Chapter 4 The Project 1

Learning Objectives Third phase starts after a contract is drawn up and ends when the project objective is accomplished; final phase involves terminating the project Elements involved in establishing a project plan steps in the project control process actions to take when a project is terminated 2 2

Real World Example Vignette: Major Problems at AT&T Wireless In 2003, AT&T assembled a team to upgrade its Customer Relationship Management (CRM) System The upgrade would position AT&T as the leading mobile phone service provider in the US The upgrade failed and the system crashed. AT&T lost customers and $100 million in revenue Factors contributing to failure: low team morale due to layoff rumors, relaxed testing requirements, and lack of contingency plan in case of failure Addressing rumors of layoffs directly, adhering to non-flexible deadlines and prioritizing projects, and having a back-up plan in case of failure would have prevented these major problems at AT&T 3 3

Real World Example Vignette: Hakalaoa Falls Emergency Bypass Tunnel Project Project took place in Hawaii’s Waipio Valley, on the windward coast of the island of Hawaii, home to historic twin falls: Hakalaoa Falls and Hiilawe Falls In 1989, a landslide destroyed a 30-foot section of the Lower Hamakua Ditch System. Farmers lost $11 million and their water supply, local ecosystem was damaged, and the beauty of twin falls no longer existed Project team worked on a limited budget with a short time frame to restore the area. The bypass (300’ x 7’) was hand-mined because of its dangerous location, and the team had to carry construction materials miles on foot each day (1300 tons, ½ ton/load, 2 miles, 2 mph) Team finished project with a good safety record, on budget, and on time. Project cost the government $17 million less than a proposed solution to build an entirely new tunnel system. Irrigation and beauty of twin falls was restored 4 5

Planning the Project Clearly define the project objective Divide and subdivide the project Define the specific activities to be performed Graphically portray the activities in a network diagram Determine which resources and how many are needed Make a time estimate Make a cost estimate for each activity Calculate a project schedule and budget This is the baseline plan 6 8

Planning the Project (Cont.) Keep in mind: Projects overrun their budgets, miss completion dates, or only partially satisfy their technical specifications because there is no viable baseline plan . The people involved in performing the project should participate in planning the work; they are most knowledgeable. Participating in the planning helps individuals become committed to accomplishing it. 7 11

Managing Risk Risk is defined as the possibility that an unwanted circumstance will occur that can result in some loss. Risk is part of project management. Must be addressed proactively Risk management consists of four components: Risk Identification Risk Assessment Risk Response Planning Contingency Plan Risk Monitoring 8

Managing Risk (Cont.) Risk Identification consists of: determining which risks may adversely affect the project objective the consequences of each risk The most common approach to identifying risks is brainstorming For each risk identified, the potential consequences should be listed Risk Assessment consists of: determining the likelihood that the risk event will occur the degree of impact the event will have on the project objective Based on the potential likelihood of occurrence and potential impact, the risks can be prioritized Use a risk assessment matrix to organize risks. See Figure 4.2 9

Weather forecast two days before event Laura Reserve indoor space now Figure 4.2 Risk Assessment Matrix Risk Consequence Chance of Occurrence (L, M, H) Impact Action Trigger Responsibility Response Plan Rain on day of event Low attendance Incur financial loss M H Weather forecast two days before event Laura Reserve indoor space now Get extra volunteers Road Cons-truct-ion Reduced revenue Hwy dept constr-uction schedule Allison Id alt routes Make signs Post 10

Managing Risk (Cont.) Risk Response Planning: Develop an action plan to reduce the impact or likelihood of each risk Establish a trigger point to implement action plans for each risk Assign responsibility to specific individuals A risk response plan can be to avoid the risk, mitigate the risk, or accept the risk Contingency Plan: set of actions that would be implemented if the risk event occurs Needed when the risk is “accepted” A contingency or management reserve should be included in the project prices and budgets to pay for the additional expenses of implementing contingency plans. Implemented at the trigger point 11

Weather forecast two days before event Laura Reserve indoor space now Figure 4.2 Risk Assessment Matrix Risk Consequence Chance of Occurrence (L, M, H) Impact Action Trigger Responsibility Response Plan Rain on day of event Low attendance Incur financial loss M H Weather forecast two days before event Laura Reserve indoor space now Get extra volunteers Road Cons-truct-ion Reduced revenue Hwy dept constr-uction schedule Allison Id alt routes Make signs Post 12

Managing Risk (Cont.) Risk Monitoring Involves regularly reviewing the risk management matrix throughout the project For each risk, look for: Changes to the likelihood of occurrence Potential impact New risks may also be identified, and need to be added to the risk assessment matrix The agenda for project status review meetings should include risk assessment Particular attention should be given to the trigger points to determine of any risk response plans need to be implemented 13

Performing the Project Once the baseline plan has been developed, project work can proceed. The project team, led by the project manager, will implement the plan and perform the activities or work elements. The pace of project activity will increase as more and various resources become involved. 14 12

Controlling the Project Monitor progress Measure actual progress and compare it to planned progress Track which activities have been started and/or completed, when, and how much money has been spent Take corrective action to get back on track Compare on a timely and regular basis and take corrective action 15 13

Controlling the Project (Cont.) A regular reporting period should collect: Data on actual performance Information on any changes in scope, schedule, and budget Keep in mind: Data should be collected in a timely manner and used to update the schedule and budget Compare updated schedule and budget to the baseline and analyze 16

Figure 4.3 Project Control Process 17

Controlling the Project (Cont.) Project management is proactive This third phase ends when the requirements have been met, project objective has been accomplished, and the customer is satisfied 18 17

Terminating the Project The purpose of properly terminating a project is to learn from the experience in order to improve performance on future projects. Termination activities should be identified in the baseline plan Verify that all agreed-on deliverables were provided Organize and file project-related documentation 19 18

Terminating the Project (Cont.) Assure that all payments have been collected from the customer Assure that all payments for materials and subcontractors have been paid Prepare a written performance evaluation of each member of the project team Hold post-project evaluation meetings Celebrate 20 20

Internal Post-Project Evaluation Have individual meetings with team members and a group meeting with the project team Hold soon after the completion Announce meeting in advance so people can be prepared Individual meetings allow team members to give their personal impressions 21 22

Internal Post-Project Evaluation (Cont.) Develop an agenda for a group meeting Group meeting should discuss performance and recommendations for improvement Issue a brief written report to management with a summary and recommendations 22 23

Internal Post-Project Evaluation (Cont.) Some topics that might be discussed: technical performance cost performance schedule performance project planning and control customer relationships team relationships communications problem identification and resolution recommendations 23 24

Customer Feedback Meet to discuss whether the project provided the customer with the anticipated benefits, assess the level of customer satisfaction, and obtain any feedback Participants include the project manager, key project team members, and key representatives of the customer Ask open-ended questions Customers can express their level of satisfaction and provide detailed comments 24 26

Customer Feedback (Cont.) If the customer is satisfied with the project: Ask about other projects you could do—perhaps without going through a competitive RFP process Ask permission to use the customer as a reference Get feedback regarding satisfaction through a post-project customer evaluation survey 25 28

Figure 4.6 Post-Project Customer Evaluation Survey 26

Early Project Termination May terminate a project before completion: If research shows costs will be much more than originally anticipated If there is a change in a company’s financial situation Because of dissatisfaction of the customer Avoid early termination due to customer dissatisfaction by monitoring customer satisfaction continually and taking corrective action 27 30