Processing Project Change Requests

Imagine that your project has just encountered a risk. You have implemented a workaround to control the risk, but the cost of the workaround will affect the project budget. What should you do to ensure that this change is incorporated into the project plan?

When the members of the project team determine that changes must be made to compensate for controlling risks, they issue a project change request. Project change requests are used to recommend changes in project scope, budget, schedule, or quality. There are various types of change requests including oral or written, direct or indirect, externally or internally initiated, and legally mandated or optional.

Regardless of the type of project change being requested, either the person requesting the change or a project team member will have to fill out a project change request form. The form should include the project name, client name, who requested the change, a description of the requested change, the reason for the change, the impact of the change, and whether it is accepted or rejected.

Project change requests are processed using integrated change control. Integrated change control is concerned with maintaining the project scope and the project's integrated performance baseline. Its ultimate goal is to accept or reject project change requests.

Integrated change control is achieved in a series of five steps.

• Step 1: Submit the change request.
  The process is initiated by the submission of a project change request. The person requesting the change, or a project team member, should fill out the project change request form.
  
  
• Step 2: Record the request in the project change request log.
  Once the project manager receives the change request, he records it in the project change request log. This log keeps track of change request submissions and the status of those requests.
  
  
• Step 3: Assess the impact of the proposed change.
  One or more of the project team members must assess the impact that the proposed change will have on the project as a whole. Project changes may affect many project areas, such as the scope, budget, schedule, quality, and objectives.
  
  
• Step 4: Make recommendations whether to accept, reject, or modify the request.
  The people who were in charge of the assessment will make recommendations about whether to accept, reject, or modify the change request. They will base these recommendations on the validity of the request and its impact on the project.
  
  
• Step 5: Decide whether to accept or reject the request.
  The project authority will use the recommendations to decide whether to accept or reject the project change request. Rejected requests will be closed and filed. Accepted requests will be incorporated into the project plan.

Project change requests are processed through the integrated change control process. This process leads your company to make informed decisions on whether or not change requests should be incorporated into the project plan.

The Cost Baseline

Project management is like baseball: You need to follow a baseline or else you will have a hard time bringing the project "home." The cost baseline is a time-phased budget that is used to measure and monitor project cost performance. It is established during the budgeting phase of the project.

Cost budgeting uses cost estimates, the Work Breakdown Structure, and the project schedule to create the cost baseline. The cost baseline is the plan that outlines how project costs are expected to be incurred over time.

Think of the cost baseline as a map that outlines planned cost performance. It is used to monitor where the project is, where it should be, and where it's going in terms of expenditures. The cost baseline is important to understand because:

• it is the basis for project cost control
• it serves as a benchmark for measuring cost performance
• discrepancies from the cost baseline foreshadow problems
• it gives everyone involved in the project a goal to work toward.

You establish the cost baseline by plotting the estimated total costs per time period on a graph. The resulting line usually takes the form of an S-curve. By reading the graph, you can see how costs are expected to be incurred over the life cycle of the project.

Large projects may have several cost baselines to measure various categories of spending. For instance, a project manager may want to measure labor costs separately from the expenses for materials and equipment.

The cost baseline is set in the planning stages of the project after a lot of time and effort has been spent on developing accurate cost estimates. Therefore, the cost baseline should change only if the project has changed substantially and only if there is no other way to control cost variances.

Day-to-day over- and underruns in costs are normal. Only persistent variances will warrant changing the cost baseline. Do not change the cost baseline if:

• cost variances are normal and based on accurate estimates
• cost variances are caused by poor cost estimating
• normally occurring costs have been forgotten in the planning stage.

Change the cost baseline if:

• there is a change to a project deliverable that will affect overall costs
• there is a change in how the work will be done that will affect overall costs
• there are major, unforeseen changes to project costs.

Remember, adjusting the cost baseline does not change the actual cost of the project—it just eliminates a negative variance. Therefore, changing the cost baseline should not be used as a means of managing variances.

The cost baseline serves as a guide for measuring project performance in terms of cost. Review the cost baseline when variances occur to ensure that the cost estimates used are as accurate and as realistic as possible.

Four Inputs to Project Cost Budgeting

You will want to enter the cost budgeting phase of a project well-equipped. To do this, you will need to know what the inputs to cost budgeting are, and you should understand their importance to the budgeting process.

During cost budgeting, a number of project elements come together to form the project's cost baseline. The following four inputs are used in the cost budgeting process.

1. The project's work breakdown structure (WBS)
The project's work breakdown structure is important in cost budgeting because it organizes all project activities into work packages. Cost budgeting involves assigning a budget, or cost account, to each work package.

Can you imagine trying to assign budgets to project elements if the work was not organized in some way? Without reference to the WBS, vital costs may be overlooked. Any omissions would cause variances later on between planned and actual costs, and cost performance may be reported as "poor."

Part of creating the work breakdown structure is assigning accounting codes to project tasks and activities based on the organization's chart of accounts. Budgeting is simplified when the cost accounts are integrated in this way.

2. The cost estimates for the work
You have made predictions about the costs of the resources required to complete your project's activities. These cost estimates are another important input to cost budgeting.

The budget for each work package is based on the estimates you have prepared. For budgeting purposes, you should be using budget or control estimates with a range of 15 percent or better. The budgeting process may increase an estimate's range by adding an appropriate allowance or contingency to cover the risk of overruns.

3. The project schedule
The third input to cost budgeting is the project schedule. In fact, it is the application of the schedule to the project budget that produces your main tool for cost control: the project's cost baseline.

Once budgets have been assigned to work packages, use the schedule to distribute the predicted costs over time. The project schedule includes the expected start and finish dates for each activity to which costs will be allocated. This information is important to the cost budgeting process because allocated funds must be assigned to the time period in which the costs will be incurred.

As you develop the control budget for your project, you'll find that a bar-chart diagram can be useful. Use it to measure the total costs that fall within each week for planning or comparative purposes. You can easily measure the cumulative costs as the project progresses.

Time-phasing the budget in this way provides the project's cost baseline. Information about cumulative costs over time is also used to determine the project's "burn rate"—that is, the rate at which funds are expended.

4. The risk management plan
Finally, the risk management plan is an important input to cost budgeting. It outlines strategies for dealing with potential risks that could cause project cost overruns. It also can include cost contingencies that are based on the reliability of your cost estimates. You will build contingencies into the budget to compensate for potential cost overruns.

An accurate and appropriate budget is one of a project manager's greatest assets when it comes to cost management. Understanding the inputs to cost budgeting will help you to create such a budget.

Estimating Project Activity Durations

Have you ever worked on a project where a critical resource was not available when you needed it? Has a project activity been shorter or longer than you expected? How do project managers plan resources for these activities?

Activity duration estimates are an important input to project resource planning. Activity duration estimates are quantitative assessments of the likely number of work periods required to complete an activity. The estimates should include the range of possible results. Project managers use activity duration estimates as a basis for scheduling time and resources for a project.

The project manager uses the WBS to determine which activities are involved in completing the project. Then using the tools and techniques of activity duration estimating, he prepares estimates for activity duration.

The estimates include an "optimistic," "most likely," and "pessimistic estimate," listed in that order. For example, activity 1 could take 10 days to complete, will most likely take 12 days, but could take as long as 16 days.

Only the optimistic and pessimistic estimates are used by project managers to create a range of possible results. These results become your activity duration estimates. In the example given earlier, the duration estimate would be two weeks, plus or minus two days, to indicate that the activity will take between 12 and 16 days.

Project managers also calculate the probability of the estimates being correct. For example, a project manager might estimate that there is a 15 percent probability that an activity duration will exceed 3 weeks, and an 85 percent probability that it will be less than 3 weeks.

John, a project manager for Quick-as-a-Wink computer consultants, has determined the activities involved in a software development project. One of those activities is scripting the content. John determines that the scripting activity should take 240 working hours to complete. He will use these hours to calculate his activity duration estimates.

John's activity duration estimates include the duration and the probability of the estimate being correct. John estimates that the scripting activity will take six weeks ± three days. There is a 75 percent probability that the scripting activity will take more than six weeks, and a 25 percent probability that it will take less than six weeks.

Activity duration estimates form the backbone of the project schedule. A properly prepared schedule will lead to better resource planning. And better resource planning will lead to a more successful project.

Taking Corrective Action on Variances

Corrective action is a crucial output from schedule control. It involves implementing a pre-determined plan of action to bring expected future schedule performance in line with the schedule baseline.

Once a significant variance from the plan occurs, the next step is to determine whether corrective action is needed. At this stage, the project team should ask:

• Has the schedule baseline changed?
• Have milestones or critical activities been missed?
• Will implementing corrective action expose risks?

Once you have determined that corrective action is required, there are a number of possible actions to take.

• Renegotiate project requirements - When achieving the desired outcome appears to be impossible, you can talk to the client about renegotiating the project requirements.
• Reallocate resources - Another option is to reallocate resources from a future activity. This allows for recovery of the current problem and provides time to repair future problems before they arise.
• Narrow the project's scope. - Certain variances are best addressed by narrowing the project's scope. In this case, you need to determine which activities can be compromised without jeopardizing the project, then cut back on those activities, or eliminate them if possible.
• Add resources. - Other variances may call for additional resources. Here, your goal is to look for opportunities to add resources that will positively affect the critical path and help bring the project back on track.
• Subcontract work out - Another possibility is to subcontract work out to companies that can perform the activities at a lower cost. Subcontracting allows the project team to concentrate its efforts on other, more critical, areas.
• Partial delivery - Another option is to talk with the customer about the possibility of making partial delivery. This may be the only way to satisfy the customer's critical requirement and keep the customer happy.

When a problem arises, you need to determine its cause. You must then review your schedule management plan and determine whether corrective action is necessary. If so, you need to meet with the project team and key stakeholders to determine the best option and follow up with the client. In this way, you can arrive at viable, workable options that are acceptable to all.

Updating the Project Schedule

To accurately reflect your project's progress, project schedules must be continuously updated. This process enables stakeholders to evaluate impacts to the project as they occur. This provides better control over the project and reduces the impact of required changes.

A schedule update is any modification to the schedule information used to manage the project. Schedule updates are required when variances from plan are higher or lower than the previously approved limit. Schedule updates may or may not require adjustments to other aspects of the overall project management plan.

There is a special category of schedule updates called revisions. Revisions are changes to the scheduled start and finish dates in the approved project schedule. Typically, start and finish dates are only revised in response to scope changes. In cases where schedule slippage is severe enough to warrant revision, rebaselining may be required to provide realistic data for performance measurement.

Palmcom Computers is developing a new palm-sized computer. The company has planned for the product to be introduced at the Fall Buyer's Show. It has decided to strive for this date, to get the heads-up on the competition. Reaching this goal allows for very little flexibility. At the end of the second phase, the management team notices that the schedule is slipping, resulting in a variance much larger than the acceptable range. If this trend continues, the company will not have the originally planned two weeks for quality testing.

In this example, the company has two choices—alter the project scope, or change the project schedule. After careful examination, the team has decided to maintain the current completion date and adjust the allotted testing time to one week to give the team an extra week for production.

Ongoing monitoring and updating are essential components of project schedule control. Adjustments to the project start or finish date (revisions) require special attention. In the event a revision is necessary, the schedules need to be accurately revised for the key stakeholders to continue to have a valid means of measuring the project's overall progress.

Analyzing Schedule and Cost Variances

Have you ever had difficulty meeting a project deadline? Variance analysis can be used during the schedule-monitoring process to compare target dates with actual start and finish dates, thereby detecting any deviations from the plan and allowing you to implement corrective solutions.

Variance analysis is widely used to measure the performance of a project's cost, schedule, resources, quality, scope, and risk. A variance in any of these areas is the difference between what is planned and what actually happens.

Variance analysis in project scheduling is most often used to measure deviations in cost and schedule from the planned budget.

Cost variance analyzes any deviations from the planned dollar budget. Schedule variance analyzes any deviations from the planned completion dates of an activity. Cost and schedule variances are both calculated based on costs and are represented as a function of cost.

When applying variance analysis, figures are obtained from the performance measurement information in project plans and work results. The three key areas for calculating variance are: earned value (EV), actual cost (AC), and planned value (PV).

Earned value (EV) is all the budgeted costs for an activity completed during a period of time. It includes any overhead costs.

Cost variance (CV) examines an activity by comparing the difference between its estimated cost and the actual cost.

Planned value (PV) is all the approved, estimated costs for the work scheduled to be completed for an activity during a period of time.

If the cost variance shows a negative value, the activity costs more than what was estimated. If the schedule variance shows a negative value, the activity is behind the estimated schedule. Depending upon the threshold or contingency, the negative values may be a cause for concern and must be reported. If contingencies were created in the budget to handle cost overruns, then a negative value in scheduling or in costs may not be a cause for concern.

When monitoring a project schedule, you can use variance analysis to identify any deviations from the plan and to ensure that your project does not fall behind schedule.

What is a Schedule Change Control System?

Changes to the baseline schedule represent significant changes and require more than a simple "yes" or "no" approval process. A schedule change control system is a collection of formal, documented procedures defining the steps involved when contemplating a schedule baseline change.

A schedule change control system:

• defines schedule change procedures
• is a decision-making guide for the project management team
• enables your company to assess project changes
• helps your company track project changes.

Schedule change control systems are facilitated by a change control board (CCB) that is responsible for the approval or rejection of change requests. Senior management takes on this decision-making role, in the absence of a CCB.

The schedule change control system itself is a 5-step process.

Step 1: Initiate the change request. - The change request may be initiated either internally or externally. It may take the form of a written or oral request. The change request may be legally mandated or discretionary.

Step 2: Record specifics of project changes. - The recording phase requires the specifics of the change request to be recorded, preferably in a change request log where they can be easily managed. Enough detail must be recorded so that anyone related to the project can understand it.

Step 3: Conduct an assessment. - At the assessment stage, someone is identified as the change request "owner," and must conduct an assessment. Assessment consists of estimating the work involved in implementing the change and quantifying the impact on the remainder of the project as well as on the project's objectives.

Step 4: Recommend a course of action. - A recommendation to accept, reject or modify the change request, is based on the information provided via the assessment. Recommendations should be based on an objective time/cost/benefit analysis.

Step 5: Make a decision. - Recommendations are presented to management for decisions. If the change request is rejected, it is closed and documentation is filed. If accepted, the project budget, schedule, and scope must be adjusted to incorporate the approved change.

Each time a new change request is received, this system is activated.
In addition to this 5-step procedure, the schedule change control system must also include a procedure for making emergency changes automatically. When emergency situations arise, changes may need to be approved without prior review. However, automatically approved changes must be monitored and recorded so they do not cause problems later in the project.

Adhering to the schedule change control procedures will help you decide whether or not a schedule baseline adjustment is required. These sets will also ensure that all change requests are properly managed.

To decide whether or not to make changes to the schedule baseline, project managers must understand the impact the proposed change will have on the entire project. A schedule change control system provides a mechanism for evaluating the need and impact of the change. The system also ensures that a recommendation to accept, reject, or modify the change request is based on objective time/cost/benefit analysis.

Managing Schedule Changes

A schedule management plan is an outline of how schedule changes will be managed. The schedule management plan can be either formal or informal, depending on the nature of the organization. The level of detail the project stakeholders require will determine whether the plan is detailed or broadly-based.

A schedule management plan is an important input to schedule control and can be used as a guide for your entire project. Project managers use a schedule management plan:

• to summarize how schedule changes will be managed
• to direct the management team on change processes
• to ensure that WBS responsibility assignments are controlled
• to make schedule changes traceable

The schedule management plan is just one of the components of the overall project management plan. Other management components include: scope, cost, risk, quality, and communications plans. To adequately assess the schedule impact of actual or proposed changes in all areas of the project, you will want to integrate the schedule management plan with the risk, quality, scope, and cost management plans.

One of the primary reasons for using schedule management plans is to determine how to manage schedule variances. During the project's planning stage, companies determine the acceptable range of variance from the schedule plan. The allowable deviation may be dependent on factors such as a project's life-cycle and accuracy of the original estimate.

For true variances to be realized, input from the risk, scope, quality, and cost control processes are essential. Once the information is incorporated into the plan, it is important to continually track "actual" against "planned" progress.

When it comes to decisions about how variances should be managed, there are four basic options to choose from:

• Dismissal - Dismissing the variance is appropriate when the variance is within the allowable range as stated in the schedule management plan. In this case, no corrective action is required, so the variance can be dismissed.
• Functional modification - Functional modification is called for when the variance is small and within the allowable range, but has the potential to become more problematic in the future.
• Replanning - Replanning is required if the variance is large enough to fall outside the allowable range. Replanning involves reviewing project requirements and redefining project goals. In replanning, less critical activities may be sacrificed to meet time and budget constraints.
• Redesign product - Redesigning the product is required if the variance is way out of range. This is the worst case scenario. In this case, the product description will need to be reconfigured which may result in lower grade performance.

As an input to project schedule control, a schedule management plan is an important component of project management. A schedule management plan helps you manage schedule changes, identify the level of variance, and determine appropriate corrective actions.

Requesting Changes to the Project Schedule

Change requests are another input to schedule control. Change requests are the initial step in making schedule changes. They provide a means for management to review and adjust the schedule and to authenticate and record schedule changes.

Project requirements can change mid-stream. Some of the determinants of change are: competition, customer reaction, technological advancements, and supplier-related conditions.

Changes to project schedules may require extending or accelerating the project schedule. Once the need for change is determined, a company must examine realistic alternatives. Comparing the costs of approving the change with the benefits is essential.

Change request forms are recommended when projects require specific changes. Just as there are reasons for initiating change requests, there are also different forms of change requests to consider—oral or written; direct or indirect; external or internal; legally mandated or optional.

Oral requests - include the rationale for making the changes and the benefits of implementing the changes. Oral requests should be followed by written documentation.
Written requests - describe the suggested change, list affected drawings and documents, and include the reason for the intended change.

• Indirect change requests - can originate at any level of the organization and eventually work their way up the ladder to the project manager.
• Direct change requests - go directly from the team lead or supervisor to the project manager.
• External requests - originate from sources outside the company.
• Internal change requests are made within the company, often within the project team.
• Legally mandated change requests - are the result of new legislation or government mandate.
• Optional change requests - have not been imposed by anyone inside or outside the company.

There are numerous potential reasons for issuing a change request and several different request formats. Understanding the reasons for change and the options for making a request is an important part of managing and controlling project schedules.

Requesting Changes to the Project Schedule

Change requests are another input to schedule control. Change requests are the initial step in making schedule changes. They provide a means for management to review and adjust the schedule and to authenticate and record schedule changes.

Project requirements can change mid-stream. Some of the determinants of change are: competition, customer reaction, technological advancements, and supplier-related conditions.

Changes to project schedules may require extending or accelerating the project schedule. Once the need for change is determined, a company must examine realistic alternatives. Comparing the costs of approving the change with the benefits is essential.

Change request forms are recommended when projects require specific changes. Just as there are reasons for initiating change requests, there are also different forms of change requests to consider—oral or written; direct or indirect; external or internal; legally mandated or optional.

Oral requests - include the rationale for making the changes and the benefits of implementing the changes. Oral requests should be followed by written documentation.
Written requests - describe the suggested change, list affected drawings and documents, and include the reason for the intended change.

• Indirect change requests - can originate at any level of the organization and eventually work their way up the ladder to the project manager.
• Direct change requests - go directly from the team lead or supervisor to the project manager.
• External requests - originate from sources outside the company.
• Internal change requests are made within the company, often within the project team.
• Legally mandated change requests - are the result of new legislation or government mandate.
• Optional change requests - have not been imposed by anyone inside or outside the company.

There are numerous potential reasons for issuing a change request and several different request formats. Understanding the reasons for change and the options for making a request is an important part of managing and controlling project schedules.

Controlling Project Schedules

Another input to project schedule control is the project schedule. Project schedules are a set of planned dates for performing activities and meeting project milestones.

Project schedules are not considered complete until they have been approved. The approved schedule is known as the schedule baseline. A schedule baseline is a fixed project schedule that is the standard by which project performance is measured.

The schedule baseline is only adjusted when the project's scope has been significantly altered as, for example, when the project scope has changed.

When baselining a schedule, you need to consider project activities, dependencies, estimates, constraints, assigned resources, and resource availability.

• Activities - Before baselining a schedule, it must be as complete as possible with regard to identifying all of the project's activities. If you overlook an activity, the schedule may need to be altered in order to add the activity later.
• Dependencies - Network logic must be included in the schedule. Dependencies from other projects should also be considered. If, for example, you plan to start Project C on March 1st, but the resources will not be available until Project B is complete, this dependency must be built into the schedule.
• Estimates - Estimates for activity duration and work effort must be reasonable. If you allot only 60 hours for a 100-hour activity in an attempt to cut costs, you are setting an unreasonable estimate which will affect the effectiveness of your entire schedule.
• Constraints - All known constraints must be accounted for. If an employee needed to complete the project is only available for three months, you must account for this constraint in the schedule and make every effort to utilize this resource within the time he is available.
• Assigned resources - Resources must be assigned to activities in a realistic manner, for example allowing for vacations and down-time. Resource requirements must be reviewed and compared to known capacity.
• Resource availability - The scheduled dates must take resource availability into account, which means the schedule must be leveled manually or automatically. If you know that a supplier can only deliver its resources at the end of phase one, you should not schedule the activity until then.

The schedule can be baselined and used to measure project progress once you have carefully considered these project schedule inputs. Then with a baselined schedule in hand, you can begin the process of deciding which method to use to present the project schedule data.
Tom, the new project manager for Askme Consulting, is beginning his first project: constructing a new office complex in Manhattan. He is reviewing the work breakdown structure developed in the initial planning and estimating stage of the project proposal. Tom and his management team meet to determine the most appropriate method of presenting the schedule for this extensive project. The team needs to determine the types of information required when reporting the project's progress and predicting its future.

The methods they are considering are: the milestone chart, project network diagram (PND), time-scaled network diagram, and Gantt chart. The method they choose will depend on the variables they need to monitor and control as the project progresses.

• A milestone chart is a summary-level schedule identifying the major activities or deliverables of the project. It can become the skeleton for the master schedule. A milestone typically marks the end of an event or the completion of an activity. For example, the first milestone activity for the Askme Consulting project is architecture/design. The second milestone activity is the foundation work.
• A project network diagram (PND) is a schematic display of the project's activities and the logical relationship between them.
• A time-scaled network diagram is a variation of the PND. The positioning and length of the activity represent its duration.
• A Gantt chart is a graphic display of schedule-related information. A typical Gantt chart displays activities, dates, and durations. Gantt charts are the most convenient, commonly used, and easily understandable method of data presentation for project planning, resource scheduling, and status reporting.

Once you are familiar with the various methods of displaying project schedule data, you can use the information for conducting performance analysis. The Critical Path Method (CPM) plays a vital role in this analysis process. Critical Path (CP) is a series of activities that determines the earliest possible completion date for the project.
CP is the longest full path in the project. CP activities have little or no float. As activities are completed, the critical path may be altered. The CP can be determined for the entire project, a milestone activity or a sub-project.

The CPM is used to predict project duration by analyzing which sequence of activities or path has the least amount of scheduling flexibility or float. The early start and finish dates for each activity appear above the node on a Project Network Diagram. The late start and finish dates for each activity are below the node.

Early dates are calculated by means of a forward pass using a specified start date. Late dates are calculated by doing a backward pass, starting from a specified completion date. The most effective way to ascertain the critical path is to perform a forward and then a backward pass through the project.

To perform a forward pass, look at the first activity and determine its earliest possible start date. This is called early start. Continue this process for every activity.

To perform a backward pass, start at the last activity and determine the latest each activity can start without affecting subsequent activity. This is called late start.

Once you have completed the forward and backward passes, you must examine the results. If early and late start dates for an activity are the same, the activity is on the critical path. If there is a difference between the dates, the activity has float time and can be placed on the non-critical path.

Project schedules help you plan dates for performing activities and meeting project milestones. Schedule baselines and critical paths are important aspects of the schedule because they help in project schedule control. Together, these project scheduling tools and methods help project managers to monitor and measure project progress.

The Primary Uses of a Schedule Management Plan

Have you ever been on your way to an important business meeting, walked over to your car and realized your tire was flat? What now?

A flat tire can really throw a monkey wrench into your work schedule and have long-lasting effects, especially if your meeting was with a client who doesn't tolerate lateness or excuses of any kind. You could lose a business deal.

Changes to a project schedule can also have far-reaching effects. Therefore, proper management is critical. One of the ways to ensure that you are properly managing your project schedule is to use a schedule management plan.

The schedule management plan should be used as a guide for your entire project. By definition, it outlines how schedule changes will be managed.

There are a number of reasons why a company would want to use a schedule management plan, for example:

• to summarize how schedule changes will be managed
• to direct the management team on change processes
• to ensure that Work Breakdown Structure (WBS) responsibility assignments are controlled
• to make schedule changes auditable

Take a look at this example. The project management team for Electro Power Designs (EPD) is meeting to discuss the contents of a recently developed schedule management plan.
Management can track the project's progress by comparing data on scope, cost, risk, and quality to the schedule management plan. For example, they can use the plan to track if EPD can produce the required amount by the imposed deadline.

To determine the impact on the project, variances must be reported and understood. Allowable variance ranges are defined, stating when corrective action is required. For example, if a project is two weeks behind schedule, corrective action is required.

To prevent further slippage, significant trends or variances may necessitate changes to the project approach. For example, EPD's product design may require new components before it is ready for the client.

Your project team must remember that the schedule management plan is a valuable output that should be used as a guide for managing your project's schedule. However, you must also keep in mind that in order to accurately reflect the entire project, the schedule management plan needs to be incorporated with the overall project plan.

Presenting Schedule Information Graphically

Everyone follows a schedule of some sort—a meal schedule, an exercise schedule, or a meeting schedule. In the area of project management, a schedule includes a list of project activities along with the planned start and expected finish dates for each part of the activities. This schedule may be presented in summary form or in detail using either a tabular or graphical format.

The tabular format presents the information in a table. The tabular format is very rarely used, as the information it presents is hard to read and understand.

The graphical format presents the information in the form of a diagram or chart. It allows the project manager to visualize the schedule.

When it comes to presenting schedule information graphically, you have a number of choices. The most common graphical presentation formats are the project network diagram (PND), Gantt chart, milestone chart, and time-scaled network diagram.

A project network diagram (PND) is a schematic display of the project's activities and the logical relationship between them. Each planned activity is numbered on the PND. For example, the number 1 could be Activity 1—the architecture and design of the project. Number 2 could then be the foundation work.

A Gantt or bar chart is the most convenient, commonly used, and easiest-to-understand format of data presentation for project planning, resource scheduling, and status reporting. It shows start and finish dates as well as the expected durations for each project activity.

A milestone chart is a summary-level schedule that identifies the major activities or deliverables of the project. It can become the skeleton for the master schedule. A milestone typically marks the end of an event or the completion of an activity.

A time-scaled network diagram is a cross between a Gantt chart and a PND. It displays the project logic, activity durations, and schedule information. The positioning and length of the activity arrow represent its duration.

Remember, there are a number of formats that your company may choose from when creating a project schedule. Determine the individual needs of your project and the key stakeholders, then make your choice based on those needs.

Choosing Project Management Software

Project management is enhanced and facilitated when you use project management software. Project management software is available to perform everything from project planning, scheduling, to payroll.

All project management software packages have the capacity to produce eye-catching charts and graphs, such as Gantt charts, histograms, milestone charts, and tables. With regard to scheduling, these packages can:

• schedule and track people working on multiple projects
• identify conflicting resource demands and allocate resources accordingly
• schedule and track dates
• make formal work estimates
• prepare status reports to monitor scheduled activities.

There are two main types of scheduling packages: resource-driven scheduling and duration-driven scheduling.
Resource-driven scheduling packages emphasize tasks. If, for example, you want to schedule and track your project based on the number of work hours, resource-driven scheduling software is your best bet. If, on the other hand, you typically plan your schedule based on task durations, you should purchase a duration-driven software package.

Both types of project management software produce schedules that show project dependencies as well as any leads or lags the dependencies might have.

Project management software is designed to simplify life for project managers. The trick to making this type of software work for you is to determine whether you schedule with an emphasis on work hours or task duration. This factor should drive your choice of software to ensure that the software you buy is compatible with your project management preferences.

Deciding if a Project Needs Resource Leveling

Another tool used for schedule development is resource leveling heuristics. The mathematical analysis process often results in the creation of a project schedule that requires more resources than are available at a given time. This is where resource leveling heuristics come into effect.

Resource leveling heuristics is a prioritization process that allocates scarce resources to critical path activities first. In other words, it is a technique that resolves resource conflicts by delaying tasks within their slack allowances.

Projects seldom have an abundance of resources. In many situations, a project will require a critical resource that must be available at certain project points. To ensure availability, the critical resource will need to be scheduled in reverse from the project ending date, this is known as reverse resource allocation scheduling.

To use the reverse resource allocation scheduling method, you must be able to complete the activity with the limited number of resources that are available. For example, the resource requirements for a renovations project indicates that three electrical engineers are needed. However, the project manager discovers that the work, which was scheduled to be done by three people, must now be done by two. The result is that the activity may take three weeks with two engineers instead of two weeks with three engineers as originally planned.

Another method of resource leveling is the resource-based method. This involves looking at the workload for each resource in a given work period and assigning a more realistic workload.

Resource leveling is the activity in which project teams encounter problems when developing their project schedules. If a company has multiple projects running simultaneously that require the same resources, problems can arise. Problems may occur when not enough attention is paid to resource allocations and their conflicts.

When conducting resource leveling heuristics, there are a number of details that must be taken into consideration. Asking the following questions will help you to determine where leveling is required or possible.

Does the activity have slack time?
If activities have little or no slack time, they are usually critical path activities. They are provided with the necessary resource requirements, when possible. If for example, activity A has zero float, activity B has a three-day float and activity C has a two-day float. Activity A is allocated resources first.

Is this activity high priority?
If resources are limited, higher-priority activities are allocated resources before lower-priority activities. Activities that are higher priority are normally on the critical path. For example, if activity D is a critical path activity and activity B a non-critical activity, activity D is allocated resources before activity B.

Can this activity be split?
If resources for an activity are only available at particular times, splitting the activity may be required. For example, the resources for activity E are only available on Mondays, Wednesdays and Fridays. Therefore, the manager must split the activity into three non-consecutive days.

Is this a flagged activity?
If an activity is flagged, it means that a component of that activity has a significant detail attached. Flagged activities have a higher priority than others. For example, a computer design project may require a special part that is only available at a certain time. The activity requiring this part would be flagged.

Can the activity requirements be altered without affecting the overall project?
If an activity can be altered to reflect the availability of resources, then that activity is finished when the resources are available. For example, an activity requires two engineers 100 percent of the time: one is only available 75 percent of the time. The activity will be finished when the other resource is available.

DataWare Software Development (DSD) is currently working on a project to develop education software. The project manager has been informed of both a reverse resource allocation scheduling conflict and a resource-based conflict. He has already determined that each of these activities has slack time and neither is on the critical path.
The resource requirements call for two graphic artists. Unfortunately, only one is available. The project manager will have to perform resource leveling by lengthening the schedule so that the work to be done by two people can be done by one.

The schedule calls for the audio to be recorded for three different projects at the same time. When the project manager applies resource leveling heuristics, these three projects will take three days for audio instead of the one day originally scheduled.

Resource leveling requires a degree of common sense. If an adjustment does not seem realistic, don't make it as it may do more harm than good.

Using Simulation to Develop the Project Schedule

Have you ever been to an amusement park or space center and gone for a ride on a flight simulator? It feels very real, doesn't it? Simulation is also a very useful tool for project schedule development. It involves calculating multiple durations with different sets of assumptions.

Simulations are performed in an attempt to predict aspects of a particular system's behavior by creating a model of it. As a project manager, you can use simulation to estimate the range of possible outcomes for a project.

The most commonly used form of simulation on a project is schedule simulation. Schedule simulation reveals the risks of various schedule alternatives. This process allows project managers to examine different scenarios without costing their companies extra time and money. Simulating project schedules has other advantages, as well as some disadvantages.

Advantages of schedule simulation

• simple to use
• uses "what if" strategies
• versatile—can be used on large, complex projects
• produces fairly accurate predictions
• saves money on testing

Disadvantages of schedule simulation

• difficult to incorporate in overall project
• probabilities may be biased

Currently, simulation possibilities are almost limitless, as are the number of industries using simulations to aid in their project completions.

The Monte Carlo Analysis is the most frequently used tool for simulation. It runs various pseudo-situations and determines the likelihood of their occurrence. Project managers can use tools like the Monte Carlo Analysis to determine the feasibility of their projects.

Monte Carlo Analysis performs project tasks numerous times. The result of this process is a "probability distribution" for the time required to accomplish a given task.

Monte Carlo Analysis can show a project's dependencies by graphically displaying the various paths each project activity can take. This is especially useful on larger projects since simple network diagrams can get very complicated and busy.

Once the range of project outcomes has been identified, the Monte Carlo Analysis can show the probability of each outcome occurring. This is beneficial because it allows the project team to choose the desired outcome.

When a project manager is developing a project schedule, one of the most important outputs of Monte Carlo Analysis is probability distribution. The probability distribution gives the project manager an estimate of how long the activity will take and a probability of the estimate being correct.

Another type of analysis is a what-if analyses. What-if analyses use logic to simulate different scenarios. Using adverse conditions, the what-if analyses assess the viability of a schedule. They may also be used to overcome or lessen the effects of unforeseen situations.

Today, software packages have been designed to run what-if analyses. The software generates a duplicate project database where it inserts the changed or adverse conditions and then runs the simulation. It compares the old information against the new information and adjusts the results accordingly.

Jacob Computer Systems ran a what-if analysis based on the delay of a small but important system component to check the feasibility of its project schedule.

Starlite Financial Group introduced an employee strike into its what-if analysis. This will help the company prepare a response plan to lessen the impact of a strike.

A key point to keep in mind, when deciding whether or not to use a simulation process, is that it can save your company valuable time and augments the efficiency of your project schedule.

Compressing Project Duration

Have you ever heard the saying, "You may delay, but time will not," by Benjamin Franklin? As a project manager, don't you sometimes wish that you could just stop the clock? This is especially true when a project's schedule needs to be shortened so it will be finished before its scheduled date.

You could use duration compression to shorten the project schedule. PMBOK defines duration compression as, "shortening the project schedule without reducing the project scope."

There are two duration compression techniques commonly used by project managers to meet imposed dates or other schedule objectives. These techniques are: crashing and fast tracking.

Crashing
Crashing a project schedule involves analysis of cost and schedule trade-offs to obtain the maximum duration compression (shortening of the project schedule without changing the scope), with the least amount of cost. This technique is usually the last choice for project managers.

Crashing the schedule may not always be the most feasible option for your project. It often results in increased project costs and the addition of extra resources. The rules of thumb for crashing a schedule are always crash or shorten tasks on the critical path and choose to crash tasks that will have the least impact on the project's budget.

Consider this example. Palmcom Computers has just reviewed its draft schedule for a new computer design project. It has discovered that the original plan has to be crashed to complete the project sooner than initially anticipated. Palmcom realizes that the objective of crashing its planned schedule is to come up with the best project end date.

Since crashing involves building a plan without regard to resources, Palmcom has restructured its schedule to include additional resources.

Fast tracking
Fast tracking involves looking at a project plan and assessing when it is practical to do work in parallel instead of sequentially. It works best where there are activities that are somewhat independent of each other. Fast tracking the schedule compresses the project schedule by overlapping activities that would normally be done in sequence, such as design and construction.

Consider this example. Sol-car, an automobile manufacturer, is designing a new solar-powered vehicle. Sol-car has just been notified by a major supplier that the panels it has ordered will not be available until May 15. The company has recently announced that it will unveil this new automobile on June 21. Therefore, this delay in shipment may cause a delay in the project's completion date.

Based on this information, Sol-car reviews its project schedule. It has decided that the last phase of the project will have to be adjusted to compensate for the previous delay. The last phase of this project would include the body assembly, the frame construction, the painting, and the final testing and marketing. The network diagram on the left is the original schedule, and the diagram on the right is the fast tracked schedule.

Looking at this schedule you can see that the activities are sequential in nature, with a finish to start dependency. This means that the preceding activity must be completed before the next activity can start.

Sol-car has fast tracked this schedule by moving activity D, which is somewhat independent of the other activities. Activity D will run concurrent to activities B and C. However, this can only occur if activity D's required resources are available.

Although these methods of project duration compression may seem like the answer to a project manager's prayer, there are disadvantages that should be taken into consideration. Can you think of what these disadvantages might be?

Fast tracking often results in rework and increases risk of a project being over budget. For example, there is an increased risk that the activity will not be performed properly when activities are overlapped. If this does occur, the activity will have to be redone.

Crashing often increases a project's cost. For example, if additional resources are added to crash a project activity, the labor costs on the project will be more than originally anticipated.

Although there are risks involved with duration compression, the ultimate goal is to bring a project back on track and end up with an improved, shorter duration. Either crashing or fast tracking will help you achieve that goal.

Estimating Activity Duration

One thing you can't afford on a project is wasted time. Time wasted on a project will affect both the budget and the schedule. Fortunately, proper planning and accurate activity duration estimates can be used to keep your project on time and within budget.

Project managers use activity attributes to select and sort the activities that comprise a project. They look at all aspects of a project before determining the project schedule knowing that a "missed" or inaccurately estimated activity can drastically alter the project schedule.

Activity lists, which describe all the activities to be performed on a project, are used in estimating the duration of project activities. Resource requirements that detail the people, equipment, and materials needed for a project are also used as inputs in this process.

Activity duration estimates are quantitative assessments of the likely number of work periods that will be required to complete an activity. Activity duration estimates give project managers a range of possible results.

Project managers can determine a timeline for a project from the range of possible results. This range can be an indication of the number of work periods or the probability that the activity will take as long or longer than expected.

Sam is a project manager for an aerospace company. He is using activity duration estimates as an input to project schedule development. Sam has estimated that assembling the wing will take at least 8 days, but no more than 12.

There is a 15 percent probability that the assembly will take more than 12 days, and an 85 percent probability that it will take less than 12 days.

Since there is a high probability that assembly will take less than 12 days, the project manager will schedule 10 days for this activity.

While activity duration estimates help project managers determine how long activities will take, activity attributes also play an important part in selecting and sorting the given project activities.

Activity attributes are important because they enable project managers to select activities and sort them into convenient groupings. Project managers use these groupings to find out information about a given project. Activities exhibit three types of attributes: responsibility, geographic area, or building, and activity type.

The responsibility attribute refers to who will perform the work. The geographic area or building attribute refers to where the work will take place.

The activity type attribute refers to whether an activity is grounded in specific details or is based on a summary of events.

Activity duration estimates help project managers determine the likely number of work periods an activity will take to complete while activity attributes are important for sorting and selecting project activities. Both inputs are essential in planning a project so that it remains on time and within budget.

Components of Project Scheduling

Have you ever scheduled a job that required more time to complete than you had initially planned for? Did you know that calendars, leads, and lags can help you schedule the appropriate amount of time for a project activity?

Calendars
In much the same way you use an agenda to keep track of your day-to-day appointments, a project manager uses a calendar to ensure that a project is progressing according to plan.

Project managers use calendars to identify project workdays. Calendars can be altered so weekends and holidays are not included. The arrangement of normal working days, together with non-working days, such as holidays and vacations, and any overtime periods, are used to determine the project completion dates.

To create and use a project calendar, you need to know the range, units and start date.

• The calendar range is the calendar's span from the start date, up to and including the last date work is performed.
• Calendar units can be in hours, days, weeks, shifts, and minutes. They are the smallest unit of time used for scheduling the project.
• The calendar start date is the first calendar unit of the working calendar.

Project managers use two types of calendars when creating a project schedule: project calendars and resource calendars. These two calendars identify periods when work is scheduled to occur.
Project calendars define global project working and non-working periods and affect all project resources. For example, work will only take place on weekdays.

Resource calendars affect specific resources or categories, like people, material or equipment. For example, scheduling around a team member's vacation.

Leads and lags
What would you do if your project was delayed by three weeks, while you were waiting for a necessary piece of equipment to arrive?

Dependencies within a project may require detailed specifications to accurately define the relationships. These specifications are in the form of leads and lags, which are important aspects of the schedule development process.

• A lead is a modification of a logical relationship allowing for the acceleration of the successor task. For example, in a finish-to-start dependency with a five-day lead, the successor activity can start five days before the predecessor has finished.
• A lag is a modification of a logical relationship which directs a delay in the successor task. For example, in a finish-to-start dependency with a five-day lag, the successor activity cannot start until five days after the predecessor has finished.

Leads are included in a schedule when an activity must be expedited. Lags are included when an activity needs to be slowed down.
Remember, if your project needs to reflect an assumed delay you may need to implement a lag at the anticipated interval in the schedule. On the other hand, if your project has imposed constraints such as time or future restriction on resources, your schedule may need to include a lead.

Understanding why you must include these components in your resource and project calendars will increase the odds of keeping your project on track, ensuring a successful completion.