Project Management II The Project Value Creation Process Opportunity framing – (identify objectives) Focus on project parameters across all phases (integration) From objectives to scope (the scoping process) Identifying work packages (from the project scope to the WBS) & Division of responsibility Inventory of activities

Project Management II Project Value Creation (Conception Phase) Opportunity Framing -identifying Objectives (1) Objectives are those things the organisation wants to achieve (part of business/part of a mandate)

Project Management II Project Value Creation (Conception Phase) Opportunity Framing -identifying Objectives (2) depending on the client/organisation for experienced clients/organisations (easy to identify objectives internally or with help of consultants) for novice clients/organisations (experts/consultants need to tease out the brief)

Project Management II Project Value Creation (Conception Phase) Opportunity Framing -identifying Objectives (3) Technique for identifying objectives: Value Engineering/Value Management Approach An appropriate brief The Chairperson The process (brainstorming approach) Duration (Continuous) The team (80/20)

Project Management II Project Value Creation (Conception Phase) Opportunity Framing -identifying Objectives (4) The success of a project will be defined by how well you meet project objectives. When defining a project objective, think SMART. Hence a project objective should be: Specific Measurable Action-oriented Realistic Time-limited (See example)

Project Management II Project Value Creation (Conception Phase) Feasibility (1) Once objectives have been identified & ranked, strategies at organisational level analyzed, the next stage is to identify those potential strategies which should be surveyed to see how feasible (how profitable/how they address the problem). This stage is referred to as a feasibility study. Feasibility studies may be undertaken for one or more potential strategies & the results of these studies may be used to decide which proposal to pursue.

Project Management II Project Value Creation (Conception Phase) Feasibility (2) Undertaking a full assessment of whether a proposal is feasible or not is a substantial project in its own right. Assessing the feasibility of a proposed scenario requires an understanding of the social, technological, ecological, economic and political (STEEP) factors involved. Financial & technical aspects are considered to be ‘hard’ factors

Project Management II Project Value Creation (Conception Phase) Feasibility (3) Financial feasibility: Will the investment of resources in a particular project be worthwhile? How worth while will it be? Where there are several alternative opportunities for investing resources, which one gives the best rewards? Consider capital costs (initial costs); revenue costs (running costs - depreciation, etc.); financing costs (interest charges?) Investment appraisal - consider the 1:5:20?? Effect of time on values? - use DCF methods (NPV, IRR, etc.)

Project Management II Project Value Creation (Conception Phase) Once a decision to go ahead has been made, a project enters a planning phase/development phase

Project Management II Project Value Creation (Development Phase) The major tasks to be carried out include: appoint key team members develop the scope - Scoping establish a work breakdown structure (WBS) establish an inventory of activities

Scoping (1) Concerned with identifying what is, or is not, included in the project, thus ensuring that the project includes all the work required, and only the work required, to complete the project successfully

Scoping (2) The project scope defines the sum total of deliverables and features (the total functionality to be delivered to the project customer/client at the completion of the proposed project) the need to provide a reasonable idea of the ‘size’ of the proposed project

Scoping – what constitute scope?(3) A scope statement should include: Reasons for undertaking the project at this time What is to be achieved (requirements & main deliverables) The limits on T, C, Q, and U The assumptions that have been made in preparing the plan The quality criteria by which the success of the project will be judged Key stakeholders Sponsor Project manager (including brief on experience) What is excluded from the project that some parties involved might otherwise have expected to be included.

Work Breakdown Structure (WBS) (1) Purpose of WBS: to sub-divide the scope of work into manageable work packages which can be estimated, planned and assigned to a responsible person or department for completion. “…a cascade of deliverables, in which the overall product or objective of the project is broken into sub-products, assemblages and components.” (Turner, 1993)

Work Breakdown Structure (WBS) (2) Two methods of presenting WBS: graphically in boxes (preferred) text indents How many WBS levels? number of levels is influenced by levels of: detail, risk, control, estimate accuracy, work package value, work package man-hours

Prepare a Project Schedule (1) (Project Time Table) From a WBS – work packages or PBS (product based structure) – components  WBS or PBS (Identify tasks)  Identify activities from tasks – inventory of activities  Establish the sequence of activities Tools for preparing a Project Time Table (Planning Models)

Prepare a Project Schedule (2) (Planning Models) Bar Charts/Gantt Charts Network Models Critical Path Method (CPM) Programme Evaluation & Review Technique (PERT)

Prepare a Project Schedule (3) (Planning Models) Bar Charts/Gantt Charts Good for static environments The basis of the graphical interface for most PC software Inability to show the interdependencies between events and activities Do not provide enough information for planning, integration of plans, time studies, scheduling, and resource management (optimizing resource allocation) Difficult to update manually – charts can quickly become obsolete and therefore discredited

Prepare a Project Schedule (4) (Planning Models) Critical Path Method (CPM) - Deterministic Detailed information Interdependencies of activities Project completion time Impact of late starts Impact of early starts Trade-off between resources and time “What if” exercises Cost of crash programme

Prepare a Project Schedule (5) (Planning Models) Programme Evaluation & Review Technique (PERT) – Probabilistic 3 Time estimates are required for each activity in the PERT: optimistic time - how long the activity would take if the conditions were ideal; most probable/or most likely time - time if conditions were ‘normal’; pessimistic time - how long the activity would take if a significant proportion of the things that could go wrong did go wrong