PM Lecture 7

8/2/2019 PM Lecture 7

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Lecture April 14, 2011

Project Management


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Overview

Project planning Repetition

Various PM Planning Issues


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adaptation

Model of Project Control

Project planning

content / deliveries

start and end dateteam members

Target values budget

Control

Activities

Project control

Real values

Monitoringdiscrepancies

Real values

Project execution scope change disturbance capacity problems

inter personal problems


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From the Structure to Scheduling of a Project

Work package

Work breakdown structure

2 6

7 12 153

4

5

8

9

10

11

13

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16

Schedule (e.g. network)

1

BCreate list ofrequirements

CProject schedule

DConduct

Feasibility study

EPhase plan

Projektmmgtcreation

FProject report

study

GDesign

system concept

HDeterminefunctions

IPhase planconcept

JDetermine

development process

Project reportConcept

AProject

organization

Work Flow


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0 0 0

0 0 0

Project start

0 1 1

2 2 3

1 2 3

3 2 5

5 4 9

5 0 9

9 0 9

project end

9 0 9

0 5 5

0 0 5

5 1 6

6 1 7

6 2 8

7 1 9

earliest starting date estimated duration earliest finishing date

latest start Total float latest finishing date

Determine Critical Path

Activity 1 Activity 3 Activity 5

Activity 2 Activity 4 Activity 6

1. step: forward calculation

2. step: backward calculation


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People in Projects

Steering committee

Project leader

Project team

Specialfunctions

Expert committee


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Overview of the Project and Organization Structures

Pure project organization

Influence project organization

Matrix project organization

Department CDepartment BDepartment A

Projekt B

PMB

Board of

Management

Projekt A

PMA

Board ofManagement

Department B

PM Staff

Department CDepartment A

Executive board

Project 1

Project 2

Department A Department B Department C

Projectrelateddirectives

Function related directives


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Overview

Project planning Repetition

Various PM Planning Issues


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Cost Planning


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Examples for Cost Planning

Modification project of the ice-skating hall Bodensee-Arenawith restaurant and hotel (2000)- budgeted costs : 8,9 Mio. CHF

- real costs : 11,9 Mio. CHF

- overrun: 1,33 Mio. CHF

Acquisition and introduction of a new administration systemfor human resources (1998)

- budgeted costs : 2,4 Mio. CHF

- real costs : 3,1 Mio. CHF

- overrun: 0,7 Mio. CHF

Roof of Munich Olympia Stadium- budgeted costs: 20 Mio. Mark

- real costs: 171 Mio. Mark

- Factor: 8,6 (other project parts: average 1,9)


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Cost Calculation Terms

Cost calculationThe anticipatory consumption in terms of amount and value,respectively the effective consumption as well as the spatiotemporalclaim of production factors for the purpose of goods and services.

Cost-type accounting

Systematical recording of all the costs, which occur with the creationand application of goods and services (e.g. HR costs, material costs,logistic cost, capital costs, but also direct and indirect costs)

Cost-centre accountingComputed allocation of included costs of each cost-type to a cost-

centre during a period of time (e.g. distribution, engineering,...)

Cost-unit accountingCost-unit: marketable goods and services (e.g. product or service)Cost-unit accounting: calculation


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Top-down (global) estimation methods For a fast and easy, approximate estimation of projects cost. Uses parameters, key data (e.g. per volume)

Bottom-up (analytical, AP-based) estimation methods

Basis for detailed project cost planning Basis for cost based project controlling

Work packagecosts

Workpackages

Type ofcost

Projectcosts (PC)

Allocatio

n

PC overtime

Principles of Cost Estimation in Projects


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WBS

Workpackages

Identification of Work Packages in a WBS

Project

System A System B System C System D

sub system

CB

Sub system

AA

WorkPackage AA1

WorkPackage AA2

WorkPackage AA3

WorkPackage CB2

WorkPackage CB1

WorkPackage D2

WorkPackage D1

Source: Litke, H.-D.: Projektmanagement. Hanser 1995


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Costs

Human resources- Developer, constructing engineer, product leader,etc.

- in CHF/h

- cost/unit: e.g. 130.- / h

Material

- Steel plate, zinced, screws M4, P4 Chips, etc.

- in m2, pieces, etc.

- cost/unit: e.g. 20.-/m2 or 500.-/piece

Acquired services- Consultant services

- All-inclusive

Etc.


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Allocation

Personnel

Factory worker 60h 130.-/h = 7800.- CHF

MaterialSteel plate:

Screws M8:

30m2

300 pieces

20.-/m2

1.-/piece

=

=

600.- CHF

300.- CHFRest

C-parts, etc. = 400.- CHF

total =9100.- CHF

Work package AA3


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Project Calculation

WP-costs (CHF)see previous slide

WP1 + WPi + Wpn = sum of all direct costs

Overhead (%)- Infrastructure

- Management- Office equipment, EDV (utilities)

= sum of all overhead costs (e.g. 10%)

Profit and risk margin (%)- e.g. 50%

Offer price (CHF)- e.g. 15000.- CHF


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Different Cost Estimation Methods

Estimation of an expert (1 person)One employee (mostly project manager) estimates costsbased on his experience, called an educated guess. This kindof estimation is only based on one persons knowledge and hisluck. It might therefore end in a catastrophic mislead.

Estimation of experts (more than one persons)

classical Delphi method

no discussion between experts

broadband Delphi methodwith discussion between experts



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Quality Issues in

Project Management


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Dependencies in Project Planning

Project task

Structuring thetask

Structuring the

processCapacities

Team

Quality

Schedule

Information

Resources

Cost Benefit

profit



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Quality as Central Key Figure in the Project

TimeCosts

Project

Quality


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DIN 55350, part11, S.2:

Quality it the entirety of attributes and characteristic valuesof a unit concerning its eligibility to achieve defined andrequired demands.

en.wikipedia.org/wiki/Quality (accessed 02.05.07)

Quality refers to the inherent or distinctive characteristics orproperties of a person, object, process or other thing. Suchcharacteristics or properties may set a person or thing apart

from other persons or things, or may denote some degree ofachievement or excellence. When used in relation to people,the term may also signify a personal character or trait.

Definition of Quality
http://www.google.com/url?sa=X&start=6&oi=define&q=http://en.wikipedia.org/wiki/Quality&usg=AFrqEzcRk6sL_BgbEqF7LzTwk97x04fufAhttp://www.google.com/url?sa=X&start=6&oi=define&q=http://en.wikipedia.org/wiki/Quality&usg=AFrqEzcRk6sL_BgbEqF7LzTwk97x04fufA


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Due to the uniqueness of each project and thereforenew/different quality requirements have to be defined

Observation of the requirements is the responsibility ofeach team member...

... but first and foremost the responsibility of the projectmanager

Quality management is an important task in projectmanagement

Quality Management


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Strategic management conceptwhich aligns the organization with all-embracing and consistentquality.

Collaborative quality awarenessRealization of an optimal product quality through an appropriatequality of the overall process

Unconditional orientationto the expectation of all stakeholders: costumers, employees,owners, suppliers and society, etc. and in all ranks:

- Product and process quality

- Service quality- Innovation quality- Environmental quality- social quality- ...

Quality Management


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Contents of Quality Management

Set up

qualitycharac-teristics

Quality

management

Quality planning Quality control Quality test

Performanceplanning

Performancecontrol

Performancecorrection

Inspection Test

To set up

arrangementsto reach thequalitycharacteristics

To set up

conduction andaffectivity ofthe qualitycharacteristics

To bring

aboutamendmentsof productquality

Verification of

documents

Check of

code orprototype


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Personnel Planning


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Dependencies in Project Planning

Project task

Structuring thetask

Structuring the

processCapacities

Team

Quality

Schedule

Information

Resources

Cost Benefit

profit



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Resources initially budgeted for projects are frequently

inadequate- Sometimes resource trade-offs are required- Subcontracting is an option

- Project and functional managers perceive availability of resources tobe strictly limited

- Competition for resources CAN turn into win-lose propositions

between project and functional managers

Source: Meredith/Mantel Project Management 2005

Acquiring Sufficient Resources


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A major problem for the PM is that most people required for a

project must be borrowed- At times, functional managers may become jealous if they perceive a

project as more glamorous than their own functional area

- Typically, the functional manager retains control of personnelevaluation, salary, and promotion for those people lent out to projects

- Because the functional manager controls pay and promotion, the PM

cannot promise much beyond the challenge of the work itself- Violation of Unity of Command principle


Acquiring Inspiring Personnel


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Personnel Planning

The planning of personnel contains all reflections which

are related to the concrete assignment of employees to

the project team.


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Contents of the Personnel Planning I

Determination of the staff requirement

Required functions Required capacity Qualification profile

Recruitment of employees recruitments of qualified internal employees (Battle for

Talents) Possibly selection of employees Possibly external recruitment of employees

Agreement of the assignment to a project

part-time / full-time assignment Organizational form (pure project organization, influence

project organization, matrix project organization) Subordination Activity after project end


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Contents of the Personnel Planning II

Assignment of the employees To be carried out in oral and written form List of activities should contain:

- The task to be solved

- The available capacities

- The planned costs

- The closing date to be obtained

Optimal condition of employment and infrastructure

Work station

PC, development and test tools

Methodological instruments Further education (related to project task)

Career planning

Supervision / Coaching of employees


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The Project Manager


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Significance of a PM

Success and Failure correspond strongly with thetype and personality of the PM

Selection of the right PM is essential

Management support for PM

Requirements- Methodological Competence

- Social Competence

- Strong Leadership abilities

- Motivator- Trainer

- Psychologist

- Conflict Manager


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PM Career Model

Source: http://www.project-management-knowhow.com/project_management_career_model.html


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PM Career at Siemens

Quelle: PM@SiemensPM-Guide


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PM Career at Siemens

Quelle: PM@SiemensPM-Guide


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The project team


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Attracting the Best Team

Characteristics of effective team members:- High quality technical skills

- Political sensitivity

- Strong problem orientation

- Strong goal orientation

- High self-esteem



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High performance teams

A team is a small group of people with complementaryskills, who work actively together to achieve a commonpurpose for which they hold themselves collectivelyaccountable.

Teams are one of the major forces behind revolutionary

changes in contemporary organizations.

High performance teams:- Have strong core values

- Turn a general sense of purpose into specific performance objectives

- Have the right mix of skills- Possess creativity

Source: Schermerhorn, Hunt, and Osborn: Organizational behavior 2003


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Optimal team size I

Number of team members

Efficiency and

EffectivenessInformationexchange

CumulatedKnow-how

Coordination


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1 2 3 5 10 20Team size

Probability ofmistakes

Optimal team size II

Conflict: General Terms


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Conflicts arise if there are different ideas/person(s) howto achieve project objectives

Virtually impossible that interaction take place withoutconflict

Definition: the process which begins when one party

perceives that the other has frustrated, some concernsof his (Thamhain and Wilemon, 1975)

Conflicts arise over:- goals (indiv. or group pursues different goals; Raiffa, 1982)- feelings (emotion; most conflicts have their roots in uncertainty)

- beliefs (personality)- behaviour (education)

Conflict: General Terms

Forming a high performance team I

Conflict intensity over the project life cycleForming a high performance team II


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Schedule and technical conflicts are most frequent and serious in thebuild up and main program stage, and schedule conflict in particularduring the phase-out stage.

Conflict intensity over the project life cycleForming a high performance team II

Documents

PM Lecture 7