Partial Listing of Upcoming Project Management Events
For a complete listing of events, please visit the Online Calendar at allPM.com

Six Sigma Free Webinar Overview
April 2, 2003 10-11:00 ET
http://www.iil.com/free_resources/free_webinars.asp

Theory of Constraints Free Webinar Overview
April 4, 2003 1-2:00 ET
http://www.iil.com/free_resources/free_webinars.asp

FREE Programme Management Seminar - Leeds
April 8, 2003 9:30-13:00
www.pm-group.co.uk/seminar

PM Maturity Assessment FREE Overview - Earn 1 PDU!
April 11, 2003 10-11:00 ET
http://www.iil.com/free_resources/free_webinars.asp

DCI's Project Management Conference
April 14-16, 2003
www.ProjectManagement.dci.com

NYC PMO Community Meeting
April 16, 2003 9-12:00 ET
www.pmousa.com

Quality Improvement & Project Management FREE overview - Earn 1 PDU!
April 24, 2003 10-11:00 ET
http://www.iil.com/free_resources/free_webinars.asp

Project Challenge Expo
April 30 - May 1, 2003
www.projchallenge.com

March Poll Results

March's poll question: The most difficult aspect of cost control in my projects is

predicting labor costs. 33.33 % (14)
establishing overhead costs. 7.14 % (3)
the cost accounting process. 26.19 % (11)
monitoring indirect labor cost. 33.33 % (14)

Total votes: 42

As shown by the responses, "predicting labor costs" and "monitoring indirect labor cost" slightly edged out the "cost accounting process" as being the voted most difficult aspect of cost control.

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April's poll question: Which aspect of MS Project do you find most valuable?

A. Scheduling
B. Tracking
C. Estimating Costs
D. Assigning Resources

If you have not already done so, please stop by allPM.com and add
your opinion today.

Column: Positive Leadership in Project Management- Third in a Series, by Frank Saladis, PMP

Connective Leadership

The word "Leadership" is getting a lot of attention these days. Each day we hear about how so called "leaders" have manipulated employees, created numerous accounting scandals and failed their employees and stockholders. We don't really hear much about the leaders who actually did something good for their companies. I guess doing "good" isn't newsworthy. I think we need to change that and start celebrating the true leaders out there. The question is " How did these people get to those high level positions in the first place?" There are probably lots of answers and explanations but there are a few things we should all consider before we apply the word "Leader" to an individual.

In an article entitled "Lead The Way" by Joshua Kurlantzick in the March 2003 edition of Entrepreneur Magazine, he suggests that tomorrow's leaders happen to be YOU. In the article "charisma" is linked to today's leaders. There was, maybe there still is, a belief that charismatic leaders were best suited to manage large companies. Most people will agree that having that quality is important. But shouldn't we be thinking about other qualities too? Think about people you believe to be great leaders. What qualities did they possess? I'm sure charm, charisma, and public speaking are some of the qualities. What other qualities are important?

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Frank P. Saladis (PMP) is Senior Consultant with International Institute for Learning, Inc. He has been involved in the development of standardized Project Management Guidelines (PMGs) for the AT&T Corporate Information Technology Services (Corporate ITS) organization and is the author of the Project Evaluation Review Process (PERP). He is the former President of the NYC PMI® Chapter

allPM Today Tips Feature
Top Ten Time-Savers in MS Project 2000, by Eric Uyttewaal, PMP

Tip #5:
Use the Tracking Gantt view and the Tracking toolbar to enter actual progress on the task level. It is a lot less work than working with timesheets. Even though task updates are less precise, if you update regularly you will likely have enough accuracy. You can do a schedule update on the task level in less than half an hour per week in a 1000-task schedule. You don't have to use timesheets to do an Earned Value analysis.

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Eric Uyttewaal (BS, Engineering; MS, Business Administration; PMP) is Director, Microsoft Project Certificaton, International Institute for Learning, Inc and author of "Dynamic Scheduling with Microsoft Project ® 2000." This tip appeared in the 2/2001 MPUG eZine. 

Dr. Kerzner's Consultant's Corner: Trouble in Paradise, a case study

A new feature, written by: Dr. Harold Kerzner

This column is being tested on a pilot basis, to see if you would enjoy reading and responding to it. A prize will be offered for the best solution, and the first one will be chosen by Dr. Kerzner himself. Submit your response to consultcorner@allpm.com.

You have been hired in as a consultant to Acme Corporation to analyze what went wrong and to prepare a list of lessons-learned for other project managers. Using the information in the case, and all three exhibits, identify what went wrong. Also were there any early warning signs, especially at the end of the first month, which should have warned the Wiley Coyote that disaster might be imminent?

As a reward for becoming Acme Corporation's first PMP, Acme assigned the new PMP, Wiley Coyote, the leadership role of an important project in which the timing of the deliverables was critical to the success of the project. A delay in the schedule could cost Acme a loss of at least $100,000 per month. Wiley Coyote's first responsibility as project manager was the preparation of a solicitation package for the selection of an engineering contractor.

Eight companies prepared bids based on the solicitation package. Wiley Coyote decided to negotiate with the low bidder, who happened to be at a significantly lower final cost than the other bidders. The contractor's project manager, Ima Roadrunner, would be handling the negotiations for the contractor. This was a contractor that Wiley Coyote had never worked with previously. Wiley Coyote reviewed the critical information in the proposal from the contractor:

• All work would be accomplished by engineering
• Total burdened labor was 2000 hours @ $120/hour
• The duration of the project would be approximately 6 months, and completed in 2003 (labor rates might be different in 2004)
• The contractor's overhead rate applied was 150 % for engineering
• All of the assigned workers would be at the same pay grade and would be assigned full time for the duration of the project
• Profit requested was 12.5 %, but subject to negotiations
• Ima Roadrunner's salary would be included in the overhead structure

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Harold Kerzner (Ph.D., MS, Engineering and MBA) is Senior Executive Director with International Institute for Learning, Inc. and Professor of Systems Management at Baldwin-Wallace College. He is an expert in the areas of project management, total quality management, and strategic planning.

Column: That Financial Alphabet...DCF, EVA, NPV: are they affecting your project?
by John C. Goodpasture, PMP

Is your project being held hostage to the financial alphabet of the CFO's office? Is there anything you can do to break it loose and get on with managing the project? Yes, certainly, if you have some understanding and familiarity with the concepts and the ways in which you can influence the outcomes of financial analysis. We are talking about the arcane acronyms of DCF, NPF, EVA, and IRR. The important idea embodied in all of these financial measures is RISK MANAGEMENT. As project managers, we know a fair amount about risk management. By applying the skills we have and adding a measure of extra knowledge about these risk-adjusted calculations we as project managers can greatly help the CFO and the Controller make good business decisions.

DCF is the root of the system. DCF stands for "discounted cash flow". Let's start with the easy stuff: cash. Cash in business is the actual monies paid out for salaries, supplies, materials, vendors, and the like. Cash is the monies received in revenues and monies saved in reduced cash expenses like labor and materials and so forth. Flow refers to the difference of cash on-hand at the beginning and end of an accounting period. There are "sources" of cash and "uses" of cash. These must balance: for every use there must be a source. "Discount" is where the risk management comes in. Discount is the factor applied to cash uses and sources to account for the risk that these cash items may not actually happen as planned. Risks include: inflation, market changes, customer credit performance or insolvency, vendor performance or insolvency, project performance (late or over budget), regulatory risks, and perhaps other project risks. By applying a discount to cash estimates to be paid out in the future or received in the future, the CFO hedges the investment bet on the project. Thus, DCF is not a simple interest rate; DCF may be different for different projects in the same company, or for the same project in a different time frame. Typical discount rates may range from about 4% to 15% or more for risky projects.

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John Goodpasture, PMP is a program manager with broad practical experience in executive management, project management, system engineering, and operations analysis. As founder and chief consultant at Square Peg Consulting, he specializes in customized application and delivery of project management techniques, business process analysis, and education of project practitioners. John can be reached at 770 650 6405 or by email at john.g@sqpegconsulting.com, or on the web at www.sqpegconsulting.com

The text in this article is the property of Square Peg Consulting, Inc. who reserves all rights to publish and distribute this material without reservation. Reproduction and distribution without permission of Square Peg Consulting, Inc. is prohibited.

Column: Working from your Center
by: George Pitagorsky, PMP

Waterfall Mind

How often are we caught up in a whirlwind of activities that are our projects, our work? When we are caught up, it reduces our ability to perform and manage. We make errors both in the content of our work and the way we relate with others. That leads to unnecessary rework, frustration and relationship difficulties.

When we are caught up we cannot see the big picture. It is as if we were in a waterfall. Current events, our fixation on our short range objectives, anxiety and emotions all combine to cloud our broader vision. We become reactive. The water is flowing so fast and furiously that we can see only what is immediately near to us.

If you have never experienced this "waterfall mind", you may have no need to read further. On the other hand, you may be so used to waterfall mind that you don't realize there is an alternative.

If waterfall mind is familiar then learning to work from your center should be a priority, particularly when you are in the midst of complex relationships, stress, and pressure to meet tight (if not impossible) deadlines within rigid budgets.

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George Pitagorsky (PMP) specializes in project management, information technology, productivity and quality improvement, systems requirements and organizational change management. He is listed in Who's Who as an expert in Quality Operations & Quality Improvement, and is the author of IIL's IT Project Management System, and developer of IIL's PM BASICS (TM)

Column: Estimates, Budgets, and Baselines -- Oh My!
by Frank P. Saladis, PMP

Based on discussions with a few hundred project managers over a period of about two years, it appears that project cost management, budget preparation, cost estimating, cost control, and cost baselines are not on the top of the priority list. Many corporate project managers are just not required to prepare budgets or manage them. "Someone in accounting or some other department does that for me!" "My job is to get the project done". Someone else manages the cost issues!

There are probably a lot of reasons why project managers are not required to develop budgets or track costs, but I think companies that don't require these activities are losing valuable data and missing lessons learned and opportunities for improving performance. Projects utilize resources such as people, material, equipment, etc. Someone has to pay for these resources. If it's an internal company project, the costs are being charged to some account or department. Part of the problem may be a lack of understanding about why cost management is important and where funding comes from. In most corporations each department prepares an operating budget usually based on past data. Specific project costs are not considered. Fulltime equivalent employees are probably a major part of the operating budget. The department receives approval and it's business as usual. People get their paychecks, meetings are held, projects are completed and the team moves on to the next project. Vouchers are prepared for expenses incurred, bills are paid and so on. Sounds pretty straightforward.

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Frank P. Saladis (PMP) is Senior Consultant with International Institute for Learning, Inc. He has been involved in the development of standardized Project Management Guidelines (PMGs) for the AT&T Corporate Information Technology Services (Corporate ITS) organization and is the author of the Project Evaluation Review Process (PERP). He is the former President of the NYC PMI Chapter

Column: Techniques for Managing Complex Projects With Planning and Scheduling Software
by Paul E. Harris

Project Managers and Directors often become frustrated with planners and schedulers when a schedule becomes so complex that even the scheduler has difficulty in understanding where he is or what is happening in the schedule.

This paper will discuss techniques that may be used for developing and managing schedules that have a large number of activities and a number of compex relationships.

These techniques may be used with other planning and scheduling software packages but were developed for and will be demonstrated using Primavera P3 and SureTrak.

The target audience is people who are beginner and intermediate project schedulers and people who are interested in schedule review and analysis.

The techniques to be demonstrated are:

• "Activity Coding" - This part of the presentation outlines some practical guideline on how to use Primavera WBS, Activity Codes and Activity ID Codes in large project schedules. It will outline the advantages and disadvantages of each and show some practical examples of each.
• "Milestone Hammocks" - This is a technique developed by the author for the management of a complex process plant commissioning schedule.
• "Staged" development of a schedule - A process following the PRINCE2 methodology of developing a master or project schedule dividing a project into Stages.

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Paul Harris holds an Honours Degree in Civil Engineering, is a Certified Cost Engineer through AACE International and a Certified PRINCE2 Practitioner. He has worked in the project controls industry for a number of years and has assisted many companies in a range of industries to set up and run project controls systems. His books draw on the author's practical knowledge in the use of project management software and presents workable solutions to real day to day planning and scheduling problems. They contain practical advice on how to use the software and how to collect the data required to create and update your schedule. His Melbourne, Australia based company, Eastwood Harris Pty Ltd, offers project controls consulting and training services with a strong focus on Primavera and Microsoft Project software.

Column: What is the True Downtime Cost (TDC)?
by Don Fitchett

The key to realizing greater savings from more informed management decisions is to predetermine the "true" cost of downtime for each profit center category. TDC is a methodology of analyzing all cost factors associated with downtime, and using this information for cost justification and day to day management decisions. Most likely, this data is already being collected in your facility, and need only be consolidated and organized according to the TDC guidelines.

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Don Fitchett, Founder of Business Industrial Network, has been developing expertise in manufacturing maintenance, manufacturing management and electronics for 17 years. He has conducted technical training for maintenance personnel, equipment operators, site managers and corporate training managers in those areas. He has a long list of companies who have benefited from his extensive knowledge in the related field.