Week 1 Charter, Scope, and WBS (graded) Professor Wade 6/17/2015 10:29:46 AM

In order to ensure that we all start at the same place in this course, let’s see what we all remember about a charter, scope, and WBS. What is the purpose of each? Who creates each of these? What are the general rules associated with the construction of each? How detailed should each be?

I agree also that the Project Charter is most essential. The WBS has to be accurate and if not, we could face an early project termination situation, where the stakeholders will be very unhappy if the charter is signed, celebrated and agreed upon for the purpose of achieving competitive organizational advantages, strategically.

WBS is the "tool used during project planning," and if these are off course, even a little bit, this can spell disaster for the project team.

The Scope involves those persons "responsible for the desired outcomes." I would also add that the RAM (Responsibility Assignment Matrix) will have a pivotal role to play as the WBS (and all the levels involved) will be discussed, agreed upon and implemented while creating "best practices" along the way.

RE: Charter, Scope, and WBS (graded) Professor Wade 7/8/2015 8:34:10 AM

Agreed, the project charter authorizes the PM to plan and execute the project. At a very minimum, a project charter should define the content scope, budget, schedule, and technical aspects as well as the vision, goals and values of the project. It should be short and concise, even to the point of using bullet points, not being verbose in nature. A great project charter can become a great reference for settling disputes, avoiding scope creep, change management, measuring project progress and ultimately, keeping the team focused on the desired goals.

No matter how small the project and the management arrangements you need at least an informal charter. If the company or management does not require one it is good if the project team drafts one and submits it to management with a request that they confirm that this is what we have been directed to accomplish. It does not have to be as involved as the formal charter. It must include the deliverables, the budget and the schedule.

Week 1 Wrap Professor Wade 7/12/2015 7:00:48 PM

We started out this first week in the threads talking about three fundamentally important project management deliverables, the Charter, the Project Statement, and the Work Breakdown Structure.

We said the Charter was the document which introduces the project to the organization and is used to determine if the effort should be approved and funded.  The Charter is produced toward the end of the initiation phase in the project life cycle (though as we found out

in our reading these phases overlap each other).  With an approved effort (which is what the Charter represents to the project) we now have budget and resources to produce the next major project deliverable, the Scope Statement.  We discussed what goes into the Scope Statement and that it is a primary input for the creation of our Work Breakdown Structure.

We introduced the concept of progressive elaboration.  The Scope Statement can be viewed as a progressively elaborated Charter.  It contains more details than the Charter and (although this is not emphasized in our text or in PMBOK) can push back on the Charter, essentially changing the project because now we know more about what we are producing, at what cost, in what timeframe.

Likewise we can view the WBS as a progressively elaborated Scope Statement.  It takes the major tasks described in the Scope Statement and breaks them down into more detail, a process known as functional decomposition.  How deep we need to go with this functional decomposition was a point of conversation.  We need our WBS to be complete enough so that we have a clear understanding of exactly what we're producing.  However, unnecessary detail is costly to document and maintain.  So, we need a balance where we have enough detail but no more.  We also found that the level of detail in the WBS does not have to be uniform!  The more uncertain the tasks the more details we need to research and document.  The more familiar and routine the task the less such efforts need to be detailed.

Additionally, we found that the controlling document is the WBS, because it lays out exactly the tasks to be done.  As was the case in the tension between the Charter and Scope Statement, with the completion of our WBS we now know more than we did before and that may push back on the Scope Statement.

We are up against practice versus theory here on this one people. In theory we have the notion of the WBS and we have the notion of the schedule (think Microsoft Project Gantt chart). From a PMBOK perspective they are distinct things and the lowest level item in the WBS is the "work package". Yes?!

The work package is the level of decomposition of a task such that the actual work implied by the task can be accurately estimated and managed by one individual (even if the work itself takes more resources than that). The idea is that when the WBS is converted into the schedule (again think Microsoft Project Gantt chart), those work packages tasks would be further decomposed. The lowest level of those is the "detailed task/activity." That is what you need to remember if you are taking the PMP exam.

Only that is NOT what normally happens in the real world. *sigh*

In the real world we don't build a WBS then create a fully populated schedule from it. We build the schedule (with its embedded WBS) at the same time! The practice is SO ubiquitous that when PMs say "WBS" they MEAN fully populated schedule.

The second issue we run into is even the fully detailed schedule is about what NOT how! The "Hows" are often in supporting external document.

Week 2 Summary

Project Overhead Costs

In our second week in the threads we tackled the topic of overhead and indirect costs. There are several types or sources of overhead including: management salaries, office support salaries, office space, office equipment costs, communication costs, insurance costs, travel and entertainment costs, taxes, etc. We must consider all costs when establishing a project estimate/budget.

Overhead is typically applied using % Allocation or Activity-Based Costing (ABC). There are pros and cons to each. While the % allocation is quicker it is less accurate. ABC tends to be more accurate but takes more time. Worse case…% Allocation may unfairly burden our project budgets and decrease a project's ROI, causing it to be deselected and never start.

Along the same line, we also need to think about reserves because we KNOW that everything will not always go according to plan (trust me)! We discussed the notion of known unknowns and unknown unknowns. The first is the Contingency Reserve, and is controlled by the project manager. It is

normally a part of project cost baseline. We will talk much more about project baselines later (see PMBOK 7.1.2.7 Reserve Analysis). The second reserve is the Management Reserve, and is not a part of the project cost baseline. A project manager must obtain approval before obligating or spending this kind of reserve” (see PMBOK 7.2.2.6 Reserve Analysis).

In this thread we had a great discussion of the cost estimating processes (we deal with schedule estimating as a future topic).

Some of the various types of estimating techniques and their pros and cons as listed in the Week 2 Lecture. There are many techniques because there are many different parameters we need to consider before we make the decision of "how do we best estimate this cost?" Our reading (and in part) our discussion addressed:

· Expert Judgment - uses individual SME's to leverage their prior experience and expertise on a task estimate. The technique suffers from individual bias (because it's easy for the SME does not make it easy for the resources involved).

· Analogous Estimating - This technique involves scope, cost, budget and duration from similar projects in the past. It utilizes past history and comes up with a basis. This techniques is useful if your new effort is VERY MUCH like a previous effort and you have good records of the previous effort

· Parametric Estimating - This technique utilizes a statistical relationship between historical data and other variables to calculate the cost. This method is very effective if you are scaling up or down from a previous estimate where you had calculated a cost per some output metric. For example: cost per sq foot for a housing development.

· PertMean / Three Point Estimating - Uses three estimate points to determine cost, "Most Likely (ML)", "Optimistic (O)", "Pessimistic (P)." Very useful in situations where there's little history and you're engaged in an activity you have not done before.

· Vendor Bid Analysis. - If your project effort is in an area where your organization has little experience but where there are vendors who specialize in such work, vendor bids are an excellent way to get costs estimates for the work. Getting more than one vendor bid can generate a range of numbers. Two problems you need to deal with are 1) the bids will contain the vendor profit margin so they may be an overstatement of the cost assuming you are able to perform the work in house. 2) You need to read the bids VERY carefully because the stated cost includes ONLY what was listed. Anything extra that it turns out you really need will not be in the bid!

· Group Decision-Making Techniques. Team-based approaches can be useful for improving duration estimates as compared to techniques using a single SME, in that it tends to smooth out individual biases.

To help practice PertMean estimating we also had an in class exercise to work on. All together a fine week of learning and activity people!

PM592 Discussion

1.We have introduced concepts in the earned value management system that allows us to forecast what it will cost to complete our project (Estimate to Completion, or ETC). We then use ETC to calculate the total actual project cost (Estimate At Completion, or EAC). In your own words, explain what ETC and EAC are and how the project team uses this information to ensure.

Estimate to Completion (ETC). This can be expressed in dollars or hours. It provides us with an estimate of the current work or task we have left to completed the project. If we were remodeling a home this would be used to see what are the cost or hours associated with the final stages of home eg: landscaping or paved driveway

Estimate at completion (EAC) is used to forecast the dollar amount or hours for the final cost of the project. This is used when the project is completed. It takes into account all of the cost and liabilities that occurred during the project and all of the remaining cost as well. It is a snapshot of what the projected cost will be given all of the expenses and liabilities and remaining cost for project.

2. Class.. we use EVM variances, efficiency ratios and forecasts numbers to provide the pulse of the project. However, the project manager must then look at that data and make a determination if corrective action needs to be taken.

This week, we are introduced to earned value techniques. Why is this method any different than just comparing the traditional budget to date with the expenditures to date, or comparing schedule to date to the schedule baseline? After reviewing the EV technique and calculations, does the method have any use when

monitoring a project? What drawbacks does the EV technique have that may limit its use in project management?

This method allows one to be able to interpret the values attached to the EV technique. This in turn allows for a contingency plans for each result to be planned for. The ACWP, BCWP, BCWS, EAC , ETC, CPI and SPI are all relevant to a project’s success or failure. This technique gives a broader view at any moment in time if project is on schedule, behind schedule, under budget, over budget or on schedule and budget. This technique gives a better and more appropriate understanding of the project.

Drawbacks of the EV technique include neglecting quality of the project. According to an article written by Penna Sparrow, “while doing earned value analysis, we don't take quality into consideration. It may be possible that our project is scoring high on earned value performance scale, but the quality of work is below par.“

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The organization you work for may not use the earned value method, but it must use some method to control a project. Does the organization for which you work, or one with which you are familiar, use earned value? If it does, briefly describe the system and discuss any changes or improvements you would make. If not, which process is used to monitor and control a project’s performance? How effective is your organization’s system?

approach where an organization would monitor the project plan, actual work, and work-completed value to see if a project is on track, I can see the US government using such in different branches. Furthermore, since Earned Value shows how much of the budget and time should have been spent, with regard to the amount of work done so far, it allows the government to be able to adjust as necessary.

advantages when monitoring a project

Advantages for using EV techniques when monitoring a project would include management having to do more checks and balances throughout the life of the project. Since EVA is done periodically, management would have to make sure that all the project parameters are on track. Also, it is said that EV techniques is the only system used at present, which tracks the project in terms of work, time and money. Lastly, Timely performance measurement makes sure that steps can be taken to the bring project back on track before its too late.

http://www.ianswer4u.com/2011/12/earned-value-management-advantages-and.html#ixzz3iAirBXBz

Communication should be carried out throughout the life of the project, with the project manager/team and stakeholders. However, not all stakeholders want to be boggled down with every aspect of the project. Hence, a communication plan should be developed at the onset of the project to meet the needs of the stakeholders. In the event that changes occur to the budget, as PM, this should be communicated to stakeholders via face-to-face updates, although, emails, as well as reports can be used. This information best comes directly from the Project Manager.