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Microsoft PowerPoint - Project and Time Management
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Microsoft PowerPoint - Project and Time Management


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  • 1. Project Cost & Time Management 9 September 2009 ELEC5701 - Arek Yapoudjian 2009 1 What is a Project? A project involves several people/groups performing interrelated activities A project has a defined objective A project has a beginning and an end A project requires resources A project has a sponsor A project involves uncertainty ELEC5701 - Arek Yapoudjian 2009 2
  • 2. Overview of Project Lifecycle A Project lifecycle can be divided into five phases (groups of processes): 1. Initiation: Idea or business need created due to new opportunity. 2. Planning: Devise and maintain a plan to accomplish the plan. Very critical in success of projects. 3. Execution: Actions taken to complete the project on time/within budget. ELEC5701 - Arek Yapoudjian 2009 3 Overview of Project Lifecycle (Cont.) 4. Control: Continuous process of measuring project progress to the meet the three performance constraints: Time, Cost and Quality. 5. Closing: Project delivery and formal acceptance by customer. Project audit and debrief sessions. ELEC5701 - Arek Yapoudjian 2009 4
  • 3. Overview of Project Lifecycle (Cont.) Source: Schwalbe ELEC5701 - Arek Yapoudjian 2009 5 How to create a successful Project? Scope: What is the project trying to achieve? Time: How long should it take to complete the project? Cost: How much will it cost to complete the project? ELEC5701 - Arek Yapoudjian 2009 6
  • 4. What is Project Management? Scope Procure Commun ment ication Project Risk Time Management Team Cost Quality ELEC5701 - Arek Yapoudjian 2009 7 9 Project Management Knowledge Areas Knowledge areas describe the key competencies that project managers must develop 4 core knowledge areas lead to specific project objectives (scope, time, cost, and quality) 4 facilitating knowledge areas are the means through which the project objectives are achieved (human resources, communication, risk, and procurement management) 1 knowledge area (project integration management) affects and is affected by all of the other knowledge areas ELEC5701 - Arek Yapoudjian 2009 8
  • 5. Project Management determines: The outcomes that need to be accomplished The approach that will be adopted to accomplish these outcomes The tasks that need to be completed to reach the desired goals The resources that are required to complete the project ELEC5701 - Arek Yapoudjian 2009 9 Project Integration Management Integration management is the key to overall project success: Coordinate the people, the plan and work required to complete the project Focus on the big picture of the project Make strategic decisions during critical times Communicate key project information to senior management ELEC5701 - Arek Yapoudjian 2009 10
  • 6. What is a Project Scope? The scope of a project is broadly defined by: The aim The end results The parameters that confine it Exclusions ELEC5701 - Arek Yapoudjian 2009 11 What is Scope Management? Project Scope Management includes all the processes involved in defining and controlling what is and also what is NOT included in a project Scope Management ensures that the project team and stakeholders have the same understanding of what is expected from the project ELEC5701 - Arek Yapoudjian 2009 12
  • 7. Scope Management A scope statement should define the following: Project Justification Project Objectives Project Deliverables Project Assumptions Project Constraints ELEC5701 - Arek Yapoudjian 2009 13 Scope Management Project Justification The importance and priority of the project need to be emphasised. This will depend on the business needs, which have been developed in consultation with the Stakeholders. ELEC5701 - Arek Yapoudjian 2009 14
  • 8. Scope Management Project Objectives The project objectives are the quantifiable criteria that must be met for the project to be considered successfully completed. To obtain achievable project objectives, they should be SMART objectives. Specific, Measurable, Achievable, Realistic, Time related ELEC5701 - Arek Yapoudjian 2009 15 Scope Management Project Deliverables The project deliverables are the physical outcomes that need to be provided by the project team. The successful delivery of these elements will mark the satisfactory completion of the project. ELEC5701 - Arek Yapoudjian 2009 16
  • 9. Scope Management Project Assumptions The project assumptions are factors that are taken into consideration in the planning process. Members of each project management team form their own assumptions regarding the project scope. ELEC5701 - Arek Yapoudjian 2009 17 Scope Management Project Constraints The constraints on any project are factors that will limit the options of the project management team. ELEC5701 - Arek Yapoudjian 2009 18
  • 10. Project Constraints Typical constraints are: Financial - Project budget Legal - Contractual provisions Technical –Technological advancements Political – Regulatory and Environmental Deadlines – Tight deadlines ELEC5701 - Arek Yapoudjian 2009 19 Scope Management Scope Definition A scope definition clarifies the details of the project. Scope definition is the process whereby the overall project deliverables are subdivided into smaller more manageable elements. ELEC5701 - Arek Yapoudjian 2009 20
  • 11. Scope Management Each element will have its own in-process deliverables and scope statement in order to: More accurately estimate costs, time and resources Identify a basis for performance measurement and control Clearly define responsibilities Often a Work Breakdown Structure is used to detail each in-process deliverable. ELEC5701 - Arek Yapoudjian 2009 21 Work Breakdown Structure A WBS is a logical sequence of all the project activities that need to be completed to achieve the project objective. Each activity should be achievable by an individual or small team. ELEC5701 - Arek Yapoudjian 2009 22
  • 12. The WBS allows you to: Plan activities (WHAT?) Develop schedules (WHEN?) Allocate responsibilities (WHO?) Estimate costs (HOW MUCH?) ELEC5701 - Arek Yapoudjian 2009 23 Work Breakdown Structure Determining the major phases then breaking each phase down into activities and tasks This approach is called Top Down Analysis ELEC5701 - Arek Yapoudjian 2009 24
  • 13. Sample WBS ELEC5701 - Arek Yapoudjian 2009 25 WBS in Tabular Form 1.0 Concept 1.1 Evaluate current systems 1.2 Define Requirements 1.2.1 Define user requirements 1.2.2 Define content requirements 1.2.3 Define system requirements 1.2.4 Define server owner requirements 1.3 Define specific functionality 1.4 Define risks and risk management approach 1.5 Develop project plan 1.6 Brief web development team 2.0 Web Site Design 3.0 Web Site Development 4.0 Roll Out 5.0 Support ELEC5701 - Arek Yapoudjian 2009 26
  • 14. Work Breakdown Structure The role of the WBS is to: Partition the major project deliverables into smaller components to improve the accuracy of cost estimates Provide a mechanism for collecting and organising actual costs Provide a mechanism for performance measurement and control ELEC5701 - Arek Yapoudjian 2009 27 Work Breakdown Structure Note: The WBS provides a simple map of what is to be produced. It does not deal with schedules and therefore has no time dimension. It is however used as entry criteria for schedule development. ELEC5701 - Arek Yapoudjian 2009 28
  • 15. Cost Management The project needs a budget to determine the capital required to complete the project. The Project Manager creates estimates and predicts the total cost of the project. The project budget will be utilised to justify the cost of the project. ELEC5701 - Arek Yapoudjian 2009 29 Cost Management Project Cost Management involves: Resource Planning: Determine what resources (people, equipment and materials) are required to complete the project. Cost Estimating: Estimate the cost of the resources required to complete the project. ELEC5701 - Arek Yapoudjian 2009 30
  • 16. Cost Management Project Cost Management involves: Cost Budgeting: Allocate the overall cost estimate to individual work items to establish baseline for measuring performance. Cost Control: Control changes to budget, revise cost estimates, take corrective actions. ELEC5701 - Arek Yapoudjian 2009 31 Resource Planning Resources such as personnel, equipment and materials, need to be costed for each activity. Personnel costs may be either on a time basis (hourly/daily/weekly), fixed or at a cost per use. It is important that cost figures for your project are: Obtained from reliable sources Constantly monitored and updated with the latest changes ELEC5701 - Arek Yapoudjian 2009 32
  • 17. Cost Estimating Estimating project costs involves developing an approximation of the costs of the resources for each of the activities identified in the WBS. In order to determine the costs of a project the following need to be estimated: Equipment cost Labour Cost Other Cost ELEC5701 - Arek Yapoudjian 2009 33 Cost Estimating 1.0 Concept 1.1 Evaluate current systems $2k 1.2 Define Requirements $2k 1.2.1 Define user requirements $0.5k 1.2.2 Define content requirements $0.5k 1.2.3 Define system requirements $0.5k 1.2.4 Define server owner requirements $0.5k 1.3 Define specific functionality $1k 1.4 Define risks and risk management approach $3k 1.5 Develop project plan $5k 1.6 Brief web development team 2.0 Web Site Design $10k 3.0 Web Site Development $50k 4.0 Roll Out $100k Total: $173k ELEC5701 - Arek Yapoudjian 2009 34
  • 18. Cost Estimating As estimates are made, a range of details should be documented. These details allow estimates to be reviewed and revised. The following details should be documented for each estimate: Assumptions used Estimating method(s) used Name of estimator(s) Dependencies of the estimate ELEC5701 - Arek Yapoudjian 2009 35 Cost Budgeting An efficient way is to establish budgetary controls over the project is to utilise the bottom- up budgeting process The bottom-up budgeting involves creating cost estimates for each of the tasks identified in the WBS. These costs are then aggregated into an overall project budget. The bottom-up budgeting method is : Objective Accurate ELEC5701 - Arek Yapoudjian 2009 36
  • 19. Cost Control Once the project has commenced, the Project Manager needs to focus on monitoring the progress of the project. This ensures the project is moving forward as planned. The Project Manager needs to regularly monitor and control the estimated costs compared to the actual cost expenditures to detect any variances. ELEC5701 - Arek Yapoudjian 2009 37 Cost Control 1.0 Concept Budget Actual 1.1 Evaluate current systems $2k $1.9k 1.2 Define Requirements $2k $2.1k 1.2.1 Define user requirements 1.2.2 Define content requirements 1.2.3 Define system requirements 1.2.4 Define server requirements 1.3 Define specific functionality $1k $1.2k 1.4 Define risks and risk management $3k $4k 1.5 Develop project plan $5k $3.9k 1.6 Brief web development team 2.0 Web Site Design $10k $12k 3.0 Web Site Development $50k $54k 4.0 Roll Out $100k $98k Total: $173k $177.1k ELEC5701 - Arek Yapoudjian 2009 38
  • 20. Cost Control The Project Manager will need to follow the following process: Determine the 'actual' (how much was spent) costs for labour, equipment and other expenses. Compare the actual spending with the budget forecast Analyse the variances and report as part of your regular status reports Initiate and monitor corrective action ELEC5701 - Arek Yapoudjian 2009 39 Variances A variance occurs when the project costs are more (negative variance), or less (positive variance), than the budget estimates. A project manager must agree on a tolerance level for the project’s budget to be a percentage variance from the predicted cost. ELEC5701 - Arek Yapoudjian 2009 40
  • 21. Time Management Project Time Management involves the processes required to ensure the timely completion of a project. ELEC5701 - Arek Yapoudjian 2009 41 Project Time Management Processes Processes include: Activity definition Activity sequencing Activity duration estimating Schedule development Schedule control ELEC5701 - Arek Yapoudjian 2009 42
  • 22. Activity Definition Project schedules grow out of the basic document that initiate a project Project charter includes start and end dates and budget information Scope statement and WBS help define what will be done Activity definition involves developing a more detailed WBS and supporting explanations to understand all the work to be done so you can develop realistic duration estimates ELEC5701 - Arek Yapoudjian 2009 43 Activity Sequencing Involves reviewing activities and determining dependencies Mandatory dependencies: inherent in the nature of the work; Discretionary dependencies: defined by the project team; External dependencies: involve relationships between project and non-project activities ELEC5701 - Arek Yapoudjian 2009 44
  • 23. Project Network Diagrams Project network diagrams are the preferred technique for showing activity sequencing A project network diagram is a schematic display of the logical relationships among project activities ELEC5701 - Arek Yapoudjian 2009 45 Sample Activity-on-Arrow Network Diagram ELEC5701 - Arek Yapoudjian 2009 46
  • 24. Arrow Diagramming Method (ADM) Activities are represented by arrows Nodes or circles are the starting and ending points of activities Can only show finish-to-start dependencies ELEC5701 - Arek Yapoudjian 2009 47 Precedence Diagramming Method (PDM) Activities are represented by boxes Arrows show relationships between activities More popular than ADM method and used by project management software Better at showing different types of dependencies ELEC5701 - Arek Yapoudjian 2009 48
  • 25. Task Dependency Types ELEC5701 - Arek Yapoudjian 2009 49 Activity Duration Estimating Next step after defining activities and determining their sequence Duration includes the actual amount of time worked on an activity plus elapsed time People doing the work should help create estimates, and an expert should review them ELEC5701 - Arek Yapoudjian 2009 50
  • 26. Schedule Development Schedule development uses results of the other time management processes to determine the start and end date of the project and its activities Ultimate goal is to create a realistic project schedule that provides a basis for monitoring project progress Important tools and techniques include Gantt charts, PERT analysis, and Critical Path analysis ELEC5701 - Arek Yapoudjian 2009 51 Gantt Charts Developed by a Mechanical Engineer Henry Laurence Gantt early last century List project activities and their corresponding start and finish dates in a timeline format ELEC5701 - Arek Yapoudjian 2009 52
  • 27. Intranet WBS and Gantt Chart ELEC5701 - Arek Yapoudjian 2009 53 Milestones Milestones are significant events on a project that normally have zero duration Milestones indicate that a certain phase of the project has been completed ELEC5701 - Arek Yapoudjian 2009 54
  • 28. Sample Tracking Gantt Chart ELEC5701 - Arek Yapoudjian 2009 55 Critical Path Method (CPM) A project network analysis technique used to predict total project duration The critical path is a sequence of tasks that defines the longest path through a project It determines the earliest possible completion date of the work If the critical path tasks slip, the entire project is delayed ELEC5701 - Arek Yapoudjian 2009 56
  • 29. Finding the Critical Path First develop a good project network diagram Add the durations for all activities on each path through the project network diagram The longest path is the critical path ELEC5701 - Arek Yapoudjian 2009 57 Determining the Critical Path for Project X ELEC5701 - Arek Yapoudjian 2009 58
  • 30. More on the Critical Path If one or more activities on the critical path takes longer than planned, the whole project schedule will slip unless corrective action is taken ELEC5701 - Arek Yapoudjian 2009 59 Misconceptions about Critical Path The critical path is not the one with all the critical activities; it only accounts for time. There can be more than one critical path if the lengths of two or more paths are the same The critical path can change as the project progresses ELEC5701 - Arek Yapoudjian 2009 60
  • 31. Techniques for Shortening a Project Schedule Shorten durations of critical tasks by adding more resources or changing their scope Crashing tasks by obtaining the greatest amount of schedule compression for the least incremental cost Fast tracking tasks by doing them in parallel or overlapping them ELEC5701 - Arek Yapoudjian 2009 61 Crashing and Fast Tracking Original schedule Shortened duration thru crashing Overlapped Tasks or fast tracking ELEC5701 - Arek Yapoudjian 2009 62
  • 32. Program Evaluation and Review Technique (PERT) PERT is a network analysis technique used to estimate project duration when there is a high degree of uncertainty about the individual activity duration estimates PERT uses probabilistic time estimates based on using optimistic, most likely, and pessimistic estimates of activity durations ELEC5701 - Arek Yapoudjian 2009 63 PERT Formula and Example PERT weighted average formula: optimistic time + 4X most likely time + pessimistic time 6 Example: PERT weighted average = 8 workdays + 4 X 10 workdays + 24 workdays = 12 days 6 where 8 = optimistic time, 10 = most likely time, and 24 = pessimistic time ELEC5701 - Arek Yapoudjian 2009 64
  • 33. Controlling Changes to the Project Schedule Perform reality checks on schedules Allow for contingencies Don’t plan for everyone to work at 100% capacity all the time Hold progress meetings with stakeholders and be clear and honest in communicating schedule issues ELEC5701 - Arek Yapoudjian 2009 65 How to manage YOUR time? • Preparation • Crises High • Planning • Pressing problems • Analysis • Customer complaints Importance • Junk Mail • Mail Low • Escape Activities • Ringing telephone • Phone Calls • Interruptions Low High Urgency ELEC5701 - Arek Yapoudjian 2009 66
  • 34. Recommended Reading IT Project Management - Author: Kathie Schwalbe Chapters 5, 6, 7 ELEC5701 - Arek Yapoudjian 2009 67 Individual Assignment #1 6 Multiple Choice Questions (1 Mark each) 2 Short Answer Questions (2 Marks each) To be returned during next week lecture If not delivered on time – 50% mark reduction Questions are under Assessment link Only hard copies accepted ELEC5701 - Arek Yapoudjian 2008 68