Week 2


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Week 2

  1. 1. IS 556 Project Management Week 2
  2. 2. What We Covered Last Week <ul><li>Course Background and Logistics </li></ul><ul><li>What is a project, project manager, project management? </li></ul><ul><li>Software Project Management Issues </li></ul><ul><li>Starting A Project Team </li></ul><ul><ul><li>Roles such as sponsor, pm, stakeholders, functional managers, members, customers. </li></ul></ul>
  3. 3. What We Covered Last Week <ul><li>Course Background and Logistics - Grade is made up of: </li></ul><ul><ul><li>1) Final Exam (each person does this individually) - 30% </li></ul></ul><ul><ul><li>2) Groups are responsible for reviewing all cases with at least a 1 to 2 page recommendations and supporting material. [20%/#cases]. (group sizes 3-4) </li></ul></ul><ul><ul><li>3) Each group specializes in one of the cases and complete: a) Case write-up (elaborating on direction) [10%] b.) Power Point Presentation -> Time ~30 minutes (~60 minutes with class discussion time added) </li></ul></ul><ul><ul><li>4) Project (case study on “real project”) [30%] - Group collaborates on “real” project based on Hvd business review or real experience or some other source. </li></ul></ul><ul><ul><ul><li>A. 15 page discussion/review/recommendations </li></ul></ul></ul><ul><ul><ul><li>b. Power Point Presentation -> Time 30 min. Note some people have asked if they can still work on a special project by themselves (because they have high interest in a particular project). I will allow this if you notify/clear it with me and let your group know also (in writing via the group system.) In this case your project grade would be separate from the rest of the groups. </li></ul></ul></ul><ul><ul><li>5) Class attendance and participation [10%] </li></ul></ul>
  4. 4. What We Covered Last Week <ul><li>Course Background and Logistics (Cont) </li></ul><ul><ul><li>I have put up groups for each person responding. </li></ul></ul><ul><ul><li>Your responsibility: </li></ul></ul><ul><ul><ul><li>Make sure you are in a group and groups are correct. </li></ul></ul></ul><ul><ul><ul><li>Let me know about mistakes or if you are not in a group. </li></ul></ul></ul><ul><li>What is a project, project manager, project management? </li></ul><ul><li>Software Project Management Issues </li></ul><ul><li>Starting A Project Team </li></ul><ul><ul><li>Roles such as sponsor, pm, stakeholders, functional managers, p members, customers. </li></ul></ul>
  5. 5. What we will cover today <ul><li>Measuring Project Value </li></ul><ul><li>Project Contracts </li></ul><ul><li>Starting Your Project (Charter/SOW) </li></ul>
  6. 6. What is a Project – Financially? <ul><li>How do we know if we should work on a project? </li></ul><ul><ul><li>Consider 3 different project possibilities with these estimates: </li></ul></ul><ul><li>Cash-flows are made up of: </li></ul><ul><ul><li>Expenses </li></ul></ul><ul><ul><ul><li>Hardware/Software Purchases </li></ul></ul></ul><ul><ul><ul><li>Labor </li></ul></ul></ul><ul><ul><ul><li>Overhead </li></ul></ul></ul><ul><ul><li>Incomes/benefits </li></ul></ul><ul><ul><ul><li>Increased revenues </li></ul></ul></ul><ul><ul><ul><li>Reduced costs </li></ul></ul></ul>35,000 25,000 20,000 -10,000 Project 3 30,000 100,000 10,000 -80,000 Project 2 40,000 90,000 50,000 -100,000 Project 1 Cost -Benefit Year 3 Year 2 Year 1
  7. 7. Project Value – Graphical cash-flows
  8. 8. How do we calculate project value? <ul><li>Break-Even </li></ul><ul><ul><li>When do I earn back the cost of the project? </li></ul></ul><ul><li>ROI </li></ul><ul><ul><li>What is the return on the cost of the project? </li></ul></ul><ul><ul><li>Result of subtracting the project costs from benefits and dividing by costs. </li></ul></ul><ul><ul><ul><li>E.g., If invest 100 today and worth 110 next year: </li></ul></ul></ul><ul><ul><ul><ul><li>($110 - $100) / 100 = .1 or 10% ROI </li></ul></ul></ul></ul><ul><li>NPV </li></ul><ul><ul><li>Net monetary gain/losses after discounting future losses/costs. </li></ul></ul><ul><ul><ul><li>Does the return from project exceed the cost of capital? </li></ul></ul></ul><ul><ul><li>What is the present value of the cashflows (+/-) associated with the project? >0 ? <0? </li></ul></ul>
  9. 9. Break Even Point of Project Source: Information Technology Project Management . Kathy Schwalbe. Pg 144
  10. 10. Using Net Present Value <ul><li>NPV = A way to compare project return VS cost of capital (the return on investing capital elsewhere) </li></ul><ul><li>Prefer projects with higher NPVs over lower ones </li></ul><ul><ul><li>NPV accounts for the time value of money </li></ul></ul><ul><ul><ul><li>Money earned today is worth more than money earned in 5 years. </li></ul></ul></ul><ul><ul><ul><li>Can compare projects with multi-year timelines: </li></ul></ul></ul>Recommend Project 3   $53,459.37 NPV3 = $35,933.43 NPV2 = $51,120.44 NPV1 = 35,000 25,000 20,000 -10,000 Project 3 30,000 100,000 10,000 -80,000 Project 2 40,000 90,000 50,000 -100,000 Project 1 Cost-Benefit Year 3 Year 2 Year 1
  11. 11. Another NPV Comparison Example Source: Information Technology Project Management . Kathy Schwalbe. Pg 145
  12. 12. Calculating NPV Example: Source: Information Technology Project Management . Kathy Schwalbe. Pg 146 Note: Discounted ROI = (516,000 - 243,200) / 243,200 - 112%
  13. 13. Calculating Net Present Value <ul><li>1. Determine estimated costs/benefits of project during its life . (e.g., project built in 6 months and produce 3 years of benefits). </li></ul><ul><li>2. Determine discount rate - minimal acceptable return on investment. </li></ul><ul><ul><li>Often minimal ROI if invested somewhere else (e.g., 8% per year) </li></ul></ul><ul><li>3. Determine NPV - </li></ul><ul><ul><li>excel has built-in function: </li></ul></ul><ul><ul><ul><li>=npv( discount rate, range of cash flows) </li></ul></ul></ul><ul><ul><ul><li>range of cash flows for previous example project 1 for each year </li></ul></ul></ul><ul><ul><ul><ul><li>So it would be from slide 10 Project 1 -100,000 50,000 90,000 </li></ul></ul></ul></ul>
  14. 14. Calculating Net Present Value - Manually <ul><li>Sum of the present values of the cash flows </li></ul><ul><ul><li>NPV = SUM( t=1 .. N) A/(1+r)t </li></ul></ul><ul><ul><ul><li>Where t = year of cash flows </li></ul></ul></ul><ul><ul><ul><li>r = discount rate </li></ul></ul></ul><ul><ul><ul><li>A = the amount of cash flow each year. </li></ul></ul></ul><ul><li>Calculating NPV by hand </li></ul><ul><ul><li>1. Determine discount factor - multiplier based on year and discount rate: </li></ul></ul><ul><ul><li> 1/(1+r) t </li></ul></ul><ul><ul><ul><li>Year 0 = discount rate = 1/(1+.08) 0 = 1 </li></ul></ul></ul><ul><ul><ul><li>Year 1 = discount rate = 1/(1+.08) 1 = .93 </li></ul></ul></ul><ul><ul><ul><li>Year 2 = discount rate = 1/(1+.08) 2 = .86 </li></ul></ul></ul><ul><ul><ul><li>Year 3 = discount rate = 1/(1+.08) 3 = .79 </li></ul></ul></ul>
  15. 15. Calculating Net Present Value <ul><li>Calculating NPV by hand </li></ul><ul><ul><li>1. Determine discount factor - multiplier based on year and discount rate : </li></ul></ul><ul><ul><li>2. Multiply the each year’s costs/benefits by its discount factor. </li></ul></ul><ul><ul><li>A. e.g., Slide 12 figure 5.3 </li></ul></ul><ul><ul><li>Year 1 costs discounted costs </li></ul></ul><ul><ul><li>40,000 40,000*.93 = 37,200 </li></ul></ul><ul><ul><li>Year 1 benefits discounted benefits </li></ul></ul><ul><ul><li>200,000 200,000*.93 = 186,000 </li></ul></ul><ul><ul><li>Year1 discounted benefits - costs = 186,000 -37,200 = 148,800 </li></ul></ul><ul><ul><li>Calculate each year’s discounted cost/benefits: </li></ul></ul><ul><ul><li>NPV = (140,000) + 148,000 + 137,500 + 126,400 = 272,800 </li></ul></ul>Year 0 is negative)
  16. 16. Critical Questions <ul><li>What is the discount rate? </li></ul><ul><li>What are the cashflows? </li></ul><ul><ul><li>Costs </li></ul></ul><ul><ul><ul><li>Direct Labor (E.g., Developer salaries) </li></ul></ul></ul><ul><ul><ul><li>Direct Material (E.g., hardware/software purchased) </li></ul></ul></ul><ul><ul><ul><li>Indirect Labor (E.g., Proj mgmr) </li></ul></ul></ul><ul><ul><li>Benefits </li></ul></ul><ul><ul><ul><li>Revenue Increase </li></ul></ul></ul><ul><ul><ul><li>Cost Decreases </li></ul></ul></ul><ul><ul><li>Costs and benefits measured should be </li></ul></ul><ul><ul><ul><li>Direct result of project </li></ul></ul></ul><ul><ul><ul><li>Quantifiable </li></ul></ul></ul>
  17. 17. Managing Project NPV <ul><li>Cost </li></ul><ul><ul><li>Domain of PM </li></ul></ul><ul><ul><li>Constrained by client </li></ul></ul><ul><li>Benefit </li></ul><ul><ul><li>Domain of client </li></ul></ul><ul><ul><li>Influenced by PM </li></ul></ul><ul><li>Rate </li></ul><ul><ul><li>Domain of client </li></ul></ul>
  18. 18. Agenda <ul><li>Measuring Project Value </li></ul><ul><li>Project Contracts </li></ul><ul><li>Starting Your Project (Charter/SOW) </li></ul>
  19. 19. Ch. 3 Contracts and Legal Issues <ul><li>What is the relationship between customer and software developer? </li></ul><ul><li>How are contracts costed? </li></ul><ul><li>Two types of contracts: </li></ul><ul><ul><li>Cost-plus -> Time and materials </li></ul></ul><ul><ul><li>Fixed Price </li></ul></ul>
  20. 20. Cost Plus <ul><li>Expense plus agreed profit margin </li></ul><ul><ul><li>E.g., rent a car -> monthly cost + expenses (gas, insurance) </li></ul></ul><ul><ul><li>E.g.,$120 / staff hours + 20% support costs </li></ul></ul><ul><li>Expenses might include </li></ul><ul><ul><li>Special purpose equipment </li></ul></ul><ul><ul><li>Travel </li></ul></ul><ul><ul><li>outside services </li></ul></ul><ul><li>Customer may have developers report to their management </li></ul>Used w/ small projects when requirements hard to define. Sometimes use for requirements only.
  21. 21. Cost plus contracts might contain: <ul><li>Contracts might cover </li></ul><ul><ul><li>Persons assigned to project </li></ul></ul><ul><ul><li>Work definition </li></ul></ul><ul><ul><li>Percent of time each person assigned </li></ul></ul><ul><ul><li>Hourly or daily work rate for each person </li></ul></ul><ul><ul><li>Authorized expenses to be reimbursed </li></ul></ul><ul><ul><li>Billing/Termination Procedure </li></ul></ul>
  22. 22. Cost Plus Advantages/Disadvantages <ul><li>Advantages </li></ul><ul><ul><li>Low financial risk to development organization </li></ul></ul><ul><ul><li>Earn while you learn </li></ul></ul><ul><li>Minus </li></ul><ul><ul><li>Low profit </li></ul></ul><ul><ul><li>Reduced control - often need to ask to authorize expenses </li></ul></ul><ul><ul><li>Developer may work within customer’s hierarchy </li></ul></ul><ul><ul><li>No commitment to complete project </li></ul></ul>
  23. 23. Fixed Price <ul><li>Developer commitment to provide: </li></ul><ul><ul><li>Agreed product/service </li></ul></ul><ul><ul><li>Agreed price </li></ul></ul><ul><ul><li>Agreed timeframe </li></ul></ul><ul><li>Example might be - custom built house: </li></ul><ul><ul><li>Decide on contact with developer </li></ul></ul><ul><ul><li>building allowances for cabinets, flooring, lights </li></ul></ul><ul><ul><li>Timeframe agreed upon </li></ul></ul><ul><li>Clearly more appropriate for well defined product/service </li></ul>
  24. 24. Developer View <ul><li>Plus </li></ul><ul><ul><li>Complete control </li></ul></ul><ul><ul><li>Higher profit (potentially) </li></ul></ul><ul><ul><li>Commitment for complete project </li></ul></ul><ul><li>Minus </li></ul><ul><ul><li>Risks - </li></ul></ul><ul><ul><ul><li>competition may cause to underbid. </li></ul></ul></ul><ul><ul><ul><li>May have cost overruns </li></ul></ul></ul><ul><ul><li>Customer management </li></ul></ul><ul><ul><ul><li>Requirements changes </li></ul></ul></ul><ul><ul><ul><li>Project completion issues </li></ul></ul></ul>
  25. 25. Customer View <ul><li>Plus </li></ul><ul><ul><li>Fixed budget, etc </li></ul></ul><ul><ul><li>Lower risk </li></ul></ul><ul><li>Minus </li></ul><ul><ul><li>Reduced control </li></ul></ul><ul><ul><li>Late delivery? </li></ul></ul><ul><ul><li>Developer management </li></ul></ul><ul><ul><ul><li>Requirements changes </li></ul></ul></ul><ul><ul><ul><li>Project completion issues </li></ul></ul></ul>
  26. 26. Request for proposal - RFP <ul><li>Beginning of selection process </li></ul><ul><li>Often organizations have pre-defined processes </li></ul><ul><li>Used for </li></ul><ul><ul><li>Software Selection </li></ul></ul><ul><ul><li>Software Development </li></ul></ul><ul><ul><li>Maintenance and/or Upgrades </li></ul></ul><ul><ul><li>Equipment Selection </li></ul></ul>Might use RPF for entire project or just a portion (e.g., testing)
  27. 27. First Decide Overall Issues <ul><li>Before Writing an RFP Need to know </li></ul><ul><ul><li>Type of contract (fixed price or cost-plus) </li></ul></ul><ul><ul><li>Overall budget allocated? (Is it reasonable amount?) </li></ul></ul><ul><ul><li>Who are candidates to receive ( too wide and have an evaluation mess, too narrow and miss potential solutions.) </li></ul></ul><ul><ul><li>How will decision be made - Who makes decision? Will make a recommendation (or decision)? What is important to him/her? </li></ul></ul>
  28. 28. As you do this ... <ul><li>Its critical you think through this process. </li></ul><ul><li>Must make comparison fair and feasible </li></ul><ul><ul><li>Must control response format. </li></ul></ul><ul><ul><li>Might need to have an idea of how vendors will respond </li></ul></ul><ul><ul><li>Might need to “trial” RFP. </li></ul></ul><ul><li>Need to decide if issue to limited, broad set or any who request basis. </li></ul><ul><ul><li>If issue to limited set, what criteria will use … </li></ul></ul><ul><ul><li>How handle vendor sales staff? Will meet with each? </li></ul></ul>
  29. 29. RFP Details <ul><li>Statement of Problem and Overall Objectives </li></ul><ul><ul><li>Overall problem, scope of solution, relevant diagrams, as needed organization structure. </li></ul></ul><ul><li>Technical Requirements - </li></ul><ul><ul><li>You must avoid leaky requirements! </li></ul></ul><ul><ul><ul><li>The software must report on the error defects in process </li></ul></ul></ul><ul><ul><ul><li>Automatic weekly reports must be generated indicating: </li></ul></ul></ul><ul><ul><ul><ul><li>The daily and overall weekly percent of failures </li></ul></ul></ul></ul><ul><ul><ul><ul><li>An exception report dictating which items had failures per week </li></ul></ul></ul></ul><ul><ul><li>It helps to avoids compound requirements! </li></ul></ul><ul><ul><ul><li>The software must weekly post web reports that indicate daily and weekly percent failures and percent failures over time. </li></ul></ul></ul>LILO - Leaky in Leaky out
  30. 30. More RFP Details ... <ul><li>Administrative Information - </li></ul><ul><ul><li>How will decision be made - what process </li></ul></ul><ul><ul><li>Who is RFP open to? </li></ul></ul><ul><li>Cost requirements - </li></ul><ul><ul><li>May indicate type of contract </li></ul></ul><ul><ul><li>May include expectations they will supply (E.g., need to breakout software, hardware and loaded costs for each person </li></ul></ul>Ability to perform - For long-term relationship/longer contracts may need to know about company stability, (D&B report indicating likelihood of staying in business) past successes with similar items, customer references, etc.
  31. 31. RFP Outline - (See details Pg 43) <ul><li>Reference documents - any references to standards or existing documentation </li></ul><ul><li>Required deliverables - clarify overall solution expectations, e.g., training, customization. hardware only, warranty </li></ul><ul><li>Required proposal format - how should vendor respond? Format of response, how answer technical requirements, how specify pricing, do they provide SOW? </li></ul><ul><li>Submission and Decision Schedule ... </li></ul>
  32. 32. RFP Outline - (See details Pg 43)
  33. 33. The Proposal for work ... <ul><li>Many consultant houses have defined format and process for this </li></ul><ul><li>Usually indicates: (See Pages 47-49) </li></ul><ul><ul><li>Executive Overview - This goes to key decision maker (1-6 pages just the bottom line). </li></ul></ul><ul><ul><li>Technical proposal (what is being proposed, how meet these requirements) </li></ul></ul><ul><ul><li>Management proposal - </li></ul></ul><ul><ul><li>Pricing Proposal (how much, cost structure) </li></ul></ul><ul><ul><li>The Statement Of Work. </li></ul></ul>
  34. 34. Proposal Review <ul><li>Review team - Likely includes all stakeholders. </li></ul><ul><ul><li>May need to differentiate between vital few and significant other. </li></ul></ul><ul><ul><li>Evaluation review can be highly emotion. (Sales teams often not help to keep objective.) </li></ul></ul><ul><ul><li>Sometimes narrow down process. </li></ul></ul><ul><ul><ul><li>The more objective the better. </li></ul></ul></ul><ul><ul><ul><li>Assume “losers” will want reasons and time. </li></ul></ul></ul><ul><ul><ul><li>“ Winners” of rounds likely get to refine and resubmit. </li></ul></ul></ul><ul><li>Major components </li></ul><ul><ul><li>Technical: what will be done? </li></ul></ul><ul><ul><li>Management: how w ill it be done? </li></ul></ul><ul><ul><li>Cost: how much? </li></ul></ul><ul><ul><li>Background: who will do it? </li></ul></ul>
  35. 35. Example: RFP for software selection <ul><li>Led a team for multi-site selection of UNIX backup software selection (~late 1980s) </li></ul><ul><ul><li>We were “major” site - We had 50% of servers there were 5-6 other sites. </li></ul></ul><ul><ul><ul><li>Our site -> 100-200 servers </li></ul></ul></ul><ul><ul><li>Project was started by our site, but management decided to expand to other sites </li></ul></ul><ul><li>Developed a list of requirements based on our site’s needs. </li></ul>
  36. 36. Example RFP - Software selection <ul><li>Requirements (20 pages) Included things like </li></ul><ul><ul><li>Hardware connectivity - needed to backup (HP, SUN, IBM) needed to backup to ATLs. </li></ul></ul><ul><ul><li>Reporting mechanism - automated report </li></ul></ul><ul><ul><li>Functionality of software - D/R capabilities, Tape rotation schedules, automated restore, operation interface, etc. </li></ul></ul><ul><ul><li>Costs of solution </li></ul></ul><ul><li>Expanded requirements to other sites </li></ul><ul><ul><li>Expanded on requirements - many cared about specific hardware </li></ul></ul><ul><ul><li>Greatly helped clarify complex requirements </li></ul></ul>
  37. 37. Example RFP:Software selections <ul><li>Once requirements approved, decided to release to 1 vendor. </li></ul><ul><ul><li>They agreed would get an early version and would work with us. </li></ul></ul><ul><ul><ul><li>This was extremely impertinent ! caused us to greatly increase level of specificity of requirements. </li></ul></ul></ul><ul><li>Developed a list of vendors to send out to: </li></ul><ul><ul><li>Because of scope of project lots of vendors wanted to answer RFP: </li></ul></ul><ul><ul><ul><li>Who to send to? How much time is enough? What would be our process with vendors? </li></ul></ul></ul><ul><ul><ul><li>Decided based on sales volume and I would “pre-screen” vendors. </li></ul></ul></ul>
  38. 38. Example RFP: Software selection <ul><li>Developed a evaluation process: </li></ul><ul><ul><li>Send out requirements </li></ul></ul><ul><ul><li>Receive input and review with vendor </li></ul></ul><ul><ul><li>Request clarifications </li></ul></ul><ul><ul><li>Receive clarifications and our team would decide on “score” for each item. </li></ul></ul><ul><ul><li>Item Prod1 PRd2 Prd3 </li></ul></ul><ul><ul><li>1. Backup system uses UNIX 5 4 3 (uses semi-prop) </li></ul></ul><ul><ul><li>standard tape format such </li></ul></ul><ul><ul><li>as tar cpio: </li></ul></ul><ul><ul><li>2. Maintain list of offsite 3 (db has 4 5 </li></ul></ul><ul><ul><li>tape volumes in database sz limits) </li></ul></ul>
  39. 39. E.g.,RFP Software Selection <ul><li>Issues with process: </li></ul><ul><ul><li>Vendors wanted to stay as involved as possible </li></ul></ul><ul><ul><li>Negotiating weights for each category major issue </li></ul></ul><ul><ul><ul><li>E.g., sites all wanted their favorite hardware/requirement </li></ul></ul></ul><ul><ul><li>Needed to do D&B and then leading company was not public </li></ul></ul><ul><ul><li>Doing this process right takes time, severe management pressure. </li></ul></ul><ul><ul><li>Hard to verify/determine where vendors “fudged” on answers. (which ones are vaporware, not 110% accurate) </li></ul></ul><ul><ul><li>Vendor references often “best case” users. </li></ul></ul><ul><ul><li>Losers often wanted to “rattle the management chain” </li></ul></ul><ul><ul><li>Final selection - Narrowed to 2 and did demos. Narrowed to 1 and then did “trial”. (Issue with trial, how to get hardware needed) </li></ul></ul><ul><ul><li>Scores were subjective (5 VS 3) and quibbled with the team and vendors (why did we get a 3 for item 15?) </li></ul></ul>
  40. 40. Proposal Review <ul><li>How evaluate proposal? </li></ul><ul><ul><li>More systematic the better. E.g., </li></ul></ul><ul><ul><ul><li>Technical: 35% </li></ul></ul></ul><ul><ul><ul><li>Management: 25% </li></ul></ul></ul><ul><ul><ul><li>Cost: 30% </li></ul></ul></ul><ul><ul><ul><li>Company Background: 10% </li></ul></ul></ul><ul><ul><li>IT may may sense to pre-define how each item will be defined in the requirements. E.g., </li></ul></ul><ul><ul><ul><li>Ability to generate reports via web (low - not there or can be built, med has some capabilities, high - automatically generates trend line) </li></ul></ul></ul><ul><ul><li>Might use weights like page 51-52. (next page) </li></ul></ul>These can be cut up lots of different ways. Poor score in one might knock someone out. Might not even emphasize beyond 1 or 2 areas.
  41. 41. Rating Scale Example (Pg 51)
  42. 42. Legal Issues <ul><li>Legal issues are an issue on to themselves </li></ul><ul><ul><li>Most major corporations have corporate lawyers handle such things. </li></ul></ul><ul><li>Intellectual Property </li></ul><ul><ul><li>Patents - Legal monopoly for use, manufacture, and sale of invention. </li></ul></ul><ul><ul><li>Copyrights - legal invention that enables holder to control how the work is used. (requires minimum originality and lasts for 75 years) </li></ul></ul><ul><ul><li>Trade secrets - often signed non-disclosure to keep secret </li></ul></ul>
  43. 43. Agenda <ul><li>Measuring Project Value </li></ul><ul><li>Project Contracts </li></ul><ul><li>Starting Your Project (Charter/SOW) </li></ul>
  44. 44. Project Management Key Classic Success Factors 1. Agreement Among Project Team, Customer's) and Management 2. A Plan That Shows Overall Clear Path 3. Constant Effective Communication Among Everyone In Project 4. Scope Management - Defensive Measures Against Growing Scope 5. Management Support -
  45. 45. Project Definition & Critical Success Factors <ul><li>Project Definition Effects 3 of the 5 CSFs </li></ul><ul><ul><li>Agreement, Scope, Management Support </li></ul></ul><ul><li>Tools of Project Definition Include </li></ul><ul><li>1. Charter </li></ul><ul><li>2. SOW </li></ul><ul><li>3. Responsibility Matrix </li></ul><ul><li>4. Communication Plan </li></ul>
  46. 46. Purpose Of the Charter <ul><li>A Straightforward Announcement Of The Project </li></ul><ul><li>A One-Time Announcement That States </li></ul><ul><ul><li>1. Name Of The Project </li></ul></ul><ul><ul><li>2. Project Purpose </li></ul></ul><ul><ul><li>3. Project Manager Name </li></ul></ul><ul><ul><li>4. Perhaps The Goal & Responsibilities </li></ul></ul><ul><ul><li>of the PM </li></ul></ul><ul><ul><li>5. Anything else to ensure responsibility is well defined </li></ul></ul><ul><li>Charter is reviewed and issued by sponsor. </li></ul>
  47. 47. Project Definition & Critical Success Factors <ul><li>Tools of Project Definition Include </li></ul><ul><li>1. Charter </li></ul><ul><li>2. SOW </li></ul><ul><li>3. Responsibility Matrix </li></ul><ul><li>4. Communication Plan </li></ul>
  48. 48. Statement Of Work <ul><li>Clarifies with stakeholders the goals, scope, and deliverables of project </li></ul><ul><li>Sometimes may be a contract (E.g., an outsourcing arrangement for SOW) </li></ul><ul><li>Other times a project clarification device </li></ul><ul><li>Reviewed by project board/sponsor (sometimes with team member input). </li></ul>
  49. 49. Elements of SOW <ul><li>Project Purpose – </li></ul><ul><ul><li>Specifically, why are we doing it? </li></ul></ul><ul><li>Project Goal - SMART </li></ul><ul><li>Project Goal - what is in or out of scope </li></ul><ul><li>Project Deliverables - What the project produces </li></ul><ul><li>Project Cost/schedule estimates - Rough OOM </li></ul><ul><li>Formal Stakeholder definition - </li></ul><ul><li>Chain of command - who reports to whom </li></ul>
  50. 50. Defining The Goal <ul><li>Need to clearly think out the goal and define it in writing </li></ul><ul><ul><li>Should spell out the criteria for success </li></ul></ul><ul><ul><li>Entire team should agree to the goal </li></ul></ul><ul><li>Should be SMART </li></ul><ul><ul><li>Specific, measurable, agreed upon, realistic, time-bound. </li></ul></ul><ul><ul><ul><li>Roll out a new version of XXX software </li></ul></ul></ul><ul><ul><ul><li>Deploy Version YYY of XXX software to ZZZ users by 4/22/04 </li></ul></ul></ul><ul><li>Every time you make a decision during the day, ask yourself this question, &quot;Does it take me closer to, or further from my goal.&quot; If the answer is &quot;closer to,&quot; then you've made the right decision. If the answer is &quot;further from,&quot; well, you know what to do. </li></ul>
  51. 51. Define The Scope <ul><li>Purpose: Define project boundaries </li></ul><ul><li>Should describe major activities in such a way that its impossible to add activities without adding to the scope statement </li></ul><ul><li>Clarify: </li></ul><ul><ul><li>What is relationship to this project and other related ones </li></ul></ul><ul><ul><li>What is within the scope </li></ul></ul><ul><ul><li>What is beyond the scope </li></ul></ul><ul><ul><li>What are the major deliverables </li></ul></ul>
  52. 52. Project Deliverables <ul><li>Precise definition of what you are providing. </li></ul><ul><li>Not requirements but major output </li></ul><ul><li>E.g., </li></ul><ul><ul><li>Internet based system that: </li></ul></ul><ul><ul><ul><li>Presents end-user survey input </li></ul></ul></ul><ul><ul><ul><li>Stores based on user name </li></ul></ul></ul><ul><ul><ul><li>Generates histogram reports of survey responses </li></ul></ul></ul><ul><ul><ul><li>System maintenance documentation </li></ul></ul></ul><ul><li>. </li></ul>
  53. 53. Software Development SOW Items
  54. 54. Elements of SOW <ul><li>Project Purpose - Specifically, why are we doing it? </li></ul><ul><li>Project Goal - SMART </li></ul><ul><li>Project Goal - what is in or out of scope </li></ul><ul><li>Project Deliverables - What the project produces </li></ul><ul><li>Project Cost/schedule estimates - Rough OOM </li></ul><ul><li>Formal Stakeholder definition - </li></ul><ul><li>Chain of command - who reports to who </li></ul>
  55. 55. More on Charter/SOW <ul><li>. Cost and Schedule Estimates </li></ul><ul><li>- What are the budget concerns? </li></ul><ul><li>- How fixed is the budget it? </li></ul><ul><li>- How good of an estimate can you make? </li></ul><ul><li>- Can a reliable estimate be made? </li></ul>
  56. 56. Formal Stakeholder Definition <ul><li>Create a table with at least the following </li></ul><ul><ul><li>Role </li></ul></ul><ul><ul><li>Description </li></ul></ul><ul><ul><li>Who </li></ul></ul><ul><ul><li>Percent Involvement </li></ul></ul><ul><ul><li>Estimated Duration </li></ul></ul>
  57. 57. Formal Stakeholder Definition - Example Planner Jane PM 100% 5 Weeks IT Admin Joe Sets up systems 50% 2 Weeks configures them Ap “A” Hans Identifies key data 50% 3 weeks Owner Ap “B” Mike Identifies key data 50% 3 weeks Owner Sponsor Jean Project Champion & <5% Monthly review Sponsor App Janet Project Board of < 5% Monthly Review Mgmt Directors Admin Frank Copies data & 100% 4 weeks. programs
  58. 58. Other SOW Items <ul><li>Can also include information about the phases of the project. </li></ul><ul><ul><li>What methods will the project follow? </li></ul></ul><ul><ul><ul><li>Incremental VS waterfall? </li></ul></ul></ul><ul><ul><li>Is there a phased approach? </li></ul></ul><ul><ul><li>E.g., Phased - D/R plan </li></ul></ul><ul><ul><ul><li>Phase 1 - Plan for vital data </li></ul></ul></ul><ul><ul><ul><li>Phase 2 - Plan for all business data </li></ul></ul></ul><ul><ul><ul><li>Phase 3 - Building facilities recovery </li></ul></ul></ul>
  59. 59. Project Definition & Critical Success Factors <ul><li>Tools of Project Definition Include </li></ul><ul><li>1. Charter </li></ul><ul><li>2. SOW </li></ul><ul><li>3. Responsibility Matrix </li></ul><ul><li>4. Communication Plan </li></ul>
  60. 60. Responsibility Matrix <ul><li>Defines key groups and their responsibilities. </li></ul><ul><li>Help define cross organization responsibilities </li></ul><ul><ul><li>E.g., change in tool design requires work in another department. Will other department have a role in decisions? </li></ul></ul><ul><li>Can be done for each major task or for specific areas </li></ul><ul><li>Best if done up-front before turf wars develop </li></ul>
  61. 61. Responsibility Matrix <ul><li>List the major activities of project on vertical axis </li></ul><ul><li>List the stakeholder groups on horizontal axis </li></ul><ul><li>Code the responsibility matrix </li></ul><ul><ul><li>E - Execution responsibility (get work done) </li></ul></ul><ul><ul><li>C - Must be consulted </li></ul></ul><ul><ul><li>I - Must be informed </li></ul></ul><ul><ul><li>A - Approval authority </li></ul></ul><ul><li>Review matrix </li></ul>
  62. 62. Project Definition & Critical Success Factors <ul><li>Tools of Project Definition Include </li></ul><ul><li>1. Charter </li></ul><ul><li>2. SOW </li></ul><ul><li>3. Responsibility Matrix </li></ul><ul><li>4. Communication Plan </li></ul>
  63. 63. Communication Plan <ul><li>A written strategy for getting the right info to the right people </li></ul><ul><ul><li>Sponsors - Probably a formal mechanism </li></ul></ul><ul><ul><li>Project Review Board - Separate from sponsor? </li></ul></ul><ul><ul><li>Functional management - as providers of resources may need to know </li></ul></ul><ul><ul><li>Customers - Make ultimate decisions, likely different levels of customer involvement </li></ul></ul><ul><ul><li>Project team - probably needs regular communication </li></ul></ul>
  64. 64. Sample Communication Plan
  65. 65. Communication Plan <ul><li>What needs to be communicated? </li></ul><ul><ul><li>Authorizations - major document agreements, such as project plans, SOW, product specifications </li></ul></ul><ul><ul><li>Regular Status Updates - Cost and status updates. </li></ul></ul><ul><ul><li>Coordination - General coordination generally among team members. </li></ul></ul>
  66. 66. PM Should Be Defined Process <ul><li>Charter </li></ul><ul><ul><li>Purpose </li></ul></ul><ul><ul><li>review and publish </li></ul></ul><ul><li>SOW </li></ul><ul><ul><li>A. Document goals, scope deliverables HL budget estimate </li></ul></ul><ul><ul><li>Review with Project board </li></ul></ul><ul><li>Communication Plan </li></ul><ul><ul><li>Document communication methods of various level </li></ul></ul><ul><ul><li>Review with project board, various stakeholders </li></ul></ul><ul><li>Risk Strategy </li></ul><ul><li>Project Plan </li></ul><ul><li>Execute </li></ul>HL Plan LL Plan
  67. 67. Summary <ul><li>Measuring Project Value </li></ul><ul><li>Project Contracts </li></ul><ul><li>Starting Your Project (Charter/SOW) </li></ul>