2 - SIM335 v2-0 Nov 07

University of Sunderland
BA (Honours) Business Management

SIM335
Managing Projects
Version 2.0
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The University of Sunderland
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Managing Projects
Contents
How to use this workbook
Introduction
Unit 1
Project Concepts
Introduction 1
What is Project Management? 2
Types of project 5
Examples of Projects 7
The Role of the Project Manager and the Team 8
Summary 12
Unit 1 References 13
Unit 2
Planning and Monitoring Tools and Techniques
Introduction 15
Project Feasibility 16
Project Life Cycle 20
Project Objectives 24
Planning the Project 27
Sequencing Activities 32
PCs and Project Management Software 56
Summary 58
Unit 3
The Management of Project Cost And Risk
Introduction 65
Financial Project Appraisal 65
Payback 66
Net Present Value (NPV) 68
Estimating Methods 70
Putting Together the Detailed Project Budget 72
Common Causes of Cost Problems 75
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Project Accounting 76
Managing Risks 80
Summary 86
Unit 4
Project Team Structuring
Introduction 89
Developing Project Teams 90
Belbins Team Roles 98
Effective and Ineffective Teams 99
Multi-disciplinary Teams 100
Project Leadership 101
Motivation 106
The Project Managers Role 110
Summary 111
Unit 5
Project Control
Introduction 115
Scope and Quality Control 118
Managing: The Start of the Project 125
Controlling Project Objectives 127
Resource Control 128
Methods to Control Resource and Project Objectives 129
Controlling the Changes in the Project 136
Project Evaluations 137
Closing the Project 138
Summary 142
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How to use this workbook
This workbook has been designed to provide you with the course
material necessary to complete Management of Projects by distance
learning. At various stages throughout the module you will encounter
icons as outlined below which indicate what you are required to do to
help you learn.
This Activity icon refers to an activity where you are required to undertake a
specific task. These could include reading, questioning, writing, research,
analysing, evaluating, etc.
This Activity Feedback icon is used to provide you with the information
required to confirm and reinforce the learning outcomes of the activity.
This icon shows where the Virtual Campus could be useful as a medium for
discussion on the relevant topic.
It is important that you utilise these icons as together they will provide
you with the underpinning knowledge required to understand
concepts and theories and apply them to the business and management
environment. Try to use your own background knowledge when
completing the activities and draw the best ideas and solutions you can
from your work experience. If possible, discuss your ideas with other
students or your colleagues; this will make learning much more
stimulating. Remember, if in doubt, or you need answers to any
questions about this workbook or how to study, ask your tutor.
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Managing Projects
Introduction
The module will define the nature of projects and their management.
Various aspects will be considered including financial control and
management of risk, human resource elements (building and leading a
multi disciplinary team) and the control of time. The module will
examine the integration of time, cost and quality aspects of projects
through the application of relevant tools and techniques.
LEARNING OUTCOMES
Upon successful completion of this module, you will be able to;
1. Evaluate and apply a range of skills and techniques associated with the
management of projects.
2. Demonstrate capability to evaluate projects from a financial, human
resource and time related perspective.
3. Appreciate the requirements for control and the application of control
mechanisms.
4. Evaluate the relationship between time, cost and quality and
understand the alternate approaches available for managing them.
Skills
Demonstrate critical thinking and analysis skills:
a) Ability to apply and evaluate tools and techniques associated
with the management of projects.
b) Conduct reporting and diagnostic skills.
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Amplified content:
1. Project Concepts
Introduction to / overview of the management of projects.
2. Planning and Monitoring Tools and Techniques
Processes and tools for project plan development.
Resource planning.
Techniques and systems for project plan execution.
Project quality assurance systems.
Planning for the co-ordination of changes during projects.
3. The Management of Project Cost and Risk
The analysis and allocation of risk
The preparation of formal project proposals
Management of project cash flows
4. Project Team Structuring
a) Choosing suitable project team structures.
b) Project human resource management.
5. Project Control
The planning and control cycle.
Application of tools and techniques for scheduling project
activities, monitoring progress, managing variations and
slippage, updating and controlling project time and quality.
Management of project cash flows and incentives.
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Managing Projects Introduction Managing Projects
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Unit 1
Project Concepts
LEARNING OUTCOMES
Following the completion of this unit you should be able to:
Understand the factors that make up a project in todays business
environment.
Be able to analyse and understand the different types of project.
Examine and understand some of the general concepts involved in
project management and be able to explain the role of the project
manager, and the skills needed to practise project management.
Introduction
This module introduces the management of projects. Traditionally the
management of projects was considered more of an art than science, but
with the growing number of project management institutions,
associations and academic establishments, project management has
become more of a science, and a discipline, as accepted practices are
captured and formalised in the global body of knowledge.
This unit will consider why project management has become important
for organisations and explain what constitutes a project in todays
business world.
A brief history of project management is reviewed and how companies
use project management to improve company performance and
introduce new products and processes.
Some general concepts are introduced and the role of the project
manager is also considered, as well as the skills needed for project
management success.
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What is Project Management?
Project management has been around since the beginning of time. The
pyramids in Egypt stand to day because of sound project management
principles (although at the time they did not realise they were practising
sound project principles!). But although there have been excellent
project managers over the years, project management was not
recognized as a formal management concept until the 1950s. This first
section looks at what project management is and how companies are
being forced to look to project management techniques to improve
company performance. It also looks at the role of project managers, a
brief history of project management and the role of a projects key
stakeholders.
It was high profile aerospace projects, such as Polaris, NASA and other
US Department of Defence projects that led to the establishment of the
project management standards that they expected their contractors to
follow. Polaris was the first British project on which contractors were
required contractually to use advanced project management systems.
The construction industry started to see the benefits of project
management and started to adopt the new techniques. The 1970s and
1980s brought more practitioners on project management leading to the
development of theories, methods and standards.
Throughout the 1970s project management continued to grow and
develop into a multi-disciplined profession with its distinctive tools and
techniques. The economic pressures during this decade, OPEC oil
embargoes and the rise of environmental pressure groups had caused
many projects to be constrained or delayed. This in turn led to a period
of refinement of project management tools and techniques. More high
technology companies outside the defence and construction industries
started to use project management systems effectively.
In the 1980s project management tools and techniques were integrated
into accepted management practices. Such techniques were known as
Program Evaluation and Review Technique (PERT) and the Critical
Path Method (CPM). We will discussing these techniques in more
details in later sections.
Other issues taken on boardat this time includedthe integration of time,
cost and quality. These were beginning to be seen as critical by
management to the success of projects.
In the 1990s the globalisation of world trade and competition from the
Far East encouraged leaner, flatter and more flexible organisational
structures, together with more efficient systems. Companies found that
by using a management-by-project approach they could assign work to
small project teams, which were able to respond to innovation and new
ideas and keep the culture of the entrepreneurial company alive.
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In the 1990s large scales re-engineering and TQM processes needed a
direction for the implementation of these new projects (many of them
in-house), and managers turned to project management for direction in
tracking such initiatives. Project management is a structured approach
to planning and controlling projects. It is a set of principles, methods
and techniques that managers use to effectively plan and control project
work. We will look at all these principles and techniques in detail in the
coming chapters.
Business Trends
It is important to note that in todays business world project
management is not just about managing a new building or managing a
civil engineering project.
In todays business world there have been several trends that have made
companies concentrate more on project management concepts, notably:
Today the focus is on high quality, quick to market and
first class customer satisfaction. During the last 15 years
there has been a shift from mass production to custom
production of goods and services. To respond to this
managers have turned to project management to ensure
highly responsive management style. Companies are
changing from hierarchical management to project
management. Organizational charts are changing from
vertical structures to team- centred structures.
Jobs that do the same tasks every day are disappearing.
Middle management are also disappearing. The new
focus is on projects and teams assigned to specific tasks
or problems. Teams might be set up to launch a new
project or re-engineer a process. Projects are conceived,
staffed up, implemented and then shut down.
Companies offer less job security than before. They
outsource non-core activities. People define themselves
less by the companies they work for, more by their
profession. Pay is determined by skill level and the
marketability of the persons services rather than by
management hierarchy.
Richman (2002)
The 1990s also saw the increasing deregulation, reduced tariff barriers
and, more importantly, expanding IT facilities and communication(s)
through the Internet.
During the 1960s and 1970s the manual tasks and concepts that
predominate throughout project management (network diagrams, bar
charts, etc) were computerised using mainframe computers. However it
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was the introduction of the PC that led to the expansion and spread of
project management software.
As Burke notes:
The introduction of the PC in the late seventies (Apple 11)
and the IBM PC (1981) in the early eighties with
accompanying business software encouraged the growth of
project planning software and the use of project
management techniques
Burke (2003)
What is a Project?
This section defines what a project is and gives several definitions of
projects. There is no one definition of a project. However most experts
agree that a project is a unique thing with a start and a finish. Most
experts also agree what a project is not: routine work, every day tasks
and the normal day to day activities of a company or person.
The following list is not exhaustive, but it will help clarify exactly what a
project is:
Buchaanan and Body (1992), defined a project as:
A unique venture with a beginning and an end; conducted
by people to meet established goals, schedule and quality.
Turner (1993), described a project as
An endeavour in which human (or machine), material and
financial resources are organised in a novel way, to
undertake a unique scope of work, of given specification,
within constraints of cost and time, so as to deliver
beneficial change defined by quantitative and qualitative
objectives.
Wilson (2002) described a project as:
Any new work if it lasts for a limited period, involves
different groups of workers, and has penalties for late
completion. The project manager is responsible for first
planning, then controlling the allocation of time, money,
people and other resources.
The British Standards Institution defined a project as:
A unique set of coordinated activities, with a definite start
and finishing point, undertaken by an individual or
organization to meet specific objectives within defined,
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scheduled cost and performance parameters. (BS
6079-1,200:2).
Another way of looking at a project is as:
An event or thing that with a start and a finish and clear
objectives covering time, cost and quality.
The most efficient way of introducing changes.
Defining what has to be done in terms of time, cost and
quality.
Using a plan to do these, and working to this plan,
ensuring that progress is maintained.
Using appropriate project management techniques to
plan, monitor and maintain progress.
Employing persons skilled in project management
including a project manager who is responsible for
introducing change and its successful accomplishment.
Types of project
Projects are usually categorized into one of three types:
Change driven: the need to change operations to match
the environment.
Market driven: producing a new product in response to
market needs. For example, BMW uses project
management techniques to deliver its new models.
Crisis driven: Usually in response to an urgent situation.
A pharmaceutical company may start a project to manage
the re-call of a defective product, and introduce the
replacement and the following public relations campaign.
Sometimes a number of related projects are done together. This is
usually called a programme. Programme management is often a very
large project that will be broken down into a number of smaller projects.
As Field and Keller highlight:
Sometimes the work needed to achieve a major
organisational objective will be far greater than can easily be
organized and carried out in a single project. This may
mean that the organisation will undertake a programme
that consists of a number of interrelated projects.
Field and Keller (1998)
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Another example from Field and Keller puts programme management
in perspective:
A good example of a programme of work is the
development of fixed-wing vertical take-off and landing jet
aircraft. The result was the successful Harrier jump jet, but
the programme began about two decades earlier, with a
project exploring the control of vertical take-off and landing
in a test-harness referred to lovingly as the Flying
Bedstead. Later projects that grew out of the Flying
Bedstead explored what was required to allow a fixed-wing
aircraft hovering, lifting or descending vertically to change
to travelling forward horizontally. Over the years the
technology, techniques and design were refined until it was
possible to build and test a prototype aircraft, and finally to
announce the design, take orders and build the Harrier.
Each phase of this programme of development contained
one or more projects which had proper schedules and
budgets, while the overall programme tended to develop
as projects successfully produced answers to key questions
in the effort to find out whether such an aircraft was
feasible, and if it was, what design parameters were
necessary for it to work satisfactorily.
Suppose that one of the early exploratory projects in
developing the Harrier had shown that the overall objective
a fixed-wing vertical take-off and landing jet aircraft was
unfeasible for some reason, such as the likely cost of the
final product far exceeding what the market could afford to
pay. When this becomes known, management can cease
continuing this development and use the financial and other
resources freed thereby to do other things of importance to
the organisation.
There are other reasons for breaking up a large project or
objective into a programme of smaller ones. One reason
might be that an appraisal of the financial situation in an
organisation will show that even if the whole of a large
project cannot be achieved at once, benefit can be gained by
taking a phased approach to the work. A smaller project,
which can quickly achieve part of the objective, may be
worth doing now, while further work is delayed until the
financial situation improves. It is also possible that an
organisation will wish to gain experience with a particular
part before proceeding with the rest, or feel it desirable to
minimize the inevitable disruption to working that the
change inherent in a project always brings with it.
Successful projects have clear deliverables and objectives from the start;
they also have time, cost and quality objectives. Projects must also meet
the customers requirement.
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Examples of Projects
To understand this more fully lets look at some examples of projects:
The research and development department of a
pharmaceutical company bringing new drugs to market
will use project management techniques.
The marketing department of a household products
company will use project management to help with
market research, arranging promotional events and press
releases.
A telecommunications company wishes to improve its
Customer Services by rationalising its customer repair
and maintenance offices by creating a more flexible
structure able to cope with future growth, and move to
Enquiry Desks dealing with all customer needs.
A research and development department in a chemical
firm may be asked to devote time to exploring the
possibilities of developing new products using a new
polymer.
The last example was from Field and Keller (section 1.1). Look at the
other examples in Field and Keller to get a more thorough
understanding of the different types of projects.
By now you will be aware of the need for projects to be managed by a
project manager, but who else is important in making projects go
smoothly? Who actually owns the project when it is completed?
Field and Keller define six key people who are critical to the success of
all projects: Sponsor, Champion, Client, Customer, Owner and
Stakeholder. You will come across these terms as we progress through
the module. They are defined as follows:
Sponsor: The person who ensures that the project is
successful at the company level.
Champion: The chief promoter of the project.
Client: The person who pays for contractual services. For
inter-company projects, the contract may be an informal
one.
Customer: Very similar to the client; could be the person
who buys or pays for the projects, but more normally it is
the person whom one is concerned with.
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Owner: Again very similar to client and customer. Think
of it more in the sense of someone with a strong
attachment to the project.
Stakeholder: Everyone who has an interest in the project
success.
ACTIVITY
Look at Activity 1.1 in Field and Keller. Note down answers to the questions
they outline. If you have not been involved in any projects at work think of a
personal/home project that you have been involved with.
ACTIVITY FEEDBACK
Refer to Field and Keller for activity feedback
READING ACTIVITY
Read section 1.1 of Field and Keller.
The Role of the Project Manager and the
Team
This section looks at the role played by project managers and the team
helping him achieve his goals. We look at the skills needed to manage
projects successfully and the essential skills project managers need to
operate successfully.
The project manager is the person assigned to manage a specific project
and is expected to meet the approved objectives of a project, including
project scope, budget and schedule.
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The project manger leads the project and provides vision, direction and
encouragement. The project manager takes lead in project planning to
determine the schedule and budgets necessary to meet the project
objectives. The project manager is responsible for delivering the project
once the project has been approved by senior management.
The PM is responsible for the project support team. On small projects
people and resources are not normally assigned directly to the project
manager. People in other departments work on the project, and for the
project, but usually stay in their functional department reporting to
their normal manager. On large projects a dedicated team will be
assigned to the project, with everyone reporting to the project manager,
or to functional managers, who in turn report to the project manager.
ACTIVITY
What do you consider to be the basic skills required for successful projects and
why do you think these are important ?
ACTIVITY FEEDBACK
Please refer to the text below.
Project Management Skills
What skills does a project manager need? Skills of flexibility,
resourcefulness, ability to negotiate, personal drive and a large measure
of common sense. On top of these a project manger needs skills that
directly relate to managing and delivering the project. These skills (as
defined by Richman, 2002) which we shall call basic skills, are listed
below.
Basic Project Management Skills
People skills.
Project management skills.
Technical skills.
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Integration Skills.
People skills: the project manager needs to be an expert at
communication. He also needs to be able to manage change andconflict,
as well as motivate others to achieve project goals. He also needs to
understand how to use authority and persuasive skills. Authority can
be defined as the ability to get another person to accept responsibility
and produce the desired result. Persuasion is the ability to convince
another person to accept your values and take on responsibility.
Project management skills: these skills include being able to estimate
costs and prepare budget plans, to be able to analyse reports, conduct
project audits and analyse progress information. Other skills include
being able to plan and execute a project.
Knowledge of the organisation: the project manager will need to
understand he organisation inside out. He will need to negotiate with
many people inside the organisation and he will need to understand
their needs, personalities and desires.
The more he knows about the organisation the more he will be able to
negotiate around problems and unforeseen challenges that crop up and
resolve them successfully.
Technical skills: Project managers need to have skills in the technical
area of the project. The greater the technical knowledge the greater the
chance of success in the project. The project manager is also responsible
for the integration phase of the project; this is where technical
experience is essential.
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Project management skills
People skills
Integration skills
Technical skills
Knowledge of organisation
Figure 1.1 Diagram of Basic Skills (Taken from Richman 2002)
Integration skills: The project manager might have to understand
technical drawing relating to a building; he might also have to
understand functional drawings from a civil engineer and co-ordinate
various other factors relating to the project. All these things are
integration issues that need to be properly co-ordinated.
Other skills that are essential for the project manager are the skills of
accountability, authority and responsibility. These are skills that we
tend to assume that all managers have to varying degrees. However,
with project managers it is very important that these skills are
understood and kept in balance.
Responsibility is having agreement on achieving the desired result. To
put this context, when a project manager passes part of the
responsibility for completing a task to others the project manager
retains full responsibility for the final outcome. In this sense
responsibility is all about trust.
Accountability is very similar to responsibility in the project
management context. For example, when a project manger assigns
responsibility to a contractor for decorating the office the manger holds
the contractor accountable for all the work. This would include work
quality, schedule performance and budget targets. Good performance
depends on sound accountability. Good accountability makes good
performance visible.
Authority is the power given to a person to complete a given task.
Authority must match the responsibility assigned .The key to all these
skills is giving each of them to the project team member in the right
balance. For these to work properly companies usually write
procedures that define howresponsibility and authority are assigned to
the project manger and team.
No matter how well a project manager executes the project there are
bound to be problems. Project managers should be able to demonstrate
experience, technical skills and imagination to overcome the problems
so they do not delay the project.
The best project manager is both a specialist and a generalist. He
succeeds because of the way he understands the requirements,
operations and problems of clients and the project team.
As Field and Keller note:
A project managers key role is to ensure that the team
succeeds, and since projects are by their very nature
interdisciplinary and cross many organisational lines,
routine does not exist and choices have to be made
frequently and quickly.
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Role of Team Members
It is vital that for each project to identify all the team members and
clearly define their roles and responsibilities. Team members can have
various roles; roles such as engineers, technicians, planners or software
specialists. Just as each project is unique so are the roles of the people
performing the work. We will look at team dynamics in more detail in a
later unit.
Summary
Today project management has emerged as a leading solution in
business operations. Large and small companies realise that a
structured approach to controlling and planning projects is the key
approach to success.
We have reviewed several definitions of projects. Most experts agree
that projects have the following: an event or thing that has a start and a
finish and clear objectives covering time, cost and quality.
Some projects have a short life span, perhaps a fewmonths, others could
continue for years. Multiple projects are usually grouped together to
form a programme of work.
Several examples of projects were given. You should all be aware that
projects are not just construction type projects, but cover a whole range
of business change processes and the introduction of new business
initiatives, i.e. new marketing and sales programmes.
We also looked at the skills needed. Project managers need a wide
variety of skills to run projects successfully: people skills and technical
skills being two of the key skills required.
REVIEW ACTIVITIES
Review activity 1
Read section 4.1 of Field and Keller to understand more fully some of the
principles introduced here.
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Review activity 2
One of the most common uses of project management is in marketing
departments. List some of the activities marketing managers would use in
launching a new product
REVIEW ACTIVITY FEEDBACK
Review Activity 1
Please refer to Field and Keller
Review Activity 2
Launching a new product would include: design of the product, design of the
packaging, distribution to be used, pricing, training sales force, arranging
advertising, booking space with TV company and newspapers, arranging
product launch, managing media and printing brochures and other new
product information.
Unit 1 References
Boddy, D. and Buchanan, D. A. (1992) Take the Lead. Prentice Hall.
Field, M., Keller, L. (1998) Project Management. Open University.
Burke, R. (2003) Project Management, Planning and Control Techniques.
John Wiley and Sons.
Richman, L. (2002) Project Management Step-by-Step. AMACOM.
Turner, R. (1993) Handbook of Project-Based Management. McGraw Hill.
Wilson, D.A. (2003) Managing Information. Butterworth Heinemann
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Unit 2
Planning and Monitoring Tools
and Techniques
LEARNING OUTCOMES
Examine and analyse the tools and processes for project plan
development
Understand the techniques for project plan execution
Analyse and discuss project quality issues, project resource issues,
project quality systems and the management of changes during
projects.
Introduction
This module takes you through the latest planning and control
techniques.
Research has shown that for projects to be successful, that is delivered
on time, satisfying customer objectives and delivered to budget, a
thorough approach to planning and control is essential. Project
feasibility is usually the first stage of the planning process.
Project planning has been likened to a modelling exercise. You draw up
plans then put them together and then experiment with the model to
find out the best way of proceeding through your project.
The project plan starts with the project life-cycle. This is the plan that
helps us break the project down into manageable chunks
Very simple projects can be run from just a bar chart. More complex
projects will have a full critical path analysis (CPA) and a detailed
network diagram. You will then measure progress, update the plan and
communicate your updates to the project team. If you have many
resources you will need a resource plan and a resource histogram. You
will also need to understand how to manage changes to your project
and plan.
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All of these techniques are covered in this unit.
Project Feasibility
A feasibility study will look at whether the company has the expertise
and experience to handle the project successfully. It will also look at
whether your company has the ability to make the best use of its
resources. Other areas that will be reviewed include: How realistic are
the project budget and time requirements? Have enough resources been
assigned to the project to successfully complete the project? Are the
objectives realistic? A feasibility study will also look at the financial
issues associated with the project. Is it worth doing financially and will
there be a return on our investment? These issues are looked at in the
next section.
The process of project formulation varies in different companies and on
different types of projects. Whichever way your projects develop there
should at some point be a feasibility study to ensure the project is
feasible, but also to make sure it is making the best use of your
companies resources.
A feasibility study looks at the following questions:
How realistic is it to expect that the project can meet the
stated objectives?
How realistic are the project scope, budget and time
requirements?
Are sufficient funds available to complete the project?
Does the organisation have the technical expertise to
accomplish the project?
A feasibility study should also look at the stakeholders involved in the
project to insure their interests are taken into account. These
stakeholders are the customers and project team, as well as the users,
the suppliers and vendors, the external stakeholders such as the
regulatory authorities, lobby groups, government agencies and trade
unions. Here, if possible, identify the key decision-makers and focus
your attention on their needs.
As Burke notes:
Whichever way your projects develop there should at
some time point be a feasibility study to not only ensure the
project is feasible, but also ensure it is making the best use
of your companys resources.
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Project stakeholders are people and organisations (both
internal and external) who are either actively involved in
the project, or whose interests may be affected by the
project being implemented. It is the project managers
responsibility to identify all the stakeholders and determine
their needs and expectations. These needs and expectations
should then be managed, influenced and balanced, to
ensure project success. The project manager should create
an environment where the stakeholders are encouraged to
contribute their skills and knowledge as this may influence
the success of the project
Burke (2003)
Burke also goes on to note..
That some stakeholders are interested in the outcomes of
the project, while others are only interested in the project
while it is being implemented
Burke (2003)
The feasibility study will also have its own project life cycle.
Burke also outlined the following issues that should be covered in the
feasibility study:
Stakeholder Analysis: The people and organisations who are actively
involved in the project, or whose interests may be affected by the project
being implemented. Stakeholders include: customers, project team,
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Concept :
outline of the
purpose
of the
feasibility
study
Desi gn:
plan how
to carry
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feasibility
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I mpl ement at i on: perform the
feasibility study
Commi ssi on:
confirm the
feasibility
study has
produced
the required
report
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f
o
r
t
Concept Desi gn I mpl ement at i on Commi ssi on
Figure 2.1 The Feasibility Life Cycle (Taken from Burke 2003)
senior management, suppliers, sub-contractors, regulatory authorities,
lobby groups and individual citizens.
Define the Clients Needs: The evolution of something quite vague to
something tangible. The clarification of the problem, need or business
opportunity.
Evaluate Constraints: Any internal or external restrictions that may
affect the achievable scope of the project. These may be broken down
into (a) Internal Project Constraints (such things as: Can the product be
made? Does the company have the technology? Can the product be
made within budget?) (b) Internal Corporate Constraints (such things
as: Can the financial objectives be met?) (c) External Constraints (such
things as national laws and international laws and regulations; material
and component delivery lead times).
A cost benefit analysis should also be carried out to establish the
financial feasibility of the project. Here a report should be produced that
looks at the costs and benefits in financial terms. In general terms if the
financial benefits exceed the costs then the project should go ahead.
(The next section looks in more detail at the financial aspect of
appraising projects). For example, a dam project may have many
benefits to the community, but might cause the silting up of the river. If
the financial benefits of having the damexceed the costs of dredging the
river, this project should go ahead.
The Pareto improvement criteria is expressed as the project should
make some people better off without making anyone worse off. As you
can imagine justifying the project in simple economic terms is fairly
straightforward, justifying it other ways (social, environmental or to the
wider community) can be difficult.
Another factor that needs to be considered is technical feasibility. From
the point of view of minimising risk we need to be sure that the chosen
technology is sound.
As Field and Keller comment:
Not only do we need to assess whether a technology is
mature, sound and applicable, we also need to assess a
variety of technical aspects of any proposal. These vary
enormously and often require experienced or expert people
to evaluate them properly. Even the building of a house by
an experienced building contractor requires this sort of
assessment. For example, the soil on the building site will
effect how the foundations have to be constructed. A house
built on clay has different requirements from one built on
sandy soil. A soil engineer may be called to take samples
and prepare a report before building commences.
Marketing projects need to take into account the fact that
markets vary due to climate, cultural and economic
differences: you cant market air conditioners very
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successfully in a cold climate, nor to people who cant
afford them. A software developer may need expert advice
from the hardware manufacturer before undertaking a
project using that manufacturers platform.
You should bear in mind that cost is by no means the only
factor when determining whether a project is worthwhile,
though its ease of measurement may tend to give it
prominence.
Towards the end of the feasibility study the project will be formally
endorsed by senior management. With larger projects a formal business
case will be prepared with clear analysis of all the issues and options
and a full financial appraisal of the project costs. Management should
clearly endorse the project showing clear commitment to the project and
the project team.
Of course, if the feasibility study shows the project is not feasible this
should be shown in the tracking reports before you get to the end of the
feasibility stage and the project should be stopped before any more time
is wasted on the project proposal.
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A s t he RFP r equest ed i t A s t he wor k st at ement
speci fi ed i t
A s i t was negot i at ed
A s engi neer i ng desi gned i t A s i t was bui l t W hat t he cust omer want ed
Swi ngs, acl assi cr evi st ed
Figure 2.2 Swings (Taken from Burke 2003)
A feasibility study should be done in-house or by an external agency. It
can, in fact be handled as a mini project. Afeasibility study is important,
look at the classic example in Figure 2.2 to understand what happens
when things go wrong at this stage!
Project Life Cycle
The project life cycle is a framework for dividing the project up into more
manageable phases. This section looks at howthe project life cycle is used
to focus on the deliverables of a project. Most projects can be subdivided
into four generic phases: concept, design, implement and commission.
The project life-cycle enables us to look at the bigger picture.
Burke defines the project lifecycle as:
a four phase life cycle that passes through four phase
headings: concept and initiation phase, design and
development phase, implementation (or construction
phase), and commission and handover phase.
Burke (2003)
Figure 2.3 shows these Life Cycle headings in graphical format:
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L evel of Effor t
Concept and
i ni t i at i on
Desi gn and
devel opment
I mpl ement at i on
or const r uct i on
Commi ssi on or
handover
Concept Desi gn Comm. I mpl ement at i on
A
c
c
u
m
u
l
a
t
i
v
e
E
f
fo
r
t
R
a
t
e
o
f
E
ffor t
Figure 2.3 Generic Project Life-Cycle (Taken from Burke 2003)
These stages are interrelated and dependent on each other, you may
have heard of them when you have been involved in projects or come
across them in other readings.
To understand these phases we will define them in a bit more detail:
Concept or Initiation Phase: The first phase. Starts the project off by
establishing the need for the project and the feasibility phase is in this
stage.
Design or Development Phase: Phase number two. Designs the service
or product, develops schedules andplans for implementing the project.
Implementation Phase: Phase number three. Implements the project as
per the agreed plan.
Commissioning Phase: The fourth phase. Confirms the project has
been completed to the design, then the project is closed down.
Note there is no single project life cycle applicable to all projects. That is,
one project life-cycle used by everyone throughout the project world.
As Field and Keller note:
There is no single life cycle that applies to all projects and
we discuss below three different life cycles which might be
a model for a given situation, depending on the approach to
be taken. These three life cycles are:
A basic project life cycle, adapted from a five-phase
model described by Weiss and Wysocki.
A phased development life cycle (a sequence of mini
projects) from Jordan and Machesky (1990)
A prototyping life cycle.
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The phased life cycle shows the phases in sequence. You would
normally complete one phase before moving to the next phase, but in
practice there may be some overlap. Remember, the phases are
interrelated and dependant on each other.
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Phase 1
CONCEPT
Concei ve
( C)
Gather data
Identify need
Establish
- goals, objectives
- basic economics
- feasibility
- stakeholders
- skill level
- strategy
- potential team
Guestimate
resources
Identify alternatives
Present proposal
Obtain approval for
next phase
Phase 2
DEVEL OPMENT
Devel op
( D)
Appoint key team
members
Conduct studies
Develop scope
baseline
- end products
- quality standards
- resources
- activities
Establish
- master plan
- budget, cash flow
- WBS
- policies and
procedures
Assess risks
Confirm justification
Present project brief
Obtain approval to
proceed
Phase 3
I MPL EMENT AT I ON
Execut e
( E)
Setup
- organisation
- communications
Motivate team
Detail technical
requirements
Establish
- work packages
- detailed schedule
- information control
systems
Procure goods and
services
Execute work
packages
Direct/monitor/
forecast/control:
- scope
- quality
- time
- cost
Resolve problems
Phase 4
T ERMI NAT I ON
Fi ni sh
( F)
Finalise product(s)
Review and accept
Transfer product
responsibility
Evaluate project
Document results
Release/redirect
resources
Reassign project
team
Plan Accomplish
T ot al Pr oj ect L i fe Cycl e
Time
A
c
c
t
u
m
u
e
E
l
a
t
i
v
f
f
o
r
Figure 2.4 Phased Development Life Cycle (Taken from Burke 2003)
With prototyping, a model of the system or deliverable is built and
shown to the user to get feed back. The prototyping is a form of phased
development. The model may start out as very basic, may be discarded
quite quickly and then another one substituted.
READING ACTIVITY
Read the London Ambulance Service case study in Field and Keller (section
1.5). This is very interesting case study that highlights many project
management issues.
CASE STUDY
XTC Mobile of Birmingham, England, is a manufacturer of mobile phone
products. Their Research and Development department has designed a new
mobile phone that is 20% smaller and 15% lighter than any of their
competitors.
The head of marketing has asked John Bedford, XTCs top salesman, to manage
the project to engineer and manufacture the new product. He asks John to
develop a schedule and budget, and present it to the management team the
following week.
When John presents his plans to the management team, there is lots of
discussion about whether the company should start manufacturing the phone.
After the meeting, the Chief Executive Officer of the company asks John to take
up the project and report directly to him. The CEOwill work to get approval of
the project and will approve every cost on the project.
Questions: based on the concepts we have looked at in the above chapters,
what steps should John take to make sure the project is a success. Bear in mind
the following when formulating your answers:
Has project approval taken place?
Is John the best qualified person to take this role on?
Have project management concepts been followed?
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CASE STUDY FEEDBACK
Your answer should have included the following points:
Project approval has not taken place; lots of discussion about
whether to start making the phone, but no approval or support
from the full management team.
John is a salesman in the company. This role does not qualify
him to be a good project manager. He needs to acquire project
management skills quickly or the project will fail.
Project management knowledge appears sorely lacking in the
company. John was asked to develop a budget and schedule in
a week for the project! Someone needs to educate the
management team about project management.
Project Objectives
This section covers project objectives, i.e. What is to be done? How is it
to be done? What are the cost constraints and timescale issues?
The classic project has a simple singular objective: build that pyramid,
launch that rocket, construct that hospital. Such projects are simple,
clear and comprehensible. Project management started in power
stations, bridges and things like that. To-day projects are not so
straightforward. Project management is applied to a wide range of tasks
that do not have this singularity. For example, a software company
might have a dozen or so projects on the go at any one time. However, it
is still true to say that unless you can identify a clear objective, or a short
list of clear objectives, project management may not be the right tool for
you.
It is essential that project teams have clear aims and goals. As Field and
Keller explain:
The term aim is used here as meaning what you intend to
do: a goal is the desired outcome. Objectives focus on
achieving the aims means to an end.
Project objectives may have been refined from the company objectives
through a series of iterations. In many companies planning is carried
out fromthe top-down, this helps keep employees minds focused on the
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key issues and objectives of the organisation. As Field and Keller
highlight:
At the strategic level a project manager may have no input
at all. However, as the key strategies are identified and
increasingly refined through iteration, strategies can turn
into programmes of change, and the tactics of realising
these strategies can become projects.
Project objectives andproject definition helpthe project manager clearly
understand the issues surrounding the project. If these are clearly laid
down from the start then the better chance the project has of success.
The objectives are the quantitative and qualitative measures by which
the project teamwill judge the completion of the project. It is not always
possible to set the projects benefits as the objectives, as they may not be
achieved until sometime after the end of the project
The project objectives are definedas soon as the project has been agreed.
Objectives should cover
What is to be done?
How it is to be done
How much will it cost?
When will the project be finished?
Objectives should be SMART (specific, measurable, agreed, realistic
and time-limited)
Specific: should define the project and what it will and
will not do.
Measurable: objectives should be laid down in
measurable terms.
Agreed: the key people involved (PM, clients and
customers) in the project must agree the project
objectives.
Realistic: the objectives agreed must be achievable.
Time limited: define how much time is available and cost
each element of that time allocated.
Project objectives should also define what will be completed by the end
of the project, detailing what will and will not be completed when the
project is finished. This will give us the essential criteria for establishing
whether the project has been successful or not.
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For example, if a project involves the construction of new chemical
works it is critical that the PM understands:
The needs of the users of the plant.
Understands why the client wants the new plant.
How the new facility will operate.
What the client is expecting from the PM and a clear view
of what is involved in constructing the plant.
Be convinced the new facility will actually solve the
problem.
All the above will have an impact on the agreed project objectives.
Project definition is often used as a stage in the project plan. Certainly in
larger projects it is normal to make project definition a clear milestone
on the project path. To make this easier for successful project outcome,
project definition and should be clear from the start, most project
managers would not start a project unless the following was clear from
the beginning:
A clear definition from the client of the problem to be solved by the
project requires:
Written definition of the clients needs and wants.
Background information to the current situation.
Understanding of the business reasons for the project.
Understanding of the clients reason for undertaking the
project.
READING ACTIVITY
Please read the section on identifying objectives in Field and Keller, section
1.1.5.
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ACTIVITY
What would happen if a project was not clearly defined?
ACTIVITY FEEDBACK
You would not have the appropriate information to understand the clients
needs and fully understand the business reasons for starting the project.
Planning the Project
This is a fairly lengthy section. It covers the important steps of planning
the project in detail, something that many failed projects have been
accused of not doing thoroughly enough. It also introduces several
important concepts, such as Work Breakdown Structure (WBS) and
Critical Path Analysis (CPA).
Many experts believe that proper planning is essential for project
success.
In the 1960s several UK Government projects were stopped or failed
due to poor initial planning. For example, the TSR-2, swing-wing
bomber was scrapped due to cost overrun and delays. A report
highlighted that the project had been started before the design was
stable. In other words, proper up-front planning was not carried out.
Planning and control go hand in hand. With solid planning a project
manager can exercise proper control. Without a plan there is nothing to
compare progress against and project control is impossible.
As Rory Burke notes:
Planning is an important component of the planning and
control cycle, because the planning process not only
establishes what is to be done, but also smoothes the way to
make it happen.
Planning is all about thinking forward in time. What varies
is how far ahead the plans stretch and how precise they are.
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The planning process communicates planning information
to the project team and stakeholders, and obliges them to
sign on and pledge their support. When plans are drawn
up by those who are going to implement them, they feel
obliged (if not totally committed) to complete as planned.
Burke (2003)
Work Breakdown Structure
One of the first steps, after a project has been sanctioned, is to break the
project down into a more detailed series of activities. Breaking the
project down into more manageable pieces is known as creating a work
breakdown structure (WBS). A WBS defines the work to be completed
in the project. It is a graphical representation (diagram) of the project
showing its component parts.
It provides definition to the project scope by showing the hierarchical
breakdown of activities and end products that must be completed to
finish the project.
As Turner has emphasised, the work breakdown is a process by which:
The work of a project is divided and sub divided for
management and control purposes
Rodney Turner (1993)
I am sure many of you have used, or seen a WBS, before. But maybe not
realized that it is a key tool in project management. Work breakdown
structures are normally shown in graphical format. The example in
Figure 2.5 shows a very simple work breakdown structure with three
levels.
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When you are putting together a WBS for the first time you will need the
following information to ensure that all the important information is
included in the WBS.
Activity.
Activity Title.
Duration of Activity.
Successor Activity.
Personnel.
Direct Costs.
Predecessor Activity.
The WBS defines the work to complete in the project. The WBS is the
backbone of the project management from which all other control
systems are derived. The work at all levels of the WBS should be defined
in terms of results, or deliverables, it is intended to achieve. There are
three reasons for this:
It gives better control of scope.
It gives a more stable plan.
It gives more visible control.
The work breakdown structure is one of the key elements of the project
plan. Once the basic work breakdown structure has been set up the time
and cost estimates for each activity can be estimated and the resources
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Gather Feed
Animals
House Feed
People
Design
boat
Build
boat
Boat
Interior
design
Exterior
design
Get
elephants
1M, 1F
Get
lions
1M, 1F
Noahs A r k
Level 0
Level 1
Level 2
Level 3
Figure 2.5 Noahs Ark WBS (Taken from Richman 2002)
for each activity defined. There are no hard and fast rules for setting up
a WBS, but in practice it is useful to bear in mind the following;
Use the categories that make up your project: i.e. components of the
product, organisational units or geographical areas.
The WBS diagram does not have to be symmetrical.
Every box is a summary of the boxes in levels below it.
The final box in each level must end in a deliverable.
The lowest level activities are called work packages, this
is lowest detail you wish to describe and control.
All the boxes must equal the complete project.
The WBS should be reviewed with the project team member to ensure it
meets their requirements and concerns. WBS can come in two different
formats, either shown graphically in boxes (as per the example) or
presented in text indent format.
READING ACTIVITY
Read Chapter 2.1.3 of Field and Keller to understand this topic more fully.
Two further examples are shown below to help you understand these
formats.
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Foundations Walls/roof
Civil
Piping Sewerage
Plumbing Electrical
Wiring Appliances
House
Figure 2.6 House Project WBS Subdivided in Boxes (Taken from Burke 2003)
ACTIVITY
Do you think the following activities should be included in the WBS:
documentation and project management activity?
ACTIVITY FEEDBACK
Yes. Be sure to include all of the following activities: project management,
documentation, product implementation, user training and project closure.
Organisational Breakdown Structure
The WBS gives us a diagram of the activities needed to complete the
project. On larger projects this is usually linked to the Organisational
Breakdown Structure (OBS) to ensure that everyone knows who is
doing what, to whom and with what.
The OBS gives us a division of responsibility. The thinking goes
something like this: if you do not have a clear idea of responsibility and
if you do not assign tasks effectively, people will be confused. This may
sound like common sense, but it is essential that the project manager
communicates clearly these responsibilities. If he does not some jobs
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Foundations
Walls/roof
Civil
Piping
Sewerage
Plumbing
Electrical
Wiring
Appliances
House
Figure 2.7 WBS Horizontal Presentation (Taken from Burke 2003)
will be done twice or not done at all! When the next project meeting is
held someone will ask if the quotes for the landscaping are in and
everyone will look at everyone else. An angry argument will follow
during which people will deny that they had responsibility for the
work.
None of this will move the project forward, but it does emphasize the
need to have a clear allocation of responsibilities.
Most project software systems have a method of allocating codes
against the activities and then assigning those activities to the different
departments. Most software systems also have a link between the WBS
and the OBS (an interface between the WBS and the OBS) which would
clearly indicate the work packages and the person responsible for
carrying out the work.
As you can imagine on large projects the level of detail this provides can
be quite cumbersome. Assigning responsibilities can be very time
consuming without the use of software. However, it is important to
understand the principles involved.
READING ACTIVITY
Please read section 3.2.2 of Field and Keller to understand this subject more
fully.
Sequencing Activities
One of the most important parts of project planning is determining the
logical flow of all the project activities. The next step is to create a
network diagram. This is a diagrammatic plan of how the project must
be completed.
It establishes the logical relationship between the activities using a
network diagram. The key point is that the diagram highlights which
activities must be carried out in sequence.
NOTE: today it is rare for network diagrams to be drawn by hand. Even
if you know nothing about network planning, the computer will
produce a schedule for you and carry out all the calculations. However,
most project managers must understand the theory behind this concept
and most projects (even the largest) usually start with a hand drawn
sketch of the first cut of the network to obtain some rough ideas. (In fact,
before computer programs were developed most project managers
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needed to be expert at draughting skills and have a degree in logic to
complete a network chart.)
A network diagram shows the activities and the logical relationships
among those activities. The method used to determine this relationship
is called the PDM method. This stands for Precedence Diagramming
Method. The diagram below shows an example of this method. The
PDMmethodwas developedfromthe activity on node (AON) method.
Both of these conventions aim to achieve the same objectives. They both
expect a project manager or project planner to break the project into
activities and work out how the activities depend on each other. The
process is then to calculate when each activity could, should and must
start, and to determine which activities are vital to the success of the
project.
Precedence diagramming method is also referred to as activity on node
because it shows the activities in a node box, with arrows showing
dependencies. This is the most common form used in project software
packages.
Relationships
Before we can start the network diagram we must determine the
relationships between all the activities. There are two basic
relationships:
Activities in series: activities are carried out one after
another.
Activities in parallel: activities can be performed at the
same time
The two examples below illustrate these points:
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A100 (Task 1) A200 (Task 2) A300 (Task 3)
FOUNDATIONS WALLS ROOF
Figure 2.8 Activities in Series (Taken from Burke 2003)
What we are doing here is putting the activities in logical sequence.
Now, this is very straightforward if you only have four activities! It gets
very complex when there are 100s (sometimes 1000s) of activities.
Note the activities are in each box. As already discussed, in project
management terminology each box is called a node. Normally the
legend in the node box will show the following information: earliest
start time, duration, earliest finish time, activity number, description,
latest start time, float and latest finish time (see the example in Field and
Keller, page 197). This method is also the most common format found in
project management software packages.
Although in todays work place the use of project management software
is widespread, which makes the formation of sequencing activities
straight forward, it is essential for students to understand the logic
behind this process.
To create a network diagram for you should use the following steps:
1. For each activity, work out the relationships with other activities.
That is, determine where each activity depends on other
activities.
2. List the activities into a logical sequence.
3. For those activities that are not dependent on each other a
separate path should be formed.
4. Each activity must be dependent on the activity that immediately
goes before it.
5. Go over the sequence to make sure it is logical and makes sense.
Here is example of how this works in practice:
Suppose you are in charge of a team responsible for arranging a sales
training programme for your organisation. You have listed all he
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A300 (Task 3)
A500 (Task 5)
A600 (Task 6)
WALLS
ELECTRICAL
PAINTING
A400 (Task 4)
PLUMBING
Figure 2.9 Activities in Parallel (Taken from Burke 2003)
components of the project. These are the activities that the members of
your team must do and the time needed for doing them the activity
durations are in days:
List locations 2
Select locations 4
Plan topics 3
Get speakers 7
Arrange speaker travel plans 5
Design and print brochure 14
Final check on travel plans 8
Take reservations 6
Run training programme 10
The next stepis the analysis phase; here youwork out what activities are
dependent on other activities being completed first. For instance, when
you are building a house you cannot plaster the walls until the walls are
built, so plastering must be scheduled to follow on, in series, after wall
building.
However, there will be other independent activities as well. For
example, once the walls are built the plumber and electrician need not
work in any special order. Either can do their work first before the other,
or they can both work at the same time in parallel.
Getting back to the example above, the sales training programme,
clearly the speaker travel plans cannot be arranged until the locations
have been finalised. This is dependent relationship. However it is
alright for the speaker travel plans to be arrangedat the same time as the
brochure is being prepared because these activities are independent.
ACTIVITY
Draw a rough sketch of the network diagram for the sales training example as
outlined above. What would help you with this task?
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ACTIVITY FEEDBACK
A copy of the network diagram as produced by Project Management software,
is shown in Figure 2.10. To help you with this it would have been useful to draw
up a chart with the activities listed, showing durations and what was the
preceding activity. The network diagram clearly shows the preceding activity
for each of the activities.
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Figure 2.10 Network for Arranging a Sales Training Programme
It also might be useful to show this in a chart form; this is known as a Gantt
chart.
We will come back to Gantt charts in a moment. To help us understand
this further let us look at another example, one with slightly more
activities.
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Figure 2.11 Gantt Chart for Arranging Sales Training Programme
Here you can see the activities have been listed, with the duration and a
preceding activity(s) for each activity.
This will help us build a network diagram for the project.
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Activity
No.
Activity
Description
Duration
in days
Precedin
g
activity
1 Start 0 0
2 Mobilise 2 1
3 Survey 1 2
4 Grade site 2 2
5 Trench footings 5 3, 4
6 Form and pour concrete 5 5, 8
7 Cure concrete 8 6
8 Concrete and material design 5 1
9 Spec prefab metal building 4 1
10 Plumbing materials, pump 5 1
11 Electrical materials, lights, panel 5 1
12 Install pump 7 7, 9, 10
13 Erect structural steel 4 7, 9, 10
14 Install roofing and siding 5 13
15 Install lights and panels 3 11,14
16 Test pump 2 12
17 Paint 3 15
18 End 0 16, 17
Figure 2.12 Activities to Construct a Pump Station (Taken from Richman 2002)
READING ACTIVITY
You now need to read section 3.3.3 of Field and Keller to understand network
techniques more thoroughly.
The earliest event time for every node is calculated by doing a forward
pass through the network. You start at the project start node and finish
at the unique completion node. We are concerned with event times here,
a point in time not a period of time. Look at the example of a forward
pass, on page 192 of Field and Keller to understand this topic.
We are also interested in the latest times that each activity can occur if
the project is to be completed by the required date. These are calculated
by doing a backward pass. This calculates the latest time for each
activity if the project is to be completed by a given completion date. The
method is exactly the reverse of the forward pass procedure. This will
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Concrete and
material design
8 5 days
Grade site
4 2 days
Form and pour
concrete
6 5 days
Cure concrete
7 8 days
Trench footings
5 5 days
Survey
3 1 day
Mobilise
2 2 days
Install pump
12 7 days
Test pump
16 2 days
End
18 0 days
Paint
17 3 days
Install lights and
panels
15 3 days
Install roofing and
siding
14 5 days
Erect structural
steel
13 4 days
Plumbing materials,
pump and controls
10 5 days
Spec prefab metal
building
9 4 days
Start
1 0 days
Electrical materials,
lights, panels, etc.
11 5 days
Figure 2.13 Network Diagram for Construction of Pump Station (Taken from Richman 2002)
also highlight any activities that could increase duration and still
complete the project on time, activities like this have what is known as
float (more on float in the next section). Look at the example of a
backward pass, on page 194 of Field and Keller.
READING ACTIVITY
You now need to read section 3.3.4 of Field and Keller to understand this topic
more fully.
Some of the examples above have been very straightforward. This has
been done on purpose so you can understand the concepts that have
been presented here. It is important you work through the examples to
ensure you understand the techniques being presented here. If you are
unsure of these concepts work through the Pump Station example,
activity by activity, to ensure you understand the logic behind the
example.
The next section introduces the critical path. This is the final piece of the
jigsaw when it comes to sequencing activities and should (if you are
finding this incomprehensible!) make all this clearer.
SEQUENCING ACTIVITY CASE STUDY
The directors of Nelson Clothing Company approved (six months ago) the
building of a new facility to manufacture a new clothing range. A project
manager and project team has already been selected.
Phil, the project manager spent the first four months planning the project. He
worked out the project costs, he worked out the time of each activity and the
project scope. Phil then obtained project approval.
His next step was to create the WBS. This had over 120 boxes in nine levels.
Some of the work packages have 2 to 4 hours of work, some have 200 hours of
work. Phil estimated each of the activities using plans he found for a similar
project planned four years ago. Phil drew a network diagram that showed the
sequence of activities and there interrelationships. Phil now intends to select a
project team and really start to roll out the project.
Question: If you were the project manager what would you do differently?
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CASE STUDY FEEDBACK
Your answer should have included:
Phil should have involved the project team from the start not done everything
himself. The project team should have helped develop the work breakdown
structure, helped with the estimates and all the other phases of the project.
How will he get the support of the project team when he has not consulted
them?
No mention is made of project reviews, cost benefit analysis or risk assessment.
The WBS seems poorly thought out; normally work packages represent 10 to
75 hours of work. Packages of 2 to 3 hours of work are too detailed to be
managed effectively. The estimates are probably out of date (over 4 years old!).
Creating the Critical Path
This next section discusses how you achieve the critical path through
the network but first, to prevent any confusion, let us reviewsome of the
jargon that often crops up in books and in project management
manuals. The terms critical path analysis, PERT, critical path
networking, CPMandnetwork analysis all mean the same thing; at least
the same basic technique.
Critical path analysis (we shall call it CPA from now on) is an entirely
natural management tool. It is something we do every moment of our
lives. You normally open the kitchen door before stepping into the
kitchen. You put the kettle on for tea before getting the cups out, as you
know that the boiling water is required for tea making.
We unconsciously understand much about the flow of doing things, the
logic that dictates the way things get done. Projects are just the same
except that there are a larger number of tasks. As we have already said
(and it is worth repeating) what we do is break down any project into
activities, or tasks, and then decide how long each task will take and
how each of these activities relate to each other. We then find the best
route through the activities, from start to finish (usually represented on
a network diagram from left to right) this is CPA. It is also the
minimumtime for the project, taking into account all the different tasks,
relationships, times and dependences.
Burke defines the critical path as:
The critical path is defined as the series of activities that
have zero float. The critical path always runs through the
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project from the first activity to the last activity. Activities
with zero float are on the critical path
Burke (2003)
You will be aware of the term float from your reading of Field and
Keller. Burke defines float as:
Float is the measure of an activitys flexibility, quantifying
how many working days the activity can be delayed before
it will extend the completion date of the project, or any
target finish dates.
Burke (2003)
Today the schedule is very rarely run manually. Most networks are
producedandmaintained(as already discussed) using project management
software. This involves assigninga calendar date tothe beginningof the first
activity and converting the time durations on each activity to a calendar
date. You can then run a schedule using the appropriate software on your
computer and review the schedule using a Gantt chart.
To highlight this further let us return to the pump station example.
Below is the pump station example with the critical path shown.
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Concrete and
material design
8 5 days
Grade site
4 2 days
Form and pour
concrete
6 5 days
Cure concrete
7 8 days
Trench footings
5 5 days
Survey
3 1 day
Mobilise
2 2 days
Install pump
12 7 days
Test pump
16 2 days
End
18 0 days
Paint
17 3 days
Install lights and
panels
15 3 days
Install roofing and
siding
14 5 days
Erect structural
steel
13 4 days
Plumbing materials,
pump and controls
10 5 days
Spec prefab metal
building
9 4 days
Start
1 0 days
Electrical materials,
lights, panels, etc.
11 5 days
Figure 2.14 Network Diagram with Critical Path (Taken from Richman 2002)
What is important about the critical path?
The activities on the critical path are those activities on the network that
if delayed will delay the completion of the project. These activities are
known as critical activities. Therefore, it is essential that these activities
must be started and completed on time.
The critical path calculates the following dates for each activity:
Early start is the earliest date the activity can begin.
Late start is the latest date the activity can begin and still
allow the project to be completed on time.
Early finish is the earliest date the activity can end.
Late finish is the latest date the activity can end and still
allow the project to be completed on time.
Obviously activities on the critical path are important. These activities
need careful monitoring because if they are not completed on time the
project will be late, unless subsequent activities are completed in less
than the scheduled time.
For activities on the critical path the early and late start, and early and
late finish, are the same. The concept of float we have already touched
on. However, it is an important concept and it is worth going over a few
important points with regard to float.
Float
This is the time an activity can slip without delaying the
project.
It is equal to the difference between the early start and
late start.
Activities on the critical path generally have zero float.
Another concept is lag. This is the time delay between activities. For
example, a lag of 5 days between activities A and (with a finish to start
relationship) means that B cannot start until 5 days after A is finished.
If the schedule does not complete by the required time you can take
action to decrease the total project duration. This is known as crashing
the schedule. To do this you need to reviewall the available options and
reduce the time of some activities. Remember that it is the activities on
the critical path that needed adjusting.
This next article concisely notes some of the key factors when putting
together a project plan.
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CASE STUDY
Detailing the Plan
The approved project charter has been signed, sealed and delivered to the
designated project manageryou! However, you are not surprised. As is
customary in your organisation, the strategic planning and project management
office facilitated the development of the project charter in coordination with
the senior management team, project sponsors and stakeholders. You were a
participant in that process. It is now your task to take the charter, develop a
project plan and manage the effort to a successful conclusion. Since you
participated in the development of the charter, you have already begun the
thought process of what needs to be done. Piece of cake! Nothing to worry
about, right? What? You were NOTincluded in the development of the charter,
and this is the first time you have seen it? Welcome to PM reality!
Now, dont take me too seriously on this. There are organisations that have
some very mature project management processes and do involve the project
manager in the development of the project charter. But many more do not
have mature PM processes, and the charter is developed without the
knowledge of the designated project manager, or the charter is developed by
the project manager with general guidance from the senior management. In
either situation, your actions, as the project manager, must follow a prescribed
course in the development of a detailed project plan.
As you read through the project charter, mentally check off key pieces of
information that you are looking for, such as:
Project description.
Scope statement.
List of the deliverables/milestones and when they are to occur.
The senior management team.
Your authority to act.
Funding limits.
Signatures of the sponsor and stakeholders.
But now the work starts. The charter only provides a high-level view of the
project and what needs to be done. It does not provide you with the totality of
the task. The devil is in the details, and thats what youll find as you begin to
develop your plan. It is now your responsibility to distill the charter into
segments that can be analysed and dissected, uncovering the detail and
complexity of the project, and developing a plan that will document a detailed
course of action that will ensure the successful completion of the project.
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Muster the Core Team
Breaking down the charter into project activities is a team effort. Therefore,
you need to identify your core team, if it has not already been selected, and
discuss the project charter. The objectives of this initial meeting are to make
sure there is a clear understanding of the overall project, and that the
composition of the core project team represents the needed resources to
accomplish your goals. For an IT project, the core team may have a software
engineer, hardware engineer, network systems engineer and a procurement
specialist. These are the individuals who will be your functional project
managers for their respective business units support to the project. The next
objective is to identify the parts of the project that will be major resource
expenditure activities, such as software development, training and hardware
engineering, or administrative activities, such as travel. These items become
what I call budget buckets. Their more formal designation is major cost
account line items.
The next step is for the core team members to take their assigned portion of
the project and:
Break down the major tasks into manageable work packages.
Identify work that needs to be done.
Quantify duration of tasks.
Schedule activities with consideration to their dependency on other
activities.
Refine resource requirements.
Identify points of risk in a structured presentation of task-oriented
grouping of work packages.
This must be a deliberate and methodical process, resulting in the identification
of project work package activities that can be managed and their progress
tracked. The quality of the effort invested in this process will be the bedrock of
the overall quality of the project.
In developing your estimates, use as many sources as possible, e.g., in-house,
outside sources, professional organisations, historical project files, etc. As the
project detail is assembled, scheduling and sequencing of activities in the plan
become the life blood of the project. Scheduling activities and the identification
of predecessor and successor activities for an activity must be identified along
with the activitys duration and required completion date. When considering an
identified risk of an activity, you may want to apply a contingency pad of
duration and/or cost to the activity, based on its probability of occurring and its
impact on the project.
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WBS Review
Once the core team members have developed their respective WBS, I suggest
that each core team member provides a presentation to the entire team of his
respective WBS, explaining the activities and their relationship to other
activities. This walk-through of all the activities does a couple of things to get
the project off on a good start. First, the WBS reviewinforms the entire teamof
what this business unit will provide. The review may uncover overlooked
activities, or a resulting discussion may lead to refinement of duration and cost
estimates. You may discover an activitys relationship to other activities to be
performed by another business unit.
The WBS is the most important tool of the project manager in the management
of a project. It provides a complete representation of work to be done as
described in the project scope. It also provides the project manager with an
element of protection and monitoring against scope creep and gold-plating,
i.e., activities that misdirect the use of time and resources from the completing
the defined in-scope work.
Assembling the Detail
The project plan is a collection of self-standing project-related documents
developed as a result of project requirements or are standard, established
organisational core policy, process and procedure documents to be applied to
managing all projects.
Here is my suggested list of project-specific and core documents to include in a
project plan:
Project Specific Documents:
Project charter
Work breakdown structure (WBS)
Project milestones
Roles and responsibilities of the project team
Communications management
Time management (network diagrams, Gantt chart)
Escalation and problem resolution
Core Project Management Documents:
Change management
Fiscal management
Risk management
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Procurement management
Quality control and assurance
The core PM processes are established enterprise standard operating
procedures for the management of the respective functional areas of all
projects. If this project is a result of a contract award from a third party,
contract terms may require modification to some core documents. One
example could be how changes of scope are processed. The contract may
stipulate a joint process of review and determination between you and the
client.
The project-specific processes are unique for each project as the nature and
requirements of the project direct the formation of the process and
procedures followed during the projects course.
The assembled plan is a formal document developed by the core project team,
describing to stakeholders and shareholders how the project will be managed
and governed. The project plan is the integration of tools, procedures and
policies to successfully manage the project.
Tracking the Detail Trail
Depending on the complexity of the project, you may decide either to develop
a single WBS document showing the project work breakdown of all activities,
or develop detailed breakdowns for each level one major activity of the project,
as a well as a summary or executive level presentation. There are numerous
project management software applications that will enable you to develop
multiple work breakdown presentations and link them to a higher level
summary presentation. These applications will also produce network diagrams
that will show lead, lag and float of the activities, their relationship based on
their designated predecessor and successor activities, and the critical path of
the project. Choosing the best method of presentation is based on experience.
If you are unsure, ask a more seasoned project manager.
As you move into project execution, I would like to provide a word of caution in
monitoring the progress of the project. As the project manager, you are
expected to provide the status of the project from a broad prospective and
situational awareness of the entire project. Monitor and track project detail at a
level that will enable you to be aware of the overall status of the project so you
can answer questions from senior management, stakeholders and sponsors.
Remember, their focus is on progress, resource expediter rate and schedule. In
short, their mantra is, On time and under budget!
Your goal is to manage the project process and to address the business
management aspects of the project. You should not track the progress of tasks
at a level of detail that causes you to lose sight of the critical parts of the project.
(My article, http://www.gantthead.com/article.cfm?ID=18757" , tells the
story of a project manager who experienced first-hand what happens to a
project and the project manager when too much project detail is
monitored.) Leave the detail tracking of major activities to your core team
leaders. They are the experts in their area, so if you need to have detail
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information regarding a situation, go to them. After all, thats what you pay
them for!
Jim Harris
December 6, 2004. From: www.gantthead.com
Gantt Charts
Gantt charts are bar charts that display a schedule of all the activities.
They were named after Henry Gantt who invented them in the First
World War.
The idea and layout is quite straightforward. (I am sure you have seen a
Gantt chart before, you have just not realized that it was a Gantt chart! It
is normally only project teams that call them Gantt charts; almost
everyone else calls them bar charts)
READING ACTIVITY
Read section 3.3.2 of Field and Keller to obtain a thorough understanding of
Gantt Charts.
A Gantt chart or bar chart provides a very easy to read picture of the
project activities (look at Figure 2.15). You will see that it easy to see the
relationships between the activities and time.
We will come back to Gantt charts later when we look at reporting, and
that subject will make Gantt charts more interesting and relevant.
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Figure 2.15 Baseline Plan Gantt Chart (Taken from Richman 2002)
CASE STUDY
Now read the following article and case study to understand how some of
these techniques and issues are managed in practice:
Dont Break Out the Champagne Just Yet!
By Luc K. Richard
Many executives evaluate software development projects with one criterion:
whether or not it meets its ship date. Agreed, missing your project milestones
could be devastating, especially if there are some legal implications tied to a
release schedule. However, the ship date is not the only decisive factor you
should pay attention to. Ever heard of customer satisfaction?
At the end of the day, if your customers dont like what youve shipped, theyre
not going to pay for it. And if they dont pay for it, then meeting that important
ship date is meaningless.
Unfortunately, too many managers learn this lesson the hard way. They declare
the product generally available as soon as it comes out of the validation phase,
and immediately break out the champagne. Congratulations everyone! Weve
met our ship date! Lets celebrate!
Wait a minute! Meeting the ship date is like studying for an important exam.
Sure, you think you are ready, but dont you think you should wait until after the
exam to celebrate? The true test to determine whether or not youve
succeeded is not exiting the validation phase; its successfully completing the
customer acceptance phase.
I remember a case where the R&D team was celebrating its success just as the
product was being packaged and shipped to the customer. One executive in
particular was going on and on about how he played an instrumental role in
meeting the ship date. Without him, this project wouldnt be a successor so
he claimed.
When the customer received the application, the installation manuals and user
guides werent even in the box. They werent quite ready replied the
executive because they needed some last-minute updates due to a change
request implemented at the last minute. Regardless, the customer proceeded
to install the application. He failed miserably! Not to worry, answered the
executive. Were going to send someone over to help you out. Finally, after
modifying a few(read: most) configuration files and tweaking some of the code,
the system seemed to work.
A week in the Acceptance Test phase, the customer reported that five of the
most important use cases werent met, and that their testers had raised more
than 50 software defects. They decided to not accept the product nor pay for
it until they reached a 98 percent success rate on the ATP.
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Do you consider this project a success? Was meeting the ship date a good
enough reason to break out the champagne?
If youre that executive, youre probably trying to put the blame on other
departments. Product Management didnt identify the right set of
requirements and Quality Assurance should have consulted with the
customer to better understand their acceptance criteria. Its their problem,
right? Wrong!
Listening to your customers is not an activity that only applies to other teams.
Its an activity that needs to be practised by every department in your
organisation. Involving the customer should be part of your corporate culture.
It should occur at every stage of the development process, including the
planning, definition, construction and validation phases.
Granted, customers are not always easy to deal with. They can make your work
life miserable and, if not managed properly, can actually do more harm than
good. Customers
Dont always know what they want, and those who do have a hard
time explaining it.
Wont commit to a set of features. Theyll describe something
different every time you ask.
Agree (after the fact) that the initial set of features dont meet all of
their requirements, yet theyre not willing to pay extra for the
additional features they are now requesting.
Wont read your specifications or answer your questions in a timely
manner, but are very quick to complain once the product is in their
hands and doesnt meet their expectations.
Arent technical enough to describe their real needs.
Dont understand your software development process and that you
cant rewrite the system two weeks before its ship date.
However, regardless of how tough your customers are, you cannot develop
your system in a silo and then hope theyre going to accept and pay for the
product. The solution is not to ignore the customer. The solution is to develop
a better relationship with them, and to involve them even more!
By further involving your customer, you build a better relationship with them:
one where youre not afraid to remind them that you need feedback in a timely
manner, or otherwise jeopardize the delivery date. One where you can say no
to change requests late in the development cycle.
Building a strong relationship with your customer doesnt just make the
experience more enjoyable. It increases your likelihood of meeting their
acceptance criteria. It allows you to manage their expectations and, therefore,
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their satisfaction. After all, isnt customer satisfaction just the customers
perception of your solution in comparison to his expectations?
Involving the customer isnt just a start-of-project and end-of-project activity.
Here are some ideas to involve the customer at every phase of the
development lifecycle.
Planning phase: Inquire about your customers internal milestones. Try
to line up your deliverables and determine a release schedule that meets both
your needs. If you can both agree to some of the larger milestones, there is a
stronger likelihood that your schedule will remain the same. Furthermore, your
designers will treat those deadlines more seriously and will put in extra effort to
meet them.
Definition phase: Get your customer to describe, or better yet, write
down use cases and other requirements that will eventually be included
in the acceptance test plan. Get him to review your prototypes and
functional specifications and welcome their feedback. The earlier you work on
the acceptance criteria, the better your chances of meeting themand getting
paid.
Construction phase: Keep your customer up-to-date on your
progress. Do regular product demos and show them youre on track.
Demonstrating progress is great for nurturing your customers trust.
Furthermore, it helps themunderstand that they cant submit significant change
requests when youre so close to project completion.
Validation phase: Ask your customer to Beta test your application. Let
them install your application, execute system tests, integrate it with their other
systems and even get a sneak peak at your manuals and user guides. Many of
them will gladly do itfor freeand will be more than happy to point out
some defects and/or recommendations that you can fix before the ship date.
This is especially useful when you dont have enough capacity to test your
system as thoroughly as youd like.
Product launch: Train your customer. Show them how the product is
meant to be used. Teach them how to not make errors. Many defects raised
during an acceptance phase are not bugs with the system itself but rather
problems related to how the tester uses the system. Educate them on how to
properly configure your system and use your graphical user interfaces.
Involving the customer wont guarantee theyll commit to a set of features,
control feature creep or magically increase their technical knowledge. It wont
get rid of the six problems highlighted earlier in this article. But it will build a
stronger relationship, it will allow you to better understand their acceptance
criteria, and it will make it easier for you to manage their expectations. Without
your customers, youd be out of business, so dont learn to ignore them, learn
how to deal with them. Involve your customers throughout the software
development process, and ship a product that meets their expectationsand
then break out the champagne!
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Preparing Resource Plans
Assigning the right resources to the project is a critical operation. The
right people, materials, and equipment all need to be assigned to the
project and they all need to be in the right place at the right time.
The following should be used as a guide when assigning resources:
Assign scarce resources to activities on the critical path
first.
Obtain firm commitments from team members,
managers, and senior management.
If you cannot get the right resources at the right time you
will need to replan.
Do not assign the wrong person to the job just because no
one else is available.
Balance critical resources by adjusting float.
One of the most important tasks is identifying the right skills. You need
to be careful that you do not assign a junior operative to do the job
specified for a more senior person. You might also need to recruit
individuals who best fit the skill requirements that were identified
during the creation of the work breakdown structure. You may need to
level the workload by reallocating other available personnel to provide
assistance or even reducing the scope of an activity.
Assign the most appropriate people to each activity. A useful tool for
determining this is a resource histogram.
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Weeks
0
3/9
2
4
6
8
10
3/16 3/23 3/30 4/6 4/13 4/20 4/27 5/4 5/11 5/18 5/25
H
o
u
r
s
p
e
r
d
a
y
Project work
Operational support
Administrative
Senior Editors
Figure 2.16 Resource Histogram (Taken from Richman 2002)
It is important to remember that the resource estimate is linked directly
to the scope of work. As Burke points out, the scope of work may be
expressed as so many tonnes of steel or so many square metres of wall to
be painted. From this description the estimator can convert the scope of
work into man-hours per unit.
Resource Loading
In an ideal world the resource requirement equals the resources
available. In practice, this rarely happens and some form of
rescheduling is needed.
A resource overload is when the resource forecast requirement exceeds
the available resources, while a resource underload is when the
resource forecast is lower than available resource. A resource overload
will lead to some activities being delayed, which could delay
completion of the project. While a resource underload will under-utilize
the companys resources, which could have a detrimental effect on the
companys profitability.
The histogram now shows the forecast resources and available
resources, both as a histogram and numerically. You can now address
the problem by:
Resource smoothing: Assign resources to critical activities and try to
move other activities to ease the overload.
Increase Resources: To address the overload.
Reduce Resources: To address the underload.
Other factors include extending the end date or increasing the resources
if the end date is fixed.
When resources are overloaded there are a number of ways of
increasing the resources available.
Working overtime.
Working shifts.
Increase productivity.
As you can imagine this can very complex. In fact, resource analysis
needs a tremendous amount of mathematical calculations. It is sensible
to use computer software for this type of analysis.
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READING ACTIVITY
Read section 3.4 of Field and Keller to obtain a full understanding of this topic.
Why do Resource Schedules fail?
Schedules often fail because administrative and operational activities
are underestimated. When his happens, fewer hours than expected can
be devoted to project work.
As you allocate resources it is important to consider the trade offs in
time, cost and resources. For example, putting more people on a project
may get the job done but may also be less efficient. Also (and this is very
important) the total cost of the project increases as you add more
employees. Some activities take the same number of time regardless of
the number of people involved.
Finally, adjust the project schedule based on the availability of the right
resources at the right time. NOTE doing this often results in increasing
the total project duration.
To make things go smoothly you should:
Compile a resource histogram to compare resource
forecast and resource available.
Allocate resources to the critical activities first.
ACTIVITY
Why is identifying skills, when preparing resource schedules, important?
ACTIVITY FEEDBACK
You dont want to assign a junior person to a job specified for a senior person,
likewise you would not normally assign a senior person to a junior persons job.
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PCs and Project Management Software
The computer is now an integral part of the project managers
information and control system. Project management software is now
used to assist with schedule development and take the pain out of
calculation of mathematical analysis of resource plans and CPA plans.
Software is used by mangers to plan and control projects and there is
now complete acceptance of project management software to help
project teams with their tasks.
Today many large projects have project offices to help with the
management of projects. These offices not only help with co-ordinating
project information but enable the standardization of project
information and management reporting systems.
With standard systems and reporting, the collecting of project data, the
processing of the data and the reporting on project performance
becomes efficient and standardized. The project office also becomes the
source of project knowledge and project information. If a project office
management structure is introduced it is essential that the
communication aspect of the project office is emphasised. The project
office becomes the single point of responsibility and lines of
communication to the project team, contractors, suppliers and all
stakeholders should be handled through the project office.
Project Management Software
Software is used to store data about projects. Data about activities, the
cost of those activities, the duration of those activities, the time it takes
to complete those activities, in fact everything about the project can be
input into project management software andusedto produce reports on
the status of the project.
In a very perceptive piece, Reiss notes the following about project
planning software:
What is a project planning software package? A software
package is a very disappointing thing indeed. Like a piece
of music what you actually want is invisible. You get a
pretty box, lots of manuals you also get a disk or three. On
these disks are recorded the instructions that turn your
computer into a project planning machine.
These instructions tell the computer how to ask for details
of your projects and how to produce barcharts and
histograms. It is these instructions that you really want. The
manuals just tell you how to use the program. The disks
carry the program. The packages nearly all work in the
same essential way. You tell the program about the tasks
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that make up your project, and it tells you when each task
should happen and which are critical. Critical tasks lie on
the critical path and are vital to the success of your project.
If you also tell the software how many resources are needed
for each task, it will add up these demands and tell you
how many resources you need day by day.
You build your plans, analyse them, and produce barcharts
and other reports to communicate your ideas to your team.
As work progresses, you frequently update your plans and
produce new reports showing the current state of the
project, which parts are going well, and which parts are
getting into trouble. While you will solve no problems with
the software, you will greatly increase your chances of
predicting problems in time for you to do something about
them. A problem foreseen is a solvable problem.
Reiss (1995)
In general, project management software has very many benefits, and
today most large projects could not be run without the use of
appropriate software.
As Rory Burke notes project management software has the following
benefits:
Project management software offers fast calculations.
The calculations are always correct, the accuracy of the
output being directly dependent on the accuracy of the
data input.
Editing is quick.
The software has the capacity to process large projects
with 10000+ activities.
The project database can be linked to the corporate
database.
Once the database has been established, what if analysis
can be performed quickly.
Burke (2003)
However there are a number of disadvantages:
Additional costs associated with education and training,
hardware and software procurement.
The additional cost of maintenance and up-grading.
If the computer goes down this could stop the companys
operation.
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The new system may cause a resistance to change.
Burke (2003)
Project management software cannot control or manage the project. It is
an aid to the PM to help calculate project timescales and critical path
analysis. It is not a substitute for practical management control of the
project.
Summary
This has been a long section, but a very important section at that.
The feasibility study helps us identify whether the proposed project is
likely to be successful. It should help us paint a scenario that will help
identify whether it is feasible to go aheadwith the project or whether the
project is too risky to be taken further.
Project planning starts with the project lifecycle and project feasibility to
test whether the project is feasible or not. The project life cycle is very
useful for planning and seeing the project through the various stages. In
real life, things do not normally go quite so smoothly. The stages in the
life cycle model are apt to run into problems, but that is what the project
manager is there for; to smooth over these problems.
After this the more detailed project plan can be put together. This will
comprise: a work breakdown structure and analysis of the activities
needed to complete the project.
The Work Breakdown Structure (WBS) breaks the project down into
manageable chunks. Critical Path Analysis (CPA) gives us a structured
approach to planning. It is a critical part of the planning process.
Following this analysis the activities will be sequenced in the correct
order.
The network diagram outlines the logic or sequence of work, i.e. the
calendar when the work can be scheduled. The critical activities are
those on the network with zero float. The CPA method is best learnt by
setting up your own network diagram and calculating the start and
finish dates.
Project planning can be likened to a modeling exercise. You put the plan
together and then experiment with the model to find out the best way of
proceeding through your project.
Very simple projects can be run from just a barchart. More complex
projects will have a CPA and a detailed network diagram. If you have
many resources you will need a resource histogram. You will then
measure progress, update the plan and communicate your updates to
the project team.
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REVIEW ACTIVITY
Urgent Care Hospital
Urgent Care Hospital has recently received several large grants to modernise
and upgrade the care they provide to the community. The hospital has
determined to spend some of the money to upgrade the radiology department
and has hired you to manage a project to install a new CAT scanner
(computerized axial tomography scanner) to provide better care to critical
patients.
The new scanner will require major renovation of the radiology department,
which is estimated to take eight weeks. Although the head of the department is
eager to have the new machinery, she is not happy about the disruption the
construction will cause. The scanner is expected to arrive March 1 and will take
three weeks to install. The construction renovation cannot begin until after the
installation is complete. The four operators who will use the new equipment
also need two weeks of training.
The estimated costs are as follows:
Purchase $1,000,000
Installation $45,000
Op Training $16,000
Renovation $96,000
Since the new hospital expects to generate income of $50,000 a month on the
new scanner, its managers are anxious to begin using it as soon as possible with
the least possible disruption to hospital functions.
The head of the radiology department has come to you asking you to reduce
the total project time as much as possible. She feels thirteen weeks is too long a
disruption.
To accommodate the request, you nowneed to complete the following tasks:
Determine what can be done to crash the schedule (make it
shorter).
Prepare a network diagram and assign calendar dates to each
activity.
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This activity asks you to crash the schedule. Although the four activities can be
done in sequence (one after another), the schedule can be fast tracked by
beginning the training before the renovation is completed. As a result, two
activities can be performed in parallel (at the same time) and the project can be
completed two weeks sooner, as illustrated below.
Urgent Care Hospital Crashed Schedule
Activity Description Duration
(weeks)
Preceding
activity
1. Receive CATSCAN 0 None
2. Install CATSCAN 3 1
3. Renovate radiology department 8 2
4. Train CATSCAN operators 2 2
5. End 0 3, 4
CASE STUDY
The following case study highlights many project management issues in a real
life situation. Read with interest!
Case Study: Universiade XVI the 16th World Student Games
Taken from Project Manager Today
The biggest sporting event ever to have taken place in the UK that is the 16th
World Student Games. All of the competitors are supposed to be students of
one formor another, and many of the athletes will go on to compete in the only
bigger sporting event the Olympics.
Now, when you think of a major sporting occasion, your first thoughts probably
go one of two ways. If you are a builder, you think of all those stadia and
swimming pools. If you are an IT professional, you think of scoring and timing
systems. The games involve many buildings and lots of computers, and that is
just the beginning.
Take a look at the management chart of Universiade Great Britain Limited.
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UGBL is the company which was formed to organise and run the games. You
will see the major departments into which the organisation is split as well as a
short list of the sub-projects within the major project. From this you may get
some idea of the projects scope.
Lets take catering as an example. There were 6000 competitors and officials
from 130 countries living in Sheffield for the two weeks of the games. They all
had to be fed in accordance with their national and religious needs as well as
their special needs as athletes. They had three nutritious, muscle-building
meals a day. Not so with the VIPs attending the sporting conference, the judges
and umpires, and the huge number of team-support members they tucked
into more up-market fare. There was guzzling going on at the student village,
most venues, the conference and the VIP facilities. The total grub requirement
was 40 tonnes per day.
The caterers didnt even start with a kitchen. In the build-up period they had to
organise the kitchens, cafeteria, bars and buffets. It is not surprising that UGBL
had a full-time catering expert seconded from Gardner Merchant the kitchen
equipment company.
There were five purpose-built venues this building work was organised by
Sheffield City Council and in these venues the hopeful athletes grunted and
groaned their way towards gold medals. The village to house all of these visitors
was converted from the semi-derelict Hyde Park Flats in Sheffield, most of
which will be put back into the local housing stock after the games. There was
one of those spectacular opening ceremonies. There were 998 competitions
including 192 athletic events, 216 basketball and 88 hockey matches and 180
swimming races. As this is a friendly competition, the losers do not simply drop
out but take part in runner-up contests, so that every visitor got to play, run,
jump, dive or whatever quite a few times.
The venues overspilt from Sheffield into South Yorkshire, causing a real
transport problem. There had to be a fleet of vehicles to take the competitors
fromthe village to the right location, as well as to move the VIPs and judges, not
to mention the transport of the huge number of visitors who came to watch
their hero, heroine, niece or boyfriend compete.
The venues could not be completed, commissioned and immediately pressed
into use for the games. They needed realistic testing as venues. Hence, most of
the newvenues were made available to local clubs to use in the period between
building completion and the opening ceremony of the games.
Everyone attending the games had to be vetted to ensure security. Every name
was entered into a purpose-built software system, so that when participants
arrived they could be issued with suitable badges to allow them into the
relevant areas. This is called accreditation, which was only a small part of the
security sub-project.
Add medical, drug and sex testing, media facilities and a daily newspaper, and
you get some feel for the size of the project. As if that were not enough,
Sheffield threwin a cultural festival to compete with the Edinburgh Festival, and
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every group in the town from the cricket club to the tiddlywink society did
something to coincide with the main games.
Planning
While the games were planned at a broad-brush level by network planning, and
barcharts existed for most of the elements in the project, this work was put on
hold following some management changes. One of the problems with the
planning, even at a summary level, was to create a work breakdown structure
(WBS) that would suit the current requirements and yet leave room for the
unknown future needs of the project.
A WBS is a structured system for coding tasks by relating them to various groups,
phases, management responsibilities or other groupings. Commercial software
packages handle it in different ways some are very structured and some have a
very free format. The various functions within the organization suited the
management needs but bore little relationship to the natural sub-projects within
the project itself. Hence, the system shown below was developed:
The software used was Pertmaster Advance, which permits a 12 character work
breakdown code. The first character was devoted to the operations function,
with A = accommodation, S = sports, and so on. The second character was left
free for later subdivision within these categories. The third character indicates a
marketing involvement with a C=ceremonies and an I =information services. A
V in the seventh position indicates a need for volunteers.
In addition to this, the tasks were numbered in groups, 12100 to 12199 set
aside for accommodation at the student village, 12200 to 12299 for
accommodation elsewhere, and 14100 to 14199 for shuttle transport. The task
numbering relates to the sub-projects, whereas the work breakdown relates to
the management functions. The tasks can have only one number but could have
many characters in the WBS. The table below shows the task numbering
system. As the plan was built, the planners allocated each task with its task
number range and entered any characters in the WBS that were relevant.
If you want a barchart for the sports department, you need to check for an S in
the first column; a C in the third position indicates a task connected with the
ceremonies. Any character at all in the fifth column indicates a finance
connection. It is easy, therefore, to get a barchart for a part of the plan. Telling
the software to look for an S in position 1 and a V in position 7 gives a barchart
relevant to volunteers working on the sports sub-project. A requirement for
task numbers between 12000 and 12199 gives details of the student village, and
tasks between 12000 and 12299 give all the accommodation activities. Asking
for tasks numbered between 12000 and 12199, plus a V in the seventh position
of the WBS, gives a barchart of those tasks in the student village that require
volunteers.
By this means, a barchart can be produced for most needs. There is
considerable scope for expansion of the plan within the structure and most
people can get a single A4 barchart for their area of interest.
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UNIVERSIADE (GB) LIMITED
PROPOSED WORK BREAKDOWN STUCTURE JULY 1989
FUNCTIONAL DEPARTMENT DIVISION CODING
SYSTEM
OPERATIONS ACCOMODATION
OPERATIONS SUPPORT
TECHNICAL SERVICES
SPORTS
PROTOCOL
A*
O*
T*
S*
P*
MARKETING SPONSORSHIP
PRESS OFFICE
MERCHANDISING
CEREMONIES
EDITOR
INFORMATION SERVICES
S*
P*
M*
C*
E*
I*
FINANCE INFORMATION
TECHNOLOGY
PURCHASING
ACCOUNTING
FINANCIAL CONTROL
OFFICE MANAGEMENT
I*
P*
A*
F*
O*
HUMAN REOURCES VOLUNTEERS V*
Unit 2 References
Field, M., Keller, L. (1998) Project Management. Open University.
Harris, J (2004) www.gantthead.com
PMBOK Handbook (1992). Volume 6, Project and Program Risk
Management.
Richard, L.H. (2004) www.gantthead.com
Reiss, G. (1995) Project Management Demystified. Geoff Reiss Spon Press
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Unit 3
The Management of Project Cost
And Risk
LEARNING OUTCOMES
Analyse the key techniques that enable project managers to manage
finance and project risks.
Be able to explain the key project financial appraisal techniques,
project accounting processes and project business case approval
processes.
Discuss the importance of risk in the management of projects.
Introduction
This module considers the management of project cost and risk.
Clear project objectives are essential to the success of the project. These
usually start the project planning process.
However, before this is even worked on the financial viability of the
project must be carried out. Investment appraisal is a series of
techniques to decide whether the project is financially feasible. Various
techniques are discussed; NPV and payback are two such techniques
that are reviewed.
The monitoring of project finance, once the project is up and running, is
discussed. The methods to control (or limit) the project from risk are
also reviewed.
Financial Project Appraisal
Clear project objectives and a project definition document are essential
to the success of the project. These are the first steps in project planning.
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If the objectives are unrealistic or not written down then the project is in
serious trouble before it has started.
But before this is even worked on a financial viability of the project must
be carried out. This is sometimes called Investment Appraisal or Capital
Investment, or even Project Financial Appraisal. No matter what this
process is called the investment decision is a decision on:
Whether or not to undertake an investment.
When there are alternative choices for an investment,
selecting which of the mutually exclusive investment to
undertake.
When capital for spending is in short supply, deciding
which investments to undertake with the money that is
available.
Investment decisions need to be considered in the light of strategic and
tactical plans of the company. Investment decisions, and therefore
projects, should use a formal process of project appraisal and approval
as a way of checking consistency with strategic objectives.
Projects, once identified should be properly financially evaluated and a
formal proposal to invest submitted to senior management for
approval. Most companies have a formal business case system in place
that includes a financial appraisal of the project in one formor another.
It is important that management give their formal, full support to the
project. It shows commitment to the project and the task in hand. Some
companies have a senior committee, perhaps a capital expenditure
committee that approves all capital expenditure (projects are normally
capital spend) and all projects of a certain spend, e.g. projects over
100,000. These are internal controls that ensure the correct procedures
have been followed in the lead up to the project approval.
The financial appraisal techniques are discussed below.
Payback
This method calculates the length of time a project will take to recoup
the initial investment, in other words howlong a project will take to pay
for itself. Aproject might not be undertaken unless it achieves a payback
within a given period of time.
Payback is often used as a first screening process. The question usually
first asked is How long will it take to pay back its cost ? Payback is a
very unsophisticated method; companies often use payback as a rough
guide and then use a more sophisticated technique.
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An example of the payback method is given below:
Payback example
The Kensgate Battery company is planning to invest in a new machine
that will increase productivity and thus profits for the company. The
projects costs and benefits can be summarised as follows:
We can see that the cumulative cash flows become positive in the third
year. Had we assumed that the cash flows arise evenly over the year the
precise payback period would be, 2 2/3 years.
To decide whether this measure is acceptable we must ask ourselves if
this minimum payback is acceptable to the company. In reality the
company would have some criteria that listed the minimum payback
that would be acceptable.
If, for example, the company had a minimum payback of 3 years the
project would be acceptable. If there were two competing projects that
both met the minimum payback criteria the company would select the
project with the shorter payback period.
ACTIVITY
Howdo you explain the popularity of the payback method, given the limitations
of this method?
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Net cash
flows
000
Cumulative
cash flows
000
Immediately Cost of machine (100) (100)
1 years time Net profit before depreciation 20 (80) (100 + 20)
2 years time Net profit before depreciation 40 (40) (80 + 40)
3 years time Net profit before depreciation 60 20 (40 + 60)
4 years time Net profit before depreciation 60 80 (+20 + 60)
5 years time Net profit before depreciation 20 100 (+80 + 20)
5 years time Disposal proceeds 20 120 (+100 + 20)
Figure 3.1 Payback example(Taken from Atrill 2003)
ACTIVITY FEEDBACK
Payback is easy to understand and use. It can avoid problems of forecasting into
the future. It emphasis to early cash flows, which are normally accurate. It
emphasizes the importance of liquidity. Where a business has liquidity
problems, a short payback period is likely to appear attractive.
Net Present Value (NPV)
You will have covered NPV and investment appraisal techniques in
your finance module. However, it is worth going over a few key points
that are critical to the success of appraising projects. You will also be
familiar with the term discounting and understand the concept of
present values from your finance module.
The net present value (NPV) method takes into consideration all the
relevant cash flows associated with a project during its life and also
when the cash flows will occur. Cash flows occurring in future years are
then adjusted to a present value. This process, which I amsure you have
heard of, is known as discounting.
Discounted cash flow techniques look at the cash flows of a project, not
the accounting profits. Cash flows show the costs and benefits of a
project when they actually occur. The timing of cash flows is taken into
account by discounting them. Briefly discounting is the opposite of
compounding. Discounting starts with the future amount of a cash flow
and converts it into a present value. A present value is the amount that
would need to be invested nowto earn the future cash flowif the money
is invested at the cost of capital.
As Peter Atrill makes clear:
If you are to be deprived of the opportunity to spend your
money for a year, you could equally well be deprived of its
use by placing it on deposit in a bank or building society. In
this case, at the end of the year you could have your money
back and have interest as well. Thus, unless the opportunity
to invest offers similar returns, you will be incurring an
opportunity cost. An opportunity cost occurs where one
course of action deprives you of the opportunity to derive
some benefit from an alternative action for example,
putting money in the bank.
Any investment opportunity must, if it is to make you more
wealthy, do better than the returns that are available from
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the next best opportunity. Thus if a company sees putting
money in the bank on deposit as the alternative to investing
in a new project, the returns from investing in the project
must be better than those from investing in the bank. If the
bank offered better returns, the business would become
more wealthy by putting money on deposit.
The advantage of the DCF method is that it helps us make
sensible investment decisions because it takes into account
all the the costs and benefits of each investment opportunity
and also makes a logical allowance for the timing of those
costs and benefits.
Atrill (1997)
The Internal Rate of Return
This method uses the discounting to calculate the return expected from
the project calculated on a discounted cash flow basis. The internal rate
of return for the project is compared with the target rate of return
(sometimes known as the hurdle rate).
The internal rate of return of a project is the discount rate at which the
project NPV is zero. For a normal project the initial outflow is followed
by the net inflows, this represents the maximum rate of return the
project is able to cover before the NPV turns negative.
Bear in mind it can sometimes be difficult to obtain an exact NPV of
zero. In these cases the nearest NPV to zero is used. With todays
modern spreadsheets it is easy to try different discount factors and get
the NPV as close to zero as possible.
ACTIVITY
How should cash flows be monitored for control purposes?
ACTIVITY FEEDBACK
By recording the capital spending, the revenues or savings fromthe project, and
the revenue expenditure incurred. In practice, it might be difficult to identify all
the cash flows directly attributable to a project. This can make monitoring very
difficult.
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Some Practical Points
When dealing with questions relating to project appraisal please bear in
mind the following points:
Costs: Only take into account costs that vary according to the decision in
our analysis. Costs that will be the same irrespective of the decision
under review should be ignored. For example, overheads that will be
incurred in equal amount whether the investment goes ahead or not
should be ignored.
Opportunity costs: opportunity costs arising from benefits forgone
must be taken into account.
Interest payments: When using DCF interest payments that have been
charged to the profit and loss account should not be taken into account
in deriving the cash flow for the period. The discount factor already
takes into account the cost of financing. To take interest charges into
account would be double accounting.
Other factors: investment decision making must not be viewed as a
mechanical exercise. The results from a particular investment appraisal
must be seen as only one input into the decision making process.
READING ACTIVITY
Now read section 1.2.3 in Field and Keller.
Estimating Methods
Estimating is the process of gathering data to develop an estimate for
the project. The process usually goes like this: We start with a rough
estimate, this is later confirmedby an expert. We then ask for quotes and
the price becomes more firm. When the work is done various arguments
about technical specification, support facilities andso on, are resolved.
Then the contractor sends in his invoice, which is too high and is argued
about a bit. The invoice is paid and the final cost of the item is 100%.
That would the ideal situation.
However gathering all that information takes a very long time. You
cannot wait for the contractor to send in his estimate before confirming
the estimate is 100% firm. You have to take you best forecast for the
estimate and put that in the project plan.
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In reality, on big projects, you can concentrate on the two or three big
items and insure you get firm estimates from the supplier for those
items (remember these items might be the largest pieces of kit you are
buying or the main contract with your biggest supplier). So, getting
these right will ensure you get a large proportion of your total project
estimate right.
There are various estimating methods, these are briefly listed below:
Parametric Modeling: Uses mathematical techniques to help with
costing estimates; for example, in the building industry square foot
( per square foot) metrics are used.
Bottom up: Estimates the activities at the bottom of the WBS first and
then works up through the WBS.
Analogous Method: Looks at the costs of similar projects and other
historical information.
Simulation: Used on large or complex projects, software calculates
many costs or durations with different assumptions, the most common
is known as Monte Carlo Analysis.
READING ACTIVITY
Read section 2.3 of your core text, Field and Keller, to build up your knowledge
on this subject
ACTIVITY
Think of two ways you could shorten the overall duration of a project.
ACTIVITY FEEDBACK
Reallocate resources from non-critical activities to provide extra help you
need. Relieve employees of other responsibilities to allow them to devote
more hours to the project.
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READING ACTIVITY
Read section 2.3 in Field and Keller on estimating.
Putting Together the Detailed Project
Budget
Once the detailed WBS has been set up you can then estimate the costs
for this in more detail. This detailed estimating is called budgeting and
is the process of allocating the cost estimates to the activities. Small
projects will not need detailed budgets. However, larger projects will
need extensive budget plans.
To prepare a project budget do the following:
Total the personnel costs from each activity.
Total the direct costs from each activity estimate sheet.
Remember to include project management costs.
Total indirect costs (overhead costs if your organisation
requires they be included in your budget).
Total cumulative costs.
The first step is to determine when spend will be made to calculate the
cash flow needed. Cash flow is usually planned according to a time
interval, i.e. weekly or monthly depending on the length of the project.
Prepare a report, in graphical format if desired, for each functional
section and for the project as a whole.
This report will give you a project cost baseline. This can be used to
measure performance as the project progresses. Often this first total of
the project cost estimates is displayed as an - curve.
The S-curve is quite common in project management as it depicts the
project spends starting off slowly and then rising steeply as the project
gets going, and then tailing off as the project reaches fruition.
An example is shown in Figure 3.2.
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This project cost baseline can be used to measure performance as the
project progresses. It is put together by summing the cost estimates by
time period.
Definition: Budgeting; the process of allocating the cost estimates to
work items to establish a cost baseline for measuring project
performance.
The basic cost spreadsheet shows the amount of money planned for
each activity. The amounts are entered as the project progresses, there is
one column for actuals and another column to calculate the variance.
The cumulative spreadsheet is along the same lines, except the
cumulative costs to date and the forecasted costs are also shown at the
completion of the project.
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C
u
m
u
l
a
t
i
v
e
c
o
s
t
s
Time
Estimated cashflow
Figure 3.2 Project Cost Base Line (Taken from Richman 2002)
The cumulative cost spreadsheet (Figure 3.4) shows the cumulative
costs to date and the forecast costs at the completion of the project.
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January February
Cost categories Plan Actual Variance Plan Actual Variance
Select demo site $5,000 $0
Prepare demo $7,000 $9,000
Conduct demo $0 $7,500
Evaluate demo $0 $0
Prepare final report $0 $0
Other $200 $200
Total direct labout $12,200 $16,700
Materials etc. $8,000 $9,500
Total direct costs $8,000 $9,500
Project mgmt. support $5,000 $5,000
Other $550 $550
Total operational costs $5,550 $5,550
Total Project Costs $25,750 $31,750
Figure 3.3 Basic Cost Spreadsheet
Cumulative costs to date Anticipated total at completion
Cost categories Plan Actual Variance Plan Actual Variance
Select demo site $15,000 $14,500 $500 $15,000 $14,500 $500
Prepare demo $17,000 $17,500 ($500) $17,000 $17,500 ($500)
Conduct demo $8,500 $9,000 ($500) $9,500 $10,000 ($500)
Evaluate demo $1,500 $50 $1,450 $2,000 $2,000 $0
Prepare final report $750 $0 $750 $750 $0 $750
Other $1,275 $750 $525 $2,500 $2,500 $0
Total direct labout $44,025 $41,800 $2,225 $46,750 $46,500 $250
Materials etc. $8,000 $8,025 ($25) $10,000 $10,500 ($500)
Total direct costs $8,000 $8,025 ($25) $10,000 $10,500 ($500)
Project mgmt. support $12,500 $12,500 $0 $15,000 $15,000 $0
Other $350 $325 $25 $550 $550 $0
Total operational costs $12,850 $12,825 $25 $15,550 $15,550 $0
Total Project Costs $64,875 $62,650 $2,225 $72,300 $72,550 ($250)
Figure 3.4 Cumulative Cost Spreadsheet
ACTIVITY
What significance does a cost variance at this stage (the first few months of a
project) in a budget report have?
ACTIVITY FEEDBACK
None, the project has only just started, so spend has probably not got going yet.
There is always a time lag in reporting spend during the first 2-3 months of a
project. Therefore not significant;, the project has just started and variances at
this stage should be insignificant and, therefore, manageable.
Common Causes of Cost Problems
Poor budgeting practices, these can usually be put under the following
headings:
Basing estimates on poor information rather than
detailed specifications of the project at hand.
Failure to allow contingency, failure to correctly estimate
research and development activities.
Indiscriminate use of the contingency budget by activities
or people, who overrun their budget.
Receiving information too late to take corrective action.
You can avoid such cost problems by following good estimating and
budgeting practices, as described earlier. Careful monitoring and quick
corrective action will also help keep cost problems under control.
Some project have certain activities that consume a large percentage of
the total cost of the budget. These activities need careful monitoring and
by focusing on these you may be able to ensure that the project is
brought back on track.
Reiss highlights some important issues regarding costs:
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Many people use cash commitment, an expression
which ignores how long the accounts department takes to
pay the bill but concentrates on what you have committed
the company to pay. The amount of your companys
commitment may be open to some doubt, as contractors
often feel that you owe them more than you think.
Arguments often occur about the amount of payment due
for some work performed.
On the other hand you could deal with actual payments
made this avoids most problems caused by arguments,
but costs take a great deal longer to establish. Some people
combine both approaches, refining actual costs as more
information comes to light. Your situation and the way your
company works will probably decide the question, but
make sure that your planned and actual costs are calculated
on the same basis. Compare, as my fruit growing uncle used
to say, apples with apples.
Reiss (1995)
Project Accounting
Project accounting includes all the processes needed to ensure that the
project is completed within the approved budget and the recording of
actual costs, as they occur, and ensuring the necessary response is taken
promptly to ensure actual costs come under budget.
The importance of sound project accounting techniques cannot be
under estimated, as Burke makes clear in his introduction to project
accounting:
The financial success of a project depends not only on the
project making a profit, but also financing the project
through the project life cycle. Statistics clearly indicate that
more companies go into liquidation because of cashflow
problems than for any other reason.
Burke (2003)
This section gives an overview of the processes and methods that make
up project accounting. Some of you will familiar with accounting terms
from your finance module, for those who are unfamiliar with them let
us briefly look at these terms and see how they apply to the project
accounting.
Financial accounting: keeps a record of financial transactions,
including creditors and debtors. This information is used to report the
financial status of the company using generally accepted accounting
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principles. The main statements are the balance sheet, profit and loss
account and cash flow statement.
Management accounting: uses financial information to analyse
company performance by producing internal reports for the company
management to make decisions.
Project accounting: uses both financial accounting and management
accounting with some project management techniques, WBS, CPM and
earned value, to integrate the project accounts with the other project
data.
Cash Flow Statement
This is a document which records the money in and out of the project.
Usually produced monthly, the statement uses the same principals as
the normal bank statement. The example below shows a cash flow
statement for the first three months of the year.
Brought forward amount for January is $5000
Income: January $10000, February $15000, March $20000
Expense: January $8000, February $12000, March $16000
How would you set up the cash-flow statement using the above
information? Think about how you would go about this before reading
the next section.
1. Set up the headings.
2. The brought forward (B/F) is given at $5000.
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January February March
Brought forward
Income
Total available
Expenses
Total expenses
Closing balance
Figure 3.5 Cash flow Statement Exercise (Taken from Burke 2003)
3. List the cash items from the income statement for January,
February and March. $10k, $15k and $20k.
4. Calculate the total funds available for January by adding the total
income to the brought forward amount.
5. List the outflow of cash items from the expense statement for
January, February and March. $8k, $12k and $16k.
6. Calculate the total outflow of funds for January.
7. Calculate the closing statement for January; funds available
minus expenditure.
8. The closing statement for January now becomes the B/F (or the
opening statement) for the next month, February.
The above example is fairly straightforward. You would just follow this
practice each month for the rest of the project. With this statement we
are only concerned with items that are paid from the companys
revenue fund. (Company assets do not appear here, capital purchases
would be treated separately. Indeed the large items that will formassets
will be paid out of the capital fund. This would normally be handled by
the in-house accounting team)
You may have a project accountant to do these transactions for you and
supply you with financial reports.
Cash flow Timing
The thing that can make the cash flow statement more difficult to put
together is the timings of the payments. As you can imagine not
everyone pays you at the same time each month. This means that the
project cash flow may not be the same as the sales figures or expenses
each month.
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January February March
Brought forward $5,000 $7,000 $10,000
Income $10,000 $15,000 $20,000
Total available $15,000 $22,000 $30,000
Expenses $8,000 $12,000 $16,000
Total expenses $8,000 $12,000 $16,000
Closing balance $7,000 $10,000 $14,000
Figure 3.6 Cash Flow Statement (Taken from Burke 2003)
For example, the following have different timings (by timings, I mean
that payments come in at different times, usually over a 1-3 month
period).
90 days credit is the norm for most suppliers.
Stage payments for large items that may take months to
complete.
Part payment with the placement of order.
Payment as you purchase the goods, normal with most
retailers.
Labour costs are usually paid in the month they are used. Material costs
are usually paid on 1-3 months credit. Remember these are
business-to-business transactions, therefore very little is paid for
straight away.
Earned Value Analysis
Earned value analysis compares the amount of work planned with the
amount of work actually done to determine whether the project is on
track. Earned value calculations are usually done by computer.
Earned value is a very complex set of project accounting methodologies
that look at he cost of work achieved alongside the cost of achieving that
work. This quote from Field and Keller defines earned value:
The system we define here is called the earned value,
because it seeks to show the manager not only the cost of
work performed so far but also the value earned by that
work. Such systems are now quite common among project
performing organisations. Some clients may insist on the
use of such a system.
The earned value of the work performed on a project is the
cost that the estimator attached to that work when the
project budget was defined. Another term for it which is
rather more explicit is Budget Cost of Work Performed, or
BCWP.
As earned value is a highly complex subject I do not propose to go
through this in detail here. If you ever manage a project with earned
value reporting you will need to have specialist training on the software
used to monitor the project using earned value. (I have never seen a
project monitored using earned value without the use of a software
package.)
This subject is covered thoroughly in Field and Keller.
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READING ACTIVITY
Read section 5.3.1 in Field and Keller to understand this complex subject
further.
Managing Risks
Risk management is all about deciding what to do about risk. In this
section we look at the techniques that help control and reduce risk.
These techniques include risk reduction, risk avoidance, risk transfer
and risk acceptance.
All projects have a certain degree of risk that needs to be managed. Risks
are uncertain events or conditions that could have a positive or negative
outcome on the project. Uncertainty, opportunity and risk are closely
related. As Rory Burke explains:
Company success is achieved by pursuing opportunities to
gain a competitive advantage, and projects have typically
been set-up to take advantage of these opportunities, to
make something new, or change an existing facility. A key
component of change is making decisions ideally those
decisions would be based on complete information with a
high degree of certainty of the outcome. However, in the
real world most decisions are based on incomplete
information with an associated level of uncertainty about
the outcome it is uncertainty that leads to risk. So risk has
always been an intrinsic part of project management
Burke (2003)
Risk management can be defined as:
the systematic processes of identifying, analysing and
responding to project risk through out the project life cycle
PMBOK Handbook, Burke (2003)
Reiss puts all of this into perspective
A risk identified is a risk shared. If you and the rest of the
project team identify and discuss and collectively accept
some risks, the team, the client and the programme
management will go ahead with the project with their eyes
wide open with the risks understood and acknowledged.
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If you do not detect a serious risk or dont mention a big
one, you are taking that risk on your own shoulders which
is unfair on your project, senior management and the
project sponsors. If you identify no risks you are taking the
whole lot on your shoulders.
Reiss (1995)
The list below is not exhaustive but summarises many of the risk
elements that project managers need to be aware of.
Major Categories of Risk
Risk Category Examples
Technical New technology, design errors or omissions.
Environmental Culture of the organisation, change in management,
office politics.
Financial Budget cuts, cash flow problems, corporate
unpredictability.
Resources Specialized skills or critical equipment not available.
Human Human error, poor worker performance, personality
conflicts, communication breakdowns.
Logistical Material supply problems.
Government Government regulations.
Market Product fails in marketplace, new competitor
products.
The first step is to determine any likely risks. This can be done by asking
yourself, What could go wrong?. Assess every part of the project,
review the work breakdown structure, review the cost estimates and
resource plans. Consider the main internal and external events that
could affect the project. You can never anticipate all the possible risks.
Simply identify all those that are fairly likely.
Another way of looking at risk is to break risk down into qualitative
and quantitative issues.
For qualitative issues you would look at : suppliers, poor
communications, labour and exchange rates (to name a few). You can
then decide which of these risks is important by giving thema value, say
out of ten. Some project managers put together what is known as a risk
register, where you can list these values and you end up with a one or
two page overview of the major risks on the project.
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For quantitative risk analysis you look at the critical path model and
assess each of the durations for each task. In fact, you need sophisticated
software for this analysis. This is known as Monte Carlo analysis. This
piece of software carries out a quantitative risk analysis along the
critical path by feeding a variety of different durations through the
logical path. Each go at analysing the plan is called an iteration. It tends
to be used only on major projects where risk plays a very significant
role.
Assessing Risk
For each potential risk event, estimate its impact on the time, cost and
scope of the project. Bear in mind that a single risk could have multiple
effects. For example, the late delivery of key component could cause
schedule delays, cost overruns and a lower quality product.
Focus on risks with high impact. These are critical risks that you can do
something about. For example, in construction projects equipment
breakdowns will be one such risk, the impact is great because
construction will stopif there is no functioning equipment. Some project
managers find it useful to prioritise risks on a chart. This can help
analyse risks more clearly.
Another model that can help identify risk is the Risk Management
Model as outlined in Fiogure 3.8:
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High impact:
Low ability to
influence
High impact:
High ability to
influence
Low impact:
Low ability to
influence
Low impact:
High ability to
influence
I
M
P
A
C
T
ABILITYTO INFLUENCE
Figure 3.7 Prioritising potential risks
This has divided the risk management process into the following
headings to make them easier to understand and tackle.
Define objectives: Define the context of your work and your plan for
success. This defines what you have to achieve to be successful and
establishes a basis for dealing with risk.
Identify Risk: Identify areas of risk, uncertainty and constraints, which
may impact on your project, limit or prevent you achieving your
objectives.
Quantify Risk: Evaluate the risks and prioritise the level of risk and
uncertainty, and quantify their frequency of occurrence and impact.
Develop Response: Define how you are going to respond to the
identified risks.
Risk Control: This implements the risk management plan. It may
involve training team members and communicating to all stakeholders.
It is essential to continually monitor and review the level of risk.
Remember that it is the project manager who is responsible for project
risk. However, responsibility is usually delegated through the project
management structure with the aim to ensure functional managers are
responsible for their own departments risk. These managers would
then be responsible for developing the appropriate risk management
plan for their scope of work.
As Rory Burke makes clear:
As with other management techniques, it should be the
managers responsibility to ensure that their team members
have a working understanding of risk within the context of
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Risk Management
Plan and Control
Document
Risk Management
Plan
Define
Objectives
Identify
Risk
Quantify
Risk
Develop
Response
Figure 3.8 Risk Management Model (Taken from Burke 2003)
their scope of work and feel accountable for the
consequences of their actions.
Burke (2003)
Responding to Risk
One possible response is to ensure you have a plan in case of major risk.
This would mean developing a response plan before the risk has
occurred. Then the response plan can simply be executed should the
event occur. Planning ahead allows you to carefully analyse the options
available and determine the best course of action, so you arent forced to
make a quick decision when presented with a threatening situation.
Possible responses including avoiding the risk, transferring the risk,
mitigating the risk, or even accepting the risk. Let us nowlook at these a
bit more closely.
Risk Avoidance: Here you concentrate on eliminating the cause of risk.
For example, you may choose to give work to an experienced contractor
who you have used before, rather hand a new contractor who you have
no experience of.
This is known as removing risk from the project. Sometimes this is only
possible if the project is not done at all!
The following case study from Field and Keller highlights some risk
avoidance issues:
Avoiding risks on a Major Construction Project
It is proposed to provide fixed links from mainland
Denmark to Denmarks large islands of Funen and Lolland.
From Funen, another link is planned across the Store Baelt
(Great Belt) strait to the main Danish island of Sjaelland
(also known as Zealans, which contains Copenhagen) and
finally to southern Sweden in place of existing ferry links
(Pearce, 1995). There already exists a fixed link between
Lolland and mainland Germany. These links will provide
Sweden and Copenhagen with their only fixed links to the
mainland of Western Europe. Intergovernmental
agreements were signed in 1991 and the first 17 km link,
between Funen and Sjaaelland, opened in 1997, was the
largest construction project in Europe. The proposed 16 km
combined tunnel and bridge between Sjaelland and Malmo,
Sweden, in particular creates a risk of restricting the vital
periodic flow of salty, oxygen-rich waters from the North
Sea through the narrow Store Baelt and Oresund straits into
the brackish and relatively stagnant Baltic and strangling it.
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The Swedish Government is concerned at the risk and
insisted in late 1993 on a complete redesign of the proposal
for the Oresund link to avoid the risk of further restricting
the flow between the Baltic to the North Sea. A further
redesign has subsequently been ordered by the Swedish
Water Rights Court to limit damage that might be caused by
proposed compensatory dredging and reduce the risk of
adversely affecting the flow to below 1%. The resulting
changes to the designs have increased the estimate for the
link by more than $100 million, but the problems have yet
(in 1995) to be resolved to the satisfaction of the expert
oceanographic panel advising the Swedish Water Rights
Court. Opponents of the bridge option who say it is too
damaging in any form favour a tunnel.
Risk Reduction: This means reducing the impact of risk. Field and
Keller highlight some common risks : lack of experienced staff,
contractors reputation is poor, project manager has no prior experience
of working with the assigned contractor.
Risk Transfer: A way of transferring risk is to subcontract the work to
specialist subcontractor. For the risk transfer to work successfully the
subcontractor should have specialist skills in the area of work. The
subcontractor needs to be reliable (in practice it also helps if you have
worked with this subcontractor before, and thus have confidence in
him) with appropriate experienced resources.
In transferring risk to a contractor there is usually a trade off. For
example, you can accept a higher price from a contractor, perhaps for a
specific activity, in return for a fixed price contract. Here the contractor
assumes most of the risk.
Another means of transferring risk is by insurance. Simply insuring
against fire or theft provides financial cover for any losses incurred.
Risk Acceptance: Accepting risk when there is the likelihood of a low
risk event and when the potential impact on the project is low. A
satisfactory response may be to accept the risk.
In this strategy, the project manager has evaluated risk but decided that
it is too costly to do anything at the present time. He may note the
various factors that could be risky to the project and plan to re-visit
them during the course of the project. The important factor is that the
project manager has given some thought to the risk(s) that might
happen.
Mitigating risk: Here you can reduce the likelihood of risk by reducing
the risk of the event happening. For example, you can reduce the risk of
product failure by using proven technology rather than cutting edge
technology.
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Contracts and Risk
Giving a large contract to a contractor is a way of deflecting risk. We
have already looked at different contract types, but is useful to review
them again from the risk point of view.
A fixed price contract is exactly that: a contract to complete the work for
a fixed price. The contract will usually include all costs associated with
labour, plant, material and risk.
Turnkey contract: this is where the contractor is responsible for the
whole project: from the design phase right through to the
commissioning phase.
Cost Plus contract: Here the direct costs are paid by the client plus an
agreed fee or percentage profit to the contractor. Once the scope of work
is finalised the type of contract may change; for example, the Channel
Tunnel contract changed from a cost plus to a fixed price.
READING ACTIVITY
Read section 2.2 of Field and Keller to be able to analyse risk more fully.
Summary
Clear project objectives are essential to the success of the project. These
are usually the first steps in project planning. If the objectives are
unrealistic or not written down then the project is in serious trouble
before it has started.
But before this is even worked on, a financial viability of the project
must be carried out. This is sometimes called Investment Appraisal or
Capital Investment, or even Project Financial Appraisal. The different
investment appraisal techniques were reviewed, these included:
payback, NPV and IRR.
The methodology for monitoring cashflow was discussed and the
techniques for estimating project costs, and obtaining sound estimates,
was reviewed.
Risk management is all about deciding what to do about risk. In this
section, we have looked at the techniques that help control and reduce
risk. These techniques include risk reduction, risk avoidance, risk
transfer and risk acceptance.
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All projects have a certain risks that needs to be managed. Risks are
uncertain events or conditions that could have a positive or negative
outcome on the project. Project managers need to be aware that
uncertainty, opportunity and risk are closely related.
REVIEW ACTIVITY
Evaluate your organisations ability to manage risk and explain what you can do
to improve the way you manage risk in projects.
Refer to the text above for key points and techniques on managing risk.
Unit 3 References
Atrill, P. (2003) Financial Management for Non-Specialists. FT Prentice
Hall 2003.
Field, M., Keller, L. (1998) Project Management. Open University
Harris, J. (2004) www.gantthead.com
Harrison, F. (1985) Advanced Project Management. Gower
Maslow, A. (1943) Motivation and Personality. revised by R.Frazer et al
(3rd edn 1970) Harper and Row, London.
Management.
Richard, L. (2004) www.gantthead.com
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Unit 4
Project Team Structuring
LEARNING OUTCOMES
Discuss the factors in the business environment that lead to the
successful selection and management of project teams.
Understand how the role of managing teams differs from the role of
the functional manager.
Explain fully the role of the project manager and understand the skills
needed to practice project management successfully.
Introduction
This module looks at the issues of forming andmanaging project teams
Managing projects successfully poses particular people issues for
project managers. This makes it particularly important for managers to
understand the issues that go with managing projects. Projects pose
particular problems of building and managing project teams. Project
managers need to be able to motivate groups to work well and
leadership skills are essential if the team is to work willingly towards
the successful achievement of organisational goals.
Management is nearly always a transaction. Most people both manage
and are managed. Good managers treat others as they themselves
would like to be treated. Something we can do, to help with these tasks,
is to try to classify people into types in order to build a rounded team
with people in suitable roles.
This unit looks at the challenges that face project mangers, the challenge
of managing and leading a team, and how people management is
critical for the success of projects.
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Developing Project Teams
Developing Teams
This section looks at how managing project teams differs from
functional management. Burke defines a project team as: a number of
people who work closely together to achieve shared common goals .
The diagram below puts this in perspective.
This diagram shows that through the teams interaction they strive to
enhance their creativity, innovation, problem solving, decision making,
morale and job performance (Burke, 2003).
As previously mentioned a team implies a number of people working
together to achieve results, while a group of people does not. A group
implies a collection of individuals who, although they may be working
on the same project, do not necessarily interact with each other. This is
the key point. It is part of the project managers job to pull together a
team to ensure that the team works with a unity of purpose.
Project managers need skills of planning, scheduling and controlling to
run projects successfully. But, more than this, they need skills of team
management. This skill is decisive, research has shown that projects fail
when the project manager does not build a strong team. Before we look
at more issues surrounding project teams let us first look at how project
management differs from normal functional work.
Look at the chart which highlights some of the differences between
project leadership and normal management leadership.
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Planner
Pr oj ect
Manager
Procurement
Designer Accountant
Draftsman
Expeditor
Engineer
Secretary
Figure 4.1 Project Team Structure (Taken from Burke 2003)
Differences Between Project Leadership and Functional
Leadership
Functional Project
Type of work Similar work Unique work
Skill level Skilled Highly Skilled
Authority Delegates authority Empowers people
Org. Structure Hierarchy Team
Focus Today Tomorrow
In a project or leadership environment the project management
becomes a partner or facilitator with the project team to accomplish the
work in hand. The project manager motivates the team, with hopefully
vision and positive team working, to ensure the team accomplishes the
work successfully.
What is a team?
It is important to understand the problems of forming new teams and
the type of development a team goes through before it can get down to
work and, as nearly all projects are made up of teams working together,
it is especially relevant to project teamformation. Having the right team
in place to deliver your project will be a key factor in meeting project
objectives successfully.
Team formation can be difficult to those inexperienced or unused to
working in teams.
Handy defined a team as:
Any collection people who perceive themselves to be a group
Handy (1980)
The point of this definition is the distinction it implies between a
random collection of individuals and a group of individuals who share
a common sense of identity and belonging.
Group dynamics is the name given to the system of relationships and
behaviour which exists in any group of people. A group or team has
certain attributes that a random crowd does not possess:
The members have a sense of identity: there are
boundaries to the group which define it.
Members are loyal to the group: they conform to the
norms of behaviour and attitude that bind the group
together.
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Purpose and leadership: most groups have a purpose and
a set of objectives.
Benefits of Teams
Today many organisations recognise that they have become too
preoccupied with the qualities of individual people. But more and more
companies are learning that teams have more benefits, the synergy of
the team, than the sumof the individual parts. As well as these attribute
teams (or rather working in teams) have certain benefits:
Team synergy generates more output than the sum of the
individual inputs.
The team can offer a wide range of technical support.
Many people are more successful working within a team
or partnership than working alone.
It is the team that is the key for sustaining and enduring
management success.
A team can build up a store of shared experiences.
Information and judgement which can be passed on to
new team members.
Purpose of Project Teams
The project will almost certainly require a range of skills, which any one
person is unlikely to have. Brainstorming and discussions are good
examples of interactive teamwork, where the outputs (hopefully!)
generate lots of creative ideas and solve problems. A suggestion from
one person can generate many ideas from others.
Once a team has made a decision the team will commit to the course of
action. The schedule of work must be distributed among the team.
Project teams help and enhance motivation: the other team members do
not want to let the side down. Team members support each other when
they need help both technically and emotionally.
ACTIVITY
Why would an individual want to be a member of a team? Think of some of the
reasons for wanting to be a member of a team.
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ACTIVITY FEEDBACK
You should have noted some of the following points:
It is a means of satisfying an individuals social and affiliation needs, to belong to
something or be part of a team. The team provides a psychological home for
the individual. It is a means of sharing risk with other teammembers to spread
the load. It is a means of gaining support to carry out their particular task or
goal. It will also allow you to discuss ideas with other team members who can
offer advice and constructive criticism.
Team Size
Team size depends on what the team has been put together for. Teams
tend to grow in size and then subdivide. Experts suggest that the ideal
teamis between five and ten people. The best analogy of this question is
with sporting teams, which provide us with some good examples. For
example, a rugby team has fifteen players, a number that is slightly
above the ideal, but a rugby teamtends to subdivide into smaller teams:
i.e. backs and forwards.
Why Teams Win
But what makes a successful team?
Belbin carried out research, at Henley Mangement College, that showed
some or all of the following characteristics are present in a successful
team:
There was a good spread of mental skills.
There was a spread of personalities which gave the team
balanced appearance.
The team leader had an appropriate management style
for the project and was not challenged by other team
members.
At least one member of the team generated innovated
ideas as a means to solve problems and identify new
products and new markets.
Belbin, also found that the chair or the leader will be successful if they
gain and earn respect from the other team members. He notes that the
chairmen did not need to dominate proceedings but should know how
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to pull matters together andintegrate the team. In practice, Belbin found
the leader always worked closely with the talented members of the
team.
It is also essential that teams show flexibility. Successful teams exhibit
flexibility where members are able to move around in the team to find
the best match between people and jobs. Also it is essential that teams
show creativity and innovation to solve problems and respond to
change.
Why Teams Fail
Belbin found that the single factor that was evident in all unsuccessful
teams was low mental ability. If this is compared with the innovation
and creativity of winning teams, it means that poor teams are not able
to:
Take advantage of opportunities.
Were poor at problem solving.
Unable to change with the times.
Burke notes that:
The failure of companies to produce teams which have an
adequate proportion of managers with good mental ability
must surely not be due to any conscious search for such
people, but rather the unintended byproduct of negative
selection. Negative selection refers to the recruitment
process designed to filter out the type of people the
company needs. Consider the company which is looking for
a good manger to reverse their present decline, but will not
increase the current salary package offered. This low salary
will unintentionally exclude the quality manager the
company needs.
Burke (2003)
ACTIVITY
List, from the organisation view, what you think the functions of teams are?
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ACTIVITY FEEDBACK
Teams and groups have several functions, or purpose. Notably: performing
tasks, creating ideas, co-ordinating work, motivating individuals, consulting or
negotiating (especially to resolve disputes), testing and ratifying decisions made
outside the group.
READING ACTIVITY
Read section 4 of Field and Keller to appreciate this subject fully.
Forming Teams
Simply bringing a group of people together does not make a team. It
implies synergy. Its output is collectively greater than the sum of the
outputs of the individuals.
When tasked with starting a team from scratch it is sensible to identify
what the task is and what skills and characteristics are needed to
achieve it.
Most project teams bring together individuals fromdifferent disciplines
and backgrounds.
Groups are not static. They mature and develop. Tuckman identified
four stages in group development.
Forming.
Norming.
Storming.
Performing.
Tuckman (1965)
Each of these stages has different implications for task and the
relationships between members.
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Look at the chart below to understand these inter relationships.
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FORMING
The group is beginning to establish personal relationships. Members will cautiously test boudaries,
trying to find out about each other, and about the aims and norms of the group, which will at this stage
be primarily organisational traditions and standards.
Interpersonal focus Task focus
Main concerns: Resulting in: Main concerns: Resulting in:
Inclusion Cautious behaviour Task orientation What are we supposed
to do?
Rejection Avoiding contact What are the goals?
Acceptance
STORMING
Interpersonal behaviours and greater confidence in self expression begin to cause conflict. There is
resistance to group influence and task requirements, as a struggle for control and leadership emerges.
Control Conflict Organisation of the task Are these the rules we
want to follow?
Status/authority Power struggles Rules and agenda
decisions
Questioning decisions
already reached
Stress Critism Is the task possible?
Values and ideas Challenging ideas and
practices
NORMING
A settling down period. Group cohesion increases as roles (including leadership) are established. Norms
and processes are evolved for group functioning: work sharing, output levels, interactions, decision
making, and so on.
Being liked Cohesion Getting on with the job Willingness to change
Being accepted Group focus Compromise and
collaboration
Open-mindedness Building team spirit Data flow Information sharing
Listening
Figure 4.2 Forming, Storming Chart
Next is a brief case study that highlights how Tuckmans theory can be
put into practice:
CASE STUDY
The Nationwide Building Society
It may be possible to apply Tuckmans ideas to the management of work
groups.
The Nationwide Building Society introduced self managed teams into its
administrative centre. The progress of the change can be described in
Tuckmans terms. The project also illustrates how management input can
contribute to the process.
At the forming stage, management provided extra training in team building,
conflict management and job specific skills. Leaders were appointed, but in
coaching rather than directive roles. The need to learn new skills produced a
temporary dip in performance.
The storming stage started at the same time, with some leaders fearing a loss of
control and some team members objecting to what they saw as more work for
the same rewards.
Forming was a important part of the project and crucial to the managements
intention. One management input was the publication of a series of
performance measures for each team. A sense of ownership and responsibility
caused the teams to work to improve their results. For instance, peer pressure
led to a 75% reduction in sickness absence. Similarly, a low achieving group
took advice from other groups and made a significant improvement in its
performance. Consistent comment from team members during annual
appraisals indicates that they are now committed to the new norms.
The performing stage has nowbeen reached. Productivity is up by 50%and the
centres staff are now top of the organisations annual staff survey in terms of
job satisfaction.
ACTIVITY
What norms and customs are there in the group you are part of, or familiar
with? What do you have to do to become part of the culture? Is there a
non-conformist in the group- someone who didnt fit in? How is that person
treated?
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ACTIVITY FEEDBACK
You should think of your real life experiences in groups; be it groups in college,
work or social occasions. Do they fit in with the theory listed above?
Belbins Team Roles
Belbin discovered that a differentiation of influence among team
members resulted in higher morale and better performance. Belbin
discovered that a mixed group of team members worked best. Ideally
the group should cover the eight roles that Belbin outlined below.
1. The co-ordinator presides and co-ordinates. This person is
balanced, disciplined and good at working through others.
2. The shaper. Highly strung, dominant, extrovert, passionate about
the task and a spur to action.
3. The plant is introverted, but intellectually dominant and
imaginative. This person is a source of ideas.
4. The monitor-evaluator is analytically rather than creatively
intelligent and so dissects ideas and spots flaws. This person is
possibly aloof and tactless, but necessary.
5. The resource-investigator is popular, sociable, extrovert, relaxed.
He or she is a source of new contacts but is not an originator.
6. The implementer (or company worker) is a practical engineer
ACTIVITY
Over the next month make a note of the sort of roles you play in meetings and
group situations. Are any of the roles absent from the group? Did this make the
task harder or easier? NOTE: more than one role may be played by each
person at a meeting.
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ACTIVITY FEEDBACK
Refer to the notes on teams in the text above.
Effective and Ineffective Teams
Let us nowlook at some of the characteristics that make upanideal team:
1. Each individual gets the support of the team and a sense of
identity and belonging.
2. Skills, information and ideas are shared, so that the teams
capabilities are greater than those of its individual members.
3. New ideas can be generated, tested and reactions taken into
account, and persuasive skills brought into play in group
discussion and problem solving.
4. Each individual is encouraged to participate and contribute, and
thus becomes personally involved in and committed to the
teams activities.
5. Goodwill, trust and respect should be built among individuals,
so that communication is encouraged and potential problems
easily overcome.
Now let us look at factors that contribute to ineffective teams.
1. Too much discord, conflicting roles and relationships can cause
difficulties in communication effectively.
2. Personality problems will harm performance if one member
dislikes or distrusts another; is too dominant or so timid that the
value of his ideas is lost.
3. Rigid leadership and procedures may strangle initiative and
creativity in individuals.
4. Difference of opinion and political conflicts of interest are always
likely.
5. Too much harmony: teams work best when there is room for
disagreement. The cosy consensus of the group may prevent
consideration of alternatives and constructive criticism.
6. Corporate culture and reward systems. Teams may fail if the
company promotes and rewards the individual at the expense of
the group.
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Think about your group at work. Howeffective is it in terms of (a) doing
what the organisation wants it to do in the way of tasks and (b) offering
satisfaction to its members?
Multi-disciplinary Teams
Multi-disciplinary teams bring together individuals from different
functional specialisms, so that their competencies can be pooled or
exchanged.
Multi-disciplinary teams have three important capabilities.
(a) They increase team members awareness of the wider context of
their tasks and decisions.
(b) They help to generate solutions to problems and suggestions for
improvements by integrating disparate ideas.
(c) They aid co-ordination across functional boundaries by
increasing the flow of communication, informal relationships and
co-operation.
However, bear in mind that the members of such teams have different
reporting lines and responsibilities. This could create the ambiguity of
dual responsibility and they may have a range of different
backgrounds, work cultures, specialist skills and terminology. This
creates a real challenge for the teamleader: howto build a sense of team
identity, role clarity and co-operative working.
Another approach is to bring together a number of versatile individuals.
This is known as a Multi-skilled team. Each of its members can perform
any of the groups tasks. The team leader, or project manager, can then
allocate work flexibly, according to who is best placed to do a given job
when required. This allows team members to see the big picture and
encourages themto contribute information andideas for improvement.
Sometimes project managers can be used within companies for
co-ordinating between functional teams as this piece from Richard L
Daft explains:
Task Forces, Teams and Project Management
A task force is a temper team or committee designed to
solve a short term problem involving several departments.
Task force members represent their departments and share
information that enables co-ordination.
For example, the Shawmut National Corporation created
two task forces in the human resources department to
consolidate all employment services into a single area. The
task force looked at job banks, referral programs,
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employment procedures and applicant tracking systems;
found ways to perform these functions for all Shawmuts
divisions in one human resource department; and then
disbanded. General Motors uses task forces to solve
temporary problems in its manufacturing plants. When a
shipment of car doors arrives from a fabricating plant with
surface imperfections, the plant manager immediately
created a task force to solve the problem. He got every
manager together on the factory floor to examine the part
that was causing the trouble, and the task force resolved the
problem in about two hours.
In addition to creating task forces, companies also set up
teams. As used for co-ordination, a team is a group of
participants from several departments who meet regularly
to solve ongoing problems of common interest. For
example, Snap on Tools gained a competitive edge by
creating engineering teams to work with marketing and
customer focus groups to discuss ideas and define new
products. Team cooperation helps new products sail
smoothly through the design and development cycle.
Companies also use project managers to increase
coordination between functional departments. A project
manager is a person who is responsible for coordination the
activities of several departments for the completion of a
specific project. Project managers may be working on
several different projects at one time. The distinctive feature
of the project manager position is that the person is not a
member of one of the departments being coordinated. The
project manager position may have a title such as product
manager, program manager or branch manger.
General Mills, Proctor and Gamble, and General Foods all
use product mangers to coordinate their product lines. A
manager is assigned to each line, such as Cheerios,
Bisquick and Hamberger Helper. Product managers set
budget goals, marketing targets and strategies, and obtain
cooperation from advertising, production and sales
personnel needed for implementing product strategy.
From: Management, Richard L Daft, (2000)
Project Leadership
For project mangers to be successful and effective they must practice an
appropriate style of leadership. This section looks at the leadership
styles that can make project mangers more effective in delivering
projects. It also touches on some general leadership issues that you may
have come across before.
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You will have already studied leadership under the HR course module,
but it is important to review some of the key concepts in respect of
leadership within a project management function. As Burke notes:
Leadership is about setting goals and objectives and
generating enthusiasm and motivation amongst the project
team, and stakeholders, to work towards those objectives.
Burke (2003)
Field and Keller define leadership in the following way:
Specific skills that contribute to effective and positive
leadership are mostly based on good communication skills:
effective listening and effective talking or writing
Leadership is the process of influencing others to work (to the best of
their capabilities) willingly towards a goal. Leadership and
management are different.
Managing is concerned with logic, structure, analysis and control.
Leadership requires a different mindset and the leader has different
tasks. These tasks include:
Creating a sense of direction.
Communicating the vision.
Energising, inspiring and motivating.
All of these activities involve dealing with people rather than things. A
manager must have leadership skills to be effective. Early writers
believedthat leadershipwas an inherent characteristic. Youeither hadit
or you didnt. Leaders were born not made. Today it is now agreed that
leadership appropriate to a given situation can be learned.
ACTIVITY
What is the difference between a manager and a leader?
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ACTIVITY FEEDBACK
Refer to the text above for guidance.
Leadership Styles
Leadership styles can be seen as either democratic or (at the other end of
the scale) autocratic. The style used will depend on the type of decision
required. Other issues to take into account include the pressure at the
time and the type of people you are working with.
The decision making diagram below shows these styles.
The six stages from autocratic to democratic are:
1. Autocratic: (isolated decision) The project manger solves the
problem on his own, using information available to him at the
time. There is no communication from team members.
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1 2 3 4 5 6
Boss makes
the decision
Team makes
the decision
A
u
t
o
c
r
a
t
i
c
D
e
m
o
c
r
a
t
i
c
Figure 4.3 Decision Making Continuum (Taken from Burke 2003)
2. Autocratic: (informed decision) The project manager obtains
information from team members but decides on the solution on
his own.
3. Consultative Autocratic (discuss with individuals): The project
manager shares the problem with team members individually,
gathering their ideas, etc. Then makes the decision on his own.
4. Consultative Autocratic: (discuss with team) The project manager
shares the problem with team members, as a group. Then makes
the decision on his own.
5. Democratic: The project manager shares the problem with the
team members. Then together they make the decision as a group
majority vote.
6 Laissez- Faire: The project manager gives the problem to the team
and lets them make the decision themselves.
But what leadership style should you use?
This is perhaps the key to being an effective project manager: choosing
the right leadership style for the appropriate situation. For there is no
one style that will lead to success in all circumstances.
Think back to the leadership styles above, what is most important is how
the project manager uses his leadership style in any given situation The
project manager may use all of the styles as different circumstance
dictate.
As a guide to how to use the above styles the following questions might
prove useful:
1. Is one decision likely to be better than another? If not, go for
number 1.
2. Does the leader know enough to make the decision on his own?
If not avoid number 1.
3. Is the problem clear and structured? If not use number 4 or 5.
4. Must the team members accept the managers decision? If not
then number 5 is preferable.
5. Do the team members share the managers goals for the
organisation. If not then number 5 is risky.
6. Are the team members likely to conflict with each other? If yes
then number 4 is better than 5.
The concept of shared leadership is essential for project management.
Because it leads to effective teambuilding and requires the participation
and involvement of all the project team members. How does this work
in practice? Well, the project manager must delegate some authority to
the team and in so doing the project manager will become more of a
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team member and the team members will assume more of a leadership
role.
This encourages the teammembers to participate in problemsolving and
decision making and accept more responsibility for achieving its goals.
The following example is from Field and Keller. It sums up nicely some
of the issues that crop up around delegation, something you will have to
do when you manage a project.
CASE STUDY
Delegation Example: Your Way Their Way
A project to produce training materials and establish a training system in a
country in Eastern Europe was in the mobilisation phase. The project manager
was not yet engaged full-time on the project because she was winding up an
earlier project and only handled the preliminary negotiations with the client.
She delegated the set-up work, which involved mainly research and scheduling,
learning the protocol and finding examples of the materials to be used, to
another team member. The team member proposed an early visit to the host
country before most of the planning and set-up had been done. The project
manager disagreed; she wanted to see more of the research undertaken first.
However, she did not interfere except to point out the key activities that must
take place before the first visit to Eastern Europe. The planner felt many of
these were unnecessary at such an early stage. The project manager gave way
and allowed the early visit.
The project planner soon realised that most of the early activities that the
project manager suggested were necessary. He then worked hard to get these
done, even working extra hours. However, he still had to delay the first visit by
a couple of days. The result, nevertheless, was that the early visit took place
successfully and the majority of the activities thought to be needed before the
first visit were done after all.
Consider the probable outcome if the project manager had not allowed proper
delegation, had stamped her authority on the project and not allowed the early
visit. Possible consequences are:
A generally bad atmosphere in the project team (at a key stage of the
project).
A demotivated project planner.
The set-up phase might have taken longer.
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Motivation
You will have studied motivation under your HRmodule. However it is
appropriate to briefly touch on it here because project managers must
understand that motivating people to deliver their project objectives
can be critical for the whole project.
The project managers task is to influence the work situation in a way
that encourages the person (or persons) to achieve the project goals. The
two most important factors that a person can bring to the job are ability
and commitment.
The competencies, skill and personal qualities a person brings to the job
are known as the person abilities. Hopefully these abilities enable the
person to achieve the tasks of the project and cope with the demands of
the job.
The persons willingness the perform the job is known as the
commitment the person brings to the job. It is the project managers job
to ensure he brings an appropriate style of leadership, addressing the
teams needs in terms of ability and commitment, to the working
environment so that the performance he brings out of his work force
achieves the project goals.
The term motivation indicates things that increase your commitment to
the job. Frederick Herzberg (I would expect most students to already of
heard of Herzberg from their HR studies) studied motivation for many
years and preached job enrichment and individual development. He
looked at what factors determine job satisfaction. He coined the term
hygiene factors. These are factors that will cause a sense of grievance
that could lead to dissatisfaction and, therefore, a lack of motivation.
Motivational factors are those factors that are the reverse of these,
factors that increase job satisfaction
Interestingly, Herzbergs research found that salary was only a
motivator for a short period of time and working conditions, once set at
an acceptable standard, were also not seen as a motivator, and therefore
improving them would not motivate employees further. All managers
need to keep motivational theories in mind when striving to achieve
project objectives with staff delegated to obtain results on behalf of the
project manager.
Maslows Hierarchy of Needs
Maslows research (Maslow1954) established an hierarchy of needs. This
hierarchy contained five needs that outlines that people work in order to
satisfy certain needs. (You will no doubt have covered this as well in a
previous module, but it is such an important topic that to review it again
in the context of project management can only be of benefit).
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Physiological Needs
This is the most basic of needs. It refers to the needs of the body to
survive and for self preservation. If you were deprived of these needs
(food, air to breathe) you would become totally preoccupied trying to
acquire these.
Security and Safety Needs
This concerns needs of job security, protection from accidents and
danger. When the security needs have been satisfied you are unlikely to
be motivated towards activities aimed at increasing security. We
generally prefer a safe environment to one plagued by unforeseen
events. To put this in a project context: if you are working on a project
that is coming to the end, and maybe your contract terminated at the
end, your security need will prevail.
Social Needs
The need to be accepted by others and belong to the team. This is
especially important in project teams as we share our lives with our
fellow workers and we seek approval and acceptance of our fellow
workers. We even alter our behaviour in order to be accepted by friends
and groups.
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Physi ol ogi cal needs
Secur i t y needs
Soci al needs
Sel f-est eem
needs
Sel f-
act ual i sat i on
needs
Fig 6.4 Maslows Hierarchy of Needs
Self-esteem Needs
This is the need for recognition and the need to be wanted and feel
important within the group. It also involves the need for attention,
importance and prestige.
Self-actualisation Needs
This is the highest of all the needs. It refers to a persons own
self-fulfilment and self-realisation and becomes very important as the
previous needs are met. Maslow described self-actualised workers as:
Strongly ethical.
A more efficient perception of reality.
Increased acceptance of self and of others.
Spontaneity and simplicity.
Deeper more profound interpersonal relationships.
A natural creativity.
Increased detachment and desire for privacy.
Maslow said that people needed to self-actualise; that is, grow and
develop and by developing themselves they begin to self-actualise.
Self-actualisation can be seen in companies where people seek a high
desire for promotion. Indeed successful companies recognise the need
among its workers for self-actualisation by providing career
opportunities and promotional opportunities. It is wise for the project
manager, especially on large projects, to bear this in mind.
Conflict
All mangers will come up against conflict at some stage in their working
relationship(s). The important thing is that managers understand what
causes conflict and take appropriate steps to control conflict.
Although the following list is not exhaustive it contains the main
symptoms of conflict:
Lots of rules and regulations.
Poor communication.
Decisions taken with incomplete information.
Low morale caused by inefficiency and frustration.
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Problems focus on people and personalities.
The important thing is that managers recognise conflict at an early stage
and take action to stop the situation deteriorating even further.
Such action might include smoothing; by seeking to maintain friendly
relations by emphasising common areas of agreement and
de-emphasizing areas of difference. Compromising; this involves
searching for solutions that bring some degree of satisfaction to the
parties involved. Negotiation: this is where conflicting parties negotiate
and trade items of behaviour.
Some managers believe it is beneficial to have conflict in the work place.
They believe conflict pushes people to higher levels of performance and
it enhances the decision process. If you have a heterogeneous project
team you are bound to have some conflict, at some time or another in
your project team. You should try to manage the conflict, not eliminate
it completely.
Read the Chapter 4.2 in Field and Keller on dealing with people to
understand this topic further.
ACTIVITY
Think about your own supervisor or manager. Would you consider himor her a
leader? Are you a leader to your subordinates (if you are in an appropriate
position)? Why, or why not?
ACTIVITY FEEDBACK
You should have covered the points as mentioned on leadership that make up
leaders characteristics. Things such as creating a sense of direction,
communicating the vision, inspiring and energising.
The energy of the leader should be directed to influencing others to work
willingly towards the companys goals.
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The Project Managers Role
Although we have looked at this in the introduction, this section builds
on that and looks in more detail at the role of the project manager and
the skills needed to be successful in a project manager career.
It is the project managers job to carry out the project plan and take the
lead in project planning to work out the resource plans, the project
schedules and budgets necessary to accomplish the project objective. It
is essential the project manager has the appropriate skills to achieve
project success. This section discusses the role of the project manager
and the type of skills needed to be a successful project manager.
The project manager is the single point of contact to co-ordinate the
work of the project team, to ensure the project meets its objectives and
make the best use of company resources.
The role of the project manger is influenced by the size of the project. On
a small project the project manager may be expected to be technical
manager as well. Some companies prefer project managers to be
technical experts rather than generalists. A technical expert being an
individual who has some experience and training in the technical
aspects of the project being implemented.
The following points favour a project manager being a technical expert:
Judgement is enhanced: the project manager knows and
understands the technical issues and thus can apply
superior judgement skills.
Technical skills: enable the project manager to be directly
involve in the feasibility study
Respect from the team: by demonstrating good technical
skills (and management skills) they will gain enhanced
respect from the team.
The other side of the coin puts the argument for the project manager
being a generalist:
A generalist will not hold back ideas and innovation
Good, effective project management requires many
non-technical skills. Skills such as team building,
financial management negotiation and co-ordination.
As managers become more experienced they will be more
aware of the people, costs and co-ordinating activities
and less with technical issues.
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The project manager is the person assigned to manage a specific project
and is expected to bring the project in on time and budget and meet the
agreed project objectives.
The project manager will have overall responsibility for planning,
integrating, controlling, leading, communicating and building a
positive and supportive climate for the project
Summary
Why is all this important in respect of managing projects? Projects pose
particular problems of building and managing project teams. Project
managers need to be able to motivate groups to work well, and
leadership skills are essential if the team is to work willingly towards
the successful achievement of organisational goals.
The selection of the project team is critical in obtaining the right balance
of skills, experience and personalities. Classifying people into types
when forming a project teamis a sound way of building a rounded team
and ensuring you have the right people in suitable roles.
It is the project manager who has to extract contributions from all the
people involved in the project. However, the nature of project
management sometimes means that very often the project team is put
together very quickly and sometimes project managers find themselves
working on a project with a crew of strangers. This means the issue of
leadership, from the project manager, is a little more complex than
ordinary management.
Motivating people working on projects can also be a problem. The
biggest problem here is motivating and keeping people when the
project nears completion. People need career progression and a job that
will grow, but major changes, like the end of a major project, make this
very hard to deal with such things.
The challenge of project managers, especially for short-term projects
that have a time constraint, is to accelerate the process of team
development and at the same time keeping pace with the immediate
targets set out in the project plan.
REVIEW ACTIVITY
Global Industries
Global industries prepares an annual stockholder report in ten languages. This
years report gives important information about a pending merger that requires
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a vote at the annual stockholder meeting on June 3. Therefore, the president
requested that the ten versions of the report be mailed by May 1.
On March 1, Larry, the project manager, scheduled the four-weeks work of
editing and designing the primary document (in English) to be completed by
April1. This would give time for translation, graphic production and printing in
the other nine languages by May 1.
The project team consists of an editor and a designer located at company
headquarters, nine language translators located in various countries, and
customer services representatives from five printing companies also located in
various countries. At the beginning of the project, Larry set up a telephone
conference call with all members of the team to explain the project objectives
and schedules. Because the representatives from the printing companies didnt
speak English very well, Larry was careful to speak slowly and clearly. He asked
each team member to provide a status report every two weeks.
In the beginning, Larry was confident that the schedules would be met, but at
the first status report, the editor informed him that she was ten days behind in
writing the report because the president had not returned her phone calls
requesting clarification on some details of the merger, Furthermore, the
designer and editor couldnt agree on the basic design of the report. The editor
wanted a formal, traditional design and the designer wanted an informal,
modern layout.
What potential problems do you see in Larrys communication plan?
What communication barriers exist and how would you solve them?
What conflicts exist and how would you resolve them?
This case presents typical issues in communications and conflict resolution.
Larry began well by gathering the entire team together in a conference call to
explain the project objectives and schedules. Because the team was dispersed
in several countries, this conference call was probably the next best option to
having a face to face meeting. However, because several team members are
not native English speakers, Larry needs to be sure they understand his
communications with them. He could consider using the translators to
interpret his communications into the languages spoken by the representatives
from the printing companies.
A fault in the communication plan appears to be the frequency of the status
reports. Since the major project tasks are in increments of one month, a status
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report every two weeks is not often enough to spot potential problems in time
to take corrective action. Status reporting on this project should be at least
weekly.
The communication barriers between the editor and the president are typical
in many organisations. Although the editor was responsible for writing about
the merger, she could not get the necessary information from the company
president. In this case, the project manager needs to help open up channels of
communication and get the needed access to the president. This access may
have been blocked by organisational culture or formal lines of communication.
The project manager also needs to help resolve the conflict between the editor
and designer on the layout of the report. The most effective strategy would be
to facilitate a rational, problem solving meeting where the editor and designer
discuss their concerns, look at alternatives and select the best approach. It may
involve compromising on some issues. The project manager could help
maintain a friendly atmosphere by emphasizing common areas of agreement.
Unit 4 References
Belbin, M., (1996) Management Teams. Butterworth-Heinemann.
Handy, C. (1993) Understanding Organisations. Penguin.
Herzberg, F. Work and the Nature of Man. Ty Crowell Co.
Maslow, A. (1943) Motivation and Personality, revised by R.Frazer et al
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Unit 5
Project Control
LEARNING OUTCOMES
Analyse and understand the factors that make up sound project
control principles.
Describe the factors of comparing actual performance against plan
and other project performance criteria.
Examine the various techniques and methods for reporting on
project progress.
Introduction
This module considers the management control of projects. This is the
system, or process, of comparing actual performance to the plan to
determine how the project is progressing.
The success of controlling a project is directly linked to the effectiveness
of the project plan. This section looks at the various systems and
methods needed for reporting progress. Evaluating the work that has
been done by visiting the project, or visiting contractors who are
working on the project, and then updating the plan is the key to
successful project monitoring.
Reporting on variances is also a key task, but even more important is
doing something about those variances, so the project is kept on track.
This section also looks at the start of the project: that is the first stages of
actually initiating the project.
Control and Reporting
Control is the system, or process, of comparing actual performance to
the plan to determine how the project is progressing. Your ability to
control a project is directly linked to the effectiveness of the project plan.
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This section looks at the various systems and methods needed for
reporting on progress.
Its important to remember, as Burke points out:
The frequency of the reporting cycle should reflect the
needs of the project. Short reporting periods when there is a
high level of change and uncertainty in the project, long
periods when there is little or no change. For example,
during project start up and during commissioning phase the
reporting cycle may be reduced or daily or even hourly,
while under normal conditions the reporting cycle is
usually weekly or monthly.
As a rule of thumb, the reporting cycle should have
sufficient time to implement corrective action to bring any
deviation back on course without delaying any critical
activities.
Burke (2003)
Field and Keller point out that:
Monitoring and control are the project managers
predominant activities during the main execution phase.
It should be apparent that the whole process of monitoring and control
is in place to prevent problems as outlined above. But even with the
most rigorous systems in place problems are likely to occur. The most
important thing is that you should be prepared for problems and even
expect problems to happen during your project.
At the very least youshouldexpect the following to happen during your
project.
There will problems meeting quality specifications.
Some items will be overlooked in the estimate.
Activities will take longer than expected.
Key staff will leave the project.
Suppliers will be late delivering equipment.
Equipment will cost more than estimated.
New legislation may prohibit a planned course of action.
(As listed by Field and Keller. For the full list see Field and Keller, page
272.)
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The important point with all this is that however much you plan some
unexpected problems will happen and these problem will use up
valuable time and resources. A project manager needs to have a strong
will and maintain a balanced view at all times.
Principles of Monitoring and Control
You need a plan to tell you where you are supposed to be and status
data to tell you how the project is progressing. Even with the best plans,
problems will still occur, but they should be fewer and less serious.
Before the project gets under way the project manager should consult
with the project team, the customer and the client to determine the
information needs, data collection methods and frequency of data
collection.
Always have a formal process to control changes in the
project.
Revise project plans as needed to keep them realistic and
accurate, but only those authorised to update the plans.
Elevate problems to the lowest level of management that
can make the decision and take action.
Ensure that progress, cost expenditure and scope
performance are calculated and reported using methods
consistent with the way the plan was set up.
Collecting information on project progress is a key task. The data can be
collected electronically, manually, by onsite inspections and team
meetings.
Electronic collection can be quick and cost effective. Today most project
team workers have access to a PC. They can input status information
directly. For example, team members can enter work hours and team
members can update cost reports and transmit data to the project
manager for collation.
Data capture should be managed to appropriate level of accuracy and
data capture feedback forms should be structured in line with the
original estimate to help make data capture less subjective.
A higher level of accuracy is required on critical activities because any
delay on these activities will extend the projects duration.
For electronic data collection to work well it is essential all team
members have access to the appropriate project management system,
they have all been trained in project management principles and a team
member (or even members) has the skills to manage and present the
information collected.
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The project manager will establish a cycle for the collection of data. This
cycle could be daily, weekly or monthly. This information should be
compared with the project plan to identify the variances. A variance
exists when the actual status does not match the planned status.
ACTIVITY
Develop a written plan for monitoring a project of your choice.
ACTIVITY FEEDBACK
You should include detailed information needs, data collection methods and
frequency of data collection. Think of data needed on each activity, manpower
data, financial data, time data and data about deliverables from suppliers.
Scope and Quality Control
Scope management is defined as:
The processes required to ensure that the project includes
all the work required, and only the work required, to
complete the project successfully. It is primarily concerned
with defining and controlling what is or is not included in
the project.
Burke (2003)
This section looks at managing the scope of the project: that is ensuring
all the work within the agreed project terms of reference is done to the
required cost and time objectives.
Rory Burke goes on to highlight what the essence of scope management
is all about:
Since most projects seem to be riddled with fuzzy
definitions, scope management takes on a greater
importance to avoid scope creep, and avoiding adding
features and functionality to the product that were not part
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of the original project contract without an appropriate
increase in time and budget.
Burke (2003)
Scope management is all about defining what the project will achieve. It
also covers what it will deliver, what it will produce and where the
work packages start and finish.
The scope document not only includes a description of the features and
functions of the project, but also the quality measures (performance
requirements, security issues and technical specifications). These
measures are used regularly in controlling quality once the project
begins. To effectively manage scope, quality standards must be defined
in the project scope statement. (More about quality in a moment.)
Scope management is interested in both the quality of the project work
and the quality of the product or service that is being created by the
project.
To control the scope and quality you must compare actual performance
to the scope statement to determine variances. Scope and quality are
more difficult to measure than time or cost, and when project team
members are up against time and cost deadlines they may forced to cut
corners on scope and quality!
Burke, highlights the following key point with regardto scope changes:
It is important, particularly on large complex projects, that
any scope changes are only approved by the nominated
technical experts. This will not only prevent scope changes
by do-gooders shooting from the hip, but also ensure that
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NCRs
Concessions
Changes
requests
Variations
Modifications
Extras
Identify
change and
document
Present
communications
Impact
statement
Circulate for
input and design
approval
Instructions
Client
approval
Revise
Scope
Baseline
Baseline
update
Issue
orders
Authorised
work
Figure 5.1 Configuration Control Flow Chart (Taken from Burke 2003)
all implications of the proposed changes have been
considered.
Burke (2003)
In practice, you need to ask yourself the following questions when
controlling scope and quality:
Is the specification, as per the scope statement, being
met?
Compare performance with the scope statement.
Analyse variance to compare against to determine impact
against scope and quality.
Publish reports that detail where the project is meeting or
not meeting specification.
Take corrective action to act on scope deviations quickly.
It is good practice to use a formal change request and a project
communication form to help with scope changes (see examples below).
The change request form will be a numbered form that describes the
scope change and the reason for change.
The project communication formis used to identify a question, problem
or suggestion. This document will be numbered and recorded (in the
configuration management system) to ensure that it is actioned.
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CHANGE REQUEST
NUMBER:
INITIATED BY:
DATE RAISED:
CHANGE REQUESTED (related drawings / work packages):
REASON FOR CHANGE:
APPROVAL:
NAME POSITION APPROVAL DATE
Figure 5.2 Change Request (Taken from Burke 2003)
The impact statement clarifies the implications for the proposed
changes. This form will look at the impact of the changes on the design
team, legal impact, cost impact, quality impact, technical impact, etc. In
fact all the impacts the change might have on the project need to be
considered.
Quality management is the processes to ensure the project will satisfy
the needs for which it is undertaken by addressing the management of
the project and the product of the project.
Burke highlights the importance of quality management:
You need to consider both the quality management system
to assure you are capable of building the product and the
quality control system which tests and inspects the product,
to confirm you have achieved the required condition.
With projects becoming larger, more complex and more
technically advanced, the need to assure the product will
meet stringent requirements is the focus of quality
management. These requirements may be set not only by
the client, but also by insurance companies, government
laws and regulations, together with national and
international standards.
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PROJECT COMMUNICATION
NUMBER:
INITIATED BY:
DESCRIPTION: (related drawings / work packages):
DATE RAISED:
COMMENTS/INSTRUCTIONS:
WE ACKNOWLEDGE YOUR ENQUIRY /
INSTRUCTION:
VERBAL FROM:
WRITTEN FROM:
DATE:
TO:
TO:
PLEASE ADVISE HOW WE ARE TO PROCEED:
1. START IMMEDIATELY AND QUOTE WITHIN 7
DAYS
2. START IMMEDIATELY ON UNIT RATES
3. DO NOT START, QUOTE WITHIN 7 DAYS
4. OTHER
REQUEST FROM:
CONTRACTOR
PROJECT MANAGER
INSTRUCTION FROM:
CLIENT
PROJECT MANAGER
The development of quality management systems can be
dated back to the large military projects of the Second
World War, where they needed to ensure standardisation.
Since then BS 5750 (1979) has established the framework for
commercial quality management systems and has since
been adapted internationally as the ISO 9000 standard.
Burke (2003)
One important document is the Project Quality Plan. This is a detailed
document that explains how the company will assure that the product
will be made to the clients requirements.
Crosby (1987) argues that quality is free. It costs less to get the job done
right first time. However, some managers never seem to have time to
get it right first time, yet seemto have time to re-work the job. The cost of
the re-work may be two or three times the cost of the original job.
Consider the example, from Burke, where a weld on a steel fabrication
project has been rejected. The additional costs would include:
Quality raises a non-conformance report.
Planning re-schedule the repair.
Remove the weld and surface preparation.
Re-weld.
Quality check new weld.
Prevention costs are those costs that are associated with actions taken to
make sure the product will be made to the required standard: such things
as reviewing and verifying designs, quality training, quality planning,
quality improvement programs and in-process control engineering.
Burke also gives us this excellent example from Jaguar cars:
When John Egan joined Jaguar in 1980 the company was
losing about $5 million a month. Under Eagans direction,
Jaguar set about developing a quality control programme
and four years later the dramatic effect could be seen in the
companys sales figures, rising morale and a boost to the
workers wage packets. In addition, Jaguar has seen a
dramatic reduction in warranty costs, huge gains in
productivity and major reductions in finished product defect
levels. Once again, Jaguar became a profitable company.
Burke (2003)
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ACTIVITY
Evaluate your companys ability to manage risk and explain what you can do to
improve the way you manage the risk in projects.
ACTIVITY FEEDBACK
You should ensure your company has proper procedures in place to manage
risk. Do they have systems in place to determine likely risks, do they have
systems in place to respond to risk?
Variances
Not all variances will have a negative impact on the project and not all
variances will need corrective action. It will be the job of the project
manager to determine whether the variance has:
A significant impact on the project.
Whether the impact is a problem.
The cause of the variance, including reasons and the
people involved.
If the variance will cause other variances elsewhere in the
project
Often the project manager will issues a report which shows what the
project should be doing, what is actually happening and the variance
between the plan and the latest status of the project.
As the project manager develops and analyses solutions to the
variances, and/or problems, he will decide on a course of action. This
action could include the following: taking action to solve the problem,
follow up to ensure the action solves the problem, document the
significant design(s) that impact on the agreed project plan, take
preventive action to be sure similar problems do not happen again.
Of course, if the project manager has sufficient authority he will decide
on a course of action, if not he will need to take a recommendation to
management that can make that decision.
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The following activity is taken from Field and Keller and it provides an
excellent example of the type of problem that project managers face
during the execution of a project:
ACTIVITY
(5.2 from Field and Keller)
Here is a typical problem for a project manager. You are halfway through the
design phase of a fixed-price project to design and supply a robotic
manufacturing system when the design engineers reach the conclusion that the
level of reliability specified in the contract cannot be met. The reliability of the
robots that had been envisaged at the estimating stage had been overestimated
by the supplier who nowwill only guarantee some lower performance. Further
discussion with your designers reveals that a route to higher reliability is
uncertain. There may be alternative suppliers but costs and timescales are
uncertain and would require further research.
Consider the following questions:
(a) Would you prefer to keep the news from the client?
(b) When should your own management be informed?
(c) What steps could you take to recover from this blow?
ACTIVITY FEEDBACK
This kind of situation is not unusual.
(a) If this is a significant problemthe client must be told as soon as possible.
You may recall that one of the first tasks of the project manager is to
establish mutual confidence with the client. Secrecy will undermine
your credibility. Nevertheless, give yourself time to prepare an outline
of options so that you are prepared for some difficult negotiations.
It is better to have a discussion with the client armed with a range of
potential answers than just with a nasty problem.
(b) Your own management should be informed at once and before the
client. (You may need to fend off the suggestion from your
management that there is no need as yet to talk to the client.)
(c)
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Ask the engineers to produce an outline of the options, within the time
constraint of a few days (no detailed research is possible). Ask them to
include the option of using the robot originally envisaged with an
estimate of the reliability now expected. Then arrange a meeting with
the client with the aimof negotiating either for reduced reliability or for
a delay in delivery, and an increase in the price to pay for the additional
work and, perhaps, higher cost equipment that may be needed as well.
As the contract is fixed price you may expect some tough bargaining
ahead, but remember also that the client has to be realistic. The client
presumably still wants the project to be completed. If you are put in a
position where future costs will be more than the fixed price, you may
have to recommend abandoning the project.
Although we have taken the supply of a robotic system as an example
here, you could apply the same sort of problemto any project. Perhaps
it has occurred (or will occur) in your own project and you will have
had to take similar actions.
Managing: The Start of the Project
Executing the Project
Most project managers start the project off by holding a formal kick-off
meeting with all the key players (client, customer, project team
members) involvedin the project. This is usually usedas an opportunity
to define the roles and responsibilities of everyone involved in the
project and to communicate the project plans clearly and concisely. It is
the first step in building the project team and building team morale
(more of these topics later).
On large projects you might do this by holding an away day. You also
might have a special project logo or slogan to use on every project
communication and report.
According to Field and Keller the activities of the project manager
during the projects execution may be considered to fall under the
following headings:
Initiating.
Planning, organizing and staffing.
Monitoring and controlling.
Directing.
Communicating.
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You may think that once the planning stage has been completed and
you have actually started getting on with the project the planning
activities will pass. However, project planning is an evolutionary
process that continues throughout the life of the project.
Harrison (1992) used the term rolling wave to describe how planning
changes throughout a medium to large project.
Hierarchical planning normally incorporates the rolling
wave concept of planning. In many projects it is not
practical or possible, because of the lack of the necessary
information, to plan the complete project in any level of
detailing its early stages. Often the necessary information to
plan the later stages of the project in detail is actually
generated in these earlier stages. In such projects, the rolling
wave concept overcomes this problem.
At the start of the project it is generally possible to create
only a Level 1 summary plan outlining the complete project,
with more detailed Level 2 or 3 plans for the early stages of
the project. Then as more information is generated by these
earlier stages of the project, it may be possible to create a
Level 2 plan for the complete project, and a Level 3 plan for
the middle stages of the project. Later, as the middle stages
generate more information, the Level 3 detailed plans for
the final stages can be created.
This can be likened to a rolling wave, moving from left to
right, that is from the start of the project to its finish. The
work in front of the rolling wave is only planned in coarse
detail to Level 1, or perhaps Level 2, with the crest of the
wave being the development of Level 3 or 4 plans. Within
cost accounts, or larger packages of work, the same concept
can be used. The earlier activities are fully developed work
packages or job cards, and the later are larger planning
packages in which the work is not fully defined and
detailed.
Harrison, (1992)
Along with monitoring and controlling, the Project Managers other
main job is to communication.
Communicating what is happening with the project, communicating to
clients, to suppliers and contractors. In fact communicating to all the
team members and management the status of the project. The Project
Manager also needs to be a good listener and encourage good
communications between all the project team members.
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READING ACTIVITY
Read section 5.1 of your core text, Field and Keller, to investigate this subject
more fully.
Controlling Project Objectives
Producing reports, schedules andbudget plans will helpyoucontrol the
project throughout its life. We will now look at the way these plans and
reports are used with any other status reports to control time, cost,
scope and resources.
Time
This is the process of comparing actual schedule performance to the
baseline schedule to determine variances, evaluate possible alternatives
and take appropriate action.
It is essential to control and monitor the time spent on projects. Time
control is the process of comparing actual schedule performance to the
baseline schedule performance. After this is done it is simply a matter of
reviewing the variances and taking appropriate action.
Cost Control
Before we look in more detail at cost control and project accounting, the
following comment from Field and Keller is highly illustrative of the
problems of cost control in the project management world:
Controlling cost is much more difficult than monitoring
cost. It is almost impossible to prescribe how it should be
done. There are numerous books on cost control which, in
spite of optimistic-sounding titles, are really mostly about
techniques for cost monitoring. Cost monitoring is, of
course, an essential prerequisite for cost control without it
the project manager is left in the position of one who can
only exhort the team to do their best but does not know
whether to praise them or blame them for their past
performance. It comes back to the project control loop.
One axiom should be stated at the outset:
You cannot control the cost of an item when the money has
already been spent or irrevocably committed.
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A consequence of this axiom is that cost control is all about
controlling future commitments, not about controlling past
expenditure. So the main part of cost control is the
authorization to spend money.
In a nutshell cost control is the process of comparing actual
expenditures to the baseline cost plans to determine variances. After
this has been done you need to evaluate alternatives and take
appropriate action.
You would need to systematically collect cost data including the
following:
Labour hours expended.
Percentage completed of activities in process.
Non labour hours to date.
New activities that have been identified.
Previously planned activities that are no longer needed.
All these would need regular review and action taken, where
applicable. Reports would need to be published.
It is very important to keep a firm grip on costs. The best way to do this
is to ensure you keep a firm grip on the amounts that are authorized.
You should only authorise those commitments that are detailed in the
project budget breakdown. On most projects a code would be noted on
the authorisation form so it can be checked against the estimate before
the order is placed.
It may also be necessary to put together revised estimates when the
performance falls below the standard required. Careful monitoring and
quick action will help take care of cost issues before the problemgets out
of hand.
Resource Control
Resource control is the process of comparing actual performance to the
source plans to highlight variances and determine appropriate action.
Obviously a project manager cannot micro-manage everyones work
and be aware of what everyone is doing all of the time. The project team
should work in an environment, and the project manager should
encourage such an environment, where team members control their
own work.
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Some methods used to control resources include:
Team members should prepare individual plans for
accomplishing their work.
Empower team members to accomplish their tasks by
giving them appropriate authority and information.
Ensue all team members understand the basic project
objectives and understand their tasks.
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Figure 5.4 Control Charts Examples (Taken from Richman 2002)
Methods to Control Resource and Project
Objectives
Inspection
You need to ensure that work is being accomplished according to the
desired quality level and specification. One method is inspection: this
will include examining, testing and measuring whether activities are
progressing to schedule.
Statistical Sampling
It not practical to inspect every activity in the project so sometimes
principles of statistician sampling are applied to measure progress.
For example, you could choose to inspect ten out of one hundred
activities. You should then apply principles of statistical sampling and
probability to determine the exact number that must be inspected to
apply those results to the total with reasonable accuracy.
Control Charts
These are charts that show results along with established control limits.
Charts help to check if the project, or an activity, is in control or in need
of adjustment. Graphs can also be used to look at trends. The examples
below (from a printing facility) show histograms, pie charts and line
graphs to identify trends and will enable project leaders to focus and
control influencing factors.
Reporting on Project Objectives
As you may have gathered project managers spend a great deal of time
preparing reports and deciding what information is relevant.
Reports should be designed to communicate exactly what it needs to
communicated. Projects are sanctioned to meet objectives in scope, time
andcost. It therefore makes sense to align reports on these three aspects.
When preparing reports you should consider the following:
Maintain concise, quality, accurate plans.
Choose the best format for a report, such as a Gantt chart,
graph or histogram.
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Use exception reporting by including only major
variations from plan.
Use software to break information down and report on
variances.
Keep everyone informed, including customers, clients,
senior management and those in the project team who
need to be informed.
Make reports easy to read: use a traffic light symbol as
visual indicator of project status; i.e. green means project
is on track, yellow equals minor trouble, red equals major
trouble.
It is very important to make reports easy to read, Always ensure that
reports only contain the information needed by the recipient. Next,
determine whether the reports can be further simplified by converting
the data to graphical format. Summary reports for senior management
should always be in graphical format. A simple pie chart or graph is
much easier to understand than a report full of numbers.
ACTIVITY
Think of the reports in a project you may have been involved in. Using
suggestions from this chapter determine how you can revise the reports to
make them more useful.
ACTIVITY FEEDBACK
Think of issuing reports in graphical format(s), think of ways of simplifying the
reports to help management understand the progress being made.
Reporting per cent Complete
Reporting per cent complete is sometimes more useful than just
reporting on how many units or hours have been completed. Take the
example of a brick wall. It would be sensible to plan for 100 bricks per
day out of the total of 1000 bricks. It would be logical to assume that 100
bricks takes the same effort to lay each day.
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However, this would be misleading because in reality bricklayers lay
more bricks at the beginning of the job and fewer bricks towards the end
of the job, because higher rows of bricks are required needing
scaffolding and more time to move materials up and down.
Sample Reports
The sample reports below show a status report. This report was
designed to show senior management key information on three aspects
of the project objectives: cost, schedule and scope.
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St at us Repor t : 1 June
Schedule (6 months to complete)
Cost
Cumul at i ve Ex pendi t ur es
0 Week 1 Week 2 Week 3 Week 4 Week 5
0
20000
40000
60000
80000
Plan Actual Projected
Jun Jul Mar Apr May
Scope
Quality standards
Legal requirements
Zoning variance
ok
ok
ok
ok
anticipate delays
ok
St at us t o dat e St at us at compl et i on
Figure 5.5 Example Status Report (Taken from Richman 2002)
Schedule information is presented as a single timeline with a solid
arrow above the line showing performance to date, positioned at the
end of the first week of May. You can then check this with the dashed
vertical line indicating the date of the report (1 June), this tells us that he
project is running three weeks late.
The solid horizontal bar shows the scheduled length of the project. In
this example the project is scheduled to complete at the end of June. The
dashed line and the arrow shows that the expected completion is now
the end of July ! This means the project is four weeks late.
Cost information is shown on a chart showing cumulative expenditure.
The dotted line shows that actual spend is ahead of planned spend. The
dotted line shows hat the project is forecast to overspend.
Scope looks at a few key indicators, with a simple warning of potential
problems.
The example below shows the status of a project. The activities are
shown in grey. The black bars represent a summary of the activities in
each phase of the project. The lines show dependencies between the
activities.
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Figure 5.6 Gantt Chart Baseline Plan (Taken from Richman 2002)
Now look at the next report below.
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Figure 5.7 Schedule Status Report (Taken from Richman 2002)
This report focuses on the same project as in Figure 5.8, except the
project manager has updated it to show the latest status on the project
(putting in actual start and actual finish dates). He has used this format
because everyone is familiar with the baseline plan. As the activities
progress the grey lines become solid lines and the actual start and finish
dates appear in the appropriate columns.
ACTIVITY
What is an exception report?
ACTIVITY FEEDBACK
A report that shows only major deviations from the project plan, rather than all
deviations.
Controlling the Changes in the Project
Throughout a project, events may happen that necessitate minor or
major changes to the plan. Most changes happen because of errors at the
planning stage. Lots of changes to the plan may be an indication of weak
management or a sign that the organisation is trying to handle more
work than it can handle.
Changes may also be brought on by external events, changes such as
government regulations new technologies or competitors changing or
adding new products.
Whatever the changes, it is important to put in place a formal change
control process to handle changes to the plan. The system should
include formal processes for submitting, evaluating and approving
changes to the plan.
Change control is needed to manage the potential effects on the project.
Whatever change you make, however small, there will be a knock on
effect to the project. A knock on effect to the budget, schedule or scope.
Beware of scope creep! This is the tendency for scope to increase
during the course of the project without proportional increases in time
or cost.
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Change control is often called configuration management.
To ensure you keep changes to projects under control take the following
actions:
Introduce a process for submitting, evaluating and
approving changes to the project plan. Define guidelines
so the team members know exactly what minor changes
are acceptable and what changes need to be put through
the change control process.
Review change requests with the project team. Consider
the impact of the changes, identify causes of change and
determine if these impact on other areas of the project.
Look at other areas and courses of action and determine
their effect on the project.
Approve or reject changes and communicate changes to
all concerned.
Document and track changes, reporting their effect in the
project.
READING ACTIVITY
Read section 5.2 to understand these concepts more fully.
Project Evaluations
You will be collecting data and issuing reports to ensure costs, time and
resources are being managed effectively. Even though these will give
you a good idea of the progress you are making, most project managers
also hold project reviews to ensure team members are motivated, and
customers and clients are happy.
Project reviews also help motivate the team. It is an opportunity to step
back and take a good look at the project to be sure that everything is
progressing to plan.
Project reviews also provide feedback to help everyone stay focused on
the project objectives. People work better when they receive positive
feedback. It helps people stay committed and motivated.
We can breakdown project evaluations into four general methods:
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On-going reviews: on-going reviews should ensure that the project
standards, as included in the scope statement, are being met.
Periodic Inspections: these are weekly or monthly inspections to
ensure that project objectives are being met. Every bit of work cannot be
inspected, therefore it should be agreed at the beginning of the project
what will be inspected and at what frequency.
Milestone Evaluations: milestones are the completion of major phases
in the project. Here you are certifying that all the work scheduled to be
completed has been completed to the agreed specification.
Final Project Audit: this happens at the end of the project to confirm
that every thing was completed as agreed by the customer, and/or
client. The audit is helpful to gather lessons learned during the project.
What was well done? What couldbe learnedto improve future projects?
ACTIVITY
Find out if your organisation has formal evaluation process? What project
reviews do you currently perform?
ACTIVITY FEEDBACK
Refer to the research you have undertaken in your own organisation and if it
matches the techniques and processes outlined above.
Closing the Project
Good project management techniques include procedures for formally
closing the project. The reason for project closure is to confirm that all
the work has been completed as agreed and the customer accepts the
final product. There may also be a deliverable called project handover.
This is very close to project completion and is usually the formal
handing over of the project to the customer or client. The following
comments from Field and Keller put this in perspective:
Right from the beginning the project manger should focus
on the target: successfully closing the project. The project
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will have finite duration and the project manger will want
to ensure not only that the project has been completed
technically to good quality, within budget and schedule, but
also that the ongoing business after the project has been
completed is as healthy as possible. As the project
progresses, the plan for its closure will need to be
developed. This is sometimes called a phase-out plan or
termination plan
Many projects deliver a working system that is handed over to some
other organization. For example, at the end of a chemical plant
construction, the plant must formally handed over to the client. Prior to
this the maintenance staff would have trained in the new plant. This is
to ensure that ease of future operation happens when the plant is on
stream.
The documentation also needs to be complete. As Field and Keller
highlight:
the documentation includes complete lists of all the project
deliverables, showing how they fit together and how they
were designed and tested. Furthermore, the documents
should show how it was intended that the product should
be used and maintained. This applies just as much to
software as it does to hardware.
Acceptance need not be 100%. The customer/client may accept the
project with reservations. Again as Field and Keller highlight:
The reservations will list the items outstanding and the
project team may then deal with these with over some
agreed time-scale. It may not make economic sense to fulfil
every aspect of the agreed scope of work, even with the
changes agreed so far. Using the Pareto principle, it is
foolish to spend huge resources on work that is of only
minor interest to the client. Negotiation is the sensible way
round this problem. Hopefully, unless the client is
unhelpfully stubborn, an agreement will be reached
between the contractor and the client that payment for the
work is adjusted to take account of those elements of the
work that cannot be tackled economically
The purpose of project closure is to ensure that all the payments have
been made and finance reconciled, project documentation complete and
final project reports completed.
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Project closure is also a time to recognize individual efforts and
celebrate project success. The project manager should also ensure that
team members have smooth transition to other projects.
Many project managers use a project closure list to ensure all the items
are taken care of during project closure. Checklists can clearly indicate
the close out functions; aid project team members who have little
experience in this area; reduce oversight of important areas.
Example project closure list
1 Have all activities in the project plan been completed?
2 Have all work orders been completed?
3 Have all the contracts been closed out?
4 Has the client accepted the final product?
5 Have all the maintenance procedures been put in place?
6 Have all final project reports been prepared?
7 Have all payments been made to vendors and contractors?
8 Have the project accounts been reconciled and closed?
9 Are all parties aware of the pending closeout?
10 Has excess project material been dealt with?
11 Have all project equipment and other resources been returned to
stores or reallocated?
Obviously the project list will vary in size according to the size of the
project.
CASE STUDY
Southern Power
In response to growth in southern England, Southern Power has decided to
build a 1 billion power plant near Worthing, Sussex. The new plant would
implement new technologies not only to produce clean power to benefit
southern England but also to generate enough power to sell to other utility
companies in the UK.
However, news of the new plant generated lots of opposition from local
residents. As building work started they launched several lawsuits to try and
stop construction.
Southern Power tried to convince local residents of the benefits of the scheme.
After a few months delay the project was started.
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However, after a few months it became apparent that income from power
sales would not be as great as forecast. Management asked Paul Jones, the
project manager, to find ways to reduce the building budget so the company
could maintain the level of profitability from the plant.
Paul couldnt find many ways to reduce costs. (Tight environmental laws and
other government legislation). Paul asked the designers and engineers to make
design changes to reduce costs.
They made several changes that were implemented immediately and Paul
asked themto visit the site every month to look for other ways to save money.
After 1 year the CEO of the building company e-mailed the CEO of Southern
Power to complain of too many changes and that caused confusion and extra
work. He outlined a catalogue of changes by the engineers that were not being
fed through to the architects.
Southern Power also discovered that the first phase of the project did not meet
environmental standards and the project was nine months behind schedule.
Management immediately fired the project manager.
You have been hired as the new project manager. What action would you take
to put the project back on track?
You should include some of the following in you answer, project objectives,
change control and risk.
CASE STUDY FEEDBACK
The major areas of concern are: managing the objectives of time, cost and
scope. As the project has issues around time, cost and scope you need a clear
direction from senior management on the priorities for these projects.
There was no formal process to control changes; this was a major error.
Numerous design changes should give you an idea that this high tech. project is
very risky!
Time and cost control: The project started late, as PM you need to review all
the activities to ensure the correct data is being collected and evaluated. Was
the return on investment done properly? Was a proper investment appraisal
done?
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Summary
This section has looked at the techniques of project monitoring and
control. It has also looked at understanding the steps of controlling the
project schedule, cost and scope.
The importance of gathering information and how information is
reported effectively in order to support corrective actions was
reviewed. The critical issues of risk were reviewed, in particular how
risk can be identified, assessed and appropriate action taken to respond
to risk.
Control is the process of comparing actual performance to the plan to
determine variances and take appropriate action. The effectiveness of
controlling a project is tied to the effectiveness of the project plan. The
plan tells you where you are supposed to be and status information will
bring you up to date with where you are.
Scope management covers the processes required to ensure that the
project includes all the work required, and only the work required, to
complete the project. It is about defining and controlling what is or is
not included in the project. Quality management is the process required
to ensure that the project will satisfy the needs for which it was
undertaken, and in todays competitive market companies compete on
price, quality and customer service.
REVIEW ACTIVITY
Now read the following case study, taken from Project Manager Today. The
case study was written when the library was under construction.
Case Study: the British Library
What was the last great public building before the new British Library?
Britain is well supplied with great public buildings. They are structures
organized and built by the government of the day and for the public good.
Westminster Palace, St Pauls, the V & A, British Museum and The Royal Opera
House are all well-known examples. The New British Library on Euston Road
and next door to St Pancras will one day surely rate among the great.
PSA Projects are managing the new library project on behalf of the sponsor,
The Department of National Heritage, and the client, the British Library.
What we especially wanted to look at on this project was the teams use of
quantitative risk analysis techniques and so your faithful reporter trotted along
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Euston Road one wet afternoon to meet James Macrae of Eurolog the
projects risk analyst.
Jamess background is in civil engineering. With Taylor WoodrowInternational,
he worked in Dubai, Nigeria and Trinidad in a project co-ordination role. He
recently managed to find time to get an MBA at City University Business School
before joining Eurolog in 1988. Eurolog and the MBA took him out of
construction into the worlds of defence, telecommunications and IT so he
welcomes the library as an opportunity to return to construction.
The need for risk management on the project stems from the complex
interfaces between construction, commissioning, handover and occupation
phases of the building. The library team have a great deal to do once the
building is complete the new computer book retrieval system has to be
installed, tested and got working as does the book delivery system. This may
not sound too hard until you remember that there will be 11 million books on
the 300 km of shelves in the four deep basements underground. Let me take
you forward in time on a short guided tour of the new building.
When the building is in use you will enter through the main hall from the piazza
area on Euston Road having already walked above the deep basements in which
the books will be stored. The main hall is very grand with marble pillars
reaching from the ground floor entrance area to the ceiling many floors above.
Balconies along the rear wall of the hall connect the two main sections of the
library to your left and right.
Proffering your library ID card, you will turn left for the Humanities section or
right for the Sciences. In either case it is likely that you will seat yourself in a
reading room at one of the many public computer terminals and search the
computerized database for the book you want to consult. Once you have made
your selection you will press a Please get it for me button which causes a slip of
paper to be printed out some distance below you in the depths of the
basements at a librarian station somewhere near where the required tome is
stored. One of the librarians will respond to your call taking the book from its
place on the shelf and sending it off on a journey using automatic paternoster
lifts and conveyors running in hidden ducts and tunnels throughout the building.
Within 20 minutes your book should appear at the reading room counter
nearest you and a red light on your terminal will let you knowthat you can stroll
over to the desk and get your book.
This is a significant improvement on the current 24 hour wait that you can
expect while the book is delivered from one of the many repositories that will
be replaced by the new library.
In addition to getting all the book handling systems installed and up and running,
which of course means new staff training, the building has a very sophisticated
air conditioning system and fire protection system which will require some
looking after. The air conditioning will maintain the buildings environment and
is linked up directly to some of the book cases where it will help to maintain the
more precious volumes (the actual Magna Carta and Gutenerg Bible to name an
unreplaceable two) in peak condition.
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So the library and the construction team have a job on their hands getting the
book handling systems and building services into place. Add to these
commissioning activities the normal administration systems that need to be
brought to life security, accounts, personnel, canteens, toilets, cleaning, etc.
and add in the phased handover of the building as various sections get finished
off by the building team and you have a king-sized planning problem.
It is planned to hand over the building in a phased way permitting both
construction and commissioning work to proceed simultaneously on the
project. In a planned and managed way the builder will hand over each section
of the building to the client who can then begin his or her own work.
The library wanted to examine various ranges of handover dates as there were
a number of possible sequences. The team decided to use quantitative risk
analysis techniques to predict the probabilities of handover dates for each part
of the building. On the basis of risk-based predictions the final decisions on the
handover sequence would be made.
Enter James Macrae of Eurolog. This is what was done to examine the phased
handovers using quantitative risk management techniques. The risk analysis
started off with the construction project plan as prepared by the managing
contractor Laing Management Contractors as this was downloaded into
the Eurolog system. Then the Librarys commissioning plan was downloaded
from their OpenPlan system and the two simplified into a master plan. To this
network plan risk analysis techniques allow James to do two major things.
Variable durations
Each duration can be replaced with a range of durations associated with
likelihoods. You can have either a continuous range or a specific number of
durations. James explains a case where a range of durations might be used:
Take an inspection task on an area of the building. The optimistic duration
might assume that the inspection found nothing outstanding: duration one day.
The pessimistic duration might assume that the inspectors uncovered a great
deal of poor quality work which requires correction: duration six days.
The most likely is that the inspection will reveal a few problems which need
tidying up: duration three days. Hence the durations will be one, three or six.
Each duration can have a likelihood associated with it. Lets say a 10%
likelihood of a six day duration, a 70%likelihood of the three day duration and a
20% likelihood of the one day time frame.
In other types of task plastering a wall, for example the task might take
anything fromtwo to six days depending on the number of plasterers, howwell
the work goes and all the other things out there waiting to make your project
take longer than planned. Hence, a duration that can be anything between one
and six days.
Variable Logic
Here the network plan is brought closer to reality by the addition of
alternatives logical paths that might be followed associated with likelihoods.
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Lets take a commissioning task like firing up and adjusting the controls on a
boiler. The risk team might judge that there is a 30% chance of commissioning
being successful straight off. Asecond possibility, judged at 40%likely, follows a
path where the commissioning is complicated by some problems with the
boiler but where simple remedies are available. The final route, only 30%
likely, is that the commissioning fails very badly causing the need for extreme
remedies.
Each part follows a series of activities which take some time.
Multiple analysis
Given a project in which either or both of these two aspects of variability exist
and have been modelled wherever appropriate you can see that a simple
calculation of early and late start and finish dates will not be enough. The system
can take the optimistic durations, pessimistic durations, likely and unlikely paths
and calculate a number of overall project durations. The system uses a Monte
Carlo simulation technique.
The technique relies on random numbers and the name refers to the random
selection of numbers in the gaming houses in the principality. The roulette
wheel spins, the little ball bearing bounces and a number gets chosen at
random.
What happens to the library project is that it is analysed many times using
durations selected scientifically at random from the range of durations that
form part of the model. The risk analysis system takes each task and uses a
random number generation technique called the Monte Carlo technique to
select a single duration for each task from the available range and to select a
single path where choices are available. The system then executes a normal
critical path analysis and arrives at an overall project duration. In each specific
pass some tasks are assumed to go really well, some really badly and some in
between. The programme notes down the overall duration and goes back to
the start.
Taking another set of randomly generated numbers the system chooses some
more options and generates another overall project duration. Do this a few
hundred times and a graph emerges linking overall project duration to the
likelihood of that duration occurring.
Instead of one overall duration based on loads of assumptions we have a large
range of durations each based on assumptions and we can deduce some trends.
In the case of the new library, rather than a single overall project duration this
use of risk analysis leads to a prediction of possibilities for each of the numerous
handover dates James Macraes Window Report shows the sensible range for
each handover and the likelihood of each occurrence. It looks much like a
barchart but it shows a range of dates for each event the window in time
during which the event is likely to happen.
Not only do you get a range of possible durations for the project, each
associated with a likelihood of occurring, you also get a valuable tool called a
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criticality diagram. The criticality diagram shows the likelihood of each task
being critical. While a normal single pass critical path analysis shows that either
a task is or is not critical, the criticality diagramshows a percentage against each
task varying from 0% (not critical in any pass) to 100% (critical in every pass)
and anything in between.
The technique involved falls under the general heading of quantitative risk
analysis methods. We are not here concerned with the qualitative risk analysis
techniques except to say that they exist and performa useful function in project
risk analysis methods (PRAM) especially in identifying areas where quantitative
techniques are most likely to be useful.
This all gives the client a better understanding about the plan for the building.
You can see that once this has all been done, variations and information
describing actual work done can be added to the network plan to see their
effect on the end date/likelihood graph and the criticality diagram.
There are disadvantages of these techniques. It takes time and resources to
work out the numbers so there has to be a significant investment throughout
the project management team to facilitate the risk analysis work. There must
be a critical path model for the program to work successfully and the various
parties involved must contribute to the plan so a degree of openness must exist
between the organisations.
The benefits of this approach do not arrive without some considerable
commitment and investment. Clearly a project network plan and good
estimating are the foundations on which analytical skills to model uncertainties
can be used to analyse risk. The information that springs from risk analysis will
be useless without decision makers ready to acknowledge and deal with
uncertainty.
Sharing the risk
The library involves many organisations contracted to each other but lets think
about these techniques being used within a single organisation where one
group of people are moving towards the start of a new project within the
company. In such a case the biggest advantage for me, an old pragmatist, is a
personal one which I call risk sharing.
If there are risks associated with a project and you keep them to yourself and
tell no one, you take the risk on your own shoulders. If things go well people
take little notice and you get off lightly. If things go badly it will be all your fault. If
you examine risk, discuss risk with your management and collectively agree to
take on the risks then you have done a great job as a project manager. If things
go well you get off lightly just as before. If things go appallingly badly and
everything that can go wrong does go wrong, you can say that the organisation
took sensible, calculated risks. And at least you get to keep your job because
you shared the risks.
Some figures from the new British Library
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The newBritish Library, after completion which is scheduled for 1995, will seat
about 1300 readers. If the 11 million books were taken from their shelves and
the shelves unwound from their basement walls and laid in a straight line
starting at St Pancras and heading North, there would be a huge traffic queue in
Hendon as the rush hour cars worked their way around this long line of
shelving. There would also be a traffic jam in Doncaster and delays in
Newcastle where the shelves would end!
The books will be stored at a temperature of 17
o
C and a relative humidity of
50% with very narrow tolerances. These cool, dry conditions will apply within
some of the air-conditioned exhibition cases.
The Mechanical Book Handling System specifies 85% of books requested will
be delivered within 15 minutes and 95% within 20 minutes.
There is a section of the main library which is a building within a building called
the Kings Library. It is designed to be a glass tower of knowledge as a visible
demonstration of the wealth of information stored in the basements beneath.
The Kings Library will store a collection of books and manuscripts created by
King George III, and given to the nation by King George IV in 1823. This section
alone will store 60,000 volumes including four folios of Shakespeare, a first
edition of Paradise Lost and other very early printed works. These are not
purely for show as many can be requested and examined.
CASE STUDY
Read the following case study to understand some general issues of how
project management might be tackled in an educational establishment.
The case study highlights some important project management issues,
especially the importance of good communication and building good
relationships during project management. The lessons learnt section is also
particularly pertinent.
Colchester Institute
Approaches to Project Management in the
Education Sector
The perspective of a large FE/HE College
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Colchester Institute Project Management Case
Study
Colchester Institute; Jayne Bacon
Introduction
Jayne Bacon is the Information Learning and Technology Manager at Colchester
Institute.
She was appointed the Project Manager of a Joint Information Systems
Committee (JISC) sponsored interoperability project at Colchester Institute in
2001. Janette Hillicks of JISC infoNet interviewed Jayne at Colchester Institute
to find out more about the Project Management approaches used on the
project and the benefits felt, challenges met and lessons learned from
successfully undertaking a sizeable project in a relatively short timescale.
The Institution
Colchester Institute is the largest college in Essex and is based over two
campuses one in Colchester, the other in the seaside town of Clacton. The
Institute has over 10,000 full-time and part-time students enrolled on over 140
full-time and over 700 part-time courses. There is a large infrastructure
underpinning the academic operation which includes a Learning Resources
Centre, Student Services and 1,200 internet enabled PCs.
The College offers both Further and Higher Education deliveries and this is one
of the challenges facing the institution given the requirements are diverse for
each; for instance, with regard to examination boards and various statutory and
other elements.
The Project
The JISC Committee for Integrated Environments for Learners (JCIEL) set up a
Managed Learning Environment Steering Group (MLESG) to help Further
Education Colleges with the selection and implementation of Managed
Learning Environments. The MLESG conducted a number of Interoperability
pilots to implement and prove the feasibility of interconnection between
systems within an MLE using the international standard of IMS (Information
Management Systems), with FE (Further Education) extensions.
Colchester Institute became one of the pilot sites in 2001.
The intention of Colchesters project was to investigate the technical and other
issues surrounding the interfacing of TekniCALs Virtual Campus (a Virtual
Learning Environment product) with Fretwell Downings EBS (a student
record system component of a Managed Learning Environment (MLE) using
appropriate elements of the IMS standards. The project took place over the
period 1st April 31st December 2001.
The projects stated aims were to:
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Achieve student and course data exchange between component
parts of the MLE.
Enable the VLE to deliver specific study material to identified group
of students.
Test interoperability between the Virtual Campus (VLE) and learning
resources (content).
Its specific objectives were to:
Achieve student and course data exchange easily;
Construct objectives for best practice within the College;
Identify summary reports required by Colchester Institute;
Ensure that the reporting and tracking of students achievements
within MLE met the needs of Colchester Institute.
The Institute was already working with a standalone VLE (TekniCALs Virtual
Campus) and were keen to consider if a Managed Learning Environment could
offer any enhancement to their current operation and also what effects this
would have in terms of staff and procedures.
The project was supported by a small team who worked on it alongside their
regular jobs and also had a steering group and a small pilot group of students in
an identified area of the curriculum.
The Project Management Approach
A great believer in using structured, methodical approaches, it is no surprise
that Jayne used just such an approach for the Interoperability Project. The
method she used was something of an adapted hybrid of recognised practices.
It was not strictly a prescribed Project Management methodology although it
did have elements of tried and tested tools. There were several similarities to
PRINCE for example.
Preferring to work within a structure with clear tasks and goals, rather than a
fluffy environment, Jayne believes that the main advantages of using a
methodical approach are:
Control.
Focus.
Key inputs/outputs.
Clear objectives.
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Challenges.
It is Colchesters policy to only take on projects that will be of benefit to the
Institute. It is imperative that there is some value for the College in any new
initiative undertaken. Jayne recognises that the temptation is there for the
availability of funding itself to be a driver for committing an institution to
undertake a project but feels strongly that this would not be in the best
interests of Colchester Institute and is keen that any project undertaken should
fit in with the strategy of the College. The Interoperability Project was
something that the Institute was going to be undertaking anyway although the
potential for involvement with JISC was very attractive.
Defining the scope wasnt easy it boiled down to what was realistic in the time
allowed.
Getting clarity of business process levels, etc there was a real element of trust
in other peoples skills and expertise. There wasnt a change of scope as such
although some minor tweaks were made. A real push was required towards
the end of the project to ensure its successful conclusion.
Stakeholders and Related People Issues
When it came to the involvement of stakeholders in the project there was a
deliberate overall strategy pursued to ensure that the maximum support from
throughout the College was generated. The goal was to ensure that
stakeholders reacted positively to the approach and this was achieved. There
was no detrimental reaction against the formal approach taken and a proactive
communication strategy helped alleviate any fears and dispel any confusion that
may have been experienced.
The whole project was managed in a proactive way. All stakeholders were
encouraged to have buy-in to the project. Indeed, it was vital for the success of
the project for stakeholders to be on board. This included the active buy-in of
the vendors as well as the other stakeholders. There was also a recognised
requirement for additional/dedicated resources for the project including a
programmer. It was essential that the Academic Registry, the Senior
Management Team and the Head of IT Services were all on board from the
outset too. Transparency of data was an important issue and was the
responsibility of the Academic Registry.
There were some challenges experienced in the selling of the project. It was
important to avoid raising stakeholders expectations too high, too quickly.
Jayne candidly admitted that the institution has had its fingers burnt on previous
projects due to overselling something from the outset. This can cause real
disappointment and helps fuel mistrust for future initiatives.
Academics were not heavily involved in the project initially; there was a
deliberate plan to get them more involved later. The college had previously
undergone a collaborative VLE project which had resulted in a number of
lessons being learned and an agreement that some aspects of the previous
experience should not be repeated. One of the lessons heeded was not to raise
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expectations too early on in a project hence the delay in including some
elements of the Institution until there were real tangible outputs.
An interesting approach was taken when academics were initially introduced to
the project. Sessions for academics were held based on the premise that
money was no object and technical barriers were surmountable. They were
asked what would make things better for them. No promises were made about
the outcome of the exercise. In actuality, several of the suggestions they made
were already available, they just hadnt realised.
Team building is very important to Jayne and she was also keen to break down
formality. Goals were seen as shared and not just the province of management.
Meeting of goals was seen as a useful motivational tool encouraging further
commitment of the stakeholders to the project.
The Project Steering Group was chaired by Jayne and she also managed the
team. Her philosophy with regard to managing people is If theyre there,
theyre important. Group mix was important and once the group was formed
it stayed together throughout the duration of the project.
Jayne is a pragmatist and one of the strengths that has become apparent in her
leading of this project is that she has trusted those people with particular levels
of experience and knowledge to use it appropriately in order to achieve set
goals. However, she felt strongly that in order for her to have an overview of
what was happening and a strong steer of direction for the project, it was
important to have regular plain English explanations of activities by all
members of the team. This was important as it helped to ensure that everyone
had an understanding of what was going on in basic terms. It also helped to
de-mystify some of the more technological and data specific aspects of the
project.
Feedback from those involved in the Project Team has been positive one
member of staff stated:
It has provided a much needed opportunity to reconsider my own,
sometimes cynical, view of new learning systems. The enthusiasm
within the project team has been infectious and I have recaptured
something of the spirit I had when I was involved in research some
twenty years ago
Tools
PEST and SWOT analyses were undertaken in order to highlight issues from an
early stage. (A PEST analysis looks at Political, Economic, Social and
Technological factors. A SWOT analysis identifies the Strengths, Weaknesses,
Opportunities and Threats involved.)
All stakeholders including the Governors, the Principal, the Senior
Management Team and the students were analysed using the tools. There was
some familiarity with the approaches and the theory behind them but the
project gave an opportunity to put the theory into a practical context. The
project investigated elements of the College rather than looking at the sector as
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a whole. Careful consideration was given to what the Institute required of the
technology and the project outcomes. The team needed to look at a minimum
level at which requirements could be met to allow scalability for the future.
The project was not just about technology. During the pilot stage a significant
amount of time was spent looking at processes and demands on technology. A
business process project was undertaken alongside other related projects at
the same time as the Interoperability Project.
External Parties
Vendors met the deadlines. The same vendor representatives attended the
regular project meetings each month there was a consistency of contact
which, it become more and more obvious, was a major factor in the successful
progression of the project. The regular meetings always ended with an
agenda/action plan being agreed in advance of the next meeting.
It was seen as a definite advantage that the two vendors had worked together
before as this helped save time from the outset of the project. The approach
and the relationship cultivated with the vendors worked well and occasionally
more progress was made than had originally been planned for so other tasks
could be fitted in. Vendors were so on board that it was not uncommon for
themto seek responses fromtheir developers via phone calls during the regular
project meetings rather than waiting until they were back at base about
particular issues. If Colchester had not taken such a proactive and methodical
approach to the project there was definite potential for deadlines to be missed.
The projects communication and reporting framework prevented float and
encouraged continued motivation.
Tracking and Review
The project used a minimum bureaucracy approach. Form filling was kept to a
minimum within a pro-active communication strategy. Emphasis was placed
much more on communication rather than on over-zealous administration.
The following questions were regularly asked:
Where are we today?
Where do we need to go?
What do we need to do?
When can it be done by?
These simple questions helped frame the projects progress and resulted in
appropriate measurements of tasks and timescales. Tasks within the action plan
were tracked. Monthly progress reports were compiled which met the
requirements of both JISC and Colchester Institute whilst also being a useful
tool for the Project Team itself to measure progress against goals. This helped
ensure that the project was regularly reviewed to monitor its progress and
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keep it on track. There was also a major review of the project at its conclusion.
Challenges were seen as a positive throughout the project as the approach was
such that challenges could be faced and met.
A schedule for monthly meetings was agreed from the outset of the project.
The whole team, including vendor representatives attended the regular
meetings. Tasks were set at these meetings with an emphasis on reality
Were undertakings realistic? Could things be done within the required
timescale? The projects success relied on the setting of realistic goals within
realistic timescales based on realistic levels of resource.
Communication
Regular communication was vital and, as well as face-to-face meetings, great
importance was applied to the use of telephones and e-mails. In order to
prevent any slippage on deadlines and milestones it was accepted practice that
the relevant parties were prompted (via telephone or e-mail) a week or so
before looming deadlines.
Risks
The biggest risk to the project as far as Jayne was concerned was failure the
Interoperability might not actually work. Colchester, however, was prepared
to accept this risk, although there was a lot of confidence within the institution
that this would not happen and it was not generally considered to be a risk
project. All risks were shared throughout the team the relationship was very
open with a high level of communication.
Cultural Challenges
There were some challenges and some cultural differences that became
apparent between business and education sectors during the projects
duration. Terminology, for instance, could be a problem at times a field
requiring the same information in both systems might be called something
different. Also the possibilities for recording that information could also be
different for instance Male and Female could be represented as Mand F in one
system and 1 and 2 in another. There were also some cultural differences
apparent between private industry (the vendors) and the education sector
(Colchester Institute). However, these challenges were met and a very good
working relationship was developed. This data mapping issue is something that
can be easily missed when planning a project. Overlooking it can have a huge
impact on the progress of an implementation project as it can cause major
delays if it is not taken into consideration from the beginning.
Project End Lessons and Benefits
There were several unexpected benefits felt as a result of undertaking the
project.
Everyone learned a lot. Good relationships were built. It gave extra credibility
to Colchester Institute within the sector. The project also helped to develop
close links between sections across the College. If Jayne were undertaking a
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similar project today the main thing shed attempt to do to improve things
would be to plan better for absences and holidays especially those that occur
during the mid-summer period as delays caused by unplanned-for absences can
be a frustration. The project experienced some challenges around the
differences between education and business holiday arrangements. However,
if vendor representatives were away they would always send a replacement to
any project meeting.
When asked what message Jayne would give to other colleges who arent
currently using a structured methodology for their projects she said that they
should, Stop and re-think you need the structure! She feels that sometimes
people blame the product but its more about insufficiently defining
requirements. Institutions need to look at what they need to achieve and who
needs to do it.
One of the main lessons learned was that being proactive was crucial, it became
clear during the project that if there is not a proactive attitude involved then the
project will not work. There is no opportunity to just sit back and expect things
to happen people and activities often require prompting.
Ultimately, the project addressed the interoperability of the Institutes VLE and
MLE with the interests and needs of staff, students and Colchester Institute.
The project complemented the Institutes CIS (College Information System)
and ILT (Information Learning Technology) strategy. The Institution found that
their approach to integration had realised benefits of a culture change within
learning practices across the curriculum. The project was a challenging and
rewarding experience for those involved had a major impact on developments
for following years and stages at the College.
Further resources
JISC infoNet has a wide variety of resources and tools freely available to
institutions and individuals in the further and higher education sectors, with the
JISC infoNet website (http://www.jiscinfonet.ac.uk) providing the main access
route to the materials.
Further information is provided on the website on a variety of issues relevant to
the Colchester Institute case study including information and data, PEST and
SWOT methodologies, and best practice models for process review and
project management.
Appendix 1
ORIGINAL PROJECT MILESTONES AND OUTCOMES. SUMMARY
(from Public Report to Prove the Concepts of Interoperability Within
Managed Learning Environments in the Further Education Sector
(Colchester Institute). Written by Jayne Bacon.)
Milestone Outcome
1 Submit tender to JISC 6 Feb. DONE
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2 Agree with partners monthly meeting dates and venues March.
DONE
3 All partners to agree on detailed action plan for the interoperability
process to start March April. DONE
4 To identify a steering group to include a student, member from
another college, ILT champion, member of SMT, Head of IT Services,
Curriculum Manager and ILT Development Manager This was not
done as stated instead many different cross college meetings took
place and heads of faculty and centre as well as staff from FE and HE
were invited. This was deemed as the steering group.
5 College to identify curriculum area for pilot with students for
September 2001. DONE
6 College to ensure that chosen curriculum area will have appropriate
study material available by September within the VLE. Course material
to be developed by MPU (Media Production Unit) with course tutors
where necessary. DONE
7 Trial transfer of student and course data from the MIS to the VLE.
JUNE
This was delayed but took place in November and was successful to all
3 levels of data transfer. (level 1 transfer, level 2 understanding data
transferred, level 3 using the data transferred in the correct manner)
8 Testing of curriculum mapping within the VLE. JULY. Again delayed
until November. In November we could see the top level course but
not the broken down modules although the vendor could see them at
their end. Tested again December and the modular level could be
seen.
9 Testing of Validation. JULY There is no method to do this in the
standards for this project
10 Testing with Virtual student data. JULY AUGUST
Testing took place in November and has been successful at all 3 levels
(see no. 7 for levels).
11 Staff development sessions for prospective tutors of the pilot project.
The pilot project was on 2 courses which the ILTchampions are all doing
through the Virtual Campus. They are all using the Virtual Campus as
students and are learning through this medium. No training on being a
staff member has taken place at present but staff are using the system.
12 Trial of interoperability with Olib the MIS and VC, This was not done
but decision was made to leave this out due to hold-ups and delays on
the rest of the project.
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13 Enrolment and training for trial students Tested in November and
successful.
14 Meeting with students on pilot where possible for evaluation of
experience. As the course they are all doing is accredited at level 3
OCN all students will be required to do an evaluation at the end of the
course. This will not be in time for this project end. However, I have
had positive feedback from staff that want to use this system with
students and can see the benefits for some groups.
15 Changes made and noted for interoperability I feel that we have made
some very relevant points in this project and we have made necessary
changes as we have progressed.
16 Testing of further areas (deletion, etc). This is something we all feel
needs further testing.
17 Evaluation of all partners and staff and students
This report (Public Report to Prove the Concepts of Interoperability Within
Managed Learning Environments in the Further Education Sector (Colchester
Institute)) submitted to JISC at end of project.
Disclaimer
Copyright Northumbria University 2004.
The statements made and views expressed in publications are those of the
authors and do not represent in any way the views of the Service.
The JISC infoNet Service offers general guidance only on issues relevant to the
planning and implementation of information systems. Such guidance does not
constitute definitive or legal advice and should not be regarded as a substitute
therefore. The JISC infoNet Service does not accept any liability for any loss
suffered by persons who consult the Service whether or not such loss is suffered
directly or indirectly as a result of reliance placed onguidance given by the Service.
The reader is reminded that changes may have taken place since issue,
particularly in rapidly changing areas such as internet addressing, and
consequently URLs and e-mail addresses should be used with caution.
No part of this document may be reproduced or distributed in any formexcept
by bona fide public sector education establishments or in accordance with the
provisions of the Copyright, Designs and Patents Act 1988 and any amending
legislation. All reproductions require an acknowledgement of the source and
the author of the work.
Parties outside the education sector should contact JISC infoNet regarding use
of these materials.
156
University of
Sunderland
References
Atrill, P. (2003) Financial Management for Non-Specialists. FT Prentice
Hall 2003.
Belbin, M., (1996) Management Teams. Butterworth-Heinemann.
Boddy, D. and Buchanan, D. A. (1992) Take the Lead. Prentice Hall.
Handy, C. (1993) Understanding Organisations. Penguin.
Harris, J. (2004) www.gantthead.com
Harrison, F. (1985) Advanced Project Management. Gower
Herzberg, F. Work and the Nature of Man. Ty Crowell Co
Maslow, A. (1943) Motivation and Personality. revised by R.Frazer et al
Management.
Project Management Today (1992)
Richard, L. (2004) www.gantthead.com
Tuckman, B.W. (1965) Development Sequence in Small Groups.
Psychological Bulletin, 63.
Weiss, J and Wysocki, R. (1994) 5 Phase Project Management: A Practical
Planning and Implementation Guide. Addisn-Wesley, Reading, Mass.
157
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Sunderland

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