Primavera Project Management P6 Course session 2

PRIMAVERA P6
PROJECT
MANAGEMENT
Mohamed Adel

7/6/2018 11:05 PMThis material is copyrighted and not allowed to be shared without the permission of the course owner2
SESSION 2
Topic Status
Setting Up the Enterprise Project Structure
Setting Up the Organizational Breakdown Structure
Creating Calendars
Reviewing Work Breakdown Structures
Defining Resources and Roles
Defining Budgets
Establishing Project Codes
Working with User-Defined Fields
The following topics will cover both session 2 and session 3:

Structuring Projects
In this section we will answer the following questions about the project:
• Where the project is classified?
• Who is the responsible?
• The When's.
• How is the project at a high level?
• what is needed to implement the project?
• What is the expected cost?
• What is the project identity?
• Project customization.

Enterprise Data
Enterprise data provides the global structure needed to
manage multiple projects.
Examples of enterprise data:
• Enterprise project structure
• Project codes
• Resource codes
• Admin categories and preferences
• Resources
• Cost accounts

Project specific Data
Project specific data is only available to the project in
which it is defined. To control their projects project
managers define project specific data
Examples of enterprise data:
• Dates
• Work breakdown structure.
• Activities
• Activity relationships
• Baselines
• Expenses
• risk.

Setting Up the Enterprise Project Structure
To establish the EPS nodes that will contain your projects, choose Enterprise, Enterprise Project Structure.
Add a node to the EPS
Select the node under which you want to
add a node. The new node will be placed
below the selected node in the hierarchy.
Click Add in the Enterprise Project Structure
(EPS) dialog box. Type a unique ID and
name for the node directly in the column
cells, or in the EPS ID and EPS Name fields.
Accept the responsible manager shown, or
click the Browse button in the field to select
a different OBS element for the node.

The organizational breakdown structure (OBS) is a global
hierarchy that represents the managers responsible for the
projects in your organization. The OBS usually reflects the
management structure of your organization, from top-level
personnel down through all levels. You can associate the
responsible managers with their areas of the EPS— either
nodes or individual projects. When you associate a responsible
manager with an EPS node, any projects you add to that branch
of the EPS are assigned that manager element by default.
Choose Enterprise, OBS. Select the OBS element immediately
above and of the same hierarchy level as the element you want
to add, then click Add.

Edit an OBS element
Choose Enterprise, OBS. Click the OBS Name
column label to display the OBS hierarchy. An
outline symbol ( ) in the OBS Name column label
indicates a hierarchy display. Select the OBS
element you want to edit. To change the
element’s information, click the General tab and
enter new information. To change the element’s
position in the OBS, click the appropriate arrow
buttons.

View the OBS chart
Click the Display Options bar, then
choose Chart View. To change the
information included in the chart and
the way it is displayed, click the Display
Options bar and choose Chart Box
Template, Customize.

Adding a New Project to the EPS
A project is a set of activities and their associated details that constitute a plan for creating a product or
service. A project has a start and finish date, work breakdown structure (WBS), and any number of activities,
relationships, baselines, expenses, risks, issues, thresholds, and work products/documents. A project may also
have its own Web site.
Add a project to the EPS
Choose Enterprise, Projects, or click Projects on the Home workspace to open the Projects window. Select the
EPS node to which you want to add a project.
Click Add. The Create a New Project Wizard guides you through the steps required to add a project, including
selecting the node in which to place the project in the EPS, naming the project, and identifying the
responsible manager for the project.

Choose File, New
1
2
Choose the project EPS
3

Project Code
Select the planned start date
Project Name
4
Write down project code and name
4
‫البرن‬ ‫من‬ ‫تلقائيا‬ ‫عليه‬ ‫الحصول‬ ‫و‬ ‫النهاية‬ ‫تاريخ‬ ‫تسجيل‬ ‫عدم‬ ‫يفضل‬‫بعد‬ ‫امج‬
‫سيناري‬ ‫من‬ ‫اكثر‬ ‫لوضع‬ ‫للمستخدم‬ ‫الفرصة‬ ‫التاحة‬ ‫األنشطة‬ ‫جميع‬ ‫ادراج‬‫لخطة‬ ‫و‬
‫المشروع‬
5
6
7

8
9
10
Select the responsible manager

You can create and assign calendars to each resource and each activity. These calendars define the number of available
workhours in each calendar day. You can also specify national holidays, your organization’s holidays, project-specific work/
non-workdays, and resource vacation days.
The module uses your calendar assignments for scheduling and tracking activities, and leveling resources. An activity’s
type determines whether the activity uses the calendar of an assigned resource or its activity calendar.
You can link resource and project calendars to global calendars. Changes to a global calendar apply to all resource and
project calendars linked to the global calendar.
There are three calendar pools: global, resource, and project. The global calendar pool contains calendars that apply to all
projects in the database. The project calendar pool is a separate pool of calendars for each project in the organization. The
resource calendar pool is a separate pool of calendars for each resource. You can assign resource or global calendars to
resources, and global or project calendars to activities.
Calendars

Create a global calendar
Choose Enterprise, Calendars. Choose
Global, then click Add. Select the
calendar you want to copy for the new
global calendar, then click the Select
button. Type the new calendar’s name.
To make the new calendar the default
global calendar for activities and
resources, mark the Default checkbox.
To edit the new calendar, click Modify.
To view the calendar’s assignments
before changing it, click Used By.
Calendars

Calendars
Create a resource or project calendar
Choose Enterprise, Calendars. If you are
creating a project calendar, you must first
open a project. Choose Resource or
Project, then click Add. Select the calendar
you want to copy for the new resource or
project calendar, then click the Select
button. Type the new calendar’s name. To
edit the new calendar, click Modify. To
view the calendar’s assignments before
changing it, click Used By.

Calendars
Modify calendars
Choose Enterprise, Calendars; choose the
calendar type (Global, Resource, or Project),
select the calendar you want to modify,
then click Modify.
Delete a calendar
Choose Enterprise, Calendars. Choose
Global, Resource, or Project, depending on
the type of calendar you want to delete.
Select the calendar you want to delete,
then click Delete. If activities or resources
are assigned to the calendar, the Calendars
in Use dialog box is displayed.

Work Breakdown Structure(WBS)
• A WBS is a hierarchy of work that must be accomplished to complete a project, which defines a product or service to be
produced.
• The WBS is structured in levels of work detail, beginning with the deliverable itself, and is then separated into identifiable
work elements.
• When creating a project, the project manager typically develops the WBS first, assigns work products and documents to
each WBS element, and then defines activities for performing the element’s work. Specific earned value calculations can be
specified for each WBS element, along with an organizational breakdown structure (OBS) element responsible for all work
included in the WBS element.
• The WBS serves to describe the link between the end objective and the operations required to reach that objective.

The work breakdown structure (WBS)
consists of the WBS for each project included
in the enterprise project structure (EPS), in
effect, extending the EPS beyond the project
level. You can view the entire WBS at once,
or you can display only the work breakdown
structures for a specific node or project.
Open the EPS element whose WBS you want
to view, then choose Project, WBS.

Viewing a WBS
You can view a WBS as a chart or a table.
Open the Work Breakdown Structure
window by choosing Project, WBS; you can
also click WBS from the Directory bar or
from the Home workspace.
View the Work Breakdown Structure chart
Click the Display Options bar, then choose
Show on Top, Chart View. To change the
displayed information, click the Display
Options bar and choose Chart Box
Template, then an information type.
View`

Add a WBS element
Choose Project, WBS. Select the WBS element
immediately above and under which you want to
add the new element, then click Add. The new
WBS element is indented one level under the
selected WBS element.
General information
Use the General tab to view and edit the
selected WBS element’s general information.
This includes the code, name, status, and
responsible manager.

Edit a WBS element
Select the WBS element you want to edit. To change the element’s position in the WBS, click the appropriate arrow buttons
at the bottom of the command bar on the right side of the Work Breakdown Structure window. Display Work Breakdown
Structure Details by clicking the Display Options bar and choosing Show on Bottom, WBS Details, then enter new information
in the tabs.
Delete a WBS element
Choose Project, WBS. Select the WBS element you want to delete, then click Delete. If the WBS elements you want to delete
have activity assignments, you are prompted to delete the WBS element and all of its activity assignments, or delete the WBS
element and reassign, or merge, all of its activity assignments to the element’s higher-level WBS element. Click OK, then click
Yes.
Copy and paste a WBS element
You can copy and paste a WBS element within a project or from one project to another. When you do so, you have the option
of copying associated activities and renumbering the activity IDs of copied activities.

Using weighted milestones in the work breakdown structure Contents
• The module provides various ways to calculate performance percent complete. One method is to assign weighted milestones
at the WBS level. For each WBS element, select the WBS Milestones Percent Complete option on the Earned Value tab, then
define as many milestones as you need and assign a level of significance or weight to each of them. As progress occurs and
you mark each milestone complete, P6 Professional calculates the WBS element's performance percent complete based on
the weight of the milestone, independent of its lower-level activities.
• For example, suppose a particular level of the WBS includes ten activities, and actual finish dates have been entered for five
of these activities. The same WBS level is also assigned four WBS milestones having equal weights, but only one of these
milestones is marked as complete. The module uses the completed WBS milestone to calculate the WBS level’s performance
percent complete as 25, even though half the activities included in the WBS level are finished.

• You may want to use WBS milestones when higher-level task increments comprise a body of activities and you want to
control the activities at the WBS level. For example, to control the design of a new product, you might assign WBS
milestones to the major steps required to complete the design—such as drafting the requirements, writing the design
specifications, and so on. Each of these milestones would contain the detailed activities required to complete it.
Note
If a WBS element has no activities beneath it, and you
mark milestones as complete, the performance percent
complete will remain zero. To calculate performance
percent complete, add a dummy activity to the WBS
element.

WBS status types
P6 Professional recognizes four status types for WBS
elements: Planned, Active, Inactive, and What-If.
• Planned WBS elements
If a WBS element's status is Planned, then the WBS is in
the planning phase. Work has not yet begun.
• Active WBS Elements
If a WBS element's status is Active, then the WBS is
currently underway.
• Inactive WBS Elements
If a WBS element's status is Inactive, then the WBS has
ceased or is placed on hold.
• What-If WBS Elements
If a WBS element's status is What -If, then the WBS is
being analyzed before establishing a more permanent
schedule.

How Weights Affect Percent Complete
If all weighted milestones for a WBS element have a value of 1.0 and you have a total of four milestones, marking one as
Completed would indicate that the WBS element is twenty-five percent complete. If this same milestone had a weight of
9.0, and the other three had 1.0 weights, marking it Completed would indicate that the WBS element is seventy-five percent
complete. The module uses the following formula to calculate percent complete from weighted milestones:
Actual Weight of Completed Milestones / Total Possible Weight of All Milestones
Applying this formula to the previous example, the completed milestone has a weight of 9.0, and is divided by the total
weight of all milestones (12.0), to equal seventy-five percent complete.

Assign a WBS category value
Choose Project, WBS. Add the WBS
category as a column by clicking the
Display Options bar and choosing
Columns, Customize. Select the WBS
category name under General in the
Available Options area, then click the right
arrow button to move it to the Selected
Options column; click OK. Select the WBS
element to which you want to assign a
category value, then click the Browse
button in the WBS category column.

Monitoring Project Performance with Earned Value
The earned value method is a performance/forecasting method that is successfully used in many projects. The method presents
performance along time and cost lines in a clear way.
Consider the following:
• The design has been planned, a schedule made, and a budget created that is broken down month by month.
• If, after 3 months, more has been consumed than was budgeted, will there be a budget overrun? It depends.
• Is the project ahead of schedule, just as planned, or behind schedule? Perhaps the project is far ahead of schedule and less
has to be spent than was thought at this point.
• Simply to study how much money has been spent says nothing. It is necessary to assess where the project stands in terms of
time and then assess where it stands financially in the light of what has been done. The earned value method uses eight basic
concepts to help do this:

PV = planned value: the cumulative budget value of what was planned to do until the assessment day
AC = actual cost for what has been done until the assessment day
EV = earned value: the budget value of what has been done until assessment day.
Earned Value = Budget At Completion (BAC) x Performance % Complete
SV = scheduled variance: the difference between EV and PV; positive SV = ahead of schedule and negative = behind schedule
(Note that one must have worked with the activities on the critical path and therefore must also control the CPM time schedule.)
SV = EV – PV
BAC = budgeted cost at completion
CV = cost variance: the difference between EV and AC; a positive value = well placed financially; negative value = over budget
CV = EV – AC

CPI = cost performance index: the ratio between EV and AC
CPI = EV/AC
SPI = schedule performance index: the ratio of EV and PV
SPI = EV/PV
To assess the earned value—that is, the budget value of performed work—the following assessments are recommended:
• Completed activities as a percentage of BAC
• Measurable milestone completed
• Measurable milestone completed and percentage of BAC
• Technical results—measurable results

Example
Planned value. The PV can be read from the reference plan that is built up according to the following Figure PV after 5 months is
$600,000.

• Earned value. The project schedule situation is reviewed after 5 months; the results are shown in Figure 6.31. The line shows
that activity A is a little behind schedule. The EV can be obtained by multiplying the performed percentage with the budget at
completion for the activity.
• we get better EV value if we ask the question: “How much will it cost me to finish this activity?” and take this amount from
the budget for the activity.
• for example, assess how well activity A has been done by estimating how much it will cost to complete the task ($25,000) and
take this from the budget of the activity ($300,000).
• Activity B is also a little behind (cost to complete $125,000); however, in activity C, more has been done than was planned to
have completed after 5 months. Thus, activity C is ahead of schedule. The cost to complete is estimated to be $25,000.
• The EV after 5 months is the difference between the budgeted amount and the estimated remaining cost. In this case,
($300,000 – $25,000) + ($300,000 – $125,000) + ($200,000 – $25,000) = $625,000.

• Actual cost. It has also been ascertained that the actual cost (AC) after 5 months is $525,000. Now the EV and the AC are
added to the reference plan (Figure 6.32). We have also added the assessment figures after 3 months. EV = $200,000
and AC = $150,000. The difference between what has been done (budgeted amount), EV, and what should have been done, PV, is
the schedule variance, SV. The difference between what has been done (budgeted amount), EV, and what it actually has cost, AC,
is the cost variance, CV.
SV = EV – PV = 625,000 – 600,000 > 0
• The project is ahead of schedule, but only if it has been worked on the critical path. Check the schedule too!
CV = EV – AC = 625,000 – 525,000 > 0—better than budget
• What conclusions can be drawn about the date for completion and the final cost of the project?
The project can continue to the way it has been done since the last assessment.
The project can continue to the way it has been done since the start.
The project can continue as planned.
The project can develop after other assessments.

Defining Earned Value Settings for Specific WBS Elements
Display Work Breakdown Structure Details by clicking the Display Options bar and choosing Show on Bottom, WBS Details. Select
the WBS element whose earned value settings you want to define, then click the Earned Value tab.

In the Technique for Computing Performance Percent Complete area, choose the completion percentage method you want to
use when calculating an activity’s earned value:
• Activity Percent Complete: Calculates earned value according to current activity completion percentages and the percent
complete type selected on the General tab of Activity Details.
• Use Resource Curves / Future Period Buckets: Overrides the Activity Percent Complete type for activities that have a resource
curve assigned to at least one of the resource assignments, or for activities that have assignments with manually-defined
future period bucket values. If a curve is assigned, Units Percent Complete is always multiplied by the Budget at Completion to
calculate Earned Value.
• WBS Milestones Percent Complete: Calculates earned value according to completion of the WBS element’s weighted
milestones, rather than the completion percentages of the element’s activities.
• 0/100 Percent Complete: Calculates earned value as 100 percent only after the activity ends. Until the activity is complete, the
activity’s earned value is zero percent.

• 50/50 Percent Complete: Calculates earned value as 50 percent after the activity starts and until the activity ends. After the
activity ends, the activity’s earned value is 100 percent.
• Custom Percent Complete: Calculates earned value as a percentage you specify. This percentage applies after the activity
starts and until the activity ends. After the activity ends, the activity’s earned value is 100 percent.

• User-defined performance factor, ( PF), for computing earned-value estimate-to-complete (ETC). ETC is computed as either
ETC = PF * ( Budget at Completion - Earned Value Cost) or as the remaining total cost for the activity. This choice can be made
for each WBS.
• In the Technique for Computing ETC area, choose the method you want to use when calculating an activity’s estimate to
complete (ETC) value:
• ETC = Remaining Cost for Activity: Calculates ETC values as the remaining cost to complete an activity (ETC = remaining
duration of activity * applicable resource rates).
• PF = 1: Calculates ETC values as Budget At Completion (BAC) less Earned Value Cost. This method yields an optimistic result.
• PF = 1/CPI: Calculates ETC values according to a Performance Factor (PF) of 1 divided by the Cost Performance Index (CPI).This
method yields the most likely result.
• PF = 1/(CPI*SPI): Calculates ETC values according to a PF of 1 divided by the product of the CPI and Schedule Performance
Index (SPI). This method yields a pessimistic result.
• PF =: Calculates ETC values according to a PF you specify.

Assigning Estimation Weights to WBS Elements
• There are 2 types of estimation
 Top-down estimation
 Bottom-Up estimation
• You can assign estimation weights to work breakdown structure (WBS) elements and activities to perform Top-down
estimation.
• The Project Management module uses the estimation weights to calculate the number of units that each WBS element
receives in relation to its lower-level elements in the WBS hierarchy.
• For example, if 1,000 days of labor are applied top down to three WBS elements with estimation weights of 30, 30, and 40,
then each WBS element receives 300 days, 300 days, and 400 days, respectively

Top-down estimation uses the WBS Estimated Weight field to determine how to “push down” the units within each branch of the
WBS. The algorithm is:
where:
WBS 1.1 Weight = Weight of WBS 1.1
WBS 1.1 Units = Number of Units Allocated to WBS Element 1.1
Sum of All WBS Weights at WBS Level = Sum of Weight of All WBSs at Same Level of Hierarchy as WBS 1.1
Est Units = Number of Estimated Units Distributed Among All WBSs at WBS Level 1.N

• if the weights for each WBS element vary, such as 6 for one element and 2 each for the other two elements, the result is 60
days for the first element, and 20 days each for the other two elements:
• If an activity has multiple resources assigned, each resource will be allocated remaining units in proportion to how many
remaining units each resource previously was assigned for that activity. For example, if Resource 1 previously had six hours of
remaining units on an activity with remaining units of five days, and Resource 2 previously had four hours of remaining units,
Resource 1 will now have remaining units of three days (24 hours) and Resource 2 will have remaining units of two days (16
hours).
Note: If an activity is completed, that activity is allocated zero remaining units. If all activities under a WBS are completed,
zero units are distributed to that WBS.

Assign estimation weights to WBS elements
Choose Project, WBS. Click the Display Options bar, then choose Columns, Customize. In the Est Weight column, enter the
applicable weights for each element.

Primavera Project Management P6 Course session 2

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