5. project management – application (2)

Project Management –
Application (2)
8/8/2017 1Arch. Dania Abdel-Aziz/ Lecture 7
University of Jordan
Year 2016/2017
Second Summer Semester
Arch. Dania Abdel-Aziz

We are going to discus Project management under those main three
headlines:
1. Description.
2. Application.
3. Implementation Procedure.
8/8/2017 Arch. Dania Abdel-Aziz/ Lecture 7 2

2. APPLICATION

Content
1. Introduction.
2. Estimating Projects.

• Projects may involve a single unit of one organization or may cross-
organizational boundaries as in joint ventures and partnering.
• They may involve a single person or thousands and also may require less
than 100 hours to complete or over 10,000,000.
• Considering the above it is clearly obvious that implementation cost and
time can differ from project to project.
Introduction

Estimating Projects
Estimating
• The process of forecasting or
approximating the time and cost of
completing project deliverables.
• The task of balancing the
expectations of stakeholders and the
need for control while the project is
implemented.

What to Estimate?

Why Estimating ?
EXHIBIT 5.1
Estimates are needed to:
• support good decisions.
• schedule work.
• determine how long the project should take and its cost.
• determine whether the project is worth doing.
• develop cash flow needs.
• determine how well the project is progressing.
• develop time-phased budgets and establish the project baseline.

Factors Influencing the Quality of Estimates
Quality ofQuality ofQuality ofQuality of
EstimatesEstimates
Project
Duration
People
Project
Structure and
Organization
Padding
Estimates
Project
uniqueness
Other
(Nonproject)
Factors
Past
experience
Planning
range

1. Past experience (historical data):
If the project is similar to past projects with
slight differences, then the time and costs of
those projects can be utilized as a reference
or a template for the current project’s
estimates with small adjustments reflecting
those differences.

2. Project uniqueness:
The more unique a project is, the more challenging it is for the project
manager to arrive at accurate and concrete estimates.

3. Project duration:
Uncertainty in project estimates tends to increase with the duration of the
project.

4. People:
• The efficiency of the project
members in working together as
an effective team, the turnover
rate,
• The experience of task
estimators, the compatibility of
their skills with the task
requirements,
• Dedication are all important
human factors that greatly
influence project estimates.

5. Planning range:
The quality of estimates decreases as the planning horizon of future events
increases.
Estimates made at the initiation phase of the project are Rough Order of
Magnitude (ROM) estimates and are typically around +/- 50 percent from
the actual.
Estimates made during the planning phase are Budget estimates and tend
to be in the range of -10 to +25 percent from the actual estimated value.
At the late planning or early execution phase of the project, estimates
become more definitive and would be in the range of -10 to +10 percent
from the actual.

6. Organizational structure:
The organizational structure, which usually comes in three different forms
(projectized, matrix, functional) influences cost and time estimates.
In the projectized form, the team is fully dedicated on the project and is
working full time which would speed up work delivery but at an extra cost.
However in the matrix form, the personnel are shared across several
projects. This would save cost but would demand more time to coordinate
among all the projects’ activities.

7. Padding estimates:
Most people when asked to estimate an activity tend to add little padding
to reduce the risk of being late.
If all estimates are padded, then the project schedule or budget becomes
unbelievable and unrealistic and that would seriously hamper the
reputation and credibility of the project management profession.
It should be noted that padding is a sign of poor project management
practice.
In order to alleviate padding, the project manager should provide all the
information that stakeholders need for their estimations and should treat
any uncertainties as risks to be managed with reserves as part of the risk
management process.

8. Organizational culture:
Project estimating is greatly influenced by the culture of the organization.
Some organizations favor estimate padding while others encourage
greater accuracy.
Some cultures believe it is impossible to predict the future and thus would
be a waste of time making detailed estimates.
Others think accuracy of estimates is the key for an effectual project
management practice.
9. Non-project factors:
delays in equipment delivery, vacations, holidays, priorities, politics, visa
consultant issuance issues, and legal affairs are all examples of non-project
factors that can considerably alter time estimates.

Estimating Guidelines
for Times, Costs, and Resources.
1. Have people familiar with the tasks make the estimate.
2. Use several people to make estimates.
3. Base estimates on normal conditions, efficient methods, and a normal level
of resources.
4. Use consistent time units in estimating task times.
5. Treat each task as independent, don’t aggregate.
6. Adding a risk assessment helps avoid surprises to stakeholders.

Estimating Projects
Types of Estimates
1. Top-down (macro) estimates.
2. Bottom-up (micro) estimates.

Macro versus Micro Estimating
TABLE 5.1
Conditions for Preferring Top-Down or Bottom-Up Time
and Cost Estimates
Condition Macro Estimates Micro Estimates
Strategic decision making X
Cost and time important X
High uncertainty X
Internal, small project X
Fixed-price contract X
Customer wants details X
Unstable scope X

Level of Detail
Level of detail is different for different levels of management.
Level of detail in the WBS varies with the complexity of the project.
Excessive detail is costly.
• Fosters a focus on departmental outcomes.
• Creates unproductive paperwork.
Insufficient detail is costly.
• Lack of focus on goals.
• Wasted effort on nonessential activities.

Refining Estimates
Reasons for Adjusting Estimates
• Interaction costs are hidden in estimates.
• Normal conditions do not apply.
• Things go wrong on projects.
• Changes in project scope and plans.

Cost Estimating
Tool &
Technique
Input Output
• Work breakdown
structure
• Recourse
requirements
• Recourse rates
• Activity duration
estimates
• Historical
information
• Chart of accounts
• Analogous
estimating
• Parametric
modelling
• Bottom-up
estimating
• Computerized
tools
• Cost
estimates
• Supporting
detail
• Cost
management
plan

Thank you 

5. project management – application (2)

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