Project Management Fundamentals 1. Project Management Concepts 1 2

Project Management Fundamentals

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Project Management Concepts

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Chapter Concepts

Definition of a project and its attributesKey constraints within which a project must be managedLife cycle of a projectDefinition of project managementElements of the project management processImplications of global project managementProject Management InstituteBenefits of project management

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Learning Outcomes

Define what a project isList and discuss the attributes of a projectExplain what is meant by project objectiveDefine what is meant by project deliverableProvide examples of projectsDiscuss project constraintsDescribe the phases of the project life cycle

Define and apply project managementDiscuss the steps of the planning processIdentify the three elements of the executing processDiscuss some implications of global project managementDiscuss the Project Management InstituteList benefits of project management techniques

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Project Integration ManagementProject Management Knowledge Areas from PMBOK® Guide

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Feds and Contractor Share Blame for Afghan Plant Delays

Background Initial plant costs $125 millionSimilar plants cost $105 millionScope and budget changes were estimated at $260 million Planned completion date > year delayedModifications and issues Costs ~ $300 millionFast tracking required turbines built in Germany and flown to siteContractor had cost-plus contractSubcontractors had fixed price contracts

OutcomesThe plant may not be used Operation costs three times

similar plantsMistakes were made Not pay attention to lessons

learned Failure related to needs,

resources, risks, and schedules Lack of critical project

management componentsPlanners ignored local officials' alternative recommendations

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Causal Inferences on the Cost Overruns and Schedule Delays of Large-Scale U.S. Federal Defense and Intelligence Acquisition Programs

Causes for DelaysFailures to translate customer needs into specific capabilitiesIncorrect commercial products selected Delays cost $12 million a week in personnel costsNon-existent succession planning

SolutionsCommunication with stakeholdersMentoring of junior project personnelAdoption and execution of project management skills and techniques

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Project Attributes

Clear objectiveSeries of interdependent tasksVarious resourcesSpecific time frameUnique, one-time endeavorSponsor or customerDegree of uncertainty

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List examples of projectsStudent Discussion

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Possible responses to Student Discussion

Staging a theatrical productionDeveloping and introducing a new productPlanning a weddingDesigning and implementing a computer systemIssuing a new $1.00 coinModernizing a factoryConsolidating two manufacturing plantsConverting a basement to a family roomHosting a conferenceDesigning and producing a brochureExecuting an environmental cleanup of a contaminated siteHolding a high school reunionBuilding a shopping mallPerforming a series of surgeries on an accident victimOrganizing a community festivalRebuilding a town after a natural disasterHosting a dinner for 20 relativesDesigning a business internship program for high school studentsBuilding a tree house

List examples of projects

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Balancing Project Constraints

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List unforeseen circumstances that jeopardize the project with respect to:

ScopeCostSchedule

Student Discussion

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Costs are more than estimatedInclement weatherAdditional redesignModificationsDelivery of critical components is delayedKey project team member leaves the project

List unforeseen circumstances that jeopardize the project with respect to

Scope Cost Schedule

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Project Manager Actions

Prevent, anticipate, overcomeHave good planning and communicationBe responsible

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The Project Life Cycle

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Initiating Phase

First phaseIdentify need, problem, or opportunityDetermine if select projectDevelop project charter Rationale Project objective Expected benefits General requirements and

conditions

Decide if RFP needed

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Planning Phase

Second PhaseShow how project scope will be accomplishedPlan the work and work the planDevelop baseline plan What needs to be done -- scope,

deliverable How it will get done -- activities,

sequence Who will do it -- resources,

responsibilities How long it will take -- durations,

schedule How much it will cost -- budget What the risks are

Have actual resources plan the work

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Performing Phase

Third phaseAccomplish project objectives Project manager leads Project team completes the

project

Increase pace as more resources are addedMonitor and control progressTake corrective action as neededManage and control changes with sponsor approvalAchieve customer satisfaction with acceptance of deliverable

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Closing Phase

Final phaseCollect and make final paymentsRecognize and evaluate staffConduct post project evaluationDocument lessons learnedArchive project documentsRecord lessons learned

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Project Planning Process

Establish project objectiveDefine scopeCreate WBSAssign responsibilityDefine specific activitiesSequence activitiesEstimate activity resourcesEstimate activity durationsDevelop project scheduleEstimate activity costsDetermine budget

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Create WBS and Assign Responsibility

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Sequence Activities

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Develop the Project Schedule

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Determine Budget

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Why is it critical to develop a baseline plan for a project?

Student Discussion

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Many projects overrun their budgets or miss completion datesA baseline plan helps to compare progressThe graphical or tabular display shows the start and finish dates for each activityThe amounts of resources are knownThe budget is displayed for each time period and the project

Why is it critical to develop a baseline plan?

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Execute the Project Plan

Perform the workMonitor and control progressControl changes

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Global Project Management

GlobalizationAdds a dimension of complexityChanges project dynamicsRequires awareness of factors Cultural differences Currency Codes and regulations Business organization Political relations Workforce availability

Helpful CompetenciesForeign language skillsKnowledge of Cultures Geography World history and

contemporary events International economics

Awareness of Customs and etiquette Geopolitical environment

Technology adoption and translation software

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Project Management Associations

Project Management InstituteWorldwide not-for-profit association of practitioners 350,000 members in >170

countries 250 chapters in >70 countries

Online communities for collaborationPMBOK® GuidePMI Code of Ethics and Professional ConductCertificationswww.pmi.org

Global AssociationsLinks available at www.cengagebrain.com

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What are benefits of Project Management?Student Discussion

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Customer satisfactionComplete the project scope in a quality manner, on time, and within budgetProject managers have satisfaction, enhance their reputation, and expand their career opportunitiesProject team members contribute to the project's success, expand knowledge, and enhance skills

What are benefits of Project Management?

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When projects are successful, everyone wins!

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Critical Success Factors Planning and communication are critical to successful project management. They prevent problems from occurring or minimize their impact on the achievement of the project objective when they do occur.

Taking the time to develop a well thought-out plan before the start of the project is critical to the successful accomplishment of any project.

A project must have a clear objective of what is to be accomplished and defined in terms of end product or deliverable, schedule, and budget; and is agreed upon by the customer.

Involve the sponsor or customer as a partner in the successful outcome of the project through active participation during the project.

Achieving customer satisfaction requires ongoing communication with the customer to keep the customer informed and to determine whether expectations have changed.

The key to effective project control is measuring actual progress and comparing it to planned progress on a timely and regular basis and taking any needed corrective action immediately.

After the conclusion of a project, the project performance should be evaluated to learn what could be improved if a similar project were to be undertaken in the future. Feedback should be obtained from the sponsor or customer and the project team.

Learning and understanding the culture and customs of other project participants will demonstrate respect, help build trust, and aid in developing an effective project team; and it is critical for successful global project management.

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SummaryA project is an endeavor to accomplish a specific objective through a unique set of interrelated tasks and the effective utilization of resources.

The successful accomplishment of the project objective could be constrained by many factors, including scope, quality, schedule, budget, resources, risks, and customer satisfaction.

The project life cycle has four phases: initiating, planning, performing, and closing the project.

Project management is planning, organizing, coordinating, leading, and controlling resources to accomplish the project objective. The project management process involves two major functions: first establishing a plan and then executing that plan to accomplish the project objective.

Globalization changes the dynamics of a project and adds a layer of complexity that can adversely affect the project outcome if the project participants are not aware of what they can encounter regarding cultural differences and multinational economic transactions.

The Project Management Institute is a premier worldwide not-for-profit association for practitioners in the project management profession.

The ultimate benefit of implementing project management techniques is having a satisfied customer—whether you are the customer of your own project or a business (contractor) being paid by a customer to perform a project.

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Chapter Questions

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Question 1

A project is an endeavor to accomplish a specific objective through a unique set of interrelated tasks and the effective utilization of resources.

Define project.

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Question 2

A project has a well-defined objective—an expected result or product. The objective of a project is usually defined in terms of scope, schedule, and cost. Furthermore, it is expected that the work scope will be accomplished in a quality manner and to the customer’s satisfaction.For example, to produce 5,000 two-page marketing brochures by July 1 for a cost of $15,000.

Define the term project objective and give some examples.

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Question 3

The list of resources will be dependent upon the type of project.Some examples are: People Equipment Money Materials

List some examples of resources that are used on a project.

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Question 4

The customer should be involved throughout the project life cycle. The customer is the one who is paying for the project. Unsatisfied customers have been known to withhold payments, to deny repeat business, and to spread the word of their dissatisfaction. On the other hand, a satisfied customer will do the opposite of those things.

What role does a customer have during the project life cycle? Why is it important to satisfy the customer?

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Question 5

Many aspects can have some degree of uncertainty, such as the schedule or the budget. An unexpected snowstorm may

delay a highway construction project.

Increased lumber rates may increase the cost of building a new home.

Not everything in a project can be planned, scheduled, or budgeted.

What aspects of a project might involve some degree of uncertainty? Why?

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Question 6

The scope of a project is all the work that must be done in order to satisfy the customer that the deliverables meet the requirements or acceptance criteria agreed upon at the onset of the project. The cost of a project is the amount the customer has agreed to pay for acceptable project deliverables. The project cost is based on a budget that includes an estimate of the costs associated with the various resources that will be used to accomplish the project.The schedule for a project is the timetable that specifies when each activity should start and finish. The project objective usually states the time by which the project scope must be completed in terms of a specific date agreed upon by the customer and the individual or organization performing the work.Customer Satisfaction is the level to which the customer is pleased with the end result of the project.The objective of any project is to complete the scope within budget by a certain time to the customer’s satisfaction. Any of these four factors can put limitations on the final product.

Define scope, schedule, cost, and customer satisfaction. Why are these considered to be constraints?

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Question 7

The first phase, the initiating phase, is when projects are identified and selected. They are then authorized, using a document referred to as a project charter.The second phase is the planning phase and includes defining the project scope, identifying resources, developing a schedule and budget, and identifying risks, all of which make up the baseline plan for doing the project work.The third phase, the performing phase, the project plan is executed and work tasks are carried out to produce all the project deliverables and to accomplish the project objective. During this phase, the project progress is monitored and controlled to assure the work remains on schedule and within budget, the scope is fully completed according to specifications, and all deliverables meet acceptance criteria. Also, any changes need to be documented, approved, and may be incorporated into an updated baseline plan.The final phase of the project life cycle is the closing phase, project evaluations are conducted, lessons learned are identified and documented to help improve performance on future projects, and project documents are organized and archived.

List and describe the main phases of the project life cycle.

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Question 8

Establish project objective -- clearly define the project objective and have it agreed upon by the sponsor or customer. Define scope -- include customer requirements, define the major work tasks or elements, as well as provide a list of deliverables and associated acceptance criteria that can be used to verify that the work and deliverables meet specifications.Create a work breakdown structure -- divide and subdivide the project scope into pieces or work packages. Assign responsibility - identify the person or organization responsible for each work item in the work breakdown structure.Define the specific activities -- develop the list of detailed activities that need to be performed for each work package to produce any required deliverables.Sequence activities -- graphically portray the activities in a network diagram to display the sequence and dependent relationships of the detailed activities. Estimate activity resources -- determine which types and skills or expertise of resources and how many of each resource are needed for each activity with consideration of the availability of the resources.Estimate activity durations -- make a time estimate for how long it will take to complete each activity, based on the estimate of the resources that will be applied.Develop the project schedule -- develop the overall project schedule, including when each activity is expected to start and finish, as well as the latest times that each activity must start and finish in order to complete the project by the project required completion date.Estimate activity costs -- determine the costs for the types and quantities of resources estimated for each activity using the appropriate labor cost rate or unit cost for each type of resource.Determine the budget -- aggregate the cost estimates for each activity.

List and describe the steps required to develop a baseline plan.

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Question 9

A manager must monitor progress to ensure that everything is going according to plan. It is also necessary to measure actual progress and compare it to planned progress. If at any time during the project the comparison of actual progress to planned progress reveals that the project is behind schedule, overrunning the budget, or not meeting the technical specifications, corrective action must be taken to get the project back on track within the scope, schedule, and budget constraints of the project objective. These actions include adding or changing resources to make up time and get back on schedule.

Why must a manager monitor the progress of a project? What can be done if a project is not proceeding according to plan?

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Question 10

Global projects have several unique influencing factors such as currency fluctuations and exchange rates, country-specific work codes and regulations, corporate joint ventures and partnerships creating entities with a presence and facilities in multiple countries, political relations between countries, and availability of high-demand workforce skills.Globalization changes the dynamics of the project and adds a layer of complexity, which can adversely affect the project outcome if the project participants are not aware of what they might encounter regarding cultural differences and multinational economic transactions.

Describe how a global project can be more complex than a project performed within just one country. How might these elements affect the successful outcome of the global project?

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Question 11

The ultimate benefit of implementing project management techniques is having a satisfied customer.Completing the full project scope in a quality manner, on time, and within budget provides a great feeling of satisfaction. It could lead to additional business.Successful projects can expand career opportunities. A feeling of satisfaction from being on a winning team. An expansion of knowledge, enhancement of skills, and preparation of more complicated projects.When projects are successful, everybody wins!

List some benefits of using project management techniques.

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Question 12

Answers to this question will vary depending on the student. Responses should include the definition of a project, an endeavor to accomplish a specific objective through a unique set of interrelated tasks and the effective utilization of resources.

Consider a project in which you are currently involved (or in which you have been involved recently).

a. Describe the objectives, scope, schedule, cost, and any assumptions made.

b. Where are you in the project life cycle?c. Does this project have a baseline plan? If

yes, describe it. If not, create it.d. Are you or is anyone else monitoring the

progress of the project? If so, how? If not, how could you do so?

e. Describe some unexpected circumstances that could jeopardize the success of the project.

f. Describe the anticipated benefits of the project.

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Project ManagementProject Management InstituteExecutive Planet TM

Internet Exercises

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Internet Exercises

Examination of broad field of project management will reinforce the growth of the project management field. Many organizations are realizing the value of employees having project management training and certifications. Exploration of the project management information provides information about additional education or certifications.

Using your favorite Web search engine, perform a search for “project management.”Do several additional Web searches by adding, after the words “project management,” some of the key words listed in this chapter.Check out the PMI website for information regarding memberships, certification, education, and publications.Search for PMI Global Congresses.Executive PlanetTM provides valuable tips on business etiquette, customs, and protocol for doing business worldwide. Go to the organization’s website and explore the business culture guides for three different countries.

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A Not-For-Profit OrganizationCase Study 1

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Case Study 1Question 1

They need to find a way to get more funds.They need more volunteers.They need more space.Some respondents may point out that they do not have a project plan for how to spend their current funding and need a project plan for their current work.

What are the needs that have been identified?

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At this point they don’t all agree on the objective.

What is the project objective?

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You must always be careful when making assumptions. However, the following statements are made in the case study. Some may or may not actually be true. They will run out of funds in

two months. The local government is not

able to provide additional funds.

The demand is increasing. They need more space and

more volunteers. They get some food donations,

but maybe not on a regular basis.

What assumptions, if any, should be made regarding the project to be undertaken?

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If the statements in the story are true, then the risk of not succeeding with this project is that the organization will have to shut down and members of the community in need of food will no longer have this student community service organization as a source of assistance.

What are the risks involved in the project?

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E-Commerce For A Small SupermarketCase Study 2

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They believe that putting their grocery store on-line will bring increased sales. They also have a need to repave the parking lot.

What are the needs that have been identified?

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At this point, Matt and Grace have not decided. They have an idea to create an online ordering site or just have a page with a picture of the market and them.

What is the project objective?

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They must list, and possibly test, some of their assumptions. You must always be careful when making assumptions. However, the following statements are made in the case study. Some may or may not actually be true. They can increase sales by putting

their operation online. There is a demand for online services. The benefits of doing this will

outweigh the costs.Matt and Grace also need to determine the motivations of the consultant. They need to find out if the consultant is selling services for web development or if the consultant is a technical assistance specialist that will provide well-informed suggestions to Matt and Grace.

What are some things Matt and Grace should do before they talk with the consultant?

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An honest consultant would determine the feasibility of this project. It might very well not be feasible, but it is very possible that the consultant will just give them a price for building the system.

What should the consultant tell Matt and Grace?

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Identifying and Selecting Projects

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Chapter Concepts

How projects are identified and selectedA project charterOutsourcing projects using a request for proposalThe proposal solicitation process

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Learning Outcomes

Discuss how projects are identifiedExplain how projects are prioritized and selectedIdentify and describe at least eight elements of a project charterPrepare a project charterPrepare a request for proposal

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Project Integration ManagementProject Procurement Management

Project Management Knowledge Areas from PMBOK® Guide

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King County and Phoenix Schools Prioritized Safe Routes to School

Background National Center for Safe Routes to SchoolThree-step identification process Prioritize schools that could benefit Assess traffic, geography, and costs

on same form Evaluate criteria and make decision

about solution and implementation

Determine highest priority locations and countermeasuresWork to have the greatest benefit for the most number of students

OutcomesUsed same metrics for all schoolsCompleted side-by-side comparison to determine greatest needsCompleted project identification efficientlyTwo schools were featured to explain process used King County, Washington Phoenix, Arizona

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Spokane Builder and Others Propose Methow Project

Problem IdentificationLocal business employees have difficulty finding affordable housingEmployees make long commute to work in the Methow ValleyA seven-acre parcel could be developed with affordable housingNo RFP was developed, any proposals for development are unsolicited

SolutionDevelopment firm build relationship with housing authorityMarket survey being completed Determine the housing

requirements for seniors, farm workers, and others

Develop the evaluation criteria for the project proposal

Needs assessments would inform funding proposals

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Project Identification

Start of Initiating phaseRecognize need, problem, or opportunityVarious ways for identification Organizations strategic planning Response to unexpected events Group organized to address a

need

Important to clearly identify need to determine if worth pursuingUse decision making process to prioritize and select project with greatest need

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Project Selection

Evaluate needs, costs, benefitsDetermine which are projectsSelect project Develop criteria List assumptions Gather data Evaluate each opportunity

Combine “gut” feelings and quantitative information to make decision

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Describe the positives and negatives for this development project.

Student Discussion

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Positives All projects will be evaluated on

common criteria Project A gets to market in the least

time Project B gains the greatest market

share Project B has highest ROI Projects A and C have high chance

of successNegatives Prices for each project have great

differences; implying that each has a different level of effort for the project solution

Project B has high risk and medium chance of success

Project C may not be accepted globally

Project B may put the company reputation at risk if the technology does not work as expected

Describe the positives and negatives for this development project.

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Project Charter

PurposeProvides sponsor approvalCommits funding for the projectSummarizes key conditions and parameters Establishes framework to develop baseline plan

Possible ElementsProject titlePurposeDescriptionObjectiveSuccess criteria or expected benefitsFundingMajor deliverablesAcceptance criteria

Milestone scheduleKey assumptionsConstraintsMajor risksApproval requirementsProject managerReporting requirementsSponsor designeeApproval signature

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Examine the project charter and comment on- the completeness of the information- possible evaluation criteria

Student Discussion

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Completeness of information Describes the project that

needs to be addressed Lists requirements, constraints,

assumptions, and risks An RFP could be developed

from the charter’s information

Possible evaluation criteria Meets the purpose Cost Reduces delivery costs by 26%

the first year Experience Risks Appropriate instructional

strategies

Examine the project charter and comment on

Completeness of the information

Possible evaluation criteria

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Preparing a Request for Proposal

Decision made to outsource to external resourceComprehensively describe project requirements Includes need, problem, or opportunity description Allows contractors to develop a thorough proposal Facilitates the development of evaluation criteria

May be communicated informally or formally, in writing or verbally

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Guidelines for Developing an RFP

State project objective or purposeProvide a statement of workInclude customer requirementsState deliverables the customer expectsState acceptance criteriaList customer supplied itemsState approvals required

State type of contractState payment termsState schedule and key milestonesList format and content instructionsIndicate due dateInclude evaluation criteriaInclude level of effort or funds available

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Examine the RFP example. What additional questions need to be answered?

Student Discussion

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Will AJACKS supply the names of the firms to be surveyed?What manufacturing industries are the target?What marketing information already exists?What are the page limitations for the proposal and supplemental information?What is an acceptable return rate on the survey?

Examine the RFP example. What additional questions need to be answered?

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Soliciting Proposals

SolicitationNotify potential contractors Identify selected group in

advance to send copy Advertise in selected journals,

newspapers, or websites

Maintain competitive situation Provide equal information to

all bidders Hold bidders’ meeting to

answer questions

ConditionsRequirements are sometimes communicated verbally instead of via a formal RFPAll RFPs start with identification of a need, problem, or opportunity

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Critical Success Factors The need must be clearly defined before preparing a request for proposal (RFP).When selecting a project from among several needs or opportunities, the decision should be based on which project will provide the greatest overall benefits compared to its costs and possible consequences.Having a well-understood evaluation and selection process and a well-rounded committee will increase the chances of making the best project selection decision.Establish quantitative project success criteria, or expected benefits.A good RFP allows contractors to understand what the customer expects so that they can prepare a thorough proposal that addresses the customer’s needs and requirements.A request for proposal should include a statement of work, customer requirements, expected deliverables, and the criteria by which the customer will evaluate proposals.An RFP should provide instructions for the format and content of contractor proposals so that the customer will be able to make a consistent and fair comparison and evaluation of all the proposals.Customers must be careful not to provide information to only some of the contractors because it would give these contractors an unfair competitive advantage in preparing their proposals.

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SummaryThe initiating phase of the project life cycle starts with recognizing a need, problem, or opportunity for which a project or projects are identified to address the need.Sometimes organizations identify several or many needs but have limited funds and people available to pursue potential projects to address all of those needs. In such cases, the company must go through a decision-making process to prioritize and select those projects that will result in the greatest overall benefit.Project selection involves evaluating potential projects and then deciding which should move forward to be implemented.Once a project is selected, it is formally authorized using a document referred to as a project charter, sometimes called a project authorization or project initiation document.In some cases, an organization does not have the expertise or staff capacity to plan and perform the project or major portions of the project, and therefore decides to have the project completed by an external resource (contractor) and prepares and RFP.Once the RFP has been prepared, the customer solicits proposals by notifying potential contractors that the RFP is available.Not all project life cycles include the preparation of a written request for proposal by a customer and subsequent submittal of proposals from contractors. Some endeavors move from the initiating phase, where a project is identified and selected, into the planning and performing phases of the life cycle.

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Chapter Questions

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Question 1

It is important to thoroughly study the problem or opportunity in order to develop a quality RFP and/or quality solution. If the need is not clearly defined, you cannot expect the proposed solutions to be clearly defined either.

Why is it important to do a thorough and detailed job of needs identification?

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Question 2

Answers will vary from student to student. Answers should contain a description of why the student identified the need, problem, or opportunity.

Describe a situation in your life in which you performed needs identification.

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Question 3

In reality, too many projects are started that should never have been. It is wise to take the time to decide which plans to address identified needs, problems, or opportunities should go forward as a project before you start working.

Why is it important to select the right project before you begin working?

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Question 4

A four-step process is recommended: 1) Develop a set of criteria

against which the opportunity will be evaluated

2) List assumptions that will be used as the basis for each project

3) Gather data and information for each project

4) Evaluate each opportunity against the criteria

Describe how a business selects which projects to work on when there are numerous projects that could be done.

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Question 5

Student responses will vary. Responses should include the elements of a project charter that describe the outcomes of the student's project with enough clarity for the contractor to deliver an approved product at the end of the project.

Which elements of a project charter would you use to help plan if you have a project that does not require a project charter? Why?

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Question 6

There are many possible answers to this question. Some examples might include an RFP for a new billing system, an RFP for a comprehensive management training program, an RFP for a new heating system for a major office building, etc. Responses should include a description of an activity that cannot be completed by the organization or is better completed by an external resource or contractor.

Give examples of situations in which a business might develop a request for proposal.

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Question 7

There are many possible answers to this question. Some examples might include an RFP for a new in-ground pool, a new deck, or a new house. These may or may not be written. Responses should include a description of an activity that cannot be completed by the person, or that is better completed by an external resource or contractor.

Give examples of situations in which an individual might develop a request for proposal.

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Question 8

If a business did not quantify the benefits of a solution in advance, it might discover that the costs of the solution exceed the benefits. In addition, because most businesses have limited resources, they must prioritize their projects based on the expected benefits.

Why is it important for a business to try to quantify the expected benefits of implementing a solution to a problem?

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Question 9

A statement of work should define the scope of the project and outline the tasks or work elements to be performed. The SOW should be very precise.

What should be contained in a statement of work?

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Question 10

The RFP must include the customer requirements, which define specifications and attributes. Requirements cover size, quantity, color, weight, speed, performance, and other physical or operational parameters that the contractor’s proposed solution must satisfy.These requirements must be very precise because this is what the contractor will use as a guideline as he or she develops the proposal and/or solution; the customer may also use it as acceptance criteria for the project.

What is meant by customer requirements? Why must they be precise?

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Question 11

It is important to state the approvals required during the project so the final solution matches what the customer expects. Examples might include: reviewing the design specifications for a house before construction begins, reviewing a prototype user interface for a new software system before coding begins, etc. Examples will vary and should include projects of a sufficient complexity level where changes as the project advances could result in higher costs.

Why would an RFP state the approvals that will be required during the project? Give some examples.

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Question 12

Instructions ensure that all proposals have a standard form and are thus easier to evaluate and compare. If instructions were not followed,

one proposal might be 5 pages and another might be 50 pages. One might include technical specifications and another might not.

Why would a customer give contractors instructions in the RFP to submit their proposals according to a standard format?

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Question 13

Answers will vary from student to student. Responses should include the guideline elements as the elements are appropriate for the need, problem, or opportunity defined by the student.

Develop an RFP for a real-world project such as landscaping the grounds surrounding a nearby business office, building a deck for your house, or holding a big graduation celebration. Be creative in specifying your needs. Feel free to come up with unique ideas for the RFP.

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Request for ProposalsInternet Exercises

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Internet Exercises

Many RFPs are available on the Web that address needs, problems, and opportunities.Some RFPs will be very short and others many pages long.Use the guidelines to evaluate an RFP for its strengths, weaknesses, and missing aspects.Revisions to the RFP should clarify the information and provide enough detail for the development of proposals that will address the need of the RFP.

Using your favorite Web search engine, perform a search for “requests for proposals.”For an RFP that was found

What company developed the RFP, and what is the company looking to accomplish?

What are the strengths and weaknesses of the RFP?

What is missing from the RFP? How should the RFP be revised?

Search for suggestions for developing an RFP. How does this compare to the chapter’s suggestions?Download a software system for developing an RFP. Describe how it works.

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A Midsize Pharmaceutical CompanyCase Study 1

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She has identified an opportunity. She has $2,000,000 of unexpected profits that she would like reinvest in the company. In this case, she is soliciting proposals from her internal managers. She should state comprehensively, and in detail, what she expects in the proposals including several of those items discussed in this chapter (due date for proposals, format required, evaluation criteria to be used, etc.). In this case, the RFP may or may not be in written form. She should then evaluate each proposal submitted based on the stated criteria.

How should Jennifer go about making her decision?

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Among other things, information on cost and benefits should be collected. Costs should include one-time

and on-going expenses.

Additional data such as specific tasks and timeframes is also needed

What kind of additional data or information should she collect?

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Each proposal should include the cost and anticipated benefits of the project. At a minimum, it should also include the tasks to be performed, the resources used, and a schedule

What exactly should Jennifer require the others to submit in the way of proposals?

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At this point, it is too early to tell.Jennifer must evaluate each of the proposals based on the established criteria and then select the proposal or proposals that provide the greatest benefit to the company. Responses should include a description of each person's position and additional information that Jennifer would need to evaluate their response. The responses should include why or why not Jennifer would fund the projects based upon the student's experiences and interpretation of the projects.

What do you think Jennifer should do with the $2,000,000? In explaining your answer, address the concerns and positions of Julie, Tyler, Jeff, and Joe.

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Transportation ImprovementsCase Study 2

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Various options can be used, as discussed in this chapter. The criteria should be defined in advance of evaluating the projects. Explain why the particular criteria was selected to evaluate the projects.

What criteria should Zachary use to evaluate the projects?

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Zachary has to make assumptions regarding the safety to the entrance outside of Big John’s superstore, the need to widen and repair Elk Mountain Road, and the condition of County Route 1045 and the bridge. Each of Zachary's assumptions needs to be evaluated.

What assumptions should he make?

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Surveys and various types of research methods could be used to gather data related to the assumptions in the case study.

What data and information should he gather and how should he go about gathering the data and information?

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The four step project selection process is a possible way to evaluate the three projects. After he has evaluated each

project against the evaluation criteria, how should he decide the priority of the three projects?

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Developing Project Proposals

3

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Chapter Concepts

Building relationships with customers and partnersProposal marketing strategiesDecision making to develop a proposalCreating winning proposalsThe proposal preparation processElements that may be included in a proposalPricing considerationsCustomer evaluation of proposalsTypes of contracts between the customer and the contractorMeasuring the success of proposal efforts

107

Learning Outcomes

Develop relationships with customers and partnersDecide whether to prepare a proposal in response to a customer’s RFPCreate a credible proposalDetermine a fair and reasonable price for a proposal Discuss how customers evaluate proposalsExplain types of contracts and various terms and conditionsMeasure the success of proposal efforts

108

Project Procurement ManagementProject Management Knowledge Areas from PMBOK® Guide

109

Mortenson Construction Selects Skire Unifier as Enterprise Project Management System

Background A collaboration platform as neededImproved quality and timeliness of information requiredSkire built relationship with MortensonSkire identified needs required

OutcomesSix months of evaluation Determine integration Reduce costs Improve quality

Solution system selected Had evaluation criteria Built relationship into strategic

partnership with Skire

Providing the solution was more than answering the RFP

110

Kings Arena Proposal Gains Support

BackgroundNew arena needed in SacramentoDesire to create a multi-use developmentPre-RFP meetings with developers and officialsDevelopers with long history of successful development projects invited to bidDesire to create new revenue for city

SolutionsWinning proposal had creative funding that did not use tax fundsDevelopment plan included additional areas of the cityRedevelopments at other locations were a better use of the landWinning bidders developed relationships with key stakeholders Winning bidders listened to needs of officials and the city

111

Why is this statement true?

Customers (clients) and partner organizations prefer to work with people they know and trust.

Student Discussion

112


Organizations know what to expect.Organizations know they will get a good product.They know how each party communicates and communications may be easier than with a stranger.Past knowledge of the organization helps the customer perform the same work for less money because they have gone through the learning curve already.

Why is this statement true?

Customers (clients) and partner organizations prefer to work with people they know and trust.

113

Building Relationships with Customers and Partners

Foundation for successful funding and opportunitiesRequires good listening and constant learningFrequent and regular contact; express appreciation for the client’s timeTrust is key and ethics are imperativeFirst impression is importantProblem solving and credibility grows with good performancePartner with several key individuals in an organization

114

Building effective and successful relationships

takes time and work; it does not happen

overnight.

115

Pre-RFP/Proposal Marketing

Begin developing the relationship before RFP is prepared Can help client identify needs Better position to win the contract Develop a more clearly focused response to RFP

Pre-RFP and pre-proposal efforts are business development No cost to the customer Help build the relationship

Unsolicited proposals and uncompetitive contracts Result of identified needs and problem solving Eliminates preparation of an RFP and soliciting process

116

Why should contractors not wait until an RFP is announced to start developing the proposal?

Student Discussion

117


Proposal development times are often very shortCan develop a better proposal in response to the RFPPrepare for bidders’ meetingIncrease percentage of proposals being fundedProposal development takes effort

Why should contractors not wait until an RFP is announced to start developing the proposal?

118

Decision to Develop a Proposal

Development is costly and time consumingContractors must be realistic about their probability of winning a contractEvaluate bid/no-bid decisionMany non-winning proposals hurt reputationMay be hard to decide to no-bid an RFP

119

Bid or No-Bid?

Factors to consider Competition Risk Mission Extension of capabilities Reputation Customer funds Proposal resources Project resources

120

Bid or No-Bid? Should a proposal be submitted?

Student Discussion

121


Yes, a proposal should be developedPositives Rated highly in five categories Low risk project

Reputation and experience could outweigh lack of familiarity with the client

Bid or No-Bid? Should a proposal be submitted?

122

Creating a Winning Proposal

Selling documentThe best idea to solve the problemHighlight unique factorsEmphasize benefits to the customerBe simple and conciseAddresses requirements from RFPBe realistic

123

Proposal Preparation

Proposal team Can be one person or many Various skills and expertise Proposal manager for large proposals

Proposal development Time for writing, review, and management approval Length dependent upon the RFP requirements Cost of proposal development is part of normal business

costs

124

Proposal Contents

Three sections Technical Management Cost

Detail level Depends on complexity of the project Requirements from the RFP

125

Technical Section

Understand the needProposed approach or solutionBenefits to the customer

126

Management Section

Description of work tasksDeliverablesProject scheduleProject organizationRelated experienceEquipment and facilities

127

Cost Section

Include estimated costs Labor Materials Equipment Facilities Subcontractors and

consultants Travel Documentation Overhead Escalation Contingency Fee or profit

128

Why is it beneficial to have a person who would be responsible for the major work tasks to help write the project proposal?

Student Discussion

129


The person can estimate the project organization, schedule, and costs more accurately.The experience will be reflected in the language used to describe the solution.The person can list related experiences that show expertise.The person can describe what makes the contractor unique and demonstrate the benefits of the solution.

Why is it beneficial to have a person who would be responsible for the major work tasks to help write the project proposal?

130

Pricing Considerations

CompetitionPrice Not overpriced or

underpriced

Factors Reliability of cost estimates Risk Value of project to the

contractor Customer’s budget Competition level

131

Simplified Project Proposal

ComplexLarge number of pagesDefined sectionsCharts and figuresTables of information

SimplifiedStatement of the customer’s needAssumptionsProject scopeDeliverablesResourcesSchedulePriceRisksExpected benefits

132

Proposal Submission and Follow-up

SubmissionOn timeFormatted properlySent in manner required Hard copies E-mail Electronic form

Two sets by different delivery methods

Follow-upBe proactiveProfessional mannerFollow RFP guidelines

133

Customer Evaluation of Proposals

Customer sets criteriaCustomer may request a best and final offer (BAFO)Helps to have common comparison criteria

134

List examples of criteria used by customers to evaluate contractor proposals.

Student Discussion

135


Compliance with the customer’s statement of work (SOW)Understanding of the problem/needSoundness of the proposed approachContractor’s experience with similar projectsExperience of key individualsManagement capabilityRealism of schedulePrice

List examples of criteria used by customers to evaluate contractor proposals.

136

Contracts

AgreementContract must be signed before starting workEstablishes communicationAgreement of deliverables for a certain price

TypesFixed Price Price remains fixed Low risk for customer High risk for contractor For well-defined projects with

little risk

Cost-Reimbursement Price for actual costs High risk for customer Low risk for contractor For higher risk projects

137

Contract Terms and Conditions

Misrepresentation of costsNotice of cost overruns or schedule delaysApproval of subcontractorCustomer furnished equipment of informationPatentsDisclosure of proprietary informationInternational considerationsTerminationTerms of paymentsBonus/penalty paymentsChanges

138

Measuring Proposal Success

MeasuresWin ratio Number won/number

submitted All proposals weighted

equally

Total dollar value Value won/value submitted More weight to larger values

StrategiesSubmit many to win fair share Increase chances of winning May be viewed negatively

Bid on potential successes Respond where better than

average chance to win Must have bid/no-bid process

139

Critical Success Factors Customers and partner organizations prefer to work with people they know and trust. Relationships establish the foundation for successful funding and contract opportunities.Establishing and building trust is key to developing effective and successful relationships with clients and partners.The first impression one makes on a client is pivotal to developing a continuing and fruitful relationship.Pre-RFP/proposal efforts are crucial to establishing the foundation for eventually winning a contract from the customer.Do not wait until formal RFP solicitations are announced by customers before starting to develop proposals. Rather, develop relationships with potential customers long before they prepare their RFPs.Working closely with a potential customer puts a contractor in a better position to be selected as the winning contractor. Learn as much as possible about the customer’s needs, problems, and decision-making process during pre-RFP/proposal marketing.

140

Critical Success Factors (continued)Becoming familiar with the customer’s needs, requirements, and expectations will help in preparing a more clearly focused proposal.Be realistic about the ability to prepare a quality proposal and about the probability of winning the contract. It is not enough just to prepare a proposal; rather, the proposal must be of sufficient quality to have a chance of winning.A proposal is a selling document, not a technical report. It should be written in a simple, concise manner and should use terminology with which the customer is familiar.In a proposal, it is important to highlight the unique factors that differentiate it from competitors’ proposals.Proposals must be realistic. Proposals that promise too much or are overly optimistic may be unbelievable to customers, and may raise doubt about whether the contractor understands what needs to be done or how to do it.When bidding on a fixed-price project, the contractor must develop accurate and complete cost estimates and include sufficient contingency costs.

141

SummaryInterested contractors develop proposals in response to a customer’s RFP.Relationships establish the foundation for successful funding and contract opportunities. Relationship building requires being proactive and engaged.Contractors should develop relationships with potential customers long before customers prepare an RFP.Because the development and preparation of a proposal take time and money, contractors interested in submitting a proposal in response to an RFP must be realistic about the probability of being selected as the winning contractor.It is important to remember that the proposal process is competitive and that the proposal is a selling document that should be written in a simple, concise manner. In the proposal, the contractor must highlight the unique factors that differentiate it from competing contractors.Proposals are often organized into three sections: technical, management, and cost.Customers evaluate contractors’ proposals in many different ways. Once the customer has selected the winning contractor, the contractor is informed that it is the winner, subject to successful negotiation of a contract: fixed-price and cost reimbursement are the two types of contracts.Contractors measure the success of their proposal efforts by the number of times their proposals are selected by customers and/or by the total dollar value of their proposals that are selected.

142

Chapter Questions

143

Question 1

It is important to build relationships with customers and partners, since they prefer to work with people they know and can trust. Relationships establish the foundation for successful funding and contract opportunities. Relationship building requires being proactive and engaged. Relationship building, in many ways, is a contact sport. It requires getting out of the office and having face-to-face interactions. It cannot be done as effectively through e-mail or phone conversations.

Describe why building relationships with customers and partners is important. How is this accomplished?

144

Question 2

Pre-RFP/proposal marketing is an opportunity for a client to help customers identify areas in which the customers might benefit from the implementation of projects that address needs, problems, or opportunities.Contractors should not wait until formal RFP solicitations are announced by customers before starting to develop proposals. Contractors need to develop relationships with potential customers long before the customers prepare RFPS. Contractors should maintain frequent contacts with past customers and current customers and initiate contacts with potential new customers. Working closely with a potential customer puts a contractor in a better position to be selected eventually as the winning contractor when the customer issues an RFP.

Describe what is meant by pre-RFP/proposal marketing. Why should contractors do it?

145

Question 3

Most companies have limited resources and preparing a proposal can be a time consuming and costly process. Therefore companies must make bid/no-bid decisions. Some factors to be considered are the competition, risk involved, mission of the company, opportunity to extend capabilities, reputation with the customer, available customer funds, proposal resources, and project resources.

Discuss why contractors must make bid/no-bid decisions and the factors involved in making these decisions. Give an example of when a contractor should bid and when a contractor should not bid.

146

Question 4

A proposal is a selling document and its purpose is to convince the customer that you understand what the customer wants and that you are the best one for the job.Sections Technical – describe solution Management – describe

capabilities and experience Cost – estimate budget

Define proposal, and describe the purpose of a proposal. In addition, list the three major sections of a proposal and the purpose and elements of each.

147

Question 5

Some factors to be considered include: reliability of cost estimates; risk; value of the project to the contractor; customer’s budget; and the competition.The proposal process is competitive.

Contractors must make sure they do not bid too high or they might lose the bid.

Contractors must make sure they do not bid too low or they might lose money even if they win the contract.

What factors must be considered when a contractor develops the proposal price? Why is this not an easy task?

148

Question 6

Contractors must continue to be proactive even after the proposal is submitted. The contractor should call the

customer to confirm that the proposal was received.

After several days, the contractor should contact the customer again and ask whether the customer has any questions or needs clarification of anything in the proposal.

Such follow-up needs to be done in a professional manner in order to make a favorable impression on the customer.

Some industrial and government customers usually do not respond to attempted follow-up communications from contractors so that no contractor gains an unfair advantage in influencing the proposal evaluation process. This is one of the reasons why it pays to do some good pre-proposal marketing, so you know your customers better and know what is acceptable.

Should a contractor try to contact a customer after a proposal has been submitted? Why or why not?

149

Question 7

Customers evaluate contractors’ proposals in many different ways. Some customers first look at the

prices. Other customers initially screen

out those proposals with prices above their budget or those whose technical section does not meet all the requirements stated in the RFP.

Others, especially on large projects, create a proposal review team that uses a scorecard to determine whether each proposal meets all requirements in the RFP and to rate the proposal against predefined evaluation criteria, such as price, schedule, capabilities, and experience.

How do customers evaluate proposals? What factors might they consider?

150

Question 8

No. The lowest-priced proposal should not always be selected as the winner. There are many other factors to consider, such as the reputation of the contractor, their experience, materials used, etc. An example would be selecting the right company to build an addition to your house. One contractor might come highly recommended, use top quality materials, and be able to fit the project into your schedule. Another company might be much lower in price, but it has a questionable reputation, uses cheap materials, and does not provide a schedule.

Should the lowest-priced proposal always be selected as the winner? Why or why not? Give examples.

151

Question 9

Fixed-price contract Well-defined projects with low

risk Low risk for customer High risk for contractor

Cost-reimbursement contract Projects that involve risks High risk for customer Low risk for contractor

Describe two different types of contracts, when each should be used, and the risks associated with each.

152

Question 10

Payments will be made at the end of the projectBonus or penalty payments related to schedule performanceMisrepresentation of costsApproval of subcontractorsCustomer furnished equipment or informationDisclosure of informationInternational considerationsTerminationHandling of changes

Give examples of some miscellaneous provisions that might be found in a contract.

153

Question 11

Win ratio Number of proposals won /

Number of proposals submitted

Total dollar value of proposals Value of proposals won / Value

of proposals submitted

Describe two methods for measuring the effectiveness of your proposal efforts.

154

Question 12

Responses will vary.Responses should match the RFP developed for Chapter 2, Question 13Responses should include at least the information in a simplified proposal Statement of the customer’s need Assumptions Project scope Deliverables Resources Schedule Price Risks Expected benefits

If the three sections are used, they do not have to be labeled

Develop a complete proposal in response to the RFP you created for question 13 at the end of Chapter 2.

155

Project ProposalsInternet Exercises

156

Internet Exercises

Many proposals are available on the Web that address needs, problems, and opportunities.Some proposals will be very short and others many pages long.Use the guidelines to evaluate a proposal for its strengths, weaknesses, and missing aspects.Revisions to the proposal should clarify the information and provide enough detail for the evaluators to determine if the need is being addressed and the project can be successful.

Using your favorite Web search engine, perform a search for sample proposals.For a proposal that was found

What company developed the proposal, and what is the company looking to accomplish?

What are the strengths and weaknesses of the proposal?

What is missing from the proposal?

How should the proposal be revised?

Search for suggestions for developing a proposal. How does this compare to the chapter’s suggestions?Download a software system for developing a proposal. Describe how it works.

157

Medical Information SystemsCase Study 1

158


The purchasing manager was not familiar with their firm.

Why didn’t this team receive the RFP at the same time the larger consulting firms did?

159


This team is being considered because Paul had completed a project for Dr. Houser when she had a private practice and she told him about it.

Why is this team being considered as a candidate to submit a proposal?

160


Student answers will vary. Responses should contain the information presented in the structure provided in the chapter. Students should develop appropriate scores.

Develop a bid/no bid checklist to help determine if they should submit a proposal.

161


If any of them can find the time (and maybe Maggie cannot), they should make a serious attempt to put together a quality proposal. They should also contact the purchasing manager, based on Dr. Houser’s comments, and see if they can get some additional information. In their proposal, they should also stress their previous success with Dr. Houser. If they win the contract, this is a great opportunity to grow the firm.

What should Maggie, Paul, and Steve do? In explaining your answer, address the concerns of each of the three team members.

162

New Manufacturing Facility In ChinaCase Study 2

163


Since very few proposals were received, the team should have reviewed their RFP and included the budget cost. They should have asked each of the contractors to give an oral presentation of their proposals.

Is there anything the team should have done when they received only three proposals by June 30?

164


Responses will vary between yes and no. Yes. Since very few proposals

were received. Asia General Contractors’ proposal fits within budget and timelines and the have the experience to be evaluated at par with the other contractors.

No, the proposal was submitted late and should not be accepted. It is not fair to the others that submitted on time and could have used the additional time to further develop their proposals.

Should the team consider the proposal from Asia General Contractors? Why or why not?

165


The team should evaluate and decide upon a contractor based upon their evaluation criteria – taking into consideration budget, timeliness, experience, and ethical standards of the contractors. They should schedule meetings with each of the shortlisted contractors to address any questions. Most importantly, the team should provide the budget details and ask contractors that are above budget to return with a best and final offer.

After sharing their individual comments at the start of the July 15 meeting, how should the team proceed with the rest of the meeting and any follow-up?

166


Selection process improvements The RFP should have included

funding information. They could have been strategic

with the placement of the proposal bid – which may have increased the number of responses.

The evaluation criteria should be streamlined to ascertain credibility and capability of the contractors.

They could have had more pre-RFP meetings and been familiar with the companies and the number of companies that potentially would have bid on the project.

How could the selection process have been improved? Is there anything the Board, I.M. Uno, Alysha, or the team could have done differently?

167

Defining Scope, Quality, Responsibility, and Activity Sequence

4

168

Chapter Concepts

Clearly defining the project objectivePreparing a project scope documentUnderstanding the importance of planning for qualityCreating a work breakdown structureAssigning responsibility for work elementsDefining specific activitiesCreating a network diagramUtilizing a project management methodology called the systems development life cycle for information systems development projects

169

Learning Outcomes

Establish a clear project objectivePrepare a project scope documentDiscuss the importance and elements of a project quality planDevelop a work breakdown structurePrepare a responsibility assignment matrixDescribe how to define specific activitiesCreate a network diagram

170

Project Integration ManagementProject Scope ManagementProject Quality ManagementProject Time Management

Project Management Knowledge Areas from PMBOK® Guide

171

Plan of Attack

Background Boeing developed the FA-18E/F for the US NavyCosts exceeded budget150 stakeholders reviewed proposal in a two-week meetingLine-by-line proposal reviewDetermine deliverables Only those necessary

Reduced costs to within budgetAdopted rigorous change control processes

Project Manager Advice“If you start out on the wrong foot with a program, it likely will get worse.”“There’s no question your plan will change along the way—but if you don’t at least start with a good plan, it’s almost impossible to succeed.”

172

What Went Wrong?—Learning from Past Postmortems

Developer Comments“Competing demands for time and resources …”Keeping the schedule … it’s absolutely critical.”“… didn’t hire aggressively enough.”“ … things tended to fall through the cracks.”“Playing catch up from day one …”

SolutionsSchedule assignment of resourcesKeep the schedule that is agreed uponAcquire enough resources to complete the tasksHave a solid project management structureHave proper schedule and project management

173

Establish Project Objective

Planning process is based on the project objective Establishes what is to be accomplished Often stated in the project charter or RFP Is the tangible end product

Project objective includes Expected benefits Primary project end product or deliverable Date required to be completed Budget

Changes agreed upon by customer and contractor174

List examples of project objectives.Student Discussion

175


To increase emergency room capacity by 20 percent and reduce average patient waiting time by 50 percent through a reconfiguration and process improvement project to be completed in 12 months and within a $400,000 budget. To reduce outstanding accounts payable by $20 million by implementing a new billing, collection, and receiving system by May 31 with a budget not to exceed $220,000.To raise $40,000 for hunger relief by organizing a community festival for the last weekend in September with a budget of $3,000.To double annual sales revenue by creating an online shopping and fulfillment capability by April 30 with a budget not to exceed $40,000.To expand market share by 3 percent by introducing a new portable food preparation appliance within 10 months with a budget of $2 million.To increase August sales revenue by 10 percent above that of last August by producing and distributing a back-to-school catalog by July 15 with a budget not to exceed $40,000.To meet new environmental regulatory requirements by installing a new filtration system within 15 months and a budget of $3.2 million.

List examples of project objectives

176

Define Project Scope

Project ScopeDefines what needs doneIncludes Items contained in project

charter, RFP, proposal More detail

Establishes common understanding of scope with stakeholders

Project Scope DocumentUsually contains Customer requirements Statement of Work Deliverables Acceptance Criteria Work Breakdown Structure

Establishes baselineChange control system to avoid scope creep

177

Why should scope creep be avoided?Student Discussion

178


Informal changes to the projectNo approvals for changesAdditional work that is not documentedMay cause errorsMay cause reworkCould make the project overtime and over budget

Why should scope creep be avoided?

179

Plan for Quality

Complete work according to specifications and standardsPlan for assuring quality as project progressesInclude References for specifications and standards Written procedures for quality tools and techniques

Key aspects Monitor as the project progresses Do work right the first time rather than rework

180

It is often said that some people think they never have enough time to do the work right the first time, but then must take the time later to redo it correctly—haste makes waste!

What can be done to change this thinking?

Student Discussion

181


Clearly list quality standardsHave monitors in place to see if the work is meeting quality standardsSubmit sample work to be sure work meets standardsIf it means a higher quality product, determine the effects and costs of a later delivery

It is often said that some people think they never have enough time to do the work right the first time, but then must take the time later to redo it correctly—haste makes waste!

What can be done to change this thinking?

182

Create Work Breakdown Structure

Deliverable-oriented hierarchical decomposition Organize project work and deliverablesCreate logical groupingsSubdivide into more manageable components Deliverable is output of work package Resource requirements and durations can be assigned Accountability can be assigned Project manager can monitor and control

Graphic chart or indentured list

183

WBS with Breakdown to Different Levels

184

WBS

Graphic Chart

Indentured List

185

Assign Responsibility

Responsibility assignment matrix Designate responsible individuals

P = Primary responsibility S = Support responsibility

Associates responsibility For each work item For each individual

Only one primary per work item

186

Define Activities

Responsible resources define activities Breakdown work packages to

work items Level needed to perform

deliverable May not be able to define all

Comprehensive activity list Not always require

expenditure of effort Could be wait time

187

Sequence Activities

Network diagram Defines the sequence of

activities and relationships Tool for arranging order

Common techniques PERT CPM PDM

188

Network Principles

Activities Represented by a box Consume time Described by verb

Relationships Linked in serial sequence Complete concurrently

189

Loops

Illogical relationship among activitiesPerpetually repeats itselfNot acceptable

190

Laddering

Ladder activitiesAllow for shortest possible time for completionBest use of the three workers and experts

Set of repeating activitiesSerial sequence One work Two wait

Can be performed at same timeWould need triple resources

191

Create Network Diagram

Tips and TechniquesLogical sequence of activitiesShow dependent relationshipsElaborate as project progressesUse subnetworks for similar activity sequences and relationships

Development of DiagramQuestions to answer Finish before next start? Done concurrently? Cannot be started next?

Guidelines for detail level Define each work package Draw summary level network

then add detail Detail to responsibility or

deliverable change Duration less than project

progress review

192

Planning for Information Systems Development

DefinitionComputer-based system Accepts data as input Processes the data Produces useful information

Examples Computerized order entry E-commerce Automatic teller machines Billing, payroll, and inventory

ProcessPlan, execute, and controlSystems Development Life Cycle Problem definition System analysis System design System development System testing System implementation

193

An IS Example: Internet Applications Development for ABC Office Designs

ABC Office DesignsLarge number of sales representativesSell office furniture to major corporationsState assignments in four regionsManagement monitor state and regional salesBuild Web-based IS system to track prices, inventory, and competition

ProjectProject manager identifiedWBS follows SDLCResponsibility assignment matrix completedList of tasks compiled and predecessors identifiedNetwork diagram created

194

IS Example: WBS follows SDLC

195

IS Example:Responsibility Assignment Matrix

196

IS Example: Task List and Predecessors

197

IS Example: Network Diagram

198

Project Management Information Systems

Wide variety of systems availablePlan and control projects in interactive modePlan and test different optionsCreate reports, diagrams, and chartsInterface with other software applicationsAppendix A has additional information

199

Critical Success Factors Plan the work and then work the plan. It is important to develop a plan before starting to perform the project. Taking the time to develop a well-thought-out plan is critical to the successful accomplishment of any project.Participation builds commitment. By participating in the planning of the work, individuals will become committed to accomplishing it according to the plan.The project must have a clear objective of what is to be accomplished. The objective should be defined in terms of end product or deliverable, schedule, and budget, and it must be agreed upon by the customer and the project team that will perform the project.The project scope document is valuable for establishing a common understanding and agreement among project stakeholders regarding the scope of the project.Having a quality plan at the outset of the project is extremely beneficial because it will help prevent incurring additional costs and schedule extensions due to rework caused by work and deliverables that fail to meet quality requirements and customer expectations.The key to quality control is to monitor the quality of the work early and regularly throughout the performance of the project, rather than waiting until all the work is completed before checking or inspecting for quality.The network diagram is also is a communication tool for the project team because it shows who is responsible for each activity and how each person’s work fits into the overall project.

200

SummaryThe planning process is based on the project objective, which establishes what is to be accomplished.The project scope defines what needs to be done.The project scope document usually contains the customer requirements, statement of work, deliverables, acceptance criteria, and a work breakdown structure.The quality plan must include or reference the specifications, industry or government standards, and codes that must be used and met during the performance of the project work.The work breakdown structure establishes the framework for how the work will get done to produce the project deliverables.A responsibility assignment matrix defines who will be responsible for the work.Activities define more specifically how the work will get done.A network diagram defines the sequence of how and when the activities will be performed.Project planning is a critical activity in developing an information system (IS).A project management planning tool or methodology, called the systems development life cycle (SDLC), is often used to help plan, execute, and control IS development projects.Numerous project management information systems are available to help project managers plan, track, and control projects in a completely interactive way.

201

Chapter Questions

202

Question 1

Planning is the systematic arrangement of tasks to accomplish an objective. The plan lays out what needs to be accomplished and how it is to be accomplished.The people who will be involved in performing the work should be involved in planning the work.

What is meant by planning a project? What does this encompass? Who should be involved in planning the work?

203

Question 2

The project objective is the target—the tangible end product that the project team must deliver. The objective must be clear, attainable, specific and measurable. If the objective is not clearly written, the end product may not meet the needs of the customerResponses should contain the expected benefits of the project, the primary project end product or deliverable, and the date required for completion.

What is meant by the term project objective? What might happen if a project objective is not clearly written? Give three examples of clearly written project objectives.

204

Question 3

A project scope document includes sections for the customer requirements, statement of work, project deliverables, acceptance criteria, and work breakdown structure. It is important to clearly define the project scope to establish a common understanding among project stakeholders regarding what needs to be done to produce all the deliverables for the project.

Describe a project scope document. Why is it important to clearly define the project scope?

205

Question 4

The WBS is a hierarchical tree or an indentured list of end items that will be accomplished.The responsibility assignment matrix is a method used to display, in tabular format, the individuals responsible for accomplishing the work items in the WBS. The WBS and the responsibility assignment matrix are related. All the work items and work packages listed in the WBS are also listed in the responsibility assignment matrix.

What is a work breakdown structure? What is a responsibility assignment matrix? How are they related?

206

Question 5

Creating a project quality plan is important to prevent poor quality and to avoid quality problems.Responses should reference how knowing the specifications, industry or government standards, and codes that were to be met during the project could have helped to prevent the quality problems of the project.

Why is creating a plan for quality important? From your experiences, give an example of how having and controlling a quality plan could have prevented quality problems in a project.

207

Question 6

An activity is a defined piece of work that consumes time. It does not necessarily require the expenditure of effort by people. List of detailed activities needed to accomplish work package 3.3: Prizes Identify prizes Specify the number and type of prizes Buy prizes Gift wrap prizes Move prizes to festival site

List of detailed activities needed to accomplish work package 4.2: Permits Identify required permits Specify where the permits need to be

acquired from Identify costs and timelines for

acquiring permits Obtain the permits

What is an activity? Does it always require human effort? Refer to Figure 4.1.

Provide a detailed list of activities needed to accomplish work package 3.3.

Do the same for work package 4.2

208

Question 7

“Mail Questionnaire & Get Responses” and “Test Software” must be done before “Input Response Data” can start. “Prepare Mailing Labels,” “Print Questionnaire,” “Develop Data Analysis Software,” and “Develop Software Test Data” can start after “Review Comments & Finalize Questionnaire” has been completed. Any of the four activities listed above that can start after “Review Comments & Finalize Questionnaire” has been completed. They can be done concurrently.

Refer to Figure 4.9. What activities must be accomplished before “Input Response Data” can start? What activities can start after “Review Comments & Finalize Questionnaire” has finished? List two activities that can be done concurrently.

209

Question 8

Laddering should be used when a project has a set of activities that are repeated several times and appropriate resources are available to handle tasks concurrently. Specific examples will vary. Responses should contain a set of activities that are repeated and for which there are adequate resources to do the tasks concurrently.

When would you use laddering in a network diagram? Give an example, different from the one provided in the chapter, and draw the corresponding network diagram.

210

Question 9

They allow the project manager and the project team to plan and control projects in a completely interactive mode. Features and benefits include the ability to: Plan and control projects in

interactive mode Plan and test different options Create reports, diagrams, and

charts Interface with other software

applications

Why would you recommend project management software to someone involved in project management? What features and benefits does it provide?

211

Question 10Draw a network diagram representing the following logic:

As the project starts, activities A and B can be performed concurrently. When activity A is finished, activities C and D can start. When activity B is finished, activities E and F can start. When activities D and E are finished, activity G can start. The project is complete when activities C, F, and G are finished.

212

Question 11Draw a network diagram representing the following information:

The project starts with three activities, A, B, and C, which can be done concurrently. When A is finished, D can start; when B is finished, F can start; When B and D are finished, E can start. The project is complete when C, E, and F are finished.

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Question 12Draw a network diagram that represents the following IS development task list.

Activity Immediate Predecessor 1. Problem Definition — 2. Study Current System 1 3. Define User Requirements 1 4. Logical System Design 3 5. Physical System Design 2 6. System Development 4, 5 7. System Testing 6 8. Convert Database 4, 5 9. System Conversion 7, 8

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Project Planning ToolsInternational Project Management AssociationInternational Journal of Project Management

Internet Exercises

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Internet Exercises

The IPMA website has information related to certifications, memberships, publications, awards, events, and educational opportunities.The “Young Crew” site has information about nurturing future project management leaders.The International Journal of Project Management contains a number of articles related to project management. Issues often have a topic for the articles.Look at the references for the chapters to see additional articles that are supplemental to the information presented in the chapters.

Using your favorite Web search engine, perform a search for project planning tools and describe what you found.Visit the International Project Management Association website.

Explore the site. Click on the “Young Crew” link.

Go to the International Journal of Project Management homepage.

Click on the “Free Tables of Contents and Abstracts” link.

Do a search for planning. Click on the “View Related

Articles” link.

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A Not-For-Profit Medical Research CenterCase Study 1

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Responses should include their interpretation of the project objective and list the assumptions for the project. One possible response: The project objective is to create a new annual report. An assumption is that the new shorter report will bring in additional funding for the center.

Establish the project objective and make a list of your assumptions about the project.

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Responses should have an indentured list or a hierarchical structure for the WBS, that shows the major tasks necessary to achieve the project objective.

Develop a work breakdown structure.

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The WBS should contain enough detail for the student responses to manage the tasks and assign responsibility and resources to the tasks.

Prepare a list of the specific activities that need to be performed to accomplish the project objective.

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Responses should show the name of the person responsible for each task.

For each activity, assign the person who will be responsible.

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Responses should sequence the tasks to show the dependencies of the tasks and what tasks can be done concurrently, if any.

Create a network diagram that shows the sequence and dependent relationships of all the activities.

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The WeddingCase Study 2

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Responses should include their interpretation of the project objective and list the assumptions for the project. One possible response: the project objective is Peggy Sue and Tony have a wedding that they want. An assumption is that Peggy Sue's mother and Tony's mother decide that they do not have to control everything and slow down a little on the plans.

Make a list of assumptions that will be used as the basis for planning the wedding. And no, it is not acceptable to assume that Tony and Peggy Sue will just elope, no matter how tempting that may be!

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Responses should include an indentured list or a hierarchical structure for the WBS that shows the major tasks necessary to achieve the project objective.

Develop a work breakdown structure.

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The WBS should contain enough detail for the student responses to manage the tasks and assign responsibility and resources to the tasks.

Make a list of the specific activities that need to be done between now and the wedding day.

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Responses should show the name of the person responsible for each task.

For each activity, identify the person (Tony, Peggy Sue, etc.) who will be responsible for seeing that the activity is accomplished.

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Responses should sequence the tasks to show the dependencies of the tasks and what tasks can be done concurrently, if any.

Create a network diagram that shows the sequence and dependent relationships of all the activities.

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Microsoft ProjectAppendix

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AppendixMicrosoft Project

Appendix activities are Enter the work breakdown

structure in a hierarchical indentured list format

Determine predecessors for tasks

Assign responsibility for each activity

Create the network diagram

Most widely used project management software system in the business environment today.It is powerful, easy to use, and available at a very reasonable price.A free trial version is included with new copies of the text or on the Microsoft website.The Gantt Chart View and the Task ribbon are the default view when Microsoft Project is first opened.Other views are chosen by clicking on the arrow in the View group on the Task ribbon and selecting the name from the drop down list.

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Figure 4A.1, Project Properties

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Figure 4A.2, Project Information

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Figure 4A.3, Work Package and Activity Entry

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Figure 4A.4, Tasks – Entering Predecessor Data

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Figure 4A.5, Resources

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Figure 4A.6, Network Diagram

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Figure 4A.7, Set Baseline for Project

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Documents

Project Management Fundamentals 1. Project Management Concepts 1 2