Key Concepts We Learned From Chapter 9

Chapter 9   Balancing the Trade-off among Cost, Schedule, and Quality

1. Any project with given time, money, and resources will always have its limitation on the cost, schedule, and product quality, properly manage the balance and trade-offs are a critical challenge for the project management. The balance on the cost, schedule, and quality can be taken on project level, business case level, and enterprise level.  
2. Balance on the project level includes re-estimate the project for its definition and work packages, adjust the task assignment so as to effectively use the schedule float, adding manpower for shorten the schedule, using expert to increase productivity, seeking expert resources from outside, partially or completely outsource the project, compress the tasks on the critical path, push people to work over time.  However, all of these attempts will have trade-offs, attention should be paid to analyze best way to apply each effort in a balanced approach.
3. Business case level of balance can be implemented through reducing the product scope, giving fixed phase schedule to make top down scheduled apportion, overlapping tasks with fast tracking, dividing the full product deliver into phased product delivery, using Crosby’s double effort method, and modifying the profit requirement. Again each approach has its limit and trade-offs, one needs to carefully balance them and pick the most efficient way in each case.
4. Enterprise level of balancing should be conducted when we face a challenge from insufficient equipment, personal, and budget. The company has to decide which project to pursue with finite budget and resources. Making these judgment and decisions requires accurate estimation on each individual project against resource, cost, and schedules.

Key Concepts We Learned From Chapter 8

Chapter 8   The Art and Science of Accurate Estimating

1. A successful project plan relies on accurate initial estimation. In the estimation, one should try to avoid several common mistakes: such as making “Ballparks in evaluators” making estimation without complete specifications, confusing between estimate and bid, and padding the estimation with over budget on time and resource. 
2. To accurately make the estimation, one should have the right people to make the estimation. These estimators should be very experienced, key expert of the project, and they must understand the goal and techniques of estimation.  The estimation has to be made based on experiences. A good and accurate estimation go through three phases. It starts with an idea evaluation or a “ballpark estimation”, then conducts the order of magnitude estimation, and finally moves into detail estimation.
3. There are four estimation techniques. The first is the phase estimating. We can break the project into multiple phases and estimate the cost and schedule for one project phase at a time. It on one hand simplify the estimation process, on the other hand, it also helps customer to reduce the risk in the development process. Second is the apportioning. It is a top-down estimating based on a formula derived from historical data in similar projects. In the same time, apportioning helps to divided the project into smaller pieces. The third one is parametric estimates. Base on the large set of historical data, one can develop a solid parametric formula or model to estimate or analyze the project. The fourth technique is the bottom-up estimation, where all the detailed tasks are estimated and the n combined to sum up into the full estimation. It requires more efforts but represent more accurate estimations.
4. Further down the road, we need to build a detailed budget estimate. We should identify the source of data for the detailed budget, adding internal labor cost with using the Burdened labor rate (average labor cost), making internal equipment cost with one time deal or multiple project shared equipment, estimate the external labor and equipment, as well as the material cost.
5. The project manager should ensure the plan generating the good cash flow schedule so as to ensure the continuity of the project in terms of both labor and other resources.

Key Concepts We Learned From Chapter 7

Chapter 7   Realistic Scheduling

1. A successful project relies on a good planning. To ensure a good plan for the project management, we need to follow key steps in developing the detail plan: (1) Create the project definition; (2) Develop a risk management strategy; (3) Build a work breakdown structure; (4) Identify task relationships; (5) Estimate work packages; (6) Calculate initial schedule; (7) Assign ad level resources
2. In identify task relationships, one has to set right sequence or priorities for various work packages. In addition, we should specify the sequence and concurrent constraints for the task relationship. The task relationship should be defined only between work packages, and it should reflect only the sequence constraints between work packages, not the resource constraints.  Proper milestone should be set so as to effectively track the beginning, progress, and finishing of the project.
3. To manage the cost and schedule of the project, one has to build a cost and schedule estimation for each work packages through a bottom up estimating. The cost estimation will include the estimation for labors, equipments, materials, and fixed price bid. The labor estimation should get down to more precise estimation with given work durations.
4. Calculate an initial schedule is a very tedious but important technique. It provides a set of detailed schedule for every work packages. One can use the forward pass to determine the tasks with early start and early finish, use backward pass to handle the late start and late finish dates, and calculate float to address the flexible tasks. To effectively arrange the work packages in the work flow, careful analysis should be conducted to find the critical path for the project with help of Gantt Chat and time scaled networks.
5. Assign and level resource will provide a good optimization for the use of people and equipment. The leveling will rely on four basic process steps: (a) forecast the resource requirements throughout the project for the initial schedule; (b) identify the resource peaks; (c) delay noncritical tasks within their float at each peak; (d) Eliminate the remaining peaks by reevaluating the wok package. One can get help for modern project management software.

Key Concepts we learned from Chapter 6

Chapter 6   Work Breakdown Structure: Break Your Project into Manageable Units of Work

1. Work breakdown structure (WBS) is the tool and foundation for project planning, it is the most important techniques used in project management. It help us to provide a detail illustration of project scope, monitor progress, create accurate cost and schedule estimates and build project teams. The key task of WBS is to summarize tasks and define work packages.
2. A good WBS can be constructed in three steps: First, we need to break down a project into descending levels of details, listing all the tasks required to create the deliverables in the statement of work (SOW); Second, specify the names for all the tasks required to produce deliverables; Third, organize the WBS effectively to enable high level of visibility and emphasize different aspect of the project with different work packages. One has to make sure all the summary tasks are meaningful and the purpose of the summary tasks on the WBS is for communication and visibility.
3. To evaluate a successful WBS, one should look into three criteria: (1) first, the WBS has to  be broken down starting at the top with using standard software and meaningful project info; (2) work packages must add up to the summary task; an (3) each summary task and workpackage must be named as an activity that produces a product.
4. Project should be break into small, meaningful, manageable units of work. The size of the work packages can be evaluated with the 80/80 rule, the reporting period rule and the “if it’s useful” rule. You will also get benefit from putting project management activities into the work breakdown structure.
5. Risk management also relies on good planning for quality. It requires setting standards on completion criteria. These completion criteria are determined through having peer reviews, looking through checklist, and conducting systematic testing.
6. Risk management should begin with the end in mind, and should define the acceptance process.  In dealing with large project, one need to beware of the deliverable oriented WBS and taking work package as subprojects or groups of activities.

Key Concepts we learned from Chapter 5

Chapter 5 Risk Management: Minimize the Threats to Your Project

1.       Risk management goal is to systematically manage the uncertainty so as to increase the likelihood of meeting project objectives. It is the key for the project management and it directly tied to project definition, planning, and control of the project.

2.       Risk management has its own framework and standard process.  They include five key steps: (a) identify risks, (b) analyze and prioritize different risks, (c) develop response to each risk, (d) establish reserves preparing for unknown risks, and (e)continuous risk management.

3.       To better identify risks, four techniques can be helpful: (a)getting risk info directly from stakeholders; (b) generating a risk profile with a list of all possible risks; (c) learn from past, similar projects since history is the best predictor of the future; and (d) focusing on the risks in the schedule and budget.

4.       Risk management should treat different risks differently. We need to analyze and prioritize the risks with three key strategies: (a) define the risks with its severity and the negative impact through its condition and consequence. Record the consequence of these risks in terms of cost, schedule and possible damage to the project; (b) using probability theory in risk management with help on analyzing the expected value and risk matrix; and (c) ranking the risk according to probability and impact.

5.       To face the challenge of the upcoming risks, one should develop a response plan for the risks. The best way to reduce the risk is to reduce both the impact and the probability of risks. There are five categories of classic risk response strategies: (a) accept the risk with understanding it; (b) avoid the risk by pick lower risk approach; (c) making contingency plans for risk treatment; (d) transfer the risk to third party like insurance or subcontract part of the project; and (e) mitigate the risk by minimizing the impact and overcome the difficulties. In general, one should identify what risk is controllable and make document for what you learn the inside during risk planning, identify someone to be responsible for every risk and rank the risk by severity and probability.

6.       Establish contingency and reserve preparing for unknown risks through the  following four steps: (a) identify all the risks in the risk log; (b)establish the additional cost of executingthe contingency plan; (c) sum the expected value of contingency for each of these risks; and (d) try your best for prepare for the known risks.  We should make contingency reserve for identified risks, the known unknowns, and make management reserve for the unknown unknowns.

7.  Finally the risk management effort is a continuous effort. One should monitor known risks with a risk log, check for new risk at regular status meetings, repeating the major risk identification activities at preplanned milestones within the project, prepare response plans and check whether sufficient contingency or management reserve exists, and finally remove negligible risks.

Key ideas we learned from Chapter 4

Chapter 4  Five Key Documents to Manage Expectation and Define Success

1.  To ensure a success of a project, PM should pay great attention on those critical factors including agreement on goals, a plan, good communication, scope control, and management support.  To achieve this, written documents are essential tool to pull everyone on the same page.  In project management, there are five key documents that will help to address these critical factors successfully. They are the Project Charter, Statement of Work, Responsibility Matrix, Communication Plan, and Project Proposal.

2.  The Charter serves as an announcement for kicking off the project. It should address the name and purpose of the project, the project manager’s name, and a statement on required support. It should be empowered by both expert and legitimate authority, and get signed by high authority such as project sponsor.  It will take the formal recognition on authority and give a definition document for the project.

3. The Statement of Work is a document that describes and defines the goals, constrains, and success criteria for the project. It works as a contract for manage expectation and establish agreements.  It can go with both internal and external customers to clarify the responsibilities and actions in a relationship.  A good Statement of Work should include following important contents:

(a) In the Statement of work, it first needs to clearly describe the purpose of the statement.

(b) Then it should address the project scope and specify all the works required to meet the  project objectives. Especially it should clearly define the boundary of the project and get everyone agreed on what is beyond the scope of the project.

(c) It should specify the final deliverable for this project.  Detailed description about the final product should be clearly addressed. This will help to define the boundaries of the project and focuses the team’s efforts on producing the expected outcomes.

(d) The statement should provide good estimation on both cost and project schedule.

(e) The statement of work needs to set the objectives and make the objective be specific and measurable.

(f) The statement should list all the major stakeholders in this project.

(g) The statement must define the report chain so as to have a clear picture on who is report to whom and who is responsible for what.

Project manager should write the statement of work first and present it to all stakeholders, and then deal with the changes later based on updated information and agreement.

4. Document for responsibility matrix serves as a responsibility assignment for everyone involved in this project. It should lay out all the major activities in the project and the key stakeholder groups.  Special code can be defined to classify the level of involvement, authority role, and responsibility of each stakeholder.  Finally, the project manager should incorporate the responsibility matrix into the project rules. Once it is approved, all the stakeholders will have to follow the responsibility matrix accordingly through the project.

5. To ensure the success of the project, we need to create a communication plan for the project.  A communication plan is the written strategy for getting the right information to the right people at the right time. All the stakeholders defined in the statement or work and responsibility matrix are the audience for most project communication. The information will be managed in different categories for authorizations, status changes and project coordination.  The regularly scheduled progress meetings should be included into the communication plan.

6. Finally the project proposal is the document to launch the project.  It is usually written before the statement of work and is used to assemble the information necessary for a sponsor or project selection board.  Similar to the SOW, the purpose of the proposal is to move the project from an inspiration to a tangible, achievable goal.  The contents of the project proposal may overlap with that in the statement of work. It should include project goal, problem/opportunity definition, proposed solution, project selection and its benefits, cost-benefit analysis, core business requirement on this project, project scope, obstacles and risk, and a schedule overview.

Key ideas we learned from Chapter 3

Chapter 3   Know Your Key Stakeholders and Win Their Cooperation

1. Stakeholders of a project are the people and organizations involved in the project performance or affected by the project.  Stakeholders are the heart of a successful project.  Identify and define stakeholders in the project, keep all the disparate groups in a project moving in harmony are the primary tasks and challenges for a good project manager.
2. Various stakeholders in the project acting as different roles, making contribution to or being impacted by the project.  Normally stakeholders include project manager, project team, management sponsors, customers, representatives from external constraints, and even the people and organization who become advocate or opponents.
3. Project manager itself is one of the most important stakeholders who play a primary role in the project. He or she not only needs to  plan the project, identify the stakeholders, watch the cost overruns, and referring disputes, but also needs to help building the project team by pulling together resources from different groups and individuals with various skill set and functions.
4. Getting strong support from top management is the critical key for success of a project. These management supports should at least include those who can take the sponsorship, allocate resources, and have authority to make decisions for this project.  The project sponsor should be the one with formal authority and who is ultimately responsible for the project.  So he or she may provide strong help to PM in various aspects.   Manager in industry who control the resources are usually the function managers, they can help PM to build the best team for this project.  In addition, PM should identify some key management, who may not be the project sponsor, but have the authority and can make timely decisions that will have direct impact to the project.
5. Customers usually play a big role among different stakeholders. Customers are the stakeholder who will have the demand, make the requirement, and sometimes pay the bills. Project manager should accurately identify them, understand their requirement, and work with them to define quality dimension of the cost-schedule-quantity equilibrium.
6. Project manager should also pay attention to some minor stakeholders such as representatives of external constrain and who may potentially advocate, opponent the project. A good project manager should be able to exercise leadership with this diverse group, influence and manage upward to conduct all the stakeholders working toward the project goal.