Software Project Management Guide
Software Project Management Guide
IT8075
Software Project Management
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                 Are software projects really different                                                                Contract management and technical project
                 from other projects?
                                                                                                                       management
Not really with all the characteristics ! …but…differ in terms of                                                      • In house projects
• Invisibility                                                                                                               • Client (users) and developers work for the same organization
      • Progress is visible for a physical artefact (something made by human being; eg : bridge construction)          • Contract projects
      • Progress in software is invisible
      • SPM helps to make invisible visible                                                                                  • Developer from outside the organization
• Complexity                                                                                                           • Project managers
      • Complexity is more in software projects                                                                              • Client organization
• Conformity                                                                                                                    • to supervise the contract
      • Software developers have to conform to the requirements of human clients                                                • delegate many technically oriented decisions to the contractors
• Flexibility                                                                                                                   • will not be concerned about estimating the effort(budget and time)
      • Software is easy to change                                                                                           • Supplier organization
                                                                                                                                • Otherwise called ‘technical project managers’
                                                                                                                                • Concerned with the more technical management issues
     Activities covered by software project management                                                               Activities covered by software project management (Cont…)
                                                                                                                      • Feasibility study
                                                                                                                         •   Whether the project is worth starting
                                                                                                                         •   Information is gathered about the requirement of the project
                                                                                                                         •   Developmental and operational costs with the benefits are estimated
                                                                                                                         •   Could be part of a strategic planning exercise examining
                                                                                                                         •   Prioritizing a range of potential software developments
                                                                                                                      • Planning
                                                                                                                         •   If it is viable from feasibility study , planning will start
                                                                                                                         •   Detailed planning is not done for large project at the beginning
                                                                                                                         •   Outline plan for the whole project and a detailed one for the first stage will be created
                                                                                                                         •   More detailed planning of the later stages would be done as they approach
    Feasibility study                                                                                                 • Project execution
        Is project technically feasible and worthwhile from a business point of view?                                    • Contains design and implementation sub-phases
                                                                                                                         • Design and planning are not the same
    Planning                                                                                                                   • Design is making decisions about the form of the products
        Only done if project is feasible                                                                                       • Planning details the activities to be carried out
    Execution
        Implement plan, but plan may be changed as we go along
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The software development life-cycle (ISO 12207) (Cont…)                                               The software development life-cycle (ISO 12207) (Cont…)
• Requirement analysis
   • Starts with requirement elicitation or requirements gathering                                    • Detailed design
   • Requirements are gathered from potential users                                                      • Each software component is made up of a number of software units.
   • It could be                                                                                         • Each unit is separately coded and tested
      •   Function- the system should do something                                                       • Detailed design of these units is carried out separately
      •   Quality requirement- how well the functions must work                                       • Code and test
      •   System requirement- Training to ensure that the operators use the system efficiently           • Refers to writing code for each software unit
      •   Software requirement- specification for development
                                                                                                         • Initial testing to debug the individual software units
      •   Resource requirement-application development cost
                                                                                                      • Integration
• Architecture design                                                                                    • The components are tested together to see if they meet the overall requirement
   • Identification of components for each requirement
                                                                                                      • Qualification testing
   • Not only software but could be new hardware or work processes                                       • All the system components have to be tested carefully
   • The design of system architecture is an input to the software requirements                          • To ensure that all the requirements have been fulfilled
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                                                                                                                            Setting objectives
    Stakeholders
                                                                                                           • Objective
                                                                                                              • Should define what the project team must achieve for project success
    • Stakeholders- people who have interest(stake) in the project                                            • All stake holders are involved for setting the objectives
                                                                                                           • Informally, the objective of a project can be defined by completing the statement:
    • Categories
           • Internal to the project team                                                                   The project will be regarded as a success if………………………………..
              • Direct managerial control of the project leader
           • External to the project team but within the same organization                                 • Focus on what will be put in place, rather than how activities will be carried out
                                                                                                              • Ex : ‘Customers can order our products online’ rather than
              • External project managers might need assistance from the internal users                           ‘to build an e-commerce website’
           • External to both the project team and the organization                                        • Project authority is a project steering committee( project board or project management
              • External users may be customers                                                              board)
                                                                                                              • Over all responsibility on objectives
              • External developers may be contractors                                                             • Setting
                                                                                                                   • Monitoring
                                                                                                                   • modifying
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Management control
• Data – the raw details
    • e.g. ‘6,000 documents processed at location X’
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                                                                                     A business case
       PROJECT EVALUATION
                                                                                     • A business case can be otherwise referred as feasibility study or project
                                                                                       justification
      Why is project evaluation important:                                           • A business case document may contain
        Project evaluation is important for answering the following questions           •   Introduction and background to the proposal
        - what progress has been made?                                                  •   The proposed project
                                                                                        •   The market
        - were the desired outcomes achieved?                                           •   Organizational and Operational infrastructure
        - whether the project can be refined to achieve better outcomes?                •   The benefits
                                                                                        •   Outline implementation plan
        - do the project results justify the project inputs?                            •   Costs
                                                                                        •   The financial case
                                                                                        •   Risks
                                                                                        •   Management plan
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                                                                                                Net profit
    Cost Benefit Evaluation techniques                                                          • Net profit
                                                                                                      • Difference between the total cost(investment) and the total income over the
It considers                                                                                            life of the project
•      the timing of the costs and benefits                                                                     Net profit=total cost - total income
•      the benefits relative to the size of the investment
                                                                                                Ye     Project1 Project2       project3
                                                                                                ar
Common methods for comparing projects on the basis of their cash flow forecasting.              0      -100000    -10,00,000   -1,20,000
• 1) Net profit (NP)                                                                            1      10,000     2,00000       30,000
• 2) Payback Period (PBP)                                                                       2      10,000     2,00000       30,000
• 3) Return on investment(ROI)                                                                  3      10,000     2,00000       30,000
• 4) Net present Value(NPV)                                                                     4      20,000     2,00000       30,000
• 5) Internal rate of return(IRR)                                                               5      100000     3,00000       75,000
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Net profit
• Net profit                                                                                 Payback Period
     • Difference between the total cost and the total income over the life of the
       project
                                                                                             • The payback period is the time taken to recover the initial
              Net profit=total cost - total income                                             investment.
Ye
ar
     Project1 Project2       project3         Year        Project1   Project2     project3
                                                                                             Advantages
0    -100000    -1,000,000   -120000          0           -100000    -1,000,000   -120000    • simple and easy to calculate.
1    10,000     2,00000      30,000           1           10,000     2,00000      30,000
                                                                                             • Not sensitive to small forecasting errors
2    10,000     2,00000      30,000           2           10,000     2,00000      30,000
3    10,000     2,00000      30,000           3           10,000     2,00000      30,000     Disadvantages
4    20,000     2,00000      30,000           4           20,000     2,00000      30,000     • Ignores the overall profitability of the project
5    100000     3,00000      75,000           5           100000     3,00000      75,000
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       Year                    project x                 project y                                                   • Alternatively present value of the cash flow can be calculated by multiplying the cash flow by the
                                                                                                                       appropriate discount factor
       • 1                     1000                      2000
                                                                                                                     • NPV for a project is obtained by discounting each cash flow and summing the discounted values
       • 2                     2000                      4000
                                                                                                                     • It is normally assumed that any initial investment takes place immediately(indicated as year 0) and is not
       • 3                     4000                      6000                                                          discounted.
       • 4                     5000                      8000                                                        • Later cash flows are normally assumed to take place at the end of each year and are discounted by the
                                                                                                                       appropriate amount.
       • 5                     8000
                                                                                                                     • Disadvantage
                                                                                                                          • Selecting an appropriate discount rate for the project is difficult
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                                                                                                          0                      -100,000
                                                                                                          1                        10,000
                                                                                                          2                         10,000
                                                                                                          3                         10,000
                                                                                                          4                         20,000
                                                                                                          5                       100,000
                                                                                                          Net profit                  50,000
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Ex :3 Solution
Ex:4
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      Ex : 5
      Consider the following fictitious scenario and some questions related to it. The table below                      Based on the above table, answer the following questions:
      gives the estimated cash flow for three different projects
Ans a16.pdf
For Case A, an interest rate of 0.38 produces NPV = 0, whereas Case B NPV arrives at 0 with an interest rate of 0.22.
    Case A therefore has an IRR of 38%, Case B an IRR of 22%.
IRR as the decision criterion, the one with the higher IRR is the better choice.
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     Step 4.4. Produce ideal activity network                        Step 4.5 modify the ideal to take into account for
• Identify the activities                                            stages and check points
  needed to create each
  product in the PFD
                                                                     • Sequencing activities( activity network) minimizes the overall duration
• More than one activity                                               or elapsed time for the project.
  might be needed to create a
  single product                                                     • Project is modified by dividing into stages and introducing check point
                                                                       activities to check the compatibility of the preceding activity
• By identifying these                                                  • These check point may introduce some delay
  activities create a activity                                          • These checkpoint activities are milestones which represent the completion of
  network which shows the                                                 important stages of projects
  task and the order in which
  they have to be executed
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