Mba

1. Real-World Project
Management
Chapter 13

2. Characteristics of Project Management
• Unique one-time focus
– Difficulties arise from originality
• Subject to uncertainties
– Unexplained or unplanned events often arise,
affecting resources, objectives and timelines
• Multiple stakeholders
– Different interests in both the processes and
outcomes of the project
• No clear authority
– Project chain of command may conflict with the
formal structures of the participating
organizational units
Chapter 13 - Real World Project Management 1

3. Measuring Project Success
• Stakeholders determine the degree of
success for each project undertaken
– For example, success may be measured by
savings in operating costs or revenue generated
– Complications arise when different groups of
stakeholders have different interests, values and
objectives
– Stakeholders must be identified, prioritized and
their measures of success well understood
• Process must be developed to achieve the desired
results
Chapter 13 - Real World Project Management 2

4. Qualitative Methods for Achieving
Success
• The path to success lies in conservative
planning
– Establishes the opportunity to exceed
expectations
– Stakeholder expectations must be managed
• Expectations must be controlled and managed over
time
• Project managers must possess both
technical and soft skills
• Work objectives must be clearly defined in
order to decrease the possibility of scope
creep
Chapter 13 - Real World Project Management 3

5. Qualitative Tools and Techniques for
Project Management
• Network diagramming is one of the most
versatile techniques for planning
– Graphic illustration of the activities in a project
and their relationship
• Provides a timeline, critical path, activities on the
critical path
Chapter 13 - Real World Project Management 4
System Development
Project
Design Development Testing and
Implementation
Data
Analysis
Analysis
Process
Analysis
Reports
Design
Database
Design
Code
Reports
Code
Data
Entry
Code
Database
System and
Network
Testing
Installation
and
Training

6. Choosing a Project Network
Diagramming Technique
• To commonly accepted approaches are
Activity on Node (AON) and Activity on
Arrow (AOA)
Chapter 13 - Real World Project Management 5
Using activity on node
(AON), nodes represent
activities and arrows show
precedence.
Using activity on arrow
(AOA), arrows are activities
and nodes are “events.”
Precedence is captured in
event relationships.
B
A
C
3
1 2
4
A
C
B

7. B and C cannot begin
until A has been
completed; D cannot
begin until both B and
C have been
completed.
C cannot begin until
both A and B have
been completed; D
cannot begin until C
has been completed.
C and D cannot begin
until both A and B have
been completed.
B and C cannot begin
until A has been
completed.
A and B must be
completed before C
can be started.
A precedes B, which
precedes C.
Activity
Relationships
AON
AOA
A B C
1 2 3 4
A B C
1
2
3
4
A
B
C
3
4
1 2 A
B
C
1
2
3
A
B
C
A
B
C
4
5
A
B
C
D
A C
D
B
1 3 5
2 4 6
Dumm
y
A C
B D
A
B
C
D
1 2 4 5
3
A B
C
D
Dummy
A B D
C
(a)
(b)
(c)
(d)
(e)
(f)

8. Diagramming the Systems Development
Project
Chapter 13 - Real World Project Management 7
I
Finish
Start
A
H
C
D
B
E
F
G

9. Developing a Project Schedule
Chapter 13 - Real World Project Management 8
• A project network can be used to
develop a project schedule or plan
• The duration of a project is equal to the
longest path on the project network
– This is the critical path
– A project may contain more than one critical
path
• Activity slack is the amount of time a
project can be delayed before it
becomes critical

10. Computing Earliest Start and Earliest
Finish Times
Chapter 13 - Real World Project Management 9
I
1
16 17
Finish
Start
A
4
0 4
H
3
13 16
C
5
4 9
D
5
3 8
B
3
0 3
E
4
9 13
F
3
8 11
G
4
8 12
Early Start
Early Finish
Activity Duration

11. Computing Late Start and Late Finish
Times
Chapter 13 - Real World Project Management 10
I
1
16
16
17
17
Finish
Start
A
4
0
0
4
4
H
3
13
13
16
16
C
5
4
4
9
9
D
5
3
4
8
9
B
3
0
1
3
4
E
4
9
9
13
13
F
3
8
10
11
13
G
4
8
9
12
13
Late Start Late Finish

12. Probabilistic Project Management
Chapter 13 - Real World Project Management 11
• Treat activities as if they are common
variables and assign probabilities to
activity times to reflect the inherent
uncertainties
– Calculate an optimistic time (a),a most likely
time (m) and a pessimistic time (b)
– Probabilities for activity times are taken from
the beta distribution
– The formula for te is a weighted average of
the three time estimates in which the most
likely time (m) is weighted four times that of
either the optimistic or pessimistic times

13. Analyzing Probabilities
Chapter 13 - Real World Project Management 12
• Assume that the duration of all activities are
independent from each other
• Activity times are random variables
• Let T = due date for the project, TE =
expected completion time for path
• T, TE and 2 can be used to calculate a z-
score
– The value of z is the number of standard
deviations that the project due date is from the
expected completion time

14. Making Time, Cost and Performance
Trade-Offs
Chapter 13 - Real World Project Management 13
• Project completion dates are generated in
isolation of management expectations and
may demonstrate no relationship to their
desires
• To meet stakeholder expectations, you may:
– Add resources
– Reduce performance specifications
– Change management expectations
– Combine the previous alternatives

15. Making Time-Cost Trade-Offs
Chapter 13 - Real World Project Management 14
• Adding resources may add complexity and
increase project length
• Accurate estimates regarding the times and
costs involved are necessary
– Normal time (NT) = Expected activity duration
without crashing
– Normal cost (NC) = Expected activity costs
without crashing
– Crash time (CT) = Expected activity duration
with crashing
– Crash cost (CC) = Expected activity cost with
crashing

16. Making Time-Cost Trade-Offs
Chapter 13 - Real World Project Management 15
• Costs are linear, it costs proportionally the
same to reduce an activity by one day as it
does two days
• Per period crashing cost is referred to as
“bang for the buck”
– Only crash activities that are on the critical path
– Crashing an activity on the critical path may not
reduce the project duration
– The process of crashing may cause the set of
critical paths to change
• The crashing technique for managing
projects reduces the duration by making a
trade-off between time and money

17. Reducing Performance Specifications
and Other Alternatives
Chapter 13 - Real World Project Management 16
• Project duration can be reduced by
eliminating certain project deliverables
– Allows managers to reallocate resources
originally intended for other activities into new
activities that could reduce the project duration
without increasing costs
• Elimination of activities depends on
criticality of deliverable
• The project due date may be negotiable
• Individual alternatives are not mutually
exclusive