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Project Management Blog
Estimating is one of the most important parts of the planning process. Effort hours (man hours) must be estimated first, before duration and cost estimates can be prepared. Use the following ten steps to estimate effort hours.
  1. Determine how accurate your estimate needs to be Typically, the more accurate the estimate, the more detail you need to understand about the project, and perhaps the more time that is needed. If you are asked for a rough order of magnitude (ROM) estimate (-25% - +75%), you might be able to complete the work quickly, at a high level, and with a minimum amount of detail. On the other hand, if you must provide an accurate estimate within 10%, you need to spend more time and understand the work at a lower level of detail.
  2. Create the initial estimate of effort hours Estimate the work of the project using one or more estimating techniques (analogy, prior history, PERT, modeling, etc.). (These techniques will be described in a separate Tips email).
  3. (optional) Factor the effort hours based on the resources assigned Your estimates are probably based on the effort it will take an average resource to do the work (or perhaps the estimates are based on the effort it would take if you did the work). Sometimes you also have knowledge of the exact resource or the type of resource that will be assigned. If you do, you may want to factor the estimate up or down based on that resource.
  4. Add specialist resource hours Make sure you have included hours for part-time and specialty resources. This could include freelance people, training specialists, administrative help, etc. These are people that may not be obvious at first, but you may need them for special activities.  Because they are typically in project support roles, you may have forgotten to include their activities in the original Work Breakdown Structure.
  5. (optional) Add rework time In a perfect world, all project deliverables would be correct the first time. Rework is the result of flaws in your quality management process. It means that a deliverable that you thought was complete turns out to need more work. Some projects add in effort hours for rework, although this should be minimized.
  6. Add project management time Project management takes effort. A rule of thumb is to add 15% of the effort hours for project management. For instance, if a project estimate is 12,000 hours (7 - 8 people), then a full-time project manager (1800 hours) is needed.
  7. Add contingency hours Contingency is used to reflect the uncertainty or risk associated with the estimate. If you are asked to estimate work that is not well defined, you may add 50%, 75% or more to reflect the uncertainty. If the estimate was required on short notice, a large contingency may be required. Even if you have time to create a reasonably accurate estimate, your contingency may still be 10-25%. If you do not add a contingency amount, it would mean that you are 100% confident in your estimate. This may be the case if similar types of projects have been done before.
  8. Calculate the total effort Add up the estimates for all the work components described above.
  9. Review and adjust as necessary Sometimes when you add up all the components, the estimate seems obviously high or low. If your estimate does not look right, go back and make adjustments to your estimating assumptions to better reflect reality.  
  10. Document all assumptions You will never know all the details of a project for certain. Therefore, it is important to document all the assumptions you are making along with the estimate.

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Quick, tell me about your employees: What are they doing? How long do they spend doing it? What should their top priorities be? Now tell me about your projects: Are they on time? Within budget? How many projects were profitable this year, last year, over the last five years? Perhaps you think these questions are unreasonable and maybe they are. But we live in an unreasonable world where every advantage should be realized. Because the truth is, while you may not be able to answer these questions easily, a large majority of your competitors can. Guess who holds the cards when it comes to executing complex, buzz-worthy projects?

Luckily, there are ways to quickly gain this knowledge. In fact, some excellent programs exist today that could provide all the information necessary to answer the above questions in one dashboard. Further, it is not at all difficult to implement a system in your company that will allow you to reap the benefits of well-tracked projects and resources.

1. Know Where Your People Are… And Where They Should Be.

In any organization, the immediate benefits of knowing what your employees are doing at any given point should be quite obvious: you want them working on tasks that are actually beneficial to the company. However, if you mistakenly believe that any forward progress is beneficial, roles become static and repetitive. Companies that have the same employee doing the exact same job for an extended period of time are quite frankly failing themselves and their employees. While roles might not be dynamic, humans are. Employees might become better at certain tasks over time and excel in areas outside their traditional roles.

If you are not paying attention, you could lose out on productivity. Additionally, your employees will get bored and dissatisfied very quickly. Implementing a system that allows employees to track time against specific tasks will allow you to see where they are most effective. Odds are that’s what they enjoy doing best. Now, don’t go changing employee job roles every day, but do consider a change when the evidence suggests that they’ve honed skills in a new area.

2. Know Exactly What People And Resources You Have Available

Project planning can be incredibly time consuming and tedious, but it’s worth it to keep a project running smoothly. A critical piece is creating your team. This task becomes much easier when you know exactly who is available (with the skill sets you need), and what their schedule will be for the duration of the project. It would create unnecessary stress if you, say, assigned an employee to a task or project and then found out the employee scheduled their annual trip to Acapulco for two weeks in the middle of the project. If you have an automated project management system, employee schedules are readily apparent and any requests for leave will be noted. You will also know the tasks that other employees are working on so you can avoid stretching resources too thin or allocating an individual to tasks they aren’t well suited for.

3. Track Time to Individual Projects

Tracking employee time spent on projects is great, but you will reap maximum benefit when you track each project separately. This allows you to view each project as a unique element in company profitability. This insight is incredibly valuable when allocating resources because you will know the parameters for each project relative to the current availability of the company. While too many metrics can paralyze decision-making, differentiated metrics allow you to execute projects with surgical precision.

4.  Analyze Resource Use Compared to Project Completion 

This is probably the most useful feature of tracking time to individual projects as it ensures you do not waste time or money…as in, ever. If you compare time and resources spent on a project versus percentage complete, you can see which projects are absorbing too many resources to remain profitable. This allows you to redistribute assets to projects as necessary or even kill projects that are too far-gone to benefit your company. It is always better to determine issues early on, and a dynamic tracking system provides that insight. Sometimes it’s best to cut your losses and move on; costs can quickly spiral out of control, causing your situation to worsen.

5. Maintain a Backlog of All Projects 

In the long run, having a backlog of your projects will be incredibly valuable, though it takes some time to build. It will allow you to make estimates with pinpoint accuracy. Determine how many people it normally takes to finish a project; improve accuracy of your budgets based on scope; and perfect timelines based on overall project parameters. Even the least efficient projects become valuable because you can glean just as much information from them. You will know what did not work, what factors caused you to go over budget, and learn from the mistakes. Maintain the backlog well, and make sure it is easily accessible, because it can reduce the margin of error on your most important business tasks, and save time and money.

As you can see, none of these actions are hard to do, and with a quality, automated time and project tracking system in place, they actually take less time than traditional paper based timesheets. The business advantages make it well worth the effort, and the conservation of time and resources will prove a huge benefit for your company. With a deeper understanding of your processes, you can move quickly and efficiently, and stay ahead of any competition to complete important (and profitable) projects.

Author Bio:

Curt Finch is the CEO of Journyx. Founded in 1996, Journyx automates payroll, billing and cost accounting while easing management of employee time and expenses, and provides confidence that all resources are utilized correctly and completely. Curt earned a Bachelor of Science degree in Computer Science from Virginia Tech.  Curt created the world's first web-based timesheet application and the foundation for the current Journyx product offerings in 1997. Learn more about Curt at http://journyx.com/company/curtfinch.  
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Many owners of small businesses have a preconceived notion that project management is for their larger competitors. They may consider project management unnecessary simply because they do things on a smaller scale. In reality, even in small businesses, questions of meeting deadlines, controlling costs, respecting budgets and satisfying customers with efficient delivery of the product or service are of utmost importance.

Lets take a quick look at the principals of project management and see just how it could help your business.

What is a Project?

A “project” is any activity carried out that is separate from the regular running of the business. Businesses will have accounting processes, client calls and follow-ups, day-to-day sales and invoicing. A project is a particular activity, supported by the routine, but unique in that it involves specific attention during an established timeframe.

What is Project Management?

Project management is coordination. Beginning with a planning stage in which objectives, budgets and individual responsibilities are laid out, project management becomes a group effort, with a leader, the project manager, motivating and controlling the ongoing project. In small businesses, project management is working in harmony with shared goals resulting in effective results.

Planning the project

Small business projects will benefit from careful planning. A project manager will first identify what the objective of the project is, then indicate when the project should come to its logical conclusion. Input from the participants is essential at this stage as they will be responsible for the work in bringing the project to fruit.

Why are you doing a project? The answer will be the objectives: to increase sales, to bring in new clients, to diversify business opportunities. How will the project be achieved? Through clear, planned steps and responsibilities outlined, with goals and deadlines. What can go wrong? Everything or nothing; however, through brainstorming pitfalls with the participants, alternatives can be developed to meet obstacles.

The Role of the Project Manager

Once the planning and presentation stage has been completed; a project manager will become the main coordinator of the project. Their responsibilities will include evaluation of record keeping, deadline control, and problem solving and overall keeping to the objectives. They are the leader, the answer-man. Above all, they must be a motivating factor, reminding participants and management of the value of the project itself and its importance to the business once completed.

Common Pitfalls in Project Management

- Though a clear objective is important, concentrating only on the objective without consideration for the individual actions can be damaging to the project and moral. Each action carried out is one move closer to the objective and should be recognised, evaluated and shared.

- Letting deadlines slip can bring a project to a halt, especially if the different participants inter-depend on their colleagues. Deadlines are also powerful, effective motivators. Keeping a deadline in mind, preparing for that deadline through regular work towards meeting it, will help keep a project running smoothly.

- Record keeping is extremely important. Both participants and the project manager should keep careful records of all activities during a project, from spending to telephone calls, from time spent creating a form letter to time spent in meetings. This information will be of use during the evaluation once the project is over as part of the learning process for future projects.

- Making things overly complicated can slow a project down. When an activity takes on a complicated format, it is best not to delve into the complications. Divide things into simple steps tackling them one by one, creating mini-objectives that will gather together into the larger objective.

SUMMARY

Doing business successfully is more than selling a product or a service, invoicing, and doing up the payroll. A business of any size, especially a small business, has the resources of collaborators and employees who can help find innovative ways of building the business. Projects are one way of being innovative; however, they should not be improvised. A successful project will be one that has been managed effectively, from planning through evaluation at its conclusion.

 

Published in Blogs
Tuesday, 05 March 2013 08:10

Questions & Answers for the PMP Exam

The Questions & Answers for the Project Management Professional (PMP)® Exam is now available for download at http://traffic.libsyn.com/pmpodcast/PMP_Exam_Q_and_A.pdf

If you are already a subscriber of The Free PM PrepCast, you will get this for free together with other PMP® Exam prep resources.

These Q&A's are answers to questions asked during a Free PMP® Exam webinar held by Cornelius Fichtner, PMP, CSM. The questions and answers here cover such topic as becoming a certified PMP®, the exam application and process, preparing for the exam, exam study materials, taking the exam, and maintaining your certification after you pass the exam. Some questions and answers also address the Certified Associate in Project Management (CAPM)® exam offered by the Project Management Institute (PMI)®.

Dont' be left behind. Download your free copy now of this very valuable resource, or to get even more, be a subscriber of The Free PM PrepCast.

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PMProject accounting is a critical concept for today’s business world, yet most businesspeople do not know their project accounting data. 

For the last 30,000 years, our hunter/gatherer and farmer ancestors have always understood their costs of production. Why is it okay that in the last 50 years, nobody does anymore? It’s not. 

Project accounting for the hunter/gatherer is easy. The ROI is simple to calculate and it's intuitive.  And if the ROI isn't good enough, a harsh environment would make sure you didn't make that mistake very long because you'd be dead. Farmers invented accounting – eventually double-entry bookkeeping - which many people argue is the basis for civilization. It enabled the measurement of and accumulation of capital, without which no progress is possible. Today, knowledge workers work with knowledge and information instead of with "stuff". Accounting for knowledge work is different. 

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Cost engineers understand the value of effective project cost estimation and analysis more than anyone.  In today's competitive environment, every dollar counts and organizations cannot afford to remain ignorant about true project costs.  Fortunately, there are a few formulas that help cost engineers to track and analyze project cost and to estimate projects with increasing accuracy in the future. 

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Much has been written about how best to establish a PMO. There are many elements to take into account, and this article seeks only to provide what we believe are a few “pointers” to consider.

For purposes of this article, we’ll assume that we are in a situation in which we (or you) work for an organisation with no existing type of PMO. It is important to fully understand the ‘Driver’ for introducing a ‘PMO’ of any type. When we say “of any type”, we mean – what type of PMO are we talking about? What does the “P” stand for in this abbreviation for a Management Office? A PMO can serve to control governance for projects, it may oversee a program of work, or it can operate at an Enterprise level and therefore be more strategic. In one way or another, all PMOs are ‘Governing Bodies’. The questions you need to ask are:

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Wednesday, 10 August 2011 14:35

Is there an “Art” to Project Management?

sculpture_-_WhittWhen you think about “art”, words such as music, literature, film, photography, sculpture, or painting come to mind. Rarely, if ever, do you hear Project Management. Why is this? I think Project Management should be added to that list. One definition of art is “the product or process of deliberately arranging items (often with symbolic significance) in a way that influences and affects one or more of the senses, emotions, and intellect”.

I don’t know about you, but every project I undertake involves influencing and affecting one or more of the senses, emotions, and intellect to get things done! Sure, there’s always the “science” of project management…identifying deliverables, creating a WBS, compiling schedules, and monitoring budgets. But, there’s also the “art” of project management that involves knowing when to follow your gut instincts, knowing when to talk or remain quiet, knowing when to raise a risk or let it ride and knowing just the right thing to say to different people to bring your project to closure.

What do you think? I’d love to hear if you think there is an “art” to project management and what that includes.
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Whether you are a current practitioner in program or project management or you are considering a career in this profession, you may have thought about the value of obtaining one or more project management credentials.

If you are already certified and/or have one or more credentials, you may be contemplating ‘broadening your armory’ by seeking additional credentials or certificates in program or project management. For many reasons, the three of us are believers in holding credentials. To prove our point, a quick review of our bios at the end of this article shows that we all have several program and project management credentials. So what is the benefit of obtaining one or multiple credentials? Is there a typical value against the investment in time and money?

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We have all been told that communication with all stakeholders, particularly the core project team, is one of the central responsibilities of the Project Manager. We support this idea and have mentioned it in several of our previous articles. You may have seen a well-known communications formula of ‘N(N-1)/2’ used as proof that the addition of new members to any program or project team increases the number of communication channels exponentially. For example, if your team increases from 15 to 17, the number of possible communication channels goes up by 31; try the calculations and you’ll see what we mean.

Applying this theory, a small team may have ten to fifty communication channels, while a large team may have thousands. A Project Manager should understand that the time required to manage communications grows with the number of channels, and begin to look for ways to effectively and efficiently communicate with their project stakeholders – keeping in mind that different stakeholders require different information at different times in the project. (Our article on Project Success Planning covers this topic.) With the ease and availability of blogs in today’s corporate setting, you may be asking yourself, “Is blogging a good communication option for my project?”

Because each project phase requires the appropriate emphasis at a given time, the number of channels the program or project manager must manage varies throughout the lifecycle of a project. For example, in the early stage of a project – let’s call it Preliminary (or Discovery, the term we use in our article “Nine Essential Steps for Project Success”) – you may have a relatively low number of channels because you are only working with a few key stakeholders. In contrast, in the Execution or Deployment phase, your team will be fully engaged with many people. Further, communication by the project manager is a key area of focus as the project lifecycle draws to a close. Figure 1.1 below illustrates an example/typical scenario. (Note: the lifecycle phases are examples; your organisation probably has different ones).

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