1. Econ106 Lecture-Discussion No. 5

2. What We’ve Learned About So
Far…
Introduction and Context
 Projects in contemporary organizations
Project Initiation
Strategic management and project selection
 The project manager
 Managing conflicts and the art of negotiation
 The project in the organizational structure

3. Next
• Project Planning
– Project activity and risk planning
– Budgeting: estimating costs and risks
– Scheduling
– Resource allocation
• Project Execution
– Monitoring and information system
– Project control
– Project auditing
• Project Termination

4. “It is almost always cheaper, faster and easier to do things right
the first time than to redo them.” – Meredith and Mantel

5. Planning
• Primary purpose and implications
– to establish a set of directions in sufficient detail to
tell the project team exactly what must be done, when
it must be done, what resources will be required to
produce the deliverables of the project successfully, and
when each resource will be needed
•
•
Deliverables (or scope, specifications, objectives) are more
than mere descriptions of the goods and/or services we
promise to deliver to the client at a quality level that will
meet their expectations
Also includes time and cost required to complete the project
to the client’s satisfaction

6. Planning
(continued)
• Other purposes/requirements and implications
– The plan must be designed in such a way that the project
outcome also meets the objectives, both direct and
ancillary, of the parent organization, as reflected by the
project portfolio or other strategic selection process used to
approve the project.
– The plan must include allowances for risk and features
that allow it to be adaptive, it is always carried out in an
environment of uncertainty.
– The plan must contain methods to ensure its integrity,
e.g. means of controlling the work it prescribes.
– The plan must include any constraints on activities and
input materials prescribed by law and society.

8. Project Launch Meeting
• It is crucial that the project’s objectives be clearly tied
to the overall (vision and) mission, goals and strategy
of the organization, such as might be reflected in the
project portfolio process.
• In the project charter, senior management should
delineate the firm’s intent in undertaking the project,
outline the scope of the project, and describe how the
project’s desired results reinforce the organization’s goals.
• It is also vital that a senior manager call and be present at
the project launch meeting, an initial coordinating
meeting, as a visible symbol of top management’s
commitment to the project.

9. • The success of the project launch meeting is absolutely
dependent on the existence of a well-defined set of
objectives.
– Unless all parties to the planning process have a clear
understanding of precisely what it is the project is expected
to deliver, planning is sure to be inadequate or misguided
• Other important matters addressed in a project launch
meeting:
– Review of major risks facing the project (usually focusing
on market reaction to a new process/product, technical
feasibility of an innovation) and starting of risk management
plan in further identification of risks
– Formulation of project’s risk management group and the
initial risk management plan
– Beware of going beyond the most aggregated level of plans;
priority importance is to clarify purposes, direction and
concerns of those to be involved/affected

10. • Whatever the process of the project launch meeting,
the outcome must be that:
– Technical scope is established (though may not yet be
“cast in concrete”);
– Basic areas of performance responsibility are accepted
by the participants;
– Any tentative delivery dates or budgets set by the
parent organization are clearly noted; and
– A risk management group is created; tasked to develop
a risk management plan that includes proposed
methodologies for managing risk, the group’s budget,
schedule, criteria for dealing with the risk, and required
reports; also communication flows

11. • The PM generally takes responsibility for gathering the
necessary approvals and assuring that any changes
incorporated into the plan at higher levels (including the
client) are communicated to, and approved by, the units
that have already signed off on the plan.
– Violation of this procedure is considered a betrayal of trust.
• The final, approved result of this procedure is the project
plan, also known as the baseline plan.
• When the planning phase of the project is completed, it is
valuable to hold one additional meeting, a postplanning
review. Ideally chaired by an experience PM not
connected with the project, to make sure that all necessary
elements of the project plan have been properly developed
and communicated.

12. • The various parts of the project plan, including the risk
management plan, are then scrutinized by the group and
combined into a composite project plan.
• The composite project plan, still not completely firm, is
approved by each participating group, by the project
manager, and then by senior organizational management.
Each subsequent approval hardens the plan somewhat,
and when senior management has endorsed it, any further
changes in the project’s scope must be made by processing
a change order, or an informal written memoranda if the
project is not large or complex.
– The main point is that no significant changes are made,
without written notice, following top management’s
approval. “Significant” depends on the specific situation and
the people involved.

13. “Given the project charter, approvals really amount to a series
of authorizations.” – Meredith and Mantel

14. Project Charter Elements
Purpose
1.
A short summary directed to top management and
those unfamiliar with the project
Contains a statement of the general goals of the
project and a brief explanation of their relationship to
the firm’s objectives
•
•
•
The Business Case: market opportunities, profit
potentials, needs of the organization, customer requests
for proposals, technological advancement opportunities
and regulatory, environmental, and social considerations

15. 2. Objectives
A more detailed statement of the general goals of the
project, what constitutes success , and how the
project will be terminated
–
•
Includes profit and competitive aims from The Business
Case as well as technical goals
3. Overview
•
This section describes both the managerial and
technical approaches to the work.
•
•
Managerial approach takes note of any deviation from
routine procedure– e.g. use of subcontractors
Technical approach describes the relationship of the
project to available technologies – e.g. project is an
extension of work done by the company from an earlier
project

16. 4. Schedules
•
Outlines the various schedules and lists all milestone
events and/or phase-gates
•
Each summary (major) task is listed, with the
estimated time obtained from those who will do the
work.

The projected baselines schedule is constructed from
these inputs. The responsible person or department head
should sign off on the final, agreed-on schedule.

17. Resources
5.
3 primary aspects: budget, contractual items, and cost
monitoring and control procedures
•
•
•
•
Budget – both capital and expense requirements are detailed by
task, with one-time costs separated from recurring project costs
Contractual items – complete list and description (e.g.
customer-supplied resources, liaison arrangements, project
review and cancellation procedures, proprietary requirements,
purchasing/procurement contracts, specific management
agreements, technical deliverables and their specifications,
delivery schedules, and a specific procedure for changing any of
these)
Cost monitoring and control procedures – in addition to
usual routine elements, must also include any special resource
requirements for the project such as special machines, test
equipment, laboratory usage or construction, logistics, field
facilities, and special materials

18. 6. Personnel
•
Lists the expected personnel requirements of the
project, especially the project manager and the
sponsor/approver of the project
•
In addition, list any special skill requirements,
training needed, possible recruiting problems, legal
or policy restrictions on work force composition, and
security clearances
•
Time-phase personnel needs to the project schedule;
personnel, schedule and resources sections can be
cross-checked with one another to ensure
consistency

19. 7. Risk Management Plans
•
Covers potential problems as well as potential lucky
breaks that could affect the project
•
Plans to deal with favorable or unfavorable
contingencies
7. Evaluation Methods
•
Against standards and methods established at
project’s inception
•
Contains a brief description of the procedures to be
followed in the monitoring, collecting, storing,
auditing and evaluating the project, as well as postproject (“lessons learned”) evaluation following
project termination

21. The Project Plan
• Usually constructed by:
1.
Listing the sequence of activities required to carry the
project from start to completion (according to project life
cycle).
2. Each activity/segment is made up of further
activities/specific tasks and milestones/significant
events.
3. As the project passes through each of the segments, it is
subjected to a series of “quality gates” (aka “phase gates”,
“toll gates”, etc.) that must be successfully passed before
proceeding to the next segment.
•
Note that the planning process must pass through the quality
gates as well as the physical output of the project itself.

22. The Work Breakdown Structure
(WBS)
A description of all the tasks to complete a project,
organized by some consistent perspective and
containing a variety of information needed for that
perspective

23. Sample Form 1
Activity Plan
Deliverables
Measure(s) of Accomplishment
Key constraints and assumptions
Tasks
Estimated
Resources
Immediate
Predecessor
Tasks
Estimated
Time
Duration
Assigned To

24. Sample Form 2

25. Sample Form3
Career Day
Steps
1. Contact
Organization
a. Print forms,
letters
b. Contact
organizations
c. Collect
display
information…
2. Publicity
and Promotion
Responsibili
ty
Time
(Weeks
)
Precede
d by
Resource Assigned
s
to

26. Sample Form 4
OBJECTIVE: Merger of Ajax Hardware into Instat Corp.
Steps
Due Date
Responsibility
Precedent
1. Advise Ajax
mgt. of changes
Dec. 15, 2012
Jose Reyes
-
2. Begin preparing
Instat sales dept.
to sell Ajax
Consumer
Division products
effective 1/1/13
Dec. 15
Jose Reyes
Paula Sanson
1

27. Sample Form 5: RACI Matrix*
Activity
Responsible Individuals
Initiate Action
Work with
Clear Action with
1. Distribution
System and Its
Administration
a. Recommend
distribution
system to be used
Marketing officers
A, B, C product
line managers
Management
committee
Agency director
VP
2.
Compensation…
*RACI – Responsible,Accountable, Consult,Inform
Sr. VP Marketing

28. Interface Coordination Through
Integration Management
Integration Management – managing the problems
that tend to occur between departments and
disciplines, rather than within individual departments
The importance of clear communication flows

29. Sample 1: 12th YEC Registration Workflow

30. Sample 2:
12th YEC Sponsorships Payments Flow

31. Risk Management
 Risk Management and Planning – deciding how to approach and
plan the risk management activities for a project
 Risk Identification – determining which risks might affect the
project and documenting their characteristics
 Qualitative Risk Analysis – performing a qualitative analysis of risks
and conditions to prioritize their impacts on project objectives
 Quantitative Risk Analysis – estimating the probability and
consequences of risks and hence the implications for project
objectives
 Risk Management Register – an up-to-date data register of risk
environments, assumptions, identified risks and categories, risk
estimates, minutes of meetings and reports, actual outcomes of
identified risks