Firstly Sir discussed about the presentation that are going to start from next week and will

be according
to the groups submitted to Sir.

Then the following discussion took place:

First thing where a project is officially started is:

Project Charter also known as PC-1. Project Charter is the formal and official document that describes
the project. It is issued for formal authorization of the existence of the project.

Identification of Stakeholders

This is one important of the most important activities of the project as there is always a need to take the
stakeholders into confidence before starting the working. There are two types of stakeholder

i. Internal stakeholder
ii. External stakeholders.

Internal Stakeholders are the people working in a company on a project e.g. employees, managers,
directors, investors etc. Whereas external stakeholders are the people who are affected by the
performance of the project e.g. consumers, regulators. The example of external stakeholders includes
government (which is discussed as regulator).

It is important to identify the stakeholders as we can then easily understand the requirements of all the
stakeholders of the project and there is no uncertainty involved in terms of stakeholders.

An example of Customer Relationship Management software (CRM). For instance, we have to develop a
CRM software for our client. His requirements might be different from a traditional CRM software like,
he might ask us to maintain customer profiles so that if there is any issue with a product and customer
has a complaint, his profile might be checked to offer better services, i.e. if a customer complaints about
a product and the cashier offers him 20% discount on his next month purchase. In case the same cashier
is not on the cash desk and the customers arrives/calls and lies that he was promised 40% discount. In
order to overcome this issue, our client might ask us to make a software in which he can maintain
customer profile and his/cashier’s conversation can be recorded.

Similarly another example of Ufone was discussed. There might come a situation where there is a
problem with 2 customers. One customer uses 900 rupees credit per month and the other one is a
company that has a contract with Ufone and uses more than 100,000 rupees credit per month. In such
situation the customer who uses more credit per month is preferred as compared to the other one. This
was another example to clarify the Customer Profile maintenance in a software.
Then Scope includes scope statement, deliverables, and acceptance criteria. Acceptance criteria is
mentioned because someone else has to accept and agree to the deliverables and then pay the
company that is working on the project.

An example of acceptance criteria was discussed by sir as he was working on a software and there was a
submit button on which client’s requirement was to submit the form within 2 millisecond. The project
was outsourced and the company that worked on this module of the project delivered the project
where the process took 4 millisecond instead of 2 milliseconds and so 30% of their project fee was
deducted as one criterion wasn’t met.

Work Breakdown Structure:

Work breakdown structure is decomposition of project into activities with hierarchal list of project
deliverables. It can also be termed as identification and definition of activities according to the
deliverables. Work breakdown structure helps us in sequencing tasks, resource management and
schedule management. It basically helps project manager to identify what to do and the actual cost
calculation.

Sequencing, resource management, schedule management and then time, basically what to do in a
project and cost calculation.

Work Package:

Work package is grouping related tasks within a project. Work packages are often called sub-projects
within a bigger project as they look like project themselves. It is smallest unit of work that a project can
be decomposed in to and these work packages actually help in making WBS in a project.

Advantage:

The advantage of making work packages is that nothing is missed and everything is covered since
deliverables are taken in to consideration when creating WBS.

Lifecycle Costing:
The cost to dispose something off e.g. In USA batteries are properly disposed off and for
this purpose the dealer asks separate amount from the customer which is disposal cost.
Similarly if we talk about a project, if there is a project’s maintenance cost weekly.
Monthly or annually, this comes in life cycle costing. [From start to end]
Kaise, kia, kis ne…. reporting formats
Estimating Costs:
Crucial and important phase to complete the project within the given budget. Since
everything has been planned up and now the Project Manager is in a better position to
calculate definitive cost (to inform the sponsor).

Estimating Costs Tools

1. Analogous Estimating:
Analogous estimating is basically estimating costs based on past experience. For
instance, a construction company is asked to estimate cost for construction project in a
society where every plot is 125 square yards. Considering the company has worked in
that society on more than 5 projects, then it can use Analogous estimating technique
(based on its past experience) to calculate the cost of the project.
This technique might not give accurate results since there can be major differences
between this new project and the previous projects this company has completed in
recent past.

There was a question regarding Delphy technique and the detailed answer to that
question is as follows:
Delphy is used while requirements are being gathered, one way is brainstorming which
is a good way but has some advantages and disadvantages.
Advantage is: Quick, creative, Advantage is too many ideas might occur at once.
Disadvantage is: Might go out of focus, someone might not be participating due to
many problems.
Delphy technique is like providing a paper to everyone present and requesting every
individual to participate in the meeting/discussion. This way everyone will participating
and no dominating personality is here to impose their idea since no one is required to
write names/designation on that piece of paper.
All ideas are then written and everyone is requested to vote and that is how
conclusion is reached. This is Delphy tech.
 2. Parametric Estimating:
Parametric estimating is cost estimation based on algorithmic/linear scales with
statistical data analysis (e.g. square footage in construction) whenever area is
discussed.
An example of Parametric Estimation is construction of a house of a specific Square
feet area. The parametric estimation might also not be accurate because of variation
as one client might require normal finishing of the house with locally manufactured
or low cost items and the other one might require excellent lavishing finishing of the
house with internationally manufactured items.

3. Three-Points Estimating:
In this type of cost estimation we come up with a best case scenario (optimistic
approach and lowest cost estimate), worst case scenario (pessimistic approach and
highest cost estimate) and a reality based scenario (realistic approach and realistic cost:
(RC*4)/6) to get an estimate of the project cost.
For example, if we want to buy a 2006 civic, we are going to come up with lowest price,
highest price and realistic price and multiple realistic price with 4 and divide the answer
by 6 to get an estimate of the price of the car. The issue regarding Three-Point
estimating is that in this estimation we have to get 3 estimates where it is quite difficult
to even get one estimate.

4. Vendor Bid Analysis:

In vendor bid analysis as the name suggests, it is the usual procurement process in
which the requirement is floated in the market and vendors bid with their commercial
quotation. These quotations are then analyzed and a cost estimation is formed via
analyses of these bids.

5. Cost of Quality:
COC & CONC (Cost of Conformity & Cost of Non-Conformity)
Detail will be discussed in Quality Management knowledge area will be discussed.
Cost of Conformity is cost of quality. As discussed earlier, the required time for
submission of a form was 2 millisecond and the developed project took 4 millisecond
so 30% of the project fee was deducted. Cost of conformity is actually the cost for
ensuring/maintaining quality. There is a specific Google tool for this.

Reserve Analysis
Known-Knowns:
It is the cost that is known and has to be paid for example to construct a room we
need 50 bags of cement. The price of one bag cement is for instance 600 rupees so
the cost of cement in construction of a room is RS: 30,000/_ that is absolutely
known.

Known-Unknowns/Contingency Reserves:
This is basically a reserve fund for identified risks. It is usually 10% of the known-
knowns. For example, for an open-air concert we reserve 10% of the total fund to
save the musical equipment and amplifiers/speakers in case of rain. These
contingency reserves can be understood with the term emergency money for a
situation we are not fully sure will occur or not but since there is a chance so we
reserve some fund for it too.

Unknown-Unknowns/Management Reserves:
This type of reserve fund is for an unknown situation or a mishap and is called
management reserve. Finest example of Unknown-Unknowns is COVID-19. Till
November, 2019 there was no idea about such a global mishap due to which there is
a lot of delay in many projects. Management reserves are set to combat this type of
situation.

PM Software:
It is the price of the software used in the project. There are many software which
aren’t free and one has to pay either monthly or one time to use it. If any paid
software is required in the project then the price of that software is also added.
Bottom-Up Estimate:
In bottom-up estimate project cost estimation is calculated from bottom to top.
In Bottom-Up approach, cost baseline is formed by adding “Activity cost estimate
and contingency reserves”. Schedule baseline is project schedule and scope baseline
is sum of “Project scope statement, WBS and WBS dictionary”
Till the cost baseline things are in control of the Project Manager however, for
unknown-unknowns the amount is kept as reserve by the management so it is called
Management reserve.

The accuracy of Estimates will be discussed in next class.

PM tripple constraints
1 he category k different projects ek program hai