Unit -4

Resource Allocation, Monitoring and Control,

Managing Contracts,
Software Quality
What is Resource Allocation?
• Up till now, the activities have been
identified using various techniques.
1. Using activity network analysis , we were
able to identify when the activities should
take place : Activity span (LF - ES)
2. Using PERT technique , we were able to
forecast a range of expected dates by which
activities would be completed.
 In both cases ,the availability of resources
was not taken into consideration.
 When we allocate resources to identified
activities. This process is considered
resource allocation.
What is Resource Allocation?
• The allocation of recourse of activities will lead
to :
▫ The review and
▫ Modification of the ideal activity plan.
• Resource allocation may lead to:
▫ Revising a stage
▫ Revising project completion dates
▫ Narrowing activity time span.
Resource Allocation Schedules
• Activity schedule –
▫ indicating start and completion dates for each
activity.
• Resource schedule –
• indicating dates when resources needed + level of
resources
• Cost schedule
• showing accumulative expenditure
• These schedules will be used on daily basis for the control
and management of the project.
Nature of Resources
• Resources can be:
▫ Item required for the execution of the project
▫ Person required for the execution of the project
• Some resources required for specific period an
some required for the whole duration of the
project.
Which type of resources need to be
concern of the project management?
• Stationary and other office supplies office
Manager should be concerned.

• System analyst , software developers , project

manager should be concerned.
Resources will fall into one of seven
following categories :
• Labour (project manager , system analyst ,software developers etc.)
• Equipment : used items (workstation , chair, desk ,printer etc)
• Materials : (floppy disk ,paper ,printer ink etc .)
• Space : for additional staff recruited(Rooms , work area etc.)
• Services : (Telecommunication, cleaning etc.)
• Time :
▫ Elapsed time can often be reduced by adding more staff
▫ Extended if other resources are reduce.
▫ Reduced if other resources are increased.
• Money :
▫ Used to buy the other resources.
▫ Is consumed while other resources are being used.
 Cost scheduling
• A detailed cost schedule will be created :
▫ Showing weekly or monthly costs over the life of
the project.
• Broad categories
▫ Staff costs
▫ Overheads(office space , interest charges, travel cost , insurance etc.)
▫ Usage charges (for external resources or contractor)
Analyst Daily cost Days required Cost
A 300 110
B 250 50
C 175 25
D 225 27
E 150 30
F 150 28
G 150 15
H 150 25
I 200 100
Total ?
 Monitoring and control
• What is monitoring ?
▫ Monitoring is the regular observation and
recording of activities taking place in a project or
program. It is a process of routinely gathering
information on all aspects of the project.
• What is control?
▫ Control is a function of management which helps
to check errors in order to take corrective actions.
This is done to minimize deviation from standards
and ensure that the stated goals of the
organization are achieved in a desire manner.
Project monitoring and control
• Monitoring and controlling are processes needed
to track, review and regulate the progress and
performance of the project. It is also identifies
any areas where changes to the project
management method are required and initiates
the required changes.
• The monitoring & controlling process group
includes eleven processes, which are :
 Visualizing Progress:
• Manager needs to present data to greatest effect.
• Some methods are used to presenting a picture
of the project and its future.
• Methods like :
▫ Gantt chart
▫ Slip chart
▫ Timeline
Gantt chart
• It is a simplest and
oldest technique for
Tracking project
Progress is the gantt
Chart.
Slip chart
• It is a very similar alternative favoured
by some project managers
who believe it provides a
more striking visual
indication of those
activities that are not
progressing to schedule.
Disadvantages of Gantt chart and Slip
chart
• They do not
▫ show slippage
▫ the project completion date
▫ Predict future progress
Timeline
• The time line chart is
a method of recording
And displaying the way
In which targets have
throughout the duration
Of the project.
• It is useful during
Execution of a project
And as part of post-
Implementation review.
Earned Value Analysis
• Planned value (PV) or Budgeted cost of work
scheduled (BCWS) – original estimate of the
effort/cost to complete a task (compare with idea of
a ‘price’)
• Earned value (EV) or Budgeted cost of work
performed (BCWP) – total of PVs for the work
completed at this time
Consistent method of assigning and EV
• The 0/100 technique: task assigned a value 0 until it
is completed when it is given a value 100
• The 50/50 technique : 50/50 half allocated at start,
the other half on completion.
• The 75/25 Technique : task is assigned 75% on
starting and 25% on completion.
• The milestone technique: Milestone current value
depends on the milestones achieved
• Percentage completed : Units processed/ percentage
completion
Baseline budget
• Baseline budget is based on the project plan and
shows the forecast growth in EV thorough time.

• EV may be measure in monetary values but, in

the case of staff intensive projects like software
development , it is common to measure EV in
person-hour or workdays.
Monitoring Earned value:
• This is done by monitoring
the completion task as well as
recording EV.

• The actual cost of each task

can be collected as actual cost.
This is known as the actual cost
Of work performance(ACWP).
Schedule Variance (SV)
• It is measured in terms as SV = EV – PV.
• Indicates the degree of which the completed work
differs from the planned work
• Example: Work with a PV of Rs. 40,000/- should have
been completed by now. Some of the work has not
been done so the earned value is Rs. 35,000/-.
• SV is -5000.
• SV negative means project is behind the schedule.
Time variance (TV)
• It is difference between the time when the
achievement of the current EV was planned to
occur and the time now.
• For example say an EV of £19000 was supposed to
have been reached on 1st April and it was reached on
1st July then TV = - 3 months
Cost Variance (CV)
• Cost Variance (CV) = Earned Value (EV) – Actual Cost
(AC)
• SV was calculated as -5,000/- and EV was 35,000/-
• Rs. 55,000/- had been spent to get the Earned value
(EV)
• CV = -20,000
• A –ve CV means project is over cost.
Performance Ratios
• Two Ratios are commonly tracked
• The cost performance index (CPI = EV/AC)
• The schedule performance index (SPI = EV/PV)
• EV = 35,000/-, AC = 55,000/-, PV = 40,000/-
• CPI = 0.64
• SPI = 0.88
• CPI > 1 means work is completed better then
planned
• CPI < 1 means work is costing more than and/or
proceeding more slowly than planned.
Performance Ratios
• CPI can be used to produce a revised cost estimate for
the project (or estimate at completion (EAC).
• EAC is calculated as BAC/ CPI where BAC (budget at
completion) is current projected budget for the
project.
• If the BAC was Rs. 1,00,000/- and CPI is 0.64
• Then a revised estimate at completion (EAC) would be
Rs. 1,00,000/0.64 = 156,250/-
Cumulative Cost:
• The planned value (PV), earned value (EV) and actual cost
(AC) can be tracked over the lifetime
of a project.
• It also shows how the graph
can be used to show adjustments
to the final estimated cost and
duration.
• Similarly a forecast of the actual
duration of the project can be
derived by dividing.
• The original estimated duration
by the SPI.
PBL
• Suppose for a certain project budgeted for Rs. 2,000/-
, at certain time during the execution of the project,
the project manager determined EV = Rs. 500/- and AC
= Rs. 400/-. What is the current estimated cost of the
project?

• BCA = 2000 , EV = 500 , AC = 400,

• CPI = EV/AC = 500/400 = 1.25

• EAC = BAC/CPI = 2000/1.25 = 1600

PBL
• Suppose a project is budgeted to cost Rs. 1,50,000/-.
The project is to be completed in 18 months. After two
months, the project is 10% complete at an expense of
Rs.
• 25,000/-. It was planned that after two months,
15% of the project work should have been
completed. Compute the cost performance index
and the schedule performance index. Interpret these
values to access the progress of the project.
 Managing contracts
• Acquiring software from external supplier
▫ a bespoke system - created specially for the customer
 Like college ERP system
▫ off-the-shelf - bought ‘as is’
 Like : msoffice
▫ customised off-the-shelf (COTS) - a core system is
customised to meet needs of a particular customer
 Like : Google meet
 Types of contract
1. fixed price contracts
2. time and materials contracts
3. fixed price per delivered unit
 Note difference between goods and services Often
licence to use software is bought rather than the software
itself
 fixed price contracts
• In this contract, a price is fixed when the contract is
signed.
• The customer knows that if there are no changes in the
contract terms, this is the price they pay on completion.
• Therefore, customer’s requirement has to be fixed
at the outset.
• Customer can not change their requirements
without renegotiating the price of the contract.
Advantages and disadvantages to customer
of Fixed price contract
• known expenditure
• supplier motivated to be cost-effective

Disadvantages :

• supplier will increase price to meet

contingencies
• difficult to modify requirements
• Cost of changes likely to be higher
• threat to system quality
 Time and materials
• In this type of contract, the customer is charged
at a fixed rate per unit of effort.
▫ Example: Staff hour rate

• The supplier may provide an initial estimate of the

cost on their current understanding of the customers
requirements.
Time and materials Advantages and
Disadvantages
• easy to change requirements
• lack of price pressure can assist product quality

Disadvantages :
• Customer liability - the customer absorbs all the risk
associated with poorly defined or changing
requirements
• Lack of incentive for supplier to be cost-effective
 Fixed price/unit

▫ This is often associated with function point (FP)

counting.
▫ The size of the system to be delivered is
calculated or estimated at the outset of the
project.
▫ The size could be estimated in lines of code, but
FPs can be more easily derived from requirements
documents.
Fixed price/unit Advantages and
disadvantages
• customer understanding of how price is calculated
• comparability between different pricing schedules
• emerging functionality can be accounted for
• supplier incentive to be cost-effective
• Disadvantages :
• difficulties with software size measurement - may
need independent FP counter
• changing (as opposed to new) requirements: how do
you charge?
 Fixed price per unit delivered
FP count Design implement- total
cost/FP ation cost/FP cost/FP
to 2,000 $242 $725 $967
2,001- $255 $764 $1,019
2,500
2,501- $265 $793 $1,058
3,000
3,001- $274 $820 $1,094
3,500
3,501- $284 $850 $1,134
4,000
Contract Management – Tendering Process
1. Open tendering
2.Restricted tendering process
3.Negotiated procedure
 The tendering process
• Open tendering
• any supplier can bid in response to the invitation to tender
• all tenders must be evaluated in the same way
• government bodies may have to do this by
local/international law (including
• EU and WTO, World Trade Organization, requirements
• Restricted tendering process
▫ bids only from those specifically invited
▫ can reduce suppliers being considered at any
stage
 The tendering process
• Negotiated procedure
▫ negotiate with one supplier e.g. for extensions to
software already supplied
 Types of Contract – Other
• The external resources required could be carrying out some
project tasks. for example: staff on short-term contracts details
needed for the new payroll system.
• Meet the needs of the client. Where equipment is purchased, in
English law, this is normally a contract for the supply of goods.
• Supply of software this may be regarded as supplying a service
(i.e. to write the software) or the licence (i.e. permission) to
use the software which remains in the ownership of the
supplier. These distinctions will have legal implications.
• Another way of classifying contracts is by the way that the
payment to suppliers is calculated.
• We have learned assessing supplier e fixed price contracts.
Stages in contract placement
• Requirements analysis
• Evaluation plan
• Invitation to tender
• Evaluation of proposals
 Requirements document: sections

• Requirements analysis :
• Introduction
• Description of existing system and current environment
• Future strategy or plans
• System requirements –
• mandatory/desirable features
• Deadlines
• Additional information required from bidders
 Stages in contract placement
• evaluation plan :
• How are proposals to be evaluated?
• Methods could include:
• reading proposals
• interviews
• demonstrations
• site visits
• practical tests
• Need to assess value for money (VFM) for each desirable feature
• VFM approach an improvement on previous emphasis on accepting lowest
bid
• Example: feeder file saves data input 4 hours work a month saved at £20 an hour
system to be used for 4 years if cost of feature £1000, would it be worth

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Invitation to tender (ITT)
• Note that bidder is making an offer in response to
ITT
• acceptance of offer creates a contract
• Customer may need further information
• Problem of different technical solutions to the same
problem
Memoranda of agreement (MoA)
• Customer asks for technical proposals
•Agreed technical solution in MoA
•Tenders judged on price
• Technical proposals are examined and
discussed
• Tenders are then requested from suppliers based
in MoA
• Fee could be paid for technical proposals by
customer
Evaluation of Proposal
• The process of evaluation may include:
• Scrutiny of the proposal documents
• Interviewing suppliers’ representatives
• Demonstrations
• Site visits
• Practical tests
The importance of software quality
• Increasing criticality of software
• The intangibility of software
• Project control concerns:
▫ errors accumulate with each stage
▫ errors become more expensive to remove the later they are found
▫ it is difficult to control the error removal process (e.g. testing)
Quality specifications
• Where there is a specific need for a quality, produce a
quality specification
• Definition/description of the quality
• Scale : the unit of measurement
• Test: practical test of extent of quality
• Minimally acceptable: lowest acceptable value, if
compensated for by higher
• quality level elsewhere
• Target range: desirable value
• Now: value that currently applies