Project Management

Project Management
Application and Concentration

BUS XXX - 3 Units
Fall 2012

Weekend 2 - Day 2

Project Management Certification – A Professional Commitment – A Responsibility

Reflecting on Last Class
• Foundations
o What is a project?
o What is Project Management?
o Process Groups / Knowledge Areas / Processes
o Project Lifecycle and its characteristics
o Organizational Structure

• Initiating
o Project Charter – Why is it important; ITTO?
o Identify Stakeholders – Why is this step important? ITTO?

• Planning
o Project Management Plan - Incorporates outputs from
all other planning processes
o Collect Requirements
• Knowing the right questions
• Knowing the right people
• ITTO?

Learning Objectives for Today
• Scope
o Recognize how to Define Scope, so we know what we are delivering
o Explain what is involved in Creating a WBS for project deliverables

• Time
o Explain the processes leading up to Develop Schedule
o Breakdown all tasks to determine what the team should work on
o Determine the dependencies and what can be worked on concurrently
o Determine what / who / how many to use by Estimating activity resources
o Assess how long activities will take by Estimating activity durations
o Compile analysis into a schedule to determine a “target date”

• Cost
o Estimate how much each activity will costs
• labor, service, equipment, and other items
o Aggregate all costs to determine funding requirements and determine if
scope needs adjustment when budget is a constraint

Weekend 2, Day 2 – Overview
Process Groups
Monitoring &
Initiating Planning Executing Closing
Controlling
Knowledge Areas
Develop Project Direct and Manage Monitor & Control Project Work, Close Project or
Integration Charter
Develop Project Management Plan
Project Execution Perform Integrated Change Control Phase
F o u n d a t i o n s o f Pr o j e c t M a n a g e m e n t

Collect Requirements,
Verify Scope,
Scope Define Scope,
Control Scope
Create WBS

Define Activities,
Sequence Activities,
Time Estimate Activity Resources, Control Schedule
Estimate Activity Durations,
Develop Schedule

Estimate Cost,
Cost Determine Budget
Control Cost

Perform Quality
Quality Plan Quality
Assurance
Perform Quality Control

Acquire Project Team,
Human Resource Develop Human Resources Plan Develop Project Team,
Manage Project Team

Distribute Information,
Identify
Communications Stakeholders
Plan Communications Manage Stakeholder Report Performance
Expectations

Plan Risk Management,
Identify Risks,
Risk Perform Qualitative Risk Analysis, Monitor and Control Risks
Perform Quantitative Risk Analysis,
Plan Risk Responses

Procurement Plan Procurements Conduct Procurements Administer Procurements Close Procurement


Five Questions - Class Exercise


Define Scope


Define Scope
- Overview
• What is Project Scope?

• Why is it important to Define Scope?
o Make sure everyone is on the right page
o Baseline for changes

• Who says what is in and what is out?

• What about open ended projects?


Define Scope
- PMBOK Process 5.2
Process Groups
Monitoring &
Controlling
Knowledge Areas
Integration Charter

Verify Scope,
Scope Define Scope,
Control Scope
Create WBS

Define Activities,
Develop Schedule

Estimate Cost,
Control Cost

Perform Quality
Assurance

Manage Project Team

Identify
Expectations

Identify Risks,
Plan Risk Responses



Define Scope
- Project vs. Product Scope

• Project Scope: measured against
project management plan

• Product Scope: measured against
product requirements


Define Scope
- Definition
1 2 3 1 2 3 4 1 2

• The process of developing a
detailed description of the project
and the product

• Defines what the project includes
and excludes


Define Scope
- Inputs
1 2 3

1) Project Charter
o High-Level project description and requirements

2) Requirements Documentation
o Primary document used for scope definition

3) Organizational Process Assets
Examples:
o Templates for a project scope statement
o Files from previous projects
o Lessons learned from previous projects


Define Scope
- Tools & Techniques
1 2 3 4

1) Expert Judgment

2) Product Analysis
o Product breakdown, system analysis, requirement analysis, systems
engineering, value engineering, and value analysis
o Only for projects that have a product as a deliverable

3) Alternative Identification
o A technique used to generate different approaches to execute the
project
o Brainstorming, Lateral Thinking, Pair wise comparison

4) Facilitated Workshops
o Cross-functional


Define Scope
- Outputs
1 2

1) Project Scope Statement
o Describes, in detail, project deliverables and work required to create
these deliverables
o Helps to create a common understanding among stakeholders (avoid
scope creep)
o Project team can perform detailed planning now
o Components
• Product Scope Description
• Product Acceptance Criteria
• Project Objectives
• Project Deliverables
• Project Exclusions
• Project Constraints
• Project Assumptions


Define Scope
- Moe’ Outputs
1 2

2) Project Document Updates
o Stakeholder Register
o Requirements documentation
o Requirements Traceability Matrix
o Etc.


Define Scope
- Top Reasons Why Projects Fail

• Unclear Project Objectives and Requirements
• Lack of Planning
• Scope Creep
• Lack of Stakeholder Involvement
• Gaps in Communication
• Resource Overload
• Etc.


Define Scope
- Data Flow Diagram


Define Scope
- Key Points
• Scope definition is a joint effort between Project
Manager , Project team, and business stakeholders
(though the Project Manager may be the one writing the Scope Statement)

• Scope Statement sets clear expectation and
establish the basis for future change requests
• Define Scope is a progressively elaborated process;
may be adjusted as more details become known
• A good idea to have Scope Statement approved
and published
• Scope Statement will later be used to measured
against to determine if the project has been
completed successfully


Define Scope
- Key Points
• Project constraints limit the options and restrict
project team’s actions: Time, Budget, Scope,
Quality, Schedule, Resource, Technology,
Management Directives

• Poorly written Scope Statement may lead to
increased cost, longer duration, deliverables that
do not meet business expectation, and ultimately
unsatisfied stakeholders.

• Meeting or exceeding stakeholder expectation
doesn’t mean gold-plating


Create Work
Breakdown Structure


Create Work Breakdown Structure
- Overview
• What is the purpose?
o More manageable components

• Key is to break it down
o Should include entire project scope

• Multiple approaches
o By Project Phases
o By Deliverables
o By Sub-projects


- PMBOK Process 5.3
Process Groups
Monitoring &
Controlling
Knowledge Areas
Integration Charter

Verify Scope,
Scope Define Scope,
Control Scope
Create WBS

Define Activities,
Develop Schedule

Estimate Cost,
Control Cost

Perform Quality
Assurance

Manage Project Team

Identify
Expectations

Identify Risks,
Plan Risk Responses



- Definition
• Definition: Deliverable – oriented hierarchical
decomposition of the work to accomplish the
project objectives and create required deliverables

• Includes total scope of the project

• Top down effort

• Lowest Level = Work package, which can be
scheduled, cost estimated, monitored, and
controlled

• Shall be revised if a major scope change occurs


- Definition
1 2 3 1 1 2 3 4


- Inputs
1 2 3

o All the deliverables and work to create them
o What type of work is not included

2) Requirements Documentation

3) Organization Process Assets
o Policies, procedures, and templates for the WBS
o Project files from previous projects
o Lessons learned from previous projects


1

1) Decomposition – Sample 5-step process
a) Identify the deliverables and work
b) Organize the WBS; structure can be organized by
- Phases
- Major deliverables
- Subprojects (e.g. contracted work)
c) Decompose the WBS into low-level components
d) Assign identification codes
e) Verify WBS


- Decomposition Guidelines
1

• Not a task list; excessive decomposition can have a
detrimental effect by making WBS overly complex,
confusing to view, and difficult to maintain

• Rule of thumb for how far to break it down is to get
to 8-80 hours of work per package

• 100% Rule: Total of lowest levels must represents the
total work of the project to ensure no work is left out
or no extra work is added


- Outputs
1 2 3 4

1) The Work Breakdown Structure (WBS) itself

• WBS is finalized by establishing control accounts for
the work packages and a unique identifier from a
code of accounts

• Control Account - a management control point
where scope, cost, and schedule are integrated
and compared to the earned value

• Each control account may have more than one
work package but one work package shall only be
linked to one control account

- Outputs
1 2 3 4

2) WBS Dictionary
o Code of account identifier
o Description of work
o Responsible person(s) or organization
o List of schedule milestones
o Resource and quality requirements
o Cost estimates
o Acceptance criteria
o Contract info and technical references

3) Scope Baseline
o Part of Project Management Plan
o Consists of
• Scope Statement
• WBS
• WBS Dictionary

o Requirements documentation, etc.


- Sample Diagram


- by Project Phases


- by Major Deliverables


- Data Flows


- Key Points

• WBS is a deliverable-oriented structure

• Work Package is the lowest level on WBS. Activities
and tasks are not included in the WBS.

• WBS should include 100% of the project scope

• WBS Levels: Project Name = Level 1, Deliverables =
Level 2

• Scope Baseline includes Scope Statement, WBS,
and WBS Dictionary


Define Activities


Define Activities
- Overview

• What’s the Purpose?
o Further decompose the Work Packages into schedule activities as basis
for estimating, scheduling, and monitoring
o Working towards creating a project schedule

• In what order should it be done – next steps
o Define Activity
o Sequence Activity
o Estimate Activity Resource
o Estimate Activity Duration
o Develop Schedule


Define Activities
- PMBOK Process 6.1
Process Groups
Monitoring &
Controlling
Knowledge Areas
Integration Charter

Verify Scope,
Scope Define Scope,
Control Scope
Create WBS

Define Activities,
Activities
Develop Schedule

Estimate Cost,
Control Cost

Perform Quality
Assurance

Manage Project Team

Identify
Expectations

Identify Risks,
Plan Risk Responses



Define Activities
- Definition
1 2 3 1 2 3 4 1 2 3

• The process of identifying the specific actions to be
performed

• Project  Deliverables  Work Packages (WBS)
Activities


Define Activities
- Inputs
1 2 3

1) Scope Baseline
o Deliverables, constraints, and assumptions

2) Enterprise Environmental Factors
o Project Management Information System used will affect the definition

o Existing formal and informal policies, procedures, and guidelines (e.g.
Scheduling methodology)
o Lessons learned/knowledge base from historical information


Define Activities
1 2 3 4

1) Decomposition
o Involving teams in decomposition can lead to more accurate results

2) Rolling Wave Planning
o A progressive elaboration process where near-term activities are in great
detail and longer-term activities are at a high level

3) Templates
o Organizational standard Activity List or Activity List from previous projects
o Can also be used to identify typical schedule milestones

4) Expert Judgment


Define Activities
- Outputs
1 2 3

1) Activity List (or Task List)
o Detailed list of all activities required to complete the project

2) Activity Attributes
o Further defines the activity, such as Activity ID, WBS ID, activity name and
description, predecessor, successor, leads and lags, person responsible,
resource requirements, constraints, assumptions, level of effort, etc.
o Activity attributes are used for schedule development and for selecting,
ordering, and sorting the planned schedule activities in various ways
within reports

3) Milestone List
o A list of significant points in a project


- Sample Milestone List
August September October
Activity Aug 13 - 17 Aug 20 - 24 Aug 27 - 31 Sep 3 - 7 Sep 10 - 14 Sep 17 - 21 Sep 24 - 28 Oct 1 - 5 Oct 8 - 12

Offer Code Setup and BOM 8/24
Forecast Mix 8/24

Packaging Design/Approval
Packaging Arrived at FFC 9/10
Collateral Arrived at FFC 9/10
Assembly Specs 8/31

Call Routing and Training 9/14
IBTM and Testing Setup 9/14

Web Creative 9/5
Web Development 9/12
Web Dependency Project 9/12
Complete
Web QA Ready 9/14
Web Brand Setup
Web End to End Testing 9/20
Merchant ID Setup 9/5
9/10
FFC Brand Setup

Planning Release 9/10
Filled Intermediate Arrived at
FFC 9/21
Kit Assembly
9/7
QA Audit and Compliance
QA Quality Agreement 9/14
Launch 9/24


Define Activities
- Data Flows


Define Activities
- Key Points

• Define Activity process uses Scope Baseline as the
primary input

• WBS is further decomposed

• Activity Lists, Activity Attributes and Milestone Lists
are the outputs

• May be progressive elaboration process

• Rolling Wave Planning = define near-term work in
greater detail than future work


Sequence Activities


Sequence Activities
- Overview

• Determine logical dependencies

• Determine what can be done concurrently


Sequence Activities
- PMBOK Process 6.2
Process Groups
Monitoring &
Controlling
Knowledge Areas
Integration Charter

Verify Scope,
Scope Define Scope,
Control Scope
Create WBS

Define Activities,
Develop Schedule

Estimate Cost,
Control Cost

Perform Quality
Assurance

Manage Project Team

Identify
Expectations

Identify Risks,
Plan Risk Responses



Sequence Activities
- Definition
1 2 3 4 5 1 2 3 4 1 2

• Process of identifying and documenting
relationships among project activities


Sequence Activities
- Inputs
1 2 3 4 5

1) Activity List


3) Milestone List

o As double-check

o Example: Previous Project File


Sequence Activities
1 2 3 4

1) Precedence Diagramming Method (PDM)
o A method used in Critical Path Methodology (CPM) to build a
network diagram showing activity dependencies
o Also known as activity on node (AON)

• FYI - Arrow Diagramming Method (ADM)
o A.K.A. Activity on Arrow (AOA) Network Diagram
o Activities are represented by arrows; Nodes or circles are the starting and
ending points of activities.
o Only use Finish to Start dependency
o Sometimes dummy activities must be inserted to accurately reflect
dependency
o Rarely used now


Sequence Activities
1 2 3 4

• Four types of PDM relationships

o Finish-to-start (FS): A must finish before B can start;
sequential, most common

o Finish-to-finish (FF): A must finish before B can finish

o Start-to-start (SS): A must start before B can start

o Start-to-finish (SF): A must start before B can finish; rarely used


Sequence Activities
1 2 3 4

2) Dependency Determination
o Mandatory (hard): Contractually required, physical limitations, etc.
o Discretionary (soft): Preferred logic; only type PM has control over
o External: outside the project team’s control


Sequence Activities
1 2 3 4

3a) Lead
o Starting work before the preceding activity finishes
o allows acceleration of the schedule (fast-track)

• ex 1: Start loading moving truck one day before packing finishes

• Although possible to use lead with SS, difficult to understand


Sequence Activities
1 2 3 4

3b) Lag: Delay
o Example 1. Start honeymoon one day after the ceremony; wait one day
for concrete to gain strength before putting on patio furniture

o Example 2. QA team can start testing two days after Dev team starts dev

o Leads and Lags can be applied to all four types of PDM relationships,
although Leads are not common with SS, FF, and SF

4) Schedule Network Templates


Sequence Activities
- Outputs
1 2

1) Schedule Network Diagram
A C D

B

2) Project Document Updates may include
o Activity List
o Activity Attributes
o Risk Register


Sequence Activities
- Data Flows


Sequence Activities
- Key Points

• Sequence Activity: Tools and Techniques include
Dependency Determination, PDM, Apply Leads and
Lags, and Schedule Network Templates

• Precedence Diagram Method (PDM or AON) has
four types of logical relationships: FS, FF, SS, SF

• Three types of PDM dependencies: Hard, Soft,
External. Soft dependency is the only type Project
Manager has control over.

• Key output is Schedule Network Diagrams


Estimate Activity
Resources


Estimate Activity Resources
- Overview

• What’s the purpose
o Determine the type and quantity of resource needed
o Resources include people, equipment, material, hardware, software, etc.

• What they don’t teach you in Kindergarten
o Anything!


- PMBOK Process 6.3
Process Groups
Monitoring &
Controlling
Knowledge Areas
Integration Charter

Verify Scope,
Scope Define Scope,
Control Scope
Create WBS

Define Activities,
Develop Schedule

Estimate Cost,
Control Cost

Perform Quality
Assurance

Manage Project Team

Identify
Expectations

Identify Risks,
Plan Risk Responses



- Definition
1 2 3 4 5 1 2 3 4 5 1 2 3

• The process of estimating the type and quantity of
material, people, equipment, or supplies required to
perform each activity

• Closely coordinated with Estimate Costs process


- Inputs
1 2 3 4 5

1) Activity List


3) Resource Calendars
o Output of “Acquire Team” in Executing progress group




- Tools and Techniques
1 2 3 4 5

1) Expert Judgment

2) Alternatives Analysis
o Examples: resource skill levels, size and type of machinery,
different tools and make-or-buy decisions

3) Published Estimating Data
o Examples: labor trades, material and equipment within the country and in
other countries


1 2 3 4 5

4) Bottom-up Estimating
o If an activity cannot be confidently estimated, it is broken down
to smaller parts for estimation; the estimates are then aggregated
up to the activity level (PMBOK preferred method)

5) PM Software
o Examples: Primavera, MS Project, Clarity, etc.
o Number of Resources usually influence activity duration; in some
cases, having two resources will cut duration in half, in other
cases it will not


- Outputs
1 2 3

1) Activity Resource Requirements
o Identifies the types and quantities of resources required for each activity
in a work package

2) Resource Breakdown Structure
o Hierarchical structure of the identified resources by resource category
and resource type
o Includes labor, materials, equipment, supplies, etc.
Software Project A

Server Developers Business Analyst Testers Trainer

Database UI
Technical Business
Developer Developer
Tester Users

o May include: Activity List, Activity Attributes, Resource Calendars


- Key Points

• You should have paid attention in Kindergarten! 

• The two processes that consider alternatives are
Define Scope and Estimate Activity Resources

• Bottom-up estimating performs estimates for each
activity and rolls them up to higher levels


Estimate Activity
Durations


Estimate Activity Durations
- Overview

• “How long will it take?”


- PMBOK Process 6.4
Process Groups
Monitoring &
Controlling
Knowledge Areas
Integration Charter

Verify Scope,
Scope Define Scope,
Control Scope
Create WBS

Define Activities,
Develop Schedule

Estimate Cost,
Control Cost

Perform Quality
Assurance

Manage Project Team

Identify
Expectations

Identify Risks,
Plan Risk Responses



- Definition

• The process of estimating the number of work
periods needed to complete each activity with
estimated resources

• The duration estimate is progressively elaborated

• In the real world, level of efforts (LOE) are estimated
first and are used to calculate duration based on
resource availability(80 hours / 0.5 head count = 160
hours or 4 weeks of duration)


- Definition
1 2 3 4 5 6 7 1 2 3 4 5 1 2


- Inputs
1 2 3 4 5 6 7

1) Activity List
o Comprehensive List of all Scheduled Activities

o Identifies multiple components associated with each activity

o Resources assigned and availability of those resources have a
significant effect on an activity’s duration

o Type, Availability, & Capability of Human Resources (Sr. versus Jr.)
o Type, Availability, & Capability of Equipment & Material Resources
also affect duration


- Inputs
1 2 3 4 5 6 7

o Assumptions regarding Existing Conditions, Information availability, and
Length of Reporting periods
o Constraints of available resources and Contract Terms & Requirements

o Duration Estimating databases
o Productivity Metrics
o Published Commercial Information

o Historical Duration Information
o Product Calendars
o Scheduling Methodology
o Lessons Learned


1 2 3 4 5

1) Expert Judgment
o Team members who will perform activities will most
accurately estimate them

2) Analogous Estimating – lower accuracy
o Use a similar previous project as a reference and adjust for known
differences; Top-down approach relying on historical information
and expert judgment
o Can be used on activity duration or total project duration
o Less costly, less time-consuming  less accurate;
useful at early project stage

3) Parametric Estimating – higher accuracy
o Uses statistical relationship between historical data and other
variables to quantitatively determine duration (= total units of
work * labor hours per unit)


1 2 3 4 5

4) Three-Point Estimates (PERT) – higher accuracy
o Expected Duration = [Optimistic + (4 x Most Likely) +
Pessimistic] / 6
o Weighted Average

5) Reserve Analysis
o Contingency reserves / time reserves / buffers to account
for schedule uncertainty
o A % or a fixed number of work periods


- Calculations
• Class Exercise
o Best case = 18 days, Most Likely = 25 days, Worse Case = 38 days
o Assume 1 Sigma unless specified otherwise

• Calculate the following
o PERT or Expected Duration
o Activity Standard Deviation = (Pessimistic – Optimistic) / 6
o Range of Estimates = Expected Duration +/- Standard Deviation
• Range needs to be widened if 2 Sigma (range = Expected Duration
+/- Standard Deviation x 2)

• FYI:
o 1 Sigma = 68.3% confidence
On this chart of a 'normal' distribution, showing the classic 'bell curve' shape,
the mean (or average) is the vertical line at the center, and the vertical lines to
either side represent intervals of one, two and three sigma. The percentage of
data points that would lie within each segment of that distribution are shown.


- Results
• Class Exercise
o Best case = 18 days, Most Likely = 25 days, Worse Case = 38 days
o Assume 1 Sigma unless specified otherwise

• Calculate the following
o PERT or Expected Duration
= [Optimistic + (4 x Most Likely) + Pessimistic] / 6
= (18 + 25x4 + 38)/6 = 26
o Activity Standard Deviation
= (Pessimistic – Optimistic) / 6
= (38-18)/6 =3.33
o Range of Estimates
= Expected Duration +/- Standard Deviation
= 26 +/- 3.33 = between 22.67 days and 29.33 days
• if 2 Sigma (range = Expected Duration +/- Standard Deviation x 2)
= 26 +/- 3.33x2 = between 19.34 to 32.66


- Outputs
1 2

1) Activity Duration Estimates
o Estimated time to complete each activity
o Duration = Effort / Resources
o This can be a range

o Activity attributes, Assumptions Log (e.g. skill level and availability)


- Data Flows


- Key Points
• Analogous estimating is top-down approach and
less accurate

• Parametric estimating calculates duration/cost
based on duration/cost per unit x total units.
Duration/cost per unit can be from historical data.

• PERT calculates a weighted average estimate by
using optimistic, mostly likely, and pessimistic
estimates.

• Activity duration estimates include number of work
periods including elapsed time.


Develop Schedule


Develop Schedule
- Overview

• Why is it important?

• Which time-related processes have been
completed so far before building the schedule?


Develop Schedule
- PMBOK Process 6.5
Process Groups
Monitoring &
Controlling
Knowledge Areas
Integration Charter

Verify Scope,
Scope Define Scope,
Control Scope
Create WBS

Define Activities,
Develop Schedule

Estimate Cost,
Control Cost

Perform Quality
Assurance

Manage Project Team

Identify
Expectations

Identify Risks,
Plan Risk Responses



Develop Schedule
- Definition
1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 1 2 3 4

• Process of analyzing sequences,
durations, resources requirements,
and schedule constraints to create
the project schedule
• Iterative process (schedule
baseline vs. schedule revision)

Develop Schedule
- Inputs
1 2 3 4 5 6 7 8 9

1) Activity List
3) Project Schedule Network Diagrams
6) Activity Duration Estimates


Develop Schedule
1 2 3 4 5 6 7 8

1) Schedule Network Analysis
o Employs various analytical techniques, such as critical path
method, critical chain method, what-if analysis, and resource
leveling

2) Critical Path Method (CPM)
o A Schedule Network Analysis technique used to determine the
schedule flexibility and determine the minimum project duration
o Calculates the theoretical start and finish dates by using a
forward pass and backward pass analysis;
o No consideration of resource limitations

3) Critical Chain Method
o Critical Path Method + Resource constraints + Schedule Buffers


Develop Schedule
1 2 3 4 5 6 7 8

4) Resource Leveling
o A schedule network analysis technique applied to a schedule
after critical path method
o Necessary when required resources are over-allocated; often
lets the schedule slip to smooth out resources
o Can cause original Critical Path to change

5) What-if Scenario Analysis
o Change conditions to simulate different possible scenarios
o A schedule network analysis is performed
o Monte Carlo Analysis: Random and iterative computer model
showing probability distributions


Develop Schedule
1 2 3 4 5 6 7 8

6) Apply Leads and Lags
o Leads – head start
o Lags – delay, time elapses

7) Schedule Compression
o Shortens schedule with no change to project scope
o Crashing: exchange higher costs for shorter schedule duration
(eg. Add resources)
o Fast tracking: converts sequential activities to parallel

8) Scheduling Tool
o Example: MS Project, Primavera P6


Develop Schedule
- Critical Path Method (ES, EF, LF, LS)
1 2 3 4 5 6 7 8

Forward Pass Forward Pass
1. EF = ES + Duration
2. ES of successor tasks = latest EF of predecessor tasks
ES = 0 EF = 3
Backward Pass
Task A 1. LS = LF – Duration
Duration = 3 days 2. LF of predecessor tasks = earliest LS of successor tasks

LS = 2 LF = 5 ES = 5 EF = 20

Task D
ES = 0 EF = 5 Duration = 15 days
Task B LS = 5 LF = 20 ES = 20 EF = 26
Duration = 5 days
Task F
LS = 0 LF = 5 Duration = 6 days

EF = 10 LS = 20 LF = 26
ES = 0 ES = 10 EF = 15

Task C Task E
Backward Pass
Duration = 10 days Duration = 5 days

LS = 5 LF = 15 LS = 15 LF = 20

Note: Critical Path represents the path of the activities with the longest duration
throughout the network diagram.


Develop Schedule
- Critical Path Method (ES, EF, LF, LS)
1 2 3 4 5 6 7 8

• ES / EF (Forward-Pass)
o Estimated Start / Estimated Finish
• EF = ES + Activity Duration
• ES of Successor tasks = latest EF of Predecessor tasks

• LF / LS (Backward-Pass)
o Latest Finish / Latest Start
• LS = LF - Activity Duration
• LF of Predecessor tasks = earliest LS of Successor tasks


Develop Schedule
- Critical Path Method (Float)
1 2 3 4 5 6 7 8

1. Float (AKA free float, slack) = LF – EF. The amount of
Forward Pass time a task can be delayed without affecting
successor’s earliest start.
2. Total Float = The total amount of time that a schedule
ES = 0 EF = 3 activity may be delayed from its early start date
without the project finish date or violating a schedule
Task A Float = 2 constraint
Duration = 3 days 3. The critical path is the path that has Total Float = 0
4. Any delays along the critical path will delay the entire
LS = 2 LF = 5 ES = 5 EF = 20 project
5. The tasks that have float > 0 can be delayed maximum
Task D Float = 0 by the amount of the float without delaying the project
Task B LS = 5 LF = 20 ES = 20 EF = 26
Duration = 5 days Float = 0
Task F
LS = 0 LF = 5 Float = 0
Duration = 6 days

EF = 10 LS = 20 LF = 26
ES = 0 ES = 10 EF = 15

Task C Float = 5 Task E
Float = 5 Backward Pass

LS = 5 LF = 15 LS = 15 LF = 20

What’s the total float of C-E-F?


Develop Schedule
- Critical Path Method (Float)
1 2 3 4 5 6 7 8

• Float (AKA free float, slack) = LF – EF. Amount of time a
task can be delayed without affecting successor’s
earliest start.

• Total Float = Total amount of time that a schedule
activity may be delayed from its early start date without
the project finish date or violating a schedule constraint

• The critical path is the path that has Total Float = 0

• Any delays along the critical path will delay the entire
project

• The tasks that have float > 0 can, at the most, be
delayed by the amount of the float without delaying the
project


Develop Schedule
- Class Activity 1 – CPM
1 2 3 4 5 6 7 8

Forward Pass

ES = 0 EF = 5

Task A Float = 8
Duration = 5 days

LS = 8 LF = 13 ES = 10 EF = 13

Task D Float = 3
Task B LS = 13 LF = 16 ES = 16 EF = 31
Task F
LS = 3 LF = 13 Float = 0
Duration = 15 days

EF = 8 LS = 16 LF = 31
ES = 0 ES = 8 EF = 16


LS = 0 LF = 8 LS = 8 LF = 16

- Calculate the ES, EF, LS, and LF
- Calculate Floats
- Identify the Critical Path


Develop Schedule
- Class Activity 2 – CPM
1 2 3 4 5 6 7 8

Forward Pass

ES = 0 EF = 8

Task A Float = 0
Duration = 8 days

LS = 0 LF = 8 ES = 8 EF = 14

Task D Float = 0
Task B LS = 8 LF = 14 ES = 14 EF = 22
Task F
LS = 2 LF = 8 Float = 0
Duration = 8days

EF = 7 LS = 14 LF = 22
ES = 0 ES = 7 EF = 12


LS = 2 LF = 9 LS = 9 LF = 14

Note: Critical Path represents the path of the activities with the longest duration
throughout the network diagram.


Develop Schedule
- Class Activity 3 – New path
1 2 3 4 5 6 7 8

Forward Pass

ES = 0 EF = 3

Task A
Duration = 3 days

LS = 2 LF = 5 ES = 5 EF = 20

Task D
Task B LS = 5 LF = 20 ES = 20 EF = 26
Duration = 5 days
Task F
LS = 0 LF = 5 Duration = 6 days

EF = 10 LS = 20 LF = 26
ES = 0 ES = 10 EF = 15

Task C Task E
Backward Pass

LS = 5 LF = 15 LS = 15 LF = 20

- If Task A duration changed to 7 days, was the critical path affected?
- If Task C duration changed to 6 days, was the critical path affected?


Develop Schedule
- Outputs
1 2 3 4

1) Project Schedule
o Planned start and finish dates for each activity; approved by sponsors(s)
o Milestone chart, bar chart, schedule network diagram

2) Schedule Baseline
o Accepted and approved version of the schedule

3) Schedule Data
o Includes: schedule milestones, schedule activities, activity attributes,
assumptions, and constraints; may also include resources by time period,
alternative schedules and contingencies

4) Product Document Updates
o Activity Resource Requirements (leveling impact), activity attributes,
calendar, risk register, etc.


Develop Schedule
- Data Flows


Develop Schedule
- Key Points
• Critical Path Method – calculates early start, early
finish, late start, and late finish dates to determine
schedule flexibility

• Critical path is the full path with the longest duration

• Schedule compression techniques: crashing and
fast tracking. Fast tracking usually increase project
risks.

• Resource leveling often pushes out the schedule

• Critical Chain Method accounts for resources and
schedule buffers

Estimate Cost


Estimate Cost
- Overview
• “How much does it cost?”

• Project Managers may or may not be
responsible for budget

• Cost Management Plan
o Established using WBS and control accounts
o Outline of how to estimate, budget and control project
costs, such as
• Level of accuracy, Units of Measure, Organizational
procedure links, Control Threshold (actual vs. planned),
and so on…


Estimate Cost
- PMBOK Process 7.1
Process Groups
Monitoring &
Controlling
Knowledge Areas
Integration Charter

Verify Scope,
Scope Define Scope,
Control Scope
Create WBS

Define Activities,
Develop Schedule

Estimate Cost,
Control Cost

Perform Quality
Assurance

Manage Project Team

Identify
Expectations

Identify Risks,
Plan Risk Responses



Estimate Cost
- Definition
• The process of developing an approximation of the
monetary resources needed to complete each
activity

• Consider costing alternatives, trade-off’s, and risks
(e.g. Build vs. Buy)

• An iterative Process
o ROM = +/-50%  Definitive Estimate = +/- 10%

• Costs should be estimated for all resources

• Cost Estimating vs. Pricing


Estimate Cost
- Definition
1 2 3 4 5 6 1 2 3 4 5 6 7 8 9 1 2 3


Estimate Cost
- Inputs
1 2 3 4 5 6

1) Scope Baseline
o Scope Statement provides key information such as deliverables and
constraints (budget is one of the most common constraints)
o WBS and WBS Dictionary contain information that help to estimate costs

2) Project Schedule
o Type and Number of Resources
o Activity Duration

Remember Triple
Constraints?
Scope


Estimate Cost
- Inputs
1 2 3 4 5 6

3) HR Resource Plan
o Staff attributes, personnel rates, rewards, etc. (who and how much)

4) Risk Register
o Risk mitigation costs
o Risk event may increases cost and/or delay schedule

5) EEF
o Market conditions, published pricing info, etc.

6) OPA
o policy, template, lessons learned, etc.


Estimate Cost
1 2 3 4 5 6 7 8 9

1) Expert Judgment

2) Analogous Estimating
o Using comparable project
o e.g. launching a new product

3) Parametric Estimating
o Using Statistical relationship
o e.g. $100 to build a wall, need to build 4 walls, the estimate is
calculated to be $400


Estimate Cost
1 2 3 4 5 6 7 8 9

4) Bottom-up Estimating

5) Three-Point Estimating

6) Reserve Analysis
o Contingency Reserve - May be a percentage of the estimated
cost, a fixed number, or developed by using quantitative
analysis methods


Estimate Cost
1 2 3 4 5 6 7 8 9

7) Cost of Quality
o Total Cost to produce project or service according to quality
standards
o Conformance (Prevention and testing costs)
o Non-conformance (Internal and external failure costs)

8) PM Estimating Software
o Software, spreadsheets, simulations, statistics

9) Vendor Bid Analysis
o Compare vendor bids to help determine what the project
should cost


Estimate Cost
- Outputs
1 2 3

1) Activity Cost Estimates
o Quantitative assessments of probable costs
o Can include direct costs and indirect costs
o Estimates for all resources (labor, services, equipments, IT, reserve, etc.)

2) Basis of Estimates
o How the estimates were developed
o Assumptions made
o Known constraints
o Cost range and confidence level

o May include Risk Register


Estimate Cost
- Data Flows


Estimate Cost
- Key Points

• Points of Emphasis
o Process of determining costs of project resources for each activity
o Tools and techniques include expert judgment, analogous estimating,
parametric estimating, bottom-up estimating, three-point estimating,
reserve analysis, cost of quality, project management estimating software,
and vendor bid analysis

• Test Tips
o Differentiate between Analogous Estimating and Parametric Estimating
o Know how to calculate costs using Three-Point Estimating
o Know the difference between contingency reserve and management
reserve
o Name tools and techniques for Estimate Costs process


Determine Budget


Determine Budget
- Overview

• “How much will it cost?”

• Goal is to establish a cost baseline, so we can
measure against it.


Determine Budget
- PMBOK Process 7.2
Process Groups
Monitoring &
Controlling
Knowledge Areas
Integration Charter

Verify Scope,
Scope Define Scope,
Control Scope
Create WBS

Define Activities,
Develop Schedule

Estimate Cost,
Control Cost

Perform Quality
Assurance

Manage Project Team

Identify
Expectations

Identify Risks,
Plan Risk Responses



Determine Budget
- Definition
1 2 3 4 5 6 7 1 2 3 4 5 1 2 3

• The process of aggregating the estimated costs of
individual activities or work packages to establish
an authorized cost baseline

• Cost baseline includes all authorized budgets, but
excludes management reserves


Determine Budget
- Inputs
1 2 3 4 5 6 7

1) Activity Cost Estimates
o From “Estimate Cost” process

2) Basis of Estimates
o Supporting Details such as assumptions

3) Scope Baseline
o Scope Statement – budget constraints
o WBS
o WBS Dictionary

4) Project Schedule
o e.g., Aggregate costs by calendar month


Determine Budget
- Inputs
1 2 3 4 5 6 7

5) Resource Calendar
o Which resource, when, and for how long

6) Contracts
o Products and Services

7) OPA
o Budgeting policies & procedures
o Budgeting tools
o Reporting methods


Determine Budget
1 2 3 4 5

1) Cost Aggregation
o Process of rolling up costs through each level of WBS (Bottom-up)

2) Reserve Analysis
o Contingency Reserve vs. Management Reserve

3) Expert Judgment

4) Historical Relationships
o Using Parametric (rule of thumb) or analogous (similar size/scope)
estimate methods

5) Funding Limit Reconciliation
o Rescheduling work to level out the rate of expenditures
o Example: quarterly budgets for public companies


Determine Budget
- Cost Aggregation
1 2 3 4 5

Budget

Mgmt
Cost Baseline +
Reserve

Contingency
Project Estimates +
Reserves

Control Account
Estimates

Work Package
Estimates

Activity Estimates


Determine Budget
- Outputs
1 2 3

1) Cost Performance Baseline
o Is an authorized time-phased budget at completion (BAC) used to
measure, monitor, and control overall cost performance on the project
o Is the total expected cost for project
o Illustrated as an S curve


Determine Budget
- Outputs
1 2 3

2) Project Funding Requirements
o Derived from the cost baseline
o Often occurs in incremental amounts
o Total Funding Requirements = cost baseline + management reserve

o Risk Register
o Cost Estimates
o Project Schedule


Determine Budget
- Data Flows


Determine Budget
- Key Points
• Points of Emphasis
o Tools and techniques: cost aggregation, reserve analysis, expert
judgment, historical relationships, and funding limit reconciliation
o Cost Performance Baseline = Cost Baseline = Authorized time-phased
project budget = Time-phased Budget at Completion (BAC) = Total
Planned Value (PV) = S Curve = a Performance Measurement Baseline
(PMB)
o Cost Baseline = project estimates + contingency reserve
o Total funding requirement = project Budget
= cost baseline + management reserve

• Debatable Issues?
o Does cost baseline include contingency reserve?

• Test Tips
o Know the difference between cost baseline and project budget
o Know how to calculate funding requirements by a certain time period
o Know components of Performance Measurement Baseline. Performance
Measurement Baseline is used for Earned Value Management.

Key Takeaways for the day…
• Scope
o Scope Statement, WBS, Scope Baseline
o If Scope changes, time and costs may be affected

• Time
Five step process:
o Understand what's required
o Prioritize and order activities/tasks
o Decide who you need to involve
o Do your estimates
o Develop schedule

• Cost - Establish Baseline

• Performance Measurement Baselines
o Scope baseline, Schedule Baseline, Cost baseline; & the completed
project plan itself


Quiz Time


Project Management

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