Incident Management

Incident management is a process to handle incidents that may happen or already happened to an IT service operation. An unplanned disruption or degradation of service is called as an incident.

How does it work?

Incident can be reported by the users, system admins, servers, network devices or any process failure that may degrade or stop IT service. As soon as an incident gets reported, incident management team should log this incident with following information….

1. A unique incident ID for tracking.

2. Assign severity level

3. Assignment Resource

Depending on the nature of incident, the case can be handled in three ways…

1. Fix the problem with regular ops activity therefore without changing anything. For example, if database server goes done….bring it up immediately and restore service….collect logs for further analysis…and take measure for permanent fix.

2. Call change management process, if the incident requires making changes in the system to restore the service.

3. Call problem management process, if the issue requires involvement of software or hardware manufacture to get a fix. In such case it is advisable to provide temporary arrangement as workaround to restore the service.

Applying incident management effectively

Applying incident management in service operation can be really challenge-some if you are in a heterogeneous environment with so many integrations, to keep the service up and running. Usually in a big operation, there are a lot of critical applications/services run to provide support to business. These applications/services can be as critical as 24×7. In such environment followings are advisable to implement incident management process more effective…

1. List and categories the applications/services as per their critical level. This can determine from the availability, integrity and confidentiality requirements of an application/service from the business.

2. Quantifiable impact analysis on business such as financial loss, revenue leakage etc. during service disruption/downtime.

3. Availability of following to incident management team

- Matrix containing impact and severity level for each critical applications/services

- Escalation matrix

- Notification matrix

4. Periodic update to all stakeholders as per the notification matrix.

Often it happens that the severity level given to an incident during primary stage remains same even if the service continues degrading. Therefore it is better to have a time bound impact matrix to follow, so that the incident gets proper attention and get handled properly.

That’s all for today…………..

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PM – Forward and Backward Pass

While doing critical path calculation two Project Management terms (PM) will always come in picture. These are Forward Pass and Backward Pass. These terms are to figure out start and finishing time of an activity and its effect on critical path calculation.

Forward Pass : it is a mechanism to move forward through a diagram to calculate total activity duration. Backward path is other way around.

  • Forward pass is used by Early Start (ES) and Early Finish (EF)
  • Backward pass is used by Late start (ES) and Late finish (EF)

Let’s run through the following diagram to get more clear idea……..

Early Start (ES) activity is A as it is scheduled on third day where B is scheduled on sixth day.  For the second activity early start day is fourth therefore the activity C and E can be performed in parallel. The reason ES for second activity is day fourth is, activity A will take three days and at earliest C and E can be started in on fourth day. So the logic is “The duration of preceding activity + 1”

Early Finish (EF) is the earliest time that an activity can be finished. To calculate early finish we use (ES for the activity + Activity duration) -1. So early finish for activity C is day seventh. The reason is activity C will start on day fourth and will take total four day (fourth, fifth, sixth and seventh).  So the earliest time it can finish is on day Seventh.

Late Start (LS) is the latest time an activity needs to start without delaying the project. Late start can be calculated by adding float to the activity early start. As per the diagram above we know that activity E has one day float and activity E’s ES is 4. So LS for activity C will be 1+4=5. Similarly, we know that activity C is on critical path therefore has zero float and activity C’s ES is 4. So LS for activity C will be 0+4=4.

Late Finish (LF) is the latest time an activity can be completed without delaying the project. LF can be calculated by LF = (Activity’s LS + Activity Duration) – 1. So the LF of Activity E = (5 + 5) – 1 = 9.

Thats all for today…………….:)

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Critical Path Method (CPM)

Critical Path Method (CPM) is a project management technique that allows Project Manager to analyze project activities. And helps to find out which activities have least or no re-scheduling flexibility. These activities considered as mission critical activity and project duration schedule completely depend on completion of these activities. Not only that this tool also help project manager to predict the completion of the project and forecast of delay to the stakeholders.

The whole chain of these activities is called as critical path. Activities that fall in this path cannot be delayed at all. Any delay completion of any of these activities will end up with delay project completion.

Steps to calculate Critical Path

A critical path is a network of activities where each activity is linked to its following activity. In this network each activity represents itself as a node in the network. And the links connecting each node represent the timeline or schedule of the activity completion. To identify the critical path and calculate the schedule of the same following steps needs to be performed by the project manager.

Step 1: Create work break down structure (WBS)

Refer to my earlier post on WBS (  While creating WBS, put extra caution on the sequence of activities and Estimate time. This requires detail understanding of the scope document, activity list and the linking sequence. Linking the activities should be done very carefully and properly. Any mistake or wrong presentation will lead the path in false direction and eventually produce erroneous project completion date.

Time for each activity can be estimated using previous experience and taking support of the subject matter expert. The estimation accuracy will help to get more clearly critical path.

After finishing the listing of activities, sequencing and estimation of time, it is time to picturize the whole activity network.

Step 2: Identify the Critical Path

The critical path is the longest duration path of the network. Activities located in this path cannot be delayed without delaying the project. Therefore critical path analysis is one of the most importance elements of project planning. There are few parameters that help to identify Critical path and these are….

Early Start (ES): The earliest time to start an activity considering prior activity is been completed (this is must)

Early Finish (EF): The earliest finish time for an activity.

Late Finish (LF): Latest time for an activity must be completed.

Late Start (LS): Earliest time for an activity must start.

How to view the critical path in MS project

To view the critical path in MS project, click on view menu and select network diagram. All activities in red color are in critical path. Or click on view menu, click on more views and select detail Gantt.

Thats all for today………….

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Point of total assumption (PTA)

In a fixed price incentive free (FPIF) contract, the point where buyer stops bearing cost is the Point of total assumption (PTA). In other word, it is the point, up to where buyer
bears the cost, however any cost above the PTA is not shared by buyer and totally imbibed by the seller. Surprisingly there is no discussion on “point of total assumption” in PMBOK, even the term is also absent there, but there is a possibility of having question in PMP exam on PTA, (though I didn’t get any in my exam).

Let’s take an example of PTA. The project is estimated to the cost of $30,000 and the seller (contractor) will get $10,000 as fee. The project scope is clearly defined and seller agrees on the scope. However as there is always a possibility of unknown risk and hence cost overrun, buyer agrees on bearing 70% of cost overrun and rest 30% goes on seller. At the same time buyer puts the cost limit of $50,000 for the project that includes project
cost, seller’s fee plus cost overrun share. So the ceiling price of the contract s $50,000.

Point of Total Assumption

Now seller needs to closely watch the cost of the project. Though initially buyer bear the 70% of the cost over run, but as soon as the ost hits buyers ceiling price, buyer stop taking over any additional cost. At that point and onward seller starts bearing 100% of additional cost. This point is the point of total assumption.

 PTA calculation

From the above example we get few points.

  1. The estimated cost of the project i.e. $30,000. This is the target cost.
  2. The fee of the seller i.e. $10,000. This is the target fee.
  3. Total estimated cost of the project i.e. target cost + target fee ($30,000 + $10,000). This is the Target price
  4. Cost overrun share ratio i.e. 70% buyer, 30% seller.
  5. Max price of project buyer agrees on is $50,000. This is the ceiling price.

As PTA only comes in picture in case of cost over run
therefore it can be assumed that PTA will be more then target cost. So

  • cost over run at PTA = PTA – target cost
  • Total price that buyer pay at PTA = (target cost + target fee) + buyer’s share of cost over run
  • as (target cost + target fee) = target price and cost over run at PTA ((PTA – target cost) x buyer’s share ratio) is buyer’s share of cost over run, therefore
  • Total price that buyer pay at PTA = target price + (PTA-target cost) x buyer’s share ratio
  • Now the Total price that buyer pay at PTA = ceiling price
  • so ceiling price = target price + (PTA-target cost) X buyer’s share ratio

or in other way

  • target price + (PTA-target cost) x buyer’s share ratio = ceiling price
  • (PTA-target cost) x buyer’s share ratio = ceiling price – target price
  • PTA-target cost = (ceiling price – target price)/buyer’s share ratio
  • PTA = ((ceiling price – target price) / buyer’s share ratio) + target cost

Hope it helps you understand the concept and calculation of PTA.

That’s all folks……………….

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Work Break down Structure (WBS) using MS project and chart pro

Work Break down Structure (WBS) is a deliverable orientated sub task/activity/goal of a project that is defined in a hierarchical way. Typically the WBS consist the organized task list, estimated time and the resources assigned/required for each tasks. It is very good way to communicate scope and deliverables of the project to stakeholder. Breaking down any project in to smaller components, makes it more manageable. As because, WBS consist the basic information of the project objectives, it becomes easier for the stakeholders to understand the scope and goal of the project.


WBS is absolutely necessary for the success of a project. As soon as we have the basic information and understanding to the project, we should start building the WBS. As stated earlier, breaking down a project in smaller pieces turns the project more manageable. However, it is always recommended to keep focus on project deliverables instead of activities while creating a work breakdown structure. Focusing on activities/actions will end you up with a large and unmanageable WBS.


Following example shows the steps to create WBS using MS project 2003 and Chart pro 4.7. Though MS project comes with number of tools and adds-on for presenting WBS, but I prefer to use chart pro. Chart Pro is an excellent tool to present WBS in more presentable and informative way. It can integrate with MS project and exchange data bi-directionally. So the step one is to have the project plan ready with tasks, subtasks, schedule and resources. Your project should look like following in Gantt chart view…

Then run WBS chart pro from your start menu. Go to Tools – Microsoft Project – Display WBS chart of active project

There are numbers of view available that can be accessed from View – views. Also same can be navigated from tool bar using navigation buttons. I took “Critical Path View 2” and my WBS chart looks like following

In this chart, there are number of information like Task Name, Start and End Date, Duration, Progress available. However, to add more information like resource name in the bottom of each task box, select a task box – go to format menu – Text Boxes. Following dialog box will appear.

Select the last cell in task box and click on Insert Below button in the left, it will insert two cells in the bottom to task box, select both then turn the “Merge Cell” check box on. Go to the field dropdown in the bottom and select resource names then Ok. Your WBS will look like this…..

Other features in chart pro are available to make your chart more attractive and informative.

That’s all folks.

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Calculating Earned Value in Microsoft Project

In this example I tried to show how to calculate earned value using MS-Project. Expecting the reader has sufficient knowledge on Earned Value Analysis and familiar with Microsoft project 2003.

Let’s take the example that I used in my other writing “Earned Value Analysis”, i.e. rolling out data network in remote office. A $30,000 project targeted to finish by eight weeks.

Well to get earned value metrics form your ms project work you need to do following tasks in sequential order

  • Have the resources name and their cost.
  • Assign resources to the tasks.
  • Save the baseline.
  • Work on the project and enter actual schedule and actual completion of the work
  • Check the EVA metric from the earned value view or reports

For this example, I put following example data in my Gantt Chart, entry view

Gantt Chart Entry View

Next, enter the resource information in resource sheet. To get resource sheet, select view menu – resource sheet. There are two types of resources in MS project, i.e. work and material. Work resources are human and materials that consumes time to get a task down. Whereas materials are consumable supplies, i.e. data cable, router, switch.

Resource Sheet

Now I have my primary data ready. I know the tasks and timeline at the same time I have the arms, ammunitions and mercenaries ready to accomplished the tasks. Next assign tasks to the resources.

To do that, click on the icon Assign Resources from standard toolbar.

Assign Task

After assigning the resources if you want to see the overall project costing or cost per task, do following

  • Split the window by selecting windows menu à split
  • Go back to Gantt Chart  – > entry view using view menu i.e. Select view -> Gantt Chart, again Select view -> Table -> Entry.
  • Select view -> Task Usage In lower window

Split View

You can take different combination of views for both windows to get clear idea about the data in your project.

As the base information is ready, the next step is to baseline the project plan. Saving the project baseline is an important step because later on you will be referring to this baseline with your actual cost and schedule to measure and manage your project.

To save the project baseline, follow these steps:

  • Select Tools – Tracking – Save Baseline
  • In the appeared Dialog box, select the Save Baseline radio button
  • Select the Entire Project radio button.

Save Base Line

Now go back to Gantt chart entry view and make some changes in the schedule of work progress as like entering the actual data. In real word team started working on the project, start updating the project with actual data.

Now time to compare the actual data with baseline and get the earned value metrics.  Both earned value view and reports are available for that.

To get earned value view, select view – Table – More table.  Select Earned Value from more table dialog box

Earned Table View

And you get your all earned value metrics.

Earned Value Metrics

Earned Value
Field Name


BCWS Budgeted cost   of work scheduled or Planned Value
BCWP Budgeted cost   of work produced or Earned Value
ACWP Actual Cost of Work Produced or Actual Cost
SV Schedule Variance
CV Cost Variance
EAC Estimate at Complete
BAC Budget at Complete
VAC Variance at Complete

That’s all folks…………

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Earned Value Analysis…..

If you are managing project or studying project management books you must have heard the magic word of “Earned Value Analysis.” What exactly is it? According to PMBOK earned value analysis is “an objective method to measure project performance in terms of scope, time and cost.”

Hmmm, a bit dry theoretical line…. lets dig it down… Earned Value Analysis (EVA) is a collection of few formulas and some simple math. It is nothing but an excellent technique that helps you assess your project health and at the same time gives you option to apply number of measurement to manage your project. EVA is also an effective way to present overall budget and schedule status to the management or customer.

Project health depends on time, cost and scope which often call as “Triple Constrain”. In project reporting, project manager prepares a report of overall project status by summarizing the status of time, cost and scope. Usually traffic light status approach is use to identify trouble points that need management or customer’s attention. The problem with this approach is it gets created more on perception and influence than any objective metrics. A project report with red status might become yellow or even green in next review meeting. In worse case a project with all green status might become red before launching date.

Earned Value Analysis evaluates the project health in a certain point of time using earned value metrics. To get the earned value metrics you need to have answer of following

  • How much work did your plan to complete? (Planned Value)
  • How much work did you actually complete? (Earned Value)
  • How much did it cost to complete the work? (Actual Cost)

Planned Value (PV) represents the budgeted cost of all the activities that were planned to start and finish at this point of time

Earned Value (EV) represents the total cost of all the activities that been completed at this point of time.

Actual Cost (AC) is the actual cost of the work produced.

Please remember EVA is based off original project budget.  Let’s take EVA in action.

Assume a small eight weeks data network rollout in a remote office is budgeted for $30,000. While reporting in fifth week, project manager find out the team has only completed 50% of the work, where they suppose of complete 62.5% by that time. He also noticed that the team has spent $25,000 to date on the project. What is the status of the project?

In this example planned value is % planned to complete * project budget, i.e.

PV = 62.5% * $30,000 = $18,750

where earned value is % actual complete * project budget, i.e.

EV  = 50% * $30,000 = $15,000

And the actual cost is

AC = $25,000

With these metrics we determine the cost variance (CV) and schedule variance (SV). CV measures the actual value of the work performed to the project value and SV measures the actual project progress to the schedule. These variances comes from two simple formulas

CV = EV – AC  => $15,000 – $25,000 = – $10,000

SV = EV – PV  => $15,000 – $18,750 = – $3,750

So both the variances are coming in negative figure that points the project is over the budget and behind the schedule. A positive variance indicates cost saving or schedule efficiency. So the project manager always want to keep the variance either zero or greater.

By reviewing these variances a project manager can prepare his next action i.e. fast track, crashing or extend schedule, ask for extra budget or reduce scope.

However two more indexes are needed to communicate the status to stakeholders that are cost performance index (CPI) and schedule performance index (SPI). These indexes are very helpful to do an objective assessment of the project health and determine the estimate at completion (EAC). CPI is a measure of project’s earned value compared to actual cost incurred and SPI is a measure of actual progress of a project to the project schedule.

CPI = EV/AC  => $15,000/$25,000  = 0.6

SPI = EV/PV  => $15,000/$18,750  = 0.8

Both numbers are less than one thus indicates the project’s budget and schedule need to be analyzed. However, if the project continues to perform in such rate, what would be the project’s revised budget? To calculate the estimate to completion (EAC), we need to divide the original budget by CPI

EAC = BAC / CPI  => $30,000/0.6 =  $50,000

Now we have all the calculative values to replace the traffic lights while presenting project status to the management or customer.

That’s all folks…….

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