1 fundamentals of project management: part 1b apegga annual conference april 24 & 25, 2003 dr....
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Fundamentals of Project Management: Part 1b
APEGGA Annual Conference April 24 & 25, 2003
Dr. George F. Jergeas PEng.
University of Calgary
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ScheduleDay 1a Introduction 5-Step PM Planning and definitionDay 1b Estimating cost and
time Video Organize project team Selecting PM and team Effective teams
Day 2 c Project procurement Bidding process Building & sustaining project team Contract administration
Day 2 d Schedule control Cost control Project Close-out Claims and disputes
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5-Step Project ManagementPLANNING IMPLEMENTATION
DEFINE
Identifyproject activities
Estimate time and cost
Quality and Communication management
Write Project Proposal
ORGANIZE CONTROL PLAN CLOSE
State the Problem
Identify ProjectGoal
List theObjectives
Determine PreliminaryResources
Identify Risks and stakeholders
Success criteria
Determine Personnel Needs
Recruit Project Manger
RecruitProject Team
Organize Project Team
Bidding
Assign Work Packages
Define Management Style
Establish Control Tools
Prepare Status Reports
Review ProjectSchedule, cost,team report
Issue Change Orders
Obtain ClientAcceptance
Install Deliverables andCommissioning
Document theProject
Issue Final Report
Conduct Post-ImplementationAudit
Project charter WBS Recruit Criteria Variance Reports Final Report Project network Define Work packages Status Reports Audit Reports Project proposal Assign Work Packages
Decision
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Project Charter Project Name - PM Conference Project Manager:
Problem/OpportunityMembership in PM Association has declined in the past four years and attendance at conference has declined in past three years. The viability and financial stability of
the organization depends on maintaining membership and successful annual conference.
Goal Reverse the downward trend in membership and annual conference attendance
Objectives1. Develop the Program2. Set the Conference Site and Date3. Design and Implement the Marketing Plan
Success Criteria1. At least 50 of previous years conferences attendees will attend2. At least 150 of 450 members will attend3. At least 1.5% of the non-members receiving conference brochure will attend4. At least 5% of the non-member attendees will join PM
Assumptions and Risks1. Interest in PM can be renewed through the annual conference2. A quality professional program will attract members and non-members3. Key speaker(s) fail to show up or submit written paper.
Stakeholders Attendees, Speakers, Hotel, PM Association, Organizing team
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Risk Quantification Technique: High, Medium, Low (HML)
H HHM Impact
L L M H Probability
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STAKEHOLDER
Objective
How They Operate
Where they gain Support
Potential Impact
How to Manage them and plan for
mitigation
Stakeholder Analysis
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Hierarchical RepresentationCONFERENCE PLANNING
SITE MARKETINGPROGRAM
DATE PLACETHEME MATERIALS SPEAKERS LISTS BROCHURE REGISTER
OBTAIN MATERIALS
PREPARE KITS
DESIGN BROCHURE
MAIL BROCHURE
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Estimating Time and Cost
Once the WBS is completed then time and cost estimates for each activity can be started.
With experience this becomes an easier task.
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Time Management
Purpose: Create a realistic schedule with the team
Identify the activities (tasks) Use the WBS and scope statement Develop activity lists and revise
the WBS Sequence activities
Consider dependencies
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Time Management
Estimate durations (time) Top down, bottom up estimates, Monte Carlo
simulations Estimating formulae (PERT estimates) Expert opinion Consider resource capabilities Look at similar projects
Develop the schedule (Gantt chart) Document assumptions and decisions Use project management scheduling software
e.g. MS Project
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Estimating formulae
PERT Estimate (weighted average) [Pessimistic + (4 x Likely) + Optimistic]/6 Pessimistic time to get to work = 30 min Optimistic time to get to work = 10 min Likely time to get to work = 15 minutes PERT Estimate = 30 + (4x15) + 10/6 100/6=16.6 = 17 min
Quick and dirty formula [Worst + best + most likely]/3 55/3=18.3 min
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Estimating Activity TimeOptimistic Completion Time - is the time the
activity will take if everything goes right
Pessimistic Completion Time - is the time the activity will take if everything that can go wrong does go wrong but the project is still completed
Most Likely Completion Time - is the time required under normal circumstances. It can also be the completion time that has occurred most frequently in similar circumstances
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Estimating Activity Time
Time to complete a task is uncertain: Skill levels and knowledge of the
individuals equipment variations Material availability Unexpected events
Illness Employee turnover and accidents
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Estimating Activity Time
We know unexpected events and occurrences will happen but are unable to predict the likelihood with any confidence
We must however account for the possibility of the occurrence of these events
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Estimated times for conference planning
ACTIVITY TIME IN WEEKS(O) (M) (P) (E)
A Set conference date1.0 2.0 3.0 2.0
B Establish theme & program2.0 5.0 8.0 5.0
C Select conference site4.0 5.0 6.0 5.0
D Obtain mailing labels4.0 6.0 8.0 6.0
E Develop brochure3.0 10.0 11.0 9.0
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Estimated Times for Conference Planning
ACTIVITY TIME IN WEEKS(O) (M) (P) (E)
F Obtain mailing labels3.0 4.5 9.0 5.0
G Mail brochure1.0 2.0 3.0 2.0
H Obtain speaker materials3.0 3.5 7.0 4.0
I Receive registrations4.0 6.0 8.0 6.0
J Confirm arrangements0.5 1.0 1.5 1.0
K Prepare conference kits1.0 2.0 3.0 2.0
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Scheduling Activities
Bar chart and RACIProduce a Logical NetworkCritical Path Method
Arrow Diagrams Precedence Diagrams
Identify Critical ActivitiesLocate the Critical PathFloats
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Bar Charts/Gantt Chart
Most projects, however complex, start by being depicted on a bar chart. The principles are very simple:
Prepare list of project activities Estimate the time and resources needed Represent each activity by a bar Decide logical sequence Plot activities on a chart with horizontal time
scale showing start and end
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Project Schedule - Sample
ID Task Name Duration
1 Develop the Program 0 days
2 Theme 1 wk
3 Obtain Material 4 wks
4 Speakers 3 wks
5
6 Conference Site 0 days
7 Set date 1 day
8 Select site 1 day
9 Confirm Arrangements 1 day
10
11 Marketing 0 days
12 Obtain lists 2 wks
13 Design brochure 2 wks
14 Mail brochure 4 days
15 Register participants 8 days
3/1
3/1
3/1
2/27 3/5 3/12 3/19 3/26 4/2 4/9 4/16 4/23 4/30 5/7March April May
Project: ____________________ Project Manager: ____________________ Date: _____________
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RACI Charts
Responsible - Accountable - Consulted - Informed Identify the roles of participants in
each element of a project Effective communications road map 4 to 8 weeks look ahead
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RACI Charts
Update weekly to: Reset expectations Ensure right people involved in detailed planning
Ensure everyone knows what needs to be done by whom
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RACI Chart
2
1
Informed
ConsultedAccountable
Responsible
Task
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Deliverable:_____________________ Manager:___________________ Project:_________
ACTION DATES
ActivityAnother activityBuild something
Another ItemYet anotherDesign a bitDesign moreSneezeGesundheitAnother thingWait for itemMore stuffFinish
A C G C F M J W B D M H F W L S W ER A A C I I - I C 120 400- R C I A A I A - 50 50R - A C I I - C - 345 1,500- R C I A A I A - 127 -R A A C I I - I C 90 9,000R - A C I I - C - 55 1,700
- A R I C C A I I 455 875R C A A I C I - - 200 7,785- R I I C - - - - 65 -
A C R - C I C - - 20 100,000- I C A A R I A I 655 -R A - I C I A A A 80 -A I C I I A A A R 12 100
Budget Actual Budget ActualW/Hrs. W/Hrs. Cost Cost
2.4.5 Major Element Amelia Drover Fred 2-5
RACI Charts (F. T. Hartman, 2000)
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CPM: Critical Path Method
Graphic network based scheduling technique Arrow Diagrams Precedence Diagrams
Use activities created by the WBS process
Analysis of timing and sequencing logic Aids in identifying complex interrelationship of
activities
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CPM: Critical Path Method
Allows for easy revision of schedule and simulation and evaluation of the impact of changes
Also used as a control tool during execution of the project
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Producing a Logical Network
The sequencing identifies activities that must be completed before another activity can start and which activities can occur simultaneously. Different methods:
1. “Low-tech” approach: use post-it labels Each label has one activity written on it Through iterative process the labels can be
arranged and rearranged
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Producing a Logical Network
2. Ask yourself the following: Which activities must be completed
before this activity starts? Which activity cannot start until this
activity is completed? Which activities have no logical
relationship with this activity and therefore take place at the same time (concurrent activities)?
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Producing a Logical Network
3. Identify immediate predecessor activities, which are activities that must be completed before another activity can begin
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Activity Sequencing: Training Example
ACTIVITY IMMED. TIME(WEEKS)PREDECESSOR (E)
A Set conference date - 2.0B Establish theme/program - 5.0C Select conference site A 5.0D Obtain speakers B 6.0E Develop brochure C,D 9.0F Obtain mailing labels C,D 5.0G Mail brochure E,F 2.0H Obtain speaker materials D 4.0I Receive registrations G 6.0J Confirm all arrangements H,I 1.0K Prepare conference kits J 2.0
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Activity Sequencing: Training Example
start
b d
a c
f
e
g i
h
j k end
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Activity Sequencing: Training Example
Start
b5 d6
a 2 c
f5
e
g i
h4
j1 k2 End
0 2 2 7 11 20
5 9 20 22 22 28
2 6 28 29 29 31
4 6 6 11 11 20
20 22 22 2811 16
0 5 5 1111 15 28 29 29 31
0 5 5 1124 28
15 20
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Critical Path
The longest path is the Critical PathCritical path is where there is zero
slack timeIf an activity takes longer than
estimated on the critical path then the project will be delayed
The critical path can change if there is a delay that make an alternative path longer
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Float (Slack)
Slack or float time is amount of delay that could be tolerated in the start or completion time without causing a delay in completion of the project
Total float or calculations to determine how long each activity could be delayed without delaying the project
Total float = LF - ES - duration
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Should be able to:
Develop a complete project plan: WBS listing all activities Project organization and communication Project schedule using Post-it notes and
bar charts RACI Chart(s)
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Video
The Power of scheduling
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Plan the Project: Basics of Cost Estimating
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5-Step Project ManagementPLANNING IMPLEMENTATION
DEFINE
Identifyproject activities
Estimate time and cost
Quality and Communication management
Write Project Proposal
ORGANIZE CONTROL PLAN CLOSE
State the Problem
Identify ProjectGoal
List theObjectives
Determine PreliminaryResources
Identify Risks and stakeholders
Success criteria
Determine Personnel Needs
Recruit Project Manger
RecruitProject Team
Organize Project Team
Bidding
Assign Work Packages
Define Management Style
Establish Control Tools
Prepare Status Reports
Review ProjectSchedule, cost,team report
Issue Change Orders
Obtain ClientAcceptance
Install Deliverables andCommissioning
Document theProject
Issue Final Report
Conduct Post-ImplementationAudit
Project charter WBS Recruit Criteria Variance Reports Final Report Project network Define Work packages Status Reports Audit Reports Project proposal Assign Work Packages
Decision
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Introduction
Cost estimates:
Key to successfully conceived, managed and completed projects
An approximation procedure Mistakes can be very costly!
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What is a Cost Estimate?
AACEI Definition “A compilation of all the costs of the elements of a
project or effort included within an agreed upon scope”
To the contractor “To forecast cost required to complete a project in
accordance with the contract, plans and specifications”
To the owner cost includes: Administering the contract Contractor's charges, consultants and suppliers fees Price of land, financing and operating costs
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What Constitutes a Good Estimate?
A clear, sound basisAn agreed upon realistic
execution planGood estimating methods and
data baseGood experienced estimator
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Order - of - Magnitude Estimates
A quick method of determining an approximate probable cost of a project due to the following specific situations: Time constraints High cost of a detailed estimate
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Order - of - Magnitude Estimates
Prepared without detailed engineering data Square feet of floor area Cubic feet of volume Plant capacity for input and output Km of road surface type
Use: In feasibility studies of a project and screening several types of alternatives or proposals
Accuracy: +/- 30%
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Definitive Estimates
Prepared from very defined engineering dataRequires as a minimum:
Plans and elevations Piping and instrument diagrams Single line electrical diagrams Equipment data sheets and quotations Architectural and structural details Soil data and sketches of major foundations A complete set of specifications
Accuracy: +/- 5%
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Components of a Cost Estimate
Direct Cost Labour: actual amount paid to field
personnel Materials: essential to constructing and
operating a facility including equipment installed permanently
Equipment: used to perform a contract Subcontracts
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Components of a Cost Estimate
Indirect Costs Overhead
Home office overheadSite overhead
Taxes Risks
ContingencyProfit
Escalation
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Profit
Is the amount of money included by the contractor in its price as compensation for risk, effort and endeavor in undertaking a project. It is the money left after a contractor has met all
costs (both indirect and direct). Profit amount included is very subjective and
depends on:Size of projectExtent of risk involvedNeed for workExtent of competition
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Contingency
An amount added to cover any additional costs that may occur. To determine the amount of
contingencies desirable, an estimator should rely on:Personal judgment, orThrough statistical analysis of past project
costs
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Training Example: Estimated Conference Planning BudgetCONFERENCE PLANNING
$243,325
Program
$41,100
Site
$170,425
Marketing
$31,800
Theme
$600
Materials
$13,300
Speakers
$27,200
Date
$1,000
Location
$169,425
Lists
$2,000
Brochure
$29,800
Registration
3 conf calls with pgm comm
Travel/expenses for 16 speakers @ $500 per speaker
Deposit3 site visits @ $800/visit food @$50 per person/day for 3 days for 1100 meeting rooms @ $225/day/room for 3 days for 3 rooms
25,000 labels @ $80/1000
Obtain Speaker Materials $800
Prepare Conference Notebook $12,500
Design Brochure $12,800
Mail Brochure $17,000
Edit/format @ $50/speaker
1100 binders @ $5/binder photocopy materials 350,000 pages @ $0.02/page
Layout: 16 pages @ $50/page
Printing: 30,000 copies @ $0.40/copy
25,000 pieces @ $0.68/piece
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Writing a Project Proposal
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5-Step Project ManagementPLANNING IMPLEMENTATION
DEFINE
Identifyproject activities
Estimate time and cost
Quality and Communication management
Write Project Proposal
ORGANIZE CONTROL PLAN CLOSE
State the Problem
Identify ProjectGoal
List theObjectives
Determine PreliminaryResources
Identify Risks and stakeholders
Success criteria
Determine Personnel Needs
Recruit Project Manger
RecruitProject Team
Organize Project Team
Bidding
Assign Work Packages
Define Management Style
Establish Control Tools
Prepare Status Reports
Review ProjectSchedule, cost,team report
Issue Change Orders
Obtain ClientAcceptance
Install Deliverables andCommissioning
Document theProject
Issue Final Report
Conduct Post-ImplementationAudit
Project charter WBS Recruit Criteria Variance Reports Final Report Project network Define Work packages Status Reports Audit Reports Project proposal Assign Work Packages
Decision
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Writing a Project Proposal
Represents the transition from the planning (define, plan) to implementation (organising, control, close)
Used as an information source to decide whether the project should proceed to the implementation phase
Different terminology used DBM, Brief, Scope Definition Statement
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Purpose
The project proposal provides:A statement of the need, the approach
being taken and the expected benefitsDescription of project activities,
timelines and resources requiredProject costsDocumentation for project controlBriefing document for new team
members and others in the organisation
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Purpose
Tool for decision making, managing, controlling, training and reporting
Written for: Senior management Project team Other managers who are indirectly
involved Consultants
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Step 3. Organising the Project Team
Projects are only as successful as the project manager and team who implements them
Building an effective team takes a lot of work
Must consider more than just a person’s technical skills
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Organising the Project Team
The selection of team members is based on skills, availability and personality
There needs to be a commitment and chemistry among the team members
Team building is not a perfect art, there is always the risk of conflict
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Organising the Project Team
Organized and located to facilitates open continuous communication This does not mean they have to be
physically located together
Team members may be reallocated for the duration of the project or remain in their function areas
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Organising the Project Team
Large projects Dedicated core team Structured More defined roles Need for open and continuous
communication lines Self contained
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Organising the Project Team
Small projects Part-time commitment from team
members Team members remain in their
functional units Conflicting priorities/demands exist Conflicts may arise from having more
than one boss or more than one team involvement
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Organising the Project Team
Be sure all parties understand the need to: Build the team What the priorities are within in the
organisation and Their assistance is appreciated
Project manager to ensure that the cross functional relationships are maintained and supported
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Opening a Project
Owner schedule a kick-off meeting: Meet contractor and other key personnel Identify areas of responsibility Establish job philosophy (set the ground rules) Set up requirements for on-or off-site meetings and
set the frequency of such meetings, who should attend Discuss problems anticipated in execution Discuss special sequence of operations or scheduling
limitations
Issue written Notice to Proceed Set precise start date - good practice
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Characteristics of an Effective Project Manager
Understands purpose of the project
Has the necessary background and experience
Effective leader with proven managerial ability
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Characteristics of an Effective Project Manager
Communication skills Consistent behaviour Has credibility with team and client Sensitive to project and corporate
politics Excellent Facilitator rather than a
dictator
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Selection of Project Manager
Key position on the project Selection of appropriate individual is
essential to success of the project
Selection criteria should be established based on the skills required to carry out project
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Project Manager Selection Criteria
1. Background and Experience Should be consistent with the nature
and needs of the project Education should be compatible with
nature and expectations of the project Look for a individual with a mix of
conceptual, analytical, operational and practical experience
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Project Manager Selection Criteria
2. Leadership Ability to design, co-ordinate, control
and implement project plan Stay the course until completion Ability to see the big picture and
understand the details
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Project Manager Selection Criteria
3. Technical expertise
Ability to direct, evaluate, and make decisions on technical alternatives
Does not and can’t be an expert in all areas of the project
Should have expertise in project management, team management and training
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Project Manager Selection Criteria
4. Interpersonal skills
Should be able to: Motivate, inspire, and coach Actively listen, give and receive feedback Empathise, relate feelings, needs and concerns
in a positive manner Prevent and resolve conflicts, negotiate Keep team, senior management and
stakeholders informed through effective communication channels
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Project Manager Selection Criteria
5. Proven Managerial Ability
Good track record, excellent indicator of the future
Knowledge of the organisation and its operation
Ability to effectively interface with all levels of the organisation
Ability to link project goals to corporate mission and goals
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Selecting the Team
Selection of team members depends on a number of factors: Nature of the technical work to be done Level and type of expertise required at
each phase of the project Availability of staff in the organisation
and reporting relationshipsSometimes you cannot always choose
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Team Selection Criteria
Similar to those of the project manager
More emphasis on the technical skills
Interpersonal skills essential Ability to function as a team member
with shared goals and objectives (us instead of me)
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Effective Team Characteristics
Commitment to the project goals and completion
Ability to communicate, share responsibility and power
Flexible willing to change or try some new methods
Technically competent Willing to:
Admit mistakes Admit not have all the answers Accept feedback
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Effective Team Characteristics
Politically astute Team players Creative and open to suggestions High self esteem, can do attitude Willing to work for more than one
boss, across formal structure and authority system
Results oriented
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What Makes Teams Work
Successful Projects:The team has fun Have the support of senior
management Everyone understands the reason for
the project Conflicts are addressed and dealt withThe entire organisation is committed
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What Makes Teams Work
Successful projects:Team understands the organisation’s
mission and how the project fits within that mission
Team understands what is to be achieved and when it is achieved
Trust and communication
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Human Resources Management Tips
Listen to understandBe responsive
Provide positive feedback Act on problems in a timely manner
Deal with problems They won’t go away, but will get BIGGER
Provide constructive criticismDocument appropriatelyTake time to have FUN