tips, tricks & common pitfalls Project scheduling done right Introduction & Tools Let’s schedule Hints for the right schedule Optimize resource allocation Introduction & the basics Adjust resources allocation: Resource leveling & smoothing Additional resource allocation techniques Tips & tricks © Proj3ctS - Dries Vandevyvere - 2024 Agenda - Covered in these slides Reliable project estimates Introduction & the basics The estimation process Diving into the numbers: estimation techniques The little secrets: tips, tricks & common pitfalls Project scheduling done right Introduction & Tools Let’s schedule Hints for the right schedule Optimize resource allocation Introduction & the basics Adjust resources allocation: Resource leveling & smoothing Additional resource allocation techniques Tips & tricks © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Quick recap Work breakdown structure (WBS) PMI definition: “A hierarchical decomposition of the total scope of work to be carried out by the project team to accomplish the project objectives and create the required deliverables” The WBS provides the relationships among all the components of the project and the project deliverables Is all about “deliverables” Work package: PMI definition: “The work defined at the lowest level of the WBS for which cost and duration can be estimated and managed.” In other words: the smallest possible or smallest desirable “deliverable” © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Quick recap WBS dictionary PMI definition: “A document that provides detailed deliverable, activity, and scheduling information about each component in the work breakdown structure” This is a document that supports the WBS. Work schedule or project schedule Project schedule PMI definition: “An output of a schedule model that presents linked activities with planned dates, durations, milestones, and resources. Goes down to the level of “activities” EXAM TIP: difference between “deliverables” and “activities” © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Key challenges in estimation “Project managers aren’t fortune-tellers” © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Why do estimates matter? Project failure could be late completion budget overruns or not achieving business benefits Standish group - Chaos report - IT projects The estimate is the baseline of the project (& your) success ! © Proj3ctS - Dries Vandevyvere - 2024 Introduction - The project Project “celebration party”: a simple example Next week you will be hosting a dinner party for a successful project As a project manager, you see this as a project But you have never hosted a party before Luckily, your significant other has been a host on many occasions Where to start ? © Proj3ctS - Dries Vandevyvere - 2024 Basics - definition Estimating: “the science of uncertainty” Estimate = A quantitative assessment of the likely amount or outcome Usually preceded by a modifier (i.e. rough order-of-magnitude, preliminary, conceptual, feasibility, definitive, final) Should always include some indication of accuracy (e.g. +- x percent) The estimating process is there to ensure that we have planned the project with the correct scope, cost, earnings, resources & deadlines © Proj3ctS - Dries Vandevyvere - 2024 Basics - Typical levels of accuracy Rough Order of Magnitude estimate (aka “ball-park estimate”) -50% to +50% (PMBOK® 4th edition) -25% to +75% (PMBOK® 5th edition) Preliminary estimate = -15% to + 50% Budget estimate = -10% to +25% Definitive estimate = -5% to +10% Final estimate = 0% © Proj3ctS - Dries Vandevyvere - 2024 Basics - Back to the project “celebration party” What does estimation have to do with your party ? What do you estimate ? © Proj3ctS - Dries Vandevyvere - 2024 Basics - Estimation What do we estimate Activity durations Resources: Human resources (labor) / Material / Supplies / Equipment Cost / effort Definition of “Estimate” according to PMBOK® Activity Durations: the process of estimating the number of work periods needed to complete individual activities with estimated resources. The key benefit of this process is that it provides the amount of time each activity will take to complete. Costs: the process of developing an approximation of the cost of resources needed to complete project work. The key benefit of this process is that it determines the monetary resources required for the project. Activity Resources: the process of estimating team resources and the type and quantities of materials, equipment, and supplies necessary to perform project work. The key benefit of this process is that it identifies the type, quantity, and characteristics of resources required to complete the project. © Proj3ctS - Dries Vandevyvere - 2024 Basics - Understand the purpose When providing an estimate, there is a purpose: to provide information to quantify uncertainty so that a decision can be made Decision-making is usually not done by the person who provides the estimate The person providing the estimate usually isn’t the person who needs the estimate for a decision To be relevant and useful (for the decision maker), the purpose needs to be understood. This purpose serves as the foundation and necessary context of each estimation. Enables to determine the method required to produce the appropriate estimation In turn, the decision made is impacted by the quality of the estimate Without understanding the purpose, it is easy to become distracted by the noise of overwhelming information & uncertainty, making it difficult to select the estimation method required A common misconception between methods and techniques. Many different techniques (e.g. “tools” or technical skills applied to achieve a desired result) A method is a procedure (including a logical, systematic or established plan): Depending on the project and level of risk associated, employ different methods for the estimation. © Proj3ctS - Dries Vandevyvere - 2024 Basics - The cone of uncertainty Evolution of the amount of (best case) uncertainty during a project At the beginning comparatively little is known and so estimates are subject to large uncertainty. As more research and development is done, more information is learned, and the uncertainty tends to decrease Narrowed both by research and by decisions that remove the sources of variability from the project. The project team and PM should actively and continuously work to reduce the uncertainty level. This reaches 0% when all residual risk has been terminated or transferred End of the project Transfer responsibilities to a maintenance group © Proj3ctS - Dries Vandevyvere - 2024 Estimation process Rumor in companies “ … estimation is a failed art form that seldom produces useful predictions …” “ … a desire to find better tools in order to produce improved results …” “ … facts and spreadsheets always trump intuition and perspectives …” No ! “Estimation is not an event, it's a process!” It is not about the art or the tools … it is about the process and the data Three key inputs: understanding of the project scope the risks associated with that scope the quality of the data Improve estimation means organizational and/or process improvement © Proj3ctS - Dries Vandevyvere - 2024 Process overview Improve Prepare to Create Manage estimating estimate estimate estimates process Prepare to Estimate stage: Creation of a project estimating approach. Create Estimates stage: Take the planning documents and other inputs and use estimating techniques to create the project estimate. Manage Estimates stage: Covers the ongoing maintenance and management of all estimates Improve Estimating Process stage: Take actual data and lessons learned and incorporate them back into the estimating processes and tools. © Proj3ctS - Dries Vandevyvere - 2024 Process overview Prepare to Create estimate Manage estimates Improve estimate Activity resources, Managing of the estimating Creation of the activity durations, and estimates occurs after process estimating approach: costs are estimated. the original estimate is completed and has As projects progress, identification of There are several lessons learned are activities, determining models and been validated members. applied to the the techniques to be techniques for estimating lifecycle, used for estimating, determining the After the project work including calibrating identifying the estimates has started: the models based on estimating team, estimation includes actual values, and preparing estimating the activities used to maintaining checklists inputs, and manage the estimate, of components to documenting any including changing include in future constraints to the controls, calibrating estimates. estimates the full cost, and comparing actual Improvements can be costs to the baseline applied at both estimate. project and organization levels © Proj3ctS - Dries Vandevyvere - 2024 Start of the estimating process - Prepare Focus on the design of the project estimating strategy We are not estimating (yet) but laying the groundwork to create a reliable estimate Identify the estimating resources required & the tools needed to estimate satisfactorily Decompose project into its key characteristics or into subsets of deliverables: WBS, Requirements, Risks, … Identify comparable historical data sets or parametric models Use the best available model to produce an estimated range of likely results Identify (internal or external) influences TIP: Don’t dive into estimating without paying proper attention to this planning phase © Proj3ctS - Dries Vandevyvere - 2024 Prepare to estimate To do’s in this phase: Identification of activities Determining the techniques to be used for estimating Identifying the estimating team Preparing estimating inputs Documenting any constraints to the estimates Process for “Estimate Cost” (PMBOK) © Proj3ctS - Dries Vandevyvere - 2024 “Celebration party” - Prepare to estimate Identification of activities: The WBS Aperitif + 3 courses + coffee + drinks afterwards Determining the techniques to be used for estimating => see later Identifying the estimating team The PM (= you) + Your significant other (= the expert) + Your assistant (= part of the organizing team) Preparing estimating inputs Data: 15 attendees already accepted Previous project celebration was over budget The sponsor (who will join) has expressed his preference for a traditional French style cuisine Documenting any constraints to the estimates Budget should stay below 100 € / person People should go home timely & safely afterwards © Proj3ctS - Dries Vandevyvere - 2024 Estimating techniques “if all you have is a hammer, everything looks like a nail” - Abraham Maslow Expand your PM toolbox with a range of estimating techniques © Proj3ctS - Dries Vandevyvere - 2024 Create estimate: Dive into the numbers Process step: “create estimate” How to estimate: Questions to ask What have we learned from the past? What variables drive my estimate? What kind and size of uncertainty do we face? What expertise is available? © Proj3ctS - Dries Vandevyvere - 2024 Diving into the numbers What have we learned from the past? => Analogous estimating What variables drive my estimate? => Parametric estimate What kind and size of uncertainty do we face? => Program evaluation and review techniques (PERT) & Multiple point estimation What expertise is available? => Expert judgement and group decision making techniques © Proj3ctS - Dries Vandevyvere - 2024 Analogous estimating Definition Estimating using historical data from a similar activity or project. Uses parameters from a previous, similar project, such as duration, budget, size, weight, and complexity, as the basis for estimating the same parameter or measure for a future project. Relies on the actual data of previous, similar projects as the basis for estimating the current project. Values and attributes of the projects may include but are not limited to scope, cost, budget, duration, and measures of scale (e.g., size, weight). Comparison of these project values, or attributes, becomes the basis for estimating the same parameter or measurement for the current project. When to use? Gross value estimating approach, sometimes adjusted for known differences in project complexity When there is a limited amount of detailed information about the project Generally, less costly and less time-consuming than other techniques (but less accurate) Most reliable when the previous activities are similar in fact and not just in appearance, The project team members preparing the estimates have the needed expertise Estimates can be applied to a total project or to segments of a project and may be used in conjunction with other estimating methods. © Proj3ctS - Dries Vandevyvere - 2024 “Celebration party” - Analogous estimate How would you apply this technique to estimate the duration? Input from your significant other Number of Event Menu Duration attendees New year party with 6 course meal: Hors d'oeuvres, Soup, Appetizer, Salad, From 18h to 12 family Main Course, Dessert + New year celebration 2:00 AM Mid year BBQ 3 course meal: Appetizer, Main Course (BBQ), Dessert 50 2 hours Team lunch Walking dinner: cold dishes + sandwiches 31 1 hour Catered birthday party 3 Course meal 17 12:00 to 14:45 Previous celebration in 4 Course Meal: Hors d'oeuvres, Appetizer, Main Course, restaurant Dessert 24 3,5 hours What is your estimate ? © Proj3ctS - Dries Vandevyvere - 2024 Parametric estimate Definition An estimating technique in which an algorithm is used to calculate based on historical data and project parameters. Uses a statistical relationship between historical data and other variables to calculate an estimate for activity parameters, such as cost, budget, and duration. For example Durations can be quantitatively determined by multiplying the quantity of work to be performed by the number of labor hours per unit of work: Duration on a design project is estimated by the number of drawings multiplied by the number of labor hours per drawing On a cable installation, the meters of cable multiplied by the number of labor hours per meter. If the assigned resource is capable of installing 25 meters of cable per hour, the duration required to install 1,000 meters is 40 hours (1,000 meters divided by 25 meters per hour). An activity needs 4,000 hours of coding and it needs to finish it in 1 year, it will require two people to code (each doing 2,000 hours a year). When to use? Can produce higher levels of accuracy depending on the sophistication and underlying data built into the model Can be applied to a total project or to segments of a project, in conjunction with other estimating methods © Proj3ctS - Dries Vandevyvere - 2024 “Celebration party” - Parametric estimate How would you apply this technique to estimate the cost? Info 15 attendees have confirmed You will foresee 1 bottle of Cava per 3 persons 20% of the attendees choose the non-alcoholic alternative A bottle of Cava is 7 € / A carton of fruit-juice 2 € What is the total cost ? # people # bottles price / bottle cost alcoholic 12 4 €7 € 28 non-alcoholic 3 1 €2 €2 TOTAL € 30 © Proj3ctS - Dries Vandevyvere - 2024 Parametric estimate - additional examples In software (development) Based on (story or function) points: 2 small @ 100 € + 5 medium @ 230 € = 1350 € Based on RICEFW’s (Reports, Interface, Conversion, Enhancements, Forms and Workflow): 2 complex interfaces @ 3000 € + 2 simple forms @ 750 € = 8250 € Based on traditional licenses: fixed cost of 5000 € + recurring maintenance of 20 % = 6000 € for year 1 Based on SaaS (Software as a Service) user licenses for 1 year for 3 users: 1 - 5 users @ 13 €/month and 5 - 100 users @ 10 €/month = 3 * 13 * 12 = 468 € In services Based on labor hours: 10 hours (including 2 hours overtime) of 2 juniors @ 30 €/h + 1 full day a senior @ 40 €/h = 980 € Based on number of km for transport: 500 km @ 0,85 €/km = 425 € In civil construction Based on square meters of living surface: 150 m² * 1500 €/m² = 225000 € Applying a luxury factor (1,25) and complexity factor (+10%) = 321750 € Based on running meters: 11 km of motorway @ 4 k€/m = 44 m€ © Proj3ctS - Dries Vandevyvere - 2024 Program evaluation and review technique (PERT) Start observation: “Single point estimates make for poor project decision making” PERT technique developed by the United States Navy in the 1958 commonly used in conjunction with the critical path method statistical tool used in project management Input optimistic time: the minimum possible time required to accomplish an activity (o) or a path (O), assuming everything proceeds better than is normally expected pessimistic time: the maximum possible time required to accomplish an activity (p) or a path (P), assuming everything goes wrong (but excluding major catastrophes). most likely time: the best estimate of the time required to accomplish an activity (m) or a path (M), assuming everything proceeds as normal. Output: Beta distribution expected time: best estimate of the time required to accomplish an activity (te) or a path (TE) tE = (o + 4m + p) / 6 standard deviation: variability of the time to accomplishing an activity (σte) or a path (σTE) σte = (p - o) / 6 © Proj3ctS - Dries Vandevyvere - 2024 Program evaluation and review technique (PERT) Important: If you use this method well Each task has about a 50% chance of finishing on-time (or early), and Each task has about a 50% chance of finishing later than expected In theory, for every task that finishes later than expected, there will be another task that should finish earlier than expected (‘Central Limit Theorem’): Late-finishing tasks offset early-finishing tasks, so the project ought to finish right on-time. Reality: Tasks very rarely finish earlier, but often finish later than expected. Solution: Contingency and more advanced techniques © Proj3ctS - Dries Vandevyvere - 2024 “Celebration party” - Three-Point Estimating How would you apply this technique to estimate the material (food) needed? What are the scenario’s? Optimistic Most likely Pessimistic What about … … a flu epidemic and half of your guest stay home in bed … the attendees misunderstand your invite and bring their significant other... any other “unknown unknowns” © Proj3ctS - Dries Vandevyvere - 2024 Group decision techniques: Delphi “Making sense of the consensus” Widely used and accepted method for gathering data from respondents within their domain of expertise. The technique is designed as a group communication process which aims to achieve a convergence of opinion on a specific real-world issue. Used in various fields of study such as program planning, needs assessment, policy determination, and resource utilization to develop a full range of alternatives, explore or expose underlying assumptions, as well as correlate judgments on a topic spanning a wide range of disciplines. Well suited as a method for consensus-building by using a series of questionnaires delivered using multiple iterations to collect data from a panel of selected subjects. © Proj3ctS - Dries Vandevyvere - 2024 The Delphi Technique for estimates An expertise-based process that a team can use to generate an estimate for both the top-down and bottom-up stages Technique the project manager chooses an estimation team, and asks each person (or small sub-team) to estimate a series of quantities (costs or schedules) Then the teams are informed of the other teams’ estimates, and the process is repeated Benefits The Delphi technique can be used when no historical data exists Is useful when installing a new product methodology or making a significant change to an existing one or implementing a unique product or project. Anonymous group approach to estimation, based on the theory that: Group opinions are fairly reliable Extreme views get annulled Informal one-on-one conversations are susceptible to bias and intimidation Individuals might not estimate frankly in the presence of managers, customers or other stakeholders © Proj3ctS - Dries Vandevyvere - 2024 The Delphi process Theoretically, the Delphi process can be continuously iterated until consensus is determined to have been achieved 3 or 4 iterations are often sufficient to collect the needed information and to reach consensus Round 1: an open-ended questionnaire Round 2: a second questionnaire to review the items summarized by the investigators based on the information provided in the first round Round 3: questionnaire that includes the items and ratings summarized by the investigators in the previous round to revise his/her judgments or “to specify the reasons for remaining outside the consensus” Round 4: the list of remaining items, their ratings, minority opinions, and items achieving consensus and final opportunity for participants to revise their judgments A facilitator (f.e. the PM) provides an anonymous summary of the experts’ forecasts from the previous round with the reasons for their judgments © Proj3ctS - Dries Vandevyvere - 2024 The Delphi process: put to practice Objective: clarify and expand on issues, identify areas of agreement or disagreement and begin to find consensus Step 1: Choose a Facilitator Take on this role yourself or find a neutral person within your organization. Choose someone familiar with research and data collection. Step 2: Identify Your Experts (= any individual with relevant knowledge and experience of a particular topic) The technique relies on a panel of experts: your project team, including the customer, or other experts from your organization or industry Step 3: Define the Problem What is the problem or issue you are seeking to understand? Ensure you provide a precise and comprehensive definition. Step 4: Round One Questions Ask general questions to gain a broad understanding of the experts view. Collate and summarize the responses, removing any irrelevant material and looking for common viewpoints. Step 5: Round Two Questions Based on the answers to the first questions, the next questions should delve deeper into the topic to clarify specific issues. Collate and summarize the results, removing any irrelevant material and look for the common ground. Remember, we are seeking to build consensus. Step 6: Round Three, Four, … Questions Focus on supporting decision making. Home in on the areas of agreement. What is it the experts are all agreed upon? You may wish to have more than three rounds of questioning to reach a closer consensus. Step 7: Act on Your Findings Your experts will reach a consensus and you will have a view of future events. Analyze the findings and put plans in place to deal with future risks and opportunities to your project. © Proj3ctS - Dries Vandevyvere - 2024 Delphi Key areas to be considered when designing and implementing a Delphi study Choosing appropriate subjects is the most important step in the entire process because it directly relates to the quality of the results generated Time frame for conducting and completing a study: can be time-consuming and the possibility of low response rates Potential of Molding Opinions: The iteration characteristics can potentially enable molding opinion or unintentionally guiding feedback from the respondent group Potential of Identifying General Statements vs. Specific Topic Related Information: assumption participants are equivalent in knowledge & experience Formulation of the questions in the first round is essential: consider involving an expert in this stage No uniform method of analysis for dealing with the material from the first round. Opinions tend to change with time © Proj3ctS - Dries Vandevyvere - 2024 Expert judgement Expert judgment is defined as judgment provided based upon expertise in an application area, knowledge area, discipline, industry, … as appropriate for the activity being performed Expertise should be considered from individuals or groups with specialized knowledge or training in the following topics: Previous similar projects Information in the industry, discipline, and application area Estimating methods Technical knowledge of the industry and focus area of the project Risk identification Determining the tools and techniques to be used Determining resources and skill levels needed to perform project work Facilitation and conflict management … © Proj3ctS - Dries Vandevyvere - 2024 Other techniques (quick overview) Monte Carlo Simulation Monte Carlo simulation is a way to simulate the execution of multiple times (computer simulation). Each simulation assumes a new random set of outcomes for each duration or cost. The random outcomes follow a distribution of likelihoods. It also gives ranges, and likelihoods for each point in the range. More accurate way to estimate your project schedule and budget. More time-consuming and expensive. Special software and skill needed. Cost of quality (CoQ) Prevention costs (prevention of poor quality) / Appraisal costs (evaluating, measuring, auditing, and testing) Failure costs (internal/external related to nonconformance of the products, deliverables, or services ) Balance for investing in the cost of prevention and appraisal to avoid failure costs -> optimal quality cost for projects, where investing in additional prevention/appraisal costs is neither beneficial nor cost effective. Project management software Vendor bid analysis Data analysis: For example, “alternatives analysis” is used to evaluate identified options in order to select the options Various levels of resource capability or skills, different sizes or types of machines, different tools (manual versus automated), and make-rent-or buy decisions Function Point analysis: used to compute a functional size measurement of software © Proj3ctS - Dries Vandevyvere - 2024 Getting the numbers: Choosing the technique Choice of technique has impact on Time to create estimate Cost to estimate Overhead cost to all projects Each leads to different accuracy levels Note: It all starts with the quality of the input and data © Proj3ctS - Dries Vandevyvere - 2024 Exercise - Fill in the questions sheet © Proj3ctS - Dries Vandevyvere - 2024 Jump back to the process - Manage Improve Prepare to Manage Create estimate estimating estimate estimates process Manage estimates Begins when the original estimate is completed, has been validated with the project team members, and the project work has started. Includes many activities that are used to manage the estimate, including changing controls, calibrating the full cost, and comparing actual costs to the baseline estimate Inputs: Starts with the baseline Estimate: Cost, schedule and resources, along with approved changes to the baseline, would constitute key baseline information. The Resource Plan (including skills of the resource) Work Performance deals with actual time and cost to complete deliverables. © Proj3ctS - Dries Vandevyvere - 2024 Jump back to the process - Manage Improve Prepare to Manage Create estimate estimating estimate estimates process Key stages of managing the estimates: Apply actuals data from various data sources Review and Control using information from tools such as Earned Value method, Change control, and PMIS/PPM system Re-estimate baselines after formal approval if there are significant changes Important The importance of Earned Value (EV): EV is early indicators or warning signals of project trouble Using Variance data, the project manager can calculate revised estimates © Proj3ctS - Dries Vandevyvere - 2024 Don’t forget the feedback loop - Improve Lessons learned should applied to the estimating lifecycle, including Refined calibration of the models, based on new actual values, Maintaining check lists of components to include in future estimates. Inputs for this process: Activities in this process: Baseline Estimates Project Estimating Approach Historical Project Information Baselined Estimates Updated Estimates/Forecasts Change Log Actuals vs. Estimates Data Stakeholder Feedback Organizational Process Assets Improve Prepare to Manage Create estimate estimating estimate estimates process © Proj3ctS - Dries Vandevyvere - 2024 The little secrets Always include contingency /reserve “An estimate can only go down”: communicate assumptions & accuracy Avoid making numbers fit the budget Bottom-up / Top-down: 2 sides of the same story Double-check for commonly overlooked activities “Our human mind fails us”: bias challenges in estimating Measure Probabilistically Over Guessing Badly Don’t forget risks Estimating is a team sport Value estimation © Proj3ctS - Dries Vandevyvere - 2024 Reserve and contingency Reserve analysis is used to determine the amount of contingency and management reserve needed for the project. Include contingency reserves to account for uncertainty Contingency reserves are the estimate for identified risks that are accepted Contingency reserves are associated with the known-unknowns, which may be estimated to account for this unknown The contingency reserve may be a percentage of the estimated activity duration or a fixed number Contingency reserves may be separated from the individual activities and aggregated Contingency should be clearly identified in the schedule documentation As more precise information about the project becomes available, the contingency reserve may be used, reduced, or eliminated Estimates may also be produced for the amount of management reserve for the project. Management reserves are a specified amount of the project budget withheld for management control purposes and are reserved for unforeseen work that is within scope of the project Management reserves are intended to address the unknown-unknowns that can affect a project Management reserve is not included in the baseline, but it is part of the overall project requirements © Proj3ctS - Dries Vandevyvere - 2024 Contingency Contingency is something that’s expected to be spent: Don’t remove it from an estimate simply to make the project look less expensive Contingency is not only money: also include the time and resources needed to handle the work the contingency implies If the contingency is not needed, the project will simply be done earlier and the organization can keep the funds for another time TIP: For quick calculation you can use a percentage to determine contingency. A detailed calculation on uncertainty and risk is better! © Proj3ctS - Dries Vandevyvere - 2024 Contingency and accuracy © Proj3ctS - Dries Vandevyvere - 2024 “An estimate can only go down” The reality: Think twice before calling out a number. Numbers stick. Communicate requirements & assumptions: Employ requirements management by providing clear details Mention the specific assumptions behind the numbers. Always indicate the accuracy level & modifier: see the basics ! © Proj3ctS - Dries Vandevyvere - 2024 Avoid making numbers fit the budget You might be tempted/ forced to (pressure the team to) keep the numbers optimistically low. But this creates an estimate that is only good on paper When the time comes to justify an overage, it will become apparent that asked to estimate low numbers and overage should be expected. If the budget and scope are at odds, adjust the scope Think about the PM triangle Tip: Ask the team to provide what can be done within the budget. © Proj3ctS - Dries Vandevyvere - 2024 Bottom-up / Top-down Bottom-up / Top-down: 2 sides of the same story Bottom-up: estimating project duration or cost by aggregating the estimates of the lower-level components of the WBS. Top-down: estimate the total cost of a project by using information from a previous, similar project (analogous estimating). The tip: Avoid using only high-level (top-down) breakdowns The more detailed the breakdown, the more accurate the estimate and the easier it is to get all stakeholders on the same page. For example Too high-level to say: We organize a celebration party. It’s clearer to state: We organize a 3-course sit-down diner party for 15 to 20 people. Clearer estimates may reveal higher estimates, but it’s better to find that out while you can still control scope or expectations, rather than mid-project when you are reporting an overage. © Proj3ctS - Dries Vandevyvere - 2024 Common sense (aka Gezond Boerenverstand) What it is not … © Proj3ctS - Dries Vandevyvere - 2024 Common sense In the strain to consider every task, deliverable and bit of scope, it can be easy to overlook the obvious things Double-check for commonly overlooked or ancillary activities: such as meetings, edits on feedback and bug fixing These activities happen frequently during a project and can derail estimating efforts It’s difficult to gauge how long certain parts of the project will take. Feedback, for example, can range from “Change these two sentences” to “I don’t like the concept, can you propose something else?” To handle this ambiguity, use your common sense and look at other techniques These tasks can have a huge impact on your estimate. My approach: Sit back and look at the estimate again from a distance or other angle Talk to people (everybody in the team & all stakeholders): Listen to understand, not to reply Trust your gut feeling: If it does not feel right, you have not asked “Why?” enough TIP: Don’t forget Project Management! As an estimated percentage of the total project Based on detailed activities (meetings, reviews, deliverables, …) © Proj3ctS - Dries Vandevyvere - 2024 Common sense Don’t only trust the data © Proj3ctS - Dries Vandevyvere - 2024 Why humans love “lying” about numbers: bias Our human mind fails us: Cognitive bias is built into our brains Human minds take mental short cuts which cause our estimates to be driven by emotion and perception more often than credible data. “People and organizations do manipulate information for their own uses.” Most instances of overly optimistic estimates are ascribed to optimism bias (wishful thinking) Well-known phenomenon in humans, and was identified as early as 1925 The inclination of individuals to believe that they are more likely to experience favorable events, and less likely to experience negative events, than other people. © Proj3ctS - Dries Vandevyvere - 2024 Measure Probabilistically Over Guessing Badly Think of weather forecasting: 90% chance of rain tomorrow. But what if it doesn’t rain tomorrow? Does it mean the weather forecaster was wrong? No ! By saying there was a 90 per cent chance of rain tomorrow, the forecaster implied that there was a 10% chance that it will not rain tomorrow. Uncertainty limits our ability to make accurate estimates, but don’t allow a careless, ignorant estimate stop a fighting chance to a timely and successful project delivery. Estimation is a skill and estimation training is a thing. Learn it ! © Proj3ctS - Dries Vandevyvere - 2024 Don’t forget the risks How aware of risk management are you and your team? Do a quick assessment, agree that it’s a risky project and add more hours or money to the estimate? That is usually not enough ! Planning & estimating for risk means Using the registered risk and mitigation plans and accounting for the time, budget and resources needed to make those plans happen For example, to prevent a technological constraint in a future phase of the project, you may plan to build a prototype TIP: Risk management means to manage the risk ! Quantify it. © Proj3ctS - Dries Vandevyvere - 2024 Estimating is a team sport TIP: know the strenghts and weakness of your team Who would you turn to for your celebration party estimate? Your significant other A friend who is cook in a small restaurant A professional event organiser Or someone else TIP: Soft skills matter ! © Proj3ctS - Dries Vandevyvere - 2024 Agenda - Covered in these slides Reliable project estimates Introduction & the basics The estimation process Diving into the numbers: estimation techniques The little secrets: tips, tricks & common pitfalls Project scheduling done right Introduction & Tools Let’s schedule Hints for the right schedule Optimize resources Introduction & the basics Adjust resources allocation: Resource leveling & smoothing Additional resource allocation techniques Tips & tricks © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Definitions A project is: Group of activities within a temporary organization with pre-defined conditions and pre-defined results Unique situation limited in time and means Scheduling is: A Logical Listing of events, activities and milestones that get their position in time in relation to other events, activities and milestones. A visualisation of time in the future. It is an estimation, not a guess!!! Basic tool in project management activities. In English planning is different from scheduling: we plan our project, but we schedule the work. © Proj3ctS - Dries Vandevyvere - 2024 “if you think time is money, you underestimate time” © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Why scheduling Your time is limited Remember the definition of a project: fixed start and stop To know: Who has to do What by When? As a communication tool To yourself, the project team, the user, to all stakeholders It is facts and data. To control stress Do not worry, it is scheduled Or, if you do not act today, I will have an issue in 3 months © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Types of schedules To Do lists: Small tasks to be done today. Agenda: Lists your daily organization Network diagram: Showing all activities or work packages as nodes in relation to the other activities Synonym: Activity-on-node (AON) Diagram © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Types of schedules Activity list: List of all activities mentioning individual start and end date of each task or work package Bar chart. e.g. a Gantt Chart of schedule information where activities are listed on the vertical axis dates are shown on the horizontal axis activity durations are shown as horizontal bars placed according to start and finished dates © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Scheduling tools Schedules can be made in MS Excel, MS Powerpoint, MS word, … But specialised tools exist: Primavera; MS Project; Hive; Monday; ProjectManager; … They are all good, but the “thinking” must come from you. © Proj3ctS - Dries Vandevyvere - 2024 Scheduling tools MS project is my favorite Microsoft is user friendly Best tool to start scheduling Most used tool in the industry It contains enough features to schedule correctly and to track the schedule correctly Think about the tooling ! Use what is available ! © Proj3ctS - Dries Vandevyvere - 2024 Scheduling © Proj3ctS - Dries Vandevyvere - 2024 Scheduling process Define the approach Remember the previous session: How to define and manage the scope of the project Gather data Define activity Define first your work process. constraints Meaning: How will you handle your Schedule Sequence throughout your Project Life Cycle? activities PMBOK: Plan Schedule management Check & finetune Communicate © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 1: Define approach Schedule Approach Traditional way Decomposition (based on your WBS); Rolling wave schedule (progressive elaboration) Agile and Lean Combination of approaches is possible troughout the PLC e.g. Traditional way during analysis phase; e.g. Lean or Agile during implementation phase. Tools and visualisation Software tool: yes/no? if yes, which one. Type: Gantt chart, network, activity list Hybrids are again possible e.g. software and Gantt chart during analysis phase, activity list during execution e.g. print out of Gantt chart during analysis, post it planning during execution All combinations are possible as long as you define it in advance. © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 1: Define approach Resources Who is responsible for the schedule? How many resources do you have in your team? What are their functions? Who delivers which input for the schedule in each project phase? Reporting & communication: Which information delivered to which stakeholder? e.g. Steering committee will receive once a month a level 2 schedule, with status (delay, on track), difficulties and/or issues. e.g. Project Team will receive updated detailed schedule weekly during team meeting. One day before the meeting, all team members inform the scheduler on their progress. Accuracy of the schedule: Define for each project phase. Inform your stakeholders of the accuracy they can expect e.g. Conceptual phase: 30% e.g. Basic design: 20% e.g. Start execution: 5% © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 1: Define approach Others Templates Units (e.g. calendar days/working days) Meetings (set-up and control) Sources of information Schedule Review and approval process... Advise: Organize a meeting with all stakeholders in order to gather their requirements and ask for their input. Prepare already the topics above and start with giving your opinion in the meeting. It will limit the degrees of freedom during this brainstorming. © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 2: Gathering data Schedule is an answer to the questions: “Who does what when?” Or “What happens when?” So, Find information on 1. Who? (meaning, who perform the activities?) 2. What? (meaning, what is all the work to be done to make the project a success?) 3. When? (meaning, what is the duration of each activity and how does it relate to the other activities) © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 2: Gathering data 1. Who? See PEP: organisational chart and roles and responsibilities 2. What? Detail further your WBS Make an extra column in your WBS with who is responsible for execution the activity. 3. When? (or how long?) Deadline for the project: date received from upper management Estimations on duration, based on (see later today) Add an extra column in your WBS for the duration. Gather also information on: Interfering activities or other projects Availability of people Production stops Working process of actual situation (e.g. between 7 AM and 5 PM, no weekend works) © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 3: Constraints Constraints for project activities As soon as possible (most common) As late as possible Must finish on date Must start on date Start/finish no earlier than date Start/finish no later than date Milestone: A significant point or event in the project. Not really an activity, more the end of a series of activities. Examples: Go/NoGo-decision; End feasibility study; Scope freeze Deadline: The latest date an activity needs to finished without impacting the dates of other activities or the total schedule. © Proj3ctS - Dries Vandevyvere - 2024 Scheduling process Define the approach Now we have the info. Gather data Let’s start sequencing ! Define activity constraints Sequence activities Check & finetune Communicate © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 4: Sequence activities Sequence activities: the process of identifying and documenting relationships between different activities. With other words: link the activities. Some terminology Predecessor activity: an activity that logically comes before a dependent activity in a schedule. Successor activity: an activity that logically comes after another activity in a schedule Remark: a dependent activity can have more than one successor or predecessor © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 4: Sequence activities Types of links between activities Finish-to-start (FS): a successor activity cannot start until a predecessor activity is finished. Start-to-finish (SF): a successor activity cannot finish until a predecessor activity has started. Start-to-start (SS): a successor activity cannot start until a predecessor activity has started. Finish-to-finish (FF): a successor activity cannot until a predecessor activity has finished © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 4: Sequence activities Finish-to-start (FS): “Supper starts when the cooking is complete” “The award ceremony cannot start until the race has finished” Start-to-finish (SF): “Concrete Pouring cannot finish until heating has started” “The first security guard shift cannot finish until the second security guard shift starts” Start-to-start (SS): “Mixing of chemicals cannot start until air quality testing starts” “Level concrete cannot begin until pour foundation begins” Finish-to-finish (FF): “Writing a document is required to finish before editing the document can finish” “Design work cannot finish until environmental studies are complete” © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 4: Sequence activities Dependencies can be a more complex than the 4 different types of dependencies. Fine-tune by lag or lead time. Lag time: A gap in timing, a time that is added to the predecessor task to delay the successor task E.g. : period that exists between sending out request for quotation for a service and receiving the quotes Lead time: An acceleration in time, which causes an overlap between 2 tasks (= negative lag time) E.g. : already starting to test an IT program during the development © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 4: Sequence activities The steps: How to start ? On paper ! Make a network diagram (or use the one of the scope definition) => Start high level (max level 3) Make the logical links within one group Make the links that are between different groups Define types of links (FS, FF, SF, SS) When all this is clear, then open your software tool © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 5: Check & finetune Basic checks First check: Within the predefined deadlines taking all the activity constraints into account? If yes: Joepie !!!! What with resource allocation? Team working more than theoretically possible? If this is the case, you have to adapt the schedule according to the resources. If this done and you are still within the schedule, Then Joepie !!!! If not Joepie ???? First of all: inform your steering committee of the situation and propose solutions. Start compressing your schedule: remove lag times and start implementing lead times where possible. Remove links based on resource Analyze the risks (see session on risk management) Ask for more people or longer project period Crash the schedule! Make the tasks shorter in duration Make compromises on the level of detail of the work © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 5: Check & finetune Critical path = The sequence of activities that represents the longest path through a project, which determines the shortest possible duration Critical path method (CPM) The longest path has the least float (usually zero) Searching for your float, means searching for the flexibility in your schedule. Answering the question: how much can an activity be delayed without delaying the project finish date ? The CPM calculates early start, early finish, late start and late finish for all activities by performing a forward and backward pass analysis through the schedule network. Use an activity node © Proj3ctS - Dries Vandevyvere - 2024 Critical Path Method (CPM) CPM: Backbone for project execution plan Activity sequencing Foundation for progress, reporting and performance analysis Tool for resource allocation and management Network diagram & CPM: Linking activities for project execution in a logical, sequential manner Such that the execution is both practical and as fast as possible The speed will be limited by the availability of required resources - see leveling Sequence of activities that represents the longest path through a project, which determines the shortest possible duration Shorten the schedule = Shorten critical path © Proj3ctS - Dries Vandevyvere - 2024 Critical Path Method (CPM) Key steps in CPM Step 1: Specify Each Activity (WBS) Step 2: Establish Dependencies (Activity Sequence) Step 3: Draw the Network Diagram Step 4: Estimate Activity Completion Time Step 5: Identify the Critical Path Step 6: Update the Critical Path Diagram to show progress Step 5 has 2 parts : The forward pass and the backward pass © Proj3ctS - Dries Vandevyvere - 2024 CPM - calculation Forward Pass: Determine the earliest date, starting with the first activity in the network Sets the early start (ES) by selecting the latest of the following: The project start date (PS) The early finish date of all of its predecessors plus 1 (EF) The date of all “not earlier than” constraints (NET) The current Data Date (DD) Backward Pass: Determine the latest date, starting with the last activity Sets the late finish (LF) by selecting the earliest of the following: The project finish date (PF) The late start date of all of its successors minus 1 (LS) The date of all “not later than” constraints (NLT) © Proj3ctS - Dries Vandevyvere - 2024 CPM - calculation Forward Pass: Determine the earliest date, starting with the first activity in the network Sets the early start (ES) by selecting the latest of the following: The project start date (PS) The early finish date of all of its predecessors plus 1 (EF) The date of all “not earlier than” constraints (NET) The current Data Date (DD) Backward Pass: Determine the latest date, starting with the last activity Sets the late finish (LF) by selecting the earliest of the following: The project finish date (PF) The late start date of all of its successors minus 1 (LS) The date of all “not later than” constraints (NLT) © Proj3ctS - Dries Vandevyvere - 2024 CPM - calculation (zoom in) © Proj3ctS - Dries Vandevyvere - 2024 CPM - Float Total Float: Calculated by subtracting the early finish date from the late finish date Each activity has its own total float value Free Float: Number of days an activity can be delayed without impacting the start date of any of its successors Manage the free float and don’t exceed it: your project is guaranteed to finish on time! Key to keeping projects on time © Proj3ctS - Dries Vandevyvere - 2024 CPM - Float Total Float: Calculated by subtracting the early finish date from the late finish date Each activity has its own total float value Free Float: Number of days an activity can be delayed without impacting the start date of any of its successors Manage the free float and don’t exceed it: your project is guaranteed to finish on time! Key to keeping projects on time © Proj3ctS - Dries Vandevyvere - 2024 CPM - Float (zoom in) © Proj3ctS - Dries Vandevyvere - 2024 Exercise CPM See xls with network diagram and durations for activities A to H Your assignment Forward pass to calculate Early Start (ES) and Early Finish (EF) Calculate the end Backward pass to calculate Late Finish (LF) and Late Start (LS) Determine the critical path Calculate the float for each activity Questions When does this project end? What is the critical path? What does Float = 0 mean? © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 5: Check & finetune Critical Path method (CPM) Scheduling software makes the calculation for you. Critical path changes during a project. More than one critical path is possible. Shortening your schedule, means shortening the critical path. Advise: Perform the CPM continuously throughout your project. Congratulations, your schedule is finished! © Proj3ctS - Dries Vandevyvere - 2024 Scheduling - 6: Communicate As soon as the schedule is finished, ensure approval by the steering committee. Explain your schedule in live sessions. Print out the schedule and stick it to the walls of your Project room. Explain, Discuss, adapt, discuss, adapt…. Manage Inform everybody long in advance of the work they must do. Block the agenda of your colleagues for review sessions or the work they must do. Discuss schedule in every project meeting. © Proj3ctS - Dries Vandevyvere - 2024 Hints & tips: Project Schedule versus work schedule Project Schedule Work Schedule What happens when? Who does what when? Explains the strategy of your project Describes all activities in detail WBS structure up to level 3: main phases WBS schedule: all levels Duration of main project phases Duration of all activities Is developed at the start of the project Starts together with the project, but develops according to the progress Basis for: Provides detailed information on the duration of the Work schedule phases. Contractual Schedule Base for finetuning your Project Schedule Procurement Schedule No responsible required or general term (company, Each activity needs a Responsible person department) Print on AO Print on A4 © Proj3ctS - Dries Vandevyvere - 2024 Hints & tips: Work schedule Work in phases. You do not need to detail everything at once. Accept that the schedule will change. Schedule everything that takes time. For example: Document Prepare document Internal review Adaptation after internal review Sending to the client Discussion with client Adaptation after remarks. Approval meeting … Work schedules can be very long and detailed: Use filters. © Proj3ctS - Dries Vandevyvere - 2024 Hints & tips: Scheduling Think in percentages. Project of one year => 1 week lost by no decision taking = 2% Manage your spare time: Define 1 strategy Contingencies at the end of the schedule. e.g. 1 extra task ” x% contingencies” Every task contains contingencies. e.g. estimated time x days, time in schedule x+2 days Use lag time: define a delay between 2 tasks. e.g. estimate time of task correctly, but let the successor only start x later One task equals 1 action An activity has a verb !! e.g. ‘windows’ but ‘install windows’ For every activity someone responsible Define the resource correct © Proj3ctS - Dries Vandevyvere - 2024 Hints & tips: Scheduling Schedule time to think about your project and your schedule. For example: Every day: first action of the day: look at your schedule Friday: think what you will do the following week (Work) Schedule is an evolution. Start high level and define further in detail. Your schedule will be “As-Built at the end of the project” Every planning has 1 owner!! Others give input. Be careful with links Link logical tasks, Not resources! All tasks (except first and last of the schedule) have a successor and predecessor. Hide all links when showing your schedule. Your team is interested in what to do when and not in what is linked with what © Proj3ctS - Dries Vandevyvere - 2024  “’I do not have time to make a schedule’ is the dumbest a project manager can say” - Unknown PM © Proj3ctS - Dries Vandevyvere - 2024 Agenda - Covered in these slides Reliable project estimates Introduction & the basics The estimation process Diving into the numbers: estimation techniques The little secrets: tips, tricks & common pitfalls Project Scheduling done right Introduction & Tools Let’s schedule Hints for the right schedule Optimize resource allocation Introduction & the basics Adjust resources allocation: Resource leveling & smoothing Additional resource allocation techniques Tips & tricks © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Input What have you learned until now? Inputs to Resource Allocation Scope WBS Time / Cost estimate Project schedule = intital schedule Stakeholders Soft skills The last step before you can start executing ! © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Allocation The title back to front: ALLOCATION / resources / optimize Project Integration Management = PMBOK knowledge area where you identify, define, combine, unify and coordinate processes & project activities Includes making choices about resource allocation Considering resource availability and project scope, time & cost Project schedule remains preliminary until resource assignment is confirmed (= allocation is complete) © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Resource The title back to front: allocation / RESOURCES / optimize PMs have access to many resources — human/people, equipment, facilities, material, and funding — when managing a project Constraints for the project Availability is key The resource allocation plan: critical part of managing resources ensure that available resources are assigned efficiently with an eye toward changes © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Types of Resource Labor Human resources are an integral part of most projects The project team needs active management Equipment Tools and equipment used to produce the product, but don’t become part of it Must be identified and allocated to each task Take into account the wear and tear experienced during the project Specialty equipment often requires significant investment of time and money Materials Materials that become a part of the final product Must be allocated so that they can be procured at the right time and their availability is confirmed Facilities: Buildings and work areas Often a significant cost to the project If they are not readily available, they also require space in the project schedule and budget Miscellaneous: All the rest Most projects require other resources that impact the budget or schedule This can include project financing and insurance costs, performance bonding, administration, contingencies, risk premiums, transportation and delivery, or any other items necessary to perform the project © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Optimize The title back to front: allocation / resources / OPTIMIZE Challenge of the PM Develop a project execution plan that fits the allotted time and can be achieved with available resources Activities need resources at various times: complex juggling job to schedule activities so they are not held back by lack of resources Resource optimization techniques Allocate resources in such a way to bring maximum output effectively Adjust the start and finish dates of activities Adjust planned resource use to be equal to or less than resource availability © Proj3ctS - Dries Vandevyvere - 2024 Basics - PMBOK knowledge areas Key process groups Planning Executing Monitoring & controlling Knowledge areas Project Schedule Management Project Resource Management © Proj3ctS - Dries Vandevyvere - 2024 Basics - PMBOK knowledge areas 6. Project Schedule Management 6.4 Estimate Activity Durations 6.5 Develop Schedule 9. Project Resource Management 9.1 Plan Resource Management 9.3 Acquire Resources 9.6 Control Resources Note: changes in PMBOK 6 vs the 5th edition Not only “human” resources © Proj3ctS - Dries Vandevyvere - 2024 Activity Durations & Resource Allocation Estimate Activity Durations process Requires estimation of the amount of resources to complete the activity Estimate time needed to complete the activity using the appropriate calendars Number of resources expected to be available to accomplish an activity, along with the skill proficiency of those resources A change to a “driving resource” will have an effect on the duration But this is not a simple “straight-line” or linear relationship Sometimes, the nature of the work will take a predetermined amount of time to complete regardless of the resource allocation Other factors for consideration: Law of diminishing returns Number of resources Advances in technology Motivation of staff © Proj3ctS - Dries Vandevyvere - 2024 Durations & Resources - Factors to consider Law of diminishing returns When one factor (e.g. resource) used to determine the effort required to produce a unit of work is increased while all other factors remain fixed, a point will eventually be reached at which additions of that one factor start to yield progressively smaller or diminishing increases in output Number of resources Increasing the number of resources to twice the original number of the resources does not always reduce the time by half, as it may increase extra duration due to risk At some point adding too many resources to the activity may increase duration due to knowledge transfer, learning curve, additional coordination, and other factors involved Advances in technology Can play an important role in determining duration allocation For example, procuring the latest technology, may impact duration and resource needs Motivation of staff PM needs to be aware of procrastination (student syndrome): People start to apply themselves only at the last possible moment before the deadline Parkinson’s Law where work expands to fill the time available for its completion © Proj3ctS - Dries Vandevyvere - 2024 Cost & Resources Two types of costs associated with a project: Direct costs: Expenditure allocated to different activities in a project Indirect costs: Expenditure shared by more than one activity and not directly allocated to individual activity Like administration, establishment charges, overhead, supervision, loss of revenue Indirect cost rise with increased duration total cost cost Total cost = direct cost + indirect cost direct cost optimum indirect cost Optimum duration = target duration optimum time © Proj3ctS - Dries Vandevyvere - 2024 Resource leveling - Preparation First schedule without regard to the availability of resources The availability of resources is too complicated to analyze manually as the schedule durations and logic is developed But take the amount of a resource required for an activity into consideration to determine the duration of an activity Once the CPM network of activities is established, determine the amount of resources In the resource library the maximum amount of each resource is entered for use in the leveling process More advanced programs allow the setting of additional levels of availability Next: determine the prioritizing index for activities competing for the same limited resource The resource leveling algorithm can proceed to establish new start and finish dates for each activity When there are many different resources, the solution tends to be more difficult TIP: Select those resources that are most “significant” (difficult to augment or reschedule) To illustrate, let’s assume that a project requires millwrights, laborers and a crane The crane is limited to a certain time frame of availability, millwrights are a skilled craft with limited availability, laborers are readily available to add to the project In this case, it is better to omit the laborers from the leveling process © Proj3ctS - Dries Vandevyvere - 2024 Resource leveling - Process Process of resource leveling results in new schedule with “resource leveled” dates Not earlier than the early start and finish dates (restrained by the network logic) Depending on the goal of the leveling process, dates may or may not be later than late start and finish dates “Within the project finish constraint”: may indicate that the project requires more resources “With the available resources”: may indicate that the project requires more time to finish The algorithm analyzes each time period and determine how many resources are required by all activities originally scheduled in that time period If any of the resources is not available, the activity is delayed for next period If not enough resources are available, the activities with the higher total float will not be scheduled yet This process continues until all activities have been scheduled Often PMs will calculate both ways to see the difference in the results After updates to the resources or schedule, the process can be started again © Proj3ctS - Dries Vandevyvere - 2024 Resource leveling - Example Project plan - no resources assigned Assign resources -> overallocation Resource leveling © Proj3ctS - Dries Vandevyvere - 2024 Resource leveling - Example Resource usage view: before leveling & after leveling Team planner © Proj3ctS - Dries Vandevyvere - 2024 Resource smoothing Adjusts the activities such that requirements for resources on the project do not exceed certain predefined resource limits In resource smoothing, as opposed to resource leveling The project’s critical path is not changed The completion date may not be delayed In other words, activities may only be delayed within their free & total float Resource smoothing may not be able to optimize all resources © Proj3ctS - Dries Vandevyvere - 2024 Resource leveling vs smoothing Resource levelling -> Resource limited scheduling Resource smoothing -> Time limited resource scheduling © Proj3ctS - Dries Vandevyvere - 2024 Resource leveling vs smoothing Resource leveling is used when limits on the availability of resources are paramount Resource limited scheduling Answers the question ‘With the resources available, when will the work be finished?’ Resource smoothing is used when the time constraint takes priority Time limited resource scheduling The objective is to complete the work by the required date while avoiding peaks and troughs of resource demand © Proj3ctS - Dries Vandevyvere - 2024 Resource Leveling vs Smoothing Resource leveling Resource Smoothing It applies the resource constraints to the project Resource smoothing after resource leveling and may result in a change in project duration. Accommodate the resource constraints before we can optimize Make use of float: no change of project duration Resource Leveling is primarily driven by resource Resource smoothing is more to do with desired constraints (not have more than 45 hours of the limits (45 hours available, but only allocate 38 hours given resource for a week) so there is some breathing space) The allocation limits identified in resource leveling The desired limit identified in resource smoothing must be applied. may not be applied in some cases, if we do not have slack. It is optimized within the float boundaries. When Resource Leveling changes the project dates, Resource smoothing will not change the critical may also change the critical path, since constraints path; it tries to make the best use of slack. drive it. © Proj3ctS - Dries Vandevyvere - 2024 Resource leveling & Smoothing: example Project with 6 activities & 2 constraints 5 resources available at any point (predefined resource limit). Only 4 resources are available to work on Activity D (scarce resources). 3 steps: CPM -> leveling -> smoothing © Proj3ctS - Dries Vandevyvere - 2024 Resource leveling & Smoothing: example (zoom in) © Proj3ctS - Dries Vandevyvere - 2024 Exercise: Leveling & Smoothing C Assignment START A B D END A project with 4 activities (A to D) Duration and resource need per time period Activity Duration Depedency Resources Network diagram A 3 2 B 1 A (FS) 4 A resource histogram before leveling or smoothing C 3 B (FS) 2 D 4 B (FS) 1 Exercise Constraint = only 2 resources available Execute a first resource leveling Can you find another levelled option? Back to the original assignment Resource smoothing © Proj3ctS - Dries Vandevyvere - 2024 Resource allocation - Baseline Baseline: approved version of a work product that can be changed only through formal change control procedures and is used as a basis for comparison to actual results A schedule baseline is the approved version of a schedule model Fixed reference after approval Accepted and approved by appropriate stakeholders With baseline start dates and baseline finish dates During monitoring and controlling, baseline dates are compared to actual dates to determine variances Component of the project management plan TIP: Use a resource leveled schedule to define the baseline dates © Proj3ctS - Dries Vandevyvere - 2024 Resource allocation - Result = baseline Desired outcome of resource leveling: generate a baseline schedule that is both achievable and makes economic use of the available resources The end result of the resource leveling process is to assign a “resource start” (RS) date and the “resource finish” (RF) date to each activity. These dates must then be captured and stored as the “resource leveled schedule” = the “baseline” Ideally, this will fall somewhere between the early start schedule and the late start schedule TIP: PM to select the most desirable solution available as baseline © Proj3ctS - Dries Vandevyvere - 2024 Schedule Compression Shorten or accelerate the schedule duration without reducing the project scope in order to meet schedule constraints, imposed dates, or other schedule objectives TIP: helpful analysis technique is “negative float analysis” The critical path is the one with the least float Due to violating a constraint or imposed date, the total float can become negative Schedule compression techniques include: Crashing: used to shorten the schedule duration for the least incremental cost by adding resources Fast tracking: activities or phases normally done in sequence are performed in parallel for at least a portion of their duration © Proj3ctS - Dries Vandevyvere - 2024 Crashing & Fast Tracking Crashing: Shorten the schedule for the least incremental cost by adding resources Examples: approving overtime, bringing in additional resources, or paying to expedite delivery to activities on the critical path Keep in mind Only work for activities on the critical path where additional resources will shorten the duration Does not always produce a viable alternative May result in increased risk and/or cost Fast tracking: Activities/phases normally done in sequence are done in parallel Example: constructing a building foundation before completing the architectural drawings Keep in mind May result in rework and increased risk Only works when activities can be overlapped to shorten the project duration on the critical path. Usually increases coordination efforts between the activities concerned and increases quality risk. Fast tracking may also increase project costs. © Proj3ctS - Dries Vandevyvere - 2024 Crashing & Fast Tracking © Proj3ctS - Dries Vandevyvere - 2024 Exercise Crashing & Fast Tracking Given the network diagram and calculations from the CPM exercise How will you bring the project end date forward? © Proj3ctS - Dries Vandevyvere - 2024 Schedule compression: options overview Option General impacts on the project Always adds risk Fast track May add management time for the PM May add cost Always adds cost Crash May add management time for the PM May add risk May save cost, resources and time Reduce scope May negatively impact customer satisfaction May save cost, resources and time May increase risk Cut quality Requires good metrics May negatively impact customer satisfaction © Proj3ctS - Dries Vandevyvere - 2024 Cost & Resources Link with the critical path If critical path is equal or shorter than the optimum duration No need to reduce the network No need for crashing the duration of any activity If however, critical path is longer than the project’s optimum duration Need to reduce the duration of some activities to make the critical path equal to the optimum duration rise in cost Use cost if project is prolonged Determining project duration, for which the rise in cost cost is least if project is crashed total cost Determining the least cost of a reduction in project duration from a stipulated date. Determining the time-cost-risk relationship: In this, risk involved in eliminating any optimum activity is calculated. optimum time © Proj3ctS - Dries Vandevyvere - 2024 Crashing & cost “Crash” point: point in time beyond which it becomes expensive to try to shorten the time schedule “Normal” point: lengthening of an activity more than a certain time duration results in negligible cost savings Cost slope In practice: assume the time-cost curve is cost linear between crash point and normal point. Crash point defined as the “increase in the cost of Cc the activity per unit decrease in the time” ∆C crash cost −normal cost cost slope = = Normal point ∆T (normal time −crash time) CN Tc TN time © Proj3ctS - Dries Vandevyvere - 2024 Crashing & cost - Cost slope Find lowest cost solution by sequential compressing activities with lowest cost slope: lowest incremental cost on critical path Crashing usually results in an increase in cost To minimize the cost increase: crash those activities which allow reduction in time at the least total increase in cost The reduction in time for a project is achieved by reducing the duration of activities on the critical path Note: By crashing one activity, the critical path can shift At each shift of the critical path: calculate the cost-slopes of the activities on new critical path The activity on this new critical path having the lowest cost slope needs to be compressed © Proj3ctS - Dries Vandevyvere - 2024 Crashing - procedure Procedure for crashing a project: i. The ratio of increase in cost to decrease in time for each activity that can be crashed on the critical path is calculated and compared ii. The activity having the lowest ratio is reduced to the next lower time value iii. The critical path for the network is again calculated using the new time for the crashed activity iv. Repeat step (ii) and (iii) until the critical path is equal to optimum project duration or equal to prescribed project duration By analyzing time and costs are in this systematic way the optimum duration of the project is determined © Proj3ctS - Dries Vandevyvere - 2024 Crashing & cost - Exercise Indirect cost per period = 100 Direct costs Normal Crash Activity Depedency Duration Cost Duration Cost C A 3 300 2 450 B A (FS) 6 480 4 520 C B (FS) 7 2100 5 2500 START A B E F END D A (FS) 8 400 6 600 E B (FS) 4 320 3 360 D F B (FS), E (FS) 5 500 4 520 4100 4950 Assignment Calculate the critical path Crash the schedule Calculate the optimal project duration and cost © Proj3ctS - Dries Vandevyvere - 2024 Project Management Information System (PMIS) Project management information systems: Resource management or scheduling software used to monitor resource utilization Functionality to optimize resource allocation Functionality to let the PM Establish resource priorities, secondary resource limits To set the goal of limiting the resources or limiting the project completion Reports to analyze the tradeoffs in each time slot of the leveling calculation When it comes to computer-based resource leveling Don't expect to obtain an optimum solution You will rarely obtain the same solution, even within the same program TIP: Don’t (only) trust the software © Proj3ctS - Dries Vandevyvere - 2024 Where to allocate resources? WSJF! Technique from Agile: WSJF = weighted shortest job first Agile: turns the PM triangle upside down (scope is variable) => Resource optimization becomes deliverable prioritisation Sequences jobs to maximize economic benefit Cost of Delay (CoD): money lost by delaying or not doing a job for a period of time User-business value Time criticality Risk reduction-opportunity enablement value WSJF -> Highest cost of delay in the shortest time © Proj3ctS - Dries Vandevyvere - 2024 WSJF: Which job first? © Proj3ctS - Dries Vandevyvere - 2024 WSJF: Which job first? © Proj3ctS - Dries Vandevyvere - 2024 WSJF: How to do it? STEP 1: List your items STEP 2: Score each of the CoD components with values 1, 2, 3, 5, 8, 13 or 20 (there must be a 1 for each column) STEP 3: Do the math STEP 4: Choose the item to focus your resources on © Proj3ctS - Dries Vandevyvere - 2024 Exercise: WSJF List 3 jobs/features/activities of a school project you are working on Apply WSJF to determine the priority © Proj3ctS - Dries Vandevyvere - 2024 Resource Allocation Best Practices & Pitfalls The bigger picture Long-term / Short-term Problem solving Hard deadlines: time vs resources Resource attributes The soft side of resource allocation Over-assigning resources Brooks's law Resources are scarce © Proj3ctS - Dries Vandevyvere - 2024 The bigger picture: you are not alone Resource allocation is one of corporate management's weak links. Enterprise-wide resource allocation requires: Visibility, Integration, Communication & Control of all projects in work Common causes for resource allocation challenges: Lack of a formal resource allocation process Lack of an appropriate process: Many allocate resources in financial or percentage terms Insufficient visibility of resource overcommitment dynamics Lack of an enterprise-wide master plan. manage projects as independent entities Lack of leadership resolve. Seldom enough resources to achieve all desired projects TIP: Know when key resources will be needed elsewhere © Proj3ctS - Dries Vandevyvere - 2024 Long-term vs Short-term Practical resource scheduling is best achieved via a balance of Long-term resource aggregation: analysis of predicted resource loads Short-term resource leveling: possibly with user intervention PM TIPs Allocate resources with the long-term in mind: Corporate strategy, Project portfolio, Functional duties, … But don’t get lost in a theoretical exercise for the far future: too much will change © Proj3ctS - Dries Vandevyvere - 2024 Problem Solving Simple technique to solve problems that arise during resource processes The problem can come from inside the organization: machines or infrastructure used by another department in the organization and not released in time materials that have been damaged because of unsuitable storage conditions, etc. outside the organization: major supplier that has gone bankrupt or bad weather that has damaged resources Use methodical steps to deal with problem solving, which can include: Identify the problem. Specify the problem Define the problem. Break it into smaller, manageable problems Investigate. Collect data Analyze. Find the root cause of the problem Solve. Choose the suitable solution from a variety of available ones Check the solution. Determine if the problem has been fixed © Proj3ctS - Dries Vandevyvere - 2024 Hard deadlines: time constraint vs resources In certain projects, it is imperative that a specific completion date is met The typical approaches to meet the time constraint incorporate sufficient slack or excessive quantities of resources In either case there will be added cost Challenge: meet the time constraint yet minimize the quantity of resources needed PM TIPs: Focus on the key resources Check schedule and resource assignments often & critically © Proj3ctS - Dries Vandevyvere - 2024 Resource attributes Each resource comes with “attributes” Grade: technical specification level of the resource For example the length of the fenceposts, the depth of the holes, and the strength of the fence material In short, the resources must be adequate for the task Skill: the same as grade but specific to the human resources. Quality: Quality refers to the degree to which the resource meets specifications, For example if poor quality fence material arrives at the site it is not acceptable and must be rejected This is different from the grade of the fence material, which can be low: Low gra