CS5363

Lecture 7:
Project Planning: Schedule and Budget

Reference:
Jack T. Marchewka, Information Technology Project, Wiley
2015
Chapter 6 – Project Planning: Schedule and Budget

Introduction
• How does the project schedule and budget build upon WBS?
– By identifying the sequence of activities and
interdependencies
– Project Planning Framework (Fig. 6.1)

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 Introduction
• Project Planning Framework (Fig. 6.1)
– A guide for developing and assessing project plan
– MOV set for a project
– Scope defined with deliverables to support a project’s MOV
– Phases determined to reduce risks
– Activity/task defined for each deliverable
– Sequence
• Linear or parallel
– Resources required by tasks
• Cost associated with resources
– Time estimates for each task

Developing the Project Schedule

• Project networks
– Support the development of the project schedule
• By identifying dependencies and sequencing of activities
defined in WBS
– Monitor and control the project activities
• Once the project work begins

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 Developing the Project Schedule
• Several project management tools and techniques
– To create a project network plan
– Tools
• Gantt Charts
• Project Network Diagram
– Activity on the node (AON)
– Critical path analysis
– PERT
– Precedence diagramming method (PDM)
• Critical Chain Project Management (CCPM)
– Tools/techniques integrated into most project management
software

Gantt Charts
• Developed by Henry L. Gantt during World War I
– A visual representation
• Compare a project plan with actual progress
– One of the most useful project management tools
– Gantt Chart for Planning (Fig. 6.2)
– Gantt Chart for Reporting Project’s Progress (Fig. 6.3)

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 Gantt Charts
• Gantt Chart for Planning (Fig. 6.2)
– Estimates for tasks represented using a bar across a
horizontal time axis
– Diamonds represented milestones

Gantt Charts
• Gantt Chart for Reporting Project’s Progress (Fig. 6.3)
– Track and monitor the progress of the project
– Completed tasks shaded or filled in
• Can see the status of project
– Useful for communicating project status
• No show relationships among tasks

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 Project Network Diagram
• Project network diagram
– Represent a visual presentation of a workflow of tasks
– Provide logical sequences and dependencies among tasks
– Provide when to start and finish specific tasks
– Provide what tasks may be delayed without affecting the
deadline
– Make decisions about scheduling and resource assignments
• To shorten the time for critical tasks
– Diagrams
• Activity on the Node (AON)
• Critical Path Analysis
• Program Evaluation and Review Technique (PERT or PERT/CPM)
• Precedence Diagramming Method (PDM)

Activity on the Node (AON)

• Activity on the Node (AON) (Table 6.1)
– Represent activities/tasks, and logical sequence/dependencies
of tasks
– Estimate the duration of tasks
– Determine predecessors, successors, or parallel tasks
– AON network diagram (Fig. 6.4)
• An activity/task as a box (node) and an arrow as
precedence/flow

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 Activity on the Node (AON)
• Developing a simple corporate intranet
- Activities, time estimate, relationships

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Activity on the Node (AON)

• An AON flows from left to right

• All predecessor activities must be completed to begin an activity

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 Critical Path Analysis
• Critical Path Analysis
– Determine how long a project will take to complete
• Critical path (Table 6.2)
– The longest path in a project network
• The shortest time to complete a project
– Has zero slack (or float)
• Any change in the duration of tasks on the critical path
affects the project schedule
• A project manager can expedite

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Critical Path Analysis

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 Critical Path Analysis
• Can expedite (or crash) the project
– By adding resources to tasks on the critical path to shorten
the duration
• E.g., the resources for E diverted to tasks on CP
• E.g., the use of additional resources can inflate the budget
– By looking for parallel task opportunities (known as fast-
tracking the project)
– Can the critical path change?
– Possible for a project to have more than one critical path

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Program Evaluation and Review Technique (PERT)

• A visual representation of scheduled activities
• Developed in the late 1950s
– The critical path method (CPM) developed at the same time
– Two methods combined and called PERT/CPM
• Use a statistical probability distribution for estimating a project
schedule
– Derived by three estimates for each activity
• Optimistic – minimum time for the best-case scenario
• Most likely – normally expected time
• Pessimistic – maximum time for the worst-case scenario
• Activity estimate = (optimistic time + (4 x Most likely time) +
pessimistic time) / 6

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 Program Evaluation and Review Technique
(PERT)
• E.g.,
– Estimates (Table 6.3)
– PERT Activity Paths (Fig. 6.4)
– Critical paths
• Deadline increases from 19 days using AON to 21 days
using PERT
• AON – most likely estimates
• PERT – pessimistic, most likely, optimistic estimates

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Precedence Diagramming Method (PDM)

• Similar to AON, and based on four fundamental relationships

– Finish-to-start (FS)
• Task B cannot begin until Task A is completed (Fig. 6.5)
• E.g., a program tested after written
• Similar to the successor and predecessor relationships in
AON

Figure 6.5 Precedence Diagramming Relationships

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 Precedence Diagramming Method (PDM)
– Start-to-start (SS)
• Occurs when two tasks can or must start at the same time
• But they do not have to finish together (no same duration)
• Task A and Task B starts at the same time (Fig. 6.5)
• Parallel activity shortening a project schedule

Figure 6.5 Precedence Diagramming Relationships

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Precedence Diagramming Method (PDM)

– Finish-to-finish (FF)
• Two tasks can start at different times, have different
duration, but be completed at the same time
• Task A and Task B finish at the same time (Fig. 6.5)
• Once FF tasks are completed, the next tasks can be started

Figure 6.5 Precedence Diagramming Relationships

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 Precedence Diagramming Method (PDM)
– Start-to-finish (SF)
• Probably the least common, exactly opposite of FS
• Task A cannot end until Task B starts (Fig. 6.5)

Figure 6.5 Precedence Diagramming Relationships

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Critical Chain Project Management (CCPM)

• Introduced in Critical Chain book by Eliyahu Goldratt
• Based on the idea that people often inflate or add cushioning to
the time estimate
– To give themselves safety from uncertainty
• Basic reasons
– If your work dependent upon the work of someone else
• Your work delayed if the person cannot finish it
– Pessimism arising from a previous experience
• Where things did not go as planned
– Project sponsor not happy with the proposed schedule
• Decides to cut the schedule globally, say, 20%
• Inflate the schedule by 25% to guard against the cut

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 Critical Chain Project Management (CCPM)
• Why do projects still finish late?
– Even though people build safety into each task
• Reasons
– 1. Student’s syndrome
• Students just begin working on an assignment right before
the due
– 2. Parkinson’s law
• Work expands to fill the time available
• No incentive for finishing a task early
• Afraid that management will cut their estimates next time
– 3. Multitasking of resources (resource contention)
• A member assigned to more than one project
• No longer able to devote time to tasks on the critical path

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Critical Chain Project Management (CCPM)

• CCPM follows a different assumption
– Put that safety in the form of buffers where needed
• Instead of adding safety to each task
– Buffer
• Feeder buffers, resource buffers, and a buffer at the end of
a project
– Fig. 6.6
• Provide an estimate with a 50 percent chance of being
completed
• A buffer of 10 days at the end
• A feeder buffer for Task D
– Task D is input to Task C and can be a bottleneck

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Critical Chain Project Management (CCPM)

• Critical chain is different from the critical path
– Consider resource contention
– Fig. 6.6
• A resource buffer for Task C
– Because of its potential bottleneck by working on
different projects
• 30 days expected in CCPM
– 40 days for Project schedule with safety in each task

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 Project Management Software Tools
• Microsoft Project
– Gantt chart
– Project network diagram
– PDM techniques
• Open-source tools
– Open Project Community edition:
• https://www.openproject.org/community-edition/

• draw.io

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Developing Project Budget

• Project budget
– Based on project tasks, duration of tasks, their sequence, and
resources required
• Cost estimation
– Define what resources will be needed to perform the work
– Determining the quantity of resources
– Defining the cost of using each resource
– Calculating the cost of the task

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 Developing Project Budget
• Direct cost
– Salary of employee
• Other cost
– Indirect cost
• Rent, utilities, insurance, and other administrative costs
– Sunk cost
• Costs incurred prior to the current project
• E.g., a previous attempt to build an application system
– Costs associated with a learning curve
• Time or effort to waist to understand a problem or use a new
technology
– Reserves
• A cushion when unexpected situation arise
• E.g., Contingency reserves for risk

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