Projectmanagement of any project chapter2.ppt
- 1. Systems Development Cycle Prepared by Eng: Mohammed Bahram Department of Oil and Gas Engineering School of Engineering IUTT University. Project Management for Business, Engineering, and Technology
- 2. Systems Development Cycle • Systems Life Cycle – It’s useful to think of a project end-item as a system that moves through phases of a “life cycle”
- 3. Life Cycle Stages: Natural Organisms • All living organisms follow life-cycle stages Conception Birth Growth Maturity Decline Death
- 4. Phases A, B, C are “Project Life Cycle” Phase B: Definition phase Project definition System definition User and system requirements Phase C: Execution phase Design stage Production/build stage Fabrication Testing Implementation stage Training Acceptance tests Installation Termination Phase A: Conception phase Initiation stage Feasibility stage Proposal preparation Phase D: Operation phase System maintenance and evaluation System Improvement System termination (To Phase A: repeat cycle)
- 5. Phase A: Conception • Perceived need or problem • Initial screening or feasibility study • Proposal • Concept approval/rejection Systems Development Cycle: Phases
- 6. SDC Phases (cont’d) Phase B: Definition (“Birth”) • Specify requirements in detail: – User requirements – System requirements/ system specifications • Define project to produce end-item/deliver requirements: – Project master plan
- 7. SDC Phases (cont’d) Phase C: Execution (“Growth”) – Design/development – Procurement/fabrication – Production/building – Installation
- 8. SDC Phases (cont'd) Phase D: Operation (“Maturity”) – Customer gains control – System developer might remain involved with system/customer through: • Maintenance • Evaluation • Enhancement • Replacement
- 9. Phase A: Conception • Project Conception involves: – Initiation – RFPs – Feasibility – Needs Analysis – Proposal preparation – Proposal evaluation/project selection – Contracting
- 10. Initiation • Every project starts in somebody’s mind as a need or problem, or as a solution to somebody else’s need or problem. • An “idea” develops based on perceived problem, opportunity, or need • Idea can originate anywhere in customer or contractor organizations
- 11. Initiation (cont'd) • To determine if idea has merit, an initial investigation – Data sources • Interviews • Background research • Documentation Usually customer does this
- 12. Initiation (cont'd) –Focus of initial investigation: • Symptoms, problems, needs • Objectives • Preliminary alternatives; estimated costs, benefits, strengths, weaknesses • People and groups effected
- 13. Initiation (cont'd) • Customer’s decision-to-proceed criteria: – The needs are real and funding is available – Project is consistent with goals and resources of organization – Project has priority with respect to other needs – Project has value in terms of new technology, organizational reputation, market share, profits, etc.
- 14. RFP (Request for Proposal) • If customer decides to proceed with idea, next step is to contact an SDO (developer or contractor) to – investigate idea further, or – do the work and deliver the solution/end-item
- 15. RFP • Purposes – Describe customer’s needs, problems, or idea – Solicit suggestions/solutions from SDO – Inform SDO how to respond to RFP (where to send proposal, to whom, and what to include in proposal)
- 16. RFP • Contents 1. Statement of Work (SOW) 2. Proposal requirements 3. Contractual provisions 4. Additional Information or Data
- 17. RFP Contents 1. Statement of Work (SOW) • Description/background of problem, need, or general type solutions to be investigated • Scope of work to be performed – work/deliverables to be included – work/deliverables to be excluded – work restrictions – criteria of acceptance for deliverables, results or end-items • Requirements for results or end-item; e.g., – specifications and standards – how results and work will be measured – expected relationship between user and contractor – expected completion date – constraints on cost of work to be performed
- 18. RFP Contents 2. Proposal Requirements • Conditions placed on proposal – proposal contents and format – data requirements – sample forms to include – submission location and deadline • All proposals should “look” same
- 19. RFP Contents 3. Contractual Provisions • Type of contract to be awarded and contractual provisions – Fixed-price – Cost-plus – Incentives – Special considerations
- 20. RFP Contents 4. Additional Information or Data • Name of contact person for requesting additional data—as necessary to enable SDO develop solution and prepare proposal or price quote • Technical information to support the SOW
- 21. Where to send RFP? • Customer sends RFP’s to – SDO’s on bidder’s list – SDO’s recommended by other customers – SDO’s requesting an RFP (as advertised in Commerce Business Daily or trade newsletters) – Qualified SDO’s based upon RFI’s (requests for information)
- 22. Preparation of Proposal • Could be… – Sales/marketing – Technical staff – Proposal specialists – Ideally: all of these • Select Proposal Manager – Best person is would-be PM (usually not feasible) – Professional proposal manager
- 23. Preparation of Proposal (cont'd) • Review RFP – Always start with RFP – Use RFP as checklist – Customer uses RFP criteria to weed-out proposals • Outline SOW based on: – Proposed work in SOW in RFP – Results of feasibility study
- 24. Preparation of Proposal (cont'd) • Prepare Preliminary Project Plan (Work, Time, Cost) – Use basic planning tools to determine necessary work, time, and cost for completion date and price in proposal
- 25. Contents of Proposal • Standard Contents – Executive Summary – Technical Section (Statement of Work) – Cost and Payment Section – Legal Section – Management/Qualifications Section
- 26. Contents of Proposal • Standard Contents – Executive Summary • Should be more personal than proposal • Briefly state contractor’s qualifications and experience • Draw attention to unique features of proposal, price, and contractor’s ability to do project • Identify “contact” person with contractor • One of most important sections of the proposal
- 27. Contents of Proposal (cont'd) • Standard Contents – Technical Section (Statement of Work) • Gives scope of work and planned approach • Based upon WBS and includes major project phases, key tasks, milestones, and reviews • Contains schedule when end-items will be delivered • Describes realistic benefits in detail to demonstrate that user needs will be fulfilled • Recognizes and discusses any problems or limitations to approach • Is specific to avoid misunderstandings and demonstrate method and appropriateness of approach, but not too specific
- 28. Contents of Proposal (cont'd) • Standard Contents – Cost and Payment Section • Breakdown of projected hours for direct, indirect, and special activities, associated labor charges and materials expenses, and price of project • Addresses contractual arrangement and method of payment
- 29. Contents of Proposal (cont'd) • Standard Contents – Legal Section • Contains anticipated, possible, or likely problems and provisions for contingencies – Example – appropriate procedures for handling changes due to scope of project or cost inflation, and for terminating project
- 30. Contents of Proposal (cont'd) • Standard Contents – Management/Qualifications Section • Background of contractor organization, related experience and achievements, and financial responsibility • Organization of management, and resumes of project manager and key project personnel • Very important section…
- 31. Customer Review of Proposal • Customer evaluates – Cost – Benefits – Success of Likelihood – Contractor Reputation – Narrow the List • Often a handful of good proposals remain after many others have been discarded. These go to negotiation.
- 32. Negotiation • Customer and SDO meet to – Clarify terms (ensure common understanding) – Reach Agreement on requirements, schedule, or price
- 33. Negotiation (cont’d) • Ideally, the would-be PM is involved. She must know: – Terms of contract and areas open to negotiation (What’s Fixed, What’s Flexible?) – Customer’s situation (how much does customer need project?) – Competition (Who are competitors and what are they saying to customer?)
- 34. Contracting • Every project involves contracting – an agreement for one party (SDO) to do something (project) for another (customer) • Most people think of project contract only between customer and SDO – in many projects the SDO is also a customer that contracts its work to many other organizations
- 35. Contracting (cont'd) Customer • Sometimes SDO doesn’t do any “work” but merely hires and manages work of others. • Project team consists of numerous organizations held together by contracts
- 36. Basic Kinds of Contractual Agreements Different contractual agreements offer different advantages to the customer and contractor, depending on the nature of the project. The basic agreements are: • Fixed Price Contract—Price paid by the customer for the project is fixed regardless of the costs incurred by the contractor. • Cost-Plus Contract—Price paid by the customer is based on the costs incurred in the project plus the contractor’s fee. • Incentive Contract—Price paid by the customer depends on the contractor’s performance in comparison to the target price, schedule, or technical specification: the contractor either receives a bonus for exceeding the target, or must pay the customer a penalty for falling short of the target.
- 37. •Eng: Mohamed Bahram • Petroleum Engineering