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  1. 1. Project Management A Short Introduction and History URBS 609 PERT, Unit 1
  2. 2. About This Training Module <ul><li>T his training module was crafted using PowerPoint by Microsoft Corporation. It has been packaged with PowerPoint Viewer, a standalone Microsoft product that allows a user to view this module without use of PowerPoint. </li></ul><ul><li>Left mouse-click or enter to go to next slide </li></ul><ul><li>Right mouse-click or backspace to go to previous slide </li></ul><ul><li>ESC to exit this module </li></ul>This Unit of Instruction was crafted by Robert Hugg For Minnesota State University, Mankato Urban and Regional Studies Institute - 2004
  3. 3. Training Module Preview <ul><li>This module will provide: </li></ul><ul><ul><li>A basic history of Project Management </li></ul></ul><ul><ul><li>Introduction to key terms </li></ul></ul><ul><ul><li>Introduction to key concepts </li></ul></ul><ul><ul><li>Introduction to traditional methodologies </li></ul></ul><ul><ul><li>Introduction to logical task sequence </li></ul></ul><ul><li>This module is constructed as the first block in a building block approach </li></ul>
  4. 4. What Is Project Management? <ul><li>Management of resources & constraints to meet a goal in as efficient a manner as possible </li></ul><ul><ul><li>Resources: Time, money, people, equipment </li></ul></ul><ul><ul><li>Constraints: preceding task completion </li></ul></ul><ul><li>A science or an art? Both </li></ul><ul><ul><li>Science: based on statistical means & norms </li></ul></ul><ul><ul><li>Art: based on intuition into human behavior </li></ul></ul><ul><ul><li>Both: balancing the known and unknown to achieve a more predictable result </li></ul></ul>
  5. 5. The Unbroken Thread of Time <ul><li>Project Management (PM) is not new </li></ul><ul><ul><li>Used in some form for centuries </li></ul></ul><ul><ul><ul><li>Pyramids, sphinx, coliseum – intricate plans </li></ul></ul></ul><ul><ul><ul><li>Active management of resources to meet a goal </li></ul></ul></ul><ul><ul><li>Value: listing and tracking complex tasks </li></ul></ul><ul><ul><li>Value: Provides a focus for project communication </li></ul></ul><ul><li>Based on a quest for efficiency </li></ul><ul><ul><li>Arranging tasks and resources for most efficient and productive result </li></ul></ul>
  6. 6. A Philosophy, not a Technique <ul><li>PM is a management philosophy </li></ul><ul><ul><li>Efficient management yields effective results </li></ul></ul><ul><li>Often mistaken as a technique </li></ul><ul><ul><li>PM contains many techniques – flexible </li></ul></ul><ul><ul><ul><li>Adaptable techniques that are industry specific </li></ul></ul></ul><ul><ul><ul><li>Techniques work in some industries and not others </li></ul></ul></ul><ul><ul><li>PM techniques evolve within the philosophy </li></ul></ul><ul><li>Many techniques, many tools, one goal </li></ul>
  7. 7. Project Management Definitions <ul><li>There are several key PM terms </li></ul><ul><ul><li>Critical Path : The longest time path through the task network. The series of tasks (or even a single task) that dictates the calculated finish date of the project (That is, when the last task in the critical path is completed, the project is completed) The &quot;longest&quot; path (in terms of time) to the completion of a project. If shortened, it would shorten the time it takes to complete the project. Activities off the critical path would not affect completion time even if they were done more quickly. </li></ul></ul><ul><ul><li>Slack Time : The amount of time a task can be delayed before the project finish date is delayed. Total slack can be positive or negative. If total slack is a positive it indicates the amount of time that the task can be delayed without delaying the project finish date. If negative, it indicates the amount of time that must be saved so that the project finish date is not delayed. Total Slack = Latest Start - Earliest Start. By default and by definition, a task with 0 slack is considered a critical task . If a critical task is delayed, the project finish date is also delayed. (Also known as float time ) </li></ul></ul>
  8. 8. Project Management Definitions <ul><li>More key PM terms: </li></ul><ul><ul><li>Crashing : Shifting resources to reduce slack time so the critical path is as short as possible. Always raises project costs and is typically disruptive – a project should be crashed with caution . </li></ul></ul><ul><ul><li>Dummy activity : An imaginary activity with no duration, used to show either an indirect relationship between 2 tasks or to clarify the identities of the tasks . In CPM, each activity must be uniquely defined by its beginning and ending point. When two activities begin and end at the same time, a dummy activity (an activity which begins and ends at the same time) is inserted into the model to distinguish the two activities. </li></ul></ul>
  9. 9. Project Management Definitions <ul><li>Even more key PM terms: </li></ul><ul><ul><li>Gantt Chart : A bar chart. While visually appealing on a task/duration basis, it is limited because it does not show task or resource relationships well. Strength: easy to maintain and read. </li></ul></ul><ul><ul><li>Network Diagram : A wire diagram, Also known as a PERT network diagram. A diagram that shows tasks and their relationships. Limited because it shows only task relationships. Strength: easy to read task relationships. </li></ul></ul>
  10. 10. Project Management Definitions <ul><li>Yet more key PM terms: </li></ul><ul><ul><ul><li>Dependencies : Links between project tasks. There are 3 types of dependencies: </li></ul></ul></ul><ul><ul><ul><ul><li>Causal , where 1 task must be completed before another can begin (have to bake bread before you can make a sandwich) </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>critical path schedules are based only on causal dependencies </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><li>Resource , where a task is limited by availability of resources (more bread can be baked by 2 bakers, but only 1 is available) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Discretionary, optional task sequence preferences that, though not required, may reflect organizational preferences </li></ul></ul></ul></ul><ul><ul><li>Milestone : A significant task which represents a key accomplishment within the project. Typically requires special attention and control. </li></ul></ul>
  11. 11. Project Management Definitions <ul><li>Yet more key PM terms: </li></ul><ul><ul><li>WBS : a work breakdown structure ( WBS ) is a detailed, hierarchical (from general to specific) tree structure of deliverables and tasks that need to be performed to complete a project. </li></ul></ul><ul><ul><li>The purpose of a WBS is to identify the actual tasks to be done in a project. WBS serves as the basis for much of project planning. </li></ul></ul><ul><ul><li>Work breakdown structure is, perhaps, the most common project management tool, it was created by the US military in the 1960s as an extension to PERT. </li></ul></ul>
  12. 12. Project Management Definitions <ul><li>Yet more key PM terms: </li></ul><ul><ul><li>Duration : The time it takes for an activity to be completed, given the planned amount of material, labor and equipment. </li></ul></ul><ul><ul><li>Effort : The amount (not duration) of work required to complete a task. Duration may decrease by adding resources but the effort required will remain the same. </li></ul></ul><ul><ul><li>Scope: A specific definition of what the project does and does not entail. Critical to managing expectations of customers and workers alike. </li></ul></ul>
  13. 13. Project Management Definitions <ul><li>Final key PM terms: </li></ul><ul><ul><li>Constraints: Restrictions set on the start or finish date of a task. You can specify that a task must start on or finish no later than a particular date. Constraints can be flexible ( not tied to a specific date) or inflexible (tied to a specific date) </li></ul></ul><ul><ul><ul><li>Flexible constraints such as As Soon As Possible (ASAP) and As Late As Possible (ALAP) do not have specific dates associated with them. Setting these constraints allows you to start tasks as early as possible or as late as possible with the task ending before the project finish, given other constraints and task dependencies in the schedule. </li></ul></ul></ul><ul><ul><ul><li>Inflexible constraints such as Must Start On (MSO) and Must Finish On (MFO) require an associated date, which controls the start or finish date of the task. These constraints are useful when you need to make your schedule take into account external factors, such as the availability of equipment or resources, deadlines, contract milestones, and start and finish dates. </li></ul></ul></ul><ul><li>There are many more PM Terms, but these are the basics – it is important to know these concepts </li></ul>
  14. 14. Project Management Assumptions <ul><li>PM makes several key assumptions </li></ul><ul><ul><li>All tasks have distinct begin and end points </li></ul></ul><ul><ul><li>All estimates can be mathematically derived </li></ul></ul><ul><ul><li>Tasks must be able to be arranged in a defined sequence that produces a pre-defined result </li></ul></ul><ul><ul><li>Resources may be shifted to meet need </li></ul></ul><ul><ul><li>Cost and time share a direct relationship (Cost of each activity is evenly spread over time) </li></ul></ul><ul><ul><li>Time, of itself, has no value </li></ul></ul><ul><li>These assumptions make PM controversial </li></ul>
  15. 15. THE PM Concept Assumption A Critical Path Exists <ul><li>The Key Concept used by CPM/PERT is that a small set of activities, which make up the longest path through the activity network control the entire project. If these &quot; critical &quot; activities could be identified and assigned to responsible persons, management resources could be optimally used by concentrating on the few activities which determine the fate of the entire project. By contrast, non-critical activities can be re-planned, rescheduled and resources for them can be reallocated flexibly, without affecting the whole project. (Wiest, 1974) </li></ul>
  16. 16. The Emergence of Standardized PM <ul><li>Organized as a formal Discipline in 1917 </li></ul><ul><ul><li>Henry Gantt introduced standardized PM tools </li></ul></ul><ul><ul><ul><li>Gantt Chart – visual tracking of tasks and resources </li></ul></ul></ul><ul><ul><ul><li>Depiction of relationships between tasks </li></ul></ul></ul><ul><ul><ul><li>Depiction of constraints between tasks </li></ul></ul></ul><ul><ul><ul><li>First Widespread acceptance of a single technique </li></ul></ul></ul><ul><ul><li>Created out of need and frustration as industrialization became ever more complex </li></ul></ul><ul><li>Little change to PM for another 40 years </li></ul>
  17. 17. The Birth of PM as We Know It <ul><li>Two main (complementary) techniques within PM </li></ul><ul><ul><li>PERT (Program Evaluation and Review Technique) – introduced by US military in 1958 </li></ul></ul><ul><ul><ul><li>US Navy needed tools to control costs and schedules for Polaris Submarine construction </li></ul></ul></ul><ul><ul><li>CPM (Critical Path Method) – introduced by US industry in 1958 (DuPont Corporation and Remington-Rand) </li></ul></ul><ul><ul><ul><li>Industry needed to control costs and schedules in manufacturing </li></ul></ul></ul><ul><ul><li>Common weakness to both: ignores most dependencies </li></ul></ul><ul><ul><ul><li>Considers only completion of a preceding required task </li></ul></ul></ul><ul><li>Both rely on a logical sequence of tasks </li></ul><ul><ul><li>Organized visually (Charts), tabular or simple lists </li></ul></ul>
  18. 18. An Example of a Logical Sequence Making a simple list of tasks <ul><li>Planting trees with flowers and edging around them – tasks required to complete this project: </li></ul><ul><ul><li>Mark utilities </li></ul></ul><ul><ul><li>Dig Holes </li></ul></ul><ul><ul><li>Buy trees </li></ul></ul><ul><ul><li>Buy flowers </li></ul></ul><ul><ul><li>Plant trees </li></ul></ul><ul><ul><li>Plant flowers </li></ul></ul><ul><ul><li>Buy edging </li></ul></ul><ul><ul><li>Install edging </li></ul></ul><ul><li>This list does not reflect time or money </li></ul><ul><li>This list does not reflect task relationships </li></ul><ul><li>This list is a simple sequence of logical events </li></ul><ul><li>This list does not provide an easy project “snapshot” </li></ul><ul><li>Hard to see conflicts </li></ul>
  19. 19. An Example of a Logical Sequence Visual - Using a PERT Chart (Network Diagram) Planting trees with flowers and edging around them Visual – task relationships are clear – good snapshot Created using RF Flow or Visio
  20. 20. An Example of a Logical Sequence Tabular – including time and cost data NOTE: Shaded areas are concurrent tasks that are completed along the timeline- they contribute to overall cost but not overall duration 675 400 6 10 TOTALS 50 25 .5 1 Install Edging 25 25 .5 .5 Buy Edging 100 50 .5 1 Plant Flowers 200 100 1 2 Plant Trees 50 50 .5 .5 Buy Flowers 50 50 .5 .5 Buy Trees 200 100 1 2 Dig Holes 0 0 3 3 Mark Utilities Crashed Cost ($) Normal Cost ($) Crashed Time (Days) Normal Time (Days) Task Name
  21. 21. PERT and CPM – The Basics <ul><li>PERT </li></ul><ul><ul><li>Weighs and estimates task and project timing based on probabilistic norms and averages </li></ul></ul><ul><ul><ul><li>Optimistic, expected, pessimistic input estimates </li></ul></ul></ul><ul><ul><ul><li>Derives probable completion dates based on a formula (does not consider constraints) </li></ul></ul></ul><ul><ul><ul><ul><li>(Optimistic x1 + expected x4 + pessimistic x1) / 6 </li></ul></ul></ul></ul><ul><ul><ul><li>The derived dates are estimates (educated guess) </li></ul></ul></ul><ul><ul><ul><li>The analysis yields a best-case date , worst-case date , and due (derived expected) date </li></ul></ul></ul>
  22. 22. PERT and CPM – The Basics <ul><li>PERT (continued) </li></ul><ul><li>Manipulating these estimates provides: </li></ul><ul><ul><li>Likely (estimated) completion dates </li></ul></ul><ul><ul><li>Probability of meeting estimated dates </li></ul></ul><ul><ul><ul><li>Best case date </li></ul></ul></ul><ul><ul><ul><li>Expected (due) date </li></ul></ul></ul><ul><ul><ul><li>Worst case date </li></ul></ul></ul><ul><li>ALL PERT dates are estimates ( ALWAYS ) </li></ul><ul><li>Preferred choice in Social & Behavioral Sciences </li></ul>
  23. 23. PERT and CPM – The Basics <ul><li>CPM </li></ul><ul><ul><li>Unlike PERT, analyzes only the longest likely chain of activities </li></ul></ul><ul><ul><ul><li>The earliest time a project can be completed when using the longest possible task durations </li></ul></ul></ul><ul><ul><li>Deterministic , not probabilistic </li></ul></ul><ul><ul><ul><li>Events will be determined by preceding events, not probability </li></ul></ul></ul><ul><ul><li>Derives a “normal” completion time </li></ul></ul>
  24. 24. PERT and CPM – The Basics <ul><li>CPM (Continued) </li></ul><ul><li>CPM assumes projects may be “crashed” </li></ul><ul><ul><li>Completing a task or project in a shorter amount of time by using extra resources </li></ul></ul><ul><ul><li>May be crashed for time but does not directly consider any impact other than cost/time </li></ul></ul><ul><ul><ul><li>Impact on shared resources (with other projects) </li></ul></ul></ul><ul><ul><ul><li>Impact on other projects (resources, timing) </li></ul></ul></ul><ul><ul><ul><li>Impact on quality or reliability </li></ul></ul></ul><ul><li>Preferred choice in industry and construction – tasks and outcomes are more finite and tangible </li></ul>
  25. 25. PERT and CPM – The Basics <ul><li>PERT and CPM can be used Together </li></ul><ul><ul><li>Provides benefits of each </li></ul></ul><ul><ul><ul><li>Time estimates – a range (PERT) </li></ul></ul></ul><ul><ul><ul><li>Time estimates – likely (CPM) </li></ul></ul></ul><ul><ul><ul><li>Cost estimates (CPM) </li></ul></ul></ul><ul><ul><ul><li>Time and cost if crashed (CPM) </li></ul></ul></ul><ul><ul><ul><li>Probability of completion “on time” (PERT) </li></ul></ul></ul><ul><ul><li>Used together: valuable management tools </li></ul></ul><ul><ul><li>PERT and CPM have remained unchanged since 1958 </li></ul></ul>
  26. 26. PERT and CPM – The Basics <ul><li>Valuable planning tools but: </li></ul><ul><ul><li>Only consider logical (causal) dependencies </li></ul></ul><ul><ul><ul><li>Completion of a preceding required task </li></ul></ul></ul><ul><ul><li>Does not consider resource or discretionary dependencies </li></ul></ul><ul><ul><ul><li>Availability of a worker, money, or machines </li></ul></ul></ul><ul><ul><ul><li>Task sequence that best fits the bigger picture </li></ul></ul></ul><ul><li>Relies on clearly defined tasks and goals </li></ul><ul><li>Provides estimates, not guarantees </li></ul>
  27. 27. PM Today – Necessary? <ul><li>Frustration with cost & schedule overruns </li></ul><ul><li>Frustration with reliability of production estimates </li></ul><ul><li>Management challenges exist today: </li></ul><ul><ul><li>Only 44% of projects are completed on time </li></ul></ul><ul><ul><li>On average, projects are 189% over-budget </li></ul></ul><ul><ul><li>70% of completed projects do not perform as expected </li></ul></ul><ul><ul><li>30% of projects are canceled before completion </li></ul></ul><ul><ul><li>On average, projects are 222% longer than expected </li></ul></ul><ul><li>PM has been shown to improve this performance </li></ul><ul><li>These statistics were compiled by an independent monitoring group, The Standish Group, and represent the US national average for 1998 </li></ul>
  28. 28. PM Overview <ul><li>Valuable tools for planning and tracking </li></ul><ul><ul><li>A good way to explore “what if” before a project ever begins </li></ul></ul><ul><ul><ul><li>How much it could cost - money </li></ul></ul></ul><ul><ul><ul><li>What it could entail – tasks </li></ul></ul></ul><ul><ul><ul><li>How long it could take - time </li></ul></ul></ul><ul><ul><ul><li>Probabilities of success - risks </li></ul></ul></ul><ul><ul><ul><li>How much resource needed– people & equipment </li></ul></ul></ul><ul><li>A good way to get and stay organized </li></ul><ul><li>Provides estimates, not guarantees </li></ul>
  29. 29. Resources Used in This Unit <ul><li>Dr. Anthony Filipovitch </li></ul><ul><li>Goldratt, Eli, Dr., The Goal: A Process of Ongoing Improvement, Great Barrington: New River Press, 1996 </li></ul><ul><li>MS Project, by Microsoft Corporation </li></ul><ul><li>PM Body of Knowledge (PMBOK), Philadelphia: PMI, 2000 </li></ul><ul><li>Project Management Institute (PMI) Resource Center </li></ul><ul><ul><li>Project Management Institute Website </li></ul></ul><ul><li>Render, Barry and Stair Jr., Ralph M. - Quantitative Analysis for Management, Massachusetts: Allyn & Bacon Inc., 1982 </li></ul><ul><li>US National Performance Survey, The Standish Group, 1998 </li></ul><ul><li>Verma, Vijay K., Managing the Project Team: The Human Aspects of Project Management, Philadelphia: PMI, 1997 </li></ul><ul><li>Wiest, Jerome D., and Levy, Ferdinand K., A Management Guide to PERT/CPM, New Delhi: Prentice-Hall of India Private Limited, 1974 </li></ul>
  30. 30. <ul><li>You have completed </li></ul><ul><li>URBS 609 PERT Unit 1 </li></ul><ul><li>Please proceed to </li></ul><ul><li>URBS 609 PERT Unit 2 </li></ul>This Unit of Instruction was crafted by Robert Hugg For Minnesota State University, Mankato Urban and Regional Studies Institute - 2004
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