1. Chapter 4 The Project 1

2. 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

3. 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

4. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. Figure 4.3 Project Control Process17

18. 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

19. 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

20. 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

21. 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

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

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

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

25. 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

26. Figure 4.6 Post-Project Customer Evaluation Survey26

27. 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