Meeting the Challenges of Project Management: A Primer

MEETING THE CHALLENGES OF PROJECT MANAGEMENT: A PRIMER

Frank Greenwood

ESI International Arlington, VA

Published by

ESI International 430 1 Fairfax Drive Arlington, Virginia 22203

C11998 bv ESI International All rights resewed. N o part of thls publication may be reproduced, stored in a retrieval systcm, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of ESI International.

I?ditor: Angela Weaver Cover Exea4tion: Claudia Guintu Layout Execution: Trinh Le

Printed in the United States of America ISBN 1-890367-08-7

About the Author ................................................................................. iv About the Reviewer ............................................................................ v Acknowledgments ............................................................................ vi Meeting the Challenges of Projcct Management: A Primer .................... 1 Introduction ...................... . . .....................................................1 Summary .................................................................................. 3 #I What Is the Scope of My Project: What Do I Want/Need? ............... 4 Summary 7 #2 What Are the Critical Factors for Your Project (e.g.. Time. Budget)? .....................................................................8 Summary ................................................................................. 11 #3 What Arc the Major Work Items, Tasks, and Sub-Tasks to be Performed? Who Will Perform Them? ...................................12 Summary ................................................................................. 15 #4 What Resources Do I Have to Reach My Objective? .......................16 Summary ................................................................................. 19 #5 When Will the Various Tasks be Performed? .................... . . . ........21 Summary ................................................................................. 23 #6 How Do I Monitor the Progress? .................................................. 24 Summary ................................................................................. 27 #7 How Do I Manage the Changes Needed? ......................................... 28 Summary ................................................................................. 31 #8 What Will This Project Cost? .......................................................... 32 Summary ................................................................................. 35 #9 How Do I End the Project? ..............................................................36 Sources ................................................................................................ 38

ABOUT THE AUTHOR After 10 ycars in t h e international oil industry, Frank Greenwood returned to the States and carncd a Ph.D. in Management from the University of California in Los Angeles. He taught graduate and undergraduatc courses in statistics. computer science, and project management. He worked in five computer centers becoming director of three. Projects managed included the following: converting a punched card system t o run o n NCR's first computer- the Century 100: consolidating two separate centers while converting both to run on an upgradcd mainframe; and designing and implementing new applications. Frank is author or co-author of nine books. He has worked in the US, West Africa, Canada, Taiwan. Singapore, and Malaysia. He is a Certified Computing Professional and is listed in WHO'S WHO in AMERICA and WHO'S WHO in SCIENCE and ENGINEERING. Married with thrce grown children, he lives in Bloomfield Hills, Michigan.

ABOUT THE REVIEWER Dr. Melvin deGuzman is the Founder a n d President o f Systems Management International - a consulting a n d training organization providing organization development, worker devcloprnent, systems integration, and project management services t o Fortune 100 companies and government agencies. He is also a faculty member o f t h e Johns Hopkins University and a course instructor for EST International.

Publishing, while highly competitive, depends on many, many people. For example: 4 The publishing house and its project managcmcnt team, its equipment and capital for transforming the manuscript into a book;

4 Those who trained the author- from the lady in seventh grade who made him learn about gerunds t o t h c employers who endured his movement along t h e learning curve;

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His parents, who, despite t h e very lean depression years. saw t o it that he became a college graduate;

4 His spouse, who keeps t h e whole family together;

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Last, but not least, the readers.

The list is endless. I hercby (inadequately) thank them all.

-Frank Greenwood

MEETING THE CHALLENGES OF

Much of what you are involved in is a project:

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Building your summer cabin Planning your wedding Re-engineering your work processes Net orking your computers Establishing your new business

These projects share common features: a budget, a deadline, and a deliverable ( i . e . , some product o r service or process that is defined objectively, not subjectively). A routine, rcpctitivc job is not a candidate for project management, because the work tends to be identical for each occurrence. That is, there is n o need for techniques that were developed t o deal with unique, new projects (which tend t o be a nonroutine collection of tasks). w Project management helps you to:

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Dcfine your outcomes/deliverables objectively: Estimate t h e resources and time you.11 need: Schedule resources and tasks; Complete your project within budgct and on schedule; and Anticipate difficulties.

Put simply, project managcmcnt is taking responsibility f o r the successful completion of a project.

Early on: consider some questions, such a s : 4 Why d o this project? Why now?

4 What am I risking? What are my assumptions (i.e., bets about the future)7

4 What will it cost? 4 What are the tangible and intangible benefits'!

As a project manager, you seldom get to choose your projects. Whatever the situation, it is important t o know who your client is. You need t o identify the one person o r small group that will be accountable for the project. That person o r group must be influential enough and dedicated enough t o commit the time and energy needed for your project to succeed. Once this is accomplished, you and the client then negotiate a written agreement on the client's objectives (the requirements and specifications of t h e product o r deliverable and the desired end date) and on your authority and responsibility.

As you plan, you create a basis for monitoring your projcct: Planning and control are opposite sides of t h e same coin. Your plan must include methods t o ensure the plan is operating effectively and the project remains focused on t h e objectives. Also, remember that experienced project managers know that change is inevitable, s o they must forever be prepared to replan. The process of planning (in contrast to drawing u p your finished plan) is critical. You can sit alone a t your desk and in. say, a half-hour write out your plan. This is just a small start. You havc t o negotiate the plan with everyone involved: otherwise, there will be no acceptance of, nor commitment to, your plan. In other words, you have t o involve all concerned in your planning process if you expect their support. In contrast, the "ready-fire-aim" approach guarantees big trouble for you. Usually, the factors that everyone needs t o agree on include:

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Goal- W h a t do you o r your client wantineed? This is typically some deliverable: a product, process o r service that is defined objectively, such as your completed summer cabin or your operating (profitable) small business. Schedule- What tasks and sub-tasks must be done? What are the major milestones along t h e way? When, and in what ordcr, should these tasks be finished and milestones reached? Budget- What resources are available t o you? Normally, everybody has t o agree about money, schedule, and person-hours.

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Contingencies- What a r e the threats that ma! operate against your plan? Should any occur, how will you react ? a

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Phase-Out- How will you end your project? You do not want it just dangling there. Agree on what "finished" means. Write out a description o f the product/process/service that is t o be produced a s a result of completing your project. Obviously, you want to end on schedule and within budget, and you want to eliminate subjective analysis after completion.

Give careful thought to these five areas of your project:

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First. Why am I doing this projcct? Do t h e benefits justify t h e costs?

Are there better placcs t o invest the time, effort, and resources that this project will cost? Remember t o factor risks into your evaluation, because comparing t h e rewards t o t h e risks can help you decide what to do. Remember, t o o , that your management abilities will be tested, specifically: - Yozrr plannzng abrlities: -

Your capability lo get work done through others and t o manage conflicts;

- Your self-dzsc~plrne,such as managlng your tzme and handllng stress; and -

Your negotiating skills (e.g., scope, costs, schedules).

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Second, What a r e the tasks and sub-tasks to be accomplished?

How a r e they t o be achieved? W h o will do these tasks? Ideally; after you negotiate a project plan, put it down o n paper and have everyone involved " sign-off" (accept) t h e plan in writing. If your boss has made you manager of this project (i.c., you are not working for yourself), negotiate a written agreement that identifies your client and dcscribes your responsibilities and authority. Tread carefully. Employees are often saddled with a n assignment that is budgeted with very few resourccs and very little time.

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Third, What will it cost? A logical approach i s t o get a good handle on all t h e tasks. Then, translate these into person-hours necessary to get the tasks done. Multiply t h c person-hours by the appropriate dollar charge-out rate. Add it all up, grind in a safety factor, and you have your cost estimate. Fourth, What's the schedule'? To determine your project's schedule, you need to know the following: - Tasks that must be done; - Sequence of these tasks;

- Duration of these tasks; - Resources required.

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Fifth, What a r e the risks? You need t o minimize the consequences of adverse events by:

- Identifyzng the potential risks; - Analyzing them; and - Determining how yo!, will respond ( e . g . , pzrrchase insurance, zlse a szrhcontractor).

It is also helpful t o note the difference betxvcen bcing task-oriented and being process-oriented. Task-oriented project managers concentrate on a limited range of tasks and thereby tend t o limit themselves. In contrast; processoriented individuals develop the ability to negotiate, to analyze problems, t o build a consensus, and to juggle different balls in the air simultaneously. They concentrate on the process o f being a project manager and don't restrict themselves t o thinking in terms o f the individual tasks making u p that particular project.

Make a list of all the activities that must be performed t o create your end product/service/process. This list is called t h e Work Breakdown Structure (WBS). From this WBS flow t h e schedule, the rcsource allocation, and t h e budget. Begin by asking: "What major work assignments must be accomplished t o complete this project?" A WBS to design and install a new software package, for example, may include the following tasks: assess requirements, design, program, test, and implement. Next, for each major work assignment ask: "What tasks must be done t o accomplish this work assignment?" These tasks a r e work items for which primary responsibility can b e assigned t o somcone and for which duration and cost can be estimated. To develop your WBS, you move from major categories of work (which map require several weeks) t o tasks and sub-tasks that may take. say. a few hours. Keep breaking t h e work into tasks until yon reach the level whcrc

you have clear completion criteria and time and cost estimates for doing t h e work. You will know your work breakdown structure i s complete when:

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It is broken down t o the level of detail that allows you, the project manager, t o control t h e project by using adequate cost estimates, scheduled start dates, reasonable duration estimates, and responsibility assignments. Each task results in a clear-cut deliverable. Someone is responsible f o r completing each task on time. within budget, and at the specified quality level.

Creating t h e WBS is often easiest using group sessions that involve a l l the concerned people. Begin b y brainstorming. Write all submitted ideas on a blackboard or on separate sticky notes, allowing no discussion (especially n o negative observations). Seek quantity, not quality. Set a time limit. Then, eliminate, group, and polish your list o f tasks and sub- tasks. Again, t h e WBS is a deliverable-oriented listing o f project components that organizes and defines t h e project. If it's not listed in t h e WBS, it is not part of your project.

The terminology may vary from project to project. but WBS levels can be described as: project goal; major milestones, activities, tasks. and sub-tasks. Although the WBS defines t h e tasks logically, putting these tasks in sequence requires a network showing when the tasks begin and end in relation t o each other and t o the calendar.

We now assume that you have crcatcd a deliverableoriented listing of project elements that organizes and defines your project (i.e.. your Work Breakdown Structure). You have successfully identified t h e tasks t o be accomplished. Nest. prepare a task analysis matrix. On the left margin of a piece of paper, list all of these tasks. Across t h e top. write headings such a s : planned duration, planned start date, planned finish date, cstimated cost, actual duration, and actual cost. Enter the appropriate information, as available. Also? for each task, show who is rcsponsible. For a big project, it is helpful to note such matters as: w h o helps the responsible individual, who must be consulted a n d kept informed, and who has final approval. The task analysis matrix lays out what must be done, when, by whom, and a t what cost. Log information as it becomes available, thereby keeping up with what is going on. You allocate your resources this way (e.g., people, money, time, tools, equipment. supplies) and construct a colitrol tool a t the same time.

Choosing capablc people and getting their commitment t o your project is critical. Decide what skills a r e needed and think about who is good a t what, who wants to do what, and who can and cannot work together. In a large project, your team probably will be made up o f a combination of suppliers, vendors, and employccs. Internal and external members all need t o agree on their roles and responsibilities.

Commitment ( a s noted earlier, in t h e discussion about planning) is formalized and documented by getting everyone t o accept your plan in writing after a reasonable amount of discussions and negotiations.

I n managing a project, handling interpersonal relationships is usually more difficult than handling the tasks, the schedules, or the costs. Keep your team informed a s your project moves forward, s o people feel part of things. Strive t o recognize and reward good performance.

If you are working a s project leader for someone else's project. you need that person's support. Serve hislher interests. Pay attention to that person's needs, and don't give pat answers or give the impression that you know it all.

You now have enough information t o develop a calendar showing when tasks need t o begin and end in relation t o one anothcr. Your WBS specifies t h e content o f each task. Next, organize these tasks sequentially in a network s o you can display the sequence of task execution and t h e relationship of work activities t o each othcr. You can create a network by going back to your WBS. Make separate sticky notcs or individual magnetized labels for a magnetic board for each work task. Begin moves them about in terms of the immediate predecessors for each activity. The sequence of your network usually follows t h e order o f major work assignments. Once the labels for your work activities are arranged. draw arrows connecting the tasks t o show the flow or t o show that some work can be done a t the samc time a s another task. You can have only one label a t t h e beginning and one at the end of your project. All your tasks must fit between those t w o labels. Don't worry about time estimates or about making your network to scale. For now: you a r e just illustrating t h e relationships between the tasks. Every task must be connected t o other tasks o r to the beginning or ending labels. Tasks that have scveral predecessors deserve special attention, because much must be done beforc they can start. It sometimes helps to show the places in the network where you will evaluate whether t o continue the project. When your network is acceptable t o all concerned, you can move on to time estimates.

You can now forecast the person- hours and elapsed time required completing each task. Your forecast should consider such factors a s waiting f o r approvals, downtime. and waiting for shipments. Refine your network to show the start and end times for each t a s k . Adjust start dates for those tasks that can begin before t h e i r predecessors a r e 100% complete. Give all concerned a copy of t h e network and negotiate their agreement. Plot actual progress t o monitor your project.

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How Do I MONITOR THE PROGRESS?

You may have been asking yourself: "What if ..." as you move through your project. What i f a key person gets sick', What if a certain delivery is delayed? What if a strike directly affects your plans? A few critical tasks have a crucial effect on your project. This concept is often called the 80120 rule: 80% of your results depend on 20% o f t h e input factors. For example, 80% of your sales c o m e from 20% of your salesmen; 80% of your personnel problems come from 20% of your people: 80% of your costs come from 20% o f your budget items. Accordingly, identify t h e 20% o f your project's tasks that have a n 80% impact on its completion. Apply " what if" analysis t o these critical tasks. asking yourself how you will manage if something interferes with them. Develop a plan for each of these twenty- percenters. Projects seldom proceed a s planned. Keep your eyes on your schedule, budget, and potential problems. Regularly discuss these matters with all involved. Agree o n what t h e problems are, their effects on t h e whole project, and t h e recommended actions t o resolve t h e m . Keep a log o f t h e completion status, budget position, and items t h a t need special attention. And remember: Don't shoot t h e messengers who bring you t h e bad news. They a r e very valuable information sources.

As a project manager. you may be required to submit regular written rcports. One of t h e specified progress measures used in these reports is " earned value." Earned value analysis, in its various forms, is the most commonly used method o f performance measurement. It integrates scope, cost, and schedule measures t o help you assess project performance. Earned value analysis involves calculating three key values for each activity: 4 Budget- also called thc budgeted cost of work scheduled (BCWS)-is that portion of the approved cost estlmate intended t o he spent on tlie activity during a given period.

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Actual cost- also called t h e actual cost of work performed (ACWP)-is the total of direct and indirect costs incurred in accomplishing work on the activity during a given period. Earned value- also called t h e budgeted cost o f work performed (BCWP)--is a percentage o f t h e total budget cqual to t h e percentage of the work actually completed.

Thcse three values a r e used in combination to measure whether or not work is being accomplished a s planned. T h e following a r e the most commonly used measures:

4 Cost variance (CV=BCWP minus ACWP) 4 Schedule variance (SV=BCWP minus BCWS)

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Cost performance index (CPI= BCWP divided by ACWP)

Typically, management requires regular reports on t h e following:

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Current status: Differences between planned vs. actual; Action taken on t h e diffcrences; and Revised plan.

Your main goals a r e to prevent problen~s,t o solve problems, and to get results.

How Do I MANAGE THE Be prepared for the inevitable changes in your project: t o the end product/service/process (i.e., your project goal), t o the schedule, cost. and resource availability. Wcll-intentioned team members making " minor" changes to your project without consulting anyone can cause big problems. Your client may decide on certain modifications that may result in extra expenses. Even your own management may require changes a t some point. Changes are inevitable. T o effectively handle thesc changes, develop a change management process. In an effective change management process, team members should d o the following:

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Describe the proposed change t o t h e project manager. Estimate the impact o n the project goal, schedule, and cost. Inform all of what is planned, asking f o r reactions Analyze their suggestions. Obtain approval or rejection of the change

As project manager, you may be espected t o design a change procedure that is formal, requiring paperwork and approval requirements beyond those suggested above. Some typical change considerations are: Schedule-

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How long is the delay'? Can we make up t h e time. perhaps by adding resources?

4 Is there a penalty clause in any of the agreemcnts'? Is it negotiable?

Costs-

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Are costs more than the amount budgeted? What can we do to limit t h e costs'! Can lost time be made up by adding resources? Can we find the money'?

Goal-

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Can a small design change solve the problem?

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Will this reduce costs or shorten the schedule?

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Will t h e client accept the design change?

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Will this modify the product/process/service to be delivered'?

Is it acceptable to the client? What a r e t h e costs and benefits of this change?

You made a rough " guessestimate" of costs before deciding t o d o your project. Now you have identified t h e tasks to be done (your Work Breakdown Structure) and you have your network schedule showing the sequence o f tasks and the relationship o f work a c t ~ v ~ t i to e s each other and t o the calendar. Yo11 a r e ready to d o your project budget. Begin with thc time it will takc t o complete each task (i.e.. t h c time spent actually working, not clapsed calendar t i m e ) . If it takcs 10 hours f o r a person t o do a job a t 100% capacity, allow 11 hours for that job (for personal breaks, etc.). When you have your time estimate, multiply i t by t h e charge-out rates for the various job categories assigned to that task. Add any other costs, such as supplies and equipment rental. Then repeat t h i s for all tasks until you have a project total. As project manager, your accountants will want you t o add overhead and burdcn allowances t o your budget. Remembering Murphy's Law- anything that can g o wrong, will g o wrong- you will want t o add a reserve of, perhaps. 5% f o r contingencies. I f you think Murphy was a n optimist, add 10%.

Create a spreadsheet t o keep track of your costs. Show your total project budgeted amount a t the top. Use P for budgcted (planned) expenditures and A for actual amount spent. Your title might be: COSTS BY MONTH. Down the left margin, list your cost categories, such a s labor, supplies. and equipment, allowing one row for each. Across the top, show the months. Each month will have two columns, P and A. At the bottom you may want t o have one row for the total for each month and another row showing accumulative expenditures. Log t h e figures as you get them, negotiating a n y operating corrections with the individuals in charge o f t h e tasks that a r e running over budget.

COSTS BY MONTH P

Total Budgeted Amount: $100,000

Labor Supplies Equipment I

MONTH TOTAL CUMULATIVE

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planned

A

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actual

#9

How Do I END THE PROJECT?

As an article in the Westinghouse Company in-house newsletter said: " There comes a timc in every project when you shoot t h e engineers and release t h e product." The project is complete when t h e goal has been reached (unless it was canceled prematurely), and all t h e tasks have been done. Final project activities often include the following:

4 Checking that all tasks and milestones have been met (hold back 5% o r 10% o f any contracted amount until you are satisfied with the results):

4 Disposition of team members (when you are working f o r a corporation and several employees have been temporarily assigned to the project);

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Turnover t o client (perhaps including training), always with formal acceptance;

4 Clearance o f final bills and charges, closing t h e project books;

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Giving credit t o your team and all concerned through thank-you letters a n d other forms of recognition; and,

4 Celebrating the successful project conclusion.

In addition t o the above, you may also:

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Preparc a final report; Conduct a post-project review with your client; and, Conduct a post-project review with your project team, documenting the lessons learned t o help you with future assignments.

This primer was designed t o get you "up and running" on your project, s o you can get it done properly. When t h e author first started earning a living i n the late 1950s, project management courses were almost nonexistcnt. In a n early assignment convcrting a punehedcard information system t o run on N C R ' s first computer (the Century l o o ) , hc carned scars that could have been avoidcd had he used the appropriate project management tools. Indeed in the succccding years h e spent working in international oil, information technology, and the academia, project management training gave him t h e skills t o handle projects with more efficiency and confidence.

The author draws freely from t h c following sources: 1. Joan Knutson and Ira Bitz. Project Management: How to Plan and Manage Successful Projects, AMACOM. 1991.

2 . Larry Johnson, Project Managemenl. CareerTrack, 1994; a series of 4 videotapes and a workbook. 3. Project Management I n s t ~ t u t e Standards , Committee. A Gzl~deto the Pro,lect Management Body of Knowledge. PMI. 1996.

4 . Thomas Belanger. S~tccess~f ul Project Management AMA; a self-study course.

5 . James Lcwis. Project Planning, Scheduling & Control. McGraw-Hill. 1995.