project management solutions webinar

Welcome!

Today’s Agenda

• Welcome and Introduction—Bill Gibbs, Webinar Coordinator

• Presentation by Dr. Jim Marion• Questions and Answers• Upcoming Webinars and Degree

BriefingBill GibbsDirector, Campus OutreachWebinar Coordinator

What is your interest in Project Management?

Poll #1

A few session pointers• We will answer questions at the conclusion of the presentation.

At any time you can post a question and we will answer as many as we can

• Slides are available for download at any time

• The recording link will be emailed to you

• A participation certificate is available upon request

• Be sure to complete our survey.

What are some of the problems you have encountered while managing projects?

Poll #2

Dr. James Marion, PMP

• Assistant Professor Embry-Riddle Aeronautical University-Worldwide

• Certified Project Management Professional (PMP)• Multiple product launches in U.S., Europe and Asia• Panasonic Senior Executive Development Program• Chair, M.S. in Engineering Management Program• Faculty member in M.S. Project Management• Ph.D. in Organization and Management• Three Master’s degrees

Project Management Solutions to Help You Stay on Schedule and on Budget

Dr. Jim Marion, PMPProgram Chair and Assistant ProfessorMS in Project ManagementDepart of Management SciencesCollege of Business

Basic assumptions• Staying on schedule and on budget requires

that you have an achievable schedule to begin with

• Sponsoring executives often don’t have visibility of the risks associated with their schedule requests.

• YOU can help them! Looks ok to me!

A typical scenario…..

Say…I need you to take charge of our office

relocation project…..that would be great….

What do you do?

• An office relocation is:– Temporary (has a beginning and ending)– Unique– Complex– Uses resources

– Therefore…it’s a project!

What’s next? Getting Started

• Formal authorization…the charter• Identify who is involved, who is interested in the

outcome, who might be willing to help …..the stakeholders

• Determine exactly WHAT needs to be done….the SCOPE

• First boil it down…the scope statement• Then, expand….the WBS

The charter…

Say…I am going to need you to sign off on this

formal authorization for this project...that would

be great….

The scope statement

We will assess our current needs as well as growth needs for the next

three years. We will identify, select, lease, and create an office layout in a new building and move our company. We will seek to use as much existing infrastructure as possible. Modifying

our existing building will NOT be considered as an option.

The stakeholders

• Who is involved in the project?• Who is affected by it?• Who has an interest in it?• Who should we think about in the larger

community?

Office Relocation

New Location

Buildingspecifications

Layout

Furniture

Existing Location

Layout

Utilities

Close out plan

Packing

FinanceBudget

Payments

Transition Plan

Supplies

Infrastructure

Communication

RelocationManagement

Personnel

Planners

Coordinators

Packers

Movers

A High-Level WBS for the Office Relocation

…a hierarchical and categorical structured outline of the project deliverables…

The Task List (high level)…

1 New location requirements2 New location search3 Select location4 Inventory current location5 New location layout6 Select moving company7 Order utilities8 Purchase network & servers9 Negotiate lease10 Pack furniture11 Pack computer equipment12 Transport moved items13 Unpack14 Cutover to new network15 Close existing building

Include only those tasks required for producing the deliverables in the

WBS..!

2-30

1-10

15-5

14-3

8-30

6-105-204-10

13-512-511-57-59-103-30

1 New location requirements2 New location search3 Select location4 Inventory current location5 New location layout6 Select moving company7 Order utilities8 Purchase network & servers9 Negotiate lease10 Pack furniture11 Pack computer equipment12 Transport moved items13 Unpack14 Cutover to new network15 Close existing building

10-5

The initial schedule estimate...

Summing the red boxes (“critical path”) = 130

days

Here we put tasks in logical order so we can see how long the project takes!

Another typical scenario…..

Say…I’m going to need you to reduce

your schedule by ten days…that would be

great…thanks….Oh no!

How to respond?

• Ask for a project brainstorming meeting with sponsoring executives

• Present high level schedule for office relocation• Ask for consensus of “Best-Case”, “Worst-Case” and

“Optimistic” durations for each element of schedule.• Show probability of achieving estimated schedule,

AND• MOST importantly—show probability of achieving

the requested schedule reduction.

Develop High-Level Schedule Based on Executive Estimates….

2 days

1 day

3 days

Hmmm..

…well..uhm....

Task 8

BC ML WC

# # #

Task 230

BC ML WC

25 30 35

Task 330

BC ML WC

25 30 35

Task 410

BC ML WC

7 10 12

Task 520

BC ML WC

15 20 25

Task 135

BC ML WC

3 5 7

Task 125

BC ML WC

3 5 7

Task 105

BC ML WC

3 5 7

Task 7

BC ML WC

# # #

Task 9

BC ML WC

# # #

Task 611

BC ML WC

8 10 13

Task 14

BC ML WC

# # #

1 New location requirements2 New location search3 Select location4 Inventory current location5 New location layout6 Select moving company7 Order utilities8 Purchase network & servers9 Negotiate lease10 Pack furniture11 Pack computer equipment12 Transport moved items13 Unpack14 Cutover to new network15 Close existing building

Task 15

BC ML WC

# # #

Task 110

BC ML WC

7 10 12

Task 115

BC ML WC

3 5 7

BC ML WC Result Rounded7 10 12 9.83 1025 30 35 30.00 3025 30 35 30.00 307 10 12 9.83 1015 20 25 20.00 208 10 13 10.17 113 5 7 5.00 53 5 7 5.00 53 5 7 5.00 53 5 7 5.00 5

131Total

Compile estimates using weighted

average:

BC+4*ML+WC6

Compiling the executive estimates….

Now what do I do with these weighted averages?

1. Add all estimates of the task durations on the critical path to find the project overall average estimate.

2. Find the project standard deviation.

3. Calculate the probability of achieving the estimated schedule—and the requested reduced schedule.

4. Show your boss the duration that gives you a 95% probability of success!

Because you are using averages—you can use the normal curve in order to calculate

schedule probability!

Now that’s a nice trick!

Why probability? Why use this normal curve thing?

1. Things we sample in nature tend to follow the normal curve (height, age, income, etc.)

2. The probability of falling near the middle (average of mean), is higher than falling far from the middle (i.e. “outliers”)

3. If we know the mean (“average”) and standard deviation (“how wide the normal curve is”), we can calculate probability.

1. +/- 1 SD= 68% of area under curve2. +/- 2 SD= 95% of area under curve3. +/- 3 SD= 99% of area under curve4. The mean is at the 50% area (or probability)

point. (Therefore, starting from 0, +1 SD = 50% + ½ of 68%=84%)

“Ballparking” the probability..(for those who don’t carry a “Z Table” in your wallet)…

What is the project standard deviation? How to find it?

• Find the variance of each task:

• Add the variances of each activity on the critical path:

• Take the square root of the sum of the variances

So what is the project standard deviation? What does it mean?

BC ML WC Result Rounded7 10 12 9.83 1025 30 35 30.00 3025 30 35 30.00 307 10 12 9.83 1015 20 25 20.00 208 10 13 10.17 113 5 7 5.00 53 5 7 5.00 53 5 7 5.00 53 5 7 5.00 5

131Total

Project SD CalculationBC WC Variance7 12 0.6925 35 2.7825 35 2.787 12 0.6915 25 2.788 13 0.693 7 0.443 7 0.443 7 0.443 7 0.44

12.193.49

Sum of VariancesSquare Root

Critical Path Variances

Project Estimated Duration: 131 DaysProject Standard Deviation: 3.49 Days

Hmmm…..what

now??

1. +/- 1 SD= 68% of area under curve2. +/- 2 SD= 95% of area under curve3. +/- 3 SD= 99% of area under curve4. The mean is at the 50% area (or probability)

point. (Therefore, starting from 0, +1 SD = 50% + ½ of 68%=84%)

Interpreting the numbers:

The 131 days estimate is a sum of averages. It is a mean of expected times. Therefore, 131 days is at the center of the normal curve and represents a 50% probability of achievement!

Since the project SD is 3.49, and your boss wants you to reduce by 10 days, the probability of actually doing that is calculated like this: -10/3.49= -2.86 SD

Since +/-2SD is 95% area, then the probability of achieving this is:

100-(50+(95/2))= <2.5%!

But what is 95% probability? 131 + (about 1.5) * 3.49=

about 137 days!

What you now get to say….

Hmmmm….

We will certainly do our best to

reduce the schedule 10 days…

however…

According to your own estimates, we have only a 2.5%

chance of achieving this….

Now don’t you wish YOU could say this?!

1. PERT can help you get agreement on the schedule you need to be successful by using the very estimates of the management team pushing you for a reduced schedule.

2. The probability of achieving a schedule built using weighted averages of estimates is only 50%!

3. Schedule reductions from the 50% estimate drop the probability rapidly (how rapidly depends upon the project SD!)

4. What you really need is a 95% probability schedule. This requires adding at least (ballpark) 1.5 SDs worth of duration to your project schedule.

5. The statistics are easy, and may be done on a white board—right in front of those executives!

Lessons learned

Yay!

QUESTIONS?

Upcoming Webinars:

May 12 Create Communications that Really Make the Point: Writing Effective Emails, Reports, and Messages

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Covering:• Bachelor of Science Technical Management

-- Project Management Major• Master of Science in Project Management• PMP Exam Prep Course (OPE)

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Thank You!This concludes today’s webinar.

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Bill Gibbs, Webinar Series CoordinatorBill.Gibbs@erau.edu

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