BUS605 Study Guide

Unit 4: Planning Projects

4a. Break down the work required to complete a project and create a detailed project schedule

• What is the purpose of a work breakdown structure?
• How is a project schedule used by the project manager to manage the project?

Determining the scope of work is an important part of the initial project planning. Careful detail during planning can help ensure that accurate schedule estimates and resource requirements are defined. More attention to detail placed in the initial planning phase can help avoid unexpected surprises later in the project.

It is important to define the deliverables of the project with sufficient detail so that the project team is then able to determine the requirements of the deliverables. Documenting the characteristics, attributes, or functionality requirements of the deliverables is necessary. Often requirements are defined as functional, non-functional, technical, business, user, or regulatory.

• Functional - describe what you want the deliverable to be able to do.
• Non-functional - describe what the deliverable must look like, what it must perform, or how it must be developed.
• Technical - describe how the deliverable should be developed technically or procedurally.
• Business - describe the needs of the business that the deliverable must satisfy.
• User - may be used to describe deliverable requirements such as the user interface or test cases.
• Regulatory - describes any laws or regulations that the deliverable must satisfy.

Requirements should be measurable to verify that they have been achieved.

To review, read Scope Planning.

4b. Decompose project deliverables into work packages

• What does it mean to decompose a deliverable?
• What is the smallest unit of work that should be achieved?
• What is a work package?

Breaking down the scope of work into deliverables and then into work packages is known as decomposing the deliverables. At this stage, the project manager seeks to identify all tasks needed to complete the deliverables required for the project. The work breakdown structure (WBS) helps us organize and track the tasks of the project.

Often, project team members will work together to decompose the deliverables into tasks and work packages. It's important to deal with one deliverable at a time and decompose tasks until a task takes no more than 40 hours to complete. The team will organize the tasks into a logical sequence of events and add durations to each task. Task dependencies should be identified. Once entered into the project software, a Gantt chart begins to become apparent.

To review, read Scope Planning.

4c. Demonstrate the use of appropriate network scheduling techniques such as Gantt, PERT, ADM, and CPM.

• Describe the difference between the Gantt chart, PERT Chart, CPM, and ADM/AON.
• Why should a project manager develop a CPM?
• What is slack?

There are several ways in which a project manager can view the workflow of the project in a visual manner. Network diagrams create a visual sequence of activities. Each diagram tells a different story about the project. For example, the critical path method demonstrates the longest path through the project and, therefore, the tasks that, should a problem occur, would cause an overall delay in the project.

The network scheduling techniques used most often include:

• Gantt: provides a visual representation of the project timeline by using horizontal bars to chart project activity durations. The chart also depicts relationships between tasks.
• PERT: uses rectangles or nodes along with days to complete to represent tasks along the project. As there are often multiple paths through a project, the PERT chart provides a visual of all paths possible through the project.
• CPM: similar to the PERT, the critical path method identifies tasks, their dependencies, and how long they will take to complete. With this information, the project manager can calculate the longest path through the project. The tasks on the longest path are considered critical tasks because if there are delays in any of these tasks, the project will be delayed.
• ADM/AON: can be used to identify early start (ES), early finish (EF), late start (LS), or late finish (LF) impacts on tasks throughout the project.

To review, read Project Scheduling and watch The Critical Path Method.

4d. Determine the physical and human resources needed to complete a project

• What are the different types of resources needed for a project?
• What are some of the methods used in selecting resources?
• Describe different techniques for determining the appropriate resources for the project.
• What is the make-buy decision?

Projects require resources to meet deliverables. These resources may be human resources, such as employees or contractors needed to complete the project tasks, or physical resources, such as raw materials or equipment. Additionally, resources may include renting equipment, physical space, or travel.

Once the deliverables have been decomposed and tasks identified, resources should be assigned to each task. Using project software, the project manager can create a record for each resource needed. Then the resources can be assigned to tasks.

The benefit of using project software is that the cost of the task can be automatically calculated based on the hours needed to complete the task and the costs of the resources required. For example, if a task is to frame the master bathroom and two carpenters are needed for 8 hours each at $35 per hour, and $1400 worth of lumber and $100 worth of nails and other hardware are required, the project software will calculate the cost for the task as follows:

The total cost of the task to frame the master bath would be $2,060.

To review, read Resource Management.

4e. Determine the cost of the resources needed to complete and deliver all project activities

• What are some techniques for determining resource rates?
• Can you describe the procurement process?
• What is analogous estimating, and when should it be used?
• What is parametric estimating, and when should it be used?

Estimating the costs of resources needed for the project includes a variety of different techniques, depending on the resource. How resource costs are defined is determined by the type of resource. For example, human resources are often referred to in terms of time, such as hours, weeks, or months of work. Raw materials may be referred to as units or lump sum costs. Then a cost per unit is assigned to the human or material resource.

Estimating involves research. Often several sources are needed to determine the most accurate estimate of the costs of resources. Maybe your organization uses a standard rate for various job activities, making it easier to input hourly pay rates based on function. If raw materials are needed, it's possible that the project manager will need to work with Purchasing to obtain bids for goods and services. However, a project manager might need to acquire cost data from several sources.

However, there are several other techniques that may be used to estimate costs, including parametric, analogous, and bottom-up estimating.

• Parametric estimating involves looking at parameters such as square footage and estimating based on an average cost from other projects.
• Analogous estimating involves looking at other similar projects and assuming costs would be the same.
• Bottom-up estimating is accurate but time-consuming because the team must look at the lowest-level tasks and work back up to create the estimates.

To review, read Resource Planning.

4f. Analyze final budget based on the input of different stakeholders and approved financial resources

• Can you describe several techniques for estimating project costs?
• What are management reserves? What are contingency reserves?
• When is it best to use analogous estimating?
• Why is bottom-up estimating the most time-consuming?

Preparing project budgets involves an accurate estimation of the costs of the resources needed for the project. This may involve determining the hourly costs of employee resources, gathering vendor bids, or pricing raw materials. Accurate estimates help ensure that the project budget is accurate.

It's important to seek input from stakeholders regarding the estimates. It may be necessary to work with stakeholders and sponsors to review estimate data to ensure that the most accurate budget calculations have been made.

To review, read Budget Planning.

4g. Prepare various project plans, including scope, schedule, cost, risk, procurement, and quality

• Describe several project documents used for scope, schedule, budget, risk, and procurement management.
• Describe several document components that make up the scope, schedule, cost, risk, and procurement project plans.

Project planning produces a project management plan. Depending on the complexity of the project or the norms of the organization, this project plan may be a single document or multiple documents. Regardless, there are several components that make up the various portions of a project plan.

Often during the planning phase, the project team focuses on planning the project scope, schedule, and budget. However, the team will need to determine if outside resources will be needed to prepare initial procurement specifications. Using the preliminary risks from the project charter, the project team can begin to develop a more detailed risk management plan that addresses risk probability, impact, mitigation, and contingency plans. Finally, the project team should be focused on what quality will look like for the final deliverables and how quality will be assessed throughout the project.

Other important plans include communication and stakeholder management plans. These plans work hand in hand to help keep stakeholders informed and engaged in the aspects of the project that are important to them. Therefore a careful analysis of stakeholders is necessary to align their information needs to project reporting. Stakeholder satisfaction can make or break project success. As a result, appropriate care and consideration of stakeholder needs should be exercised.

To review, read Key Components of Project Management.

Unit 4 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• activity
• analogous estimating
• bottom-up estimating
• cost
• critical path
• decompose
• deliverable
• duration
• milestone
• parametric estimating
• procurement
• requirements
• resource
• schedule compression
• slack
• top-down estimation
• work package