Lesson Seven

- The Planning Process Group

Planning

7.1 | Plan Cost Management

INPUTS TOOLS & TECHNIQUES OUTPUTS

1. Project charter 1. Expert judgment 1. Cost management plan

2. Project management 2. Data analysis
plan 3. Meetings
• Schedule management
plan
• Risk management plan
3. Enterprise
environmental factors
4. Organizational process
assets

C R E A T E & E X C H A N G E
Planning

7.3 | Determine Budget

INPUTS TOOLS & TECHNIQUES OUTPUTS

1. Project management 1. Expert judgment 1. Cost baseline

plan 2. Cost aggregation 2. Project funding
• Cost management plan 3. Data analysis requirements
• Resource management • Reserve analysis 3. Project documents
plan 4. Historical information updates
• Scope baseline review • Cost estimates
2. Project documents 5. Funding limit • Project schedule
• Basis of estimates reconciliation • Risk register
• Cost estimates 6. Financing
• Project schedule
• Risk register
3. Business documents
• Business case
• Benefits management
plan
4. Agreements
5. Enterprise
environmental factors
6. Organizational process
assets

C R E A T E & E X C H A N G E
 Project Management
Budget Reserve

Contingency
Cost Cost Reserve
Baseline Accounts Activity
Contingency Reserve
Work Package
Cost Estimates Activity Cost
Total Amount

Estimates

Project Budget Component

Project Budget Components

 v.s v.s Organizational
Project Program Portfolio v.s
Project Management
WBS
 Project Budget
Management Reserve
BAC
Cumulative Values

Funding Requirements

Expenditures
Cost Baseline

Time

Cost Baseline, Expenditures, and funding Requirements

During the course of your hybrid project, changes and additions have
gradually moved the total project scope upward. The original scope was 400
story points, but at this point the total project scope is 620 story points. The
team’s average velocity has stabilized at 20 story points per iteration, and
they have already completed 120 story points worth of scope. The team’s
burn rate is $16,000 per week. The original cost estimate for the team was
$256,000 based on the initial scope and the team's initial velocity estimate of
25 story points per iteration. What is the remaining cost of running the team
on this project?

A. $496,000
B. $400,000
C. $320,000
D. $200,000
Rates

• The project manager is responsible for project budget and disbursements.

• Resource requirements should be met using the most cost-effective
resource based on:
• The needs of the project
• Resource availability
• Experience
• Knowledge
• Skills
• Attitude
• International factors
Planning

8.1 | Plan Quality Management

INPUTS TOOLS & TECHNIQUES OUTPUTS

1. Project charter 1. Expert judgement 1. Quality management

2. Project management 2. Data gathering plan
plan • Benchmarking 2. Quality metrics
• Requirements • Brainstorming 3. Project management
management plan • Interviews plan updates
• Risk management plan 3. Data analysis • Risk management plan
• Stakeholder • Cost-benefit analysis • Scope baseline
engagement • Cost of quality 4. Project documents
plan 4. Decision making updates
• Scope baseline • Multicriteria decision • Lessons learned
3. Project documents analysis register
• Assumption log 5. Data representation • Requirements
• Requirements • Flowcharts traceability matrix
documentation • Logical data model • Risk register
• Requirements • Matrix diagrams • Stakeholder register
traceability matrix • Mind mapping
• Risk register 6. Test and inspection
• Stakeholder register planning
4. Enterprise 7. Meetings
environmental factors
5. Organizational process
assets

C R E A T E & E X C H A N G E
Quality vs Grade
Process vs Deliverable
 Prevention vs Inspection

▪ Prevention: Keeping errors out of the process

▪ Inspection: Keeping errors out of the hand of the customer

 Cost of Conformance Cost of Nonconformance

Prevention Costs Internal Failure Costs

(Build a quality product) (Failures found by the project)
• Training • Rework
• Document processes • Scrap
• Equipment External Failure Costs
• Time to do it right (Failures found by the customer)
Appraisal Costs • Liabilities
(Assess the quality) • Warranty work
• Testing • Lost business
• Destructive testing loss
• Inspections Money spent during and after
the project because failures
Money spent during the project
to avoid failures

Cost of Quality
Planning

9.1 | Plan Resource Management

INPUTS TOOLS & TECHNIQUES OUTPUTS

1. Project charter 1. Expert judgment 1. Resource management

• Quality management 2. Data representation plan
plan • Hierarchical charts 2. Team charter
• Scope baseline • Responsibility 3. Project documents
2. Project management assignment matrix updates
plan • Text-oriented formats • Assumption log
3. Project documents 3. Organizational theory • Risk register
• Project schedule 4. Meetings
• Requirements
documentation
• Risk register
• Stakeholder register
4. Enterprise
environmental factors
5. Organizational process
assets

C R E A T E & E X C H A N G E
 Reward and Recognition Plans

Rewards Recognition

• Tangible, consumable items • Intangible, experiential event

• Given as a result of reaching a specific • Given as a result of recipient’s behavior
outcome or achievement rather than outcome
• Definite start and finish, or fixed time • Not restricted to a set time
• Usually expected when goal is met • Usually unexpected by recipient
• Purpose is to motivate towards a • Purpose is to increase recipient’s
specific outcome; never given without feeling of appreciation; can be given
recognition too without a reward
Organization Breakdown Structure
 Organizational Theory

• Organizational Theory: The study of how people, teams, and organizations behave.
• Purpose of organizational theory
▪ Maximize efficiency and productivity
▪ Solve problems
▪ Motivate people
▪ Meet stakeholder requirements
Planning

13.2 | Plan Stakeholder Engagement

INPUTS TOOLS & TECHNIQUES OUTPUTS

1. Project charter 1. Expert judgment 1. Stakeholder

2. Project management 2. Data gathering engagement plan
plan • Benchmarking
• Resource management 3. Data analysis
plan • Assumption and
• Communications constraint analysis
management plan • Root cause analysis
• Risk management plan 4. Decision making
3. Project documents • Prioritization/ranking
• Assumption log 5. Data representation
• Change log • Mind mapping
• Issue log • Stakeholder
• Project schedule engagement
• Risk register assessment matrix
• Stakeholder register 6. Meetings
4. Agreements
5. Enterprise
environmental factors
6. Organizational process
assets

C R E A T E & E X C H A N G E
 C D
High Keep Satisfied Key Players
Power

Low A B
Minimal Effort Keep Informed
Low High

Level of Interest
Planning

10.1 | Plan Communications Management

INPUTS TOOLS & TECHNIQUES OUTPUTS

1. Project charter 1. Expert judgment 1. Communications

2. Project management 2. Communication management plan
plan requirements analysis 2. Project management
• Resource management 3. Communication plan updates
plan technology • Stakeholder
• Stakeholder 4. Communication models engagement
engagement plan 5. Communication plan
3. Project documents methods 3. Project documents
• Requirements 6. Interpersonal and team update
documentation skills • Project schedule
• Stakeholder register • Communication styles • Stakeholder register
4. Enterprise assessment
environmental factors • Political awareness
5. Organizational process • Cultural awareness
assets 7. Data representation
• Stakeholder
engagement
assessment matrix
8. Meetings

C R E A T E & E X C H A N G E
Example: Communications Management Plan

Goals Communication Method Frequency Responsibility Notes

Includes project schedule, key

Project Management project deliverables, meeting
Extranet Ongoing
Office minutes, change request log,
Key Stakeholder issues Log
Project Management Both team and client kickoff
Project Kickoff Meeting Start of project
Office meetings recommended
Monthly — first Review status, milestones met,
Executive Steering
Client Executive Wednesday Account Manager earned value indicators, key
Committee
of each month issues
Review project status,
Status Meetings
Client Sponsor Weekly — Friday 2 p.m. Project Manager schedule, change
Status Report (Email)
requests, issues
Provides input for subsequent
Development Team Status Meetings Weekly — Friday 11 a.m. Project Manager
meetings with client sponsor
Project Management
Client Managers Newsletter (Email) Weekly — Friday
Office
Client Sponsor/ Key Account
Informal (Monthly)
Client Client Satisfaction Survey Monthly/end of each phase Manager/Project
Formal (End of each phase)
Stakeholder Manager
 Communication Methods

▪ Push Communication

▪ Pull Communication

▪ Interactive Communication
 Communication Methods

▪ Written/Verbal

▪ Formal/Informal
 Transmit
Current Message Current
Emotional Emotional
State Encode Noise Decode State
Culture: Acknowledge Culture:
• Generational Noise • Generational
Message
• National Sender Receiver • National
• Professional Medium • Professional
discipline discipline
• Gender • Gender
Personality Decode Encode Personality
biases Feedback biases
(assumptions) Noise Message (assumptions)

Communication Model for Cross-Cultural Communication

 Communication Channel Interactivity

Face-to-Face
at whiteboard
Phone
Interactivity

Instant
Messaging
Video
Recording
Audio
Recording
E-mail

Paper

Bandwidth/Information Density
 Information Radiators

➢ The features delivered to date versus the features

remaining to be delivered
➢ Who is working on what
➢ The features selected for the current iteration
➢ Velocity and defect metrics
➢ Retrospective findings
➢ List of threats an issues
➢ Story maps
➢ Burn charts
Information Radiators
 ADVISORS Equations and Calculations
Earned Value Calculations Summary
Positive -Under planned cost

PV -Planned Value PV =Schedule % complete x BAC CV -Cost Variance CV= EV-AC Neutral - On planned cost

Negative -Over planned cost

Positive - Ahead of schedule

SV -Schedule
EV -Earned Value EV=% complete of the work x BAC SV = EV-PV Neutral -On schedule
Variance
Negative -Behind schedule

Greater than 1.0 - Under planned cost

AC - Actual Cost Actual cost spent or paid CPI - Cost

CPI= EV/AC Exactly 1.0 -On planned cost
Performance Index
Less than 1.0 - Over planned cost
Greater than 1.0 -Ahead of schedule
BAC - Budget at SPI -Cost
Total budget SPI = EV/PV Exactly 1.0 -On schedule
Completion Performance Index
Less than 1.0 -Behind schedule

Positive - Under planned cost

ETC - Estimate to VAC -Variance at
ETC= EAC -AC VAC = BAC -EAC Neutral - On planned cost
Complete Completion
Negative - Over planned cost

If the C Pl is expected to be the same for EAC = BAC/CPI

the remainder of the project

If the future work will be accomplished EAC = AC + BAC -EV

EAC -Estimate at at the planned rate
Completion
If the initial plan is no longer valid EAC =AC+ Bottom-up ETC

If both CPI and SPI influence the EAC =AC+ [(BAC - EV)/(CPI x SPI)]
remaining work

The efficiency that should be maintained TCPI = (BAC -EV)/(BAC -AC) Greater than 1.0 - Harder to complete
in order to complete on time Exactly 1 . 0 - Same to complete Less
than 1.0 -Easier to complete

TCPI
The efficiency that should be maintained TCPI = (BAC - EV)/(EAC - AC) Greater than 1.0 - Harder to complete
in order to complete the current EAC Exactly 1.0 -Same to complete Less than
1.0-Easier to complete

Critical Path Calculations Communication Channels

Forward path EF =ES+ DU-1 Number of For N people, the number of
communication communication channels = (N2 - N)/2
Backward path LS= LF - DU+ 1 channels

Free float/slack Total Free Float= Early start of Successor activity - Early Finish -1

float/slack Total Float= Late Dates -Early Dates

Three-Point Estimating
Duration Estimate Standard Deviation

Cost Estimate cE = (cP + cM + cO)/3

Triangular Distribution

Beta Distribution cE = (cP· + 4cM + cO)/6

Standard Deviation ϭ= (Pessimistic -Ootimistic)/6

 Communication Channels

Number of
For N people, the number of
communication
communication channels = (N2 – N)/2
channels