beyond the clouds

I thought it might be cool to document my work in OLS 499A this week as I stay trapped in my room. For this take-home final, I need to describe “in extreme detail” each of these project management (PM) topics, so that the reader might feel like an expert at the end of it (though, as Dr. Windle would tell you, would never be an adequate timeframe).

Discuss, in extreme detail, the following topics:

• Project Mangement Institute (PMI)
• Project Management Body of Knowledge (PMBOK)
• PMBOK Methodology
• Project Plan
• Work Breakdown Structure (WBS)
• Project Scope
• Gantt Charts
• Cost Budgeting Tools/Techniques
• Earned Value (EV) Management
• Planned Value
• EV
• Schedule Variance (Index)
• Scheduled Performance (Index)
• Risk Management

Answers are now up.

PMI
Project mangement has been around for some time. As with most professions, matching organizations have been created to foster developement and support of the practice. The Project Management Institute (PMI), located in Pennyslvania, is the national standard in project management organizations. Along with publications such as the Project Management Body of Knowledge (PMBOK), it also offers memberships, certifications in PM, and an active to community to further the study and practice of PM. They also have continuing education programs to keep members up-to-date on emerging trends.

PMBOK
As mentioned above, perhaps PMI’s most well-known tool is the Project Management Body of Knowledge, or PMBOK. The PMBOK is a thorough, detailed description of the entire project management process. As stated in the PMBOK, it serves “to identify and describe that subset of the PMBOK which is generally accepted.” In other words, while it would be impractical to try to include everything in the body of PM, the PMBOK conveys that which is most accepted and practiced.

In addition to covering the context of PM and differentaion in process types, it breaks down every step of planning and executing a project. The following major knowledge areas are covered in minute detail:

• integration management
• scope management
• time management
• cost management
• quality management
• human resource management
• communications management
• risk management
• procurement management

PMBOK Methodology
Many people see the PMBOK text as a methodology used to manage projects. However, it’s more accurate to see PMBOK as a generic resource and reference that specific methodologies draw from. Within each methodology, you find a specializtion for the type of project that is being completed. For example, METHOD/E was created by ArthurAndersen for training development projects, whereas the Rational Unified Process (RUP) is designed for software engineering projects. However, both methodologies will reference PMBOK frequently as a baseline for project management.

Project Plan
As each project is developed, a project plan will form, detailing the formal process to be used in completing the project. More often than not, the term integrated project plan is used because the plan is in fact multiple documents, brought together to form the structure and style of the project.

A typical project plan will contain a variety of documents and plans. While they vary greatly, most plans will include a project charter, which formally annouces the project to management, as serves as a funding request; the PM approach, containing management plans from the knowledge areas listed above; a scope statement, stating the brevity of the project; a work breakdown structure (WBS) separating the project into deliverables; cost, time, and responsibility schedules to match items on the WBS; performance measurement baselines, as a way to measure progress using metrics; milestones; staff requirements; risk assessment and resolution plans; and, open issues that could challenge the project’s progress. A well-drawn project plan also includes supporting detail such as additional documentation and specifications, as well as consideration from historial documentation on past projects and processess, constraints and assumptions, and overseeing organizational policies.

WBS
Creating a solid, well-planned work breakdown structure (WBS) is essential to giving your project the best chance of success. The purpose of the WBS is to take each area of the project, whether it be a divison’s contribution to a project, the different components of a wedding, or the different parts of a manufacturing process, and break each section into deliverables that the next step or section can use to continue. Breaking the project down into deliverables can greatly help with setting target dates and milestones, as well as measuring the project’s progression.

Scope
In addition to the WBS, the project scope is also a necessary component, possibly more so than the WBS. There are two major components to the cope statement: the scope statement, and scope management plan. The scope statement serves to define the limits of the project in terms of time, quality, and cost. It’s absolutely essential that each of those components is carefully evaluated and included into the statement, for a change in one will affect the other two. As with most parts of a project plan, the scope statement can be reiterated, with the understanding that every component is affected by the change in one, and that subsequent changes in the duration of the project could occur as a result. Also included should be the scope management plan, a set of guidelines to follow regarding changes to the scope, as well as how the scope should be managed. It should also include an expected scope stability estimate - if the scope is apt to change, that should be documented. Scope change and identification is also essential as the project develops.

Gantt Charts
Visual layouts of the project are extremely helpful, both when planning and performing the project. A great way to do this, and a standard way to document activity lists, is with a Gantt chart. Invented in 1917 by Henry L. Gantt as a production control tools, but now frequently used in project management, a Gantt chart is a horizontal bar chart that graphically displays the duration and sequence of each activity, over the course of the project. The chart visually shows the reader each activity’s parent activity, the order in which each activity is completed, and the expected duration of each activity. Gantt charts list the activities chronologically from top to bottom, and display the sequential duration left to right, to the right of the activity list.

Cost Estimating
When planning a project, effective and accurate cost estimating is crucial. If you misjudge the costs and you end up over budget, the end result of the project is much less likely to turn out favorably. To avoid this, three standard methods of cost budgeting have been developed: analogous, parametric, and bottom-up estimating. In addition, computer modeling is being used more and more frequently to quickly model budget scenarios.

Analogous estimating is also known as top-down estimating, and uses information from prior projects to create a best-guess scenario. It therefore relies on expert opinion, and can be prone to inaccuracy. Although this model is not favored, it is useful if not much information is available about the project, or if estimating costs seems more complicated to outright state. Analogous estimating is also more cost-effective, although the lack of accuracy may still be too much of a burden.

Parametric modeling is another form of cost estimating that uses parameters and models to determine costs. An example of this is product in which there is a fixed price for a certain dimension, and the total cost is solely based on the dimensions you wish the product to be. Or, a software developement firm could use this method based the quantity of features in a product to be developed. This method is more accurate than analogous estimating, but also more costly. In addition, a reliable model and scalability are necessary for this method to be effective.

Bottom-up estimating is even more costly, but yet more accurate. This form of estimating determines the cost of each item, then adds it together to create the overall cost estimate. Although the accuracy is very high with this form of estimating, the cost of calculating each item can be prohibitive, especially for large projects that could potentially have tens of thousands of individual work items.

Computerized modeling is a newer method of cost estimating that uses both traditional planning and advanced algorithms to more accurately predict costs. These algorithms, depending on their sophistication, can quickly calculate the cost of both simple and complex projects based on information given by the user. Due to the potential complexity of the tools, these can be very expensive.

Earned Value Analysis
Once the project is underway, tools are needed to measure the progress of the project against the estimated cost at any given time. This is a very valuable tool, as it can easily show if the project is on schedule and on budget. To accomplish this, we use Earned Value Analysis (EVA) EVA uses simple calculations to determine the project’s status. To perform an EVA, you need to know certain information for the point at which you are measuring. First, you need to find the planned value (PV), which is the amount of work (in dollars) that is planned to be completed at that point. This can be found with a combination of your activity list and the cost estimates - simply calculate what should be spent at that point. Next, find the earned value (EV), which is the value of the work completed at that point. Once again you’re using the activity list and cost estimates, but this time you’re compiling the estimated cost of the work that has been actually completed, not what is planned to be completed. Lastly, you need the actual value (AC), which is the actual cost of the work completed at that point.

Once you have these three values, several additional values become available. To begin with, you can calculate the schedule variance (SV) of the product, which is the difference between the earned value and planned value. If the result is positive, then more work has been done than planned, and the project is ahead of schedule. If the result is negative, however, the project is behind schedule. In addition, we can find the schedule variance index (SVI), which computes the schedule variance as a percentage of the entire time period measured. This percentage can more objectively show how far ahead or behind a project is.

We can also calculate the cost variance (CV), which is the difference between the budgeted project cost and the actual cost at that given point. A positive result indicates that less dollars are being spent than planned, and that the project is under budget. Conversely, a negative result means that the project is over budget. Like with the schedule variance, we can calculate the cost variance index (CVI), which will more easily show, as a percentage, how much over or under budget the project is. In addition to the CVI, we can also calculate the scheduled performance index (SPI). This calculation compares the earned and planned values to objectively show how much work is actually being completed for each dollar spent.

Risk Management
To ensure the success of any project, risk management should be carefully executed and evaluated. There are four main steps in risk management, according to PMBOK:

• risk identification
• risk quantification
• risk response development
• risk response control

Risk identification is the act of determining what risks have the greatest chance of affecting the project, and documenting each one. Risk identification should be performed throughout the project, not just at the beginning. It should include internal and external risks, and also forsee opportunities as well as potential for harm. In addition to a list of risk sources and potential events, indirect events such as morale or inadequate funding should also be noted.

Risk quantification evaluates each identified risk for possible outcomes in terms of money, time, and quality. This can be done with expert advice, simulations, statistics, and past experience. Both opportunities to pursue and ignore should be noted.

The next step, risk response development, focuses on directed actions to either accept, mitigate, or ignore quantified risks. Results can include procurement of goods, capital or services, contingency planning, alternative strategies, and insurance. As a result of this step, the project should now contain a risk management plan, which details the procedures to be taken when a new risk arises, building off of the experience gained in identifying and quantifying the current round of risks. Contingency plans should also be in place to handle new risks as the project progresses.

The final step, risk response control, is an ongoing process during the project to utilize the risk management plan put in place. Every time a new risk is identified, the process of identification, quantification, and response should be used. Along with this, corrective action should be used to continually learn from past experience for future risks.