UNIT III

Activity Planning and Risk Management

Objectives of Activity planning – Project schedules – Activities – Sequencing and scheduling

–Network Planning models – Formulating Network Model – Forward Pass & Backward Pass

techniques – Critical path (CRM) method – Risk identification – Assessment – Risk Planning –

Risk Management – – PERT technique – Monte Carlo simulation – Resource Allocation –

Creation of critical paths – Cost schedules.

Objectives of Activity planning

 The objective of software project planning is to provide a framework that enables the
manager to make reasonable estimates of resources, cost, and schedule.
 Planning includes all the activities required to select a systems analysis team, assign
members of the team to appropriate projects, estimate the time required to complete
each task, and schedule the project so that tasks are completed timely.

Elements of Activity Planning: -

1. Feasibility assessment: - Is the project possible within required timescales and resource
constraints?

2. Resource Allocation: - What are the most effective ways of allocating resources to the
project. When should the resources be available.

3. Detailed Costing: - How much will the project cost and when is that expenditure likely to
take place?

4. Motivation: - Providing targets and being seen to monitor achievement against targets is
an effective way of motivating staff.

5. Co-ordination: - When do the staff in different departments need to be available to work

on a particular project.

Project schedules
 A project plan is developed to the level of showing dates when each activity should start
and finish, when and how much of each resource will be required. Once a plan has been
refined to this level, it is known as a project schedule.
 A stage of a larger project, the project plan must be developed to the level of showing
dates when each activity should start and finish and when and how much of each
resource will be required.

 It is an activity that distributes estimated effort across the effort to specific software
engineering tasks.
 Once the plan has been refined to this level of detail, we call it a project schedule.
 It is the culmination of a Project Planning activity that is a primary component of
Software Project Management.

Creating a project schedule comprises four main stages

 The first step in producing the plan is to decide what activities need to be carried out and
in what order they are to be done.
 The ideal activity plan will then be the subject of an activity risk analysis, aimed at
identifying potential problems.
 The third step is resource allocation.
 The final step is schedule production.

PROJECTS AND ACTIVITIES

 A project is composed of a number of related activities.
 A project may start when at least one of its activities is ready to start.
 A project will be completed when all of its activities have been completed.
 An activity must have a clear start and a clear stop.
 An activity should have a duration.
 Some activities may require that other activities are completed before they can begin.

Approaches to Identify Activities: -

There are three approaches to identifying the activities or tasks that make up a project

– the activity-based approach, the product-based approach and the hybrid approach.

1. The activity-based approach: -

 It consists of creating a list of all the activities that the project is supposed to involve
in its life cycle.
 It can be done by using a brainstorming process which includes the complete project
team and analyzing of the past projects.
 Work Breakdown Structure (WBS) is created for the same purpose.
 It involves dividing a complex and big scale project into simpler, manageable,
independent and smaller tasks which can be completed in approximately few weeks
by a single development team working on the project.
  The root of the project tree is labelled by the project name itself. Each node (activity)
is recursively decomposed and divided into smaller sub-activities, until at the leaf
level, the activities require approximately two weeks to develop and can be given to
a single development team. It follows top-down approach.

2. Product based approach: -

 This approach involves creating a Product Breakdown Structure (PBS) and a Product
Flow Diagram (PFD).
 The PFD illustrates the interdependencies between products, indicating which
products serve as inputs for others.
 By identifying transformations that convert products, the PFD can be transformed
into an ordered list of activities.
 Advocates argue that this method reduces the risk of omitting products compared to
an unstructured activity list, enhancing accuracy in project planning.
3. Hybrid approach: -
 It is a mix of the activity-based approach and product-based approach. It is the most
common used approach.
 Structuring of product-based or activity-based approach depend on the nature of the
project type.
 WBS deals with list of final deliverables whereas PBS deals in producing the products
using the product flow diagram.
Sequencing and scheduling
 Sequencing the tasks means identifying the dependencies among activities dictated by
the development process.
 Scheduled activities mean specifying when they should take place. The scheduling has
had to take account of availability of staff and the way in which the activities have been
allocated to them.
 A Gantt chart is a bar chart that provides a visual view of project tasks scheduled over
time. A Gantt chart is used for project planning: it’s a useful way of showing what work is
scheduled to be done on specific days. It helps project managers and team members
view the start dates, end dates and milestones of a project schedule in one simple
stacked bar chart.
 To create a Gantt chart, use the vertical axis to list the tasks that need to be completed,
and the horizontal axis to depict a timeline. As you input tasks, their start dates, their
end dates and their dependencies, bars on the stacked bar chart will populate, which
represent task durations.

Network Planning models

 Network Planning Models are essential tools for visualizing and managing the flow of
activities, task and dependencies within project.
 The three most common network modelling techniques are CPM (Critical Path Method),
PERT (Program Evaluation Review Techniques) and PDM (Precedence Diagram Model).
Components: -

1. Nodes (Boxes): Nodes represent project activities or tasks. Each node contains
information such as the activity name, duration, resources, and any other relevant
details.

2. Arrows (Lines): Arrows represent dependencies between activities. They show the
logical sequence in which activities must be performed. The direction of the arrow
indicates the flow of work.
3. Relationships: There are four types of relationships between activities:

 Earliest Start Time (ES): It is defined as the earliest time at which the activity can
start.
 Earliest Finish Time (EF): It is equal to the earliest start time for the activity plus the
time required to complete the activity.
 Latest Finish Time (LF): It is defined as the latest time at which the activity can be
completed without delaying the project.
 Latest Start Time (LS): It is equal to the latest finish time minus the time required to
complete the activity.
4. Slack Time: Slack time is the amount of time a task can be delayed without affecting the
project's completion time. It's also known as float. For calculating slack time, we
 Subtract the earliest start time (ES) from the latest start time (LS) or
Subtract the earliest finish time (EF) from the latest finish time (LF)

5. Critical Path: The critical path is the longest sequence of dependent activities that
determine the shortest possible duration for completing the project. Activities on the
critical path have zero slack or float time, meaning any delay in these activities will
directly impact the project's overall timeline.
Formulating Network Model
• A project network should have only one start node.
• A project network should have only one end node.
• A node has duration.
• A node represents an activity and, in general, activities take time to execute.
• Links normally have no duration.
• Time moves front left to right.
• A network may not contain loops.
• A network should not contain dangles.

FORWARD PASS AND BACKWARD PASS

Forward Pass and Backward Pass are used to calculate the project schedule, including task
start and finish times, and to determine the Critical Path.

Steps in Forward Pass:

• Early Start (ES) is plotted on the 1st left corner box at the top. Likewise Early Finish (EF) is
plotted on top right corner box.
• Start with the first activity and assign Earliest Start (ES) = 0.
• Calculate Earliest Finish (EF) using:
EF = ES + Duration
• For successor activities, set Earliest Start (ES) as the maximum EF of all preceding
activities:

ES = max (EF of predecessor activities)

• Continue until the last activity is reached.

Steps in Backward Pass:

• Late Finish (LF) is on the right corner box at the bottom and Late Start (LS) is plotted on
the left bottom corner box.
• Start from the last activity and set Late Finish (LF) = EF of last task.
• Calculate Late Start (LS) using:
LS = LF – Duration
• For predecessor activities, set Late Finish (LF) as the minimum LS of all succeeding
activities:
LF = min (LS of successor activities)
• Continue backward to the first activity.

Example: -Consider the following project specifications with estimated activity durations

and precedence requirements.

1. Network Activity Diagram

2.Forward Pass (Calculate Earliest Start & Finish Times)

2.Backward Pass (Calculate Latest Start & Finish Times)

3.Identify Critical Path

Means activity with zero slack.

FG = 12 + 5 = 17

CRITICAL PATH METHOD (CPM)

Critical Path Method (CPM) is a method used in project planning, generally for project
scheduling for the on-time completion of the project. It helps in the determination of the
earliest time by which the whole project can be completed. Any delay to an activity on this
critical path will lead to a delay in the completion of the entire project. To identify the critical
path, we need to calculate the activity float for each activity. Activity float is the difference
between an activity’s Earliest start and its latest start date or the difference between the
activity’s Earliest finish and its latest finish date, and it indicates how much the activity can
be delayed without delaying the completion of the entire project. If the float of an activity is
zero, then the activity is critical and must be added to the critical path of the project
network.

Steps in Critical Path Method (CPM)

Step 1: Identify all tasks required to complete the project

Step 2: Determine the sequence of tasks

Step 3: Estimate the duration of each task

Step 4: Draw a network diagram

Step 5: Identify the critical path

Step 6: Calculate the float

Step 7: Monitor the critical path

Construct Project Network: -

Forward Pass in Critical path: -

Backward Pass in Critical path: -

Identifying Critical Path: -

In this example, activities F and G have zero float and hence, are critical activities.

So, total project duration = 10 + 3 =13

Example - Determine the early start and late start in respect of all node points and identify
critical path for the following network.
PERT technique
 It is a project management tool that helps in planning, scheduling, organizing and tracking
tasks in a project.
 It is a procedure through which activities of a project are represented in its appropriate
sequence and timing.
 It is basically a mechanism for management planning and control which provides
blueprint for a particular project.
 In this technique, a PERT Chart is made which represent a schedule for all the specified
tasks in the project.
 The objective of PERT chart is to determine the critical path, which comprises critical
activities that should be completed on schedule.
 The reporting levels of the tasks or events in the PERT Charts is same as defined in the
work breakdown structure (WBS).

How to Create a PERT chart?

To create a PERT chart, we can follow the below steps:

 Identify dependencies: Shows how tasks depend on each other.

 Find critical paths: Determines the minimum time needed to complete a

project.

 Estimate task duration: Estimating the timeline involves figuring out how long
each task will take to complete. The three- time values are associated with each
activity.
1. Optimistic time – It is the shortest possible time in which the activity can
be finished. It assumes that everything goes very well. This is denoted by
t0.
2. Most likely time – It is the estimate of the normal time the activity would
take. This assumes normal delays. If a graph is plotted in the time of
completion and the frequency of completion in that time period, then most
likely time will represent the highest frequency of occurrence. This is
denoted by tm.
3. Pessimistic time – It represents the longest time the activity could take if
everything goes wrong. As in optimistic estimate, this value may be such
that only one in hundred or one in twenty will take time longer than this
value. This is denoted by tp.
 Identify risks: Helps identify potential problems that could delay the project.

 Plan resources: Helps determine how many resources are needed for each
task.

 Track progress: Helps monitor how a project is progressing.

PERT VS. CPM

Monte Carlo simulation

Monte Carlo Analysis is a risk management technique used to conduct a quantitative
analysis of risks and used to analyze the impact of risks on your project — in other
words, if this risk occurs, how will it affect the schedule or the cost of the project?
Monte Carlo gives you a range of possible outcomes and probabilities to allow you to
consider the likelihood of different scenarios.

For example, let’s say you don’t know how long your project will take. You have a
rough estimate of the duration of each project task. Using this, you develop a best-
case scenario (optimistic) and worst-case scenario (pessimistic) duration for each
task.

You can then use Monte Carlo to analyze all the potential combinations and give you
probabilities of when the project will complete.

The results would look something like this:

 2% chance of completing the project in 12 months (if every task finished by
the optimistic timeline)
 15% chance of completion within 13 months
 55% chance of completion within 14 months
 95% chance of completion within 15 months
  100% chance of completion within 16 months (If everything takes as long as
the pessimistic estimates)

Using this information, you can now better estimate your timeline and plan your
project.

Mathematics of Monte Carlo Simulation: -

The core idea of Monte Carlo simulation is to use random sampling from a probability
distribution to estimate the expected value of a function f over a domain D.

Benefits of Monte Carlo analysis in project management

The primary benefits of using Monte Carlo analysis on your projects are:

 Provides early inducation of how likely you are to meet project milestones and
deadlines

 Can be used to create a more realistic budget and schedule

 Predicts the likelihood of schedule and cost overruns

 Quantifies risks to assess impacts

 Provides objective data for decision making

Limitations of Monte Carlo analysis in project management

There are some challenges to using the Monte Carlo analysis. These include:

 You must provide three estimates for every activity or factor being analyzed.
  The analysis is only as good as the estimates provided

 The Monte Carlo simulation shows the overall probability for the entire project or a
large subset (such as a phase). It can’t be used to analyze individual activities or risks.

Resource Allocation
Resource allocation is the process of assigning and scheduling available resources in the
most effective and economical way possible. Projects will always need resources but they
can often be scarce. The task, therefore, lies with the project manager to determine the
proper timing and allocation of those resources within the project schedule.

In project management, resources are often in high demand but low in availability. This
reality puts project managers in a position where they must strategize the best ways to use
what they have. They need to determine who does what, when, and with what tools or
support. It’s a balancing act that requires keen insight into the project's needs and the
capabilities of the resources at hand.

steps to allocate resources for any project

 Assess resource needs

 Prioritize resource requirements
 Strategically allocate resources for the project
 Monitor and adjust resources throughout the project

Work Breakdown Structure

WBS is a hierarchical decomposition of a project into smaller, manageable components, used
to organize and plan the project's deliverables and tasks.

The root of this tree (structure) is labelled by the Project name itself. For constructing a work
breakdown structure, each node is recursively decomposed into smaller sub-activities, until
at the leaf level, the activities become undividable and independent. It follows a Top-Down
approach.
Construction of Work Breakdown Structure

1. Firstly, the project managers and top-level management identifies the main deliverables
of the project.

2. After this important step, these main deliverables are broken down into smaller higher-
level tasks and this complete process is done recursively to produce much smaller
independent tasks.

3. It depends on the project manager and team that up to which level of detail they want to
break down their project.

4. Generally, the lowest level tasks are the simplest and most independent tasks and takes
less than two weeks’ worth of work.

5. Hence, there is no rule for up to which level we may build the work breakdown structure
of the project as it totally depends upon the type of project we are working on and the
management of the company.

6. The efficiency and success of the whole project majorly depends on the quality of the
Work Breakdown Structure of the project and hence, it implies its importance.

Uses of Work Breakdown Structure

1. Cost estimation: It allows doing a precise cost estimation of each activity.

2. Time estimation: It allows estimating the time that each activity will take more precisely.
3. Easy project management: It allows easy management of the project.
4. Helps in project organization: It helps in proper organization of the project by the top
management.