The Process of Building a Project Schedule

The next important concept related to core project planning we need to review is "the process of building a project schedule." As mentioned at the beginning of this chapter, people often think they know how to plan a project and develop a project schedule. However, when they review the PMBOK and learn of PMI's methods for doing these items, many of these project managers realize they have "holes" in their skill sets (according to PMI) that could prove detrimental on the PMP exam. There are four main reasons why the PMBOK can create this doubt in project managers:

• The breakdown of the Time Management component into four distinct steps (activity definition, activity sequencing, activity duration estimating, and schedule development) is not familiar.

• Project managers have never thought about the "logical" steps involved in building a project schedule. They just instinctively know and do this.

• Project managers were never taught how to build a project schedule correctly and/or have never worked in organizations where a project schedule is used properly to manage a project. (See the prior sections that describe a project schedule.)

• Project managers were never taught how to use their project planning tools properly to actually build a project schedule in this way.

For the exam, it's important that you understand the logical steps involved in building a project schedule, regardless of whether you physically complete each step in real-world practice. Plus, if you understand this, you may actually improve the quality of the project schedules you develop for future projects. Table 4.4 describes the purpose of each PMBOK time management process involved in developing a project schedule.

Table 4.4. Building a Project Schedule

PMBOK Process	Translation
6.1: Activity Definition	In this process you identify all tasks to be scheduled.
6.2: Activity Sequencing	In this process you identify the relationships (dependencies) between these tasks.
6.3: Activity Duration Estimating	In this process you estimate the effort and duration for each task.
6.4: Schedule Development	In this process you apply the tasks, their relationships, and their estimated durations to a calendar, assign resources, level resources, account for risk factors, and look for ways to compress the schedule.

Another discrepancy between the expectations of PMI and the real-world experiences of many project managers regarding the project schedule is the criteria for completing this important planning activity. Per PMI, the project schedule must possess the following key attributes to be considered complete and ready to be used as a baseline for project performance:

• Buy-in The schedule must have acceptance from team members and stakeholders.

• Achievable and realistic The schedule must represent all the work to be done and must be realistic with regard to time expectations.

• Formal The schedule must be documented and formalized.

Types of Task Dependencies

Now that we've reviewed the key steps and the key completion criteria for schedule development, let's get into a few of the important details of this process that you'll need to know for the exam. After the project's work has been decomposed into activity lists (tasks), you are ready to identify the relationships between tasks. Understanding task dependencies (the relationships between the activities) enables a project manager to build a more realistic, achievable schedule, and it helps to identify the focal points for any type of schedule-compression activity.

For the exam, you will need to be familiar with the various types of task dependencies and relationships detailed in Table 4.5 and be able to identify examples of each.

Table 4.5. Types of Task Dependencies and Relationships

Type	Description	Example(s)	Notes
External	Dependencies on events outside the project	A permit must be granted by the local government to start construction.	A dependency can be both external and mandatory.
Mandatory	Logical dependencies due to the nature of the work	The foundation of the house must be built before the first floor construction can start.	Also known as "hard logic."
Discretionary	Dependencies defined by the project team	An internal QA review should be conducted before the deliverable is presented to the client.	Also known as "soft logic." This type is often based on "best practices" and needs to be fully documented.
Predecessor	When one activity must occur "before" the other	"Software selection" is a predecessor of "software implementation."	These relationships are captured in the network diagram and then in the project schedule.
Successor	When one activity must occur "after" the other	"Software implementation" is a successor of "software selection."	These relationships are captured in the network diagram and then in the project schedule.
Concurrent, parallel	When one activity can occur "at the same time" as the other	"User acceptance test case design" can be performed concurrently with "software module design."	Generally, tasks can be concurrent if they are not dependent on each other.

Benefits of Network Diagrams

As mentioned in Table 4.5, the task relationships are usually captured in a network diagram, as well as later in the project schedule. A network diagram (or project network diagram) is one of the best mechanisms available to help you identify task relationships in your project. By creating a visual representation of the project activities and tasks, it is much easier for you to see how they are related to each other. Depending on the schedule development process you were taught or expected to follow, you may or may not have much experience with constructing network diagrams.

For the PMP exam, you will need to know the following about network diagrams:

• How to use network diagrams

• The benefits of network diagrams

• The three different types of diagrams

In addition to highlighting relationships among activities, here are some other advantages offered by a network diagram:

• It helps to identify the time and resources for each activity.

• It helps to identify schedule development constraints.

• It identifies the critical path.

• It illustrates total and free float.

Three Different Types of Network Diagrams

For the exam, you need to be familiar with the three different types of project network diagrams and how they compare to each other. Table 4.6 summarizes this information.

Table 4.6. Types of Project Network Diagrams

Network Diagram Type	Also Known As	Key Characteristics	Example	Notes
Activity-on-Node (AON)	Precedence Diagramming Method (PDM)	Nodes represent activities, and arrows represent relationships.AON does not use "dummy" activities, and it can use four types of dependency relationships: Start-to-finish Start-to-start Finish-to-finish Finish-to-start	See Figure 4.2	AON is the most popular network diagram type. Nodes are displayed as boxes or rectangles. Finish-to-start is the most common dependency relationship.
Activity-on-Arrow (AOA)	Activity Diagramming Method (ADM)	Arrows represent activities, and nodes connect activities to represent relationships. AOA uses dummy activities and only uses finish-to-start relationships.	See Figure 4.3	Dummy activities are shown as dashed arrow lines.AOA is rarely used in IT.
GERT	Conditional Diagramming Method (CDM)	GERT uses loops and conditional branches and is also a scheduling technique.	See Figure 4.4	Used to represent repeated activities such as "test cycles" or conditional activities such as updates to validation documents after QA inspection.

Figure 4.2. Activity-on-Node network diagram example.

Figure 4.3. Activity-on-Arrow network diagram example.

Figure 4.4. GERT network diagram example.

A "dummy activity" is an activity arrow that does not represent any actual work. It is needed to represent a logical dependency only in an AOA network diagram.

Figures 4.2, 4.3, and 4.4 provide graphical representations of network diagrams.

PDM network diagrams are often referred to as PERT diagrams. This was the term used by MS Project for network diagrams in the past. However, Microsoft now uses the term network diagram. Technically, and for the PMP exam, "PERT" has a distinct definition.

You must be able to assess and draw a network diagram to answer some of the exam questions.

Time Estimating Guidelines and Methods for Schedule Development

With network diagrams, we can clearly see the "relationships" among the various activities. A corresponding step to review in schedule development is the critical process of "estimating" the activity durations. This section summarizes the key activity duration estimating guidelines and methods that you need to know for the exam.

First, let's start with the "Golden Guidelines" of estimating activity duration by PMI:

• Estimating should be performed (or approved) by the person doing the work.

• Estimating should be based on the work breakdown detailed in the WBS.

• Estimating should be based on historical information and expert judgment.

• Estimates are influenced by the capabilities of the resources (human and materials) allocated to the activity.

• Estimates are influenced by the known project risks.

• All bases and assumptions used in estimating should be documented.

• Estimates should be given in specific time ranges.

Per PMI, estimating should be performed (or approved) by the person doing the work.

The two main reasons: more accurate estimates and higher commitment levels to the project.

Next, you need to understand several estimating methods, techniques, and terms for the exam. These are summarized in Table 4.7.

Table 4.7. Estimating Methods, Techniques, and Terms

Estimating Topic	Key Characteristics	Notes
Expert judgment	Needed due to various factors that influence actual durations. Should be guided by historical information and not just "memory" (see the next entry).	Delphi technique, heuristic estimating, rule of thumb.
Historical information	Critical to improving estimate accuracy. The three types are project files, commercial databases, and project team members.	Recollection of project team members is the least reliable source.
Bottom-up	Starts at the lowest level of the WBS and provides accurate time and cost estimates.	Takes longer to develop and is more costly to develop.
Analogous (top-down)	Utilizes actual duration periods from previous projects to form estimates. Reliable if activities from previous projects mirror activities needed for this .project	Used in early planning phases and project selection. This method costs less to develop because you are leveraging historical information. It's a form of expert judgment because it's based on historical information.
Parametric estimating	Uses historical data and statistical relationships and is 25% to 75% accurate. Estimates are developed by identifying the number of work units and the duration/effort per work unit.	Also known as quantitative-based estimating. Examples include: Lines of code for software development Square footage for construction Number of sites for network migration
Phased estimating	Estimates the project phase by phase. This method is simple and accurate.	Helps stakeholders decide whether to continue the project.

Project Management Guidelines Related to Estimating

In addition to the key concepts and definitions related to the "estimating" activity itself, several "project management" guidelines regarding estimating are emphasized by PMI throughout the PMBOK and the PMP exam. Here's a list of those guidelines:

• A project's time and cost estimates (requirements) should be based on project needs and not dictated by senior management. The project manager should work with senior management to reconcile any differences.

• Reserve time (contingency, buffer) should be added to either the project schedule or to individual activity duration estimates to account for the level of risk and any uncertainty that exists.

  

  We have no doubt that these first two guidelines are common, everyday practice in your "real-world" experience!

  This is a clear example of why leadership, negotiation and communication skills are so important.

  
  

• Historical information is vital to improving estimates.

• Key project success factors (cost, time, scope, resources) should be managed to baselines and only changed when an approved project change has been executed.

• All assumptions used in estimating should be documented.

• The scheduling technique to be used will impact the estimating effort (see the section titled "Scheduling Techniques" for an additional discussion of this topic).

Improving the accuracy of activity duration and project costs estimates is a key reason why PMI emphasizes the importance of historical project records and information.

Critical Path, Lag, Lead, Slack and Other Scheduling Concepts

Before we review the key scheduling techniques, let's review some fundamental scheduling concepts and terms. You'll need this knowledge to effectively answer many questions on the exam related to schedule development. The best way to review these fundamentals is by walking through an example of a question type you may see on the exam.

Table 4.8 lists a set of project activities, their predecessor relationships, and their estimated durations.

Table 4.8. Network Diagram Sample Question

Activity	Predecessors	Duration (Days)	Earliest Start Date
A	None	5	8/1/03
B	A	2
C	A	3
D	B	7
E	C	4
F	D	1
G	E, F	2

Now that you've reviewed Table 4.8, follow along with these steps:

1. From this table, draw an Activity-on-Node network diagram, using the node template depicted in Figure 4.5.

   Figure 4.5. Activity Node template.

   

2. From this network diagram, which activities make up the critical path and how long is the critical path?

   The critical path represents the longest sequence of activities in the network diagram and is characterized by zero float or slack at each node (activity) in the path.

   Given this understanding, the critical path is the combination of activities A, B, D, F, and G and has a total duration of 17 days (5+2+7+1+2 = 17).

   

   Any delay in the critical path delays the project. You must decrease this path time to shorten the project. Also, keep in mind that a schedule may have multiple critical paths.

   
   

3. From this network diagram, what are the earliest start and earliest end times for each activity?

   Earliest start time (EST) is the sum of the durations for all predecessor activities. Earliest finish time equals EST plus the activity duration.

   See the earliest start and end time values listed for each activity node in Figure 4.6. Do you see how these were calculated?

   Figure 4.6. Activity-on-Node network diagram for table.

   

   

   Earliest start times and earliest end times for project activities are calculated by starting at the first activity and moving forward through the network diagram. This is known as the forward pass.

   
   

4. Now, calculate the latest start and latest end times for each activity.

   Latest finish time (LFT) equals the project EFT minus the expected duration of the successor activities, and latest start time (LST) equals LFT minus the activity duration.

   See the latest start and end time values listed for each activity node in Figure 4.6. Do you see how these were calculated?

   

   Latest start times and latest end times for project activities are calculated by starting at the last activity and moving backward through the network diagram. This is known as the backward pass.

   
   

5. Now that you know the latest finish time (LFT) and the earliest finish time (EFT) calculated for each activity, what is the slack (or float) time for each activity?

   Mathematically, activity slack (or float) is calculated as follows:

   Float = LFT EFT

However, the key to remembering this is understanding what slack represents. Slack is the amount of time an activity can be delayed without impacting the start time of the successor activities.

Given this definition, do you see how the slack values were calculated for each activity in Figure 4.6?

There is no slack along the critical path.

You may see the terms free slack and total slack on the exam.

Free slack refers to the time the activity can be delayed without affecting the start of the successor activity. This is what you normally think of when you hear the term slack or float.

Total slack refers to the time the activity can be delayed without affecting the project completion date.

Two additional scheduling and task relationship concepts that are frequently misunderstood are lead and lag. In many cases, project managers also confuse lag with slack (or float).

Let's start with the lag. Lag is the amount of delay time before the successor activity can start. In other words, once Activity A is complete, how soon can Activity B start? If the lag is zero, Activity B can start immediately after Activity A is complete. Generally, "lag" times are captured when there are external dependencies on a task that are not being captured in the project schedule.

Note that slack time (or float) is concerned with the amount of time an activity can be delayed without impacting the successor activity; it's not an attribute of the dependency relationship.

Lead is described as the amount of advance notice that is required for the successor activity to begin. This is most frequently used when a successor activity can be started before the predecessor is completely finished.

Most scheduling software calculates EFT, EST, LFT, LST, total float, free float, and the critical path, if the following information is provided for each activity:

• Activity name

• Activity duration

• Dependency relationships

Scheduling Techniques

The PMBOK categorizes these scheduling techniques as mathematical analysis techniques that calculate theoretical early/late start and finish dates. In other words, these techniques will give you a preliminary schedule. The final schedule may be different, depending on the application of any resource leveling and/or schedule-compression techniques (discussed later in this chapter).

For the exam, Table 4.9 summarizes the key facts about these scheduling techniques.

Table 4.9. Scheduling Techniques

	CPM	PERT	GERT
Full name	Critical Path Method	Program Evaluation and Review Technique	Graphical Evaluation and Review Technique
Key features	Identifies the critical path as well as identifies the least flexible activities based on float calculations. Used for crashing. Uses the most likely estimate.	Uses three estimates for each activity (weighted average).Used mainly on large scale projects. Incorporates risk management. Can be used for crashing and can develop four types of schedules.	Illustrates loops in an activity sequence, branches between activities, and different project outcomes.
Shows alternative paths?	No	No	Yes
Looping?	No	No	Yes
Estimating	Uses one estimate for each activity (most likely). Does not allow for risk events.	Uses three estimates for each activity: optimistic, most likely, pessimistic. ET = (O + 4M + P) / 6 This technique is time consuming.	Multiple

All schedules are "assumption based." The activity duration estimates are based on staffing and project execution assumptions.

In addition to the three mathematical analysis techniques, you should also be familiar with simulation scheduling techniques. In particular, you need to know what the Monte Carlo simulation technique is all about.

In summary, a preliminary project schedule can be submitted to a simulation tool to validate its feasibility. The Monte Carlo simulation technique is the most popular one used. In addition, a project scheduling simulation tool is often used in risk management to perform "what-if" analysis.

The Monte Carlo Simulation Technique

The Monte Carlo simulation technique was indeed named after Monte Carlo, Monaco specifically, after the casinos and games of chance located in Monte Carlo. The random behavior that we find in "games of chance" is similar to how the Monte Carlo simulation technique selects variable values at random to simulate a model.

When you roll a die, you know that either a 1, 2, 3, 4, 5, or 6 will come up, but you don't know which value for any particular roll. It's the same with the variables that have a known range of values but an uncertain value for a specific time or event (such as interest rates, staffing needs, stock prices, inventory, and phone calls per minute).

The Monte Carlo simulation technique randomly generates values for uncertain variables corresponding to every node in the model (or in our case, random duration times for every activity in the project schedule) and combines these event outcomes with each other until a statistically accurate representation of all possible combinations has been created. This allows a project manager to make better decisions by understanding what's most likely to happen and by understanding the impact individual event outcomes can have.

Here are the key facts to understand about the Monte Carlo simulation technique:

• It's the most common simulation technique.

• It uses specialized software.

• It allows multiple project durations to be calculated.

• It figures duration probability for each activity.

• It assesses the feasibility of the schedule under adverse conditions.

• It allows for "what-if" (risk) analysis.

A schedule is considered "preliminary" until resource assignments are confirmed.

Various Methods of Presenting a Project Schedule

One element of project planning and project management that is often overlooked is effectively communicating the project schedule to the various project stakeholders. Although presenting a detailed, tabular view of the schedule to the core team is acceptable, PMI favors the use of visual, summary representations when presenting the schedule to other stakeholders. For the exam, you should be familiar with the common methods of presenting a project schedule summary, as detailed in Table 4.10, and the benefits of each.

Table 4.10. Methods for Presenting a Project Schedule Summary

Method	Key Attributes	Benefits	Notes
Milestone chart	This is a bar chart that shows start and end dates, major deliverables, and key external dependencies.	Highlights key decision and completion points, as well as any external dependencies.	Milestone tables are also used (same information, no bar chart).
Gantt chart	This is a bar chart that shows the various levels of the WBS.	Easy to read, incorporates the WBS, and can easily show actual progress against estimates.	Does not generally show interdependencies.
Network diagram	A network diagram uses nodes and arrows. Date information is added to each activity node.	Highlights the critical path and shows project logic (flow).	For presentations, the summary task level of the WBS is generally used. Otherwise, a network diagram is best suited for wall display.

Techniques for Shortening the Schedule

As mentioned previously, the scheduling techniques result in a theoretical schedule. On most projects, this will not be the schedule presented to the stakeholders for approval. Due to either stakeholder expectations or an external deadline that must be met, an effort must be made to compress or "shorten" the schedule without reducing the scope of the project. For the exam, you will need to understand the techniques detailed in Table 4.11 and the key issue(s) with each.

The only way to shorten a schedule is to compress the critical path time.

Table 4.11. Techniques for Compressing the Project Schedule

Technique	Definition	Key Issue(s)
Crashing	Adding resources to critical path activities only	Certain activities cannot be completed faster by adding resources. Additional resources often add overhead that can negate any time savings. Crashing can increase project costs.
Fast tracking	Performing critical path activities in parallel	Fast tracking is a high-risk technique that increases the probability of rework.
Process improvements	Gaining productivity increases based on different work processes, technologies, and/or machinery	New approaches can increase project risks. Process improvements are not always available.
Limited overtime	Increasing the number of hours per day or week available to work on project tasks	Overtime is most effective when used for limited periods of time. Overuse can lead to team morale and quality of work issues.

Techniques to shorten the project schedule can also be deployed during project execution as a corrective action to a schedule variance.

The project schedule is a critical component of the project plan, and it is a critical input for the creation of the cost baseline. In addition to this fact, you should review several other important points related to project cost estimating to help with your exam preparation.