Tathagat Varma

Tathagat Varma Session 12/12: 28-Jul-2010

  Influencing the factors that create changes to the authorized cost baseline

  Ensuring that all change requests are acted on in a timely manner

  Managing the actual changes when and as they occue

  Ensuring that cost expenditures do not exceed the authorized funding, by period and in total for the project

  Monitoring cost performance to isolate and understand variances from the approved cost baseline

  Monitoring work performance against funds expended

  EVM integrates project scope, cost and schedule measures to help the project management tea assess and measure project performance and progress.

  Principles of EVM can be applied to all projects, in any industry.

  EVM develops and monitors three key dimensions for each work package and control account:   Planned Value (PV)  Earned Value (EV)  Actual Cost (AC)

  Planned Value: is the authorized budget assigned to the work to be accomplished for an activity or WBS component. Total of the PV for a projects is also known as Budget at Completion (BAC)

  Earned Value: is the value of work performed expressed in terms of the approves budget assigned to that work for an activity or WBS component.

  Actual Cost: is the total cost actually incurred and recorded in accomplishing work performed for an activity or WBS component. The AC has no upper limit – whatever is spent to achieve the EV will be measured

  It is the authorized work that has been completed, plus the authorized budget for such completed work

  Project managers monitor EV, both incrementally to determine current status and cumulatively to determine the long-term performance trends

  Schedule Variance (SV): is a measure of schedule performance on a project

  SV = EV – PV   It can indicate a project falling behind its

baseline schedule   It will ultimately equal zero when the project

is completed because all of the planned values will have been earned.

  These are best used in conjunction with critical path methodology scheduling and risk management

  Cost Variance (CV) is a measure of cost performance on a project.

  CV = EV – AC   Cost variance at the end of the project will be

the difference between Budget At Completion (BAC) and the actual amount spent.

  It is particularly critical because it indicates relationship of physical performance to the costs spent.  Any negative EVM CV is often non-recoverable to

the project

  SV and CV can be converted to efficiency indicators to reflect the cost and schedule performance of any project for comparison against all other projects or within a portfolio of projects.

  The variances and indices are useful for determining project status and providing a basis for estimating project cost and schedule outcome

  A measure of progress achieved compared to progress planned on a project. It is sometimes used in conjunction with the CPI to forecast the final project completion estimates.

  SPI = EV / PV   SPI < 1 indicates less work was completed than

planned   SPI > 1 indicates more work was completed than

planned

  A measure of the value of work completed compared to the actual cost or progress made on the project

  CPI = EV / AC  CPI < 1 indicates cost overrun for work completed  CPI > 1 indicates cost underrun of performance to

date

  As the project progresses, the project team can develop a forecast for the estimate at completion (EAC) that may differ from the budget at completion (BAC) based on project performance.

  Forecasting the EAC involves making estimates or predictions of conditions and events in the project’s future based on information and knowledge available at the time of forecast. Forecasts are generated, updated, and reissued based on work performance information provides as the project is executed

  COQ includes all costs incurred over the life of the product by investment in preventing nonconformance to requirements, appraising the products or service or conformance to requirements, and failing to meet requirements (rework). Failure costs are often categorized into internal (found by the project) and external (found by the customer) and also called cost of poor quality

  Cost of Conformance = money spent during the project to avoid failures   Prevention costs = build a quality product

o  Training o  Document processes o  Equipment o  Time to do it right

  Appraisal costs = assess the quality o  Testing o  Destructive testing loss o  Inspection

  Cost of Non-Conformance = money spent during and after the project because of failure   Internal failure costs = failures found by the project

o  Rework o  scrap

  External failure costs = failures found by the customer o  Liabilities o  Warranty work o  Lost business

  A quality audit is a structured, independent review to determine whether project activities comply with organizational and project policies, processes and procedures. The objectives of a quality audit are:   Identify all the good/best practices being implemented   Identify all the gaps/shortcomings   Share the good practices introduced or implemented in

similar projects in the organization and/or industry   Proactively offer assistance in a positive manner to

improve implementation of processes to help the team raise productivity, and

  Highlight contributions of each audit in the lessons learnt repository of the organization

  Process of monitoring and recording results of executing the quality activities to assess performance and recommend necessary changes.   QC is performed through out the project   QC activities identify causes of poor process or product

quality and recommend and/or take action ti eliminate them

  QC is often performed by a quality control department or similarly titled organizational unit.

  Quality standards include project processes and product goals.

  Project results include deliverables and project management results, such as cost and schedule performance.

  The project management team should have a workign knowledge of statistical qualoty control, especially sampling and probability, to help evaluate quality control outputs. Among other subjects, the team may find it useful to know the differences between   Prevention (keeping errors out of the process) and

Inspection (keeping errors out of the hands of customer)   Attribute Sampling (the result either confirms or does

not confirm) and Variables Sampling (the result is rated on a continuous scale that measures the degree of conformity)

  Tolerances (specified range of acceptable results) and Control Limits (thresholds, which can indicate whether the process is out of control)

  Cause and Effect Diagrams   Control Charts   Flowcharting   Histogram   Pareto Chart   Run Chart   Scatter Diagram   Statistical Sampling   Inspection

  Also known as “Ishikawa Diagram”, they illustrate how various factors might be linked to potential problems or effects.

  A possible root cause can be uncovered by continuing to ask “why” or “how” along one of the lines.

  “Why-why” and “How-How” diagram may be used in RCA

  Control charts illustrate how a process behaves over time and when a process subject to special cause variation, resulting in an out of control condition.

  When a process is within acceptable limits it is in control and does not need to be adjusted.

  Conversely, when a process is outside acceptable limits, the process should be adjusted. Seven consecutive points outside the UCL or LCL indicate a process that is out of control. UCL/LCL are usually set at +/- 3σ

  Flowcharting is used during QC to determine a failing process step and identify potential process improvement opportunities

  A histogram is a vertical bar chart showing how often a particular variable occurred.  Each column represents an attribute or characteristic

of a problem/situation.  The height of each column represents the relative

frequency of the characteristic.

  This tool helps illustrate the most common cause of problems in a process by the number and relative heights of the bars

  A Pareto chart is a specific type of histogram, ordered by frequency of occurrence.

  It shows how many defects were generated by type of category of identified cause

  Rank ordering is used to focus corrective action. The project team should address the causes creating the greatest number of defects first

  Pareto diagrams are conceptually related to Pareto’s Law which holds that a relatively small number of causes will typically produce a majority of problems or defects. Also known as 80/20 principle.   Focus on ‘vital few’ rather than ‘trivial many’

  Similar to a control chart without displayed limits, a run chart shows the history and pattern of variation.

  A run chart is a line graph that shows data points plotted in the order in which they occur.

  Run charts show trends in a process over time, variation over time, or declines or improvements in a process over time.

  Trend analysis is performed during run charts and involves mathematical techniques to forecast future outcomes based on historical results.

  A Scatter Diagram shows the relationship between two variables. This tool allows the quality team to study and identify the possible relationship between changes observed in two variables.

  Dependent variables versus independent variables are plotted. The closer the points are to a diagonal line, the more closely they are related.

  An inspection is the examination of a work product to determine whether it conforms to documented standards. The results of an inspection generally include measurements and may be conducted at any level.

  Inspections may be called reviews, peer reviews, audits or walkthroughs.

  Inspections are also used to validate defect repairs.

  Influencing the project team: being aware of, and influencing when possible, those human resource factors that may impact the project. This includes team environment, geographical locations of team members, communications among stakeholders, internal and external politics, cultural issues, organizational uniqueness, and other such people factors that may alter the project performance.

  Professional and ethical behavior: the project management team should be aware of, subscribe to, and ensure that all team members follow ethical behavior

  Developing Human Resources Plan   Process of identifying and documenting project roles,

responsibilities, and required skills, reporting relationships, and creating a staffing management plan

  Role: the label describing the portion of a project for which a person is accountable. Role clarity concerning authority, responsibilities, and boundaries should be documented.

  Authority: the right to apply project resources, make decisions, and sign approvals. Team members operate best when their individual levels of authority match their individual responsibilities.

  Responsibility: the work that a project team member is expected to perform in order to complete the project’s activities.

  Competency: the skill and capacity required to complete project activities. If project team members don’t possess required competencies, performance can be jeopardizes. When such mismatches are identified, proactive responses such as training, hiring, schedule changes, or scope changes are initiated.

  Used to illustrate the connections between work packages or activities and project team members.

  One example of RAM is RACI (Responsible, Accountable, Consult and Inform).  RACI is particularly important when the team

consists of internal and external resources to ensure clear divisions of roles and expectations.

  Staff acquisition   Resource Calendars   Staff Release Plan   Training Needs   Recognition and Rewards   Compliance   Safety

  The use of virtual teams creates new possibilities when acquiring project team members. They are groups of people with a shared goal who fulfill their roles with little or no time spent meeting face to face. The availability of electronic communication has made such teams feasible. The virtual team format makes it possible to   Form teams of people from the same company who live in

widespread geographic areas   Add special expertise to a project team even though the expert

is not in the same geographic area   Incorporate employees who work from home offices   Form teams of people who work different shifts or hours   Include people with mobility limitations and disabilities, and   Move forward with projects that would have been ignored due

to travel expense

  Conflict is inevitable in a project environment.   Sources of conflict include scarce resources, scheduling,

priorities, and personal work styles.   Team ground rules, group norms, and solid project

management practices like communication planning and role definition, reduce the amount of conflict

  Successful conflict management results in greater productivity and positive working relationships.   When managed properly, differences of opinion can lead

to increased creativity and better decision making.   If conflicts escalates, the project manager should help

facilitate a satisfactory resolution.   Conflict should be addressed early and usually in private,

using a direct, collaborative approach. If disruptive conflict continues, formal procedures may be used, including disciplinary actions.

  Conflict is natural and forces a search for alternatives

  Conflict is a team issue   Openness resolves conflict   Conflict resolution should focus on issues,

not personalities, and   Conflict resolution should focus on the

present, not the past

  Relative importance and intensity of the conflict

  Time pressure for resolving the conflict   Position taken by players involves, and   Motivation to resolve conflict on a long-term

or a short-term basis

  Withdrawing / Avoiding: retreating from an actual or potential conflict situation

  Smoothing / Accommodating: emphasizing areas of agreement rather than areas of difference

  Compromising: searching for solutions that bring some degree of satisfaction to all parties

  Forcing: pushing one’s viewpoint at the expense of others; offers only win-lose solutions

  Collaborating: incorporating multiple viewpoints and insights from differing perspectives; leads to consequences and commitment

  Confronting / problem solving: treating conflict as a problem to be solved by examining alternatives; requires a give-and0take attitude and open dialog

  PMs accomplish work through the project team and stakeholders. Effective PMs acquire a balance of technical, interpersonal, and conceptual skills that help them analyze situations and interact appropriately. Some important interpersonal skills are:   Leadership   Team building   Motivation   Communication   Influencing   Decision making   Political and cultural awareness   Negotiation

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  Project Managers use a combination of technical, human and conceptual skills to analyze situations and interact appropriately with team members. This aids in capitalizing on the strengths of all team members.

  Some of the skills used most often include:  Leadership   Influencing  Effective Decision Making

  Successful projects require strong leadership skills.

  Leadership is important through all phases of the project life cycle.

  It is especially important to communicate the vision and inspire the project team to achieve high performance.

  Since project managers often have little or no direct authority over their team members in a matrix environment, their ability to influence stakeholders on a timely basis is critical to project success.

  Key influencing skills include:  Ability to be persuasive and clearly articulate points

and positions  High levels of active and effective listening skills  Consideration of the various perspectives in any

situation, and  Gathering relevant and critical information to

address important issues and reach agreements

  Involves the ability to negotiate and influence the organization and the project management team.

  Some guidelines include:   Focus on goals to be serves   Follow a decision-making process   Study the environmental factors  Develop personal qualities of the team members   Stimulate team creativity  Manage opportunity and risk

  A basic communication model demonstrates how information is sent and received between two parties, defined as sender and receiver.

  The key components of the model include   Encode: to translate thoughts or ideas into a language

that is understood by others   Message and feedback-message: the output of encoding   Medium: the method used to convey the message   Noise: anything that interferes with the transmission and

understanding of the message (e.g., distance, unfamiliar technology, lack of background information)

  Decode: translate the message back into meaningful thoughts or ideas

  Components in the communications model need to be taken into account when discussing project communications

  As part of the communications process, the sender is responsible for making the information clear and complete so that the receiver can receive it correctly, and for confirming that it is properly understood.

  The receiver is responsible for making sure that the information is received in its entirely, understood correctly, and acknowledged.

  A failure in communication can negatively impact the project

  Interactive comm: between two or more parties performing a multidirectional exchange of information. It is the most efficient way to ensure a common understanding by all participants on specified topics, and includes meetings, phone calls, video conf, etc.

  Push comm: sent to specific recipients who need to know the information. This ensures that the info is distributed but does not certify that it actually reached or was understand by the intended audience. Includes letters, memos, reports, emails, faxes, voice mails, press releases, etc.

  Pull comm: used for very large volumes of information, or for very large audiences, that requires the recipients to access the communication content at their own discretion. Include internet sites, e-learning, knowledge repositories, etc.

  Internal (within the project) and External (customer, other projects, media, public)

  Formal (reports, memos, briefings) and Informal (emails, ad-hoc discussions)

  Vertical (up and down the organization) and Horizontal (with peers)

  Official (newsletters, annual report) and Unofficial (off the record communications)

  Written and Oral, and   Verbal and Non-Verbal (voice inflections,

body language)

  Listening actively and effectively   Questioning, probing ideas and situations to ensure

better understanding   Educating to increase team’s knowledge so that they

can be more effective   Fact-finding to identify or confirm information   Setting and managing expectations   Persuading a person or organization to perform an

action   Negotiating to achieve mutually acceptable

agreements between parties   Resolving conflict to prevent disruptive impacts, and   Summarizing, recapping and identifying the next

steps

  Close Project or Phase is the process of finalizing all activities across all of the project management process to formally complete the project or phase.   When closing the project, the project manage will review

all prior information from the previous phase closures to ensure that all project work is complete and that the project has met its objectives. Since project scope is measured against the project management plan, the project manager will review that document to ensure completion before considering the project closed

  This process also establishes the procedures to investigate and document the reasons for actions taken if a project is terminated before completion.