Unit 1 SPM

Q. 1 Explain risk analysis using decision trees.

Risk Analysis
• The analysis of the risk factors is the most crucial step in risk management as it determines
the probability of their occurrence and the quantum of the effect they might incur on the
project.
• Risk assessment is carried out in a sequential manner where the quality analysis is first
done, and it is then followed by the quantity analysis.
Decision trees
• A decision tree is a graphical representation of the logic in a decision-making process and
the sequence of the decision points that creates the decision.
• It has many branches as logical alternate, and it simply sketches the logical structure based
on the state policy.
• It is a useful technique for representing analysis when the decision maker must make a
sequence of the decisions.
• It is referred to as the decision tree as different alternatives form branches from an initial
decision point known as the decision node and then moves onto the various options in
emanating from different points called Chance Nodes. A system analyst has the following
considerations while constructing decision tree
a. Branches of the tree should represent the various alternatives available
b. The flow should proceed from left to right
c. The values associated each alternative must be shown at the end of the branch
d. All the alternatives available to the decision maker should branch out from the root node
which is the starting point of decision tree.
• Decision Rules and Decision Tables are used together.
• Decision Rules enables decisions to be made better and more cost effectively.
• As a result, Decisions could be faster and more precise.
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2. What is Project? What are its characteristics?

• A project is an activity to meet the creation of a unique product or service and thus
activities that are undertaken to accomplish routine activities cannot be considered
project.
• A project is a combination of interrelated activities to achieve a specific objective within a
schedule, budget, and quality.
• It involves the coordination of group activity, wherein the manager plans, organizes, staffs
directs, and controls to achieve an objective, with constraints on time, cost, and
performance of the end product.
Characteristics of Project:

1. Invisibility:
When a physical artefact such as a bridge or road is being constructed the progress being
made can actually be seen.
With software, progress is not immediately visible to others and may be difficult to quantify
in terms of the percentage of work done.
2. Complexity:
Software projects are complex in nature than other engineering projects and the complexity
can be gauged by the success rate of these projects.
3. Flexibility:

• The ease with software can be changed is usually seen as one of its strengths.
• However, this means that where the software system interfaces with a physical or
organizational system, it is expected that, where necessary, the software will change to
accommodate the other components rather than vice versa.
4. Conformity:
These physical systems have complexity, but are governed by consistent physical laws.
Software developers have to conform to the requirement of human clients.
It is not just that individuals can be inconsistent.
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3 . Explain step 5 of step-wise project planning.

Phase I: Project Conceptualization and Initialization

➢ In this phase, the project's primary goal is defined and understood, which helps in shaping
the project's scope.

➢ Project Initiation is the official starting point, where the project manager ensures a clear
understanding of the business needs throughout the project's lifecycle.
Phase II: Developing Project Plan and Charter

➢ This phase involves detailed planning based on the project's size and complexity.

➢ The planning process is iterative and may require adjustments to budget, scope, schedule,
or quality as needed.

➢ The project charter outlines project details, aligning with the company's vision and goals,
and sets milestones and deadlines.
Phase III: Project Execution and Control

➢ Quality assurance, risk management, and team development are core supporting activities.

➢ The controlling process ensures project activities stay on track, adhering to scope, budget,
schedule, and quality parameters.

➢ This phase emphasizes monitoring and managing project progress.

Phase IV: Project Closure

➢ The closing process group's main objective is to bring the project to a successful conclusion
and integrate it with the organization's operations.

➢ It ensures all project deliverables are completed, and contract terms are fulfilled.

➢ This phase marks the orderly completion of the project.

Phase V: Project Evaluation

➢ Project evaluation occurs after project completion and involves several parts.

➢ The first part reviews best practices used during the project in the organization's
methodology.
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4 . Write a short note on Portfolio Management.

1) Project Portfolio Definition An organization should record a single repository details of all
current projects. A decision will be needed about whether projects of all types are to be
included. One problem for many organization is that projects can be divided into new product
development (NPD). NPD projects are often more frequent in organizations which have a
continuous development of new goods and services.
2) Project Portfolio Management Once the portfolio has been established more detailed costing
of projects can be recorded. The value that managers hope will be generated by each project
can also be recorded, Actual performance of projects on these performance indicators contain
be tracked. This info can be basis for more rigorous screening of new project.
3) Project Portfolio Optimization The performance of portfolio can be tracked by high-level
managers on a regular basis. A better balance of projects may be achieved some projects could
potentially be very profitable but some also be risky. The portfolio ought to have a carefully
thought out balance between the two type of project.
Elements are:- 1. Official Project Title 2. Project Sponsor 3. Project Manager 4. Description Of
The Project 5. Project Scope 6. Measurable Organizational Value(MOV) 7. Road Map For Work
8. Project Schedules 9. Project Budget 10.Project Resources 11.Assumptions And Constraints
12.Risks 13.Project Administration 14.Acceptance.
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5 . Define Business Case. Specify the content of business case document.

The business case:• Feasibility studies can also act as a ‘business case’ • Provides a justification
for starting the project • Should show that the benefits of the project will exceed development,
implementation and operational costs • Needs to take account of business risks Contents of a
business case
1.Introduction/ background 2. The proposed project 3. The market 4. Organizational and
operational infrastructure 5. The benefits 6. Outline implementation plan 7. Costs 8. The
financial case 9. Risks 10. Management plan
Introduction/background: describes a problem to be solved or an opportunity to be
exploited
The proposed project: a brief outline of the project scope
The market: the project could be to develop a new product (e.g. a new computer game).
The likely demand for the product would need to be assessed.
Organizational and operational infrastructure: How the organization would need to
change. This would be important where a new information system application was being
introduced.
Benefits These should be express in financial terms where possible. In the end it is up to
the client to assess these – as they are going to pay for the project.
Outline implementation plan: how the project is going to be implemented. This should
consider the disruption to an organization that a project might cause.
Costs: the implementation plan will supply information to establish these.
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6. Briefly explain the different phases of project management life cycle.

• Project Initiation
o Starts with project concept development
o Characteristics throughly understood-Scope, project constraints, cost,benefit
o Determine whether technically and financially feasible
o Business case is developed
o Project manager is appointed, Project team is formed
o Project charter is written
o Project bidding- to select a suitable vendor
• Project Planning
o Project plan-Identifies project tasks, schedule, assign resources and time frames to the
task
o Resource plan-Lists resources, manpower and equipment
o Financial plan-Manpower, equipment and other costs
o Quality plan-Quality targets and control plans
o Risk plan-Lists the identification of risks, priority and plan for actions
• Project Execution
o Ensure that tasks ae executed as per plan
o Corrective actions are initiated whenever deviations from the plan
o Release all the required deliverables and resources
o Supply agreements with the vendor are terminated
o Pending payments are completed o Post implementation review, List the lessons learned
Diagram
Initiation Planning Execution Control Closure
1 -> 2 -> 3 -> 4 -> 5
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7.What is a project product? Explain Product Breakdown Structure with the help of example.

Project Product

• The next step after the development and approval of the project scope statement is project planning.

• The primary requirement for project planning is the Work Breakdown Structure (WBS) for which the
approved project scope statement is required.

• The WBS is a deliverable or a product-oriented classification that regulates the decomposition of the job
to be executed by the project team, to accomplish the project objectives and create the required
deliverables or project products.

• Decomposition indicates the breaking down of the project scope statement into smaller, more
manageable components i.e., the project deliverables.

• The project scope statement defines all the project deliverables. These defined deliverables are then
clubbed together to form the Delivery Definition Table (DDT).

• The Delivery Definition Table contains the sequence of the delivery of the deliverables.

• The Delivery Definition Table is then used to create the Delivery Structure Table (DSC) which contains
the work packages which is then further used to create the Work Breakdown Structure.

• So, WBS is similar to Bill of Materials (BOM), wherein a product is broken into its smallest component
for which estimation of time and cost is possible.

• The idea behind WBS is to split each component into smaller components till it reaches its smallest
component which is called the work package.

• The work package is the smallest component in the WBS that facilitates estimation of cost, schedule,
resources, and monitoring and control.
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8 . How the resource allocation is managed in an activity of programme management?

• A Programme is a group of related projects which means that the resources, namely
people, of the organization have to be shared between concurrent projects.
• Every organization has a pool of people of varying expertise, such as developers, network
experts, database designers, etc.
• These people will have to share amongst the number of projects within the programme.
• The programme manager will have to ensure the optimal use of the specialist staff and
plan the allotment of this staff to the individual project within the programme.
• This means that some activities in some projects will have to be delayed until the required
staff has completed the previous task allotted to him.
• The programme manager will have to ensure that the highly paid technical staff are
utilised to optimum and their utilization is not intermittent.
• Thus, allocation of resources is critical from the point of view of success of the programme.

• The resource allocation management includes ➢ Defining proper organization project by

creating a project team and allocating responsibilities to each team member. ➢ Determining
resources required at a particular stage and their availability
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9 . Write a note on risk evaluation and management.

Risk evaluation –

➢ There is a risk that software might exceed the original specification and that a project will
be completed early and under budget. That is not a risk that need concern us.

➢ Every project involves risk of some form. When assessing and planning a project, we are
concerned with the risk of the project's not meeting its objectives.
Risk management - Risk can be managed by following certain process:
1) Risk Identification : Risk identifies in the planning phase will evolve over time. Some risks
may be eliminated while some new ones may be added to the list. Resolved risks should be
struck of the list and new ones should be added.
2) Risk Assessment :The risk management process is created, base lined and kept ready in the
project planning phase for the execution phase.
3) Evolution of Risks :Though the likely risks have been identified in the project planning
phase they become more definitive during the execution phase. The project manager is in a
better position to define and specify the risk items.
4) Risk Management an Iterative Process : Risk management is an iterative process which is
initiated in the project planning phase and then continues right through the entire lifecycle of
the project.
5) Risk Meeting : Risk meeting contribute to the process of risk identification and
development of action plans to tackle the risk.ollective minds enable better and faster
identification and resolution of risks.
 Unit 1 SPM

10.Write short notes on: Risk analysis

• The analysis of the risk factors is the most crucial step in risk management as it determines
the probability of their occurrence and the quantum of the effect they might incur on the
project.
• Risk assessment is carried out in a sequential manner where the quality analysis is first
done, and it is then followed by the quantity analysis.
A] Quality Risk Analysis –

➢ It is a subjective approach and so does not involve detail analysis of the risk.

➢ It does not determine the probability of their occurrence and the quantum of risk that
would be faced by the project. the main reason for conducting this is to decide whether the
risk qualifies for further analysis.

➢ It is generally carried out using a risk matrix which is also called as a probability- impact
matrix.

➢ In this Risk is “rated” for its probability and the Impact on a scale to understand the Risk
Matrix.
B] Quantitative Risk Analysis –

➢ After successfully completing Quality Risk Analysis, more serious research on the risks
which pose as true potential threats are carried out to plug their chances of occurrence and
the quantum of the effect, they might possess on the project.

➢ The main drawback of this process is that it takes a lot of time to do the detail analysis and
as a result budget associated with it also increases.

➢ The probability of the risk of occurrence and the quantum of the effect can be mapped in a
controlled environment
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11. Write short notes on content of project plan.

➢ After the feasibility study is found viable for the organization in the 1st stage, planning is
done. As the project is new to the organization and has been undertaken for the first time,
hence careful planning is needed.

➢ It involves identifications of number of activities, milestones, and project deliverables.

➢ It should be done by keeping in mind the requirements of the business along with its size
and complexities.

➢ In this stage, Detail Project Report (DPR) is prepared by incorporating the methodologies
to be applied in different phases of the project along with the timelines and the finances
involved in it.

➢ Planning is an iterative and never-ending process as it might require changes in budget,

timeframe, requirements of the stakeholders, etc due to various reasons like natural
calamities, change in government rules, etc.

➢ It is at this point that the project manager has to use his experience and technical
knowledge in developing a sound and realistic project plan.

➢ He needs to focus on the goals of the project and narrow down on the project descriptions
to achieve the desired results.

➢ It is here that the Project Charter which is an official document is prepared in accordance
with the mission and vision of the company.

➢ This document will give the minute details of the project along with the deadlines and
milestones to be achieved in the project.

➢ The Project Charter acts a guidebook for the project manager and clearly describes the
goals to be achieved in each stage of the project as well as the whole project.