Planning & Iron Triangle

Project Management Plan

3Project Management Plan

The Project Management Plan (PMP) is a formal, approved document used to manage project execution. The PMP documents the actions necessary to define, prepare, integrate and coordinate the various planning activities. The PMP defines how the project is executed, monitored and controlled, and closed. It is progressively elaborated by updates throughout the course of the project. The PMP is also a communication vehicle for ensuring key stakeholders share an understanding of the project. The PMP is NOT a project schedule. A project schedule lists planned dates for performing tasks and activities to meet milestones identified in the project plan.

4Project Management Plan TOC

Critical Path Method

6Develop Schedule

To develop your project schedule, you'll need to do three things first...• Define Activity• Sequence Activity• Estimate Activity Durations

1. Define ActivityThe first step to developing your schedule is to define the specific activities that need to be performed in order to complete the project.

2. Sequence ActivityOnce your activity list is ready, the next step is to determine the order each of the activities needs to be completed in.

3. Estimate Activity DurationsThe third step is to estimate how long each activity will take to complete. This needs to take into account the type, amount, and availability of people, material, equipment and supplies that are needed to perform each activity.

7Activity Dependency

8Critical Path Method

Critical path schedules...• Help you identify the activities that must be completed on time in order to complete the whole project on time.• Show you which activitys can be delayed and for how long without impacting the overall project schedule.• Calculate the minimum amount of time it will take to complete the project.• Tell you the earliest and latest dates each activity can start on in order to maintain the schedule.

The CPM has four key elements...• Critical Path Analysis• Float Determination• Early Start & Early Finish Calculation• Late Start & Late Finish Calculation

9Activity Dependency

10Activity Dependency

Critical path schedules...• Help you identify the activities that must be completed on time in order to

complete the whole project on time.• Show you which activities can be delayed and for how long without impacting the

overall project schedule.• Calculate the minimum amount of time it will take to complete the project.• Tell you the earliest and latest dates each activity can start on in order to maintain

the schedule.

The CPM has four key elements...• Critical Path Analysis• Float Determination• Early Start & Early Finish Calculation• Late Start & Late Finish Calculation

11Critical Path Method

12Float

13Early Start & Early Finish Calculation

The Critical Path Method includes a technique called the Forward Pass which is used to determine the earliest date an activity can start and the earliest date it can finish. These dates are valid as long as all prior activities in that path started on their earliest start date and didn't slip.Starting with the critical path, the Early Start (ES) of the first activity is one. The Early Finish (EF) of an activity is its ES plus its duration minus one. Using our earlier example, Activity 2 is the first activity on the critical path: ES = 1, EF = 1 + 5 -1 = 5.

You then move to the next activity in the path, in this case Activity 3. Its ES is the previous activity's EF + 1. Activity 3ES = 5 + 1 = 6. Its EF is calculated the same as before: EF = 6 + 7 - 1 = 12.If an activity has more than one predecessor, to calculate its ES you will use the activity with the latest EF.

14Late Start & Late Finish Calculation

The Backward Pass is a Critical Path Method techique you can use to determine the latest date an activity can start and the latest date it can finish before it delays the project.You'll start once again with the critical path, but this time you'l begin from the last activity in the path. The Late Finish (LF) for the last activity in every path is the same as the last activity's EF in the critical path. The Late Start (LS) is the LF - duration + 1.In our example, Activity 4 is the last activity on the critical path. Its LF is the same as its EF, which is 14. To calculate the LS, subtract its duration from its LF and add one. LS = 14 - 2 + 1 = 13.You then move on to the next activity in the path. Its LF is determined by subtracting one from the previous activity's LS. In our example, the next Activity in the critical path is Activity 3. Its LF is equal to Activity 4 LS - 1. Activity 3 LF = 13 -1 = 12. It's LS is calculated the same as before by subtracting its duration from the LF and adding one. Activity 3 LS = 12 - 7 + 1 = 6.You will continue in this manner moving along each path filling in LF and LS for activities that don't have it already filled in.

Earn Value Metrics

16Earn Value Metrics

Earned Value measures performance against a plan at a given point in time.

Term Full Name Meaning

PV Planned Value Estimated value of the work planned to be done

EV Earned Value Estimated value of the work actually accomplished

AC Actual Costs Actual Costs Incurred

BAC Budget At Completion Amount budgeted for total project

EAC Estimate At Completion Currently expected total for project

ETC Estimate To Complete How much More to finish

VAC Variance At Completion How much over/under we expect to be

17Formula

Earned Value Formula

Name Formula Meaning

Cost Variance CV=EV-AC -ve=over budget, +ve=under budget

Schedule Variance SV=EV-PV -ve=behind schedule, +ve=ahead schedule

AC Actual Costs Actual Costs Incurred

Cost Performance Index (CPI)

CPI=EV/AC We are getting _ cents out of every $ spent

Schedule Performance Index

SPI=EV/PV We are progressing at _% of the rate originally planned

Estimate At Completion

EAC=BAC/CPI As of now, how much do we expect the total project to cost

Estimate To Complete ETC=EAC-AC How much more to finish

Variance At Completion

BAC-EAC How much over/under we expect to be

18Example

Let’s imagine our project is to build a wall around a garden. Assuming 4 equal sides, a budget of $200 per side and a schedule of 1 side per day. We should be finished in 4 days for a total of $800. If, after Day 3, our progress is as follows:

19Calculation

Name Formula Day 3 Value

PV - Planned Value Estimated value of the work planned to be doneShould have done 3 x $200 = $600 or Percentage Complete 75%

SV=EV-PV Estimated value of the work actually accomplishedActually done 2.5 sides $200+$200+$100 = $500 orActual Percentage Complete 62.5%

AC - Actual Costs Actual Costs Incurred $200+$220+$140=$560

Cost Performance Index Over / Under Budget factor CPI = EV / AC $500 / $560 = 0.89

Schedule Performance Index Ahead / Behind Schedule factor SPI = EV / PV$500 / $600 = 0.83 0r62.5%/75%% = 0.83

BAC - Budget At Completion Amount budgeted for total project $800

EAC - Estimate At Completion ETC=EAC-AC Currently expected total for project EAC=BAC / CPI

ETC - Estimate To Complete How much more to finish? ETC = EAC - AC $899 - $560 = $339

VAC - Variance At CompletionHow much over/under we expect to be VAC = BAC –EAC

$800 - $899 = -$99