Learning Objectives
LO 12-1: Describe the primary concerns and objectives of project management.
Project management is concerned with the successful planning, scheduling, and controlling of project resources. Its objectives are to effectively manage resources such as capital, people, materials, and equipment. In addition, project management’s objective is to satisfy the client’s requirements such as on time completion, budgeted costs, and performance targets.
LO 12-2: Develop a work breakdown structure and a Gantt chart.
See table 12.2, time, cost, and performance information, page 368. Work breakdown structure (WBS) is a hierarchical listing that segments work into basic tasks. Successive levels identify basic activities that make up the higher level work. See figure 12.2, the Gantt chart, page 369. A Gantt chart is a timeline used for planning purposes that show the time lengths and sequence of a project’s task activities.
LO 12-3: Understand and discuss the Critical Path Method and the Program Evaluation and Review Technique.
The critical path method (CPM) is used to determine a project’s longest sequence of activities that, when linked together, determine the completion time for the entire project. The purpose of the program evaluation and review technique (PERT) is the same as CPM. The primary difference is that PERT uses three time estimates for each activity, optimistic completion time, pessimistic completion time, and most likely completion time.
LO 12-4: Perform project crashing.
Project crashing reduces a project’s completion time by using more resources to complete an activity; consequently, adding more resources to an activity will increase the cost of completing that activity. Furthermore, crashing an activity on the critical path could result in causing another activity path to become the critical path. See table 12.3, normal and crash times and costs, page 376, for an illustration of project crashing.
LO 12-5: Identify and manage project risks.
There are five categories of project risks. External risks are outside of the company’s control. Costs risks are within the company’s control. Schedule risks are generally within the company’s control. Technology risks can be either inside or outside (external risks) of the company’s control. Operational risks are within a company’s control. Project risks can be managed by developing risk mitigation plans and contingency plans. Risk mitigation plans are actions taken to reduce project risk. Contingency plans are the actions that will be taken when something goes wrong.
LO 12-6: Discuss the advantages and disadvantages of cloud-based project management applications.
The primary advantages of cloud-based project management are computing power and cost. Cloud-based project management allows smaller firms to use computing resources when needed instead of investing in expensive information systems. The disadvantages some companies are concerned about are data security, availability, hidden fees, and cost escalations. Of these four perceived disadvantages, data security is viewed as basically unfounded because cloud sites use either 128-bit or 256-bit data encryption.
Chapter Outline
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