Chapter Nine

Project Implementation
Schedule
Objectives of the session
After the session, you will be able to apply
project implementation tools like WBS,
Gantt chart, network techniques, CPM,
and PERT in a specific projects; and
analyses the project cost-time relationships.
You will also be highlighted on the
resources, cost, quality issues, change, risk,
performance and communication plans.
Activity Scheduling
Activities Schedule is the backbone of
every project and is essential for a
successful outcome.
It gives all personnel involved in the
project common understanding of what is
required, how this will be achieved, when it
will be achieved and who will be
responsible for the successful outcome of
each activity.

3
Activity Scheduling Involves:
Application of Work Breakdown
Structure in order to subdivide the major
project deliverables into smaller, more
manageable component based on the
project scope.
Identification of the activities needed in
order to produce the project deliverables
and if necessary breaking down the
activities into more manageable tasks which
can then be assigned to individuals
Determination of activities’ sequence (i.e.
in what order should related activities be
undertaken?) and dependencies (i.e. is the
activity dependent on the start up or
completion of any other activity?)- Network
Estimation of activities/ tasks duration
Scheduling of activities by defining the start
up and completion dates of each
activity/task.
Work Breakdown Structure (WBS)
It represents a systematic and logical
breakdown of the project into its component
parts.
It is constructed by dividing the project in to
its major parts, with each of these being
further divided in to sub parts.
This is continued till a breakdown is done in
terms of manageable units of work for
which responsibility can be defined.

6
Thus, the work breakdown structure helps in:
 Effective planning by dividing the work
in to manageable elements which can be
planned, budgeted and controlled.
 Assignment of responsibility for work
elements to project personnel and outside
agencies.
 Development of control and
information system.

7
Ways of doing WBS
Hardware orientation [identification of
basic work packages]
 Agency orientation [based on
assignment of responsibility to different
agencies]
Functional oriented [e.g. deign,
procurement, construction and
commissioning]
 Illustrative WBS for Construction Projects

Foundation Exterior Interior Finish

Heating/air Electrical Paint Fixtures

Frame conditioning
Layout Form & install Roof
window
s
Pour & Finish
insulate Dry wall
Floor Clean up
Install siding Painting covering
Doors & trim
Tools of Implementation Planning
Gantt or bar chart showing when
activities take place
Project network showing
activities, their dependencies and
their relation to the whole.
Bar or Gantt Chart

11
A Gantt chart is a graphical
representation of the duration of tasks against
the progression of time.
A Gantt chart is a useful tool for planning,
scheduling and monitoring projects.
The advantages of the bar chart are:
 It is simple to understand
 It can be used to show progress
 It can be used for manpower planning

12
The disadvantages of the bar chart
are:
 It cannot show interrelationship among
activities on large , complex projects;
 There may be a physical limit to the size
of the bar chart, which may limit the size
of the project; and
 It cannot easily cope with frequent
changes or updating.

13
Network Techniques
In this technique, the
 activities,
 events, and
 their relationships are presented by a
network diagram, also called an arrow
diagram.

14
 Why Project Network?
It is a convenient way to show activities and
precedence in relation to the whole project.
 It is a basis of project planning:
◦ Responsibility allocation
◦ Definition of subcontracting units
◦ Role of different players
It is the base for scheduling and establishment
of work time tables
• Facilitate critical path determination for
management control
– deterministic Vs probabilistic activity times
• Facilitates resource planning for projects
– Project crashing with time cost trade offs
– Resource aggregation
– Resource leveling
– Limited resource allocation
• It can handle very large and complex projects
and it can be easily computerized and updated
Uses for project implementation
 Time table for implementation
 Monitoring and reporting progress
 updating of schedules and resources
 Coordination of work with different agencies

The project network is thus a common

vehicle for planning, communicating and
implementing the right from inception.
Drawbacks of network technique
Being more complicated than the
traditional bar chart it is not easily
understood by the project personnel, and
It does not define an operational
schedule which tells who does what and
when.

18
Basic Network terminologies
An activity is a task or a job that takes
time and resources
It is represented in a network by an
arrow.
The arrow doesn’t have any relationship
with a scale.
Example: Excavate the land, Dig foundations,
Lay foundations, Build a wall, etc.

19
In a network analysis, it is important to
establish:
 The activities involved in the project,
 Their logical relationship, ex.
Building a wall comes after laying the
foundation.
 An estimate of the time that an
activity is going to take

20
 An event is a point in time and
indicates the start or finish of an activity
or activities, e.g. wall built, foundations
dug, etc.
An event is represented in a network by a
circle.

The establishment of activities automatically

determines events because they are the start
and finish of activities.
21
Dummy activity: an activity that
does not consume time or resources.
It shows merely the dependencies or
proper relationship between
activities.
A dotted arrow represents dummy.

22
Network: this is the combination of activities,
dummy activities and events in logical sequence
according to the rules of drawing networks.
Example:

23
Rules for drawing networks:
A complete network should have one point
of entry – a start event, and one point of exit
– a finish event.
Each activity must have one preceding (tail)
event and one succeeding or head event.
Many activities may have the same tail event
and many may have the same head event.
No activity can start until its tail event is
reached.

24
An event is not complete until all
activities leading in to it are complete.
A series of activities which lead back to
the same event are not allowed.
All activities must be tied in to the
network; all must contribute to the
progress of the project, danglers are not
allowed.

25
Activity Identification
Short description: example, Lay foundation,
erect frame, etc.
Alphabetic or numeric code: example, A, B,
C, etc., or 100, 101, 108 etc.
Using tail and head event numbers:
example, 1-2, 2-3, 3-4, 3-6, etc

26
Example 1: Organizing a one day seminar
Generate the list of jobs to be done:
a) Decide date, budget , venue for seminar
b) Identify speakers, participants
c) Contact and finalize speakers
d) Print seminar brochure
e) Mail brochures to tentative participants
f) Estimate number of participants
g) Decide menu for lunch, tea and coffee
h) Arrange for catering
i) Arrange projection facilities at venue
j) Receive guests at registration
k) Conduct seminar as per brochure
l) See off guests
Code Activity Predecessors
A Decide date, budget , venue for seminar -
B Identify speakers, participants -
C Contact and finalize speakers B
D Print seminar brochure A, C
E Mail brochures to tentative participants D
F Estimate number of participants E
G Decide menu for lunch, tea and coffee F
H Arrange for catering G
I Arrange projection facilities at venue F
J Receive guests at registration E
K Conduct seminar as per brochure H, I, J
L See off guests K
 Network of A one day
seminar on PM
10
L

9
K
J 8
A D E
1 4 5
3 I H
B F 6
2 C 7
G
 Example 2: Complex Construction
Project
A = Lay foundation
B = Erect framework
C = install millwork
D = install wiring
E = install plumbing
F = plaster walls
G = install siding
H = decorate the interior
I = finish the exterior
The interrelationship among these
activities is as follows:
 A should precede B
 B should precede C, D, E, F, and G
 C, D, E and F should precede H
 G should precede I

31
Network diagram of the project:
4
C

H
1 2 3
D
7 9
A B
E

F 5

I
G 6

8
Activity Duration
Deterministic [as in CPM]
◦ When previous experience yields fairly accurate
estimates of activity duration, [e.g.,
construction activity, market surveys]
 Probabilistic [as in PERT]
◦ when there is uncertainty in times, as for
instance in R & D activities, new activities
being carried out for the first time.
Deterministic time estimate:
◦ A single time estimate is used for each activity.
This is taken from experts who have prior
knowledge and experience of the activity.
 Probabilistic time estimate:
◦ Multiple time estimates -Three time estimates
[Optimistic, Most Likely and Pessimistic] are
commonly used for each activity based on the
consensus of the group.
O  4 ML  P
ExpectedTime
6
Critical path
Isthe longest path in the network
 Lower bound on the project duration [the
shortest time in which the whole project
can be completed]
 Selective control for management of the
project
Can be determined by:
◦ Enumeration of all paths in the network
◦ Event based computations [forward pass and
backward pass]
There may be two critical paths and
the critical path can pass through a
dummy.
The Critical path is determined by
selecting the chain of activities where
their ESTs are equal to their LSTs.
The other activities with differences in
their ESTs and LSTs are non-critical
activities.

36
Earliest start time (EST): the earliest
possible time at which a succeeding activity
start. Calculating the EST is called the
forward pass.
Latest start times (LST): is the latest
possible time at which a preceding activity
can finish without increasing the project
duration. Notes on calculating LST (termed
the backward pass)

37
 Example 1 2

B D

2 4

0 1 3 4 5
A C E F

1 3 1 2

• The Critical paths of this project are A, B, D and F.

• The total duration of this project is 9 days.
• The non-critical paths are C and E.

38
Example
Activity Preceding Activity Activity durations (Weeks)
A - 9
B _ 3
C A 8
D A 2
E A 3
F C 2
G C 6
H C 1
J B, D 4
K F, J 1
L E, H, G, K 2
M E, H 3
N L, M 4
Required: Find the critical path and the duration for this project.

39
 Answer 3
M (3)

7
E (3) 8

N (4)
A (9) H (1)
1
L (2)
C (8)
G (6)
4 6
D (2)

B (3) F (2)

2
K (1)
J (4)
5

Critical path : A, C, G, L and N

Project duration : 29 Weeks

40
Exercise 1
Activity Predecessors Duration (days)

A - 2
B - 3
C A 1
D A, B 4
E D 5
F D 8
G C, E 6
H C, E 4
I F, G, H 3

Draw the network and find the critical path?

Float: Float or spare time is associated with
non- critical activities. There are three types
of floats: total floats, free float and
independent float.
float
Total float is the amount of time a path of
activities could be delayed with out affecting
the overall project durations.
Total Float = Latest finish time – Earliest
Start time – Activity duration
For example total float for activity C and E is
7-1-4 = 2 days.

42
Free float is the amount of time an activity
can be delayed without affecting the
commencement of a subsequent activity at
its earliest start time, but may affect float of a
previous activity.
Free float = (Latest finish time but without
affecting succeeding activity)-Earliest Start
Time – Activity Duration
For example free float for activity E is 7-4-1
= 2 days

43
Independent Float is the amount of time an
activity can be delayed when all preceding
activities are completed as late as possible and all
succeeding activities started as early as possible.
Independent float therefore does not affect the
float of either preceding or subsequent activities.
Independent Float= (Latest finish time but
without affecting succeeding activity) -
latest Start Time-activity Duration
Example, Independent float for activity E is 7-6-1
= 0 days.

44
Activity Duration EST LST EFT LFT TF FF IF

A 1 0 0 1 1 - - -

B 2 1 1 3 3 - - -

C 3 1 3 4 6 2 - -

D 4 3 3 7 7 - - -

E 1 4 6 5 7 2 2 -

F 2 7 7 9 9 - - -

45
 Uncertain activity duration
[PERT]
For each activity in the project three time
estimates are obtained:
◦ Optimistic times, a
◦ Most likely time, m
◦ Pessimistic time, b
 PERT time estimates
• Mean of activity duration:
= (a + 4m + b)/6
• Variance of activity duration:
=( (b-a) /6 )2
• Standard deviation of activity
duration:
= sq. roots of variance = (b-a )/6
Basic PERT Procedure
 Compute mean and variance of all jobs
 Conduct forward and backward pass on the
project network with expected times of all
activities
 Identify the critical path
Obtain variance of critical path by adding
variance of activities.
 Obtain the distribution of the project duration
Make probability statements about the
project
◦ Chances of meeting the target date
◦ Probability of exceeding a given ceiling date
◦ Probability that the project duration is
confined to an interval of time.
◦ Z (standard normal deviate) = [x-q]/SD
Multiple time estimate

1
3

C
A D F

0.5, 1, 1.5
2, 3.5, 4 5.6, 7, 15 3, 4.5, 5.4

2
0 4
E
B

5,6,8
4,5,6

50
Activity Expected duration
 a  4m  b 
 ED 
 6 

A 3.33
B 5.00
C 1.00
D 8.10
E 6.17
F 4.40

The critical path B, D and F

Project duration = 5+8.1+4.4 = 17.5

51
To calculate the probability that the project
can be completed within 19 days:
Calculate the SD of each activity on the
critical path using the formula:
b a
6
64
– Activity B = 6  0.33
15  5.6
1.57
– Activity D = 6

5.4  3
– Activity F = 6 0.4

52
Find the combined standard deviation of
all activities on the critical path.

0.33  1.57  0.4 1.65weeks

2 2 2

Find the number of standard deviations

that the scheduled date is away from the
expected duration.

19  17.5
 0.91
1.65

53
Look up this value in a table of areas
under the normal curve to find the
probability.

In this case the probability of

achieving the scheduled date of week
19 is 82%.

54
 Exercise 2
Activity Predecessors Time estimates
a m b

A - 2 4 8
B - 4 6 10
C A 6 6 6
D A 2 8 14
E A 6 8 12
F B,C 9 3 15
G D,F 8 16 20
H D,F 4 4 4
I E, H 4 8 10
Draw the network? Find the CP?
What is the probability of completing the project by 36 days?
What is the probability of finishing the project by 28 days?
 Cost scheduling

The overall objective is to calculate

the cost of various project durations and
to find the cheapest way of reducing
the overall duration

56
 Multiple Objectives
 Project cost and time are undoubtedly the
two major objectives that project managers
strive to minimize and control
 Project performance ( in terms of both
quantum and quality of work done)needs to
be monitored and controlled
 There could be a number of attributes that
reflect project performance, time and cost.
 Conflicting objectives:
Meeting a certain contracted date
 Minimizing the total project cost
◦ Direct activity cost
◦ Indirect activity cost
◦ Penalties for project delays
 Ensuring that certain activities are not
crashed for quality reasons
Confining the expenses to a fixed budget
With expenditure of additional resources it
is generally possible to accomplish the
activity in a shorter duration
 The minimum possible duration of the
activity is its crash duration, when its cost
is the highest.
For technological reasons it is not possible
to shorten duration below the crash limit
even by spending more money or
resources.
• project schedules influence both the direct
costs of activities and indirect costs
associated with the project.
• Activity direct costs:
– Costs associated with the performance of the
specific activity, such as:
• cost of planning and design
• raw materials procurement
• Labor costs
• Manufacturing or processing costs
• Travel, communication and transportation
• Consultation fees, etc
 Project indirect costs
 Overhead costs such as:
◦ managerial services
◦ Indirect supplies
◦ Equipment rentals
◦ Allocation of fixed expenses
◦ Site office maintenance
Indirect costs increase with the duration of the
project
Project cost comprises direct costs and
indirect project costs.
As we shorten project duration, direct
costs increase whereas indirect costs
decrease.
Therefore, there is optimal project
duration where the total project cost
becomes the minimum.

62
Project direct cost- time relationship

Normal cost: The costs associated with a

normal time estimate for an activity.
Crash cost: they are caused by extra wages,
overtime premiums and extra facility costs.
Crash time: the minimum possible time that
an activity is planned to take. Applying extra
resources usually brings this about.

63
Cost slope: this is the average cost of
shortening an activity by one time unit.

CrashCost NormalCost
Cost Slope 
NormalTime  CrashTime

Least cost scheduling or crashing: The

process by which we can find the least cost
method of reducing the overall duration of a
project.

64
Heuristic solution procedure:
 Start with the normal project duration
 Obtain the critical paths
 Choose that activity on the critical path
which is cheapest to crash
Crash that activity till either another path
becomes critical or the activity is fully
crashed
Determine the most economical set of
activities to be crashed or relaxed to reduce the
durations all critical paths
 No further crashing is possible when at least
one critical path can not be reduced
 When two or more activities on any path are
simultaneously crashed, some previously
crashed activity on the path may be relaxed.
Example: Given the information below, find the maximum length of the
schedule and the minimum cost schedule when the indirect cost is
Birr70 per day.

Preceding
Time Cost
Activity
Activity
Normal Crash Normal Crash Slope *

A - 4 2 150 350 100

B - 8 6 100 200 50
C A 2 1 50 90 40
D B 10 5 100 400 60
E B 5 1 100 200 25
F C, E 3 1 80 100 10
Total Direct Cost 580

* Average cost of shortening an activity by one time unit

67
 2

4 13
C (2)
A (4) 4
F(3)
0 5
13 15
18 18
0 0 E (3)

B (8) 3 D (10)

8 8

The critical paths are B and D

Normal project duration is 18 days

68
Step 1: The first is to determine the normal
costs and normal durations of the project.
 The critical paths are B and D
 Normal project duration is 18 days
 Direct Cost = Birr580
 Indirect cost = 70X18= 1260
 Total project cost = Birr1840

69
Step 2: Reduce the least cost slope critical
activity B by two days
 The critical paths B and D (Not changed)
 Project duration 16 days
 Direct cost = normal cost + crush cost =
580+100 = 680
 Indirect Cost = 70X16 = 1120
 Total project cost = 1120 + 680 = 1800

70
Step 3: Since we have fully used the crash time
for B, now we can crash activity D by two days
 Two Critical paths: the first is B and D; and
the second is B, E and F.
 Project duration 14 days
 Direct cost = Cost of step 2 + crash cost =
680+60*2=120 = 800
 Indirect Cost = 70X14 = 980
 Total project cost = 980 + 800 = 1780

71
Step 4: Three crashing days remain from activity D.
We select one either E or F with the least cost slope
to crash it together with activity D. Therefore we
can crash critical activity D and F by two days:
 Two Critical paths: the first is B and D; and the second is
B, E and F.
 Project duration is 12 days
 Direct cost = Cost of step 3 + crash cost (crash cost of D
+ Crash cost of F) = 800 + (60+10)*2 days = 940
 Indirect Cost = 70X12 = 840
 Total project cost = 940 + 840 = 1780

72
Step 5: We can further crash by one more day
activity D and E but not activity F
 Two Critical paths. The first is B and D;
and the second is B, E and F.
 Project duration is 11 days
 Direct cost = Cost of step 4 + crash cost
(crash cost of D + Crash cost of E) = 940 +
(60+25)*1 days = Birr1025
 Indirect Cost = 70X11 = 770
 Total project cost = 1025+ 770 = 1795

73
Conclusion: Note that the total
project cost starts to increase at step
5 when compared to step 4. Then the
optimal solution for this project is the
values of step 6 as follows.
Project duration = 12 days;
Total project cost = 1780

74
The activities and time estimate ( in weeks) for various
activities are illustrated below:
Activity Preceding Time Estimates
Activity Optimistic Most likely Pessimistic

A - 1 2 3
B - 8 10 12
C A 2 4 6
D B 1 2 3
E C,B 6 8 10

 DrawFthe D
network diagram?
4 3 8

 Determine the critical path

 Calculate EST, LST, EFT and LFT of the activities on the critical
path?
 Determine the average estimated duration of the project?
 What is the probability of finishing the project with in 20 weeks?

75
 Given the following list of activities , precedence
relationships, normal and crash time and cost of a project,
when the indirect cost is birr 120 per day,
Activity Preceding Time Cost
activity Normal Crash Normal Crash

A _ 6 4 500 620
B _ 4 2 300 390
C A 7 6 650 680
D A 3 2 400 450
E B,C 5 3 850 1000
 Calculate the cost slope?
 Draw the network diagram?
 Determine the project completion time?
 Determine the critical path?
 Construct a least cost schedule for the network (Crash it)?

76
Development of Resource Plan
• The resource plan identifies the physical
resources that are needed to complete the
project successfully.
• Obviously, in order to develop a resource
plan, every activity and task should have
been identified.
• It should be performed in parallel with the
development of the activities schedule, since
the determination of the resource
requirements affects directly the estimation
of the activities/ tasks duration.
In order to develop the Resource Plan, the
following steps should be followed:
For simple projects the development of a
Resource Plan may be limited to entering only
the resource name against the project activity
on the Activities Schedule.
However, for larger and more complex
projects, a detailed resource plan should be
completed to ensure that the resource
allocation is both accurate and appropriate.
Once the Work Breakdown Structure (WBS)
has been applied and the project activities
have been identified, you are ready to identify
the types (labor, equipment, material) and
quantities of the resources needed to
implement the project.
Labor (or Human Resources): It is not
necessary at this stage of the project to be
identified by name, but the professional
qualifications and the type of skills required
for carrying out an activity/ task, the
employment condition[full time, part time, etc]
should be identified.
Equipment: You have to list the equipment
that will be used for the performance of works
(e.g. excavators, cranes), the delivery of
services or supplies (e.g. classrooms for the
conduction of training seminars, lorries for
carrying supplies and warehouses for storing
supplies), as well as for carrying out
supportive actions like project and
procurement management (e.g. computers,
software packages, photocopiers).
Material: You have to list the material that
will be used for the production of the
deliverables. For example in case of a
building construction project, materials like
bricks, cement, steel, cables, paints will be
used. Or in case of a training delivery
project, materials like paper for printing the
training material and blank CDs for
distributing the training material to
participants will be used.
Development of Resource Schedule
In order to achieve this you should look at the starting
and finishing dates of the activities and tasks in which
each of the resources will be used, since at the end of
the day the most important thing is to achieve effective
and on time completion of all planned activities and
tasks. For example, in a building construction project
where you will need the architect for the elaboration of
the architectural study, you have to advise the
Activities Schedule for finding out when and for how
long this task will take place, in order to estimate the
corresponding period that the architect will need to be
engaged in the project.
For the same project the building equipment &
material will mainly be used in the construction
stage, so you have to schedule them according
to when that stage will take place. Undoubtly,
there are resources that will be used in more
than one phases of the project or in more than
one activities/tasks, like for example the Quality
Manager, who is responsible for managing and
assuring quality in all the phases of the project.
In these cases you should estimate the whole
duration for which the resource will be engaged.
Assignment of resources
When assigning resources to activities/ tasks
you should take into account the following
factors in order to build a more effective
Resource Plan:
• Availability of resources. The most important
factor for deciding which resource will be assigned
to what activity(ies)/ task(s) is the potential
availability of the resources in the periods the
corresponding activities/ tasks will take place.
• Cost of resources. Apart from being
effective in terms of schedule, the Resource
Plan should also be effective in terms of
cost, since the cost of the resources has
usually a great contribution to the overall
cost of the project.
• Capability of resources. The more familiar you
are with resource capabilities, the more efficiently
and effectively you can assign resources to tasks.
Concerning the human resources you need to
understand their background, experience, skills and
capabilities. Concerning the equipment you have to
be familiar with their operation, performance and
maintenance. As far as materials are concerned you
need to know their quality characteristics, their
suitability for purpose and the rate of consumption.
 Development of Cost Plan
The Cost Plan includes an estimate and a
schedule of the costs that will be incurred in
order to complete the project activities and
tasks.
 The Cost Plan is usually prepared after the
development of the Activities Schedule and the
Resource Plan, since it requires input from both
of them.
Based on the information now known about
the project as a result of Project Planning
activities (i.e. more detail and greater accuracy
regarding project activities, tasks and
durations, a more detailed understanding of
the resources required to perform the work and
their associated costs), the Project Manager
can refine the budget required to complete the
project.
This is particularly important when a project
or some of its components are planned to be
performed under contract (i.e. through a
tendering process), since in this case the value
of the contract should be accurately estimated
in order to be included in the relative tender
documents.
In order to develop the Cost Plan, the
following steps should be followed:
For simple projects the development of a cost
plan may be limited to entering only the overall
cost against the project activity on the activities
schedule.
However, for larger and more complex
projects, A detailed cost plan should be
completed to ensure that the overall
expenditure is both accurate and appropriate.
 Identification and estimation of costs
• The identification of the various costs is closely
related to the resource requirements of the project,
since the greatest percentage of the project’s
overall cost consists of the costs of the resources
needed to complete the project activities.
• When developing a cost plan, apart from the costs
of all resources that will be charged to the project,
you should also take into account travel costs,
administrative costs and contingency costs.
• More specifically, the basic types of costs,
which are usually incurred in a project, are the
following:
• Costs of resources: This type of costs include
the following subcategories:
• Labor costs: include salaries, wages or any other kind of
remuneration provided to people who are assigned to
perform one or more activities of the project.
• Equipment costs: associated with the purchasing, renting
or leasing of equipment, as well as with the operation/
using and maintenance of the equipment (operating costs).
• Materials costs: costs associated with the purchasing or
usage of materials.
Travel costs: costs associated with any
travelling that may be required in the scope of
the project. They include transportation costs
(e.g. flight tickets, taxi fees, car fuel, parking
fees, etc), accommodation costs (e.g. hotel
rooms, apartments, etc.) and any daily
allowances (e.g. lunch/ dinner, entertainment).
Administrative costs or overheads: costs
associated with the performance of
administration and coordination activities.
Examples of such costs are: office supplies
(e.g. printing paper, envelopes, labels, etc.),
postage or delivery costs, costs for utilities
(e.g. electricity, water, telecommunication),
clerical and administrative salaries and wages,
legal and insurance fees, memberships in
technical and professional organizations.
Contingency costs: costs which are known to
be regularly encountered but difficult or
impossible to estimate at the time the plan is
prepared. These costs may result from
incomplete design, unforeseen and
unpredictable conditions, risks or uncertainties
within the defined project scope. The reason that
they are included in the Cost Plan is to reduce
the risk of budget overrun. Contingency costs
may be either built into the above costs or listed
as a separate category.
 Cost Schedule
• After you have estimated all costs, you
have to estimate when these costs are
expected to be incurred during the project
implementation period and develop the
Cost Schedule.
• In order to determine when the resource
costs will be incurred you should look at
the Resource Schedule to find out when
each resource is planned to be used.
Usually, there are three available options for
determining when the costs will accrue. You
can either select a cost to accrue at the start of
a task or at the end of a task or you can select
the prorated method according to which the
cost is distributed over the task’s duration and
the cost accrual is based on the completion
percentage of a task. It should be noted that
per-use costs always accrue at the start of a
task.
The above graph represents the cumulative project costs
in the time. In order to prepare this graph you need to
create an intermediate table that will sum, for each time
period of your schedule (week or month), the planned
costs, and calculate the cumulative cost for each period
(week or month).
Estimation of cost per activity/ task

Apart from identifying when the various costs

are likely to occur, it is also important to
identify the cost of undertaking each activity/
task laid down in the Activities Schedule.
Once you have estimated the cost of each
activity/ task you should review the total cost
in order to verify that it falls within your
budget.
• If the total cost does not meet your budget,
you may need to examine each individual
task's costs and each resource's task
assignments to see where costs can be
reduced. As a result of this process you may
come up with revised Resource and Cost
Schedules or even with a revised Activities
Schedule, since time, costs and resources are
interrelated. This means that applying changes
to one of them will cause respective changes
to the others.
Development of Quality Plan
The success of a project is typically measured
in terms of the achievement of “time, cost and
quality” targets. As “time and cost” targets are
addressed in the Activities Schedule and Cost
Plans respectively, you need now to develop
the Quality Plan which means to outline the
“quality” targets and identify the methods that
will be used to assure that the quality targets
will be achieved for this project.
To create a Quality Plan the following
steps should be undertaken:
The quality plan is being developed by the
project manager or the quality manager,
depending on whether the quality assurance
and control responsibilities will be delegated
to a third party.
Definition of quality criteria
The objective of this step is to determine the
quality required for the products of the project.
In this perspective quality targets can be
defined by:
• Describing the product/ service/ infrastructure in
detail.
• Stating the functional requirements of a
product/infrastructure or by defining and if
possible quantifying the characteristics that
the product/ service/ infrastructure should
possess in terms of: Performance, Accuracy,
Practicability, Compatibility, Reliability,
Maintainability, Expandability, Clarity, etc.
Considering and adopting any standards that
are specific to the product/ service or
infrastructure provided by the project. Industry
wide standards exist for many products and
services, e.g. for construction, for automotive,
for health and safety as well as for aerospace,
building code software, electrical/ electronics,
government/ military, medical,
petrochemicals, quality, telecommunications,
welding & metals, etc.
 Establishment of quality assurance and
control processes and techniques
After having set the quality targets, the
organization should plan the quality control
activities to be employed during the
implementation of the project, in order to
verify that the deliverables meet the quality
targets established during the planning
process and that the organization performs
according to the submitted quality plan.
The most known and frequently used technique
for quality assurance and control is the review.
Review includes activities such as measuring,
examining and testing undertaken to determine
whether results conform to requirements.
Review can be conducted at any level (e.g. the
results of a certain activity are reviewed or the
final product is inspected).
Depending on the type of the final product (e.g.
software, study, training material, training
execution, a bridge etc) the review can take
different forms.
Development of Issue Management Plan
The issue management plan describes how
issues will be captured, tracked and prioritized
during the project life cycle, as well as how
and when issues will be escalated for
resolution.
Project Issues are usually problems that may
be raised at any time during the project by
anyone with an interest in the project or its
outcome.
Issues that remain unresolved are likely
to become major problems resulting in
the need for initiating a change control
process.
It is therefore, very important to have an
issue escalation and management process
in place, and to execute this process
before change control procedures become
necessary.
During the planning phase, the project
manager has to develop the issue management
plan which will be used from this point till the
end of the project to ensure that every issue is
formally resolved.
The Issue Management Plan describes how project
issues will be: captured, communicated,
documented, prioritized, escalated, reviewed and
finally resolved by defining the issue management
process to be followed, the documentation to be used,
as well as the roles and responsibilities of all human
resources involved in the process.
Development of Change Management Plan
• Project change can be generally defined
as any adjustment or modification to the
formally documented aspects of the
project, such as cost, scope, schedule or
resources.
• Although a change may occur throughout
every project phase, the need for change
is usually discovered during project
execution phase, as actual work on
activities/ tasks is being performed.
 It is during execution phase that the
organization may discover that his original
effort estimates were not accurate and will
result in more effort being required to
complete its work.
In order to handle any need for change that
may arise throughout every project phase
without negative effect on the project
outcome, an effective change management
plan should be developed during the project
planning phase.
 Development of Risk Plan
• During the planning phase, the project manager
must review the list of risks initially identified
for the project to determine if all these risks
remain applicable.
• In addition he must identify new risk variables
that may have been introduced due to analytical
planning of the project, provide a set of actions
to be taken to both prevent the risk for
occurring and reduce the impact of the risk in
case that it eventuates.
Furthermore, the project manager must define
the risk management process which will be
used from this point until the end of the
project to ensure that every risk is formally
identified, quantified, monitored , avoided,
transferred or mitigated.
• As it has been stated above, the project
manager must review all the risks identified
during the project initiation phase in order to
identify if all of them remain applicable.
• Since project planning phase has already
started and project manager is participating in
activities scheduling, in resource, cost and
quality planning, he/she should be
considerably more knowledgeable about the
project and therefore more able to predict
possible risks.
Setting up Performance Indicators
• To be able to monitor a project’s
implementation and judge its performance
against the objectives and targets set, it is
necessary to use a set of indicators, which
might be decided during the planning phase, so
that data on them can be collected. Indicators
are usually quantitative measures but may also
be qualitative observations.
• They define how performance will be measured
along a specific scale, without specifying a
particular level of achievement.
The various levels of indicators are as
follows:
• Financial indicators are used to monitor
progress in terms of the commitment and
payment of the funds available for the
project in relation to its cost.
• Output indicators relate to activity. They
are measured in physical units (e.g. Length
of road constructed)
 Result indicators relate to the direct and
immediate effect brought about by a
project. They provide information on
changes to, for example, the behavior,
capacity or performance of direct
beneficiaries.
 Such indicators can be of a physical nature
(reduction of journey times, number of
successful trainees, number of road
accidents etc) or of a financial nature (e.g.
decrease in transportation cost)
• Impact indicators refer to the consequences
of the project beyond the immediate effects
on its direct beneficiaries (effects occurring
after a certain lapse of time but which are
nonetheless directly linked to the action
taken).
• Financial and output indicators can be used
to monitor the progress of a project while the
result and impact indicators can be used to
evaluate the project’s outcome at the post –
project period.
Using the indicators defined above, one can
also measure concepts such as effectiveness
and efficiency.
• Effectiveness compares what has been done with
what was originally planned i.e. it compares
actual with expected or estimated outputs, results
and/or impacts
• Efficiency looks at the ratio between the outputs,
results and/or impacts and the inputs
(particularly financial resources) used to achieve
them.
In order to plan the use of performance
indicators both for monitoring the progress of
the project and for evaluating it, the Project
Manager has to follow the following steps:
Establishment of the Performance Indicators
Establishing the process for monitoring the
performance indicators.
Establishing the Performance Indicators
Normally, the indicators selected must have the
following characteristics:
They must be relevant to the basic objectives
of the project
They must be few and meaningful
The data required to compile the indicators
must be easily available and obtained in a
timely way and at a reasonable cost
To the extent possible, performance indicators
should allow the quantitative measurement of
progress, result or impact. However, for some
project objectives (for instance capacity
building) it may be necessary to develop
qualitative indicators to measure success,
which should still allow credible monitoring.
Monitoring the Performance Indicators
After having defined the indicators to be used
in order to monitor the progress of the project
and/or to evaluate the project, the principal
aspects of the monitoring process have to be
defined.
At the outset the data sources for each
performance indicator should be investigated
and defined. In most cases a reliable system
for collecting the requisite data must be
developed in a timely fashion.
Many output indicators are derived from
records kept (e.g. km of road constructed,
number of people trained etc). For result or
impact indicators, (e.g. increase in traffic flow
of passengers/ vehicles/ freight one year after
the construction of a new port), the
organization may need to collect data from
external sources as well (e.g. the information
system of the new port).
Next, the project manager should define how
the data collected should be processed,
initially interpreted and then presented to the
project steering committee, the funding agency
and to other stakeholders.
In case that the impact analysis is too
complicated, assistance from outside experts
should be asked.
Development of Communication Plan
• Project communication is the exchange of
project specific information.
• Effective communication with all stakeholders
is absolutely fundamental to project success
and therefore it is necessary to plan it during
the project planning phase.
• Communication Planning is the process for the
determination of information and
communication needs of the stakeholders
relative to the progress of the project.
Itaims to give answers to the following
questions:
◦ Who needs what information?
◦ When do they need the information?
◦ Who delivers the information?
◦ How should the information be delivered?
Steps of developing communication plan
Stakeholders Communication needs
Thank You!!