Project Management –MGMT627 VU

LESSON 18

PROJECT PLANNING (CONTD.)

Broad Contents

Sorting Out Projects

Objectives and Reasons of Project Planning
Policies, Procedures and Standards in Projects

18.1 Sorting Out Project:

As we move into consideration of details of project, we need to know exactly what is to be done, by
whom, and when. All activities required to complete project must be precisely delineated and
coordinated. Necessary resources must be available when and where they are needed, and in correct
amounts. Some activities must be done sequentially, but some may be done simultaneously. If large
project is to come in on time and within cost, great many things must happen when and how they are
supposed to happen. In this section, we propose conceptually simple method to assist in sorting out and
planning all this detail.

To accomplish any specified project, several major activities must be completed. First, list them in
general order in which they would normally occur. Reasonable number of major activities might be
anywhere between two and 20. Break each of these major activities in two to 20 subtasks. There is
noting sacred about these limits. Two is minimum possible breakdown and 20 is about largest number
of interrelated items that can be comfortably sorted and scheduled at given level of task aggregation.
Second, preparing network from this information is much more difficult if number of activities is
significantly greater than 20.

It is important to be sure that all items in list are at roughly same level of task generality. In writing
book, for example, various chapters tend to be at same level of generality, but individual chapters are
divided into finer detail. Indeed, subdivisions of chapter may be divided into finer detail still. It is
difficult to overstate significance of this simple dictum. It is central to preparation of most of planning
documents that will be described in this chapter and those that follow.

Some times problem arises because some managers tend to think of outcomes (event) when planning
and other think of specific tasks (activities). Many mix two. Problem is to develop list of both activities
and outcomes that represents exhaustive, non-redundant set of results to be accomplished (outcomes)
and work to be done (avidities) in order to complete project.

Procedure proposed here is hierarchical planning system. First, goals must be specified. This will aid
planner in identifying set of required activities for goals to be met, project action plan. Each activity has
outcome (event) associated with it, and these activities and events can be decomposed into sub-activities
and sub-events, which may, in turn, be subdivided again. Project plan is set of these action plans.
Advantage of project pan is that it contains all planning information in one document.

Assume, for example, that we have project whose purpose is to acquire and install large machining
center in existing plant. In hierarchy of work to be accomplished for installation part of project, we
might find such tasks as “Develop plan for preparation of floor site” and “Develop plan to maintain
plant output during installation and test period”. These tasks are two of larger set of jobs to be done.
Task “ . . . preparation of floor site” is subdivided into its elemental parts, including such items as “get
specifics on machine center mounting points”. “Check construction specification on plant floor” and
“Present final plan for floor preparation for approval”.

Short digression is in order before continuing this discussion on action plans. Actual form action plan
takes is not sacrosanct. In some cases, for example, amounts of specific resources required may not be
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relevant. On others, “due dates” may be substituted for activity durations. Appearance of action plans
differs in different organizations, and may even differ between departments or division of same
organization (though standardization of format is usual, and probably desirable in any given firm). In
some plans, numbers are used to identify activities; in others, letters. In still others, combinations of
letters and numbers used.

Tree diagram can be used to represent hierarchical plan. Professor Andrew Vazsonyi has called this type
of diagram Gozinto Chart after famous Italian mathematician, Professor Zepartzat, Gozinto, of
Vazsonyi’s invention (Readers familiar with Bill of Materials in Materials Requirements Planning
(MRP) – system will recognize parallel to nested hierarchical planning).

Objective: Career Day

Steps Responsibility Time (Weeks) Prec. Resources

1. Contact Organizations

a. Print forms Secretary 6 -

b. Contact organizations Program Manager 15 1. A

c. Collect display information Office Manager 4 1. B

d. Gather college particulars Secretary 4 1. B

e. Print programs Secretary 6 1. D

f. Print participants’ certificates Graduate Assistant 8 -

Objective: Career Day

Steps Responsibility Time (Weeks) Prec. Resources

2. Banquet and
Refreshments

a. Select guest speaker Program Manager 14 -

b. Organize food Program Manager 3 1. b Caterer

c. Organize liquor Director 10 1. b Dept of Liquor

Control

d. Organize refreshment Graduate Assistant 7 1. b Purchasing

Objective: Career Day

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Steps Responsibility Time (Weeks) Prec. Resources

3. Publicity and Promotion

a. Send invitations Graduate Assistant 2 - World processing

b. Organize gift certificates Graduate Assistant 5.5 -

c. Arrange banners Graduate Assistant 5 1. d Print shop

d. Contact faculty Program Manager 1.5 1. d Word processing

e. Advertise in college paper Secretary 5 1. d Newspaper

f. Class announcements Graduate Assistant 1 3. d Registrar’s office

g. Organize posters Secretary 4.5 1. d Print shop

Objective: Career Day

Steps Responsibility Time (Weeks) Prec. Resources

4. Facilities

a. Arrange facility for event Program Manager 2.5 1. c

b. Transport materials Office Manager .5 4. a Movers

Table 18.1: Partial Action Plan for College “Career Day”

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Level 00089
0 Toy bus

Level 10003 10189 10002

1 Case Toy bus Packing

Level 20003 20289

2 Bus box Toy bus

30089 30077
Level Body Wheel/a
3

Level 400337 50317 40050 40039

4 Plastic Plastic Axle Wheel

Level 50317 50702

5 Plastic Plastic
Figure 18.1: Gozinto Chart for Toy Bus

Important of careful planning can scarcely be overemphasized. Slevin developed list of ten
factors that should be associated with success in implementation projects. Factors split into
strategic and tactical clusters. Of interest here are strategic factors:

• Project Mission:
It is important to spell out clearly defined and agreed-upon goals in beginning of project.

• Top Management Support:

It is necessary for top managers to get behind project at outset and make clear to all
personnel involved that they support successful completion.

• Project Schedule or Plan:

Detailed plan of required steps in implementation process needs to be developed, including
all resource requirements (money, raw materials, staff and so forth).

At this point, it might be helpful to sum up this section what description of how planning
process actually works in may organization. Assume that you as project manager have been
given responsibility for developing computer software required to transmit medical X-Ray
from one location to another over telephone line. There are several problems that must be
solved to accomplish this task. First X-Ray image must be translated into computer
language. Second, computerized image must be transmitted and received. Third, image
must be displayed (or printed) in way that makes it intelligible to person who must interpret
it. You have team of four programmers and couple of assistant programmers as signed to
you. You also have specialist in radiology assigned part-time as medical advisor.

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S# Steps Due Date Responsible Precedent

1.
Ajax management advised of changes 24/7 Bob, Van -
2.
Begin preparing Instat sales dept to sell Ajax 24/7 Bob 1
consumer Division products effective 1/1/96
3.
Prepare to create two sales groups: (1) Instat (2) 1/8 Bob 1
Ajax Builder Group effective 1/1/96
4.
Advise Instat regional managers of sales division 1/8 Bob 2,3
changes
5.
Advise Ajax regional managers of sales division 1/8 Van 2,3
changes
6.
Visit Ajax management and plan to discuss merger 1/8 Smith 4,5
of operations
7.
Advise Ajax sales personnel and agents 14/8 Smith 6
8.
Visit Instat to coordinate changeover 26/8 Bob 6
Gerard
9.
Interview Ajax sales personnel for possible 30/8 Instat Regional 7
positions Manager

Table 18.2: Tabular Action Plan for Ajax-Instat Merger

Your first action is to meet with programmers and medical advisor in order to arrive at technical
requirements for project. From these requirements, project mission statement and detailed
specifications will be derived. (Note that original statement of your “responsibility” is too vague
to act as acceptable mission statement). Team then develops basic actions needed to achieve
technical requirements for project. For example, one technical requirement would be to develop
method of measuring density of image at every point on X-Ray and to represent this
measurement as numerical input for computer. This is first level of project’s action plan.

Responsibility for accomplishing first level tasks is delegated to project team members who are
asked to develop their own action plans for each of first level tasks. These are second level
action plans. Individual tasks listed in second level plans are then divided further into their level
action plans detailing how each second level task will be accomplished. Process continues until
lowest level tasks are perceived as “units” or “packages” of work.

18.2 Objectives and Reasons of Project Planning:

One of the objectives of project planning is to completely define all work required (possibly
through the development of a documented project plan) so that it will be readily identifiable to
each project participant. This is a necessity in a project environment because:

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• If the task is well understood prior to being performed, much of the work can be
preplanned.
• If the task is not understood, then during the actual task execution more knowledge is
gained that, in turn, leads to changes in resource allocations, schedules, and priorities.
• The more uncertain the task, the greater the amount of information that must be processed
in order to ensure effective performance.

These considerations are important in a project environment because each project can be
different from the others, requiring a variety of different resources, but having to be performed
under time, cost, and performance constraints with little margin for error.

Without proper planning, programs and projects can start off "behind the eight ball" because of
poorly defined requirements during the initial planning phase.

There are four basic reasons for project planning:

• To eliminate or reduce uncertainty

• To improve efficiency of the operation
• To obtain a better understanding of the objectives
• To provide a basis for monitoring and controlling work

There are involuntary and voluntary reasons for planning. Involuntary reasons can be internally
mandatory functions of the organizational complexity and an organizational lag in response time; or
they can be externally correlated to environmental fluctuations, uncertainty, and discontinuity. The
voluntary reasons for planning are attempts to secure efficient and effective operations.

Planning is decision making based upon futurity. It is a continuous process of making

entrepreneurial decisions with an eye to the future, and methodically organizing the effort
needed to carry out these decisions. Furthermore, systematic planning allows an organization to
set goals. The alternative to systematic planning is decision making based on history. This
generally results in reactive management leading to crisis management, conflict management,
and fire fighting.

18.3 Policies, Procedures and Standards:

A policy is a deliberate plan of action to guide decisions and achieve rational outcome(s). The
term may apply to government, private sector organizations and groups, and individuals.
Presidential executive orders, corporate privacy policies, and parliamentary rules of order are all
examples of policy.

A procedure is a specification of series of actions, acts or operations, which have to be

executed in the same manner in order to always obtain the same result in the same
circumstances (for example, emergency procedures). Less precisely speaking, this word can
indicate a sequence of activities, tasks, steps, decisions, calculations and processes, that when
undertaken in the sequence laid down produces the described result, product or outcome. A
procedure usually induces a change.

Standards in the context related to technologies and industries, is the process of establishing a
technical specification, called a standard, among competing entities in a market, where this will
bring benefits without hurting competition. It can also be viewed as a mechanism for optimizing
economic use of scarce resources such as forests, which are threatened by paper manufacture.

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18.3.1 Categories of Planning:

Strategic Planning:

Strategic planning produces fundamental decisions and actions that shape and guide
what an organization is, what it does, and why it does it. It requires broad scale
information gathering, an exploration of alternatives, and an emphasis on the future
implications of present decisions. Top-level managers engage chiefly in strategic
planning or long range planning. They answer such questions as "What is the purpose
of this organization?" "What does this organization have to do in the future to remain
competitive?" Top-level managers clarify the mission of the organization and set its
goals. The output needed by top management for long range planning is summary
reports about finances, operations, and the external environment.

Tactical Plans:

Top-level managers set very general, long-term goals that require more than one year to
achieve. Examples of long-term goals include long-term growth, improved customer
service, and increased profitability. Middle managers interpret these goals and develop
tactical plans for their departments that can be accomplished within one year or less. In
order to develop tactical plans, middle management needs detail reports (financial,
operational, market, external environment). Tactical plans have shorter time frames and
narrower scopes than strategic plans. Tactical planning provides the specific ideas for
implementing the strategic plan. It is the process of making detailed decisions about
what to do, who will do it, and how to do it.

Operational Plans:

Supervisors implement operational plans that are short term and deal with the day-to-
day work of their team. Short-term goals are aligned with the long-term goals and can
be achieved within one year. Supervisors set standards, form schedules, secure
resources, and report progress. They need very detailed reports about operations,
personnel, materials, and equipment. The supervisor interprets higher management
plans as they apply to his or her unit. Thus, operational plans support tactical plans.
They are the supervisor's tools for executing daily, weekly, and monthly activities. An
example is a budget, which is a plan that shows how money will be spent over a certain
period of time. Other examples of planning by supervisors include scheduling the work
of employees and identifying needs for staff and resources to meet future changes.
Resources include employees, information, capital, facilities, machinery, equipment,
supplies, and finances. Operational plans include policies, procedures, methods, and
rules.

Policies, procedures, and standards vary from project to project due to the uniqueness
of every project. Every Project Manager can establish project policies, within broad
limits set by the top management.

Although project managers have the authority and responsibility to establish project
policies and procedures, they must fall within the general guidelines established by top
management. Guidelines can also be established for planning, scheduling, controlling,
and communications.

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LESSON 19

PROJECT PLANNING (CONTD.)

Broad Contents

Identifying Strategic Project Variables

19.1 Identifying Strategic Project Variables:

The project manager must continually monitor the external environment in order to develop a
well-structured program that can stand up under pressure (for long-range or strategic projects).
These environmental factors play an integral part in planning. The project manager must be able
to identify and evaluate these strategic variables in terms of the future posture of the
organization with regard to constraints on existing resources.

As we know that in the project environment, strategic project planning is performed at the
horizontal hierarchy level, with final approval by upper-level management. There are three
basic guidelines for strategic project planning:

• It is extremely important that upper-level management maintain a close involvement with

project teams, especially during the planning phase.
• Successful strategic planning must define the authority, responsibility, and roles of the
strategic planning personnel.
• Strategic project planning is a job that should be performed by managers, not for them.

In order to ensure the success of the project, all members of the horizontal team must be aware
of those strategic variables that can influence the success or failure of the project plan. The
analysis begins with the environment, subdivided as internal, external, and competitive, as
shown below:

• Internal Environment
• Management skills
• Resources
• Wage and salary levels
• Government freeze on jobs
• Minority groups
• Layoffs
• Sales forecasts

• External Environment
• Legal
• Political
• Social
• Economic
• Technological

• Competitive Environment
• Industry characteristics
• Company requirements and goals
• Competitive history
• Present competitive activity
• Competitive planning
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— Return on investment
— Market share
— Size and variety of product lines

• Competitive Resources

It is important to note here that once the environmental variables are defined, the planning
process continues with the following:

• Identification of company strengths and weaknesses

• Understanding personal values of top management
• Identification of opportunities
• Definition of product market
• Identification of competitive edge
• Establishment of goals, objectives, and standards
• Identification of resource deployment

At the program level, complete identification of all strategic variables is not easily obtainable.

However, internal, or operating, variables are readily available to program personnel by virtue
of the structure of the organization. The external variables are normally tracked under the
perceptive eyes of top management. This presents a challenge for the organization of the
system. In most cases, those in the horizontal hierarchy of a program are more interested in the
current operational plan than in external factors and tend to become isolated from the
environment after the program begins, losing insight into factors influencing the rapidly
changing external variables in the process. Proper identification of these strategic variables
requires that communication channels be established between top management and the project
office.

It is essential that the top-management support must be available for identification of strategic
planning variables so that effective decision making can occur at the program level. The
participation of top management in this regard has not been easy to implement. Many top-level
officers consider this process a relinquishment of some of their powers and choose to retain
strategic variable identification for the top levels of management.

It is important to note here that the systems approach to management does not attempt to
decrease top management's role in strategic decision-making. The maturity, intellect, and
wisdom of top management cannot be replaced. Ultimately, decision-making will always rest at
the upper levels of management, regardless of the organizational structure.

Therefore, identification and classification of the strategic variables are necessary to establish
relative emphasis, priorities, and selectivity among the alternatives, to anticipate the
unexpected, and to determine the restraints and limitations of the program. Universal
classification systems are nonexistent because of the varied nature of organizations and projects.
However, variables can be roughly categorized as internal and external, as shown in Table 19.1
below.

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Table 19.1: Strategic Planning Variables in the Tire Industry

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LESSON 20

PROJECT PLANNING (CONTD.)

Broad Contents

Life Cycle Phases

Responsibilities of Key Players
Problems in Objective Setting

20.1 Life-Cycle Phases:

To describe it further, project planning takes place at two levels. The first level is the corporate
cultural approach; the second method is the individual's approach. The corporate cultural
approach breaks the project down into life-cycle phases, such as those shown in Table 20.1. The
life-cycle phase approach is not an attempt to put handcuffs on the project manager but to
provide a methodology for uniformity in project planning. Many companies, including
government agencies, prepare checklists of activities that should be considered in each phase.
These checklists are for consistency in planning. The project manager can still exercise his own
planning initiatives within each phase.

Table 20.1: Life-Cycle Phase Definitions

In addition to this, the second benefit of life-cycle phases is control. At the end of each phase
there is a meeting between the project manager, sponsor, senior management, and even the
customer, to assess the accomplishments of this life-cycle phase and to get approval for the next
phase. These meetings are often called critical design reviews, "on-off ramps," and "gates." In
some companies, these meetings are used to firm up budgets and schedules for the follow-on
phases. In addition to monetary considerations, life-cycle phases can be used for manpower
deployment and equipment/facility utilization. Some companies go so far as to prepare project
management policy and procedure manuals where all information is subdivided according to
life-cycle phasing. Life-cycle phase decision points eliminate the problem where project
managers do not ask for phase funding, but rather ask for funds for the whole project before the
true scope of the project is known. Several companies have even gone so far as to identify the
types of decisions that can be made at each end-of-phase review meeting. They include:

• Proceed with the next phase based on an approved funding level

• Proceed to the next phase but with a new or modified set of objectives
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• Postpone approval to proceed based on a need for additional information
• Terminate project

For instance, consider a company that utilizes the following life-cycle phases:

• Conceptualization
• Feasibility
• Preliminary planning
• Detail planning
• Execution
• Testing and commissioning

As the name suggests, the conceptualization phase includes brainstorming and common sense
and involves two critical factors:
1. Identify and define the problem, and
2. Identify and define potential solutions

All ideas are recorded and none are discarded in a brainstorming session. The brainstorming
session works best if there is no formal authority present and if the time duration is no more
than thirty to sixty minutes. Sessions over sixty minutes in length will produce ideas that may
begin to resemble science fiction.
The second phase, that is the feasibility study phase, considers the technical aspects of the
conceptual alternatives and provides a firmer basis on which to decide whether to undertake the
project.

Note that the purpose of the feasibility phase is to:

• Plan the project development and implementation activities.

• Estimate the probable elapsed time, staffing, and equipment requirements.
• Identify the probable costs and consequences of investing in the new project.

If practical, the feasibility study results should evaluate the alternative conceptual solutions
along with associated benefits and costs. The objective of this step is to provide management
with the predictable results of implementing a specific project and to provide generalized
project requirements. This, in the form of a feasibility study report, is used as the basis on which
to decide whether to proceed with the costly requirements, development, and implementation
phases.

Moving ahead with the life-cycle, the third life-cycle phase is either preliminary planning or
''defining the requirements." This is the phase where the effort is officially defined as a project.
In this phase, we should consider the following:

• General scope of the work

• Objectives and related background
• Contractor's tasks
• Contractor end-item performance requirements
• Reference to related studies, documentation, and specifications
• Data items (documentation)
• Support equipment for contract end-item
• Customer-furnished property, facilities, equipment, and services
• Customer-furnished documentation
• Schedule of performance
• Exhibits, attachments, and appendices

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20.2 Responsibilities of Key Players:

We know that planning simply does not happen by itself. Companies that have histories of
successful plans also have employees who fully understand their roles in the planning process. Good
up-front planning may not eliminate the need for changes, but may reduce the number of changes
required. The responsibilities of the major players are as follows:

1. Project manager will define:

• Goals and objectives
• Major milestones
• Requirements
• Ground rules and assumptions
• Time, cost, and performance constraints
• Operating procedures
• Administrative policy
• Reporting requirements

2. Line manager will define:

• Detailed task descriptions to implement objectives, requirements, and milestones

• Detailed schedules and manpower allocations to support budget and schedule
• Identification of areas of risk, uncertainty, and conflict

3. Senior management (project sponsor) will:

• Act as the negotiator for disagreements between project and line management
• Provide clarification of critical issues
• Provide communication link with customer's senior management

Remember that successful planning requires that project, line, and senior management are in
agreement with the plan.

20.3 Problems in Objective Setting:

It is not possible to satisfy all objectives every time. At this point, management must prioritize
the objectives as to which are strategic and which are not. Typical problems with developing
objectives include:

• Project objectives/goals are not agreeable to all parties.

• Project objectives are too rigid to accommodate changing
• Insufficient time exists to define objectives well.
• Objectives are not adequately quantified.
• Objectives are not documented well enough.
• Efforts of client and project personnel are not coordinated.
• Personnel turnover is high.

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