2 PLANNING THE

PROJECT – PART
2
 Project Management Framework – Work in project management
Buyer/ Asking organization/ Requesting organization
2 OR
Seller/ Performing organization
Assess
Complexity: Far from
agreement
The Stacey CHAOS
Fundamentally
Complexity risky
Model
-Ralph D. Stacey COMPLEX

Requirements
Adaptive
approaches
COMPLICATED work well here

Linear
SIMPLE approaches
Close to work well here
agreement
Close to Far from
certainty Technical Capability
certainty

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Uncertainty
Spectrum
PLAN-BASED CHANGE-BASED/ ADAPTIVE

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Plan-based vs. Change-based Project Management/ Development approaches
Certainty
Change and Value Delivery
Description/ Characteristics Key Roles About
Risk Proposition
Requirements
Plan-based approach: • Project sponsor • Deliverables transitioned
• Activities completed in a distinct or authorizes project
• Change
to customer at completion
linear fashion
possible, but
• Phase completion governed by • Team led by
• High, from controlled
• Value realized in both
phase gates - New phase begins project manager short and long term
beginning • Risks carefully
only when the previous phase is
studied and
completed
managed

Change-based/ Adaptive approach: • Product owner • Iterative or incremental

• Agile, incremental or iterative controls value delivery to customer
development proposition • Built on during life cycle
• Timeboxed cadence • Project team assumption of • Regular customer
(iterations/sprints) or continuous delivers work • Unclear or high degree of feedback cycle enables
flow • Process roles customer- change continuous development
include team lead, driven, so • High tolerance of value toward a ”final”
scrum master, needs further of risk with product
agile coach, discovery guardrails for
facilitator risk
management

Hybrid -Any combination of the above

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Development
Approaches
Guidance and • Deliverable type and the development approach influence the number
Probing and cadence for project deliveries.
• The development approach and the desired delivery cadence determine
Questions
the project life cycle and its phases.

• How much unplanned work?

• How does the team prefer to work?
• What cadence suits our work?
• What does the customer want? Is incremental value delivery even
important to them?
• What’s our schedule? Do we want a steadier, building approach or a faster
pace?
• What’s our risk appetite/threshold?
• Are sprints helpful?

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Project Management/ Development Approaches
Development
Best Suited When Examples
Approach
Plan-based Construction projects or projects that have many
Predictive / Traditional/ physical assets or have similar projects that been
• Changes are expensive due to scrap and waste.
Waterfall (Software • Predictability and coordinated timing is important.
completed in the past.
Development Life Cycle
(SDLC) Waterfall/SDLC model for software development

Change-based • Dynamic requirements and activities are repeated until Projects where learning and correction is expected to
Iterative they are deemed correct. eventually get to the ideal solution.

• Dynamic requirements, as well as frequent small Projects where customers or business is wanting or
Change-based
deliveries. expecting to see outputs or partial outputs early and
Incremental • Speed to deliver small increments is a major goal. often.

• Changes are relatively easy, and waste is not costly.

Change-based • Complex environment where end product is not fully Software projects or projects based on intellectual
Agile known and user feedback is very valuable. property and research.

• There are some costs to changes. Projects with a mix of resources and experience levels
Hybrid • Stakeholders are interested in another method, but not or projects seeking or willing to learn new methods or
comfortable to fully adopt one method. techniques.

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Predictive Life
Cycle
FEASIBILITY
Example
DESIGN

BUILD

TEST

DEVELOPMENT DEPLOY

CLOSE

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 Predictive/ Plan-driven/ Traditional/ Waterfall
Predictive
Life Cycle
Example

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 Scope, Schedule, Cost (Traditional)- Baselines

Scope Baseline Schedule Baseline Cost Baseline

Adaptive Life
Cycle Initial Project and
Product Vision
Example

Note the iterations on the ITERATION 1 ITERATION 2 ITERATION 3

Product /
graphic, then describe Service
how this life cycle uses Delivered
an incremental Feedback Feedback
Backlog Backlog
approach.
Prioritization Prioritization

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Iterative
Incremental

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Source:https://agilenotion.com/agile-categoriesiterative-incremental-evolutionary/
 Agile as an Umbrella term
Agile
Methodology/
Approach Agile Frameworks

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Source:https://teamhood.com/agile-resources/what-is-agile/
 SDLC (Software Development Life Cycle)/ Waterfall Model
SDLC/
Waterfall Model

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Source https://kruschecompany.com/waterfall-software-development-methodology/
 SDLC (Software Development Life Cycle)/ Waterfall Model
Predictive/
SDLC/ ● Takes so long to develop they are technologically outdated by the time they are
Waterfall Model released.
● Takes so long to develop the market changes before they are released.
● Scope too large for the project management to effectively handle.
● Clients will often find it difficult to state their requirements at the abstract level of
a functional specification and will only fully appreciate what is needed when the
application is delivered.

● Mistaken presumptions and failure to fully understand user needs at the

requirements analysis phase mean the completed software product is not fit for
purpose.
● The extent of bugs and other problems discovered at the testing phase so great
fixing them is not considered commercially viable.

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Source https://kruschecompany.com/waterfall-software-development-methodology/
 Agile Timeline
History of Agile

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Source:https://www.visual-paradigm.com/guide/agile-software-development/what-is-agile-software-development/
 Agile Timeline
History of Agile

AGILE
MANIFES
TO

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Source: https://awarenessagents.wordpress.com/2018/07/11/a-brief-history-of-agile/
Agile

Derived from:
• Four values from the Agile Manifesto
• 12 principles

There are more than 50 known agile

practices and methods in use!

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18
The Agile
Manifesto for “We are uncovering better ways of developing software by doing it and
Software helping others do it.
Development
Through this work we have come to value:

Individuals and interaction over Process and tools

Comprehensive
Working software over
documentation
Customer collaboration over Contract negotiation

Responding to change over Following a plan

That is, while there is value in the items on the right, we value the items
on the left more.”
-2001
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Principles
Behind the
Agile
Manifesto 1. Our highest priority is to satisfy the customer through early and
continuous delivery of valuable software.
1 to 6 2. Welcome changing requirements, even late in development. Agile
processes harness change for the customer’s competitive advantage.
3. Deliver working software frequently, from a couple of weeks to a
couple of months, with a preference to the shorter timescale.
4. Businesspeople and developers must work together daily throughout
the project.
5. Build projects around motivated individuals. Give them the
environment and support they need and trust them to get the job
done.
6. The most efficient and effective method of conveying information to
and within a development team is face-to-face conversation.

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Principles
Behind the
Agile
7. Working software is the primary measure of progress.
Manifesto
8. Agile processes promote sustainable development. The sponsors,
7 to 12 developers, and users should be able to maintain a constant pace
indefinitely.
9. Continuous attention to technical excellence and good design
enhances agility.
10. Simplicity – the art of maximizing the amount of work not done – is
essential.
11. The best architectures, requirements, and designs emerge from self-
organizing teams.
12. At regular intervals, the team reflects on how to become more
effective, then tunes and adjusts its behavior accordingly.

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 12 Principles
Agile 4 core
Values
12 Agile
Principles
4 Core Values
Agile Timeline

https://agilemanifesto.org/
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Source:https://www.simpliaxis.com/resources/agile-manifesto-principles-values; https://elearninginfographics.com/agile-principles-infographic/
Adaptive Planning Overview

A release schedule
usually lasts from 3-6
months.

Time-boxed iterations
or sprints typically last
1 - 4 weeks.

Assign story points to

tasks to determine the
amount of work

Velocity – the capacity

of the team to complete
work

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 SCRUM is iterative
Scrum vs.
Waterfall

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 SCRUM is incremental
Scrum vs.
Waterfall

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 SCRUM is incremental
Scrum vs.
Waterfall

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 SCRUM is incremental; provides usable output every iteration
Scrum vs.
Waterfall

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Source:https://medium.com/@gerterasmus23/the-greatest-example-ever-of-mvp-and-iterative-incremental-development-41fd718ece06
 Product Backlog
Scrum User story format

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Source: https://www.techno-pm.com/2016/09/product-backlog-excel-template.html
 Prioritization Techniques
Scrum MOSCOW

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Source: https://blog.knoldus.com/moscow-method-how-to-make-the-best-of-prioritization/ https://youtu.be/EmAm0xnvfqk

 Prioritization Techniques
Scrum KANO Model

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Source: https://www.isixsigma.com/kano-analysis/kano-analysis-customer-needs-are-ever-changing/
 Prioritization Techniques
Scrum 100 Point Method

1. Richard

2. Sumit

3. Shirley

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Source: https://youtu.be/U7IEYWqRQ3w
Adaptive Planning Overview

A release schedule
usually lasts from 3-6
months.

Time-boxed iterations
or sprints typically last
1 - 4 weeks.

Assign story points to

tasks to determine the
amount of work

Velocity – the capacity

of the team to complete
work

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32
Product Roadmap/
Story Map

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Scrum

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Scrum

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Scrum

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 o What I did since last daily scrum meeting?

Scrum o What I am planning to work on today?

o Impediments (Issue/blocker) if any?

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 o What I did since last daily scrum meeting?

Scrum o What I am planning to work on today?

o Impediments (Issue/blocker) if any?

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 o What I did since last daily scrum meeting?

Scrum o What I am planning to work on today?

o Impediments (Issue/blocker) if any?

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 o What I did since last daily scrum meeting?

Scrum o What I am planning to work on today?

o Impediments (Issue/blocker) if any?

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 Scrum – Roles, Artifacts, Ceremonies (Meetings)
Scrum

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Scrum
• Sprint planning
Ceremonies • Team collaborates with product owner to plan work for current sprint
• Scrum master/senior scrum master facilitates
Overview
• Daily scrum
• Short, daily meeting of team only
• Team members describe work, ask for help, consider progress toward goal
• Not a status meeting

• Sprint review – can include Demo

• Held at end of sprint
• Team, product owner and stakeholders attend, or customers review progress
and give feedback to adapt product

• Sprint retrospective
• Team identifies improvements to performance and collaboration

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42
Agile:
The “Far Side” of “Doing Agile vs. Being Agile”
Adaptive
Approaches
Agile means:
• Iterations are likely to be shorter
• Product is more likely to evolve based on stakeholder feedback

Still used for software development, and agile principles have been
applied to other kinds of development projects, vis-à-vis the agile
mindset.
• Adopt a flexible, change-friendly way of thinking and behaving
• Understand the purpose of these practices
• Select and implement appropriate practices based on context
• Internalize agile values, mindset and behavior
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Hybrid Project
Approaches:
Examples

• Use agile or iterative practices within a predictive framework

• Use predictive artifacts or processes within an adaptive life cycle
• Business analysis techniques assist with requirements
management
• New tools help identify complex elements in projects
• Organizational change management methods prepare for
transitioning project outputs into the organization

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44
Estimation

🠶 The people doing the work should perform the estimating tasks because they have
the best knowledge of:
🠶 The risks
🠶 Level of effort
🠶 Potential pitfalls
🠶 Traditional project managers use hours of effort.
🠶 Three-point estimating is one example.
🠶 Agile projects avoid using absolute time estimates.
🠶 Story Point technique provides a unit-less measure estimation.
Measure Effort, Not Time

Relative sizing
• Compares effort of multiple user stories through assignment of values (XS, S, M, L, XL)

Use common t-shirt sizes to assign values to user stories.

Story points
• Uses a relative measure – e.g., numbers in the Fibonacci
sequence – to identify the level of difficulty or complexity of
a user story or task

Planning poker
• Estimates effort or relative size of development effort
• Uses a deck of cards with modified Fibonacci numbers to vote on user stories

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 Estimation
Scrum Story Points

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Source: https://rubygarage.org/blog/how-to-estimate-with-story-points
 Estimation
Scrum Story Points – Relative Measure

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Source: https://www.linkedin.com/pulse/estimation-prioritization-agile-safe-framework-samir
 Estimation
Scrum Planning Poker

Fibonacci
Series

Modified Fibonacci

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Source: https://gonztirado.gitbooks.io/scrum-y-xp-desde-las-trincheras/content/4/estimacion_de_tiempos_usando_planning_poker.html
https://www.freecodecamp.org/news/how-to-write-a-java-program-to-find-the-fibonacci-series/
 Estimation
Scrum Planning Poker

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Source: https://www.c-sharpcorner.com/article/agile-story-point-estimation-techniques-planning-poker/
 Estimation
Scrum T shirt sizing

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Source: https://pmtips.xyz/2020/05/12/t-shirt-estimation/
 Estimation
Scrum Complexity Bucket

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Source: https://us.agiledigest.com/agileestimation/
 Decision-making
Scrum Voting Techniques

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Source: https://ecampusontario.pressbooks.pub/paths/chapter/making-decisions-as-a-team/
Risk
Conditions of
Uncertainty

• Risk originates from a wide range of known and unknown causes

within and outside the business environment.
• Risk development is indicated by a trigger condition.
• Risks can be positive (opportunities) or negative (threats).
• If a risk becomes an issue, you must act! - Workaround

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Project Risks
SLC Examples
Project Risks

• Working with new vendors and

building processes
• Supply chain issues for correct
bricks
• Building code compliance
• Key stakeholder conflict
• Retail market changes –
decline of in-store shopping
• Site survey shows risk of
slippage from coastal erosion
< 25 years

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Create Risk
Strategy
How would you describe the Management Guidelines
organization/ project’s risk • Use qualitative (high, medium,
appetite? low, etc.) or quantitative
(numerical) ratings
• Risk-seeking?
First, understand risk • Risk-neutral? • Set a maximum risk exposure
parameters for the level that can be managed
• Risk-averse?
organization and the without escalation
project! The risk threshold is tied to
individual and organizational risk
appetites. Do you know:
• Which are too high to accept?
• Which are low enough to just be
accepted?
• What criteria determines
inclusion in the risk register?

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Project Risks
management

1. Identify Risks
2. Perform qualitative risk analysis
3. Perform quantitative risk analysis
4. Plan risk responses
5. Implement risk responses
6. Monitor risks

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 1. Identify Risks 2. Perform qualitative risk analysis Perform quantitative risk
analysis
Risk RBS Level 0
4. Plan risk responses 5. Implement risk responses 6. Monitor risks
RBS Level 1 RBS Level 2

Breakdown 1.1 Scope definition

1.2 Requirements definition

Structure 1. Technical Risk

1.3 Estimates, assumptions, and constraints
1.4 Technical processes
1.5 Technology
1.6 Technical interfaces
Uses typical categories, 2.1 Project management

such as: 2.2 Program/portfolio management

2.3 Operations management
• Technical 2. Management Risk
2.4 Organization

• Management 2.5 Resourcing

2.6 Communication
0. All Sources of Project Risk
• Commercial 3.1 Contractual terms and conditions
3.2 Internal procurement
• External 3.3 Suppliers and vendors
3. Commercial Risk
3.4 Subcontracts
3.5 Client/customer stability
3.6 Partnerships and join ventures
4.1 Legislation
4.2 Exchange rates
4.3 Site / facilities
4. External Risk
4.4 Environmental / weather
4.5 Competition
4.6 Regulatory
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Example RBS
 1. Identify Risks 2. Perform qualitative risk analysis Perform quantitative risk
Project Risks analysis
4. Plan risk responses 5. Implement risk responses 6. Monitor risks
management Probability and Impact Matrix

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Source: https://www.wallstreetprep.com/knowledge/burn-rate/
Probability & Impact matrix - Quantitative Analysis
1. Identify Risks 2. Perform qualitative risk analysis 3. Perform quantitative risk analysis
4. Plan risk responses 5. Implement risk responses 6. Monitor risks

Risk Response
Good Practice

Risk responses should be:

• Appropriate for the significance of the risk

• Cost effective
• Realistic within the project context
• Agreed to by relevant stakeholders
• Owned by a responsible person

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61
 1. Identify Risks 2. Perform qualitative risk analysis 3. Perform quantitative risk analysis
4. Plan risk responses 5. Implement risk responses 6. Monitor risks
Plan Risk
Response
Guidelines and • A trigger condition signals a risk can develop
Terminology
• Team implements a risk response

• A secondary risk can arise as a direct result of the risk response

implementation

• Residual risk can remain after risk responses have been

implemented

• Have a contingency (fallback) plan ready in case the primary risk

response fails

• The contingency reserve (or allowance) is the budget within the

cost baseline that is allocated for identified risks and their response
strategies

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 1. Identify Risks 2. Perform qualitative risk analysis 3. Perform quantitative risk analysis
4. Plan risk responses 5. Implement risk responses 6. Monitor risks
Risk Response Strategies THREAT OPPORTUNITY

Prepare strategies for threats (negative) as ESCALATE ESCALATE

well as opportunities (positive) and for
individual project risks and overall project
risk. AVOID EXPLOIT

TRANSFER SHARE

MITIGATE ENHANCE

ACCEPT ACCEPT

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63
 1. Identify Risks 2. Perform qualitative risk analysis 3. Perform quantitative risk analysis

Risk Response Strategies 4. Plan risk responses 5. Implement risk responses 6. Monitor risks

Strategies Example
Escalate: • Legal matters
THREAT
Escalate to higher/relevant authority
Avoid : •Reduction in scope
ESCALATE It involves strategies to eliminate threat
completely - Probability to reduce to zero.
Mitigate : • Safety measures
AVOID It implies a reduction in the probability and/
or impact of an adverse risk event.

TRANSFER Transfer : Insurance

It requires shifting the negative impact
(some) of a threat, along with ownership of
MITIGATE the response to a third party.
Accept :
Do nothing about the risk. Put them in
ACCEPT watchlist.

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64
 1. Identify Risks 2. Perform qualitative risk analysis 3. Perform quantitative risk analysis

Risk Response Strategies 4. Plan risk responses 5. Implement risk responses 6. Monitor risks

OPPORTUNITY Strategies Example

Escalate: • New project
Escalate to higher/relevant authority opportunity
ESCALATE Exploit •Monopoly
Make the probability 100 %
Enhance : • Increased scope
EXPLOIT It improves the opportunity factor by
increasing probability and/ or positive
impact.
SHARE
Share: •Joint Venture
It involves sharing ownership with a third-
party to capture the opportunity
ENHANCE
Accept :
Do nothing about the risk. Put them in
watchlist.
ACCEPT

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 1. Identify Risks 2. Perform qualitative risk analysis 3. Perform quantitative risk analysis

Risk Response Strategies 4. Plan risk responses 5. Implement risk responses 6. Monitor risks

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 1. Identify Risks 2. Perform qualitative risk analysis Perform quantitative risk analysis

Risk Register* 4. Plan risk responses 5. Implement risk responses 6. Monitor risks

Risk Score
Risk Impact Impact Level Probability Trigger Planned
(probability and Owner
Description Description Score Level Score Condition Response
impact multiplied)
What will
(IMPACT X
happen if the Rate Rate
PROBABILITY) What indicates the Who’s
risk is not 1 (LOW) to 1 (LOW) to Action plan
Address highest risk will occur. responsible
mitigated or 5 (HIGH) 5 (HIGH)
first.
eliminated
Supply chain
Supplier
issues for 5 1 5 L. De Souza
notification
correct bricks
Building code
5 2 10 Pre-checks fail K. Ayoung
compliance
Working with
new vendors
3 3 9 Delays or conflict K. Ayoung
and building
processes

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67
 1. Identify Risks 2. Perform qualitative risk analysis Perform quantitative risk analysis
4. Plan risk responses 5. Implement risk responses 6. Monitor risks
Risk List
Probability Impact
Risk Magnitude
(1-10) (1-10)
• Working with new vendors and Teams can add (tailor)
5 6 30
building processes columns for:
• Supply chain issues for correct
5 10 50 • Owner
bricks
• Status
• Building code noncompliance 5 10 50
• Date identified
• Key stakeholder conflict (Josie
Bynoe) 4 6 24 • Date resolved

• Retail market declining 8 10 80

• Days active
• Resolution strategy
• Site survey shows risk of slippage
from coastal erosion < 25 years 5 3 15

In addition to a risk list or a risk register, teams use information radiators and a
backlog refinement process with risks added, which are discussed at various
planning meetings.
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Quality

The degree to which a set of inherent

characteristics fulfill requirements.
Include:
• Stakeholder expectations and end-user
satisfaction
• Compliance with standards and
regulations
• Continuous improvement

Copyright
Copyright2023©
2023 Project Management Institute, Inc. All rights reserved.
This
Thismaterial
materialis is
being
being
provided
providedasas
part
part
ofof
aaPMI
PMI®
Workshop.
course.
69
Cost of Quality
(CoQ) Cost of Conformance/
Cost of Good Quality
Money spent during project to avoid failure

• Prevention costs (Build a quality

product)
• Training
• Document processes
• Equipment
• Time to do work “right” – resources,
infrastructure expenses
• Appraisal (quality assessment)
• Testing
• Inspections
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70
Cost of Quality
(CoQ) Cost of Conformance/ Cost of NON -Conformance/
Cost of Good Quality Cost of Poor Quality
Money spent during project to avoid failure Money spent during/after project
because of failures

• Prevention costs (Build a quality • Internal failure costs

product) • Rework
• Training • Scrap
• Document processes • External failure costs
• Equipment • Liabilities
• Time to do work “right” – resources, • Warranty work
infrastructure expenses
• Lost business
• Appraisal (quality assessment)
• Testing
• Inspections
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71
Quality Cost of Quality

Cost of Quality = Cost of good quality + Cost of Poor

quality

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72

Source: https://youtu.be/ZQDgxH6pRbs
Cost of Quality

Cost of Quality All costs incurred over the life of the product by investment in preventing nonconformance to
requirements, appraisal of the product or service for conformance to requirements, and failure to meet
requirements.
Stakeholder
and Customer
Expectations
of Quality PRODUCT/DELIVERABLE PROCESSES

Identify quality requirements Ongoing observation and checking

during requirements elicitation; of processes stated in quality
create quality management plan. management plan; overseen by a
quality policy.

Your organization should have a quality policy which applies to

all projects. If your organization does not have a quality policy,
then your project needs to create one.

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Compliance
Requirements

Internal and external standards, such as:

• Appropriate government regulations
• Organizational policies
• Product and project quality requirements
• Project risk
Compliance actions:
• Classify compliance categories
• Determine potential threats to compliance
• Analyze the consequences of
noncompliance
• Determine necessary approach and
action to address compliance needs

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75
Quality Example

Standards and Documents established as a model

Standards by an authority, custom, or by Dictionary
Regulations general consent.
Requirements that can establish
product, process, or service
Regulations characteristics, including applicable Language rules
administrative provisions with
government-mandated compliance.

De facto standards or Widely accepted and adopted Words are used widely in
regulations through use, but not yet. . .. groups, like slang or jargon.

De jure standards or Mandated by law or approved by a Word enters dictionary and

regulations recognized body of experts. becomes a defined word.

A number of international institutes are devoted to quality, including:

• American Society for Quality (ASQ) - ISO 9000 Series
• The Chartered Quality Institute (CQI)
• ASTM International

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76
Quality
Metrics,
Checklists,
Metrics measure desired quality attributes for your product or project
and through testing, use of tools, processes.
Processes
Include a tolerance level that factors in what the customer will accept
and describe the desired quality level in the acceptance criteria and
DoD.

Include checklists, templates and quality artifacts in the quality

management plan.

Adaptive teams use retrospectives and small batch cycles to ensure

quality.

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77
Quality Measurement Tools
78

Control
Pareto
Charts and
Charts
Variability

Statistical
Sampling
Control Charts and Variability (Slide 1 of 2)

79

Variability above the

Upper
mean A control
UCL UCL limit –
10.5

A Above the UCL

10 mm
x x
7 points above
C
the mean

Lower
LCL LCL control
limit –
9.5
x = mean
Control Charts and Variability (Slide 2 of 2)
80

Variability below the

mean
UCL UCL

B Below the UCL

x x
7 points below
D D
the mean

LCL LCL

x = mean
Pareto Chart
81

Pareto chart: A histogram that is used to rank causes of problems in a hierarchical format.

An example of a Pareto chart

Continuous Improvement Approaches
82

🠶 Agile project management contains small development cycles that are used to develop the product by
feature and receive client feedback on each feature.

Kaizen Plan Do Study Act

• Many small changes or improvements. Act
• Identify issues Plan
• Small changes less likely to require major and root causes, • Define
then modify to objectives and
expenditures of capital. improve process processes

• Ideas come from workers—not expensive

research, consultants, or equipment.
• All employees should continually improve
their own performance. Study Do
• Evaluate data
• All are encouraged to take ownership of and compare
• Execute plan
and collect
results to
data
their work to improve motivation. expectations
Continuous Improvement Tools
83

🠶 Lessons Learned Register is an important component of each project.

🠶 Use it as a source of improving the processes in other projects.
🠶 Avoid filing it away at the end of a project and not referring to it.
🠶 Retrospectives
🠶 Common in agile projects at the end of each iteration.
🠶 Help the team look back at an iteration and plan improvements for the next
one.
🠶 Experiments provide a way to improve team efficiency and effectiveness.
 Lessons-Learned Register & Repository
84

Lessons-learned register* A project document used to record knowledge gained during a project so that it can
be used in the current project and entered into the lessons-learned repository.
Lessons-learned repository* A store of historical information about lessons learned in projects.

Project A

Project B
Project A

Project C
Lessons-Learned Register Lessons-Learned Repository
Procurement Strategy
85

Make-or-buy analysis The process of gathering and organizing data about product requirements and analyzing
them against available alternatives including the purchase or internal manufacture of the product.
Make-or-buy decisions Decisions made regarding the external purchase or internal manufacture of a product.

Make-or-buy decision considerations:

• What is the impact on cost, time, or quality?
• Is there an on-going need for the specific skill set?
• How steep is the learning curve?
• Are required resources readily available
within the organization?
Source Selection Criteria
86

Source selection criteria A set of attributes desired by the buyer which a seller is required to meet or exceed to
be selected for a contract.

Sample source selection criteria:

• Overall or life-cycle cost • Production capacity and interest

• Understanding of need • Business size and type
• Technical capability • Past performance of sellers
• Management approach • References
• Technical approach • Intellectual property rights
• Warranty • Proprietary rights
• Financial capacity
Procurements Documents

Procurement Documents
🠶 They are ……RFI, IFB, RFP, RFQ, Tender Notice or bid, tender, quotation
❑ Used to seek responses from prospective sellers.
❑ They are structured to facilitate;
🠶 An accurate and complete response from each prospective seller
🠶 Easy evaluation of the bids.
🠶 Rigorous enough to ensure consistent, comparable responses but
🠶 Flexible enough to allow consideration of seller suggestions for better ways
to satisfy the requirements.

🠶 They include ..
❑ A description of the desired form of the response,
❑ The relevant contract statement of work (SOW) and
❑ Any required contractual provisions like non-disclosure provisions, a copy of
a model contract etc.
Contract Types
88
Contract type Description
Fixed-price* • An agreement that sets the fee that will be paid for a defined scope of work
regardless of the cost or effort to deliver it.
• Also known as a lump sum contract.
• Provides maximum protection to buyer but requires a lengthy preparation and
bid evaluation.
• Suited for projects with a high degree of certainty about their parameters.
Cost-reimbursable* • A contract involving payment to the seller for the seller's actual costs, plus a fee
typically representing the seller's profit.
• Includes incentives for meeting certain objectives, such as costs, schedule, or
technical performance targets.
• Suited for projects when parameters are uncertain.
Time and Material • A type of contract that is a hybrid contractual arrangement containing aspects
(T&M)* of both cost-reimbursable and fixed-price contracts.
• Combines a negotiated hourly rate and full reimbursement for materials.
• Include not-to-exceed values and time limits to prevent unlimited cost growth.
• Suited for projects when a precise statement of work cannot be quickly
prescribed.