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MODULE

Project Planning

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All rights Reserved

MODULE 3

Project Planning

Risk Management Plan

Project Management Plan

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Cost Management Plan

Project Charter

Requirements
Management Plan

A description of the PM approach or strategy


Work Breakdown Structure (WBS)
Cost estimates, Schedule, Responsibility

Schedule Management
Plan

Assignments (each task if necessary)

Scope Management Plan

Performance measurement baseline (scope,


schedule, cost)
Major milestone

Staffing Management
Plan

Key staff

Quality Management
Plan

Change
Procurement
Risk Response Plan Management Plan Management Plan

Configuration
Management
Plan
Communication
Management Plan

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Project Planning

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Project Scope & Product Scope


Remember that project scope product scope
Project scope
Work performed to deliver the product, service, or result
with the specified features and/or functions
May include product scope
Measured against Project Management Plan

Product scope
Features and functions characterizing the product, service,
or result
Measured against product requirements

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Project Planning

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Planning Scope Management


Scope Management Plan
includes processes for:
Preparing a detailed project scope
statement
Enabling the creation of WBS from
the detailed project scope
statement
Establishing how the WBS will be
maintained and approved
Specifying how formal acceptance
of the completed project
deliverables will be obtained
Controlling how requests for
changes to detailed project scope
statement will be processed

Requirements Management Plan


Component of the project
management plan that describes
how requirements will be analyzed,
documented, and managed
How requirements activities will be
planned, tracked, reported
Configuration management
activities
Requirements prioritisation process
Product metrics that will be used
and the rationale for using them
Traceability structure to reflect
which requirement attributes will
be captured on the traceability
matrix

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Project Planning

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Scope Definition
Results in Scope Statement, which contains
many details concerning project and product
deliverables, as one of many basis used to
keep the project on track
Dont forget to Identify the service coverage
for:
Preparation & Resource Mobilization
Technical Solution & Infrastructure
Management of Change
Communication & Socialization
Start-up System and Commissioning
Project Hand-over

Product scope description

Description
What should be done?
Key Deliverable of the project.

Project assumptions

Function: as a Documented basis in making


project decisions

Scope Statement

Acceptance criteria
Project deliverables
Project exclusions
Project constraints

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Project Planning

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Work Breakdown Structure (WBS)


Creating WBS involves subdividing project
deliverables and project work into smaller,
more manageable components. WBS provides a
structured vision of what has to be delivered
deliverable-oriented hierarchical
decomposition of the total scope of work to be
carried out by project team to accomplish
project objectives and create required
deliverables
Work not included in WBS is not within project
scope

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Project Planning

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Scope Baseline
The approved version of scope statement, WBS, and its
associated WBS dictionary, that can be changed only through
formal change control procedures and is used as a basis for
comparison original plan + approved changes
Project Scope Statement
WBS
WBS dictionary (document
providing detailed
deliverable, activity, &
scheduling information
about each WBS
component)

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Project Planning

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Work Breakdown Structure (WBS)


Decomposition

Division & subdivision of project scope & project deliverables into


smaller, more manageable components until the work and
deliverables are defined to the work package level

WBS Level 1
WBS Level 2
WBS Level 3

WBS Level 2

WBS Level 3
Work Package
Work Package
Work Package

WBS Level 2
Work Package is the lowest level
in the WBS, and is the point at
which the cost and schedule for
the work can be reliably estimated.

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Project Planning

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Planning Project Schedule


Define tasks and activities to be
carried out by each phase
Define the milestones &
deliverables; sequencing the
activities and tasks
Estimate duration of activities,
tasks and phases
Refine the plan
Create schedule
Refine/Tune Schedule

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Project Planning

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Defining activities: identifying and


documenting specific actions to be
performed to produce project
deliverables
Scope definition vs. Activity definition
Activity definition: decomposition
up to activity level
Scope definition: decomposition up
to deliverables level
Rolling Wave Planning:
iterative planning technique in which
the work to be accomplished in the
near term is planned in detail, while
future work is planned at a higher level
of the WBS
As more is known about the
upcoming events, work packages can
be decomposed into more detailed
activities

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Project Planning

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Activity sequencing
Activity sequencing: Identifying and documenting relationships
among the project activities
May use diagrams, such as PDM and ADM
PDM

ADM

Mostly represented by
Activity-on-Node (AoN)

Represented by Activity-on-Arrow (AoA)

4 relationships:
Finish to start
Start to finish
Start to start
Finish to finish

1 relationship:
Finish to start

Does not use dummy

May use dummy activity (does not require


work or time) to show task dependencies

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Project Planning

Network Diagram
ES

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Precedence Diagramming Method (PDM)

EF

ES

EF

Activity Name 1

Activity Name 2

Duration (D)

Duration (D)

LS
Example
121

LF

LS

LF

ES : Earliest Start
EF : Earliest Finish

LS : Latest Start
LF : Latest Finish

A120

Draft Drawing
20 days

A140

Final Design
10 days

Initial Design
10 days

A130

Run Simulation
15 days

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Project Planning

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Precedence Diagramming Method


(PDM)

Sequence Activities

12 activities, 23 logic diagrams

Begin

End

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Project Planning

Network Diagram

Activity

Node
1

Arrow Diagramming Method (ADM)

Node
2

Duration

Draft drawing

Example
A
10

Initial design
10 days

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20 days

Node
1

A
50

15 days

No duration

Node
2

A
30

A
20
Simulation

Dummy

A
40

Final design
10 days

A
60

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Project Planning

Network Diagram

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Precedence Relationship Types

Finish to Start

Activity A

Start to Start

Activity A

Finish to Finish

Start to Finish

FS

SS

Activity B

Activity B

FF

Activity A
Activity B

Activity A

SF

Activity B

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Project Planning

Network Diagram

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Leads and Lags

Leads

FS 5 days

Lags

A
B
FS + 5 days

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Project Planning

Sequence Activities

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Precedence Calculation

Forward Calculation

Backward Calculation

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Project Planning

Sequence Activities

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Critical Path Identification and Float

Activity
No.

Duration
(Day)

Start (ES)

Finish (EF)

Start (LS)

Finish (LF)

Total
FLOAT
(TF)

A10

A20

A30

A40

A50

A60

13

13

Early

Late

Total FLOAT (TF) = (LS) - (ES) = (LF) - (EF)


Total FLOAT = 0

(Critical Path)

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Project Planning

Sequence Activities

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Dependency Determination

Mandatory Dependency (Hard Logic)


Discretionary Dependency (Soft Logic)
External Dependency

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Duration
Estimation
Techniques

Project Planning

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Activity duration estimation: estimating the


number of work periods needed to complete
individual schedule activities with estimated
resources
Expert Judgment
Analogous Estimating
Parametric Estimating
Reserve Analysis
Group Decision-Making Techniques
Three-Point Estimating

MODULE 3

Project Planning

Develop Schedule
Schedule baseline
The approved time phased plan
(for a project, a work breakdown
structure component, a work
package, or a schedule activity)
Define task list from each work
package
Estimate the duration for each
defined task
Do Network Planning to show
interdependency among tasks
Create project schedule baseline and
milestones

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Project Planning

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Tuning Schedule
Fast Tracking

Schedule
Compression

Compressing Project Schedule (phases normally done


in sequence performed in parallel , at least
partially)
Higher probability of rework
Usually increases risk

Crashing

Usually increases cost


Taking action to decrease project duration
Increase productivity
Move resources from non-critical tasks or adding resources
Work overtime
Reduce the scope of work (if possible)
Subcontracting part of the work

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Project Planning

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Workgroup Session:
Project scheduling

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Project Planning

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Cost Estimation
Developing an approximation of the cost
of resources needed to complete project
activities
Identifying and considering various
costing alternatives
Also considering cost tradeoffs & risks,
such as:
o Make or buy
o Buy or lease
o Resource sharing to achieve optimal
costs for project
Cost Risk: who has the cost risk in a type
of contract (buyer or seller) described in
risk management
Cost Estimating is different with Pricing
(when project is performed under contract)

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Project Planning

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Project Cost
Direct Cost
Direct Material
Direct Labor Cost

Indirect Cost
Supervisory Cost
Construction Equipment/Tools

Overhead Cost
Fringe benefits
Office and its facilities

Variable Cost
Cost that changes with the amount of work
Cost of material, supplies, wages

Fixed Cost
Cost that does not change as production changes

Sunk Cost
Cost that has been invested into or expended upon
the project

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Project Planning

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Cost Estimating Techniques


Analogous estimating
Using the actual cost of previous, similar
projects as the cost estimation basis.
Parametric estimating
Using a statistical relationship between
historical data and other variables (e.g. square
footage in construction, lines of code in software
development, required labor hours)
Bottom-up estimating
Estimating the cost of individual work packages
then summarized or rolled up to higher levels
Three-point estimating
Considering estimation uncertainty & risk,
using three estimates to define approximate
activity cost range

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Project Planning

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Cost Budgeting
Allocating overall cost estimates to individual
activities or work packages to establish cost
baseline for measuring project performance
Some questions to ask:
Is it expensive ?
Is it a high volume item ?
Is it complex or difficult to construct?
Is there duplication ?
Is there spare capacity ?
Does it require special skills ?
High maintenance & operation costs?
Does it use obsolete materials ?
Is the design rushed ?
Project budget includes all funds authorized to
execute the project
Cost baseline == approved time-phased project
budget, excluding management reserves

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Project Planning

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Cash Flow, Cost Baseline and Funding Display

Cumulative Costs

Funding requirements

Cost
baseline
Expenditures

The difference between the


maximum funding and the end of
the cost baseline is Management
Reserve

Time

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Project Planning

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Workgroup Session:
Develop Project Schedule & Cost Estimation

MODULE 3

Project Planning

Project Quality
Management

Quality
Management
Concerns

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Quality Management Plan


Quality Assurance
Quality Control

Customer satisfaction
Prevention over Inspection
Continuous improvement
Management responsibility
Cost of Quality (CoQ)

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Project Planning

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Quality Grade
The degree to which a set of inherent
characteristic fulfill requirements
(ISO 9000)
Delivered performance/result

Category assigned to deliverables


having the same functional use but
different technical characteristics
Design intent

LOW QUALITY is a problem LOW GRADE is not necessarily problem

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Project Planning

Describing how the organisations


quality policies will be implemented,
and how project management team
plans to meet the quality requirements
set for the project
Project quality system: organizational
structure, responsibilities, procedures,
process, and resources needed to
implement quality management
Quality management plan must
address QC, QA, and quality
improvement for the project
May contain:
Deliverables & milestones
Quality requirements
Standards for monitoring &
controlling
Process review
Major check points
Inspections & acceptance criteria

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Quality
Management Plan

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Project Planning

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CoQ refers to total cost of conformance work and nonconformance


work that should be done as a compensatory effort
May be incurred throughout the deliverables life-cycle

Post-project CoQ may be incurred because of

Product return
Warranty claim
Product recall
Errata

Cost of conformance
Money spent during project to avoid
failures

Cost of nonconformance
Money spent during & after project
because of failures

Prevention costs (build a quality product) Internal failure costs (found by project)
training, document processes,
rework, scrap, repair
equipment, time to do it right
External failure costs (failures found by
Appraisal costs (assess the quality)
customer)
testing, destructive testing loss,
liabilities, warranty work, business loss,
inspections, quality audits
legal issues

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Project Planning

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Project Human Resource Management


the processes that organize and manage the project team.
Project Team:
is comprised of the people who have
assigned roles and responsibilities for
completing the project.

Project Management Team


is a subset of the project team and is
responsible for project management activities
such as planning, controlling, and closing.

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Project Planning

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Form of Project Organization


Organization chart & position
description forms:
Hierarchical type charts
Graphical, top-down format
Matrix-based charts
e.g.: Responsibility Assignment
Matrix
Text-oriented formats
e.g.: Position description document,
role-responsibility-authority form

Project Organization Charts:


Functional Organization
Projectized Organization
Weak Matrix Organization
Balanced Matrix Organization
Strong Matrix Organization
Composite Matrix
Organization

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Project Planning

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Functional Organization
Project Coordination
FUNCTIONAL
MANAGER

Chief Executive
FUNCTIONAL
MANAGER

FUNCTIONAL
MANAGER

FUNCTIONAL
MANAGER

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff engaged in project activities


on part time basis under coordination
of each functional manager

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Project Planning

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Projectized Organization
Chief Executive
PROJECT
MANAGER

PROJECT
MANAGER

PROJECT
MANAGER

PROJECT
MANAGER

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Project Coordination

Staff

Staff engaged in project activities


On full time basis under full
direction of project mgr.

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Project Planning

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Weak Matrix Organization


Chief Executive
FUNCTIONAL
MANAGER

FUNCTIONAL
MANAGER

FUNCTIONAL
MANAGER

FUNCTIONAL
MANAGER

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff engaged in project activities


On part time under stronger influence by
Functional manager

Project Coordination

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Project Planning

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Balanced Matrix Organization


Chief Executive
FUNCTIONAL
MANAGER

FUNCTIONAL
MANAGER

FUNCTIONAL
MANAGER

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Project Manager

Staff

FUNCTIONAL
MANAGER

Staff engaged in project activities sharing


time and effort on equal basis

Project Coordination

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Project Planning

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Strong Matrix Organization


Chief Executive
Manager of Project
Managers

FUNCTIONAL
MANAGER

FUNCTIONAL
MANAGER

FUNCTIONAL
MANAGER

Project Manager

Staff

Staff

Staff

Project Manager

Staff

Staff

Staff

Project Manager

Staff

Staff

Staff

Staff

Staff engaged in project activities


With 60-90% time effort under coordination
Of designated project manager

Project Coordination

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Project Planning

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Composite Matrix Organization


Chief Executive
Manager Of Project
Managers

FUNCTIONAL
MANAGER

FUNCTIONAL
MANAGER

FUNCTIONAL
MANAGER

Project Manager

Staff

Staff

Staff

Project Manager

Staff

Staff

Staff

Project Manager

Staff

Staff

Staff

Project A
Coordination

Staff

Staff engaged in project activities


with help of additional staff assigned
& control by functional mgr.

Project B
Coordination

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Project Planning

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Responsibility Assignment Matrix

Responsible

Accountable

Inform

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Project Planning

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Key Factors of Determining Project Organization Form


Functional

Weak Matrix

Composite
Matrix

PROJECT

Uncertainty

LOW

MODERATE

HIGH

HIGH

Technology

STANDARD

STANDARD

COMPLEX

NEW

Complexity

LOW

LOW

MEDIUM

HIGH

Duration

SHORT

MEDIUM

MEDIUM

LONG

Size

SMALL

SMALL

MEDIUM

LARGE

LOW

MODERATE

MODERATE

HIGH

DIVERSE

DIVERSE

3 OR 4

ONE

Interdependency (Within)

LOW

MEDIUM

MEDIUM

HIGH

Interdependency (Between)

HIGH

MEDIUM

MEDIUM

LOW

Time Criticality

LOW

MODERATE

MODERATE

HIGH

Project Characteristic

Importance
Customer

Adapted from: Robert Youker.Organizational Alternatives For Project Management, Project Management Quarterly, Drexel Hill, Pa.8(1), March 1977, p.21.

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Project Planning

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Workgroup Session:
Develop Responsibility Assignment Matrix (RAM)

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Project Planning

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Provides guidance on how project human resources should be


defined, staffed, managed, controlled, and eventually released

Human
Resource
Plan

Roles and responsibilities


Role
Authority
Responsibility
competency
Project organization charts
Staffing management plan
Staff acquisition
Resource calendars
Staff release plan
Training needs
Recognition and rewards
Compliance
Safety

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Project Planning

Project Organization
Sample for Complex Project

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MODULE 3

Project Planning

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Project Communication Management

Stakeholder analysis

Setup project file

Define documentation standards

Choose project management tools

Define monitoring and


reporting metrics

Define reporting &


meeting procedures

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Project Planning

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Communication Management Plan

Stakeholder communication requirements


Information to be communicated
Reason for information distribution
Time frame & frequency for the distribution of required information & receipt of
acknowledgment or response
Person responsible for communicating the information
Person responsible for authorising confidential information release
Information receiver
Methods/technologies used to convey the information
Allocated resources for communication activities
Escalation process identifying time frames & management chain for escalation of issues
that cannot be resolved at lower staff level
Method for updating & refining communications management plan as the project
progresses & develops
Glossary of common terminology
Flow charts of project information flow, workflows with possible sequence of
authorisation, report list, meeting plans, etc
Communication constraints (usually derived from specific legislation or regulation,
technology, organisational policies, etc)

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Project Planning

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The Plan..

.. documents how you will manage and control communications


Since communications are complex, the communications
management plan should be in writing in order to be understood by
all project team members and stakeholders.
As with other management plans, the communications management
plan becomes part of the project management plan

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Project Planning

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Stakeholder Management Planning


Stakeholder management
planning will identify how the
project will affect stakeholders,
allowing:
Development of various ways to
effectively engage stakeholders
Manage stakeholders
expectations
Ultimately achieve project
objectives

Stakeholder management
Create & maintain relationships
between and among project team
& stakeholders
Aims to satisfy the needs &
requirements within project
boundaries

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Project Planning

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Desired & current engagement levels of key


stakeholders
Scope & impact of change to stakeholders
Identified interrelationships & potential
overlap between stakeholders
Stakeholder communication requirements
for current project phase
Information to be distributed to
stakeholders, including language, format,
content, and level of detail
Reason for the distribution of that
information & the expected impact to
stakeholder engagement
Time frame & frequency for the distribution
of required information to stakeholders
Method for updating & refining stakeholder
management plan

Stakeholder
Management
Plan

MODULE 3

Project Planning

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Workgroup Session:
RAM, Communication planning, Stakeholder
management

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Project Planning

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Project Risk
An uncertain event or condition that, if it
occurs, has a positive or negative effect on a
projects objectives
Impact to:

Scope
Quality
Cost
Schedule

Uncertainty:
Known (Open)
Known Unknown (Blind or Hidden)
Unknown Unknown

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Project Planning

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Risk Management Plan

Risk Management
Plan

Methodology
Roles & Responsibilities
Budgeting
Timing

Describes how risk management will


be structured and performed on the
project.

Risk Categories
Definitions of risk probability &
impact
Probability & impact matrix

It becomes the subset of


Project Management Plan.

Revised stakeholders
tolerances
Reporting formats
Tracking

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Project Planning

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Risk Register
Document in which the results of risk
analysis & risk response planning are
recorded
List of Identified Risks
Risk event
Cause/root cause
Effect
Assigned risk owners
List of Potential Responses
Control actions
Risk symptoms & warning signs
Residual & secondary risks
Risk watch list
Contingency reserves

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Project Planning

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Risk Analysis: Qualitative


Assess the impact and likelihood of identified risk (subjective)
Activities:
Determine which risk events warrant a
response
Determine the probability and impact
Determine which risk to analyze more fully
in risk quantification or to skip risk
quantification in favor to going directly to
risk response planning
Document non critical or non top risk
Determine the overall risk ranking for the
project

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Project Planning

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Risk Analysis: Qualitative


Risk Event Status = Risk Probability x Risk Impact
Risk Event Status

precisely what might happen to the


detriment of the project

Risk Probability

how likely the event is to occur

Risk Impact

the severity of the consequences

MODULE 3

Project Planning

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Risk Analysis: Quantitative


Numeric analysis of probability of each risk and impact on the project
Include:
Determine which risk events warrant a
response
Determine overall project risks
Determine quantified probability
Determine cost and schedule reserves
Identify risks requiring the most attention
Create realistic and achievable cost,
schedule or scope targets

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Project Planning

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Risk Rankings
Evaluating Impact of a Risk on Major Project Objectives
Impact

Time

Cost

Scope

1
Insignificant
schedule
slippage

2
Delivery plan
milestone
delay
within
quarter

16

Delivery plan
Delivery plan
Delivery plan
milestone
milestone
milestone delay
delay of
delay\outside
of one quarter more than one
fiscal year
quarter

Insignificant
cost increase

<5% cost
increase

510% cost
increase

1020% cost
increase

>20% cost
increase

Scope
decrease is
barely
noticeable

Changes in
project
limits or
features
with <5%
cost
increase

Changes in
project
limits or
features with
510% cost
increase

Sponsor does
not
agree that
scope
meets the
purpose
and need

Scope does
not meet
purpose
and need

MODULE 3

Project Planning

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Risk Rankings
Time, Cost, and Scope Objectives
Large Aversion to High & Very High Impacts
Translate Score to Risk Rank

Score
16
7 14

Risk
Low
Moderate

15 ++

High

Probability

Impact

10

20

40

80

16

32

64

12

24

48

16

32

16

MODULE 3

Project Planning

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Risk Probability Impact Matrix


Prob.

Threats

Opportunities

0,90

0,05

0,09

0,18

0,36

0,72

0,72

0,36

0,18

0,09

0,05

0,70

0,04

0,07

0,14

0,28

0,56

0,56

0,28

0,14

0,07

0,04

0,50

0,03

0,05

0,10

0,20

0,40

0,40

0,20

0,10

0,05

0,03

0,30

0,02

0,03

0,06

0,12

0,24

0,24

0,12

0,06

0,03

0,02

0,10

0,01

0,01

0,02

0,04

0,08

0,08

0,04

0,02

0,01

0,01

0,05

0,10

0,20

0,40

0,80

0,80

0,40

0,20

0,10

0,05

Each risk is rated on its probability of occurring and impact on an objective if it does occur. The organizations thresholds
for low, moderate or high risks are shown in the matrix and determine whether the risk is scored as high, moderate or low
for that objective

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Project Planning

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Strategies for negative risks or threats


Avoid

Transfer

Eliminate threat or
protect the project
from its impact

Shift threat impact &


response ownership to
third party

Negative
Mitigate

Accept

Reduce risk probability


or occurrence or
impact

Acknowledge & not


take action unless the
risk occurs

Passive acceptance
Document the strategy, leaving the project team to deal with the risks as they occur,
periodically review the threat to ensure that it doesnt significantly change
Active acceptance
Usually involves establishing contingency reserve to handle the risks

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Project Planning

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Strategies for positive risks or


opportunities
Exploit

Enhance

Eliminate uncertainty by
ensuring the opportunity
happens

Increase probability
and/or the positive
impacts

Positive
Share

Accept

Allocate some/all
ownership to third party
to benefit the project

Willing to take advantage


of the opportunity but
not actively pursuing it

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Project Planning

Cause-related

Avoid

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Risk Response Strategies

Exploit
Outsource-related
Transfer

Share

Probability & impact-related


Mitigate

Enhance

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Project Planning

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Workgroup Session:
Risk Analysis

MODULE 3

Project Planning

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Procurement Management

Identify potential
vendors/contractors

Assess and select


shortlist vendors

Identify seller
selection planning

Update Project Plan

MODULE 3

Project Planning

Procurement Documents
Bid and Quotation
Generally used when the source selection
decision will be price driven.
Proposal
Generally used when non financial
consideration such as technical skills or
approach are paramount
Common names of procurement documents
IFB : Invitation for Bid
RFP: Request for Proposal
RFQ: Request for Quotation
IFN : Invitation for Negotiation
CIR : Contractor Initial Response

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Project Planning

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Types of Contract
Fixed Price or Lump-Sum
Fixed Firm Price (FFP)
Fixed Price Incentive Fee (FPIF)
Fixed Price with Economic Price
Cost Reimbursable
Adjustments (FP-EPA)
Cost Plus Fee
(CPF) or Cost
Cost Reimbursable
Plus Percentage
of Cost
Cost
Plus(CPPC)
Fee (CPF) or Cost Plus
or Cost Plus
Percentage of Cost (CPPC) or Cost Plus
Award Fee
(CPAF)Fee (CPAF)
Award
Cost Plus Fixed
Cost Plus Fixed Fee (CPFF)
Fee (CPFF)
CostPlus
PlusIncentive Fee (CPIF)
Cost
Incentive Fee
(CPIF)
Time and Material (T&M)

MODULE 3

Project Planning

Prosys Solutions Intl

Contract types to be used


Risk management issues
Constraints & assumptions
Make-or-buy decisions, procurement matrix
Evaluation criteria
Direction for managing multiple sellers
Requirement identification for performance
bonds or insurance contracts
Direction to be provided to the sellers
Form and format for procurement
Procurement documentations
Guidance to coordinate procurement with
scheduling, performance reporting, and project
activities
Prequalified sellers identification
Procurement metrics

Project
Procurement
Plan