Plan procurements imagePlan Procurements process is about looking at ALL of the work involved in your project, and deciding which ones are to be given out to vendors.

Once these are identified, next 2 processes of Project Procurement knowledge area are going to be performed for each of these contracts – that is, conducting and closing procurements.

For example, Kathy from Landscaping project may have one contract for laying of jogging tracks, one for supplying exotic plants and one for getting manual labor with a contractor.

We need a ton of things for this planning

There are quite a lot of them. But they are very logical, and you can remember them easily.

In a way procurement is like beginning a project, only that some other team is going to work on it and deliver it to you.

Considering procurement to beginning of a project, we need all those documents that are available at the beginning of the project.

Which are easy to remember.

Project charter, business case, benefits management plan – they contain the information about project components that are needed. At the high level we can see whether we have internal capability to produce them or we need to procure from outside.

Then we need a bunch of plans that are relevant to procurement, let us see which are they.

  • Scope management plan – we’ve established the process of gathering scope in this plan.
  • Quality management plan – we need to understand how quality measurements and assurance processes impact our needs of procurement.
  • Resource management plan – do we have the ability and plan to gather and manage resources needed for those components of the project that may be outsourced?

Apart from these we also need scope baseline – which contains project scope statement, WBS and WBS dictionary to understand about ALL of the work expected to be done in the project. And this includes the work that would be outsourced (or, ‘procured’).

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Procurement management knowledge area“How do you lay a jogging track, I wonder” said Kathy, flipping through requirements documents of the Landscaping project she is doing for Mammoth Constructions Company.

She is in the planning phase and figuring out what skills she and her team already possess and what do they not.

“Oh, that is quite involved,” said Eliz, her colleague. “I got a similar work done for Lockhead Community over other side of the town. Let me give you a quick summary”, she offered.

What are the 10 procurement steps? Look for the infographic at the end of this post.

“First you mark the width and course of the track, then pave at least 2 inches of asphalt on top of a compacted gravel foundation. Let it sit for about two weeks. Coat the surface of asphalt with tack coat, a tacky binder that helps to bind the first layer of rubber to the asphalt. Then mix the rubberized granules, strands of rubber, or recycled EPDM (ethylene propylene diene monomer) rubber with binder and spread out over the tack coat.” [continue reading…]

Plan risk responsesOnce the risks are identified and prioritized by doing qualitative and quantitative analysis, the next step is to plan for possible responses for each of them.

Kathy from earlier Landscaping project example, should think about stuff like –

  • what if there is torrential downpour on the day jogging tracks are laid?
  • what if large amount of exotic plant saplings die within first 2 weeks due to unfavorable soil or weather condition?
  • what if the lone designer on the team quits halfway through the project?

In this process you think of ways to reduce threats and enhance opportunities to project objectives. [continue reading…]

Expected monitory value analysisExpected Monitory Value (EMV) analysis is part of risk analysis process. This is used to calculate cost of each decision alternatives available in the project to choose the cost effective and best decision, using Decision Tree analysis.

This is typically used during the exercise to prioritize risks based on quantitative risk analysis.

This statistical analysis tool is about coming up with possible scenarios to deal with a risk and assessing how much each of those paths will cost the project against the benefits, and letting you choose the best possible path which has lesser risk and higher benefit.

Expected Monitory Value of a project = Sum of (every possible outcome x probability of the outcome happening)

If this looks cryptic, do not worry. This is done easily with visual aid, called Decision Tree.

EMV lets you map all possible decisions and associated uncertainties to their respective payoffs and costs, and show what would be the outcome of each of those decisions.

What is a decision tree?

A decision tree is a decision support tool to decide on a strategy that is most likely to reach the costs-versus-benefits goal. [continue reading…]

Perform quantitative risk analysis imageThis process is carried out as a supporting activity to risk analysis project management activity, to back your qualitative analysis of risks with some solid numbers.

It may also be possible that certain risks could not be analyzed qualitatively and hence you use quantitative risk analysis to prioritize them.

In some projects, as part of tailoring considerations, this process is treated as optional. Also possible when there is lack of high-quality data, and after analyzing the risks qualitatively the team thinks it has enough information about the risks to prioritize them effectively, and moves to the exercise of planning risk responses.

What is the difference between qualitative and quantitative risk analysis?

Qualitative risk analysis is more subjective in nature, based on facts and figures from previous experience. And quantitative risk analysis produces statistical numbers for each of the risks, thus making it easier to prioritize them. This process is analyzes effect of risks on project objectives.
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perform qualitative risk analysis In the previous process you identified all possible risks on the project.

Next logical step is to prioritize them, so that high priority risks are addressed first.

Prioritization is done based on probability of occurrence and impact on project objectives if and when they materialize.

In PMBOK guide PMI suggests this to be done in this process called Perform Qualitative Risk Analysis.

Since this is a qualitative measure, it is subjective assessment based on risk data and parameters. With this we do our best to prioritize the risks.

Once thus analyzed, the risk list then forms a basis for analyzing risks quantitatively. With some numbers in front of each risks it becomes easier to prioritize them. [continue reading…]