1. Chapter 4 The Project

2. 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 Identifying & assessing risks Steps in the project control process Actions to take when a project is terminated

3. 3 Real World Example Vignette: IBM Pitches a New Global Risk Management Strategy IBM unveils new IT governance and risk management strategy which helps global customers better plan, integrate, and reduce unexpected expenses for security and compliance projects. IBM intends to change the way companies view IT problems in more general terms, as opposed to specific and isolated issues. Most significant difference between IBM’s governance and risk management strategy and those of others: IBM is aiming its efforts at a broader view of business operations and technologies. Identifying risks, assessing their impact, properly planning a response, and monitoring those risks throughout the project is important for projects to be successful in the project planning phase.

4. Vignette: UC Berkeley’s Success Story UC Berkeley decides to pack up and move data center from Evans Hall after 40 years. Move to impact over 40,000 members of the community. Hybrid-type approach was chosen, and space was identified where a building was planned for development. Detailed evaluation plan developed explaining the current and projected needs of the data center. Representatives from key constituency groups met to determine plan and detailed scheduling. Team was able to identify 50 sub-projects to be completed in less than 10 months. Months of advanced planning and design had paid off, and the project was successfully completed ahead of the scheduled time frame and within budget. 4 Real World Example

6. 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 Make a time estimate Make a cost estimate for each activity Calculate a project schedule and budget This is the baseline plan

7. 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.

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

15. 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 Controlling the Project

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 Process 17

18. 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

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

20. 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

21. 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

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

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

24. 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 Customer Feedback

25. 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

26. Figure 4.6 Post-Project Customer Evaluation Survey 26

27. 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