MODULE-3: RESOURCING PROJECTS

Module-3: Contents
Abilities needed when resourcing projects, Estimate resource needs,
Creating staffing management plant, Project team composition issues,
Budgeting Projects: Cost planning, Cost estimating, Cost budgeting,
Establishing cost control. Project Risk Planning: Risk Management
Planning, Risk identification, Risk analysis, Risk response planning,
Project Quality Planning and Project Kick off: Development of quality
concepts, Project quality management plan, Project quality tools, Kick
off project, Baseline and communicate project management plan, Using
Microsoft Project for project baselines.

Abilities needed when resourcing projects

Project managers need two types of abilities to correctly resource a project. The first type of
skill needed is technical. Various techniques can be used to estimate resource demands, create
a staffing management plan, assign one or more persons to each activity, identify when a person
is assigned too much work at a point in time, schedule a project with limited numbers of key
people and other resources, and compress (speed up) a project schedule.

The second type of skill needed is behavioral. As you might guess, many behavioral issues are
involved in completing project resourcing tasks such as:
• Selecting the right people
• Identifying exactly what each person needs to accomplish
• Ensuring each person either has the capability needed or developing that person to be capable
• Dealing with difficult individual work schedules
• Getting people to work overtime when there are conflicts
• Making honest and open estimates of the amount of work required to complete an activity
• Assembling an effective team
• Dealing with people from diverse backgrounds
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• Deciding where each person will work
• Deciding how a team that is geographically split can work in an effective virtual manner.

Estimate Resource Needs

A starting point in resourcing a project is to estimate how many resources of each type and skill
or knowledge level are needed. The PMBOK task estimate activity resources is “the process of
estimating the types and quantities of material, human resources, equipment, or supplies
required to perform each activity.” This can be accomplished at either a detailed or an overview
level.

When a project team determines a detailed list of activities that must be performed, it makes
sense to ask what type of person (by specific knowledge or skill) is needed to perform each of
the activities. However, when a project team does not identify individual activities, they still
need to determine how many resources and what knowledge and skill each needs to complete
the project.

When estimating resource needs, the team needs to make sure they have considered support
needs as well such as information systems and human resources. Some types of workers have
specific constraints placed upon how they are hired, scheduled, and released. Co-located teams
and highly skilled resources often require more detailed resource planning. Many issues may
be involved in securing specific knowledge or skills.

Creating staffing management plan

Staffing management plan and Resource management plans are important part of project
resource management. Every project will require resources for executing project activities.
There will be a need for both man power resources and physical resources. The resource
requirement for each activity will be estimated. The resources will be acquired during project
execution as per the schedule.
Planning for resources, acquiring resources, developing team and managing team are the
important activities to be carried out as part of project resource management. A resource
management plan will contain all the necessary guidelines for project resource management. A
staffing management plan will also be part of the overall resource management plan.
Staffing management plan, which part of overall resource management plan will specifically
focus on the man power aspects of the project. Staffs are the most important part of project. It
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is important to select and acquire the right staff with right skills at the right time. A staffing
management plan contains a plan for addressing all the aspects of man power and will include
below information:
• Identification of human resources
• How the human resources will be acquired
• Criteria to be used for how the human resources will be selected
• From where the human resources will be acquired
• How to acquire resources from within the organization
• How to acquire resources from external sources
• When the resources will be acquired (based on the project schedule)
• When the resources will be released (based on the project schedule)
• Process for maintaining the resource calendars
• Resource loading table depicting total number of resources needed at different points
in the project
• Safety and security guidelines for the human resources
• Identification of training needs and plan for fulfilling the training needs of the team
• Rewards and recognition plan for the team
• How to build the team and enhance team performance
• How to monitor the performance of each team member and help keeping them
motivated.
Staffing is the most important part of project management. It is the staff who will actually
complete the project work. Staff will also consume the majority of project cost. Hence it is
extremely important to be very precise in planning and acquiring the right staff at the right time
for the right duration. It is also important to keep the staff members motivated and ensure their
safety and well- being.

Project Team Composition Issues

Project teams are often composed of people from many sources both within and outside a parent
company. Several of these issues, such as who will be on the project and where each will be
physically located, are best considered when selecting team members. These issues are
introduced here, and the management of teams with these compositions is discussed.
Cross-Functional Teams: Projects often require cross-functional teams since the work of many
projects requires input from multiple disciplines. When people from different backgrounds
work together, misunderstandings often arise

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Co-Located Teams: Another team issue is where everyone physically sits. Teams are co-located
if the members are assigned work spaces near each other. Project managers and teams can often
take advantage of many modern methods for communicating from anywhere on the planet.
Virtual Teams: Virtual teams are also common and represent the opposite approach. Members
of virtual teams do not meet face to face very often.
Outsourcing: Many project managers are faced with the prospect of not finding the necessary
talent within their organization. When that is the case, project managers often need to hire
expertise from one or more other organizations.

Budgeting Projects
Cost planning Management:
Once the overall cost is estimated, the next step is to develop the budget by aggregating the
costs and determining the project’s cash flow needs. Project managers also need to establish a
system to report and control project costs.
Plan cost management is “the process that establishes the policies, procedures, and
documentation for planning, managing, expending, and controlling project costs.
Cost planning entails developing a cost management plan for your project. The cost
management plan is “a component of the project management plan that describes how costs
will be planned, structured, and controlled.

On small projects, this can be as simple as ensuring accurate estimates are made, securing the
funding, and developing cost reporting procedures to ensure that the money is spent correctly.
On large projects, each of these processes can be much more involved; in addition, developing
and using accurate cash flow estimates become critical.
A project cost management plan includes descriptions, procedures, and responsibilities for:
• Costs included (such as internal and external, contingency, etc.),
• Activity resource estimating,
• Cost estimating,
• Budget determination, and
• Cost control, including metrics, reporting, and change approvals.
A project cost management plan needs to be consistent with the methods of the parent
organization. In many organizations, project managers are provided with specific guidance on
setting up their cost management plan. The plan provides guidance to the project manager and
other stakeholders in order to serve several purposes:

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• First and most fundamentally, it shows how to develop and share relevant, accurate, and
timely information that the project manager, sponsor, and other stakeholders can use to make
intelligent and ethical decisions.
• It provides feedback, thereby showing how the project’s success is linked to the business
objectives for which it was undertaken.
• It provides information at a detailed level for those who need details and at appropriate
summary levels for those who need that.
• It helps all project stakeholders focus appropriately on schedule and performance as well as
cost.

Cost estimating
Estimate cost is “the process of developing an approximation of the monetary resources needed
to complete project activities.” Cost estimating is linked closely with scope, schedule, and
resource planning. To understand cost well, a project manager needs to understand what the
work of the project includes, what schedule demands exist, and what people and other resources
can be used.
FIXED VERSUS VARIABLE COSTS
DIRECT VERSUS INDIRECT COSTS
RECURRING VERSUS NONRECURRING COSTS
REGULAR VERSUS EXPEDITED COSTS.

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Cost Budgeting
Once a project manager enters into the more detailed planning stage, it is generally possible to
create a more accurate cost estimate. This is the same thought that goes into creating a more
detailed project schedule, resource estimates, risk profiles, quality plans, and communications
plans. Depending on the complexity and size of their projects and organizational norms, some
project managers can proceed directly to definitive cost estimates at this point.
Others may still need to look at one or more intermediate levels of detail before they have
enough detailed knowledge to create cost estimates with accuracy. At the end of project
planning, cost estimates should have a small enough margin of error that they can be used to
create a project budget, show cash flow needs, and be used as a basis for controlling the project.
Most project organizations want an accuracy level of no more than plus or minus 10 to 15
percent, and some require considerably better, such as plus or minus 5 percent.

Establishing Cost Control

The approved project budget with contingency reserves (and any amount of management
reserve that has already been approved) serves as a baseline for project control. The budget
shows both how much progress is expected and how much funding is required at each point in

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time. These are used for establishing project control. Control cost is “the process of monitoring
the status of the project to update the project costs and managing changes to the cost baseline.

When establishing cost control, a typical measuring point is a milestone. Major milestones are
often identified in the milestone schedule in the project charter, and additional milestones may
be identified in constructing the project schedule. Project managers can use the cash flow
projections they have made to determine how much funding they expect to need to reach each
milestone. This can then be used for determining how well the project is progressing. The
sponsor and project manager often jointly determine how many milestones to use. They want
enough milestones to keep track of progress, but not so many that they become an
administrative burden. Microsoft Project and other software can be used to automate the cost
reporting.

Project Risk Planning

Risk Management Planning
Plan risk management is “the process of defining how to conduct risk management activities
for a project. To plan for project risks, a project manager must first understand the project’s
objectives. A project manager develops this understanding initially by realizing what project
success in general is and then by understanding the specific priorities of the most important
project stakeholders.
The first set of general project success measures is meeting agreements. This includes meeting
the technical requirements while not going over the cost and schedule agreements.
The second set of project success measures focuses on the project’s customers. Specifically,
did the project result meet the customers’ needs, was the project result used by the customers,
and did it enhance the customers’ satisfaction? The third set deals with the future of the
performing organization.

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The specific priorities of the project’s most important stakeholders can be summarized in a
table such as figure. A project manager and team need to understand not only what the project
plans call for but also what area(s) the most important stakeholders would like to improve and
what area(s) they are willing to sacrifice to enable those improvements.

Once the project team understands the project success measures and priorities, attention is
turned to understanding the project risks.
All projects have some risk, and the more unique a project is, the more risk may be present. It
is impossible to remove all sources of risk. It is undesirable to even try to remove all risk
because that means the organization is not trying anything new.
A risk is anything that may impact the project team’s ability to achieve the general project
success measures and the specific project stakeholder priorities.
This impact can be something that poses a threat or “a risk that would have a negative effect
on one or more project objectives. The impact, on the other hand, could be something that poses
an opportunity or “a risk that would have a positive effect on one or more project objectives.
A risk management plan template for an IT consulting company is shown in figure.

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Risk Identification
Once the risk management planning is in place, it is time to begin identifying specific risks.
Identify risks is “the process of determining which risks might affect the project and
documenting their characteristics. Project managers are ultimately responsible for identifying
all risks, but often they rely upon subject matter experts to take a lead in identifying certain
technical risks.

a) Information Gathering
A large part of the risk identification process is gathering information. The categories shown
in above figures and/or project stages can be a good starting point in this information gathering.
The project manager either needs to act as a facilitator or get another person to serve as
facilitator for information gathering. This is essentially a brainstorming activity, during which
time the question “what could go wrong?” is repeatedly asked of everyone who is present. It is
helpful to use Post-it Notes and write one risk per note to prepare for further processing the
risks during risk analysis.

Sometimes, team members interview stakeholders. Other times SWOT analysis is “analysis of
strengths, weaknesses, opportunities, and threats to a project” might be used.

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b) Reviews
A project manager and team can review a variety of project documents to uncover possible
risks.

c) Understanding Relationships
Project managers can also seek to identify risks by learning the cause-and-effect relationships
of risk events. One useful technique is a flow chart that shows how people, money, data, or
materials flow from one person or location to another. This is essentially what the team does
when it reviews the project schedule, provided it looks at the arrows that show which activities
must precede others.

d) Risk Register
The primary output of risk identification is the risk register. When complete, the risk register
is “a document in which the results of risk analysis and risk response planning are recorded.”
At this point (the end of risk identification), the risk register includes only the risk categories,
identified risks, potential causes, and potential responses. The other items are developed during
the remainder of risk planning.

Risk analysis
If a project team is serious about risk identification, they will uncover quite a few risks. Next,
the team needs to decide which risks are major and need to be managed carefully, as opposed

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to those minor risks that can be handled more casually. The project team should determine how
well they understand each risk and whether they have the necessary reliable data. Ultimately,
they must be able to report the major risks to decision makers.
a) Perform Qualitative Risk Analysis
Perform qualitative risk analysis is “the process of prioritizing risks for further analysis or
action by assessing and combining their probability and impact. All project teams should
perform this task. If they understand enough about the risks at this point, they proceed directly
to risk response planning for the major risks. If not, they use more quantitative techniques to
help them understand the risks better.

Differentiating between major and minor risks

The primary questions project teams use in qualitative risk analysis are “how likely is this risk
to happen?” and “if it does happen, how big will the impact be?”. Note that for each dimension
probability and impact in Exhibit below figure a scale of 1 to 5 is used with descriptions.

Cause-and-effect diagram
A tool that is useful in this analysis is the cause and- effect diagram. Many project teams use
this diagram to identify possible causes for a risk event. An example is shown in figure below.
The cause-and-effect diagram is also known as the fishbone diagram because the many lines
make it look like the skeleton of a dead fish. To construct the cause-and-effect diagram, the
project team first lists the risk as the effect in a box at the head of the fish.

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b) Perform Quantitative Risk Analysis
Perform quantitative risk analysis is the process of numerically analyzing the effect of
identified risks on overall project objectives.
• Decision tree analysis
• Expected monetary value (EVA) analysis
• Failure mode and effect analysis (FMEA)
• Sensitivity analysis
• Simulation
c) Risk Register Updates
The probability of each risk occurring and the impact if it does happen are added to the register
for each risk. The priority for each risk is also listed. Some organizations use a “Top 10” list to
call particular attention to the highest priority risks.

In addition, some organizations choose to place higher priority on risks that are likely to happen
soon. Some organizations want to call attention to risks that are difficult to detect—that is, risks
with obscure trigger conditions. Any of these means of calling attention to certain risks are also
listed in the risk register. If the project team performed any quantitative risk analysis, the results
are also documented in the risk register.

Risk Response Planning

Once risks have been identified and analyzed, the project team decides how they will handle
each risk. Plan risk responses is “the process of developing options and actions to enhance
opportunities and reduce threats to project objectives.”
a) Strategies for Responding to Risks
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 • Avoid risk
• Transfer risk
• Mitigate risk
• Accept risk
• Research risk
• Exploit opportunity
• Share opportunity
• Enhance opportunity

b) Risk Register Updates

The project manager sees that the risk register is updated with the results of the response
planning. For each risk, this means the response strategy is noted. It also means that a single
person is assigned as the “owner” of each risk. That person is responsible for understanding
the trigger and for implementing the strategy. Finally, any changes that need to be made to the
project schedule, budget, resource assignments, and communications plan should be included.
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Project Quality Planning and Project Kick off
Development of quality concepts
The contemporary approach to quality management has evolved first from the teachings of
several quality “gurus” from the 1950s through the 1980s and then through various frameworks
popularized during the last 25 years.

a) Quality Gurus
Arguably the most influential thought leader in quality was W. Edwards Deming. One concise
way to summarize his ideas is his four-part Profound Knowledge System, shown in figure.
Deming started as a statistician, and initially preached that understanding variation was
essential to improving quality.
Joseph Juran, who was a contemporary of Deming, also wrote and lectured prolifically for
decades. Juran is perhaps best known for his Quality Trilogy of quality planning, quality
control, and quality improvement, as shown in figure.

Many other pioneers in quality, particularly Japanese and American, have added to the body of
quality concepts and tools. Several of the most influential, and their contributions that apply
specifically to project quality, are shown in figure.

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b) Total Quality Management/Malcolm Baldrige
TQM came into vogue during the late 1980s when it was becoming more widely apparent that
the old way of trying to catch quality problems by inspection was not adequate. Many early
advocates of TQM used slightly different ways of describing it. What they had in common was
implied by the first word in the name: total. Most serious practitioners included several
components in their TQM system.
In the United States, government, business, consulting, and academic specialists in quality
worked together to develop a common means of describing TQM. This description forms the
key areas of the Malcolm Baldrige National Quality Award as shown in figure

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C) ISO 9001:2008
While the Baldrige Award is a framework developed in the United States, ISO represents a
framework developed in Europe. The International Organization for Standardization has
developed many technical standards since 1947. ISO 9001 is the quality management standard,
and the 2008 designation is the latest revision of the standard.

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d) Lean Six Sigma
Lean evolved from lean manufacturing ideas of eliminating as much waste as possible from
work processes. Sigma stands for standard deviation—a statistical term for the amount of
variation in data. Six Sigma quality literally means quality problems are measured in parts per
million opportunities.
Six Sigma uses a disciplined process called the define, measure, analyze, improve, and control
(DMAIC) process to plan and manage improvement projects. The DMAIC methodology is a
15-step process broken up into five project phases: define, measure, analyze, improve, and
control, as shown in figure.

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Project quality management plan
In addition to the quality policy, most project quality management plans describe which quality
standards the project will use and how the project team will implement them. The quality
management plan may include a description of the quality baseline by which the project will
be judged, along with methods for quality assurance and control.
A project quality management plan should describe how to identify some or all of the
following:
• The project’s overall quality objectives
• Key project deliverables and the standards to evaluate each
• Deliverable completeness and correctness criteria from the customer’s viewpoint
• Quality control activities
• Critical project work processes and standards to review each
• Stakeholder expectations for project processes
• Quality assurance activities
• Quality roles and responsibilities
• Quality tools
• Quality reporting plan

Project Quality Tools

Literally hundreds of tools have been developed to help organizations manage the quality of
their processes. Many of these tools are variations of each other and have multiple names.
Many of the quality tools can be applied specifically to managing project quality. Since many
of these tools can also be used on projects for areas in addition to quality.

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Kick off project
Kickoff meetings are also helpful in convincing all the project stakeholders that the project
leaders (sponsor, project manager, and core team) will be good stewards of the customer’s and
the parent organization’s assets. Answering any remaining questions and overcoming lingering
concerns helps to accomplish this. Finally, all interested parties (outside customers, top
management, functional managers, frontline workers, and any others) should be eager to
commit to the project and get on with the work.

a) Preconditions to Meeting Success

Several preconditions that must be met for project kickoff meetings to be successful are as
follows:
• The sponsor and project manager need to set clear direction during the planning.
• The core team needs to commit to the project first—it is hard for them to convince
others if they do not believe in it themselves.
• An atmosphere of trust and relationship building should be set by all.
• Project leaders need to practice active listening to uncover potential problems.
• As many people as possible should be included in parts of the planning to enhance
chances so they will buy in to the resulting project plan.

b) Meeting Activities
The formality of a kickoff meeting can vary considerably depending on the size and type of
project. Typical activities that might be included in the kickoff meeting are the following:
• The sponsor and project manager describing the importance of the project
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• The customer(s) describing their acceptance standards, sense of urgency, and budget concerns
• The project manager outlining the project goals
• The project manager and the core team describing work expectations
• The project manager unfolding the project plan and its current status (if work has commenced)
• The core team explaining the communications, risk, and quality plans
• Everyone asking questions and making suggestions
• The project manager authorizing appropriate changes to the project plan
• Everyone concurring with the overall plan and to his or her individual action items

Baseline and Communicate Project management plan

Once the project plan is complete and accepted by the stakeholders, the plan is baselined. A
baseline is the approved plan. Many project plans are developed iteratively as more information
comes to light. A project plan is considered to be in draft form until enough information is
available for the key stakeholders to commit to all of the details and baseline the plan. At that
point, it becomes official, and any changes in the future need to be formally approved and
documented
This is a time of great joy, because this marks the transition between planning and executing
the project. In reality, on many projects, some activities that are on the critical path or nearly
critical paths are started before the official project kickoff. Planning also continues in the form
of replanning to adjust to changing circumstances. However, the majority of planning is done,
and the majority of executing is just starting.
The project management plan needs to be communicated in accordance with the
communications plan requirements. Hopefully, many of the key stakeholders are able to attend
the kickoff meeting. Regardless of who is present, proper communication needs to be sent to
all stakeholders.

Using Microsoft Project for Project Baselines

MS Project can be used as a tool to automate and communicate many facets of a project.
However, those involved in the project should be sure that they are ready to use it effectively.
Before a baseline is created with MS Project, the following should be verified:
• Quality assurance and quality control activities are included.
• Risk response plan activities (or duration compensation) are included.
• Performance posting activities are included.
• All “hard” date constraints are incorporated.
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• A realistic start date is chosen.
• Resource overloads are addressed.
• Organizational holidays are entered.
• Resource vacations are entered.
• Resource allocations are realistic.
• A management reserve is in the schedule.
• A contingency reserve is in the schedule.
• Time and cost tradeoffs are applied to the schedule.
a) Baseline the Project Plan
Microsoft Project supports three sets of activity metrics, each set having five fields. The sets
are used for cross-comparison purposes to better understand impacts, such as progress or
requested change. The sets and their field names are shown in figure.

b) First Time Baseline

Once key stakeholders agree to the project plan, the baseline is created by:
1. On the Project tab, Schedule group, click Set Baseline, then click Set Baseline
2. The defaults should be accepted as shown in figure; click OK.

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c) Subsequent Baselines
For any number of reasons, it may not be useful to continue to manage to the present baseline.
Reasons to change the baseline might include changes to the project scope, project delay or
restart, unavailability of planned resources, slower cash flow than planned, occurrence of risk
events, and quality problems. Remember, any change to the project baseline must be officially
designated as an approved change. If a change has been approved, then the changed material
must be re-baselined, as well as the WBS parents of the new or changed material (step 3 below):
1. Select the changed or added activities, milestones, and WBS elements.
2. On the Project tab, Schedule group, click Set Baseline, then click Set Baseline…
3. Click Selected tasks, then click to all summary tasks.
4. Click OK.

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