Unit IV

Resource Allocation
Introduction
• Resource allocation is the process of assigning and scheduling
available resources in the most effective and economical way
possible.
• Nature of Resources:
1. Services : A project may benefit from, and often require, hiring third-
parties for certain tasks. Making the right choice requires careful
consideration from the project manager.
• (2) Labor
• The labor resource concerns the staff involved in a project.
• Every staff member will not necessarily be engaged for the
entire duration of a project.
• Whilst the project manager will be engaged from start to finish,
the involvement of others can vary.
• Staff availability is also a factor. An individual might be
involved in another project at the organization or an earlier
activity may have taken longer than planned.
• (3) Equipment
• equipment covers a range items of varying uses. There are computers,
monitors, servers, keyboards, telephones, interactive whiteboards and
a number of other mundane computing and office items. Desks,
chairs, filing cabinets, office furniture and vehicles are also in the
equipment resource category.
• (4) Materials
• Materials are a consumed resource. They are used up in the
completion of a project and may also form part of deliverables.
• (5) Money
• Money is a secondary resource type in project management. It is used
to purchase, acquire, and maintain all other resources in a project.
This is usually in the form of investment and business capital.
• (6) Space
• Space should be already available for projects that do not require
hiring new staff. More space may be required when adding new staff
(permanent or temporary) to the team.
• Space requirements may also vary during different stages of the
project. For example, developers for Quality Assurance may only
needed at a later stage of development.
• (7) Time
• Time is the resource that is being offset against the other primary
resources – project timescales can be reduced by increasing other
resources and will almost certainly be extended if they are
unexpectedly reduced.
• Cost Schedules:
• It is now time to produce a detailed cost schedule showing
weekly or monthly costs over the life of the project. This will
provide a more detailed and accurate estimate of costs and will
serve as a plan against which project progress can be
monitored.
• Calculating cost is straightforward where the organization has
standard cost figures for staff and other resources. Where this is
not the case, then the project manager will have to calculate the
costs. In general, costs are categorized as follows.
• • Staff costs :These will include staff salaries as well as the other
direct costs of employment such as the employer's contribution to
social security funds, pension scheme contributions, holiday pay
and sickness benefit. These are commonly charged to projects at
hourly rates based on weekly work records completed by staff.
Note that contract staff are usually charged by the week or month
- even when they are idle.
• Overheads : Overheads represent expenditure that an
organization incurs, which cannot be directly related to individual
projects or jobs including space rental, interest charges and the
costs of service departments (such as personnel)..
• Overhead costs can be recovered by making a fixed charge on
development departments (in which case they usually appear as
a weekly or monthly charge for a project), or by an additional
percentage charge on direct staff employment costs. These
additional charges or on costs can easily equal or exceed the
direct employment costs
• Usage charges In some organizations, projects are charged
directly for use of resources such as computer time (rather than
their cost being recovered as an overhead). This will normally
be on an 'as used' basis.
Project Monitoring and Control

• Project monitoring and control is a vital

aspect of software engineering that ensures
the successful completion of software
projects within the specified constraints of
time, cost, and scope.
• It involves the tracking and oversight of
project activities and resources to ensure
that they are progressing as planned and
meeting the set project objectives.
• Effective project monitoring and control
require the use of various tools and
techniques to gather and analyze project
data, identify potential issues, and take
corrective actions to keep the project on
track.
• With the growing complexity of software
development projects, effective project
monitoring and control have become
indispensable in achieving successful
project outcomes.
Project Monitoring and Control Process
• Monitor and Control Project Work
– The process of monitoring and
controlling project work is a fundamental
step that encompasses all other monitoring
and controlling activities. It involves
closely observing the project activities,
identifying any deviations from the plan,
and taking corrective actions to bring the
project back on track. Effective project
monitoring and control are essential for
ensuring that the project progresses
according to the schedule, meets the
desired quality standards, and stays within
the allocated budget.
• Integrated change control is a crucial
process in project management that
involves reviewing all proposed changes to
the project, determining their potential
impacts, and making informed decisions
on whether to approve or reject them. This
process covers changes to the project plan,
including schedule, budget, scope, quality,
and other areas. Once a change is
 approved, the project sponsor authorizes it,
and the plan is updated accordingly.
•

• Performance control quality refers to the

process of verifying that the quality of the
project’s deliverables conforms to the
standards defined in the project
management plan. It involves evaluating
the outputs of each project phase to ensure
they meet the specified requirements and
quality criteria. This activity plays a
crucial role in achieving project success by
ensuring that the final product meets or
exceeds the customer’s expectations.
•

• Scope Verification and Control Scope

– Validating the scope of a project refers
to the activities aimed at obtaining
approval of the project’s deliverables. This
involves ensuring that the end product
meets the project’s requirements and
expectations. On the other hand,
controlling scope involves ensuring that
the project remains within its defined
scope and that unauthorized activities are
 not performed. Scope creep, which refers
to the addition of unapproved changes to
the project’s scope, is avoided through
effective scope control.
•

• Control Risk – The protection of a project

from unforeseen events that could have
adverse effects on the project’s finances,
timeline, stakeholder requirements, or
other measures of project success is known
as Control Risks.

• Administer Procurement – The process

of Control Procurements is aimed at
ensuring that subcontractors and vendors
engaged in a project meet the set project
objectives.

How to Create Project Monitoring and

Control Plan?
Steps to Create a Project Monitoring and
Control Plan:
• Outline the Project:
During the planning phase of the project
lifecycle, develop a plan that integrates
factors such as success, scope, schedule,
resources, risk, and costs.
• Establish Baselines:
Establish scope, schedule, and budget
baselines for benchmarking as per the
project plan. Define project
goals,resources, and milestones.
• Break down the Project:
Create subtasks or units of work to break
down the project. A work breakdown
structure is a useful tool that project
managers can use to manage work and
track performance and deliverables.
• Execute the Project Plan:
Execute the project plan and report and
analyze to identify variances.
• Identify Variances:
Determine if the variances are acceptable
and continue to monitor them. Find the
cause of unacceptable variances and make
adjustments to the project plan
accordingly.
Steps to Implement Project Monitoring and
Control
• Define KPIs:
Choose three to five specific, measurable,
attainable, relevant, and timely key
performance indicators (KPIs) to report
monitoring data and define project
objectives.
• Monitor Project Parameters:
Monitor the project scope and
measurements for success, and use KPIs to
track schedule, effort, and cost to ensure
they align with the project plan.
• Monitor Stakeholder Involvement:
Engage and communicate with the project
team, management, and clients to keep
everyone involved and on task.
• Monitor Risk:
Conduct risk assessments throughout the
project lifecycle to avoid issues and
mitigate negative impacts on the project
timeline and budget.
 • Monitor Project Performance:
Use KPI dashboards to identify problems
and measure work progress.
• Take Corrective Action to Control

Progress:
Use the project plan as a baseline to
control progress and track changes until
resolution or project closure.
• Monitor and Manage Data

Documentation:
Document performance and changes in the
project to keep stakeholders involved,
mitigate issues, and inform future projects.
Importance of Project Monitoring and
Control
• Keeps Projects on Track:
Monitoring and control are crucial to
keeping projects on track, and the right
controls can play a significant role in
completing projects on time.
• Informed Decision Making:
The data gathered through monitoring and
control allows project managers to make
informed decisions. This helps them take
 advantage of opportunities, make
necessary changes, and avoid crisis
management issues.
• Ensures Seamless Execution:

Monitoring and control ensure the

seamless execution of tasks, which
improves productivity and efficiency.
In summary, project monitoring and control
are essential to ensuring that a project is
completed on time, within budget, and to the
desired quality. By tracking progress,
identifying issues early, and making informed
decisions, project managers can optimize their
resources and deliver successful projects.
 Managing Contracts
Introduction :
The contract in the software project
management is an agreement between two or
more parties that comply with all its parts,
including the proposal, procurement state of
work, marketing and reporting agreements,
and payment terms.
The key features and components are the
following:
• There is an offer from one of the sides and
acceptance from the others;
• It contains equal exchange of values between
all the sides;
• Authorized personnel should sign the contract
and approve that the work is legally allowed.

Types of Contract in Software Project

Management
 Fixed Price Contract (FP):
This type requires fully detailed
specifications, project scope statements, and
checklists from the seller side. Both sides
agree on a fixed price. It means that when the
project is delayed as well as there are cost
overruns, the seller will absorb all the extra
expenses. With this option, the buyer is in the
least risk category.
This type is also divided into several subtypes:

• Firm Fixed Price (FFP) is the most common

one. The price is set from the outset and
cannot change unless there is a change in
scope;
• Fixed Price Incentive Fee (FPIF) model is
usually chosen to offer the seller a
performance-based incentive. It can be
dependent upon certain project metrics,
including development cost, time, and
performance;
• Fixed Price Award Fee (FPAF) is used when
the expectations from the seller can be
exceeded. If the product is finished earlier
than expected, an extra payment will be
received;
• Fixed Price Economic Price Adjustment
(FPEPA) option gives you an opportunity to
readjust the fixed price according to the
fluctuations in the market. Usually, it is
chosen in the case when a project is going to
last for multiple years.

Cost Reimbursable Contract (CR)

This type is used when the requirements are
uncertain from one side and the development
process is not clear from the other. It is used
for new research and development and
requires immense innovation without a
guarantee of predicted outcome. The key idea
of this contract is that the seller provides work
for a fixed time period and then increases the
bill to get profit after finishing the product.
The amount of the raise in this case is
 unknown to the other party, because it is not
discussed prior to the agreement.
There are subtypes that you can choose from if
you decide to go for this option:

• Cost Plus Percentage of Cost

(CPPC) arrangement mainly benefits the
seller. Upon completion of the software, they
get the total cost they incurred during the
software development as well as a defined
percentage of the total cost;
• Cost Plus Fixed Fee (CPFF) ensures that,
besides the cost incurred on the product, the
seller gets an additional fee as well. The profit
is set at the beginning of the project;

• Cost Plus Incentive Fee (CPIF) option

contains a performance-based fee that is paid
on top of the actual expenses;
• Cost Plus Award Fee (CPAF) type provides an
award on top of the costs incurred.
Time and Material Contract (T&M)
This is the second popular option after FP, and
it is a hybrid of both FP and CR. One of the
parties agrees to pay the other the time and
materials that are used for the project within a
reasonable limit. It can be cost reimbursable
when the customer agrees to pay the cost for
all the genuine and legitimate expenses. Or, it
can be more like a FP type when the customer
sets the limit.

The vendor is selected based on the

capabilities and experience, having the
required manpower and materials. The cost for
supplies is negotiated and is paid according to
the quantity of the resources consumed or
purchased. The contract is pretty simple and
convenient for both parties, and it is possible
to establish a not-to-exceed price to avoid
massive cost overruns.
Unit Price Contract
This type is less popular than the other three
options and is also known as an hourly rate
contract. It combines the elements of the FP
and CR models, just like T&M. However, this
option differs on setting the price per item or
unit not per hour rate along with the receipts
for all the resources used in the overall
process.

Purchase Orders
As for this one, it is a specific type that is used
only to purchase commodities and goods.

Most Popular Options: Fixed Price

Contract VS Time and Material Contract:
If both parties are thinking about choosing
the fixed price software development
agreement, it is important to remember that
the price is fixed. The buyer should be ready
for higher initial cost, while the seller needs to
be ready for the risk of loss. Lack of flexibility
is another weak point of the FP agreement.
The T&M contracts, the advantages are
vendor relations for the buyer and no loss for
overages for the seller. As for the
disadvantages, it is important to mention the
risk of exceeding expected costs and the
requirement of having a good scope
agreement. This is because of the fact that the
buyer pays the seller for all time and materials
and bears risk. The overall expenses can go far
beyond the expected budget, which is why it is
vital to be ready for this.

Software Quality
Introduction:
Defining software quality:
Quality software refers to a software which is
reasonably bug or defect free, is delivered in
time and within the specified budget, meets
the requirements and/or expectations, and is
maintainable. Software quality reflects
both functional quality as well as structural
quality.
• Software Functional Quality − It reflects
how well it satisfies a given design, based
on the functional requirements or
specifications.
• Software Structural Quality − It deals
with the handling of non-functional
requirements that support the delivery of
the functional requirements, such as
robustness or maintainability, and the
degree to which the software was
produced correctly.
• Software Quality Assurance − Software
Quality Assurance (SQA) is a set of
activities to ensure the quality in software
engineering processes that ultimately
result in quality software products. The
activities establish and evaluate the
processes that produce products. It
involves process-focused action.
• Software Quality Control − Software
Quality Control (SQC) is a set of activities
to ensure the quality in software products.
These activities focus on determining the
defects in the actual products produced. It
involves product-focused action.