Tools And Techniques For Effective Project Planning

Different Types of Tools and Techniques

Planning means the controlling of future task by developing a plan for doing it. Project is the set of activities which are required to be performed for delivering a common objective to produce some product. So all the activities in a project is required to be defined very well in such a manner that the total project can be finished within the time frame or also called as ‘Budgeted Time’. These activities are interlinked to each other with different relationships to produce a whole schedule. The schedule which is developed by the set of such well-defined activities and after being agreed up on by the stakeholders becomes the ‘Baseline Schedule’. Moreover the duration of the activity which it shall take to get completed also depends on the resources which are being available with it. The resources can be measured in the form of cost, hence to complete an activity resources and equivalent cost is required. So all such data are required to be maintained against each activity for developing a schedule of a project which is just next to impossible for a human being to develop and maintain it manually and even generate the reports whenever required. Hence some tools or software is developed to control all such features of an activity which are required to be maintained to develop a professional project schedule. This was regarding the basic features and requirement of planning tools and techniques. Now we shall discuss regarding how these tools can improve a Manager’s capability to organize the tasks properly to get the project completed before or on time.

Suppose a Manager is assigned the responsibility to organize a small official party or a get together at the lunch time, when every employee normally takes break for having lunch and utilize the time to develop team binding by having a combined lunch all together by booking some restaurant nearby to the office premises. So the first job of Manager would be to document the objective of the task, which may be ‘to develop team building’ or ‘to get refreshed in between the work pressure’ etc. Now, the work is to define the list of activities like ‘call restaurant to book the slot’, ‘call transport manager to arrange the same at lunch time’, ‘conducting a small meeting with head of the department to fix the menu’, ‘develop an estimated budget’, ‘get approval for the budget from head of the department’, ‘inform all the group member about the time and venue and all other pick-up & drop facilities’, ‘execute the job during the lunch day and time’, ‘after everything s over receive the feedbacks about the lunch party or get together’, ‘document the lessons learnt’ for taking care of the mistakes happened this time and learn from it so that it does not gets repeated next time. As we can observe that for merely arranging a lunch party at office time itself the Manger had to document all such activities, then arrange them in order and also list the constraints and budgeted the cost requirement to fulfill the activities. All these activities could be finished well due to having a well planning at the beginning for arranging get together at lunch time, but any professional project involves many activities between 100 to 10,000 number of activities for simple engineering review project to complex turnaround projects where planning becomes necessity and the recognized tools and techniques become necessity to do the planning. Now, we shall go through few such tools and techniques during the course of this report.

Budgets and Forecasts

Different types of the tools and techniques which can be used to plan the complex activities involved in a project are as below:

Budgeting reports how the general arrangement will be executed month to month, determining the consumptions of the cash reserve to perform the activity (Crippen, 2003). Forecasting utilizes collective recorded information to anticipate money related results for future months or years (A KPMG and ACCA Thought Leadership Report, 2015). So the budgets provide the history of the activities and the balance reserve calculation to enable the Project Manager plans the future expenditures accordingly so that cash crunch does not happens in the project life cycle (Penner, 2001). On the other hand the forecasting is the tools which provide the total forecast of the cash requirement to complete the set of activities. Once forecast is ready the Project Manager can meet with the sponsor with the detailed back-up sheet of the forecast developed for further arrangement of the funds by sponsor. The main role of the Project Manager is to maintain a positive working capital throughout the project so that, the cash crunch does not happen in between the project due to which it may get impacted negatively. So to avoid the situation Project Manager need to always perform the tools to keep on calculating the forecast figures and if found something alarming, then it should be bought to the notice of higher management and sponsor immediately.

When we have already chosen what are the feasible arrangements involved, and then we should choose how these plans are to be financed. Arrangement of a financial plan is a basic device in guaranteeing that we remain responsible for our expenses. As a result, a spending will aid the accompanying Controlling Finances, affirming that arranged action can certainly be supported, settling on monetary choices in an informed and very much technical way, recognizing ranges of potential trouble and making arrangements for the same and measuring the performance of execution to date against pre-arranged parameters (Oracle, 2017). The nature of data being generated by budgeting is proportionate to the exertion that has been put resources into it. A not well structure and severely arranged budgeting file can hamper the project and at the same time the goof budgeting can provide flexibility to the project. So to develop a well-structured budgeting file the Project Manager needs to put adequate time in readiness of the financial plan, be sensible and legitimate notwithstanding when the data is not attractive and survey the financial plan at normal interims or as new data winds up noticeably accessible.

It is a tool which can help the entrepreneur in distinguishing between the peaks and drops in cash flow (TechTarget, 2017). The forecast is made effectively, and then it will help with distinguishing the requirements in which development is to be overseen. The forecast figure is demonstrative in nature, and will help with molding feasible arrangements by distinguishing ranges from the financing necessities to be arranged for the proper execution of the project, ranges of cost that should be looked into so that nothing gets overlooked and all the detailed are captured in the file, vendor or supplier’s terms that may be required to be renegotiated. It is likewise an essential apparatus from the perspective that it alarms the entrepreneur to the way that trade works out a way altogether different from benefit. A business that is gainful may in actuality be confronting cash flow issues during the project life cycle, so the forecasting can actually reduce such issues. Attributable to its prescient nature, the cash flow ought not to be seen as a pathway to what’s to come. Exactness can be enhanced by normal audits, yet it is not an apparatus by which execution can be measured.

Budgeting

Now let us understand the above concept of budgeting and forecasting tools with an example. Suppose a builder wants to build a residential building for selling and business purpose. So the first activity of any project is to develop the WBS to cover the scope of work, then the builder need to access the cost requirement for completing the project within the scope of work and the stipulated time frame. The calculated figure provides the overall expenditure which is required to be done to build the facility by builder and this is called the budgeting. In budgeting we just see the pockets where the expenditures can happen. By conducting a good budgeting exercise, we can ascertain ourselves about the confidence level of the expenditure heads and none of the expenditure can go beyond the budgeting information or data. This helps in providing information to the builder to arrange the requisite funds. Now let us understand the cash flow forecasting, in which after the cost requirement is calculated, it is required to be liquidated along the time period for the construction till the selling of the last buildings to the prospective owners. By calculating and distributing the above figures, the trend of cost requirement will be generated in the form of expenditure and revenue plan. The difference between the expenditure and revenue expected to be generated throughout the project life cycle can actually provide the cash flow forecasting figures. This will always show a comparative figure between the revenue and expenditure and the difference amount will be required to be arranged by the builder to continue the work smoothly. The difference may sometime go positive (extra cash shall be available with the builder) or negative (builder need to arrange the required funds) and at last the figure must generate positive results. The positive figure obtained by this calculation is the profit margin figure which the builder can expect to get from the project. This way the budgeting and forecasting tools can be used to plan the expected expenditures, revenues and the fund required to be raised during the overall project life cycle to maintain the continuity of job. The cash flow forecasting can be developed beyond the project time also, as till the last unit of the building is getting sold out, the actual profit will not be reflecting in the calculation sheet, whereas the budgeting can be done till the project time only.

Sensitivity analysis provides the information about a particular activity or task which can behave separately in different conditions or how sensitive is the activity is provided by the sensitivity analysis report. Sensitivity analysis generally uses the what-if scenario analysis calculation tool to reach the desired goal. Whereas the scenario analysis is used to analyze the action of different scenario on given activity, this is a method for organizing considering the future, of distinguishing potential issues and furthermore of expanding readiness to deal with them. Results are noticeable given the distinctive situations conceived as are the ways that prompt them from the present circumstance, giving an organization or project more degree to refine and modify designs as needs be. More extraordinary situations (which might be sure or negative) enable plans to be stretch tried and further hazard alleviation to be done, if proper.

Forecasting

It is a system used to decide how unique estimations of a free factor affect a specific ward variable under a given arrangement of suspicions. This method is utilized inside particular limits that rely upon at least one information factors (Zenand, 2015). Budgetary projections demonstrate a solitary result in view of an arrangement of presumptions and data sources. Vulnerability in the different presumptions and data sources makes hazard, and will decide how the financial specialist deciphers the projections. Affectability examination is done keeping in mind the end goal to evaluate hazard (Borgonovo & Plischke, 2016). For instance, a speculator might need to comprehend what happens if income targets are not met and the reasonable effect of utilizing an option income target, or a bank might need to survey the impact of changes in loan costs on the money related projection. Such an activity would include looking at the affectability of the money related projections to changes in its suspicions and information sources. With affectability investigation just a single info is changed at once keeping in mind the end goal to survey the effect of that contribution on the money related projection. By changing information separately it is conceivable to survey the centrality of every factor on the business.

Every criteria is judged against three different scenarios only, the scenarios can be the base situation, best situation or the worst situation. All the task or conditions are examined against these three cases only and the best result is documented and advised to the client (Kazi et al., 2009). Situations are valuable in considering how choices might be influenced by future vulnerability. Situations ought to be attracted regard for the significant vulnerabilities and suppositions on which the achievement of the proposition depends. Are there any factors, (for example, trade rates, pay costs etc.) that substantially impact the net advantages? These key factors ought to be distinguished utilizing the hazard and vulnerability process above. The situation investigation

Figure 1: Scenario analysis

Source: (Salleh, 2013)

should then concentrate on asking “what-if” addresses and recalculating the normal Net Present Value for a few situations. For instance, imagine a scenario in which at least one touchy/key factors were changed by ±10%, or ±50%, or whatever is a reasonable and conceivable variety. Imagine a scenario where related Government strategy changed or basic enactment is not passed. On the off chance that these occasions happen, should the proposition continue? Under what conditions does the favored choice change? A typical approach is to test three situations are the cynical or moderate situation, most likely or base situation, and hopeful situation.

For the sensitivity analysis report, say a person is looking to expand his business and so he is willing to change the internal space along with buying the extra space for the shop. But before investing he wanted to analyses the decision by conducting the sensitivity analysis method. He noted the all-day transactions of the customers for analyzing the report as he needs to comprehend the effect of client activity on adding up the deals. He confirms that deals are a component of cost and exchange volume. The cost of an item in the shop is $2,000 and he sold 10 numbers in last year, so total selling price obtained is $20000. He additionally verifies that a 10% expansion in client movement expands exchange volume by 10%, which enables him to manufacture a budgetary model and sensitivity analysis around this condition in view of imagine a scenario in which explanations. It can disclose that what can happen if client activity increments by 10%, half or 100%. So by looking at the client’s movement, he discovered that the client base increase by 10% is directly affecting the selling volume by 10%. So the expansion plan of shop is purely justifiable and should immediately go for it, because it can allow increasing more flow of clients and hence more daily selling and the profit margin too.

Example

Whereas in case of scenario analysis, the seller had to develop three conditions, according to which the best, worst and actual scenarios are to be compared to reach the common consensus. So he had to start planning for the action in case the expansion gets failed, then at least whatever is there it’s going to be there and the old shop is not going to change the space. Then if the best condition happens and really he customer flow increases a lot and equally the profit so all is well. Finally the situation if at all remains in between the best and the worst, then also there shall not be an issue as the worst is absorbable so the in-between situation too. Hence the investment is advisable.

PERT is a tool which is used to calculate the realistic period of time for the completion of the project (Wrike, 2017). This technique is developed in 1950 by US Defense Department. This technique is similar to the ‘critical path’ technique. In this technique the activities are first listed down with the duration required to complete the activity (Agyei, 2015). After the duration is fixed, the relationships are provided by using the arrow to show which activity is dependent on which. The activities are mentioned in the node. The design of node is as below:

Figure 2: Activity detail of PERT

Source: (Uludag, 2017)

In this above diagram we can see the earliest start date and earliest finish dates which are obtained in forward path calculation and the late finish and late start date is obtained by backward path. Expected duration is the time to complete the activity.

Accordingly all the activities are interlinked to each other to develop the network for the project. While calculating the completion date of the project, the early finish date of the predecessor is added with the duration of the activity to develop the early finish date of the activity and similarly we can reach the last activity and the early finish date of the last activity in the link shall be the earliest completion date of the project. Now once the completion date is reached, we need to back track the calculation as discussed in below process called as the backward path calculation method.

Figure 3: PERT network with activity on nodes

Source: (Uludag, 2017)

In the backward path calculation system, the late finish of the last activity is made equal to the early finish and then starts the backward path. The late finis of the successor activity is then again subtracted by the duration of the activity to obtain the late finish date of the activity and likewise we reach the first activity of the project. After all the activities been identified like wise and developed the early start and finish dates along with the late finish and start dates the critical path of the project can be identified. The critical path of the project is the sequence of the activity which forms the longest path of the project and the activity has zero afloat. Now the question is how this float can be calculated, the float is the simple difference between the late finish and the earliest finish dates of the particular activity. And wherever it is zero it produces the critical path of the project. As shown in above figure that the path or the chain of activities which are being shown as red colored line is the critical path.

Suppose a project is defined to have very few activities as only 8 to make the calculations easy and understandable. Let the activity table be as below:

Activity	Duration	Predecessor
A	3	—-
B	6	A
C	4	A
D	3	A
E	4	B
F	4	B, C, D
G	1	B
H	8	E, F

Table 1: Activity Table

Source: By Author

The activities are A B C D E F G & H, and the durations are let 3, 6, 4, 3, 4, 4, 1 & 8 week respectively. Then coming to the predecessors, A has no predecessor, so it is the starting point. Then is the activity B, which has A as predecessor. Then the activity C which has A as predecessor. Then the D has A as predecessor. Then the E which has B as predecessor. Then the F which has B, C & D as predecessor and likewise the H has E & F as predecessor and the G has B as predecessor. Now on the basis of the above requirement the forward path will generate the below figures for the early start & early finish, late start and late finish dates.

Activity	Duration	Early Start (ES)	Early Finish (EF)
A	3	0	3
B	6	3	9
C	4	3	7
D	3	3	6
E	4	9	13
F	4	9	13
G	1	9	10
H	8	13	21

Table 2: Activity Schedule (Early Dates)

Source: By Author

Once the forward path is over and we can define that the overall project duration is 21. Now we can again come back from the end point and the late finish and late start dates are as obtained shown below:

Activity	Duration	Early Start (ES)	Early Finish (EF)	Late Start (LS)	Late Finish (LF)
A	3	0	3	0	3
B	6	3	9	3	9
C	4	3	7	5	9
D	3	3	6	6	9
E	4	9	13	9	13
F	4	9	13	9	13
G	1	9	10	20	21
H	8	13	21	13	21

Table 3: Activity Schedule (Late Dates)

Source: By Author

Now once the early and late dates are calculated then the job remains is the calculation of float. Float is the duration by which the activity can be delayed without impacting the final completion date of the project. It can be obtained by subtracting the late finish from the early finish or the late start from the early start. The critical path is shown in red colour as below:

Activity	Duration	Early Start (ES)	Early Finish (EF)	Late Start (LS)	Late Finish (LF)	Slack or Total Float
A	3	0	3	0	3	0
B	6	3	9	3	9	0
C	4	3	7	5	9	2
D	3	3	6	6	9	3
E	4	9	13	9	13	0
F	4	9	13	9	13	0
G	1	9	10	20	21	11
H	8	13	21	13	21	0

Table 4: Total Float Calculation table

Source: By Author

So we can observe the development of the table from the mere activity list with duration and relationships to the final table with total float and critical path.

Gantt chart is the pictorial view of the time frame of each activity according to their relationships. We shall use the above figures to develop the Gantt chart too. Due to having a pictorial view presentation of the project schedule, it has many benefits over the tabular form like it has produced a good production plan from a hundred years of work on enhancing production booking, Gantt, Taylor and Johnson emerge for their unique and influential commitments, which speak to three vital and particular points of view: the organizational point of view, the basic leadership point of view, and the issue solving point of view. All these three points can prove to be vital for improvement of production or the project schedule effectiveness too.

It provides clarity, better communication, motivate the team, help in coordinating well, as well the greatest advantages of a Gantt diagram is the instrument’s capacity to come down numerous undertakings and courses of events into a solitary record. Partners all through an association can without much of a stretch comprehend where groups are in a procedure while getting a handle on the courses in which free components meet up toward project finish. Groups can utilize Gantt charts to supplant gatherings and upgrade different announcements. Essentially clearing up outline positions offers a simple, visual technique to help colleagues comprehend errand advance. A few groups or colleagues turn out to be more powerful when confronted with a type of outer inspiration. Gantt diagrams offer groups the capacity to center work at the front of an assignment course of events, or at the last part of a chart fragment. The two sorts of colleagues can discover Gantt diagrams significant as they connect their own work propensities to the general undertaking plan. Most directors view booking as one of the real advantages of Gantt diagrams in an imaginative situation. Helping groups comprehend the general effect of undertaking deferrals can cultivate more grounded coordinated effort while empowering better errand association. Regardless of whether we utilize Excel to produce Gantt outlines or we stack assignments into a more exact diagram generator, the capacity to issue new charts as our project develops gives us a chance to respond to surprising changes in project extension or course of events. While amending our task plan too every now and again can dispense with a portion of alternate advantages of Gantt outlines, offering a reasonable perspective of an undertaking can help colleagues recoup from difficulties or acclimate to different changes. Another of the advantages of Gantt charts is the capacity for groups’ individuals to use each other’s due dates for most extreme productivity. For example, while one colleague tends to the result of three different errands previously beginning an essential bit of the task, he or she can perform other project undertakings. Imagining asset use amid project enables chiefs to improve utilization of individuals, spots, and things. At the point when project groups confront major authoritative change, recording exertion and results winds up plainly vital to profession achievement. Utilizing Gantt charts amid basic tasks permits both undertaking chiefs and members to track group advance, featuring both huge wins and real disappointments. Amid proficient survey periods, colleagues who every now and again surpass desires can use this documentation into bigger raises or rewards.

Now let us use the above table to produce the Gantt chart as shown below:

The figures are obtained as per the early dates, late dates and a combination of both to show the exact difference between the dates when we present it in pictorial view like Gantt charts.

Figure 4: Gantt chart of (Early Date) obtained from above table

Source: By Author

 

Figure 5: Gantt chart of (Late Date) obtained from above table

Source: By Author

 

Figure 6: Gantt chart of (Early & Late Dates) obtained from above table

Source: By Author

Along with such a big list of advantages, the use of Gantt chart also has few disadvantages like the schedule can become very complex and the Gantt chart may not provide the clarity of information which is the major tool of the Gantt chart and all the information could not be read at once (Maylor, 2001). Then the next disadvantage is the size of the bar, the size only provides information regarding the time of the activities and not the effort required to complete it. The span of the bar does not demonstrate the measure of work. Each bar on the diagram shows the day and age over which a specific arrangement of undertakings will be finished. In this way, a short bar may take 100 worker hours while a more extended bar may take just 10 worker hours. The more drawn out bar may show to the clueless that it is a greater assignment, when in reality it is most certainly not. As we get into a project, things will change. In case we utilize a Gantt diagram we should be able to change the outline effectively and every now and again. In the event that we do not do this, it will be overlooked. The product items that create these diagrams should be seen on a PC screen, as a rule in sections, to have the capacity to see the entire task. It at that point ends up plainly hard demonstrating the subtle elements of the arrangement to a group of people.

Conclusion

After having such a long review of the tools and techniques which are being used to plan the activities of the project, it can be concluded that by using these tools and techniques like budgeting and cash flow forecasting we can develop a very good cost management system, where the cash availability criteria can be developed from the beginning itself and accordingly the steps of fund arrangement can be finalized well before the start of the project itself. Few other tools like the sensitivity analysis and scenario analysis can provide the right direction of investment and all the investment made need to be passed through the path to get a clear indication of the project even though some very unfortunate condition happens during the project life cycle. These tools are actually used to provide a back-up for the risks which may arise during the course of the project. The other tools like PERT and Gantt charts are used to produce the activity critical path and present it to stakeholders. The critical path can be used to concentrate the whole effort towards the goal to finish the activities in critical path at the urgent to have control over the project duration.

References 

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TechTarget, 2017. Budgeting, Planning and Forecasting (BP&F). [Online] Available at:

https://searcherp.techtarget.com/definition/budgeting-planning-and-forecasting-BPF [Accessed 19 September 2017].

Uludag, 2017. Program evaluation and review technique (PERT). [Online] Available at: https://tozalp.home.uludag.edu.tr/PERT.pdf [Accessed 19 September 2017].

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Zenand, Y.S., 2015. Sensitivity Analysis to know the Projects Ability to continue. European Journal of Accounting, 3(11), pp.60-66.