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Project Management Basic Concepts

Project Management Basic Concepts. What is a Project?. A Project is a series of activities and tasks that: Have a specific tasks and activities to be completed with certain objectives. Have a defined start and end dates Have funding limits (if applicable) Consume Resources.

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Project Management Basic Concepts

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  1. Project ManagementBasic Concepts

  2. What is a Project? • A Project is a series of activities and tasks that: • Have a specific tasks and activities to be completed with certain objectives. • Have a defined start and end dates • Have funding limits (if applicable) • Consume Resources

  3. Typical Project Structure Project Definition Project Monitoring Project Planning Project Implementation Project Evaluation Project Adjustment

  4. Project Life Cycle Resources and Effort Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Conceptual Design Advanced Development Detailed Design Project Implementation Project Termination • Goals • Scope • Baseline • Requirements • Feasibility • Desirability • Plan • Budget • Schedule • Management • Commitment • Define • Responsibility • Team • Organization • Structure • Detailed Plan • Kickoff • Manage • Measure • Control • Update and • Modify Plan • Problem Solve • Closeout • Document • Suggest • Improvements • Reassign • Dissolve Project • Team

  5. Successful Projects • A successful project is one which achieves the following objectives: • Completed On Time • Completed Within Cost • Meets Performance Criteria • Minimum Disruption of the Main Work of the Organization • Effective Utilization of Resources

  6. The Triple Play ofProject Management Constraints Time Cost Performance

  7. Triple Constraint Trade-offs $ Budget Better Performance Specifications Worse Schedule Early Late TIME

  8. Major causes of failure • Selection of a unsound project • Selecting the wrong person as a project manager • Lack of support from upper management • Misused management techniques • Project termination not planned

  9. Project Definition Build Canoe Rental Building on Coeur d A’lene Lake

  10. Form Project Team • Select Project Leader • Identify Key People • Gain Management Commitment • Define Project Team Operating Rules

  11. Project Manager

  12. Project Manager Skills • Scheduling and time mgt. skills • Technical skills ( scope of project ) • Leadership skills ( goals, performance measures) • Resource mgt., human relationship skills. • Communication skills • Negotiation skills • Marketing, Contracting, customer relationship skills • Budgeting and cost skills.

  13. Major Interactions of project stakeholders Government agencies Top Management Consultants Client Financial Managers Project Manager Subcontractors Project Team Other Organization

  14. Project Manager Responsibilities • Responsibility to the parent Org. • Responsibility to the project and client • Responsibility to the member of the project team

  15. Selecting Project ManagerList of some of the most popular attributes: • A strong technical background • A hard-nosed manager • A matured individual • Someone who is currently avaiable • Someone on good terms with senior executive • A person who can keep the project team happy • One who has worked in several departments • A person who can walk on ( or part ) the waters.

  16. Selecting the PM • Credibility • Technical credibility ( technical knowledge ) • Administrative credibility ( managing resources( money, people, material) keeping the project on scheule. • Sensitivity • It is related to the ability of the manager to discover the problems at early stages and solve the team’s problems if we have some conflects • Leadership and management style • Leadership is defined as the ability of affecting others in away that gurantees the project profitability to the org. and sociey. • Ability to work under stress

  17. Project Planning • There are several reasons why we must use considerable care when planning projects • The primary purpose of planning is to establish a set of directions in sufficient detail to tell the project team exactly : • What must be done? • When it must be done? • What resources to use ?

  18. Project plan Elements: • Overview : • A short summary of the objectives and scope of the project • Directed to top mgt. and contains a statement of goals of the project • A description of the managerial structure that will be used for the project. • A list of major milestones in the project schdule.

  19. Project plan Elements: • Objectives: • More detailed statement of general goals noted on the overview section. • The statement should include profit and competitive aims as well as technical goals. • General approach: • Describes both the managerial ( style of mgt. ) and the technical approaches ( required equipments, technology ) to the work.

  20. Project plan Elements: • Contractual aspects: ( list for ) • All reporting requirements • Customer-supplied resources. • Advisory commitees • Project review • Cancellation procedures. • Specific management agreements • subcontracts

  21. Project plan Elements: • Schedules: • Various schedules. • Lists all milestones events. • All tasks, and their durations….. • Resources: • The budget • Both capital and expense requirements are detailed by task. ( Project budget ) • Cost monitoring and control procedures.

  22. Project plan Elements: • Personnel : • Expected personnel requirements • Special skills needed • Types of training needed • Possible recruiting problems. • Legal and political restrictions.

  23. Project plan Elements: • Evaluation Methods: • Every project should be evaluated against standards and by methods established at the project inception. • This section include : • A brief description of the procedure to be followed in monitoring , collecting, storing, and evaluating the history of the project.

  24. Project plan Elements: • Potential problems: • External and internal potential problems.

  25. Work-Breakdown- Structure (WBS) • It is a result family tree , subdivision of the major tasks( hw, services , etc ) and the data required to produce the final product , it acts as a vehicle for breaking down the work into smaller elements.

  26. Work-Breakdown- Structure (WBS) • We have 2 types of WBS: • Managerial level • Technical level

  27. Earned Value Analysis • It is a continuous comparison between the plan of the project data and the actual data. Budgeted and Committed Cost: Variance = Budgeted cost – committed cost Variance (+ve ) = Unconsumed Cost Variance ( -ve ) = Over spend activities

  28. Cost and Schedule Variances

  29. Cost and Schedule Variances

  30. BCWSBudgeted Cost of Work Schedule NOW BCWS = X1 + X2 + X3 + X4 + X5 $ This is the sum of all the costs up to the specific activity that is stated in budget plan.

  31. BCWPBudgeted Cost of Work Performed BCWP = X1 + X2 + X3 + 0.8 X4 + 0.5 X5 $ This is the sum of all the costs up to the specific activity in relation with its completion percentage.

  32. ACWPActual Cost of Work Performed ACWP = Actual cost of work done. This is the total costs of the work done on reality provided by project manager on the financial monitor.

  33. If BCWP > BCWS ( over spend ) • If BCWP < BCWS ( time is late -ve ) • If BCWP > BCWS ( +ve time is more than sufficient )

  34. Forecasting • It is the process of prediction of the future events. • Benefits of forecasting: • To estimate the cost of remaining parts of a project ( forecasted value ). • To identify the source and places of certain problems in the budget plan. • It is a tool for corrective actions.

  35. ForecastingMathematical Expressions • The Cost Performance Index ( CPI ): CPI = BCWP / ACWP • It gives a good indication whether the project is performing financially well or not. • CPI > 1 : Good performance. • CPI < 1 : Bad performance ( shortages • Overspend ).

  36. ForecastingMathematical Expressions • The Schedule Performance Index ( SPI ): SPI = BCWP / BCWS • It is a good indicator for the project timing. • SPI > 1 : Good performance. • SPI < 1 : Bad performance (Poor ).

  37. ForecastingMathematical Expressions • Budgeting Cost to Completion ( BCC ): • The Amount of money needed to completion. • BCC = BAC – BCWP • It is defined as the amount of money required to complete a project where it is partially completed ( remaining money ).

  38. ForecastingMathematical Expressions • Estimated Cost to Completion ( ECC ): • Its more realistic value than budgeted. • ECC = BCC / CPI • It depends on CPI which is a by product of the actual cost of work performed. • Forecasted Cost to Completion ( FCC ): • FCC = ACWP + ECC

  39. Example • The R&D department of a company has been developing a new product line, the project manager is concerned whether the following provided data is exhibiting a good project performance, calculate the following and comment on the project status to convince the project manager. • CPI,BCC, ECC, SPI, FCC.

  40. Solution • BCWS = 20000 + 20000 + 37000 + 27000 + 12000 + 28000 = 144000 $ • ACWP = 23500+20500+23000+27000+4500+18500 = 117000 $ • BCWP = 20000 + 20000 + ( 37000 x 0.7 ) + 27000 + ( 12000 x 0.6 ) + ( 28000 x 0.75 ) = 119900 $ CPI = BCWP / ACWP = 119900 / 117000 = 1.02 good performance.

  41. BAC = Budget at Completion = 184000 • BCC = BAC – BCWP = 184000 – 119900 = 64100$ • ECC = BCC / CPI = 64100/1.02 = 62843.14 $ • SPI = BCWP / BCWS = 119900 / 144000 = 0.832 < 1 Poor performance according to time. • FCC = ACWP + ECC = 117000 + 62843.14 = 179843.14 $

  42. Comments • We do not have any financial problem i.e the budgeted cost (money resources) is larger than the forecasted values, we conclude that the money is available , it is more than sufficient as the indicators were positive, the only problem we have is the time.

  43. Comparing Projects

  44. Problem : Compare between the following projects according to the time and cost consumed: Project A Project B

  45. Scheduling • Scheduling : is the process of converting a project action plan into an operating time table. • Why scheduling ? To answer the following questions: • If each activity goes according to plan , then when will the project be completed? • Which tasks are most critical to ensure the timely completion of the project? • Which tasks can be delayed , if necessary , without delaying project completion and by how much? • More specifically , at what times should each activity begin and end? • At any given time during the project, how much money should have been spent? • Is it worthwhile to incur extra costs to accelerate some of the activities? If so, then which ones?

  46. Network Techniques • PERT • CPM • PERT/CPM is based on a diagram that represents the entire project as a network of arrows and nodes. • Two most popular approaches are : • AOA : activity on arrow ( PERT ) • AON : activity on node ( CPM )

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