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Feasibility Study

Financial Planning with Project Management Tools

January 6, 2014 – 9:06 pm

Creating a Financial Plan with Project Management Tools

Within this article, we will help you as a Project Manager to budget for project expenditure by describing:

How to create a Project Financial Plan with Project Management Tools

Early in the Project Planning phase, you will need to define the overall budget for the project implementation. However setting a budget isn’t an easy task. In fact, many experienced Project Managers would say that its more of an Art rather than a Science! As challenging as it is, there are 4 steps you can take to create an accurate and realistic budget, by documenting a project “Financial Plan”:

Step 1: List the Financial Expenses

The first step taken when defining a Financial Plan and setting a project budget, is to identify all of the types of expenses that are likely to be incurred throughout the Project Lifecycle.

Typically, most projects spend the majority of their budget on purchasing, leasing, renting or contracting the resources to the project (e.g. labor, equipment and materials). However other types of expenses incurred may include those related to the:

  • Procurement of resources from suppliers
  • Establishment of a Project Office
  • Administration of the project

Step 2: Quantify the Financial Expenses

Once you have identified a detailed list of expenses to be incurred throughout the project, the next step is to forecast the unit cost of each expense type listed. The unit cost is simply the cost of a single unit of a particular expense item. For instance, the unit cost for:

  • labor may be calculated as the cost per hour supplied
  • equipment may be calculated as the rental cost per day
  • materials may be calculated as the purchase cost per quantity

After listing the unit costs, you should calculate the total amount of each expense item needed to undertake the project using these project management tools. For instance:

  • Identify the number of roles required
  • Quantify the items of equipment needed
  • Determine the amount of materials required
  • Quantify the procurement items to be sourced from suppliers
  • Calculate the administration costs the project

Step 3: Construct an Expense Schedule

You have now collated all the information needed to build a detailed expense schedule. This schedule enables the Project Manager to calculate the total cost of undertaking the project on a daily, weekly or monthly basis.

To create an Expense Schedule, build a table which lists all of the expense types down the left hand side of page, and all of the weeks in the year across the page. Then identify for each week and for each expense type, the amount of financial expenditure to budget. Once complete, you can sum up all of the expenses for any particular week to gain a weekly budget for the entire project.

Of course you may wish to calculate a daily, monthly or yearly view, based on your particular project need. Also don’t forget to list any assumptions made during the creation of this Financial Plan. For example, it may be assumed that:

  • “The project delivery dates will not change during this project.”
  • “The unit costs forecast are accurate to within 5%.”
  • “The funds listed by this plan will be available as required.”

And finally, list any constraints identified during this financial planning process. For example:

  • “Limited information was available when identifying costs”
  • “A market shortage has resulted in a high labor costs”

Step 4: Define the Financial Process

Now that you have created a detailed Expense Schedule, you need to define the process for monitoring and controlling expenses (i.e. costs) throughout the Project Lifecycle. Define the Cost Management Process for your project by documenting the:

  • Purpose of the process
  • Steps involved in undertaking the process
  • Roles and responsibilities involved in undertaking the process
  • Templates used to support the process

There you have it! By completing the 4 steps listed above, you will be able to create a comprehensive Financial Plan for your project and ensure that you consistently produce project deliverables within budget. To complete a project inside budge, implement project management tools.

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Quality Plan

Creating a Quality Control Plan

December 23, 2013 – 9:50 pm

Creating a quality control plan is not something that can happen overnight or by accident. This is one of the important processes that must be documented in all business ventures that have the deliverable aimed at the global market place.

 

To begin a quality control plan, the use of a project management tool, the templates, is advisable. This is a structured document that has all of the necessary task that must be addresses for your quality plan to be complete. The project management templates are also created so the tasks are listed in the most efficient order to follow. This makes you plan more constructive to use when you are wishing to increase the level or just check the level of quality your deliverable will have.

 

To have a successful quality control plan, you must not only know the requirements of your customer or target audience, but put into place ways to achieve them. The plans are like a set of instructions that should be followed. By constructing your plan in a method that accomplishes the goals you need to obtain, the final result should be acceptable.

 

Just like in the six sigma methodology, your quality control plan should also have a structure that permits improvements to it. This will allow your staff to have valuable input into how to improve the efficiency and quality of the production of your deliverable. This makes it easy for your deliverable to be constantly improving. It also makes it easier to save money on the budget because you and your project team are working more efficiently.

 

By making your quality control plan as complete as possible, you can show your target audience you have addressed all of their needs and concerns when it comes to creating the deliverable they desire. This due diligence is what can help cut thru a great amount of red tape if or when a problem arises.

 

The creating of a quality control plan is not easy, but it is very doable. With the aid of knowing the goals of the business venture along with the right project management tools, this task can be accomplished quickly and easily so you can progress to the next task in your project.

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Project Life Cycle

Performing Project Management Life Cycle

December 9, 2013 – 4:49 am

Project Management Life Cycle Change Management

In this latest article, we’re discussed the topic of Change Management.

A project management lifecycle is typically undertaken within changing business environments, so it’s inevitable that during the life of your project, there will be some element of change required. Whether a customer requests a change to their requirements, management request a change in priority or team members request a change in roles, you will need an effective Change Management Process to minimize the resulting impact on your project. So here, we have described:

How to implement a “Change Management Process”

Change Management is the process of monitoring and controlling changes within a project management life cycle. By managing the implementation of change, you can:

  • Reduce the impact of changes to the project
  • Identify new issues and risks as a result of changes raised
  • Ensure that changes do not affect the project’s ability to achieve its desired objectives
  • Control the cost of change within the project

Change Management is comprised of the following processes:

Step 1: Identify Changes

The first step in the change process is to identify the need for change. Any team member can suggest a change to the project, if he or she believes it is needed to keep the project producing deliverables to the customer’s specified requirements. After identifying a need for change, the team member records relevant information on a Change Request Form (commonly called a CRF), describing the change, and identifying drivers, benefits, costs and likely impact of the change on the project management life cycle. The CRF is forwarded to the Project Manager for review and approval.

Step 2: Review Changes

The Project Manager investigates the change to identify the reason for it and its impact. Then he or she decides whether it is critical to the successful delivery of the project. Changes which are not critical to project delivery should be avoided whenever possible to prevent “scope creep” (i.e. the gradual increase in scope throughout the Project Lifecycle).

If the change is deemed critical to success, the Project Manager either approves the request or seeks approval for the CRF raised. In some cases, the Project Manager has the direct authority to approval minor change requests; however, in most cases the Project Manager needs to seek CRF approval from the Project Board.

Step 3: Approve Changes

The Project Board reviews the details in the CRF to determine whether or not the change should be implemented. Based on the level of risk, impact, benefits and cost to the project, it may decide to decline, delay or approve the change request.

Step 4: Implement Changes

The Project Manager approves all changes, which are then are scheduled and implemented accordingly. After implementation, the Project Manager reviews the effects of the change on the project to ensure that it achieved the desired outcome, when the change is then closed in the Change Register.

Throughout the Change Management Process, the Project Manager can monitor and control changes to the project managemeny lifecycle by keeping this Change Register up-to-date.

There you have it. By completing these 4 steps, you can carefully monitor and control project changes, to increase your likelihood of success. If you would like to use a suite of templates to complete each of these activities quickly and efficiently, then read about the Change Management Kit. This kit includes all of the project management templates, forms and processes required to perform these steps efficiently. Learn more…

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Project Closure

Efficient Project Closure with Project Management Tools

November 25, 2013 – 5:34 am

Efficient Project Closure with Project Management Tools

How to close projects quickly and efficiently using our project management tools

Once all the deliverables within a project have been completed and approved by the customer, the project is ready for closure. Closing a project is a task not to be under-rated, as it requires the review of the entire project to date and the completion of a comprehensive set of closure actions. Take the following steps to close projects quickly and efficiently.

Step 1: Confirm Project Completion

The first step in closing a project is to confirm that the project is ready to be closed. The project is only ready for closure when all the completion criteria specified in the Terms of Reference have been met in full. Examples of completion criteria may include:

  • The project vision has been achieved.
  • All the project objectives have been met.
  • The project has resulted in the stated benefits.
  • All the deliverables specified have been produced.

If you’re confident that the project has met all of the completion criteria specified, then the next step is to identify any outstanding items using the specified project management tools. These are typically activities listed as “Incomplete” on the Project Plan; however they may also be miscellaneous risks, issues or general items that are noteworthy and need to be raised. Identify the outstanding items required to be completed, in order to confirm that the project is ready for completion.

Step 2: Identify Closure Actions

Now that you’ve confirmed that the project is ready for closure, you’re ready to document the actions needed to close the project, within a “Project Closure Report”. This report describes how the:

  • Deliverables will be handed over to the customer
  • Documentation will be handed over to the business
  • Supplier Contracts will be terminated and contractors released
  • Project resources will be released. This includes:staff, equipment and materials.

You should also identify the actions required to close down the Project Office, including the cessation of premise rental agreements and cancellation of supply accounts such as water, electricity and phone lines.

Step 3: Undertake Closure Actions

Following the approval of the “Project Closure Report” by the Project Board, the Project Manager will be responsible for undertaking each of the actions listed within the specified dates. The Project Manager and Project Sponsor will stay in close contact as each closure action is performed, to ensure that the project is closed quickly and efficiently.

Only after all of the actions specified within the Project Closure Report have been completed, will the project be designated as officially closed.

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Project Time

Delivering on Time with Project Management Forms

November 11, 2013 – 5:22 am

Delivering on Time with Project Management Forms

To succeed as a Project Manager, you need to deliver projects on time and within budget. But delivering “on time” is not as easy as it sounds. A survey from the Standish Group estimates that up to 84% of projects fail to deliver on schedule. So how can you put processes in place to help you to deliver your projects on schedule? We suggest, by using these project management forms and by taking these steps:

3 Steps to Project Time Management

Time Management is the process of monitoring and controlling time spent within a project. By recording the actual time spent by staff on a project, you can:

  • Calculate the time spent undertaking tasks
  • Identify the staff cost of undertaking tasks
  • Control the level of resources allocated to tasks
  • Monitor the completion percentage of tasks
  • Identify any outstanding work required to complete tasks

To do all of this effectively within your project, you need to implement a structured Time Management Process. This process uses “Timesheets” upon which staff record their time spent undertaking tasks. The process also involves the use of a “Timesheet Register”, upon which you collate the time recorded by staff. With this information, you can update the Project Plan and assess whether or not the project is on time and likely to deliver within schedule. Here’s how you do it.

Step 1: Document Timesheet

The first step in the process is to capture all of the time spent completing project tasks, using the Timesheet from your project management forms. All project leaders, team members, staff and contractors responsible for completing tasks in the Project Plan should complete Timesheet forms to record the time they spend.

Timesheets exist in various formats, including paper, spreadsheet and software, and they should be used from the moment the Project Plan is approved until the project is closed.

To ensure that all staff members record their time accurately, they should complete their Timesheets as they complete each task, rather than waiting until the end of the reporting period to complete them. They should then forward their completed Timesheets to the Project Manager on a weekly basis for approval.

Step 2: Approve Timesheet

Upon review of each Timesheet, the Project Manager will:

  • Confirm the time spent against tasks listed in the Project Plan
  • Confirm the team member was delegated the task
  • Determine whether the time spent was reasonable
  • Identify whether sufficient progress has been made
  • Identify issues with the time spent and the progress achieved

Based on these conclusions, the Project Manager may decide to approve the timesheet, request further information from the staff member regarding the time spent, or decline it and raise a staff issue.
Step 3: Update Project Plan

After approval, the Project Administrator then enters all time recorded,  against the Project Plan. This allows them to identify:

  • The total time spent per project activity
  • The percentage completion of each project activity
  • The overall delivery of the project against the schedule
  • Tasks that exceed their completion date or forecast effort

The Project Manager is then notified of any exceptions and can choose to take corrective actions, such as:

  • Changing the team member assigned to the task
  • Allocating additional team members to the task
  • Providing additional time for completing the task
  • Requesting assistance from suppliers to help complete the task

Throughout the Time Management Process, the Project Administrator monitors and controls the time spent within the project, by keeping a Timesheet Register up-to-date.

And there you have it. If you take these 3 steps and use project management forms for performing Time Management within your project, you’ll greatly increase you chances of delivering projects on time and within schedule.

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Project Life Cycle

Project Management Life Cycle Phase Reviews

October 28, 2013 – 5:16 am

Phase Reviews in the Project Management Life Cycle

As a Project Manager, would you like to review your project management life cycle to see if it’s on track?

At regular points during the Project Management Lifecycle, you’ll need to perform a formal project review (otherwise known as a stage gate review), to determine whether your project is on track. To help you do this, we’ve described how to:

How to Perform Project Reviews Efficiently

There are many ways that a project management life cycle can be reviewed to determine its current status. These include:

  • Quality Assurance & Control Reviews
  • Project Audits & Independent Reviews
  • Post Implementation Reviews
  • User Acceptance Reviews

But the most important type of project review is completed at the end of each project phase, it’s called a “Phase Review”.

A Phase Review is a formal review of the project undertaken by the Project Manager, to determine whether the project is currently on schedule, within budget and has generated all of the required deliverables to date. The results are documented in a Phase Review Form which is presented to the Project Board, to gain the approval to proceed to the next phase in the Project Lifecycle.

You need to complete a Phase Review at the end of each phase, to allow your board to determine whether your project has achieved its objectives to date and is ready to proceed to the next phase.

So how do I complete Project Phase Reviews? Here’s how to do it…

Step 1: Identify your Review Criteria

The first step is to identify the criteria that you’re going to review the project against. Examples of review criteria are:

  • Have the business benefits been defined?
  • Was the feasibility of the solution determined?
  • Is the project on schedule as per the Project Plan?
  • Is the project within budget as per the Financial Plan?
  • Has the project produced the required deliverables?
  • Have there been any substantial changes?
  • Are there any critical project risks?
  • Are there any high priority issues?

Step 2: Complete the Phase Review

Having defined your review criteria, you’re now ready to conduct your Phase Review, to determine whether the above criteria have been adequately satisfied. To perform the review, you will need to assess the project’s performance against the project plan, financial plan and quality plan. You will also want to check that all of the deliverables have been produced and that the quality targets have been met.

As well as determining whether the project is currently on-track, the review should also check that the project team have all of the resources needed to complete the project. For instance, if you need additional support, funding, people, equipment or materials, then this is the time to ask for it from your project board.

Step 3: Fill-in a Phase Review Form

You need 3 phase review forms at your disposal:

  • Initiation Phase Review Form
  • Planning Phase Review Form
  • Execution Phase Review Form

Complete the relevant form, depending on the phase you have just completed within your project. The form will help you to summarize the results of your phase review. You will need to clearly communicate the current status of your project, if you wish to obtain all of the resources needed to proceed to the next phase in the project lifecycle.

Step 4: Gain Approval to Proceed

As the Project Manager, you’ll then present your Phase Review Form at a board meeting held specifically to discuss the current status of the project and decide on its continuation. At this meeting, you will present:

  • The original project vision, objectives, scope and deliverables
  • The deliverables completed by the project to date
  • The progress of the project against the delivery dates
  • Any areas of slippage, in terms of time, cost and quality
  • Any key issues and risks that require attention

The Project Board will assess this information and reach one of the following conclusions:

  • Approve the project to proceed to the next phase
  • Request additional work be undertaken to complete this phase
  • Delay, transfer or close the project

Completing a Phase Review is a critical step in delivering a successful project, as it gives your Project Board more control and it helps you to share with them the responsibility for the delivery of the project.

By taking these 4 steps, you can ensure that your project progresses smoothly through each of the project management life cycle phases, with the full support of your Project Board.

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Project Risk Management

Documenting the Risk Management Process

October 14, 2013 – 11:54 pm

Documenting the risk management process has become less frustrating today, with the use of the risk management template. This preformatted tool was designed to help reduce the time required for this important document. Because the path to follow, along with the sections required, in this document are already set, the project manager can then concentrate on the details of the process.

The biggest challenge to properly documenting the risk management process is the inclusion of all the possible risks your business venture could encounter. There are general risks that are well known in the business world, but each business sector also has its own sets of risks to worry about. On top of that, each region of the world will again have a different set of risks from other parts of the nation. Each and all of the risks must be listed in this document for it to truly be effective.

Once all of the risks have been identified, the risk management process must then prioritize them. This has to be done with two approaches that work together. You must know the impact potential of each of the risks. You also have to know the damage each of the risks can cause if they actually do impact your project. Weighing the importance of each characteristic of the risks, and listing them in the correct order to be mitigated, is essential to handling as many risks as possible with the limited budget you have available to you.

With this part of the risk management process completed, the next step is the actual pre-mitigation process. This is where you decide if any of the risks pose enough of a danger to your project that you take steps in advance to prevent as much damage from occurring, if and when that risk impacts your business venture.

The documenting of the risk management process is essential for the project manager that wants to be prepared for any possible problem their business venture might encounter. The risks generally are impacted during the execution phase of a project’s life cycle, so preparation and plans must be made before you begin production of your deliverable.

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