Definition of a Project

A clear and accurate project definition is critical to the success of a project. The definition process consists of setting clearly defined objectives, determining the key success criteria and evaluating the risks involved. The final outcome should be a Project Definition document, sometimes referred to as a Project Charter. The Project Definition should include a statement of the business need that the project aims to address and a description of the product, service or other deliverables that will be its output. It can be constructed by asking a series of questions: y y y y y y y y y What is the purpose, or project mission, ie the reason for doing the project? What are the goals, ie what targets does the project aim to achieve. What is the scope of the project, ie how will the organisation gain? What are the quality standards and performance criteria? What are the measurable objectives of the project? What are the key success criteria? What are the project deliverables? What are the project constraints, eg time, resources, performance criteria? What risks are involved?

You can find a more detailed explanation of Project Definition on Spottydog's Project Management Website. The project definition process produces the information needed to begin constructing a Project Plan.

Task
A task is an activity that needs to be accomplished within a defined period of time. Tasks are generally pieces of work that require effort and resources and have a concrete outcome or deliverable. In theory a task can be of any size. Indeed, a project could be regarded as a very large task. However, the term task is normally used to refer a smaller piece of work. Tasks take place over a period of time and usually consume resources. Projects are made up of tasks, sometimes grouped together into work packages. In practice, the term task can be applied to almost any project activity. Task durations can be long or short and there can be huge variations in costs and resource requirements. The deliverables from many small tasks may be combined together to create the deliverable for a larger task. For example, a project manager may be allocated the task of producing a project plan. This task may involve obtaining information from a number of people. Each meeting could be regarded as a task in its own right. Some of the people the project manager meets with may also have to carry out tasks themselves in order to provide the required information. Next: Resource

Resource
Resources can be defined as the personnel, equipment, materials and services required to complete tasks in a project. y y Personnel are the people employed to the organisation to work on a project or task. Equipment is the machinery allocated to the project, whether mechanical or electronic, eg engineering machines, computers. y Materials are the property that may be included in or attached to a deliverable or consumed or expended in performing a task. They include assemblies, components, parts, fuels and lubricants, raw and processed materials, and small tools and supplies. y Services are areas where labour is expended without producing a tangible commodity, eg accounting, secretarial or legal services.

Schedule
A schedule is a timeline of events and activities which can be used as an operating timetable. It can be presented on a calendar framework or on an elapsed time scale and specifies the occurrence, times of events and the relative start and finish times of activities. The schedule specifies the timing and sequence of tasks within a project, as well as the project duration. It consists mainly of tasks, dependencies among tasks, durations, constraints and time-oriented project information. A display of project time allocation, in the form of milestones, deliverables, activities or Gantt charts, is often referred to as the project schedule. You can read a more about Schedules on Wikipedia. Next: Risk Analysis and Risk Management

Risk Analysis and Risk Management

A risk is an event, which is uncertain and has a negative impact on some activity. Risk analysis is the process of quantitatively or qualitatively assessing risks. It involves estimating both the uncertainty of the risk and its impact. Risk management is the use of risk analysis to devise management strategies to reduce risk. In project management, these techniques are used to address the following questions: y y y Will the project go over schedule? (Schedule Risk) Will the project overrun its budget? (Cost Risk) Will the output of the project fail to satisfy the goals? (Performance Risk)

At the beginning of a project and throughout its duration, the answers to these questions are unknown, but a 'yes' answer to any of them is obviously undesirable. Each of these elements should therefore be subjected to a risk analysis, to help project managers decide whether the project is in danger of failing to meet its commitments and whether or not anything can be done to improve the project's chances of success.

Schedule Risk
Schedule risk is the risk that the project takes longer than scheduled. It can lead to cost risks, as longer projects always cost more, and to performance risk, if the project is completed too late to perform its intended tasks fully. Apart from the cost estimation and resource allocation used in CPM, most of the techniques used in quantitative cost risk analysis are different from those used in schedule risk analysis. The earliest technique used for schedule risk analysis was the Gantt chart, developed by Henry Gantt in 1917. A Gantt chart gives a graphical summary of the progress of a number of project activities by listing each activity vertically on a sheet of paper, representing the start and duration of each task by a horizontal line and then representing the current time by a vertical line. This makes it easy to see where each activity should be and to show its current status. You can read more about Gantt charts on Wikipedia. Many tasks require that prior tasks are completed before they can be initiated, but unfortunately, Gantt charts are not a good method of showing theinterrelationship between tasks, so computers must be used to set up and maintain the network of tasks. One commonly-used technique is Program Evaluation Review Technique (PERT) which uses a detailed diagram of all anticipated tasks in a project, organised into a network to represent the dependence of each task on those that must precede it. PERT can be used to analyse the tasks involved in completing a project, especially the duration of each task, and identify the minimum time needed to complete the total project. PERT makes it possible to schedule a project without knowing the precise details and durations of all the activities. You can read more aboutPERT on Wikipedia. The Critical Path Method (CPM) is a similar project planning and management technique which also uses a network representation. Earlier versions did not try to estimate probability distributions for task durations, making it easier to derive the critical path, ie the set of tasks that determined the final project length. Various enhancements were made to CPM to allow alternative resource allocations to be explored, within specified cost constraints. The increasing availability of computing power allowed led to the inclusion of probability distributions for task durations in CPM. This allowed Monte Carlosimulation to be substituted for the PERT assumptions. (Monte Carlo simulations are a type of algorithm used to simulate the behaviour of systems. They are described as stochastic or nondeterministic because they are based on the use of random

numbers. A stochastic model is a method of estimating probability distributions of potential outcomes by allowing for random variation in one or more inputs.) The addition of stochastic task durations means tasks can be placed on the critical path with some probability, also estimated using the Monte Carlo method.Stochastic CPM is now the preferred methodology for assessing schedule risk. You can read more about CPM on Wikipedia.

Cost Risk
Cost risk is the risk that the project costs more than budgeted. It can lead to performance risk if cost overruns lead to reductions in scope or quality. Cost risk can also lead to schedule risk if the schedule is extended because not enough funds are available to complete the project on time. The main technique used for cost analysis of complex projects is based on the Work Breakdown Structure (WBS) which organises project tasks into hierarchical stages or phases. WBS is a project management technique for defining and organising the total scope of a project using a hierarchical tree structure. The first two levels, known as the root node and Level 2, define a set of planned outcomes representing the entire project scope. At each subsequent level, the children of a parent node represent the entire scope of their parent node. A well-designed WBS describes planned outcomes instead of planned actions. Outcomes are the desired ends of the project and can be predicted accurately, whereas actions make up the project plan and may be difficult to predict accurately. A well-designed WBS makes it easy to assign any project activity to one and only one terminal element of the WBS. WBS cost estimation attaches a cost to each component and sums these to obtain a total. Experts in relevant areas are asked to specify a probability distribution for each part of the WBS and then Monte Carlo simulation is used to estimate a probability distribution for the total project cost. You can read more about Work Breakdown Structure on Wikipedia.

Performance Risk
Performance risks include the risks that the completed project, when complete, fails to perform as intended or fails to meet business requirements that justified it. Performance risks can lead to schedule and cost risks if technological problems increase the duration and cost of the project. The methods used for schedule and cost risk analysis are similar for all types of projects, but methods of performance risk analysis can depend more on subject area. Quantifying the relationships between different aspects of performance can be difficult. There have been some attempts to construct quantitative estimates of performance risk, eg for aerospace systems, but current practice seems to be to use a mix of quantitative methods and models.

Scope and Scope Creep

The scope of a project is the sum total of all project products and their requirements or features. Sometimes scope is used to refer to the totality of work needed to complete a project. In traditional project management, the tools to describe a project's scope are the product breakdown structure and product descriptions. The primary tool to describe a project's scope is the work breakdown structure. If requirements are not completely defined and described and if there is no effective change control in a project, scope or requirement creeps may occur. Creep is a problem that occurs in project management where the initial objectives of the project are placed in jeopardy by a gradual increase in overall objectives as the project progresses. The requirements of the new objectives can exceed the resources allocated to the project resulting in the project missing deadlines, overrunning budgets or failing completely. Scope Creep refers to uncontrolled changes in a project's scope. It can happen when the scope of a project is not properly defined, documented and controlled and can result in time or budget overruns.

Scope creep can involve a scope increase, consisting of new products or new features of existing products. This can happen if the project team drifts away from its original purpose. Scope creep can also cause a project team to overrun its original budget and schedule. As the scope of a project grows, more tasks must be completed at the same cost and in the same time frame as the original series of project tasks. Scope creep is often a result of weak project management, poor change control or incorrect identification of the products and features required to achieve project objectives.

Critical Path
Critical Path Analysis (CPA) is an effective method for planning and managing projects. Let's consider a very simple example, cooking and serving a fried breakfast. We can begin by listing all the tasks required in roughly correct order: y y y y y y y y y assemble plates and cutlery assemble ingredients prepare cooking equipment make toast fry sausages and eggs grill bacon and tomatoes set table warm plates serve breakfast

The order isn't quite right as some of these tasks need to take place simultaneously. Also, some tasks must be started before others, and some tasks must be completed before others can be started, eg: y The plates need to warm while other tasks are taking place

The toast needs to be made while the sausages are frying, and the bacon and tomatoes are grilling. The eggs need to be fried last.

The critical path analysis represents what tasks need done, and when they need done, as a diagram. Timescales and costs can be attached to each activity and resource. The diagram alongside shows the CPA for making a fried breakfast. This is a fairly trivial example which only shows a few activities taking place over a few minutes. Real business projects are likely to have far more activities and to take place over weeks or months. A spreadsheet like Microsoft Excel, or a specialised project management package like Microsoft Project can be used to carry out Critical Path Analysis.

Gantt Charts
Gantt Charts are a very useful tool for project management. Project management packages like Microsoft Project generally offer a Gantt Chart function, but you can easily construct one using Excel or a similar spreadsheet. A Gantt chart can be used to keep track of progress for each activity and how the costs are running.

Create a time-line for the duration of the project. Each activity is represented by a separate line. In our Breakfast example the timescale is given in minutes, but normally you would use weeks, or even months, for long-term projects. You can colour code the time blocks to denote type of activity, eg intense, watching brief, directly managed, delegated and left to run, and you can schedule review and break points. You can also move the time blocks around to report on actual versus planned, to re-schedule and to create new plan updates.

At the end of each line you can show as many cost columns as required for the activities. Our Breakfast example shows capital cost (Cap) of the consumable items and the revenue cost (Rev) for labour and fuel. Cost columns can show planned and actual expenditure and variances, and calculate totals, averages, ratios, etc. Gantt Charts are flexible and useful project management tools, but they do not show the importance and inter-dependence of related parallel activities, and they don't show the need to complete one task before another can begin, like a critical path analysis. Both tools are necessary, especially at the planning stage.

Estimating Project Duration and Costs

The duration of a project can only be estimated once you know what resources are available, for example, if a project is estimated to require 1000 hours of effort and only one person is available to work on it, it may take six months or more. However, if three people are available, it may be possible to complete the project in two months. Costs are normally split into labour costs and non-labour costs. The labour cost can be determined by examining the number of hours of effort required and the cost per hour. If you are using external labour, eg contractors or consultants, the costs should be estimated and budgeted in advance. This is straightforward if you already know your exact requirements, but if the final staffing requirements are not yet known you may need to make some assumptions based on the general type of staff required, eg use standard hourly cost for accountants, programmers, office administrators. Methods of calculating the costs of internal labour vary from company to company. In some cases, the labour costs for internal employees are assumed to be zero, since they are already accounted for in a departmental budget. This does not mean that there is no cost; it simply means that there are no further costs in addition to what the company is already paying. Other companies use an average hourly cost per employee when calculating project budgets. This may be an average cost per hour for all employees or it may vary depending on job function. Non-labour costs include everything not directly related to salary or contractor costs. Some of these, such as training and team-building costs are employee-related, but they are not regarded as labour costs as they do not relate directly to employee salary or contractor costs. Every project manager should be familiar with the accounting rules in his or her own company to ensure that labour and non-labour costs are allocated correctly. Non-labour costs generally include:

y y y y y y y

Hardware and software Equipment Materials and supplies Travelling expenses Training Team building Facilities

If parts of a project are outsourced, this is normally regarded as a non-labour cost since the company is paying for deliverables and is not concerned about the supplier's labour costs.

Project Manager Skills

The project manager is the individual who has the overall responsibility for the successful planning and execution of a project. Although this course concentrates on IT project management, the title is widely used in other industries which are involved in producing a product or service, including the construction industry, architecture and engineering. A project manager must possess a combination of skills including planning, organising, communicating and problem-solving. One of the prime responsibilities of the project manager is risk management and a good project manager will ensure that risks are carefully monitored throughout the duration of the project as they can have a major impact on its eventual success or failure. Good communication can play a major role in minimising risk by ensuring that all members of the project team are able to express their opinions and concerns. Most project managers use project management software, such as Microsoft Project or Open Workbench to organise their tasks and resources, as this allows them to produce charts and reports that might otherwise take hours of work.

Planning Skills
Project managers must be able to organise staff and tasks into a schedule and monitor its progress. This schedule should define the scope of work to be undertaken and

a timetable for the project. It includes all activities that are to be resourced, scheduled and undertaken over a period of time to achieve the required project outcomes. For large and complex projects the project manager will normally direct the work of others who are involved in the detailed scheduling of the project. On smaller projects the project manager may be expected to carry out some or all of this work. A project manager should understand the general principles and processes of developing project schedules, know the legislative and regulatory frameworks, understand the relevant software and be familiar with project management methods and techniques.

Organisational Skills
Project managers must be able to understand the internal functioning of an organisation and know how it achieves its specific objectives. This is particularly important in public sector organisations which are often riddled with bureaucracy and the need to go through multiple levels of approval. They should also be skilled in personal organisation, as they may be required too to keep track of requirements and design documents, contracts, schedules, personnel records, project reports, communication records (including e-mail), hiring history, meetings and status reports. They must also be able to work with and develop teams and create appropriate environments with the aim of achieving common objectives. The effort spent motivating a team to perform at its peak is always worthwhile. The four critical components are rewarding achievements, providing feedback, recognising strengths and providing challenges. Team leadership is seldom easy. It is difficult to persuade your team to go with your idea without making them feel that the idea is being thrust on them. The team looks to the Project Manager to provide direction and vision. To achieve this successfully the project manage must constantly enhance his/her breadth and depth of knowledge.

Communication Skills
Project managers must be able to speak well in public and present information in both positive and negative scenarios. They must also be able to communicate effectively in writing, so that they can transmit ideas and objectives. They must also be able to interpret the verbal and non-verbal communications of others in order to know their requirements and opinions. A project manager is expected to produce high-quality project planning and design documents and send out meeting agendas, updates, status reports and courteous and effective email. A good manager can get his/her ideas across clearly and in a non-confrontational manner, without appearing to impose views on subordinates.

Problem-Solving Skills
Project managers must be able to reason well and use a logical, analytical process to solve problems, identify solutions and choose the most appropriate. They must be able to seek creative and innovative solutions to the problems that will arise in the course of the project.

The Project Life Cycle

The project life cycle consists of four phases, initiation, planning, execution (including monitoring and controlling) and evaluation. The MPMM Project Management Methodology is an excellent resource for this part of the Unit. The Initiation phase begins by defining the scope, purpose, objectives, resources, deliverables, timescales and structure of the project. The next step is to develop a Business Case, including several possible solutions and a cost/benefit analysis for each. A Feasibility Study should then be carried out to ensure that the chosen solution is feasible and has an acceptable level of risk. The next step is to define the Terms of Reference, followed by the appointment of the project team. The final step is to carry out Phase Review before seeking approval to proceed. The first step of the Planning phase is the creation of a detailed Project Plan which the project manager will refer throughout the project to monitor and control time, cost and quality. The project manager will then create the following plans: y y y y y Resource Plan: to identify the staffing, equipment and materials needed Financial Plan: to quantify the financial expenditure required Quality Plan: to set quality targets and specify Quality Control methods Risk Plan: to identify risks and plan actions needed to minimise them Acceptance Plan: to specify criteria for accepting deliverables

Finally, a Phase Review is carried out to assess the deliverables produced to date and approve the start of the Project Execution phase. During the Project Execution phase the project team produces the deliverables while the project manager monitors and controls the project delivery by undertaking: y Time Management: tracking and recording time spent on tasks against the Project Plan y y Cost Management: identifying and recording costs against the project budget Quality Management: reviewing the quality of the deliverables and management processes y Change Management: reviewing and implementing requests for changes to the project y Risk Management: assessing the level of project risk and taking action to minimize it y y Issue Management: identifying and resolving project issues Acceptance Management: identifying the completion of deliverables and gaining the customers acceptance

Communications Management: keeping stakeholders informed of project progress, risks and issues

Once the customer has accepted the deliverables and a Phase Review has been carried out to determine whether the project objectives have been achieved, the project is ready for Closure. A Project Closure Report should list all of the actions required. When this has been approved, the listed actions are completed to release project resources, hand over deliverables, and inform all stakeholders that the project is now closed. Shortly after the project has been closed, anEvaluation (also known as a Post-Implementation Review) should be carried out to determine the project's overall success and find out whether the benefits stated in the original Business Case were actually realised. Any lessons learned should be documented for future projects.

The Project Life Cycle Initiation

The Initiation Phase involves defining the purpose and scope of the project, the justification for undertaking it and the solution to be implemented. It also involves recruiting the project team and carrying out a Phase Review, before proceeding to the next stage. y A Business Case is developed, describing the business problem to be addressed by the project, the alternative solutions and the potential costs and benefits associated with each. The Business Case is foundation for the project as it fully describes the project, the reasons for creating it and the key benefits to be produced. y A Feasibility Study is then completed to ascertain the likelihood of the alternative solutions actually delivering the stated benefits in the Business Case. This is used to identify the preferred solution, which must be approved before proceeding. y The Terms of Reference describe what the project intends to achieve and the boundaries within which it must achieve it. This includes the project vision, objectives, scope, deliverables, project organisation and an Implementation Plan. y Once the project is defined, it is time to appoint the Project Team. The Project Manager is recruited to take on responsibility for the project and recruit the remaining members of the team.

Finally, a Phase Review is carried out to ensure that all of the required activities have been completed and to provide formal approval to proceed to the next phase of the project.

Planning
The Planning phase involves the creation of a set of planning documents which will guide the team throughout the project. The key stages are as follows: y A comprehensive Project Plan is critical to the success of the project. It identifies the Work Breakdown Structure (WBS) of phases, activities and tasks to be undertaken to complete the project. It also identifies the sequencing, duration and dependencies of tasks and the resources and financial expenditure required to complete the project. y The Resource Plan should give a detailed assessment of the resources required to undertake the project. It should list the required labour, equipment and materials and quantify the amount of each resource. It should also give a resource usage schedule to give the Project Manager with a complete view of the total amount of resources needed at each stage. y The Financial Plan describes the financial resources required during each stage of the project. y The total cost of each item of labor, equipment and materials is calculated, as well as the total cost of undertaking each activity. y The Quality Plan lists the quality targets that need to be achieved to ensure that the project deliverables meet customer requirements. Quality Assurance and Quality Control activities are scheduled to make sure that the required level of quality is achieved throughout the project. y The Risk Plan identifies all foreseeable project risks and rates them in terms of their likelihood of occurrence and potential impact on the project. The risks are prioritised and actions identified to reduce the likelihood of each risk and minimize its impact on the project.

An Acceptance Plan is created to ensure that customer acceptance is sought for each deliverable produced by the project. The Acceptance Plan provides a schedule of Acceptance Reviews.

The Communications Plan describes the information to be provided to project stakeholders to keep them informed of the progress of the project. A schedule of communication events and activities is drawn up to make sure that the right information is communicated to the right people at the right time.

Finally, a Phase Review is carried out to ensure that all of the required Planning activities have been completed and to provide formal approval to proceed to the next phase.

Execution
During the Execution phase the deliverables are physically built and presented to the customer for acceptance. While each deliverable is being constructed, a group of management processes are carried out to monitor and control activities. Once all the deliverables have been produced and accepted by the customer, the project is ready for closure. The first and most important step is to build the deliverables specified in the Terms of Reference. During this activity, a detailed design of each deliverable is created and the deliverables are physically constructed, tested and reviewed to determine whether they meet the quality criteria and the acceptance criteria. When all the criteria have been met the deliverables are signed off on by the customer and handed over. At this stage, the project is ready for closure. During the construction of the deliverables the project manager performs several management processes to monitor and control the time, cost and quality of each deliverable as follows: y Time Management involves monitoring and controlling the time spent by staff on the project. Timesheets are used to track and record time spent, so that the project manager can ascertain the overall progress of the project. y Cost Management involves identifying project costs and recording the rate of consumption of the project budget.

Quality Management involves undertaking the Quality Assurance and Control activities specified in the Quality Plan, to manage a project's level of quality and ensure that the project deliverables meet customer requirements.

Risk Management involves monitoring and controlling project risks by taking the steps necessary to prevent risks and minimise the impact on the project should those risks occur.

Issue Management involves resolving any unforeseen issues that may arise before they affect the ability of the project to meet its stated objectives.

Acceptance Management involves carrying out Acceptance Reviews to gain the customer's approval of each deliverable. If the customer does not accept that the deliverables meet their requirements the success of the project will be compromised.

Communications Management involves completing the activities specified in the Communications Plan to ensure that every stakeholder receives the right information, at the right time.

Finally, a Phase Review is undertaken to ensure that all of the required activities in the Execution phase have been completed and the project is ready to proceed to the next phase.

Closure and Evaluation

The Project Closure phase involves releasing the final deliverables to the customer, handing over project documentation, terminating supplier contracts, releasing project resources and communicating project closure to all stakeholders. The final step is to undertake an Evaluation to determine the extent to which the project was successful and note any lessons learned for future projects. The Project Closure Report should list all the activities required to close the project, to ensure that project closure is undertaken smoothly and efficiently. Once the report has been created and approved, the closure activities specified within the report are undertaken and the project is then officially closed. One to three months after the project has been closed and the business has begun to experience the benefits provided by the project, it is important to undertake an Evaluation, often referred to as a Post Implementation Review (PIR). This allows the business to identify the level of success of the project and list any lessons learned for future projects.

Evaluation is often carried out by an independent person to provide an unbiased opinion of the project outcome. The first step is to review the project performance to determine whether the project delivered the benefits, met the objectives, operated within the scope, and produced the deliverables on time, within budget and using the allocated resources. The review also needs to determine whether the project conformed to the management processes specified in Terms of Reference. It should also identify the key project achievements, failures and any lessons learned for future reference. The evaluation should review how the project performed against each of the targets set during the Initiation and Planning phases of the project, ie has the project: y y y y y y y Delivered the business benefits described in the Business Case? Achieved the objectives specified in the Terms of Reference? Deviated from the original scope as defined in the Terms of Reference? Met the quality targets defined in the Quality Plan? Proceeded according to the planned Delivery Schedule? Deviated from the budgeted project expenditure as defined in the Financial Plan? Deviated from the forecast resource levels as defined in the Resource Plan?

The next stage is to identify the extent to which the project has conformed to the management processes (as set out in the Terms of Reference) during the Execution phase of the project. These are: Time Management, Cost Management, Quality Management, Change Management, Risk Management, Communications Management and Acceptance Management. Finally, the Evaluation should: y List the major achievements for this project and describe the positive effect that each achievement has had on the customer's business. y List any project failures and describe the effects they have had on the customer's business. y Describe the lessons learned from undertaking this project and list any recommendations for similar projects in the future. Successful project management models can often be used as templates for future projects.