Chapter 4. Examine Project Planning

In Chapter 1, “Project Management Framework Fundamentals,” we introduced the PMI concepts of processes, process groups, and knowledge areas. Recall that PMI defines a total of 47 project processes that describe activities throughout a project’s life cycle. These processes are organized into 10 knowledge areas and represent 5 process groups. One of the most prominent of the process groups is project planning. Over half of the processes occur in this group; 24 of the 47 processes are in this group. You might think that planning processes are localized to a particular area of your project, but note that processes in the planning group span all 10 knowledge areas. Let’s look at project planning in more detail.

After you have completed the initiating processes, you are ready to start planning your project. Remember what that means? It means that you possess formal authorization to conduct the work of the project. But you don’t know what to do without a plan. Planning answers a few very important questions, such as What work will you do? and What exactly are you trying to accomplish?

To answer these questions, start from what you know. There are two outputs from the initiating process group processes. Always start with the information necessary to proceed. Recall that PMI refers to this initial information for each process as the process’s inputs. There are two outputs from the initiating processes:

The project charter

The stakeholder register

Armed with these initiating documents, you can start the planning processes. In a nutshell, you follow each of the planning processes to refine the project documents from these outputs. As you develop the planning documents, always remember how the various processes are related.

Think of the initiating process group as the processes that answer the “what” and “why” questions. The planning processes answer the “how” questions. The planning processes result in outputs that explain how the project will progress toward reaching its goals.

Figure 4.1 shows how the processes in the planning group are related in the PMBOK Guide, Fifth Edition.

PMI is explicit in stressing the importance of planning. Far too many projects suffer from the poor practice of starting work before anyone really knows what needs to be done. This almost always results in wasted effort and lost time. Proper planning requires good communication among the team and sound leadership from the project manager. The result of solid planning is a project team that is more informed and prepared to carry out the work required to meet the project’s goals. You should expect to see several questions on the exam that require you to understand the importance of fully planning before starting work.

Because planning is such a large process group, the material is divided into two separate chapters. This chapter covers the general concepts of planning and the processes that relate to the development of project baselines, including the following topics:

Integration

Scope

Time

Cost

Chapter 5, “Explore More Elements of Project Planning,” covers the remaining project planning processes that support project planning by applying more details to the baselines. Topics covered in Chapter 5 include these:

Communications

Risk

Quality

Procurement

Human resources

Stakeholders

The main purpose of planning is to provide a framework to gather information to produce a project management plan. In fact, the plan itself is really a collection of other plans. The majority of activities in the planning group center around developing the supporting documents that comprise the final project management plan. As more detailed information is learned about the project, the overall plan becomes more complete, and the stakeholders’ confidence in the project increases.

Planning is an iterative group of processes. As a project progresses, it often becomes necessary to modify the plan for a number of reasons. Unexpected results, delays, outside factors, and internal factors can all require additional planning. Any scope changes are likely to require one or more planning processes to be revisited. Don’t assume that planning is accomplished only once. The exam requires that you understand how planning is iterative throughout a project.

The following are some fundamental planning process items you need to understand for the exam:

Project management plan—One process in the planning group addresses the project management plan. The develop project management plan process is the high-level process that provides direction for developing subsidiary plans and compiling their information into the final project plan.

Scope—Four processes address scope planning. These direct the refinement of the preliminary scope statement and break down the high-level goals of the project into smaller, more manageable chunks.

Activity—Six processes deal with activity planning. After the work of the project is expressed in small, manageable chunks, the activity-related processes focus on defining the activity details, integrating with project resources, and sequencing the project activities.

Cost—Three processes address cost planning. These processes collect estimates and organize them into a project budget.

We examine each of these processes in the next section.

The project management plan process covers all activities that identify and direct the actions of many other processes in the planning process group. Developing the project management plan includes coordinating the development of the subsidiary plans and incorporating them into the complete project plan. The main purpose of the project management plan is to define how the project is to progress from its beginning to completion.

In short, the project management plan provides the high-level game plan for how the project moves through its life cycle. PMI defines many potential subsidiary plans that make up the overall project management plan. These subsidiary plans provide the specific details for managing each aspect of the project from initiation through closure. The subsidiary project management plans could include

Project scope management plan

Requirements management plan

Schedule management plan

Cost management plan

Quality management plan

Process improvement plan

Human resource plan

Communication management plan

Risk management plan

Procurement management plan

One of the most common mistakes inexperienced project managers make is to confuse a project plan with a project schedule. The output from many common project management software packages does not qualify as a project plan. This output is a good start, but a true project plan is made up of much more information than just scheduling information. This process requires a focused effort to create a plan that incorporates all known information about a project. Table 4.1 shows the inputs, tools and techniques, and outputs for the develop project management plan process.

Collect Requirements—5.2

Define Scope—5.3

Create WBS—5.4

Scope management is the set of processes which ensures that the requirements of the customer are captured in a specification of work that ensures the delivery of the project’s deliverables, that all the project work is done, and that only the work required to complete the project is done. In other words, scope management makes sure that the project is completed without expending any unnecessary effort.

A WBS provides the project manager and project team with the opportunity to decompose the high-level scope statement into much smaller, more manageable units of work, called work packages. The resulting WBS should provide a complete list of all work packages required to complete the project (and nothing more). Table 4.5 shows the inputs, tools and techniques, and outputs for the create WBS process.

In creating the WBS, the project team repeatedly decomposes the work of the project into smaller and smaller units of work, and the result is a collection of small work packages. The process continues until the resulting work packages are simple enough to reliably estimate duration and required resources. Don’t go overboard, though. When you have work packages that are manageable and each represent a single work effort, stop the process. Each project is different, so this process results in different levels of detail for each project.

The last main feature of the WBS is that it is organized in a hierarchical fashion. The highest level is the project. The children that represent project phases, divisions, or main deliverables are listed under the project. Each child process or task is divided into further levels of detail until the lowest level, the work package, is reached. Figure 4.2 depicts a sample WBS with multiple levels.

In addition to the WBS itself, another output of the create WBS process is the WBS dictionary. The WBS dictionary is a document that supports the WBS by providing detailed information for each work package. The WBS dictionary can contain many types of information, including

Work package name or identifier

Accounting code identifier

Description of work

Technical specifications

Quality requirements

Owner or responsible party assignment

Required resources

List of schedule milestones

Associated schedule activities

Cost estimates

Acceptance criteria

Contract information

Define Activities—6.2

Sequence Activities—6.3

Estimate Activity Resources—6.4

Estimate Activity Durations—6.5

Develop Schedule—6.6

The next section of the planning processes address the steps required to develop the project schedule. This is the part of the project plan that might be most familiar to new project managers. Many automated project management tools help create schedules by keeping track of activities, resources, durations, sequencing, and constraints. Although the schedule is an integral part of the project plan, it is only one part. Don’t start working on the schedule until you have a proper WBS. Starting to work before completing the WBS nearly always results in doing more work than is necessary. A good WBS reduces task redundancy and helps ensure that all work performed is in the scope of the project.

Sometimes it is difficult to know everything about a project during the planning stage. It is common to learn more about the project as you work through the project life cycle. This is called progressive elaboration and affects the planning process. If you don’t know everything about a project, you can’t plan the whole project to the necessary level of detail.

For a large project, it is common to plan the entire project at a high level. The project starts with detailed plans in place for the work packages that are near the beginning of the project. As the time draws near to begin additional work, the more detailed, low-level plans for those work packages are added to the project plan. The planning process is revisited multiple times to ensure that the detailed plans contain the latest information known about the project. This practice is called rolling wave planning because the planning wave always moves to stay ahead of the work execution wave.

For example, when building a car, you cannot install the engine until the engine has been built and delivered to the main assembly line. This is just one example of how activities can be dependent on one another. The sequence activities process is one that can benefit from the use of computer software to assist in noting and keeping track of inter-activity dependencies. Table 4.8 shows the inputs, tools and techniques, and outputs for the sequence activities process.

Figure 4.3 shows an example of a PDM diagram.

Early start—The earliest date the activity can start

Duration—The duration of the activity

Early finish—The earliest date the activity can finish

Late start—The latest date the activity can start

Late finish—The latest date the activity can finish

Slack—Difference between the early start and the late start dates

Figure 4.4 shows an example of a PDM node template.

The PDM diagram in Figure 4.3 shows eight activities, labeled A through H, with 13 dependencies. The arrows show how some activities are dependent on other activities. For example, activity B cannot start until activities A and C are complete. To show this dual dependency, we draw an arrow from A to B and another arrow from C to B.

You can represent four types of dependencies with a PDM diagram:

Finish-to-start (the most common dependency type)—The successor activity’s start depends on the completion of the predecessor activity.

Finish-to-finish—The completion of the successor activity depends on the completion of the predecessor activity.

Start-to-start—The start of the successor activity depends on the start of the predecessor activity.

Start-to-finish—The completion of the successor activity depends on the start of the predecessor activity.

Now use the sample PDM node template shown in Figure 4.4 to create a PDM diagram for the project.

Your completed network diagram should look like the one shown in Figure 4.5.

People

Equipment

Materials and supplies

Money

Table 4.10 shows the inputs, tools and techniques, and outputs for the estimate activity resources process.

Two of the tools and techniques warrant further discussion. One of the techniques you use when estimating activity resources is alternative analysis. Analyzing the various alternatives provides an opportunity to consider other sources or ways to achieve the desired result for an activity. Alternatives might be more desirable than the initial expected approach due to cost savings, higher quality, or earlier completion. Another important outcome of alternative analysis is that in case the primary source becomes unavailable, you might have already identified a replacement method to complete the work. Suppose your main supplier of industrial fittings suffers a catastrophic fire. If your alternative analysis identified another source, you might be able to continue the project with minimal disruption.

The second item is bottom-up estimating. Recall that one of the purposes of creating the WBS is to decompose project work into work packages that are small enough to reliably estimate for duration and resource requirements. Using the WBS, you can provide estimates for mid- and high-level work by aggregating the estimates for the work packages that make up the desired work. Because this process starts at the lowest level of work (the work package) to create the estimate, it is called bottom-up estimating. This type of estimating tends to be fairly accurate because the estimates come from the people doing the actual work. The alternative is top-down estimating. Top-down estimates generally come from management or a source that is higher up than the people actually doing the work. The estimates are really educated guesses on the amount of resources required for a collection of work packages and tend to be less reliable than bottom-up estimates.

In addition to expert judgment and reserve analysis, four main techniques are used for project activity duration estimation. In many cases, using multiple techniques provides more accurate estimates. The four estimation techniques are

Analogous estimating—This uses actual duration figures from similar activities. These activities can be from the same project or another project but share similarities in budget, size, weight, complexity, or other parameters.

Parametric estimating—This calculates duration estimates by multiplying the quantity of work by the productivity rate. This type of estimate works best for standardized, and often repetitive, activities.

Three-point estimates—This uses three estimate values for each activity:

Most likely (t _M)—The duration most likely to occur.

Optimistic (t _O)—The duration of the activity based on the best-case scenario.

Pessimistic (t _P)—The duration of the activity based on the worst-case scenario.

This approach originated with the Program Evaluation and Review Technique (PERT). PERT analysis calculates the expected (t_E) activity from the three-point estimates by using the following formula:

t_E = (t_O + 4 * t_M + t_P) / 6

Triangular distribution—This simple estimating method takes an average of the most likely, optimistic, and pessimistic values. Unlike a three-point estimate, each value receives the same weight. This estimating method assumes that risks are just as likely to be realized as the most likely estimate. You can calculate a triangular distribution by using the following formula:

Average = (t_O + t_M + t_P) / 3

An important topic to understand with respect to project schedules is the critical path. In the AON diagram in Figure 4.3, the critical path is the longest path from start to finish. It is calculated by adding all the durations along each path from start to finish. The reason it is called the critical path is that any delay (or increase in duration) of any activity on the critical path causes a delay in the project. It is critical that all activities on this path be completed on schedule.

Path A–B–D–F–G will take 17 days to complete. (Just add up all the durations: 5 + 2 + 7 + 1 + 2 = 17)

Path A–C–E–G will take 14 days to complete.

From this diagram, you can see that the longest path is A–B–D–F–G, and that is the critical path. Any delays in any of these tasks delay the project.

In general, you make two main passes through each path in your network diagram. The first pass starts with the initial project task (the project start task). A task’s early start date is the earliest you can start working on that task. The late start date is the latest you can start working on the task. The difference between the early and late start dates is called float. The float is the schedule flexibility of a task. In Figure 4.5, the early start date for Task A is 9/5/14. To get the early finish date, just add the duration to the early start date. The duration for Task A is 5 days, so the earliest Task A can finish is 9/10/14. Now, the early finish date for Task A becomes the early start date for any tasks that are dependent on Task A (namely, Task B and Task C). Then, continue to follow each path until you reach the final task, calculating the new early end dates by adding the duration to the early start dates.

Now it is time for the second pass through your project to calculate the late start and late ending dates. This pass starts at the end and moves backward through the same paths you just followed in the forward pass. The first step in the backward pass is to record the late ending date. It is the same as the early ending date for the last task in the project. Then, subtract the duration to get the late start date. In Figure 4.5, the late ending date for Task G is 9/22/14, and the late start date is 9/20/14. Next, move backward to each task on which your current task depends (that is each task that has an arrow pointing to your current task). The late ending date for this predecessor task is the same as the late start date of the dependent task. In other words, the late ending date for Task F and Task E would be 9/20/14 (the late start date for Task G). Continue backward through the project, subtracting the duration to calculate a new late start date.

After completing both the forward and backward passes, you should have all of the early start times (EST), early finish times (EFT), late start times (LST), and late finish times (LFT) filled in. To complete the network diagram entries, calculate the float for each task by subtracting the early start date from the late start date. The float is the amount of time each task can be delayed without delaying the project.

Finally, add the durations for each path from the start task to the finish task. The largest total represents the critical path of your project. There could be more than one critical path. Remember that tasks on the critical path all have a float of 0, and any delay of a task on the critical path results in an overall project delay.

Estimate Costs—7.2

Determine Budget—7.3

Cost estimates are compiled into the project budget. You probably recognize several estimating techniques from other processes. Three of the techniques used in the estimate costs process are the same basic techniques used in the estimate activity durations process. The other technique, bottom-up estimating, is also used in the estimate activity resources process. Although they are the same techniques, they are applied to different criteria and bear revisiting.

Analogous estimating—This uses actual cost values from similar activities. These activities can be from the same project or another project.

Parametric estimating—This calculates cost estimates by multiplying the quantity of work or result of work, such as square feet or hours, by a known rate, such as $30 per square foot or $45 per hour. This type of estimate works best for standardized, and often repeated, activities.

Three-point estimating—This uses three estimate values for each activity:

Most likely—The cost most likely to occur

Optimistic—The cost of the activity if everything goes as planned, or better

Pessimistic—The cost of the activity in a worst-case scenario

Bottom-up estimating—This technique calculates cost estimates by adding the costs of each individual work package. The technique starts at the most detailed level and rolls up the costs until a total cost for the project is obtained.