‫بسم هللا الرحمن الرحيم‬
College Of Engineering   GE402-Project Management              Group (1)                Done by :-Mohammad Al- Rasheed    ...
PLANNING PROCESS   4-1 Quality plan   4-2 Communication Plan   4-3 Implementation Plan   4-4 Change Plan   4-5 Risk P...
Quality plan
What        is Quality?   Quality is seven attributes(portability, reliability,   efficiency, usability, testability, u...
Quality Quality means many things to many people Quality ISO 8402: “the totality of features  and characteristics of a p...
Definitions: QualityFitness for use                  +   Conformance to                       specifications. Features the...
Quality vs. Grade   Grade — a category or rank given to    entities having the same functional use but    different requi...
Cost of Quality   Cost of conformance:        Prevention costs        Appraisal (inspection) costs   Cost of non-confo...
Cost of Quality Details Prevention Quality planning. Formal process audits. Training. Detection In-process and inter...
Cost of Quality Details   Failure Costs   Rework.   Repair.   Scrap.   Failure mode analysis.   Complaint resolution...
What is a Quality    Plan?
What is a Quality Plan?A Quality Plan is different than a Test Plan Defines the Quality Goals. Realistic about where de...
Quality planThis plan details : Quality policy : if the organization delivering don‟ t  have a quality policy Project Man...
Quality plan  It also may list standards that your  deliverables will be measured against  (particularly where a product ...
What is Quality Control ? Quality  Control (QC) is fault/failure  detectionthrough static and/or dynamic testing of  arti...
Defining Quality GoalsA  goal is SMART Specific. Measurable/Testable. Attainable. Relevant. Time-bound. The primary...
Enterprise Approaches to QualityImprovement   Total Quality Management — statistical    process control, continuous impro...
Quality tools More than 300 tools Choose your tool according to your problemExample : ISHIKAWA tree SPC PARETO Six S...
Quality toolsIshikawa emphasizes on what can causes defects to theproject:
PARETO Pareto  Principle say: s that 80% of the results caused 20% of the reasons. This is known also to launch the datab...
PARETO   The principle has many applications in all areas, the following are    some examples of these applications:    I...
An Introduction to   Six Sigma
Six Sigma Methodology   Define — what to work on   Measure — current performance   Analyze — root causes   Improve — t...
Design for Six Sigma   Define — what to work on   Measure — customer needs   Analyze — how to meet customer needs   De...
26
Communications Plan
What Drives the Plan?• Your organization‟sgoals• The vision asexpressed in themission statement• Your organization‟svalues...
Vision and Mission Statement-Provides overall direction formedia activities.-The plan must advance yourorganizations agenda.
Typical Communication Goals• Enhancing visibility andreputation• Planning for crisis management• Generating positive media...
Six Critical Elements1. Understand your target audience andhow to reach it2. Research past media coverage andpublic opinio...
5. Obtain resources for staff andequipment6. Develop written work plan
Identifying Target Audience• List your stakeholders• What do they like to reador watch• Obtain demographic infofrom media•...
Research• Use the internet to conductmedia trend analysis• Analysis should includestory placement, tone andBylines• Look w...
Developing Key Messages• A phrase of 4 to 10words you want tosee in every story• Produce 3 or 4 keymessage points• Imagine...
Developing Effective Materials• Strong visualidentity• Brochures• Videos, slides• Reports, bios• Newsletter, newsstories
Assessing Resources• Assess staff time andin-house services• Arrange for training ifnecessary• Designate acommunications l...
Develop Written Plan• Create time lines,calendar of events,priorities• Assign tasks• Review progress,enforce or revisedead...
Implementation Plan
INTRODUCTION :  The chances to implement the policies, practices,and programs contained within the fourteencomponents of t...
What is the definition ofimplementation plan?      Detailed listing of activities, costs, expecteddifficulties, and schedu...
Another Definition    The sum of all the planning tools. Theimplementation plan is based around thefuture-state map and sh...
Implementation Plan?
DESCRIPTION OF THE      IMPLEMENTATION PLANThe Implementation Plan table, which is included inthis document, is composed o...
The implementation strategies capture theintent of transportation policies in aconsolidated and action-oriented manner.Ass...
The topics column provides a general list oftopics to be addressed within each project.Scope provides additional insight r...
From Strategy to Implementation :Getting from smart ideas to action requires seriousattention and fortitude to a supportin...
Backing up and Going Around :Because everything changes, you must have aback-up and go-around plan. Just like your planfor...
CHANGE PLAN
CHANGE PLAN                Kelly’s Concept  The Wright Brothers‟ great insight was thatinstability was necessary for maneu...
MODULE OVERVIEW   Change plan   Four project baselines   Types of changes   Evaluating change requests   Exercise: te...
CHANGE PLANHelpful tools for managing change are : The Action and/or Issue register and The Change Control form/register...
CHANGE PLANChange process make sure the change is : identified and approved. Just because someone thinks a change would...
FOUR PROJECT BASELINES   Scope baseline = progressively    detailed product description   Stakeholder satisfaction basel...
TYPES OF CHANGES   Scope changes (modify product documentation    and often project plan):       Requirements changes   ...
EVALUATING CHANGE             REQUESTS   All change requests are documented:        Emergency changes are documented    ...
FIRST LEVEL APPROVAL       OF CHANGE REQUESTS   Usually provided by the project manager or a    senior team member:      ...
SECOND LEVEL APPROVAL  OF CHANGE REQUESTS   Usually provided by a Change Control Board    (CCB):       Do the expected b...
Risk Plan
Risk Plan Definitions :- The possibility of suffering harm or loss- The potential for realizing unwanted , negativeconsequ...
What is a Risk Plan ?A Risk Plan helps you to foresee risks, identifyactions to prevent them from occurring andreduce thei...
So, What is a risk management plan ?A good definition of risk and risk management is:Risk is anything that threatens or li...
When do I use a Risk Plan ?A Risk Plan should be used anytime that risksneed to be carefully managed.For instance, during ...
In some cases , risk plan may be rescue planthat mean risk plan may be important to Planned andimplemented .In this cases ...
Threats and OpportunitiesSome authors divide risk into threats and opportunities:What is a threats ?A threat is equivalent...
We will focus on threats :- The most important opportunity on mostproject is to reduce the impact to negative riskevents ....
Risk managementMinimize risk with management plansLike any business transaction, export involvesrisk .There are a number o...
Creating a Risk Management Plan is acritical step in any project, as it helps youto reduce the likelihood of risk fromoccu...
There are six basic elements of the riskmanagement process :* Establishing the context* Identifying the risks* Assessing p...
Create a risk management matrixStart your risk management plan by creating a simplematrix of potential risks. This is a go...
Example :if all your export business is with a single clientin Malaysia, and that company becomesinsolvent, the outcome co...
A risk management plan will also help youdevelop and broaden your risk profile forthe Australian market. For a smallbusine...
This project ( Risk management plan )helps you to identify risks and implement a plan toreduce them .risk It helps you do ...
Risk StatementLike any business is exposed to risk asan inherent part of creating value shareholders.It has put in place p...
Two Main Parts To a Risk Statement :A- Structured risk statement .B- Sample risk statement .
Risk TaxonomyDefinition :Domain specific classification or categorizationof risks .Objective :Help to ensure that the most...
A Simple Taxonomy :- Environment :War, famine, flood, and pestilence ; terrorism ,pollution .- Economy :Currency rate chan...
- Stakeholder actions :Changes in requirements, conflicts .- Other projects :Reliance on their staff or their deliverables...
Impacts :Impacts may affect the project, the business, or anotherproject.Typical impacts include :- Cost overruns .- Sched...
Summary or conclusion* Risk are always in the future .* you can never eliminate all risk .* Focus your attention on the mo...
4-7 Contracting for Project Managers
Boundaries- Definition of a contract: An agreement  enforceable by law is a contract.” We will discuss contracting from t...
Day One Agenda:Why Contracts End Up In Court   Conduct of the work:        Product description        Price        Sch...
Day Two Agenda:Procurement Management Process   procurement planning — deciding what to    buy   Acquisition — selecting...
Some Topics We Won’t Cover   Detailed administrative procedures   Joint ventures   Jurisdictional differences   Ongoin...
Key Learning Objectives   Upon completion, you should be (better) able    to:        Identify the basic elements of a co...
Thesaurus (1): AlternativeTerminology   Acquisition — more common among    government agencies   Buying, purchasing — us...
Thesaurus (2): Buyer and Seller   Different names:        Buyer = customer, sponsor, owner        Seller = vendor, supp...
Thesaurus (3): Contracts   Legally binding obligations may be called:         Agreements         Contracts         Mem...
A Valid Contract Must:A.   Be between competent parties.B.   Accomplish a lawful purpose.C.   Include an offer and accepta...
A. Competent Parties, B. LawfulPurpose   Competent parties:        Legal age        With appropriate authority        ...
C. Offer and Acceptance   Anything said or done that shows a    willingness to exchange value.   Offers and acceptances ...
Example of Offer and Acceptance   Offer — Projects wishes to engage PM    Partners for project management    consulting a...
D. Exchange of Value   Both parties must receive something:         Financial or non-financial         Directly or indi...
Module Overview   Product description   Pricing issues   Scheduling issues   Payment terms
Product Description   Definition — an explanation of what the    buyer wants to buy:        Normally written by the buye...
Buyer and Seller Interests Often Differ   Buyer wants:         Flexibility         Minimum effort   Seller wants:     ...
Developing a Good Product Description   Must provide enough detail for the seller to    understand the buyer‟s needs.   ...
Pricing Issues   Key concept — price and cost are not the    same:        Buyer‟s cost is seller‟s price        Seller‟...
Types of Price-Based Contracts   Firm fixed price:         Seller agrees to deliver the defined scope for          a set...
Buyer View of Fixed Price Contracts   Advantages:        Better budget control        Seller assumes most cost risk    ...
Seller View of Fixed Price Contracts   Advantages:        Higher profit potential        Limited day-to-day buyer overs...
Unit Price Contracts   Buyer provides detailed list what is    needed:         Items         Quantities   Seller provi...
Buyer View of Unit Price ContractsAdvantages:-More insight into sellers‟ pricing-Quantity variations easy to processDisadv...
Cost-Based Contracts   The amount that the buyer pays is driven    by the actual costs incurred by the seller:         U...
Buyer View of Cost-Based Contracts   Advantages:        Less effort needed to define scope        More sellers likely t...
Hybrid Contracts   Time and materials (T&M):        Labor charged at hourly rate(s)        Materials charged at cost pl...
Factors to Consider When ChoosingType of Contract   Detailed requirements = price-based   Many able vendors = price-base...
Scheduling Issues   Definition — seller may have difficulty    satisfying buyer‟s requirements for date of    completion....
Potential Scheduling Problems   Seller‟s schedule is fast-tracked   Inadequate critical path analysis:         No proba...
Responding to Scheduling Issues   Schedule incentives — amounts paid for    completing work prior to contractual dates. ...
continued   Incentive amount should always be less    than the gains from early completion!   May be used with or withou...
Payment Terms   All payments require a signed contract!   Advance payments:        Payments made prior to start of work...
continued   Retainage:        Amounts withheld to ensure performance   Final payments:        Payments made when all o...
Sample Payment Terms and Conditionsi.     Payment requests must be supported by       a correct invoice.ii.    Buyer will ...
Module Overview   Product performance guarantees   Product warranties   Financial guarantees   Limitation of liability
Product Performance Guarantees   Definition — does the contracted item    perform as specified?   Examples:        FedE...
Product Warranties   Definition — how post-completion failures    will be addressed        Normally limited to physical ...
Other Warranty Issues   Coverage:         For how long?   Responsibilities:         Can buyer actions void the warrant...
Financial Guarantees   Definition — protection from the risk that    the other party will be financially unable to    ful...
Bonds Used for Financial Guarantees   Performance bond:        Paid for by the Seller.        Protects the Buyer if the...
Limitation of Liability   Definition — any condition which limits one    party‟s ability to collect from the other in a  ...
Negotiations
Negotiating                “Negotiating is the art of              reaching an agreement by                   resolving di...
Overview :    Core concepts               The four stages of    Your negotiating style       negotiations    Relations...
Proposed Norms :   Start (and end) on time   Ask questions   Electronics on silent   Short frequent breaks   Have fun!
Core Concepts :    The road to success is always under                construction.Lily Tomlin
Overview :   Definitions   Types of negotiations   Should you negotiate?   Six Foundations   Four Stages
Differences Happen …   Administrative procedures    Cost estimates    Managerial procedures                            ...
… and we negotiate to resolve them!
Dictionary Definition“To confer with another or others in order to   come to terms or reach an agreement;     to arrange o...
A Practitioner’s View   “Think of negotiation as a cooperative  enterprise: common interests must be                 sough...
Definition: Successful Negotiation   Both sides think the other was fair.   Both sides feel the other side cared about  ...
Negotiating Situations                                                 Concern for Results                                ...
… continued   We will focus on Type I, Balanced    Concerns, since that is the situation for    most project negotiations...
Should You Negotiate?Not …      if you are already in agreement.Not …      if only one outcome is acceptable.Not …      if...
Negotiations :   In a typical negotiation, the customer attempts to increase the    performance specifications while redu...
Several things can help :1-A good plan, well explained 2-A clear understanding of your risk- response planning ( have yo...
Several things can help :4- A complete WBS with activity schedule    and cost estimate can help to explain anddefend to t...
Six Foundations : Your negotiating style Your goals and expectations Standards and norms Relationships Your counterpa...
Four Stages : Preparing Exchanging  information Making offers and concessions Gaining commitment
Summary :   Negotiation is part art and part science.   Six Foundations define the concepts you    must master.   Four ...
Your Negotiating Style :Nothing is quite as astonishing as common sense and plain dealing.Ralph Waldo Emerson
Five Negotiating Styles :                                              Concern for Results                                ...
Compromise :   Find an acceptable agreement:       Meet halfway.       Split the difference.       Look for trade-offs...
Accommodate :   Accommodate the other party‟s needs:       Good relationships produce good deals.       Maintain harmon...
Defeat :   Defeat the other party    at any cost:       Drive a hard bargain.       Total victory is the goal.       T...
Withdraw :   Withdraw and remove oneself:       Keep a low profile.       Results are beyond my influence.       Indif...
Collaborate :   Work to build a win-win outcome:       Form a partnership.       Push for mutual gain.       Focus on ...
What Style Do the ProfessionalsPrefer?   Of all lawyers:       65% are consistently collaborative (N2)       24% are co...
… continued   Irritators (i.e., insults, attacks):       Average negotiator = 10.8 per hour       Best negotiators = 2....
Personal Attributes of the BestNegotiators :   Listening skills   Willingness to prepare   Subject matter knowledge   ...
Relationships:       “Doverai no proverai”     Said Russian Responsible          during cold war
Your Counterpart :The person or persons sitting across thetable from you is your peer — they deserveyour respect.
Cooperative: High Trust   Acknowledge degree of trust.   Tell your counterpart what your interests    are.   Ask them t...
Adversarial: Low Trust   You have to decide whether or not to    acknowledge the low level of trust.   Start slow, start...
Foundation :Goals, norms, andleverage  High achievement comes from high aims.  Chinese Proverb
2. Goals and Expectations :   Goals (hopes):       Something to strive for       Beyond our previous best       No rea...
… continued  Goal        Expectation    Buyer’s Cost Range            Negotiating              Range           Seller’s Pr...
Increasing Your Chances :   Be specific with both goals and    expectations.   Use the security of your expectations to ...
3. Standards and Norms :   The Consistency Principle:       We have a proven, psychological need to be        consistent...
6. Leverage Who has the most to lose from a failure to                 agree?    Who needs an agreement most?
Understanding Leverage   Leverage and power are not the same —    power is objective, leverage is situational.   Leverag...
Three Types of Leverage :   Positive — I have something you want.   Negative — I can cause you pain.   Normative — I ca...
Sources of Leverage   Time — project deadlines, fiscal year end   Competition — supply and demand   Marketability — nam...
… continued   Information — public reports, body language,    spoken comments   Importance — strategic fit, financial im...
More Practice Sometimes we stare so long at   a door that is closing that we    see too late the one that is              ...
Multiple Issue Negotiation   Before the negotiation:       Read the case description.       Meet with your team to disc...
Multiple Issue Negotiation :   During the negotiation:       Meet with your counterparts as needed.       Meet with you...
Some Final Thoughts      The power of accurate   observation is frequently called cynicism by those who         don‟t have...
Practice, Practice, Practice   Practice at work   Practice at home
A Good Negotiator Is.. Creative Versatile Motivated Hasthe abilityto walk away
Remember…   Don‟t dwell on people or gains. Stick tothe interests at hand.   Don‟t close doors. Be fair. You may wishto en...
Remember…  If you don‟t ask, don‟t expect…  Negotiations with high expectations dobetter.  The pie is almost never “fixed”...
Remember…   Pay attention to both levels of process:   Discussion of the issue about which decision must   be made   Devel...
The End ! Thank You
Types of Management
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Types of Management

  1. 1. ‫بسم هللا الرحمن الرحيم‬
  2. 2. College Of Engineering GE402-Project Management Group (1) Done by :-Mohammad Al- Rasheed 425035374Anas Ahmed AL-Moshigeh 271100085Abdussalam AL-Shodokhi 425035104Abdulaziz Al-Nasser 425035227Awad Al- Mutairy 424037043Yazeed Abdullah AL- Roqieebh 426035098 Submitted to :- prof.Dr.Tomas u Ganiron
  3. 3. PLANNING PROCESS 4-1 Quality plan 4-2 Communication Plan 4-3 Implementation Plan 4-4 Change Plan 4-5 Risk Plan 4-6 Negotiating 4-7Contracting Summary key points
  4. 4. Quality plan
  5. 5. What is Quality? Quality is seven attributes(portability, reliability, efficiency, usability, testability, understandability, modifiability) ( Glass ) Quality is conformance to requirements(Crosby) Quality is fitness for use (Deming) Quality is value to some person (Weinberg) Quality is whatever the customer decides (Ginac) Quality is an attitude or state of mind (Juran)
  6. 6. Quality Quality means many things to many people Quality ISO 8402: “the totality of features and characteristics of a product or service that bear on its ability to satisfy started or implied needs”.
  7. 7. Definitions: QualityFitness for use + Conformance to specifications. Features they want + Problems they don‟t want. Customer + value Zero defects.
  8. 8. Quality vs. Grade Grade — a category or rank given to entities having the same functional use but different requirements for quality:  Ford Escort vs. BMW 635i
  9. 9. Cost of Quality Cost of conformance:  Prevention costs  Appraisal (inspection) costs Cost of non-conformance:  Internal failure costs — fixes prior to delivery  External failure costs — fixes after delivery
  10. 10. Cost of Quality Details Prevention Quality planning. Formal process audits. Training. Detection In-process and inter-process review. Test equipment. Equipment calibration. and maintenance. Testing.
  11. 11. Cost of Quality Details Failure Costs Rework. Repair. Scrap. Failure mode analysis. Complaint resolution. Product return and. Replacement. Help line support. Warranty work.
  12. 12. What is a Quality Plan?
  13. 13. What is a Quality Plan?A Quality Plan is different than a Test Plan Defines the Quality Goals. Realistic about where defects come from. Selects appropriate detection and prevention methods. Has means not to “go dark”.
  14. 14. Quality planThis plan details : Quality policy : if the organization delivering don‟ t have a quality policy Project Management Team should develop it for the project The level of quality required in the deliverables Shows how quality is going to be assured in the project: Quality assurance what quality control measures you will use : Quality Control
  15. 15. Quality plan It also may list standards that your deliverables will be measured against (particularly where a product is involved). Example : - HACCP - FAR - Environmental, safety ,and healthregulations(ES&H)
  16. 16. What is Quality Control ? Quality Control (QC) is fault/failure detectionthrough static and/or dynamic testing of artifacts. Examining the artifact against pre- determined criteria to measure conformance.
  17. 17. Defining Quality GoalsA goal is SMART Specific. Measurable/Testable. Attainable. Relevant. Time-bound. The primary project goals must be described in the chartering process.
  18. 18. Enterprise Approaches to QualityImprovement Total Quality Management — statistical process control, continuous improvement Lean Production — eliminate waste Six Sigma — TQM focused on financial performance
  19. 19. Quality tools More than 300 tools Choose your tool according to your problemExample : ISHIKAWA tree SPC PARETO Six Sigma
  20. 20. Quality toolsIshikawa emphasizes on what can causes defects to theproject:
  21. 21. PARETO Pareto Principle say: s that 80% of the results caused 20% of the reasons. This is known also to launch the database from 80 to 20. This principle is called the name of the Italian economist who noted that 80% of the property in Italy, is owned 20% of the population.
  22. 22. PARETO The principle has many applications in all areas, the following are some examples of these applications: In sales: 80% of your profits come from 20% of customers Management: 20% of employees are 80% of the company. At time: 80% of your time is spent on 20% of the tasks or objects. To contact: 80% of the time you spend in speakerphone with 20% of those who are in the book of your phone. In clothing: dress in 80% of the time 20% of what is in your clothes closet. And others ...
  23. 23. An Introduction to Six Sigma
  24. 24. Six Sigma Methodology Define — what to work on Measure — current performance Analyze — root causes Improve — the process Control — ongoing performance
  25. 25. Design for Six Sigma Define — what to work on Measure — customer needs Analyze — how to meet customer needs Design — a process to meet those needs Verify — that customer needs were met
  26. 26. 26
  27. 27. Communications Plan
  28. 28. What Drives the Plan?• Your organization‟sgoals• The vision asexpressed in themission statement• Your organization‟svalues and beliefs
  29. 29. Vision and Mission Statement-Provides overall direction formedia activities.-The plan must advance yourorganizations agenda.
  30. 30. Typical Communication Goals• Enhancing visibility andreputation• Planning for crisis management• Generating positive mediacoverage• Changing attitudes or teachingnew skills• Generating public support• Fund raising
  31. 31. Six Critical Elements1. Understand your target audience andhow to reach it2. Research past media coverage andpublic opinion about your issue3. Determine key messages4. Determine key materials to beproduced
  32. 32. 5. Obtain resources for staff andequipment6. Develop written work plan
  33. 33. Identifying Target Audience• List your stakeholders• What do they like to reador watch• Obtain demographic infofrom media• Don‟t forget internalaudiences
  34. 34. Research• Use the internet to conductmedia trend analysis• Analysis should includestory placement, tone andBylines• Look within your own datafor newsworthy research
  35. 35. Developing Key Messages• A phrase of 4 to 10words you want tosee in every story• Produce 3 or 4 keymessage points• Imagine theHeadline• Review, revise andrepeat
  36. 36. Developing Effective Materials• Strong visualidentity• Brochures• Videos, slides• Reports, bios• Newsletter, newsstories
  37. 37. Assessing Resources• Assess staff time andin-house services• Arrange for training ifnecessary• Designate acommunications leader• Develop a budget
  38. 38. Develop Written Plan• Create time lines,calendar of events,priorities• Assign tasks• Review progress,enforce or revisedeadlines• Reassign tasks asneeded
  39. 39. Implementation Plan
  40. 40. INTRODUCTION : The chances to implement the policies, practices,and programs contained within the fourteencomponents of the Comprehensive TransportationPlan are almost unlimited. If implementation is openlydefined, then many past, current, and future projectshave, do, or will implement the policies, practices, andprograms of the Comprehensive Transportation Plan.
  41. 41. What is the definition ofimplementation plan? Detailed listing of activities, costs, expecteddifficulties, and schedules that are required to achievethe objectives of the strategic plans.
  42. 42. Another Definition The sum of all the planning tools. Theimplementation plan is based around thefuture-state map and should include thegoals, to-do lists, and other devices that willhelp improve the process.
  43. 43. Implementation Plan?
  44. 44. DESCRIPTION OF THE IMPLEMENTATION PLANThe Implementation Plan table, which is included inthis document, is composed of five sections:* Implementation Strategies* Associated Projects* Project Type* Topics* Scope
  45. 45. The implementation strategies capture theintent of transportation policies in aconsolidated and action-oriented manner.Associated projects provide more specific,yet still general, guidance regarding how toachieve the implementation strategy.Project type refers to whether a project canbe categorized as a new initiative, an existingoperations requiring additional emphasis.
  46. 46. The topics column provides a general list oftopics to be addressed within each project.Scope provides additional insight regardingthe timeframe in which a project is expectedto extend. For each project.
  47. 47. From Strategy to Implementation :Getting from smart ideas to action requires seriousattention and fortitude to a supporting set of practices.Four things are necessary for success: marketing,operations, finance, and professional services. If any ofthese are missing, a firm‟s performance will be marginalized
  48. 48. Backing up and Going Around :Because everything changes, you must have aback-up and go-around plan. Just like your planfor backing up the data on your computers, youneed a backup and go-around plan for everythingelse.
  49. 49. CHANGE PLAN
  50. 50. CHANGE PLAN Kelly’s Concept The Wright Brothers‟ great insight was thatinstability was necessary for maneuverability. A ponderous bird would not fly.
  51. 51. MODULE OVERVIEW Change plan Four project baselines Types of changes Evaluating change requests Exercise: team competition
  52. 52. CHANGE PLANHelpful tools for managing change are : The Action and/or Issue register and The Change Control form/register.What these two documents do is : Help you control the issues/risks/actions that people are raising Help change will affect your project outcomes (time, cost or scope)
  53. 53. CHANGE PLANChange process make sure the change is : identified and approved. Just because someone thinks a change would be a good idea doesn‟t mean it should be added to your project. Once you start to deliver something amazing, everyone will want to have a say. The challenge is to manage their expectations without compromising your original plan.
  54. 54. FOUR PROJECT BASELINES Scope baseline = progressively detailed product description Stakeholder satisfaction baseline = project success criteria Cost baseline = budget Schedule baseline = schedule
  55. 55. TYPES OF CHANGES Scope changes (modify product documentation and often project plan):  Requirements changes  Clarifications  Site emergencies Work changes (modify project plan):  Resource changes  Modified approach  Corrective action
  56. 56. EVALUATING CHANGE REQUESTS All change requests are documented:  Emergency changes are documented after the fact.  Non-emergencies are documented before being considered. Change requests should be documented by the requestor.
  57. 57. FIRST LEVEL APPROVAL OF CHANGE REQUESTS Usually provided by the project manager or a senior team member:  Are the expected benefits significant enough to merit further investigation? Implications:  Must have budget for this work!  Benefits may include cost avoidance  Organizational politics must be considered
  58. 58. SECOND LEVEL APPROVAL OF CHANGE REQUESTS Usually provided by a Change Control Board (CCB):  Do the expected benefits outweigh any negative impacts? Implications:  Must have budget for this work!  Benefits may include cost avoidance  Organizational politics must be considered
  59. 59. Risk Plan
  60. 60. Risk Plan Definitions :- The possibility of suffering harm or loss- The potential for realizing unwanted , negativeconsequences from an event .- More things can happen than will happen
  61. 61. What is a Risk Plan ?A Risk Plan helps you to foresee risks, identifyactions to prevent them from occurring andreduce their impact should they eventuate.The Risk Management Plan is created as part ofthe Risk Planning process.It lists of all foreseeable risks, their ranking andpriority, the preventative and contingent actions,along with a process for tracking them
  62. 62. So, What is a risk management plan ?A good definition of risk and risk management is:Risk is anything that threatens or limits the ability of aproject to achieve its goal, objectives, or theproduction of project deliverables.Risk management is a process of thinkingsystematically about all possible undesirableoutcomes before they happen and setting upprocedures that will avoid them, minimize or copewith their impact .
  63. 63. When do I use a Risk Plan ?A Risk Plan should be used anytime that risksneed to be carefully managed.For instance, during the start up of a project aRisk Plan is created to identify and managethe risk involved with the project delivery.The Risk Plan is referred to frequentlythroughout the project, to ensure that all risksare mitigated as quickly as possible .
  64. 64. In some cases , risk plan may be rescue planthat mean risk plan may be important to Planned andimplemented .In this cases risk plan will try to reduce the DamagesAnd loss .In other words risk plan may be as plan BThis plan B Created because the plan A is not work .So, plan B try to solve problem that happen from planA and reduce the Damages And loss
  65. 65. Threats and OpportunitiesSome authors divide risk into threats and opportunities:What is a threats ?A threat is equivalent to the dictionary definition of risk(The possibility of suffering harm or loss) .What is an opportunity ?An opportunity is the potential for realizing desirable,positive consequences from anevent .
  66. 66. We will focus on threats :- The most important opportunity on mostproject is to reduce the impact to negative riskevents .- Many opportunities are business opportunitiesthat are not always the responsibility of theproject manager .
  67. 67. Risk managementMinimize risk with management plansLike any business transaction, export involvesrisk .There are a number of techniques to protectyour company from the risks associated withexport. Developing a simple risk managementplan is a good starting point .
  68. 68. Creating a Risk Management Plan is acritical step in any project, as it helps youto reduce the likelihood of risk fromoccurring.
  69. 69. There are six basic elements of the riskmanagement process :* Establishing the context* Identifying the risks* Assessing probability and possibleconsequences of risks* Developing strategies to mitigate these risks* Monitoring and reviewing the outcomes* Communicating and consulting with the partiesinvolved
  70. 70. Create a risk management matrixStart your risk management plan by creating a simplematrix of potential risks. This is a good way ofidentifying the probability of risks occurring and theconsequences if they did occur .Creating the matrix will help you to order the priority ofissues that cannot be ignored. Grading risks helpsyou to focus on the critical areas and to mitigatethem before they become a crisis .
  71. 71. Example :if all your export business is with a single clientin Malaysia, and that company becomesinsolvent, the outcome could be catastrophic.But if the likelihood of insolvency is low, yourrisk ranking for that event is more moderate,although still requiring to be monitored .
  72. 72. A risk management plan will also help youdevelop and broaden your risk profile forthe Australian market. For a smallbusiness, keep your risk managementanalysis clear and simple, but ensure ithas priority for everyone in the company .
  73. 73. This project ( Risk management plan )helps you to identify risks and implement a plan toreduce them .risk It helps you do this, by giving you a completeshowing you how to take action to ,management planreduce risk in your project .Using this risk plan, you can monitor and control riskseffectively, increasing you chances of achievingsuccess .
  74. 74. Risk StatementLike any business is exposed to risk asan inherent part of creating value shareholders.It has put in place processes designed toidentify the principal risks and to manage andmitigate the effect of them.
  75. 75. Two Main Parts To a Risk Statement :A- Structured risk statement .B- Sample risk statement .
  76. 76. Risk TaxonomyDefinition :Domain specific classification or categorizationof risks .Objective :Help to ensure that the most common riskcauses have been identified .
  77. 77. A Simple Taxonomy :- Environment :War, famine, flood, and pestilence ; terrorism ,pollution .- Economy :Currency rate changes, market conditions, competition.- Government :Changes in laws and regulations .- Company actions :Change in strategic direction, internal politics
  78. 78. - Stakeholder actions :Changes in requirements, conflicts .- Other projects :Reliance on their staff or their deliverables .- Planning errors :Estimating errors .- Assumptions and constraints :Things that can go wrong .
  79. 79. Impacts :Impacts may affect the project, the business, or anotherproject.Typical impacts include :- Cost overruns .- Schedule delays .- Shortfalls in scope or quality .- Stakeholder dissatisfaction .- Multiple impacts .
  80. 80. Summary or conclusion* Risk are always in the future .* you can never eliminate all risk .* Focus your attention on the most severerisks .
  81. 81. 4-7 Contracting for Project Managers
  82. 82. Boundaries- Definition of a contract: An agreement enforceable by law is a contract.” We will discuss contracting from the perspective of the buyer in the buyer-seller relationship. Our focus will be on purchases made for a specific project:  Products that are tailored or customized  Services provided by non-employees
  83. 83. Day One Agenda:Why Contracts End Up In Court Conduct of the work:  Product description  Price  Schedule  Payment terms Assurances for both sides:  Product performance guarantees  Product warranties  Financial guarantees  Limitation of liability
  84. 84. Day Two Agenda:Procurement Management Process procurement planning — deciding what to buy Acquisition — selecting a seller Contract management — working with the seller
  85. 85. Some Topics We Won’t Cover Detailed administrative procedures Joint ventures Jurisdictional differences Ongoing contractual relationships:  Service level agreements  Employment contracts Proposal preparation
  86. 86. Key Learning Objectives Upon completion, you should be (better) able to:  Identify the basic elements of a contract  List eight key business issues  Differentiate common contract types  Understand common contract terms  Describe the procurement process from start to finish  Apply SMART to seller selection  Establish a positive relationship with your sellers
  87. 87. Thesaurus (1): AlternativeTerminology Acquisition — more common among government agencies Buying, purchasing — usually used for off- the-shelf items; price is paramount Contracting, procurement — more common within the private sector Tendering — British English 9
  88. 88. Thesaurus (2): Buyer and Seller Different names:  Buyer = customer, sponsor, owner  Seller = vendor, supplier, contractor, provider Different perspectives:  For the buyer, the seller‟s work is usually a deliverable or subproject  For the seller, the contract is often a complete project
  89. 89. Thesaurus (3): Contracts Legally binding obligations may be called:  Agreements  Contracts  Memoranda of understanding (MOU)  Purchase orders  Others?
  90. 90. A Valid Contract Must:A. Be between competent parties.B. Accomplish a lawful purpose.C. Include an offer and acceptance of that offer.D. Involve an exchange of value.
  91. 91. A. Competent Parties, B. LawfulPurpose Competent parties:  Legal age  With appropriate authority  Mentally competent Lawful purpose:  Does not violate applicable laws  Compatible with public policy
  92. 92. C. Offer and Acceptance Anything said or done that shows a willingness to exchange value. Offers and acceptances may be:  Written  Spoken (with limitations)  Demonstrated through action
  93. 93. Example of Offer and Acceptance Offer — Projects wishes to engage PM Partners for project management consulting and training. Acceptance — PM Partners wishes to provide consulting and training to Projects and its clients. 16
  94. 94. D. Exchange of Value Both parties must receive something:  Financial or non-financial  Directly or indirectly Also called “consideration”
  95. 95. Module Overview Product description Pricing issues Scheduling issues Payment terms
  96. 96. Product Description Definition — an explanation of what the buyer wants to buy:  Normally written by the buyer.  May be supported by “technical” detail. How do we end up in court?  Differing interpretations.  Changes — improperly approved, poorly defined.
  97. 97. Buyer and Seller Interests Often Differ Buyer wants:  Flexibility  Minimum effort Seller wants:  Clarity  Completeness
  98. 98. Developing a Good Product Description Must provide enough detail for the seller to understand the buyer‟s needs. Will generally describe a specific result or deliverable. Reflects the difference between scope and work.
  99. 99. Pricing Issues Key concept — price and cost are not the same:  Buyer‟s cost is seller‟s price  Seller‟s price is not seller‟s cost How do we end up in court?  Agree to an unreasonable price  Wrong type of contract
  100. 100. Types of Price-Based Contracts Firm fixed price:  Seller agrees to deliver the defined scope for a set price  Also called “lump sum” Unit price:  Set price per unit of product or service  Widely used in construction
  101. 101. Buyer View of Fixed Price Contracts Advantages:  Better budget control  Seller assumes most cost risk  Fewer staff needed to monitor and manage Disadvantages:  More effort needed to define scope  Changes can be expensive  Seller may compromise on quality 24
  102. 102. Seller View of Fixed Price Contracts Advantages:  Higher profit potential  Limited day-to-day buyer oversight Disadvantages:  Higher loss potential  Cost of proposal preparation
  103. 103. Unit Price Contracts Buyer provides detailed list what is needed:  Items  Quantities Seller provides unit price for each item. Quantities may vary, but usually only within defined range.
  104. 104. Buyer View of Unit Price ContractsAdvantages:-More insight into sellers‟ pricing-Quantity variations easy to processDisadvantages:-Effort required to develop item list and quantities-Missing items can generate claims
  105. 105. Cost-Based Contracts The amount that the buyer pays is driven by the actual costs incurred by the seller:  Used mostly in defense sector  Used when scope is difficult to define Three main types:  Cost plus fixed fee (CPFF)  Cost plus incentive fee (CPIF)  Fixed price incentive fee (FPIF)
  106. 106. Buyer View of Cost-Based Contracts Advantages:  Less effort needed to define scope  More sellers likely to be interested  Easier to get changes accepted Disadvantages:  Limited control over total cost  Can be difficult to agree on indirect cost rates
  107. 107. Hybrid Contracts Time and materials (T&M):  Labor charged at hourly rate(s)  Materials charged at cost plus a percent for administrative overhead Time and materials, not to exceed:  Seller stops work once limit has been reached 30
  108. 108. Factors to Consider When ChoosingType of Contract Detailed requirements = price-based Many able vendors = price-based Urgent = hybrid Complex requirements = cost-based High value contract = cost-based
  109. 109. Scheduling Issues Definition — seller may have difficulty satisfying buyer‟s requirements for date of completion. How do we end up in court?  Early activities are delayed by buyer  Inadequate schedule analysis  Failure to monitor and manage schedule performance
  110. 110. Potential Scheduling Problems Seller‟s schedule is fast-tracked Inadequate critical path analysis:  No probabilistic analysis  No analysis of resource constraints  No detail beyond milestone schedule
  111. 111. Responding to Scheduling Issues Schedule incentives — amounts paid for completing work prior to contractual dates. Most often used when the buyer may profit from early completion:  Real estate development  Highway construction  Power plant maintenance
  112. 112. continued Incentive amount should always be less than the gains from early completion! May be used with or without:  Cost incentives.  Penalties for late completion.
  113. 113. Payment Terms All payments require a signed contract! Advance payments:  Payments made prior to start of work  Usually made to support purchase of materials Progress (partial) payments:  Payments that are less than the full contract amount  Method of calculation should be defined within the contract
  114. 114. continued Retainage:  Amounts withheld to ensure performance Final payments:  Payments made when all of the contract work has been completed and accepted
  115. 115. Sample Payment Terms and Conditionsi. Payment requests must be supported by a correct invoice.ii. Buyer will pay seller 85% of the agreed value of each work item upon completion of the work item.iii. Payments will be made within 30 days.iv. Retainage will be paid within 30 days of final acceptance. 38
  116. 116. Module Overview Product performance guarantees Product warranties Financial guarantees Limitation of liability
  117. 117. Product Performance Guarantees Definition — does the contracted item perform as specified? Examples:  FedEx will refund your shipping charges if we miss our published delivery time by even 60 seconds.  Air conditioning unit will cool room to 20ºC with exterior temperature 40ºC or lower.
  118. 118. Product Warranties Definition — how post-completion failures will be addressed  Normally limited to physical products  May differ for installation and use Key issue — can implied warranties be excluded?
  119. 119. Other Warranty Issues Coverage:  For how long? Responsibilities:  Can buyer actions void the warranty?  Effect of failure by a subcontractor?  If a part fails, is the whole product covered? Can damages be assessed?
  120. 120. Financial Guarantees Definition — protection from the risk that the other party will be financially unable to fulfill the contract. Key issue — enforcement may be difficult.
  121. 121. Bonds Used for Financial Guarantees Performance bond:  Paid for by the Seller.  Protects the Buyer if the Seller fails to perform for any reason. Payment bond:  Paid for by the Buyer.  Protects the Seller if the Buyer becomes insolvent.
  122. 122. Limitation of Liability Definition — any condition which limits one party‟s ability to collect from the other in a court of law. Common limitations:  Indirect damages  Lawsuits by others
  123. 123. Negotiations
  124. 124. Negotiating “Negotiating is the art of reaching an agreement by resolving differences through creativity”
  125. 125. Overview :  Core concepts  The four stages of  Your negotiating style negotiations  Relationships  Goals, norms, and leverage  More practice
  126. 126. Proposed Norms : Start (and end) on time Ask questions Electronics on silent Short frequent breaks Have fun!
  127. 127. Core Concepts : The road to success is always under construction.Lily Tomlin
  128. 128. Overview : Definitions Types of negotiations Should you negotiate? Six Foundations Four Stages
  129. 129. Differences Happen … Administrative procedures Cost estimates Managerial procedures ! Priorities Resource allocation Role definition Schedules Technical options
  130. 130. … and we negotiate to resolve them!
  131. 131. Dictionary Definition“To confer with another or others in order to come to terms or reach an agreement; to arrange or settle by discussion and mutual agreement.”
  132. 132. A Practitioner’s View “Think of negotiation as a cooperative enterprise: common interests must be sought. In a good negotiation, everybody wins something.” Gerard Nierenberg
  133. 133. Definition: Successful Negotiation Both sides think the other was fair. Both sides feel the other side cared about their needs. Both sides believe the other side will fulfill the agreement. Both sides are reasonably satisfied with the agreement. Both sides would negotiate together again.
  134. 134. Negotiating Situations Concern for Results Low High Concern for Relationship High Type I: Type II: Balanced Relationship Concerns Type IV: Type III: Tacit Transactions Low Coordination 135
  135. 135. … continued We will focus on Type I, Balanced Concerns, since that is the situation for most project negotiations. Each type of situation assumes that both sides have the same view — we will deal with what happens when the sides have different views later in the program.
  136. 136. Should You Negotiate?Not … if you are already in agreement.Not … if only one outcome is acceptable.Not … if time is of the essence and a decision must be made.Not … if potential gains are not worth the effort to prepare.
  137. 137. Negotiations : In a typical negotiation, the customer attempts to increase the performance specifications while reducing the schedule and the budgeted cost. A common negotiation problem is deciding how to deal with the customer „s request to lower the price If it is a competitive solicitation, the customer often will play off one prospective contractor against another to try to maximize his benefit
  138. 138. Several things can help :1-A good plan, well explained 2-A clear understanding of your risk- response planning ( have you any padding?Any contingency budget?3-Management guidance , or clearance, on how much you can give up
  139. 139. Several things can help :4- A complete WBS with activity schedule and cost estimate can help to explain anddefend to the prospective customer5- A reputation for having met prior commitments
  140. 140. Six Foundations : Your negotiating style Your goals and expectations Standards and norms Relationships Your counterpart‟s interests Leverage
  141. 141. Four Stages : Preparing Exchanging information Making offers and concessions Gaining commitment
  142. 142. Summary : Negotiation is part art and part science. Six Foundations define the concepts you must master. Four Stages define the process of negotiating.
  143. 143. Your Negotiating Style :Nothing is quite as astonishing as common sense and plain dealing.Ralph Waldo Emerson
  144. 144. Five Negotiating Styles : Concern for Results Low High Concern for Relationship High N3. Accommodate N2. Collaborate N5. Compromise N4. Withdraw N1. Defeat Low 145
  145. 145. Compromise : Find an acceptable agreement:  Meet halfway.  Split the difference.  Look for trade-offs. Behavior in thought experiment?
  146. 146. Accommodate : Accommodate the other party‟s needs:  Good relationships produce good deals.  Maintain harmony.  Make concessions for the sake of the relationship. Behavior in thought experiment?
  147. 147. Defeat : Defeat the other party at any cost:  Drive a hard bargain.  Total victory is the goal.  There can be only one winner. Behavior in thought experiment?
  148. 148. Withdraw : Withdraw and remove oneself:  Keep a low profile.  Results are beyond my influence.  Indifferent; resigned. Behavior in thought experiment?
  149. 149. Collaborate : Work to build a win-win outcome:  Form a partnership.  Push for mutual gain.  Focus on problem-solving. Behavior in thought experiment?
  150. 150. What Style Do the ProfessionalsPrefer? Of all lawyers:  65% are consistently collaborative (N2)  24% are consistently competitive (N1) Of those viewed as most effective:  75% were consistently collaborative  12% were consistently competitive
  151. 151. … continued Irritators (i.e., insults, attacks):  Average negotiator = 10.8 per hour  Best negotiators = 2.3 per hour Emotion-laden comments:  Average negotiator = 6.3%  Best negotiators = 1.9%
  152. 152. Personal Attributes of the BestNegotiators : Listening skills Willingness to prepare Subject matter knowledge Verbal communication ability Analytic ability
  153. 153. Relationships: “Doverai no proverai” Said Russian Responsible during cold war
  154. 154. Your Counterpart :The person or persons sitting across thetable from you is your peer — they deserveyour respect.
  155. 155. Cooperative: High Trust Acknowledge degree of trust. Tell your counterpart what your interests are. Ask them to disclose their interests. Share your options, ask them to do the same.
  156. 156. Adversarial: Low Trust You have to decide whether or not to acknowledge the low level of trust. Start slow, start small. Look for incremental agreements; be persistent.
  157. 157. Foundation :Goals, norms, andleverage High achievement comes from high aims. Chinese Proverb
  158. 158. 2. Goals and Expectations : Goals (hopes):  Something to strive for  Beyond our previous best  No real surprise if we fall short Expectations:  What we can reasonably accomplish  Real disappointment if we fall short
  159. 159. … continued Goal Expectation Buyer’s Cost Range Negotiating Range Seller’s Price Range Expectation Goal
  160. 160. Increasing Your Chances : Be specific with both goals and expectations. Use the security of your expectations to challenge yourself with some stretch goals. Write them down and carry them with you.
  161. 161. 3. Standards and Norms : The Consistency Principle:  We have a proven, psychological need to be consistent with our prior words and deeds.  Consistency is an interest — it is not always logical. Authority:  People in most cultures will defer to authority.  Authority comes in different forms.
  162. 162. 6. Leverage Who has the most to lose from a failure to agree? Who needs an agreement most?
  163. 163. Understanding Leverage Leverage and power are not the same — power is objective, leverage is situational. Leverage changes over time — the side that most needs the deal now lacks leverage. Leverage is based on perception — the facts may not be relevant!
  164. 164. Three Types of Leverage : Positive — I have something you want. Negative — I can cause you pain. Normative — I can show you to be violating the consistency principle.
  165. 165. Sources of Leverage Time — project deadlines, fiscal year end Competition — supply and demand Marketability — name recognition Opportunity — future business Investment — emotional, financial Environment — location, temperature, etc.
  166. 166. … continued Information — public reports, body language, spoken comments Importance — strategic fit, financial impact Pressure — from your boss Composure — staying in control of yourself Precedent — what happened last time? Policy — law, ethics, procedures
  167. 167. More Practice Sometimes we stare so long at a door that is closing that we see too late the one that is open. Alexander Graham Bell
  168. 168. Multiple Issue Negotiation Before the negotiation:  Read the case description.  Meet with your team to discuss the case.  Use the tools and techniques covered in the program to prepare.  Complete a “Negotiating Plan.”  Schedule a meeting with your counterparts.
  169. 169. Multiple Issue Negotiation : During the negotiation:  Meet with your counterparts as needed.  Meet with your team as needed.  Craft an agreement. After the negotiation:  Be prepared to share your results with the other participants.
  170. 170. Some Final Thoughts The power of accurate observation is frequently called cynicism by those who don‟t have it. George Bernard Shaw
  171. 171. Practice, Practice, Practice Practice at work Practice at home
  172. 172. A Good Negotiator Is.. Creative Versatile Motivated Hasthe abilityto walk away
  173. 173. Remember… Don‟t dwell on people or gains. Stick tothe interests at hand. Don‟t close doors. Be fair. You may wishto enter into negotiations again. The end result should be acceptable toboth parties. Your BATNA establishes the reality ofhow important the agreement is to youand what you are willing to accept.
  174. 174. Remember… If you don‟t ask, don‟t expect… Negotiations with high expectations dobetter. The pie is almost never “fixed”. Don‟t be afraid to offend: “it‟s onlybusiness.” Most negotiations are as much aboutemotion as they are money.
  175. 175. Remember… Pay attention to both levels of process: Discussion of the issue about which decision must be made Development of a relationship that leadsoften to win/win solution Don‟t give too much credit to the otherside You are an asset and present fromstrength
  176. 176. The End ! Thank You

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