2.2. The Project Planning Phase

2.2.1. Purpose

The purpose of the Project Planning Phase is to kickoff a new project and establishes an accurate plan and schedule. The infrastructure that is established during the planning phase is critical to effectively manage the projects success. At no other time during the life of the project is the success of the project more vulnerable. During this phase, responsibilities are assigned; communications and reporting expectations will be developed and presented to the project team. Tracking systems will be established. The project team will further decompose the high-level work breakdown structure into measurable tasks. This decomposition will form the basis of the project plan and schedule. Once the project team has determined the scope of the project a Risk Management Plan can be developed. The rigor that is established during this phase is dependant on the size, visibility, and impact of the project. The effort taken during theconclusion.


2.2.2. Project Managers Role

􀂃 Obtain staff

􀂃 Assign roles & responsibilities

􀂃 Develop Organization Chart

􀂃 Prepare Project Notebook and Project Files

􀂃 Develop the detailed WBS

􀂃 Develop Communications Plan

􀂃 Establish reporting frequencies

􀂃 Conduct due diligence or risk assessment

2.2.3. Inputs

􀂃 High Level Project Charter (with attachments)

􀂃 High Level Risk Assessment

􀂃 Requirements Document

2.2.4. Outputs

• Communications Plan

o Communications Matrix

o Issue Log

o Action Item Log

o Documentation Matrix

o Status Reports

o Organization Chart

o Project Team Directory

• Project Charter

• Resource Request Form

• Project WBS

• Requirements Traceability Matrix

• Responsibility Matrix

• Risk Management Guide

• Project Notebook

• Developing Task Worksheet

• Project Schedule

2.2.5. Step-By-Step Process

1. Conduct a Project Team Detailed Planning Meeting and Work Session

The project manager will hold a project detailed planning meeting once the project team is established. The main purpose of the detailed planning meeting is to introduce the project and enlist the project team to continue work completing the Project Charter (Appendix B), which was started during the Opportunity Assessment & Initiation Phase. The project owner should be present to communicate expectations, goals, and success criteria. Other agenda items should be team member responsibilities, time and/or budgetary constraints, and the schedule for future meetings (communication plan). If the project’s conceptual development is clearly defined, the team should work on defining the scope and objectives by creating a Work Breakdown Structure (WBS).

In order to hold a successful detailed planning meeting the project manager must determine the following:

Meeting Attendees

The detailed planning meeting attendees will include the project manager, the project owner, and all project team members. This information is listed in the agenda.

Agenda

The Purpose must be stated clearly to set expectations and stimulate interest in the meeting. An Agenda will include the meeting attendees, subjects to be covered and time for each. The meeting attendees must be listed in the agenda section that is distributed. The agenda for the detailed planning meeting will include the project owner discussing the purpose and expectations of the project. A High-level WBS will be produced and responsibilities will be assigned to the project team members. The project manager will facilitate the identification of the following:

Business need for the project

Vision, Mission, Scope, and Objectives

Project assumptions, risks, and constraints

A Limit to the meeting is provided to inform all meeting attendees of the time required for the meeting. A typical detailed planning meeting and work session may take several hours to several days depending on the size of the project.

The project manager should prepare the agenda and distribute it a minimum of 24 hours before the meeting.

Location

The project manager is responsible for reserving an office or conference room large enough to accommodate all meeting attendees. Be sure there is ample wall space to display flip charts for the development of the WBS

Equipment and Props

The project manager must ensure the meeting location is equipped with the needed equipment and props for the meeting. Equipment includes overhead projectors, white boards, markers, tables, and chairs. Props include the post-it notes, easels, large paper, and tape.

Meeting Minutes

The project manager should designate one person at the beginning of the meeting to take the minutes. The project manager will take responsibility for distribution of the meeting via e-mail within 48 hours of the meeting. During the meeting it is helpful to have current ideas and information captured on flip charts for the visibility and focus of the project team

2. Develop the Detailed WBS

The Detailed WBS process found in this section should be used to develop the detailed WBS. It will result in a further decomposition of the project objective into the deliverables that must be produced to successfully accomplish the project. These deliverables are measurable in the hours and cost required to produce them. Review the project sponsor-approved proposal or business case to determine if any changes in scope have occurred during the approval process.

The purpose of the WBS and the benefit it provides are:

􀂾 It facilitates detailed planning by subdividing the project scope into smaller, manageable work efforts. These work efforts can be mapped to the individual responsibilities.

􀂾 The “owner” of each deliverable can be established and that “ownership” becomes part of the project charter.

􀂾 Tasks can be identified to produce each deliverable. The responsibility for each task can be established. That individual is then responsible for the schedule of the task.

􀂾 The detail estimated costs and budgets can be established for each WBS element, facilitating bottom-up estimating.

􀂾 It provides a framework to identify projects separately from organizations, funding sources, accounting systems, etc.

There is no theoretical lower limit to the composition of a WBS, but a limit can be determined from information about the monitoring practices (for example whether actual tasks or milestones only are tracked). At the lowest deliverable level, the scope, cost, and complexity of each unit are more manageable. As a general rule, nouns should be used to describe deliverables. Resource responsibility should be assigned and a budget established for the lowest level deliverable identified in the WBS.

Once the WBS has been established and owners assigned the individual deliverables can be broken down into verbs that describe specific tasks. These tasks should take no more than 80 hours to complete. Taking the deliverable to the task level enables you to establish a project schedule.

The WBS development process is an iterative one. It is completed as a project team effort and reviewed and updated as part of the project life cycle. Specific major steps should be followed during the development of the WBS. Starting with the high-level WBS developed in the Initiation Phase; follow the steps as described below.Detailed Work Breakdown Structure Process

The WBS is the heart of project planning on which many disciplines rely. The WBS is used as the basis for creating:

􀂃 Responsibility matrix

􀂃 Schedule

􀂃 Cost

􀂃 Quality plan

􀂃 Communications plan

􀂃 Risk assessment

􀂃 Procurement plan

The development of a detailed WBS is the effort of the entire team during the detailed planning meeting. It is imperative to use the knowledge and resources of the team. The WBS development as a team helps to establish team member’s roles and responsibilities for the duration of the project and reinforces the reason each individual has been allocated for this particular project. The WBS is one of the most valuable tools for acquiring ownership of the project by the team. If the project budget is limited, ensure that there are funds allocated for this planning session. There is not a better way for the project manager to gain commitment and buy-in to the project for the team as a whole. For this reason the WBS is considered to be the basis for all planning.

b. General Guidelines for WBS

􀂃 All project objectives are made up of deliverables

􀂃 WBS defines products not tasks

􀂃 Sum of all the deliverables produces the final project solution

􀂃 One WBS level’s output is an input to the next higher level

􀂃 If you break down a deliverable, it must be broken into at least two deliverables

􀂃 Same deliverable cannot be in two different places in the WBS

􀂃 Lowest level deliverable is called a work package with work effort of 80-150 hours

􀂃 Deliverables are represented as nouns

􀂃 Tasks are identified at the work package level not to exceed 80 hours

􀂃 Tasks are represented as verbs and usually not nouns

c. Creating the WBS

Gather your team into a “war room” or a room that has plenty of wall space. Make sure everyone has access to:

􀂃 Post-it-notes

􀂃 Markers

􀂃 Colored dots

􀂃 Pen and paper

􀂃 Flip chart paper

Use the following steps to guide the team through the development process:

Steps

Preparation

Tasks

1

Assign two recorders to write on post-it-notes with markers, one deliverable per post-it.

Tape project requirements and high-level charter WBS on wall.

Discuss requirements for project.

Encourage entire team to participate in brainstorming session.

Have recorders alternately list one deliverable per post-it and place on wall – take all contributions.

After 10 minutes of brainstorming, arrange and rearrange the deliverables into hierarchical categories.

Note each highest level deliverable and brainstorm to see if additional deliverables can be added.

Break down into the lowest level deliverable (work package) 80-150 hours.

2

Demonstrate coding structure.

Code each deliverable using a standardized corporate coding system.

3

Set-up computer with project management software tool.

Assign someone to input information.

4

Distribute colored sticky dots.

Assign one color per person.

If not enough colors, place marks on dots to differentiate.

Make “color coded key”.

Request that each team member place their colored dots on the “work packages” for which they will be responsible.

Ensure that each work package has an owner.

If a work package does not have an owner, assign one.

5

Explain the difference between work effort and duration.

Have each owner assign work effort for each work package.

Add all the work effort totals to calculate high-level work effort estimate for project time line.

6

Develop Tasks.

(Note: Tasks are not typically identified during the detailed planning meeting, due to time constraints. It is more important in this meeting to completely identify all project deliverables. For more information on developing tasks, see the Schedule Preparation section of this chapter.)

Give each deliverable owner a copy of the Developing Tasks Worksheet (Appendix B).

Have them return to their workplace and breakdown each lowest level deliverable they own into its respective tasks.

Be sure to identify the date that the Task Worksheets need to be turned in. These will be used to develop the project schedule.

When developing tasks, be sure to include duration in days and estimates in hours.

d. Presenting the WBS

Once the entire WBS had been developed and tasks have been entered into the scheduling tool, the project manager should also develop a visual representation of the WBS. Keep in mind that the WBS does not include tasks. It only represents those deliverables that must be produced in order to complete the total solution. Managers and project owners are mostly interested in what needs to be produced, (deliverables) and not so much in how it is produced (tasks). For this reason the project manager will develop a visual portrayal of the WBS using a tool such as Microsoft Visio or PowerPoint. Below is a sample of what a WBS would look like using Microsoft PowerPoint.

3. Develop The Responsibility Matrix

Purpose: The Responsibility Matrix is a matrix that contains the description of the deliverables of the detailed WBS with each deliverables code of accounts (identifying number) and the owner or person taking responsibility for managing that deliverable. This matrix is used during the project execution and controlling phase to locate, track and establish status for each deliverable. This matrix is used by the project manager as well as the project team.

There are four basic responsibilities contained in the Responsibility Matrix.

􀂃 Owner - It is not essential for the owners to do the actual work. They are responsible for seeing that all the tasks are completed on time, within budget, and meeting performance requirements. The owner may also create their own responsibility matrix for their project team if they own many deliverables and manage a sizable sub-team

􀂃 Reviewer - This person is responsible for interim review of deliverables in progress. Additionally, they may interface on issues affecting the quality, cost, or timeliness of producing the deliverable. They also determine when the deliverable is ready to proceed through the approval process

􀂃 Approval – This person, usually someone from the project sponsor has the authority to approve the final deliverable and will most likely intervene in issue resolution concerning that deliverable. This approval usually indicates acceptance by the project sponsor that the deliverable meets the requirements and quality standards set forth in the Project Charter.

􀂃 Last Word – Regardless of approval levels, most organizations have a senior representative that can “veto” or overrule an approving authority. This type of action usually occurs very seldom and is typically tied to a change of business strategy. It is important, however, for the project manager to identify who this person is and understand their role in the project.

The Responsibility Matrix enables the project team to understand the responsibility structure for each deliverable in the project. Another purpose of the responsibility matrix is to ensure that all deliverables are assigned which helps eliminate any duplication of efforts. It creates accountability and ownership of the deliverables assigned. Distribute a copy of this report to any person named on the Matrix and resolve any conflicts that may arise. The Responsibility Matrix also helps to establish that all functional areas are accounted for within the project.

4. Develop Communications Plan

Purpose: The Communication Plan is one of the supporting knowledge areas needed for project success. It is often one of the areas that is most often neglected or taken for granted by the project manager and project team. This part of the planning phase is critical for implementing an infrastructure for tracking and controlling the project during the entire project life cycle.

Communication throughout the project is critical to project success. The project manager should be the central point of communication for all project related information exchange. During project initiation, it is important to establish a communication network that is based on the project owner’s expectations to meet this objective.

The project manager develops guidelines for all information created as part of the overall Communications Plan (Appendix B). Consistency among project team members requires guidelines for the information created and distributed. The format, style and quantity of information to be implemented during the life of the project should be well defined. Project managers should edit the Communication Plan to develop a comprehensive understanding among team members on how the team will communicate.

Another very important aspect of communication is the interaction among the project team members, owner(s), and other project stakeholders. Situations arise where communication among project stakeholders is needed, including participation on users groups, advisory teams, and in newsletters. The project manager must understand the importance of communication to the success of the project and create an environment in which communication is encouraged and accomplished. The following sections describe components of well-defined communications plan.

a. Define Communication Technology

There are many ways of communicating information throughout a project. Various methods may be used on the same project. The project manager will define the technology required for all project communications. Different communications will require different technologies and it is the project manager’s job to define the communication requirements. This enables consistency among all project stakeholders. Communication technology utilized by the project stakeholders and management may include e-mail, fax, shared network drives, Intranet or other available inter-office communication. Regardless of the technology chosen, the project manager must ensure that all project team members can access and use the selection. Understanding of the communication technology assures consistency among the project team.

b. Develop Team Organizational Structure

Purpose: The Project Team’s Organizational Structure can be represented in an organizational chart of the project. This chart is representative of who is on the team; functional areas represented, stakeholders, project manager, project team, project sponsor and or project champion. The reason this is needed for each project is that during the project, given the cross-functional and geographically disbursed team members, it allows for clear communication and escalation of project needs.

Once the project team has been defined and the high-level WBS has been developed, the project manager will develop the project team organizational

structure. The project manager must determine the project team members and the functional department and manager to whom they report. The project manager should create the project’s organizational structure to provide a means of communicating the reporting relationships throughout the project life cycle. Use the Organization Charting function found in Microsoft Word to develop the Organization Chart. See the Organization Chart for a sample Organization Chart.

c. Develop Project Directory

Purpose: The Project Directory is used for communication between team stakeholders and allows for new team members to be able to identify the necessary contact information for project efficiency.

Once the project team (the “core” team) has been assigned, the project manager will develop the Project Directory. The purpose of the project directory is to provide an easily accessible document containing project stakeholder contact information. A project directory includes all project team members. Be sure to include items such as email, cell phone, or pager information. The Project Directory must be updated in a timely manner to keep it as an effective communication tool.

The project manager will develop, at a minimum, a Global Distribution List. The list should contain all necessary contact information for each person involved in the project. Be sure that any team members external to the organization are given appropriate access to this list. The project manager should print a copy of each member record and provide this copy to each member that does not have access to the Global Address book.

d. Develop Communication Matrix

A Communication Matrix (Appendix B) detailing the information recipients and the communication methods (memos, verbal, e-mail, meetings, etc.) will be developed by the project manager. The communication matrix contains the individuals or groups involved with the project and the types of information required. The purpose of the communication matrix is to ensure the creation of proper information and the accurate and timely distribution to the appropriate parties. The method of communicating (verbal or written) will also be defined in the communication matrix. Regardless of the communication methods selected, the project manager must ensure all team members are trained and have access to the chosen method. To complete the Communications Matrix, follow these steps:

􀂃 Enter the recipients. Groups are already entered, but the project manager may need to add specific individuals.

􀂃 Enter the report or meeting title. Again, a select set of documents, reports, and meetings are already entered. Edit the matrix to add or delete any that do not apply.

􀂃 Indicate the method and frequency for each title next to the name of each recipient.

􀂃 Be sure to update and redistribute the Communications Matrix as additions/changes occur

e. Meeting Management

Meetings are an important form of communication among project teams. Types of meetings include:

􀂃 Detailed planning meeting

􀂃 Regular status meetings

􀂃 Management review meetings

Typically the project is started with a detailed planning meeting to set the stage for final development of the project charter and the WBS, as described in the Initiating Phase section.

The project manager will have planning meetings during this Phase to develop the project plan that includes the schedule and various plans.

Once the project has been planned, the project manager will conduct regularly scheduled status meetings. These meetings will inform the project manager and project team of the project status, surfacing issues, and updating action items.

The project manager will also conduct management review meetings with the project owner. During the management review meetings, the owner will decide to continue the project and/or make changes as necessary. These meetings will provide the project team with continual awareness of changes in owner requirements as well as regularly communicate the project’s status to the owner. They will also promote owner awareness of issues and constraints the project is encountering. Bad news does not get better with age.

Other specially scheduled meetings held throughout the project include technical reviews, design reviews, interim project reviews, and budget reviews.

Once the project has been completed, the project manager will conduct a post implementation review with the project owner to discuss any outstanding issues and ensure owner satisfaction.

f. Issues and Action Item Management

The project manager should introduce the Issues and Action Items process to the team. Issues are defined as any problem that will impact the team’s ability to deliver a solution on time and within budget. Issues will be tracked and managed through an Issues Log. The Action Item Log is used to document any administrative tasks that must be completed but that do not qualify as issues or tasks to the project plan. Examples of Action Items include reserving meeting rooms, or having reports printed for a meeting. These logs need to be explained to the team and utilized during planning until closeout.

g. Status Reporting

Even though status reporting is accomplished during the Execution & Control Phase, it is important for project managers to determine specific reporting requirements early in the planning process. Reporting provides project stakeholders with information regarding how resources are being utilized to accomplish the project objectives. The project manager will provide regular status reports, progress reports, and forecasts (additional resource requirements, estimates to complete, etc.). The project manager must ensure that the team members are aware of what information is needed, in what format, and by when. This will facilitate the accurate and timely production of reports.

Status meetings are held regularly to report on progress and issues encountered. Several types of reports may be used to communicate the overall status of the project.

􀂃 Variance reports compare the actual results to the project plan baseline. Cost and schedule variances are the most common variance reports generated. A trend analysis studies project performance over time to determine if performance is improving or declining

􀂃 Performance reports organize the collected information and analyze the results. Typical formats for performance reports include Gantt charts, S-curves, histograms, and tables.

Status reports should be tailored to the specific need of the project. The project manager can use the templates provided as a baseline for creating custom reports.

h. Prepare the Project Documentation

A Project Notebook must be created by the project manager as a repository for the various documentation generated during the project’s life cycle. The notebook must include tabs for inserting project information produced throughout the project life cycle. The project notebook will include, at a minimum:

􀂃 Project Charter

􀂃 Communication Plan

o Organization Chart

o Communications Matrix

o Issues and Action Items List

􀂃 WBS Baseline Schedule and Cost & Current Actual Schedule and Cost

􀂃 Responsibility Matrix

􀂃 Scope Change Log

􀂃 Current Status Reports (Archive past reports as needed)

􀂃 Risk Management Plans

􀂃 Other Project Documentation as needed

In addition to the Project Notebook, the project manager will set up the project files (both electronic and manual as appropriate) according to the needs of the project. Use the Project File Checklist (Appendix B) to determine the files that need to be established.

Much of the project documentation will be stored on a shared network drive. It is critical that the project manager actively control and manage access to this drive.

5. Risk Assessment and Management Planning

a. Identify risks

Risk identification involves brainstorming the possible threats to the project. The project manager is responsible for having the project team assist in identifying these risks.

b. Risk Assessment

The probability of occurrence is the degree of belief that various events or effects will occur. For each risk that is identified, there must be a determination of how likely it is that the risk will happen. A cardinal (1 - low to 10 - high) or ordinal (high, medium, low) scale may be used.

The potential severity of impact or consequence determines the significance of the risk. This is an assessment of how great an impact the event will have if it happens. Quantitative methods might include monetary costs or time estimates that can be associated with the impact. Qualitative methods may be simply high, medium, or low estimates. The cardinal and ordinal scale would be similar to those used for probability.

The project manager should organize and prepare for a risk meeting that is separate from project detailed planning meeting.

To begin, the project manager should prepare and distribute the assessment agenda. In planning for this meeting, be sure to allow at least four hours. The project manager should also identify a separate facilitator since the project manager will actively participate in this meeting. Senior management should not participate in initial risk assessment meetings so the project team is not inhibited to openly discuss and assess all risks and impacts to the project.

Before the meeting, make sure the following items have been arranged or prepared:

􀂃 Meeting room

􀂃 Overhead projector

􀂃 Computer with a spreadsheet program

􀂃 Agenda distributed at least two days in advance

􀂃 On the day of the meeting, list the risk attributes separately on flip chart paper and post around the room.

Kick off the risk meeting with a review of the project charter and any critical issues, milestones, or assumptions that have already been determined. In addition, describe the attributes listed on the flip charts to encourage participants to begin thinking of possible risks. Because this initial risk meeting is used to gain feedback from the entire team, it is important to make sure each participant feels unrestricted in identifying and assessing any risks. Once you have set the stage for he meeting proceed as follows:

􀂃 Have each participant go around the room listing risks on each of the attribute flip charts posted before the meeting.

􀂃 Have the recorder enter each risk listed into a Risk Planning Spreadsheet organized by attribute.

􀂃 Each participant is given a printed copy of the spreadsheet and asked to rate from 1 to 10 (1 – low to 10 – high) the probability of occurrence and the consequence if the risk event occurs.

􀂃 Collect the sheets and enter them into the spreadsheet so an average score can be obtained for both the probability and consequence.

􀂃 Plot each risk, based on the average probability and consequence on a graph as follows

􀂃 Review the results with the team to gain concurrence on each risk. Where significant differences occurred in individual scoring, discuss in detail the reasons for the difference.

􀂃 Next, prioritize the risks as a group from the most important to the least important. Assign ownership to each risk.

􀂃 Select the top 5 – 10 priority risks (depending on the total number.) Enter these risks into the Risk Priorities List. These risks will have detailed plans developed that will help you manage the consequence of the risk. For all of the other risks, detailed plans will not be developed, but they likewise must be reviewed periodically to ensure the do not become a higher priority risk.

Adjourn the meeting with clearly defined deliverables, with completion dates, that will result from the development of the risk plans for the selected top priority risks. Owners should develop the risk plans using the Risk Management Plan.

c. Develop Risk Management Plans

The assigned owners will develop detailed Risk Management Plans, which include mitigation strategies and contingency plans, on the highest priority risks. Not all risks warrant a mitigation strategy. Depending upon the probability of occurrence, potential losses and frequency, and/or time available for planning, the project manager and team members will decide if a mitigation strategy is necessary.The prioritized risk list is used as input into developing a risk strategy. There are four basic risk strategies:

􀂃 Risk avoidance is eliminating the risk threat. An example would be planning a company picnic. The threat of rain is a risk if the event is held outside. One way to avoid this risk is to hold the event indoors or under tents.

􀂃 Risk mitigation is determining how to decrease the probability of the risk and/or reduce its impact. Risk mitigation involves lessening or reducing the probability of a risk event, its impact, or both.

􀂃 Risk acceptance is understanding the risk and accepting the consequences should the risk occur. An example would be accepting extended project duration due to resource availability.

􀂃 Risk transfer is shifting the risk to someone else. An example would be hiring a subcontractor to handle toxic waste rather than exposing the company’s employees to the hazardous materials.

A contingency plan for a risk event is the identification of steps that will be accomplished if the risk strategy is implemented. The steps will be included in the project’s schedule and cost baselines. Make sure the WBS reflects the deliverables required by the contingency plan.

Use the Risk Management Plan to develop detailed Risk Management Plans. The template is designed to provide a comprehensive assessment of each risk and the mitigation/contingency plan in the event the risk occurs. Once the Plan has been developed the project manager will consolidate the plans and ensure any needed deliverables are added to the WBS.

d. Obtain Risk Management Plan Approval

The project manager is responsible for reviewing the Risk Management Plan with the owner and obtaining the owner’s approval. During this meeting, the project manager must be clear on what risks are associated with the project and the impact if they occur. The project owner must understand the costs in terms of dollars, quality, and timeliness that risks have on the project.

6. Define Human Resource Skill Requirements

Successful project management, regardless of the organizational structure, is only as good as the individuals and leaders who are managing the key functions. Project management is not a one-person operation; it requires a group of individuals dedicated to the achievement of a specific goal. Project management includes:

􀂃 A project owner/sponsor

􀂃 A project manager

􀂃 An assistant project manager (backup)

􀂃 A project office

􀂃 A project team

Generally, project managers are assigned full-time to the project and work out of the Project Management Office, whereas the project team members work out of the functional units and may spend only a small percentage of their time on the project.

Five basic questions should be considered before the staffing function begins:

􀂃 What are the requirements for an individual to become a successful project manager?

􀂃 Who should be a member of the project team?

􀂃 Which member of the project office is assigned to the project?

􀂃 What problems can occur during the recruiting activities?

􀂃 What can happen downstream to cause the loss of key team members?

In some situations where constant streams of projects are necessary for corporate growth, the staffing problems become very complex, especially if the organization is understaffed. Use the Project Staffing Request (Appendix B) to ensure effective communication and management commitment to providing qualified staff.

The staffing requirements are in addition to the project team members assigned during the initiating phase. The acquisition may be both internal and external to the company. The resources identified are more skill related; for example the project may call for a C++ programmer or a technical writer. The project manager must acquire (either internally or externally) these resources to carry out specific project tasks.

After determining the preferred project staff, negotiation skills are essential in acquiring the desired project staff. The project manager will negotiate with functional managers for the use and availability of their employees. Changes in resource requirements will occur during the project and may cause availability problems. The project manager will have to negotiate with the functional managers for extended resource availability based upon project priorities.

Negotiations between the project manager and the owner/management will occur if the project manager concludes that hiring external personnel will provide more suitable qualifications to perform project tasks than internal candidates. If outsourcing is necessary, contact the Human Resources Department for assistance.

7. Schedule Preparation

a. Determine Calendars and Time Constraints

The project manager is responsible for determining the project calendar and time constraints that exist. The project calendar is used to specify both working and non-working days including company holidays and weekends. The project calendar is used for the overall project. However, the project manager may develop individual resource calendars for the project team to address vacation

time, individual schedules, and team member availability (if not available full-time for the project).

Time constraints include any predetermined milestone or completion date, resource time constraints, and resource availability. The project manager must determine the calendar and time constraints before the schedule can be developed.

b. Develop Task List

A task is the lowest level of work defined in a project. Task list development is the process of identifying all the tasks that must be accomplished in order to complete each of the lowest-level deliverables. It closely follows the lowest levels of the work breakdown structure to ensure that all areas of the project have been covered and that the deliverables will be as specified in the project charter.

Once all of the deliverables have been entered into the scheduling tool, the tasks are then entered. Each of the deliverable owners were asked to develop detailed tasks lists for each of the deliverables they own. This was done at the end of the detailed project planning meeting. The project manager should now have collected all the Developing Tasks Worksheets from the deliverable owners.

There are two rules to always follow when developing a task description:

􀂃 A description of the task should contain no more than fifty characters. This is a general limitation for producing Gantt charts and fitting the task description on a standard page. If more detail is necessary, use the note area in the scheduling too.

􀂃 Always use a format with a verb first and then a noun. Using verb first forces an action to be established for the task. Examples: Develop Communications Plan; Obtain Approval; Produce Reports, etc. Remember, deliverables are nouns and tasks are verbs.

Having collected the Developing Tasks Worksheets, the project manager should now enter all of the tasks into their Microsoft Project schedule.

c. Task Estimates

One of the most important processes of the project plan is that of estimating the time involved in completing each task. These estimates are being made at a time when many variables of the future are unknown. Some of the pieces of information that should be used to make the best estimate are:

􀂃 Effort is defined as the total number of hours that will be expended on a task. For example, if two people work 5 hours each, then the total effort for that task is 10 hours.􀂃 Duration is defined as the total number of calendar days that it takes to complete a task. For example, if the same two people spend 10 total hours working on a task that they start on Monday and end on Friday, then the total duration for that task is 5 days. Duration is affected by resource availability, waiting time for deliveries, or other interruptions in the constant flow of work hours to complete a task. Never assume that 8 work hours equates to 1 duration day.

􀂃 Resource Requirements - The project team will determine what types of resources are needed and how much of each one are needed to complete the activities defined in the WBS. The duration of any task is usually influenced by the amount of resources assigned to it.

􀂃 Resource Capabilities - The duration of most projects will be influenced by the quality of the resources assigned to them. Individuals who have worked on several similar projects previously would generally be expected to complete an assignment in less time than new personnel do with little experience in project work.

􀂃 Historical Information - Many tasks of a project may have been performed before, either by the project team, other members of the organization, or by outside entities for which information may be available. Some sources which should be utilized are:

􀃠 Project files: Previous project teams or project members may have records that would help in estimating duration times for tasks in a new project.

􀃠 Commercial duration estimating databases: These databases may be helpful in obtaining durations for tasks that are common to many different applications, such as characteristics of different wall coverings.

􀃠 Project team knowledge: Members of the project team may have been involved in a similar project and may have direct experience with task durations.

The deliverable owners in the Developing Tasks Worksheet should have provided durations and effort estimates. Use this information to initially set up the project estimates. Once all of the information is in Microsoft Project, the project manager will be able to determine the overall accuracy of the information provided.

d. Sequence Tasks

In order to develop a schedule for the project, a project manager must determine the inter-task relationships. Determining the sequence in which the tasks must be performed, identifying the number of tasks that can be underway at the same time (called parallel paths), and identifying the dependencies is called Task Sequencing. Task sequencing and inter-task relationships should be developed during planning meetings with the team members responsible for each area of work. There are generally three types of dependencies that are necessary inputs(either hard or soft-logic), and each is discussed below.

􀂃 Mandatory (hard-logic) – This dependency includes relationships that require something to happen before another can begin. For example, hardware must be installed before the software can be installed. The project manager cannot change this relationship.

􀂃 Discretionary (soft-logic) – This dependency includes relationships where the project manager has discretion regarding when a subsequent task can begin. For example, in software development projects, some plans call for software installation to be complete before training documentation can begin. In reality, there is probably some element of training documentation that can begin even before the software is installed.

􀂃 External (either hard or soft-logic) – This dependency can be either mandatory or discretionary. External dependencies are those relationships to tasks outside the scope of the project. In companies where multiple software development projects are in progress simultaneously, tasks among separate projects may be dependent on each other.

The sequencing of tasks is the heart of schedule development. Sequencing will establish logic and will drive the schedule dates of the tasks. If logic is not used in the schedule and arbitrarily force start and finish dates on tasks, and then a simple spreadsheet should be used to schedule your project. Logic is the most important and complicated input to the planning process. Logic actually creates a modeling of the project to produce a forecast of the future. The logic forces the project manager to plan how work on the project will be accomplished.

All projects should have a ‘start’ and ‘finish’ milestone. Other milestones will be inserted in the logic for clarification of major accomplishments. Limit the number of ‘start-to-start’, ‘finish-to-finish’, and ‘start-to-finish’ relationships because of the difficulty in understanding the logic. Lag and lead times for dependencies may be used.

To develop an accurate logic diagram always ask the question: What do I have to complete before I can start this task? Do not ask the question, “What do I do next?”

When developing the project schedule in Microsoft Project, use milestones to indicate critical dates or to indicate the end of significant deliverables. All dependencies should be task to task or task to milestone. Watch out for floating tasks called floaters. These are tasks that end prior to the end of the project and are not predecessors to any subsequent task or milestone. There should only be one floater per project - the Project Complete Milestone. Once you have completed all sequencing, go to the custom “Floater Highlight View” of Microsoft Project that will identify all floaters. Correct all floaters by linking them to their successor task or milestone.e. Determine Task Resources

The project manager, with the assistance of the project team, will determine which resources will be responsible for completing each task. There are a few rules that must be followed:

􀂃 Responsibility assignments must be made to all tasks.

􀂃 The project team member(s) assigned must accept the responsibility.

􀂃 The assigned project team member will provide the project manager with all time, resource, and cost estimates and provide update information.

􀂃 The project team member assigned must provide the activity duration estimate, planned work effort, and report to the project manager the update status.

f. Develop Schedule

Once the project manager has determined the project calendar, task list, resources, durations, and sequence, the schedule can be developed. The project manager will enter the start date for the project and the scheduling tool will calculate the duration of the project based on the information entered. The project manager should level the resources to ensure they are not over allocated for any particular day.

The calculation of the schedule, the critical path, major milestones, and date of completion must be verified that they are logical and within the time constraints of the project. A critical path is the path(s) throughout the project with the longest duration or the one(s) with the least amount of float. Float is the amount of time an activity may be delayed from its early start without delaying the project completion date. The critical path tasks must be verified. Does it make sense for certain tasks to be on the critical path? This is a reality check. Also, the dates on major milestones and project completion date must be checked to see if they are within the constraints from the owner.

The project manager, with the consensus of the project team, will coordinate all changes to the schedule. All schedule changes that are affected by scope change will be documented through the scope change control. The Gantt Charts in the scheduling tool will compare the actual dates to the established baseline dates. The project manager will develop the exact control procedures for all schedule change control.

8. Develop Cost Management Plan

a. Determine Project Cost Status

The project manager is responsible for monitoring cost versus project progress to assure the project is completed within budget or to identify problems that may prevent satisfactory completion within budget. This task may be performed directly by the project manager or the duties may be assigned to another member of the team. Regardless of responsibility, the cost information routingof labor expenditure reports, purchase requisitions, purchase orders, invoices and stock requisitions. At the beginning of the project, the following items need to be addressed by the project manager to determine the status of the project from a cost perspective:

􀂃 Is the project Operation & Maintenance (O&M) or Capital?

􀂃 Has a cost code been assigned?

􀂃 Is the project budgeted?

􀂃 If budgeted, what is the budget for current and future years?

􀂃 Will the budget, if one exists, support the project scope?

􀂃 Have funds already been expended on the project?

􀂃 What types of reports are available for the project?

􀂃 Who is the best person on the team to obtain/interpret the reports?

􀂃 Are there special report needs that do not currently exist?

b. Identify Project Cost Components

The basic components that make up the total cost of a project are:

􀂃 Company Labor - This charge results when any employee charges time on their time sheet to the unique project account code.

􀂃 Overhead - This charge is based on the employee’s time charged to company labor. It is pre-calculated percentage added to company labor to cover the cost of employee benefits. This percentage should be adjusted each year. The project manager should consult the Accounting Department for the current percentage and further detail as needed.

􀂃 Material - This charge results when standard stock material is obtained from the warehouse supply using the unique project code. Non-stock items are charged when they are received by the warehouse and transferred to the user via a stock requisition form. This information is updated nightly. The project manager should be included in the approval routing for all project material purchases requiring a purchase order.

􀂃 Direct Business - Travel, training, food and lodging are examples of charges that fall into this category. All expenses (except mileage) associated with employee expense account are included. The project Manger before payment should approve reimbursements charged to the project’s account code.

􀂃 Outside Services - These costs result when any non-employee charges time to the project via a supplier invoice. These charges may be a small part of a large invoice but will be identified by the cost code. The project manager may also have a unique purchase order number issued specifically for the projectthat the project manager will receive invoices against. In either case, the project manager should review all invoices resulting in charges to their project for accuracy and comparison to the budget.

􀂃 Company Services - These costs result from charges from other departments in support of the project. An example would be graphic artwork done “in house”.

The project manager should create a simple spreadsheet to track total costs for the project. The largest portion of most project costs is associated with labor. For this reason the resource table in Microsoft Project should reflect as accurately as possible the hourly rate for any project resource. Contact the Accounting Department for assistance in determining labor costs.

9. Measuring Quality

Quality is one of the most important aspects of project management. It should be inherent in everything that is produced. If the project manager waits until the end of the project to determine if the quality was met, then it is too late to make corrections that could have been identified earlier on. Quality is measured in a variety of ways. For example, a good requirements gathering and software testing program ensures quality as the project progresses. Phase sign-off at the end of critical deliverables help ensure quality before progressing to the next phase or deliverable.

A quality management plan describes how the project management team will implement its quality policy. It will not only address the quality requirements of the project but must also address the policy and procedures of the existing corporate quality plan reviewed during the Initiation Phase.

When developing a quality management plan, some questions to ask are:

􀂾 What is a quality review?

􀂾 What does conformance to requirements mean to the customer?

􀂾 What are the quality objectives?

􀂾 What procedures and processes must be followed?

􀂾 When should quality reviews be held?

􀂾 Who should attend the quality review meetings?

􀂾 Who should not attend the quality review meetings?

􀂾 Who should organize the quality review meetings?

The quality of the product includes the following:

􀂾 Objectives (performance)

􀂾 Monitoring and acceptance criteria

The quality of the product must meet or exceed all of the project’s objectives as stated in the project charter. If the objectives are met, the quality of the product isachieved and the owner and users will be satisfied. Developing specific, measurable, and time-framed objectives will help create a quality plan that is quantifiable.

Quality audits will be performed periodically throughout the project life cycle to verify processes and procedures are in compliance. Quality must be incorporated into the project processes. It is always easier to do it right the first time than have to rework the process. Simply because a projects processes were adhered to does not guarantee product compliance. However, the more detailed quality management plan in place increases the likelihood of conformance.

Quality review meetings may be scheduled periodically to review and make corrective adjustments to the project. The standard meeting agenda template should be used and should include the following:

Checklist for Quality Review Meeting

Introduction

􀂃 Complete known parts of a review summary form.

􀂃 Make introduction.

􀂃 Give overview of presentation

Review

􀂃 Present material regarding quality status.

􀂃 Respond to issues.

􀂃 Record defects, suggestions, and questions.

Conclusion

􀂃 Collect materials, notes, etc.

􀂃 Agree on corrective actions.

􀂃 Update review summary.

􀂃 Review decisions

􀂃 Set follow-up review date (if applicable)

The project manager may select one project team member to be quality manager. The quality manager will monitor the product to ensure compliance and report results to the project manager.

The project owner is responsible for approving the acceptance criteria, as well as approving any changes that are to be implemented. The owner also sets the standards for quality.

Quality management of the project includes the following:

􀂾 Checklists

􀂾 Quality Reviews􀂾 Reporting

􀂾 Communication

􀂾 Project Plans - change control

Checklists ensure that the project plans are complete and eliminate the omission of items.

As needed, project manager will create and distribute reports that are relevant to the quality management of the project. These reports include the project status report and meeting minutes.

Satisfaction must be measured throughout the project. Owner, user, and team member satisfaction are essential to the quality of the management of the project. The owner must believe the project is running smoothly and well managed. The users must have confidence that the deliverable will provide the expected benefits. Team member satisfaction is equally important to project quality. The team must feel empowered, challenged, and believe their efforts contribute to the success of the project.

The project manager will conduct status updates and owner review meetings. The status update meetings must be timely, follow the agenda, and have documented meeting minutes.

The project manager will monitor project statistics including time, cost, and resources and compare to the baseline. Actual start and finish dates will be compared to the baseline dates to determine schedule variances and task on-time statistics. Actual costs versus budgeted costs will be compared and the cost variance will be determined. By comparing the statistics with the baseline figures the project manager can gauge how the project is doing in accordance with the project plan. The project manager will monitor all changes to ensure that the change control processes are being followed and that the project plan is being updated accordingly.

10. Project Procurement Management

a. Procurement Planning

The project manager is responsible for acquiring goods and services from external sources. The initial step is to define the project requirements by considering the following:

􀂃 Is the project strategically aligned with the goals of the organization?

􀂃 Develop the statement of work (SOW), specifications, and WBS

􀂃 Determine whether the requirements can be made or bought and analyze the costs associated

􀂃 Analyze the schedule and major milestones􀂃 Calculate costs

􀂃 Obtain approval and authorization to proceed

Procurement Planning Components

Procurement planning is the process of identifying which project needs can be best met by procuring products or services from outside the performing organization.

This involves consideration of

􀂃 Whether to procure

􀂃 How to procure

􀂃 What to procure

􀂃 How much to procure

􀂃 When to procure

Once it is determined to procure the product or services then the project manager, working with the procurement department (when applicable)

􀂃 Select a supplier

􀂃 Arrive at a proper price, terms and conditions

􀂃 Issue a contract or order

􀂃 Ensure proper delivery

Buyer Contract Planning Approach

Once the project requirements are determined and the decision is made to purchase from outside the organization, a contractor WBS (CWBS) will help define what the deliverable expectations are and will provide for bottom-up cost and schedule estimates and risk analysis.

The CWBS is used for developing the list of contract deliverables, the specifications or state of work and the analysis of contract uncertainties. This needs to include both technical and administrative performance elements – analysis of all sellers’ obligations to the buyer. Other things to consider: quality, shipping contract administration, documentation and reporting.

The next step is to prepare for source selection and contract formation procedure. The following decisions need to be made:

􀂃 Competitive bidding or negotiate with single source?

􀂃 Sealed bidding or competitive negotiations?􀂃 If competitive negotiation

􀃠 Who should participate in the evaluation panel?

􀃠 What criteria should be used for the evaluation?

􀃠 What will be included in the proposal evaluation?

􀃠 What negotiation and selection procedure should be use?

􀃠 How much time will be needed to execute the procedure effectively?

b. Solicitation Planning

Once all the decisions are made in procurement planning a solicitation plan is developed which documents the product or service requirements and identifies potential suppliers needed to support the solicitation. Then, a solicitation is sent out which obtains quotations, bids, offers or proposals as appropriate. From these responses a vendor or supplier is chosen.

There are various types of solicitations:

􀂃 Invitation for bid (IFB) - This is used for purchasing routine items when buyer wants the best price.

􀂃 Request for proposal (RFP) – Used for more complex non-standard items where the description is not as clear as an IFB and monetary value is relatively high.

􀂃 Request for quotation (RFQ) - An RFQ is much smaller than an RFP and usually contains a request for a price, delivery date for standard products and any special packaging, shipping and handling conditions.

􀂃 Request for information (RFI) – Is also known as “contractor initial response” generally used when the buyer is not sure if the product or service is available or is the proper solution for the project requirements

􀂃 Invitation for negotiation – Is used when there is only one supplier capable or being considered. There are five stages of negotiation:

􀃠 Protocol: setting the atmosphere, making introductions

􀃠 Probing: Identifying issues of concern, judging strengths and weaknesses, finding areas of interest

􀃠 Scratch bargaining: Actual negotiations occur and concessions made, points of concession identified and the gap narrows!

􀃠 Closure: Positions summed up and final concessions reached

􀃠 Agreement: documents drawn outlining final agreement, ensuring identical understanding by both partiesSelection criteria – There are generally three categories of selection criteria:

􀂃 Management criteria – With which vendor would there be the better relationship and trust. Does this vendor have a good performance reputation in their industry? Do they have a track record of successful technical capabilities?, Are they financially stable? Can they handle the capacity? Is their location acceptable? Do they have labor problems or managerial concerns?

􀂃 Technical criteria – Here criteria needs to be developed to evaluate:

􀃠 What each vendor is offering

􀃠 How each source will deliver the product/service

􀂃 Price criteria – Is the price proposed reasonable and how does it compare with the other responses.

c. Contract Administration

Many companies have standard formats to use for contracts. The project manager’s role is to assist in drawing-up the contract to ensure that there is some type of control included it its contents – incentive and penalty clauses when appropriate.

Contract Types

It is important to choose the best type of contract for the project. There are three broad categories:

􀂃 Unit price contracts

􀂃 Fixed price or lump sum contracts

􀂃 Cost reimbursable contracts

􀃠 Unit price contracts – The vendor is paid a preset amount (e.g. $80 per hour for services or $3.12 per square yard for materials). The total reflects the quantities needed to complete the project. This is also commonly known as “time and materials”.

􀃠 Fixed price or lump sum contracts – There is a fixed total price for a well define product. The risk is on the seller. There may be incentives or penalties for early or late delivery. There are different types of fixed price contracts:

􀃠 Firm-fixed price (FFP) – Vendor commits to amount and assumes the risks, most appropriate for routine implementation projects with high seller confidence

− Economic price adjustment clauses – usually based on factors beyond the seller’s control thus lessening the risk for seller.− Re-pricing agreement – Appropriate for short-term confidence in pricing, shifts some risk back to the buyer

− Retroactive re-pricing – This type should be avoided for it is determined after project completion

− Incentive agreement – Allows seller participation in cost savings sharing the risks

− Escalation provision – Adjustment up or down based on defined criteria

􀃠 Cost reimbursable contracts – This is primarily used for development projects with the risk on the buyer. It is appropriate for high uncertainty and/or risk. It requires

− Clear and complete definitions

− An appropriate formula for computing cost and profit

− Close monitoring and approval of seller’s costs

􀂃 Cost reimbursement variations:

􀃠 Cost-plus-fixed-fee (CPFF)

− Limits seller profit to fixed amount

− Risk on buyer

− Appropriate for unclear work requirements

􀃠 Cost-plus-incentive-fee (CPIF)

− Encourages cost effective performance

− Contains rewards for savings and punishments for poor performance

− Often used for lengthy project performance period

􀃠 Cost-plus-award-fee (CPAF)

− Buyer flexibility in dealing with seller

− Award pool available for performance

− Objective and subjective criteria used for evaluation

􀃠 Cost-plus-percentage-of-cost

− Prohibited with federal government

− Risk on buyer

− Incentives for seller to make cost as high as possible to maximize profit

It is important for the project manager and team members to be aware of what type of contract is used for each vendor. This will help control the vendor performance.Contract Administration Policies

􀂃 Compliance with contract terms and conditions

􀂃 Effective internal and external communication and control

􀂃 Effective control of contract changes

􀂃 Effective resolution of claims and disputes

Contract Administration Management Measures

􀂃 Clearly define project requirements

􀂃 Determine measures of success

􀃠 Decide on key indicators

􀃠 Develop measure of success, both subjective and objective

􀃠 Create methodology for capturing data

􀃠 Identify reporting requirements for project team, sponsor and executives

􀂃 Communicate standards

􀂃 Implement contractor measures

􀃠 Weight specific measures of key indicators

􀃠 Measure each contractor regularly

􀃠 Average input scores

􀃠 Provide contractor feedback of individual score vs. average and best

􀃠 Work with individual contractors to improve results

􀂃 Reward/terminate when appropriate

Contract Change Control Principles

There are seven steps for contract change control principles

􀂃 Identify any actions that conflict with the terms of the contract

􀂃 Notify the other party in writing of the action

􀂃 Seek authorization for any change to the contract only by authorized people

􀂃 Estimate the cost of the changes and the effect to the schedule and procure sign-offs of approval from both parties before proceeding

􀂃 Team members document and report in writing all actions to comply with authorized changes and the cost and time to comply

􀂃 Project manager must seek compensation for increases in costs.

􀂃 Document all changes and have both parties sign-offDocument Decisions and Events

􀂃 Contract modifications and working copies

􀂃 Internal and external correspondence

􀂃 Meeting minutes

􀂃 Progress reports

􀂃 Project diaries

􀂃 Telephone logs

􀂃 Photographs and videotapes

Contractor Alliances

􀂃 Establish a senior-level Alliance Implementation Team (AIT)

􀂃 Hold kickoff and regularly scheduled meetings to identify concerns and develop common goals

􀂃 Develop measures of success and establish baseline results

􀂃 Develop sub-teams

􀃠 Ownership of issues

􀃠 Local improvement teams (LIT)

􀂃 Report progress

Administrative Management Execution and Control – Project Manager’s role:

􀂃 Plan for administration

􀂃 Manage change

􀂃 Monitor progress

􀂃 Manage triple constraints

􀂃 Maintain relationships

􀂃 Settle disputes

􀂃 Make payments

􀂃 Document when needed

d. Contract Close Out

Normally all the provisions for contract close out are specified in contract. The following items should be included as a minimum:

􀂃 Involves product/service verification of completion

􀂃 Written notice that contract is completed

􀂃 Administrative closeout11. Obtain Communication Management Plan Approval

The project manager will meet with the project owner and review the communication management plan to obtain owner approval.

12. Finalize Project Charter

During the Planning Phase of the project, the project manager will finalize the project charter. An initial project charter was developed in the initiating phase during the project team detailed planning meeting and work session. After the owner has reviewed and agreed to the initial proposal and any scope changes are approved, the project charter is finalized and the owner’s signature is obtained.

13. Conduct Management Review with Owner

The project manager will meet with the project owner to review the completed project charter and project plans developed during the Planning Phase. The project manager will follow the meeting guidelines described earlier when performing the management review. The project owner must give the approval to proceed to the Executing & Control Phase.

14. Develop Baselines

Once the project manager has obtained approval and the go ahead from the project owner, the project manager will develop the baselines. A baseline is the basis for determining how the project is progressing according to plan. The baseline is the original schedule, budget, and project plans plus any owner approved changes. Baselining allows all project stakeholders the opportunity to compare the actual project data against the baseline to determine if the project is on track.