PMI RMP – TOOLS AND TECHNIQUES –ADVANCED part 2
- ALTERNATIVES ANALYSIS
Hi and welcome back again. In this lecture we are going to discuss one of the most commonly used tools and techniques, the alternative analysis, which is part of the data analysis techniques as we are comparing and we are analyzing between the available alternatives. So all data was gathered earlier about these alternatives and we out the time to analyze through the data analysis techniques. Now, the alternative analysis are used in 13 project management processes. So out of the 49 project management processes we are using, the alternative analysis in 13 of them used in the Perform integrated change control process, defines scope and monitor stakeholder engagement.
So what’s the general definition of the alternative analysis? It’s a technique used to evaluate and select options or approaches to execute and perform the project work. So in this technique we are going to evaluate between the options, between the approaches, between the alternatives in order to execute and perform part of the project work. An alternative analysis can be used at a high level or can be applied with a more complex approach that incorporates a matrix that identifies rating criteria and weighting factors. This technique can be used in several processes and in a wide range of industries. So you can apply the alternative analysis only on the high level or you can use a more complex approach creating a matrix with a scoring model with weighted factors.
Some organizations refer to the high level identification of option as an alternative analysis and the scoring and the ranking using the weighting factors can be considered as a multi criteria decision analysis. Alter native analysis can be used at the start of the project to determine the disk approach during the project to assist in selecting a vendor of your performing conduct procurement process in quality management knowledge area to identify options to respond to quality issues and in risk management to determine an acceptable risk response plan. So here is an example of using the alternative analysis in the procurement, quality and risk management knowledge areas.
Now, what are the steps, what’s the guideline of applying the alternative analysis in a professional manner? First of all, you need to identify the problem or the decision you are evaluating. What’s the problem or what’s the decision you want to evaluate by performing and conducting these alternative analysis? Then you need to define the solution requirements. Often the solution requirements can be extracted from the requirements documentation, the statement of what the scope statement or any other project. The third step will be to define evaluation criteria and weightings. The relevant stakeholders should provide input on the criteria they need in a solution or outcome.
For sure, what’s that criteria you will use to compare between the alternatives? For sure, there shall be an input from the key stakeholders in this matter. They should also provide weight values for each criterion. Which one is the most important, which one is the least important. So each criterion shall have its own weighting value. The project manager, usually the project manager or the business analysis, facilitates the process of the alternative analysis. So it’s usually the project manager responsibility to be the facilitator of the alternative analysis or the business analysis. The following steps are used to define and weigh the selection criteria. Starting with identify the selection criteria.
Then you need to develop a weighted value for each iteration for each criterion. I’m sorry, it’s the best practice for all weights to add up to 100%, but it’s not mandatory. In my experience, it will always add up to each 100%. So in this step you need to have a fixed weighted value for each criteria you are using in the alternative analysis. Define the scoring algorithms to determine how effectively each alternative meets the selection criteria. Create a scoring matrix with a space for alternatives on the axis on one axis and the criteria and waiting on the other axis. Step number four identify options and conduct market research.
To conduct the market research, you can send out a request of information for the vendors, for example, or you can hold meetings with these vendors. You can perform an internet research or you can talk with consultants. Step number five conduct initial assessment score and evaluate and eliminate the options. The initial assessment can be used to narrow the field to the final one or two options or alternatives. Or it may provide you with the best solution, in which case you can skip the next step. So we can start this alternative analysis with six or seven alternatives. So up to this step, step number five we can eliminate three or four out of these six alternatives to narrow the field to the final one or two options.
Step number five conduct a cost benefit analysis with risk adjusted costs to eliminate more options. This step is used to evaluate the highest scoring options. Considering the various risks that each option or alternative contains, depending on the size of the investment, it may be appropriate to conduct an extensive risk analysis on the potential solution before finalizing a recommendation. So now, after we are done with the previous step, we have only two or three options. So it’s the time. Now, depending on the alternatives and the complexity of these alternatives, we need to apply the cost benefit analysis to compare the cost of choosing this alternative with the benefits that will come out of using this alternative.
Also, we might need to perform some risk analysis on the potential solution. The last step will be to recommend a solution, the solution that scores the highest using the selection criteria and weighting and has an acceptable risk profile presented to the stakeholder who who has the authority to make the final decision. So as a facilitator, as a project manager at this step, all the data is clear for you. You can have a recommendation, but there shall be an authorized stakeholder who will confirm your recommendation and make the final decision. Thank you so much. This is all for the alternative analysis. I will see you at the next lecture.
Hi and welcome to a new tool and technique. The bench marking, which is a data gathering technique used in the collect requirements process as a part of the Scope Management knowledge area plan quality Management as a part of the Quality Management Knowledge area plan stakeholder engagement as a part of the Stakeholder Management Knowledge area. So benchmarking, it’s a gathering or it’s gathering data on the best in the class or the best in the industry, or the best in organizational practices, processes and products. The information is used as a target to improve the processes, the current processes within the organization, to improve the products and the results.
Simply, the benchmarking is used to gather data about the best companies, the best competitors in the market. This is the core value of performing the benchmarking. It’s either you want to improve a product or an existing feature in the product or a practice or process and so on. So benchmarking is a process of measuring the performance of a company’s products, services or processes. Again, it’s those of another business considered to be the best in the industry. This is the most important. We want to select the best in the industry who is performing this process or practice. We want to improve within our organization.
So we are going to measure the performance of a company’s products, services or processes against those to another leader in the market. The point of benchmarking is to identify internal opportunities for improvement by studying companies with superior performance, with excellent performance, breaking down what makes such superior performance possible and then comparing those processes to how your business operates. This is exactly what we are going to do. That benchmarking is very valuable and improving internal processes within the organization by studying the company’s excellent performance and knowing how such companies are reaching such excellent performance.
Benchmarking involves comparing actual or planned products, processes and practices to those of comparable organizations to identify best practices, generate ideas for improvement, and provide a basis for measuring performance. The organizations compared unit the benchmarking can be internal or external. Benchmarking is most often used in projects to collect requirements, establish quality matrix, collect requirements through the collect requirements process, establish quality matrix through the plan quality management process, establish cost and schedule targets, and establish stakeholder satisfaction targets while planning for the stakeholder engagement on the project.
Now, what are the steps we need to follow when performing benchmarking? First of all, you need to identify the process or metric that you want to improve what you are working on to improve. If you are developing a new product, on improving an existing one, identify the aspect of the product you are gathering data about. So the first step is to define what’s your point, what you want to improve? Is it a product? Is it a process of practice? If you are using benchmarks for improving performance, you need to take a baseline measurement of your organization current performance. If we are looking to improve our company’s performance, we need to know what’s the current state of our company’s performance before we measure for others.
Identify areas in your own company, leaders in the industry or leaders in other industries with similar processes. These are your targets to measure against. You may need to talk with industry peers, consultants, vendors, associations or other resources to help you discover the industry leaders or targets. Step number Four depending on who and where your target is and what you are benchmarking, you may be able to easily identify the best practices, such as when you are using a target that is internal to your organization. If the target is external or even a competitor of your organization, you may need to gather business intelligence, work with a consultant, or find some other way to determine how they achieve their performance.
These are the four steps of performing the benchmarking. This is where the data gathering aspect of the benchmarking stops. If you are working on a process improvement project like what we are doing in quality management that is built around achieving the benchmarks, you would develop a plan to implement a process that would help you to reach the benchmark. If you are using the information for collecting requirements, the benchmark will provide information that will be prioritized along with other requirements. This is all for the benchmark team. Thank you so much. So you’ll see at the next lecture.
- RESERVE ANALYSIS
Hi and welcome to a new tool and technique, the reserve analysis, one of the most important tools and techniques in project management used in frequent processes for the purpose of dealing with the project contingency reserves, either reserves for schedule or reserves for the budget. It’s a data analysis technique used in the estimate duration of the process, estimate cost, determine budget, control cost, and monitor risks. So the reserve analysis is used in the planning processing group in three processes and used in the monitoring and controlling processing group in two processes.
Now, the reserve analysis is used to determine the appropriate amount of schedule or cost reserve necessary to establish an achievable and reasonable cost or schedule baseline. So the reserve analysis is used on two parts of the project. You can use the reserve analysis during the planning process group to determine the required amount of schedule and host reserves. Also, you can use the reserve analysis techniques in the monitoring and controlling process group to check if the remaining reserves are sufficient for your project. So the reserve analysis is conducted prior to developing a baseline after the initial risk identification analysis and response planning has taken place.
So you need to perform the reserve analysis before developing the cost or schedule baseline. At the same time, you should be done with risk identification, qualitative and quantitative analysis, and risk response planning. The purpose here is to account for both the individual and overall risks associated with the project and to allocate a suitable amount of time and or funding to meet the project objectives. This is why we will create the contingency reserve on the project in order to allocate a suitable amount of time or funding to meet the project objectives while considering all the identified project risks.
After the baselines are established and the project is underway, you can conduct a reserve analysis to determine if the reserve amounts are sufficient. Given the most recent project schedule and cost performance. This is what we are going to do while monitoring and controlling the project work and applying the reserve analysis within the control costs process and the monitor risks. If the project is performing ahead of schedule or under budget, it may be feasible to release some of the reserves back to the organization. While the project is performing behind schedule or over budget, it may be appropriate to increase the reserve and send an official change request to be approved by the senior management to add to the current project reserves.
So what are the steps you need to follow? First of all, develop the cost estimates for all the project. Develop a schedule to show the allocation of project work over time. Create a budget that shows the allocation of project funds over time. Conduct a risk identification analysis and response exercise, including establishing a contingency reserve to implement responses and to account for the accepted risks. Usually, the contingency reserves can be calculated based on the expected monetary value through the plan risk responses process. Now we need to estimate the amount of reserve you will need for the project. Usually when we are talking about reserves, we are talking about budget and schedule.
Now to assess the risk reserved throughout the project during the monitoring and controlling process group, first of all, you need to identify the amount of reserve remaining on your project. Assess the current budget performance, are you over or under budget and by how much? Analyze the risk register and risk reports to determine the amount of risk remaining on the project. Compare the amount of reserve remaining to the amount of risk remaining to determine the remaining reserve is sufficient so reserve analysis can be applied the planning process group or during the monitoring and controlling process group. This is all. Thank you so much. I will see you at the next lecture.
- ROOT CAUSE ANALYSIS
Hi and welcome to a new important tool and technique the root cause analysis as a part of the data analysis techniques. Now we are using the root cause analysis in six processes out of the 49 project management processes. First of all, monitor and control project work as a part of the interview integration management, manage quality and control quality in the quality management, identify risks, plan stakeholder engagement and monitor stakeholder engagement as a part of the stakeholder management knowledge area as it’s used in six process. So this tournament technique is very important for the exam preparation purposes.
Now the definition the root cause analysis is a technique used to identify the underlying cause of a variance, risk or defect. We want to find out the root cause, the underlying cause of what is making this variance appear or this risk or this defect. Often when a problem arises, we rush to fix it by treating the symptoms only. For example, if your project is behind schedule and you will crash the schedule to get the schedule back on track. In this technique we will spend more efforts and time locking and identifying the underlying causes of this schedule variance root cause analysis locks beneath the symptoms to find out what underlying events, conditions, systems or processes allow the event or condition to happen in the first place.
This is why we perform the root cause analysis. The underlying assumption when conducting a root cause analysis is that the variances, defects and risks have an underlying cause in a system or process. It’s not happening like this. There is a cause in the system or the process. The goal of performing the RCA or the root cause analysis is to trace the problem back to its source so that you can fix the source of the problem. Most defects or variances can be attributed to one of these three categories. The first category the physical causes. Physical causes include faulty material or equipment, environmental issues such as poor lighting and confusing instructions. These are examples of the physical causes of a problem or defect or a variance.
We have the human causes based on someone doing something he or she should not have or not doing something he or she should have. And the third category will be the organizational causes. There are an issue in the policies, procedures, systems or processes that govern the work within the organization or help people make decisions. So most probably the defect or the variance can be attributed to the physical causes or the human causes or the organizational causes. Now, what are the steps you need to follow while performing the root cause analysis? First of all, you need to define the variance, defect or problem. This is the first step. Sometimes being able to clearly artically the problem can be challenging.
So spending some time coming up with a defined clear problem statement is very important. In some other cases it is fairly obvious. So the first step in performing the root cause analysis to clearly define the variance, defect or problem. The second step will be to collect all the facts and data around the variance, defect or risk for complex problems. This can take some time and perseverance to understand the full situation you are studying, identify the contributing factors around the code. These are events, conditions or circumstances that increase the likelihood of the variance or problem according. The fourth step will be to analyze the contributing factors to determine the underlying assumption, process, event or system that allowed the variance problem or the risk to occur.
Once you have boiled down the contributing factors, you will find one or more root causes that need to be addressed to fix the problem. So you gathered the data. First of all, you define the variance, you define the problem. You collected all the facts around the problem or around the variance you identified. Whatever there are contributing factors around, you analyzed these contributing factors to determine the underlying assumption. Step number five is to recommend and implement solutions. Once the root cause or the underlying cause is identified, it’s clear now you will need to figure out the appropriate steps to take to ensure it does not happen again.
You will need to assess the risks associated with various solutions. Assign someone to follow through and check back to see if the solution fixed the problem. With some projects you are just trying to figure out what caused a delivery to be late and the process will be relatively simple and quick. Some process improvement projects are based actually in the root cause analysis and implementing the proposed solution. The steps in this process can be scaled to fit your needs. This is all for the root cause analysis, a very important technique, especially in the risk identification. Thank you so much. I’ll see you at the next lecture.