Project Management Techniques

Project Management
Second Session
Egypt Scholars
Presented by
Mohamed Khalifa Hassan
Jan 2014
© Mohamed Khalifa, 2014 All Rights Reserved 1

2
Benefit
measurement
methods
Scoring and
Rating
System
Benefit &
Cost
Cash Flow
Analysis
Techniques
Pay Back Period
Discounted Cash Flow
Net Present Value (NPV)
Internal Rate of Return (IRR)
Decision tree
Criteria profiling
Weighted factor
Q-Sorting
Delphi technique
© Mohamed Khalifa, 2010 All Rights
Reserved
2.1 Project selection

1- Benefit Cost Ratio (BCR)
A ration attempting to identify the relationship between the Benefits and
Costs of proposed project.
Used to measure both quantitative and qualitative factors since some cost and
benefits cannot be measured exclusively in financial terms.
BCR = PV benefits / PV Costs
PV benefits = Present Value of Benefits
PV Costs = Present Value of Cost
Example :
PV Revenue = $ 4000
PV Cost = $ 2000
Benefit Cost Ratio = PV benefits / PV Costs = 4000/2000 = 2
Indicate that for every $1 investment (Costs) the company will gain $2 (Benefits)
3
Reserved

Scoring and Rating System
4
System Description
Decision tree
In a decision tree model, selection criteria are arranged along the
branches of a tree flowchart. The project is evaluated against criterion.
If the project fails to meet any criterion, it is removed from
consideration.
Criteria profiling
This is similar to the decision tree in that the project is evaluated using
one criterion at a time. However, in this model the project continues to
be considered even if it fails to meet some of the criteria.
Weighted factor
This type of model is similar to criteria profiling, but different criteria may
be weighted and factored into the scoring.
Q-sorting
In a Q-sorting model, groups of people rate the relative priority of a
number of projects.
Delphi technique
In the Delphi technique, individuals can be located remotely and may
remain anonymous, yet still participate in group decision making.
People participating in a Delphi process are given criteria, asked to rate
a project on a zero-to-ten scale, and provide reasons for their ratings.
Reserved

1- Pay Back Period Analysis:
Time to “Break Even” or payback initial
investment.
5
Year Project A Project B
0 -1000 -1000
1 500 100
2 400 300
3 300 400
4 100 600
Pay back 2.33 yrs 3.33 yrs
2- Return On Investment (ROI) (Net Income)
Cash Invested = 1000
Project A :
Avg Annual Income = (500 +400+300+100) /4 = 325
ROI = (325 / 1000) * 100 = 32.5%
Project B :
Avg. Annual Income = (100+300+400+600)/4= 350
ROI = (350 / 1000)* 100 = 35%
3 – Net Present Value (NPV)
The present value of an investment minus the initial investment. A negative NPV signals a
poor investment risk.
i : Project Cost of capital (Interest Rate)
If NPV > 0 Accepted Project
If NPV < 0 Rejected Project
If NPV in both project > 0 Choose the
biggest value
ni
CFn
i
CF
i
CF
CFNPV
)1(
........
2)1(
2
)1( 1
1
0
+
++
+
+
+
+=
18.49
)10.01(
600
)10.01(
400
)10.01(
300
)10.01(
100
1000
82.78
)10.01(
100
)10.01(
300
)10.01(
400
)10.01(
500
1000
4321
4321
=
+
+
+
+
+
+
+
+−=
=
+
+
+
+
+
+
+
+−=
B
A
NPV
NPV
Cash Flow Analysis Techniques
Reserved

4 - Internal Rate of Return
• The discount rate that makes the NPV of the future cash return equal to the initial
investment. A Favorable IRR should be higher than the hurdle rate.
• The discount rate that makes the PV(inflows) = PV (outflows)
After solve the IRR for A & B
For Project A, The IRR that solves this equation is 14.5%
For Project B, The IRR that solve this equation is 11.8%
6
n
IIR
CFn
IRR
CF
IRR
CF
CFNPV
)1(
........
)1()1( 2
2
1
1
0
+
++
+
+
+
+=
0
)1(
600
)1(
400
)1(
300
)1(
100
1000
0
)1(
100
)1(
300
)1(
400
)1(
500
1000
4321
4321
=
+
+
+
+
+
+
+
+−=
=
+
+
+
+
+
+
+
+−=
BBBB
B
AAAA
A
IRRIRRIRRIRR
NPV
IRRIRRIRRIRR
NPV
Reserved

2.2 Project governance
7
Reserved

• Stakeholders:
- People or organization that have a vested interest
in the outcome of the project or who is actively
involved in a project.
- Stakeholders take on various roles and
responsibilities on projects.
- They may have a positive or negative influence on
a project
8© Mohamed Khalifa, 2010 All Rights Reserved
2.2 Roles and responsibilities of the project
manager and the project sponsor

• Project Sponsor:
– An Executive who has the power and authority to
make decisions. (If the sponsor is outside of the company, such as a
customer, the duties listed here may be the responsibility of the project manager.)
• Has the financial resources for the project.
• Sign and publishes the project charter.
• Has ultimate responsibility for project success.
• Sign off on all planning documents and change requests.
• Authorize team to use resources.
• Champion and mentors the project manager and team
• Reviews progress and quality.
• Cuts through red tape and expedites activities
manager and the project sponsor

• Project Manager:
– The individual responsible for managing all aspects of
the project. The Project manager:
• Works with stakeholders to define the project.
• Plans, Schedule and budgets project activities with team
input.
• Works with the team to carry out project plans.
• Monitors performance and takes corrective action.
• Keeps the sponsor and the stakeholders informed.
• Request and documents scope changes.
• Acts as a liaison between the project team and other
stakeholders.
manager and the project sponser

• Project team members:
(May include internal and/or external resources)
The individuals who work with project manager to carry out
plans and produce the project work result.
• Project management team :
The project team members who perform project
management activities.
11
Reserved
2.2 Roles and responsibilities of the team

12
Reserved
2.3 Initiating the project and developing the
project charter

13
1 – Project Statement Of Work (SOW)
• A document describing the product or services to be supplied for the project.
• SOW documents the business need for the project, a description of the project and
a description of the product requirements and characteristics.
• SOW specifies the relationship between the business need and the product or services
being created to meet that need.
• internal Projects : Developed by Initiators or Sponsors
External Projects : Developed by Customer as a part of bid document.
2 – Business Case
Business case is created as a result of one or more of the following:
- Market demand - Organizational need
- Customer request - Technology advance
- Legal requirement - Social need
3– Contract (When Applicable) :
If the project is commissioned for an external customer’s organization is an input for
project charter development.
Reserved
project charter

4 – Enterprise environmental factors:
• Enterprise environmental factors are external influences that affect project success
like :
– Company culture and organization structure - Existing Human Resources.
– Marketplace condition - Government or Industry Standards
– Stakeholder risk tolerances - Information System Infrastructure
5 – Organizational Process Assets:
• Policies and procedures - Learning and Knowledge from previous
projects
• Template and guidelines - Corporate Knowledge base for sorting and
retrieving information
14
Reserved
project charter

1 – Expert judgment
Knowledge provided based upon expertise in a knowledge area, an application area, an
industry, or discipline relevant to the project charter development process.
Expert Judgment may be from internal or external sources such as stakeholders, industry
group, functional units, and so on.
15
Reserved
project charter

• Project Charter Development Outputs:
– The Project charter is the only output from develop project charter
process.
– In many companies the project manager is responsible for its creation, but
is issued by the sponsor.
– The Project Charter is a document that makes the project official and
authorized the project manager to lead the project and draw on
organizational resources as needed.
– It include:-
• Project purpose or justification
• Measurable project objectives and related success criteria.
• High-level requirements
• High-level project description
• High-level risks
• Summary milestone schedule
• Summary budget
16
Reserved
project charter

Develop Project Charter
Workshop
(20 Min.)
project charter

Reserved
18
3. Requirements

3.1 Conducting stakeholder assessments
3.2 Understanding and managing resistance
3.3 Communicating and refining requirements
3.4 Change control process
3.5 Communications
Reserved
19
3. Requirements

20
Identify Stakeholders
Identify stakeholders is the process of identifying all people or organizations impacted
by the project, and documenting relevant information regarding their interests,
involvement, and impact on project success
Reserved
3. 1 Conducting stakeholder assessments

1. Project Charter:
Project charter can provide information about internal and external parties
involved in and affected by project.
2. Procurement documents:
If the project is the result of a procurement activity or is based on an
established contract, the parties in that contract are key project
stakeholders.
3 – Enterprise Environmental factors :
The enterprise environmental factors that can influence the identify
stakeholders process include, but not limited to:
- Organization or company culture and structure
- Governmental or industrial standards.
4 – Organizational Process Assets:
- Stakeholder register templates
- lessons learned from previous projects
- Stakeholder registers from previous projects.
21
Reserved

Stakeholder analysis is a process of systematically and gathering and
analyzing quantitative and qualitative information to determine whose
interests should be taken into account throughout the project.
Stakeholder analysis generally follows the steps described below:-
– Step one: Identify all potential project stakeholders and relevant
information such as their roles, departments, interest, knowledge levels,
expectations and influence levels.
- Step two: Identify the potential impact, classify them so as to define an
approach strategy.
- Step three: Assess how key stakeholders are likely to react or respond in
various situations.
22
Reserved

23
Power
Interest
Keep
Satisfied
Monitor
(Minimum Effort)
Manage
closely
Keep
Informed
Power / Interest Grid with Stakeholders
© Mohamed Khalifa, 2010 All Rights Reserved
High
HighLow

24
Stakeholder Register
This contains all details related to the identified stakeholders including but not limited to:
Stakeholder Management Strategy:-
The stakeholder management strategy defines an approach to increase the support and
minimize negative impact of stakeholders throughout the entire project life cycle.
Name Position Location Role in the
project
Contact
Information
Major
Requirements
Main
Expectations
Phase with
the most
interest
Classification
(Internal /
External)
Reserved

Identify Stakeholders
Workshop
(20 min.)
25
Reserved

3.2 Understanding and managing
resistance
– Technical
• Process, procedures, and technology
– Social/political
• Changes in established relationships with others
and the organization
– Personal – “What’s in it for me?”
– Company – “What’s in it for the company?”
– Professional interests – “What’s in it for my career?”
– Peers’ and friends’ interests – “What’s in it for others?”

1 – Interviews
An Interview is a formal or informal approach to discover information from
stakeholders by talking to them directly.
2 – Focus group
Focus groups bring together prequalified stakeholders and subject matter experts
to learn about expectations and attitudes about the proposed product, service or
result.
3 – Facilitated Workshops:
Requirements workshop are focused sessions that bring key cross-functional
stakeholders together to define product requirements. Workshops are considered
a primary technique for quickly defining cross-functional requirements and
reconciling stakeholder differences.

4 – Group Creativity Techniques
Several group activities can be organized to identify project and product
requirements.
Creativity techniques that can be used are :
Brainstorming, Nominal group technique, Delphi Technique, Idea/mind mapping
affinity diagram.
5 - Group Decision Making Techniques:
Group decision making is an assessment process of multiple alternatives with an
expected outcome is the form of future actions resolution.
Methods of reaching a group decision are
Unanimity , Majority , Plurality, Dictatorship

6 – Questionnaires and Surveys
The most appropriate with broad audiences, when turnaround is needed, and
where statistical analysis is appropriate.
7 – Observations
It called “Job Shadowing” is usually done externally by observer viewing the
user performing his /her job. It cal also be done by a “Participant observer”
who actually performs a process or procedure to experience how it is done to
uncover hidden requirements.
8 – Prototype
It allows stakeholders to experiment with a model of their final product rather
than only discussing abstract representations.
30
Reserved

Requirements Documentation
Describes how individuals requirements meet the business need for the
project.
It may start out at a high level and become progressively more details as
more is known.
It must be Measurable and testable, traceable, complete, consistent and
acceptable to key stakeholders.
Requirements Management Plan
Document how the requirements will be analyzed , documented , and
managed throughout the project.
Requirement Tractability Matrix
31
Reserved

32
Plan Communication is the process of determining the project
stakeholder information needs and defining a communication
approach
3.4 Communications
Communication Plan

Communication Models
A basic model of communication demonstrates how information is
sent and received between two parties, defined as the sender and
receiver. The key components of this 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 the message.
- Decode: to translate the message into meaningful thoughts or
ideas.
33
Reserved
3.5 Communications

Communication Methods :
Interactive Communication : Between two or more parties
perform multidirectional exchange of information (Meeting ,
Conference call, video , ..).
Push Communication : Sent to specific recipients who need to
know the information (Fax , E-mail, letters, Memo, ..).
Pull Communication : Used for very large volumes of
information, or very large audience ( e-learning, Intranet and
knowledge repositories)
Reserved
34
3.5 Communications

• Communication management plan :
– Describes the project team’s approach to communication project
information this includes:-
• What information is communicated to whom , by
whom , when and in what manner.
• It document how information is collected, archived and
accessed.
• Flow charts of the information flow in the project,
workflow with possible sequence of authorization, list
of reports and meeting plans.
• Communication constraints .
35
Reserved
3.5 Communications

Reserved
36
4. Work Breakdown Structure (WBS)

4.1 The central role of the WBS
4.2 Developing a usable WBS
4.3 Using the WBS to clarify product constraints
and activities
4.4 Using the WBS to facilitate project
development
Reserved
37
4. Work Breakdown Structure (WBS)

• Definition:
– A work breakdown structure is a logical of project deliverables
arranged in a hierarchical structure.
– A WBS defines the total scope of work required to complete the
project.
– The deliverables and their component sub-deliverables are represented
on the WBS in levels of descending order.
38
Project
Phase 1
Deliverable
1.1
Deliverable
1.2
Phase 2
Deliverable
2.1
Work Package
2.2.1
Work Package
2.2.2
Deliverable
2.2
Deliverable
2.3
Phase 3 Phase 4
Organization of Work in a WBS
In WBS, major components of
work can be grouped by:
Major project deliverables.
Life cycle phases.
Organizational or functional
responsibility.
Geographical location.
Reserved
4. The central role of the WBS

Create WBS is the process of dividing project deliverables and
project work into smaller, more manageable components.

WBS:
It will organize deliverables and work packages into a manageable
hierarchy. It should not be confused with other kinds of breakdown
structure like: Bill Of Material (BOM) or Resource Breakdown Structure
(RBS).
WBS Dictionary:
– An auxiliary document containing details about each element in the
WBS process, It may includes:
• Code of accounts identification. * Quality requirements
• Milestones * Time estimates
• Contract information * Resources estimates
• Cost * Information for measuring performance

• Activity :
– Is an element of project work that requires action to produce a deliverable.
• Activities share some common characteristics like :
– Has an expected duration.
– Consumes budget and/or human resources.
– Is named in verb-noun format. Example (Revising a user manual – Digging
footers).
• The 8/80 rule :
– The 8/80 rule refers to a guide line suggesting that activities should require
more than 8 and fewer than 80 hours of effort to complete.
4.3 Using the WBS to clarify product
constraints and activities

42
Define activities is the process of identifying the specific actions to be
performed to produce the project deliverables.

43
Activity List:
A definitive list of activities that are
necessary to complete in order to
produce deliverables.
Milestone list:
Helps prioritize activities during scheduling.
Reserved

44
WORK PACKAGE/ACTIVITY DESCRIPTION
Project Name/Number: Prepared by: Date:
Customer/End User Group: Contact Name: Project Type (S/M/L):
Please complete a form for each WorkPackage item in the Project. See Work Package
List for a full listing of the project Work Packages. Note that some fields will be
completed after scheduling is completed.
WORK PACKAGE LEADER INFORMATION
Name Organization, phone number, email
WORK PACKAGE FUNCTIONAL MANAGER INFORMATION
Name Organization, phone number, email
WBS Component Name and Number:
Description:
Deliverable(s) and Acceptance Criteria:
Assumptions:
Dependencies (Predecessor and successor
tasks):
Inputs:
Outputs:
Resource Requirements (Type of
resource(s)):
Responsible org. units and Responsibility
(RASCI):
Staff Assigned:
Effort Estimate (Number of resource hours
per type of resource):
Estimated Cost:
Estimated Duration:
Start date: End date:
Remarks:
Current effort estimate to completion
Actual Duration:
Actual Start date: Actual End date:
Actual Effort:
Activity attributes :
Information describing the different
activities (Such as responsible team
members, manpower required, and
so on).

4.4 Using the WBS to facilitate project
development
– Planning
– Budgeting
– Estimating
– Scheduling
– Performance measurement
– Communication
– Change management
– Coordination
– Control
– Risk management

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