project management, unit 6
DESCRIPTION
Project Management, Unit 6. Managing Project Time, Cost, and Procurements. Unit Objectives. At the end of this unit the learner will be able to: Define project time management activities Define project cost management activities Define project procurement activities. Unit Outline. - PowerPoint PPT PresentationTRANSCRIPT
Project Management, Unit 6
Managing Project Time, Cost, and Procurements
Component 19/Unit 6 Health IT Workforce Curriculum Version 1.0/Fall 2010 1
Unit ObjectivesAt the end of this unit the learner will be able to:
1.Define project time management activities2.Define project cost management activities3.Define project procurement activities
Component 19/Unit 6 Health IT Workforce Curriculum Version 1.0/Fall 2010 2
Unit OutlineThis unit consists of the following lesson topics:
1.Unit Introduction and Overview2.Define project activities and develop project schedule 3.Develop project cost and develop the project budget 4.Develop a project procurement management plan and evaluate make-or-buy decisions
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Unit Introduction and Overview
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.
PROJECT
INITIATION PROJECT
PLANNING
PROJECT
EXECUTION
PROJECT CLOSURE
MONITOR & CONTROL
PROJECT
PLANNING
5Health IT Workforce Curriculum Version 1.0/Fall 2010Component 19/Unit 6
Process Group Sequence
Essential Planning Processes
1. Collect Requirements Process2. Define Scope Process 3. Create WBS Process 4. Define Activities Process5. Developing Schedule, Determining Budget &
Making Procurement Decisions
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TIME MANAGEMENT
COST MANAGEMENT PROCUREMENT MANAGEMENT
Define activities Estimate costs Plan procurements
Sequence activities Determine budget Conduct procurements
Estimate activity resources
Control costs Administer procurements
Estimate activity durations
Close procurements
Develop schedule
Control scheduleComponent 19/Unit 6 Health IT Workforce Curriculum
Version 1.0/Fall 2010 7
Project Activities by Process Group
Collect Requirements Process
Project Charter+ Requirements Documentation
Stakeholder Register
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Define the Scope Process
Requirements Documentation
Project Scope Statement
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Create the WBS Process
Project Scope Statement Work Breakdown Structure
+ +
Requirements Documentation Scope Baseline
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Work Breakdown Structure (WBS)
PROJECT
1.1 1.2 1.3
1.1.1
1.1.2 1.2.1 1.2.2
1.1.1.1
1.1.1.2
1.1.1.3
WORK PACKAGE LEVELdiscrete activities w/definable
end results
Level 1
Level 2
Level 3
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PLAN PURCHASES & ACQUISITION
QUALITYPLANNING
RISKMANAGEMENT
PLANNING
HR PLANNING
COST ESTIMATING
WBSWORK PACKAGE
Work Breakdown Structure (WBS)
ACTIVITYDEFINITION
& ACTIVITY
RESOURCE PLANNING
COMMUNICATIONPLANNING
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Define Activities Process
Scope Baseline Activity List
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Developing Schedule, Determining Budget & Making Procurement Decision
Develop ScheduleActivity List Determine Budget
Make-or-Buy Decisions
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Schedule and Cost Constraints
Early in the project it is important for the project team to work with the key stakeholders to identify project constraints related to scope, time, cost and other (technical, legal, etc).
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Class Exercise
1. Ask the students to list project constraints inherent in their organization (2 minutes)
2. Ask the students to list unique constraints they have encountered on individual projects (2 minutes).
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PROJECT MANAGERManages the Project Constraints
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Project Constraints
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Triple Constraint: Basic Foundation of Project
Management
Competing demands on projects:
1. Scope 2. Time3. Cost
Consider all constraints equal unless otherwise stated
Cost Time
Scope
Strategies to Manage Schedule and Cost Constraints
Questions to ask:•Importance of each constraint?•Is possible to prioritize the constraints (rank order)? •What is the flexibility of a constraint?•Can the deadline or budget be negotiated?•What is the customers’ risk tolerance?
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Time Management Process Sequence
20Health IT Workforce Curriculum Version 1.0/Fall 2010Component 19/Unit 6
PROCESS GROUP
PROCESS NAME KEY OUTPUTS
1 Planning Define Activities Activity listMilestone list
2 Planning Sequence Activities Project schedule network diagrams
3 Planning Estimate Activity Resources Activity resource requirements Resource breakdown structure
4 Planning Estimate Activity Durations Activity duration estimates
5 Planning Develop Schedule Project scheduleSchedule baseline
6 Monitor & Control
Control Schedule Work performance measurements, Change requests
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Time Management Processes and Outputs
Developing a Project Schedule
1) Activities are sequenced (predecessors and successors are determined)
2) Activity paths are determined 3) Duration of each path is calculated4) Critical path is identified (longest path &
determines the soonest the project will complete)
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Schedule Terminology
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• Duration• Effort• Project schedule
network• Activity relationships• Schedule
Activity Duration Estimates
The project team can estimate the likely number of work periods required to perform an activity by using any of the following techniques:
•Analogous•Expert Judgment•Parametric•Three point estimate•PERT (three point estimate with weighted average)
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Dependency Determinations
The project team must determine the existence of dependencies between activities when preparing a schedule. There are three types of dependencies or relationships between activities.
•Mandatory•Discretionary•External
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Activity Sequencing - Precedence Diagramming Method (PDM)
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B 5
E 5
C 12
F 14
D 2
G 17
H 11
A 8
FINISHSTART
Student exercise:(5 minutes)
Identify other paths thru the above network, calculate the duration of the paths, and then determine which path is the critical path.
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PATHS DURATION CRITICAL PATH
ABCDH 8 + 5 + 12 + 2 + 11= 38
Duration Compression Techniques
• Crashing - involves adding additional resources to perform an activity to compress the schedule, but may result in increased cost to the project
• Fast tracking - involves over lapping activities which normally are performed in sequence. Compressing the schedule by performing activities at the same time or in parallel may result in increased project risk and rework.
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Project Cost Management - Develop Estimates for Project Cost and Budget
• The project team aggregates the estimated costs of individual activities or work packages to establish a cost baseline.
• A cost management plan is developed by the project team and describes how project costs will be planned, managed and controlled (i.e. cost estimates, cost budgeting, cost baseline, cost variances).
• During project execution the project team uses the cost performance baseline to monitor and control project costs.
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Project Cost Management - Develop Estimates for Project Cost and Budget
Project Cost Management Processes which Occur in Project Planning, Execution, and Monitor & Control: • Estimate costs• Determine budget• Control Costs
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PROCESS GROUP
PROCESS NAME KEY OUTPUTS
1 Planning Estimate Costs Activity cost estimates,Basis of estimates
2 Planning Determine Budget Cost Performance Baseline,Project funding requirements
3 Monitor & Control
Control Costs Work Performance Measurements,Budget Forecasts,Change requests
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3 project cost management processes and key outputs
Types of Project Costs1. Direct cost 2. Indirect cost 3. Fixed cost 4. Variable cost
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How are Costs Estimated?• Analogous• Parametric• Bottom-up
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How are Costs Controlled?• Cost management plan• Project performance• Change request
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Project Procurement Management Processes
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Project Procurement Management Processes which occur in Project Planning, Execution, Monitor & Control, and Closing:1. Plan Procurements2. Conduct Procurements3. Administer Procurements4. Close Procurements
Project Procurement Management Processes and Key Outputs
PROCESS GROUP
PROCESS NAME KEY OUTPUTS
1 Planning Plan ProcurementsProcurement management planProcurement statements of workMake-or-buy decisionsProcurements documentsSource selection criteria
2 Executing Conduct ProcurementsSelected SellersProcurement contract awardResource calendars
3Monitor & Control
Administer Procurements Procurement documentation
4 Closing Close Procurements Closed procurements
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Types of ContractsThere are three main types of contracts. The type of contract selected may be based on the good or service to be purchased or level of scope of work definition.
1. Fixed-Price or Lump-Sum Contracts2. Cost-Reimbursable Contracts 3. Time and Material Contracts
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What are Procurement or Bid Documents?
• Invitation for Bid (IFB)• Request for Proposal (RFP)• Request for Quotation (RFQ)
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Contracting Environments: Centralized & Decentralized
Advantages Disadvantages
Centralized • Greater contracting expertise• Economical and more efficient
• Working multiple projects
Decentralized
• Greater focus on a specific project• PM has authority to execute and control contract • Greater loyalty to a project
• Duplication of effort • Inconsistent contracting practices
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Administer Procurements Process & Close Procurements Process
Administering the procurement process involves monitoring and controlling the contract performance, managing procurement relationships, and making changes and corrections when required.
A procurement audit is performed at the completion of each contract.
Contracts must be closed before the project can be closed.
Summary• Developing a realistic schedule and budget and
accurately making procurement decisions is based on having well defined project scope
• The project manager must continually monitor and control the schedule, budget, and procurements to ensure project success.
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