Project management planning and control techniques

PROJECT MANAGEMENT Planning and Control Techniques Fourth Edition-·· ~ - i i The Britich CouncU II II' ~J~~ ~:043 \ Ethiopia Tel 56 31 15 Rory Burke _ _ Copyright c 2003 Rory Burke Email (for orders and customer service enquiries): cs-books@wiley.co.uk Visit our Home Page on www.wileyeurope.com or www.wiley.com All Rights Reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except under the terms of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London WIT 4LP, UK, without the permission in writing of the Publisher Requests to the Publisher should be addressed to the Permissions Department, John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex PO 19 8SQ, England, or emailed to permreq@wiley.co.uk, or faxed to (+44) 1243 770620 This publication is designed to provide accurate and authoritative information in regard to the subject matter covered It is sold on the understanding that the Publisher is not engaged in rendering professional services If professional advice or other expert assistance is required, the services of a competent professional should be sought Other Wiley Editorial Offices John Wiley & Sons Inc., III River Street, Hoboken, NJ 07030, USA Jossey-Bass, 989 Market Street, San Francisco, CA 94103-1741, USA Wiley-VCH Verlag GmbH, Boschstr 12, D-69469 Weinheim, Germany John Wiley & Sons Australia Ltd, 33 Park Road, Milton, Queensland 4064, Australia John Wiley & Sons (Asia) Pte Ltd, Clementi Loop #02-01, Jin Xing Distripark, Singapore 129809 John Wiley & Sons Canada Ltd, 22 Worcester Road, Etobicoke, Ontario, Canada M9W IL I Wiley also publishes its books in a variety of electronic formats Some content that appears in print may not be available in electronic books British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN: 0470851244 Typeset in Times New Roman 1l/13pt by Mathematical Composition Setters Ltd, Salisbury, Wilts Printed and bound in Great Britain by Biddies Ltd, Guildford This book is printed on acid-free paper responsibly manufactured from sustainable forestry in which at least two trees are planted for each one used for paper production To Sandra, my best friend, partner, galley slave andforedeck crew v Twenty years ago I remember listening to an academic telling us that we professionally qualified engineers were our own worst enemies, in that anyone from a CEng to the lowest unskilled worker in an engineering company could, and did, call themselves engineers To an outsider there was no distinction between the professional levels as, for example, there is in the medical world between doctors and nurses, and as a result engineers were not generally accorded the status our work and qualifications deserved Regrettably, the same can be said today for project managers in that anyone, from a social worker running a help desk to the manager running a major construction project, are called project managers The main reason for this is because the term 'Project Manager' is currently in vogue with regrettably not too many senior managers/ directors having the vaguest idea or understanding of what this really means So how we project managers spread the word about our capability and the benefits that our profession can deliver? The only route is through education That is the education ofour peers, our bosses and all those who work with us and for us, until all the processes covered in this book become second nature Rory's books on project management provide a clear understanding of what project management is all about and are widely used as standard text books in most colleges that teach the subject If you think you are running a project but are not using the majority of the processes in this book then you are either running your project very badly or, more probably, you are simply not running a project Kirk Phillips Ramble vi This is a techniques book designed to take you step-by-step through the latest planning and control techniques, particularly those used by the Project Management Software and the Project Management Body of Knowledge (both APM and PMI) Project management continues to grow as a profession through a wide range of projects (both large and small) The project management body ofknowledge (PMBOK and bok) have both been revised and expanded into nine and 55 knowledge areas respectively Employers are increasingly encouraging their managers to gain professional project management certification to comply with their quality management systems Project management techniques are now used outside the traditional project industries, and a management-by-project approach has been adopted by many large companies in an effort to keep their work small, innovative and manageable Project Management Computing: Despite the advances in the project management software over the past twenty years (over 200 software packages are reported to be available), the project manager still needs to understand the basic principles ofproject management to apply the software successfully Although there have been no new project management planning and control techniques introduced since the sixties, the communication field has developed through computer networking and the Internet both enhancing the project's information and control system, and the mobile office Target Market: This book is widely used on university degree programmes, executive management training courses, planning software courses, and professional certification (PMP) The undergraduate degree programmes tend to focus on project management principles and calculations, while the postgraduate degrees and MBA modules focus on applying project management principles through case studies and academic projects vii The executive management training courses for practising managers focus on the practical planning and control techniques often using the delegates' projects as a live case study The computer planning skills training courses teach clients how to use proprietary software (often having to explain basic planning techniques first) The professional certification examinations (project management professional [PMP]) are structured around the project management body of knowledge (PMBOK and bok) to give a formal qualification which is internationally recognised Academically there is a trend away from knowledge based assessment towards competency based assessment where you are not assessed on your knowledge alone, but on your ability to apply your knowledge In this context project management competency is the application of project management planning and control techniques to your projects - developing a plan and guiding your projects towards a successful completion An accompanying website with additional exercises, proformas and worked examples is available for lecturers using this book I have derived considerable benefit and ideas from lecturers, students, consultants and practising project managers who were willing to discuss the commercial application of project management techniques The writing of this book was a team effort - I particularly wish to thank: Book proposal: Particular thanks to Steve Hardman at John Wiley & Sons for coordinating feedback from lecturers in Britain and Australia, and Michael Hougham at Henley Management College Diagrams and DTP: Sandra Burke Proof reading for content: Derek Archibald, Bob Bums, Peter Goldsbury, Steve Hinge, Mark Massyn, and Chris Naude (Chris and Derek also designed the computer screens) Proof reading for grammar and spelling: Sandra Burke, Linda Logan, Renee Bampfield-Duggan, Tony Shapiro and Derek Archibald Sketches: Ingrid Franzsen and Buddy Mendis Foreword: Particular thanks to Kirk Phillips Rory Burke New Zealand viii Chapter 1: Introduction to Project Management Chapter 2: History of Project Management , , , Chapter 3: Project Life-Cycle Chapter 4: Feasibility Study Chapter 5: Project Selection Chapter 6: Project Estimating Chapter 7: Planning and Control Cycle Chapter 8: Scope Management Chapter 9: Work Breakdown Structure (WBS) Chapter 10: Critical Path Method (CPM) Chapter 11: Schedule Barchart Chapter 12: Procurement Schedule Chapter 13: Resource Planning Chapter 14: Project Accounts Chapter 15: Project Control Chapter 16: Earned Value Chapter 17: Quality Management Chapter 18: Project Risk Management Chapter 19: Project Communications Chapter 20: Project Organisation Structures Chapter 21: Project Teams Chapter 22: Project Leadership Chapter 23: Project Management Computing Appendix 1: Appendix 2: Appendix 3: Appendix 4: Abbreviations J •••••••••••••••••••••••••••••••••••••••••••• Bibliography Index , '" 14 28 43 56 74 94 103 115 131 154 169 180;.\ 195 211 224 240 252 270 284 301 309 321 332 339 349 353 363 364 369 ix Introduction To Project Management Project management offers a structured approach to managing projects The purpose of this book is to outline the latest planning and control techniques used by industry, commerce, sport and domestic projects, and particularly those used by the project planning software and referred to in the Project Management Institute's (PMI) project management body of knowledge (PMBOK), and the Association of Project Manager's (APM) body of knowledge (bok) As the use of projects becomes more pervasive, so more managers are entering the field of project management Their success will be helped by their ability to develop a fully integrated information and control system to plan, instruct, monitor and control large amounts of data, quickly and accurately to facilitate the problem-solving and decision-making process To achieve these goals the project manager needs a comprehensive toolkit - as a plumber works with a bag oftools, so the project manager works with a computer producing organisation charts, work breakdown structures, barcharts, resource histograms and cash-flow statements Projects have traditionally been managed through a classic functional hierarchical type organisation structure, but with the increase of multi-disciplines, multi-departments, multi-companies and multi-national projects so there has been a move towards management-by-projects, project teams and matrix organisation structures As the project manager is the single point of responsibility, it is the project manager's job to set up a management structure which not only meets the needs of the project, but the needs of the organisation, the needs of the stakeholders and the needs of the individuals working on the project as well (see figure 1.1) Figure 1.1: Intersecting Needs (OBS = Organisation Breakdown Structure) APPENDIX 100 $11,000 May 6May 100% 200 $2,000 May 8May 100% 300 $2,000 May 2May 100% 400 $11,500 May May 100% 500 $7,000 7May (crash) 50% 600 $4,000 May 66.60% 700 $2,500 8May 50% 1000 $1,500 8May 50% 1200 $7,000 May 1300 $3,000 8May 1400 $3,500 4May May 25% May 100% Table 8: Data Capture at Timenow (the project has now progressed to timenow 8) 100 $9,000 $9,000 100% $9,000 $11,000 $0 0% ($2,000) (22.2%) $11,000 200 $2,000 $2,000 100% $2,000 $2,000 $0 0% $0 0% $2,000 300 $1.000 $1.000 100% s1.000 $2.000 $0 0% ($ 1.000) (100%) $2,000 400 $12.000 $12,000 100% $12,000 $11.500 $0 0% 50000% (42%) $11.500 500 $10,000 $6,000 50% $5,000 $7,000 ($1.000) (16.6%) ($2,000) (40%) $14,000 600 $6,000 $6,000 66.60% $4,000 $4,000 ($2,000) (33.3%) $0 0% $6,000 700 $4,000 $4,000 50% $2,000 $2,500 ($2,000) (50%) ($500) (25%) $5,000 800 $6,000 $0 0% $0 $0 $0 0% $0 0% $6,000 900 $8,000 $0 0% $0 $0 $0 0% $0 0% $8,000 1000 $4,000 $2,000 50% $2,000 $1.500 $0 0% $500 25% $3,000 1100 $6,000 $0 0% $0 $0 $0 0% $0 0% $6,000 1200 $8,000 $8,000 100% $8,000 $7,000 $0 0% $1.000 12.50% $7,000 1300 $8,000 $4,000 25% $2,000 $3,000 ($2,000) (50%) ($1.000) (50%) $12,000 1400 $4,000 $4,000 100% $4,000 $3,500 $0 0% $500 12.50% $3,500 Table 9: Earned Value at Timenow 361 PROJECT MANAGEMENT PLANNING AND CONTROL TECHNIQUES Revised Early Start Barchart at Timenow Showing expenditure value x $1000 (Where 400 500 600 700 _ =ActualliwdiiUH =Revised) 2 2 2 2 2 800 900 1000 1100 1200 1300 4 2 2 1400 Figure 6: Revised Barchart at Timenow Project Analysis at Timenow 8: From the schedule and cost variances, overall the project is still late, but now the budget is over spent The trends indicate SV% improving from (20%) to (12%), but CV% deteriorating from 2.5% to (7.8%) This is flag to check productivity on activities 100, 500, 700 and 1300 They are either under performing, the estimate was too optimistic, or there are special circumstances Although the SV is negative the revised barchart indicates that the project will finish on time The discrepancy is caused by activities with float running late The negative cost variance indicates a need to apply control on activities 500, 700 and 1300, to bring the project in on budget 362 AOA: Activity-on-Arrow AON: Activity-on-Node ACWP: Actual Cost of Work Performed APM: Association of Project Managers BAC: Budget at Completion BCWP: Budgeted Cost of Work Performed BCWS: Budgeted Cost of Work Scheduled BOK: Body ofKnowledge BOM: Bill of Materials BOOT: Build Own Operate Transfer BOT: Build Operate Transfer CIF: Cost Insurance Freight CV: Cost Variance COD: Cash on Delivery CPA: Critical Path Analysis CPI: Cost Price Index CPM: Critical Path Method CV: Cost Variance DCF: Discounted Cash-Flow DDP: Delivered Duty Paid DoD: Dept ofDefence EAC: Estimate-at-Competition FF: Finish-to-Finish FIFO: First In First Out FRI: Forecast Rate ofInvoicing FS: Finish-to-Start FOB: Free on Board IPMA: International Project Management Association IRR: Internal Rate of Return JIT: Just-in-Time LIFO: Last In First Out MBE: Management by Exception MBO: Management by Objectives MRP: Material Requirement Planning NCR: Non Conformance Report NPV: Net Present Value OBS: Organisation Breakdown Structure PERT: Project Evaluation and Review Technique PC: Percentage Complete PDM: Precedence Diagram Method PMBOK: Project Management Body ofKnowledge PMI: Proj ect Management Institute PMP: Project Management Professional QCP: Quality Control Plan ROI: Return on Investment ROT: Refurbish Operate Transfer SPI: Schedule Performance Index SV: Schedule Variance SF: Start-to-Finish SS: Start -to-Start TQM: Total Quality Management WBS: Work Breakdown Structure 363 Adair, John., Action-Centred Leadership, Pan, 1989 Adair, John., Effective Decision-Making, Pan, 1985 Adair, John., Effective Leadership, Pan, 1988 Adair, John., Effective Time Management, Pan, 1988 Adair, John., Team Building, Pan Adams, J., and Campbell, B., Roles and Responsibilities ofthe Project Manager, PMI Ahuja, Hira., Project Management: Techniques in Planning and Controlling Construction Projects, Wiley, 1994 ASINZS 4360: 1995., Risk Management Association of Project Managers (APM)., Body ofKnowledge (BOK) Barkley, Bruce., and Saylor, James., Customer-Driven Project Management: A New Paradigm in Total Quality Implementation, McGraw-Hill, 1994 Barnes, N., and Wearne, S., The Future for Major Project Management, International Journal ofProject Management, Vol 11 ,No 3, August 1993, pp 135142 Begg, D., Economics, McGraw-Hill, 1997 Belbin, M., Management Teams, Butterworth-Heinemann, 1996 Benedetto, R., Matrix Management Theory in Practice, Kendall Hunt Bentley, C., Configuration Management Within Prince, 1993 Bolton, Robert., People Skills, Simon & Schuster, 1986 Bryans, P, Cronin, T., Organisation Theory, Core Business Studies, 1983 BS 5750 (1979), Quality Management Burleson, C., Effective Meetings, Wiley Caper, Richard., A Project-By-Project Approach to Quality: A Practical Handbookfor Individuals, Teams and Organizations, Gower, 1997 Catapult., Microsoft Project 98 Step by Step (Step by Step Series), 1997 Carnall, c., Managing Change, Prentice-Hall, 1990 Chapman, C., and Ward, Stephen., Project Risk Management: Processes, Techniques and Insights, Wiley, 1996 364 BIBLIOGRAPHY Charland, T., Advanced Project Management Techniques Handbook, 1990 Charoenngam, Chotchai., and Popescu, Ca1in., Project Planning, Scheduling, and Control in Construction: An Encyclopedia of Terms and Applications, Wiley, 1995 Child, J., Organisations, Sage, 1985 Clark, c., Brainstorming, Wilshire Cleland, D., Project Management Field Guide, Van Nostrand Reinhold, 1997 Cleland, D., and King, W., Systems Analysis and Project Management, McGraw-Hill, 1983 Crosby, P.B., Quality Without Tears, McGraw-Hill, 1995 Crosby, P.B., Quality is Free, McGraw-Hill, 1987 Davidson Frame, J., Managing Projects in Organizations: How to Make the Best Use ofTime, Techniques, and People, (Jossey-Bass Management Series), 1995 Davidson Frame, J., The Project Office (Best Management Practices), Crisp,1998 Darnall, Russell., and Thatcher, John., The World's GreatestProject: One Project Teamon the Path to Quality (Perspective Series), Cambridge Interactive, 1996 Dinsmore, P., Human Factors in Project Management, Amacom Dinsmore, Paul., (Editor) The Ama Handbook of Project Management, McGraw-Hill, 1993 Drigani, Fulvio., Computerized Project Control Fellows, R., Langford, D and Newcombe, R., Construction Management In Practice, Construction Press Fleming, Quentin., and Koppelman, Joel., Earned Value Project Management, PMIC, 1996 Forsberg, Kevin., Visual Project Management, 1993 Frank, M., How to Run a Successful Meeting in Halfthe Time, Corgi Gibson, C.P., and Nolan, R.L., Managing the Four Stages ofEDP Growth, Harvard Business Review, January 1974 Gido, 1., and Clements, 1., Successful Project Management, South Western College Pub, 1999 Goodworth, C., Effective Delegation, Business Books Grey, Stephen., Practical Risk Assessmentfor Project Management, Wiley Series in Software Engineering Practice, 1995 Handy, C., Understanding Organisations, Penguin, 1993 Hans, J Thamhain andDavid, L Wilemon., "Conflict Management in ProjectOrientated WorkEnvironments", Drexel Hill, Pennsylvania: Project Management Institute, 1974, p87 365 PROJECT MANAGEMENT PLANNING AND CONTROL TECHNIQUES Harris, Jean., Sharpen Your Team s Skills in Project Management, McGrawHill,1998 Haynes, Marion., Project Management (Fifty Minute Book), Elaine Fritz, 1997 Heisler, Sanford., The Wiley Project Engineer s Desk Reference: Project Engineering, Operations, and Management, Wiley, 1994 Herzberg, F., Work and the Nature ofMan Institute of Chemical Engineers, A Guide to Capital Cost Estimating, 1988 Jain, R., and Triandis, Henry., Management ofResearch and Development Organizations: Managing the Unmanageable, (Wiley Series in Engineering and Technology Management), 1990 Johnston, Andrew., A Hacker s Guide to Project Management, Computer Weekly, 1995 Jones, Peter., Handbook of Team Design: A Practitioner s Guide to Team Systems Development, McGraw-Hill, 1997 Juran, Joseph., Product Quality -A Prescriptionfor the West Kerzner, H., In Search ofExcellence in Project Management, Van Nostrand Reinhold, 1998 Kerzner, H., Project Management A Systems Approach to Planning, Scheduling and Controlling, Van Nostrand Reinhold, 1997 Kharbanda, 0., and Pinto, Jeffrey., What Made Gertie Gallop?: Lessonsfrom Project Failures, 1996 Kim, Steven., Essence ofCreativity: A Guide to Tackling Difficult Problems, Oxford University Press, 1990 Kimbler, D., and William, Ferrell., Tqm-Based Project Planning, 1997 Knight, A and Silk, D., Managing Information, McGraw-Hill Knutson, Joan., Project Management: How to Plan and Manage Successful Projects, Amacon, 1991 Kuhre, Lee., ISO 1401 Os: Environmental Auditing: Tools and Techniques for Passing or Performing Environmental Audits, Prentice-Hall, 1996 Lewis, James., Project Planning, Scheduling & Control: A Hands-On Guide to Bringing Projects in on Time and on Budget, McGraw-Hill, 1995 Lewis, James., The Project Manager s Desk Reference: A Comprehensive Guide to Project Planning, Scheduling, Evaluation, Control & Systems, Irwin, 1993 Lientz, Bennet., and Rea, Kathryn, Breakthrough Technology Project Management, Academic Press, 1998 Lock, D., Project Management, Gower, 1996 Lockyer, Keith., Critical Path Analysis and Other Project Network Techniques, Financial Times Pitman, 1991 366 BIBLIOGRAPHY Lockyer, Keith., Production Management, Financial Times Pitman, 1992 Lockyer, Keith, and Gordon, James., Project Management and Project Network Techniques, Financial Times Pitman, 1996 Lowery, 0., Managing Projects With Microsoft Project '98, Van Norstrand Reinhold, 1997 Lysons, C., Purchasing, Financial Times Pitman, 1998 Maslow, A., Motivation and Personality, 1987 Meredith, J., and Samuel, J., Project Management A Managerial Approach, Wiley, 1995 Moody, P., Decision-Making, McGraw-Hill, 1989 Morris, Peter., The Anatomy ofProjects, Thomas Telford, 1997 Morris, Peter., The Management ofProjects, Thomas Telford, 1994 Mott, 0., Investment Appraisalfor Managers, Pan, 1982, Mott, 0., Management Accounting, Pan, 1987 Newbold, Robert., Project Management in the Fast Lane: Applying the Theory ofConstraints, St Lucie Press/Apics Series on Constraints Management, 1998 Obeng, Eddie., All Change: Project Manager sSecret Handbook, Financial Times Management, 1996 O'Connell, Fergus., How to Run Successful Projects II: The Silver Bullet, Prentice Hall,1996 Oosthuizen, Pieter., Goodbye MBA, International Thomson, 1998 Palfreman, J., and Swade, D., The Dream Machine, BBC Books, 1993 Parkinson, C., Parkinson's Law, Buccaneer Books, 1993 Peace, A., Body Language, Sheldon Press, 1977 Pennypacker, James., Project Management Forms, Cambridge University Press, 1997 Phillips, Dwayne., The Software Project Manager sHandbook: Principles that Work at Work, lEE Computer Science Press, 1998 Pokras, Sandy., Rapid Team Deployment: Building High-Performance Project Teams (Fifty-Minute Series), 1995 PMBOK Handbook Volume 6, Project and Program Risk Management, 1992 Pollalis, Spiro., Computer-Aided Project Management: A Visual Scheduling and Management System Project Management Institute (PMI)., The Global Status of the Project Management Profession, PMI publication Project Management Institute (PMI)., A Guide to the Project Management Body ofKnowledge (PMBOK), 1996 Pyron, Tim., Sams Teach YourselfMicrosoft Project 98 in 24 Hours, Sams 367 PROJECT MANAGEMENT PLANNING AND CONTROL TECHNIQUES Pyron, Tim., Special Edition Using Microsoft Project 98, Sams, 1997 Raftery, John., RiskAnalysis in Project Management, Routledge, 1993 Rakos, John., Software Project Management for Small to Medium Sized Projects, Prentice Hall, 1994 Rosenau, M., Successful Project Management, Van Nostrand Reinhold, 1998 Schuette, S., and Liska, W., Building Construction Estimating (McGraw-Hill Series in Construction Engineering and Project Management), 1994 Schuyler, John., DecisionAnalysis inProjects, Cambridge University Press, 1996 Sharp, John., and Howard, Keith., The Management of a Student Research Project, (second edition), Gower, 1996 Shaughnessy, Haydon., Collaboration Management: New Project and Partnering Skills and Techniques, Wiley, 1994 Simmons, Dick., Software Measurement: A Visualization Toolkit for Project Control and Process Improvement, Prentice Hall, 1997 Stephenson, Ralph., Project Partnering for the Design and Construction Industry, Wiley, 1996 Stuckenbruck, L., The Implementation of Project Management: The Professional Handbook, PMI Toney, Frank., Best Practices of Project Management Groups in Large Functional Organizations, Addison-Wesley Longman, 1997 Turner, R., Handbook ofProject-Based Management, McGraw-Hill, 1993 Turner, Rodney., The Commercial Project Manager: Key Commercial, Financial, and Legal Skills for Project Managers, McGraw-Hill, 1995 Verma, Vijay., and Thamhain, Hans., Human Resource Skills for the Project Manager: The Human Aspects ofProject Management Vol 2, PMIC, 1996 Walker, Anthony., ProjectManagement in Construction, Blackwell Science, 1996 Weiss, Joseph., and Wysocki, Robert., 5-Phase Project Management: A Practical Planning & Implementation Guide, Perseus, 1992 Westney, Richard., Computerized Management of Multiple Small Projects, Marcel Dekker Wild, R., Production andOperations Management, Holt,Rinehartand Wmston, 1995 Wideman, Max., and Dawson, Rodney., Project & Program Risk Management: A Guide to Managing Project Risks and Opportunities, Vol 6, 1998 Wideman., A Frameworkfor Project and Program Management Integration, PMBOK Handbook Series - volume 1, 1991 Van Der Waldt, Andre., Project Management For Strategic Change and Upliftment, International Thomson, 1998 368 Body of knowledge (bok), Bond (performance), 265 Brainstorming, 302 Break-even point, 71 BS 5750 (1979) Quality management, 240 Budget, 98 Build-method, 95 Build own operate transfer (BOOT) Contract, 265 B2B (procurement), 177 Acceleration, 152, 158,340 Accounts, 195-210 - financial, 195 - management, 195 - project, 195 Action centred Leadership, 303, 311 Activity, 132 - duration, 136, 149 - float, 157 - in parallel, 132 - in series, 132 - on-Arrow (AOA), 20 - on-Node (AON), 20 ACWP, 227 Adair, John, 311 Association ofProject Managers (APM), 1,8,22 Auckland bridge, 38 Audits, 21, 247 Authority, 297 - budget, 298 - formal, 297 Banana curve, 207 Barchart, 154-168, 220 Baseline plan, 99,101,163, 191,211 BCWS,227 Belbin, 304, 305 Benefits of proj ect management, 10 Billed rates, 264 Calendar, 136, 150 Cash- flow (life-cycle), 72 Cash-flow statement, 196 Certification (PMP), Change management (control), 34, 100, 105,108,215 Client's needs, 46 Closeout report, 52, 111 Coercive power, 298 Cognitive persuasion, 298 Commissioning phase, 29 Communications, 8, 98, 108,215,270283 Computing, 25, 321-331 Conceptual estimate, 75 Concept phase, 28 Configuration management, 16, 106, 213 Conflict, 317 Construction phase, 29 Contingencies, 89 Contract breakdown structure, 119 Contracts, 263 Control, 99, 211-223 - plan, 249 - scope, 213 Cost - break-even, 71 - breakdown structure, 118 - benefit analysis, 54 - management, 215 - of change, 34 - plus contract, 264 - variance, 229 - to-complete, 204 369 PROJECT MANAGEMENT PLANNING AND CONTROL TECHNIQUES Costing, 76 CPM, 17, 18,98, 131-153 Crashing (see acceleration) Critical path method (CPM), 131-153 Data capture, 216, 219 Daywork,87 Decision-making, 100,301,309 Decommissioning phase, 40 Delegation, 318 Design and development phase, 28 Direct costs, 77 Disaster recovery, 255, 267 Discounted cash-flow (DCF), 63 Document control, 278 Earned value, 224-239, 277 Economy of scale, 85 Emotional persuasion, 298 Environment, 216 Escalation, 90 Estimating, 74-93, 124 Events, 160 Execution strategy, 95 Expediting, 100, 172, 175 Factoring, 84 Failure (project), 259 - costs, 244 Fast tracking, 32 Fayol, Henri, 15 Feasibility study, 43-55, 76, 95 Financial accounting, 195 Fixed price contract, 263 Flag1e,Henri, 17 Float, 141, 151 Flow sheet, 110 Foreign currency, 129 Functional OBS, 288 Gantt, Henry (chart), 14, 15, 154, 166 General management, Global project management forum, Half-life refit, 38 Hammocks, 159 370 Handover meeting, 280 Henley Management College, 304 Herzberg's motivation and hygiene factors, 15 Hicks-Kaldor,54 History ofproject management, 14-27 Human resource management, 8,216 IBM (PC), 25 Impact statement, I09 Implementation (computer system), 329 Implementation phase, 29 Indirect costs, 78 Inflation, 85 Information power, 298 Innovation, 305 Insurance, 265 Internal rate of return (IRR), 59, 66 International Project Management Association (IPMA), 7, 10 Invoicing, 203 ISO 9000, 25, 240, 242 ISO 10006 Guideline to Quality in Project Management, IT projects, 60 Jobbing, 83 Job description, 296 Joint venture, 265 Just-in-time (JIT), 178 Keydates, 160 Labour costs, 78 Lag (activity), 146 Leadership, 301-3 12 Level of effort, 33 Life-cycle (cash- flow), 72 Life-cycle costing, 40 Light Brigade (charge of), 271 Lines ofcommunication, 274 Logic errors, 147 Logic (see network diagram), 132 - barchart, 167 Lump sum price (contract), 263 INDEX Management - accounting, 195 - by-projects, 1,4 Manhattan project, 21 Maslow hierarchy of needs, 304 Matrix, 21, 286, 290 - co-ordinating, 293 - overlay / balanced, 294 - secondment, 294 Meetings, 280 Microsoft project (software), 15, 154, 160 Milestones, 30,160 Mission statement, 104 Monitoring progress, 100 Monthly reports, 278 Motivation, 312 MRP, 214 Multi-project resource scheduling, 192 NASA, 16 Needs analyses, 46 Net present value (NPV), 59, 63 Network diagram, 17,31, 131 Non conformance report (NCR), 107, 215, 243 Non-verbal communication, 293 Numeric (selection) models, 59 OBS, 1,21,95, 118,284 - WBS (interface), 128,287 Overtime, 84 Pareto, 54 Parkinson's law, 32 Parameter costs, 264 Partnering, 265 Payback period, 59 Percentage complete (PC), 227 Performance bond, 208 PERT, 17, 18, 19 Personal power, 298 Planning and control cycle, 94-102 Planning software, 324, 326 PMBOK, 1,2,3,24 - human resource management, - OBS, 21 - project communications, - project integration management, - project life-cycle, 28 - project quality management, - project risk management, - project scope management, - team development, 301 Portfolio management, PMI,22 PMP, Power (authority), 298 Precedence diagram method (PDM), 131 Problem-solving, 100,302 Procedures, 11 Procurement, 169-179 - B2B, 177 - control, 176 - costs, 80 - cycle, 169 - JIT, 178 - life-cycle, 40 - management, 214 -schedul~98, 171, 173 Product life-cycle, 23, 37, 28-42, 121 Production management,S Programme management, Progress report, 281 Project - accounts, 195-210 - charter, 95, 104 - closeout report, III - communication, 270-283 - control, 123,211-223 - control cycle, 99 - cost management, - definition, - environment, 6, 23 - estimating, 74-93 - information and control system, 275 - initiation, 103 - integration, - interfaces, 285 -life-cycle, 23, 28, 44, 254 371 PROJECT MANAGEMENT: PLANNING AND CONTROL TECHNIQUES -life-cycle (risk), 254 -life-cycle (scope changes), 106 - life-cycle cash flow, 72 - management (definition), - Management Associations, - Management Institute (PMI), - Management Professional (PMP), - office, 82,322 - organisation structures (matrix), 284 - procurement management, - quality management, - quality plan, 98,171,215,241 - risk management, - selection, 56-73 - scope management, - teams, 301-308 - time management, ProjectPro (SA), 260 Purchase order, 214 Pure project OBS, 294 Quality - assurance, 241 - audit, 242, 247 - circle, 242, 245 - control plan (QCP), 98, 241,249 - costs, 243 - definitions, 241 - management, 215, 240-251 - meetings, 247 - organisation, 246 Reimbursable, plus-fee contract, 264 Reporting, 276 - earned value, 237, 277 - frequency, 101 - interfaces, 10 - over optimistic, 212 - trends, 277 Resistance to change, Resource - availability, 183 - estimating, 180 - forecasting, 181 - histogram, 98, 184 372 - limited resource scheduling, 188 -loading, 185 - management, 214 - planning, 180-194 - smoothing, 186 - planning and control, 191 Responsibility, - authority gap, 297 - matrix, 286 Retention, 265 Return on investment (ROI), 59, 62 Revised barchart, 162 Reward power, 298 Risk,89 - continuum, 252 - control, 266 - contracting, 263 - deflection, 263 - elimination, 262 - identification, 258 - failure, 259 -life-cycle, 254 - management, 99, 252-269 - management responsibility, 255 - mitigating, 262 - objectives, 256 - quantify, 261 - response, 262 - WBS, 124 Role of the project manager, 11,306 Rolling horizon barchart, 164 Rolls Royce (RB 111), 48 S Curve (how to draw), 191 Sandhurst Military Academy, 311 Secondment matrix, 294 Select and sort function, 158 Selection (project), 56-73 Self-actualisation, 314 Self-esteem, 313 Schedule - barchart, 98, 154-168 - of rates, 264 - performance index (SPI), 230 - variance percentage, 229 INDEX - variance (SV), 228 Scheduling (definition), 154 Scope, 103-114 - change control, 105 - control, 213 - definition, 105 - design and development, 106 -management, 7,95,103-114 - planning, 104 - verification, 105 Scoring models, 69 Single point ofresponsibility, Slack (see activity float) Small projects,S Software (planning), 6,192,324 Sort (function), 158 Stakeholders, 44 Start-to-finish (SF), 145 Start-to-start (SS), 144 Status reports (table), 276 Sunk costs, 204 Supplier list (procurement), 171 Systems breakdown structure, 120 Tabular reports, 155 Task (see activity) Teams, 285, 301-308 Team building, 301 Technical management,S Technology transfer, 50 Templates (WBS), 121 Tender, 171 Terms of reference, 104 Thamhain and Wileman, 318 Threshold variance, 228 Time - cost, quality triangle, 22 _limited resource scheduling, 188 _cost trade-off, 18,78,94, 131 - management, 214 Timenow, 227 Total quality management (TQM), 25, 242 Toyota cars, 178 Tracking progress, 100 Training (computer skills), 26, 50, 241 Transmittal note, 279 Transport, 81, 120, 172 Trend - barchart, 165 - documents, 214 - reports, 277 Triangle offorces (time, cost, quality), 22 TSR-2,16 Turnkey contract, 265 Unit rates, 86,264 Upgrade, 38 Value management, 53 Vendor selection (computing), 328 Warehousing, 172 What-if analysis, 100,209,324 WBS, 37, 95,131,115-130 -life-cycle, 37 - numbering system, 125 - OBS interface, 128,287 -roll-up, 127 - subdivision, - templates, 121 Work - authorisation, 99 - package (see WBS), 115 - pattern, 136, 150 - procedures, 216 373 1 1 1 1 1 1 1 1 1 1 1 1 1 /1 Reflects changes in new versions of the bodies of knowledge of the PMI (American Project Management Institute) and the APM (British Association of Project Managers) Provides coverage of improvements in communications through the Internet and mobile telephones, and the implications of these changes for project managers Includes numerous worked examples and practical exercises, which introduce the reader to the latest planning and control techniques A website, for lecturers adopting containing additional worked examples and exercises, together with PowerPoint slides can be found at: is a freelance project management lecturer and consultant @WILEY \\ I I' 111 I SB N -4 70 -85124-4 ... initiation and closing, then you have the key components of the planning and control cycle developed in chapter 15 PROJECT MANAGEMENT PLANNING AND CONTROL TECHNIQUES Project Management 19505 and 19605... and domestic projects, and particularly those used by the project planning software and referred to in the Project Management Institute's (PMI) project management body of knowledge (PMBOK), and. .. intersecting circles MANAGEMENT SKILLS (figure 1.2) Figure 1.2: Intersecting Management Skills PROJECT MANAGEMENT PLANNING AND CONTROL TECHNIQUES Project Management Environment: The project environment