Triple Constraints of Projects: Scope, Cost & Schedule

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Triple Constraints of Projects: Scope, Cost & Schedule

  1. 1. Managing Triple Constraint<br />Syed Shofiul AlomSr. Project ManagerEktoo Limited<br />Project Scope Management<br />Project Cost Management<br />Project Time Management<br />
  2. 2. Project Scope Management<br />The processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully<br />Why Do We Manage Scope?<br />Can’t manage schedule and budget if scope is out of control (Triple Constraint)<br />Scope docs are used to manage expectations<br />
  3. 3. Scope Management Key Points<br />What is scope management<br />Checking to ensure that one is completing work<br />Saying No to additional work not in the charter<br />Preventing extra work<br />Work Breakdown Structure (WBS)<br />Foundation of the project, all planning and controlling is based on the WBS <br />Identifies all work to be performed, if it is not in the WBS it does not need to be done<br />Graphical picture of work<br />
  4. 4. Scope Management Key Points<br />TIME<br />Estimating<br />WBS<br />Staffing<br />Risk<br />Quality<br />COST<br />Network Diagrams<br />SCOPE<br />
  5. 5. How Do We Manage Scope?<br />Five processes<br />Scope Planning<br />Scope Definition<br />Create WBS<br />Scope Verification<br />Scope Control<br />Scope Planning<br />Scope Definition<br />Create WBS<br />Scope Verification<br />Scope Control<br />
  6. 6. Scope Planning<br />Scope Definition<br />Create WBS<br />Scope Verification<br />Scope Control<br />Scope Planning<br />Enterprise Environmental Factors<br />Inputs<br />Tools & Techniques<br /><ul><li>Expert judgment
  7. 7. Templates, forms, standards</li></ul>Organizational Process Assets<br />Outputs<br />Project Charter<br />Preliminary Project Scope Statement<br />Project Management Plan<br />
  8. 8. Scope Planning<br />Scope Definition<br />Create WBS<br />Scope Verification<br />Scope Control<br />Scope Definition<br />Inputs<br />Tools & Techniques<br />Organizational Process Assets<br />Outputs<br /><ul><li>Product analysis
  9. 9. Alternatives identification
  10. 10. Expert judgment
  11. 11. Stakeholder analysis</li></ul>Project Scope Statement<br />Project Charter<br />Requested Changes<br />Preliminary Project Scope Statement<br />Project Scope management plan updates<br />Project Scope Management Plan<br />Approved Change Requests<br />
  12. 12. Scope Management Plan<br /><ul><li>Guidance on how scope will be defined, documented, verified, managed, and controlled
  13. 13. Usually contained in project management plan
  14. 14. Identifies processes to manage scope, other tools used to manage scope (i.e. WBS, Scope statement, etc) </li></ul>Project Scope Statement<br /><ul><li>Project assumptions
  15. 15. Initial project organization
  16. 16. Initial risks
  17. 17. Schedule milestones
  18. 18. Funding limitations
  19. 19. Cost estimate
  20. 20. Project specifications
  21. 21. Configuration Mgmt System
  22. 22. Approval requirements
  23. 23. Project objective
  24. 24. Product scope description
  25. 25. Project requirements
  26. 26. Project boundaries
  27. 27. Project deliverables
  28. 28. Product acceptance criteria
  29. 29. Project constraints</li></ul>Remember the difference between product and project?<br />
  30. 30. Scope Planning<br />Scope Definition<br />Create WBS<br />Scope Verification<br />Scope Control<br />Create WBS<br />Outputs<br />Inputs<br />Tools & Techniques<br />Project Scope Statement<br />Organizational Process Assets<br /><ul><li>Work breakdown structure templates
  31. 31. Decomposition</li></ul>Work Breakdown Structure<br />Project Scope Statement<br />Project Scope Management Plan<br />WBS Dictionary<br />Approved Change Requests<br />Scope Baseline<br />Project Scope management plan updates<br />Requested Changes<br />
  32. 32. Scope Planning<br />Scope Definition<br />Create WBS<br />Scope Verification<br />Scope Control<br />Scope Verification<br />Tools & Techniques<br />Inputs<br /><ul><li>Inspection</li></ul>Project Scope Statement<br />Outputs<br />Accepted Deliverables<br />WBS Dictionary<br />Requested Changes<br />Project Scope Management Plan<br />Recommended Corrective Actions<br />Deliverables<br />
  33. 33. Scope Planning<br />Scope Definition<br />Create WBS<br />Scope Verification<br />Scope Control<br />Scope Control<br />Outputs<br />Project Scope Statement Updates<br />Tools & Techniques<br />Inputs<br />Project Scope Statement<br />Work Breakdown Structure Updates<br /><ul><li>Change control system
  34. 34. Variance analysis
  35. 35. Replanning
  36. 36. Configuration management system</li></ul>Work Breakdown Structure<br />WBS Dictionary Updates<br />WBS Dictionary<br />Scope Baseline Updates<br />Requested Changes<br />Project Scope Management Plan<br />Recommended Corrective Action<br />Performance Reports<br />Organizational Process Assets Update<br />Approved Change Requests<br />Project Management Plan Update<br />Work Performance Information<br />
  37. 37. Scope Definition<br /><ul><li>Change Control System
  38. 38. Documentation, tracking, and approvals required to change project scope
  39. 39. Configuration Management System
  40. 40. Documentation, tracking, and approvals required to change product scope
  41. 41. Management by Objectives (MBO)
  42. 42. Establish unambiguous and realistic objectives
  43. 43. Periodically evaluate if objectives are being met
  44. 44. Take corrective action</li></li></ul><li>Case Studies…<br />One Bank upcoming Project<br />Cost of Project/Expense = Cost of goods + Human Resource Cost+ Infrastructure cost + Carrying cost+ Employee Convenience<br />Profit = Total Revenue– Expense<br />= ????<br />
  45. 45. Project Time Management<br /><ul><li>“The processes required to accomplish timely completion of the project”
  46. 46. Why Time Management?</li></ul>Part of triple constraint, can’t manage one without the others (scope, time, and quality) <br />Second hardest section on the test behind integration<br />
  47. 47. Activity Resource Estimating<br />Activity Duration Estimating<br />Activity Definition<br />Activity Sequencing<br />Schedule Development<br />Schedule Control<br />How Do We Manage Time?<br /><ul><li>Six processes
  48. 48. Activity Definition
  49. 49. Activity Sequencing
  50. 50. Activity Resource Estimating
  51. 51. Activity Duration Estimating
  52. 52. Schedule Development
  53. 53. Schedule Control</li></li></ul><li>Activity Resource Estimating<br />Activity Duration Estimating<br />Activity Definition<br />Activity Sequencing<br />Schedule Development<br />Schedule Control<br />Activity Definition<br />Enterprise Environmental Factors<br />Inputs<br />Tools & Techniques<br />Outputs<br /><ul><li>Decomposition
  54. 54. Templates
  55. 55. Rolling wave planning
  56. 56. Expert judgment
  57. 57. Planning component</li></ul>Organizational Process Assets<br />Activity List<br />Project Scope Statement<br />Activity Attributes<br />Work Breakdown Structure<br />Milestone List<br />WBS Dictionary<br />Requested Changes<br />Project Management Plan<br />
  58. 58. Activity Definition<br /><ul><li>Rolling Wave Planning – Progressive planning where near term work is broken down in detail and distant work is kept at a higher WBS level
  59. 59. Planning Component – WBS items that cannot be broken down into work packages are put in a:
  60. 60. Control Account – High level planning dates for the scope to be defined
  61. 61. Planning Package – Package includes scope to be completed but no activities</li></li></ul><li>Activity Resource Estimating<br />Activity Duration Estimating<br />Activity Definition<br />Activity Sequencing<br />Schedule Development<br />Schedule Control<br />Activity Sequencing<br />Inputs<br />Tools & Techniques<br />Outputs<br />Project Scope Statement<br /><ul><li>Precedence diagramming method (PDM)
  62. 62. Arrow diagramming method (ADM)
  63. 63. Schedule network templates
  64. 64. Dependency determination
  65. 65. Applying leads and lags</li></ul>Project Schedule Network Diagrams<br />Activity List<br />Activity List Updates<br />Activity Attributes<br />Activity Attributes Updates<br />Milestone List<br />Requested Changes<br />Approved Change Requests<br />
  66. 66. Precedence Diagramming Method (PDM)<br /><ul><li>Commonly called Activity on Node (AON), most commonly used sequencing method
  67. 67. Boxes are used to represent tasks with arrows used for dependencies
  68. 68. Four types of dependencies
  69. 69. Finish to Start – Task must finish before next one can start
  70. 70. Finish to Finish – One task must finish before the other can finish
  71. 71. Start to Start – One task must start before the other can start
  72. 72. Start to Finish – One task must start before the other can finish</li></ul>Activity<br />A<br />Activity<br />B<br />Node<br />Dependency<br />
  73. 73. Arrow Diagramming Method (ADM)<br /><ul><li>Commonly called Activity on Arrow (AOA)
  74. 74. Boxes are used to represent dependencies with arrows used for tasks
  75. 75. Only Finish to Start relationships
  76. 76. Can use “dummy” activities
  77. 77. Used for CPM and PERT estimating methods</li></ul>Task<br />Activity<br />A<br />Dependency<br />Method Comparison<br />Install Grass<br />PDM (AON) Method<br />Build Foundation<br />Build Walls<br />Build Roof<br />Start<br />Finish<br />Build Walls<br />Build Roof<br />ADM (AOA) Method<br />Build Foundation<br />Start<br />Finish<br />Install Grass<br />
  78. 78. Activity Resource Estimating<br />Activity Duration Estimating<br />Activity Definition<br />Activity Sequencing<br />Schedule Development<br />Schedule Control<br />Activity Resource Estimating<br />Inputs<br />Tools & Techniques<br />Enterprise Environmental Factors<br />Outputs<br /><ul><li>Expert judgment
  79. 79. Alternatives analysis
  80. 80. Published estimating data
  81. 81. Project management software
  82. 82. Bottom-up estimating</li></ul>Activity Resource Requirements<br />Organizational Process Assets<br />Activity Attributes Updates<br />Activity List<br />Resource Breakdown Structure<br />Activity Attributes<br />Resource Availability<br />Resource Calendar Updates<br />Project Management Plan<br />Requested Changes<br />
  83. 83. Activity Resource Estimating<br />Activity Duration Estimating<br />Activity Definition<br />Activity Sequencing<br />Schedule Development<br />Schedule Control<br />Activity Duration Estimating<br />Tools & Techniques<br />Enterprise Environmental Factors<br /><ul><li>Expert judgment
  84. 84. Analogous estimating
  85. 85. Parametric estimating
  86. 86. Three-point estimates
  87. 87. Reserve Analysis</li></ul>Organizational Process Assets<br />Outputs<br />Inputs<br />Project Scope Statement<br />Activity Duration Estimates<br />Activity List<br />Activity attributes updates<br />Activity Attributes<br />Activity Resource Requirements<br />Resource Calendar<br />Project Management Plan<br /><ul><li>Risk Register
  88. 88. Activity Cost Estimates</li></li></ul><li>Activity Resource Estimating<br />Activity Duration Estimating<br />Activity Definition<br />Activity Sequencing<br />Schedule Development<br />Schedule Control<br />Schedule Development<br />Tools & Techniques<br />Project schedule<br />Enterprise Environmental Factors<br /><ul><li>Schedule network analysis
  89. 89. Critical path method
  90. 90. Schedule compression
  91. 91. What-if analysis
  92. 92. Resource leveling
  93. 93. Critical chain method
  94. 94. Project management software
  95. 95. Applying calendars
  96. 96. Adjustable leads and lags
  97. 97. Schedule model</li></ul>Schedule model data<br />Organizational Process Assets<br />Schedule baseline<br />Resource requirements updates<br />Outputs<br />Inputs<br />Project Scope Statement<br />Activity attributes updates<br />Activity List<br />Activity Attributes<br />Project calendar updates<br />Activity Resource Requirements<br />Requested changes<br />Resource Calendar<br />Project management plan updates<br /><ul><li>Schedule management plan updates</li></ul>Project Management Plan<br /><ul><li>Risk Register
  98. 98. Activity Cost Estimates</li></li></ul><li>Activity Resource Estimating<br />Activity Duration Estimating<br />Activity Definition<br />Activity Sequencing<br />Schedule Development<br />Schedule Control<br />Schedule Control<br />Schedule model data updates<br />Tools & Techniques<br />Schedule baseline updates<br /><ul><li>Schedule network analysis
  99. 99. Critical path method
  100. 100. Schedule compression
  101. 101. What-if analysis
  102. 102. Resource leveling
  103. 103. Critical chain method
  104. 104. Project management software
  105. 105. Applying calendars
  106. 106. Adjustable leads and lags
  107. 107. Schedule model</li></ul>Inputs<br />Schedule Management Plan<br />Performance measurements<br />Outputs<br />Requested changes<br />Schedule Baseline<br />Recommended corrective actions<br />Performance reports<br />Organizational process assets updates<br />Approved Change Requests<br />Activity list updates<br />Activity attribute updates<br />Project Management Plan updates<br />
  108. 108. Other Important Terms<br /><ul><li>Lag – Inserted waiting time between tasks
  109. 109. Free Slack – Available delay time without impacting start of successor
  110. 110. Total Slack – Amount of time a task can be delayed without delaying project completion date
  111. 111. Project Slack – Amount of time a project can be delayed without impacting completion dates imposed by client
  112. 112. Crashing – Adding resources to critical path items to shorten schedule
  113. 113. Fast Tracking – Performing critical path tasks in parallel rather than series
  114. 114. Resource Leveling – Adjusting completion dates of tasks</li></li></ul><li>Project Cost Management<br />Cost is a resource sacrificed or foregone to achieve a specific objective, or something given up in exchange.<br />Costs are usually measured in monetary units, such as dollars or Taka’s.<br />Project Cost Management includes the processes required to ensure that the project is completed within an approved budget.<br />Project Cost Management Processes<br />Cost estimating: Developing an approximation or estimate of the costs of the resources needed to complete a project.<br />Cost budgeting: Allocating the overall cost estimate to individual work items to establish a baseline for measuring performance.<br />Cost control: Controlling changes to the project budget.<br />
  115. 115. Basic Principles of Cost Management<br />Most members of an executive board have a better understanding and are more interested in financial terms than IT terms, so IT project managers must speak their language.<br />Profits are revenues minus expenses.<br />Life cycle costing considers the total cost of ownership, or development plus support costs, for a project. <br />Cash flow analysis determines the estimated annual costs and benefits for a project and the resulting annual cash flow.<br />Tangible costs or benefits are those costs or benefits that an organization can easily measure in dollars. <br />Intangible costs or benefits are costs or benefits that are difficult to measure in monetary terms.<br />Direct costs are costs that can be directly related to producing the products and services of the project. <br />Indirect costs are costs that are not directly related to the products or services of the project, but are indirectly related to performing the project.<br />Sunk cost is money that has been spent in the past; when deciding what projects to invest in or continue, you should not include sunk costs.<br />
  116. 116. Earned value Management<br />The earned value Management involves developing these key values for each schedule activity, work package, or control account: <br />Planned value (PV). PV is the budgeted cost for the work scheduled to be completed on an activity or WBS component up to a given point in time. <br />Earned value (EV). EV is the budgeted amount for the work actually completed on the schedule activity or WBS component during a given time period. <br />Actual cost (AC). AC is the total cost incurred in accomplishing work on the schedule activity or WBS component during a given time period. This AC must correspond in definition and coverage to whatever was budgeted for the PV and the EV (e.g., direct hours only, direct costs only, or all costs including indirect costs). <br />Cost variance (CV). CV equals earned value (EV) minus actual cost (AC). The cost variance at the end of the project will be the difference between the budget at completion (BAC) and the actual amount spent. Formula: CV= EV - AC <br />Schedule variance (SV). SV equals earned value (EV) minus planned value (PV). Schedule variance will ultimately equal zero when the project is completed because all of the planned values will have been earned. Formula: SV = EV - PV <br />These two values, the CV and SV, can be converted to efficiency indicators to reflect the cost and schedule performance of any project. <br />Cost performance index (CPI). A CPI value less than 1.0 indicates a cost overrun of the estimates. A CPI value greater than 1.0 indicates a cost underrun of the estimates. CPI equals the ratio of the EV to the AC. The CPI is the most commonly used cost-efficiency indicator. Formula: CPI = EV/AC <br />Schedule performance index (SPI). The SPI is used, in addition to the schedule status to predict the completion date and is sometimes used in conjunction with the CPI to forecast the project completion estimates. SPI equals the ratio of the EV to the PV. Formula: SPI = EV/PV <br />
  117. 117. Questions ? <br />
  118. 118. Thank You !!<br />

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