MS4801 Project Management

1
MS4801 Project Management

• Budget Planning
• Resource estimating
• WEEK 6

2
Project Budgets

• Four elements in most project budgets
• Direct labor costs wage multiplied by time
• Overhead expenses incurred to maintain
  environment
• Fringe benefits directly proportional to direct
  labor (est 30-40)
• Auxiliary costs project specific costs

3
Management Reserve

• AKA slush fund, fudge factor, etc.
• Agree/Disagree
• Provides flexibility?
• Encourages overruns?

4
Project Variance
5
Dynamics of Accurate Estimating

• Unique or Unpredictable Factors
• Skills and knowledge of project team unknown
• Technology-based projects face questions of
  reliability
• Expect a certain number of changes during
  implementation, but theres no way to predict how
  many
• Overestimated projects may not be pursued, while
  underestimated may appear doable Business
  benefits must be determined ahead of time
• Incorrect timing decisions will cost money
• Individual performance based on ability to meet
  estimates

6
Classic Mistakes

• (1) Avoid making ballparks in elevators
• RESPOND There are a lot of factors (list some of
  them) I wouldnt want to mislead you by offering
  a guess on that
• Offer to get a sheet of paper to write details
• Take your best guess and double it.
• Refuse
• (2) Confusing an estimate with a bid
• (3) Padding the estimate

7
Golden Rules

• Have the right people make the estimates
• Base the estimate on experience
• Demonstrate how estimate is tied to
  product/project specifications

8
Different Estimates for Different Decision Points

• Three Levels of Accuracy
• (accuracy takes time, costs money)
• Idea Evaluation only function is to determine
  if further accuracy is warranted
• Order of Magnitude (ROM) extrapolations from
  other projects
• Detailed Estimate bottom-up considering all the
  steps in a project

9
Scheduling Resources

• Discuss Power Train Case
• What recommendations would you make to Jones?
• (2) What approaches might you take maximize the
  scheduling software, while at the same time
  ensuring the right people are assigned to
  projects?

10
MS4801 Project Management

• Week 6
• Estimating Risk Planning Contingencies

Great deeds are usually wrought at great risk.
- Herodotus, Greek historian
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Risk Assessment Process

• Use brainstorming
• Do not focus on consequences, rather focus on
  events that cause
• Focus on whole project rather than parts of the
  project
• Use WBS to be sure nothing is missed

• Step 1 Risk identification
• Step 2 Risk assessment
• Step 3 Risk response development
• Contingency planning
• Contingency funding
• Step 4 Risk response control
• Change control management

• Risk Assessment Forms
• GO TO 3

• Mitigating Risk reduce likelihood / reduce
  impact
• Transfer Risk costs
• Share Risk
• Retain Risk
• GO TO 5

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Risk Assessment FormMS Office 97 to XP
13
Risk Severity Matrix
Return to Slide 2
14
Risk Response Matrix
15
Step 4 Risk Response Control
16
Alaska Fly-Fishing Expedition

• See handout