Software Project Management (KOE-068)

UNIT-1 (Lecture-1)

Software Project Management: Importance, Activities &

Methodologies
Basically job pattern of an IT company engaged in software development can be seen split in
two parts:

• Software Creation
• Software Project Management
A project is well-defined task, which is a collection of several operations done in order to
achieve a goal (for example, software development and delivery). A Project can be
characterized as:

• Every project may have a unique and distinct goal.

• Project is not routine activity or day-to-day operations.
• Project comes with a start time and end time.
• Project ends when its goal is achieved hence it is a temporary phase in the lifetime of an
organization.
• Project needs adequate resources in terms of time, manpower, finance, material and
knowledge-bank.

Software Project

A Software Project is the complete procedure of software development from requirement

gathering to testing and maintenance, carried out according to the execution methodologies, in a
specified period of time to achieve intended software product.

Importance of software project management

Software development is a kind of all new streams in world business and there’s very little
experience in building software products. Most software products are tailor made to fit client’s
requirements. The most important is that the underlying technology changes and advances so
frequently and rapidly that experience of one product may not be applied to the other one. All
such business and environmental constraints bring risk in software development hence it is
essential to manage software projects efficiently.

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(KOE-068)

Software Project Manager

A software project manager is a person who undertakes the responsibility of executing the
software project. Project manager may never directly involve in producing the end product but
he controls and manages the activities involved in production.
A project manager closely
osely monitors few responsibilities:

Managing People

• Act as project leader

• Liaison with stakeholders
• Managing human resources
• Setting up reporting hierarchy etc.

Managing Project

• Defining and setting up project scope

• Managing project management activities
• Monitoring progress and performance
• Risk analysis at every phase
• Take necessary step to avoid or come out of problems
• Act as project spokesperson

Software Management Activities

Software project management comprises of a number of activities, which contains planning of
project, deciding scope of software product, estimation of cost in various terms, scheduling of
tasks and events, and resource management. Project management activities may include:
• Project Planning
• Scope Management
• Project Estimation

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 Software Project Management (KOE-068)

Project Management Methodologies

A methodology is a model, which project managers employ for the design, planning,
implementation and achievement of their project objectives. There are different project
management methodologies to benefit different projects.

Following are the most frequently used project management methodologies:

1. Adaptive Project Framework

In this methodology, the project scope is a variable. Additionally, the time and the cost are
constants for the project. Therefore, during the project execution, the project scope is adjusted
in order to get the maximum business value from the project.

2. Agile Software Development

Agile software development methodology is for a project that needs extreme agility in
requirements. The key features of agile are its short-termed delivery cycles (sprints), agile
requirements, dynamic team culture, less restrictive project control and emphasis on real-time
communication.

3. Crystal Methods

In crystal method, the project processes are given a low priority. Instead of the processes, this
method focuses more on team communication, team member skills, people and interaction.
Crystal methods come under agile category.

4. Dynamic Systems Development Model (DSDM)

This is the successor of Rapid Application Development (RAD) methodology. This is also a
subset of agile software development methodology and boasts about the training and documents
support this methodology has. This method emphasizes more on the active user involvement
during the project life cycle.

5. Feature Driven Development (FDD)

This methodology is more focused on simple and well-defined processes, short iterative and
feature driven delivery cycles. All the planning and execution in this project type take place
based on the features.

6. Joint Application Development (JAD)

Involving the client from the early stages with the project tasks is emphasized by this
methodology. The project team and the client hold JAD sessions collaboratively in order to get
the contribution from the client. These JAD sessions take place during the entire project life.

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 Software Project Management (KOE-068)

UNIT-1 (Lecture-2)
Categorization of Software Projects – Setting objectives

Phases in software development life cycle

Requirement analysis
Architecture design
Detailed design
Code and test
Integration
Qualification testing
Installation
Acceptance support

Who are project stakeholders?

These are people who have a stake or interest in the project. Stakeholders can be categorized as:
Internal to the project team
External to the project team but within the same organization
External to both the project and the organization.

Activities of project management

Planning –deciding what is to be done.
Organizing – making arrangements.
Staffing-selecting the right people for the job
Directing-giving instructions.
Monitoring – checking on progress
Controlling- taking action to remedy hold-ups
Innovating-coming up with new solutions.
Representing – liaising with clients, users , developers , suppliers

Objective of a project
Informally, the objective of a project can be defined by completing the statement:

The project will be regarded as a success “if……….” Rather like post-conditions for the project,
Focus on what will be put in place, rather than how activities will be carried out.

e.g. ‘a new payroll application will be operational by 4th April’ not ‘design and code a new payroll
application’

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Diagram of overview of stepwise project planning

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UNIT-1 (Lecture-3)
Management Principles – Management Control

Principles of Project Management

The principles of project management are the fundamental rules that should be followed for the successful
management of projects.
Formal project management structure
Invested and engaged project sponsor
Clear and objective goals and outcomes
Documented roles and responsibilities
Strong change management
Risk management
Mature value delivery capabilities
Performance management baseline
Communication plan

Management control
Management, in general, can be seen as the process of setting objectives for a system and then monitoring
the system to see what its true performance is.
Especially in the case of large undertakings, there will be a lot going on about which management should
be aware. This will involve the local managers in data collection.
Bare details, such as ‘location X has processed 2000 documents’, will not be very useful to higher
management: data processing will be needed to transform this raw data into useful information. This
might be in such forms as ‘percentage of records processed’, ‘average documents processed per day per
person’ and ‘estimated completion date’.
In our example, the project management might examine the estimated completion date’ for completing
data transfer for each branch. These can be checked against the overall target date for completion of this
phase of the project. In effect they are comparing actual performance with one aspect of the overall
project objectives. They might find that one or two branches will fail to complete the transfer of details in
time. They would then need to consider what to do The project manager would need to calculate carefully
what the impact would be in moving staff from particular branches.
This is modeling the consequences of a potential solution. Several different proposals could be modeled
in this way before one was chosen for implementation.

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Project Control Cycle

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UNIT-1 (Lecture-4)

Project portfolio Management – Cost-benefit evaluation technology

Project Portfolio Management
Strategic and operational assessment carried by an organization on behalf of customer is called portfolio
management [third party developers]

They make use of assessment of any proposed project themselves.

They ensure for consistency with the proposed strategic plan.
They proposed project will form part of a portfolio of ongoing and planned projects
Selection of projects must take account of possible effects on other projects in the
portfolio(example: competition of resource) and the overall portfolio profile

Objectives of Project Portfolio Management

The need to create a descriptive document, which contains vital information such as name of
project, estimated timeframe, cost and business objectives.
The project needs to be evaluated on a regular basis to ensure that the project is meeting its target
and stays in its course.
Selection of the team players, who will work towards achieving the project's objectives.

Project Portfolio Management Tools

A systematic method of evaluation of projects.
Resources need to be planned.
Costs and the benefits need to be kept on track.
Undertaking cost benefit analysis.
Progress reports from time to time.
Access to information as and when its required.
Communication mechanism, which will take through the information necessary.

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Techniques Used to Measure PPM

There are various techniques, which are used to measure or support PPM process from time to time.
However, there are three types of techniques, which are widely used
Heuristic model.
Scoring technique.
Visual or Mapping techniques.
The use of such techniques should be done in consideration of the project and organizational objectives,
resource skills and the infrastructure for project management.

Cost-benefit evaluation techniques

Various cost-benefits Evaluation Techniques are
Net profit
Payback period
Return on investment
Net present value
Internal rate of return
Net profit
Difference between total cost and total income
Pros: Easy to calculate
Cons:
Does not show profit relative to size investment (e.g., consider Project 2)
Does not consider timing of payments (e.g., Projects 1 and 3)
Not very useful other than for "back of envelope" evaluations

Payback period
The payback period is the time taken to recover the initial investment or is the length of time required for
cumulative incoming returns to equal the cumulative costs of an investment.
Total cost / total revenue (or benefits) = length of time (payback period)
Pros: Easy to calculate
Cons:
It attaches no value to cash flows after the end of the payback period.
It makes no adjustments for risk.
Return on investment
It provides a way of comparing the net profitability to the investment required
A performance measure used to evaluate the efficiency of an investment or to compare the
efficiency of a number of different investments
Disadvantages:
It takes no account of the timing of the cash flows.
Rate of returns bears no relationship to the interest rates offered or changed by bank.
ROI = average annual profit * 100 / total investment
Average annual profit = net profit / total no. of years

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Net present value

A project evaluation technique that takes into account the profitability of a project and the timing of
the cash flows that are produced.
Sum of all incoming and outgoing payments, discounted using an interest rate, to a fixed point in time
(the present)
Pros:
Takes into account profitability
Considers timing of payments Considers economic situation through discount rate
Cons: Discount rate can be difficult choose
Internal rate of return (IRR)
Internal rate of return (IRR) is the discount rate that would produce an NPV of 0 for the project. It can
be used to compare different investment opportunities
Pros: Calculates figure which is easily to interest rates
Cons: Difficult to calculate (iterative)

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 Software Project Management (KOE-068)

UNIT-1 (Lecture-5)

Software Project Management – Risk Evaluation

Risk evaluation is meant to decide whether to proceed with the project or not, and whether the project is
meeting its objectives.
Risk Occurs:
When the project exceed its original specification
Deviations from achieving it objectives and so on.
Every project involves risk. The project risks which prevent the project being completed successfully and
the business risk that the delivered products are not profitable.
Risk evaluation consists of
Risk identification and ranking
Risk and NPV
Cost benefit analysis
Risk profile analysis

Risk identification and ranking

Identify the risk and give priority.
Could draw up draw a project risk matrix for each project to assess risks
Project risk matrix used to identify and rank the risk of the project

Risk and net present value

Where a project is relatively risky it is common practice to use a higher discount
rate to calculate the NPV. The risk premium be an additional 2 % for an safe
project or 5 % for a fairly risky project
Projects may be categorized as high, medium or low risk using a scoring method
and risk premiums designated for each category.

Risk profile analysis

An approach which attempts to overcome some of the objections to cost benefit averaging is the
construction of risk profiles using sensitivity analysis.
This makes use of “risk profiles” using sensitivity analysis.
It compares the sensitivity of each factor of project profiles by varying Parameters which affect
the project cost benefits.
Eg:Vary the original estimates of risk plus or minus 5% and re-calculate the expected cost
benefits.

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Decision trees method for risk evaluation

Decision tree provide tools for evaluating expected outcomes and choosing between alternate
strategies. A decision tree is a decision support tool that uses a treelike graph or model of decisions and
their possible consequences, including chance event outcomes, resource costs, and utility. It is one way to
display an algorithm.

In above diagram:
1. Contractor having two available contractors Low Bidder but Risky & Reliable High Bidder.
2. The demands by contractors are 110000K & 140000K respectively.
3. The late penalties by customer to contractor as 30000K/Month.
4. Chances of being late by each contractor 3 months and 1 month respectively.
5. Probability for late and on-time completion is 50-50 by contractor 1 and 10-90 by contractor 2.
6. Path value by contractor 1:
110000+3*30000=200000 & 110000
7. Path value by contractor 2:
140000+30000=170000 & 140000
8. Expected Monitory Value(EMV):
EMV by Contractor 1:
200000*50% + 110000*50% = 100000+55000=155000
EMV by Contractor 2:
170000*10% + 140000*90% = 17000+126000=143000
9. Correct decision made by decision contractor is Reliable High Bidder.

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UNIT-1 (Lecture-6)

Software Project Management – Strategic program Management

Strategic planning is an organization's process of defining its strategy, or direction, and making decisions
on allocating its resources to pursue this strategy. In order to determine the direction of the organization,
it is necessary to understand its current position and the possible avenues through which it can pursue a
particular course of action. Strategic programming makes sense when the world is expected to hold still or
change predictably while the intended strategies unfold, so that formulation can logically precede
implementation.
Strategic Project Management
Strategic Project Management (SPM) (also called Enterprise Project Management by some) has been
defined by Callahan & Brooks (2004) as “the use of the appropriate project management knowledge,
skills, tools and techniques in the context of the companies goals and objectives so that the project
deliverables will contribute to company value in a way that can be measured”.
Strategic Project Management is really nothing more than picking the right projects for the organization
to ensure optimal returns.
The Process of Strategic Project Management

1. Know the direction of the project

Before starting the project, fully outlines the project objectives and identifies how the project will
help the company's efficiency and competitiveness as a whole.
2. Explain responsibilities
It creates an ideal project team by gathering employees with qualities that are essential for the
project. In this case, such qualities include visual creativity and efficiency, so that the product
stays on track, is completed in time for the holidays, and gives the company an edge over its
competitors.
3. Project planning
It outlines the steps and tasks of the project. This means we aligns each step with the timeline so
that everyone on the team is aware of when each step needs to be completed.

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The Five Question Model for project portfolio management

It illustrates that the project manager is required to answer five essential questions before the inception as
well as during the project execution. The answers to these questions will determine the success of the
implementation of the project.
Therefore, all the project managers of the organization need to have an awareness of the organizational
project portfolio management in order to contribute to the organizational goals when executing respective
projects.

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