project management

Department of Electrical Services Engineering

Course Code / Year DT 018 /2012 Year 1

Module Services Development and Management

Lecturer Mr. Alan Harrison

Student Name Steven Agunbiade D11125287

Rory Conlon D07114364

Paul Derwin D07114349

Paul Dunne D11124233

Submission Date 20/3/2012

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Steven Agunbiade, Rory Conlon, Paul Derwin & Paul Dunne

1.1 Declaration

I hereby certify that the material, which is submitted in this assignment/project, is entirely my

own work and has not been submitted for any academic assessment other than as part fulfilment of

the assessment procedures for the program Bachelor of Science in Electrical Services and Energy

Management (BSc (Hons)) (DT 018).

Signature of students: Steven Agunbiade,

Rory Conlon,

Paul Derwin,

Paul Dunne

Date: 20/ March /2012

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2.0 Glossary of Terms

WBS Work Breakdown Schedule

PERT Project Evaluation Review Technique

CPM Critical Path Method

BCWS Budgeted Cost of Work Scheduled

ACWP Actual Cost of Work Performed

ETC Estimate to Complete

EAC Estimate at Completion

SSM Soft System Methodology

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Contents

1.1 Declaration......................................................................................................................................................ii

2.0 Glossary of Terms ..................................................................................................................................................iii

3.0 Table of Figures:.................................................................................................................................................... vi

4.0 Project Management an Overall Introduction. ...................................................................................................1

5.0 Planning Introduction- Written by : Paul Derwin ..............................................................................................2

5.1 Network Technologies ..................................................................................................................................2

5.2 PERT Charts...................................................................................................................................................2

5.3 Gantt Charts....................................................................................................................................................3

5.4 Work Breakdown Structure .........................................................................................................................3

6.0 Project Planning .......................................................................................................................................................4

7.0 Planning for Error....................................................................................................................................................5

7.1 Factors Affecting ...........................................................................................................................................5

7.2 1 Project Goals ...............................................................................................................................................6

7.3 Project Schedule ............................................................................................................................................6

7.4 Project Closure...............................................................................................................................................7

8.0 Risk Management---Written by: Stephen Agunbiade .................................................................................8

8.1 Introduction ....................................................................................................................................................8

8.2 Risk Identification and analysis ..................................................................................................................8

8.3 Risk assessment .............................................................................................................................................8

8.4 Risk Management Process ...........................................................................................................................9

8.5 Risk Analysis..................................................................................................................................................9

8.6 Risk Management Strategies .....................................................................................................................10

8.7 Avoiding the risk .........................................................................................................................................10

8.8 Reducing the risk .........................................................................................................................................10

8.9 Transferring the risk (Insurance) ..............................................................................................................11

8.10 Contingency Plans .......................................................................................................................................11

8.11 Accepting the risk........................................................................................................................................12

8.11.1 Risk monitoring ............................................................................................................................12

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8.12 General Pro ject management problems ...................................................................................................13

9.0 Estimation ---Written by: Pau l Dunne ...............................................................................................................14

10.0 Estimation .....................................................................................................................................................15

10.1 Methodology and IT....................................................................................................................................15

10.2 Methods in Construction ............................................................................................................................16

10.3 Generalised Terms.......................................................................................................................................17

11.0 Work Breakdown Structure........................................................................................................................18

11.1 Estimation Technical ..................................................................................................................................18

11.2 ETC ................................................................................................................................................................19

12.0 Analysis .........................................................................................................................................................20

12.1 Future Developments ..................................................................................................................................20

13.0 Cost Reports---Written by: Rory Conlon.................................................................................................21

14.0 Real Costs......................................................................................................................................................22

14.1 Cash Flow Statement ..................................................................................................................................22

14.2 Income statement .........................................................................................................................................22

14.3 Balance sheet................................................................................................................................................22

14.4 Variable Cost Increases ..............................................................................................................................23

15.0 Earned Value Analysis ................................................................................................................................24

15.1 Example of Earned Value ..........................................................................................................................24

16.0 NPV (Net Present Value) ...........................................................................................................................26

16.1 Example of NPV: ........................................................................................................................................27

17.0 Conclusion –Written by Group .................................................................................................................29

18.0 Bibliography .................................................................................................................................................30

19.0 Appendix 1 Soft System Methodology ....................................................................................................32

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3.0 Table of Figures:

Page No.

Figure 1 (Carnegie, 2012) ........................................................................................................................................... 5

Figure 2 Risk management assessment..................................................................................................................... 9

Figure 3(Field Mark, et al 2000) .............................................................................................................................. 11

Figure 4 Risk, strategy and type (Field Mark et al, 2000) ................................................................................... 12

Figure 5(Turner, 1995)............................................................................................................................................... 15

Figure 6 (Kerzner, 2009) ........................................................................................................................................... 16

Figure 7(Lock, 2007).................................................................................................................................................. 17

Figure 8(Lock, 2007).................................................................................................................................................. 18

Figure 9(Conlon, 2012).............................................................................................................................................. 24

Figure 10(Conlon, 2012) ........................................................................................................................................... 25

Figure 11(Barrett, 2012) ............................................................................................................................................ 26

Figure 12 (Conlon, 2012) .......................................................................................................................................... 27

Figure 13(Conlon, 2012) ........................................................................................................................................... 27

Figure 14(Hemanta Kumar, 2011) ........................................................................................................................... 32

4.0 Project Management an Overall Introduction.

Modern project management is a product of the late 1930’s. It owed its evolution to the demands

of modern life and particularly modern industry. The complexity and minutiae of large projects led

directly to the requirement of systems capable of controlling them. So for instance when the Polaris

project was first undertaken it was necessary to develop a control system to try and tie in all the disparate

elements in an effort to make progress as economically and as efficiently and as possible. This led

directly to the development of the PERT (programme evaluation and review technique) system. Since

then numerous methodologies have evolved in the hope of achieving even better results.

This assignment will look at how the project management systems exist today by dividing the

subject into four areas; Project Planning, Risk Analysis, Estimation, and Cost Reports. Even though the

writers came at the subject from an energy management perspective the headings were generic and it was

thus found that the application of technique was for the most part ubiquitous through all situations.

However where possible an effort was made to apply the theories and lessons learned , to a green energy

situation or indeed to apply them to an energy efficiency project.

Project planning will delve more deeply into the generic systems for project analysis including

both PERT and Gantt systems. However at the same time it has to be appreciated that some cross-over is

inevitable. So for instance the Work Breakdown Structure will make more than one appearance because

of its usage in both planning and estimation.

Risk assessment will cover some common ground as well as it tries to explain the necessity of

how to deal with the factors of risk in all its forms. Here again it will be necessary to explain how there is

a commonality with some issues which cross over boundaries between some of the headings.

Nevertheless if approached from a strictly risk analysis point of view it would be hoped to illustrate some

different nuances and insights.

Estimation will try to delve into the process by which proper estimation can be delivered. In this

less than exact science it would be hoped to show both the past and future developments in this aspect of

project control. The on-going struggle to increase accuracy will be highlighted by a look at what might be

future tendencies.

The Cost Reports will look at different methodologies associated with on-going financial

reckoning with regard to project progress. In order to do this it will be necessary to examine Cash Flow

Statements, Income Statements, and associated Balances. Finally some time will also have to be devoted

to the application of how Net Present Values and Earned Values are calculated.

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5.0 Planning Introduction- Written by : Paul Derwin

In this section I will be reporting on project planning, so of the topics will include Bar Charts, (Gantt

Charts), PERT Charts (Critical Path Analysis, WBS (Work Breakdown Structure) and the step required in

Project Planning. I will be gathering information from the D.I.T. library, lecture notes and the Internet.

If success is to be achieved in the construction industry where labour costs are very high and all

subcontractors have various portions of works to be undertaken. Coordination and planning is the key to

the successful completion of a project. It is an important duty of the project manager that all construction

work from subcontractors and builder fits exactly into a jigsaw pattern. The timing of various tasks must

be right otherwise delays with consequent financial loss will occur. As a project manager it is very

important to understand that two projects are never the same and whatever the size or complexity the

supervisory personal must have objectives of cost planning and office to increase productivity, quality

and efficiency.

5.1 Network Technologies

5.2 PERT Charts

The Programme Evaluation and Review Technique (PERT) was developed by the US Navy in

cooperation with Booz Allen Hamilton and the Lockheed Corporation for the Polaris missile/submarine

project in 1958” (Meredith, 2012).

A PERT Chart, which sometimes called “Critical Path Method”, is an event-oriented planning

aid which is used to estimate project duration when there is uncertainty in estimates of duration times for

individual activities. It helps the project manager to order the activities that must be completed.

A PERT Chart is a graphical illustration of a project as a network diagram consisting of

numbered nodes (either circles or rectangles) representing events or milestones in the project linked by

directional lines. The direction of lines (arrows) indicates the sequence of events. Events must be

completed in sequence according to the PERT Chart; some events can be dependent on other events and

cannot start. The PERT Chart is sometimes preferred over other methods of network techniques because

it clearly illustrates task dependencies, but sometimes it can be more difficult to understand, especially on

complex projects. Some project managers can sometimes use both PERT and Gantt Charts.

When the PERT Charts are finished the project manager will be able to identify:

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How long the project will take

At what points in time can the supervisor expect to start and finish various jobs

If the project has a scheduled completion date what are the latest point in time at which jobs can

be started and finished so not to let the project over-run the finishing date

How long a job can be delayed without affecting the scheduled completion date

If more labour becomes available to which job can they be moved to?

5.3 Gantt Charts

An old but very useful method of producing project schedule information is the Gantt chart. Henry

L. Gantt developed the Gantt chart in 1917. The Gantt chart displays planned and progress for a number

of tasks displayed as bars against a horizontal time scale. It is an effective and easy to read method of

indicating the actual current status for each of a set of tasks compared to the planned progress for each

item of the set. As a result, the Gantt chart can be helpful in reallocating resources among tasks, as well as

in the job of keeping track of the project (Meredith, 2012).

Gantt charts are drawn on a scale where the horizontal axis is directly proportional to time.

Depending on the time scale of the project the units of time can vary form days; months and years can be

used.

A horizontal bar on the chart represents the project task, and its length is scaled to the amount of time

required to complete the task.

The advantages of using Gantt charts are firstly, they are easily understood, they can be edited and

updated very easily on Microsoft project, they can contain large amounts of data and are very easy to

construct. The Gantt chart does have drawbacks in that if a project is complicated with a lot of activities,

it may be hard to follow multiple activity paths.

5.4 Work Breakdown Structure

On very large projects critical path networks can become very difficult to handle, and it’s very

hard to manage thousands of tasks on a day-to-day basis. The Work Breakdown Structure breaks down

large projects into small sections, which allows the project manager to handle the project easily.

A Work Breakdown Structure (WBS) is a project management technique for defining and

organizing the total scope of a project, using a tree structure.

A Work Breakdown Structure starts with project as the top level deliverable and further

decomposed into sub-deliverables. The project team creates the Work Breakdown Structure of the project

by identifying tasks and subdividing these into smaller sub-deliverables. These sub-deliverables can be

broke down even further so a single person can carry out the task.

A perfect example of a Work Breakdown Structure would be a construction of a house where it’s

split into three sub-deliveries, number 1 is the excavating, foundations and pouring concrete; number two

external works which include block work roofing and plastering etc.; and number three internal works

which include electrical, plumbing and carpentry etc.

The Work Breakdown Structure has a number of benefits. A project budget can be allocated to

all the top levels of the Work Breakdown Structure and department budgets can be quickly calculated, so

when all the subcontracts for electrical and mechanical etc. go out for tender the project manager knows

how much capital is available for the subcontracts and can keep the project within the budget.

Another benefit of the Work Breakdown Structure is it can highlight potential risks in a branch if

the branch was undefined or if new energy saving technology was going to be installed in the p roject, this

can be tracked and highlighted in a project log. Other benefits include clarity; the project team can seek

out the risks and issues to be prepared for it. Timelines, the project team can obtain an easy to understand

defined project timeline.

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6.0 Project Planning

The key to a successful project is in the planning. Creating a project plan is the first thing you

should do when undertaking any kind of project. Often project planning is ignored in favour of getting on

with the work. However, many people fail to realise the value of a project plan in saving time, money and

many problems”(2012). Good planning and scheduling will allow:

The project to be finished or completed within the required timescale

Work to be issued at the right time and the right sequence

The project to be controlled with no panic and at an ideal pace, which leads to quality work.

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7.0 Planning for Error

One of the most common faults in project planning is to assume there will be no errors. An

understanding that errors will happen at some critical stages in the project life cycle is mandatory.

Implementing a monitoring strategy means that when a problem occurs the project management team can

adapt and plan to overcome that problem. There is certainly nothing wrong in recognizing that problems

will occur and in altering them to avoid the inevitable. When the project management team is planning a

project they should ask themselves what could go wrong and armed with experience from previous

mistakes on other projects, he or she can make amendments and corrections to the planning process.

Figure 1 (Carnegie, 2012)

7.1 Factors Affecting

Factors during the planning phase that are sometimes ignored which leads to project failure:

The project manager ignores vague contract terms (it’s vital to know the contract terms before

signing up).

Management wants to Start working and worry about planning later.

Management warns project manager against raising issues with the client/ stakeholder.

The project manager is too worried about losing his or her job or making people angry

Client rep. accepts work informally, but refuses to put it in writing.

Projects lack of the right resources

Inexperienced project managers

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Lack of methodology increases risks

No tracking of changes to the project

No up to date data about the status of the project

Project manage ignores problems

Lack of communicating between project sponsors and stakeholders

Factors that affect project planning operationally:

Design error

Component failure

Key staff leave

Strikes and lockouts

Company runs out of money

Crime (theft, fraud & vandalism)

Broken tools or equipment

7.2 1 Project Goals

A project is successful when the needs of the stakeholders have been met. A stakeholder may be a group, person or organisation that has invested money in the project.

An important first step is to identify the stakeholders in your project. It is not always easy to

identify the stakeholders of a project, particularly those impacted indirectly. Examples of stakeholders are:

• The project sponsor

• The property developer

• The users of the project outputs.

Once the project manager has identified the stakeholder/s, he/she must find out what their needs

are. The best way to do this is to start with a kickoff meeting with the project team and stakeholder/s.

During the interview recording notes on needs and what they want to achieve from the project. Often

stakeholder/s will talk about needs that aren't relevant and don't deliver benefits. These can be recorded

and set as a low priority. The next step, once project management team have conducted all the interviews,

and have a list of needs is to prioritise them.

Once you have established a clear set of goals, they should be recorded in the project plan. It’s important to include the needs and expectations of the stakeholder/s.

7.3 Project Schedule

The project team must be comprised of the right individuals with the appropriate backgrounds and skill

sets. The team can include professionals from any number of internal departments or disciplines” (Kiser,

2012)

An important step is allocating tasks or roles to each project team member. Depending on the skill

levels of each team member and the complexity some tasks can be broken down into small ones to be

completed. Individuals with leading roles in the project should be identified. The project managemen t

team must create a list of tasks that need to be carried out for each deliverable. For each task identify the

following:

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• The amount of time (hours or days) required to carry out the task.

• The resources that will carry-out the task (subcontractor or builder).

Once the project management team has established the amount of time required for each task,

he/she can work-out an accurate delivery date for the project. Software packages such as Microsoft

project can be used to create the project schedule. Input all of the deliverables, tasks, durations and the

resources that will complete each task. Preparation of Gantt Charts and PERT charts make the planning process easier which are composed from software packages.

A common problem discovered that could arise at this point, is when a project has an imposed

delivery deadline from the sponsor that is not realistic based on project managers estimates. If the project

manager discovers that this is the case, he/she must contact the sponsor immediately. The options

available in this situation are:

• Renegotiate the deadline.

• Request more resources

• Downsize the scale of the project.

A communications and reporting plan should be in place so all parties involved can be informed

about the progress of the project outlining targets being met and the overall performance. Holding weekly

site meetings and walk rounds to daily e-mails is key to outline or show the level of work being achieved

or if adjustment is necessary.(2012)

7.4 Project Closure

The final step is project closure; it’s good practice to carry out a project closure checklist to

insure that key tasks have been completed to the satisfaction of the project sponsor. It ensures that all

participants and stakeholders to the project are informed of follow-on activities for example new projects

and servicing. It’s important to identify lessons learned and best practices on completion with the project

management team. (Carnegie, 2012)

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8.0 Risk Management- Written by: Stephen

Agunbiade

8.1 Introduction

Risk management is the name given to a logical and systematic method of identifying, analysing,

treating and monitoring the risks involved in energy efficiency and green technology activity or process.

Also, risk management helps project managers to make best use of their resources.

Risk management is concerned with identifying risks and drawing up plans to minimise their effect on a

project. Essentially there are two parts to this work:

8.2 Risk Identification and analysis

Risk is inherent and inevitable in any project but the degree of risk may vary widely. When risks

in a project have been identified and the idea of their likelihood occurring , then it must be decided what to

do about them and gauge their impact on project estimates, budgets, and schedules.

A risk is a probability that some adverse circumstances will occur:

Project risks affect schedule or resources

Risks affect the quality or performance

Business risks affect the organisation developing.

8.3 Risk assessment

The process of risk assessment is more than simply identifying specific risks. It means obtaining

a clear definition of risks, including how important the risk is to the project – what the severity of its

occurrence would be, and the sensitivity and likelihood of that risk occurring (Mike et al, 2000)

The green technology projects such as solar, wind, hydro and geothermal are still developing in Ireland

and this illustrates that energy project development is a high risk undertaking.

The risks affecting green energy projects appear throughout the entire project lifetime, but vary greatly in

character. Some examples are listed below:

(a.) Construction risk: Risk of property damage or liability stemming from errors during the

building of new projects.

(b.) Company risk: Risk affecting the viability of the project developer, for example risk related to

key personnel, financial solidity to execute on plans.

(c.) Environmental risk: Risk of environmental damage caused by the green technology impact

including any liability following such damage.

(d.) Financial risk: Risk of insufficient access to investment and operating capital

(e.) Market risk: Risk of cost increases for key input factors such as labour or rate decreases for

power generated.

(f.) Operational risk: Risk of unscheduled plant closure due to the lack of resources, equipment

damages or component failures.

(g.) Technology risk: Risk of components or parts generating less power over time than expected

(h.) Political and Regulatory risk: Risk of a change in policy that may affect the profitability of the

project, for example changes in levels of tax credit. Also, changes in policy as related to

permitting and interconnection.

(i.) Climate and Weather risk: Risk of changes in electricity generation due to lack of natural

supplies, for example lack of sunshine for solar energy system

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(j.) Sabotage, terrorism and the theft risk: Risk that all or parts of the green technology will be

subject to sabotage, terrorism or theft and thus generate less than planned (Jon Worren

2012)

8.4 Risk Management Process

(i.) Risk Identification

Identify project, product and business risks

(ii.) Risk Analysis

Assess the likelihood and consequences of these risks;

(iii.) Risk Planning

Draw up plans to avoid or minimize the effect of the risk

(iv.) Risk Monitoring

Monitor the risks throughout the project

8.5 Risk Analysis

Assess probability and seriousness of each risk

Probability may be very low, moderate, high or very high

Risk effects might be catastrophic, serious, tolerable or insignificant

Risk Probability(1=low, 5=high)

Impact(1=low, 5=high

Organisational financial problems force reductions in project

budget

It is impossible to recruit staff with the skills required for the

project

Key staff are ill at critical times in the project

The components that should be reused contain defect which

limit their functionality

Changes to requirements that require major design rework are

proposed

The organisational is restructured so that different

management are responsible for the project

There are changes in energy policies

Sabotage, terrorism and theft of vital parts of the equipment

Figure 2 Risk management assessment

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8.6 Risk Management Strategies

The project manager needs to identify what cost-effective countermeasures can be applied in order

for each risk to be managed. These may need to be specified in great detail, depending upon the

complexity of the countermeasures. Possible countermeasures are:

Avoiding the risk

Reducing the risk

Transferring the risk

Contingency plans

Accepting the risk

Let’s review strategies for the risk.

8.7 Avoiding the risk

Avoiding the risk means removing the risk totally from the project to be done. Avoiding a risk

may mean not doing the project, if the risk occurs in one of the key elements of the project. It may be

possible to redefine the project to exclude the risk area.

8.8 Reducing the risk

Reducing the risk means reducing either the likelihood or the impact of the threat.

Risk reduction is an important strategy; it can be an expensive one or it can be a very cheap one,

but in most cases it is likely to be cost-effective when compared to the cost of incurring the unreduced

risk. Common risks which can be reduced are shown in the table below but there are many list s, the few

common ones are shown here in Fig 3: Common risks: reducing their probability and impact (Field Mark,

et al 2000)

Risk How probability can be

reduced

How impact can be reduced

Lack of experienced staff Recruit experienced people, train

staff, use outside consultants or

sub-contractors

Have experienced staff

informally supervise the work of

less experienced staff; increase

project time to accommodate a

‘learning curve’

Lack of technical

infrastructure in the form of

tools or access to tools

Purchase or hire appropriate

tools

Increase project time

Project manager has no prior

experience of working with a

contractor or vendor

Develop and maintain a good

relationship; establish formal

communication mechanism

Increase project time to deal with

problems of complex

communications and co-

ordination

Multiple vendors or

contractor’s involved

Name one vendor or contractor

as the prime contractor

Increase project contingency

times

Vendor’s or contractor’s Choose another contractor with a Involve management, particularly

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reputation shaky sound reputation to discuss concerns,regarding

vendor’s or contractor’s ability to

provide work

Potential users lack

commitment to outcome of

project

Review with them all expected

benefits; show how this fit with

their strategic plans or working

practices

Introduce the products of the

project in a phased fashion to

spread the impact over a longer

period (may involve increasing

project time )

People potentially affected by

project outcome fear changes,

resulting in their non-co-

operation

Use consensus-building

techniques to obtain their input

where possible when defining

requirements.

Review with them all expected

benefits; show how this fits with

their plans or practices

Figure 3(Field Mark, et al 2000)

8.9 Transferring the risk (Insurance)

Insurance is a means of transferring the financial impact of having a risk occur. Insurance

against fire or theft simply provides financial compensation for losses actually incurred. Compensation as

the result of an insurance claim may not be adequate to keep a project on track, because the financial

compensation may only be enough to compensate the organization of time an d resources lost, not for

repairing the damage so that the project can continue.

Many of the risks mentioned earlier in this write up can be managed through financial instruments

and insurance products, the examples listed below:

Weather risks can be mitigated through weather futures or forecasting

Technology risks can be offset through warranties

For lack of engineering studies for actuarial purposes often means that financial risk management

products are badly re-purposed from other fields and prohibitively priced

8.10 Contingency Plans

Contingency planning involves identifying the range of alternative options for providing

acceptable recovery strategies in the event of loss.

Contingency plans can involve the allocation of a fund of money to cover minor cost-overruns or

elaborate plans for alternatives, or the restoration of lost resources, work or services. For each alternative

option identified, its benefits and disadvantages must also be identified so that the optimum solution can

be presented to management for a decision. General contingency strategies are:

Do nothing (choosing this option should be a positive choice, not a default because no one has

taken the time to identify other possibilities!)

Alternative procedures, previously identified and described in detail (for example, a retreat to an

earlier stage in the project so that work can recommence), or alternative ways to proceed from

the point at which the hazard occurs.

Reciprocal arrangements with other organizations the client, contractor or subcontractor can

provide specific resources and facilities in the event of a hazard arising.

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8.11 Accepting the risk

The final strategy of managing a risk is the possibility of risk acceptance; the project manager

can decide nothing can or needs to be done at present, but notes that the situation needs reviewing from

time to time during the course of the project. It will be too costly to develop a contingency plan against

everything that could go wrong. During the course of the project execution it will be necessary to review

the list of risks and risk factors to determine:

Whether any risk has become or is likely to become critical at any time soon

To determine whether any new risk has arisen which might require new assessment and possible

planning, or even immediate action.

In any case each risk and any management and contingency plans should be reviewed on a periodic

basis to ensure that, should the worst happen, the project manager will have given some thought about

what to do.

Risk Strategy Type

Supplier goes bankrupt Identify and approach alternative

supplier

Contingency plan

Supplier does not deliver on

time

Insert penalty clause in contract

with supplier

Add extra time to project plan

after date told to supplier

Specification of components or

parts must be met as thy

interface with items from other

suppliers

Stipulate exactly what

specification must be met in

contract with supplier

Key expert in supplier’s

organisation may leave

Watch this situation

Figure 4 Risk, strategy and type (Field Mark et al, 2000)

8.11.1 Risk monitoring

The purpose of risk assessment is to allow the project manager to identify and plan for the risk. The

manager manages risk by monitoring the situation and controlling it when it occurs. Monitoring risk can

be tied to the tracking of milestones. The setting aside of a timetable to examine the situation for the

most likely and most damaging risks, reassessing risks as the project progresses, and, of course, taking

corrective action.

Assess each identified risk regularly to decide whether or not it is becoming less or more

probable

Assess whether the effects of the risk have changed

Each key risk should be discussed at management progress meetings

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8.12 General Project management problems

The list of problems within projects boiled down in one expert’s opinion to eight

clear definable reasons. Those listed below could be labelled under the general category

of ‘risk’ but they are also generic in form and so are included in this section.

Inadequate resources

Unrealistic schedules

Unclear goals

Uncommitted team

Bad planning

Unclear communications

Change of directions

Uncooperative teams (adversarial / turf clashes)(Taylor, 1998)

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9.0 Estimation ---Written by: Paul Dunne

Accurate cost estimation is in the words of one authority ‘ The bedrock upon which all aspects of

project pricing, budgeting and cost control are built’(Ross, 1994) The rationale for this was not hard to

find. Without engaging in the proper (cost) estimation process it would be impossible to establish any

kind of budgetary order, financial appraisal, or assess spending. Indeed the very formation of a business

plan let alone calculate the material or manpower spending would be impossible. For a project to succeed

therefore everything would seem to hinge upon the successful implementation of this initial step. The

process of estimation can be complex and it would seem pertinent to mention that all data gathered for

this purpose was only valid for a certain period of time. Yet the successful estimator has to allow for

projects which might run for years. It was at this stage that most confusion arose about the actual

difference between the estimation process and costing. Burke phrased the distinction as the idea that if

costing constituted the defined and detailed price based on a complete bill of materials and data. Then

estimation was a quick method for pricing based mostly on incomplete data.(Burke, 2004) It also gives

notice that the entire process was one in which there was the expectation of error. In fact if a project were

to come in completely within estimates it would be cause for celebration. While at the same time it would

also have to be acknowledged as just mere chance(Lock, 2007) There can be so many variables In terms

of time, inflation, shortages, and even politics, that to get it completely right would be to say the least

unusual. Yet the successful project estimator is expected to do just that. He/she has to compete and win

within these defined boundaries and have the confidence to persevere. The following recommendations

apply to every area in which project estimation is applied, from energy management to construction or

even information technology.

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10.0 Estimation

There are various levels or types of estimation. Below is an illustration of how these are gauged in

terms of accuracy and effort. The key to understanding the approach is to appreciate that the initial

estimate method is a highly inaccurate approximation. This carries with it a health warning that it has

used rule of thumb, to see if it is worthwhile proceeding to the next stage of the estimation process. As

each level is achieved and accepted there is a rising cost to take it to the next. Th is is because each

individual step upwards requires greater investment in terms of time and expertise. However because

there has been this investment in the first place there is a better return in terms of accuracy.

Type of Level of Effort as

Estimate Accuracy % of project cost

Proposal +- 30-50% 0.02-0.1

Budget +- 20-35% 0.1-0.3

Sanction +-10-25% 0.4-0.8

Control +- 5-15% 1-3

Tender +- 2-5% 5-10

Figure 5(Turner, 1995)

So by the final stage (tendering) the accuracy of the es timate should have approached 2-5%. In

terms of the final cost to produce this level of accuracy in estimation one expert quoted the inverse square

law that is: twice the accuracy required four times the effort, or in this case 5-10%.of total project

cost(Turner, 1995)

10.1 Methodology and IT

Estimation methodology is as varied as there are industries and processes which would employ

resources to use it in the first place. Typically there would be a completely different approach to say

estimation in the IT industry than that used for construction or indeed for a green field wind turbine site.

In fact the first two of these very different industries could serve as a template to show how a wide a

spectrum of approach would be needed to balance both. Turner highlighted the difference in end product

to illustrate this. Construction he considered to be almost mechanistic whereas, Software activities could

be at best illusive to define. Within the IT industry the more complex the task and greater the complexity

the harder it was to get an accurate estimate.(Turner, 1995) Furthermore within this same industry there

was a constant stream of innovation. This limited the value of specific information which in the

construction industry could be ascertained from historical sources. Basically they argued that this industry

was doing things so new that they had to develop their structures for estimation as they went along. In the

more traditional industries like construction it was theoretically possible to look into reoccurring

scenarios. This led to the development of approaches which could improve vital aspects to the project like

coordination, which could then be reused on other sites.(Elhag et al., 2005)

This was not to say that there were not some software manufacturing lessons which could n ot be

applied elsewhere. But where the IT industry was doing something like estimation of an Research and

Development project then the project was termed ‘high risk’.(Kerzner, 2009) In fact Kerzner

16


recommended that the approach in these situations should be to employ the ‘rolling- wave ‘technique. In

essence this meant that the level of estimation which might be highly accurate for say the first six months

(he termed it level 5) lost its momentum in the second six. The reason for this could be the dependency on

developments from the first half year to affect the results in the second period, thus dropping the

reliability level down to what he termed level 2. This ensured its ‘high risk’ label. To improve this it was

necessary to go through a re-estimation process from for example month 2 to raise the profile of month

seven to a level 5.(Kerzner, 2009) Graphically this is shown In Fig 6

Figure 6 (Kerzner, 2009)

The’ rolling wave’ simply implied that the level of accuracy could be better estimated after an

initiation period. Going forward at this point could dramatically improve the accuracy for the estimation

process six months down the road.

10.2 Methods in Construction

One popular technique used in determining the project cost estimate was as shown below. It was

usually referred to as the above–below line system and it incorporated most of the accounting terms used

on the subject.

17


Direct Labour

Direct Materials

Direct Expenses (Direct costs)

Overhead Costs. (Indirect or fixed costs)

Contingency Sums

Escalation

Mark-up for Profit

Selling Price

Provisional Sums (Below the line items)

Figure 7(Lock, 2007)

Most of the above terms are self-explanatory but some of the estimations for example like direct

labour might have two components such as basic wages on the one hand, and taxes insurance, etc. also

known as labour burden on the other

In a well developed industry like construction the approach to an estimation procedure was a

well worn path. In contrast to the IT example the estimator in these instances could make far more use of

things like ‘collective judgement’ or ‘comparison estimating technique’. This would involve using

experiences garnered from previous similar projects and applying them to the new circumstances.

Broadly speaking these come under five headings

Graphic and tabular relationships

Unit rate

Resources allocation method

Factor estimating

Cost indices. (Agnew, 2010)

The proviso that cost data should only be used when using order- of- magnitude estimates was included in

the above reference.

10.3 Generalised Terms

Two other forms of estimating would have to be included in the overall scheme of things and

these were usually known as Top-down or Bottom-up. The top-down version was as the name suggested

a format where the price was given by comparative estimation on a global scale that is, to a similar

project elsewhere. This estimate almost by definition was normally ball-park, but it had one distinct

advantage. It rarely underestimated the cost. The technique included allowances for dividing the project

into its constituent parts which were then priced individually. Onto this price was then added a generous

contingency allowance. Under these circumstances there was little chance of leaving out or forgetting an

item.(Lock, 2007)

The bottom–up version resembled the approach made when trying to achieve accuracies of 5-

10% as explained earlier. However in a general sense these tended to become engrossed in the minutiae

of detail and the danger then existed that a larger oversight might occur. Strangely this was a more

common occurrence when an approach of this nature was made. However for obvious reasons the

bottom-up approach was the one most favoured for use in estimation in general.

18


11.0 Work Breakdown Structure

A desirable format for estimation could be the Work Breakdown Structure (WBS). Specifically the

‘packages’ below are used in this way to collate the different estimates or framework for estimates for the

entire project.

Figure 8(Lock, 2007)

On larger projects the above boxes represented spreadsheets. These constituted a hierarchical

structure spreading sometimes through many levels. There is or can be a high level of complexity but

what was most important was how easily the information could be retrieved and collated. With higher

complexity came the necessity to allow for different combinations and permutations of pricing and

estimation. Of the utmost importance was how easily this information could be accessed, refined and if

necessary altered. Structured as above the WBS nature of the filing system allowed for this

11.1 Estimation Technical

Two technical terms in relation to the estimation process needed explanation. The first was estimate

at completion (EAC). As the project progressed there was the need to constantly revalue or update the

original estimate. More information was obviously available to the project manager at this stage and some

of the inevitable glitches and hold-ups would have been more apparent by then. These factors allowed for

the updated version and for a constant finger-on –the –pulse approach to see where if any there was major

deviance from the original estimate. The fact that there might have been some positive gains in terms of

price for the project was also a possibility.

19


11.2 ETC

The estimate to complete although similar in sound differed in some key areas. This estimate

was made normally towards the end of a project or from some key point along the critical path, and this

assessed the amount of money necessary from that point onward to finish the project. It normally

translated to the three part relationship below

EAC = ETC – ACWP (Actual Cost of Work Performed) (Taylor, 1998)

20


12.0 Analysis

It was important to try and establish whether the estimation process as it existed today was successful

or not. In other words how accurate had the estimates been in general? An unbiased view would regard

this as a fundamental aspect of any report on the subject. The results of several studies were surprising in

their degree of negative outcomes. A typical report read as;

‘The “normal” cost estimation processes and methods are considered to be weak and flawed and are

beginning to yield to more efficient and less costly approaches to achieve the same results’ (Hemanta

Kumar, 2011)

The above heading would seem to reflect a despondent attitude towards the performance of

estimations in a number of key industries and processes. In the software industry the projects sampled

experienced cost overruns of between 150% -200% in one third of all cases. Overall the time overruns

were in the order of 2 -3 times the original estimates. Samples taken outside of the United States, that is

of the construction industry in Australia showed a different phenomena. In these cases it was the size of

the project which showed up the main discrepancies , for example smaller projects were normally

overestimated by a large amount. 86%of the infrastructural projects in the transportation sector of the US

were ‘overwhelmed’ with costs on average nearly one third higher.(Hemanta Kumar, 2011)

Under any heading these findings would seem to indicate a pretty flawed approach to estimation.

While as already stated the science was hardly exact nevertheless one might have expected more. There

were a number of excuses offered and these revolved around things like

attitudes and traditional methods in project estimation,

Increasingly complex projects

Unpredicted additions etc.

12.1 Future Developments

Appendix1 gives a graphic display of the Soft System Methodology which came highly

recommended in the Kumar document. The most important aspect of the report in the final analysis was

the obvious awareness of how stubbornly the problem of estimation inaccuracy persisted within

estimation practices. The system described offered their insight into how to deal with this on an on-going

basis and where the future lay in both analysing and solving the problem. The ultimate goal was to

improve prediction accuracy and it approached the problem from the point of view that the previously

held doctrine of scientific reductionism; namely reducing the investigation to isolated components was

essentially flawed. The SSM approach suggested that the better option was to have a system wide

approach or at least one which was more holistic. It meant that the perceptions of different experts

involved at all levels have an input. These were then collated and shown in their ‘soft’ imaging as shown

in the appendix.

21


13.0 Cost Reports---Written by: Rory Conlon

Cost on a project can be defined as:

“The formal expression of plans, goals, and objectives of management that covers all aspects of operations for a designated time period” (Harrin, 2007)

The three main areas with regard to project management on a given project are:

1. Cost

2. Quality 3. Time

While each of the above are as important as one another, nevertheless it is the project itself which

will determine the key element. For example in 2008 Beijing hosted for the Olympics and was due to

build a state of the art stadium to host the games. The most important element here was time since it would have been a project failure if the stadium had not been finished for the start of the games.

Another example, is the Scottish Parliament Building, which is the home of the Scottish

Parliament at Holyrood, within the UNESCO World Heritage Site in central Edinburgh. This project

commenced in June 1999, with the demolition of the previous Scottish and Newcastle brewery and the

beginning of foundation work to support the structure of the building. MSPs began to move into the

building complex in the Summer of 2004, with the official opening by the Queen taking place in October

of the same year. From the outset, the building and its construction proved to be highly controversial. The

choices of location, architect, design, and Construction Company were all criticised by politicians, the

media and the Scottish public. Scheduled to open in 2001, it finally did so in 2004, more than three years

late with an estimated final cost of £414m, many times higher than the initial estimates of between £10m and £40m. This highlights a project failure associated with time and cost.

The Sydney Opera House in Australia is also an example of a project where cost was not

evaluated correctly and in turn ran over budget by a long way. It was formally completed in 1973, having

cost 102 million dollars. The original cost estimate in 1957 was 3,500,000 pounds (7 million dollars). The

original completion date set by the government was 26 January 1963 (Australia Day). Thus, the project

was completed ten years late and over-budget by more than fourteen times. This proved to be one of the

biggest project failures with regard to cost the world has ever seen and is frequently used to illustrate

many mistakes that ultimately can be avoided. These are just a few examples of different projects with time and cost issues.

The following section will deal specifically with cost issues in relation to project management. In

order to assess costs in relation to a project, it is important not to make assumptions or guess the order or size of a budget.

Budgets, particularly costs and charges, should only be produced after adequate research has been completed because only then will costs be controlled and the project not put at risk or compromised.

http://en.wikipedia.org/wiki/Scotland

http://en.wikipedia.org/wiki/Scottish_Parliament

http://en.wikipedia.org/wiki/Holyrood,_Edinburgh

http://en.wikipedia.org/wiki/World_Heritage_Site

http://en.wikipedia.org/wiki/Edinburgh

http://en.wikipedia.org/wiki/Politics_of_Scotland

http://en.wikipedia.org/wiki/Scottish_media

22


14.0 Real Costs

The cost of a project is usually not as transparent as originally considered. The only way of getting a

real understanding of cost is to ensure knowledge of all the details of a project. This will help greatly in

order to get a better understanding of how much a project will ultimately cost and also will avoid any surprises along the way. (Harrin, 2007)

It is statistically shown that most companies go into liquidation due to a cash flow problem and with

this in mind it is very important to manage the amount of money available at any g iven time on a project.

Financial cost management may be defined as:

“Estimating the proper cost that should reasonably be expected to be incurred against a clear baseline,

understanding how and why actual costs occur, and ensuring that the necessary response is taken promptly to ensure actual costs come under budget “(Burke, 2003)

It is very important to ensure that current costs are monitored at all times in the life cycle of a given

project. Records should be kept for all financial dealings that are made on a project. There are three main principles of operation with regard to real costs. They are as follows:

1. Cash Flow statement

2. Income Statement

3. Balance sheet (Burke, 2003)

14.1 Cash Flow Statement

Cash flow statement monitors the amount of money that is put into and taken out of a project.

Generally, this is done on a weekly or monthly basis. It is very like a standard bank statement. The only difference being that income cash and expenditure are in the same bracket.

14.2 Income statement

Income statement should show a detail of all transactions that have been received on a project. It

measures the overall performance of a specified accounting duration. It should also include the net profit

or loss that can happen over a project usual done every month or three months can vary depending on project.

14.3 Balance sheet

Balance sheet should show a complete analysis of all transactions that have taken place on a

project showing the money being made or lost. Also it is a good indicator of a summary of a company’s assets. It allows shareholders and investors to get an idea of how much it has or hasn’t got.

23


14.4 Variable Cost Increases

Variable cost increases are rises in materials that may not have being allowed for. An example of this

is on a project were large amounts of electrical cabling and mechanical pipes are being installed , a cost

for copper would be submitted in the original costing, However by the time the cabling is ready for

purchase the price of copper may have risen in some cases quiet significantly . Therefore it is very

important to allow for a separate cost allowance in the original contract in case of a rise in material cost.

24


15.0 Earned Value Analysis

There is a method used widely in order to measure the performance of projects cost. It is known as

“Earned Value Analysis”. This is used by many project managers to evaluate the performance of a project

with regard to comparing planned costs to actual costs. Earned value analysis allows for better planning

and also gives early warning signs if a project is in trouble and enables managers to control the issues and to take the necessary remedial measures before it is too late. It allows potential risks to be highlighted.

There are three main factors for cost performance measurement using Earned Value Analysis:

1. Budgeted Cost of Work Scheduled (BCWS) or Planned Value (PV) - This is the sum of budgets

for all work packages scheduled to be accomplished within a given time period.

2. Budgeted Cost of Work Performed (BCWP) or Earned Value (EV) – This is known as the sum of budgets for completed work packages and open works.

3. Actual Cost of Work Performed (ACWP) or Actual Cost (AC) – The actual cost applied within a time period. (Nagrecha, 2002)

15.1 Example of Earned Value

1 2 3 4 Total

Work Scheduled (€)

(Planned Value PV)

250 250 250 250 1000

Figure 9(Conlon, 2012)

The above table indicates the amount of money to be spent over a 4 week period.

As the project progresses it can be shown what will be spent at each stage in the table below.

1 2 3 4 Total

Work Scheduled (€)

(Planned Value PV)

250 250 250 250 1000

25


Actual Cost (€)

(Actual Cost AC)

220 200 220 300 940

Variance 30 50 30 -50 60


From this table we can see that this project is under run by €60. The project was due to spend €

1000 after four weeks but has only spent € 940. (Nagrecha, 2002)

There are many advantages to Earned Value Analysis:

1. Reliable data is received

2. Uses work breakdown structures in order to calculate budgets

3. Provides early warning signs if project is running into problems or is about to run into problems

4. Can be used as a certain method in order to forecast the overall final cost of a project

5. Can reduce an information overload

6. It uses a index based method in order to predict the final cost. (Nagrecha, 2002)

26


16.0 NPV (Net Present Value)

NPV can be defined as:

“The difference between the present value of cash inflows and the present value of cash outflows.

NPV is used in capital budgeting to analyze the profitability of an investment or project”

(www.investopedia.com, 2011)

Net Present Value is very important in costing of a project mainly where projects duration is

long term that is, more than two years. It works of the basis that the value of a euro today compared to the

value of your euro in the future is different. NPV uses an interest rate on the value of the euro to show

that the euro today will be worth less in the future this can be a major factor in the planned costing of a

project and made be over looked

Figure 11(Barrett, 2012)

The above chart shows the value of different rates of discount that can applied depending on the

current economic situation in a given country and what level of growth is expected. This interest rate can

then be applied as in the example below in which a 6% interest rate was selected.

Discount Rate % (Or Interest Rate % )

Year 2 4 6 8 10 12 14 16

0 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000

1 0.980 0.962 0.943 0.926 0.909 0.893 0.877 0.862

2 0.961 0.925 0.890 0.857 0.826 0.797 0.769 0.743

3 0.942 0.889 0.840 0.794 0.751 0.712 0.675 0.641

4 0.924 0.855 0.792 0.735 0.683 0.636 0.592 0.552

5 0.906 0.822 0.747 0.681 0.621 0.567 0.519 0.476

6 0.888 0.790 0.705 0.630 0.564 0.507 0.456 0.410

7 0.871 0.760 0.665 0.583 0.513 0.452 0.400 0.354

8 0.853 0.731 0.627 0.540 0.467 0.404 0.351 0.305

9 0.837 0.703 0.592 0.500 0.424 0.361 0.308 0.263

10 0.820 0.676 0.558 0.463 0.386 0.322 0.270 0.227

11 0.804 0.650 0.527 0.429 0.350 0.287 0.237 0.195

12 0.788 0.625 0.497 0.397 0.319 0.257 0.208 0.168

13 0.773 0.601 0.469 0.368 0.290 0.229 0.182 0.145

14 0.758 0.577 0.442 0.340 0.263 0.205 0.160 0.125

15 0.743 0.555 0.417 0.315 0.239 0.183 0.140 0.108

27


16.1 Example of NPV:

Years 6% Interest Rate Annual Investment (€) Present Value

(€)NPV

0 1 € 600,000.00 € 600,000.00

1 0.943 € 200,000.00 € 188,600.00

2 0.890 € 200,000.00 € 178,000.00

3 0.840 € 200,000.00 € 168,000.00

NVP +€ 534,600.00

Figure 12 (Conlon, 2012)

The above chart indicates a value of money to manage a project with a three year investment. As

you can see the money that was invested at the start of the project of €600,000.00 is not worth as much

after the three years, it is worth €65,400.00 less. This is an important area that should be considered when

costing any project lasting for a long duration.


0

100000

200000

300000

400000

500000

600000

700000

1 2 3 4 5 6 7

Year:

Annual Investment (€)

Simple Payback

(Cumulative Cash Flow)

28


Finally the above line diagram illustrates the difference between a standard investment and an

investment in which there was an allowance for Net Present Value.

29


17.0 Conclusion –Written by Group

Project management has evolved over the years from its infancy in the 1930’s to the rather more

sophisticated level to which it is at today. That evolution has seen innovations which have revolutionised

the science of project control. The object of these progressive steps has been to try and increase the ability

of individual project managers to control their projects. There has been a continuous d rive to increase

efficiency and to predict both time and costs on an on-going basis. This has led to the development of

various systems like PERT and Gantt Charts to help process the information and deliver more accurate

results. But the strides forward have by no means stopped there. Within each of the separate headings

chosen, Project Planning, Risk management, Estimating, and Costs Reports there have been

commensurate innovations also. Risk management has moved onto the expectation of how these

inevitable errors occur and how to prepare for such eventualities. This in turn has given the project

manager tools to deal with the same inevitable fall-out. By focusing on the causes of previous failures the

preparation can be put into place to deal with a foreseeable one in the future. Not only that but it has been

possible to build up profiles of why there is risk build up in projects in the first place. Why for instance

there is the necessity for proper personality traits in management and the desirability for certain policies

to both protect and insulate the workers and the stakeholders in any undertaking.

This assignment looked at how projects particularly those of a larger size could be dealt with using

these four major headings. Each of which brought a particular emphasis on that part of the process. There

was a biased input in favour of newer or green technologies but it was found on a general level that the

lessons in other situations also applied in much the same way here. On some levels the newer

environmental projects were almost in the same category as high risk IT projects. In other ways they

resembled construction jobs. So the lessons learned did cross over to some extent. The overall conclusion

of the assignment would have to be that the individual parts of the processes all contributed vitally to the

whole. In no one undertaking could it be said that one component was more important than the other.

Rather it was the successful combination of all the factors which led to an overall success in the outcome.

If one component failed then this had a detrimental effect on everything else. This applied as much to the

first phase of the operation like estimating as it did to examining cost reports in hindsight. This idea of

failure was a constant theme throughout the whole experience, and it reflected certain realities. These

were ever-present at each stage, and ultimately they would have had to be there. Project management is

exactly that. There are new experiences on each and every job and inevitably there are pit-falls. The ever-

present threat of failure and loss of reputation mean that the undertaking is not for the faint hearted. It

requires a good team and steady nerves.

30


18.0 Bibliography

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BARRET, M. (2010) D.I.T. (ed.). Dublin: D.I.T Kevin Street.

BLAIR, GM, Planning a Project, viewed 2 March 2012,

<http://www.ee.ed.ac.uk/~geard/Management/art8.html>.

BURKE, R. (2003) Project Management Planing and control techniques. West Sussex.John Wiley and

Sons.

BURKE, R. 2004. Project Management Planning and Control Techniques, Chichester, John Wiley and

Sons.

CARNEGIEMELLON, U. Planning and Project Management Office – Closure,

viewed 13 March 2012 http://www.cmu.edu/computing/ppmo/project-management/life-

cycle/closing/index.html#Section1

ELHAG, T. M. S., BOUSSABAINE, A. H. & BALLAL, T. M. A. 2005. Critical determinants of

construction tendering costs: Quantity surveyors’ standpoint. International Journal of Project

Management, 23, 538-545.

FIELD, M. KELLER, L. 2000. Project Management, Thomson learning

HARRIN, E. (2007) Project Management in the Real World. Edinburgh Capdm limited.

HEMANTA KUMAR, D. 2011. Understanding stakeholders' perspective of cost estimation in project

management. International Journal of Project Management, 29, 622-636.

KERZNER, H. 2009. Project Management A Systems Approach to Planning, Scheduling, and

Controlling, New York, John Wiley&Sons, Inc.

KISER, J, Elements of Effective Project Management Planning , viewed 8 March

2012 <http://www.ism.ws/files/Pubs/Preceeding/KiserALT.pdf>.

LOCK, D 1996, Project Management , Sixth Edition edn, MPG Books Ltd.

NYS Project Management Guidebook 2006, Project Execution and

Control, viewed 28 Feburary 2012,

<http://www.cio.ny.gov/pmmp/guidebook2/ExcutionAndCotrol.pdf>.

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31


LOCK, D. 2007. Project Management, Hampshire, Gower.

MEREDITH, J.R. SJM 2012, Project Management A Managerial Approach , Eight Edition edn, John

Wiley & Sons, Inc.

NAGRECHA, S. (2002) Earned Value Analysis, viewed on 11 March 2012

http://www.investopedia.com/terms/e/eva.asp#axzz1pI34CsD8

Projectsmart.co.uk 2012, Project Planning a Step by Step Guide, viewed 10

March 2012, http://www.projectsmart.co.uk/project-planning-step-by-step.html>

ROSS, D. (ed.) 1994. Handbook of Project Management, Hampshire: Gower Publishing.

ROSSO-LIOPART,M.2005, Project Planning and Scheduling , viewed 7 March 2012

<http://www.cs.cmu.edu/~aldrich/courses/413slides/5-planning-1.pdf

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Association.

TURNER, J. R. 1995. The Commercial Project Manager, Maidenhead., McGraw Hill.

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19.0 Appendix 1 Soft System Methodology

Figure 14(Hemanta Kumar, 2011)

SSM used things like associations through visual linkages. So above would have

dotted arrows for the more obscure links, whereas the more defined solid lines indicated

stronger connections. This type of ‘rich picture’ representation was used at every stage

of the estimation process.

project management

Documents

risk management process98

risk management strategies108

modern project management

risk assessment88

risk identification

risk analysis98

risk monitoring128

risk insurance118