• Assess the various methods of budgeting and their appropriateness for projects.
• Apply the techniques and processes for estimating projects.
• Apply project plan elements.
• Using MS Project, add tasks, assign predecessors, develop critical path, add milestones, and add resources.
Welcome
There are several reasons why you must use considerable care when planning projects. The primary purpose of planning, of course, is to establish a set of directions in sufficient detail to tell the project team exactly what they must do, when they must complete the work, and what resources they will need to produce the deliverables of the project successfully. You will expand on the information in the Project Charter by developing the Project Scope and refining the Work Breakdown Structure (WBS). After planning the work of the project, you will need to obtain resources with which to do the work. In order to develop a budget, you must forecast what resources the project will require, the required quantity of each, when they will be needed, and how much they will cost. A project’s activities must meet defined cost (budget), schedule (time) and scope (performance) requirements. The project team is continually challenged to manage these three elements as the three interact and affect each other. There are constraints that occur throughout the project life cycle that require the project team to analyze the impact to the three areas – cost, schedule and scope. For example, if the project schedule must be extended, this may add costs. If resources are added to shorten the schedule, the total project cost may increase. If the scope is changed, such as adding additional functionality, then the costs and schedule may increase. In project management circles, this is commonly called “The Triple Constraint”.
Readings
Textbook Readings
• Read: Meredith & Mantel, Chapters:
o 6 – Activity Planning: Traditional and Agile
o 7 – Budgeting and Risk Management
Read:PMBOK® GuideSections:
o 6 – Project Schedule Management and Appendix X4.3
o 7 – Project Cost Management and Appendix X4.4
Additional Readings
• Background Paper: Work Breakdown Structure
Building Knowledge
• Project Planning is one of the activities in a project where people think it is a waste of time. Why, because the team wants to get started on the meat and potatoes of the project, that of project execution. But, it has been proven over and over that without a plan a project lacks direction and will most likely fail. A project with a well thought out plan has a much higher probability of finishing successfully. The adage of "pay me now or pay me later" applies to project planning. Planning is often done through a Joint Project Planning Session (JPPS). A JPPS is where project managers get the entire team together to discuss every element of the project from Initiation through Closing.
• Realistic project managers know that a project plan is indispensable when it comes to project success. It is the GPS for the project and just as in any GPS system, without knowing your starting point and destination you cannot have a road map that will get you there. Developing a plan will allow you to devise alternative approaches to project solution, develop a complete schedule, with durations and resource requirements, and allow for structured and well thought out deviations from the baseline plan.
o Planning allows us to recognize three benefits:
Planning reduces uncertainty by enabling you to consider likely outcomes and when they are different from the expected, allows you to take corrective action before it becomes out of control
Planning increases understanding by causing the team to think through the goals and objectives of a project along with risks, cost, schedules, etc.
Planning will improve effectiveness and efficiency of the project by depicting areas where resources can be put to best use, work can be done concurrently, and activity and task end dates can be estimated.
• Project Estimating is the act of providing a quantitative estimate of cost, resources, duration, and many other unknowns on the project. As practitioners, we must recognize the inherent difficulties in estimating. It is an established fact that people are not good at estimating as depicted in this TED Talk video by Tali Sharot on our Optimism Bias.
o Because of the Optimism Bias we, as PMs, always plan some wiggle room in our estimates. We call this Reserve which we place in the cost and schedule of a project near the end of the WBS. Projects cannot be planned or later controlled without some time and cost estimation taking place. If we have conducted a JPPS as part of the planning session, this has been done for us using the PERT method, so we will accept the estimates we have, for now. Time estimation underpins the cost and resource needs of a project.
o It is important for us to remember Parkinson’s Law, which states that “Work will expand to the time allotted to it”. In simple terms that means if we have a two week task but allow three weeks for it, the task will take three weeks.
In estimating the aforementioned 'wiggle room', called Reserve has two components: Management Reserve where
Sample Solution