Selected Details in Project Management

PreviousNext©Gary Sanders 2002Selected Details - 20061002Distinct stages in a project…• Definition to Reference Design• Reference Design to Baseline Definition• …to Final Design and Commitment• … to IndustrializationManage obligations• Execution and Performance Measurement• Integration and Plan to Completion• Endgame “broke and done on the same day”Manage costs

PreviousNext©Gary Sanders 2002Selected Details - 20061002Definition to Reference Design• Define scientific question(s)• Define science requirements• Develop informal conceptual design• Define and initiate needed R&D• Define technology options *• Produce traditional small scienceexperiment proposal• Define “reference design” *

PreviousNext©Gary Sanders 2002Selected Details - 20061002Reference Design Technology Options• Even at the early conceptual level, work, viaformal review, each of the major technologyoptions into one of the following categoriesas early as possible, no later than thereference design definition– Baseline choice with fallback option and decisiondate– Equal options with decision date– Firm baseline choice with no option• Make this choice succeed, no fallbacks

PreviousNext©Gary Sanders 2002Selected Details - 20061002The Reference Design Package• This is the deliverable of this stage of theproject• Write a “Project Book”– Put it on the web as you build it– When it is mature, put it under revision control– It foreshadows the baseline definition withoutsacrificing anything that we do as scientists inwriting experimental proposals– Start off with a methodology that looks forward

PreviousNext©Gary Sanders 2002Selected Details - 20061002A Project Book Outline …• Overview• Science Goals• Reference DesignBaseline Definition– Parameters– Sensitivity Goal– Options and Selection• Program Plan– Roles andResponsibilities– Method ofAccomplishment• Work BreakdownStructure• Subsystem WBS 1Description– Overview– FunctionalRequirements– Concept/Options– DevelopmentIssues/R&D– Work Plan• …• …

PreviousNext©Gary Sanders 2002Selected Details - 20061002… A Project Book Outline• …• Subsystem WBS NDescription– Overview– FunctionalRequirements– Concept/Options– DevelopmentIssues/R&D– Work Plan(Includes installationand projectmanagement WBS’s)• Schedule– Summary schedule– Relationship to otherprograms– Schedule options• Cost Estimate– Methodology– Summary by WBS– Cost Drivers– Risk areas andcontingency– Funding profile• Responsibilities/Resources/Staffing

PreviousNext©Gary Sanders 2002Selected Details - 20061002The baseline...• Scientific requirements are defined and fixed• Technical requirements meet the scientificrequirements and are fixed• Project deliverable is defined in a conceptualdesign• Subsystems are defined– interfaces are defined• Work Breakdown Structure (WBS) defines allwork to be performed in the project includingdelivery of each subsystem and their integration

PreviousNext©Gary Sanders 2002Selected Details - 20061002…The baseline• Costs are estimated at the lowest level in the WBS• Schedule is developed following the WBS• Costs and other resources are integrated with theschedule to define the value of each scheduledactivity, and a profile of obligations and costs• Risks are assessed at the cost estimate level in theWBS and a contingency pool of funds are defined forproject-wide management of risks• Basis for performance measurement is established

PreviousNext©Gary Sanders 2002Selected Details - 20061002The Baseline Package• Project Book *– Updated and more rigorous• Work Breakdown Structure Dictionary *– Can be part of schedule database• Integrated Project Schedule *– mature and captured in a scheduling system/tool• Cost Estimating Plan *• Cost Book not on the web– down to low level in a database/cost book tool• Performance Measurement Plan *• Project Management Plan ** on the webprocurement sensitive

PreviousNext©Gary Sanders 2002Selected Details - 20061002Project Management Plan• Objectives and Scope• Project Description• Institutional Roles andResponsibilities• Organization of the Project• Collaborative Relations• Work Breakdown Structure• Work Plan• QA/ESH• Procurement• Cost Estimate• Schedule• Staffing• Cost and Schedule Controland PerformanceMeasurement• Configuration Managementand Change Control• Documentation• Reporting to sponsor• Meetings and Reviews• Publication…thin…easy to read…easy to use...…not too baroque…

PreviousNext©Gary Sanders 2002Selected Details - 20061002Cost Estimating Plan• Scope• Objectives• Basis of Estimate• WBS• Costing Methodology– Relational CostDatabase– Collection of CostInformation– Confidence– Cost Book– Integration withschedule• Labor Pricing– Direct Labor Rates– Contract Labor Rates• Risk Analysis,Contingency– Risk Analysis– Risk AssessmentMethodology• Escalation• Estimators

PreviousNext©Gary Sanders 2002Selected Details - 20061002Cost Estimate Tools• Standard relational databases– LIGO uses a web based interface to Access– TMT uses an Excel interface to Access– Many projects have developed tools• But they built them for internal use and may beunable to support your use• Commercial estimating packages– “Success”– Construction industry tools• Commercial “pricing” tools– ProPricer,…

PreviousNext©Gary Sanders 2002Selected Details - 20061002

PreviousNextCost ©Gary Estimating Sanders Worksheet 2002Selected Details - 20061002WBS*: Estimate Date: Links:Subphase*:Cost Estimating PlanResponsible Estimator*: Start Date*: Input Cheat SheetEstimators*: End Date*: Cost Estimating Publications* - Required FieldsElement Scope / WBS Dictionary Entry*:Description*:LaborBOE*:12+ResourceNon-LaborBOE*:OrganizationEstimateType Start Date End Date FTE Hours12+Expense Item Description CategoryEstimateType Start Date End Date Unit Cost CyclicalUnits /CycleMonths /CycleNumber of unitsTravelBOE*:12+Trip Duration Start Date End Date CyclicalUnits /CycleMonths /CycleNumber ofTripsRisk FactorsTechnical*:Factor % Basis*:Cost*:Schedule*:TOTAL: 0%Override:Misc Comments:Scoping Options:

PreviousNext©Gary Sanders 2002Selected Details - 20061002

PreviousNext©Gary Sanders 2002Selected Details - 20061002Contingency• Cost contingency– Not always adequate by itself• Scope contingency– Deferred scope• Delay some scope until later in the project and execute it if earlyprogress is good• Store scope in contingency pool as a planning package– Phased scope• Real reduction in scope and returned to contingency• Execute as a later project or if favorable performance permits– Permanent reduced scope• Returned to contingency and project baseline precludes return ofthis scope• Baseline must always be definite

PreviousNext©Gary Sanders 2002Selected Details - 20061002Auditing a subsystem cost estimate• During estimating, hold majorreviews for each subsystem– Appoint internal reviewers– Invite other subsystem estimators– Invite outside experts as reviewers• Estimators deliver to review apresentation that is designeduniformly across all subsystems

PreviousNext©Gary Sanders 2002Selected Details - 20061002Cost review presentation …• Subsystemrequirements• Subsystem parameters• WBS• WBS Dictionary• Estimate summaryrollup (base year)– Analysis by labor,materials, contingency,etc.• Basis of Estimateexamples– Large cost items –cost drivers– High costuncertainty items– Fraction ofestimate in variousbasis categories

PreviousNext©Gary Sanders 2002Selected Details - 20061002… Cost review presentation• Contingency– Summary analysisof contingency– Details of highcontingency $items– Details of highcontingency %items– Other risks• Options for 10%cost reduction– Scope deferral– Scope reduction– Other options• Summary schedule• Escalation and“as-spent” profile

PreviousNext©Gary Sanders 2002Selected Details - 20061002Schedule• Plan top level milestones as input tosubsystem estimators– Set “architecture” of project• Subsystem estimators develop subsystemschedules– Critical path and schedule slack strategies– Workarounds sketched out• Review and integration by projectmanagement with visibility acrosssubsystems

PreviousNext©Gary Sanders 2002Selected Details - 20061002Schedule - Tools• Who does the schedule development and managesthe performance measurement baseline?– The Project Manager?• Top level strategy and integration– Scientists or engineers in the project?• Substantive development and performance management– Schedule/cost contractor?• Operates the tools• But scientists/engineers will want to be able tooperate the tools– Tight control by the task leaders– Planning and replanning scenarios

PreviousNext©Gary Sanders 2002Selected Details - 20061002Schedule - Tools• Scientists and engineers can operate MicrosoftProject– This tool is relatively simple to use– Full of errors– Does not perform a true critical path calculation– Does not accommodate integration with cost estimatedatabase nor performance measurement• Can be used as a working development andscenario tool– Files transferred to central system• Not suitable for a full performance measurementsystem in a big science project

PreviousNext©Gary Sanders 2002Selected Details - 20061002Schedule - Tools• The sole project schedule should be held by theproject management• It should be captured in an industrial strengthtool or combination– Primavera P3 or P3E– Open Plan– …• An experienced cost/schedule professionalshould be hired or contracted to operate thissystem and provide development, audit, reportingand performance measurement support to theproject management and subsystem leaders

PreviousNext©Gary Sanders 2002Selected Details - 20061002Schedule - Tools• Choose tools very carefully– Try them and throw them away early• There are big projects running onMicrosoft Project– But …• Use experts in support

PreviousNext©Gary Sanders 2002Selected Details - 20061002…to Final Design and Commitment• Deliverables of this phase are thecomplete set of– Final Design packages for each subsystem• Ready-to-build designs– System Design Requirements– Interface control documents– Acquisition strategy for each majorprocurement• Make or buy• Competitive procurements– Contract type– Selection strategydefines scope offinal design

PreviousNext©Gary Sanders 2002Selected Details - 20061002… to Industrialization• Complete developmental procurements and firstarticletests– Main project technical risks confronted here• Develop quality assurance plan– Overwhelmingly important• Produce bid packages– Keep competition as long as possible• Carry out selection of contracts and commit funds• Develop adequate robust contractor oversight• Performance signaled by obligations• Bid jeopardy is the first big threat to contingencypool

PreviousNext©Gary Sanders 2002Selected Details - 20061002Managing contracted effort• All contracts or purchases of $100K or more gothrough a formal planning process– market survey and source identification– careful consideration of contract type• fixed price• cost reimbursable + fee• incentives/penalties– structure of bid package or tender• competition• multiple awards followed by final selection• Contract change management is a crucialelement of project management

PreviousNext©Gary Sanders 2002Selected Details - 20061002Reviewing a procurement: Source Selection• RFP (Tender) includes Statement of Work, legalrequirements and criteria for selection ofcontractor• Proposals are reviewed by Proposal EvaluationTeam which develops a rigorous selectionrecommendation• Recommendation reviewed by Review Committeewhich comments to Project Management• Selection is finalized by a Source SelectionAuthority from fiduciary institution

PreviousNext©Gary Sanders 2002Selected Details - 20061002Managing contractors• Crucial to manage multiple contractors on “noninterfering”basis• Crucial to manage who is taking the risk• Crucial to have a rigorous system to track andcontrol all contacts between Project andcontractors with a single approving authority foreach contract• Crucial to rigorously, but quickly, managecontractor change orders• Managing “fixed price” contracts is very differentfrom managing “cost reimbursable” contracts

PreviousNext©Gary Sanders 2002Selected Details - 20061002Execution - Performance Measurement• Main activities of the project are in motion• Weekly telecons/meetings to focus on“issues”• Monthly performance reporting by inhouseteams and contractors• Monthly meeting to review progress, costand schedule variances• No longer measuring by obligations, butby earned value and costs

PreviousNext©Gary Sanders 2002Selected Details - 20061002Performance measurement• Early visibility leads to early project response andrepair• Learn to separate out performance measurementartifacts from real performance measurements– Invoicing delays retards ACWP– Original progress profiles built into earned value plan may bein error• Flat, progressive, final delivery methods may have beeninappropriately applied• Learning curve effects not planned• Wrong planned values of milestones– Despite these, learn to look closely and to respect the systemand make it work

PreviousNext©Gary Sanders 2002Selected Details - 20061002Performance measurement level• Cost estimate and schedule may have beendetailed down to levels 5 to 9 in WBS• Learn to look at appropriate level in WBS forperformance measurement– In building baseline system, choose level 3 or 4 forperformance measurement level– Create work packages and earned value plans at thislevel– Subsystem in-house and contractor reporting should beat this measurement level even if lower level detail isavailable

PreviousNext©Gary Sanders 2002Selected Details - 20061002Contingency management• Be very stingy with contingency till late inthe project– Use it when really needed but husband it tillendgame arrives– Bid jeopardy is a big consumer of contingency– Final integration, installation, commissioningis a big consumer of contingency• And it is too late for some project responses• How do you manage this approach to theendgame?

PreviousNext©Gary Sanders 2002Selected Details - 20061002(%Contingency used)/(% Project complete)50454035$ Millions30252015105-0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Percent Complete

PreviousNext©Gary Sanders 2002Selected Details - 20061002LIGO Cost Schedule Status

PreviousNext©Gary Sanders 2002Selected Details - 20061002Integration and Plan to Completion• Executing to plan• Plan must be adjusted to incorporateactual progress and experience• Actual costs must be put into costestimate for completed scope– This leaves the remaining Estimate toComplete• Actively manage “hidden contingency”needs– “slips of paper” in task manager back pockets– Pull them out onto the table

PreviousNext©Gary Sanders 2002Selected Details - 20061002Reestimate and rebaseline• Include revised information from actualexperience and signed contractor cost/schedulecommitments• Revise BCWS to reflect most realistic plan so thatperformance measurement is meaningful– If not, Task Leaders will not use system• Cost, Schedule and PMB changes made annuallyon average and only after careful review byTechnical/Change Control Board

PreviousNext©Gary Sanders 2002Selected Details - 20061002Contingency in final phase …• If you have managed contingency centrallyand well– Subsystem task leaders will trust that surplusescan be put back into contingency pool and– Later contingency requests will be judged fairly– All contingency is in the central pool– Is there “hidden contingency”?– Are there invisible risks waiting for last minutesurprises?

PreviousNext©Gary Sanders 2002Selected Details - 20061002… Contingency in final phase• Actively maintain a list of possible calls oncontingency with all task leaders contributingitems and estimates– All the private “slips of paper”– Examine weekly in later project phases– These are not “claims” on contingency funds– They are an actively managed list of concerns– If the risks mature, change control requests are made– If the risks disappear, they are dropped from the list– Total list value is managed and compared to estimate tocomplete

PreviousNext©Gary Sanders 2002Selected Details - 20061002

PreviousNext©Gary Sanders 2002Selected Details - 20061002Endgame• Manage last flexibility• Testing• Acceptance reviews• As-built documentation• Transition to operations isincremental but must be managedformally

PreviousNext©Gary Sanders 2002Selected Details - 20061002Other crucial factors• People• Clear, shared agendas• Communicating openly and listening• Trust• Teambuilding• Share project goals and subordinate individual goals• Delegate authority to lowest appropriate level but makeaccountability very clear• Draw organization around people, instead of trying to fitpeople into a predetermined organization• Clear process