P03 Project Planning & Estimating

Project Planning

and Estimating

DJ201 0407

© Copyright ESI International April 2007 All rights reserved.

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CONTENTS Page

Project Planning and Estimating .......................................................................... 1-1 Workshop Agenda ................................................................................ 1-3 Workshop Objectives ........................................................................... 1-4 Introduction: Review of Project Management and the WBS................... 1-5 What Is a Project? ................................................................................. 1-6 Project Management ............................................................................. 1-7 Project Life Cycle.................................................................................. 1-8 Why Scheduling and Cost Control? ....................................................... 1-9 Organizing the WBS ........................................................................... 1-10 WBS Review....................................................................................... 1-11 Exercise 1: Office Move ...................................................................... 1-12 Estimating ........................................................................................... 1-13 Estimating Basics................................................................................. 1-14 Estimating Recommendations ............................................................. 1-15 Resource Planning .............................................................................. 1-16 Roles and Responsibilities Matrix........................................................ 1-17 Resources as Sources for Estimates ...................................................... 1-18 Estimating Durations ........................................................................... 1-19 Duration Considerations ..................................................................... 1-20 Productivity and Availability in Resource-Driven Estimates.................. 1-21 Exercise 2: Estimating Task Cost and Duration..................................... 1-22 Program Evaluation and Review Technique (PERT).............................. 1-23 Scheduling Techniques ....................................................................... 1-24 Scheduling Techniques ....................................................................... 1-25 Setting Milestones............................................................................... 1-26 Gantt Charts ....................................................................................... 1-27 WBS and Network Diagramming ........................................................ 1-28 Precedence Diagramming Method (PDM) ........................................... 1-29 Scheduling Sample ............................................................................. 1-30 PDM Sample ...................................................................................... 1-31 Exercise 3: Network Diagram for the Office Move............................... 1-32 Basic Scheduling................................................................................. 1-33 Forward Pass ...................................................................................... 1-34 Backward Pass .................................................................................... 1-35 Total Float .......................................................................................... 1-36 Free Float............................................................................................ 1-37 Critical Path ........................................................................................ 1-38 Lag and Lead Times ............................................................................ 1-39 Hammock Activity .............................................................................. 1-40 Techniques for Decreasing Project Duration (Schedule Compression) . 1-41 Resource Trade-Offs: Leveling............................................................. 1-42 Baselines ............................................................................................ 1-43 The Basics of Baselines ....................................................................... 1-44

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0BCONTENTS

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Cost Baseline ...................................................................................... 1-45 Cost Baseline Sample.......................................................................... 1-46 Baseline Costs Plus Reserve ................................................................ 1-47 Exercise 4: Develop a Baseline............................................................ 1-48 Workshop Review .............................................................................. 1-50 Bibliography and Suggested Reading................................................... 1-51

Project Planning and Estimating

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Workshop Agenda

Introduction: Review of Project Management and the Work Breakdown Structure (WBS)EstimatingScheduling TechniquesBaselines


Workshop Objectives

By the end of this course, you will be able to—Use the WBS to identify, assign, and tabulate resource requirementsPredict costs and work times using specific levels and estimate types from the WBSUse the WBS to develop a network diagramCalculate schedules using the Precedence Diagramming Method (PDM)Interpret data gained from time-phased distribution of project costs


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Introduction: Review of Project Management and the WBS


What Is a Project?

A temporary endeavor undertaken to create a unique product, service, or result.

—PMBOK® Guide, p. 5

“PMBOK” is a trademark of the Project Management Institute, Inc., which is registered in the United Statesand other nations.

ProjectC

Ongoing Business Operation

ProjectD

ProjectE

ProjectA

ProjectB

Program X

Program Y

Cancelled


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Project Management

[T]he application of knowledge, skills, tools and techniques to project activities to meet [the] project requirements[A]ccomplished through the application and integration of the project management processes of initiating, planning, executing, monitoring and controlling, and closing.


Sound project management helps ensure success.


Project Life CycleProject Life Cycle Used in this Workshop

Initiation Definition Planning Implementation Closure

Project

Phase Purpose

Initiation Introduce project to obtain approval and create project charter

Definition Document project scope, deliverables, and methods for containing scope

Planning Create plan to document the activities required to complete the project, the sequence of activities, the resources assigned to the activities, and the resulting schedule and budgets

Implementation Execute and manage the plan, using artifacts created in the planning phase

Closure Formally review the project, including lessons learned and turnover of project documentation


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Why Scheduling and Cost Control?

The triple constraint—Has the most clearly measurable indexes for project managementDelivers business results

It’s what we do!Scope

Cost

Time

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Organizing the WBS

Define the project—ScopeTasksWork packagesTechnical baseline

Organize the WBS to—Allow for realistic estimatingAllow assignment to a single organizational unit or allow for exclusive responsibility

Use tools consistent with your comfort level and project needs


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WBS Review

The WBS should—Be consistentBe task-oriented and start with a verb, or be deliverables oriented and start with a noun Be decomposed to your level of controlEnsure that each work package accomplishes a discrete work element Make work packages SMART

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Office Move

Exercise 1

Use the following major categories to develop a WBS of those activities necessary to accomplish an office move: project management; pre-move activities; moving activities; post-move activities.

Arrange the following tasks as work packages under the four headings described above: select furniture; prepare office for move; hold kickoff meeting; set up utilities (wiring and so on); complete internal construction to final floor plan; plan move; move/relocate; install new furniture, communications equipment, and computers; install new signs; close out project.


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Estimating

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Estimating Basics

An estimate—Is a quantitative assessment of the likely amount or outcomeIs usually applied to project costs, resources, effort, and durations and is usually preceded by a modifier Should always include some indication of accuracy

“Resources” are—Skilled human resourcesEquipmentSuppliesBudgets or funds

Source: PMBOK® Guide, pp. 360, 372


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Estimating Recommendations

Use the most accurate method availableCommunicate the level of precisionGain agreement on the level of precisionInvolve the teamAssess the environmentBase estimates on historyUse standards (if available)

Do not develop estimates from the budgetBase estimates on known or committed operational plansAccount for likely conditions and circumstancesBase estimates on assumptions of staff, team, and working conditionsInclude date and version stampDo not pad the estimates

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Resource Planning

Fundamental questionsWhat needs to be done?Who and what do we need?Who can do the work?What can do the work?Who and what can we get?What level of excellence and competence is essential?How will we use the resources?How will the resources affect schedules and costs?


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Roles and Responsibilities Matrix

1.1.1

1.1.2

1.1.3

Resource

Task Pat Jean Francis

R—ResponsibleA—AccountableC—ConsultI—Inform

Source: PMBOK® Guide, p. 206

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Resources as Sources for Estimates

Who provides the best estimates?Outside sourcesThose who know the workThose who are accountableThose who do the work


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Estimating Durations

Working time?

Personal time?

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Duration Considerations

Effort hours: Resource hours required to complete a task (24 effort hours = 3 resource days)Working time: Period of time in which actual work on a project or task can and should be completed (24 hours = 3 days)Elapsed time: Calendar duration, including weekends, holidays, and breaks (24 hours = 1 day)Productivity: Rate at which work is producedAvailability: Resources present and ready to workContiguous duration: Work time that is not interruptedInterruptible duration: Work time that may be interrupted


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Productivity and Availability in Resource-Driven Estimates

EffortCost= x Unit Cost

Productivity

Effort/ProductivityDuration=

Availability

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Three team members are being considered for an assignment. Your subject matter expert estimated that the task will take 90 effort hours for an individual with average productivity. The following resource matrix provides measures of individual productivity, availability, and unit cost for each team member.

Calculate the cost and duration for each person to accomplish the task.

$6040%100%$8040%120%$4550%60%Install communications equipment

$/HrAvailProd$/HrAvailProd$/HrAvailProdTask

JuanKimBill

Estimating Task Cost and Duration

Exercise 2


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NOTE: PERT is useful in estimating cost as well as schedule.

( )

( )

+ × +

+ × +=( )

Optimistic 4 Most Likely PessimisticEstimated Time =

6

3 days 4 5 days 8 days = 5.17 days

6te

Program Evaluation and Review Technique (PERT)

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Scheduling Techniques


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Scheduling Techniques

Milestone chartsGantt chartsNetwork diagrams

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Setting Milestones

Milestones—Are significant eventsDenote achievements regarding time, money, and tasksConsume no time

Task 1 complete

200,000,000 Yen spent

500 resource-hours expended

5 10 15 20


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Gantt Charts

Task A

Task B

Task C

Task D

Task E

Task F

ProjectMonth 1 2 3 4 5 6 7

Today

Task A

Task B

Task C

Task D

Task E

Task F

ProjectMonth 1 2 3 4 5 6 7

Today

= Plan= Actual

= Planned Start= Actual Start

= Planned Finish= Actual Finish

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WBS and Network Diagramming

1.1.1 1.1.2 1.2.1 1.2.2 1.3.1 1.3.2

1.31.21.1

WBS1.0

StartStart A C D

B E F

StartFinish

Use only the workpackages to build the

network schedule.


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Precedence Diagramming Method (PDM) A schedule network diagramming technique in which schedule activities are represented by boxes (or nodes). Schedule activities are graphically linked by one or more logical relationships ...


PDM uses activity-on-node (AON) diagramsArrows show various relationships (finish-start, start-start, finish-finish, start-finish) Accommodates lag and lead

Start 1.1.1 1.1.2 1.2.2

1.3.1 1.3.2

Finish

1.2.1

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Scheduling Sample

Construction chart for a house

Activities and Times to Build a House

Activity

Immediately Preceding Activity

Expected Completion Time (days)

(a) Excavate — 5 (b) Pour foundation a 2 (c) Plumb outside a 6 (d) Frame b 12 (e) Plumb inside d 10 (f) Wire d 9 (g) Build roof d 5 (h) Lay brick b 9 (i) Inspect plumbing c, e 1 (j) Nail shingles g 2 (k) Cover walls f, i, j 3 (l) Finish interior k 9 (m) Finish exterior h, g 7 (n) Landscape m 8


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PDM Sample

Start (a) Excavate5.0 days

(c) Plumboutside6.0 days

(b) Pourfoundation

2.0 days

(d) Frame12.0 days

(e) Plumb inside10.0 days

(f) Wire9.0 days

(i) Inspectplumbing1.0 day

(k) Cover walls3.0 days

(l) Finishinterior9.0 days

Finish

(j) Nail shingles2.0 days

(g) Build roof5.0 days

(m) Finishexterior7.0 days

(n) Landscape8.0 days

(h) Lay brick9.0 days

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10Install new furniture/communications equipment/computers

45Complete internal construction to final floor plan (build out)

15Install new signs

5Close out project

30Set up utilities

5Move/relocate

20Prepare office for move

25Select furniture

1Hold kickoff meeting

20Plan move

Duration (days)Work Package/Activities

Using the WBS you developed for the office move and the durations provided below, build a network diagram for the office move.

Network Diagram for the Office Move

Exercise 3


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Basic Scheduling

Earlystart (ES)

How _________ can this activity _________based on the network logic and constraints?

Earlyfinish (EF)

Latestart (LS)

Latefinish (LF)

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Forward Pass

Duration=7Task A

0 7

EFES

LS LF

Duration=6Task C

7 13

EFES

LS LF

Duration=3Task G

13 16

EFES

LS LF

Start Duration=2Task H

16 18

EFES

LS LF

Finish

Duration=3Task B

0 3

EFES

LS LF

Duration=3Task D

3 6

EFES

LS LF

Duration=2Task F

3 5EFES

LS LF

Duration=3Task E

6 9

EFES

LS LF

ES + duration = EF


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Backward Pass

Duration=7Task A

0 7

70

EFES

LS LF

Duration=6Task C

7 13

137

EFES

LS LF

Duration=3Task G

13 16

1613

EFES

LS LF

Start Duration=2Task H

16 18

1816

EFES

LS LF

Finish

Duration=3Task B

0 3

107

EFES

LS LF

Duration=3Task D

3 6

1310

EFES

LS LF

Duration=2Task F

3 5

1311

EFES

LS LF

Duration=3Task E

6 9

1613

EFES

LS LF

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Total Float

Activities—not projects—may have float. Total float (also called slack, float, or path float)

“The total amount of time that a schedule activity may be delayed from its early start date without delaying the project finish date”*Late finish minus early finish (LFj – EFj) Late start minus early start (LSj– ESj)

J*Source: PMBOK® Guide, p. 378


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Free Float

The amount of time that a schedule activity can be delayed without delaying the early start of any immediately following schedule activities.


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Critical Path

Path on which any delay in project activities will affect the project scheduleLongest of all paths through the projectPath with the least float or slack timeShortest time to complete the project

Start 1.1.1 1.1.2 1.2.2

1.2.1 1.3.1 1.3.2

FinishStart Finish9

34

43

6


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Lag and Lead Times

Lag A modification of a logical relationship that directs a delay in the successor activity.


Lead A modification of a logical relationship that allows an acceleration of the successor activity.


A B

Time Units

FS* + 1

A

B

Time Units

FS* – 1

*FS=Finish–Start

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Hammock Activity

A group of related schedule activities aggregated at some summary level, and displayed/reported as a single activity at that summary level.


Test system10

Monitor contract180HA

Install cars20

Install rail150


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Techniques for Decreasing Project Duration (Schedule Compression)

Crashing tasks: Reducing the duration of activities on the critical path in any possible wayCrashing a network: A “[s]chedule compression technique in which cost and schedule trade-offs are analyzed to determine how to obtain the greatest amount of compression for the least incremental cost”*Fast tracking: “A schedule compression technique in which phases or activities that normally would be done in sequence are performed in parallel”*

*Source: PMBOK® Guide, pp. 145-146

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Resource Trade-Offs: Leveling

Leveling is the rescheduling of tasks with float to resolve resource issuesSteps:

Determine early and late schedulesEvaluate resource loading for each scheduleIdentify free floatAdjust activities (tasks) on an activity-by-activity basis within the float to fit available resourcesDetermine new schedule


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Baselines

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The Basics of Baselines

A baseline is the original approved plan, plus approved scope changesThe baseline establishes a reference against which project managers can measure actual project progress


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Cost Baseline

ContractPrice

ContractBudget Base

Contract Feeor Profit

ReservePerformanceMeasurement

Budget

UndistributedBudget

DistributedBudget

Project Budget Model

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Cost Baseline Sample

BDur=4

CDur=5

Start

Finish

ADur=3

DDur=4

EDur=3

FDur=4

0

500

1,000

1,500

2,000

2,500

0 5 10 15 20

$

Days


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Baseline Costs Plus Reserve

Reserve is money or time provided for in the project plan to mitigate cost, schedule, or performance risk.

—Ward, p. 188

Cost to Complete (CTC)

Reserve

Baselinecosts

Time

T1 T2 T3

Budget at Completion(BAC)

$

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Using the graph on the next slide, develop a cumulative cost curve based on the network diagram you created for the office move.

$15,000Install new furniture/communications equipment/computers

$20,000Complete internal construction to final floor plan (build out)

$1,000Install new signs

$0Close out project

$150Set up utilities

$10,000Move/relocate

$1,100Prepare office for move

$0Select furniture

$50Hold kickoff meeting

$0Plan move

Estimated CostWork Package/Activities

Develop a Baseline

Exercise 4


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Develop a Baseline (continued)

Exercise 4

Time

$

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Workshop Review

By now, you should be able to—Use the WBS to identify, assign, and tabulate resource requirementsPredict costs and work time using specific levels and estimate types from the WBSUse the WBS to develop a network diagramCalculate schedules using the Precedence Diagramming Method (PDM)Interpret data gained from time-phased distribution of project costs


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Bibliography and Suggested Reading

Project Management Institute. A Guide to the Project Management Body of Knowledge.Newtown Square, Pa.: Project Management Institute, 2004.Ward, LeRoy, ed. Project Management Terms: A Working Glossary. Arlington, Va.: ESI International, 2000.

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P03 Project Planning & Estimating

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