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Project ManagementBasics
Seminar
Manfred Gutheins
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Copyright Manfred Gutheins, 2013All rights reserved.
Reprint and reproduction only withwritten permission of the author
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Effective Organization of Meetings ...................................................................................................... 38Status Report .......................................................................................................................................... 39Case study: Trade fair attendance of FleetSolutions Inc. ....................................................................... 40
The company ....................................................................................................................................... 40Case study: Project charter ..................................................................................................................... 41Case study: Stakeholder register ............................................................................................................ 42Case study: Communications Plan ......................................................................................................... 44Case study: Requirements ...................................................................................................................... 45Case study: Scope description ................................................................................................................ 47Case study: Work Breakdown Structure - WBS ...................................................................................... 48Case study: Work package description ................................................................................................... 49Case study: Schedule (extract) ............................................................................................................... 50Case study: Cost plan ............................................................................................................................. 51Case study: Risk register ........................................................................................................................ 52Case study: Cost monitoring ................................................................................................................... 53Case study: Status report ........................................................................................................................ 54Exercise: What are projects? .................................................................................................................. 55Example project: Stadt-Bus AG .............................................................................................................. 56Exercise: Writing a project charter .......................................................................................................... 57Stadt-Bus AG Organizational Chart ........................................................................................................ 58Exercise: Identifying the stakeholders ..................................................................................................... 59Template: Stakeholder Register .............................................................................................................. 60Exercise: Describing the project scope and content ............................................................................... 61 Template: Scope Statement .................................................................................................................... 62Exercise: Work Breakdown Structure ..................................................................................................... 63Exercise: Describing work packages ...................................................................................................... 64Template: Work Package ........................................................................................................................ 65Exercise: How well can you estimate? .................................................................................................... 66Exercise: Analogous Estimating .............................................................................................................. 67Exercise: Three Point Estimating ............................................................................................................ 68Exercise: Parametric Estimation ............................................................................................................. 69Exercise: Drafting a schedule ................................................................................................................. 70Exercise: Quality Metrics ......................................................................................................................... 71Exercise: Risk planning ........................................................................................................................... 72Exercise: Milestone-Trend-Analyse ........................................................................................................ 73Exercise: Earned Value ........................................................................................................................... 74Exercise: RACI-Chart .............................................................................................................................. 75Exercise: Project communication ............................................................................................................ 76Exercise: Status report ............................................................................................................................ 77
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Definition of a Project
There are various definitions of a project:
PMI Project Management Institute
A temporary endeavour undertaken to create a unique product, service, or result.
The German DIN 69901 defines the characteristics of a project as follows:
! Project-specific organization
! Uniqueness
! Set target
! Isolation from other endeavours
! Financial, personnel or other limits
! Time limit
Project management is a method of reaching goals. The basic idea of project management is to break a
complex task down into small subtasks; to plan and monitor their execution, possibly taking corrective
action. In the process, work is completed with the focus on results, and on what deliverables a project is
supposed to produce, and what partial results lead to these deliverables.
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Project Management
The magic project management triangle
There are three factors that you as project leader must keep an eye on above all, and these are oftenillustrated in the magic project management triangle.
Figure 1: The magic project management triangle
It is often possible to optimize one of the factors at the cost of the other two. For example, you can keep
a timeline by leaving something out of the end result or by delivering poor quality; or by improving
performance with the help of expensive specialists. Mostly, however, it isnt possible to optimize all
three factors at the same time, and the job mainly consists of keeping a balance between all three.
Project Management Knowledge Areas
The PMI defines nine Knowledge Areas, beyond the project management triangle, that belong to project
management:
! Project Integration Management
! Project Scope Management
! Project Time Management
! Project Cost Management
! Project Quality Management
! Project Human Resource Management
! Project Communications Management
! Project Risk Management
!
Project Procurement Management
History of Project Management
Throughout human history there have always been projects. Project management methods were first
used in the middle of the 20th century with the construction of the Hoover Dam, and with the Manhattan
Project (development of the atom bomb in the USA).
Project management is gaining ever more in importance today. The reasons, amongst other things, are:
! Markets are changing ever faster.
! Hierarchies have become flatter.
! Globalization.
! Projects are getting more complex.
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Project Organization
Project organization is temporary and exists only for the duration of the project.
Stakeholders
People or organizations that are either directly involved in, or can be affected by, the project are called
stakeholders.
The most important stakeholders in a project are:
! Project leader
! Sponsor
! Project team
!
Other stakeholders are e.g. (list not comprehensive):
! Customer! Management
! Project Management team
! Sales
! Other departments
! QA (Quality Assurance)
! Outsiders affected by the project.
Figure 2: Stakeholders
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Project Life Cycle
Projects typically go through a process with the following structure.
Figure 3: Project Life Cycle
During this process, the project generates deliverables, like e.g. the project charter, project
management plan etc, in Figure 3.
The size of the project team usually changes during the life cycle and is at its biggest during the
execution of the project.
Figure 4: Staffing Level
Different projects and different types of projects can differ greatly in their detail. But basically, they
mostly follow this typical process.
Cost of error correction
The longer the time span between the introduction and the discovery of an error, the more expensive it
is to correct. Any ambiguity in the specification, if discovered during the review, can be corrected with
little effort. Conversely, if this ambiguity leads to different team members interpreting the specification
differently, and thus implementing the various project parts differently; and furthermore, if this is only
discovered towards the end of the project, the damage is probably many times greater.
Therefore you should check all work results as soon as possible, e.g. through reviews already during
initiating and planning.
Starting
Organizing
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Carrying out the work
Closing
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Figure 5: Costs of correcting errors
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Project Initiation
Right at the beginning, even before the planning for the project begins, the project has to first be
launched by the sponsor. There must be at least a rough idea of the requirements or of the project
content. At this time point there is still no project organization, not even a project leader.
The first things that should happen at the begin of a project are:
! Developing a project charter
! Identifying the stakeholders
Developing a project charter
By the project charter the project is formally authorized.
The naming of the project leader is another important result.
It is a good idea for the project leader himself to write the project charter, as he often has the best skills
for this; and he also gets the chance to have a say in how the project is run, right from the start.
The project charter can/should include the following points:
! The whole purpose or justification for the project
! Measurable project goals and success criteria
! High-level requirements
! High-level project description
! High-level risk summary
! Summary milestone schedule
! Summary budget
Identifying stakeholders
Identifying the stakeholders is important right from the begin of a project. Firstly, knowing this is to some
extent a prerequisite for planning, and secondly you can ensure the early involvement of the
stakeholders, leading to greater participation, acceptance and support for the project.
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Project Planning
If you plan a project thoroughly, then the execution of the project is much simpler as in a badly planned
project. Planning does not only include the creation of a detailed schedule. Other documents are part
the project plan, as the requirements description and a risk register.
Figure 6: How to plan a project
In all planning steps, documents are created. In practice however, you do not necessarily need to create
all these documents for every project. Rather you have to consider what selection and what range ofdocuments you actually need. This depends, on the one hand on the size and complexity of the project,
and on the other on the requirements and specifications of the organization.
Project Plan(In PM Software
like MS Project)
Project Charter
Requirements
Scope Statement
WBS
Activity List
NetworkDiagrams
Activity durationestimates
Project Schedule
Project Management Plan
Cost Perfor-manceBaseline
Human Re-sources Plan
Other Plans
3-PointEstimates
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In this seminar, first of all a framework of documentation is introduced and prepared in practical
exercises. While doing this, not all processes will be examined down to the last detail. In Figure 6 there
is an overview of the documents we shall be using in this seminar first of all. The documents contained
in the circle (Project Plan) are usually not independent documents, but part of the project plan which youcreate with a tool like MS Project, e.g. the Project Schedule is normally contained in the project plan.
The project management plan is the summary of all other plans. The scope statement can, for example,
be a chapter of the project management plan. It can however also be an independent document, and in
the project management plan you only reference it.
Whereas a project plan created by a tool is not necessarily suitable for forwarding or communication, as
it contains a lot of information that would more likely confuse the outsider, the project management plan
is also intended as a project reference which can be forwarded. Other stakeholders can get the
information that is important to them from the project management plan, e.g. a high-level milestone
schedule.
You should have all plans checked by the relevant stakeholders, and approved e.g. in a review meeting.Doing this ensures that all involved are informed about the details of the project, and that any objections
can be taken into consideration.
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Scope Planning
Requirements
When the project charter has been made completed, in your planning you should first of all determinethe requirements of the project. Here it is important that you differentiate between product and project
requirements. Requirements of the product could possibly have no direct effect on the project. For
example, it could be that your project builds on another project or on a finished product and only
expands it. In that case, the requirements of the product include the features of the previous version, but
this doesnt have to lead to an activity in the project. Conversely, for example the requirement to have a
regular customer meeting during the project is a project requirement but not a requirement of the
product.
There is a whole series of techniques to ascertain the requirements, e.g.:
! Mind Mapping
!
Interviews
Project Scope Statement
The scope means the extent or scale of the product or project. As with the requirements, a
differentiation must be made between product and project scope.
The project scope is fixed by the project deliverables. The goal of the project is to create the
deliverables not less and also not more.
A frequent weakness of projects is when it hasnt been precisely defined what exactly the project is
supposed to deliver.
! Is a complex system test part of the project or not?
!
How extensive a handover with training, documentation etc is necessary?You should clarify questions like these as precisely as possible. If something changes later on, you can
point out to the customer that this is not part of the project scope and that this kind of change also
means changes to the project costs or schedule. Unchecked changes in the scope during project
execution, is called scope creep. Scope creep is a very frequent cause of going over budget and
timelines.
When describing the project scope, you should also list things that are notpart of the project. That way
you can keep expectations clear. The project scope statement is the document in which the scope is
described.
Work Breakdown Structure (WBS)
The WBS is the breaking down of the project into small parts. This can be drawn e.g. as a tree diagram.
Figure 7: Sample WBS
Projekt
Messeauftritt
2. Organi-
sation
3. Material
3.2
Muster
3.1
Werbe-
material
3.1.1Flyer
2.1
Personal
1. Stand
1.1
Standflche
1.2
Aufbauten
1.1.1Vertrag
1.2.1Plan
2.2
Reisen
1.2.2Vertrge
2.1.1Einsatzplan
2.2.1Buchungen
3.1.2Prospekte
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Structure of the WBS
There are many different ways of structuring the project. You can, for example, structure it according to
product components, or according to departments involved, or according to different stages in the life
cycle. At first sight it seems like any structure is possible.
Practice however has shown that it is best to start with the deliverables. Producing deliverables is the
goal of the project. Deliverables should therefore be on the highest level. All activities in the project have
to aim at producing the deliverables. With this kind of WBS you will always have the focus on achieving
the project goals.
What is found on the lowest level of a WBS? It is actually not the activities that lead to the achieving of
the deliverables, but work packages. Work packages are work results, and not the work itself.
This means that also here you focus on goals and results. For all these partial stages of the project,
there should be tangible results.
If, for example, software is to be tested, then the work package is not called software testing but
software test report. Only when you have the test report in your hands is the work package complete,
and not when someone says to you that they have tested the software. The test report can be
forwarded on, and it is likely also part of one of the deliverables. The statement we have tested is
probably not much use to you.
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Time Planning
Activity List
A work package can generally be further divided into activities that are necessary to create the workpackage these are the activities that are included in the activity list.
Although, it should be differentiated neatly between the WBS and the activity list, in practice both are
found together in the project plan. The risk here is not thinking in work packages, but way up in the
hierarchy in activities. This can lead to a lot happening in your project, with everyone working hard, but
in the end having no actual results in your hands.
It is therefore particularly important, even if the WBS is simply a part of the project plan, to define clearly
what the work packages are, as they are what you need to ensure project success.
Gantt Chart
The project plan normally uses a Gantt Chart in order to show the activities.
Figure 8: Sample Gantt Chart
In the Gantt Chart, every activity is represented by a bar that shows how long the activity takes and
when it is to be executed. The duration of activities is arrived at by considering the effort estimation and
the resource allocation (see below).
Milestones
It is important for the success of the project to have binary milestones in the schedule. With a binary
milestone there are only two statements: Achieved or not achieved. The deliverables of a project arelinked with such milestones. Here it is necessary to take care that each of the deliverables undergoes
inspection. A document only counts as finished when it has been approved, not when it has been
written. A software delivery is only finished if it has been successfully tested and the test report is
available. Statements like software 60% finished are not appropriate for milestones.
Dependencies
As well as the duration, the dependencies of the activities have to be defined. For example, you can
only put up wallpaper when the plastering is finished. In addition there are also arbitrary dependencies
when, for example, project staff are assigned to several tasks which they can only execute one after the
other (otherwise they would be overloaded).
Just considering the dependencies already results in a time schedule.
In the Gantt, dependencies are indicated by arrows between the activities. In Figure 8 every activity is
dependent on its predecessor.
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An activity can at least in theory depend on another activity in four ways:
! FS Finish to Start (this is the most frequent type of dependency. One activity can only start
when the other activity has been completed.)
! SS Start to Start (e.g. recording the measuring data of a technical system is dependent on the
begin of its test run)
! FF Finish to Finish (e.g. in a plant, installing a sensor which has to be installed during the last
step of the plants construction)
! SF Start to Finish (doesnt happen in practice)
Precedence Diagram
The Precedence Diagram is another type of representation of dependencies between activities.
Figure 9: Precedence Diagram
Like the Gantt Chart, the Precedence Diagram also shows the dependency between activities using
arrows. In practice, as the Precedence Diagram is only another way of presenting the Gantt Chart, and
can also be displayed using current project planning tools, you do not need to draw a Precedence
Diagram.
The Critical Path
The critical path is the chain of activities that, if delayed, immediately mean a delay to the project. You
must keep a particularly close eye on the critical path during the execution of the project. Other activities
that do not lie on the critical path can however become the critical path if they get delayed enough.
Therefore you should monitor these activities with the same care.
The critical path is automatically calculated by the project management software. But you can also usea Precedence Diagram to determine the critical path manually.
G E F
C D
J H I
K
A B
Begin
0
End
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Figure 10: Calculation of the critical path
For this, first enter the duration of each activity. Then you go through all activities, from left to right, and
calculate the earliest start and the earliest end. When you have reached the end, go backwards from
right to left through all activities and calculate the latest end and the latest start. The float of an activity
describes how much the activity can be delayed without it having an effect on the project. It is the
difference between the earliest and latest start (or end). All activities whose float equals zero, lie on the
critical path.
In the example, you would first enter the duration of all activities. Then you enter 0 in A as early start
(carried over from the beginning). Early finish is then 0+the duration of A. The early start of B then
corresponds to the early finish of A etc.
Leads, Lags and Schedule Compression
In addition to the dependencies you can also take certain times into consideration:
! Lead: The successor activity can already start early by a certain time frame. This leads to
overlapping.
! Lag: The successor activity can only begin after a certain delay. This allows for, amongst otherthings, process-related waiting times (like e.g. drying times in construction).
Figure 11: Leads and Lags
The term schedule compressionmeans the techniques you can use to condense the time schedule and
get to the project end faster, or if you would like to catch up again after a project delay.
There are two types of schedule compression:
! Fast Tracking (overlapping of activities by using leads)! Crashing (shortening of the project by introducing extra resources, overtime etc.)
Do not overestimate the effect of either technique.
ES = early start dateLS = late start dateEF = early finish date
LF = late finish date
Name
ES Durat. EF
LS Float LF
Lag:
Lead:
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Fast tracking makes the project plan even more sensitive to delays and is also only possible to a certain
extent.
The effect of crashing can be smaller than expected, as the resources brought in first need to be trained
up. With a larger team there is an increased chance of miscommunication, and overtime could lead to
overwork, with a drop in performance, or to demotivation.
Critical Chain
The critical chain is an extension of the critical path. It is used after resources have been planned in for
all activities. This normally will have resulted in a change in the time schedule, as resources cannot be
available anytime and without limitation. The critical path of this plan is then described as a critical
chain. Then at the end of the critical chain and with that at the end of the project a project buffer is
added, whose size depends on the level of uncertainty in the project. In addition, feeding buffers are
added to all chains that feed into the critical chain; their size depends in turn on the uncertainty of the
activities being protected by the respective feeding buffer. When monitoring the project, attention is paid
that none of the feeding buffers run over.
Figure 12: Critical Chain
Critical Chain
S E
Feeding
Buffer
Feeding
Buffer
Project
Buffer
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Effort Estimation
Estimating effort is a difficult task and in many projects there can be serious errors in the estimation.
The results of the effort estimation are used for planning timelines and costs.
Research and experience show that in general estimations are made too tightly. For example, one study
of 300 software projects showed that the estimates of software developers had an optimism factor of
20%-30%. (Why is software late? An Empirical Study of Reasons for Delay in Software Development.
In IEEE Transactions on Software Engineering SE 17, no.6 (June).)
Unfortunately, simply increasing the estimation isnt the answer, as experience shows that when the
estimation is too generous, the extra time just gets used up as well.
Work expands so as to fill the time available for its completion.
Parkinsons Law
One problem in estimating it is that it is basically about prediction, of a statistical nature. In reality, the
effort can end up being higher or also lower. The use of a single value (one-point estimate) is therefore
misleading as it gives the impression of a certainty that does not exist at all.
Figure 13: One-point estimate
In Figure 13 only one single estimate is named. Its impossible to tell what level of uncertainty is to be
reckoned with.
Schtzwert
Aufwand/Dauer
Wahrscheinlichkeit
Schtzwert
Aufwand/Dauer
Wahrscheinlichkeit
90% Bereich
Normaler Fall
(50/50)
Min Max Aufwand/Dauer
Wahrscheinlichkeit 90% Bereich
Normaler Fall
(50/50)
Min Max Aufwand/Dauer
Wahrscheinlichkeit
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Figure 14: Probability distribution
In reality there is something more like a probability distribution (Figure 14). This is about making a
statistical prediction as to the effort (or length of time) required for the project to be completed. There isan area with higher probability, but you can see that due to uncertainty, a significantly higher or smaller
effort is also possible.
The 90% area is the area of effort (or length of time), in which the project will likely be completed with a
probability of 90%.
Figure 15: Cone of uncertainty
The width of the area of probability depends on how much information is available about the project at
the time of the estimate. Normally the information gets ever more exact in the course of the project, thus
making a more precise estimate possible. This can also be depicted as the "cone of uncertainty (see
Figure 15).
The continuous lines show how the probability area reduces in size in the course of the project, as moreinformation becomes available and uncertainty is reduced. The dashed line shows an example of the
process of a one-point estimate that keeps getting adjusted upwards, which gives the impression that
the project is running over. In fact this curve is lying within the area of the cone. This increase of the
estimate can simply be the result of ever more precise information becoming available.
In order to improve the quality of the estimation, the following is necessary:
! Compilation of as exact information as possible about the project early on.
! Use of historical information from projects already completed.
! Use of estimation techniques instead of subjective estimates.
Estimation techniques
For effort estimation there are a lot of methods which can essentially be divided into two groups:
! Bottom-up estimating
Geschtzter
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Einpunkt-
schtzung
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Geschtzter
Aufwand
Projektverlauf
Einpunkt-
schtzung
90% Bereich
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! Top-down estimating
Bottom-Up Estimating
Bottom-up estimating assumes that a WBS or an activity list already exists. For every single workpackage, or for every single activity, the effort is estimated. The estimated total effort is then the sum of
the individual effort estimates.
For a good estimation it is necessary, amongst other things, for the WBS to contain the complete set of
all project parts. It is possible to make an estimate even if not all parts of the WBS are fleshed out in
detail. But if parts are actually missing then the estimate will definitely be too low.
Top-Down Estimating
With top-down estimating, the project as a whole is estimated. This method is good if there is not a lot of
time for estimation, e.g. when submitting an offer.
Even if not very detailed information is available, you can still make a good estimate through the use of
estimating techniques and historical data.
Analogous Estimating
With analogous estimating (estimating by comparing parameters) the whole project is compared with
one or several previous, and similar, projects so it is a case of top-down estimating. The comparison
is made based on an estimate of the size of the new project, and the known size of the previous
projects. Estimating on the basis of comparing size is more accurate than comparing without
considering the size. The skill is in determining which size parameters are relevant for the project scope.
In software development that could be e.g. the number of features, the number of entry masks etc.
Generally, several parameters will be combined with weighting factors. Determining the weighting
factors is also critical, and has a great influence on the estimate. This should be checked using
historical data.
Parametric Estimating
With parametric estimating you proceed in a similar way as with analogous estimating, only the
comparison is not with one previous project, but with data collected from many previous projects. Also
here the parameters for comparison and their weighting factors must be selected carefully.
Figure 16: Parametric estimation
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Statistical Foundations of the 3-Point Estimate
As a bottom-up process, the 3-point estimate is normally applied. With the 3-point estimate, for every
work step, not only the expected effort is estimated but also the minimum and maximum effort to be
expected. Out of these three values, the total effort for the project is calculated using a statisticalprocess over several steps, where statistical variances are taken into account. If the maximum and
minimum efforts really are correctly estimated, the resulting estimate will be correct with 95% certainty.
With the 3-point estimate, the statistical parameters expected value and standard deviationare whats
important.
Figure 17: Expected value and standard deviation
In many statistical calculations, a Gaussian normal distribution is assumed (see Figure 17), where the
probability curve surrounds the average value symmetrically the so-called expected value E. The
expected value is the value that can be expected on average after a high number of observations. Sothe expected value of the number of dots if you throw two dice is 7. With a high number of throws, the
sum of the number of dots, divided by the number of throws, gives a value which with great probability
will be near 7.
Figure 18: Standard deviation !
The standard deviation !(=sigma) is a measure for the width of a distribution curve. The greater the
uncertainty is, the greater the standard deviation.
E
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!2
p1
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Figure 19: Confidence values
Estimating efforts usually involves asymmetrical distribution curves. So E lies not where the curve is
highest, but slightly to the side. It is possible, with the aid of standard deviation to indicate so-called
confidence values.
! E + !: 70 % of all values lie in the area E !.
! E + 2!: 95 % of all values lie in the area E 2!.
! E + 3!: 99.7 % of all values lie in the area E 3!.
!
Therefore, if you know the expected value and the standard deviation you can make a prediction with
95% accuracy. The problem however is defining E and !reliably.
The Execution of a 3-Point Estimate
In order to execute a 3-point estimate, you do not need to do any statistical calculations yourself. You
can use a table that has been set up with the appropriate formulae already integrated.
All you have to do is estimate three values for every activity or for every work package:
! The most likely case (m)
! The worst case (a)
! The best case (b)
From this, the following is calculated:
E the expected value.
6
4 bmaE
++
=
! the standard deviation. The distance between the best case and the worst case is 6 !.
6
ab!="
The estimate (95%) this estimate has a confidence level of 95% i.e. that in 95% of cases the effort will
lie below the estimate and only in 5% of cases above it.
E + ! E + 2! E + 3!E
!
2!
3!
50% 70% 95% 99,7%
E + ! E + 2! E + 3!E
!
2!
3!
50% 70% 95% 99,7%
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!*295_ += EEstimate
Figure 20: 3-Point-Estimation
The whole project effort (95% confidence) is then calculated from the sum of the individual estimates
(95%).
However, you must be aware that, in practice, the maximum values can also be exceeded. The
statistical/mathematical basis for this process can lead to the false assumption that, by using it, one is
getting sure-fire estimated values. However, this is only the case if the three-point estimate values
entered are correct. An error that is made here cannot be corrected by using the process, so there is a
risk of being lulled into a false sense of security.
A significant advantage of the three-point estimate is that anyone making an estimate has to consider
extreme values, so that an optimist takes into consideration the worst case, and a pessimist takes into
consideration the best case. Through this you get a more neutral estimate than with the one-point
estimate, where only the expected effort is estimated.
Task
Best Case
Estimate a
Most Likely
Estimate m
Worst Case
Estimate b E Value !Value
Task
Estimate95%
Confidence
Task 1 10,0 12,0 15,0 12,17 0,84 13,9
Task 2 24,0 28,0 40,0 29,34 2,67 34,7
Task 3 10,0 15,0 20,0 15,00 1,67 18,3
Task 4 8,0 11,0 16,0 11,34 1,34 14,0
Task 5 10,0 14,0 25,0 15,17 2,50 20,2
Task 6 20,0 30,0 45,0 30,84 4,17 39,2
Totals 82,0 110,0 161,0 113,86 140,3
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Cost Planning
By doing the effort estimate, a large part of the cost planning is already covered. As well as calculating
the estimated total costs, a cost performance baseline is also defined. A baseline is basically a
document that reflects the status, authorized and frozen. With the cost performance baseline you can, in
the course of the project, make reference to what costs were originally planned.
The cost performance baseline is a chart showing the planned accumulated costs during the course of
the project.
Figure 21: Cost Performance Baseline
The cost performance baseline is an important aid, during the execution of the project, for monitoring
project progress using the Earned Value Technique. In the context of the Earned Value Technique, the
cost performance baseline is also called the performance measurement baseline (PMB).
The cost performance baseline includes all costs incurred, even if payment hasnt been made yet.
Figure 21 includes the expenditure curve, which shows only the actual expenditures. But for monitoring
the project progress it is the work done, and not the work paid for, that is a crucial indicator.
The budget at completion (BAC) is the sum of all planned expenses, i.e. the cost performance baseline
ends with the BAC.
Planned spending buffers are not incorporated into the cost performance baseline. A difference can be
made between:
! Contingency Reserves and
! Management Reserves.
Contingency reserves are intended for unplanned but maybe necessary changes because of known
risks arising. The project leader can have access to the contingency reserves.
Management reserves are intended for unforeseen things, the unknown risks. The project leader may,
usually only with authorization, be allowed access to the management reserves.
Cost(cumulative)
Time
Cost Performance Baseline
Expenditures
Funding
Requirements
BAC
Cost(cumulative)
Time
Cost Performance Baseline
Expenditures
Funding
Requirements
BAC
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Human Resource Planning
The human resource plan documents roles, responsibilities and project organizational charts. In
addition, it includes a plan for how the staffing needs of the project will be covered.
Responsibility Assignment Matrix
Roles and responsibilities can be represented e.g. in a responsibility assignment matrix (RAM), which
illustrates the connection between the work packages or tasks of the project and the project team staff.
One kind of RAM is the RACI chart, where not only accountability is included, but also who contributes
something to a project part, who advises on it and who should be informed about it.
Please note that, in the RACI chart, for one task there is only one person accountable, but there can be
several who are responsible.
RACI Chart Role
Activity/Process Sponsor ProjectManager
SystemArchitect
Developer SystemTester
Collect requirements A R C C
Create project plan A R C
Develop specification I A R
Create deliverables A R
Test deliverables A R
Manage change requests A R I C
R = Responsible, A = Accountable, C = Consult, I = Inform
Figure 22: RACI Chart
Resource Calendar
The staffing need can be represented in a resource calendar.
Figure 23: Resource calendar
If there is an upper limit for personnel availability (line in Figure 23) adjustments can be made usingresource leveling until the staffing need is spread evenly over the time available. Resource leveling can
also be used for individual employees, in order to ensure that they are not overburdened by the work
planned, but are generally working at 100% capacity.
Ressourcen-Kalender
0
5
10
15
20
25
Mai Jun Jul Aug Sep Okt Nov
Monat
Mitarb
eiter
Mitarbeiter
Verfgbar
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Resource leveling for individual employees is usually performed with a project planning tool. Here you
can either look at the resource calendar of every employee and then shift the tasks assigned to him, or
put them into a preferred order according to dependencies; or you can execute resource leveling
automatically. With the automatic execution, however, you have no influence over the result, so youmay not get a satisfactory result.
If you want to structure your project team because e.g. it is too big to be managed by you alone, then
you can illustrate this structure in an organizational chart.
Figure 24: Project Team Organization Chart
Project Manager
Head
Development
Team
Head
Test Team
Sales
Representative
Customer
Support
Representative
Developer 1
Developer 2
Tester 1
Tester 2
Project Manager
Head
Development
Team
Head
Test Team
Sales
Representative
Customer
Support
Representative
Developer 1
Developer 2
Tester 1
Tester 2
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Milestone Trend Analysis (MTA)
The milestone trend analysis serves to illustrate clearly any trend in the change of milestones.
In a graph, the passage of time in the run of the project is illustrated on the x-axis. The y-axis is also anaxis showing time; here however the planned date for the milestones is shown.
A milestone that is not postponed (or moved forward) creates a horizontal line. Each change of a
milestone is shown in an upward or downward movement of the line.
Graphic 25: Milestone Trend Analysis
On the lowest ascending straight line in the MTA, the current date corresponds to the milestone date.
The area below the line is generally empty in the MTA. As soon as a milestone is reached, it goes onto
this line and no longer needs to be tracked (e.g. MS1 and MS2). If a milestone is not reached, then it
has to be moved up.
An ascending trend curve indicates too optimistic planning. The milestone has not been reached and
has to keep being postponed.
A descending trend curve means that milestones are being reached earlier than originally planned. On
the one hand this is good news, but it does however indicate too cautious planning.
The advantage of this procedure is that you not only see a current snap-shot of the milestones, but also
get a view of both the past (through the trend lines) as well as the future (through the dates of planned
milestones).
The MTA is a tool developed in Germany. There is a description at
http://www.theprojectgroup.com/E/produkte/produkte_mta_server_e.html
Milestone Trend Analysis
15.01.2009
12.02.2009
12.03.2009
09.04.2009
07.05.2009
04.06.2009
02.07.2009
30.07.2009
27.08.2009
15.
01.
2009
22.
01.
2009
29.
01.
2009
05.
02.
2009
12.
02.
2009
19.
02.
2009
26.
02.
2009
05.
03.
2009
12.
03.
2009
19.
03.
2009
26.
03.
2009
02.
04.
2009
09.
04.
2009
16.
04.
2009
23.
04.
2009
30.
04.
2009
07.
05.
2009
Date
MilestoneDat
e MS 1
MS 2
MS 3
MS 4
MS 5
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Earned Value
With the Earned Value Process you can convey the status of the project with regard to costs and
timelines in just one or two numbers. This makes the Earned Value an excellent indicator for reporting
purposes.
The process is explained in detail in the worksheets.
Here are just some definitions, briefly summarized:
Earned Value (EV): Earned value is a measure of how much of the planned work has been completed
so far. For this the planned cost of each activity is multiplied by its degree of completion. The result from
these products added together is the Earned Value.
Actual Cost (AC): This value indicates how much investment has been necessary so far. The Earned
Value can be lower (or higher) than AC, as the EV does not take into account how much expenditure a
particular activity required, but how much expenditure was planned for it.
Planned Value (PV): The Planned Value indicates what costs have been incurred up to a particular
point in time in the plan.
Graphic 26: Earned Value, Planned Value und Actual Costs
It is perfectly conceivable that PV and AC are the same, i.e. that the planned costs equal the actual
expenditures at a particular point of time. To believe that everything is therefore running according toplan would however be illusory if you do not also take into account the EV.
Example: You are building a road, which is 4km long, the construction of which takes 4 months and
costs !400,000.
After 1 month you have spent !100,000.
In that case AC is = !100,000.
PV is also = !100,000.
If, however, only 500m of the street is complete, then the degree of completion is 12.5% and EV = 0.125
* !400,000 = !50,000.
Only when EV is included can you see that the project is behind schedule, and so far twice asexpensive as planned. In a simple case like this the delay is of course obvious. In a complex project
C
ost(cumulative)
Time
Planned Value (PV)
Earned Value (EV)
Actual Costs (AC)
Budget at
Completion
(BAC)
C
ost(cumulative)
Time
Planned Value (PV)
Earned Value (EV)
Actual Costs (AC)
Budget at
Completion
(BAC)
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with a lot of individual activities, it is not nearly as easy to notice a delay and especially difficult to
quantify it.
Earned Value IndicatorsThere are two indicators based on the earned value variable, which express how much the project is
following the plan regarding costs and schedule.
Cost Performance Index (CPI): The Cost Performance Index is the ratio between Earned Value and
Actual Costs. It expresses, which results you have got for the money spent.
CPI = EV / AC
A CPI of 1.0 indicates that the costs are exactly as planned.
A CPI < 1.0 indicates that so far the project has been more expensive then planned.
A CPI > 1.0 indicates that the project is cheaper then planned.
Schedule Performance Index (SPI). The Schedule Performance Index ist the ratio between Earned
Value and Planned Value and indicates, how well the planned schedule is achieved.
SPI = EV / PV
If the project is running exactly according to the plan, then the SPI = 1.0.
If the project is delayed, then the SPI < 1.0.
If the project is faster as planned, then the SPI > 1.0.
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Risk Management
Risk management is there to handle risks that can have an influence on the project, but are not included
in the project plan. Risks are uncertain future events that can have a positive or negative impact on the
project.
Risk list
Initial data on risks can already be included in the Project Charter. When planning the project a list of
known risks is compiled. It should not only be the project leader who works on compiling the list, but
also experts, team members and other stakeholders. The first step is to identify the risks.
Risk identification
The identification of risks is a prerequisite for effective risk managementThere are numerous techniques
for risk identification:
!
Reviews,! Brainstorming,
! Delphi technique,
! Interviewing,
! Root cause analysis,
! Checklist analysis,
! Assumption analysis,
! Cause and effect diagrams,
! System or process flow charts,
! Influence diagrams,
! SWOT analysis,
! Expert judgement
Delphi Technique
With the Delphi Technique a consensus amongst experts can be reached. Each expert gives a written
evaluation on a problem. The evaluations are then passed on to the other experts for further comment,
all the time with no discussion taking place. After several rounds you generally end up with a consensus
of the experts. There is a detailed description in Wikipedia: http://en.wikipedia.org/wiki/Delphi_method
SWOT Analysis
The SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) is a versatile procedure where,
having identified the strengths and weaknesses of an organization, a second step analyzes what
opportunities result from the strengths and what threats (risks) from the weaknesses. This procedure is
suitable for risk identification, as well as other things.
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Table 1: SWOT-Analysis
Strengths Weaknesses
Opportunities Threats
Risk evaluation
Risks are evaluated according to
! The probability of their occurring, and according to their
! Impact on the project.
From this a value is determined for the size of the risk.
The probability is generally indicated by a number in the range [0..1].
The impact can also be expressed by a number in the same range. For this a predefined matrix, for
example, can be used.
Table 2: Risk/Impact Matrix (example)
Impact on Very low Low Medium High Very high
0.05 0.20 0.40 0.60 0.80
Costs No markedimpact
Less than 6 %increase
7 % - 12 %increase
13 % - 18 %increase
More than18 % increase
Time No markedimpact
Less than 6 %increase
7 % - 12 %increase
13 % - 18 %increase
More than18 % increase
Quality No markedimpact
Only a fewcomponents
affected
Significantadverse impact
that requirescustomerpermission tocontinue
Unacceptablequality
Productunusable
Both the valuesprobabilityand impactcan be combined to make one value for total risk, for example by
simple multiplication.
Risk Response Strategies
For risks as of a certain risk value, actions are defined to reduce their probability or their impact, as well
as actions on how to respond to them if they do occur. It should be predefined as of what threshold
actions for reduction should be planned, and as of what threshold reactions. All activities for preventingrisks must be included in the project plan.
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The risk list gets updated in the weekly status meeting. This means the project leader asks if there are
any new risks, or any changes in the evaluation of risks already identified.
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Stakeholder Management
Stakeholder Analysis
For successful project management, it is necessary to have effective stakeholder management. In this,it is important that you set priorities, classify the stakeholders and focus on the more important
stakeholders.
The first step of stakeholder analysis is the identification of the stakeholders.
The second is classification. There are various criteria for this (see PMBOK p 249). One possibility is to
assess stakeholders according to their power and their stake (interest) in the project. Then you can
enter the stakeholders into a power/interest grid.
Graphic 27: Stakeholder Power/Interest Grid
Depending on their power and interest, various strategies lend themselves to the different groups of
stakeholders. In addition, it also has to be taken into consideration whether the stakeholders have more
of a positive or a negative attitude to the project, in order to be able to evaluate how they would behave
in various situations.
The third step is a description of the strategies, with which you want to involve the different stakeholders
in the project and get their support for the project.
Communications Planning
The various stakeholder strategies also primarily contain different communication methods. This is
defined in the communication management plan.
The communications management plan should at least contain:
! Meetings
! Reporting. In addition to the reporting of the project manager, this includes the reporting of team
members, suppliers, etc.
! The project repository, in which you will find all project documents. This can be a network folder
that can be accessed from all team members and other stakeholders. You should describe the
structure along with responsibilities and access rights. Who is responsible for which subfolder?
Which documents must exist? And who is responsible for them?
The following communication methods are conceivable:
! Interactive communication (meetings, calls, etc.)
Monitor
(Minimum
Effort)
Keep
Informed
Keep
Satisfied
Manage
Closely
!"#$%$
'()$%
*+,-
*+,-
. ()
*+,-. () *+, -. ()
Monitor
(Minimum
Effort)
Keep
Informed
Keep
Satisfied
Manage
Closely
!"#$%$
'()$%
*+,-
*+,-
. ()
*+,-. () *+, -. ()
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! Push communication (sending of information. E.g. weekly status report to specific stakeholders)
! Pull communication (information is made available for retrieval, e.g. in the intranet or in the
project repository)
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Case study: Project charter
Project: Project name: Fair attendance CeBIT 2013
Project manager: Carin Langwasser
Sponsor: Sandra Freiberger
Description: Short description of the project.
The complete fair attendance of FleetSolutions Inc. on the CeBIT 2013 shall be
prepared and organized.
Project purpose: Motivation for the project (Why will the project be executed?)
It is the goal of FleetSolutions Inc. to reach a high number of decision makers on the
CeBIT. The focus is on introducing the services of FleetSolutions Inc. to medium-sized
companies with a potential demand of fleet management solutions. A further purpose
of the CeBIT attendance is to collect contact data for further marketing and sales
activities.
Project
objectives
Which objectives does the project have?
The objective of the project is to prepare and conduct the complete fair attendance.
This includes:
Collecting of detailed requirements for the project
Selecting the location of the exhibition stand and concluding the contract with
the fair organizer.
Designing, building, setting up, and removal of the stand. Organizing the team on the exhibition including the travel arrangements
Assuring the availability and creation of materials to be distributed
The exhibition stand should be designed in such a way that it clearly distinguished
itself from competitors. It should leave a long lasting impression at the visitors. The
visitors should get a vivid impression of the products of FleetSolutins Inc.
Great stress is put on a smooth going event without surprises and troubles.
Constraints: Project constraints (e.g. budget, time, technical constraints)
The stand must be ready 2 days before the fair. Maimum costs are 45,000 !. All
regulations of the organizer of the fair must be observed.
Resources: Human Resources, material, financial resources:
1 person for the preparation, 6 persons permanently at the exhibition stand.
Maximum budget 45,000.00 !
Approval(s): Project manager:
Date:
Sponsor:
Date:
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Case study: Stakeholder register
Project: Fair attendance CeBIT 2013
Project manager:Carin Langwasser Doc.-No. / Version:8014.13 / v1.1
Author:Carin Langwasser Date:30.06.2012
Stakeholder Interest /
influence on
the project
Strategy
Project manager
Carin Langwasser
High / high n.a.
Sponsor
Head of Marketing
Sandra Freiberger
High / high Close cooperation
Regular coordination meetings
Project changes will be approved by the sponsor
Head of Sales
Roberto Castellani
High / high Involve in requirements analsis
Align on stand design, advertising material and staff
schedule
Regular reporting
Marketing
Gabriele Schmidt
Medium / high Inform early about the project and explain the importance
of the fair attendance in order to get as much support as
possible.
Involve in planning to secure resources.
Consider corporate identity requirements for the stand
design
Procurement
Andreas Schotte
Medium /
medium
Inform early about the project and explain the importance
of the fair attendance in order to get as much support as
possible.
Deutsche Messe AG
Fair organizer
Medium /
medium
Establish contact early to have the best influence on the
location of the stand and its environment.
Trade visitors High / low Media research to investigate on trend topics
Get in touch with a group of trade visitors, selected by
Sales, to understand their main area of interest
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Stakeholder Interest /
influence on
the project
Strategy
Stand builder
To be selected
High / low Consider the flexibility of the stand builder along with the
cost effectiveness.
Daily contact during the time of stand constructions
Fire department
Contact to be
determined
Low / high Provide plans in advance for review to avoid problems ate
the time of stand acceptance
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Case study: Communications Plan
Project: Fair attendance CeBIT 2013
Project manager:Carin Langwasser Doc.-No. / Version:8014.14 / v1.0
Author:Carin Langwasser Date:30.06.2012
Communication Frequency Target Group Format
Status Report 1x / week Sponsor, Head of Sales 1 page Powerpoint per
Project Review
Meeting
Every 2 weeks Sponsor One-to-one meeting
Team Meeting 1x / week Gerhard Koch (Advertising),
Claudia Stenger (HR),
Bastian Schrder (Legal)
Meeting (1h)
Newsletter 1x / month All stakeholders Email with essential news
Kick-Off Meeting At the start of
projectexecution
All stakeholders Meeting
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Case study: Requirements
Project: Project name: Fair attendance CeBIT 2013
Project manager: Carin Langwasser
Sponsor: Sandra Freiberger
Functional
requirements
F001 The stand must be located in the sector Systems Solutions of the CeBIT
F002 The stand must have an area of 45-50 sqm.
F003 Two sides of the stand must face a passageway.
F004 The stand must have an electrical connection.
F005 The stand must be equipped with a LAN connection
F006 The stand should have a creative design, which distinguishes itself clearly from
standard fair stand designs.
F007 The stand must be equipped as follows:
Closed back panels
3 m counter with stackers below the desk.
6 barstools
Bistro table
4 bistro chairs
Lockable clothes cabinet
Lockable office cabinett
Brochure display stand
Mini refrigerator
Drinks, glasses,
Vacuum cleaner
F008 The stand design must comply to the corporate designF009 On the stand there must be a sufficient amount of flyers, brochures and sample
devices. Business cards have to be brought by the employees themselves. This must
be pointed out to them.
Organisational
requirements
O001 During the fair there must be 4 employees at the stand permanently.
O002 For peak hours 6 employees must be planned for
O003 The departments management, sales and development must be present on the fair.
O004 Hotel and travel bookings must be done for the employees on the fair. For visitorsbookings of reservations are not perpormed.
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O005 Es muss in Abstimmungen mit den betroffenen Bereichen und den vorgesehenen
Mitarbeitern ein Einsatz- und Reiseplan erstellt werden, der im Intranet einsehbar ist.
Project
requirements
P001 The stand must be built up on the fair ground at the latest 2 days before the begin of
the fair.
P002 The advertising material must be present in the company at least 4 days before the
begin of the fair and must be brought in time to the fair.
P003 The employees must arrive on the day before the fair in the hotel.
P004 On the night before the fair opening a briefing takes place in the hotel.
P005 There is a budget of mayimum 45,000 Euro.
P006 There must be a biweekly reporting about the progress of the project to the sponsor.
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Case study: Scope description
Project: Project name: Fair attendance CeBIT 2013
Project manager: Carin Langwasser
Sponsor: Sandra Freiberger
Product
description:
Description of the product.
The complete fair attendance of FleetSolutions Inc. on the CeBIT 2013 shall be
prepared and conducted.
Acceptance
criteria:
Which criteria must the product fulfill?
Fullfillment of all requirements.
Compliance with applicable safety regulations
Deliverables: List of all deliverables.
Exhibition stand (this includes renting the floor space and the completed stand)
Organization of the stand personal
Advertising material and sample devices
Exclusions: Items not included in the project.
Invitation of customers
Public relations for the fair attendance
Evening events for the stand personalAssumptions: Facts that are assumed and on which the plan is based.
Availability of a stand constructor at usual conditions.
No simultaneous events of the company in the same time frame.
Constraints: Project constraints (e. g. cost, schedule, technical constraints)
The stand must be set up on the fair already 2 days before the fair opens.
Maximum costs: 45,000 !.
All regulations of the fair organizer must be observed.
The stand and all materials must comply with the corporate identity.
Approval(s): Project manager:
Date:
Sponsor:
Date:
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Case study: Work Breakdown Structure - WBS
ProjektMesseauftritt
2. Organi-
sation
3. Material
3.2
Muster
3.1
Werbe-
material
3.1.1
Flyer
2.1
Personal
1. Stand
1.1
Standflche
1.2
Aufbauten
1.1.1
Vertrag
1.2.1
Plan
2.2
Reisen
1.2.2
Vertrge
2.1.1
Einsatzplan
2.2.1
Buchungen
3.1.2
Prospekte
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Case study: Work package description
Work package:Reservations
WBS-ID: 2.2.1 Doc.-No. / Version:0815/v0.1
Project:Fair attendance CeBIT 2013 Project manager:Carin Langwasser
Author:Carin Langwasser Date: 25.05.2012
Responsible Organization: FleetSolutions Inc. Accountable:Sandra Freiberger
Estimated effort / costs: Estimated duration:
Start date: End date:
Description:
The work package contains all travel reservations for the fair attendance CeBIT 2012. This includes
hotel reservations and booking the flight and train tickets for all employees of the FleetSolutions Inc.
which present the company as exhibitors. Cars must be rented by the employees themselves in case
this is required.
Deliverables / Products:
Tickets, travel itineraries, confirmed hotel reservations. The documents must be placed in the inbox of
the employees. A copy must be provided to HR for the travel expense accounting.
Acceptance criteria:
Tickets are booked according to the specifications of the employees and are confirmed by the
operator / hotel.
Additional conditions:
Only economy / 2nd
class. Limit for hotel rooms: 150,00 !
Signature responsible person: Signature project manager:
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Case study: Schedule (extract)
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Case study: Cost plan
Project: Fair attendance CeBIT 2013
Project manager: Carin Langwasser
Sponsor: Sandra Freiberger
Internal hourly rate 80,00 !
Work package Variance
Internal
hours
Costs Internal
hours
Actual
Cost
Perce
nt
Earned
Value
Cost
Variance
Rent floor space 16.000,00 !
Stand
Design 30 h 2.400,00 !
Stand construction 9.000,00 !
Staff 120 h 9.600,00 !
Travel 1.800,00 !
Hotel 2.600,00 !
Flyer design 20 h 1.600,00 !
Flyer printing 800,00 !
Brochure design 20 h 1.600,00 !Brochure printing 1.400,00 !
Project managemen 60 h 4.800,00 !
Total 51.600,00 !
Contingency reserve 3.000,00 !
Budget 54.600,00 !
Cost plan
Baseline Actuals Conpleted
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Case study: Risk register
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Case study: Cost monitoring
Project: Fair attendance CeBIT 2013
Project manager: Carin Langwasser
Sponsor: Sandra Freiberger
Internal hourly rate 80,00 !
Work package Variance
Internal
hours
Costs Internal
hours
Actual
Cost
Perce
nt
Earned
Value
Cost
Variance
Rent floor space 16.000,00 ! 16.600,00 ! 100% 16.000,00 ! -600,00 !
Stand
Design 30 h 2.400,00 ! 15 h 1.200,00 ! 50% 1.200,00 ! 0,00 !
Stand construction 9.000,00 ! 0,00 ! 0% 0,00 ! 0,00 !
Staff 120 h 9.600,00 ! 0 h 0,00 ! 0% 0,00 ! 0,00 !
Travel 1.800,00 ! 0,00 ! 0% 0,00 ! 0,00 !
Hotel 2.600,00 ! 0,00 ! 0% 0,00 ! 0,00 !
Flyer design 20 h 1.600,00 ! 0 h 0,00 ! 0% 0,00 ! 0,00 !
Flyer printing 800,00 ! 0,00 !
Brochure design 20 h 1.600,00 ! 0 h 0,00 ! 0% 0,00 ! 0,00 !Brochure printing 1.400,00 ! 0,00 !
Project managemen 60 h 4.800,00 ! 0 h 0,00 ! 0% 0,00 ! 0,00 !
Total 51.600,00 ! 17.800,00 ! 0% 17.200,00 ! -600,00 !
Contingency reserve 3.000,00 !
Budget 54.600,00 !
Cost plan
Baseline Actuals Conpleted
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Case study: Status report
Project:Fair attendance CeBIT 2013 Project manager:Carin Langwasser
Date:25.01.2013 Client / customer:Marketing
Overall status:critical Percent complete:40%
CPI:0,84 SPI:0,97
Cost
Baseline Actual Variance Updated plan
Total 47.000 21.000 3.000 54.000
WP 1, Stand 28.000 11.000 2.800 33.000
WP 2, Organizat. 8.000 7.000 -500 8.000
WP 3, Material 11.000 3.000 700 13.000
Milestones
Baseline Updated Plan Achieved
MS 1, Contract 10.07.12 15.07.12 15.07.12
MS 2, Design 15.12.12 15.12.12 22.12.12
MS 3, Stand 14.02.13 14.02.13
MS 4, Stand comp. 04.03.13 04.03.13
Project end 12.03.13 12.03.13
Problems Actions Date
Stand design does not comply with
regulations of the organizer
Revision of the design by the stand constructing
company
29.01.13
Cost variance in the stand
constructins of 2000 !
Save by using standard furnitures instead of the
custom build. Selection still to be done
31.01.13
Risks Response Termin
Staff for the stand team not
decided yet. Risk for early travel
reservations
Individual talks with the departmental heads Next
week
Possible delay of the brochure due
to overload at the advertising
agency
Search alternative supplier 05.02.13
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Exercise: What are projects?
Please indicate which of the following examples represent a project. Please add a cross.
Plan / Intention Project Not a project
Flat renovations
Manufacturing a car
Creating a website
Running the accounts department
Building of a new shopping centre
Construction of the Great Pyramid of
Giza
Organizing a Christmas party
Relocation of a major airport
Hosting CeBit
Hosting an international football game
Carrying out painting work for newly built
block of flats
Reorganization of the accounts
department
Developing new features for some
software
Carrying out software maintenance
Conducting an election campaign
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Example project: Stadt-Bus AG
You work for Stadt-Bus(City Bus) AG, the local public transport operator of a major city. The vehicle
fleet of Stadt-Bus AG is no longer state-of-the-art. Therefore 42 new buses are to be acquired within the
next 12 months to operate on the 4 central lines of the network. After their introduction, further buses
are to be added for other lines.
The management board has selected you to be project manager for the introduction of the 42 new
buses. A budget has been allocated by the city for acquiring the buses, and the contract with the bus
manufacturer has already been signed. It is now your task to ensure the smooth introduction of the new
buses. Your contact person is the technical director, Mr. Grossmann.
You are in charge of the planning, coordination and execution of all activities required to introduce the
new buses. Give thought to all the things that are required, or would be helpful, for the introduction of
the new buses.
All costs exceeding the pure purchase price of the buses have to be borne by Stadt-Bus AG. Mr.
Grossmann expects a cost and time schedule from you.
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Exercise: Writing a project charter
! Write a project charter for the Stadt-Bus project.
! Use the Project Charter template for this.
! Template: Project Charter
Project: Project name:
Project manager:
Sponsor:
Description: Short description of the project.
Project purpose: Motivation for the project (Why will the project be executed?)
Project
objectives
Which objectives does the project have?
Constraints: Project constraints (e.g. budget, time, technical constraints)
Resources: Human Resources, material, financial resources:
Approval(s): Project manager:
Date:
Sponsor:
Date:
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Stadt-Bus AG Organizational Chart
Vorstandsvors
itzender
Dr.MaxSch
nelle
Betrieb
DanielMeier
Personal
Katharina
Weienbach
Finanzen
J
ensJakobi
ffentlichkeit
Dr.JuttaKern
Technik
GunnarGromann
Werkstatt
KostasKalfa
s
Recht
Dr.SabineLange
Buchhaltung
ChristinaThaler
Controlling
GerhardPreu
Kunden-
kommunikation
LuigiCastor
Werbung
GabrieleSchmidt
IT
FredBruns
Einkauf
AndreasSchotte
Fahrbetrieb
JanSchweitzer
Personalplanung
FrankStammer
Personal-
entwicklung
GesineKunz
Inkasso
GuidoBrecher
Umweltschutz
LarissaGrnwa
ld
Finanzplanung
Dr.Hasso
Schmalbach
Technische
Planung
HeikoOtto
Kundenrechte
ClaraFall
Allgemeine
Rechtsfragen
TomKusmirek
Investitionsgter
MelissaKaiser
Beschaffung
PetraWerner
Fundbro
WilhelmSchal
Fahrerpool
Stadt-Bus
AG
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Exercise: Identifying the stakeholders
Who are the stakeholders affected by the project? Draw up a list of stakeholders. For each stakeholder
group specify:
! Description of the group.
! What is the groups interest? What attitude to the project do you anticipate?
! What influence can the group have on the project?
! How do you want to handle the group during the project? How do you want to involve the group
and keep them informed?
Please use the template Stakeholder Register for this.
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Exercise: Describing the project scope and content
Describe the scope and content of the project. In doing so, specify:
! What does the project include?! What deliverables will the project produce? These include both the items making up the overall
project result; as well as additional output like documentation, plans, reports etc, that are to be
delivered by the project. Services, like e.g. training are also deliverables
! What is out of scope for this project?
! Constraints imposed on the project (e.g. time constraints or a fixed budget), and that limit the
options of the project team.
! List the assumptions underlying the project planning, and that could jeopardize the project
should they turn out to be wrong.
Please use the template Scope Statement for this.
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Template: Scope Statement
Project:
Project Manager: Doc. No. / Version:
Author: Date:
Product scope.
Project deliverables.
Exclusions. What is not part of the project? What features or characteristics does the productnot have?
Constraints.
Assumptions.
Signature Sponsor: Signature Project Manager:
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Exercise: Work Breakdown Structure
Specify in detail what the project includes.
! For this, put together a work breakdown structure.! Start with the highest level deliverables.
! Subdivide these until you have defined manageable work packages that you can assign for
completion.
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Exercise: Describing work packages
Describe a number of work packages from the WBS in detail. For each work package include the
following:
! Brief description of the work package
! Department or organization responsible
! Person responsible
! List of milestones that apply to the work package.
Optional additional information:
! Information about the contract (if outsourced to a supplier)
! Quality requirements
! Resource requirements
! Cost estimate.
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Template: Work Package
Work package: Name of work package
WBS ID: Doc. No. / Version:
Project: Project Manager:
Author: Date:
Organization responsible: Person responsible / owner:
Estimated effort / costs: Estimated duration:
Start date: End date:
Description:
Results / products to be delivered:
Acceptance criteria:
Conditions:
Signature Owner: Signature Project Manager:
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Exercise: Analogous Estimating
In the software industry, Lines of Code (LOC) are use as a measurement of the size of the software.
Lines of Code are the number of text lines of a software program. The effort for writing the software is
correlated to the Lines of Code approximately. In particular, places the effort may vary much, but in
average, this is leveled.
A reference project consists of several modules. For each module, the size is known in some way. In
addition, the LOC per module are known. Therefore it is concluded for example that a web page of the
user interface is equivalent to 1000 LOC (see below 17 web pages = 17000 LOC). In detail the
parameters of the reference project are:
Module Size LOC (Lines of
User Interface 17 web pages 17000
Data base 12 tables 4000
Report generator 9 reports 9000
Base classes 27 classes 12000
Converter 4 file formats 2000
Total !Syntaxfehler, )
The project had an effort of 35 person months.
A new project shall be estimated. The size is specified as follows:
Module Size Size factor LOC (estimated)
User Interface 24 web pages
Data base 15 tables
Report generator 15 reports
Base classes 32 classes
Converter 5 file formats
Total
1. First determine the size factor for each module (=1000 for web pages in the example).
2. Then calculate the expected size (LOC) of each module of the new project.
3. Finally calculate the expected effort of the new project from the relation of the totals.
old
new
oldnewSize
SizeEffortEffort *=
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Exercise: Three Point Estimating
Perform a three point estimation for a part of the sample project.
! Estimate the effort for 10 activities or work packages of the project.! Specify the minimum, maximum and most likely case for each activity.
! Calculate the total effort with 95% confidence
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Exercise: Parametric Estimation
You are working as a project manager in the construction business. You have data about the costs from
three previous projects. Calculate parameters that allow you to estimate the cost of future projects:
Units (sqm) Price (EUR) Parameter(EUR/sqm)
Project 1 Walls 1200 10.500,00
Floor 450 15.000,00
Tiles 135 6.000,00
Project 2 Walls 3500 31.000,00
Floor 1400 52.000,00
Tiles 520 21.000,00
Project 3 Walls 2200 17.000,00
Floor 900 27.000,00
Tiles 400 15.000,00
Total Walls
Floor
Tiles
Use the parameters to estimate the cost of a new project quickly:
Units (sqm) Parameter Price (EUR)
NewProject
Walls 1800
Floor 700
Tiles 300
Total
! How could you extend this method in case you normally just get to know the floor area of new
projects?
! What are the advantages and disadvantages of such an adapted model?
! In parametric estimation what are factors that make the estimation more reliable?
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Exercise: Drafting a schedule
Subdivide your project according to timelines and draft a rough schedule in the form of a Gantt Chart. In
doing so, consider the following points:
! How can you break down the timelines in your project into separate phases?
! What milestones can you define?
! How can these milestones be linked to deliverables?
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Exercise: Quality Metrics
Define how you plan to measure quality in this project.
! Choose suitable variables that can be used to measure quality.! Specify also, exactly how the values for the variables are to be determined.
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Exercise: Risk planning
Identify 10 of the most serious project risks in the example project. Define the probability (p) and the
impact (i). For the impact you can use Table 3: Risk/impact matrix (example) -page 35. Then calculate
the risk value (p x i) and define for what risks you want to take what actions (risk response):
Id Risk p i p x i Risk Response
1
2
3
4
5
6
7
8
9
10
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Exercise: Milestone-Trend-Analyse
There are three milestones in your project that have been defined during planning as:
! MS 1 15. 03. 2010
! MS 2 15. 05. 2010
! MS 3 20. 06. 2010
In the following table there is a list of six review meetings. At each review meeting there is an updated
plan for the milestones.
Meeting 01.01.10 31.01.10 20.03.10 30.04.10 20.06.10 15.08.10
MS 1 15.03.10 15.03.10 20.03.10
MS 2 15.05.10 15.05.10 30.05.10 20.06.10 20.06.10
MS 3 20.06.10 20.06.10 08.07.10 15.07.10 20.07.10 15.08.10
Draw the milestones in the following diagram in the form of a milestone trend analysis:
Milestone Trend Analysis
01.01.10
01.02.10
01.03.10
01.04.10
01.05.10
01.06.10
01.07.10
01.08.10
01.09.10
01.01.10
01.02.
10
01.03.
10
01.04.10
01.05.
10
01.06.
10
01.07.
10
01.08.
10
01.09.
10
Date
MilestoneDate
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Exercise: Earned Value
You are building three roads for a municipality. The following is planned:
Road 1
! Length 3 km
! Construction period: 4 months
! Construction start: 01.01.2011
! Costs: 5,000,000 !
Road 2
! Length 4 km
! Construction period: 4 months
! Construction start: 01.01.2011
! Costs: 3,000,000 !
Road 3
! Length 2 km
! Construction period: 2 months
! Construction start: 01.02.2011
! Costs: 1,500,000 !
On 28th Feb 2011 you have completed the fo
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