1-1 Information Technology Project Management by Jack T. Marchewka Power Point Slides by Richard Erickson, Northern Illinois University Copyright 2003 John Wiley & Sons, Inc. all rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express permission of the copyright owner is unlawful. Request for further information information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein.

1-2 Chapter 7 -The Project Schedule and Budget

1-3 Chapter 7 Objectives Describe the Project Management Body of Knowledge (PMBOK) area called project cost management.Describe the Project Management Body of Knowledge (PMBOK) area called project cost management. Develop a Gantt chart.Develop a Gantt chart. Develop a project network diagram using the activity on the node (AON) technique.Develop a project network diagram using the activity on the node (AON) technique. Identify a project’s critical path and explain why it must be controlled and managed.Identify a project’s critical path and explain why it must be controlled and managed. Develop a PERT diagram.Develop a PERT diagram.

1-4 Chapter 7 Objectives Describe the concept of precedence diagramming and identify finish-to-start, start- to-start, finish-to-finish, and start-to-finish activity relationshipsDescribe the concept of precedence diagramming and identify finish-to-start, start- to-start, finish-to-finish, and start-to-finish activity relationships Describe the Project Management Body of Knowledge area called project cost managementDescribe the Project Management Body of Knowledge area called project cost management Describe the various costs for determining the project’s budget.Describe the various costs for determining the project’s budget. Define what is meant by the baseline project plan.Define what is meant by the baseline project plan.

1-5 The Project Planning Framework

1-6 Project Time Management as defined in PMBOK Activity definitionActivity definition Activity sequencingActivity sequencing Activity duration estimationActivity duration estimation Schedule developmentSchedule development Schedule controlSchedule control

1-7 PMBOK Project Cost Management Resource planningResource planning Cost estimatingCost estimating Cost budgetingCost budgeting Cost controlCost control

1-8 Developing the Project Schedule Project Management ToolsProject Management Tools –Gantt Charts –Project Network Diagrams Activity on the Node (AON)Activity on the Node (AON) Critical Path AnalysisCritical Path Analysis PertPert Precedence Diagramming Method (PDM)Precedence Diagramming Method (PDM)

1-9 Gantt Chart for Planning

1-10 Gantt Chart Reporting Project’s Progress

1-11 Activity Analysis for AON ActivityDescription Estimated Duration (Days) Predecessor A Evaluate current technology platform 2None B Define user requirements 5A C Design Web page layouts 4B D Set-up Server 3B E Estimate Web traffic 1B F Test Web pages and links 4C,D G Move web pages to production environment 3D,E H Write announcement of intranet for corp. newsletter 2F,G I Train users 5G J Write report to management 1H,I

1-12 Activity on the Node (AON) Network Diagram

1-13 Possible Activity Paths Possible Paths PathTotal Path 1 A+B+C+F+H+J Path 2 A+B+D+F+H+J Path 3 A+B+D+G+H+J Path 4 A+B+D+G+I+J19* Path 5 A+B+E+G+I+J

1-14 Critical Path Longest pathLongest path Shortest time project can be completedShortest time project can be completed –Zero slack (or float) The amount of time an activity can be delayed before it delays the projectThe amount of time an activity can be delayed before it delays the project Must be monitored and managed!Must be monitored and managed! –Project manager can expedite or crash by adding resources –Fast tracking – running activities in parallel which were originally planned as sequential –The CP can change –Can have multiple CPs

1-15 PERT – Program Evaluation and Review Technique Developed in 1950s about same time as CPM and often combined – PERT/CPMDeveloped in 1950s about same time as CPM and often combined – PERT/CPM Uses project network diagramming to create visual representation of activities showing both logical sequence and interrelationshipsUses project network diagramming to create visual representation of activities showing both logical sequence and interrelationships Scenario analysisScenario analysis –Best-case –Most likely –Worst-case

1-16 PERT Estimates Activity Estimate = ((Optimistic Time + (4 x Most Likely Time) + Pessimistic Time)) 6 n Total Expected Time of Project =  Activity Estimates i=1

1-17 Activity Analysis for PERT ActivityPredecessor Optimistic Estimates (Days) Most Likely Estimates (Days) Pessimistic Estimates (Days) Expected Duration (a+4b+c) 6 ANone BA CB DB EB FC,D GD,E HF,G IG JH,I

1-18 Possible PERT Activity Paths Possible Paths PathTotal Path 1 A+B+C+F+H+J Path 2 A+B+D+F+H+J Path 3 A+B+D+G+H+J Path 4 A+B+D+G+I+J20.5* Path 5 A+B+E+G+I+J Possible PERT Activity Paths

1-19 Precedence Diagramming Method - PDM Based on 4 fundamental relationshipsBased on 4 fundamental relationships –Finish-To-Start (FS) –Start-To-Start (SS) –Finish-To-Finish (FF) –Start-To-Finish (SF) Lead and Lag timesLead and Lag times

1-20 PDM Relationships

1-21 Project Management Software

1-22 Microsoft Project 2000 Gantt Chart View

1-23 Developing the Project Budget Cost Estimation StepsCost Estimation Steps 1.Defining what resources will be needed to perform the work 2.Determining the quantity of resources that are needed 3.Defining the cost of using each resource 4.Calculating the cost of the task or activity 5.Ensuring that the resources are leveled, that is, resources have not been over allocated.

1-24 Types of Costs DirectDirect IndirectIndirect SunkSunk Learning CurveLearning Curve ReservesReserves

1-25 Finalizing the Project Schedule and Budget Project schedule and budget may require several iterations before it is acceptable to the sponsor, the project manager, and the project teamProject schedule and budget may require several iterations before it is acceptable to the sponsor, the project manager, and the project team Once the project schedule and project plan are accepted, the project plan becomes the baseline plan.Once the project schedule and project plan are accepted, the project plan becomes the baseline plan. Once accepted, the project manager and project team have the authority to execute or carry out the plan.Once accepted, the project manager and project team have the authority to execute or carry out the plan.