Project Management Guide

Project Management 1.Anatomy of a Project Project: Non-Repetitive Effort, aimed at achieving one or more goals in a certain period of time, carried out using a joint effort of a pool of resources. Poor Goals – Poor Project Performance. And Managing projects means managing resources, but above al...

Project Management 1.Anatomy of a Project Project: Non-Repetitive Effort, aimed at achieving one or more goals in a certain period of time, carried out using a joint effort of a pool of resources. Poor Goals – Poor Project Performance. And Managing projects means managing resources, but above all management of resources is based on Coordination. Element of Uniqueness: A-Cone of Uncertainty We can say that there are few certainties in Projects. In every project, it is necessary to estimate (duration, budget, resources…) and the uncertainty of the estimates is greater at the Beginning of the project and then decreases over the life cycle of the project. The 2 Curved lines depict the so called Cone of Uncertainty and the Dotted Line represents the true value of the variable taken into consideration. This Cone Suggests that: -The true Value of the variables is known only at the end. The project team has the responsibility to try to reduce estimation errors as much as possible, in accordance to time constraints and available resources. -The real Performance of the project normally remains unknown throughout its life. Some rules (not applied to very innovative ReD projects) suggests that after the first 20-30%of project progress, the real performance of the project is sufficient clear. Goal of the project team is to reduce the distance between estimated and actual values, in order to do this there are 2 main Ideas: -Plan Properly -Copy/Reuse: mostly when faced with a not very innovative project that simply aims to make the product available to clients and users. In this case the best approach is to copy existing solutions that have proven to be functional- In other cases, the concept of copying may apply only to specific elements of the project. In general copying allow you to be more innovative because they free up resources for value-added activities. B-Project Life Cycle Projects go through different Phases: Set of logically related activities that normally culminate in the completion of one or more deliverables. 1.Conception Least structured phase; it arises from the recognition of the need for a project. The Output is not always formalized, when it is, the output document is the Business Case and it should justify the need for a new project, defining the objectives and assessing the benefits of the investments. 2.Feasability Not formally present in all projects, it is activated in major projects, when ideas are not very clear and there are different feasible design alternatives. Concept of Feasibility corresponds to the choice of the best option among those possible. The Output is the Feasibility Study, it involves the analysis of the various project alternatives. Only with the selection of the best project alternative that the project really comes to life. Informations of preferred alternative are in a document called Project Charter, if validated, it formally authorizes the existence of the project. 3.Planning Project Manager receives delegated authority to conduct a project. Planning phase serves precisely to deepen the analysis and arrive at an Action Plan that indicates to those involved the actions and results expected. The Output is the Project Management Plan 4.Execution Once the project management plan has been officially approved can starts the execution phase. Executing the projects does not mean stopping planning activities. 5.Closure and Transfer Closing the project means several things: -Acceptance of the deliverable by clients -Administrative Closure (compliance with contracts and execution of all payments) -Document Closure -Organizational Closure (communicate to stakeholder the closure of the project; conduct “lessons learned meetings, provide awards…) Transfer on the other hand is the diligent management of the handover between the project and those who will then manage the process generated or impacted by it. 6.Benefit Realization and Post-Implementation Evaluation Means extending the project life cycle well beyond the end date, to include the period of time required to verify that the project is actually delivering the intended benefits. Benefit Realization involves: -capturing the benefits that the project should generate -identify people who should take charge of the realization At the End we can finally carry out an overall evaluation of the benefits achieved by the project. The Low resource utilization in the early stages stems from the fact that conception activities usually involve a few people doing high-level analysis. Until the typical explosion of the execution phase, where there is a significant increase in resource utilization. In the end closing and transfer phases signal sharp decrease in the use of resources. The rise of the curve indicates that normally shortly after the end of the project, small improvements activities or resolution pf preciously unnoticed or unresolved errors emerge. >Cost to Modify Curve: evidence as to repair to an error or to implement a modification always has a cost, and the increase ion change cost often has an exponential trend >Opportunity to Add Value: changing ideas in the early stages has a low cost so you should leverage this and welcome all the suggestions that can improve the project. The same ideas tend to lose value as the project moves forward. Implication: these curves advise the project team to conduct in-depth analysis at the outset, considering time spent on analysis as an investment and not a waste. They also suggest not to keeping information that could improve the project under wraps, waiting for it to stall on some problem. Opportunity to add values curve in fact suggests that good ideas lose value as the project progresses. 2.Project Environment and Key Players The Project Manager Is the person entrusted with responsibility and authority to achieve project objectives, using a project team coordinated by him. The project manager is a Temporary Role, but in companies whose business is heavily project based, the project manager may be a permanent position in the organization chart. Important Aspect of the role: Development of Strategic Skills, very often project managers is relegated to execution and planning, without being able to exert any influence on defining the project strategy. Effective Project Managers Should: -read up on the strategy of the organization they work for -try to set up the project to contribute to the achievement of the firm’s strategic objectives. -in making operational choices, take the broader strategic objectives of the firm as imput -instill strategic thinking in the project team as well Other less debated aspects: -Abandon the specialist mindset: being too specialist is a risk because team members will stop making specialist contributions, knowing that their proposals will always overturned or challenged by the project manager -Do not always delegate decision: hesitancy does not allow the team to continue the project activities (sense of instability) -Make your presence felt without being pedantic: present without being invasive, otherwise it may lead to short term results, not helping to develop the potential of the project team -Protect team from external turbulence -Use mistakes as a source of knowledge -Adaptability -Energy -Consistency Project Team Composed of those who support the project manager by performing the work necessary to achieve the project objectives. Project Fellowship traits that a team member should have: -Global Vision: build and maintain an overall picture of the project. This allows to compare ideas and proposal. The construction of a global vision is responsibility of the project manager, but also of the team members Openness: ability to encourage and support a dialectical confrontation with the other members of the project team, showing sincere attention to the points of view of the others. Openness means comparing oneself with other team members in order to acquire more and more skills and understand different perspectives -Initiative: ability to take action on key project issues even in the absence of a directive or specific order -Adaptability: be flexible in rpject contexts that, by their nature are very dynamic -Influence: gain others’ attention toward the solutions to be adopted or action to be taken -Professionalism: behave and act in accordance with professional, behavioral, and ethical models Sponsor Person who provides the necessary authority for the project manager to be able to effectively perform his role. He also provides support to the project so that it can achieve the agreed-upon objectives. In this way the project manager is able to make sure that the project’s objectives are met. Functions: -Give authority to the project manager -Finding resources or facilitating the finding of resources -Solving problems that are outside the project manager’s mandate or scope -Assigning goals to the project -Formulate strategic direction -Emotional support for the project Functional Managers Very relevant especially when projects are conducted in firms organized by function or matrix where the resources that are expected to collaborate on the project often belong to different functions. Customers Today’s approach aims at receiving feedbacks provided by customers throughout the life of the project. Customer involvement is critical in highly dynamic environments. Suppliers Are part of the project team and can perform essential project activities. It is useful to look at suppliers by also considering their project management skills and practices. 3.A Project Management Framework The project team does not start from a blank sheet but receives input in term of Objectives to be achieved, Resource available, Constraints to be met, Stakeholders, Key risks. These inputs are normally captured in the Project Charter. At this point, it is necessary to go into more detail so as to be more performant during execution. Defining the Project Strategy >Identification of the Critical Success Factors (CSF), these are the few things that really matters to achieve the project objectives. >Stakeholder Analysis: recognize that there are many players who can influence the project. Normally project teams underestimate this aspect and consider a simplified organizational environment compared to reality. Analyzing stakeholders becomes a useful element for building a sort of Power Map and then managing the project accordingly. We can also say that Stakeholder Analysis works as an input for the identification of CSFs. Identification of CSF + Stakeholder Analysis = Define the Project Strategy Project Operational Planning Identification of CSF and Stakeholder Analysis are very important inputs for operational planning, in the sense that the operational methods of project execution will have to consider both the stakeholders and their characteristic and what really matters, so as to define correct priorities. Checklist: offer a structured approach that allows us to assess and control many elements. Checklists have been proven to work very well, but despite this, few people use them. The reason is mainly psychological: Their use is interpreted as a need for help, inability to remember, and lack of experience, and therefore, people prefer to rely only on their own mnemonic and evaluative skills. It is important to note that there are many interrelationships between the different elements involved. When getting into the details of planning, previously unidentified stakeholders or CSFs may be identified, or the difficulty of creating certain deliverables may require the project management plan to be revised. Or, again, some deliverables may lead to the reaction of stakeholders not previously considered. Finally, it is important to remember that project are dynamics. As such, monitoring, controlling, and managing changes are fundamental. In some cases, the monitoring and control system also triggers requests for change to realign the project with the initial plan or, in more serious cases, to modify some key features of the project. 4.Project Management Plan Is a summary document of a managerial nature, containing indications of the Motivations for the project, the Objectives, the Scope, and How the project is to be executed, monitored and controlled taking into consideration the stakeholders, resources, risks and constraints. This document should be formally approved and represents the First Baseline. Elements: - It has a Management and Not Technical or Legal Purpose. It must become the common heritage of the team and not a document in the hands of a single person. For this reason is important to separate the management component from the technical component of the project. -it must be a Summary Document; a document with operational details on every single aspect would be difficult to use. -it must contain the Information Needed to Manage the Execution of the project. -it can be viewed as a Promise, or even a Contract. This means that Key Stakeholders (clients, sponsor) should validate the content so that the parties are committed to it. Structure Example Other contents: -procurement plan -quality plan -safety plan -transfer plan -post implementation evaluation and benefits realization plan (it all depends on the type of project) Project Plan vs Management Plan: The project plan is a les detailed document that is more focused on what has to be done, resources available, deadlines, goals to be achieved But the indistinct use of one or the other is not a serious matter. 5.Critical Success Factors (CSFs) CSFs are the limited number of variables that, if managed satisfactionally, will lead to positive project results. CSFs have a strong impact on many elements of a project. For example to properly manage a factor, it is necessary to have the Human Resources with particular skills, involve specific stakeholder… In summary, project planning and project execution are strongly influenced by CSFs, but to identify CSFs we need people with strategic thinking and able to carry out a strategic analysis at the project level. Recurring CSFs The list should be interpreted in this way: If a factor is present, it is unlikely to be a problem; if it is not present, it is necessary to evaluate the role of that factor in the project, in order to understand if negative impacts produced by its absence are tolerable and if other factors can counterbalance its absence 6.Stakeholder Management Stakeholders=Individuals, groups, organizations participating in, affected by, interested in the execution or result of the project. There is an element of subjectivity that shows the difference between a well-managed project and one that was unprepared for the demands or actions of some stakeholder. Underestimation of stakeholder (3 factors): 1.stakeholder management is an issue not yet fully understood 2.stakeholder management appears to be a less concrete issue, whose control is less important than other aspects 3.projects are under great time pressure; this is why focusing on getting things done rather than governing the project environment is considered more relevant Stakeholder contribution Stakeholders if well managed, can make key contributions: -Informative: provide unknown information about the project -Consultative: stakeholders can be consulted on ideas, proposals, decisions to be made -Decision Making and Approval -Design -Execution: increased level of involvement -Facilitative: influence other stakeholder -Evaluation: project is evaluated by stakeholders with different levels of importance; it would be reductive to think that the entire success of a project is determined solely by clients Stakeholder Management Process 1.Stakeholder Identification Applying different techniques: -brainstorming -document analysis -similar projects -other stakeholders (asking them to support the identification of additional stakeholders) -public sessions 2.Stakeholder Analysis Having a simple list of stakeholders is not enough, it is necessary to know their characteristics Fundamental information to analyze stakeholders are: -What the stakeholder would Want From the project -What the project Need From the stakeholder -Understanding of How the stakeholder Perceive the project -Evaluation of the ability of the stakeholder to Influence the project -Assessing a Level of Interest that the stakeholder has in the project -Relationships the stakeholder has with other stakeholders 3. Classification and Prioritization of stakeholder It is possible to draw 8 Profiles: Saviors (high power, high interest, positive attitude): Our best allies, we must try not to betray their expectations but also use them to support the success of the project. Friends (low power, high interest, positive attitude): They can support the project operationally. It may happen that in the long term, they could also change their power level, so it is better not to manage them superficially. Sleeping giants (high power, low interest, positive attitude): They could become very good allies if we were able to awaken their interest. Acquaintances (low power, low interest, positive attitude): At present, it is of little relevance to the project unless we can increase their power and/or interest. Saboteurs (high power, high interest, negative attitude): They are potentially the most dangerous stakeholder, so it is advisable to try to involve them and present the project in such a way as to make them understand the positive aspects; in other cases, vice versa, it is necessary to limit their ability to harm. Irritating (low power, high interest, negative attitude): Thanks to low power, they are not really dangerous for the success of the project but certainly their “rowing against” can be disturbing especially from a relational point of view. Time bombs (high power, low interest, negative attitude): They can become very dangerous, especially if their interests in the project change; therefore, they should not be underestimated, it is necessary to monitor any change in their attitude and see if they can be “defused” by reducing their power Hidden traps (low power, low interest, negative attitude): In the model of Murray-Webster and Simon, they are defined as tripwires. In theory, they are stakeholder of little importance, but their negative attitude can lead them to “trip up” the project and, in case of negative reaction, their interest could grow. Normally, one should try to isolate the project as much as possible from these types of stakeholders, to decrease their interactions and therefore disturbances. Classification is also useful in setting priorities: Stakeholder with less power receives less attention, but also useful for the timing with which action needs to be taken on certain stakeholders 4.Stakeholder Management Planning How to manage stakeholders; information gathered during the analysis phase is used to define the best strategies for successfully interacting with them. 5.stakeholder Management Through concrete actions stakeholders can be addressed in the most coherent way with respect to the objectives of the project. 6.Monitoring and Controlling This phase has several purposes: -Evaluate whether the actions taken to manage stakeholders led to the desired results -Update the Stakeholder Analysis -Implement any Emergency Actions with which to manage unexpected stakeholder reactions Stakeholder Management is an ongoing process: Along the project life cycle, new stakeholders may emerge, other may disappear, and still others need to be re-classified and managed in new ways 7.Defining the Project Scope and Objectives If objective were not clear, the team involved in the project would not be able to direct their efforts in a specific direction. Risk: devoting too much effort to activities with little added value. Scope: clarifies what the project team will be working on and what will be excluded Three Characteristics of successful project’s objectives: -Clarity: objects must be easily understood by the people involved in the project -Shared among Key Stakeholders: entire project team and stakeholders must be aware of the project objectives and scopes -Agreeable: people most directly affected by the project should appreciate it and believe in it, from both a rational and emotive point of view. The degree of involvements depends on the commitment devoted However, having engaging objective is a positive but not a determining factory Project Scope Statements Framework for describing objectives and scope with a focus on the crucial element of Clarity. 1.Justification: The fundamental question that precedes the “what” is the “why” the project is necessary. Three sources of motivations behind a project: -Problems: identification of problems that need to be solved -Opportunity: -Obligations: projects motivated by legal obligations The rationale for the project should be contained first in the Business Case and then in the project charter and finally in the project management plan. 2.Project Description: Describes what will be produced to meet the needs expressed in the Project Justification and the process (high-level) that will be followed. Form is also a substance, and a synthetic form helps people to really use the important documents 3.Main Deliverables: Describe the intermediate and final products that the project will generate. Good Deliverables should: -Generate unique products (sign a contract and deliver a product are different deliverables because generate different results) -Be Verifiable -Be Necessary for the project completion -sometimes, Formally Accepted by the stakeholders Deliverables can be classified in: -deliverables part of the final project -deliverables generated during the life of the project Final project products are not enough to properly manage a project. There are also deliverables created along the project. There is a hierarchy of deliverables, some broader and more relevant. Reasons for the deterioration in a project performance depends on: -inability to receive formal feedback -inability to gain knowledge about some of the project mechanisms during the project itself -difficulty in carrying out project activities in a rational manner So, the type of interim deliverables and their temporal allocation influence the project performance. In some projects deliverables are given, in other cases, it is up to the project team to define deliverables that make sense for the project. Deliverables if well implemented can bring great benefits in terms of: -quality -efficient use of resources: focus on things that really matters and better organization of work during the project -risk reduction: if a deliverable is an intermediate result, some element of project uncertainty can be identified in advance -increase motivation -result oriented 4.Success Criteria: A good objective must therefore be measurable and also have one or more desired levels of performance to be achieved (Targets). Distinguish between output and outcome indicators. Indicator refers to the measurability of an objectives and in particular: -Output Indicators defines the characteristics that the project product and intermediate deliverables must have in order to be positively evaluated -Outcome Indicators are more concerned with the benefits generated by the project and are normally measurable with a certain delay Measuring projects on outcomes is correct but not always easily implemented in the reality, solutions could be: -evaluate waiting for a period of time -design output indicators that reasonably correlate with outcome indicators -include in the project team, stakeholders who are representative of the future beneficiaries of the project -identify the people responsible for sustaining the planned benefits over time 5.Biundaries This element should clarify what is part of the project and what is not. Multiple interpretations of boundaries lead to unfocused project teams. So clarifying boundaries permits to have a better definition of the resource need, to have a more focused team, and to align stakeholder expectations. 6.Constraints Element that limits or regulate the project action in a particular way. Very often, time and budget are mentioned among constraints. Constraints define conditions that must be met; if they are met, they simply lead to compliance, if not met they can generate negative impacts. 7.Assumpotion: Are kind of limitation of responsibility that the project team wants to make explicit and clear to its stakeholders. Good Assumptions fall under one or both the following conditions: -are factors that are indipendent of the way the project is conducted and are considered external, outside the team’s responsibilities -are factors whose management or verification would cost disproportionate to the project objectives or would not make sense from an organizational perspective 8.Scope Breakdown The project scope still has an inadequate level of detail to provide realistic estimates, assign clear responsibilities, and schedule the project. It is therefore necessary to break the scope down into further elements; this can be done leveraging the Work Breakdown Structure (WBS). WBS represents the hierarchical decomposition of the project scope into elements that are sufficient to create the required deliverables and achieve the project objectives. WBS supports the development of realistic estimates, allows for the assignment of responsibilities and facilitates the use of other project management methodologies. -WBS delimits boundaries (scope) of the project -WBS is hierarchical; the elements of the WBS can be further broken down into sub-elements (graphic or tabular) Appropriate Level of Breakdown Not breaking up enough does not allow to estimate and plan the project realistically. Breaking down too much makes project management very time consuming. So we have to break down the elements of the WBS until each element is: -Distinct from each other -Estimable in terms of Time, so it is possible to assign a duration or effort -Estimable in terms of Costs : assign a budget -with a unique accountable -all elements of the WBS are independent of each other during the execution, so No Mutual Interdependencies but only Clear Inputs and Outputs Links The element identified so far are called Work Packages. All the elements that are broken down into further elements are called Summary Activities/Summary Tasks. Since the WBS, and especially the work packages, are the basis for other planning activities, each work package may contain additional information such as: clear and concise description of the activity; unique and hierarchical identification code; duration; effort; cost; accountable person; resources; inputs required for its completion; outputs produced by its completion; related documents Some or all the information related to work packages can be systemized into a single document: WBS Dictionary Breakdown Criteria WBS should not me a mere list of elements. There are different ways of presenting the content and different ways can have very different impacts and effects on different stakeholders, and different structures can lead to different ways of managing the project. 1.Phases (one of the most commonly used method), sequential-like approach, and is very convenient to retrace, in consecutive logical blocks, the elements that compose the project 2.By Deliverables: at level 1 the main deliverables are represented, are then broken down into the elements that contribute to their creation (appreciated by clients) 3.By Objectives: at level 1 are isted the objectives that make up the project; then they are broken down into the activities needed to achieve them. It is difficult to use because of the redundancy of those elements that contribute to the achievement of more than one objective 4.By Location (Geographical Criterion), grouping elements that are carried out in the same place and separated from those carried out elsewhere How to Develop a WBS -Bottom Up Begins with a meeting involving the team members, the meeting should be a brainstorming session, asking team members to list the work elements they believe are needed to carry out the project Even if the approach is bottom up, in practice it is not true that we start from the bottom (es, from work packages), because from the brainstorming, some elements may emerge that, at the end of work, will turn out to be summary activities or work packages or elements so detailed that need to be aggregated with others. Team members should be encouraged to express more ideas, to build an overall vision of the project. When the group suddenly begins to slow down, it is best to start grouping the elements identified according to one of the criteria. After a first phase of regrouping, you will discover redundancies and gaps that must be eliminated or filled through a second and faster brainstorming session. This method is suitable when the project team does not have a clear idea of which breakdown criterion is most appropriate, and also when knowledge of the detailed content of the project is not very high. Also useful to develop a cohesive team -Top Down In this case the breakdown starts from level 1, assumed to be already known in term of breakdown criteria and contents. The level 1 elements are broken down. The process repeats until work packages are identified. Is an approach more orderly and well suited to projects that, at least at the level of outline structure, have already been addressed by the project team. -Anthology If it were possible to identify similar projects (or part of projects), adopt the copying strategy and use it at a starting point for the development of the new WBS; integration and customization is required. -Template Some organizations carry out so many similar projects that the elements/structure of the WBS is already known. They can use templates, which often leave some room for customization -Standard Is similar to the concept of template but taken to the extreme; Entire project WBS is predefined. +With reference to the first 3 approaches, in reality it is not always possible to develop the entire WBS with the desired level of detail. For this reason, an approach called Rolling Wave is often adopted, which consists of adding more detail to the WBS as new information is received. 9.Definition and Allocation of Resources An initial high-level survey of the skills needed can be done at the level of the project charter; however, the details provided by WBS allow for a more precise identification of the skills required for a successful project. The best resource may come from inside or outside the company. It must be considered that: -from skill analysis the need for additional or different HR might arise -> so skills analysis can be used to negotiate with the project sponsor. -even in the case of immutable team, noticing skills gaps allows you to launch development plans aimed at filling the gaps. -noticing skills gaps allows to provide more realistic estimates and identifies risks related to skill gaps Planning and Allocation Human Resources to Activities Assigning resources with the right skills to the activities in one of the priority selection criterion, but there are 2 other variables that need to be considered: -Availability of resources: we assign a resource to 15 different activities for a total of 400 hours of work, but the resource selected is available only for 200 hours -Resource Development Objectives: resources with skill profile not perfectly aligned could be assigned with the aim of offering an opportunity for professional growth (Project as a Training Ground). Responsibility Matrices The RAM (responsibility assignment matrix) has the purpose to better specify the contribution expectedfrom people with respect to the project: -Rows: element of the WBS -Columns: people or roles involved in the project (stakeholder analysis is a great input for this) The intersection defines who does what Most widely adopted standards in the RAM is the RACI Matrix: R:Responsible: people/roles who must perform the assigned activity. For each activity there is at least one executor (so at least one R) A:Accountable: the person in charge for the work package identified in the WBS so has the ultimate responsibility for the good progress of the activity (coordinator) C:Consulted: persons/roles to be consulted in order to perform the activity in the best way possible; could be useful for 3 main reasons: -consulted has an high level of knowledge so it is useful for the successful execution -to verify the existence or to anticipate the emergence of problems -to create engagement and support I:Informed: people/role who need to be informed about the progress or results of the activity; used in 3 situations: -Reporting -Involvement of key stakeholders -coordination; accountable person for the next activity should be informed by the accountable person for the precious activity by analyzing a RACI we could check whether: -one or more people perform the activity -only one has the accountability -there is not an excess of consultation (slowdowns problems) -there is not an excess of information (spam) or lack (poor coordination) >Many R or A: a person with a lot of R e A assigned, there may be doubt that he may be overallocated >A Few R or A: detecting very low involvement could sometimes be correct, as some resources have limited exposure to the project >A Few I or C: not surprising because normally in the construction of the RCI matrix, attention falls primarily on execution and coordination >Only I and/or C: roles that are not very active could be the result of a conscious and correct choice especially for roles such as project sponsor and functional managers Estimating Resource Use Responsibility matrix does not indicate the Workload but define the type of involvement. The estimation of resources utilization is often one of the most difficult aspects for project management. One classic mistake when approaching project management is to ask for very precise estimation of resource utilization. Instead of looking for detailed estimates, a good idea is to start a process of improving estimates. Estimating the use of resources is not simple for several reasons: -people are not used to doing so, they have not developed a correct mental process for this purpose -estimates is influenced by the level of detail of plans -often, time actually used in not trucked Estimating resource usage allows to identify Resource Load. The two concepts are not equivalent ex: if we have a resource available full-time and we assigned 40% of his time to 4 activities in parallel, each activity would use less than the resource’s maximum availability, but overall we would have a total load of 160% Planning and allocation of material resources In projects where the focus of activities and deliverables is to use, transform, assemble material resources, normally the planning of material resources is quite good (is the firt thought that comes to people’s mind). The problem arises when material resources are only Supporting the Execution of activities and not the main output. Here people tend to focus more in the planning and management of HR and: -assume that material resources are available -overlook the role of that materials resources play in supporting the performance of the activity 10.Communication Management An important aspect of Stakeholder Management is to establish communication channels with stakeholders so that they can receive and provide correct information. This can be addressed through the Communication Plan that should be part of the project management plan The Communication Plan’s Content: -Who is the recipient of the communication -What information should they receive (not all stakeholders should receive the same information) -in What Format -With which media (ex. electronic signatures for legal validity) -When the communication should occur and How Often -Who should provide it (Sender), is good that someone is identified as accountable for conveying the information in the correct way and the correct time This plan may be considered a tool that introduces rigidity and slowdowns; for this reason communication plans use fairly general wording such as “as needed” if it makes no sense to define more precise indications. From a practical perspective, the communication plan reminds us of the need for (and encourage to maintain) an appropriate level of attention to all stakeholders in order to minimize misunderstandings, mistakes and conflict 11.Time Management Information needed to properly plan and manage a project from a time perspective: 1-List of activities to be performed: could be sufficient work packages or further breaking down 2-Duration of activity 3-Dependency relationships between activities: Inputs and outputs can be information, authorizations, documents, resources. The representation of such relations is conveyed from the so-called predecessors. These define 4 types of relations between activities: -Finish to Start: the successor activity can only begin if the predecessor one is finished -Start to Start: the successor activity can only begin if the previous one is also begun -Finish to Finish: the successor activity can only finish if the precious one has finished as well -Start to Finish: the start of the successor activity determines the end of the predecessor one (es. Beginning of the concert determines the conclusion of the selling tickets) Predecessors can be refined by applying Leads and Lags. And dependency links are distinct in: -mandatory: determined by the nature of the work to be performed -discretionary: representing preferred sequences of activities derived for example from previous experience The distinction is useful because in situation of design optimization, it is easier to act on discretionary predecessors. 4-Availability of Resources, which affect the duration of activities 5-Calendars 6-Schedule constraints on Activities Critical Path Method Critical Path is the sequence of activities that determines the longest path in a project, which in turn is the shortest duration the project can be done. While on simple projects we can imagine the critical path, in more complicated projects we need to rely on project management software to easy visualize it. The identification of the path is done through the CPM (Critical Path Method) an algorithm applied to a network diagram that is the graphical representation of the activities and their relationships accompanied with their duration. Important factors: -Critical Path is the longest path, the one that corresponds to the minimum project end date -being composed of sequences of activities, could happen that project has more than one critical path (rare) -in order to reduce the duration, we must act on critical path -shortening noncritical activities does not make much sense, as could generate cost rise or stressing people -compressing activities on the critical path has limits: Critical path is a dynamic concept, non a static one, and may change during the life of the project -Noncritical Activities may allow some flexibility, they may be delayed without impacting the total project duration- The measure of this flexibility is called Float or Slack. -total slack is the amount of time a task can be delayed without lengthening the overall project duration -free slacks is the amount of time an activity can be done -having slacks in always good news but having free slacks ìs even better. An activity slack has total slack but no free slack, any delay would not delay the project but would create delays in subsequent activities and additional costs -the reliability of the critical path is strongly influenced by the reliability of the duration of individual activities and the correctness of the predecessor PERT Program Evaluation and Technique is very similar to CPM with a difference. While in CPM, activity durations are deterministic (single duration for each activity), in PERT are Probabilistic, introducing uncertainty. For each activity are proposed 3 estimates about each activity duration: -the Optimistic (o), which can be achieved if all favorable conditions come true -the Pessimistic (p), most negative scenario -the Most Likely (m), the scenario in which the team believe the most Expected duration (t) can be calculated like this: t=(o+4m+p)/6 since it has a probabilistic approach PERT also provide the standard deviation of t: (p-o)/6. Critical Chain Project Management ultimate form of this method arise with the theory of Constraints (TOC), aimed at improving the performance of processes. TOC aims at improving the performance of processes; it states that the improvement of a system and therefore its ability to achieve the assigned objectives, its substantiated by the identification of the weakest element (constraint) and its removal. The critical chain method applied to project management start from the observation that traditional methods, such as CPM, are not able to optimize project performance; due to: -Student Syndrome (starting working on tasks when realizing there is no more time left) -Parkinson Law (people use all of their available time for the completion of their activities) -Self Protection (if a person were to finish their work early, the reward would be to receive new work (no incentive to finish work earlier) -Dropped-Baton (if an activity ends early, it will not result in a gain in time if those involved in subsequent activities are not notified in time) CCPM propose to address the limitations of traditional approaches through: -Removal of Safety Margins on Activities -Aggregation of Buffers at the end of the project: buffer is part of any activity but not all activity will be delayed then some buffers will not be used and wasted. The idea is to remove buffers from activities and insert them after the last project activity (project buffer instead of activity buffer). The project buffer will not be the sum of the single activity buffers (often about 40%). -Adopting ALAP (as late as possible approach): starts form student syndrome and the belief that it would be useless to start activity earlier, in very dynamic environments, anticipating activities may lead to having partially redo them, as new, more detailed, and stale information may come to light later. -Insertion of feeding buffers to protect the critical chain: Feeding Buffers are time buffers inserted when a noncritical path enters a critical chain: this dilutes the concept of ALAP a bit, as in reinsert elements conceptually similar to slacks -Insertion of resource buffers: these are alerts; the predecessor activities must alert the successors activities about their progress, so that the end of an activity corresponds to the beginning of the successive one, without dropping the baton +CCPM suggest elimination of multitasking activities as much as possible since they reduce productivity 12.Cost Management Normally projects require financial investments, and most organizations are interested in keeping costs down. Fundamental aspects: -Types of Cost -Ways Costs are represented -Cost Trends Types of Costs >Fixed and Variable In economics, fixed are costs that do not vary with the volume of the production (rent and insurance); variable are costs directly affected by production level (raw material). In projects these costs are different, in particular the production volume is not considered since for many projects, you cannot speak of production; what is important is: -the variation in the quantities of some relevant deliverables -variability of costs in relationship with the duration of the project >Direct and Indirect Direct costs can be traced specifically to the cost element, because they are caused by the element itself. Indirect costs are costs element that can be traced to, or caused by, two or more cost elements or whose direct assignment is not cost-effective. In general direct costs are part of the projects, while indirect costs are subjectively allocated and therefore could affect, to a greater or lesser extent project costs. This differentiation also allows to asses when is worth accepting a contract. Every amount of money more than the direct cost contributes to covering the indirect costs. >Standard A standard cost is a subjectively created measure and rarely corresponds to the actual costs incurred. In projects these are often used when assigning internal resources to teams, this for 2 reasons: -provide greater simplicity to budget process -allows to overcome the inevitably imperfect transparency surrounding the actual costs of colleagues >Parametric Are costs whose amount is determined from parameters. All projects have costs that depends on parameters, however costs are defined as parametric if they depend on a few parameters (ex. construction renovations and square parameters) >Controllable and Committed Controllable if its amount is significantly influenced by the manager of the activity or project. Committed are costs already incurred that can no longer be recovered, or arising from contractual obligations that cannot be changed (so non controllable costs). Project Budget Structures A powerful tool for the project team is the classification of costs using budget structures. Useful Budget structures in project management certainly include: -By Nature: hysical characteristics of the project factors. Personnel costs, raw material costs, rental costs… Understanding which type is dominant and where to intervene to optimize costs -By Cost Centers: Cost center is an accounting unit of the company in which costs are aggregated (department or organizational unit). Project Budget by cost center allows you to understand which organizational units will be most involved in economic terms, and then, depending on the benefits generated to the different organizational units, calibrate the project communication -By Phases: Structure useful for studying the cause-and-effect links between phases. A lack of emphasis on one phase could lead to an increase in costs in subsequent phases that is more than proportional to the savings achieved in the previous phase -By Deliverables: As the WBS, the project budget can also be structured by deliverables, which allows you to asses whether or not the cost associated with a deliverable is proportionate to the value generated, as well as to compare projects with similar deliverables. Costs Over Time Issue of when costs are incurred and how they are distributed over time is relevant for expensive and long term projects. Additionally, when the monetary disbursement will occur. In a multi-project situation, the financial dynamics are even more complex because sustainable financial outlays ion a single project may no longer be sustainable if other parallel projects make additional financial demands. 13.Risk Management Risk management is a systematic and proactive process to keep the project under control and reduce uncertainty; the 5 Steps of the Process: 1.Identifying Risks: Use of appropriate methodologies and the various source of information available. The main tools are: -Project Management Plan Useful because it is tailored to the project and allows for the identification of very contextualized and non- generic risks -Assumption Analysis A project, as innovative activity, is also based on assumption -Checklists Predefined lists of risks that can be used in a very simple way (usually developed based on experience gained in similar project) -Historical Information -Interviews -Brainstorming 2.Risk Analysis -qualitative approach Analyze the risks to understand their characteristics and to focus on the most relevant risks. Analyzing risks means associating at least the following information to each risk: -probability and or frequency of occurrence (building a scale) -temporal location of the event -impacted areas -impact assessment The qualitative analysis is based on assigning approximate values to the probability and impact variables. using only probability and impact values, risks can be represented in a risk matrix; risks do not all reserve the same treatment, methods like this are necessary to classify risks. Some organizations classify risks through an approach based on multiplying probability by impact. So there is indifference between probability and impact; this behavior is described as “being risk neutral”. PxI only when the risk can be repeated many times, but in reality, this never happens. -quantitative approach -EMV: Expected Monetary Value In this method point values are used for the probability while impact is translated in terms of economic impact only, and PxI is calculated for each risk. If you have a large list of risks, it makes sense to sum the EMVs. This sum represents the toal riskiness of the project. -Sensitivity Analysis Used to understand which risks have the greatest impact on the project but also how certain objectives are impacted as the risks change.  So starting by taking baseline values, then vary one risk at time and evaluating its impact on the project. (Tornado Diagram) -Monte Carlo Simulation Allows to define the probability that a given variable has a value lower or greater than a determined threshold. Just by defining the distribution of probability, the simulation allows to define the statistic distribution of the value of interest. (es, duration of an avtivity and the risk of change of the duration) 3.Risk Response Planning and Implementation (4) The objective of this phase is to identify actions to be taken in order to reduce overall threats to the project by decreasing the probability of occurrence or the impact of individual threats; common strategies are: -Avoid: eliminate a specific threat even with the modification of the project plan -Mitigate: most common response action. It involves reducing the risk likelihood or impact without fundamentally changing the activities that generate the threats -Transfer or Share: pass the threat in full to another party (transfer) or share part of the threat to a third party through a collaborative approach (share) rather than being total delegated -Escalate: need to refer to higher hierarchical level -Accept: do nothing, option activated when it is not possible to adopt any other action (for technical or costs reasons) + 2 temporary response actions that might be activated when it is not yet clear which action is the most correct: -Observe: suitable for changing risks and whose behavior is not understood -Investigate: more active than observe, consist of studying the risk in order to understand it more thoroughly with the aim of proceeding with an action 5.Risk Monitoring and control Monitoring: asses wheter or not the actions aimed at managing the risks have had the desired outcome. Risk control: serves to implement the changes necessary to have the project under control 14.Monitoring and Controlling The need to plan and replan does not end in the early stages of the project. The most dynamic project phases is not the initial one, but the execution phase during which it will physiological to record deviations from what was planned. For planning to continue to be useful, 2 types of activities mist be carried out: -Monitoring: process of gathering data about the project performance and calculating performance indicators. The activity also includes the distribution of information about project performance and the production of reports. -Controlling: relies on information from monitoring and uses it to assess whether deviations from the plan require corrective actions and, if so, identifies and promote such actions. Monitoring is a passive process (detecting the situation), Controlling is more active (propose actions). Typical issue: evaluating the work done. A common tool is the Percentage of Complexity. In general when assessing the progress of the work done, we are satisfied with approximations. In order to make practical sense of the information coming from monitoring, it is essential to have data with which to compare. In projects it is very useful to define the so-called Baseline (Forecast), which represents the state of the main project variables that will be used as a reference in the performance evaluation. The baseline makes it possible to compare actual performance with expected performance, and this allow you to assess whether or not to implement corrective action. Earned Value Method 2 S-Curves are often used in project management to represent cumulative cost trends over time: -The Upper one represents the expected costs -The Lower one the costs actually incurred Values are compared to the so-called Time Now, the moment (a date) the progress monitoring takes place. The Curve Suggest that the project is doing well because the actual cost (AC) are lower than expected. The EV method propose to evaluate the performance of a project by considering the variables of cost and work performed in an integrated manner; 3 fundamental variables: -PV (Planned Value), also known as BCCWS (Budget Cost of Work Scheduled), How much we planned to spend -AC (Actual Cost), also known as ACWP (Actual Cost of Work Performed), How much we have actually spent -EV (Earned Value), also known as BCWP (Budget Cost of Work Performed), How much we would have had to spend, using budgeted values, for the work actually performed at a certain date The method translates actual work done and planned work into economic terms. EV allows to compare the 2 curves. The three variables allow for the calculation of some quantities that provide a better understanding of the project performance: -SV (Schedule Variance) = EV – PV; if positive, for the same cost we have done more work than planned -CV (Cost Variance) = EV – AC; if positive, for the same amount of work done, we have spent less than expected Indices developed that allow for easily readable and comparable data: -CPI (Cost Performance Index) = EV / AC. >1: budget cost to do the work in a certain date is greater than the AC to do the same amount of work. We are saving money 1: the amount of work actually performed on a. Certain date is greater than the amount of work expected on the same date.