57086 01 introduction

57086 Contract and Project Management

The University of Hull

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57086 Contract and Project Management

Introduction

Jim Gilbert, David Sowden

The University of Hull

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Overview

• Aims of the Module• Why use a project management method?• What is a Project?• The Terminology• The Processes• The Components• The Techniques• Process and Component links

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Aims of the Module

The aim of this module is to present various current practices, topics and methodologies relevant to contract and project management that underpin engineering projects, products and services. This module focuses upon developing your own personal ‘practitioner’ skills.

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Aims of the Module

At the end of the module, with guidance, You will be expected to have the ability to:

Demonstrate some breadth and understanding of a range of tools, techniques and methodologies relevant to planning, managing and controlling an engineering project involving a wide range of resources within the workplace environment. (Learning Outcome 1 (LO1))

Construct and convey to a range of stakeholders, a fully detailed contract / project proposal (including appropriate cost estimates) drawing upon data / information / literature from a largely prescribed range of sources utilising appropriate IT skills and applications. (Learning Outcome 2 (LO2))

Coherently evaluate and reflect upon their own proposals identifying risks, and seeking appropriate guidance with respect to relevant legal and ethical issues associated with engineering projects. (Learning Outcome 3 (LO3))

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Method of Assessments for this module

• Problem solving exercises (40%)• Project proposal (40%)• Reflective review (20%)

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What is Project Management?

• It is the application of knowledge, skills and techniques to execute projects effectively and efficiently.

• It’s a strategic competency for organisations, enabling them to tie project results to business goals — and thus, better compete in their markets.

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History (1)

• Henri Fayol (1841 - 1925)– Creator of the basic project-management functions

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‘To manage is to forecast and plan, to organise, co-ordinate and to control’

• forecasting• planning• organising• commanding• coordinating• controlling

DevelopmentPhases

History (2)

• Henry Gantt (1861 - 1919)– Invent of the project management tool - the Gantt chart.

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Strength• easy to read• understandable

Weakness• tendency to depict dates as

set in ‘stone’• movement of milestones

difficult

http://www.ganttchart.in/GanttChartHistory.html



Why do project fail?

• Remember that Gantt charts and basic project management principle were developed in the 19th Century

• The traditional way of project management is called ‘waterfall’, little flexibility at times

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Requirements

Specification

Design

ImplementationNo way back!

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‘be flexible’

Why use a project management method?

• Project failure are all too commonYear Company Cost Outcome

2010 Lumber Liquidators £9 million Insufficient training of personnel on new SAP implementation resulted in lost sales.

2010 Virgin Airlines (Australia) £13 million Cloud hosting failure disrupted travel for 50,000 customers.

2010 EDS £296 million Fine paid to settle lawsuit over a failed CRM project for British Sky Broadcasting.

2007 Deloitte £26 million Poor requirements gathering and testing of LAUSD payroll system caused overruns.

2005 Hudson Bay Co. [Canada] £21.5 million Problems with inventory system led to loss.

2005 UK Inland Revenue £2.15 billion Software errors contributed to tax-credit overpayment.

2004 Avis Europe PLC [UK] £35 million Enterprise resource planning (ERP) system cancelled.

2004 J Sainsbury PLC [UK] £340 million Supply-chain management system abandoned after deployment.

1994 Eurotunnel £7.34 billion The project of Channel Tunnel came in over its predicted budget.

1993 London Stock Exchange [UK] £386 million Taurus stock settlement system cancelled after 10 years of development.

1993 London Ambulance Service [UK] £16 million First attempt to build dispatch system cancelled; second abandoned after deployment.

• Project failure - some causes– Insufficient attention to checking a valid business case exist for the project.

– Insufficient attention to quality at the outset and during development.

– Insufficient definition of the required outcomes, leading to confusion over what the project is expected to achieve.

– Lack of communication with stakeholders and interested parties, leading to products being delivered that are not what the customer wanted.

– Inadequate definition and lack of acceptance of project management roles and responsibilities, leading to lack of direction and poor decision making.

– Poor estimation of duration and costs, leading to project taking more time and costing more money than expected.

– Inadequate planning and co-ordination of resources, leading to poor scheduling.

– Insufficient measurables and lack of control over progress, so that projects do not reveal their exact status until too late.

– Lack of quality control, resulting in the delivery of products that are unacceptable or unusable.

Why use a project management method?

Breakdown into Work Packages• Consider small work packages, that build to the final

requirements

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Don’t be afraid to deliver to customers quickly even if it mean living without a full roadmap

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Satisfy the customer through early and continuous delivery

Terminology

• Business Case is used to define the information that justifies the setting up, continuation or termination of the project - it answers the question: ‘Why should this project be done?’ it is updated at key points throughout the project

• Customer is used to represent the person or group who has commissioned the work and will be benefiting from the end result

• Product is used to describe everything that the project has to create or change, however physical or otherwise this may be. Results of projects can vary enormously from physical items, such as buildings and machinery, to intangible things such as culture change and public perception.

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Terminology

• Programme is a collection of projects that together achieve a beneficial change for an organisation.

• Supplier is used to mean the group that is providing specialist resources and skills to the project or is providing goods and services to create the project outcome required by the customer and user(s).

• User is defined as the person or group who will use or operate the final product. In some situations, the customer and user may be the same group of people.

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What is Contract Management

Used in Procurement or Purchasing departmentsAs part of the department’s responsibilities, the manager of the department usually negotiates, accepts, and signs contracts with suppliers of goods and services to the organisation. Contract management is the process of ensuring that the supplier honours their negotiated contract terms. Although the role of procurement in the negotiation process is an essential part of a cost management process, contract management is where the actual savings are either achieved or missed.

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What is Project Management

• A Project is a finite process with a definite start and end

• Projects should:–focus on business justification–define an organisational structure–use a product based planning approach–be divided into manageable, controllable stages–be flexible to be able to be applied to the scale of

the project / investment

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WHAT IS A PROJECT?

What is Project Management

• Projects should therefore, have the following:

–A finite and defined life cycle

–Defined and measurable business products

–A corresponding set of activities to achieve the business products

–A defined amount of resources

–An organisation structure, with defined responsibilities, to manage the project.

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WHAT IS A PROJECT?

IdeaStudy (Research)

Trigger

SpecifyDesignDevelop

TestChange over

Assess valueUse

Scrap

What is the Project life span?

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Project life spanProduct

life span

WBL3

Project ‘Board’ Meeting 1

Clear Start

Clear End

Stage 1

Stage 2

Stage 3

Stage 4

Stage 5

Stage 6







Communication

Project life span

Processes

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Initiating Planning ExecutingMonitoring

and Controlling

Closing

THE BASICS

Processes

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Initiating

PlanningClosing

Start up

Stage Management(Work Packages)

Stage Control

‘Product’ Delivery

Processes

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Initiating

PlanningClosing

Start up

Stage Management(Work Packages)

Stage Control

‘Product’ Delivery

Knowledge

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THE BASICS

Integration Scope Time

Cost Quality Procurement

Human Resources Communication Management

of Risk

The Components

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Business Case Organisation

PlansControls

Configuration ManagementChange control

Quality in a project

environmentManagement

of Risk

The ComponentsDifferent methodologies mapped

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PMBOK® Knowledge Area Comparable PRINCE2™ Components

Integration Combined Processes andComponents, Change Control

Scope, Time, Cost Plans, Business Case

Quality Quality, Configuration Management

Risk Risk

Communications Controls

Human Resources Organisation

Procurement Not Covered

PMBOK® - see - A guide to the Project Management Body of Knowledge, 2008, Project Management Institute, ISBN 978-1-933890-51-7PRINCE2™ - see - PRojects IN Controlled Environments 2, Managing Successful project with PRINCE2, 2009, OGC, ISBN 978-0-11-331059-3

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Common Glossary

GuidesModels

Portfolio,Programmeand Project

Office(P3O®)

Gateway® M_O_R® ITIL®

Refresh pending

Portfolio Guide (PfM)

Portfolio, Programme and

ProjectManagement

Maturity Model(P3M3 )TM

PRINCE2 (Project)TM

MSP (programme)TMPRINCE2Maturity Model

(P2MM)

TM

EXAMPLE

The Different Methodologies

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Service Management – ITIL®

ITIL is the most widely accepted approach to IT service management in the world. Providing a cohesive set of best practice guidance drawn from the public and private sectors across the world, it has recently undergone a major and important refresh project.

IT Service Management (ITSM) derives enormous benefits from a best practice approach. Because ITSM is driven both by technology and the huge range of organisational environments in which it operates, it is in a state of constant evolution. Best practice, based on expert advice and input from ITIL users is both current and practical, combining the latest thinking with sound, common sense guidance.

ITIL UsersITIL has been adopted by hundreds of organisations worldwide. These include:

• Microsoft• IBM• Barclays Bank• HSBC• Guinness• Procter & Gamble• British Airways• Ministry of Defence• Hewlett Packard• NASA• Disney


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Project Management – PRINCE2

PRINCE® (Projects in Controlled Environments), is a widely used project management method that navigates you through all the essentials for running a successful project. Since its introduction in 1989 as a UK government standard for IT project management, PRINCE has been taken on by both the public and commercial sectors and is now recognised as a de facto standard for project management. PRINCE is a flexible method and although originally designed for the management of IT projects is now aimed at all other types of projects too.

The latest version of the PRINCE method is PRINCE2 which was driven by user based improvements, project management specialists and a review panel of 150 public and private sector organisations. This end result is a generic best practice tool which is flexible enough to be tailored to your organisation and used successfully for all types of projects.

How does PRINCE2 work?The PRINCE2 series consists of a range of linked publications covering everything from business benefits to people issues. Along with all other OGC guidance, they share a common vocabulary and way of approaching projects.

Who uses PRINCE2?PRINCE2 has been adopted by hundreds of organisations worldwide. Equally applicable to large and small organisations in the public and private sectors, clients include:

• Barclays• British Telecom• GlaxoSmithKline• Ministry of Defence


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Programme Management – Managing Successful Programme - MSP

Large, complex deliveries are often broken down into manageable, inter-related projects. For those managing this overall delivery the principles of programme management are key to delivering on time and within budget. MSP offers best-practice guidance to all organisations - large or small, public or private sector - to help them achieve successful outcomes from programme management, time and time again. MSP has been developed to help achieve excellence by improving practices, offering better services and preparing more effectively for the future.

Who uses MSP?MSP has been adopted by hundreds of organisations worldwide. Equally applicable to large and small organisations in the public and private sectors, clients include:

• Barclays• British Telecom• GlaxoSmithKline• Ministry of Defence


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Risk Management – Management of Risk (M_o_R)

M_o_R: How it worksIn organisations almost every decision has an upside and a downside involving some degree of risk. Aimed at everyone who has ever made an important decision, M_o_R is a robust yet flexible framework that allows organisations to assess risk accurately time and time again.

How M_o_R worksM_o_R is a route map for risk management, bringing together principles, an approach, a set of interrelated processes, and pointers to more detailed sources of advice on risk management techniques and specialisms. It also provides advice on how these principles, approach, and processes should be embedded, reviewed and applied differently depending on the nature of the objectives at risk.

M_o_R shows how risks can be:

• Identified• Assessed• Controlled.

Only in recent years have organisations begun to recognise that risk management – in its broadest sense – can be applied to both negative threats and positive opportunities.

Who uses M_o_R?MoR has been adopted by hundreds of organisations worldwide. Equally applicable to large and small organisations in the public and private sectors, clients include:

• British Telecom• GlaxoSmithKline• Ministry of Defence

TASK

There are many other methodologies investigate

these

The Techniques

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• Very few techniques are usually offered by different Project Management methodologies, however one that is useful to follow is a product based start to the planning activity, this involves:

– Establishing what products are needed

– Defining the form and content of each product

– Determining the sequence in which each product should be produced.

TASK

What products do you have within your project?

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Overview of Project Management processes

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Directing a Project

Starting a Project

Initiating a Project

Managing a Stage

Boundary

Controlling a Stage

Managing ‘Product’ Delivery

Closing a Project

Quality review Change control

Planning

Controls QualityManagement of RiskOrganisationBusiness Case

PlansQualityManagement of RiskBusiness CaseControlsConfiguration ManagementChange Control

ControlsChange ControlConfiguration ManagementBusiness CaseManagement of RiskQuality

Change ControlQualityControlsPlansManagement of Risk

PlansQualityBusiness CaseManagement of RiskControlsOrganisation

ControlsConfiguration ManagementBusiness CaseManagement of RiskChange Control

Product based

planning

Process Component Techniques

Del

iver

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emen

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irect

ion

Corporate or programme

Project mandate

Del

iver

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emen

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irect

ion


Starting up a

Project

Project mandate

Del

iver

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anag

emen

tD

irect

ion


Request to initiate a project

Starting up a

Project

Project mandate

Del

iver

yM

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emen

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irect

ion



Directing a Project

Starting up a

Project

Project mandate

Del

iver

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anag

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Initiation notification

Authority to initiate a project

Directing a Project

Starting up a

Project

Project mandate

Del

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ion






Directing a Project

Starting up a

Project

Project mandate

Del

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Request to deliver a project





Directing a Project

Starting up a

Project

Project mandate

Del

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Project authorisation notification



Directing a Project

Starting up a

Project

Project mandate

Del

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Directing a Project

Starting up a

Project

Project mandate

Controlling a Stage

Del

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Directing a Project

Starting up a

Project

Project mandate

Stage boundary approaching

Controlling a Stage

Del

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Directing a Project

Starting up a

Project


Authority to deliver a Work Package

Project mandate


Controlling a Stage

Del

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Directing a Project

Starting up a

Project



Project mandate


Controlling a Stage

Del

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Completed Work Package







Directing a Project

Starting up a

Project



Project mandate

Managing a Stage Boundary


Controlling a Stage

Del

iver

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emen

tD

irect

ion









Directing a Project

Starting up a

Project



Project mandate



Request to approve next stage plan

Controlling a Stage

Del

iver

yM

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tD

irect

ion



Stage Authorisation







Directing a Project

Starting up a

Project



Project mandate




Controlling a Stage

Del

iver

yM

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tD

irect

ion



Stage Authorisation







Directing a Project

Starting up a

Project



Request for advice

Project mandate




Controlling a Stage

Del

iver

yM

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tD

irect

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Stage Authorisation




Project Board request for advice




Directing a Project

Starting up a

Project



Request for advice

Project mandate




Controlling a Stage

Del

iver

yM

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tD

irect

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Stage Authorisation








Directing a Project

Starting up a

Project



Request for advice

Project mandate




Corporate advice and decisions

Controlling a Stage

Del

iver

yM

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tD

irect

ion



Stage Authorisation








Directing a Project

Starting up a

Project



Request for advice

Project mandate




Project Board advice


Controlling a Stage

Del

iver

yM

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tD

irect

ion



Stage Authorisation








Directing a Project

Starting up a

Project



Request for advice

Exception raised

Project mandate






Controlling a Stage

Del

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yM

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tD

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Stage Authorisation








Directing a Project

Starting up a

Project



Request for advice

Exception raised

Project mandate





Exception Plan request


Controlling a Stage

Del

iver

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irect

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Stage Authorisation








Directing a Project

Starting up a

Project



Request for advice

Exception raised

Project mandate




Request to approve Exception Plan




Controlling a Stage

Del

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yM

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Stage Authorisation




Exception Plan approved





Directing a Project

Starting up a

Project



Request for advice

Exception raised

Project mandate








Controlling a Stage

Del

iver

yM

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tD

irect

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Stage Authorisation









Directing a Project

Starting up a

Project



Request for advice

Exception raised

Project mandate







Closing a Project

Project end approaching

Premature close


Controlling a Stage

Del

iver

yM

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tD

irect

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Stage Authorisation









Directing a Project

Starting up a

Project



Closure recommended

Request for advice

Exception raised

Project mandate







Closing a Project


Premature close


Controlling a Stage

Del

iver

yM

anag

emen

tD

irect

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Stage Authorisation




Closure notification






Directing a Project

Starting up a

Project



Closure recommended

Request for advice

Exception raised

Project mandate







Closing a Project


Premature close


Controlling a Stage

Del

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‘Tailoring the methodologies to suit’

COMMUNICATION

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COMMUNICATION

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TASK

Consider your communication techniques to all those involved

in your project