Part II

Project Planning

© 2012 John Wiley & Sons Inc.

6-6-22

Project Management

Chapter 6

Project Activity and

Risk Planning

© 2012 John Wiley & Sons Inc.

6-6-44

Initial Project Coordination and the Project Charter

Early meetings are used to decide on participating in the project

Used to “flesh out” the nature of the project

Outcomes include:– Technical scope– Areas of responsibility– Delivery dates or budgets– Risk management group

6-6-55

Outside Clients

When it is for outside clients, specifications cannot be changed without the client’s permission

Client may place budget constraints on the project

May be competing against other firms

6-6-66

Project Charter Elements

PurposeObjectivesOverviewSchedulesResourcesPersonnelRisk management plansEvaluation methods

6-6-77

Systems Integration

Performance Effectiveness Cost

6-6-88

Starting the Project Plan: The WBS

What is to be doneWhen it is to be started and finishedWho is going to do it

6-6-99

Starting the Project Plan: The WBS Continued

Some activities must be done sequentially

Some activities may be done simultaneously

Many things must happen when and how they are supposed to happen

Each detail is uncertain and subjected to risk

6-6-1010

Hierarchical Planning

Major tasks are listedEach major task is broken down into

detailThis continues until all the activities to be

completed are listedNeed to know which activities “depend

on” other activities

6-6-1111

A Form to Assist Hierarchical Planning

Figure 6-2

6-6-1212

Career Day

Figure 6-4

6-6-1313

The Work Breakdown Structure (WBS)

A hierarchical planning processBreaks tasks down into successively finer

levels of detailContinues until all meaningful tasks or

work packages have been identifiedThese make tracking the work easierNeed separate budget/schedule for each

task or work package

6-6-1414

A Visual WBS

Figure 6-3

6-6-1515

Steps to Create a WBS

1. List the task breakdown in successive levels

2. Identify data for each work package

3. Review work package information

4. Cost the work packages

5. Schedule the work packages

6. Continually examine actual resource use

7. Continually examine schedule

6-6-1616

Human Resources

Useful to create a table that shows staff needed to execute WBS tasks

One approach is a organizational breakdown structure– Organizational units responsible for each

WBS element– Who must approve changes of scope– Who must be notified of progress

WBS and OBS may not be identical

6-6-1717

The Responsibility (RACI) Matrix

Another approach is the Responsible, Accountable, Consult, Inform (RACI) matrix– Also known as a responsibility matrix, a

linear responsibility chart, an assignment matrix, a responsibility assignment matrix

Shows critical interfacesKeeps track of who must approve what

and who must be notified

6-6-1818

Sample RACI Matrix

Figure 6-7

6-6-1919

Risk Management

Projects are risky, uncertainty is highProject manager must manage this riskThis is called “risk management”Risk varies widely between projectsRisk also varies widely between

organizationsRisk management should be built on the

results of prior projects

6-6-2020

Parts to Risk Management

Risk management planning Risk identification Qualitative risk analysis Quantitative risk analysis Risk response planning Risk monitoring and control The risk management register

6-6-2121

Risk Management Planning

Need to know the risk involved before selecting a project

Risk management plan must be carried out before the project can be formally selected

At first, focus is on externalities– Track and estimate project survival

Project risks take shape during planning Often handled by project office

6-6-2222

Risk Identification

Risk is dependent on technology and environmental factors

Delphi method is useful for identifying project risks

Other methods include brainstorming, nominal group techniques, checklists, and attribute listing

May also use cause-effect diagrams, flow charts, influence charts, SWOT analysis

6-6-2323

Qualitative Risk Analysis

Purpose is to prioritize risksA sense of the impact is also neededEach objective should be scaled and

weightedConstruct a risk matrixSame approach can be used for

opportunities

6-6-2424

Risk Matrix

Figure 6-12

6-6-2525

Quantitative Risk Analysis

1. List ways a project can fail2. Evaluate severity3. Estimate likelihood4. Estimate the inability to detect5. Find the risk priority number (RPN)

(RPN = S L D)6. Consider ways to reduce the S, L, and

D for each cause of failure

6-6-2626

A FMEA Example

Table 6-1

6-6-2727

Decision Tree Analysis

Figure 6-13

6-6-2828

Risk Response Planning

Threats– Avoid– Transfer– Mitigate– Accept

Opportunities– Exploit– Share– Enhance– Accept

6-6-2929

Risk Monitoring and Control

Monitoring covered in detail in Chapter 10Control covered in Chapter 11

6-6-3030

The Risk Management Register

Environments that may impact projectsAssumptions madeRisks identifiedList of categories and key wordsEstimates on risk, states of project’s

environment, or on project assumptionsMinutesActual outcomes