Chapter 13 Review

Solving Common Project Problems


This chapter provides an overview of common challenges and recommends strategies for applying the tools presented in the text.

• Responsibility beyond your authority, use project document to substantiate your role.
• Charter
• Statement of work
• Communication plan - make sure this is a two-way medium so you'll know they are up-to-date and involved.
• Small work packages with strong completion criteria - make assignments easy to understand and track; involve the team in estimating the cost and duration of tasks and in defining the completion criteria.
• Network diagram - show how they fit in the project; emphasize the importance of their contribution.
• Project status meetings with an open task report - provide updates even during times that they are not directly involved.
• Sponsor - develop a strong relationship with your sponsor by keeping him or her informed of your plans and progress.
• Disaster recovery: the PM is removed and you have to pick up the pieces, what do you do?
• Statement of work - start at the beginning with the project. Prioritize the remaining scope, clarify the penalties for running over budget or missing the deadline.
• Project plan - using the work breakdown structure and critical path analysis figure out the best possible schedule scenario assuming infinite resources to determine the absolute shortest possible schedule. Then, negotiate for more resources, more time, or less scope based on your plan. Use your critical path schedule to show management which resources you will need to get to project done as fast as possible. Allow for project team learning time.
• Work package estimates - use the actual performance so far to create realistic estimates and include the team in the estimating process.
• Project status meetings - frequent status meetings focused on completing near-term tasks will keep you on top of progress and allow you to solve problems early. Use the open task report to keep your meetings brief and productive. Graph the process on the plan for everyone to see -- it's tangible progress. Celebrate small victories.
• Reducing the time to market
• Statement of work - getting agreement from all stakeholders will ensure you don't waste time with organizational battles.
• Fixed-phase estimating - no point in generating a detailed schedule from start to finish, instead choose several reveiw points where you can reevaluate the functions of the product against the available resources and deadline.
• Project plan - develop a detailed plan for every phase. Using a network diagram identify all concurrent tasks. These are places where adding people can compress the schedule.
• Completion criteria - build quality check into the project at every step of the way
• Project status meetings - be clear about the responsibilities and track schedule progress rigorously. Create a culture of accountability. Celebrate successes along the way.
• When the customer delays the project
• Network diagram - look for other activities that the team can shift its attention to; this is also the tool for assessing the impact of the delay.
• Change management - determine the costs and schedule impacts of the delay. Document the reason for the delay as well as the cost and schedule impacts and bring it to the customer's attention without delay. Show the unexpected delay on the project plan by adding a task to the WBS called "Delay due to ____" and insert the delay in the network diagram too. If the delay idles any of your team members you can start assigning hours to the delay task.
• The impossible dream: you've been handed a project with an impossible budget and schedule. What to do?
• Statement of work - be extremely clear about the project's purpose, scope and deliverables. Learn all the schedule and cost penalties.
• Project plan - develop at least three options for what can be done, you must be able to demonstrate the trade-offs available to the managers. Recommend the option that seems to match their cost-schedule-quality priorities. Determine the maximum number of people you can usefully apply to the project using the network diagram and resource spreadsheet. Look for schedule adjustments that will bring the greatest cost reductions. Use a crash table to analyze the most cost-effective tasks to compress.
• Risk management - perform a risk assessment at both the high level and the detail level to find your danger points.
• Status reports - don't give up on changing your stakeholders expectations. Let them know with each status report how diligently the team is striving to meet the goals and what the actual progress is. Raise the alarm frequently that if early progress is an indicator, actual cost and schedule performance won't match the plan.
• Fighting fires - no time for definition and planning activities
• Organizing for project management - get organized before the fire starts, a systematic method for using PM techniques will increase your ability to respond quickly to any situation.
• Managing volunteers - no authority over the team of unpaid volunteers
• Statement of work - build enthusiasm and common vision by focusing on the purpose and deliverables.
• Small tasks with strong completion criteria - make it easy for each person to succeed by giving everyone clear direction and little latitude for straying from the task.
• Project plan - be extremely organized and very aware of critical path and float. You will need to do some resource analysis.
• Communication plan - develop a method of staying in touch with everyone without a lot of effort or frequent meetings
• Status meetings - frequent status checks will keep you in touch with progress, but periodic meetings are an opportunity to energize the group, build relationships, make project decisions, and celebrate progress. Ensure that these are productive meetings that people want to attend.
• MANAGE PROFESSIONALS LIKE VOLUNTEERS
• Peter Drucker says they want the same things: interesting, meaningful work that is a good use of their time.
• Achieving the five project success factors
• Agreement among the project team, customer, and management on the goals of the project.
• A plan that shows an overall path and clear responsibilities, which is also used to measure progress during the project.
• Constant, effective communication between everyone involved in the project.
• A controlled scope
• Management support 

Chapter 12 Review

Measuring Progress

The key to finishing a project on time and on budget is to start out that way and stay on track throughout. Progress measurement tools are how we identify problems when they are small, when there is still time to catch up. Cost and schedule progress comprise two-thirds of the cost-schedule-quality equilibrium and are the primary focus of progress measurement.

• Measuring schedule performance
• Each work package in the plan is a measurable unit of progress, each has start and finish dates.
• The primary tool for illustrating a schedule is also good for displaying schedule status, the Gantt chart
• Use the 0-50-100 rule
• To simplify task reporting use 0% complete for tasks that have not yet started, 50% for tasks that are in process, and 100% for completed tasks. Since no work package is greater than 80 hours of work no task should be in progress for more than one week. If it is you know that there is a problem.
• Every work package should have completion criteria and should not be considered complete until it meets these criteria.
• Schedule completion measure accomplishment, not the effort expended.
• Measuring cost performance
• Cost performance is acutely critical because cost measures productivity
• Each work package has estimates for labor, equipment and materials
• Be sure to capture actual costs and compare planned and actual costs to determine whether the project is progressing as planned
• How to get cooperation in reporting labor hours
• Point out that there is a legitimate need to track actual labor hours. It provides early warning on cost problems and improves estimates on future projects.
• Make it easy to report by using the largest increments possible for reporting actual hours
• Problems associated with graphing cost performance
• The rate at which money is being spent doesn't indicate whether the work is getting done
• Accounting lag time can make cost information arrive months late
• Earned value reporting
• To get a true picture of cost performance, the planned and actual cost for all completed tasks need to be compared. Earned value reporting uses cost data to give more accurate cost and schedule reports by combining cost and schedule status to provide a complete picture of the project.
• Calculating cost variance using earned value
• Planned cost
• Budgeted cost of any or all tasks
• Budgeted cost of work performed (BCWP)
• The planned cost of tasks that are complete
• Actual cost of work performed (ACWP)
• The actual cost of tasks that have been completed
• Cost variance (CV)
• CV =BCWP-ACWP
• Cost variance percent (CV%): the cost variance divided by the planned cost
• CV%=CV/BCWP (positive CV% is good/under budget, negative CV% is bad/over budget)
• Cost performance index (CPI)
• Earned value (BCWP) divided by actual cost (CPI > 1.0 = under budget; CPI > 1.0 = over budget)
• Budget at completion (BAC)
• The approved budget for the project
• Estimate at completion (EAC): the reestimate of the total project budget
• The original budget is multiplied by the ACWP and divided by the BCWP.
• Estimate to complete (ETC): budget amount needed to finish the project based on the current CPI
• ETC=EAC-AC
• Variance to completion (VAC): estimated difference at the end of the project between budget and actual cost.
• VAC=BAC-EAC
• New terminology used by the PMI
• BCWS=PV
• BCWP=EV
• ACWP=AC
• Use cost variance to identify problems early
• Recalculating the estimated cost at completion using earned value implies the current trends will continue.
• Calculating schedule variance using earned value
• Earned value calculations can help measure schedule variance just as they help measure cost variance. It is useful because it takes into account the number and size of tasks that are behind schedule:
• Budgeted cost of work performed (BCWP)
• budgeted cost of tasks that are complete
• Budgeted cost of work scheduled (BCWS)
• budgeted cost of work that should have been completed to date
• Schedule variance (SV)
• the difference between the value of the work that was planned for completion and the value of the work that was actually completed
• SV=BCWP-BCWS
• Schedule variance percent (SV%): schedule variance divided by the planned cost to date
• SV% = SV / BCWS
• Schedule performance index (SPI): SPI > 1.0 = ahead of schedule; SPI < 0 = behind schedule
• SPI = BCWP/BCWS
• Graphing an earned value chart yields the most accurate presentation of a project's cost and schedule performance.
• Earned value is an easy calculation if you have a detailed plan and capture actual performance data.
• The WBS is critical to a successful earned value calculation. 
• Each task on the WBS must be a discrete task that meets the following criteria:
• Defined start and finish dates
• Produces a tangible outcome whose completion can be objectively assessed
• Costs must be assigned to the task, even if they are only labor costs
• Problems occur when the WBS contains one of the following mistakes:
• WBS tasks should rarely represent an ongoing activity, these are called level of effort (LOE) tasks and require some basis staffing level throughout the project
• PM time is an example of an acceptable LOE
• It is not possible to track cost or schedule variance within an LOE task that has not been adequately broken down.
• LOE tasks produce the illustion that the task is on schedule and on budget until it doesn't finish on time and every subsequent day costs and schedule variances increase.
• An LOE task that is understaffed sends the message that it is under budget because fewer people are working on the task than originally budgeted.
• Keep the lowest level tasks small, if the work packages are large, the variance is likely to be skewed (+/-) from week to week.
• Data isn't information
• Trends are more useful than snapshots. Forecasting on trends tells us whether our management strategies are working.
• Schedule variance doesn't tell the whole story. Projects with many concurrent tasks benefit from calculating variance because many are bound to be ahead and others late. If the critical path tasks are late, the entire project will be held up.
• Watch the schedule variance and the critical path.
• Size increases complexity for earned value.
• The projects that benefit most from earned value calculations have the greatest challenges implementing it.
• Escalation thresholds
• The determining factors for who handles a problem or approves a solution are its cost and schedule impacts. Thresholds accomplish several important functions:
• Change management thresholds separate the changes the project team can approve from the ones that require board approval
• Problem-solving thresholds bring the appropriate level of attention to specific problems.
• Rising a problem to the appropriate level immediately minimized the negative impact. Don't wait for regularly scheduled project meetings.
• Cost and schedule baselines
• Comparison point
• Planned and accepted cost-schedule-quality equilibrium for the project.
• A new baseline should be as realistic as possible and reflect the level of performance that led to the baseline change.

Chapter 11 Review

Clear Communication among Project Stakeholders


Project communication ranks high among the factors that make a project successful. Constant, effective communication among everyone involved in the project is facilitated using the project management techniques described in the text, all of which are essentially communication tools. This chapter describes the communication responsibilities of the PM, summarized as follows:

• Communicating with the project team comprises four areas:
• Responsibilities - each team member need to know what part of the project s/he has responsibility
• Make task assignments clear by observing these basic rules:
• Explain the deliverables
• Be clear about the level of effort expected and the due dates
• If you know of any obstacles or special information they'll need, make sure they know it too. Set them up for success.
• Hand out work assignments personally, allowing plenty of time for questions and discussion
• Coordination - enables the team to work together effectively
• Start the project with a bang, have a kickoff meeting. The kickoff meeting brings all the stakeholders together to look each other in the eye and commit to reaching goals. One format would be:
• Sponsor leads the meeting and explains the project purpose and connection to the overall business
• Customers are introduced and they offer an explanation of the project's importance to their business
• PM is introduced and is enthusiastically endorsed by the sponsor
• Project team members are introduced. (Vendors and contractors also need to be introduced.) On big projects there are usually too many team members to introduce, so have kickoff meetings for teams within the project too.
• Project memorabilia are distributed. They help create a sense of unity and team spirit - don't wait until the project conclusion.
• Celebrate. Everyone needs to get to know each other and communicate their enthusiasm for the project.
• Enlisting Cooperation (Marlene Kissler)
• When working with people outside your group, department or company, you must overcome a tendency to minimize contact. These are the people who need interpersonal contact the most. Some tips include:
• Make personal contact. Establish rapport face-to-face.
• Start with a warm-up visit, a brief introductory meeting at a mutually convenient time. Send a friendly memo with a succinct overview of your project prior to the meeting and allow them ample time to review it and bring their questions.
• Ask for their help. Ask if they can meet the project schedule, giving them an opportunity to say no. Make sure they have realistic workload support from their manager.
• Personally introduce them to their contacts and technical resources in your company or department. Sit in on high-level meetings if necessary. Make sure your group is accessible and helpful.
• Provide an in-depth explanation in person including documentation they can refer to later. Don't force them to ask for anything.
• Invite them to all meetings and treat them like full team members.
• Include them in the information loop and make sure they are on all relevant distribution lists.
• Do milestone check-ins. Personally review the deliverables and catch miscommunications up front. Be explicit in your feedback about what has been done right and what needs improvement.
• Include them in all acknowledgement meetings and accomplishment write ups. Make acknowledgments appropriate to their level of contribution.
• Write them personal thank you notes.
• Write a memo to their supervisor specifically describing their contributions. Be fair, honest and timely with your report.
• If you don't employ these soft management skills, all the hard skills in the world won't get the project completed.
• Every component and every person on your project is important, and this includes interfaces with projects and people outside your project.
• A good project manager wants to be known as a person with whom people want to work.
• Set communication expectations
• Managing expectations applies equally to project communication
• Put the communication structure in place by setting up the structure for meetings and status reports, establishing the location of issue logs, and publishing change management procedures
• Configuration management
• Identify items/products
• Establish the control structure
• Assign configuration management responsibility
• Status - team members must be kept up to speed on the status of the project
• Schedule individual status meetings with every member of the team on a regular basis.
• You can't make them more productive if you don't know what they're working on and what problems they are struggling with.
• Put the meetings on the calendar
• Regular status meetings give the PM the opportunity to:
• Increase team cohesion
• Keep the internal team informed about project developments from sources external to the team
• Identify potential problems and share solutions
• Ensure that the team understands the progress of the project and works together to determine any changes to the project plan
• Make sure the entire team shares the responsibility of meeting all the project objectives
• Guidelines for running the project status meeting are as follow:
• Be prepared. Everyone attending the meeting needs to have an open task report (OTR) before the meeting begins. An OTR is a subset of the project plan listing any tasks that should have been completed but weren't, plus the tasks scheduled for the next two reporting periods.
• Include part-time team members who have been working on project tasks or will be working on them in the next two weeks.
• Use the meeting to disseminate decisions make by management or customers, and pass on any positive feedback from these stakeholders.
• Using the OTR get the status of every task that should have been started or completed since the last status meeting.
• Leverage whole team presence by considering action on any problems. If special action needs to be taken, write it down and add a task to the project plan or an action to the issues log. 
• Every action should have a due date and person responsible for its completion.
• Don't try to solve problems that are too big for the meeting or that don't include everyone present
• Review readiness for future tasks on the OTR
• Review project logs including issue logs and the risk log
• Face-to-face status meetings are best, but for a geographically dispersed team this is not possible. In that case, more formality is required to ensure all the issues are raised and everyone is heard. 
• OTR provides this structure.
• Authorization - team members need to know about the decisions made by customers, sponsors and management in order to keep all project decisions synchronized
• The best way to communicate difficulties to customers and managers is to simply present them with the facts.
• Change management process has two parts
• the steps leading up to the initial approval of the product
• the process for controlling changes to that product
• Preset change thresholds automatically escalate the change management responsibility to an appropriate level. These thresholds include:
• Lowest threshold: changes the project team can approve; no impact to cost, schedule or the way the customer will use the product
• Middle threshold: changes that will affect cost, schedule or functionality; require more formal approval and are the domain of the change board up to predefined limits
• High threshold: changes that affect cost, schedule or functionality beyond the limits of change board approval; requires higher-level executives from customer and project organizations to be involved
• Who makes up the change board?
• Representatives from the project team
• The customer's representative
• Representatives from groups with related products
• Representatives from functional management
• The formal change management process guards against the anarchy of sudden change decisions and helps the PM manage expectations and preserve reputation
• Change management planning occurs during the project definition stage.
• Select the members of the change board and decide how often meetings will be held
• There are eight components to every change management process:
• Identification of deliverables
• Creation of the intermediate deliverables
• Stakeholder evaluation/modification
• Formal acceptance
• The recording of change requests
• Evaluation of requests and recommendations
• Ongoing stakeholder evaluation/modificaiton
• Formal acceptance
• The purpose of change management is to keep the overall cost-schedule-quality equilibrium realistic and desirable
• Closeout reporting

• This is most neglected project management activity, but it can bring a very high return to the project management organization.
• The deliverables from the project closeout serve two purposes:
• finalize the project in the eyes of the stakeholders
• learning opportunity
• Produce a lessons learned report
• The PM must plan for customer acceptance form the beginning and must be clear what from it will take and the work required to achieve it.

Chapter 10 Review

Building a High-Performance Project Team


Framework for building high-performance teams

• Positive team environment creates personal ownership and strong interpersonal relationships built on trust and respect. Creating this environment has four elements:
• Ground rules that describe work patterns and values of the team
• Prime the pump with a starting list of ground rules that can be completed by the group to elicit greater ownership
• A team identity built on commitment to a shared goal
• Communicate the goals and scope of the project
• Repeat, repeat, repeat (we learn through repetition)
• Establish the project's organizational alignment
• Demonstrate management support for the project
• Build team relationships based on understanding strengths and diversity
• The ability to listen
• Employ active listening
• Mitigate natural obstacles to listening, including: physical distractions, preconceived ideas about what the speaker is saying, confusing speech styles, mental noise from other problems
• Suspend judgment
• Once you have clearly understood the speaker, you are free to disagree
• Teach your team to listen
• Look for effective listening behaviors within the team, point them out and emphasize how they contributed to a better decision
• Add active listening to ground rules
• Active Listening Tips (Erik Van Slyke, 1999)
• Focus yourself physically, eliminate environmental distrations
• Use nonverbal cues such as nodding, eye contact and leaning forward
• Provide feedback such as paraphrasing to ensure that you understand what the speaker intended
• As relevant follow-up questions
• Listen for the idea behind the facts and data
• Suspend judgment and remain neutral in your responses until you understand
• Don't try to solve the problem or give advice until it is requested
• Don't judge what you are hearing either positive or negative
• Don't shift the attention to yourself
• Be aware of resistance and defensiveness from the speaker
• The ability to effectively manage meetings
• Effective Meeting Guidelines
• Before the meeting
• Send a meeting invitation specifying: purpose, planned start and finish, location, who will attend
• Send an agenda listing purpose and major topics of discussion with timeframe by topic and topic leader; frame each topic with a specific goal for the discussion
• During the meeting
• Start on time and reward promptness
• Review the process you expect to follow. Set ground rules and define how decisions will be made.
• Have a recorder tack decisions and key points leading to decisions (these become the meeting minutes)
• Use the agenda to structure the meeting
• Drive topics to resolution
• Facilitate the group and control involvement to encourage fair participation
• After the meeting
• Send out meeting minutes
• Collaborative problem solving can be built by focusing on four team abilities:
• Problem solving skills tied to an accepted problem solving process
• Problem Analysis Steps
• Identify the problem
• Find the source of the problem
• Set solution requirements
• Generate possible alternative solutions to the problem
• Select an alternative
• Perform risk and cost-benefit analysis on the selected option
• Make a decision and action plan
• Understanding and applying multiple decision modes, these include:
• Consensus
• Guidelines for Building a Consensus Decison
• Follow a structure problem solving process
• Manage group participation
• Embrace conflict as a sing of creative thinking
• Build consensus by integrating multiple viewpoints
• Know how you'll make the final decision (if consensus fails)
• Voting
• Delegating
• Autocratic
• Conflict resolution skills
• View conflict as a source of positive creative energy and apply these guidelines:
• Prevent the conflict by attending to the components of a high-performance team
• Acknowledge the conflict and focus on the problem rather than the people
• Frame the conflict in reference to the project
• Focus on interests, not positions
• Trade places, attempt to describe the situation from the other person's perspective
• Separate identifying and selecting alternatives
• Agree on process, not outcome
• Continuous learning
• Project managers can speed up team learning by: (Amy Edmondson, October 2001)
• Being accessible
• Asking for input
• Recognizing the need to learn
• Serving as a model
• Enlisting full participation
• Eliminating fear
• Recognizing success
• Continuous learning habits include:
• Actively identify and question assumptions
• Strive for honesty over conformance
• Make learning a conscious goal on an ongoing basis
• Be disciplined in creativity
• Question the project's goal, scope, and plan
• Leadership includes the following responsibilities relative to creating a high-performance project team
• Attend to the health of the team and its members
• Maintain the strategic vision
• Attend to team members
• Exhibit and demand accountability
• Display personal energy that inspires the team through example
• Stages of team development  (Bruce Tuckman, 1965)
• Forming: members are polite and avoid conflict; leader should respond to group uncertainty by providing structure and clear direction
• Storming: power struggles emerge as team gains clarity about goals and roles; leader should respond to chaos with structure and clear direction, recognize early accomplishments, facilitate group discussion, demonstrate effective listening, ensure equitable participation
• Norming: team members begin to trust each other, rules have become internalized; leader should delegate increase authority to team, build momentum by reviewing and improving team processes
• Performing: personal relationships are strong enabling high trust, team handles challenges with ease and is highly productive; team practically manages itself, leader should focus on removing obstacles and improving team processes, share leadership more widely with team
• Adjourning: closure rituals enable team to say goodbye; leader should facilitate closure by setting up opportunities to review team's performance
• Team Process Assessments can be used to identify what's working and what can be improved
• Decide on a feedback tool
• Set a timetable
• Evaluate the tool
• Take concrete actions based on the feedback

Chapter 9 Review

Balancing the Trade-off among Cost, Schedule, and Quality


The best predictor of project success is realistic stakeholder expectations. The PM must use definition and planning techniques to balanced the project scope against the three most common project constraints: time, money and resources.

There are three levels of balancing a project:

• Project: requires making changes that keep the project on track for its original cost, schedule and quality objectives. The PM should have the authority to make these decisions.
• Business case: if the project cannot achieve it's cost/schedule/quality goals then the business case for the project should be reexamined. Changing any of the project goals puts this decision beyond the authority of the project manager and team because:
• Cost goals are related to profitability goals
• Schedules are closely linked to the business case
• Changing features and performance level affects the quality and value of the end product
• Balancing the project to the business care requires agreement from all stakeholders, most of all those who will be affected by the changes
• Enterprise: the firm has to choose which projects to pursue. This is well beyond the authority of the PM and project team.

Techniques to balance at the project level  include:

• Reestimating the project. By checking your original assumptions in the statement of work and work package estimates, it is hoped that increase knowledge of the project will allow you to reduce pessimistic estimates. Make sure your estimating assumptions about productivity, availability of skilled people and complexity of tasks are consistent and match all available information. The second round of estimation should create a firmer foundation of facts supporting cost, schedule and resources estimates.
• Change the task assignments to take advantage of schedule float. This could reduce the schedule with no change in labor cost, however this may compromise efficiency on non-critical tasks. To be effective, the tasks must be of the same resource type, the noncritical task needs enough float to allow it to be delayed without delaying the whole project, and you must be able to reduce the duration of the critical path tasks by applying more people.
• Add more people to the project. Diminishing marginal returns predicts that this will work in most cases, but only so much, and this method requires qualified resources. Task independence is important to productivity from additional people...the more independent the task the more benefit to adding labor.
• Increase productivity by using experts from within the firm. Create an optimal mix of average and star players by making experts within the team by putting the same people on related tasks; and using the WBS, network diagram and work package estimates, identify the tasks that benefit most from top talent.
• Increase productivity by using experts from outside the firm. Don't let these experts become islands working alone, they should be integrated into the project team.
• Outsourcing the entire project or a significant portion of it. This moves a large portion of the work to experts who should be able to deliver with greater productivity and shortened schedule. However, shifting responsibility creates more risk as the PM will have less control and there will be less expertise inside your company at the end of the project than if it was done in-house. Also, finding qualified subcontractors for large projects is a major subproject in itself.
• Crashing the schedule. Reduce the duration of the critical path by identifying which tasks are least expensive to compress. It may throw off estimates. Maintaining a crash table (or a cost/schedule trade off table) will help to identify the path where the payback will be the greatest.
• Working overtime. Increasing the daily hours of the project team avoids the addition coordination and communication cost of adding more people. However, overtime costs more and there are many intangible costs and an increase in "undertime" to compensate.

Rebalancing at the business case level can be done by:

• Reducing the product scope
• Fixed-phase scheduling
• Fast-tracking
• Phased product delivery
• Do it twice - quickly and correctly
• Change the profit requirement

Balancing at the enterprise level mainly confronts the constraints of insufficient equipment, personnel and budget. Alternatives at the enterprise level are variations of the ones applied at the project and business case levels.

• Outsourcing
• Phased product delivery
• Shifting work to the customer
• Reducing product scope
• Using productivity tools

Chapter 8 Review

The Art and Science of Accurate Estimating


Project are unique and the more unique they are, the harder to accurately estimate. A new team with members unknown to the PM, new technologies on which the project is dependent, and incorrect timing predictions can all  impact the accuracy of an estimate. However there are some "classic" mistake we should take care to avoid:

• Don't make "ballpark" estimates when you're put on the spot. Instead refocus on the complexity of the estimating process and the desire to provide accurate information. If pressed, write down exactly what is being requested and start listing the questions that need to be answered before an accurate estimate can be produced.
• Don't confuse a bid with an estimate. A bid estimates the schedule and budget of a subcontractor with a tidy profit margin built in.
• Don't pad the estimate. Adding time and money to the estimate solely for the purpose of bringing the project in early and under budget unnecessarily ties up company resources and (if discovered) undermines the PM's reputation.

Estimating also have several "Golden Rules" that apply to all projects. These include:

• Have the right people make the estimates. Have people with experience with the work that is being estimated create the estimate. The people who will actually perform the work should also be involved in estimating it because people who have had a voice in estimating their own work are more motivated to achieve. Make sure the estimator understand the goals and techniques of estimating. PMs working independently never create accurate, useful estimation processes.
• Base the estimate on experience. Past performance data is critical to accurate estimation. Compariing actual performance to estimates is essential to refining the estimating model.
• Negotiate the equilibrium (cost-schedule-quality), not the estimate itself. As the estimate should be derived from the product specifications it is a more defensible stance to negotiate the equilibrium.
• It takes time and money to develop accurate estimates.

Estimates have three levels of accuracy that are used at different decision points in a project.

1. Idea evaluation or "ballpark estimate": can be off by as much as 90%, but are useful for initial sizing; the accuracy relies on the estimator's knowledge; the purpose is to determine whether it would be useful to invest in a more accurate estimate.
2. Project selection or order of magnitude (or "ROM" for Rough Order of Magnitude): has a wide variance but is based on extrapolations from other projects; similar to a ballpark estimate but includes a few hours of effort comparing the proposed project to past projects; acceptance of an ROM estimate may initiate a project (the PM will then be assigned and tasked with defining and planning the project and in so doing creating a more detailed estimate).
3. Detailed estimates (bottom-up estimates): include all schedule and resource information and a forecast of a project budget and cash flow; this estimate will be used to measure the project's success and is based on product specifications.

Phased estimating requires cost and schedule commitments for only one phase of the project at a time. The method recognizes that it is impractical to demand a complete estimate at the beginning of the product life cycle, instead breaking down the project into phases which are considered separately as projects. Phase gate development includes decision points at the conclusion of each subproject to determine whether the project will continue to the next phase given the additional information derived from the concluding phase.

Apportioning (or top-down estimating) assigns a total project estimate then assigns a percentage of that total to each of the phases and tasks of the project. Although this is rarely as accurate as bottom-up estimating, it can be useful in determining what projects to pursue. Making useful estimates in this way relies on:

• Historical projects that are very similar to the current project since the apportioning formula is derived from historical data.
• Accurate overall estimates since the pieces are a percentage of a designated total.

Parametric estimates use a basic unit of work to act as a multiplier to size the entire project. It is always based on historical data and requires the estimator to have a solid parametric formula. Parametric models can be used at either the project or task level; greater accuracy is achieved by first estimating low-level tasks using parametric models then combining these work packages to build a project or phase estimate; the variables in the parametric formula almost always require detailed product specifications.

Bottom-up estimating requires the most effort, but is also the most accurate. Detailed tasks are estimated and then "rolled up" to create a project or phase estimate. The accuracy of the entire model is dependent on the accuracy of the work package estimates. Bottom-up estimating works only to build the detailed phase estimates.

The detailed cost estimate becomes the standard for keeping costs in line, and forecasting cash flow enables the project's funding to be planned and available when needed. It is important to consider the following categories of costs when developing a detailed estimate:

1. Internal labor cost (people employed by the company)
2. Burdened labor rate (average cost of an employee including wages, benefits and overhead)
3. Internal equipment cost (special equipment that is not routinely available)
4. Expendable equipment (with consideration that it could be used on multiple project and may only be partially used up on this project)
5. External labor and equipment costs
6. Materials costs (these are estimated primarily from product specifications)

Chapter 7 Review

Realistic Scheduling


A realistic schedule includes a detailed knowledge of the work to be done, has task sequences in the correct order, accounts for external constraints, can be accomplished on time, and takes into consideration the objectives of the project.

A predecessor table and a network diagram are two ways of recording sequence constraints. Two rules when graphing task relationships with a network diagram: define task relationships only between work packages, and task relationships should reflect only sequence constraints between work packages, not resource constraints.

Milestones have zero duration, but are useful to mark significant events in the life of a project such as major progress points.

• Project start and finish milestones are useful anchors for the network.
• Milestones can be used to mark input from one party to another (aka external dependencies).
• Milestones can represent significant events that are not already represented by a work package or summary task.

The finish-to-start relationship indicates that one task must be completed before its successor can begin. This is the most common type of relationship. Start-to-start relationships allow the successor task to begin when its predecessor begins. Finish-to-finish tasks can start independently of each other.

Bottom-up estimating builds a cost and schedule estimate from the summation of cost and schedule estimates for each work package. Cost estimates come from three sources: labor estimates, equipment estimates, and materials estimates (materials costs should be estimated from product specifications, not bottom up estimates). These three cost sources can be replaced by fixed-cost bids.

Labor and duration are not always related in an intuitive way,  you need to consider productivity. Adding people to simple tasks always reduces the duration. However, for tasks involving knowledge workers, adding more workers does not always result in greater productivity or a shorter duration of the task. Also people who spend all their time on a project tend to be more productive than people who are spread across multiple projects.

Calculating an initial schedule is key to establishing realistic schedules and meeting them. It provides detailed schedule data for every work package including early start (earliest begin date for a task), early finish (earliest finish date), late start (latest date a task can start without delaying the project), late finish (the latest date a task can finish without delaying the project).  Calculating these dates is a three step process:

1. Forward Pass: works through the network diagram from start to finish to determine the early start and early finish for each task.
2. Backward Pass: works through the network diagram from finish to start to determine the late start and late finish dates for every task.
3. Calculate the float: determine which tasks have schedule flexibility and which define the critical path (the task progression that has zero or negative float and must be completed on schedule to keep the project on schedule). 

Gantt charts are the most common way to display a project schedule. The time scaled network can also be used when it is important to condense the network onto less paper. The completed initial schedule has not yet taken into account  people and equipment limitations which must be assigned and leveled. It is most productive to have consistent, continuous use of the fewest resources possible.

Resource leveling begins with the initial schedule and work package resource requirements then follows a four step process:

1. Forecast the resource requirements throughout the project for the initial schedule
2. Identify resource peaks
3. At each peak, delay noncritical tasks within their float
4. Eliminate the remaining peaks by reevaluating the work package estimates

If the resource leveled plan is unrealistic, the PM should restimate work packages and look at delaying tasks within their float to remove the worst resource peaks and valleys. Failing that the next option is to accept a later project completion date.

Chapter 6 Review

Work Breakdown Structure: Break Your Project into Manageable Units of Work


The work breakdown structure (WBS) is a tool for breaking down a project into its component parts, the foundation of project management, and one of the most important techniques of PM. The WBS can take either a graphical or outline form, though the outline is more scalable for large projects.  The WBS helps to:

• Provide a detailed illustration of project scope
• Monitor progress
• Create accurate cost and schedule estimates
• Build project teams

The WBS takes the deliverables listed in the Statement of Work as the high level task which are then broken down into levels of summary tasks culminating in work packages that are assigned time and cost estimates. Work packages should include the Project Management activities under a Project Management summary task, and all work packages should sum to the total cost and time estimate for the full project. Ideally, work packages should be no smaller than 8 hours or longer than 80 hours, or longer than the time between two status points. This will help make the work packages easier to manage. Work packages should also be parsed and named according to activities that produce a product.

The WBS can be the most detailed and time consuming portion of project planning, however, done correctly it can save immense time and money be averting changes to scope later in the project.

Chapter 5 Review

Risk Management: Minimize the Threats to Your Project

All activities of the project manager can be reasonably viewed as risk management. Risk management is the means by which uncertainty is systematically managed to increase the likelihood of meeting project schedule, cost and quality objectives. Two types of risk impact a project: known unknowns (which can be prepared for) and unknown unknowns (which cannot reasonably be predicted). Project risk is the responsibility of the PM, while business risk responsibility lies with the project owner.
To successfully manage risk throughout a project, risk planning must be an ongoing process. As follows:

1. Identify risks through a systematic search for all factors that threaten project objectives
• Engage stakeholders in risk planning through brainstorming sessions and more structured interviews
• Use a risk profile to apply lessons learned from previous, similar projects and document the lessons learned on this project for future similar projects
• Continue to identify risks during detailed planning, scheduling and budgeting
2. Analyze and prioritize these identified risks based on the possible damage and probability of occurrence
• Define the risk with condition and consequence statements
• Prioritize using "expected value = probability x impact" formula
3. Develop response strategies to reduce the possible damage and/or the likelihood of each risk
• For any risk there are several possible response strategies:
• Accept the risk and choose to do nothing about it (low impact or low probability)
• Avoid the risk by chosing not to do that part of the project or doing a lower-risk alternative to meet project objectives
• Develop contingency plans 
• Transfer the risk (subcontract that portion)
• Mitigate the risk
• Record risk management strategies in a risk log
• Make sure someone is responsible for each risk
• Rank by risk severity and probability
• Remove risks that do not materialize
4. Establish reserve funding for these response strategies based on the probability and magnitude of the risk
5. Implement continuous risk management by reanalyzing and reprioritizing (and reevaluating responses) given new and revised information as the project progresses
• Monitor known risks on the risk log
• Check for new risks at regular status meetings (raises risk awareness of the team)
• Repeat major risk identification activities at preplanned milestones within the project
• When new risks are identified, prepare response plans and ensure sufficient reserves exist

Risk management is one of the most important skills in project management draws its power (like many other PM tools) from a systematic and methodical approach to identifying, measuring, prioritizing and responding to potential risks to achieving project goals.

Chapter 4 Review

Chapter 4: Write the Rules - Five Key Documents to Manage Expectations and Define Success


Project Rules are the foundation of a successful project. Agreement on the goals of the project among all parties involved, control of the scope of the project, and management support are the crucial factors that are defined in the following project documents.

Project Charter.  This document comes from the Project Sponsor (and the Customer, if possible) and announces that a project has begun while demonstrating management support for the project and project management. It establishes the PM's authority to make decisions and lead the project. It is distributed widely and comes first among these project documents.

Statement of Work (SOW). Lists the goals, constraints and success criteria for the project. Once written this document is subject to negotiation and modification by stakeholders, but once formal agreement is reached on its content it becomes the project rules. At a minimum, the SOW includes:

• Purpose statement (why are we doing this project?) - guides the project team's decision making and clarifies the purpose of the project for the customer.
• Scope statement - describes the major activities of the project in such a way that it will be clear if extra work is added later, and explicitly includes what is NOT included in the project.
• Deliverables (what is the project supposed to produce) - tells the team what it is supposed to produce including intermediate and end deliverables; product descriptions should be referenced in deliverables but deliverables does not reiterate the product description, if a detailed product description does not already exist then that should be the only deliverable for a project.
• Cost and schedule estimates - must be realistic and accurate.
• Objectives - defines the measures of success beyond producing the deliverables on time and under budget; objectives should be specific and measurable to provide a basis for agreement on the project.
• Stakeholders 
• Chain of command

Responsibility Matrix.  Precisely details the responsibilities of each group and major player in a project and shows cross-organizational interaction. Each item on the matrix of major activities and stakeholder groups is assigned a code: R (responsible for execution), A (approval authority), C (must be consulted), and I (must be informed). This tool manages the role of the project office, and, once accepted, gives the PM a written document to refer to in the event of a dispute.

Communications Plan. Establishes a written strategy for getting the right information to the right people at the right time; defines which stakeholders need what information (authorization, status change, coordination); and should include an escalation procedure; communications should be repetitive, multichannel and include informal communication.

Project Proposal. Launches the project and overlaps the content found in the SOW verifying earlier assumptions or developing topics in greater detail; results from a mini-analysis phase that assembles enough information to make the decision to formally launch the project. The Project Proposal contains, at a minimum, the following:

• Project goal - states the specific desired results from the project over a specified time period
• Problem/Opportunity definition - describes the problem/opportunity without suggesting a solution
• Proposed solution - describes what the project will do to address the problem/opportunity
• Project selection and ranking criteria - categorizes the project benefit to facilitate decision making regarding the allocation of resources across a portfolio of projects
• Cost-benefit analysis - summarizes the financial reasons for taking on the project, expected benefits compared to costs to quantify ROI; includes tangible benefits, intangible benefits, required resources (cost), financial return
• Business requirements - primary success criteria for the project in terms of what the business or customer will be able to do as a result of the project's successful completion
• Scope - list and description of the major accomplishments required to meet the project goal
• Obstacles and risks - know risks (might occur) and obstacles (certain to occur) that could cause disruption of failure
• Schedule overview - expected duration, significant milestones and major phases

These project documents provide a vital framework for understanding, communicating and negotiating the purpose and details of the project, and a means of achieving consensus among stakeholders while keeping scope creep at bay.

Chapter 3 Review

Chapter 3: Know Your Key Stakeholders and Win Their Cooperation

The first task of the PM is to identify stakeholders. Stakeholders must agree on project goals and constraints, and ultimately will judge success. They are less likely to be overlooked in planning when we identify them based on classic roles.

These role include:
Project Manager. The PM has the primary role of keeping all disparate groups moving in symphony; the PM should be sure to define all stakeholder roles including their own (which can be spread over multiple people). When leading the stakeholders, the PM should control who becomes a stakeholder, and be sure to manage upward.
Project Team. The team does the work and can include contractors, vendors and customers. It's important to distinguish between the core team and vital, but more peripheral team members when establishing a communication strategy.
Management. Management roles fall into three general areas as follow:

• Sponsor. The sponsor is the specific executive accountable for the project's success. The sponsor:
• Issues the Project Charter
• Assists in developing the Responsibility Matrix
• Review and approves the Statement of Work, Project Plan, Cost/Schedule/Quality Equilibrium
• Meets with the PM regularly to advise and monitor the project, maintain project priority, and help the PM overcome organizational obstacles
• Resource Manager. These are functional or line managers who control and assign people and resources and are likely involved in setting company policies. They should review and approve the Statement of Work and Project Plan. Resource Manager can also offer assistance in resolving HR issues as the Project Team is comprised of their employees.
• Decision Makers. These managers influence project decisions and represent organizational policy, processes and assets. These include:
• Managers whose operations will be affected by project outcomes
• Managers representing other stakeholders
• Manager(s) to whom the PM reports
• Anyone else with veto authority on the project

The Customer. Although difficult to identify in some environments, the customer is whoever pays for the project. The customer gets first and last word on product description, budget and success criteria. Customers supply requirements and/or funding.
Representatives of External Constraints. These include governing/regulatory agencies; financial organizations related to project financing; and individuals/organizations whose routine, property or profits will be affected by the project.

Identifying the stakeholders is essential to the success of all projects, and the breakdown offered by the text offers a simple and practical means to approach the question of who are the project stakeholders. In the context of my project, the stakeholders are clearly defined but viewing them through this role-based lens offers valuable insights into how project communication should flow.

Chapter 2 Review

Chapter 2: Foundation Principles of Project Management

• How is a project defined?
• Has a beginning and an end
• Produces a unique product
• Contrasts with ongoing operations
• Challenges that face project managers
• Personnel
• Estimating
• Authority
• Controls
• Project management is industry-independent, project managers are not. PMs require skills in three areas:
• Project management
• Business management
• Technical
• A successful project is delivered:
• On-time, according to schedule
• On budget, meeting forecast cost estimates
• With high-quality as defined by scope and performance
• Cost-Schedule-Quality Equilibrium
• Manage expectations by:
• Setting realistic expectations
• Managing expectations throughout the project
• Delivering the promised product, on time and within budget
• Project management functions
• Project definition
• Project planning
• Project control (progress measurement, communication, corrective action)
• Project Life Cycle (how to manage the work)
• Define
• Plan
• Execute
• Close out
• Product Life Cycle (work required to create a product)
• Requirements
• Design
• Construct
• Operate
• Organizational models
• Function-driven
• Matrix organizations
• Project-oriented organizations
• Projectized firms
• Programs
• Product-oriented organizations
• Five issues of project management affected by organizational structure
• Authority
• Communication
• Priority
• Focus
• Chain of command

For me, the lesson of managing project expectations, the need for project managers to have technical skills in their industry, and the difference between the project life cycle and the product life cycle were the most significant concepts of this chapter. Although the book has address project management at a fairly high level thus far to set the scene for subsequent chapters, the concepts and perspectives it presents match my experience. 

Chapter 1 Review

From The Fast Forward MBA in Project Management, Third Edition by Eric Verzuh

Chapter 1: Project Management Is the New Critical Leadership Skill

• Project management is a strategic strength. It has absolutely been true in my career that leading projects and turning a vision into tangible products, services and outcomes has made me stand out. It is a discipline that can be learned and a skill set so portable that it can be applied universally.
• Art and Science of Project Leadership: Five Project Success Skills
• Agreement among the project team, customers and management on the goals of the project
• A plan that shows an overall path and clear responsibilities and that can be used to measure progress during the project
• Constant, effective communication among everyone involved in the project
• A controlled scope
• Management support

Having worked in an organization where organizational change was a constant and project managers were at the core of organizational effectiveness. The five project success skills resonate deeply with my experience. I can think of examples of projects which, lacking just one of the five factors above, have spun horribly out of control.
Each of these applies to my project, however the plan and communication seem to me to be the most relevant to the accreditation process as management support, a well-defined (controlled) scope and a high degree of agreement already exist in this case.

Project Proposal

PROJECT GOAL:

To achieve accredited status for an unnamed university's MBA program by the end of 2012, at a cost less than might otherwise be paid to an educational consultant by understanding, planning, coordinating and communicating the process, documentation and events necessary to successfully complete the application process.

DEFINITION OF OPPORTUNITY:

Although non-accredited universities do operate successfully, it is difficult to recruit students and foster a thriving intellectual community without some means of externally validating the quality of the program. As the university in question is a fairly new institution, it is still in the process of publicly establishing itself as the center for leadership, learning and innovation that it wishes to become. At the same time, as with any business, it is vital that the university generate the revenue necessary to maintain its operations. As education is our business, this translates to enrollment. As it competes with many other high-quality institutions of higher learning in the Bay Area, it is important that we demonstrate that an education from this university is at least on par with our peer institutions as we further differentiate ourselves from our competitors. This challenge can be measured in terms of our enrollment to capacity ratio, the number of admissions applications and the number and nature of inquiries about this university from prospective students.

PROPOSED SOLUTION:

By achieving accreditation from a well-known and respected body such as an accrediting agency, the university can publicly validate the high-quality of its degree programs which will both place it on par with other accredited institutions and open the door to many potential applicants who may be too risk averse to attend an pre-accredited institution.

Accreditation will also afford the university such benefits as the ability to allow students to use state and federal grant, scholarship and loan programs to help fund their education, and to issue I-20 visas to international students who wish to study at the university thereby further broadening access to a quality  education.  Accreditation also affords such benefits as freeway signage and the right to use a “.edu” web address, which will help with school visibility and recruitment.

PROJECT SELECTION AND CRITERIA RANKING:

Accreditation is a goal that is whole-heartedly embraced by the university’s administration and facilitates their compliance, efficiency and revenue-oriented strategic goals. Although it is important to achieve accreditation as quickly as possible, the university wishes to thoroughly and methodically address the requirements and wherever possible use the accreditation process to enhance the operations and effectiveness of the organization as a whole.

QUALITATIVE COST-BENEFIT ANALYSIS:

Tangible benefits include an anticipated increase in enrollment and the ability to accept financial aid. Intangible benefits include an enhancement of the university’s reputation and visibility. Required resources include a significant amount of labor to research, plan, collect, organize and document information about the organization's operations; and the accrediting agency's application fee and site visit expenses.

The financial return from accreditation will not be realized immediately; however, accreditation is essential for the university to meet its goal of becoming a global leader in innovative, flexible, industry-focused management and technology education programs.

BUSINESS REQUIREMENTS:

The project will be judged successful when the accrediting agency accredits the university’s MBA program; when students can use government financial aid to fund their CALMAT education; when international students are able to pursue their education at the university using I-20 visas sponsored by the university iteself; and when the university's alumni have their degrees grandfathered into accredited status.

SCOPE:

Understanding all the requirements of the accreditation process is essential to success, training and information gathering will be the vital first step. As these requirements are individually pursued, we may expect some degree of policy and process changes. Throughout this 18-month process, communication, organization will be essential.

OBSTACLES AND RISKS:

There is a risk that the university will not enroll and graduate enough students in the pre-accreditation phase to meet the accreditation requirements. Although much planning has been done to set and meet enrollment targets there is always a risk that they may not be met in the anticipated timeframe. One obstacle is that no one at the university has experienced the accreditation process as an applicant – the process is new to everyone involved – though we do have advisors who have experience as part of the accrediting body.

Staff turnover of essential employees is also a risk during this process. Although the university's management team is a dedicated group, there is always a chance that an unforeseen situation may result in staffing changes and a corresponding loss of experience and knowledge.

SCHEDULE OVERVIEW:

Meetings and training have already begun for key stakeholders and participants in the process. Preparation of documentation will begin in earnest in July 2011. The full accreditation process including the site visit and response to the university’s application is expected to take until the end of 2012 with numerous deadlines and benchmarks leading up to that point.

SMART GOAL REVIEW:

With regard to “SMART” criteria, this goal of this project is specific in outcome, timeframe and cost. Each of these elements are measurable, realistic and more or less agreed upon (explicit agreement will come as stakeholders ratify the statement of work, responsibility matrix and communications plan).

Charter Post

Greetings! My name Jamie and I'm writing this blog as part of my master studies at the California University of Management and Technology (CALMAT) in San Jose, CA. This blog has been specifically created as a venue to explore the topic of Project Management. Despite working in project management -- of one form or another -- for ten years, this is my first formal instruction on the topic. I'm currently working as Director of Marketing and Strategic Communication for a local university, as well as trying to launch a startup solar manufacturing company (we need preformulation seed money).
 While I don't technically need to take this class for my degree (Computer Science and Information Technology), I believe there is a great benefit to be gained from learning the project management skills set and the language of projects. I'm looking forward to refining my project management skills, learning from and discussing the project management experiences of my classmates, and generally helping to build and participate in what I hope will be a supportive and enduring community of  project management professionals. I'm also considering using this course a springboard to PMP certification through the Project Management Institute.

To get this ball rolling on this blog, I've started with a few amusing cartoon examples of project SNAFUs. Enjoy!