Examining the project

What is this chapter about? Gathering and analysing information for decision making in (and about) running projects: What has happened What is happening What should have happened What should be happening Process of gathering information: monitoring & controlling

Processes can be… Time related Cost related Or related to both

Time related processes Concerned with the activities in the project plan: Determination of logical interactions Estimation of durations Schedules and key event schedules (with identification of critical activities) Focus of control is on the future. If not, it will degenerates into a recording system Consistent unit of time throughout the plan (with the exemption of different levels of detail).

Cost related processes Goal: to complete the project within the financial budget, including forecasting and managing costs. Estimation of activity costs for the budget-plan are based on: Labor-hours (man-hours) Labor-rates (wage etc.) Material costs Service costs Set-up charges Rental charges Overheads Cost control is based on the budget Cost control is the principal means of control (esp. for the customer)

Resource related processes Aim: to plan the use and control of resources. Resources: anything (any input) that is required. Availability of resources means constraints for the project. Resource planning: Summation (aggregation) for each period Scheduling activities with resource needs Coming only after the scheduling of activities by logical interactions Resource control: monitor the usage of resources and report any deviations to the plan Lack of information on future resource needs can severely hamper a project. If a firm’s usual business is not planned with sufficient detail, it can lead to shortages if the project needs them.

Planning project duration Network techniques: a formal and explicit statement of policy, and also a communication tool Statement of Work (SoW) Work Breakdown Structure (WBS) Logical sequencing of the project More than one logic can be appropriate (depending on the project-context): Physical Functional Cost-centre etc. Assign the durations to the tasks and task groups Use iterative refining of the duration estimations Examination of the plan: ‘there is always a better way’ Project network techniques identifies the critical activities to focus the examinations on. Duration reduction always costs resources.

Reducing total project time (TPT) Systematic approach: Critical activities subjected to the questioning technique (if there is a quicker way) Can we modify the network logic to overlap or parallel activities? Is it acceptably possible to increase the risk taken? Can any resources moved or can the costs of increased resources be tolerated?

The questioning method Its backround is work-study Systematic questioning: the same questions on the same (rigid) way Two kinds of activities: ‘do’ activities: tasks advancing the project in themselves ‘ancillary’ activities: supporting ‘do’ activities

Questions to be asked when reducing the project time ? Purpose Place Sequence Person Means Overlapping Risk Trade-off Cost

Reduction by overlapping activities Activities following each other, depending on the interrelationships can be overlapped or paralleled. actvity name 1st day 2nd day 3rd day 4th day 5th day actvity ‘A’ actvity ‘A’ Original sequence actvity ‘B’ actvity ‘B’ actvity ‘A’ actvity ‘A’ Overlapping activities actvity ‘B’ actvity ‘B’ actvity ‘A’ actvity ‘A’ Parallel activities actvity ‘B’ actvity ‘B’

Reduction by increased risk Reducing (sub-)activities like: Testing Checking Proving Risk of failure will increase

Reduction of time by the transference of resources Trading-off resources: moving resources from non-critical activities to critical ones (to speed them up).

Reduction of time by increased cost („cost slope concept” or „crashing”) Increasing activity cost to reduce its duration. Cost-slope: cost of reducing duration time by unit time. We need network diagrams to do crashing.

Dangers of the 'cost-slope concept' It is difficult to find reliable figures for the changes in cost resulting from changes in duration times. Cost/time relations are frequently neither constant nor simple Not all resources are freely convertible to cost (problem of availability)

Reducing cost by increasing time Non-critical activities can be increased in time without extending the duration of the whole project (they have float time). In this case cost savings are the only effect.

Relationship between time and labour employed There is a minimum time below it is impossible to reduce duration.

The final network The network after reduction will be different than the one before: Logic and connections changed between activities Duration times altered New critical path or paths A test is needed to uncover illogicalities and to match the new activity schedule to the resource availabilities

Reading Textbook chapter 8

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