Basic concepts of software economics and project management

1. Lecture 2: Basic concepts of software economics and project management.

2. Basic concepts of project management

• A project is an assignment/task/job that
has to be undertaken and completed
within a set time, budget, resources and
performance specifications designed to
meet the needs of stakeholder and
beneficiaries
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Software
Economics
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3. Basic concepts of project management

• Project Management is the use of
knowledge, skills, tools, and techniques to
plan and implement activities to meet or
exceed stakeholder needs and
expectations from a project.
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Software
Economics
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4. Basic concepts of project management

• Project management is accomplished through the
appropriate application and integration of the 47 logically
grouped project management processes, which are
categorized into five Process Groups. These five
• Process Groups are:
• Initiating,
• Planning,
• Executing,
• Monitoring and Controlling, and
• Closing.
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Software
Economics
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5. Basic concepts of project management

• Initiating Process Group. Those processes performed
to define a new project or a new phase of an existing
project by obtaining authorization to start the project or
phase.
• Planning Process Group. Those processes required to
establish the scope of the project, refine the objectives,
and define the course of action required to attain the
objectives that the project was undertaken to achieve.
• Executing Process Group. Those processes performed
to complete the work defined in the project management
plan to satisfy the project specifications.
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Software
Economics
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6. Basic concepts of project management

• Monitoring and Controlling Process Group. Those
processes required to track, review, and regulate the
progress and performance of the project; identify any
areas in which changes to the plan are required; and
initiate the corresponding changes.
• Closing Process Group. Those processes performed to
finalize all activities across all Process Groups to
formally close the project or phase.
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Software
Economics
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7. Basic concepts of project management

Project Management Process Groups
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Software
Economics
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8. Basic concepts of project management

• The project manager is unique because s/he manages
temporary activities and is usually an outsider brought
into a business or government department to implement
a specific project.
• A project manager is generally expected to be the
projects’ leader who needs to motivate and inspire
people working on the project.
• Project managers are expected to organise resources to
complete a project on time, on budget and within
specification. They provide direction, coordination, and
integration to the project team and are responsible for
performance.
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Software
Economics
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9. Basic concepts of project management

• The project manager competencies:
• Knowledge—Refers to what the project manager knows
about project management.
• Performance—Refers to what the project manager is
able to do or accomplish while applying his or her project
management knowledge.
• Personal—Refers to how the project manager behaves
when performing the project or related activity. Personal
effectiveness encompasses attitudes, core personality
characteristics, and leadership, which provides the ability
to guide the project team while achieving project
objectives and balancing the project constraints.
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Software
Economics
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10. Basic concepts of project management

• Project governance is an oversight function
that is aligned with the organization’s
governance model and that encompasses the
project life cycle. Project governance
framework provides the project manager and
team with structure, processes, decisionmaking models and tools for managing the
project, while supporting and controlling the
project for successful delivery.
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Software
Economics
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11. Basic concepts of project management

The elements of a project governance framework include:
Project success and deliverable acceptance criteria;
Process to identify, escalate, and resolve issues that arise during the project;
Relationship among the project team, organizational groups, and external
stakeholders;
Project organization chart that identifies project roles;
Processes and procedures for the communication of information;
Project decision-making processes;
Guidelines for aligning project governance and organizational strategy;
Project life cycle approach;
Process for stage gate or phase reviews;
Process for review and approval for changes to budget, scope, quality, and
schedule which are beyond the authority of the project manager; and
Process to align internal stakeholders with project process requirements.
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Software
Economics
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12. Basic concepts of project management

• According to the modern analysis being
done in the field of project management it
has been justified that any project is
critically dependant on three fundamental
pillars or legs.
• 1. Development Cost
• 2. Implementation Schedule
• 3. Working Performance
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Software
Economics
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13. Development cost

• Here are typical kinds of costs found in a project:
• Direct costs – These costs are chargeable to
individual work package in the WBS:
• Labour
• Materials
• Equipment
• Other ƒ
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Software
Economics
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14. Development cost

WBS is a hierarchical decomposition of the total
scope of work to be carried out by the project
team to accomplish the project objectives and
create the required deliverables.
PMBOK 5
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Economics
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15. Development cost

• Project Overhead Costs – represents project costs that
cannot be tied to specific deliverable but serve the entire
project. For example, a temporary shed may be set up
that will be used to store tools and equipment of various
contractors, host the training and the handing over
function. ƒ
• General and Administrative (G&A) overhead costs –
these represent organisational costs incurred by the firm
managing the project. G&A overhead costs are usually
allocated as a percentage of total direct cost and may
vary from one project manager to another. The
organisation of the budget into these three categories
helps control the process and improve decision making.
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Economics
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16. Development cost

An example of a budget format:
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Economics
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17. Implementation schedule

• This is the process of analyzing activity
sequences, durations, resource requirements,
and schedule constraints to create the project
schedule model. The key benefit of this process
is that by entering schedule activities, durations,
resources, resource availabilities, and logical
relationships into the scheduling tool, it
generates a schedule model with planned dates
for completing project activities.
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Software
Economics
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18. Project team

• Project teams include roles such as:
• Project management staff. The members of the team who perform
project management activities such as scheduling, budgeting, reporting
and control, communications, risk management and administrative
support.
• Project staff. The members of the team who carry out the work of
creating the project deliverables.
• Supporting experts. Supporting experts perform activities required to
develop or execute the project management plan. These can include
such roles as contracting, financial management, logistics, legal, safety,
engineering, test, or quality control.
• User or Customer Representatives. Members of the organization who
will accept the deliverables or products of the project may be assigned
to act as representatives or liaisons to ensure proper coordination,
advise on requirements, or validate the acceptability of the results.
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Software
Economics
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19. Project team

• Sellers. Also called vendors, suppliers, or contractors, are external
companies that enter into a contractual agreement to provide
components or services necessary for the project. The project team is
often assigned the responsibility to oversee the performance and
acceptance of sellers’ deliverables or services.
• Business partner members. Members of business partners’
organizations may be assigned as members of the project team to
ensure proper coordination.
• Business partners. Business partners are also external companies,
but they have a special relationship with the enterprise, sometimes
attained through a certification process. Business partners provide
specialized expertise or fill a specified role such as installation,
customization, training, or support.
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Software
Economics
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20. Project team

• The composition of project teams varies based on factors such as
organizational culture, scope, and location. Examples of basic project
team compositions:
• Dedicated. In a dedicated team, all or a majority of the project team
members are assigned to work full-time on the project. The project team
may be colocated or virtual and usually reports directly to the project
manager. This is the simplest structure for a project manager, when
team members can focus on the project’s objectives.
• Part-Time. Some projects are established as temporary additional work,
with the project manager and team members working on the project
while remaining in their existing organizations and continuing to carry
out their normal functions.
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Economics
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21. Models of plan schedule management

• 1. Expert Judgment
• Expert judgment, guided by historical information, provides
valuable insight about the environment and information from
prior similar projects. Expert judgment can also suggest
whether to combine methods and how to reconcile
differences between them.
• Judgment based upon expertise in an application area,
Knowledge Area, discipline, industry, etc., as appropriate
for the activity being performed, should be used in
developing the schedule management plan.
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Software
Economics
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22. Models of plan schedule management

• 2. Analytical Techniques
• The Plan Schedule Management process may involve
choosing strategic options to estimate and schedule the
project such as: scheduling methodology, scheduling tools
and techniques, estimating approaches, formats, and
project management software. The schedule management
plan may also detail ways to fast track or crash the project
schedule such as undertaking work in parallel.
• Organizational policies and procedures may influence which
scheduling techniques are employed in these decisions.
Techniques may include, but are not limited to, rolling wave
planning, leads and lags, alternatives analysis, and
methods for reviewing schedule performance.
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Software
Economics
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23. Models of plan schedule management

• 3. Meetings
• Project teams may hold planning meetings to develop the
schedule management plan. Participants at these meetings
may include the project manager, the project sponsor,
selected project team members, selected stakeholders,
anyone with responsibility for schedule planning or
execution, and others as needed.
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Software
Economics
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24.

Mail for questions:
[email protected]
Andrii Sidliarenko

25. Practice task № 1.1

• Description of software (requirement
specification), what necessarily includes
budget, labor costs, organizational
structure and economic effect from
implementation.
• Real geographically distributed
organization, what buys services /
products and manufacturing services /
products.
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Software
Economics
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26. Practice task № 1.2

• Make a plan of works, what necessarily includes
identifying deliverables, identifying the activities
needed to complete those deliverables,
estimating the resource requirements for the
activities, estimating time and cost for activities,
developing the schedule, developing the budget
and risk planning. Make a flow-chart.
• Real geographically distributed organization,
what buys services / products and
manufacturing services / products.
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Software
Economics
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27. Deadlines

Type of work
Module 1
Homework
06/03/17
Test
27/02/17
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Software
Economics
Module 2
27/03/17
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28. Deadlines

Practice work
Deadline
1.1. Description of software (requirement specification), what necessarily includes budget,
labor costs, organizational structure and economic effect from implementation.
30/01/17
1.2. Make a plan of works, what necessarily includes identifying deliverables, identifying the
activities needed to complete those deliverables, estimating the resource requirements for the
activities, estimating time and cost for activities, developing the schedule, developing the
budget and risk planning. Make a flow-chart.
30/01/17
1.3. Choose life cycle model for your project. Make a plan of works according phases of life
cycle.
06/02/17
1.4. Make a plan of works and phase of life cycle according GOST 34.601-90 (par.2.1) / GOST
34.602-89.
13/02/17
1.5. Make a risk planning part of plan of works. Include different types of risks.
20/02/17
2.1. Count direct and indirect metrics in your software project.
07/03/17
2.2. Estimate your software project using algorithmic method and improve estimation by
calibration the algorithmic model.
13/03/17
2.3. Prove economic & technological project efficiency.
20/03/17
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Economics
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