Project Scope, Schedule, and Cost Management PDF

DEPARTMENT OF PLANNING DEPARTMENT OF PLANNING BSc. Development Planning 3 PL 356 Project Analysis & Evaluation UNIT 8: Project Scope, Schedule & Cost Management Course instructor: Dr. Charles Oduro  DEPARTMENT OF PLANNING PROJECT SC...

DEPARTMENT OF PLANNING DEPARTMENT OF PLANNING BSc. Development Planning 3 PL 356 Project Analysis & Evaluation UNIT 8: Project Scope, Schedule & Cost Management Course instructor: Dr. Charles Oduro  DEPARTMENT OF PLANNING PROJECT SCOPE MANAGEMENT 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 2  DEPARTMENT OF PLANNING Project Scope Management Project Scope: All the work that must be performed to deliver a specified product, service or result with specified features and functions Product Scope: The specified features and functions of a product or service (product specifications) What is Project Scope Management? Ensuring that the project includes all work required, and only the work required, to complete the project successfully 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 3  DEPARTMENT OF PLANNING Project Scope Management Work Breakdown Structure (WBS) The process of subdividing (decomposing) project deliverables and project work into small, manageable components 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 4  DEPARTMENT OF PLANNING Project Scope Management A Simple Work Breakdown Structure Source: PMBOK (4th Edition) 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 5  DEPARTMENT OF PLANNING Project Scope Management Another Example 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 6  DEPARTMENT OF PLANNING PROJECT SCHEDULE MANAGEMENT 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 7  DEPARTMENT OF PLANNING Project Schedule Management What is Project Schedule Management? The processes required to ensure timely completion of a project Among other processes, it involves: 1. Defining project activities 2. Sequencing the activities 3. Estimating Activity Durations and 4. Developing a Schedule 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 8  DEPARTMENT OF PLANNING Project Schedule Management Defining Project Activities Identifying and documenting specific activities to be performed to produce the deliverables identified in the WBS Work packages are typically decomposed into activities that represent the work effort required to complete each work package 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 9  DEPARTMENT OF PLANNING Project Schedule Management Sequencing Project Activities Identifying and documenting relationships among project activities Includes identifying dependencies 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 10  DEPARTMENT OF PLANNING Project Schedule Management Some Methods/Techniques in Activity Sequencing Precedence Diagramming Method (PDM) Used to construct schedule models in which activities are represented by nodes and graphically linked by one or more logical relationships Activity-On-Node (AON) is one method of representing a precedence diagram It uses four dependencies: Finish-to-Start Finish-to-Finish Start-to-Finish Start-to-Start Unit 8: Project Scope, Schedule & Cost Management 7:17 PM 11  DEPARTMENT OF PLANNING Project Schedule Management Finish-to-Start Installing OS on a PC (successor) cannot start until the Hardware is assembled (predecessor) Finish-to-Finish Writing a document (predecessor) should finish before editing (successor) can finish Start-to-Finish Installing a new accounts system (successor) has to start before the old system can be shut down (predecessor) Start-to-Start Level Concrete (successor) cannot begin until Pour Concrete (predecessor) begins 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 12  DEPARTMENT OF PLANNING Project Schedule Management PDM Relationship Types 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 13  DEPARTMENT OF PLANNING Project Schedule Management Project Schedule Network Diagram 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 14  DEPARTMENT OF PLANNING Project Schedule Management Estimating Activity Durations Estimating the number of work periods required to do the work, as well as amount of time each activity will take 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 15  DEPARTMENT OF PLANNING Project Schedule Management Some Methods/Techniques in Estimating Activity Durations Analogous Estimating Using parameters (such as duration, budget, size, weight, and complexity) from previous, similar projects to estimate the same parameters for current/ future project It is a gross value estimating approach It is less costly and less time consuming but also less accurate Parametric Estimating It uses statistical data on two variables to estimate duration (square metres in construction) Level of accuracy depends upon the sophistication and underlying data built into the model 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 16  DEPARTMENT OF PLANNING Project Schedule Management Bottom-Up Estimating Technique of estimating durations or costs of lower- level components of WBS and aggregating them to higher-level components Where duration of an activity cannot be determined with a reasonable degree of confidence, the activity is further decomposed and the duration of each of the decomposed parts is determined These estimates are then aggregated into a total duration. It is much more accurate than Analogous and Parametric techniques 7:17 PM 17 Unit 8: Project Scope, Schedule & Cost Management  DEPARTMENT OF PLANNING Project Schedule Management Three-Point Estimation Using three estimates to approximate an activity’s duration: Most Likely time (tm) ie. duration based on most likely case scenario Optimistic time (to) ie. duration based on best-case scenario Pessimistic time (tp) ie. duration based on worst- case scenario ❑ Beta Distribution = (to + 4tm + tp)/6 ❑ Triangular Distribution = (to + tm + tp)/3 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 18  DEPARTMENT OF PLANNING Project Schedule Management Developing a Schedule Analyzing activity sequences, activity durations, resource requirements and schedule constraints to create a project schedule model, including start and finish dates for completing activities 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 19  DEPARTMENT OF PLANNING Project Schedule Management Some Methods/Techniques for Developing a Schedule The Critical Path Method Used to estimate the minimum project duration and amount of scheduling flexibility It calculates:  Early Start: the earliest possible time an activity can start  Late Start: the latest possible time an activity can start.  Early Finish: the earliest possible time an activity can be completed.  Late Finish: the latest possible time an activity can be completed. Forward Pass: Determination of early start and early finish dates for an activity. Backward Pass: Determination of late start and late finish dates for an activity. 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 20  DEPARTMENT OF PLANNING Project Schedule Management The Critical Path Method (cont.) CPM also calculates total and free floats of activities within the schedule model Total Float (Total Slack): amount of time an activity can be delayed without delaying the finish date of the project = LS – ES or LF – EF Free Float (Free Slack): Amount of time an activity can be delayed without delaying the early start date of its successor Critical Path: the sequence of activities that represents the longest duration (path) through a project and, therefore, the shortest possible duration of the project Critical Path Activity: any activity on the critical path 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 21  DEPARTMENT OF PLANNING Project Schedule Management Illustration of Critical Path Critical Path = B-E-H-I = 12 wks C=3 2 4 F=4 A=2 1 G=1 5 I=2 7 8 D=3 B=3 3 H=4 E=3 6 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 22  DEPARTMENT OF PLANNING Project Schedule Management Illustration of Total Float: 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 23  DEPARTMENT OF PLANNING Project Schedule Management Resource Optimization Techniques It includes: Resource Levelling: adjusting start and finish dates based on resource constraints E.g. when shared resources are only available at certain times Can often cause the original path to change, usually to increase Resource Smoothing: adjusting activities such that resource requirements on the project do not exceed some predefined limits Here the critical path is not changed and the completion date may not be delayed 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 24  DEPARTMENT OF PLANNING Project Schedule Management Resource Levelling 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 25  DEPARTMENT OF PLANNING Project Schedule Management Schedule Compression Techniques for shortening schedule duration without reducing scope in order to meet schedule constraints, including: Crashing: shortening duration (especially on the critical path) by adding more resources e.g. workers working overtime, paying more for express delivery of inputs, etc Fast Tracking: changing the network logic to allow activities that are normally performed in sequence to run simultaneously e.g. completing architectural/ engineering drawings and constructing the foundation 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 26  DEPARTMENT OF PLANNING PROJECT COST MANAGEMENT 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 27  DEPARTMENT OF PLANNING Project Cost Management What is Project Cost Management? It includes the processes involved in planning, estimating, budgeting, financing, managing and controlling costs to ensure that the project is completed within the approved budget. Among other processes, it involves: 1.Estimating Costs 2.Determining a Budget 3.Controlling Costs 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 28  DEPARTMENT OF PLANNING Project Cost Management Estimating Costs It is the process of developing an approximation of the costs of resources needed to complete project activities May be refined with progressive elaboration 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 29  DEPARTMENT OF PLANNING Project Cost Management Some methods/techniques for Estimating Costs Analogous (Top-Down) Estimating Top or middle managers use expert judgment or actual time on previous projects to estimate See same technique under Schedule Mgt Bottom-up Estimating The people doing the work create the estimates See same technique under Schedule Mgt 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 30  DEPARTMENT OF PLANNING Project Cost Management Parametric Estimating Uses mathematical model to predict project/activity costs based on known values of related parameters/variables ❑ e.g. cost per length [e.g. metre], area [sq. metre], per line of code, per installation etc.) It is based on an established statistical model (relationship) Accuracy depends on level of sophistication and underlying data built into the model. 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 31  DEPARTMENT OF PLANNING Project Cost Management Three-point Estimating It improves on the accuracy of single-point estimates by considering estimating uncertainty by using three estimates to define an approximate range of costs. The concept originated from PERT (Program Evaluation and Review Technique). Let Cm = Most Likely Cost, Co = Optimistic Cost, Cp = Pessimistic Cost, Ce = Expected Cost 𝐶𝑜 + 4𝐶𝑚 + 𝐶𝑝 𝐶𝑒 = 6 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 32  DEPARTMENT OF PLANNING Project Cost Management Determining a Budget It is the aggregation of the estimated costs of individual activities or work packages to establish an authorized baseline It provides authorized project funding requirements and serves as the basis for monitoring and controlling project cost performance 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 33  DEPARTMENT OF PLANNING 7:17 PM Unit 8: Project Scope, Schedule & Cost Management 34