PM_21ME651_Module3

Module -3
Resourcing Projects

Abilities needed when resourcing projects:

Project managers need two types of abilities to correctly resource a project.
The first type of skill needed is technical. Various techniques can be used to estimate resource
demands, create a staffing management plan, assign one or more persons to each activity,
identify when a person is assigned too much work at a point in time, schedule a project with
limited numbers of key people and other resources, and compress (speed up) a project
schedule.
The second type of skill needed is behavioral. Many behavioral issues are involved in
completing project resourcing tasks such as:
• Selecting the right people
• Identifying exactly what each person needs to accomplish
• Ensuring each person either has the capability needed or developing that person to be capable
• Dealing with difficult individual work schedules
• Getting people to work overtime when there are conflicts
• Making honest and open estimates of the amount of work required to complete an activity
• Assembling an effective team
• Dealing with people from diverse backgrounds
• Deciding where each person will work
• Deciding how a team that is geographically split can work in an effective virtual manner.
Considerations when resourcing projects:
The following ideas should be kept in mind
 If some of the key people on a project do not have the skills to participate, managers
should help them develop those skills.

 Projects always have trade-offs; with regard to resources, time versus human resources
versus other costs versus scope should be considered. Which of these takes precedence on the
project you are planning

 Project managers need to understand resource limitations to prevent over-promising.

Often, after activities are tentatively scheduled as discussed in the previous chapter, it appears that

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the project can be completed by a particular date. However, the schedule may be unrealistic if
enough resources are not available at key points in time.

 People are often a large portion of total project cost. This is especially true when a
project requires special knowledge

Estimate resource needs: A starting point in resourcing a project is to estimate how

many resources of each type and skill or knowledge level are needed.
The PMBOK task estimate activity resources is “the process of estimating the
 Types And Quantities Of Material
 Human Resources,
 Equipment, Or Supplies Required Performing Each Activity”.
This can be accomplished at either a detailed or an overview level.
When a project team determines a detailed list of activities that must be performed, it makes
sense to ask what type of person (by specific knowledge or skill) is needed to perform each of the
activities.
However, when a project team does not identify individual activities, they still need to determine
how many resources and what knowledge and skill each needs to complete the project.
When estimating resource needs, the team needs to make sure they have considered support
needs as well such as information systems and human resources.
Some types of workers have specific constraints placed upon how they are hired, scheduled, and
released. Co-located teams and highly skilled resources often require more detailed resource
planning. Many issues may be involved in securing specific knowledge or skills. When estimating
resource needs, it is wise to include time to communicate between activities as well as time to
perform activities. “Handoffs” occur when one person or group passes work on to another group.

Plan Human Resource Management

It is the process of identifying and documenting Project Roles, Responsibilities, Required Skills,
Reporting Relationships, and creating a staffing management plan. Roles and responsibilities for
project participants can be documented in role descriptions. These often include title, assigned
duties, and limits of authority.

Creating staff Management Plan:

A staffing management plan is “a component of the human resource plan that describes when and
how project team members will be acquired and how long they will be needed.” The staffing
management plan addresses how to identify potential internal and/or external human resources for the
project; determine the availability of each; and decide how to handle timing issues with regard to
building up, developing, rewarding, and releasing the project team.

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A Staffing Management plan includes:

Identify potential resources:
 Identifying people who might work on a project differs significantly from one
organization to another.

 Many organizations are staffed in a lean manner and have few people from which
to choose

 In a small organization, one particular person may often be the logical choice for
certain types of work on a project.

 However, in larger organizations and in situations where outside resources may

be hired, identifying potential people becomes a bigger issue.

 The following information may be considered by project manager while

resourcing.
1. Work functions (may include job titles and range of responsibilities)
2. Professional discipline (may include degrees and professional certifications)
3. Skill level (may include experience and performance ratings)
4. Physical location (may include willingness to relocate and travel)
5. Organizational/administrative unit (may include costs and contractual issues)
Determine resource availability:
 Once the potential resources have been identified and compared to the estimated resource
needs, it is necessary to discover if the identified people are available and to secure their
commitment.
 This is necessary even for internal projects because multiple projects often choose resources
from the same resource pool.
 A schedule is preliminary until needed resources are committed to the project. In terms of
resource availability, full- and part-time resources as well as internal and external resources
may be available.
 If the new project is of higher priority than an existing project, resources that were already
committed may be freed up.
Decide Timing Issues when Resourcing Projects:
 Projects, because of their temporary nature and unique outputs, have timing issues unlike
those of ongoing operations.
 Early in the project, one timing issue is when to bring people on board. Bringing them on
before they are needed can be costly.
 However, if the project manager takes a chance with an important resource and that person is
not available, the schedule will probably be delayed.
 The general solution to the first timing issue is to assign key players as quickly as possible.
This helps establish good project planning, effective project culture, and early project
progress.

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 The staffing management plan deals with these three issues:

1. how the project planners identify potential people for the project,
2. how they determine which people are available and secure their services, and
3. How to deal with timing issues of building up and then releasing the project workforce.

Project team composition issues:

Project teams are often composed of people from many sources—both within and outside a parent
company. Several of these issues, such as who will be on the project and where each will be
physically located, are best considered when selecting team members.
Cross-Functional Teams: Projects often require cross-functional teams since the work of many
projects requires input from multiple disciplines. When people from different backgrounds work
together, misunderstandings often arise. An engineer may be predisposed to look at an issue one
way, while an accountant may look at the same issue a different way. This may be due to education,
experience, and/or personality.
Co-Located Teams: Another team issue is where everyone physically sits. Teams are co-located if
the members are assigned work spaces near each other. Project managers and teams can often take
advantage of many modern methods for communicating from anywhere on the planet. These
methods are used often, especially for larger decisions. However, many minor decisions are made
every day on projects. Co-location helps to create these opportunities for easy communications. On
some projects, members of a supplier company and/or representatives from the customer may have
a desk in the project work space.
Virtual Teams: Virtual teams are also common and represent the opposite approach. Members of
virtual teams do not meet face to face very often. Sometimes a project requires the expertise of
many far-flung people, and it is impractical to have them all work in the same area. These teams
require many forms of communications. Many people report that if they have met another person
face to face even once, they feel they can relate better to that person.
Outsourcing: Many project managers are faced with the prospect of not finding the necessary talent
within their organization. When that is the case, project managers often need to hire expertise from
one or more other organizations.
Budgeting Projects:
Plan cost management is “the process that establishes the policies, procedures, and documentation
for planning, managing, expending, and controlling project costs.” Cost planning entails developing
a cost management plan for your project.
The cost management plan is “a component of the project management plan that describes how
costs will be planned, structured, and controlled.” On small projects, this can be as simple as
ensuring accurate estimates are made, securing the funding, and developing cost reporting
procedures to ensure that the money is spent correctly. On large projects, each of these processes
can be much more involved; in addition, developing and using accurate cash flow estimates become
critical. A project cost management plan includes descriptions, procedures, and responsibilities for:

• Costs included (such as internal and external, contingency, etc.)

• Activity resource estimating
• Cost estimating
• Budget determination and

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• Cost control, including metrics, reporting, and change approvals.

A project cost management plan needs to be consistent with the methods of the parent organization.
In many organizations, project managers are provided with specific guidance on setting up their cost
management plan. The plan provides guidance to the project manager and other stakeholders in
order to serve several purposes:
• First and most fundamentally, it shows how to develop and share relevant, accurate, and timely
information that the project manager, sponsor, and other stakeholders can use to make intelligent
and ethical decisions.
• It provides feedback, thereby showing how the project’s success is linked to the business
objectives for which it was undertaken.
• It provides information at a detailed level for those who need details and at appropriate summary
levels for those who need that.
• It helps all project stakeholders focus appropriately on schedule and performance as well as cost
Estimate cost
It is “the process of developing an approximation of the monetary resources needed to complete
project activities.”
Cost estimating is linked closely with
• Scope,
• Schedule, and
• Resource planning.
To understand cost well, a project manager needs to understand what the work of the project
includes, what schedule demands exist, and what people and other resources can be used.

Types of costs:
FIXED VERSUS VARIABLE COSTS Cost can first be classified as either being fixed or
variable. Fixed costs are those that remain the same regardless of the size or volume of work. For
example, if we need to buy a computer for our project, the cost is the same regardless of how much
we use it. Variable costs are those that vary directly with volume of use. For example, if we were
building a cement wall, the cost of the cement would vary directly with the size of the wall.
DIRECT VERSUS INDIRECT COSTS A second classification divides project costs into direct
and indirect costs. Direct costs are those that only occur because of the project and are often
classified as either direct labour or other direct costs. For example, direct labour includes workers
who are hired specifically to work on the project and who will be either assigned to a new project or
released when the project is complete. Other direct costs may include such items as materials,
travel, consultants, subcontracts, purchased parts, and computer time. Indirect costs are those that
are necessary to keep the organization running, but are not associated with one specific project. The
salaries of the company executives and the cost of company buildings, utilities, insurance, and
clerical assistance are examples.
RECURRING VERSUS NONRECURRING COSTS The third cost comparison is recurring
versus nonrecurring costs. Recurring costs are those that repeat as the project work continues, such
as the cost of writing code or laying bricks. Nonrecurring costs are those that happen only once

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during a project, such as developing a design that, once approved, guides the project team.
Nonrecurring costs tend to occur during project planning and closing, while recurring costs tend to
occur during project execution.
REGULAR VERSUS EXPEDITED COSTS A fourth cost comparison is regular or expedited.
Regular costs are preferred and occur when progress can be made by normal work hours and
purchasing agreements. Expedited costs occur when the project must be conducted faster than
normal and overtime for workers and/or extra charges for rapid delivery from suppliers are
necessary. The comparison of these costs shows why it is vital to understand schedule pressures and
resource demands as costs are estimated.
OTHER COST CLASSIFICATIONS The next several cost comparisons require little
explanation. They are helpful to understand both in structuring the cost estimates and as checklists
to help remember items that may be forgotten. One comparison is costs internal to the parent
organization versus those external to it. Major external cost items such as equipment can be either
leased or purchased. Direct cost items are often labour or materials.
Estimate versus reserve costs form the next comparison. The estimate is “a quantified assessment of
the likely amount… It should always include an indication of accuracy.” The reserve is “a provision
in the project management plan to mitigate cost and/or schedule risk. Often used with a modifier
(e.g., management reserve, contingency reserve) to provide further detail on what types of risk are
meant to be mitigated.” Management reserve is “an amount of the project budget withheld for
management control purposes… for unforeseen work that is within the scope.” By contrast,
contingency reserve is “budget within the cost baseline that is allocated for identified risks that are
accepted and for which contingent or mitigating responses are developed.
Methods of Project cost estimating:
ANALOGOUS ESTIMATING: Analogous estimating is “a technique for estimating the duration or cost of
an activity or a project using historical data from a similar project.” These methods involve techniques
that use historical data to define the cost of the typical transportation facility using measurements
that are easily determined, such as cost per lane mile, cost per interchange, cost per square foot, and
cost per intersection. Several things need to be in place for analogous estimates to be effective.
First, the organization needs to have experience in performing similar projects and know how much
each of those projects actually cost (not just what they were estimated to cost). Second, the
estimator needs to know how the proposed project differs from the previous project. Third, the
estimator needs to have experience with the methods by which the project will be performed.
PARAMETRIC ESTIMATING: Parametric estimating is “an estimating technique in which an
algorithm is used to calculate cost or duration based on historical data and project parameters. A bit
more information is needed to complete a parametric cost estimate. In the example of estimating the
cost of elevator installation projects, parametric estimates might involve finding a bit more
information regarding the project. For example, one might want to know how tall the elevator was,
how fast it needed to travel, how large the platform would be, the trim level, the complexity of the
controls, and the like. Each of those factors would have an impact on the elevator installation cost.
For example, the cost per foot traveled might be calculated (this would cover the cost of providing
and installing guide rails, wiring, etc.). Another cost might be associated with speed because faster
elevators require bigger motors, more stability, stronger brakes, and so on.

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BOTTOM-UP ESTIMATING: In this approach a larger project is broken down into number of
smaller components. The project manager then estimates costs specifically for each of these smaller
work packages. For example, if a project includes work that will be split between multiple
departments within an organization, costs might be split out by department. Once all costs have
been estimated, they are tallied into a single larger cost estimate for the project as a whole. Because
bottom-up estimating allows a project manager to take a more granular look at individual tasks
within a project, this technique allows for a very accurate estimation process.
THREE-POINT ESTIMATING: In this case a project manager identifies three separate estimates for
the costs associated with a project. The first point represents an “optimistic” estimate, where work is
done and funds spent most efficiently; the second point represents the “pessimistic” estimate, where
work is done and funds spent in the least efficient manner; and the third point represents the “most
likely” scenario, which typically falls somewhere in the middle.

Control cost is “the process of monitoring the status of the project to update the project
costs and managing changes to the cost baseline.”
• The approved project budget with contingency reserves (and any amount of management
reserve that has already been approved) serves as a baseline for project control. The budget
shows both how much progress is expected and how much funding is required at each point
in time. These are used for establishing project control. When establishing cost control, a
typical measuring point is a milestone. Major milestones are often identified in the milestone
schedule in the project charter, and additional milestones may be identified in constructing
the project schedule.

Issues in project cost estimating: (factors impacting cost estimation):

 Supporting details like the scope, method used to create the estimate,
assumptions, constraints, and range of possible outcomes.
 Activity based testing.
 Causes of variation.
 Life cycle costing.
 Vendor Bid analysis.
 Value engineering.
 Time value of Money.
 International currency fluctuations.

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COST BUDGETING
• It is “the process of aggregating the estimated costs of individual activities or work packages
to establish an authorized cost baseline.” To develop the budget, the project manager starts
by aggregating all of the various costs. Once those are totaled, it is time to determine how
much money is required for reserve funds. Finally, the project manager must understand cash
flow—both in terms of funding and requirements for costs.
Establishing Cost Control: The approved project budget with contingency reserves (and any
amount of management reserve that has already been approved) serves as a baseline for project
control. The budget shows both how much progress is expected and how much funding is required
at each point in time. These are used for establishing project control. Control cost is “the process of
monitoring the status of the project to update the project costs and managing changes to the cost
baseline.”When establishing cost control, a typical measuring point is a milestone. Major
milestones are often identified in the milestone schedule in the project charter, and additional
milestones may be identified in constructing the project schedule. Project managers can use the cash
flow projections they have made to determine how much funding they expect to need to reach each
milestone. This can then be used for determining how well the project is progressing. The sponsor
and project manager often jointly determine how many milestones to use. They want enough
milestones to keep track of progress, but not so many that they become an administrative burden.
Microsoft Project and other software can be used to automate the cost reporting.

RISK
Risk is a measure of the probability and consequence of not achieving a defined project goal. Most
people agree that risk involves the notion of uncertainty. Can the specified aircraft range be
achieved? Can the computer be produced within budgeted cost? Etc

Risk management is the act or practice of dealing with risk. It includes planning for risk,
identifying risks, analyzing risks, developing risk response strategies, and monitoring and
controlling risks to determine how they have changed. Risk management is not a separate project
office activity assigned to a risk management department, but rather is one aspect of sound project
management. Risk management should be closely coupled with key project processes, including but
not limited to overall project management, systems engineering, configuration management, cost,
design/engineering, earned value, manufacturing, quality, schedule, scope, and test.
Risk management includes several related actions, including risk: planning, identification, analysis,
response (handling), and monitoring and control.
 Plan risk management is the process of developing and documenting an organized,
comprehensive, and interactive strategy and methods for identifying and analyzing risks,
developing risk response plans, and monitoring and controlling how risks have changed.
● Identify risks are the process of examining the program areas and each critical technical process
to identify and document the associated risk.
● Perform risk analysis is the process of examining each identified risk to estimate the probability
and the impact(s) on the project. It includes both qualitative risk analysis and quantitative risk
analysis.
● Plan risk response is the process that identifies, evaluates, selects, and implements one or more
strategies in order to reduce risk to an acceptable level given program constraints and objectives.
This includes the specifics on what should be done, when it should be accomplished, who is

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responsible, and associated cost and schedule. A risk or opportunity response strategy is composed
of an option and implementation approach. Response options for risks include acceptance,
avoidance, mitigation (also known as control), and transfer. Response options for opportunities
include acceptance, enhance, exploit, and share. The most desirable response option is selected, and
a specific implementation approach is then developed for this option. Finally, resources are
allocated to the risk response plan (e.g., budget, personnel, equipment, facilities) and the response
plan is implemented.
● Monitor and control risks is the process that systematically tracks and evaluates the performance
of risk response actions against established metrics throughout the acquisition process and provides
inputs to updating risk response strategies, as appropriate.

Risk Management Plan:

Plan for risk management (risk planning) is the detailed formulation of a program of action for the
management of risk. It is the process to:
● Develop and document an organized, comprehensive, and interactive risk management strategy
● Determine the methods to be used to execute a program’s risk management strategy
● Plan for adequate resources
Risk planning is iterative and includes the entire risk management process, with activities to
identify, analyze, respond to, and monitor and control risks. Important outputs of the risk planning
process are the risk management plan (RMP) and risk management training. Risk planning develops
a risk management strategy, which includes both the process and implementation approach for the
project. Each of these two considerations is of primary importance for achieving effective risk
management. However, it is generally far easier to improve a deficient process than remedy a
problematic project environment that is unsupportive or hostile towards risk management. Early
efforts should establish the purpose and objective, assign responsibilities for specific areas, identify
additional technical expertise needed, describe the assessment process and areas to consider, define
a risk rating approach, delineate procedures for consideration of response strategies, establish
monitoring and control metrics (where possible), and define the reporting, documentation, and
communication needs.
The RMP is the risk-related roadmap that tells the project team how to get from where the program
is today to where the project manager wants it to be in the future. The key to writing a good RMP is
to provide the necessary information so the program team knows the objectives; goals; tools and
techniques; reporting, documentation, and communication; organizational roles and responsibilities;
and behavioral climate to achieving effective risk management. Since the RMP is a roadmap, it may
be specific in some areas, such as the assignment of responsibilities for project personnel and
definitions, and general in other areas to allow users to choose the most efficient way to proceed.
For example, a description of techniques that suggests several methods to perform a risk
identification is appropriate, since every technique will have advantages and disadvantages
depending on the situation. Another important aspect of risk planning is providing risk management
training to project personnel. This training should be tailored to various groups within the project as
necessary, and a different emphasis may exist for decision makers versus working-level personnel
and technical versus nontechnical personnel.

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RISK IDENTIFICATION
The second step in risk management is to identify risks. This may result from a survey of the
project, customer, and users for potential concerns. Some degree of risk always exists in the project,
such as in technical, test, logistics, production, engineering, and other areas. Project risks include
business, contract relationship, cost, funding, management, political, and schedule risks. (Cost and
schedule risks are often so fundamental to a project that they may be treated as standalone risk
categories.) The understanding of risks evolves over time, and new risks may appear as the program
transitions from examining concepts to evaluating designs, to building prototypes and/or models,
and finally production of the selected design. Consequently, risk identification must continue
through all project phases.
Project risks should be examined and dissected to a level of detail that permits an evaluator to
understand the significance of the risk and its causes and when possible to potentially examine the
root cause(s). It is important that all project personnel are involved with risk identification.
RISK ANALYSIS
Risk analysis is a systematic process to estimate the level of risk for identified and approved risks.
This involves estimating the probability of occurrence and consequence of occurrence and
converting the results to a corresponding risk level. The approach used depends upon the data
available and requirements levied on the project. The most common form of qualitative approach is
the use of probability-of-occurrence and consequence-of-occurrence scales together with a risk
(mapping) matrix to convert the values to risk levels. Quantitative approaches include but are not
limited to expected value [also known as expected (monetary) value for cost-based calculations],
decision tree analysis (with branches specified by specific probabilities and/or distributions), payoff
matrices, and modeling and simulation.
Risk analysis begins with a detailed evaluation of the risks that have been identified and approved
by decision makers for further evaluation. The objective is to gather enough information about the
risks to estimate the probability of occurrence and consequence of occurrence and convert the
resulting values to a corresponding risk level.
Risk analyses are often based on detailed information that may come from a variety of techniques
including but not limited to:
● Analysis of plans and related documents
● Comparisons with similar systems
● Data from engineering or other models
● Experience and interviewing
● Modeling and simulation
● Relevant lessons-learned studies
● Results from tests and prototype development
● Sensitivity analysis of alternatives and inputs
● Specialist and expert judgments
After performing a risk analysis it is often necessary to convert the results into risk levels. When a
quantitative risk analysis methodology is used, the results can be grouped by existing cost risk,
schedule risk, or technical risk boundaries that have specifically been tailored to the program or by
performing a (statistical) cluster analysis on the results.
When a qualitative risk analysis is performed, risk ratings can be used as an indication of the
potential importance of risks on a program. They are typically a measure of the probability of
occurrence and the consequences of occurrence and are often expressed as low, medium, and high
(or possibly low, medium low, medium, medium high, and high).

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 High risk: Substantial impact on cost, technical performance, or schedule. Substantial action
required to alleviate the item. High-priority management attention is required.
● Medium risk: Some impact on cost, technical performance, or schedule. Special action may be
required to alleviate the item. Additional management attention may be needed.
● Low risk: Minimal impact on cost, technical performance, or schedule. Normal management
oversight is sufficient.
A number of different outputs are possible for both qualitative and/or quantitative risk analyses.
These include but are not limited to (1) an overall project risk ranking, (2) a list of prioritized risks,
(3) probability of exceeding project cost and/or schedule, (4) probability of not achieving project
performance requirements, (5) decision analysis results, (6) failure modes and effects (reliability),
(7) fault paths (reliability), and (8) probability of failure (reliability).

PLAN RISK RESPONSE

Planning risk responses (risk handling) includes specific methods and techniques to deal with
known risks and opportunities, identifies who is responsible for the risk or opportunity, and
provides an estimate of the resources associated with handling the risk or opportunity, if any. It
involves planning and execution with the objective of reducing risks to an acceptable level and
exploiting potential opportunities.
Risk response planning must be compatible with the RMP and any additional guidance the project
manager provides. A critical part of risk response planning involves refining and selecting the most
appropriate response option(s) and specific implementation approach(es) for selected risks (often
those with medium or higher risk levels) and opportunities. The selected risk response option
coupled with the specific implementation approach is known as the risk response (handling)
strategy, which is documented in the risk response (handling) plan. The procedure to develop a risk
response strategy is straightforward. First, the most desirable risk response option (of acceptance,
avoidance, control [mitigation], and transfer for risks, and acceptance, enhance, exploit, and share
for opportunities) is selected based upon cost, performance, schedule, and risk trade studies, then
the best implementation approach is chosen for the selected option. In cases where one or more
backup strategies may be warranted (e.g., high risks), the above procedure is repeated. (While the
selected option for a backup strategy may be the same as for the primary strategy, the
implementation approach will always be different; otherwise, the primary and backup strategy
would be identical.) Similarly, contingent responses can be developed for risks and opportunities
where action is taken only if certain predefined conditions occur. Finally, handling strategies can be
developed using a hybrid of up to all four risk or opportunity options coupled with a suitable
implementation approach.

Risk response options:

For risks this includes acceptance, avoidance, mitigation (control), and transfer while for
opportunities this includes acceptance, enhance, exploit, and share. In addition, contingent
responses are possible for both risks and opportunities.

A brief discussion of the four response options for risks follows:

Acceptance (i.e., retention): The project manager says, “I know the risk exists and am aware of the
possible consequences. I am willing to wait and see what happens. I accept the risk should it occur
and have allocated sufficient budget, schedule, and other resources to deal with it.”
● Avoidance: The project manager says, “I will not accept this design because of the potentially
unfavorable results. I will change either the design to preclude the risk or the requirements that lead
to the risk.”

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● Control (e.g., mitigation): The project manager says, “I will take the necessary measures required
to actively mitigate this risk. I will do what is expected.”
● Transfer: The project manager says, “I will share this risk with others through insurance or a
warranty or transfer the entire risk to them. I may also consider partitioning the risk across hardware
and/or software interfaces or using other approaches that share the risk.”

A brief discussion of the four response options for opportunities follows:

 Acceptance (i.e., retention): The project manager says, “I know an opportunity exists and am
aware of the possible benefits. I am willing to wait and see what happens. I will accept the
opportunity should it occur.”
● Enhance: The project manager says, “This is an opportunity. What can we do to increase the
probability of occurrence of the opportunity, such as by using more aggressive advertising?”
● Exploit: The project manager says, “This is an opportunity. How can we make the most of it?
Will assigning more talented resources allow us to get to the marketplace quicker?”
● Share: The project manager says, “This is an opportunity but we cannot maximize the benefits
alone. We should consider sharing the opportunity with a partner.”

Risk Monitoring and Control: Risk monitoring and control includes:

 Identifying new risks and planning for them.

 Keeping track of existing risks to check if.
 Reassessment of risks is necessary.
 Any of risk conditions have been triggered.
 Monitor any risks that could become more critical over time.
 Tackle the remaining risks that require a longer-term, planned, and managed approach with
risk action plans.
 Risk reclassification
For the risks that cannot be closed, the criticality has to go down over a period of time due
to implementing the action plan. If this is not the case then the action plan might not be
effective and should be re-examined.
 Risk reporting
The risk register is continuously updated, from risk identification through risk response
planning and status update during risk monitoring and control. This project risk register is
the primary risk reporting tool and is available in the central project server, which is
accessible to all stakeholders.

Risk Register
• The primary output of risk identification is the risk register. When complete, the risk
register is “a document in which the results of risk analysis and risk response planning are
recorded.”
• At this point (the end of risk identification), the risk register includes only the risk
categories, identified risks, potential causes, and potential responses. The other items are
developed during the remainder of risk planning. The risk register is a living document. As
a risk is identified, it is added. More information regarding a risk can be added as it is
discovered. As risks are handled, they can be removed because they are no longer of the

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same level of concern. On smaller projects, a spreadsheet works fine for a risk register. On
larger, more complex projects, some organizations use databases.

Risk Register Updates

The probability of each risk occurring and the impact if it does happen are added to the register for
each risk. The priority for each risk is also listed. Some organizations use a “Top 10” list to call
particular attention to the highest priority risks. In addition, some organizations choose to place
higher priority on risks that are likely to happen soon. Some organizations want to call attention to
risks that are difficult to detect—that is, risks with obscure trigger conditions. Any of these means
of calling attention to certain risks are also listed in the risk register. If the project team performed
any quantitative risk analysis, the results are also documented in the risk register.

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Project kick-off: meetings are conducted for many reasons. First, everyone should
express their legitimate needs and desires and should strive to understand the desires of
all the other stakeholders. If the leader charged with accomplishing the project does not
have the full authority to direct all of the project work activities, she needs to use her
influence to get everyone excited about the project, to feel pride in their participation, to
feel they share in the risks and rewards the project offers, and to be motivated to self-
manage as much as possible. Many people may have helped with some parts of the
project planning. This is their chance to see how all the parts fit together. Since many
projects fail because of “touch points” where one worker hands off work to another, it is
critical for all parties to understand these potential trouble spots. Kick-off meetings are
also helpful in convincing all the project stakeholders that the project leaders (sponsor,
project manager, and core team) will be good stewards of the customer’s and the parent
organization’s assets. Answering any remaining questions and overcoming lingering
concerns helps to accomplish this. Finally, all interested parties (outside customers, top
management, functional managers, frontline workers, and any others) should be eager to
commit to the project and get on with the work!

Development of Contemporary Quality Concepts

The contemporary approach to quality management has evolved first from the teachings
of several quality “gurus” from the 1950s through the 1980s and then through various
frameworks popularized during the last 25 years. Arguably the most influential thought
leader in quality was W. Edwards Deming. One concise way to summarize his ideas is
his four-part Profound Knowledge System. Deming started as a statistician, and initially
preached that understanding variation was essential to improving quality. By the time
he had fully developed this system, he also stated that it is important to understand how
companies operate as systems; that managers need insight in order to accurately predict
the future; and that leaders need to understand individual motivations. Joseph Juran,
who was a contemporary of Deming, also wrote and lectured prolifically for decades.
Juran is perhaps best known for his Quality Trilogy of quality planning quality control,
and quality improvement. Many other pioneers in quality, particularly Japanese and
American, have added to the body of quality concepts and tools Much of the work of
these pioneers and many others has been incorporated into three popular frameworks
that many organizations use to define and organize their quality initiatives. These
frameworks are Total Quality Management (TQM), the International Organization for
Standardization (ISO), and Six Sigma.

Total Quality Management/Malcolm Baldrige

TQM came into vogue during the late 1980s when it was becoming more widely
apparent that the old way of trying to catch quality problems by inspection was not
adequate. Many early advocates of TQM used slightly different ways of describing it.
What they had in common was implied by the first word in the name: total. Most
serious practitioners included several components in their TQM system. In the United
States, government, business, consulting, and academic specialists in quality worked
together to develop a common means of describing TQM.

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ISO 9001:2008 ISO represents a framework developed in Europe. The International

Organization for Standardization has developed many technical standards since 1947.
ISO 9001 is the quality management standard, and the 2008 designation is the latest
revision of the standard. When the standards first appeared, they focused largely on
documenting work processes.

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Lean Six Sigma

Lean evolved from lean manufacturing ideas of eliminating as much waste as possible
from work processes. Sigma stands for standard deviation—a statistical term for the
amount of variation in data. Six Sigma quality literally means quality problems are
measured in parts per million opportunities. Many projects have few routine activities
and many unusual activities, so the rigor of the statistics in Six Sigma is not always
applicable. However, the ideas behind Six Sigma provide a meaningful framework for
project quality.
Six Sigma uses a disciplined process called the Define, measure, analyze, improve,
and control (DMAIC) process to plan and manage improvement projects. The
DMAIC methodology is a 15-step process broken up into five project phases: define,
measure, analyze, improve, and control. . The DMAIC process is illustrated to show
objectives within each of the five key stages. It is shown as a continuous, circular flow
because DMAIC is typically used as a method of implementing continuous
improvement and thus can be practiced repeatedly. Lean Six Sigma uses DMAIC and
waste elimination together to improve performance.

DMAIC process for achieving quality improvement:

DEFINE the problem and scope the work effort of the project team. The description of
the problem should include the pain felt by the customer and/or business as well as how
long the issue has existed. Hence, identify the customer(s), the project goals, and
timeframe for completion. The appropriate types of problems have unlimited scope and
scale, from employee problems to issues with the production process or advertising.
Regardless of the type of problem, it should be systemic—part of an existing, steady-
state process wherein the problem is not a one-time event, but has caused pain for a
couple of cycles.
MEASURE the current process or performance. Identify what data is available and
from what source. Develop a plan to gather it. Gather the data and summarize it, telling
a story to describe the problem. This usually involves utilization of graphical tools.

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ANALYZE the current performance to isolate the problem. Through analysis (both
statistical and qualitatively), begin to formulate and test hypotheses about the root cause
of the problem.
IMPROVE the problem by selecting a solution. Based on the identified root cause(s) in
the prior step, directly address the cause with an improvement. Brainstorm potential
solutions, prioritize them based on customer requirements, make a selection, and test to
see if the solution resolves the problem.
CONTROL the improved process or product performance to ensure the target(s) are
met. Once the solution has resolved the problem, the improvements must be
standardized and sustained over time. The standard-operating-procedures may require
revision, and a control plan should be put in place to monitor ongoing performance. The
project team transitions the standardized improvements and sustaining control plan to
the process players and closes out the project.

Project Quality Tools

Literally hundreds of tools have been developed to help organizations manage the
quality of their processes. Many of these tools are variations of each other and have
multiple names. Many of the quality tools can be applied specifically to managing
project quality.

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Flow Chart: A flow chart is a tool that project managers use as they begin to control quality. Flow
charts can be used to show any level of detail from the overall flow of an entire project (such as a
network diagram of the project schedule) down to very specific details of a critical process. Flow
charts show clearly where a process starts and ends. Each step in the process is shown by a box.
Arrows show the direction in which information, money, or physical things flow

Check Sheet: Check sheets are customized for each application. Decide exactly what data will be
useful in understanding, controlling, and improving a process and create a form to collect that
information. It is helpful to also collect the date or time when each event happened and notes
regarding the impact or any special circumstances. When creating categories on a check sheet, it is
wise to have a category entitled “other” because many times a problem comes from an unexpected
source.

Pareto Chart: Once a check sheet is used, the gathered data can be displayed on an analysis tool
such as the Pareto chart. The purpose of the Pareto chart is to quickly understand the primary
sources of a particular problem using the 80/20 rule, where 80 percent of defects often come from
only about 20 percent of all the sources. Note that, in this example, the error of using an incorrect

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scope shows the highest cost impact by far. Therefore, that is probably the first place the project
team looks for improvements

Cause and Effect Diagram: The cause and effect diagram (also commonly known as the fishbone
diagram, because it resembles a fish skeleton, and the Ishikawa diagram, after its developer) is
constructed with each “big bone”representing a category of possible causes. For example, one of the
possible categories is “deliverable design,” meaning that maybe something about the design of the
project’s deliverables contributed to problems with the “head of the fish”—in this case, using
incorrect scope to estimate the labor cost. Once categories of possible causes are identified, the
project team brainstorms ideas with the goal of identifying as many potential causes as possible.
Once the team can think of no additional possible causes, they decide to test one or more possible
causes to see if they actually have an impact. Testing can be done by gathering more data on the
project as it is currently operating. Alternatively, a project team can test a new method and then
collect data on it.

Histogram: Once the additional data are gathered, they can be analyzed using a histogram, run
chart, and/or control chart. For example, if one of the potential causes of using incorrect scope is
that the client demands the cost estimate within four days of job notification

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Run Chart: Perhaps the project team wants to see how one specific aspect of the work process may
change over time. If they collect data for two weeks on a daily basis and show them on a run chart
they could determine trends in how the process is changing over time. The team could look for three
types of variation. First, is there a trend either up or down? In this example, there is an upward
trend. Second, is there a repeating pattern, such as a low every Monday or a high every Wednesday?
In this case, it is too early to tell. Both Tuesdays are up from Mondays, and both Thursdays are low,
but day of week does not seem like the major source of variation. The third type of variation is
abrupt changes, such as either a single point far higher or lower than the others or all of the points
suddenly being much higher or lower than previous points. The question teams ask when trying to
find this variation is: “How big of a change is big enough to count?”

Control Chart: Quality control charts are helpful in answering this question. The below diagram
displays the same data on a control chart with a process average and control limits shown. This
chart shows the final point above the upper control limit. This means the variation is enough that it
is not likely to have happened purely by chance. Something is causing the variation—some sort of
special cause.

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Baseline and Communicate Project Management Plan:

Once the project plan is complete and accepted by the stakeholders, the plan is
baselined. A baseline is the approved plan. Many project plans are developed iteratively
as more information comes to light. A project plan is considered to be in draft form
until enough information is available for the key stakeholders to commit to all of the
details and baseline the plan. At that point, it becomes official, and any changes in the
future need to be formally approved and documented. This is a time of great joy,
because this marks the transition between planning and executing the project. In reality,
on many projects, some activities that are on the critical path or nearly critical paths are
started before the official project kick off. Planning also continues in the form of
replanning to adjust to changing circumstances. However, the majority of planning is
done, and the majority of executing is just starting. The project management plan needs
to be communicated in accordance with the communications plan requirements.
Hopefully, many of the key stakeholders are able to attend the kick off meeting.
Regardless of who is present, proper communication needs to be sent to all stakeholders
Using MS Project for Project Baselines:
MS Project can be used as a tool to automate and communicate many facets of a
project. However, those involved in the project should be sure that they are ready to use
it effectively. Before a baseline is created with MS Project, the following should be
verified:
• Quality assurance and quality control activities are included.
• Risk response plan activities (or duration compensation) are included.
• Performance posting activities are included.
• All “hard” date constraints are incorporated.
•A realistic start date is chosen.
• Resource overloads are addressed.
• Organizational holidays are entered.
• Resource vacations are entered.
• Resource allocations are realistic.
•A management reserve is in the schedule.
•A contingency reserve is in the schedule.
• Time and cost trade-offs are applied to the schedule.