Project Management: Integration, Selection, and Planning, Lecture notes of Cost Management

Download Project Management: Integration, Selection, and Planning and more Lecture notes Cost Management in PDF only on Docsity! Project Integration Management PM Knowledge Areas Scope Time Cost Quality HR Comm. Risk Procure Project Integration Management Project Concept Development Implementation Close Out Project Life Cycle 5 Project Integration Management Processes (cont’d)  Direct and manage project execution: Carry out the project management plan by performing the activities included in it.  Monitor and control the project work: Oversee project work to meet the performance objectives of the project.  Perform integrated change control: Coordinate changes that affect the project’s deliverables and organizational process assets.  Close the project: Finalize all project activities to formally close the project. 6 A Portfolio Management System  Selection Criteria  Financial: payback, net present value (NPV), internal rate of return (IRR)  Non-financial: projects of strategic importance to the firm.  Multi-Weighted Scoring Models  Use several weighted selection criteria to evaluate project proposals. Project Screening Process Project proposal idea Data collection and backup Self-evaluation “es by criteria Periodic reassessment of priorities Priority team evaluates proposal and reviews portfolio for risk balance Need strategic fit ROl/payback risk Return for more information Hold for resources, Assign priority Assign resources Assign project manager Evaluate progress 10 Focusing on Broad Organizational Needs  It is often difficult to provide strong justification for many IT projects, but everyone agrees they have a high value.  Three important criteria for projects:  There is a need for the project.  There are funds available for the project.  There is a strong will to make the project succeed. 11 Financial Analysis of Projects  Financial considerations are often an important aspect of the project selection process.  Three primary methods for determining the projected financial value of projects:  Net present value (NPV) analysis  Return on investment (ROI)  Payback analysis 12 Net Present Value Analysis  Net present value (NPV) analysis is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time.  Projects with a positive NPV should be considered if financial value is a key criterion.  The higher the NPV, the better. 15 Return on Investment  Return on investment (ROI) is calculated by subtracting the project costs from the benefits and then dividing by the costs. ROI = (total discounted benefits - total discounted costs) / discounted costs  The higher the ROI, the better.  Many organizations have a required rate of return or minimum acceptable rate of return on investment for projects.  Internal rate of return (IRR) can by calculated by setting the NPV to zero. 16 Payback Analysis  Another important financial consideration is payback analysis.  The payback period is the amount of time it will take to recoup, in the form of net cash inflows, the total dollars invested in a project.  Payback occurs when the cumulative discounted benefits and costs are greater than zero.  Many organizations want IT projects to have a fairly short payback period. 17 Weighted Scoring Model  A weighted scoring model is a tool that provides a systematic process for selecting projects based on many criteria.  Steps in identifying a weighted scoring model: 1. Identify criteria important to the project selection process. 2. Assign weights (percentages) to each criterion so they add up to 100 percent. 3. Assign scores to each criterion for each project. 4. Multiply the scores by the weights to get the total weighted scores.  The higher the weighted score, the better. 20 Project Charters  After deciding what project to work on, it is important to let the rest of the organization know.  A project charter is a document that formally recognizes the existence of a project and provides direction on the project’s objectives and management.  Key project stakeholders should sign a project charter to acknowledge agreement on the need and intent of the project; a signed charter is a key output of project integration management. Figure 4-6. Project Integration Management Overview PROJECT INTEGRATION MANAGEMENT 4.1 Develop Project peters 4.2 Develop Preliminary Project Scope Statement ois ational process Sscets Cupaates) Riser t perce 3. Guupute 4.3 Develop Project Management Plar pets, Preliminary project scope ny processes ean Factcre 1S Geriverspies 21 22 Preliminary Scope Statements  A scope statement is a document used to develop and confirm a common understanding of the project scope.  It is an important tool for preventing scope creep:  The tendency for project scope to keep getting bigger.  A good practice is to develop a preliminary or initial scope statement during project initiation and a more detailed scope statement as the project progresses. 25 Attributes of Project Plans  Just as projects are unique, so are project plans.  Plans should be:  Dynamic  Flexible  Updated as changes occur  Plans should first and foremost guide project execution by helping the project manager lead the project team and assess project status. 26 Common Elements of a Project Management Plan  Introduction or overview of the project.  Description of how the project is organized.  Management and technical processes used on the project.  Work to be done, schedule, and budget information. 27 Table 4-1. Sample Contents for a Software Project Management Plan (SPMP) Subsidiary Plans  Scope management plan  Change management plan  Requirement management plan  Schedule management plan  Cost management plan  Quality management plan  Human resource plan  Communication management plan  Risk management plan  Procurement management plan Scope management plan Objectives The purpose of Scope Management is to ensure the project includes all the work required, and only the work required, for completing the project successfully. In scope management the emphasis is on identifying and controlling what is or is not included in the project. Consequently, the objective of this scope management process is to provide a methodology for:  Describing the process and tools used to define the project scope;  Developing a project scope statement;  Defining and developing the Work Breakdown Structure;  Describing the scope verification activities; and  Describing how the project scope will be controlled. Contd. Scope is defined and then refined during an iterative process that begins in the Project Identification Stage and continues into the Delivery Stage. The process is conducted in consultation with subject matter experts (SMEs) and stakeholders, becoming increasingly detailed as the project progresses. The fully defined project scope will contain the following elements:  Project goals, business outcomes and objectives;  Product scope description;  Project boundaries;  Specifically excluded activities;  Deliverables and associated acceptance criteria;  Project constraints; and  Project assumptions. Requirement management plan The Requirements Management plan is used to document the necessary information required to effectively manage project requirements from definition, through traceability, to delivery. The Requirements Management Plan is created during the Planning Phase of the project. Its intended audience is the project manager, project team, project sponsor and any senior leaders whose support is needed to carry out the plan.  ORGANIZATION, RESPONSIBILITIES, AND INTERFACES [Describe here who is going to be responsible for performing the various activities described in the requirements workflows defined later in this document.]  TOOLS, ENVIRONMENT, AND INFRASTRUCTURE [Describe the computing environment and software tools to be used in fulfilling the Requirements Management functions throughout the project or product lifecycle.  Describe the tools and procedures that will be used to control the versioning of the Requirements items generated throughout the project or product lifecycle.]  ASSUMPTIONS/CONSTRAINTS [Define any assumptions and/or constraints taken into account when defining requirement for this section of this document.] Schedule management plan Objectives The main objective of the Time Management Plan is to provide a methodology for:  determining the amount of time and effort required for a project to complete its deliverables;  defining a structure to organize the project work;  arranging the work in a logical, traceable structure;  assigning resources to complete the work;  defining the critical path; and  managing the schedule and work effort so as to ensure the project completes its deliverables and hands over its product in the most optimal time period. Cost management plan  Cost Management includes the processes involved in planning, estimating, budgeting and controlling costs so that a project can be completed within the approved budget.  Cost Management procedures are used to create a budget, and to monitor performance relative to that budget. Effective monitoring requires a focus on the actual and forecast consumption of elements such as people's time, materials, equipment, facilities, and transportation, among others.  The Cost Management Plan is the document that sets out the format and establishes activities and criteria for planning, structuring, and controlling project costs. The Cost Management Plan is typically incorporated within the Project Management Plan. Objectives The objective of a Cost Management Plan is to provide a methodology for:  deriving the project baseline budget and associated tracking tools;  defining how cost reporting will occur; and  describing how cost variances will be managed for the project. Communication management plan The Communications Management Plan is an output of the Communications Management process that details the specific communications products, events, recipients, timelines, frequency and other pertinent communications information. Project management deliverables can also be considered principal communications tools. Objectives The objectives of the Communications Management process are as follows:  define the communications needs of a project;  conduct a stakeholder analysis to identify stakeholders, their roles, interests, how they will impact or will be impacted by the project, and develop a stakeholder management plan;  define required messages, appropriate media and channels, task assignments and timings for communications delivery that will enable the project to meet these needs; and  ensure that the right people receive the right information at the right time to meet their needs and to achieve project objectives. Risk management plan Risk management is a systematic approach to setting the best course of action under uncertainty by identifying, assessing, analyzing, evaluating, controlling, and communicating risks. Risk management involves the review and evaluation of strategies, policies and practices. Risks derive from project constraints, sources of funding, fixed timelines, assumptions and other sources of uncertainty and vulnerability in the project and operational environment. Risk Approach  The overall approach to risk management on Business Projects-IT-Enabled is based on the following activities:  Risk assessment;  Risk identification;  Risk analysis;  Risk evaluation,  Risk treatment;  Monitor and review; and  Communication/consultation. Procurement management plan Objectives The objective of a Procurement Management Plan is to describe the end-to-end procurement process that the project will use to acquire its goods and services. The plan will be completed in the Project Management Plan document. The key objectives of this document are to describe:  the procurement planning process;  the key procurement activities;  the procurement constraints and assumptions;  the departmental procurement organizations;  the bid evaluation process; and  to define the roles and responsibilities of those involved.