An Introduction to Trend Analysis

In project management, it is useful to discern trends in the quality data to determine if the project is progressing according to quality expectations. Trend analysis is a technique that tells project managers whether quality goals are being achieved according to the quality management plan.

Trend analysis is a mathematical technique using statistical methods that provide an equation that best fits data in a scatter diagram. Scatter diagrams are simple X and Y axis diagrams with an independent variable, such as time, as the X axis, and the dependent variable as the Y axis. Trend analysis determines the best or most appropriate equation and measures the fit of the equation to the data. Trend analysis is also known as "curve fitting."

Fitting a curve is often done by the least squares method, a mathematical method in which the distance between the data points and a possible line is minimized over its length. This gives the most statistically accurate representation. These lines are often called "regression lines."

Trend analysis is a useful tool for cost and schedule performance, and quality control. The utility of the trend analysis is that it gives a clear and understandable indication of change caused by every incremental change of the independent variable. One of the more useful functions of trend analysis is predicting, or forecasting.

The different lines mean a variety of different things could have occurred in a process. Line and curve shapes indicate whether a process is behaving according to the quality control norms.

• Lines of positive correlation - Lines of positive correlation indicate the desired value y is increasing. This is good if improvement is sought, but bad if the line continues past a specified value.
• Lines of negative correlation - Negative correlation indicates y is decreasing. This is good if the tolerance of a process is coming closer to a desired value, but bad if that same value is exceeded.
• No correlation - A diagram with no correlation means the data is inconsistent. The process is out of control, and immediate steps are necessary to bring the process under control.
• No slope lines - A line with no slope means there is no change. This is indicative of a stable process.
• Curvilinear line - Curvilinear lines indicate a cyclical process or a process decreasing or increasing at a non-uniform rate. Cyclical patterns indicate a possible worn out process. A curvilinear line indicates a complex relationship with the independent variable.

Of all the different lines, curved lines are the most difficult to make conclusions from because of their shape. Other statistical analysis must be used to determine at which point the objective value has been met or exceeded.

Trend analysis allows project managers and teams to predict a pattern and come up with a formula that accurately reflects a data set. As long as the appropriate quantity of data have been selected, accurate predictions can be made of a process. Trend analysis is also useful for determining at which point a quality concern may become an issue based on historic data. Trend analysis is often useful when used in conjunction with other tools and techniques.

Project Quality Planning Tools: Benchmarking

Did you know that project management can be similar to detective work? The benchmarking process (BMP) is like an investigation. It involves searching through available clues, finding leads, and then following up on those leads to understand the processes of world-class companies.

The BMP compares the performance of one company against another that is best-in-its-class. This is an effective tool and technique for quality planning.

Why should you perform a BMP? There are two main reasons for benchmarking—setting goals and process development. The BMP also will help you to know yourself, understand your competition, and define and integrate the best processes into your organization.

The benefits of benchmarking far outweigh the costs or effort involved. Benchmarking will:

• improve customer satisfaction
• define the best processes
• improve already-existing processes
• promote a desire to improve and change
• identify your competitive position
• improve the relationship between benchmarking partners.

The BMP provides information about where a company stands when compared to standards. These standards are set by customers, companies, certification organizations, and industry associations. The BMP will indicate the areas of strength within a company and uncover opportunities for improvement.

There are four common types of benchmarking assessments: internal, competitive, world-class operations, and activity-type benchmarking. Details are provided below.

• Internal benchmarking. This type of benchmarking usually takes place first. It involves examining your own organization and determining the best practices observed. It's easy to carry out, and matters of security and confidentiality do not exist.
• Competitive benchmarking. This is also called reverse engineering. It involves studying a competitor's services, products, and processes. The easiest way to do this type of benchmarking is to buy the competitor's product or service and then analyze it.
• World-class operations benchmarking. This benchmarking type takes the BMP past a specific type of organization to one that is different. It's a useful technique for discovering innovative processes not currently used by an organization.
• Activity-type benchmarking. This type of benchmarking examines specific process steps or activities that go beyond specific industries. It includes activities such as recruiting, invoicing, and engineering change control.

The benchmarking process is a useful tool and technique for quality planning. It's natural that companies want to immediately visit a top-notch organization as their first BMP activity. Although doing this is a part of the BMP, it's not the only activity that should be performed. There are six separate stages for every BMP.

• Process design (planning). Select one quality process to study at a time. Form a team of people involved in the process you wish to study. Determine the measurements you will use.
• Internal data collection. Know your own practices and performance. This can be done using such techniques as system and process flowcharts, or cause-and-effect diagrams.
• External data collection. Select a competitor in the same or different industry as your company. Select one that is best-in-its-class for the process you are studying.
• Data analysis. Compare the information gathered with the information from your own company.
• Process upgrading. Based on information you have learned from your competitor, identify which ideas can be adopted for your own process and decide how they can be implemented.
• Periodic reassessment. Monitor the effectiveness of the new ideas and re-benchmark them at specific intervals of time.

Effective benchmarking requires choosing the specific benchmarking type and completing the appropriate steps. This process is not just about uncovering the secrets of your competition—it includes learning about yourself.

Project Quality Planning Tools: Flowcharting

Just as road maps are useful tools for reaching your destinations, flowcharts are the road maps used to reach project quality. A flowchart graphically represents a process and its activities in almost the same way a map represents an area.

Flowcharting is an effective quality planning tool you can use to describe an existing process or a proposed new process. You can use flowcharts when charting work on an object, when charting workers' tasks, when charting an operation or inspection process, and even when brainstorming.

For quality planning, flowcharting can help you identify problems in a process. Flowcharting will also:

• result in disciplined thinking
• facilitate communication about problems
• illustrate how different elements fit together.

Some flowcharts are recorded in a narrative form, like an essay. For example, first you do this, and then you do this, and then you do this, and so forth. However, this method can be vague and hard to follow. Using charts and diagrams to map a process can allow information to be more clearly and easily understood.

There are 12 standard flowcharting symbols that indicate what is done to a product from one step to another. Everyone using this method on a project must understand the meaning of each symbol. Process information is placed inside or beside the symbols. Various symbols indicate an operation or an activity, movement or transportation, decision points, inspection, paper documents, and delay.

Symbols also indicate storage, annotation, direction of flow, transmissions, connectors, and boundaries, which are the beginning or end of a process. It's important to understand these symbols and how they add to the flowcharting process.

Flowcharts do not have to be drawn by specialists. They are researched and drawn by quality improvement teams. However, some training is usually necessary to draw an accurate flowchart.

Drawing a flowchart is drawing a picture of a process. With some training and practice, process flowcharts can be somewhat straightforward to create. To create a flowchart, follow the steps outlined below. Keep in mind, however, that drawing your first process flowchart is not easy. If necessary, quality improvement teams can call on an expert in their field to contribute to the process.

• Step 1: Define the process steps. As a team, brainstorm to talk through the steps in the process. For an already existing process, examine the process in action. Suggestion: Write the steps on sticky notes.
• Step 2: Sort the steps in order. Identify what is done at each step. Suggestion: Use the sticky notes from Step 1 and sort them in the proper order.
• Step 3: Place the steps in the appropriate symbol. Use the standard symbols to sketch the flowchart. Suggestion: Make a rough copy at first. Then rework the graph to fix errors.
• Step 4: Evaluate the steps. Check for completeness, efficiency, and problems. Review the actual process and then make any necessary revisions to the flowchart.

For every quality effect or problem in a project, a cause must be identified. Cause-and-effect diagrams, also called Ishikawa diagrams or fish-bone diagrams, focus on the causes of problems instead of the problems themselves. Cause-and-effect diagrams are often used in brainstorming sessions because they act as visual displays for breaking large problems into manageable parts. Follow these steps to construct a cause-and-effect diagram.

• Step 1: Identify the problem or effect. Place a concise statement of the problem or effect in a box at the end of a horizontal line.
• Step 2: Identify the causes. Identify the causes of a problem or effect in a brainstorming session by focusing on one cause at a time. Discussions usually will focus on methods, materials, people, information, machines, and environment. Identify any subcauses.
• Step 3: Build the diagram. To build the diagram, organize the causes and subcauses into the diagram layout. Each branch represents cause-types such as materials, machines, and people. The subcauses connect to these branches.
• Step 4: Analyze the diagram. Identify potential solutions weighing the cost-effectiveness and achievability of each solution.

Drawing a flowchart or diagram involves creating a picture of a process or effect. Both act as visual displays that assist with problem-solving. Once you and your project team become accustomed to using these tools for quality planning, they'll become an automatic part of your processes.

Computerized Tools for Project Cost Control

Many software companies have produced computerized tools to aid in project cost control. Project management software that will run on your personal computer or network is available at many different levels of sophistication, with prices ranging from $25 to over $10,000.

Computerized tools could include anything from standalone spreadsheets and accounting packages to fully integrated cost management systems. They offer planning and tracking capabilities at varying levels of detail.

Computers and the appropriate software have helped many project managers cut down on time, costs, and effort involved in getting their work done. You can use these tools to collect information, make calculations, and produce reports. In terms of project cost control, computerized tools can help you to:

• track performance more easily and quickly
• track multiple projects at once
• design, simulate, analyze, and improve cost control processes
• conduct "What if?" analyses
• obtain organized and summarized reports
• catch potential problems early in the project that may cause damage later on.

When it comes time to choose the appropriate computerized tools, you will have to ask, "What kind of tool can I afford?" Most inexpensive applications will enable you to produce charts and basic reports. If your budget allows, you can buy software that will do just about anything you need for project management.

Bear in mind that when implementing new software, you not only have to consider the expense of the tool, but also the time you have to invest to learn how to use it properly. New software costs time as well as money.

You also must decide how "large" a tool you need. Make sure you don't invest in project management software that is not right for you. Before you go shopping, spend some time figuring out:

• the maximum level of complexity you can handle
• aspects of cost control that you need automated
• the level of analysis that stakeholders demand.

Computerized tools should be tailored to your needs. Perhaps the projects you manage are fairly simple with straightforward work breakdown structures and modest budgets. You would likely then benefit most from low-end software that is easy to use.

The larger and more complex your projects become, however, the more you will require a system that integrates schedules and the cost management plan, and one that controls change. There are mid-range and high-end products that meet increasingly complex needs.

Computerized tools are a big help to project management. However, the package your company chooses to invest in will be worthwhile only if it suits your needs and the needs of the projects' stakeholders. Provided below are details about project management software for three main categories of users.

• Low-end users. Packages that will simply automate the basics for a low-end user are simple to use and will produce pretty charts. Cost: $25 to $200.
• Mid-range project managers. Mid-range users include managers of large projects or multiple projects. Software for these projects would need a moderate level of sophistication. Cost: $200 to $500.
• High-end/multi-project users. High-end users are those with complex projects running concurrently, and whose team members work on more than one project at a time. Software would allow simulations and more complex analysis. Cost: $2,000 to $10,000.

Computer software can be a very effective tool for controlling project costs. Remember to purchase software that fits your budget, that you can quickly come up to speed on, and that will meet your needs.

Tools and Techniques for Cost Budgeting

Budgeting for your project is not simply a matter of taking the cost estimates for various activities and saying, "This is the budget for this task." Estimates provide merely the base or frame upon which you will build a finalized project budget.

You can use a number of tools and techniques to take your bare-bones estimates and create the budget that will guide all your cost-control efforts. The tools and techniques of budgeting are based on the tools and techniques for cost estimating. Several tools and techniques you can use for cost budgeting are described below.

1. Create contingency funds and a management reserve.
The main difference between an estimate and a budget is the additional cushion a budget has built into it. Budgeting takes your estimates a step further by adding contingencies based on previous experience and risks related to particular activities.

Contingency funds are specific provisions for unforeseen increases in costs at the project activity level. In other words, contingencies are added to work packages and activities at the lower level of the work breakdown structure.

While cost budgeting takes place at the project activity level, it also takes place at the project management level. General project budgeting takes into account overall risk and establishes a management reserve for the project. This account contains a percentage of the project's funds that are set aside for potential problems.

The management reserve is held over and above the budgets for individual work packages. The size of a management reserve depends on the type of project, industry standards, and the guidelines for establishing reserves found in the project's risk management plan.

Although a number of factors must be weighed when developing a management reserve, you can follow this general rule of thumb: find the optimal add-on percentage that will minimize risk and yet not be overly cautious. You want to ensure that actual costs don't exceed your estimates, but you also want to remain competitive and avoid creating a "fat" budget.

2. Identify the ranges of accuracy for each of the cost-estimating techniques.
You developed the cost estimates for your project using one or more of the cost-estimating tools and techniques that are listed below. How accurate do you think your estimates are? It depends on the method you used, since the degree of accuracy varies between estimating techniques. Cost budgeting uses the deemed accuracy of your estimates to come up with appropriate contingencies.

• Parametric modeling. Parametric models provide a rough order of magnitude. These estimates could have a range as great as plus or minus 35 percent. To increase accuracy for budgeting purposes, you may want to run project activities through a more detailed methodology, such as bottom-up estimating.
• Analogous estimating. The accuracy of estimates improves somewhat if you have based cost estimates on a similar project. An analogous, or top-down, estimate may be accurate to plus or minus 15 percent to 20 percent. The range will decrease relative to an increase in similarity between the two projects.
• Bottom-up estimating. Bottom-up estimates are the most reliable (plus or minus five percent to 10 percent) since you have examined each activity in the work breakdown structure. When preparing a budget based on detailed and finalized estimates, you can reduce contingencies and overrun allowances due to the reduction in risk.
• Computerized tools. Project management software greatly simplifies cost budgeting. You can use statistical analysis and simulation to generate a budget based on the probability that actual costs will be over or under the base estimates, giving you an accuracy range as low as plus or minus five percent.

3. Use cost-budgeting techniques based on the cost-estimating techniques you used.
As you work with your base estimates to develop a project budget, remember how your estimates were developed and their level of accuracy, since you will use cost-budgeting techniques based on the cost-estimating techniques you used.

For example, you may have used a parametric model or analogous estimating to develop your cost estimates. If you based estimates on another accurate budget or used an accepted model, why not base the new budget on these, making allowances for any differences? You can use the accuracy range of your estimates to find the "most likely" total cost of your project. Set your budget somewhere between the low and high cost.

If accuracy is not paramount and you are looking for a general contingency, you can use the formula: Most Likely = Estimate + (x percent ÷ 2). Take the maximum cost based on the range of results, divide it in half, and use it as the "most likely" amount. This dollar figure, or percentage amount, is what you add over and above the estimated amount.

Have you used the bottom-up technique to develop the cost estimates for your project? If so, you can use statistical sums to develop the cost budget. The most common approach is to use the Expected Value calculation for each estimate. This formula is: Expected Value = (a + 4m + b) ÷ 6.

In this formula, Expected Value is the mean or average of the base, most likely, and maximum values, a = low or most optimistic forecast, m = the most likely estimate, and b = high or most pessimistic forecast for cost outcomes. Sum up the values for each estimate and base your budget on the total.

You can follow a number of guidelines for setting base budgets when you have used an estimating technique other than bottom-up estimating. Use computerized tools to assess risk and determine appropriate contingencies. You can also use the contingencies from other similar projects as a benchmark. The most likely cost will fall somewhere between the maximum and the base estimate.

In summary, cost budgets are based on the general accuracy of, and statistical information about, cost estimates. Budgeting depends on the assessed risk related to individual activities and the project as a whole. Appropriate contingencies are based on known risks. The higher the impact and probability of the risk, the more contingency you will want to allocate in your budget.

Computerized Cost-estimating Tools

Whichever cost-estimating technique you choose for your project, you'll find that performing cost estimates manually can consume a lot of time and resources. If you feel you would rather be spending your valuable time actually managing your project, you'll want to consider using computerized cost-estimating tools.

Even the simplest tool can dramatically speed up cost estimating by totaling long columns or rows of figures in a split second. Which tools do you use in the workplace now? Perhaps you use a basic spreadsheet program, or you may use project management software.

A computerized spreadsheet of project costs allows for easy reference and analysis from a single page. Most basic applications also enable you to create simple charts and graphs for reporting purposes.

Project management software applications are specifically designed to aid in the planning and controlling of project activities. These programs are designed to make schedule and cost control much easier for project management teams.

Most software applications contain cost-estimating features that enable you to develop your cost estimates quickly and accurately. More details on how project management software can benefit your project are provided below.

• Triangulation. Triangulation is the act of using two points in space to accurately position yourself. You can use your computer to run two or more sets of cost estimates using different approaches in order to verify and affirm their accuracy.
• Simulation. There are some fairly sophisticated software products on the market that perform simulations. These programs enable you to develop various cost performance scenarios based on a few key inputs.
• Integration. Computer software enables you to integrate your cost estimates with your company's coding system for cost accounts. Your project team will also benefit from having cost information about current and past projects available on-line through a computer network.

There is a range of project management software available, from low-end software you can use to manage simple projects to high-end software that will enable you to handle multiple or complex projects. You should choose the product that best meets your needs.
Computerized tools have a number of advantages when used in cost estimating. They can save you time and money in the following ways.

1. They can simplify the use of other costing techniques.
Computerized tools simplify the use of other cost-estimating techniques, including analogous estimating, parametric modeling, and bottom-up estimating. Cost estimating often relies on statistical analysis that is simplified by computers. Totaling and rolling-up costs is also quicker and more accurate if you use computerized tools. More details are provided below.

• Analogous estimating. Analogous estimating means using the actual cost of a previous, similar project as the basis for estimating the cost of a current project. With the right software, you can easily use computerized databases to aid in cost estimating.
• Parametric modeling. You know how well computers crunch mathematical formulas. Put this power to use if your project lends itself to parametric modeling as the best cost-estimating technique to use.
• Bottom-up estimating. Even the most basic of applications can make bottom-up estimating much easier and faster. Automated spreadsheets would be ideal for totaling individual work items, and then rolling-up the individual estimates to find the project total.

2. They can calculate cost estimates quickly and accurately and enable you to perform simulations and "what if" analyses.
Computerized tools make preparing a variety of costing alternatives easy. You can decide which estimates are most feasible and achievable in the current project. Computer applications can also run simulations and do this much more quickly and accurately than most humans can.
Plus, you can use your computer to consider costing alternatives and to perform "what-if" analyses. For example, you could "ask" your software, "What if I add five percent to all production estimates?" or "What if I used this type of metal?"

Speed, accuracy, and the ability to run simulations are all characteristics that make computerized tools both time-savers and money-savers when developing cost estimates for a project.

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.

Project Tools: Quantitatively-based Durations

If you had five lawns to mow and you knew it took you about an hour to mow one lawn, then how long would it take you to mow all five? Pretty simple, right? Well, that's how easy it is to use quantitatively-based durations to estimate project activity durations.

Quantitatively-based durations are often the simplest types of estimates to make, provided you have accurate activity information with which to work. The two types of activity information required to calculate quantitatively-based durations are quantities of work and productivity unit rates.

• Quantities of work to be performed refers to work amounts. Some examples of quantities of work to be performed for each activity are number of graphics, meters of cable, and tons of sand.

• Productivity unit rates refers to the length of time required to complete a fixed amount of work. Examples of productivity unit rates include hours per graphic, meters of cable per hour, and tons of sand per day.

Consider the example of a contractor who is building a new overpass as part of a highway project. Based on the size of the overpass, the project manager knows that she will require about 40 tons of concrete to complete the project. Since she will be working with a crew that she has worked with before, she knows it will take around five days to pour each ton of concrete.
In the example above, 40 tons of concrete represents the quantity of work, while the productivity unit rate for the project is five days per ton of concrete.

Understanding quantities of work to be performed for each activity and productivity unit rates provides useful information to project managers. This information is useful because it provides the data required to perform quantitatively-based duration calculations.

Quantitatively-based durations are calculated by multiplying the quantities of work to be performed for each activity by their productivity unit rates.

Remember, quantitatively-based durations can help you perform activity duration estimates, which can help you avoid surprises that could throw off your project schedule.

Project Activity Sequencing Outputs

Project activity sequencing consists of the methods and tools used to set the stage for the most efficient and trouble-free project plan. Project activity sequencing has several outputs, including the project network diagram and activity lists.

The project network diagram
One output that results from activity sequencing is the project network diagram. This diagram may be produced manually or on a computer.

The project network diagram includes full project details, including clear, concise, self-explanatory names for all project activities.

Full project details include "hammock activities" as well. For example, an auto parts manufacturer inspects all the parts it produces. Rather than repeat the inspect activity in the project network diagram, the manufacturing company rolls all inspection into a single summary or hammock activity.

Overall start and finish dates are then associated with the single hammock activity. One or more summary or hammock activities often make up part of full project details.

The project network diagram includes a summary narrative. The summary narrative outlines the basic activity sequencing approach used in the network. The summary narrative provides details about the use of dependencies, sequencing assumptions and leads and lags.

The summary narrative outlines how dependencies are included in the project, how outside dependencies will be handled, and which dependencies are mandatory or optional.

The summary narrative also includes assumptions about sequencing. It may be assumed, for example, that testing can start after 25 percent of development has taken place.

In addition to assumption, the summary narrative outlines how leads and lags will be handled. In a finish-to-start relationship, an activity with a lead of five days may start five days before its predecessor has finished. An activity with a lag of five days cannot start until five days after its predecessor activity has finished.

Finally, the project network diagram contains a description of unusual sequencing. Unusual sequences occur in a network to allow for things like client preferences or specific resource availability. For example, in setting up a computer network, it may seem logical to configure the servers before configuring the workstations. The customer, however, may stipulate that employees are to begin training and work on their workstations immediately. As a result, the configure workstations activity takes place in the project network diagram before the configure servers activity.

Activity list updates
The second output from activity sequencing is activity list updates. Network diagram preparation may reveal instances where an activity must be divided or redefined in order to diagram the correct relationships.

As an example, consider the initial activity list for installing a computer network. Attempts to construct a network for this project reveal that there is overlap between the build and test activities. Computer tower components must be tested at intermediary intervals.

If the build and test activities have been defined at too high a level, the sequencing diagram may not show this overlap. The solution is to break the build and test activities down into their component parts, and indicate their dependencies on other activities. Based on this, a new project network diagram can be constructed.

The outputs from activity sequencing are the project network diagram and the activity list. These two outputs are important components in the creation of the project schedule. The project network diagram reflects project activities and their dependencies. After initially diagramming the network, the activity list may remain the same or change based on the diagram.

Project Decomposition and Templates

To complete any task, you need to know what tools are at your disposal. Project managers who are engaged in defining project activities use two main tools to accomplish this task: decomposition and templates.

Decomposition
Decomposition means breaking a project deliverable down into a list of achievable activities.

Telecom Corp. is a telecommunications company. One service that it provides to its clients is the virtual private network (VPN). VPN project deliverables include a firewall, routers, encryptors, Internet service, IP backbone, and secure remote access.

The last deliverable could be decomposed into the following three activities:

1. provide remote access
2. provide encryption key
3. authenticate users

After dividing a deliverable into potential activities, the team must evaluate each activity using the following six criteria.

1. Status is measurable.
2. Sign of completion is visible.
3. Start and end conditions are clearly defined.
4. Time and cost are easily estimated.
5. Duration has acceptable limits.
6. Work assignments are independent.

The first criterion to consider is whether the activity's status is measurable. For example, one deliverable in a Telecom Corp. VPN project is secure remote access. One activity defined for this deliverable is authenticating users, and it is measurable. When half the users have working login IDs and passwords, the activity is fifty percent complete.
Whether there is a visible sign that the activity is complete is the second criterion. This sign could be the delivery of a document or product, or it could be the manager's signature. In the Telecom Corp. example, the visible sign that users have been authenticated to the network is when all users can access the network with a functional user password.

The third criterion to use is whether an activity has clearly defined start and end conditions. Once the beginning event has occurred, work may begin on the activity and continue to a visible sign of completion. For Telecom Corp., the authentication activity should only begin when the network is in place. The authentication activity is clearly finished only when the users are able to use their login IDs and passwords to access the VPN.

Whether activity time and cost can be easily estimated is the fourth criterion to consider. This is accomplished by estimating the time and cost of a project's activities. In the Telecom Corp. example of authenticating users to the VPN, time can be estimated at a few days.

The fifth criterion to examine is whether an activity's duration is within acceptable limits. Although there is no set rule on this, projects should avoid activities with long durations. Delays in such activities can create serious scheduling problems. In evaluating Telecom Corp.'s authentication activity, duration can be estimated at a few days. Delays here would not create huge project delays or large-scale scheduling problems. The authentication activity then meets this fifth criterion.

The final criterion is an activity's level of independence from other project activities. Independence in an activity means that once work has begun on the activity, it may continue without interruption. For example, once Telecom Corp.'s authentication activity begins, it is not dependent upon any other project activities for completion.

Templates
The second tool a project manager and team uses to define project activities is a template. A partial or total activity list, or WBS from a previous project, can be used as a template for a current project. Using templates simplifies project activity definition and reduces project costs by improving team efficiency.

To define project activities, project managers use decomposition and templates. Decomposition means breaking project deliverables into achievable activities. A template is a partial or total WBS, or activity list defined in a previous project, which can be used in a current project.