Unit 1

Software Project Management

Prepared By:
Mr. Jay Prakash Maurya
 Syllabus of Unit 1

• Introduction to software project

management: Project Definition –
Contract Management – Activities covered
By Software Project Management.

• Project evaluation: Strategic Assessment

– Technical Assessment –Cost Benefit
Evaluation Techniques – Risk Evaluation.
 Unit 1 – Part 1 - Introduction to
software project management
• Project Definition
• Contract Management
• Activities covered By Software Project
Management.
 Project Definition
Importance of Software Project Management

The job pattern of an IT company engaged in software

development can be seen split in two parts:

– Software Creation
– Software Project Management

A project is well-defined task

A Software Project is the complete procedure of software

development from requirement gathering to testing and
maintenance
 Importance of Software Project Management
Project Management Institute breaks the entire process
down into five broad areas, Which provide an
excellent high-level view of the key concepts of
project management for most methodologies.
1. Initiating – The process of outlining your project and
obtaining proper approval to begin.
2. Planning – The process of developing your project
management plan to reach your project goals.
3. Executing – The process of completing work as
defined in your project management plan.
4. Monitoring and Controlling – The process of reviewing
and tracking the progress of predetermined work while
accounting for unplanned changes.
5. Closing – The process of completing the project work
and receiving approval from the stakeholder.
 Need of software project management
Software is said to be an intangible product.
Software development is a kind of all new stream in
world business. Software products are tailor made to fit
client’s requirements.
The most important is that the underlying technology
changes and advances so frequently and rapidly . All
such business and environmental constraints bring
risk in software development.

The image shows triple constraints

for software projects.
It is an essential part of software
organization to deliver quality
product, keeping the cost within
client’s budget constrain and
deliver the project as per
scheduled.
 Categorization of Software Projects
In project management,
there are many categories
that need to plan as well
while planning the project.
The project can be
classified on the grounds of
the following.

1. Scope and Significance

National Projects.
International Projects

2. Type
Industrial
Non-Industrial
 Categorization of Software Projects

3. Level of Technology
Conventional Technology Projects
Non-Conventional Technology
High-Tech Project
Low Investment Projects

4. Size and Scale of Operations

Small Scale Projects
Medium Scale Projects
Large Scale Projects

5. Ownership and Control

Public Sector Projects
Private Sector Projects
Joint Sector Projects
 Categorization of Software Projects

6. Speed of Implementation
Normal Projects
Crash Projects
Disaster Projects

7. Purpose
Rehabilitation Projects
Balancing Projects
Maintenance Projects
Modernization Projects

8. Others
Capacity Expansion Projects
Employees Welfare Project
 Setting objectives
Effective objectives in project management are
specific. A specific objective increases the
chances of leading to a specific outcome.

Objectives are statements of a lower level. They

describe the specifics
what exactly you’re intending to do?
How? In order to meet your goals.

Objectives can describe tangible products,

deliverables, or service that the project will
deliver.
Objectives are described using metrics and KPIs
 Setting objectives
Tracking progress towards an objective is usually
done via a project dashboard, as available in many
project planning and management applications,
such as Keep Solid Goals.

The best way to set project management objectives is

by using the SMART approach. According to it, an
objective should be:
• Specific - well defined and clearly understood.
• Measurable - the result of your objective can be
measured, so it will be clear when it has been
accomplished.
• Achievable - considering the resources and the
time that your team has available, it should be
possible to accomplish your PM objective.
 Setting objectives
• Realistic - objectives must be a reasonable way of
proceeding, fit within the broader project.
• Time-bound - project management objectives must
have a concrete deadline to avoid constant delays.

In lots of instances, project teams are tasked with

achieving a series of objectives in pursuit of the
final objective.

Objectives can often be set under three headings:

1. Performance and Quality - The result of a project
must fit the purpose for which it was intended.
2. Budget - The project must be completed without
exceeding the authorized expenditure.
 Setting objectives
3. Time to Completion - Actual progress has to
match or beat planned progress. All significant
stages of the project must take place no later than
their specified dates, to result in total completion
on or before the planned finish date.
 Management Principles
• The principles of project management are the
fundamental rules that should be followed for the
successful management of projects.
– Formal structure
• Processes, Procedures, And Tools
– Invested and engaged project sponsor
• communicate progress, escalate issues, overcome
roadblocks, guide stakeholders, decision-making
– Clear and objective goals and outcomes
• measure a project’s success, reviewed and
approved, determined and documented
– Documented roles and responsibilities
• RACI or RASCI is used
 Management Principles
– Management of project changes
• well-defined scope, meets customer expectations
– Risk management
• manage risk, minimize, and eliminate
• identifying, evaluating, and monitoring risks
– Mature value delivery capabilities
• Project tools, processes, and procedures
• More mature processes and procedures, will be a
more success.
– Performance management baseline
• Three basic components: cost, schedule, and scope
• Improves decision-making
Example of Risk Management
 Management Principles
– Communication plan
• Project management is 90% communication
• Success requires communication
– Keeping stakeholders engaged
– Coordinating tasks and schedules
– Decision-making and problem-solving
– Identifying and resolving conflicts
– Escalating risks and issues
 Management Control
• Management, in general, can be seen as the
process of setting objectives for a system and
then monitoring the system to see what its true
performance is.
• Especially in the case of large undertakings –
Example - IT project that is to replace locally held paper-
based records with a centrally-organized database

• Objectives - Project objectives should to have a

successful software project, the manager and the
project team members be clearly defined.
• Must know what will constitute success. This will
make them concentrate on what is essential to
project success.
Management
Control
 Management Control
• Measures of effectiveness –

Effective objectives are concrete and well defined.

Vague aspirations such as 'to improve customer
relations' are unsatisfactory.
Ideally there should be measures of effectiveness,
which tell us how successful the project has been.

• Sub-objectives and goals –

In order to keep things manageable, objectives might

need to be broken down into sub-objectives.
These sub-objectives are also known as goals, steps
on the way to achieving an objective.
Despite best efforts and intentions, many
organizations find that large-scale projects miss their
targets
 Management Control
What Are Project Controls? –
Project controls are processes for gathering and
analyzing project data to keep costs and schedules on
track.
The functions of project controls include initiating,
planning, monitoring and controlling,
communicating, and closing out project costs and
schedule.
Activities under the umbrella of project controls may
include:

• Aligning projects with portfolio/organization goals and

objectives
• Developing a work-breakdown structure (WBS)
• Collaborating on initial project schedules
 Management Control
• Developing a risk management plan
• Project budgeting and forecasting
• Monitoring project costs
• Feedback and reporting
• Optimizing project strategies to enable better
outcomes in the future

Processes That Define Project Controls –

The strengths of project controls lie in their data-
focused approach and attention to detail.
A project manager does not simply want to know
that there is a cost overrun, but rather wants to
know the root causes, the precise numbers, and
how it can be fixed.
 Management Control
The processes that define project controls.
• Project Planning
• Budgeting
• Risk Management
• Change Management-
• Forecasting
• Performance Management
• Project Administration

The following are some of the key benefits of project

controls:
• Reduced project costs through ability to make
timely decisions using KPIs
 Management Control
• Increased project predictability for cost and
completion date
• Increased visibility into the financial health of the
project at all stages
• Ability to mitigate project scope creep
• Meaningful benchmarking data for future projects
via well-structured projects
• Increased margins when working in a fixed-price
environment
• Improved reputation for properly managing and
controlling projects
• Increased job satisfaction for project
 Project portfolio Management
Project Portfolio Management

PPM is a management process with the help of

methods aimed at helping the organization to
acquire information and sort out projects
according to a set of criteria.

Objectives of Project Portfolio Management –

These objectives are designed to bring about

expected results through coherent team players.
When it comes to the objectives, the following
factors need to be outlined.

• Need to create a descriptive document

 Project portfolio Management
• Needs to be evaluated on a regular basis
• Selection of the team players

There are five basic project portfolio management

steps:
1. Define Business Objectives
2. Collect Project Ideas for Your Portfolio
3. Select the Best Projects for Your Portfolio
4. Validate Project Portfolio Feasibility
5. Execute and Manage your Project Portfolio

Benefits of Project Portfolio Management

Project portfolio management ensures that projects

have a set of objectives, which when followed brings
about the expected results.
 Project portfolio Management
PPM can be used to bring out changes to the
organization which will create a flexible structure
within the organization in terms of project execution.

The following benefits can be gained through efficient

project portfolio management:

• Greater adaptability towards change.

• Constant review and close monitoring brings about a
higher return.
• Management's perspectives with regards to project
portfolio management is seen as an 'initiative towards
higher return'.
• Identification of dependencies is easier to identify.
This will eliminate some inefficiency from occurring.
 Project portfolio Management
• Advantage over other competitors (competitive
advantage).
• Helps to concentrate on the strategies, which will
help to achieve the targets rather than focusing on the
project itself.
• The responsibilities of IT is focused on part of the
business rather than scattering across several.
• The mix of both IT and business projects are seen as
contributors to achieving the organizational objectives.

Project Portfolio Management Tools - Essential features

of those tools:
• A systematic method of evaluation of projects.
• Resources need to be planned.
• Costs and the benefits need to be kept on track.
 Project portfolio Management
• Undertaking cost benefit analysis.
• Progress reports from time to time.
• Access to information as and when its required.
• Communication mechanism, which will take through the
information necessary.

Techniques Used to Measure PPM

There are various techniques, which are used to measure

or support PPM process from time to time.

Three types of techniques, which are widely used:

• Heuristic model.
• Scoring technique.
• Visual or Mapping techniques.
The Five Question
Model
The five question model
of project portfolio
management illustrates
that the project
manager is required
to answer five essential
questions before the
inception as well as
during the project
execution.

The answers to these

questions will
determine the success
of the implementation
of the project.
 Activities covered By Software Project Management

• Software project management comprises of a number of

activities, which contains
– 1. Project Planning
Set of multiple processes, its task, which is performed
before the production of software actually starts.
– 2. Scope Management
It defines the scope of project; this includes all the
activities.
It creates boundaries of the project
Contain limited and quantifiable tasks
• Define the scope
• Decide its verification and control
• Divide the project into various smaller parts for ease of
management.
 Activities covered By Software Project Management

• Verify the scope

• Control the scope by incorporating changes to the scope

– 3. Estimation management
Effective management accurate estimation of various
measures
• Software size estimation - In terms of KLOC (Kilo Line
of Code) or by calculating number of function points in
the software.
• Effort estimation - Efforts in terms of personnel
requirement and man-hour required to produce the
software. Software size should be known.
• Time estimation - Once size and efforts are estimated,
the time estimation is done. Efforts required is
segregated into sub categories as per the requirement
specifications and interdependency of various components
of software.
 Activities covered By Software Project Management

• Cost estimation - The most difficult of all because it

depends on more elements like
» Size of software
» Software quality
» Hardware
» Additional software or tools, licenses etc.
» Skilled personnel with task-specific skills
» Travel involved
» Communication
» Training and support

– 4. Scheduling Management
All the activities to complete in the specified order
and within time slotted to each activity. It is
compulsory -
• Find out multiple tasks and correlate them.
 Activities covered By Software Project Management

• Divide time into units.

• Assign the respective number of work-units for every job.
• Calculate the total time from start to finish.
• Break down the project into modules.

– 5. Project Resource Management

All the elements are referred to as resources, it can be a
human resource, productive tools, and libraries.
• Create a project team and assign responsibilities to every
team member
• Developing a resource plan is derived from the project
plan.
• Adjustment of resources.

– 6. Project Risk Management

All the activities like identification, analyzing and
 Activities covered By Software Project Management

preparing the plan for predictable and unpredictable

risk in the project.
• The Experienced team leaves the project, and the new
team joins it.
• Changes in requirement.
• Change in technologies and the environment.
• Market competition.

– 7. Project Communication Management

Essential factor in the success
It is a bridge between client, organization, team
members and as well as other stakeholders
Communication must be clear and understood
Miscommunication can create a big blunder in the
project.
 Activities covered By Software Project Management

– 8. Project Configuration Management

To control the changes in software like requirements,
design, and development of the product.
 Unit 1 – Part 2
Project evaluation
• Strategic Assessment
• Technical Assessment
• Cost Benefit Evaluation Techniques
• Risk Evaluation.
Project evaluation: Strategic Assessment
• Project evaluation is a systematic method particularly
about the effectiveness and efficiency of project.
• It is a high level assessment of the project to see whether
– It is worthwhile to proceed with the project
– Project will fit in the strategic planning of the whole
organization

• Project evaluation is a step by step process of collecting,

recording and organizing information about
– Project results
– Short term outputs (immediate results of activities or project
deliverables)
– Long term outputs (changes in behaviour, practice or policy
resulting from the result.

• Why is project evaluation important

– What progress has been made?
Project evaluation: Strategic Assessment
– Were the desired outcomes achieved?
– Whether the project can be refined to achieve better
outcomes?
– Do the project results justify the project inputs?

• Project evaluation is use

– Want to decide whether a project can proceed before it is
too late.
– Want to decide which of the several alternative projects
has a better success rate, a higher turnover, a higher.
– Is it desirable to carry out the development and operation of
the software system?

• Project evaluation is done by

– Senior management
– Project manager/coordinator
– Team leader
Project evaluation: Strategic Assessment
• Project evaluation
– Strategic assessment
– Technical assessment
– Economic assessment

• Strategic Assessment

1. Strategic Planning
Organization’s process of defining its strategy, or
direction and making decisions on allocating its
resources to pursue this strategy, including its capital and
people, it deals with
– What do we do?
– For whom do we do it?
– How do we excel?
Project evaluation: Strategic Assessment
• Strategic Assessment
First criteria for project evaluation – For evaluating and
managing the projects, the individual projects should be
seen as components of a programme.
• Programme management
Group of projects that are managed in a coordinated way
to gain benefits.
Collection of projects that all contribute to the same
overall organization goals.

Well Defined programme goal is required and that all the

organization’s projects are selected and tuned to contribute
to this goal.
– How it contributes to programme goal.
– Timing.
– It is viability [capability of developing or usefull.
Project evaluation: Strategic Assessment
– Resourcing

• For successful strategic assessment, there should be a

strategic plan which defines:
– Organization’s objectives.
– Provides context for defining programme and programme
goals.
– Provide context for accessing individual project

• In large organization, programme management is taken

care by programme director and programme executive,
rather than, project manager.

• If a well defined information system does not exist then

the system development and the assessment of project
proposals will be based on a more “piece meal approach”.
Piece meal approach is one in which each project being
individually early in its life cycle.
Project evaluation: Strategic Assessment
• Typical issues and questions to be considered during
strategic assessment

• Issue – 1: objectives
How will the proposed system contribute to the
organization’s stated objectives?
How, might it contribute to an increase in market share?

• Issue – 2: is plan
How does the proposed system fit in to the MIS plan?
Which existing system will it replace/interface with?
How will it interact with systems proposed for the later
development?

• Issue – 3: organization structure

What effect will the new system have on the existing
departmental and organization structure?
Project evaluation: Strategic Assessment
• Issue – 4: MIS
What information will the system provide and at what
levels in the organization?
In what ways will it complement or enhance existing
management information system?

• Issue – 5: personnel
In what way the proposed system affect manning levels
and the existing employee skill base?
What are the implications for the organization’s overall
policy on staff development.

• Issue – 6: image
What will be the effect on customer’s attitudes towards the
organization?
Will the adoption of automated system conflict with the
objectives of providing a friendly service?
Project evaluation: Strategic Assessment
• Project Portfolio management

• Provides an overview of all the projects that an

organization.
• It prioritizes the allocation of resources to projects and
decides which projects should be accepted and which
existing ones should be dropped.
– Identifying which project proposals are worth implementation;
– Assessing the amount of risk of failure that a potential project
has;
– Deciding how to share limited resources, including staff time
and finance, between projects;
– Being aware of the dependencies between projects;
– Ensuring that projects do not duplicate benefits;
– Ensuring that necessary developments have been
inadvertently been missed.
Project evaluation: Strategic Assessment
• The three key aspects of Project Portfolio management
are:

– Portfolio definition
– Portfolio management
– Portfolio optimization
 Technical Assessment
• Technical assessment is the second criteria for evaluating
the project. Technical assessment of a proposed system
evaluates functionality against available:
– Hardware
– Software

• Limitations
– Nature of solutions produced by strategic information
systems plan
– Cost of solution. Hence undergoes cost-benefit analysis.

• Referred as Technology Evaluation.

• Technical aspects of the project sector and planned
technical purchases.
• Technology is defined broadly here to include: equipment,
tools, products, processes, raw materials, skills, and
ways of organizing production.
 Technical Assessment
• Assessing Technology Planning: -
– Analyze Technology Needs
– Planning for Change and Technology
– Assessing a Technology Plan Before and After Implementation

• Why it is important:
– It’s a tool to Identify the Problem
• At the core of any project is a series of big and small
problems that need to be addressed
• Reviewing the production process including the systems
and equipment in place provides transparency into what
some of the constraints are.
– It’s a tool to Identify the Best Solution
• Once you know what the technical problems are,
you can start to look for solutions. The Technology
Assessment provides the opportunity to explore
potential solutions
 Technical Assessment
• Analysis can lead to more creative, better fitting,
and more cost effective solutions.
• The grant budget is limited, so looking at the
options in a systematic way.
– It’s a tool for Communication
• A clear presentation will reduce questions and
will help them better understand the design choices.
• It serves as a record and resource for the
grantee in case they need to go back and reconsider the
options at a later date.

• Purpose: -
– Provides information about the profitability of current
technology as well as the benefits of implementing new
technology.
– Ineffective technology needs to be upgraded or replaced for
businesses to produce quality products or services.
 Technical Assessment
• Types of Assessments: -
Technology assessment can happen on several levels, To
assure that an organization can remain competitive,
every aspect of its technology system must be in excellent
operating condition.

• Flexibility Assessment - How technology will adapt to

new levels of applications and other technology systems.
• Longevity Assessment - Provides information on how long
the technology will last.

• Upgrade Assessment - Determines the ability of the

technology to function with the addition of new, advanced
features and equipment.

• Scale Assessment - Considers how well the technology can

operate in a larger, ever-growing network of systems.
 Cost Benefit Evaluation Techniques
• In order to choose among projects, we need to take into
account the timing of the costs and benefits as well as
the benefits relative to the size of the investment.

– Net profit
The difference between the total costs and the total
income over the life of the project.

– Payback period
The time taken to break even or pay back the initial
investment.
The project with the shortest payback period will be
chosen on the basis that an organization will wish to
minimize the time
Advantage –
Simple to calculate
Not particularly sensitive to small forecasting errors.
Cost Benefit Evaluation Techniques
Disadvantage
Ignores the overall profitability of the project
Ignores any expenditure

– Return on investment
• ROI also known as the Accounting Rate of
Return (ARR)
• A way of comparing the net profitability to the
investment required.
• The main difficulty with NPV for deciding
between projects is selecting an appropriate discount
rate.
• The discount rate should be chosen to reflect
available interest rates plus some premium
– Internal rate of return
• One disadvantage of NPV as a measure of
Cost Benefit Evaluation Techniques
earnings from other investments or the costs of
borrowing capital.
• The IRR is calculated as that percentage discount rate
that would produce an NPV of zero.
• It is most easily calculated using a spreadsheet or
other computer program that provides functions for
calculating the IRR.
• Manually, it must be calculated by trial-and-error or
estimated using the some technique.
 Risk Evaluation
• The last thing that any project.
• Projects are designed to take advantage of resources and
opportunities and with these, come uncertainty,
challenges and risk.
• Hence risk management becomes a very important key to
all project success.
• Risk assessment is a step in a risk management procedure.
Risk assessment is the determination of quantitative or
qualitative value.
• Risk assessment involves measuring the probability that
a risk will become a reality.
• Risk assessment is not a project manager's
responsibility its ideas of the entire team.
– Project Manager: acts as the chairperson
 Risk Evaluation
– Project Team: project manager assign any project team
member the roles of recorder and timekeeper
– Key Stakeholders: those identified that may bring value in
the identification of project risks.
– Subject Matter Experts: those identified that may specialize
in a certain project activity
– Project Sponsor: may participate depending on the size and
scope of the project

• Common Phases of Risk Assessment

In many projects, risks are identified and analyzed in a
random, brainstorming, fashion.
Unexpected risks arise, which have not been assessed or
planned for and have to be dealt with on an emergency
basis.
It is essential that potential risks are identified,
categorized, evaluated & documented.
Risk Evaluation
 Risk Evaluation
1. Risk Identification
Compiled a list of risks from previous project experiences.
Reviewed at the beginning of the project
Give an insight to the members to predict possible risks.
Use methods for identifying risks like Crawford Slip method

2. Categorize and Group Duplicates

Categorizing risks is a way to systematically identify the
risks.
Provide a foundation for awareness, understanding and
action.
The most common, easy and the most effective method for
this is to post the sticky notes

3. Qualify Risks
Assign Probability and Impact to Each Risk
The key questions to assess any risk in projects are:
 Risk Evaluation
• What is the risk – how will I recognize it if it becomes a
reality?
• What is the probability of it happening – high, medium or
low?
• How serious a threat does it pose to the project – high,
medium or low?
• What are the signals or triggers that we should be looking
out for?

4. Determine Risk Response

Identified with a high risk score.
Determine the triggers or causes and identify responses.
Responses may include:
• Adding the risk to the project plan and scheduling for it.
• Adding funding to the project to mitigate any potential
increase in costs,
 Risk Evaluation
• Adding resources to the project to mitigate any potential
shortage in assigned resources;
• Developing a course of action for avoiding the risk.

5. Documentation of Risks
– Enter all the risks, probability-impact scores, and
responses and maintain a document to explain all risks.
– The high scoring risks will be added to the Project
Management Plan.
– As a method to track the risk at the correct time.
– Provide awareness and visibility to the participants