International project management

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PLANNING THE INTERNATIONAL PROJECT IN TERMS OF TIME,

COST, AND QUALITY

Chapter 5

THE CHALLENGE OF PLANNING AN INTERNATIONAL PROJECT

Why planning a project?

 Planning reduces uncertainty and brings structure into chaos.

Issues with planning in international project.

 Planning needs to be constantly revised due to a fast changing international environment.

 The international environment is complex and difficult to predict.

 More factors need to be included into project planning than for planning standard projects.

THE PLANNING PROCESS

The planning process can be divided into four major tasks:

1. Planning time.

2. Scheduling under resource constraints.

3. Planning cost.

4. Planning quality.

The objective of planning is to:

 Minimize project duration.

 Minimize the resource availability cost.

 Maximize quality.

Required inputs:

3 2

Planning

Time

Scheduling

under

resource

constraints

Planning

Cost

Planning

Quality

Planning

Time, Cost,

Quality of the

International

Project

1. Work Breakdown Structure

2. Organizational Breakdown Structure

3. Analysis of skill sets of available staff beyond academic and job titles (based on CVs and interviews)

4. Overview of holiday entitlements of international staff in different locations

Main output: Gantt chart or network diagram

Required tools and

techniques:

- Project Network Diagram, mainly Activity on Arrow (AoA)

as basis for CPM, CPA, PERT, PDM etc.

- Gantt chart or bar chart

1. Project Scope Statement

2. Work Breakdown Structure

3. Estimates for activity duration

4. Establishment of relationships between single activities in form of precedence

5. Calendar with international holidays relevant to the international project

Main output: Resource loaded Gantt chart

Required tools and techniques:

- Loaded Gantt chart

Required inputs: 1. Financial objective / available budget

2. Cost estimates

3. Overview of international locations

involved in the project

4. Overview of salaries, facilities,

equipment and other costs in the

relevant international locations

5. Cost for risk mitigation or contingency

plans (cf. Chapter 4)

6. Development of currency fluctuations

Required tools and techniques: - Step counting cost-estimating techniques

- Exponential cost-estimating techniques

- Parametric cost-estimating techniques

- Even-loading, front-loading, back-loading budget

methods

- Periodic cost spreadsheet

- Cumulative cost spreadsheet

Required inputs:

1. Project scope statement incl. cross-check of

customer’s expectation level

2. Cultural gap analysis regarding perception of quality

in involved countries and cultures

3. Functionality of product/service/project result

Not

discussed

in this book

Main output: Budget spreadsheets

Required tools and techniques: - Standard quality control techniques

- Pareto diagrams

- Checklists for partner selection

- Spider diagrams for training assessments

Main output: Definition of quality known to all project

members

Water-tight specification sheets

Final output of cycle: project master

plan (additional input needed for master plan: OBS/responsibility chart cf. Chapter

Cf.

Chapter

Not discussed in this

book

Not

discussed

in this

book

CULTURAL IMPACT ON PLANNING

National culture determines the attitude of a project member or stakeholder towards the effectiveness of planning.

It also has an influence on the detail level and structure of the plans.

The attitude towards planning is influenced by the external environment, e.g. frequency of natural disasters, reliability of infrastructure.

The following two slides will use the cultural gap tool and apply it to the area of project planning.

Project managers who are rather hierarchy-

oriented tend to create a plan on their own.

More equality-oriented PMs will tend to involve

their team.

Equality Hierarchy

Project managers and members who are

afraid of risk tend to put more effort on

planning details than risk embracing project

managers and teams.

Embracing

Risk

Avoiding

Risk

Project managers and other stakeholders with

a universal background tend to create a

Master Plan which is to be applied at all sites

and to situations. Circumstantial people tend

to stick to high-level planning with flexibility.

Universal Circumstan-

tial

Project managers and other stakeholders who

are task-oriented tend to create Work

Breakdown Structures and to-do lists.

Relationship-oriented individuals tend to

spend much more time on networking with

main stakeholders than on creating a plan.

Task Relationship

CULTURAL GAP TOOL FOR PLANNING (1 )

Achievement Standing /

Status

Project managers and members with a

sequential approach tend to follow the

planning process, with the creation of

estimates of time, cost, and links to resource

availability. People from synchronic cultures

may put less effort in sequencing.

Sequential Synchronic

Project managers and members who are more

oriented towards theory tend to attach more

importance and put more effort into planning.

People from pragmatic cultures may tend to

focus on learning by doing and spend less

time on the creation of plans.

Theoretical Pragmatic

Project managers who are more

achievement-oriented tend to ‘follow the

textbook’ in order to obtain the given targets.

Project managers and members with a

stronger status orientation might have a

separate agenda partially contradictory to the

project goal.

CULTURAL GAP TOOL FOR PLANNING (2)

SCHEDULING

Scheduling comprises of the following activities:

 Estimating the duration of the activities outlined in the Work Breakdown Structure.

 Determining the sequence of these activities.

 Optimizing the sequencing of activities to minimize the overall duration of the project.

Tools used for scheduling:

 Gantt chart.

 Network diagram.

The prerequisite of scheduling is the assumption that time can be measured, and duration needs to be minimized. This prerequisite is not given in all local cultures.

Integration

start

0 Finalize

new

strategy

Decide on

new

processes

Test pilot

Roll out

new

processes

Integration

end

Build new

intranet

Feed with

new

processes

Identify key

users among

personnel

Language

trainings

General

process

trainings

Estimating activity durations in an activity on arrow network diagram

Activity 1 Activity 2

Activity 1 Activity 2 10

After durations have been estimated, the logical relation between activities needs to be determined.

Determining relations between activities

Activity Name

Earliest

Start Time

Latest

Start Time

Latest

Finish Time

Earliest

Finish Time

Float or Slack

Activity Duration

1 2

34 5

The structure of a node of a network diagram

Integration

start

0 Finalize

new

strategy

0 10

1010

Decide on

new

process

10 15

155

Test pilot

15 25

2510

Roll out

new

process

25 55

5530

Integration

end

55 55

550

Build new

intranet

4 18

1414

Feed with

new

processes

18 25

227

Identify key

personnel

27 32

155

Language

trainings

32 47

3015

General

process

trainings

47 55

388

17 12

The complete network diagram with duration, float, and interdependencies

Factors impacting

international project

scheduling

Additional time for coordination,

communication and training

Additional time for local adaptations (of processes, products,

or services)

Additional time for team building

activities

Consideration of different public holidays and vacation time

Consideration of different calendars and auspicious days

Particularities of scheduling international

projects

ADDING RESOURCES TO SCHEDULING (1)

To finalize the scheduling activities, the project manager has to take quantitative and qualitative aspects of resources into account:

 Quantitative aspects means that sufficient financial and human resources need to be available to carry out the tasks as depicted in the WBS.

 Qualitative aspects are extremely important for scheduling international projects:

 Availability of qualified staff.

 Limited mobility and flexibility of staff.

 Task allocation to minimize interfaces.

ADDING RESOURCES TO SCHEDULING (2)

Staff planning involves the following main activities:

 Determine whether the team members are 100 per cent dedicated to the project.

 Perform resource levelling in case of over-commitment of resources:

 Re-schedule tasks.

 Re-prioritize tasks.

 Negotiate for additional time or resources.

 Reduce the scope of the project.

Peak Units:

Calendar week

TL: Team leader

Over-allocated

resources

Allocated

resources

Example of resource-loaded Gantt chart

PLANNING COST

Purpose of cost planning:

 Minimization of financial resources needed to realize the project’s objective.

Cost planning activities:

 Estimating cost.

 Putting cost into a budget.

 Controlling/monitoring cost in order to revise estimations where necessary.

Types of costs:

 Direct costs.

 Solely linked to the project the budget is planned for.

 Indirect costs.

 Costs that cannot clearly be allocated to one single project, such as general administrative costs.

EXAMPLES OF COST COMPONENTS

Labour

Materials

Plant and equipment

Travel and transportation

Subcontract

Training

Legal support

Investment cost

Rent

Overhead and administration

Fees and taxation

Inflation

Contingency (covers oversights or unknowns as a sort of buffer) 18

Simplified Cumulative Cost Spreadsheet: Production Transfer from Europe to China

P = Plan

Total Budget € 1 million A = Actual

Cost