project management_2.pdf

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Time Management

Project time management project is defined as ‘‘the process used to ensure the timely completion of the

project.’’

Five major processes that are required so as to achieve proper project time management:

i) Activity Definition. Defining the specific activities that are necessary to complete the project and

produce all of the project deliverables.

ii) Activity Sequencing. Identifying the sequence in which the activities must be done. This is the

same as identifying the interdependencies that the activities have between each other and inputs

external to the project.

iii) Activity Duration Estimating. In addition to the cost estimate for each activity in the project plan,

the duration of time that is necessary for each activity must be estimated.

iv) Schedule Development. Analyzing all of the data available to determine the project schedule that

will work for the project.

v) Schedule Control. Controlling changes that occur in the project that affect the project schedule.

Activity definitions are derived from the WBS. The WBS represents all of the work that the

project team must do to complete the project. Before the scheduling work can begin, the scope

statement, the constraints and assumptions, and any other historical information must be reviewed

to be certain that the work definition is correct and complete.

Activity sequencing also referred to as precedence analysis is necessary before even the durations

and connectivity is analysed. Each output from an activity is used by another activity or is

required as a part of a project deliverable. If an activity requires something from another activity,

which is that activity’s output, both activities must be done in sequence or at least partly so.

Activities that do not have any relationships can be carried out simultaneously or in parallel.

Precedence analysis:

– Must be done before an activity plan can be produced

– Reviews the activities that are to be carried out

– Decides what activities must be carried out before particular activity can start

Activity duration and estimation otherwise known as activity planning help to:

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– ensure that the appropriate resources will be available precisely when required

– avoid different activities competing for the same resource at the same time

– produce a detailed schedule showing which staff carry out each activity

– Produce a detailed plan against which actual achievement may be measured

– produce a timed forecast

– re-plan the project during its life to correct drift from a target

GANTT CHARTS

• Developed by Henry Gantt, around 1917

• Gantt charts are easy to use and produce

• They are very useful for use on less complex projects

• Commonly used due to their simplicity

• Gantt charts are easily understood and easy to read

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6

Task 1

Task 2

Task 3

Task 4

Task 5

Task 6

The information represented in the diagram is as follows:

– The project will last six weeks and consists of five tasks

– Task 1 starts at the beginning of week 1 and end in the middle of week 2 lasting one and half

weeks.

– Task two is carried out wholly in the second week

– Task 3 starts on week 3 (after completion of task 2) and lasts two and half weeks ending in the

middle of week 5.

– Task 4 starts in the middle of week 2 (after completion of task 1) and lasts two and half weeks

ending in week 4

– Task 5 starts in week 5 (after completion of task 4) and ends in half a week.

– Task 6 starts in the middle of week 5 (after completion of task 3 and task 5) and lasts one nad half

weeks to the end of week 6.

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NB: Tasks/activities that must be completed before start of a particular activity are called its preceding

activities.

Example: Draw the following Gantt chart given the following information

Task Precedence Duration (Days)

A - 5

B - 4

C A 6

D B 2

E B 5

F C,D 8

Network Planning Models

Two models have been used in network plan modelling.

- PERT (Program Evaluation and Review Technique)

- CPM ( Critical Path Method/Analysis)

PERT was developed by the US Navy with in collaboration with BOOZ-Allen Hamilton and

Lockheed Corporation for the Polaris missile/submarine project in 1958

CPM was developed by DuPont Inc in the Late fifties early sixties to facilitate building of

complex process plant

Though the two were different when developed, the difference between them is not significant currently.

Simple network diagram

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activities.



A - 5

B - 4

C A 6

D B 2

E B 5

F C,D 8











3


activities.



A - 5

B - 4

C A 6

D B 2

E B 5

F C,D 8











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Terminology

• Activity

– A specific task, uses resources takes time to complete

• Event

– The result of completing/starting an activity

– Events use no resources

– They are instances in time, points on the network, conditions of a system that can be

recognised

• Network

– The combination or all activities (often drawn as lines) and events (often drawn as nodes

at the beginning and end of each line) define the project and the activity precedence

relationship.

– Arrow heads placed on the lines indicate the direction of flow. Before and an event can

be realised all the activities that immediately precede it must be completed

• Path

– The series of connected activities (or intermediate events) between any two events in a

network

• Critical

– Activities, events, or paths, which, if delayed, will delay the completion of the project

– A project’s critical path is understood to mean that sequence of critical activities (and

critical events) that connect the project’s start event to its finish event

On Arrow Network diagram showing critical path in broken lines

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Terminology

• Activity


• Event




recognised

• Network



relationship.



• Path


network

• Critical





4

Terminology

• Activity


• Event




recognised

• Network



relationship.



• Path


network

• Critical





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Network syntax

• Time moves from left to right

• Nodes are numbered sequentially

• A network may not contain loops

• A network may not contain dangles

• Precedents are the immediate preceding activities

• Dummy activities can be used to indicate a particular precedence



Nodes are numbered sequentially

Dummy activities can be used to indicate a particular precedence

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Network syntax











5

Network syntax











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• Draw the following as an on arrow network

Tasks Precedence Time

a - 5 days

b - 4 days

c a 6 days

d b 2 days

e b 5 days

f c,d 8 days

• Another on arrow network to draw


a - 6 weeks

b - 4 weeks

c a 3 weeks

d b 4 weeks

e b 3 weeks

f - 10 weeks

g e,f 3 weeks

h c,d 2 weeks

Each event circle can contain the information below

Earliest

Start Time

Event

Number

Latest

start

time

Slack

time

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Forward pass ( In case of one or more precedents take the one with the highest period/value)

Backward pass (in case of more than one node precedence assume the least value)

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7



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Activity Slack/ float time

The float/slack of an activity is the amount of time that the activity can be delayed without causing adelay in the project

Complete diagram

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Complete diagram

8



Complete diagram

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If the predicted date of the schedule is later than the promise date we must compress the schedule.

Crashing or fast tracking must be used. Crashing a schedule is doing anything at all to reduce the

scheduled completion of the project. Examples of crashing would include reducing the scope of the

project, adding additional resources for selected activities, eliminating activities, and changing the process

to eliminate steps.

Precedence Networks

• Syntax the same as for On Arrow networks

– Except there are no dummy activities

– Precedence networks must start with a start node and end with a end node

Simple precedence network

The same information is presented as on-arrow network below

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to eliminate steps.

Precedence Networks






9





to eliminate steps.

Precedence Networks






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Drawing a precedence network and on-arrow networks given the data -


a - 5 days

b - 4 days

c a 6 days

d b 2 days

e b 5 days

f c,d 8 days

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a - 5 days

b - 4 days

c a 6 days

d b 2 days

e b 5 days

f c,d 8 days

10



a - 5 days

b - 4 days

c a 6 days

d b 2 days

e b 5 days

f c,d 8 days

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• Another on precedence network to draw


a - 6 weeks

b - 4 weeks

c a 3 weeks

d b 4 weeks

e b 3 weeks

f - 10 weeks

g e,f 3 weeks

h c,d 2 weeks

• Adding more information to the node

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a - 6 weeks

b - 4 weeks

c a 3 weeks

d b 4 weeks

e b 3 weeks

f - 10 weeks

g e,f 3 weeks

h c,d 2 weeks


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a - 6 weeks

b - 4 weeks

c a 3 weeks

d b 4 weeks

e b 3 weeks

f - 10 weeks

g e,f 3 weeks

h c,d 2 weeks


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Example:

Activity Precedence Duration

A Hardware selection - 6

B Software design - 4

C Install hardware A 3

D Code & test software B 4

E File take-on B 3

F Write user manual - 10

G User training E,F 3

H Install & test system C,D 2

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Example:






E File take-on B 3




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Example:






E File take-on B 3




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Basic network diagram

Forward pass

- Activities A, B and F may start immediately, so that their earliest start dates for their start is zero

- Activity A will take 6 weeks so that the earliest it can finish is week 6 (0+6= 6). Likewise for the

other activities, the latest finish time is the sum of the earliest start time and duration of the activity:

EF = ES + D

- Activity C can start as early as A has finished so its earliest start date is week 6. It will take 3 weeks

such that the earliest it can finish is week 9. The same logic applies for activities D and E

Star

t

End

A

B

F

A

D

C

E

H

G

EndStar

t

0 44

3 73

B

4 73

7 103

E

9 112

11 132

H

0 1010

0 100

F

10 133

10 130

G

0 66

2 82

A

4 84

7 113

D

6 93

8 112

C

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- Activity G cannot start until both E and F have been completed. It cannot start therefore until week

10, the later of the two (Activity E = 7 and F= 10). The same logic applies for activity H wich can not

start until activity C is completed (C takes 9 weeks while D takes 8).

- The project will be complete when both activities H and G have been completed. Thus the earliest

project completion date will be the later of the two activities H and G, i.e. 13 weeks.

Backward pass

The backward pass calculates the latest date in which the activity may be started and completed without

delaying the end date of the project. It is assumed that the latest finish date for the project is the same as

the earliest finish date.

- The latest completion date for the activities G and H is assumed to be week 13.

- Activity H must therefore start at week 11 at the latest (13-2) and the latest start date for activity G is

week 10 (13-3).

- The latest completion date for activities C and D is the latest date at which activity H must start – that

is week 11. They therefore have latest start dates of week 8 (11-3) and week 7 (11-4) respectively.

Same logic applies for Activities E and F and A.

- Activity B must be completed by week 7 (the latest start times for both activities D and E) so its latest

start is week 3 (7-4). In cases where say D and E have different start dates, then B should be

completed in the earliest start date of the two.

- The latest start date for the project start is the earliest of the latest start dates for activities A, B and F.

This is week zero.

Critical Path

There is at least one path through the network that defines the duration of the project known as the critical

path. Any delay to any activity on this critical path will delay the completion of the project.

The difference between an activity’s earliest start date and its latest start date is known as ithe activity’s

float – a measure of how much the start or completion of an activity may be delayed without affecting the

end date of the project. Any activity with a float of zero is critical in the sense that any delay in carrying

out the activity will delay the completion date of the project as a whole. There will always be at least one

path through the network joining those critical activities – the critical path.

The significance of the critical activity is two-fold.

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In managing the project, we must pay particular attention to monitoring activities on the crotical

path so that the effects of any delay or resource unavailability are detected and corrected at the

earliest opportunity.

In planning the project, it is the critical path that we must shorten if we are to reduce the overall

duration of the project.

Exercise

Draw a precedence network given the following data.


a - 2 weeks

b - 4 weeks

c - 3 weeks

d a 3 weeks

e a 5 weeks

f c 6 weeks

g c 4 weeks

h d 4 weeks

i d 8 week

j b, e, f, i 2 weeks

k - 4 weeks

l g, k 3 weeks

i) What is the duration of the project

ii) Identify the critical path

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COST MANAGEMENT

Cost management is the completion of the project management triple constraint of cost, schedule, and

scope. Each of these must be completed in order to complete the project on time and on budget and to

meet all of the customer’s expectations. In order to meet the cost goals of the project, the project must be

completed within the approved budget.

It is important to consider the whole life cycle of a project when costing as opposed to up to project

completion and acceptance. Guarantees, warranties, and ongoing services that have to be performed

during the life of the project must be considered.

In order to determine the project cost accurately enough to be considered the project cost baseline, a

bottom-up estimate must be made. Using the WBS, each activity is costed and all added together to give

the final estimate cost. When they are added together, some of the overestimates will cancel out some of

the underestimates

Cost Estimating

Cost estimating is done throughout the project and their accuracy depends on the stage at hand e.g.:

‘‘order of magnitude’’ estimate is performed at the beginning to allow the project to go on, followed by

others.

Order of magnitude estimates: accuracy of _50 percent to _100 percent.

conceptual estimates: accuracy of _30 percent to _50 percent.

Preliminary estimates: accuracy of _20 percent to _30 percent.

Definitive estimate: accuracy of _15 percent to _20 percent.

Finally, the control estimate of _10 percent to _15 percent is done.

Types of estimates

Several types of estimates are in common use. Depending on the accuracy required for the estimate and

the cost and effort that can be expended.

Top-Down Estimates: Used to estimate cost early in the project when information about the project is

very limited. The term top down comes from the idea that the estimate is made at the top level of the

project e.g. the project itself is estimated with one single estimate.

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Bottom-Up Estimates: Used when the project baselines are required or a control type of estimate is

needed. These types of estimates are called ‘‘bottom up’’ because they begin by estimating the details of

the project and then summarizing the details into summary levels.

Analogous Estimates: Analogous estimates are a form of top-down estimate. This process uses the actual

cost of previously completed similar projects to predict the cost of the project that is being estimated.

Parametric Estimates: Parametric estimates are similar to analogous estimates in that they are also top-

down estimates. The process of parametric estimating is accomplished by finding a parameter of the

project being estimated that changes proportionately with project cost. Mathematically, a model is built

based on one or more parameters.

Control Estimates: Control estimates are of the bottom-up variety. This is the type of estimate that is

used to establish a project baseline or any other important estimate. In a project, the WBS can be used as

the level of detail for the estimate.

Cost Budgeting

Cost budgeting is the process of allocating cost to the individual work items in the project. Project

performance will be determined based on the budget allocated to the various parts of the project. The

result of the cost budgeting process will be to produce the cost baseline of the project.

The cost baseline for the project is the expected actual cost of the project plus the expected value for

risks. A contingency budget is set up for the risks that can be identified but may or may not take place.

The management reserve is money that is budgeted for the project for risks that are not even identified but

where through experience or even intuitive insight we feel that the money will be needed

.

Cost ControlCost control is the process of controlling the project cost and taking corrective action when the control

indicates that corrective action is necessary. It is important that our cost control system be thoroughly

understood by those who are measuring with it as well as by those who are being measured. Inappropriate

responses to cost and schedule variances can result in serious quality problems and higher than acceptable

risk levels.

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Earned Value Reporting:

This is the most commonly used method of performance measurement and project control currently. Its

popularity is attributed to the fact that it reports performance to cost and performance to schedule in one

report.

In any reporting system, the principle is to set some standard, measure the actual performance to that

standard, and then report on the observed differences. The earned value reporting system uses the planned

budget and schedule and then measure the actual progress in the budget and schedule.

Cumulative Reporting:

Earned value reports are cumulative reports. The values collected for the current reporting period are

added to the values from the last reporting period, and the total is plotted.

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QUALITY MANAGEMENT

Quality management will include all the work that is necessary to ensure that each of the objectives of the

project is met. Quality should be concerned with prevention rather than detection since the cost of

preventing a defect is much less than the cost of finding a defect and correcting it. It is worse if a defect is

not found early hence having to correct it much later.

Costs and schedule are two out of the triple constraint triangle. Quality management forms the third side.

Stakeholders should get what they pay for, not more, not less. The quality of the item means that it is

indeed what it was intended to be. Project quality management addresses both the quality of the project

and the quality of the product that is produced.

There are three processes for quality management: quality planning, quality assurance, and qualitycontrol.

- Quality planning function is the process that determines which quality standards should be usedto accomplish the goal of ensuring that the scope of the project fulfills the stakeholders’expectations.

- Quality assurance function is a process that monitors the overall ability of the project to meet theexpectations of the stakeholders. The purpose of the quality assurance function is to provide theconfidence that the project will have the proper controls to be able to meet the standards that areexpected by the stakeholders.

- Quality control function is the process used to measure the specific items that must be monitoredto determine that the project will meet the stakeholders’ expectations

Quality Planning

This involves identifying all of the standards that are relevant to the project. For environmental issues, all

government regulations, rules, standards, and guidelines specific to the specific project must be

considered. Generally, this is the common policy that will be used by all projects that the company will

accomplish. Each project and each interrelated project must modify the guidelines and gain approval on

changes that will be required for a particular project.

Quality AssuranceThis is the application of planned and systematic quality activities to ensure that the project will employ

all processes needed to meet all stakeholder expectations and provide the confidence that the product of

the project will fulfill the requirements of quality.

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- Quality audits are performed to review certain important areas of the project. Audits make it

possible to determine what is happening in the project and whether the project quality is meeting

the standards that were determined in the quality plan.

- The quality assurance function includes the means to continuously improve the quality of future

projects as well. Lessons learned from one project are applied to the quality plans of future

projects so that there can be an ever-improving level of quality in projects completed by the

organization.

Quality ControlThe function of quality control is to monitor specific project results to ensure that the results match the

standards that were set for the project. The quality control function utilizes a number of techniques to

accomplish this. Many of these tools and techniques are rooted in the concepts of probability and

statistics.

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Human Resources Management

This is necessary so as to make the most efficient use of the project human resources. This includes all of

the people involved in the project— the stakeholders, sponsors, customers, other departments, the project

team, subcontractors, and all others.

Organizational planning involves the organizing of the human resources. These are the roles,

responsibilities, and relationships of the people who are on the project team. HRM takes place throughout

the project.

Staffing Plan

A functional manager (responsible for a unit in the project) must have a staffing plan that allows him or

her to know where the people in the functional organization are committed. If these commitments are not

organized, the utilization of the human resources will be poor. A staffing plan for the functional manager

is similar to the project schedule, except that instead of showing the schedule for each task in the project,

it shows the schedule for each resource in the functional manager’s responsibility.

Training Plan

Sometimes the project work requires skills that are not available. In these situations it may be necessary

for a project to accept a resource who lacks the proper training for the work. A training plan is necessary

to support the training for this type of individual.

Organization Chart

The organizational charts show the reporting hierarchy from the bottom of the project organization to the

project manager. It is important that these charts be circulated widely so that any misunderstandings about

who reports to whom can be avoided.

MotivationMotivated employees come to work every day and produce high quality work. Employees who are not

motivated have high absenteeism, produce lower quality work, and actually work a smaller percentage of

the time.

Procedures vs. Motivation: Research in the areas of procedures and motivation show that the highest

performance was in companies that improved on both. A certain amount of proceduralization in

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combination with the creation of a motivational environment created the highest performing

organizations.

Expectancy Theory: To a large extent people become or perform according to what is expected of them.

In project management, this concept can be applied by treating people with encouragement, giving them a

sense of recognition and achievement, and giving praise publicly and criticism privately.

Maslow’s Hierarchy of Needs Theory: The basic human needs are arranged in a hierarchy. The lower

needs must be satisfied before the higher needs can be addressed. As one level of needs in the hierarchy

is satisfied, the next level becomes the motivating factor, and so on.

If people are given what they have already achieved, it will have no effect on their performance. It is

important to evaluate individuals’ or team need so that company resources are not wasted in trying to

meet what has already been met. Care also must be taken in case a particular action results in withdrawing

hence lowering individuals/teams status which essentially de-motivates.

PowerPower is the ability of one person to influence the behavior of another. In project management,

understanding power and the use of power can have a great effect on the outcome of the project.

Food, Shelter and Clothing

Security & Safety

Socialization

Recognition

Self Actualization

Maslow’s Hierarchy of Needs

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Forms of Power

Coercive : is based on the idea in the mind of the person being influenced that the person having the

influence has the ability to inflict punishment or pain. This pain will be unpleasant, and it will be more

unpleasant than doing the task.

Reward power: is based on the idea in the mind of the person being influenced that the person having the

influence has the ability to administer some sort of reward. This reward will be pleasant, and it will be

more pleasant than any unpleasantness associated with doing the task.

Referent Power: Referent power is based on the idea in the mind of the person being influenced having a

strong desire to identify with the person influencing. A person who leads others by virtue of his or her

charisma has this type of power.

Expert Power: Expert power is based on the idea in the mind of the person being influenced that theperson having the influence has this influence based on special knowledge or ability.

LeadershipTheory X and Theory Y ManagersDouglas McGregor’s theory of X and Y managers says that there are two kinds of managers: type X and

type Y.

Type X managers think that all people are basically lazy and that unless they are threatened or in some

way forced to do work, they will not do any work. These managers direct work to be done and do not

allow very much participation in any decision making, because they feel that the participation by the

workers would only lead to less work being done.

Type Y managers believe that people will do a good job for the sake of doing it. They believe in

participative management and sharing information with the workers. These managers will also listen to

problems that are brought up by their staff.

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Communications Management

The project team must have a communication plan that determines which items of information need to be

communicated to all of the stakeholders of the project. The communications management plan contains

all of the information regarding the format of the reports, frequency of distribution, and the individual

who has the responsibility for generating the reports and distributing them.

Lessons Learned

The lessons-learned document is a document that captures the good and bad things that happened in the

project. It should also contain a recommendation for how to avoid or minimize the bad things and

enhance the good things. The purpose of the document is to serve other project managers working on

future projects. The lessons-learned documents are an excellent starting place for risk identification.

Databases can be constructed to classify and store lessons-learned data to simplify the lookup process.

Barriers to Communications

There can be many barriers to communications. Messages can be blocked or distorted, and as a result,

their meaning can be changed considerably.

Improving CommunicationsThe following guidelines will help improve your communications:

- Make the Message Relevant for the Receiver

- Reduce the Message to Its Simplest Terms

- Organize the Message into a Series of Stages

- Repeat the Key Points

Verbal and Written CommunicationsVerbal and written communications each have their place, and it is important that the correct medium

be used for each communication.

Verbal communications are faster than written ones; they allow us to keep the message simple and present

one thought at a time to the listener. Because verbal communications are two way, we are able to get

feedback from the receiver before going on. If the feedback coming from the receiver does not confirm

that he or she got the message, the message can be modified and the point made in another way.

Questions can be raised by the receiver to help clarify the point.

Written communications can be more detailed than verbal ones and can be used to explain something that

is quite complex and requires more explanation than the receiver can absorb in a short verbal exchange.

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The written communication can be better organized than a verbal communication, and if it is properly

organized, the receiver is able to go back and review material already read.

Formal and Informal CommunicationsFormal Communications

Project managers and members of their project teams are frequently required to make formal

presentations to their managers, their customers, and various other stakeholders in the project. In order to

accomplish this, it is necessary for them to have good presentation skills.

Formal communications can also be via, video and audio conferencing and e-mail. It is also possible to

share project data from various parts of a project located in remote parts of the world including combining

with other project data through the Internet

Informal CommunicationsA lot of communication in organizations is informal. This does not require strict adherence to procedure

and can take place almost anywhere. However, care must be taken since informal communication

becomes difficult if the information has to be referred to. The following must be formally communicated:

- When major milestones in the project are being passed

- Agreements with all the stakeholders

- Making authorized project changes

As the number of persons involved in a decision is increased, the need for formal communications

increases.

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RISK MANAGEMENT

Introduction

- A risk is an uncertain event that has a positive or negative effect on at least one project objective.

- All risks have causes.

- All risks have uncertainty associated with them and all risks have an impact associated with them.

The impacts can affect the project baselines of cost, schedule, and scope.

- The risk may also affect activities in multiple areas of the project as well as activities outside of

the project.

- Risks are justified by the benefits that come as a result of taking them

- In project risk there are many things that can go wrong in the course of the project. The potential

benefits should justify the risks that are taken.

- Risks can have a positive or negative effect. They can produce benefits for the project, or they

can produce loss for the project.

- Risks can be divided into known and unknown risks. Known risks are those risks that can be

identified. Unknown risks are those that cannot be identified

When to Do Risk Management- Risk management must be done during the whole life of the project.

- When risks are identified, they should be recorded in a risk management file or folder so that they

can be dealt with later in the project.

- As time goes by and progress is made on the project, the risks need to be reviewed, and the

identification process must be repeated for the discovery of new risks. As the project advances,

some risks disappear. Other risks that were not thought of earlier will be discovered.

The Risk ProcessThe risk process is divided into six major processes:

i) Risk management planning

ii) Risk identification

iii) Risk assessment

iv) Risk quantification

v) Risk response planning

vi) Risk monitoring and control

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Risk categories

• Risk types to be found on Project

– those caused by the inherent difficulties of estimation

– those due to assumptions made during the planning process

– those of unforeseen (or at least unplanned) events occurring

• Estimation errors

– some tasks are easier to estimate than others

• manual writing is a reasonably straight forward task

• program testing and debugging may not be

– analysing historic data for similar things can help with deciding the level of

accuracy to be assigned to a particular estimation

• Planning errors

– assumptions are used when planning, if the assumption are wrong then the plan is

at risk

• e.g. the need for rework may not be planned

– when a plan is prepared the assumptions that have been made should listed and

details given to the affect on the plan if the assumption are incorrect

• Eventualities

– some eventualities might never be foreseen

– it has to be accepted that such eventualities do happen, even if they are rare!

– Most unforeseen eventualities generally could have been identified and predicted

• e.g. the required hardware not arriving on time

– plans should be in place to minimise the damage caused by an unforeseen event

Managing risk

• There are various models of risk management

• They are generally similar and identify to main elements

– risk identification

– risk management

• A popular model is the Boehm Risk Engineering Model

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Risk identification

• Identification of hazards that may affect a project must be the first steps in a risk

assessment

• A hazard is an event that if it occurs may adversely affect the project

• The risk a hazard presents to a particular project must decided

• Checklist are often used to help in identifying hazards

• Knowledge based software is also available to help with the task of hazard identification

• Some hazards will be generic

Other hazards will be project specific

Various categories of factors will need to be considered

o Application factors

the nature of the application

e.g. simple data processing or safety critical system

the size of the system

o Staff factors

e.g. experience and appropriateness of experience

RiskEngineering

Risk Analysis RiskManagement

RiskIdentification

RiskEstimation

Riskevaluation

RiskMonitoring

Risk ControlRisk Planning Risk StaffingRisk Directing

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skills, turn-over rate, level of absenteeism

Project factors

o definition of the project

o project objectives

o team members understanding of the above

o project quality plan

Hardware / software factors

o the use of new untried hardware carries a higher risk than using existing hardware

o where a system is developed on one type of hardware or software platform for use

on another, then this will carry higher risks

Changeover factor

o An instant change over carries greater risks than an incremental change over

o Parallel running is desirable but has cost implications

Supplier factors

o can be difficult to control suppliers

e.g. installation of phone lines, delivery of equipment

Environmental and social factors

o generally outside the control of the project

e.g. changes in legislation

e.g. public opinion

Health and safety factors

o not generally a major issue for software project when compared to other

engineering projects

o still need to be covered to ensure compliance with statutory obligation

Risk analysis

• Once identified risks should be assessed for their possible affect on the project

• the level of importance of a risk must also be established this is often done by assessing

the risk value

• The importance of a risk is known as the risk value or the the risk exposure

• risk exposure = risk likelihood x risk impact

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• risk likelihood is the probability of hazard occurring

• risk impact is the effect the resulting problem will have on the project

• Risk impact is estimated in monetary terms

• Risk likelihood is assessed as a probability

• Risk exposure therefore is an expected cost, in a similar manner to a cost-benefit analysis

• Ranking schemes can be used to assess impact and likelihood

• Impact scores should take account of

• the cost of delay to scheduled dates for deliverables

• cost overruns caused by using additional or more expensive resources

• the costs incurred or implicit in any compromise to the system’s quality or functionality

• Managing risk involves the use of two strategies

- reducing the risk exposure by reducing likelihood and impact

- drawing up contingency plans to deal with the risk should it occur

• All attempts to reduce risk exposure will have a cost

• Risk reduction work should be prioritised to obtain best value

• Factor other than risk exposure that should be taken account of when prioritising risk

management

- confidence of risk assessment

- compound risks

- the number of risks

- cost of action

Reducing risks:

• There are five broad categories for risk reduction

- hazard prevention

- likelihood reduction

- risk reduction

- risk transfer

- contingency planning

Risk management:

• Risk Planning

- preparing contingency plans

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- large project will use a risk manager to do this

• Risk Control

- minimising the affect caused by the problems occurring

• Risk monitoring

- ongoing assessment of the importance and relevance of particular risks

Risk directing and staffing

- the day-on-day management of risk

- risk aversion and problem solving

project management_2.pdf

Documents

week task

activity sequencing

project plan

particular activity

activity definitions

project deliverables

project andproduce

activity duration estimating