Chapter 6: Project Activity and Risk Planning (Chapter 5 in Chinese Edition)

1. Chapter 6:Project Activity and Risk Planning(Chapter 5 in Chinese Edition) Jason C. H. Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99258 chen@jepson.gonzaga.edu

2. Part II Project Planning

3. Project Management

4. Why do Projects Fail? Studies have shown that the following factors contribute significantly to project failure: • Improper focus of the project management system • Wrong level of detail • Lack of understanding about project management tools; too much reliance on project management software • Too many people • Poor communication • Rewarding the wrong actions

5. Project Triangle(Project Management Trade-offs) Cost Time The center of project triangle is QUALITY Scope The objective of the PM is to define project’s scope realistically and ultimately deliver quality of product/serviceon time, on budget and within scope.

6. Why Planning?Reasons for Planning • To eliminate or reduce uncertainty • To improve efficiency of the operation • To obtain a better understanding of the objectives • To provide a basis for monitoring and controlling work

7. MOST MANAGERS DO NOT LIKE PLANNING DUE TO THE FOLLOWING: • It takes time. • You have to think. • It involves paper work. • You are bound to systematic procedures. • You are committed to achieve a specific result within a specified time period.

8. Effective Planning An effective plan will be: • Explicit • stated in detail, leaving nothing merely implied. • Intelligible - • it must be understood and be comprehensible. • Flexible - • capable of accepting change. • Controllable - • capable of being monitored for control purposes.

9. DEFINITION OF A PROJECT LIFE CYCLE CONCEPTUAL PHASE FEASIBILITY AND PRELIMINARYPLANNING PHASE DETAILEDPLANNING PHASE IMPLEMENTATION PHASE CONVERSION OR TERMINATIONPHASE RESOURCES Resources Utilized PMO PMO TIME PMO: Project Management Office

10. PLANNING QUESTIONS OFTEN ASKED • Who plans the project? • Who executes the project? • Who is responsible for monitoring work and controlling work? • Who is responsible for providing feedback regarding the planning and execution phases of a project? The Line Manager(s) ? The Project Manager ? Both Parties ?

11. Project Manager vs. Line Manager • A Project Manager manages the work taken up by a single project whereas the Line Manager will be managing the work taken up by a line of projects. • The Line manager will interact/liase with the Project Managers who manage the projects that fall in his line. • Usually projects in organizations are aligned based on the line of business, catered to, by the project. Hence, they will have a Line Manager who manages all those projects.

12. Project Manager’s Responsibility • Project Manager will define: • Goals and objectives • Major milestones • Requirements • Ground rules and assumptions • Time, cost, and performance constraints • Operating procedures • Administrative policy • Reporting requirements

13. Line Manager’s Responsibility • Line manager will define: • Detailed task descriptions to implement objectives, requirements, and milestones • Detailed schedules and manpower allocations to support budget and schedule • Identification of areas of risk, uncertainty, and conflict

14. 6.1 Initial Project Coordination and the Project Charter • Early meetings are used to decide on participating in the project • Used to “flesh out” the nature of the project • Outcomes include: • Technical scope • Areas of responsibility • Delivery dates or budgets • Risk management group

15. Outside Clients • When it is for outside clients, specifications cannot be changed without the client’s permission • Client may place budget constraints on the project • May be competing against other firms

16. Project Charter Elements • Purpose • Objectives • Overview • Schedules • Resources • Personnel • Risk management plans • Evaluation methods

17. Systems Integration • Performance • Effectiveness • Cost

18. 6.2 Starting the Project Plan:The Work Breakdown Structure (WBS) • A hierarchical planning process • Breaks tasks down into successively finer levels of detail • Continues until all meaningful tasks or work packages have been identified • These make tracking the work easier • Need separate budget/schedule for each task or work package

19. Hierarchical Planning • Major tasks are listed • Each major task is broken down into detail • This continues until all the activities to be completed are listed • Need to know which activities “depend on” other activities

20. A Form to Assist Hierarchical Planning Figure 6-2

21. Work Breakdown Structure (WBS)

22. A Visual WBS Figure 6-3 WBS with account numbers shown

23. Career Day Figure 6-4 Partial WBS for college “Career Day”

24. The WBS • What is to be done • When it is to be started and finished • Who is going to do it • Some activities must be done sequentially • Some activities may be done simultaneously • Many things must happen when and how they are supposed to happen • Each detail is uncertain and subjected to risk

25. PURPOSE OF WBS • Detailed planning can be performed • Costs and budgets can be established • Objectives can be linked to available resources in a logical manner • Specific authority and responsibility can be assigned It is to STRUCTURE an ASSIGNED PROJECT into VARIOUS ACTIVITIES in ORDER that:

26. WORK BREAKDOWN STRUCTURE (WBS) LEVEL DESCRIPTION 1 Total Program 2 Project(s) 3 Task(s) 4 Subtask(s) 5 Work Package(s) 6 Level of Effort Most common type: Six-Level Indentured Structure

27. THE WBS BREAKS WORK DOWN INTO SMALLER ACTIVITIES THUS REDUCING THE RISK THAT ANY MAJOR OR MINOR ITEM WILL BE OMITTED WBS: SIX-LEVEL STRUCTURE LEVELS RESPONSIBILITY 1 2 3 4 5 6 Usually specified by the client and managed the project manager. Generated by contractor for in-house control and managed by the functional manager(s). Planning accuracy is dependent on the WBS level selected. The lower the level the greater is the planning accuracy but the higher the management cost.

28. WBS Controls SCHEDULES DECISION TREES MGT. COORDIN. WORK BREAKDOWN STRUCTURE ORGANIZ. CHARTS ACCOUNT- ABILITY COSTS

29. 6.3 Human Resources:The RACI Matrix and Agile Projects • Useful to create a table that shows staff needed to execute WBS tasks • One approach is a organizational breakdown structure (OBS) • Organizational units responsible for each WBS element • Who must approve changes of scope • Who must be notified of progress • WBS and OBS may not be identical

30. The Responsibility (RACI) Matrix • Another approach is the Responsible, Accountable, Consult, Inform (RACI) matrix • Also known as a responsibility matrix, a linear responsibility chart, an assignment matrix, a responsibility assignment matrix • Shows critical interfaces • Keeps track of who must approve what and who must be notified

31. Sample RACI Matrix Figure 6-7

32. COBIT®Answers Key Business Questions – A Model for Information Ethics Is my information technologyorganization doing the right things? Are we doing them the right way? Are we getting them done well? Are wegetting the benefits? * * Based on the “Four Ares” as described by John Thorp in his book The Information Paradox, written jointly with Fujitsu, first published in 1998 and revised in 2003

33. COBIT® Defined Responsibilities for Each Process – A Model for Information Ethics RACI Chart A RACI chart identifies who is Responsible, Accountable, Consulted and/or Informed. Functions Activities

34. Project Development Methodologies The choice of development methodologies and managerial influences distinguish IT projects from other projects. There are four main methodologies IT professionals use to manage the technology projects: Systems Development Life Cycle (SDLC) Prototyping Rapid applications development (RAD) Joint applications development (JAD)

35. Agile Project Planning and Management • When scope cannot be determined in advance, traditional planning does not work • Agile project management was developed to deal with this problem in IT • Small teams are located at a single site • Entire team collaborates • Team deals with one requirement at-a-time with the scope frozen

36. Project Requirements analysis Strategic Project Planning Resource allocation Project Planning Project Planning: Basic Four-Stage Model Generic Activity

37. Phases in the SDLC (Waterfall Approach) SDLC Revisited Project Identification and Selection Project Initiation and Planning Analysis Logical Design Analysis Physical Design Implementation Major features will be summarized in the next slides. Maintenance

38. Economic Feasibility Systems Definition/Investigation (Feasibility Study) What are new from the last slide? Operational Feasibility Can we afford it? Will it be accepted? Schedule Feasibility Technical Feasibility Will it be completed by the deadline? Does the IT capability exist? Organizational Feasibility Legal and Contractual Feasibility (Is it a good fit – objective of the organization Is the proposed system legally?

39. Systems Development Life Cycle SDLC typically consists of seven phases Initiation of the project The requirements definition phase The functional design phase The system is actually built Verification phase The “cut over” where the new system is put in operation and all links are established. Possible conversion methods Parallel Direct Phased in/out pilot The maintenance and review phase Which one is the best approach? Sabre mini case

40. System Conversion Approaches (4Ps) • Pilot • Implement entire system in limited portion of business • MRV uses system for selected customers. • Advantage: limits exposure to business if system fails • Phased • System is installed in phases or modules. • Each piece is installed and tested. • Parallel • Complete new and old systems run simultaneously • Very safe, but expensive • Plunge (or direct) • High risk if new system fails, no old system to fall back on • Only used if new system is not vital to company operation

41. Cut-over time Old System New System Old System New System Old System New System Old System New System Installation Conversion Methods: 4 Ps Parallel Pilot Phased Plunge/ Direct Name a major advantage and disadvantage of “Parallel” and Plunge”?

42. Skip the following ppts

43. 6.4 Interface Coordination Through Integration Management • Managing a project requires a great deal of coordination • Projects typically draw from many parts of the organization as well as outsiders • All of these must be coordinated • The RACI matrix helps the project manager accomplish this

44. Integration Management • Coordinating the work and timing of different groups • Interface coordination is the process of managing this work across multiple groups • Using multidisciplinary teams to plan the project • Requires structure Q: What do you have at Ming-Chi regarding “Integration”?

45. Managing Projects by Phases and Phase-Gates • Break objectives into shorter term sub-objectives • Project life cycle is used for breaking a project up into component phases • Focus on specific, short-term output • Lots of feedback between disciplines

46. Homework:Incidents for Discussion WBS (p. 265) • Ringold’s Pool and Patio Supply • Tasks to do: • 1. Create a WBS like Figure 6-3 or Figure 6-4 • 2. Then, answer the following two questions • a) Is John Jr.’s WBS projection reasonable? • b) What aspects of the decision will John Sr. consider?

47. Incidents for Discussion (p. 265)WBS (continued) • Ringold’s Pool and Patio Supply • Question: • 1. Is John Jr.’s WBS projection reasonable? • 2. What aspects of the decision will John Sr. consider?

48. Answer for Ringold’s Pool and Patio Supply • This is a good opportunity to engage the class in a discussion of the importance of involving the team in developing plans and schedules. • One way to do this is to engage the class in collectively creating the upper level or two of a WBS for the project. Chances are they will come up with several items that Junior missed in his, demonstrating the danger of working alone.

49. Answer for Ringold’s Pool and Patio Supply • John Sr. is asking a reasonable question, but his son is giving him a defective answer. Even though Junior’s WBS looks very precise, it would be dangerous to base any decision on it. Since, it has not been validated by anyone who has actual experience in installing pools, there is no way of knowing if the estimates are reasonable, or even if it has accounted for all the work. • Junior has made no effort to evaluate the requirements of the job. For example, he doesn’t list in his WBS anything related to permitting, electrical or plumbing. In addition to these concerns, John Sr. must consider several business issues including whether his company has the staff, skills, and equipment to take on this new area. He needs to consider whether this expansion matches his long-term goals for the business.

50. 6.5 PROJECT RISK MANAGEMENT