PMBOKstudy guide

Project Management Project Management Professional (PMP)Professional (PMP)

Certification Study GuideCertification Study Guide

PMI Certification MaterialsPMI Certification Materials

To assist PMI candidates for To assist PMI candidates for completing the PMI certification completing the PMI certification exam administered by the exam administered by the Project Management InstituteProject Management Institute

Content is from “A Guide To The Content is from “A Guide To The Project Management Body Of Project Management Body Of Knowledge” (PMBOK)Knowledge” (PMBOK)

www.pmi.orgwww.pmi.org

Recurring ThemesRecurring Themes

Historical Records – need to collect and Historical Records – need to collect and use for planning, estimating and riskuse for planning, estimating and risk

Kickoff meetings are importantKickoff meetings are important Work Breakdown StructuresWork Breakdown Structures Do not introduce benefits that are not Do not introduce benefits that are not

stated in requirementsstated in requirements Needs of all stakeholders should be taken Needs of all stakeholders should be taken

into account during all projectsinto account during all projects Team Members must be involved in project Team Members must be involved in project

planningplanning Project Mangers must be pro-activeProject Mangers must be pro-active

Chapter 1 – IntroductionChapter 1 – Introduction

Project – temporary endeavor Project – temporary endeavor undertaken to create a unique undertaken to create a unique product or serviceproduct or service

Has a definite beginning and end Has a definite beginning and end and interrelated activitiesand interrelated activities

Programs adopt new set of Programs adopt new set of objectives and objectives and continuecontinue to work; to work; projects projects cease cease when declared when declared objectives have been attainedobjectives have been attained

Chapter 1 – IntroductionChapter 1 – Introduction

Projects are unique – Projects are unique – characteristics are progressively characteristics are progressively elaboratedelaborated Progressively: proceeding in stepsProgressively: proceeding in steps Elaborated: worked with care and Elaborated: worked with care and

detaildetail Scope of project should remain Scope of project should remain

constant even as characteristics constant even as characteristics are “progressively elaborated”are “progressively elaborated”

Chapter 1 - IntroductionChapter 1 - Introduction

Project Management: the application Project Management: the application of knowledge, skills, tools and of knowledge, skills, tools and techniques to project activities in techniques to project activities in order to meet or exceed stakeholder order to meet or exceed stakeholder needs and expectations from a needs and expectations from a defined project – balancing the defined project – balancing the following:following: Scope, time, cost, and qualityScope, time, cost, and quality Stakeholders’ expectationsStakeholders’ expectations Requirements (needs) vs. unidentified Requirements (needs) vs. unidentified

requirements (expectations)requirements (expectations)

Chapter 1 - IntroductionChapter 1 - Introduction

Programs are groups of projects Programs are groups of projects managed in a coordinated way to managed in a coordinated way to obtain benefits not available from obtain benefits not available from managing the projects individuallymanaging the projects individually

Most programs have elements of Most programs have elements of ongoing operationsongoing operations Series of repetitive or cyclical Series of repetitive or cyclical

undertakingsundertakings Projects are often divided into Projects are often divided into

“subprojects” for more manageability“subprojects” for more manageability Often contracted out to external Often contracted out to external

organizationsorganizations

Chapter 2 – Project Chapter 2 – Project Management ContextManagement Context Project Phases are marked by Project Phases are marked by

the completion of a deliverablethe completion of a deliverable Tangible, verifiable work productTangible, verifiable work product Review of deliverables and Review of deliverables and

approval/denial are “phase exits, approval/denial are “phase exits, stage gates, or kill points”stage gates, or kill points”

Phases are collected into the Phases are collected into the Project Life CycleProject Life Cycle Set of defined work procedures to Set of defined work procedures to

establish management controlestablish management control

Chapter 2 – Project Chapter 2 – Project Management ContextManagement Context Project Life Cycle defines:Project Life Cycle defines:

Technical work performed in each phaseTechnical work performed in each phase Who is involved in each phaseWho is involved in each phase

Project Phases can overlap – “Fast Tracking”Project Phases can overlap – “Fast Tracking” Common Characteristics of Project Life Cycles:Common Characteristics of Project Life Cycles:

Cost and Staffing levels are low at start and move Cost and Staffing levels are low at start and move higher towards the endhigher towards the end

Probability of successfully completing project is low at Probability of successfully completing project is low at beginning, higher towards the end as project beginning, higher towards the end as project continuescontinues

Stakeholder influence is high at the beginning and Stakeholder influence is high at the beginning and progressively lowers as project continuesprogressively lowers as project continues

Chapter 2 – Project Chapter 2 – Project Management Context Management Context Stakeholders: individuals and Stakeholders: individuals and

organizations who are actively organizations who are actively involved in the projectinvolved in the project Often have conflicting expectations and Often have conflicting expectations and

objectivesobjectives In general, differences should be In general, differences should be

resolved in favor of the customer – resolved in favor of the customer – individual(s) or organization(s) that will individual(s) or organization(s) that will use the outcome of the projectuse the outcome of the project

Stakeholder management is a proactive Stakeholder management is a proactive tasktask

Project Mangers must determine all Project Mangers must determine all stakeholders and incorporate their needs stakeholders and incorporate their needs into the projectinto the project

Chapter 2 – Project Chapter 2 – Project Management Context Management Context Stakeholders are:Stakeholders are:

Project ManagersProject Managers CustomersCustomers Performing Organizations, ownersPerforming Organizations, owners SponsorSponsor TeamTeam Internal/ExternalInternal/External End UserEnd User Society, citizensSociety, citizens Others: owner, funders, supplier, Others: owner, funders, supplier,

contractorcontractor

Chapter 2 – Project Chapter 2 – Project Management ContextManagement Context Organizational Systems: Project Organizational Systems: Project

based vs. Non-Project Basedbased vs. Non-Project Based Project Based – derive revenues from Project Based – derive revenues from

performing projects for others performing projects for others (consultants, contractors),”management (consultants, contractors),”management by projects”by projects”

Non-Project Based – seldom have Non-Project Based – seldom have management systems designed to management systems designed to support project needs (manufacturing, support project needs (manufacturing, financial services)financial services)

Chapter 2 – Project Chapter 2 – Project Management ContextManagement Context Organizational Cultures and Organizational Cultures and

Styles: Styles: Entrepreneurial firms more likely Entrepreneurial firms more likely

to adopt highly participative to adopt highly participative Project Manager – accept higher Project Manager – accept higher risk/rewardrisk/reward

Hierarchical firms less likely to Hierarchical firms less likely to adopt participative Project adopt participative Project Manager – take fewer risksManager – take fewer risks

Chapter 2 – Project Chapter 2 – Project Management ContextManagement Context Organizational StructuresOrganizational Structures

Functional (classical) marked by Functional (classical) marked by identifiable superiors. Staff grouped identifiable superiors. Staff grouped by specialty . Perceived scope of by specialty . Perceived scope of project limited by function project limited by function (Engineering, HR). Typically have (Engineering, HR). Typically have part-time Project Managerpart-time Project Manager

Projectized Organization –blend Projectized Organization –blend functional and projectized functional and projectized characteristics. Mix cross-department characteristics. Mix cross-department personnel with full-time Project personnel with full-time Project MangerManger

Chapter 2 – Project Chapter 2 – Project Management ContextManagement Context Project Management SkillsProject Management Skills

General Business Management (consistently General Business Management (consistently producing results expected by stakeholders)producing results expected by stakeholders)

Leading (establishing direction, aligning Leading (establishing direction, aligning resources, motivating)resources, motivating)

Communicating (clear, unambiguous, and Communicating (clear, unambiguous, and complete)complete)

Negotiating (conferring with others to reach an Negotiating (conferring with others to reach an agreement)agreement)

Problem Solving (definition and decision Problem Solving (definition and decision making)making)

Distinguish causes and symptomsDistinguish causes and symptoms Identify viable solutionsIdentify viable solutions

Influencing Organization (understanding power Influencing Organization (understanding power and politics)and politics)

Chapter 2 – Project Chapter 2 – Project Management ContextManagement Context Socioeconomic InfluencesSocioeconomic Influences

Standards – document approved that provides Standards – document approved that provides common, repeated use, rules and guidelinescommon, repeated use, rules and guidelines

Compliance is not mandatoryCompliance is not mandatory Regulations – document that identifies Regulations – document that identifies

products, services or characteristicsproducts, services or characteristics Compliance is mandatoryCompliance is mandatory

Standards often become “Standards often become “de factode facto” ” regulationsregulations

InternationalizationInternationalization Cultural InfluencesCultural Influences

Chapter 2 – Project Chapter 2 – Project Management ContextManagement Context Organization Structure Pro’s and Con’sOrganization Structure Pro’s and Con’s

ProjectizedProjectized Efficient Organization – No “home”Efficient Organization – No “home” Loyalty – Lack of ProfessionalismLoyalty – Lack of Professionalism Effective Communication – Duplication of functions, Effective Communication – Duplication of functions,

less efficient resource usageless efficient resource usage MatrixMatrix

Visible Objectives – not cost effectiveVisible Objectives – not cost effective PM Control – More than 1 bossPM Control – More than 1 boss More support – More complex to controlMore support – More complex to control Utilize scarce resources – Tough resource allocationUtilize scarce resources – Tough resource allocation Information distribution – Competition of prioritiesInformation distribution – Competition of priorities Coordination – Policies & ProceduresCoordination – Policies & Procedures Home based – Potential for conflict Home based – Potential for conflict

Chapter 2 – Project Chapter 2 – Project Management ContextManagement Context Functional OrganizationFunctional Organization

Specialists – More emphasis on Specialists – More emphasis on functionsfunctions

1 supervisor – No career path in PM1 supervisor – No career path in PM

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Project Management requires Project Management requires

active management of Project active management of Project ProcessesProcesses Series of actions that achieve a Series of actions that achieve a

resultresult Project Management ProcessesProject Management Processes

Describing and organizing the workDescribing and organizing the work Product-Oriented ProcessesProduct-Oriented Processes

Specifying and creating the productSpecifying and creating the product

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Process Groups:Process Groups:

Initiating processes: recognizing a Initiating processes: recognizing a project or phase should beginproject or phase should begin

Planning processes: devising and Planning processes: devising and maintaining a workable planmaintaining a workable plan

Executing processes: coordinating Executing processes: coordinating resources to execute the planresources to execute the plan

Controlling processes: ensuring project Controlling processes: ensuring project objectives are met; monitoring, objectives are met; monitoring, correcting and measuring progresscorrecting and measuring progress

Closing processes: formalized Closing processes: formalized acceptanceacceptance

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Process Groups are linked by the results Process Groups are linked by the results

each produceseach produces Process Groups are overlapping activities Process Groups are overlapping activities

with various levels of intensitywith various levels of intensity Process Group interactions cross phases – Process Group interactions cross phases –

“rolling wave planning”“rolling wave planning” Provides details of work to complete current Provides details of work to complete current

phase and provide preliminary description of phase and provide preliminary description of work for subsequent phaseswork for subsequent phases

Individual processes have inputs, tools and Individual processes have inputs, tools and techniques, and outputs (deliverables)techniques, and outputs (deliverables)

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Initiating and Planning ProcessesInitiating and Planning Processes Committing the organization to beginCommitting the organization to begin

Initiation, High-level planning, CharterInitiation, High-level planning, Charter Amount of planning proportional to the Amount of planning proportional to the

scope of the project – Core Planningscope of the project – Core Planning Scope Planning – written statementScope Planning – written statement Scope Definition – subdividing major Scope Definition – subdividing major

deliverables into more manageable unitsdeliverables into more manageable units Activity Definition – determine specific tasks Activity Definition – determine specific tasks

needed to produce project deliverablesneeded to produce project deliverables Activity Sequencing – plotting dependenciesActivity Sequencing – plotting dependencies

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Core Planning (continued)Core Planning (continued)

Activity Duration Estimating – determine amount Activity Duration Estimating – determine amount of work needed to complete the activitiesof work needed to complete the activities

Schedule Development – analyze activity Schedule Development – analyze activity sequences, duration, and resource sequences, duration, and resource requirementsrequirements

Resource Planning – identify what and how Resource Planning – identify what and how many resources are needed to perform the many resources are needed to perform the activitiesactivities

Cost Estimating – develop resource and total Cost Estimating – develop resource and total project costsproject costs

Cost Budgeting – allocating project estimates to Cost Budgeting – allocating project estimates to individual work itemsindividual work items

Project Plan Development – taking results from Project Plan Development – taking results from other planning processes into a collective other planning processes into a collective documentdocument

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Planning/Facilitating Processes – manage Planning/Facilitating Processes – manage

the interaction among the planning the interaction among the planning processesprocesses Quality Planning – standards that are relevant to Quality Planning – standards that are relevant to

the project and determining how to meet the project and determining how to meet standardsstandards

Organizational Planning – identify, document, Organizational Planning – identify, document, and assigning project roles and responsibilitiesand assigning project roles and responsibilities

Staff Acquisition – obtaining the human Staff Acquisition – obtaining the human resourcesresources

Communications Planning – determining rules Communications Planning – determining rules and reporting methods to stakeholdersand reporting methods to stakeholders

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Planning/Facilitating Processes (continued)Planning/Facilitating Processes (continued)

Risk Identification – determining what is likely Risk Identification – determining what is likely to affect the project and documenting these to affect the project and documenting these risksrisks

Risk Quantification – evaluating risks and Risk Quantification – evaluating risks and interactions to access the possible project interactions to access the possible project outcomesoutcomes

Risk Response Development – defining Risk Response Development – defining enhancement steps and change control enhancement steps and change control measuresmeasures

Procurement Planning – determining what to Procurement Planning – determining what to buy and whenbuy and when

Solicitation Planning – documenting product Solicitation Planning – documenting product requirements and identifying possible sourcesrequirements and identifying possible sources

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Planning/Facilitating Processes (continued)Planning/Facilitating Processes (continued)

Order of events:Order of events: Scope StatementScope Statement Create Project TeamCreate Project Team Work Breakdown StructureWork Breakdown Structure WBS dictionaryWBS dictionary Finalize the teamFinalize the team Network DiagramNetwork Diagram Estimate Time and CostEstimate Time and Cost Critical PathCritical Path ScheduleSchedule BudgetBudget Procurement PlanProcurement Plan Quality PlanQuality Plan Risk Identification, quantification and response developmentRisk Identification, quantification and response development Change Control PlanChange Control Plan Communication PlanCommunication Plan Management PlanManagement Plan Final Project PlanFinal Project Plan Project Plan ApprovalProject Plan Approval Kick offKick off

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Executing ProcessesExecuting Processes

Project Plan Execution – performing the Project Plan Execution – performing the activitiesactivities

Complete Tasks/Work PackagesComplete Tasks/Work Packages Information DistributionInformation Distribution Scope Verification – acceptance of project Scope Verification – acceptance of project

scopescope Quality Assurance – evaluating overall Quality Assurance – evaluating overall

project performance on a regular basis; project performance on a regular basis; meeting standardsmeeting standards

Team Development – developing team and Team Development – developing team and individual skill sets to enhance the projectindividual skill sets to enhance the project

Progress MeetingsProgress Meetings

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Executing Processes (continued)Executing Processes (continued)

Information Distribution – making Information Distribution – making project information available in a project information available in a timely mannertimely manner

Solicitation – obtaining quotes, bids, Solicitation – obtaining quotes, bids, proposals as appropriateproposals as appropriate

Source Selection – deciding on Source Selection – deciding on appropriate suppliersappropriate suppliers

Contract Administration – managing Contract Administration – managing vendor relationshipsvendor relationships

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Controlling Processes – needed to Controlling Processes – needed to

regularly measure project performance and regularly measure project performance and to adjust project planto adjust project plan

Take preventive actions in anticipation of Take preventive actions in anticipation of possible problemspossible problems Change Control – coordinating changes Change Control – coordinating changes

across the entire project planacross the entire project plan Scope Change Control – controlling “scope Scope Change Control – controlling “scope

creep”creep” Schedule Control – adjusting time and project Schedule Control – adjusting time and project

schedule of activitiesschedule of activities

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Controlling Processes (continued)Controlling Processes (continued)

Cost Control – managing project budgetCost Control – managing project budget Quality Control – monitoring standards Quality Control – monitoring standards

and specific project results; eliminating and specific project results; eliminating causes of unsatisfactory performancecauses of unsatisfactory performance

Performance Reporting – status, Performance Reporting – status, forecasting, and progress reporting forecasting, and progress reporting scheduleschedule

Risk Response Control – responding to Risk Response Control – responding to changes in risk during the duration of changes in risk during the duration of the projectthe project

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Closing ProcessesClosing Processes

Administrative Closure – generating Administrative Closure – generating necessary information to formally necessary information to formally recognize phase or project completionrecognize phase or project completion

Contract Close-out – completion and Contract Close-out – completion and delivery of project deliverables and delivery of project deliverables and resolving open issuesresolving open issues

Procurement AuditsProcurement Audits Product VerificationProduct Verification Formal AcceptanceFormal Acceptance Lessons LearnedLessons Learned Update RecordsUpdate Records Archive RecordsArchive Records Release TeamRelease Team

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Overall ProcessesOverall Processes

Influencing the organizationInfluencing the organization LeadingLeading Problem SolvingProblem Solving NegotiatingNegotiating CommunicatingCommunicating MeetingsMeetings

Chapter 3 – Project Chapter 3 – Project Management ProcessesManagement Processes Project Selection TechniquesProject Selection Techniques

Comparative Approach (similar Comparative Approach (similar projects)projects)

Benefit measurement methodBenefit measurement method Constrained Optimization Constrained Optimization

(mathematical approach) (mathematical approach) Key aspect of scope verification Key aspect of scope verification

is customer acceptanceis customer acceptance Only 26 % of projects succeedOnly 26 % of projects succeed

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Project Integration ManagementProject Integration Management

Ensures that the project processes are properly coordinatedEnsures that the project processes are properly coordinated Tradeoffs between competing objectives and alternatives in Tradeoffs between competing objectives and alternatives in

order to meet stakeholder approvalorder to meet stakeholder approval Project Plan DevelopmentProject Plan Development Project Plan ExecutionProject Plan Execution Overall Change ControlOverall Change Control

These processes may occur repeatedly over the project These processes may occur repeatedly over the project durationduration

Historical Records are needed to perform project Historical Records are needed to perform project management well, they are inputs to continuous management well, they are inputs to continuous improvementimprovement

FilesFiles Lessons LearnedLessons Learned Actual CostsActual Costs Time EstimatesTime Estimates WBSWBS BenchmarksBenchmarks RisksRisks

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Project Plan DevelopmentProject Plan Development

Uses outputs from other planning Uses outputs from other planning processes to create consistent document processes to create consistent document to guide project execution and controlto guide project execution and control

Iterated several timesIterated several times Documents planning assumptionsDocuments planning assumptions Documents planning decisions that are Documents planning decisions that are

chosenchosen Facilitates communicationFacilitates communication Defines key management reviewsDefines key management reviews Provides a baseline to track progress Provides a baseline to track progress

measurement and project controlmeasurement and project control

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Project Plan Development InputsProject Plan Development Inputs

Other planning outputs: primarily the Other planning outputs: primarily the planning process outputs (WBS, base planning process outputs (WBS, base documents, application area inputs)documents, application area inputs)

Historical information – verify assumptions, Historical information – verify assumptions, records of past project performancerecords of past project performance

Organizational policies – quality Organizational policies – quality management, personnel administration, management, personnel administration, Financial controlsFinancial controls

Constraints – factors that limit performance, Constraints – factors that limit performance, contractual provisions, budgetcontractual provisions, budget

Assumptions – risk factorsAssumptions – risk factors

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Tools & Techniques for Plan Tools & Techniques for Plan

DevelopmentDevelopment Project Planning Methodology – any Project Planning Methodology – any

structured approach (software, structured approach (software, templates, forms, start-up meetingstemplates, forms, start-up meetings

Stakeholder Skills & Knowledge – tap Stakeholder Skills & Knowledge – tap into plan development; use expertise for into plan development; use expertise for reasonablenessreasonableness

PMIS – Out of the box approach to PMIS – Out of the box approach to support all project aspects through support all project aspects through closureclosure

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Project Plan Development OutputsProject Plan Development Outputs

Project Plan is a collection that changes over Project Plan is a collection that changes over time as more information about the project time as more information about the project becomes availablebecomes available

Baseline will change only in response to Baseline will change only in response to approved scope changeapproved scope change

Project Plan includes some or all of the Project Plan includes some or all of the following:following:

Project CharterProject Charter Project Management approach or strategyProject Management approach or strategy Scope statementScope statement Work Breakdown Structure (WBS)Work Breakdown Structure (WBS) Budget, schedule, risksBudget, schedule, risks Key Staff, Major MilestonesKey Staff, Major Milestones Change Control Plan, Management and Change Control Plan, Management and

Communications PlanCommunications Plan

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Project Plan Components (continued)Project Plan Components (continued)

Cost Estimates, scheduled start dates and Cost Estimates, scheduled start dates and responsibility assignmentsresponsibility assignments

Performance measurement baselinesPerformance measurement baselines Major milestones and target datesMajor milestones and target dates Required StaffRequired Staff Risks, constraints and assumptionsRisks, constraints and assumptions Subsidiary management plans (scope, Subsidiary management plans (scope,

schedule)schedule) Open IssuesOpen Issues Pending DecisionsPending Decisions

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Supporting Details to the Project Supporting Details to the Project

PlanPlan Outputs from planning processesOutputs from planning processes Technical documentationTechnical documentation Business requirements, Business requirements,

specifications, and designsspecifications, and designs Relevant standardsRelevant standards Additional information not Additional information not

previously knownpreviously known

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Project Plan ExecutionProject Plan Execution

Primary process for carrying out Primary process for carrying out the project planthe project plan

Most costly aspect of project Most costly aspect of project managementmanagement

Direction of organizational Direction of organizational resources and interfacesresources and interfaces

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Project Plan Execution Inputs:Project Plan Execution Inputs:

Project PlanProject Plan Supporting DetailSupporting Detail Organizational PoliciesOrganizational Policies Corrective Action – anything to Corrective Action – anything to

bring expected performance in line bring expected performance in line with the project planwith the project plan

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Tools & Techniques for Plan ExecutionTools & Techniques for Plan Execution

General Management SkillsGeneral Management Skills Product Skills and Knowledge – defined as Product Skills and Knowledge – defined as

part of planning, provided by staffingpart of planning, provided by staffing Work Authorization System – formal Work Authorization System – formal

procedure for sanctioning work to ensure procedure for sanctioning work to ensure completion – written or verbal authorizationcompletion – written or verbal authorization

Status review meetings – regular Status review meetings – regular exchanges of informationexchanges of information

Project Management Information SystemProject Management Information System Organizational ProceduresOrganizational Procedures

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Project Plan Execution OutputsProject Plan Execution Outputs

Work results – the outcome of Work results – the outcome of activities performed is fed into the activities performed is fed into the performance reporting processperformance reporting process

Change Requests – expand/shrink Change Requests – expand/shrink project scope, modify costs and project scope, modify costs and schedule estimatesschedule estimates

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Overall Change ControlOverall Change Control

Influencing factors that create change to ensure Influencing factors that create change to ensure beneficial results; ensure that change is beneficialbeneficial results; ensure that change is beneficial

Determining that change has occurredDetermining that change has occurred Managing actual changes as they occurManaging actual changes as they occur

Evaluate impact of changeEvaluate impact of change Meet with team to discuss alternativesMeet with team to discuss alternatives Meet with management to present decisionMeet with management to present decision

Change control requiresChange control requires Maintaining integrity of performance measurement Maintaining integrity of performance measurement

baselines (project plan)baselines (project plan) Ensuring changes to scope are accurately recordedEnsuring changes to scope are accurately recorded Coordinating changes across knowledge areas Coordinating changes across knowledge areas

(scheduling, risk, cost, quality, etc.)(scheduling, risk, cost, quality, etc.) Determine all factors that control change and pro-Determine all factors that control change and pro-

actively preventing the occurrence; evaluate the impact actively preventing the occurrence; evaluate the impact of change of change

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Inputs to Change ControlInputs to Change Control

Project Plan – baseline Project Plan – baseline performanceperformance

Performance Reports – issue Performance Reports – issue tracking, risk managementtracking, risk management

Change Requests – orally or Change Requests – orally or written, externally or internally written, externally or internally initiates, legally mandated or initiates, legally mandated or optional optional

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Change Control Tools & TechniquesChange Control Tools & Techniques

All Changes must be evaluated before a decision All Changes must be evaluated before a decision can be reachedcan be reached

Change Control System – collection of formal Change Control System – collection of formal procedures, paperwork, tracking systems, approval procedures, paperwork, tracking systems, approval levelslevels

Change Control Board – decision making authorityChange Control Board – decision making authority Configuration Management – documented Configuration Management – documented

procedure to apply technical and administrative procedure to apply technical and administrative directiondirection

ID and document functional and physical characteristicsID and document functional and physical characteristics Control changes to these characteristicsControl changes to these characteristics Record and report change and implementation statusRecord and report change and implementation status Audit items and system to verify requirementsAudit items and system to verify requirements

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Change Control Tools & TechniquesChange Control Tools & Techniques

Performance Measurement – earned value, Performance Measurement – earned value, plan variance analysisplan variance analysis

Additional Planning – revised cost estimates, Additional Planning – revised cost estimates, modify activity sequences, plan adjustmentsmodify activity sequences, plan adjustments

Project Management Information SystemProject Management Information System Change Control System may haveChange Control System may have

Change Control PlanChange Control Plan Change Control BoardChange Control Board Change Control Procedures, Corrective Action Change Control Procedures, Corrective Action

plansplans Performance Statistics, Reports, Change formsPerformance Statistics, Reports, Change forms Specification reviews, Demonstrations, Testing, Specification reviews, Demonstrations, Testing,

MeetingsMeetings Configuration ManagementConfiguration Management

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Change Control OutputsChange Control Outputs

Project Plan UpdatesProject Plan Updates Corrective ActionsCorrective Actions Lessons Learned – variance Lessons Learned – variance

causes and reasoning causes and reasoning documented for historical documented for historical purposespurposes

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Configuration ManagementConfiguration Management

Rigorous Change Management as it Rigorous Change Management as it relates to scoperelates to scope

Subset of the change control systemSubset of the change control system Work Authorization SystemWork Authorization System

Controls “gold plating”; defines what Controls “gold plating”; defines what task is/is not task is/is not

MeetingsMeetings Most are inefficient; keep minutesMost are inefficient; keep minutes Status can be determined without Status can be determined without

meetingmeeting

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Lessons LearnedLessons Learned

Project is not complete until a Lessons Project is not complete until a Lessons Learned is completedLearned is completed

What have we done, how can we do it What have we done, how can we do it betterbetter

Technical Aspects of the projectTechnical Aspects of the project Project Management (WBS, plans, etc.)Project Management (WBS, plans, etc.) Overall Management (communications, Overall Management (communications,

leadership)leadership) Best to have whole team complete and Best to have whole team complete and

made available made available Also called “Post – Mortem”Also called “Post – Mortem”

Chapter 4 – Project Chapter 4 – Project Integration ManagementIntegration Management Integration is a result of need for Integration is a result of need for

communication within a projectcommunication within a project Primary responsibility to decide Primary responsibility to decide

what changes are necessary is what changes are necessary is ManagementManagement

Project Managers must pro-Project Managers must pro-actively define and solve actively define and solve problems before reporting to problems before reporting to superiorssuperiors

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Project Scope ManagementProject Scope Management

Processes required to ensure that the Processes required to ensure that the project includes all, and only, work project includes all, and only, work requiredrequired

Defining what “is/is not” included in the Defining what “is/is not” included in the projectproject

Project scope – work that must be Project scope – work that must be done – measured against project plandone – measured against project plan

Product scope – features and Product scope – features and functions included in the product or functions included in the product or service – measured against service – measured against requirementsrequirements

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Initiation – process of formally Initiation – process of formally

recognizing that a new project exists, or recognizing that a new project exists, or an existing project continue to next phasean existing project continue to next phase

Involves feasibility study, preliminary Involves feasibility study, preliminary plan, or equivalent analysisplan, or equivalent analysis

Authorized as a result of:Authorized as a result of: Market DemandMarket Demand Business NeedBusiness Need Customer RequestCustomer Request Technological AdvanceTechnological Advance Legal RequirementLegal Requirement

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Initiation Inputs:Initiation Inputs:

Product Description – characteristics of Product Description – characteristics of the product/service that the project was the product/service that the project was to createto create

Less detail in early phases, more Less detail in early phases, more comprehensive in lattercomprehensive in latter

Relationship between product/service and Relationship between product/service and business needbusiness need

Should support later project planningShould support later project planning Initial product description is usually provided Initial product description is usually provided

by the buyerby the buyer Strategic Plan – supportive of the Strategic Plan – supportive of the

organization's goalsorganization's goals

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Initiation Inputs (continued)Initiation Inputs (continued)

Project Selection Criteria – Project Selection Criteria – defined in terms of the product defined in terms of the product and covers range of management and covers range of management concerns (finance, market)concerns (finance, market)

Historical Information – results of Historical Information – results of previous project decisions and previous project decisions and performance should be performance should be consideredconsidered

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Tools & Techniques for InitiationTools & Techniques for Initiation

Project Selection Methods:Project Selection Methods: Benefit measurement models – comparative Benefit measurement models – comparative

approaches, scoring models, economic modelsapproaches, scoring models, economic models Murder BoardsMurder Boards Peer ReviewPeer Review Scoring ModelsScoring Models Economic ModelsEconomic Models Benefits compared to costsBenefits compared to costs

Constrained operation models – programming Constrained operation models – programming mathematicalmathematical

Linear ProgrammingLinear Programming Integer ProgrammingInteger Programming Dynamic ProgrammingDynamic Programming Multi-objective programmingMulti-objective programming

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Tools & Techniques for InitiationTools & Techniques for Initiation

Project Selection Methods:Project Selection Methods: Decision models – generalized and Decision models – generalized and

sophisticated techniquessophisticated techniques Expert judgmentExpert judgment

Business Units with specialized skillsBusiness Units with specialized skills ConsultantConsultant Professional and Technical AssociationsProfessional and Technical Associations Industry GroupsIndustry Groups Delphi Technique – obtain expert opinions Delphi Technique – obtain expert opinions

on technical issues, scope of work and riskson technical issues, scope of work and risks Keep expert’s identities anonymousKeep expert’s identities anonymous Build consensusBuild consensus

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Outputs from Initiation:Outputs from Initiation:

Project Charter – formally recognizes project, Project Charter – formally recognizes project, created by senior manager, includes:created by senior manager, includes:

Business need/Business CaseBusiness need/Business Case Product description & titleProduct description & title Signed contractSigned contract Project Manager Identification & Authority levelProject Manager Identification & Authority level Senior Management approvalSenior Management approval Project’s Goals and Objectives - Project’s Goals and Objectives - Constraints – factors that limit project Constraints – factors that limit project

management team’s optionsmanagement team’s options Assumptions – factors that are considered true for Assumptions – factors that are considered true for

planning purposes. Involve a degree of risk planning purposes. Involve a degree of risk

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Scope Planning – process of Scope Planning – process of

developing a written statement as developing a written statement as basis for future decisionsbasis for future decisions Criteria to determine if the project or Criteria to determine if the project or

phase is successfulphase is successful Scope Planning Inputs:Scope Planning Inputs:

Product descriptionProduct description Project CharterProject Charter ConstraintsConstraints AssumptionsAssumptions

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Scope Planning Tools & TechniquesScope Planning Tools & Techniques

Product Analysis - - developing a Product Analysis - - developing a better understanding of the product of better understanding of the product of the projectthe project

Cost/Benefit Analysis – estimating Cost/Benefit Analysis – estimating tangible/intangible costs and returns of tangible/intangible costs and returns of various project alternatives and using various project alternatives and using financial measures (R.O.I.) to assess financial measures (R.O.I.) to assess desirabilitydesirability

Alternatives Identification – generate Alternatives Identification – generate different approaches to the project; different approaches to the project; “brainstorming” “brainstorming”

Expert JudgmentExpert Judgment

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Scope Planning OutputsScope Planning Outputs

Scope Statement – documented basis for Scope Statement – documented basis for making project decisions and confirming making project decisions and confirming understanding among stakeholders. Includes:understanding among stakeholders. Includes:

Project justification – business need, evaluating Project justification – business need, evaluating future trade-offsfuture trade-offs

Project Product – summary of project descriptionProject Product – summary of project description Project Deliverables – list of summary of delivery Project Deliverables – list of summary of delivery

items marking completion of the projectitems marking completion of the project Project Objectives – quantifiable criteria met for Project Objectives – quantifiable criteria met for

success. Addresses cost, schedule and metrics – success. Addresses cost, schedule and metrics – unqualified objectives indicate high risk (customer unqualified objectives indicate high risk (customer satisfaction)satisfaction)

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Scope Planning Outputs (continued)Scope Planning Outputs (continued)

Supporting detail – includes Supporting detail – includes documentation of all assumptions and documentation of all assumptions and constraintsconstraints

Scope Management Plan – how project Scope Management Plan – how project scope is managed, change control scope is managed, change control procedure, expected stability, change procedure, expected stability, change identification and classificationidentification and classification

Control what is/is not in the project; prevents Control what is/is not in the project; prevents delivering “extra” benefits to the customer delivering “extra” benefits to the customer that were not specified/requiredthat were not specified/required

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Scope Definition – subdividing major Scope Definition – subdividing major

deliverables into smaller, deliverables into smaller, manageable componentsmanageable components Improve accuracy of cost, time, and Improve accuracy of cost, time, and

resource estimatesresource estimates Define a baseline for performance Define a baseline for performance

measurementmeasurement Clear responsibility assignmentsClear responsibility assignments Critical to project success – reduces risk Critical to project success – reduces risk

of higher cost, redundancy, time delays, of higher cost, redundancy, time delays, and poor productivityand poor productivity

Defines “what” you are doing; WBS is Defines “what” you are doing; WBS is the toolthe tool

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Scope Definition Inputs:Scope Definition Inputs:

Scope StatementScope Statement Constraints – consider contractual Constraints – consider contractual

provisionsprovisions AssumptionsAssumptions Other Planning OutputsOther Planning Outputs Historical InformationHistorical Information

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Scope Definition Tools & TechniquesScope Definition Tools & Techniques

Work Breakdown Structure – templates from Work Breakdown Structure – templates from previous projectsprevious projects

Decomposition – subdividing major Decomposition – subdividing major deliverables into manageable components:deliverables into manageable components:

Major elements – project deliverables and project Major elements – project deliverables and project management approachmanagement approach

Decide cost and duration estimates are appropriate Decide cost and duration estimates are appropriate at level of detailat level of detail

Constituent elements – tangible verifiable results to Constituent elements – tangible verifiable results to enable performance management, how the work will enable performance management, how the work will be accomplishedbe accomplished

Verify correctness of decompositionVerify correctness of decomposition All items necessary and sufficient?All items necessary and sufficient? Clearly and completely defined?Clearly and completely defined? Appropriately scheduled, budgeted, assigned?Appropriately scheduled, budgeted, assigned?

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Scope Definition OutputsScope Definition Outputs

Work Breakdown Structure (WBS) – a Work Breakdown Structure (WBS) – a deliverable-oriented grouping of project deliverable-oriented grouping of project assignments that organizes and defines the assignments that organizes and defines the scope of the project scope of the project

Each descending level represents further detail; smaller Each descending level represents further detail; smaller and more manageable piecesand more manageable pieces

Each item is assigned a unique identifier collectively Each item is assigned a unique identifier collectively known as “code of accounts”known as “code of accounts”

Work element descriptions included in a WBS dictionary Work element descriptions included in a WBS dictionary (work, schedule and planning information) (work, schedule and planning information)

Other formats:Other formats: Contractual WBS – seller provides the buyerContractual WBS – seller provides the buyer Organizational (OBS) – work elements to specific org. unitsOrganizational (OBS) – work elements to specific org. units Resource (RBS) – work elements to individualsResource (RBS) – work elements to individuals Bill of Materials (BOM) – hierarchical view of physical resourcesBill of Materials (BOM) – hierarchical view of physical resources Project (PBS) – similar to WBSProject (PBS) – similar to WBS


Work Breakdown Structure (WBS)Work Breakdown Structure (WBS) First Level is commonly the same at the Project Life First Level is commonly the same at the Project Life

Cycle (requirements, design, coding, testing, conversion Cycle (requirements, design, coding, testing, conversion and operation)and operation)

First level is completed before the project is broken down First level is completed before the project is broken down furtherfurther

Each level of the WBS is a smaller segment of level Each level of the WBS is a smaller segment of level aboveabove

Work toward the project deliverablesWork toward the project deliverables Break down project into tasks thatBreak down project into tasks that

Are realistically and confidently estimableAre realistically and confidently estimable Cannot be logically divided furtherCannot be logically divided further Can be completed quickly (under 80 hours rule of thumb)Can be completed quickly (under 80 hours rule of thumb) Have a meaningful conclusion and deliverableHave a meaningful conclusion and deliverable Can be completed without interruptionCan be completed without interruption

Provides foundation for all project planning and controlProvides foundation for all project planning and control


Work Breakdown Structure (WBS) - Work Breakdown Structure (WBS) - BenefitsBenefits

Prevent work slippagePrevent work slippage Project team understands how their tasks fit into the Project team understands how their tasks fit into the

overall project and their impact upon the projectoverall project and their impact upon the project Facilitates communication and cooperation between Facilitates communication and cooperation between

project team and stakeholdersproject team and stakeholders Helps prevent changesHelps prevent changes Focuses team experience into what needs to be done Focuses team experience into what needs to be done

– results in higher quality– results in higher quality Basis and proof for estimating staff, cost and timeBasis and proof for estimating staff, cost and time Gets team buy-in, role identificationGets team buy-in, role identification Graphical picture of the project hierarchyGraphical picture of the project hierarchy Identifies all tasks, project foundationIdentifies all tasks, project foundation

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement WBS phrasesWBS phrases

Graphical hierarchy of the projectGraphical hierarchy of the project Identifies all tasks Identifies all tasks Foundation of the projectFoundation of the project Very importantVery important Forces thought of all aspects of the projectForces thought of all aspects of the project Can be re-used for other projectsCan be re-used for other projects


Work Breakdown Structure (WBS) – Work Breakdown Structure (WBS) – DictionaryDictionary

Designed to control what work is done and whenDesigned to control what work is done and when Also known as a task descriptionAlso known as a task description Puts boundary on what is included in a task and Puts boundary on what is included in a task and

what is not includedwhat is not included

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Scope Verification InputsScope Verification Inputs

Work results – partially/completed Work results – partially/completed deliverables, costs to datedeliverables, costs to date

Product documentation – description Product documentation – description available for review (requirements)available for review (requirements)

Scope Verification Tools & TechniquesScope Verification Tools & Techniques Inspection – measuring, examining, testing to Inspection – measuring, examining, testing to

determine if results conform to requirementsdetermine if results conform to requirements Scope Verification OutputsScope Verification Outputs

Formal acceptance – documentation Formal acceptance – documentation identifying client and stakeholder approval, identifying client and stakeholder approval, customer acceptance of effortscustomer acceptance of efforts

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Scope Change Control:Scope Change Control:

Influencing factors to ensure that Influencing factors to ensure that changes are beneficialchanges are beneficial

Determining scope change has Determining scope change has occurredoccurred

Managing changes when they Managing changes when they occuroccur

Thoroughly integrated with other Thoroughly integrated with other control processescontrol processes

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Scope Change Control Inputs:Scope Change Control Inputs:

Work Breakdown StructureWork Breakdown Structure Performance Reports- issues reportedPerformance Reports- issues reported Change Requests – expansion/shrink of Change Requests – expansion/shrink of

scope derived from :scope derived from : External events (government regulations)External events (government regulations) Scope definition errors of product or projectScope definition errors of product or project Value adding change – new technologyValue adding change – new technology

Scope Management PlanScope Management Plan

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Scope Change Control Tools & Scope Change Control Tools &

TechniquesTechniques Scope Change Control System – defines Scope Change Control System – defines

procedures how scope change can occurprocedures how scope change can occur All paperwork, tracking systems, approval All paperwork, tracking systems, approval

levelslevels Integrated with overall change control Integrated with overall change control

proceduresprocedures Performance Measurement – determine Performance Measurement – determine

what is causing variances and corrective what is causing variances and corrective actionsactions

Additional Planning Additional Planning

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Scope Change Control Outputs:Scope Change Control Outputs:

Scope Changes – fed back Scope Changes – fed back through planning processes, through planning processes, revised WBSrevised WBS

Corrective Actions Corrective Actions Lessons Learned – cause and Lessons Learned – cause and

reasoning for variances reasoning for variances documented for historical documented for historical purposespurposes

Chapter 5 – Project Scope Chapter 5 – Project Scope ManagementManagement Management By Objectives (MBO)Management By Objectives (MBO)

Philosophy that has 3 steps:Philosophy that has 3 steps: Establish unambiguous and realistic Establish unambiguous and realistic

objectivesobjectives Periodically evaluate if objectives are Periodically evaluate if objectives are

being metbeing met Take corrective actionTake corrective action

Project Manager must know that if project is Project Manager must know that if project is not aligned or support corporate objectives, not aligned or support corporate objectives, the project is likely to lose resources, the project is likely to lose resources, assistance and attention.assistance and attention.

MBO only works if management supports it MBO only works if management supports it

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Project Time ManagementProject Time Management

Processes required to ensure Processes required to ensure timely completion of the projecttimely completion of the project

No consensus concerning No consensus concerning differences between activities and differences between activities and taskstasks

Activities seen as composed of Activities seen as composed of tasks –most common usagetasks –most common usage

Other disciplines have tasks Other disciplines have tasks composed of activitiescomposed of activities

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Activity Definition: identifying Activity Definition: identifying

and documenting specific and documenting specific activities to produce project activities to produce project deliverables identified in the deliverables identified in the WBSWBS Must be defined to meet the Must be defined to meet the

project objectivesproject objectives

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Activity Definition InputsActivity Definition Inputs

WBS – primary inputWBS – primary input Scope Statement – project Scope Statement – project

justification & project objectivesjustification & project objectives Historical Information Historical Information ConstraintsConstraints Assumptions Assumptions

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Activity Definition Tools & Activity Definition Tools &

TechniquesTechniques Decomposition – outputs are Decomposition – outputs are

expressed as activities rather than expressed as activities rather than deliverablesdeliverables

Templates – reuse from previous Templates – reuse from previous projectsprojects

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Activity Definition OutputsActivity Definition Outputs

Activity List – all to be performed; Activity List – all to be performed; extension to the WBS and includes extension to the WBS and includes description to ensure team members description to ensure team members understand work to be performedunderstand work to be performed

Supporting Detail – organized as Supporting Detail – organized as needed and include all assumptions and needed and include all assumptions and constraintsconstraints

WBS Updates – identify missing WBS Updates – identify missing deliverables and clarify deliverable deliverables and clarify deliverable descriptions. WBS updates often called descriptions. WBS updates often called refinements; more likely using new refinements; more likely using new technologies in project technologies in project

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Activity Sequencing – identifying Activity Sequencing – identifying

and documenting interactive and documenting interactive dependencies among activities. dependencies among activities. Support later development of a Support later development of a realistic schedulerealistic schedule Project Management software Project Management software

often usedoften used

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Activity Sequencing Inputs:Activity Sequencing Inputs:

Activity ListActivity List Product Description – product characteristics often Product Description – product characteristics often

affect activity sequencing affect activity sequencing Mandatory Sequencing – physical limitations, hard Mandatory Sequencing – physical limitations, hard

logic, prototypes needed; inherent in nature of work logic, prototypes needed; inherent in nature of work being donebeing done

Discretionary Dependencies – defined by project Discretionary Dependencies – defined by project management team; “best practices” or unusual aspects management team; “best practices” or unusual aspects of project – soft logic, preferred logic, preferential logicof project – soft logic, preferred logic, preferential logic

External Dependencies – relationship between project External Dependencies – relationship between project activities and non-project activities (company policies, activities and non-project activities (company policies, procurement, etc.)procurement, etc.)

ConstraintsConstraints AssumptionsAssumptions

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Network DiagramsNetwork Diagrams

Shows how the project tasks will flow from Shows how the project tasks will flow from beginning to endbeginning to end

Proves how long the project will take to Proves how long the project will take to completecomplete

Takes project tasks from low levels of WBS and Takes project tasks from low levels of WBS and placing them into their order of completion placing them into their order of completion (beginning to end)(beginning to end)

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Activity Sequencing Tools & TechniquesActivity Sequencing Tools & Techniques

Precedence Diagramming Method (PDM) – Precedence Diagramming Method (PDM) – constructing network diagram using nodes to constructing network diagram using nodes to represent activities and arrows to indicate represent activities and arrows to indicate dependencies; also called Activity On Node dependencies; also called Activity On Node (AON)(AON)

Most project management software usesMost project management software uses Includes 4 types of dependencies:Includes 4 types of dependencies:

Finish to Start – “from” activity must finish before “to” activity can Finish to Start – “from” activity must finish before “to” activity can begin; most commonly used begin; most commonly used

Finish to Finish – “from” activity must finish before the next may finishFinish to Finish – “from” activity must finish before the next may finish Start to Start – “from” activity must start before next “to” activity can Start to Start – “from” activity must start before next “to” activity can

startstart Start to Finish – task must start before next activity can finishStart to Finish – task must start before next activity can finish

Use caution with last 3 techniques - logical relationships often Use caution with last 3 techniques - logical relationships often not consistently implemented with project management softwarenot consistently implemented with project management software

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Activity Sequencing Tools & Activity Sequencing Tools &

Techniques (continued)Techniques (continued) Arrow Diagramming Method (ADM) Arrow Diagramming Method (ADM)

– uses arrows to represent activities – uses arrows to represent activities and connecting at nodes to and connecting at nodes to illustrate dependenciesillustrate dependencies

Also called Activity On Arrow (AOA)Also called Activity On Arrow (AOA) Only uses finish to start dependenciesOnly uses finish to start dependencies PERT and CPM only can be drawn PERT and CPM only can be drawn

using AOAusing AOA


Techniques (continued)Techniques (continued) Conditional diagramming methodsConditional diagramming methods

GERT (Graphical Evaluation and GERT (Graphical Evaluation and Review Technique)Review Technique)

System Dynamic ModelsSystem Dynamic Models Allow for non-sequential activities Allow for non-sequential activities

(loops) or conditional branches – not (loops) or conditional branches – not provided by PDM or ADM methodsprovided by PDM or ADM methods


Techniques (continued)Techniques (continued) Network Templates – standardized Network Templates – standardized

networks can be used. Composed of networks can be used. Composed of subnets, or fragnetssubnets, or fragnets

Subnets are several nearly identical portions Subnets are several nearly identical portions of a network (floors on a building, clinical of a network (floors on a building, clinical trials, program modules)trials, program modules)

Useful for several identical processes Useful for several identical processes (clinical trials, programming modules).(clinical trials, programming modules).

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Activity Sequencing Outputs:Activity Sequencing Outputs:

Project Network Diagram – Project Network Diagram – schematic display of project schematic display of project activities and relationships activities and relationships (dependencies). Should be (dependencies). Should be accompanied by a summary accompanied by a summary narrative that describes the narrative that describes the diagram approachdiagram approach

Activity List UpdatesActivity List Updates

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Activity Duration EstimatingActivity Duration Estimating

Involves assessing number of Involves assessing number of work periods needed to complete work periods needed to complete identified activitiesidentified activities

Requires consideration of Requires consideration of elapsed time, calendars, elapsed time, calendars, weekends, and day of week work weekends, and day of week work startsstarts

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Activity Duration Estimating Inputs:Activity Duration Estimating Inputs:

Activity ListsActivity Lists ConstraintsConstraints AssumptionsAssumptions Resource Requirements – amount of labor Resource Requirements – amount of labor

assigned to activityassigned to activity Resource Capabilities – human and material Resource Capabilities – human and material

resources, expertiseresources, expertise Historical InformationHistorical Information

Project Files, or records of previous project resultsProject Files, or records of previous project results Commercial Duration Estimates – useful when Commercial Duration Estimates – useful when

durations are not driven by actual work (approval durations are not driven by actual work (approval periods, material resources)periods, material resources)

Project Team KnowledgeProject Team Knowledge

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Activity Duration Estimating Tools & Activity Duration Estimating Tools &

TechniquesTechniques Expert Judgment – guided by historical Expert Judgment – guided by historical

information should be used whenever information should be used whenever possible; high risk without expertise avail.possible; high risk without expertise avail.

Simulation – using different sets of Simulation – using different sets of assumptions (Monte Carlo Analysis) to assumptions (Monte Carlo Analysis) to drive multiple durationsdrive multiple durations

Analogous Estimating – “top down Analogous Estimating – “top down estimating” – use actual, similar, previous estimating” – use actual, similar, previous known durations as basis for future activity known durations as basis for future activity duration. Used when limited knowledge is duration. Used when limited knowledge is available. Form of expert judgmentavailable. Form of expert judgment

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Activity Duration Outputs:Activity Duration Outputs:

Activity Duration Estimates – Activity Duration Estimates – quantitative assessments of work quantitative assessments of work periods to complete an activity. periods to complete an activity. Should indicate a range +/- of Should indicate a range +/- of possible resultspossible results

Basis of Estimates – all Basis of Estimates – all assumptions should be documentedassumptions should be documented

Activity List Updates Activity List Updates

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Schedule DevelopmentSchedule Development

Determining start and finish dates Determining start and finish dates for project activitiesfor project activities

Without realistic dates, project Without realistic dates, project unlikely to be finished as scheduledunlikely to be finished as scheduled

Schedule development process Schedule development process often iterates as more information often iterates as more information becomes available (process inputs)becomes available (process inputs)

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Schedule Development Inputs:Schedule Development Inputs:

Project Network DiagramProject Network Diagram Activity Duration EstimatesActivity Duration Estimates Resource RequirementsResource Requirements Resource Pool Description – availability Resource Pool Description – availability

patterns; shared resources are highly patterns; shared resources are highly variablevariable

Calendars – define eligible work periodsCalendars – define eligible work periods Project Calendars affect all resourcesProject Calendars affect all resources Resource Calendars – affect specific Resource Calendars – affect specific

resource pools or individualsresource pools or individuals

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Schedule Development Inputs Schedule Development Inputs

(continued):(continued): ConstraintsConstraints

Imposed Dates – may be requiredImposed Dates – may be required Key events or milestones – are initially Key events or milestones – are initially

requested and become expected during requested and become expected during projectproject

AssumptionsAssumptions Lead and Lag Time – dependencies may Lead and Lag Time – dependencies may

specify time in order to satisfy relationship specify time in order to satisfy relationship (example – 2 weeks to receive order)(example – 2 weeks to receive order)

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Schedule Development Tools & Schedule Development Tools &

TechniquesTechniques Mathematical Analysis – calculating theoretical Mathematical Analysis – calculating theoretical

early/late finish and start dates without regard early/late finish and start dates without regard for resource pool limitations; indicate time for resource pool limitations; indicate time periods which activity should be scheduled periods which activity should be scheduled given resource limits and other constraints:given resource limits and other constraints:

Critical Path Method (CPM) – single early/late start and finish Critical Path Method (CPM) – single early/late start and finish date for all activities. Based on specified, sequential network and date for all activities. Based on specified, sequential network and single duration estimate. Calculates float to determine flexibilitysingle duration estimate. Calculates float to determine flexibility

Graphical Evaluation and Review Technique (GERT) – Graphical Evaluation and Review Technique (GERT) – probabilistic treatment of network and activity duration estimates probabilistic treatment of network and activity duration estimates

Program Evaluation and Review Technique (PERT)- sequential Program Evaluation and Review Technique (PERT)- sequential network and weighted average duration to calculate project network and weighted average duration to calculate project duration – differs from CPM by using mean (expected value) duration – differs from CPM by using mean (expected value) instead of most-likely estimate in CPMinstead of most-likely estimate in CPM


TechniquesTechniques Critical Path Method: refers to estimating based on one Critical Path Method: refers to estimating based on one

time estimate per activitytime estimate per activity One time estimate per task (Most Likely)One time estimate per task (Most Likely) Emphasis on controlling cost and leaving schedule flexibleEmphasis on controlling cost and leaving schedule flexible Drawn using AOA diagramsDrawn using AOA diagrams Can have dummy taskCan have dummy task

PERT (Program Review and Estimating Technique)PERT (Program Review and Estimating Technique) 3 Time estimates per activity 3 Time estimates per activity

OptimisticOptimistic PessimisticPessimistic Most LikelyMost Likely

Emphasis on meeting schedule, flexibility with costsEmphasis on meeting schedule, flexibility with costs Drawn on AOA diagramsDrawn on AOA diagrams Can have dummy tasksCan have dummy tasks


TechniquesTechniques Monte Carlo AnalysisMonte Carlo Analysis

Uses a computer with PERT values and network Uses a computer with PERT values and network diagramdiagram

TellsTells Probability of completing a project on any specific dayProbability of completing a project on any specific day Probability of completing a project for any specific Probability of completing a project for any specific

amount of costamount of cost Probability of any task actually being on the critical Probability of any task actually being on the critical

pathpath Overall Project RiskOverall Project Risk

Suggests that Monte Carlo simulation will create a Suggests that Monte Carlo simulation will create a project duration that is closer to reality than CPM or project duration that is closer to reality than CPM or PERTPERT


Techniques (continued)Techniques (continued) Duration Compression – look to shorten Duration Compression – look to shorten

project schedule without affecting scopeproject schedule without affecting scope Crashing – cost and schedule trade-offs to Crashing – cost and schedule trade-offs to

determine greatest amount of compression for determine greatest amount of compression for least incremental cost – often results in higher least incremental cost – often results in higher costscosts

Fast Tracking – performing activities in parallel Fast Tracking – performing activities in parallel that normally would be sequenced – often that normally would be sequenced – often results in re-work and usually increases riskresults in re-work and usually increases risk

SimulationSimulation


Techniques (continued)Techniques (continued) Resource Leveling Heuristics – leveling Resource Leveling Heuristics – leveling

resources that apply to critical path resources that apply to critical path activities a.k.a. “resource constrained activities a.k.a. “resource constrained scheduling” – when limitation on scheduling” – when limitation on quantity of available resources; quantity of available resources; sometimes called “Resource Based sometimes called “Resource Based Method” – often increases project Method” – often increases project durationduration

Project Management SoftwareProject Management Software


Techniques (continued)Techniques (continued) Project Manger’s roleProject Manger’s role

Provide the team with the necessary Provide the team with the necessary information to properly estimate the taskinformation to properly estimate the task

Complete a sanity check of the estimateComplete a sanity check of the estimate Formulate a reserveFormulate a reserve

Project Team should be involved; Project Team should be involved; determine task estimatesdetermine task estimates

Historical RecordsHistorical Records GuessesGuesses Actual Costs Actual Costs BenchmarksBenchmarks CPM and PERTCPM and PERT


TechniquesTechniques Critical Path Method: longest path Critical Path Method: longest path

through a network diagram and through a network diagram and determines the earliest completion of determines the earliest completion of the projectthe project

Proves how long the project will takeProves how long the project will take Indicates tasks that need most Indicates tasks that need most

monitoringmonitoring Almost always have no slackAlmost always have no slack

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Schedule Development Outputs:Schedule Development Outputs:

Project Schedule – includes planned Project Schedule – includes planned start and finish dates for each activity; start and finish dates for each activity; remains preliminary until resources remains preliminary until resources assignments are approved. Usually in assignments are approved. Usually in following formats:following formats:

Project Network Diagrams (with date Project Network Diagrams (with date information added) – show logical and information added) – show logical and critical path activitiescritical path activities

Bar or Gantt charts – activity start and end Bar or Gantt charts – activity start and end dates, expected durationsdates, expected durations

Milestone Charts – identifies key Milestone Charts – identifies key deliverables and interfaces deliverables and interfaces

Time-scaled network diagrams – blend of Time-scaled network diagrams – blend of project network and bar chartsproject network and bar charts

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Schedule Development Outputs Schedule Development Outputs

(continued):(continued): Supporting Detail – all assumptions and Supporting Detail – all assumptions and

constraints. May also include:constraints. May also include: Resource requirement by time period Resource requirement by time period

(resource histogram)(resource histogram) Alternative schedules (best/worst case)Alternative schedules (best/worst case) Schedule reserve/risk assessmentsSchedule reserve/risk assessments

Schedule Management Plan – how Schedule Management Plan – how updates are managedupdates are managed

Resource requirement updates – Resource requirement updates – leveling and activity impactleveling and activity impact

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Schedule Control:Schedule Control:

Influencing factors which create schedule Influencing factors which create schedule changes to ensure changes are beneficialchanges to ensure changes are beneficial

Determining that schedule has changedDetermining that schedule has changed Managing actual changes as they occurManaging actual changes as they occur

Inputs to Schedule ControlInputs to Schedule Control Project Schedule – baseline approved, Project Schedule – baseline approved,

measure against project performancemeasure against project performance Performance Reports – planned dates met, Performance Reports – planned dates met,

issuesissues Change RequestsChange Requests Schedule Management PlanSchedule Management Plan

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Schedule Control Tools & Schedule Control Tools &

TechniquesTechniques Schedule Change Control System – Schedule Change Control System –

defines procedures for schedule defines procedures for schedule changes, paperwork, approval, tracking changes, paperwork, approval, tracking systemssystems

Performance Measurement – assess Performance Measurement – assess magnitude of variations to baseline; magnitude of variations to baseline; determine if corrective action is neededdetermine if corrective action is needed

Additional Planning Additional Planning Project Management SoftwareProject Management Software

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Schedule Control Outputs:Schedule Control Outputs:

Schedule Updates – any modifications, Schedule Updates – any modifications, stakeholder notificationstakeholder notification

Revisions change scheduled start and finish Revisions change scheduled start and finish dates – generally in response to scope dates – generally in response to scope changes. “Re-baselining” may be needed in changes. “Re-baselining” may be needed in drastic situationsdrastic situations

Corrective Action – re-align performance Corrective Action – re-align performance with project planwith project plan

Lessons LearnedLessons Learned

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Key knowledge points not in PMBOKKey knowledge points not in PMBOK

Need to know manual calculations of Need to know manual calculations of network diagramsnetwork diagrams

Created after project charter and WBS (task Created after project charter and WBS (task estimates and dependencies are estimates and dependencies are determined)determined)

Mandatory dependencies (Hard Logic) – Mandatory dependencies (Hard Logic) – inherent in nature of workinherent in nature of work

Discretionary dependencies (Soft Logic) – Discretionary dependencies (Soft Logic) – based on experience, desire or resultsbased on experience, desire or results

External dependencies – based on needs External dependencies – based on needs and desires of organizations outside the and desires of organizations outside the projectproject

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Methods to draw network diagramsMethods to draw network diagrams

Activity on Node (AON) or Precedence Activity on Node (AON) or Precedence Diagramming Method (PDM)Diagramming Method (PDM)

Boxes represent tasksBoxes represent tasks Arrows show task dependenciesArrows show task dependencies 4 types of task relationships4 types of task relationships

Finish to Start (task must finish before next Finish to Start (task must finish before next can start)can start)

Finish to Finish (task must finish before next Finish to Finish (task must finish before next can finish)can finish)

Start to Start (task must start before next can Start to Start (task must start before next can start)start)

Start to Finish (task must start before the Start to Finish (task must start before the next can finish)next can finish)

No dummy tasks usedNo dummy tasks used


Activity on Arrow (AOA or Arrow Activity on Arrow (AOA or Arrow Diagramming Method (ADM)Diagramming Method (ADM)

Arrows used to represent tasksArrows used to represent tasks Only Finish to Start relationships are usedOnly Finish to Start relationships are used May use dummy tasks (show dependencies)May use dummy tasks (show dependencies) PERT and CPM estimating techniques can PERT and CPM estimating techniques can

only be drawn using AOAonly be drawn using AOA CPM (Critical Path Method) – estimating CPM (Critical Path Method) – estimating

based on one time estimate per activity (the based on one time estimate per activity (the most likely time estimate)most likely time estimate)

Emphasizes controlling cost and allowing Emphasizes controlling cost and allowing schedule flexibilityschedule flexibility

Can have dummy tasksCan have dummy tasks


Activity on Arrow (AOA or Arrow Activity on Arrow (AOA or Arrow Diagramming Method (ADM) Diagramming Method (ADM) continued:continued: PERT (Program Evaluation and Review PERT (Program Evaluation and Review

technique)technique) 3 time estimates per activity: Optimistic (O), 3 time estimates per activity: Optimistic (O),

Most Likely (M), Pessimistic (P)Most Likely (M), Pessimistic (P) Emphasizes meeting schedule, flexibility with Emphasizes meeting schedule, flexibility with

costcost Can have dummy tasksCan have dummy tasks


PERT (Program Evaluation and Review technique)PERT (Program Evaluation and Review technique) Estimating based on 3 formulas:Estimating based on 3 formulas:

PERT Duration: (P + 4M + O)/6PERT Duration: (P + 4M + O)/6 Standard Task Deviation: (P – O)/6Standard Task Deviation: (P – O)/6 Task Variance:Task Variance:

Total project estimate:Total project estimate: Add up all Optimistic, Most Likely and Pessimistic values Add up all Optimistic, Most Likely and Pessimistic values

of the critical path tasks and apply P + 4M + O/6 of the critical path tasks and apply P + 4M + O/6 Total project variance (+/-):Total project variance (+/-):

Add up the individual task variances and take the square Add up the individual task variances and take the square root of the value. Use the value as a +/- figure to compute root of the value. Use the value as a +/- figure to compute the Optimistic and Pessimistic values. The total project the Optimistic and Pessimistic values. The total project estimate will serve as the basis.estimate will serve as the basis.

[P – O]2 6

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Monte Carlo Simulation:Monte Carlo Simulation:

Uses a computer with PERT values (P, Uses a computer with PERT values (P, M, O) and a network diagram but does M, O) and a network diagram but does not use the PERT formulanot use the PERT formula

IndicatesIndicates Probability of completing project on a Probability of completing project on a

specific dayspecific day Probability of completing project for any Probability of completing project for any

specific amount of costspecific amount of cost Probability of any task actually being on Probability of any task actually being on

critical pathcritical path Overall project riskOverall project risk

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Estimating techniques in general:Estimating techniques in general:

Should be performed by entire project Should be performed by entire project teamteam

Project manager needs to provide Project manager needs to provide information to allow team to create information to allow team to create estimates; sanity check; formulate reserveestimates; sanity check; formulate reserve

Estimates are:Estimates are: Guesses, Historical Records, Actual Costs, Guesses, Historical Records, Actual Costs,

Benchmarks, CPM, PERTBenchmarks, CPM, PERT Critical paths determines the earliest Critical paths determines the earliest

completion date and identifies tasks that completion date and identifies tasks that need monitoringneed monitoring

Can be obtained by CPM, PERT and Monte Can be obtained by CPM, PERT and Monte Carlo estimating techniquesCarlo estimating techniques

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement Key Definitions:Key Definitions:

Slack (Float): the amount of time a task Slack (Float): the amount of time a task can be delayed without delaying the can be delayed without delaying the entire project. Tasks on critical path have entire project. Tasks on critical path have no slack. no slack.

Slack is calculated by the difference between Slack is calculated by the difference between Early Start and Late Start of a taskEarly Start and Late Start of a task

Free Slack (Float): the amount of time a task Free Slack (Float): the amount of time a task can be delayed without delaying the early start can be delayed without delaying the early start date of its successordate of its successor

Total Slack (Float): the amount of time a task Total Slack (Float): the amount of time a task can be delayed without delaying the project can be delayed without delaying the project completion datecompletion date

Lag: inserted waiting time between tasksLag: inserted waiting time between tasks

Chapter 6 – Project Time Chapter 6 – Project Time ManagementManagement General Comments:General Comments:

Projects can have more than 1 critical path Projects can have more than 1 critical path (increases risk) and can involve dummy tasks(increases risk) and can involve dummy tasks

Negative float indicates that you are behindNegative float indicates that you are behind Resource Leveling involves possibly letting Resource Leveling involves possibly letting

schedule and cost slipschedule and cost slip Heuristics – just means “rule of thumb” e.g. 80/20 Heuristics – just means “rule of thumb” e.g. 80/20

rulerule Schedules are calendar based – makes this Schedules are calendar based – makes this

different than a time estimatedifferent than a time estimate Bar Chart a.k.a. Gantt chart (track progress, report Bar Chart a.k.a. Gantt chart (track progress, report

to entire team including stakeholders, control tool)to entire team including stakeholders, control tool) Network Diagram (to show task inter-dependencies, Network Diagram (to show task inter-dependencies,

show project organization, basis for project control)show project organization, basis for project control) Milestone chart (report to Senior management, Milestone chart (report to Senior management,

shows major events)shows major events)


To shorten project schedule examine To shorten project schedule examine the critical paththe critical path

Crashing – add more resources to the critical Crashing – add more resources to the critical path taskspath tasks

Usually results in increased costUsually results in increased cost Fast Tracking – performing tasks in parallelFast Tracking – performing tasks in parallel

Can result in re-work and increased riskCan result in re-work and increased risk Best to select method that has least Best to select method that has least

impact on the project (is the importance impact on the project (is the importance on cost, risk or schedule?)on cost, risk or schedule?)


Bar (Gantt) ChartsBar (Gantt) Charts Weak Planning Tool, effective progress and reporting Weak Planning Tool, effective progress and reporting

tooltool Does not show interdependencies of tasksDoes not show interdependencies of tasks Does not help organize the project more effectivelyDoes not help organize the project more effectively

Network Diagrams (PERT, CPM, PDM)Network Diagrams (PERT, CPM, PDM) Shows task interdependenciesShows task interdependencies Aids in effectively planning and organizing workAids in effectively planning and organizing work Provides a basis for project controlProvides a basis for project control

Milestone ChartsMilestone Charts Only shows major eventsOnly shows major events Good for reporting to management and customerGood for reporting to management and customer

Flow ChartsFlow Charts Depicts workflow and not commonly used for project Depicts workflow and not commonly used for project

managementmanagement


Free Slack (Float) – amount of time a task can be delayed Free Slack (Float) – amount of time a task can be delayed without delaying the early start date of its successorwithout delaying the early start date of its successor

Total Slack (Float) – amount of time a task can be delayed Total Slack (Float) – amount of time a task can be delayed without delaying the project completion datewithout delaying the project completion date

Lag – inserted waiting time between tasksLag – inserted waiting time between tasks Resource Leveling – level peaks of resource usage; Resource Leveling – level peaks of resource usage;

stable number of resources – allows schedule and cost stable number of resources – allows schedule and cost slip in favor of leveling resourcesslip in favor of leveling resources

Heuristic – rule of thumb (80/20 rule)Heuristic – rule of thumb (80/20 rule)

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Project Cost ManagementProject Cost Management

Ensure that the project is completed within Ensure that the project is completed within budgetbudget

Concerned with cost of resources needed Concerned with cost of resources needed to complete activities; consider effect of to complete activities; consider effect of project decisions on cost of using product project decisions on cost of using product “life-cycle costing”“life-cycle costing”

Most prospective financial impact of using Most prospective financial impact of using the product is outside the project scopethe product is outside the project scope

Consider information needs of Consider information needs of stakeholders, controllable and stakeholders, controllable and uncontrollable costs (budget separately for uncontrollable costs (budget separately for reward and recognition systems)reward and recognition systems)

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Project Cost ManagementProject Cost Management

Estimating should be based on WBS to improve Estimating should be based on WBS to improve accuracyaccuracy

Estimating should be done by the person Estimating should be done by the person performing the workperforming the work

Having historical records is key to improving Having historical records is key to improving estimatesestimates

Costs (schedule, scope, resources) should be Costs (schedule, scope, resources) should be managed to estimatesmanaged to estimates

A cost (schedule, scope, baseline) should be A cost (schedule, scope, baseline) should be kept and not changedkept and not changed

Plans should be revised as necessary during Plans should be revised as necessary during completion of workcompletion of work

Corrective action should be taken when cost Corrective action should be taken when cost problems (schedule, scope and resources) problems (schedule, scope and resources) occur.occur.

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Resource Planning:Resource Planning:

Determining what physical resources and Determining what physical resources and quantities are needed to perform workquantities are needed to perform work

Inputs to Resource Planning:Inputs to Resource Planning: Work Breakdown StructureWork Breakdown Structure Historical InformationHistorical Information Scope Statement – justification & objectivesScope Statement – justification & objectives Resource Pool Description – what resources are Resource Pool Description – what resources are

potentially available for resource planningpotentially available for resource planning Organizational Policies – staffing, procurementOrganizational Policies – staffing, procurement

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Inputs to Resource Planning:Inputs to Resource Planning:

Work Breakdown StructureWork Breakdown Structure Network DiagramNetwork Diagram ScheduleSchedule RisksRisks Historical InformationHistorical Information Scope Statement – justification & objectivesScope Statement – justification & objectives Resource Pool Description – what resources are Resource Pool Description – what resources are

potentially available for resource planningpotentially available for resource planning Organizational Policies – staffing, procurementOrganizational Policies – staffing, procurement

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Resource Planning Tools & Resource Planning Tools &

TechniquesTechniques Expert JudgmentExpert Judgment Alternatives IdentificationAlternatives Identification

Resource Planning Outputs:Resource Planning Outputs: Resource Requirements – what Resource Requirements – what

type & how many resources are type & how many resources are needed for each activity in the needed for each activity in the Work Breakdown StructureWork Breakdown Structure

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Cost Estimating:Cost Estimating:

Develop approximate costs of Develop approximate costs of resourcesresources

Distinguish estimating from pricingDistinguish estimating from pricing Estimating – likely amountEstimating – likely amount Pricing – business decisionPricing – business decision

Identify alternatives and consider Identify alternatives and consider realigning costs in phases to their realigning costs in phases to their expected savingsexpected savings

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Cost Estimating Inputs:Cost Estimating Inputs:

Work Breakdown StructureWork Breakdown Structure Resource RequirementsResource Requirements Resource Rates (if known)Resource Rates (if known) Activity Duration EstimatesActivity Duration Estimates Historical Information – (project files, Historical Information – (project files,

commercial cost databases, team commercial cost databases, team knowledgeknowledge

Chart Of Accounts – coding structure for Chart Of Accounts – coding structure for accounting; general ledger reportingaccounting; general ledger reporting

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Cost Estimating Tools & TechniquesCost Estimating Tools & Techniques

Analogous Estimating – “top down”; using actual Analogous Estimating – “top down”; using actual costs from previous project as basis for estimate costs from previous project as basis for estimate

Reliable when previous projects are similar and Reliable when previous projects are similar and individuals have expertise – form of expert judgmentindividuals have expertise – form of expert judgment

Parametric Modeling – uses project Parametric Modeling – uses project characteristics in mathematical models to predict characteristics in mathematical models to predict costs (e.g.building houses)costs (e.g.building houses)

Reliable when historical information is accurate, Reliable when historical information is accurate, parameters are quantifiable, and model is scalableparameters are quantifiable, and model is scalable

2 types: Regression analysis, Learning Curve 2 types: Regression analysis, Learning Curve Bottom Up Estimating – rolling up individual Bottom Up Estimating – rolling up individual

activities into project total – smaller work activities into project total – smaller work activities have more accuracy - activities have more accuracy -

Computerized tools – spreadsheets, software Computerized tools – spreadsheets, software


Pro’s and Con’sPro’s and Con’s Analogous Estimating Analogous Estimating

Quick - Less AccurateQuick - Less Accurate Tasks don’t need to be identified – Estimates Tasks don’t need to be identified – Estimates

prepared with little detail and understanding prepared with little detail and understanding of projectof project

Less costly – Requires considerable Less costly – Requires considerable experience to do wellexperience to do well

Gives PM idea of management expectations Gives PM idea of management expectations – Infighting at high levels of organization– Infighting at high levels of organization

Overall project costs are capped – Difficult Overall project costs are capped – Difficult for projects with uncertaintyfor projects with uncertainty


Pro’s and Con’sPro’s and Con’s Bottom Up EstimatingBottom Up Estimating

More Accurate – Takes time and expenseMore Accurate – Takes time and expense Gains buy-in from the team – Tendency for Gains buy-in from the team – Tendency for

team to pad estimatesteam to pad estimates Based on detailed analysis of project – Based on detailed analysis of project –

Requires that project be defined and Requires that project be defined and understoodunderstood

Provides a basis for monitoring and control – Provides a basis for monitoring and control – Team infighting to get biggest piece of pieTeam infighting to get biggest piece of pie

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Outputs from Cost EstimatingOutputs from Cost Estimating

Cost estimates – quantitative assessments of likely Cost estimates – quantitative assessments of likely costs of resources required to complete taskscosts of resources required to complete tasks

For all resources of the project (labor, materials, For all resources of the project (labor, materials, supplies, inflation allowance, reserve)supplies, inflation allowance, reserve)

Expressed in units of currencyExpressed in units of currency Supporting DetailSupporting Detail

Description of scope (reference to the WBS)Description of scope (reference to the WBS) Documentation how estimate was developedDocumentation how estimate was developed Indication of range of possible resultsIndication of range of possible results AssumptionsAssumptions

Cost Management Plan – how cost variances will be Cost Management Plan – how cost variances will be managedmanaged

Cost Risk: associated to seller for Fixed Price; Cost Risk: associated to seller for Fixed Price; associated to buyer for Time and Materials budgetassociated to buyer for Time and Materials budget

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Cost Budgeting Cost Budgeting

Involves allocation of total estimate to Involves allocation of total estimate to individual work to establish a cost individual work to establish a cost baseline to measure performancebaseline to measure performance

Cost Budgeting InputsCost Budgeting Inputs Cost EstimateCost Estimate Work Breakdown StructureWork Breakdown Structure Project Schedule – includes planned Project Schedule – includes planned

start and finish dates for items costs are start and finish dates for items costs are allocated toallocated to

Needed to assign costs during the time Needed to assign costs during the time period when the actual cost will be incurredperiod when the actual cost will be incurred

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement

Cost Budgeting Tools & TechniquesCost Budgeting Tools & Techniques same as Cost Estimating Tools and same as Cost Estimating Tools and

TechniquesTechniques Outputs from Cost BudgetingOutputs from Cost Budgeting

Cost Baseline – time phased budget to Cost Baseline – time phased budget to measure and monitor cost performancemeasure and monitor cost performance

Developed by summing estimated costs by Developed by summing estimated costs by period (S curve of values vs. time)period (S curve of values vs. time)

Larger projects have multiple baselines to Larger projects have multiple baselines to measure different aspects of cost measure different aspects of cost performanceperformance

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Cost ControlCost Control

Concerned with influencing factors that create Concerned with influencing factors that create changes to the cost baseline that are beneficialchanges to the cost baseline that are beneficial

Determining that the cost baseline has changedDetermining that the cost baseline has changed Managing actual changes as they occurManaging actual changes as they occur

Monitor cost performance to detect variancesMonitor cost performance to detect variances Record all appropriate changes accurately in the Record all appropriate changes accurately in the

cost baselinecost baseline Preventing incorrect, unauthorized changes being Preventing incorrect, unauthorized changes being

included in the cost baselineincluded in the cost baseline Informing stakeholders of authorized changes Informing stakeholders of authorized changes

Determine the “why’s” of positive and negative Determine the “why’s” of positive and negative variancesvariances

Integrated will all other control processes (scope, Integrated will all other control processes (scope, change, schedule, quality)change, schedule, quality)

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Inputs to Cost ControlInputs to Cost Control

Cost BaselineCost Baseline Performance Reports – meet, exceed budgetPerformance Reports – meet, exceed budget

50/50 Rule – task is considered 50% complete when it begins 50/50 Rule – task is considered 50% complete when it begins and gets credit for remainder 50% only when completedand gets credit for remainder 50% only when completed

20/80 Rule - task is considered 20% complete when it begins 20/80 Rule - task is considered 20% complete when it begins and gets credit for remainder 80% only when completedand gets credit for remainder 80% only when completed

0/100 Rule – task only credited when fully completed0/100 Rule – task only credited when fully completed Change RequestsChange Requests Cost Management PlanCost Management Plan

Tools & Techniques of Cost ControlTools & Techniques of Cost Control Cost Change Control System – defines the procedures by Cost Change Control System – defines the procedures by

which the cost baseline may be changedwhich the cost baseline may be changed Performance Measurement – assess magnitude of cost Performance Measurement – assess magnitude of cost

variations (Earned Value Analysis) and what is causing the variations (Earned Value Analysis) and what is causing the variancevariance

Additional Planning – examine alternativesAdditional Planning – examine alternatives Computerized Tools – forecast planned costs, track actual Computerized Tools – forecast planned costs, track actual

costs, forecast effect of cost changescosts, forecast effect of cost changes

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Cost Control OutputsCost Control Outputs

Revised Cost EstimateRevised Cost Estimate Modifications to cost information; require stakeholder Modifications to cost information; require stakeholder

approval and adjustments to other project areasapproval and adjustments to other project areas Budget Updates – changes to approved cost baseline; Budget Updates – changes to approved cost baseline;

revised in response to scope changesrevised in response to scope changes Corrective ActionCorrective Action Estimate at completion – (EAC) – forecast of total Estimate at completion – (EAC) – forecast of total

expendituresexpenditures Actual to date plus remaining budget modified by a Actual to date plus remaining budget modified by a

factor (cost performance index)factor (cost performance index) Current variances are seen to apply to future variancesCurrent variances are seen to apply to future variances

Actual to date plus new estimate for remaining workActual to date plus new estimate for remaining work Original estimates are flawed, or no longer relevantOriginal estimates are flawed, or no longer relevant

Actual to date plus remaining budgetActual to date plus remaining budget Current variances are typical and similar variances will not Current variances are typical and similar variances will not

occur in the futureoccur in the future Lessons LearnedLessons Learned

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Earned Value AnalysisEarned Value Analysis

Integrates cost, schedule and scopeIntegrates cost, schedule and scope Better that comparing projected vs. Better that comparing projected vs.

actual because time and cost are actual because time and cost are analyzed separatelyanalyzed separately

Terms:Terms: BCWS – Budgeted Cost of Work Scheduled BCWS – Budgeted Cost of Work Scheduled

(how much work should be done)(how much work should be done) BCWP – Budgeted Cost of Work Performed BCWP – Budgeted Cost of Work Performed

a.k.a. Earned Value (how much work is a.k.a. Earned Value (how much work is budgeted, how much did we budget)budgeted, how much did we budget)

ACWP – Actual Cost of Work Performed ACWP – Actual Cost of Work Performed (how much did the completed work cost)(how much did the completed work cost)


Earned Value AnalysisEarned Value Analysis Terms:Terms:

BAC – Budget at Completion (how BAC – Budget at Completion (how much did you budget for the total job)much did you budget for the total job)

EAC – Estimate at Completion (what EAC – Estimate at Completion (what do we expect the total project to cost)do we expect the total project to cost)

ETC – Estimate to Completion (how ETC – Estimate to Completion (how much more do we expect to spend to much more do we expect to spend to finish the job)finish the job)

VAC – Variance at Completion (how VAC – Variance at Completion (how much over/under budget do we expect much over/under budget do we expect to be)to be)


FormulasFormulas Variance (Plan – Actual)Variance (Plan – Actual) Cost Variance (CV): BCWP – ACWP; Cost Variance (CV): BCWP – ACWP;

negative is over budgetnegative is over budget Schedule Variance (SV): BCWP – Schedule Variance (SV): BCWP –

BCWS; negative is behind scheduleBCWS; negative is behind schedule Cost Performance Index (CPI): Cost Performance Index (CPI): BCWPBCWP

ACWPACWP I am only getting x¢ out of every $I am only getting x¢ out of every $BCWP

ACWP


FormulasFormulas Schedule Performance Index (SPI): Schedule Performance Index (SPI): BCWPBCWP

BCWSBCWS

I am only progressing x % of the planned rateI am only progressing x % of the planned rate Estimate at Completion (EAC): Estimate at Completion (EAC): BACBAC

CPICPI

As of now we expect the total project to cost x$ As of now we expect the total project to cost x$ Estimate to Complete (ETC): EAC – ACWP; Estimate to Complete (ETC): EAC – ACWP;

how much will it cost from now to completionhow much will it cost from now to completion Variance at Completion: BAC – EAC; when the Variance at Completion: BAC – EAC; when the

project is over how much more or less did we project is over how much more or less did we spend (most common way of calculating EVAspend (most common way of calculating EVA

BCWPBCWS

BACCPI


Earned Value AnalysisEarned Value Analysis BCWP comes first in most formulasBCWP comes first in most formulas If it is a variance, BCWP comes firstIf it is a variance, BCWP comes first If it is an index, BCWP is divided byIf it is an index, BCWP is divided by If the formula relates to cost, use AWCPIf the formula relates to cost, use AWCP If the formula related to schedule, use If the formula related to schedule, use

BWCPBWCP Negative is bad; positive results are goodNegative is bad; positive results are good ETC refers to “this point on”; EAC refers ETC refers to “this point on”; EAC refers

to when job is completedto when job is completed


Accuracy of EstimatesAccuracy of Estimates Order of Magnitude Estimate: -25% Order of Magnitude Estimate: -25%

- 75%; usually made during Initiation - 75%; usually made during Initiation PhasePhase

Budget Estimate: -10% - 25%; Budget Estimate: -10% - 25%; usually made during the Planning usually made during the Planning phasephase

Definitive Estimate: -5% - 10%; Definitive Estimate: -5% - 10%; usually made during the Planning usually made during the Planning phasephase


Accounting StandardsAccounting Standards Not usually part of the examNot usually part of the exam Present Value (value today of Present Value (value today of

future cash flows):future cash flows): PV = PV = FVFV

(1 + r) N(1 + r) NFV = Future ValueFV = Future ValueR = Interest RateR = Interest RateN = Number of time periodsN = Number of time periods

Chapter 7 – Project Cost Chapter 7 – Project Cost ManagementManagement Accounting StandardsAccounting Standards

Net Present Value: total benefits (income or Net Present Value: total benefits (income or revenue) less the costs. NPV is the sum of each revenue) less the costs. NPV is the sum of each present value of each income/revenue item present value of each income/revenue item

Internal Rate of Return (IRR): company may Internal Rate of Return (IRR): company may select project based on highest IRRselect project based on highest IRR

Payback Period: number of time periods it takes Payback Period: number of time periods it takes to recover the investment in the project before to recover the investment in the project before generating revenuesgenerating revenues

Benefit Cost Ratio (BCR): compares costs to the Benefit Cost Ratio (BCR): compares costs to the benefits of different projectsbenefits of different projects

Greater than 1 means benefits are greater than Greater than 1 means benefits are greater than costscosts

Less than 1 means costs are greater than benefitsLess than 1 means costs are greater than benefits Opportunity Cost: opportunity given up by Opportunity Cost: opportunity given up by

selecting one project over anotherselecting one project over another


Sunk Costs: expended costs. Sunk costs should not Sunk Costs: expended costs. Sunk costs should not be considered when determining to continue with a be considered when determining to continue with a troubled projecttroubled project

Law of Diminishing Returns: the more that is put in Law of Diminishing Returns: the more that is put in the less of an outcome is receivedthe less of an outcome is received

Working Capital: current assets – current liabilitiesWorking Capital: current assets – current liabilities Variable Cost: costs that change with the amount of Variable Cost: costs that change with the amount of

production or the amount of work (materials, wages)production or the amount of work (materials, wages) Fixed Cost: non-recurring costs that do not changeFixed Cost: non-recurring costs that do not change Direct Cost: directly attributable to project work Direct Cost: directly attributable to project work

(travel, wages, materials)(travel, wages, materials) Indirect Cost: overhead items or costs for the Indirect Cost: overhead items or costs for the

benefit of more than one project (taxes, fringe benefit of more than one project (taxes, fringe benefits)benefits)


Depreciation: assets lose value over Depreciation: assets lose value over timetime

Straight Line depreciation: same amount is Straight Line depreciation: same amount is taken each yeartaken each year

Accelerated Depreciation: 2 formsAccelerated Depreciation: 2 forms Double Declining BalanceDouble Declining Balance Sum of the Years DigitsSum of the Years Digits

Life Cycle Costing: includes operations Life Cycle Costing: includes operations and maintenance phasesand maintenance phases

Value Analysis: find a less costly way to Value Analysis: find a less costly way to do same workdo same work


Accounting StandardsAccounting Standards Make or Buy decisions –at Development Make or Buy decisions –at Development

(Planning) phase, not conceptual phase(Planning) phase, not conceptual phase Project Objectives – are not necessarily Project Objectives – are not necessarily

needed to fund projectneeded to fund project Project Definition – focus on end product Project Definition – focus on end product

initially; costs and benefits will be initially; costs and benefits will be evaluated laterevaluated later

25% of project lifecycle expended at end 25% of project lifecycle expended at end of planningof planning

No guarantees; only most likely resultsNo guarantees; only most likely results


Accounting StandardsAccounting Standards Line of Balance charts are used Line of Balance charts are used

for manufacturingfor manufacturing Negative Float – the late start date Negative Float – the late start date

is earlier than the early start dateis earlier than the early start date Value Engineering/analysis – does Value Engineering/analysis – does

not trade performance for costnot trade performance for cost Prospectus – profitability and Prospectus – profitability and

technical feasibility used to solicit technical feasibility used to solicit fundingfunding


Definitive Estimate –most precise/accurate estimate Definitive Estimate –most precise/accurate estimate for determining project costsfor determining project costs

Management Reserve – over time PM wants no Management Reserve – over time PM wants no change to reserve; customers wants $ backchange to reserve; customers wants $ back

Cost and Schedule Data – predicts future Cost and Schedule Data – predicts future performanceperformance

ROI, Nest Present Value and Discounted Cash ROI, Nest Present Value and Discounted Cash Flow – all can be used to measure total income vs. Flow – all can be used to measure total income vs. total $ expendedtotal $ expended

Undistributed budget – budget that contains Undistributed budget – budget that contains approved scope changes but are not planned yetapproved scope changes but are not planned yet

Depreciation is not a measurement of profitabilityDepreciation is not a measurement of profitability Pay Back Period - # of periods required to recover Pay Back Period - # of periods required to recover

the initial investmentthe initial investment

Chapter 8 – Project Quality Chapter 8 – Project Quality ManagementManagement

Project Quality ManagementProject Quality Management Processes required to ensure that Processes required to ensure that

the project will satisfy the needs for the project will satisfy the needs for which it was designedwhich it was designed

Includes all activities of the overall Includes all activities of the overall management function that management function that determine the quality policy, determine the quality policy, objectives, and responsibilities. objectives, and responsibilities. These are implemented by quality These are implemented by quality planning, quality control, quality planning, quality control, quality assurance, and quality improvementassurance, and quality improvement

Chapter 8 – Project Quality Chapter 8 – Project Quality ManagementManagement 3 major processes:3 major processes:

Quality Planning – identifying quality standards Quality Planning – identifying quality standards that are relevant to the project (Plan); Project that are relevant to the project (Plan); Project Manager, Project OwnerManager, Project Owner

Quality Assurance – evaluating overall project Quality Assurance – evaluating overall project performance to provide confidence that project performance to provide confidence that project will satisfy relevant quality standards (Implement will satisfy relevant quality standards (Implement or Execution); Project Teamor Execution); Project Team

Quality Control – monitoring specific results to Quality Control – monitoring specific results to comply with quality standards and eliminating comply with quality standards and eliminating unsatisfactory performance causes (Check or unsatisfactory performance causes (Check or Control); Project Manager, Project TeamControl); Project Manager, Project Team

Compatible with ISO 9000 and 10000 seriesCompatible with ISO 9000 and 10000 series Proprietary and non-proprietary approaches (total Proprietary and non-proprietary approaches (total

quality managementquality management Must address the management of the project and Must address the management of the project and

the product of the project the product of the project

Chapter 8 – Project Quality Chapter 8 – Project Quality ManagementManagement Quality – the totality of characteristics of an entity that Quality – the totality of characteristics of an entity that

bear on its ability to satisfy stated or implied needsbear on its ability to satisfy stated or implied needs Critical aspect is to turn implied needs into stated needs Critical aspect is to turn implied needs into stated needs

through project scope managementthrough project scope management Do not confuse with grade – category or rank given to Do not confuse with grade – category or rank given to

entities having the same functional use but different entities having the same functional use but different requirements for qualityrequirements for quality

Customer satisfaction – conformance to specifications Customer satisfaction – conformance to specifications (must produce what is stated) and fitness for use (must (must produce what is stated) and fitness for use (must satisfy real needs)satisfy real needs)

Prevention – avoid mistakes vs. cost of correctionPrevention – avoid mistakes vs. cost of correction Management responsibility – requires participation of Management responsibility – requires participation of

team; responsibility of management to provide team; responsibility of management to provide resourcesresources

Processes within phases – plan-do-check-act cycleProcesses within phases – plan-do-check-act cycle Recognize that the investment in product quality Recognize that the investment in product quality

improvements may be borne by the performing improvements may be borne by the performing organization since the project may not last long enough to organization since the project may not last long enough to reap rewardreap reward

Chapter 8 Chapter 8 – Project Quality – Project Quality ManagementManagement Quality PlanningQuality Planning

Identify quality standards are relevant and how Identify quality standards are relevant and how to satisfyto satisfy

Inputs to Quality PlanningInputs to Quality Planning Quality Policy – the overall intentions and Quality Policy – the overall intentions and

direction of an organization with regard to quality direction of an organization with regard to quality as expressed by managementas expressed by management

Scope StatementScope Statement Product DescriptionProduct Description Standards and RegulationsStandards and Regulations Other Process Outputs – processes from other Other Process Outputs – processes from other

knowledge areas (procurement planning)knowledge areas (procurement planning)

Chapter 8 Chapter 8 – Project Quality – Project Quality ManagementManagement Tools &Techniques for Quality PlanningTools &Techniques for Quality Planning

Benefit/Cost Analysis – consider trade-offs, benefit Benefit/Cost Analysis – consider trade-offs, benefit is less rework; cost is expense of project is less rework; cost is expense of project management activitiesmanagement activities

Benchmarking – comparing actual or planned Benchmarking – comparing actual or planned practices to those of other projectspractices to those of other projects

FlowchartingFlowcharting Cause and effect diagramming (Ishikawa or fishbone Cause and effect diagramming (Ishikawa or fishbone

diagrams) illustrate how causes relate to potential diagrams) illustrate how causes relate to potential problems or effectsproblems or effects

System or Process flowcharts – show how various System or Process flowcharts – show how various elements of the system interrelateelements of the system interrelate

Helps anticipation of what and where quality problems Helps anticipation of what and where quality problems may occurmay occur

Design of Experiments – analytical technique which Design of Experiments – analytical technique which defines what variables have most influence of the defines what variables have most influence of the overall outcomeoverall outcome

Cost and schedule tradeoffsCost and schedule tradeoffs

Chapter 8 Chapter 8 – Project Quality – Project Quality ManagementManagement Outputs from Quality PlanningOutputs from Quality Planning

Quality Management Plan – describes how team Quality Management Plan – describes how team will implement its quality policy; describes the will implement its quality policy; describes the project quality system – organizational project quality system – organizational structures, responsibilities, procedures, structures, responsibilities, procedures, processes and resources needed to implement processes and resources needed to implement quality managementquality management

Operational Definitions – defines how an item is Operational Definitions – defines how an item is measured by the quality control process. Also measured by the quality control process. Also known as Metrics.known as Metrics.

Checklists – structured tool used to verify that a Checklists – structured tool used to verify that a set of required steps has been performedset of required steps has been performed

Inputs to other processes – may identify a need Inputs to other processes – may identify a need for further activity in another areafor further activity in another area

Chapter 8 Chapter 8 – Project Quality – Project Quality ManagementManagement Quality AssuranceQuality Assurance

All planned and systematic activities All planned and systematic activities implemented within the quality system to implemented within the quality system to provide confidence that the project will provide confidence that the project will satisfy quality standardssatisfy quality standards

Inputs to Quality AssuranceInputs to Quality Assurance Quality Management PlanQuality Management Plan Results of quality control measurements Results of quality control measurements

(testing)(testing) Operational definitionsOperational definitions

Chapter 8 Chapter 8 – Project Quality – Project Quality ManagementManagement Tools & Techniques for Quality Tools & Techniques for Quality

AssuranceAssurance Quality planning tools & techniquesQuality planning tools & techniques Quality Audits – structured review of quality Quality Audits – structured review of quality

management activities to identify lessons management activities to identify lessons learnedlearned

Outputs from Quality AssuranceOutputs from Quality Assurance Quality improvements – taking action to Quality improvements – taking action to

increase the effectiveness and efficiency of increase the effectiveness and efficiency of the project to provide added benefits to the the project to provide added benefits to the stakeholdersstakeholders

Most likely will involve change controlMost likely will involve change control

Chapter 8 Chapter 8 – Project Quality – Project Quality ManagementManagement Quality Control – monitoring specific results Quality Control – monitoring specific results

to determine if they comply with quality to determine if they comply with quality standards and identifying ways to eliminate standards and identifying ways to eliminate causes of unsatisfactory resultscauses of unsatisfactory results Includes project (deliverables) and management Includes project (deliverables) and management

(cost and schedule performance) results(cost and schedule performance) results Awareness of statistical quality controlAwareness of statistical quality control

Prevention (keep errors out of process) and Prevention (keep errors out of process) and inspection (keep errors from customers)inspection (keep errors from customers)

Attribute sampling (result conforms) and variable Attribute sampling (result conforms) and variable samplingsampling

Special Causes (unusual events) and random Special Causes (unusual events) and random causescauses

Tolerances (acceptable range) and control limits Tolerances (acceptable range) and control limits (result falls within range)(result falls within range)

Chapter 8 Chapter 8 – Project Quality – Project Quality ManagementManagement

Inputs to Quality ControlInputs to Quality Control Work results – include process Work results – include process

and product resultsand product results Quality Management PlanQuality Management Plan Operational DefinitionsOperational Definitions ChecklistsChecklists

Chapter 8 Chapter 8 – Project Quality – Project Quality ManagementManagement Tools & Techniques for Quality ControlTools & Techniques for Quality Control

Inspection – activities such as testing to determine if Inspection – activities such as testing to determine if results comply with requirementsresults comply with requirements

Control Charts – plot results over timeControl Charts – plot results over time Pareto diagrams – frequency of occurrence that Pareto diagrams – frequency of occurrence that

identifies type or category of result (80/20 rule) – identifies type or category of result (80/20 rule) – guides corrective actionguides corrective action

Statistical sampling – select population of interest for Statistical sampling – select population of interest for inspectioninspection

FlowchartingFlowcharting Trend Analysis – forecast future outcomes based on Trend Analysis – forecast future outcomes based on

historical resultshistorical results Technical performance (# of errors identified; # of errors Technical performance (# of errors identified; # of errors

that remain)that remain) Cost and Schedule performance (activities per period Cost and Schedule performance (activities per period

with significant variances)with significant variances)

Chapter 8 Chapter 8 – Project Quality – Project Quality ManagementManagement Outputs from Quality ControlOutputs from Quality Control

Quality ImprovementQuality Improvement Acceptance Decisions (accept/reject)Acceptance Decisions (accept/reject) Rework – action to bring defective item Rework – action to bring defective item

into complianceinto compliance Frequent cause of project overrunsFrequent cause of project overruns

Completed checklistsCompleted checklists Process Adjustments – immediate Process Adjustments – immediate

corrective/preventive actionscorrective/preventive actions Most likely involves change controlMost likely involves change control

Chapter 8 Chapter 8 – Project Quality – Project Quality ManagementManagement Tips from the Review GuideTips from the Review Guide

Philosophy: definition of quality, avoidance of “gold Philosophy: definition of quality, avoidance of “gold plating” – giving customer extras, prevention over plating” – giving customer extras, prevention over inspectioninspection

““Conformance to requirements, specifications and Conformance to requirements, specifications and fitness of use”fitness of use”

Quality Management – processes required to ensure Quality Management – processes required to ensure that the project will satisfy the needs for which it was that the project will satisfy the needs for which it was undertakenundertaken

Continuous Improvement - small improvements to Continuous Improvement - small improvements to reduce costs and ensure consistency reduce costs and ensure consistency

Marginal Analysis – optimal quality is reached at the Marginal Analysis – optimal quality is reached at the point when revenue from improvement equals the point when revenue from improvement equals the costs to secure itcosts to secure it

Just in Time Just in Time - - decrease amount of inventory/decrease decrease amount of inventory/decrease investmentinvestment


ISO 9000 or 10000 – standards to ensure that ISO 9000 or 10000 – standards to ensure that corporations follow their own quality procedurescorporations follow their own quality procedures

Total Quality Management – continuous Total Quality Management – continuous improvement in business practicesimprovement in business practices

Normal Distribution – most common probability Normal Distribution – most common probability – used to measure variations– used to measure variations

Standard deviation (sigma) – measure how far Standard deviation (sigma) – measure how far away from the mean (dotted vertical line)away from the mean (dotted vertical line)

3 or 6 sigma – represents level of quality 3 or 6 sigma – represents level of quality +/- 1 sigma equal to 68.26%+/- 1 sigma equal to 68.26% +/- 2 sigma equal to 95.46%+/- 2 sigma equal to 95.46% +/- 3 sigma equal to 99.73%+/- 3 sigma equal to 99.73% +/- 6 sigma equal to 99.99% +/- 6 sigma equal to 99.99%


Tips from the Review GuideTips from the Review Guide Responsibility to quality – entire Responsibility to quality – entire

organizationorganization Ultimate – employeeUltimate – employee Overall or Primary – Project ManagerOverall or Primary – Project Manager Design and Test Specifications – Design and Test Specifications –

engineerengineer Prevention over inspection – quality Prevention over inspection – quality

must be planned in not inspected inmust be planned in not inspected in


Cost of conformance vs. non-conformanceCost of conformance vs. non-conformance Quality Training vs. reworkQuality Training vs. rework Studies vs. ScrapStudies vs. Scrap Surveys vs. Inventory Costs and warranty costsSurveys vs. Inventory Costs and warranty costs

Quality Planning (Plan) – determine what will be Quality Planning (Plan) – determine what will be quality on project and how quality will be quality on project and how quality will be measured – done during Planning Phasesmeasured – done during Planning Phases

Identifying which standards are relevant to project –Identifying which standards are relevant to project –how to satisfy them how to satisfy them

Benchmarking – look at past projects to determine Benchmarking – look at past projects to determine ideas for improvementideas for improvement

Cost Benefit Analysis Cost Benefit Analysis Flowcharts (fishbone)Flowcharts (fishbone) Design of ExperimentsDesign of Experiments


Tips from the Review GuideTips from the Review Guide Quality Assurance (Implement) – Quality Assurance (Implement) –

determine if your measurement of determine if your measurement of quality is appropriate – done quality is appropriate – done during Execution phasesduring Execution phases Process of evaluating overall Process of evaluating overall

performance on a regular basis performance on a regular basis Quality Audits – structured review of Quality Audits – structured review of

quality activities that identify lessons quality activities that identify lessons learned learned


Quality Control (Check) – perform the Quality Control (Check) – perform the measurement and compare to the measurement and compare to the quality plan – done during Control quality plan – done during Control phasesphases

Process of monitoring specific project Process of monitoring specific project results to determine if they comply with results to determine if they comply with relevant quality standards and identify relevant quality standards and identify ways of eliminating unsatisfactory ways of eliminating unsatisfactory performanceperformance

Performance of the measurement or Performance of the measurement or process, using quality control tools – process, using quality control tools – checking workchecking work


Quality Control ToolsQuality Control Tools Pareto Diagrams – 80/20 rule – the chart Pareto Diagrams – 80/20 rule – the chart

presents the information being examined presents the information being examined in its order of priority and helps focus in its order of priority and helps focus attention on the most critical issuesattention on the most critical issues

Fishbone diagram (Cause and Effect) Fishbone diagram (Cause and Effect) A creative way to look at the causes A creative way to look at the causes

or potential causes of a problemor potential causes of a problem Helps stimulate thinking, organizes Helps stimulate thinking, organizes

thoughts and generates discussionthoughts and generates discussion Can be used to explore a desired Can be used to explore a desired

future outcome and the factors to future outcome and the factors to which it relateswhich it relates


Quality Control ToolsQuality Control Tools Checklists – list of items to inspectChecklists – list of items to inspect Control Charts – graphic displays of the results over Control Charts – graphic displays of the results over

time – used to determine if a process is in controltime – used to determine if a process is in control Upper and Lower Control Limits – two dashed Upper and Lower Control Limits – two dashed

lines – show the acceptable range of a variation lines – show the acceptable range of a variation – range determined by company’s quality – range determined by company’s quality standard (sigma)standard (sigma)

Mean – line in the middle – shows middle of the Mean – line in the middle – shows middle of the range of acceptable resultsrange of acceptable results

Specification Limits – 2 solid lines outside the Specification Limits – 2 solid lines outside the upper and lower control limits – represent the upper and lower control limits – represent the customer's expectations/requirements of quality customer's expectations/requirements of quality


Quality Control ToolsQuality Control Tools Out of Control – process is out of Out of Control – process is out of

control when:control when: A data point falls outside of the upper A data point falls outside of the upper

or lower control limitor lower control limit Non-random data points are within the Non-random data points are within the

upper control and lower control limitsupper control and lower control limits Rule of 7 – non-random points outside Rule of 7 – non-random points outside

the mean - process should be the mean - process should be investigatedinvestigated

Assignable Cause – data point the Assignable Cause – data point the requires investigation to determine the requires investigation to determine the cause of the variationcause of the variation

Chapter 8 Chapter 8 – Project Quality – Project Quality ManagementManagement PMI and DemingPMI and Deming

Cost of conformance – 85% of costs of Cost of conformance – 85% of costs of quality are responsibility of Managementquality are responsibility of Management

Quality Training – ReworkQuality Training – Rework Studies – ScrapStudies – Scrap Surveys – Inventory and Warranty costsSurveys – Inventory and Warranty costs

Crosby – absolutes of qualityCrosby – absolutes of quality Performance standard is zero defects; Performance standard is zero defects;

measurement system is cost of non-measurement system is cost of non-conformanceconformance

Continuous ImprovementContinuous Improvement Japanese (Kaizen)Japanese (Kaizen)

Chapter 8 Chapter 8 – Project Quality – Project Quality ManagementManagement Marginal Analysis – optimal quality is Marginal Analysis – optimal quality is

reached when incremental revenue reached when incremental revenue from improvement equals incremental from improvement equals incremental cost to securecost to secure

Variable – characteristic to be Variable – characteristic to be measuredmeasured

Attribute – measurement (objective or Attribute – measurement (objective or subjective)subjective)

Increase quality = increased Increase quality = increased productivity, increased cost productivity, increased cost effectiveness, decreased cost riskeffectiveness, decreased cost risk

Chapter 8 – Project Quality Chapter 8 – Project Quality ManagementManagement Review Guide TipsReview Guide Tips

Primary responsibility for quality Primary responsibility for quality management is the PMmanagement is the PM

Results of increase in qualityResults of increase in quality Increased productivityIncreased productivity Increased cost effectivenessIncreased cost effectiveness Decreased cost riskDecreased cost risk

Quality attributes – can be subjective, Quality attributes – can be subjective, objective and are specific characteristics for objective and are specific characteristics for which a project is designed and testedwhich a project is designed and tested

Quality assurance – example is team Quality assurance – example is team trainingtraining

Cost of Conformance = team trainingCost of Conformance = team training


Marginal Analysis: optimal quality is reached Marginal Analysis: optimal quality is reached when incremental revenue from improvement when incremental revenue from improvement equals the incremental cost to secureequals the incremental cost to secure

Standard Deviation: how far away from meanStandard Deviation: how far away from mean Variable: characteristic you want to measureVariable: characteristic you want to measure Attribute: measurement (subjective or Attribute: measurement (subjective or

objective)objective) Ultimate Responsibility – EmployeeUltimate Responsibility – Employee Overall Responsibility – PMOverall Responsibility – PM Design/Test Specifications - EngineerDesign/Test Specifications - Engineer


If quality sample size increases, the quality If quality sample size increases, the quality control band decreasescontrol band decreases

Product Cost plus Operations and Maintenance Product Cost plus Operations and Maintenance costs increase perceived value when balancedcosts increase perceived value when balanced

Cost of Conformance = trainingCost of Conformance = training Crosby Absolutes of Quality – performance of Crosby Absolutes of Quality – performance of

standard is zero defects and the measurement standard is zero defects and the measurement system is the cost of non-conformancesystem is the cost of non-conformance

Deming & Japanese are associated with Quality Deming & Japanese are associated with Quality Improvement programsImprovement programs

Quality Control – performed by operating Quality Control – performed by operating personnel personnel


Quality objectives are approved in Quality objectives are approved in conceptual stage by project ownerconceptual stage by project owner

QA – auditing function that provides QA – auditing function that provides feedback to team and client about feedback to team and client about quality of output being producedquality of output being produced

If sample size is a constant and If sample size is a constant and acceptance numbers increase, the acceptance numbers increase, the producers risk decreases and consumer producers risk decreases and consumer risk increasesrisk increases

85% of costs of quality are direct 85% of costs of quality are direct responsibility of managementresponsibility of management

Chapter 9 – Human Resource Chapter 9 – Human Resource ManagementManagement Project Human Resource ManagementProject Human Resource Management

Processes required to make the most Processes required to make the most efficient use of peopleefficient use of people

3 major processes:3 major processes: Organizational PlanningOrganizational Planning Staff AcquisitionsStaff Acquisitions Team DevelopmentTeam Development

Keep in mind of transient nature of Keep in mind of transient nature of projectsprojects

Apply techniques that apply to current Apply techniques that apply to current project needsproject needs

Ensure HR compliance with project Ensure HR compliance with project management activitiesmanagement activities

Chapter 9 – Human Resource Chapter 9 – Human Resource ManagementManagement Project Human Resource ManagementProject Human Resource Management

1,9 manager = good relationship with team1,9 manager = good relationship with team Project OrganizationProject Organization

Conflict between PM and Functional ManagersConflict between PM and Functional Managers Dual allegiance of team membersDual allegiance of team members Complex prioritization of resourcesComplex prioritization of resources Loss of developed procedures on project Loss of developed procedures on project

dissolutiondissolution Compromise = both sides will loseCompromise = both sides will lose DelegationDelegation

Defer the decisionDefer the decision Interpreted as passiveInterpreted as passive Emphasize task vs. personnelEmphasize task vs. personnel Can be frequently usedCan be frequently used

Chapter 9 – Human Resource Chapter 9 – Human Resource ManagementManagement Project Human Resource Project Human Resource

ManagementManagement If there is a team of experts, PM If there is a team of experts, PM

decisions will promote high satisfactiondecisions will promote high satisfaction Functional/Project Managers likely to Functional/Project Managers likely to

exercise:exercise: PowerPower AuthorityAuthority InfluenceInfluence

Traditional organization forms have no Traditional organization forms have no single point of contact for client/sponsorsingle point of contact for client/sponsor

Chapter 9 Chapter 9 – Human Resource – Human Resource ManagementManagement

Organizational PlanningOrganizational Planning Identifying, documenting and Identifying, documenting and

assigning project roles, assigning project roles, responsibilities, and reporting responsibilities, and reporting relationshipsrelationships Individual and group assignmentsIndividual and group assignments Internal and external employeesInternal and external employees Linked with communication planningLinked with communication planning

Chapter 9 Chapter 9 – Human Resource – Human Resource ManagementManagement Inputs to Organizational PlanningInputs to Organizational Planning

Project Interfaces Project Interfaces Organizational interfaces – formal and informal Organizational interfaces – formal and informal

reporting relationships among organizational unitsreporting relationships among organizational units Technical interfaces - formal and informal Technical interfaces - formal and informal

reporting relationships among technical reporting relationships among technical disciplinesdisciplines

Engineers, manufacturers, electrical, etc.Engineers, manufacturers, electrical, etc. Interpersonal interfaces – formal and informal Interpersonal interfaces – formal and informal

reporting relationships among individualsreporting relationships among individuals Staffing Requirements – define skill sets Staffing Requirements – define skill sets

from individual/group in particular time from individual/group in particular time framesframes


Inputs to Organizational PlanningInputs to Organizational Planning Constraints – factors that limit Constraints – factors that limit

project team’s optionsproject team’s options Organizational structure (strong vs. Organizational structure (strong vs.

weak matrix)weak matrix) Collective bargaining agreements – Collective bargaining agreements –

contractual arrangementscontractual arrangements Preferences of project management Preferences of project management

teamteam Expected staff assignments Expected staff assignments

Chapter 9 Chapter 9 – Human Resource – Human Resource ManagementManagement Tools & Techniques for Tools & Techniques for

Organizational PlanningOrganizational Planning Templates – reuse a similar project’s Templates – reuse a similar project’s

role and responsibility definitionsrole and responsibility definitions Human Resource Practices – corporate Human Resource Practices – corporate

policies, guidelines, and practicespolicies, guidelines, and practices Organizational Theory – how Organizational Theory – how

organizations are structuredorganizations are structured Stakeholder Analysis – needs of Stakeholder Analysis – needs of

stakeholders are ensuredstakeholders are ensured

Chapter 9 Chapter 9 – Human Resource – Human Resource ManagementManagement Outputs from Organizational PlanningOutputs from Organizational Planning

Role and Responsibility Assignments – can vary Role and Responsibility Assignments – can vary over time, closely linked to scope definition. Utilizes over time, closely linked to scope definition. Utilizes a Responsibility Assignment Matrix (RAM) to define a Responsibility Assignment Matrix (RAM) to define responsibility for each item in the Work Breakdown responsibility for each item in the Work Breakdown Structure/task listStructure/task list

Staffing Management Plan – when and how Staffing Management Plan – when and how personnel are included and removed from the project personnel are included and removed from the project teamteam

Resource leveling, reduce transition periods, eliminate Resource leveling, reduce transition periods, eliminate “dead time” between assignments, sensitivity to morale“dead time” between assignments, sensitivity to morale

Organizational Chart – display reporting relationshipsOrganizational Chart – display reporting relationships Supporting DetailSupporting Detail

Organizational impactOrganizational impact Job descriptionsJob descriptions Training needsTraining needs

Chapter 9 Chapter 9 – Human Resource – Human Resource ManagementManagement Staff AcquisitionStaff Acquisition

Ensure resources are available for Ensure resources are available for project workproject work

Inputs to Staff AcquisitionInputs to Staff Acquisition Staffing Management PlanStaffing Management Plan Staffing Pool DescriptionStaffing Pool Description

Previous experiencePrevious experience Personal interestsPersonal interests Personal characteristicsPersonal characteristics AvailabilityAvailability

Recruitment PracticesRecruitment Practices

Chapter 9 Chapter 9 – Human Resource – Human Resource ManagementManagement Tools & Techniques for Staff Tools & Techniques for Staff

AcquisitionAcquisition Negotiations with functional managers Negotiations with functional managers

and other teamsand other teams Staff utilization and corporate politicsStaff utilization and corporate politics

Pre-assignment – result of a competitive Pre-assignment – result of a competitive proposal, or an internal initiativeproposal, or an internal initiative

Procurement – outside services are Procurement – outside services are needed (lacking internal skills or needed (lacking internal skills or availability can not be met)availability can not be met)

Outputs from Staff AcquisitionOutputs from Staff Acquisition Project staff assignedProject staff assigned Project Team Directory – contact listProject Team Directory – contact list

Chapter 9 Chapter 9 – Human Resource – Human Resource ManagementManagement Team Development – enhancing Team Development – enhancing

stakeholders to contribute along stakeholders to contribute along with maintaining the project with maintaining the project team’s functionalityteam’s functionality Personal development is the Personal development is the

foundationfoundation Team members often balance Team members often balance

responsibilities to a functional responsibilities to a functional manager and project managermanager and project manager Critical to success of projectCritical to success of project


Inputs to Team DevelopmentInputs to Team Development Project StaffProject Staff Project PlanProject Plan Staffing Management PlanStaffing Management Plan Performance ReportsPerformance Reports External FeedbackExternal Feedback

Periodic measurements of Periodic measurements of performanceperformance

Chapter 9 Chapter 9 – Human Resource – Human Resource ManagementManagement Tools & Techniques for Team Tools & Techniques for Team

DevelopmentDevelopment Team-building activitiesTeam-building activities General Management SkillsGeneral Management Skills Reward and recognition systemsReward and recognition systems

Promote desired behaviorPromote desired behavior Must be achievable; apply to the projectMust be achievable; apply to the project Cultural differences recognitionCultural differences recognition

Co-location – place members in physical Co-location – place members in physical locationlocation

Training – enhance skills, knowledge, and Training – enhance skills, knowledge, and capabilities of project teamcapabilities of project team

Must be factored in cost analysis of projectMust be factored in cost analysis of project


Outputs from Team Outputs from Team DevelopmentDevelopment Performance ImprovementsPerformance Improvements

Individual skillsIndividual skills Team BehaviorTeam Behavior Identify more efficient methods of Identify more efficient methods of

workwork Input for performance appraisalsInput for performance appraisals

Chapter 9 Chapter 9 – Human Resource – Human Resource ManagementManagement Review Guide TipsReview Guide Tips

Roles and responsibilitiesRoles and responsibilities Project Manger – plan, estimate and schedule Project Manger – plan, estimate and schedule

of projectof project Team – help prepare the WBS, Network Team – help prepare the WBS, Network

Diagrams, and estimate time for tasks, Diagrams, and estimate time for tasks, complete taskscomplete tasks

Senior Management – approve Overall project Senior Management – approve Overall project plan, budget and schedule and to approve any plan, budget and schedule and to approve any changes that are made to those figureschanges that are made to those figures

The person experiencing the problem must try The person experiencing the problem must try to solve it themselves as long as means are in to solve it themselves as long as means are in their controltheir control


Powers:Powers: Formal (legitimate)Formal (legitimate) RewardReward Penalty (coercive)Penalty (coercive) Expert (earned)Expert (earned) Referent – authority of a higher positionReferent – authority of a higher position

Best are Expert and Reward; Penalty is Best are Expert and Reward; Penalty is the worstthe worst

Formal, Reward and Penalty derived from Formal, Reward and Penalty derived from PM’s position within the companyPM’s position within the company


ConflictConflict Inevitable consequence of organizational Inevitable consequence of organizational

interactionsinteractions Can be beneficialCan be beneficial Resolved by identifying the causes and Resolved by identifying the causes and

problem solving by people that are involved problem solving by people that are involved & their immediate manager& their immediate manager

Nature of projectNature of project Limited power of the project managerLimited power of the project manager Necessity for obtaining resources from Necessity for obtaining resources from

functional managers functional managers


Avoid conflictAvoid conflict Informing the teamInforming the team Clearly assigning tasks without ambiguityClearly assigning tasks without ambiguity Challenging and interesting work assignmentsChallenging and interesting work assignments

Conflict Sources (in order of frequency)Conflict Sources (in order of frequency) SchedulesSchedules Project PrioritiesProject Priorities ResourcesResources Technical opinionsTechnical opinions Administrative ProceduresAdministrative Procedures CostCost PersonalityPersonality


Motivational TheoriesMotivational Theories Maslow’s Hierarchy of Needs – people work to get a Maslow’s Hierarchy of Needs – people work to get a

chance to contribute and use their skillschance to contribute and use their skills ‘‘self-actualization’self-actualization’

McGregor’s Theory of X and YMcGregor’s Theory of X and Y X – people need to be watched every minuteX – people need to be watched every minute Y – people willing to work without supervisionY – people willing to work without supervision

Herzberg’s Theory – poor hygiene factors destroy Herzberg’s Theory – poor hygiene factors destroy motivation but improving them will not improve motivation but improving them will not improve motivationmotivation

Motivating AgentsMotivating Agents ResponsibilityResponsibility Self-actualizationSelf-actualization Professional growthProfessional growth RecognitionRecognition


Responsibility ChartsResponsibility Charts Matrix – cross references team members with Matrix – cross references team members with

tasks (does not show time – when job is done)tasks (does not show time – when job is done) Histogram – months vs. number of resourcesHistogram – months vs. number of resources Gantt Chart – shows when staff allocated to Gantt Chart – shows when staff allocated to

taskstasks Leadership SkillsLeadership Skills

DirectiveDirective FacilitatingFacilitating Coaching Coaching SupportiveSupportive

Team Building SkillsTeam Building Skills

Chapter 9 Chapter 9 – Human – Human Resource ManagementResource Management Review Guide TipsReview Guide Tips

Projectized OrganizationProjectized Organization Conflict between PM and Functional ManagersConflict between PM and Functional Managers Dual Allegiance of team membersDual Allegiance of team members Complex prioritization of resourcesComplex prioritization of resources Loss of developed procedures on project Loss of developed procedures on project

dissolutiondissolution Compromise – both sides will loseCompromise – both sides will lose DelegationDelegation

Defer the decisionDefer the decision Interpreted as passiveInterpreted as passive Emphasize task vs. personnelEmphasize task vs. personnel Can be frequently utilizedCan be frequently utilized

Chapter 10 – Project Chapter 10 – Project Communications ManagementCommunications Management Project Communications ManagementProject Communications Management

Processes to ensure timely and proper Processes to ensure timely and proper generation, collection, dissemination and generation, collection, dissemination and disposition of project informationdisposition of project information

General communications managementGeneral communications management Communications Planning – determining Communications Planning – determining

informational needs, who needs what and informational needs, who needs what and when; 90% of PM’s time is spent when; 90% of PM’s time is spent communicatingcommunicating

Information Distribution – making information Information Distribution – making information availableavailable

Performance Reporting – collecting and Performance Reporting – collecting and disseminating project informationdisseminating project information

Administrative Closure – formalize Administrative Closure – formalize project/phase completion project/phase completion

Chapter 10 – Project Chapter 10 – Project Communications ManagementCommunications Management Communications PlanningCommunications Planning

Determining information requirements of Determining information requirements of stakeholdersstakeholders

Tightly linked with organizational planningTightly linked with organizational planning Inputs to Communications PlanningInputs to Communications Planning

Communication requirements – sum of the Communication requirements – sum of the information requirements of the stakeholdersinformation requirements of the stakeholders

Define type and format of information with analysis Define type and format of information with analysis of value of informationof value of information

Project organization and stakeholder responsibility Project organization and stakeholder responsibility relationshipsrelationships

Disciplines, departments and specialties involved in Disciplines, departments and specialties involved in projectproject

Logistics of number of individuals at locationLogistics of number of individuals at location External communication needs (media)External communication needs (media)

Chapter 10 – Project Chapter 10 – Project Communications ManagementCommunications Management

Communication Technology – used to Communication Technology – used to transfer informationtransfer information

Immediacy of need for informationImmediacy of need for information Availability of technologyAvailability of technology Expected project staffing – compatible with Expected project staffing – compatible with

personnel experiencepersonnel experience Length of project – will technology change Length of project – will technology change

during duration?during duration? Constraints – factors that limit project Constraints – factors that limit project

team’s optionsteam’s options AssumptionsAssumptions

Chapter 10 – Project Chapter 10 – Project Communications ManagementCommunications Management Tools & Techniques for Communication Tools & Techniques for Communication

PlanningPlanning Stakeholder analysis – informational needs should Stakeholder analysis – informational needs should

be analyzed to develop methodology suited for the be analyzed to develop methodology suited for the project; eliminate unnecessary information or project; eliminate unnecessary information or technologiestechnologies

Outputs from Communications PlanningOutputs from Communications Planning Communication Management PlanCommunication Management Plan

Collection and filing structure to detail the gathering Collection and filing structure to detail the gathering and storage of information; updating and disseminationand storage of information; updating and dissemination

Distribution structure – who gets info in certain format; Distribution structure – who gets info in certain format; compatible with project organization chartcompatible with project organization chart

Description of information included – format, level of Description of information included – format, level of detail, conventionsdetail, conventions

Production schedules of each type of communicationProduction schedules of each type of communication Methods for accessing informationMethods for accessing information Method for updating and refining communications planMethod for updating and refining communications plan


Information Distribution – making Information Distribution – making information available in a timely information available in a timely manner by implementing the manner by implementing the communications plan; responding to communications plan; responding to requests for informationrequests for information

Inputs to Information DistributionInputs to Information Distribution Work ResultsWork Results Communication Management PlanCommunication Management Plan Project PlanProject Plan

Chapter 10 – Project Chapter 10 – Project Communications ManagementCommunications Management Tools & Techniques for Information Tools & Techniques for Information

DistributionDistribution Communication Skills – used to exchange Communication Skills – used to exchange

information. Sender is responsible for clarity; information. Sender is responsible for clarity; receiver is responsible for receipt and receiver is responsible for receipt and understandingunderstanding

Information retrieval systems – filing systems, Information retrieval systems – filing systems, softwaresoftware

Information distribution systems – meetings, Information distribution systems – meetings, correspondence, networked databases, correspondence, networked databases, video/audio conferencingvideo/audio conferencing

Outputs from Information DistributionOutputs from Information Distribution Project Records – maintained in an organized Project Records – maintained in an organized

fashionfashion


Performance ReportingPerformance Reporting Collecting and disseminating Collecting and disseminating

performance indicators to provide performance indicators to provide stakeholders information how stakeholders information how resources are achieving project resources are achieving project objectivesobjectives Status reportingStatus reporting Progress reportingProgress reporting ForecastingForecasting Project scope, schedule, cost and Project scope, schedule, cost and

quality, risk and procurement quality, risk and procurement


Inputs to Performance ReportingInputs to Performance Reporting Project PlanProject Plan Work Results – deliverables Work Results – deliverables

completed, % completed, costs completed, % completed, costs incurredincurred

Other Project recordsOther Project records

Chapter 10 – Project Chapter 10 – Project Communications ManagementCommunications Management Tools & Techniques for Performance ReportingTools & Techniques for Performance Reporting

Performance reviews – meetings to assess statusPerformance reviews – meetings to assess status Variance Analysis – comparing actual results to planned or Variance Analysis – comparing actual results to planned or

expected results (baseline); cost and schedule most frequentexpected results (baseline); cost and schedule most frequent Trend Analysis – examining results over time to determine Trend Analysis – examining results over time to determine

performanceperformance Earned Value Analysis – integrates scope, cost and Earned Value Analysis – integrates scope, cost and

schedule measures – calculate 3 keys:schedule measures – calculate 3 keys: Budgeted Cost of Work (BCWS) – portion of approved cost Budgeted Cost of Work (BCWS) – portion of approved cost

estimate planned to be spent on activity during a given periodestimate planned to be spent on activity during a given period Actual Cost of Work Performed (ACWP) – total of direct and Actual Cost of Work Performed (ACWP) – total of direct and

indirect cost incurred in accomplishing work on activity in a indirect cost incurred in accomplishing work on activity in a given periodgiven period

Earned Value (Budgeted Cost of Work Performed – BCWP) – Earned Value (Budgeted Cost of Work Performed – BCWP) – percentage of total budget equal to percentage of work actually percentage of total budget equal to percentage of work actually completedcompleted

Cost Variance (CV) = BCWP – ACWPCost Variance (CV) = BCWP – ACWP Schedule Variance (SV) = BCWP – BCWSSchedule Variance (SV) = BCWP – BCWS Cost Performance Index (CPI) = BCWP/ACWPCost Performance Index (CPI) = BCWP/ACWP

Information Distribution Tools & TechniquesInformation Distribution Tools & Techniques


Outputs from Performance Outputs from Performance ReportingReporting Performance Reports – organize Performance Reports – organize

and summarize information and summarize information gathered and present resultsgathered and present results Bar charts, Gantt charts, S-curves, Bar charts, Gantt charts, S-curves,

etc.etc. Change Requests – handled as Change Requests – handled as

part of change controlpart of change control


Administrative ClosureAdministrative Closure Projects/phases after achieving Projects/phases after achieving

results or terminated require closureresults or terminated require closure Verifying and documenting project Verifying and documenting project

results to formalize acceptanceresults to formalize acceptance Collection of project records, Collection of project records,

analysis of effectiveness, reflect analysis of effectiveness, reflect final specifications and archiving of final specifications and archiving of materialmaterial

Chapter 10 – Project Chapter 10 – Project Communications ManagementCommunications Management Inputs to Administrative ClosureInputs to Administrative Closure

Performance Measurement Documentation – Performance Measurement Documentation – includes planning docs; all information that includes planning docs; all information that records and analyzes performancerecords and analyzes performance

Documentation of product and projectDocumentation of product and project Other project recordsOther project records

Tools & Techniques of Administrative Tools & Techniques of Administrative ClosureClosure Performance Reporting tools & techniquesPerformance Reporting tools & techniques

Outputs from Administrative ClosureOutputs from Administrative Closure Product Archives –complete index of all records, Product Archives –complete index of all records,

database updatesdatabase updates Formal Acceptance – signoffs from client or Formal Acceptance – signoffs from client or

sponsorsponsor Lessons LearnedLessons Learned


Tips from Review GuideTips from Review Guide Understand all concepts and major pointsUnderstand all concepts and major points Memorize the communications modelMemorize the communications model Understand the inputs/outputs of Understand the inputs/outputs of

Administrative ClosureAdministrative Closure Understand how administrative closure Understand how administrative closure

differs from contract closeoutdiffers from contract closeout Contract closeout has product verification and Contract closeout has product verification and

administrative closeout but the contract terms administrative closeout but the contract terms may have special provisions/procedures for may have special provisions/procedures for closeoutcloseout

Chapter 10 – Project Chapter 10 – Project Communications ManagementCommunications Management Communication ModelCommunication Model

Messages are encoded by sender and Messages are encoded by sender and decoded by receiver based on receiver’s decoded by receiver based on receiver’s education, experience, language and education, experience, language and cultureculture

Sender should encode message carefullySender should encode message carefully NonverbalNonverbal Paralingual (pitch and tone)Paralingual (pitch and tone) Active Listening – receiver confirms they are Active Listening – receiver confirms they are

listening, confirms agreement and ask for listening, confirms agreement and ask for clarificationclarification

Effective Listening – watching speaker, think Effective Listening – watching speaker, think before speaking, ask questions, repeating and before speaking, ask questions, repeating and providing feedbackproviding feedback

Chapter 10 – Project Chapter 10 – Project Communications ManagementCommunications Management Communication MethodsCommunication Methods

Pick the form of communication that is Pick the form of communication that is best for the situationbest for the situation

Formal Written – complex problems, All Formal Written – complex problems, All Plans, communicating over long distancesPlans, communicating over long distances

Formal Verbal – Presentations, speechesFormal Verbal – Presentations, speeches Informal Written – memos, e-mail, notesInformal Written – memos, e-mail, notes Informal Verbal – Meetings, conversationsInformal Verbal – Meetings, conversations

Chapter 10 – Project Chapter 10 – Project Communications ManagementCommunications Management Communication BlockersCommunication Blockers

Noise, Distance, Improper en-coding, “bad idea”, Hostility, Noise, Distance, Improper en-coding, “bad idea”, Hostility, Language, CultureLanguage, Culture

Performance ReportingPerformance Reporting Status Reports (where project stands)Status Reports (where project stands) Progress Reports (what has been accomplished)Progress Reports (what has been accomplished) Trend Report (project results over time)Trend Report (project results over time) Forecasting Report (projecting future status)Forecasting Report (projecting future status) Variance Report (actual results vs. planned)Variance Report (actual results vs. planned) Earned ValueEarned Value

Communication Channels – communications Communication Channels – communications grow at a linear rategrow at a linear rate N (N-1)/2 where N = the number of peopleN (N-1)/2 where N = the number of people Example 4 people equals 6 communication channelsExample 4 people equals 6 communication channels

Chapter 10 – Project Chapter 10 – Project Communications ManagementCommunications Management To determine if someone understands message feedback To determine if someone understands message feedback

must be obtainedmust be obtained Unanimous AgreementUnanimous Agreement

All members committedAll members committed Decisions reached slowlyDecisions reached slowly Integrity is developedIntegrity is developed Future decision making is enhancedFuture decision making is enhanced

Clearly defined group goalsClearly defined group goals Motivate team behaviorMotivate team behavior Cause tension until completedCause tension until completed Encourage member identificationEncourage member identification

Complex messages need oral, written and non verbal Complex messages need oral, written and non verbal methodsmethods

There are 5 directions of communicationThere are 5 directions of communication Façade – when an individual processed needed information Façade – when an individual processed needed information

but withholds the informationbut withholds the information

Chapter 10 – Project Chapter 10 – Project Communications ManagementCommunications Management Least effective form of communication for complex situations is Least effective form of communication for complex situations is

verbal and formalverbal and formal If there are a team of experts, PM decisions will likely promote high If there are a team of experts, PM decisions will likely promote high

satisfactionsatisfaction Functional/Project Mangers likely to exerciseFunctional/Project Mangers likely to exercise

PowerPower AuthorityAuthority InfluenceInfluence

Traditional organization forms have no single point of contact for Traditional organization forms have no single point of contact for clients/sponsorsclients/sponsors

To determine if someone understands message, must obtain To determine if someone understands message, must obtain feedbackfeedback

Unanimous Agreement – all members committed, decisions reached Unanimous Agreement – all members committed, decisions reached slowly, integrity is developed, future decision making is enhancedslowly, integrity is developed, future decision making is enhanced

Clearly defined group goals: motivate team behavior, cause tension Clearly defined group goals: motivate team behavior, cause tension until completed, encourage member interactionuntil completed, encourage member interaction

Chapter 10 – Project Chapter 10 – Project Communications ManagementCommunications Management Complex messages need oral, written and non Complex messages need oral, written and non

verbal methodsverbal methods Least effective form of communication for complex Least effective form of communication for complex

issues: verbal and formalissues: verbal and formal

Chapter 11 – Project Risk Chapter 11 – Project Risk ManagementManagement Project Risk ManagementProject Risk Management

Includes identifying, analyzing, and responding to Includes identifying, analyzing, and responding to risk areas; maximizing results of positive events risk areas; maximizing results of positive events and minimizing consequences of adverse eventsand minimizing consequences of adverse events

Risk Identification – which are likely to affect the Risk Identification – which are likely to affect the projectproject

Risk Quantification – evaluation of risk to assess Risk Quantification – evaluation of risk to assess the range of possible outcomesthe range of possible outcomes

Sometimes treated as single process; risk Sometimes treated as single process; risk analysis/assessmentanalysis/assessment

Risk Response Development – defining Risk Response Development – defining enhancement steps for opportunities and responseenhancement steps for opportunities and response

Sometimes called response planning/mitigationSometimes called response planning/mitigation Risk Response Control – responding to changes in Risk Response Control – responding to changes in

risk over course of project risk over course of project May be combined as risk managementMay be combined as risk management

Chapter 11 – Project Risk Chapter 11 – Project Risk ManagementManagement

Risk IdentificationRisk Identification Determining which risks are likely to Determining which risks are likely to

affect the project and documenting themaffect the project and documenting them Performed on a regular basis; address Performed on a regular basis; address

internal and external risksinternal and external risks Internal –project team has control/influence Internal –project team has control/influence

overover External – beyond project team’s controlExternal – beyond project team’s control

Identify cause and effect and effects and Identify cause and effect and effects and causes; what could happen vs. what causes; what could happen vs. what outcomes should be avoidedoutcomes should be avoided

Chapter 11 – Project Risk Chapter 11 – Project Risk ManagementManagement Inputs to Risk IdentificationInputs to Risk Identification

Product Description – more risk associated with Product Description – more risk associated with unproven technologies (innovation/invention). unproven technologies (innovation/invention). Often described in terms of cost and schedule Often described in terms of cost and schedule impactimpact

Other Planning ReportsOther Planning Reports WBS (any non-traditional approaches)WBS (any non-traditional approaches) Cost/Duration Estimates – aggressive schedules; Cost/Duration Estimates – aggressive schedules;

limited amount of informationlimited amount of information Staffing Plan – hard to replace/source skill setsStaffing Plan – hard to replace/source skill sets Procurement Management Plan – market Procurement Management Plan – market

conditionsconditions Historical Information – previous projectsHistorical Information – previous projects

Project FilesProject Files Commercial DatabasesCommercial Databases Project Team Knowledge – member experiencesProject Team Knowledge – member experiences


Tools & Techniques for Risk Tools & Techniques for Risk IdentificationIdentification Checklists – organized by source of risk, Checklists – organized by source of risk,

included project context, process included project context, process outputs, product and technology issues, outputs, product and technology issues, internal sourcesinternal sources

Flowcharting – understand cause and Flowcharting – understand cause and effect relationshipseffect relationships

Interviewing – conversations with Interviewing – conversations with stakeholdersstakeholders

Chapter 11 – Project Risk Chapter 11 – Project Risk ManagementManagement Outputs from Risk IdentificationOutputs from Risk Identification

Sources of Risk – categories of possible risk events, all-Sources of Risk – categories of possible risk events, all-inclusiveinclusive

Changes in requirementsChanges in requirements Design errors, omissions, misunderstandingDesign errors, omissions, misunderstanding Poorly defined roles and responsibilitiesPoorly defined roles and responsibilities Insufficiently skilled staffInsufficiently skilled staff

Include estimate of probability, range of possible outcomes, Include estimate of probability, range of possible outcomes, expected timing, anticipated frequencyexpected timing, anticipated frequency

Potential Risk Events – discrete occurrences that may affect Potential Risk Events – discrete occurrences that may affect projectproject

Identified when probability/magnitude of loss is high (e.g. Identified when probability/magnitude of loss is high (e.g. turnover)turnover)

New technologies obsolete need of productNew technologies obsolete need of product Socio, Political and Economic eventsSocio, Political and Economic events Include estimate of probability, range of possible outcomes, Include estimate of probability, range of possible outcomes,

expected timing, anticipated frequencyexpected timing, anticipated frequency Risk Symptoms – triggers that are indirect manifestations of Risk Symptoms – triggers that are indirect manifestations of

actual risk events (e.g. poor morale)actual risk events (e.g. poor morale) Inputs to other processes – identify need in another area; Inputs to other processes – identify need in another area;

constraints and assumptionsconstraints and assumptions


Risk QuantificationRisk Quantification Evaluation of possible project outcomes Evaluation of possible project outcomes

and determining which events warrant and determining which events warrant responseresponse

Opportunities and threats can provide Opportunities and threats can provide unanticipated results (e.g. schedule delay unanticipated results (e.g. schedule delay considers a new strategy)considers a new strategy)

Multiple effects from a single eventMultiple effects from a single event Singular Stakeholder opportunities may Singular Stakeholder opportunities may

force suffering in other areasforce suffering in other areas Reliance on statistics and forecasting Reliance on statistics and forecasting

(mathematical errors)(mathematical errors)


Inputs to Risk QuantificationInputs to Risk Quantification Stakeholder risk toleranceStakeholder risk tolerance

More capital to expend; perceptions More capital to expend; perceptions of severityof severity

Sources of RiskSources of Risk Potential Risk EventsPotential Risk Events Cost EstimatesCost Estimates Activity Duration EstimatesActivity Duration Estimates

Chapter 11 – Project Risk Chapter 11 – Project Risk ManagementManagement Tools & Techniques for Risk QuantificationTools & Techniques for Risk Quantification

Expected Monetary Value – product of 2 Expected Monetary Value – product of 2 numbersnumbers

Risk Event Probability – estimate that event will Risk Event Probability – estimate that event will occuroccur

Risk Event Value – estimate of gain or lossRisk Event Value – estimate of gain or loss Statistical Sums – calculate range of total costs Statistical Sums – calculate range of total costs

from cost estimates for individual work itemsfrom cost estimates for individual work items Simulation – representation or model; provide Simulation – representation or model; provide

statistical distribution of calculated results.statistical distribution of calculated results. Monte Carlo, Critical Path, PERT techniquesMonte Carlo, Critical Path, PERT techniques

Decision Trees – depicts key interactions Decision Trees – depicts key interactions among decisions and possible outcomesamong decisions and possible outcomes

Expert Judgment Expert Judgment


Outputs from Risk QuantificationOutputs from Risk Quantification Opportunities to pursue; threats to Opportunities to pursue; threats to

respondrespond Opportunities to ignore; threats to Opportunities to ignore; threats to

acceptaccept


Risk Response DevelopmentRisk Response Development Defining enhancement steps for Defining enhancement steps for

opportunities and responses to opportunities and responses to threatsthreats

Avoidance – eliminating threat by Avoidance – eliminating threat by eliminating the causeeliminating the cause

Mitigation – reducing expected Mitigation – reducing expected monetary value of event by reducing monetary value of event by reducing the probability of occurrencethe probability of occurrence

Acceptance – accept the Acceptance – accept the consequences (active - contingency consequences (active - contingency plan - or passive response)plan - or passive response)

Chapter 11 – Project Risk Chapter 11 – Project Risk ManagementManagement Inputs to Risk Response DevelopmentInputs to Risk Response Development

Opportunities to pursue, threats to respondOpportunities to pursue, threats to respond Opportunities to ignore, threats to acceptOpportunities to ignore, threats to accept

Tools & Techniques for Risk Response Tools & Techniques for Risk Response DevelopmentDevelopment Procurement – acquire resources Procurement – acquire resources

(exchange 1 risk for another)(exchange 1 risk for another) Contingency Planning – defining action Contingency Planning – defining action

steps should a risk event occursteps should a risk event occur Alternative Strategies – change planned Alternative Strategies – change planned

approachapproach Insurance Insurance

Chapter 11 – Project Risk Chapter 11 – Project Risk ManagementManagement Outputs from Risk Response DevelopmentOutputs from Risk Response Development

Risk Management Plan – document procedures to Risk Management Plan – document procedures to manage risk events. Addresses risk identification and manage risk events. Addresses risk identification and quantification processes, personnel responsible for quantification processes, personnel responsible for managing areas of risk, maintenance of identification managing areas of risk, maintenance of identification and quantification process, implementation of and quantification process, implementation of contingency plans and allocation of reservecontingency plans and allocation of reserve

Inputs to other processes – alternative strategies, Inputs to other processes – alternative strategies, contingency plans, anticipated procurementscontingency plans, anticipated procurements

Contingency Plans Contingency Plans Reserves – provision in project plan to mitigate costs Reserves – provision in project plan to mitigate costs

and schedule risks. Used with a modifier and schedule risks. Used with a modifier (management, schedule, budget) to provide further (management, schedule, budget) to provide further detail when type of reserve can be useddetail when type of reserve can be used

Contractual Agreements – insurance, services and Contractual Agreements – insurance, services and other functions to avoid and mitigate threats.other functions to avoid and mitigate threats.


Risk Response ControlRisk Response Control Involves executing the risk management Involves executing the risk management

plan in order to respond to risk events plan in order to respond to risk events during the projectduring the project

Control and iteration are required; not all risks Control and iteration are required; not all risks can be identifiedcan be identified

Inputs to Risk Response ControlInputs to Risk Response Control Risk Management PlanRisk Management Plan Actual Risk Events – recognize occurrenceActual Risk Events – recognize occurrence Additional Risk Identification – surfacing of Additional Risk Identification – surfacing of

potential or actual risk sourcespotential or actual risk sources

Chapter 11 – Project Risk Chapter 11 – Project Risk ManagementManagement Tools & Techniques for Risk Tools & Techniques for Risk

Response ControlResponse Control Workarounds – unplanned responses to Workarounds – unplanned responses to

negative risk events (response was not negative risk events (response was not defined in advance)defined in advance)

Additional Risk Response Development – Additional Risk Response Development – planned response may not be adequateplanned response may not be adequate

Outputs from Risk Response ControlOutputs from Risk Response Control Corrective Action – performing the Corrective Action – performing the

planned risk responseplanned risk response Updates to Risk Management PlanUpdates to Risk Management Plan

Chapter 11 – Project Risk Chapter 11 – Project Risk ManagementManagement Tips from Review GuideTips from Review Guide

Definition of risk: a discrete occurrence Definition of risk: a discrete occurrence that may affect the project for good or badthat may affect the project for good or bad

Definition of uncertainty: an uncommon Definition of uncertainty: an uncommon state of nature, characterized by the state of nature, characterized by the absence of any information related to a absence of any information related to a desired outcomedesired outcome

Definition of risk management: The Definition of risk management: The processed involved with identifying, processed involved with identifying, analyzing, and responding to risk. analyzing, and responding to risk. Maximize results of positive events; Maximize results of positive events; minimizing consequences of negative minimizing consequences of negative eventsevents


Inputs to Risk Management:Inputs to Risk Management: All project background informationAll project background information Historical recordsHistorical records Past Lessons LearnedPast Lessons Learned Project CharterProject Charter Scope StatementScope Statement Scope of workScope of work WBSWBS Network DiagramNetwork Diagram Cost and Time estimatesCost and Time estimates Staffing PlanStaffing Plan


Risk Management ProcessRisk Management Process Risk Identification – majority during Planning; Risk Identification – majority during Planning;

onset of project to close of projectonset of project to close of project 2 Types2 Types

Business: Risk of a gain or lossBusiness: Risk of a gain or loss Pure (insurable): only a risk of lossPure (insurable): only a risk of loss

Sources:Sources: External: Regulatory, environmental, External: Regulatory, environmental,

governmentgovernment Internal: Schedule, cost, scope change, Internal: Schedule, cost, scope change,

inexperience, planning, people, staffing, inexperience, planning, people, staffing, materials, equipmentmaterials, equipment

Technical: Changes in technologyTechnical: Changes in technology Unforeseeable: small (only about 10%)Unforeseeable: small (only about 10%)


Tips from Review GuideTips from Review Guide Risk Management ProcessRisk Management Process

Risk Factors – determine:Risk Factors – determine: Probability that it will occur (what)Probability that it will occur (what) Range of possible outcomes (impact, amount Range of possible outcomes (impact, amount

at stake)at stake) Expected Timing (when)Expected Timing (when) Anticipated frequency (how often)Anticipated frequency (how often)

Symptoms – early warning signs determined Symptoms – early warning signs determined by PMby PM

Risk Tolerances – amount of risk that is Risk Tolerances – amount of risk that is acceptableacceptable


Common Stumbling BlocksCommon Stumbling Blocks Risk identification is completed without knowing enough Risk identification is completed without knowing enough

about the projectabout the project Project Risk evaluated only by questionnaire, interview Project Risk evaluated only by questionnaire, interview

or Monte Carlo; does not provided a per task analysis or Monte Carlo; does not provided a per task analysis of riskof risk

Risk identification ends too soonRisk identification ends too soon Project Risk identification and Evaluation are combined Project Risk identification and Evaluation are combined

– results in risks that are evaluated when they appear; – results in risks that are evaluated when they appear; decreased total number of risks and stops identification decreased total number of risks and stops identification processprocess

Risks are identified too generallyRisks are identified too generally Categories of risks are forgotten (technology, culture)Categories of risks are forgotten (technology, culture) Only 1 identification method is usedOnly 1 identification method is used First risk response strategy is used without other First risk response strategy is used without other

considerationconsideration Risks are not devoted enough attention during the Risks are not devoted enough attention during the

Execution phaseExecution phase



Risk Quantification – assess risks to Risk Quantification – assess risks to determine range of possible outcomes; determine range of possible outcomes; which risk events warrant a responsewhich risk events warrant a response

ProbabilityProbability Amount at stake (impact)Amount at stake (impact) Develop a ranking (priority) of risksDevelop a ranking (priority) of risks

Qualitative – take an educated guessQualitative – take an educated guess Quantitative – estimation by calculationQuantitative – estimation by calculation

Risk Assessment = Risk Identification + Risk Risk Assessment = Risk Identification + Risk QuantificationQuantification


Risk Management ProcessRisk Management Process Monte Carlo simulation – simulates cost and schedule Monte Carlo simulation – simulates cost and schedule

results of projectresults of project Indicates risk of a project and each task by providing a Indicates risk of a project and each task by providing a

percent probability that each task will be on the critical percent probability that each task will be on the critical pathpath

Accounts for path convergence (where tasks in a Accounts for path convergence (where tasks in a Network diagram converge into 1 task – more risk)Network diagram converge into 1 task – more risk)

Expected Monetary Value – multiply probability by Expected Monetary Value – multiply probability by impactimpact

Helps define and prove what the project reserve should Helps define and prove what the project reserve should bebe

Decision TreesDecision Trees Takes into account future events when making a Takes into account future events when making a

decision todaydecision today Makes use of expected value calculations and mutual Makes use of expected value calculations and mutual

exclusivityexclusivity Be able to draw one; boxes are decisions, circles are Be able to draw one; boxes are decisions, circles are

what can happen as a result of the decision what can happen as a result of the decision



Outputs from Risk QuantificationOutputs from Risk Quantification Determination of top risksDetermination of top risks Opportunities to pursueOpportunities to pursue Opportunities to ignoreOpportunities to ignore Threats to respond to Threats to respond to Threats to ignoreThreats to ignore


Risk Management ProcessRisk Management Process Risk Response Development (what will be Risk Response Development (what will be

done, how to make risk smaller or done, how to make risk smaller or eliminate)eliminate)

Not all risks can be eliminatedNot all risks can be eliminated Alternative Strategies (risk mitigation)Alternative Strategies (risk mitigation)

Avoidance – eliminate the causeAvoidance – eliminate the cause Mitigation – effect the probability or Mitigation – effect the probability or

impact of riskimpact of risk Acceptance – do nothingAcceptance – do nothing Deflection (transfer, allocate) – make Deflection (transfer, allocate) – make

another party responsible, insurance, another party responsible, insurance, outsourcingoutsourcing


Risk Management ProcessRisk Management Process Outputs from Risk Response DevelopmentOutputs from Risk Response Development

Insurance – exchange an unknown risk for a Insurance – exchange an unknown risk for a known risk (response to pure risks)known risk (response to pure risks)

Contracting – hire experience to perform workContracting – hire experience to perform work Contingency Planning – specific actions to Contingency Planning – specific actions to

take if risk event occurstake if risk event occurs Reserves (contingency) – recommended total Reserves (contingency) – recommended total

of 10% to account for known and unknown of 10% to account for known and unknown risksrisks

Risk Management Plan – documents risks Risk Management Plan – documents risks identified and how they are addressed; non-identified and how they are addressed; non-critical risks should be recorded to revisit critical risks should be recorded to revisit during the execution phaseduring the execution phase



Risk Response Control – executing Risk Response Control – executing and updating the Risk Management and updating the Risk Management PlanPlan

Workarounds – Unplanned responses to Workarounds – Unplanned responses to risks; addressing risks that were risks; addressing risks that were unanticipatedunanticipated

Contingency Plans – planned responses Contingency Plans – planned responses to risks; risk response development to risks; risk response development actionsactions


Risk Mitigation – does not involve ID of Risk Mitigation – does not involve ID of risks (they are already known)risks (they are already known)

Self Insurance – can lead to failure to Self Insurance – can lead to failure to ensure funds for low probability events ensure funds for low probability events and confuse business risks with pure risksand confuse business risks with pure risks

Risk mitigation – can purchase insuranceRisk mitigation – can purchase insurance Schedule Risk – critical path adjusted by Schedule Risk – critical path adjusted by

High Risk activity floatHigh Risk activity float Sensitivity Analysis – estimate the effect Sensitivity Analysis – estimate the effect

of change of one project variable on of change of one project variable on overall projectoverall project


Tips from Review GuideTips from Review Guide Standard Deviation of project Standard Deviation of project

completion – relationship of completion – relationship of uncertainty of critical path uncertainty of critical path activities; indicator of project end activities; indicator of project end target confidencetarget confidence

Chapter 12 – Project Procurement Chapter 12 – Project Procurement ManagementManagement

Project Procurement ManagementProject Procurement Management Processes required to acquire goods and Processes required to acquire goods and

services from outside the organizationservices from outside the organization Discussed from the perspective of the Discussed from the perspective of the

buyerbuyer Terms and conditions of the contract is a key Terms and conditions of the contract is a key

input to many processesinput to many processes Buyer is the customer, thus a key stakeholderBuyer is the customer, thus a key stakeholder Seller’s project management team must be Seller’s project management team must be

concerned with all processes of project concerned with all processes of project management, not just their knowledge areamanagement, not just their knowledge area


Procurement PlanningProcurement Planning Identify project needs that can best Identify project needs that can best

be met by acquiring resourcesbe met by acquiring resources Consideration whether to procure, Consideration whether to procure,

how to, how much, when to how to, how much, when to purchasepurchase

Subcontractor decisions may Subcontractor decisions may provide flexibilityprovide flexibility

Internal procurement does not involve Internal procurement does not involve formal solicitation and contractformal solicitation and contract

Chapter 12 – Project Procurement Chapter 12 – Project Procurement ManagementManagement Inputs to Procurement PlanningInputs to Procurement Planning

Scope Statement – boundary for needs and Scope Statement – boundary for needs and strategiesstrategies

Product Description – broad technical issues, Product Description – broad technical issues, not to be confused with a statement of worknot to be confused with a statement of work

Procurement Resources – formal contracting Procurement Resources – formal contracting group (RFP)group (RFP)

Market Conditions – supply and demand, what Market Conditions – supply and demand, what services are available services are available

Other Planning Outputs – preliminary cost and Other Planning Outputs – preliminary cost and schedule, quality management plans, cash flow, schedule, quality management plans, cash flow, WBS, risks, staffingWBS, risks, staffing

Constraints – factors that limit buying optionsConstraints – factors that limit buying options Assumptions Assumptions

Chapter 12 – Project Procurement Chapter 12 – Project Procurement ManagementManagement Tools & Techniques for Procurement Tools & Techniques for Procurement

PlanningPlanning Make or Buy analysis – determine if the Make or Buy analysis – determine if the

service can be provided from withinservice can be provided from within Include direct and indirect costsInclude direct and indirect costs Factor ongoing need for items vs. 1-time usageFactor ongoing need for items vs. 1-time usage

Expert Judgment – assess inputExpert Judgment – assess input Contract type selectionContract type selection

Fixed Price (lump sum) – incentives for meeting Fixed Price (lump sum) – incentives for meeting targetstargets

Cost Reimbursable Contracts – Time and Cost Reimbursable Contracts – Time and Materials basisMaterials basis

Unit Price – preset amount per unit of service Unit Price – preset amount per unit of service

Chapter 12 – Project Procurement Chapter 12 – Project Procurement ManagementManagement Outputs from Procurement PlanningOutputs from Procurement Planning

Procurement Management Plan – describes Procurement Management Plan – describes how procurement process will be managedhow procurement process will be managed

Type of contractType of contract Independent estimates needed?Independent estimates needed? Autonomy of project teamAutonomy of project team Standardized documentsStandardized documents Multiple provider management?Multiple provider management? Incorporate with other project aspects (scheduling Incorporate with other project aspects (scheduling

and performance reporting)and performance reporting) Statement of Work (SOW) – describes the Statement of Work (SOW) – describes the

procurement in detail – clear, concise procurement in detail – clear, concise description of servicesdescription of services

Can also be a Statement of Requirements for Can also be a Statement of Requirements for problem-solving activitiesproblem-solving activities


Solicitation PlanningSolicitation Planning Preparing documents neededPreparing documents needed

Inputs to Solicitation PlanningInputs to Solicitation Planning Procurement Management PlanProcurement Management Plan Statement of WorkStatement of Work Other Planning OutputsOther Planning Outputs

Tools & Techniques for Solicitation Tools & Techniques for Solicitation PlanningPlanning Standard Forms and ProceduresStandard Forms and Procedures Expert JudgmentExpert Judgment

Chapter 12 – Project Procurement Chapter 12 – Project Procurement ManagementManagement Outputs from Solicitation PlanningOutputs from Solicitation Planning

Procurement Documents – used to solicit proposals from Procurement Documents – used to solicit proposals from prospective sellersprospective sellers

Bids, Request for Proposal, Request for Quotation, Contractor Bids, Request for Proposal, Request for Quotation, Contractor Initial Response, etc.Initial Response, etc.

Structure to receive complete and accurate responsesStructure to receive complete and accurate responses Description of desired form of response and any required Description of desired form of response and any required

contractual provisions (e.g. non-disclosure statements)contractual provisions (e.g. non-disclosure statements) May be defined by regulationMay be defined by regulation Flexible to allow seller suggestionsFlexible to allow seller suggestions

Evaluation Criteria – rate proposals; objective or subjective Evaluation Criteria – rate proposals; objective or subjective (previous experience)(previous experience)

PricePrice Understanding of need by sellerUnderstanding of need by seller Overall/Life Cycle cost (purchase plus operating cost)Overall/Life Cycle cost (purchase plus operating cost) Technical CapabilityTechnical Capability Management ApproachManagement Approach Financial CapacityFinancial Capacity

Statement of Work UpdatesStatement of Work Updates

Chapter 12 – Project Procurement Chapter 12 – Project Procurement ManagementManagement SolicitationSolicitation

Obtaining information from prospective sellersObtaining information from prospective sellers Inputs to SolicitationInputs to Solicitation

Procurement DocumentsProcurement Documents Qualified Seller Lists – preferred vendorsQualified Seller Lists – preferred vendors

Tools & Techniques for SolicitationTools & Techniques for Solicitation Bidder Conferences – mutual understanding Bidder Conferences – mutual understanding

meetingsmeetings Advertising – primarily with Government projectsAdvertising – primarily with Government projects

Outputs from SolicitationOutputs from Solicitation Proposals – seller prepared documents Proposals – seller prepared documents

describing willingness and ability to provide the describing willingness and ability to provide the serviceservice

Chapter 12 – Project Procurement Chapter 12 – Project Procurement ManagementManagement Source SelectionSource Selection

Apply evaluation criteria (seldom straight-Apply evaluation criteria (seldom straight-forward)forward)

Price (lowest price may not always result in lowest Price (lowest price may not always result in lowest project cost)project cost)

Technical (approach) vs. commercial (price)Technical (approach) vs. commercial (price) Multiple sourcing may be needed for same serviceMultiple sourcing may be needed for same service

Inputs to Source SelectionInputs to Source Selection ProposalsProposals Evaluation CriteriaEvaluation Criteria Organizational Policies Organizational Policies

Chapter 12 – Project Procurement Chapter 12 – Project Procurement ManagementManagement Tools & Techniques for Source SelectionTools & Techniques for Source Selection

Contract Negotiation – clarification and mutual Contract Negotiation – clarification and mutual agreement on structure and requirements of contract agreement on structure and requirements of contract prior to signatureprior to signature

Responsibilities and authoritiesResponsibilities and authorities Applicable terms and lawApplicable terms and law FinancingFinancing PricePrice Technical and business managementTechnical and business management

Weighting – quantifying data to minimize personal Weighting – quantifying data to minimize personal prejudice of source selectionprejudice of source selection

Assign numerical weight to evaluation criteriaAssign numerical weight to evaluation criteria Rating sellersRating sellers Multiply weight by rating and totaling overall scoreMultiply weight by rating and totaling overall score

Screening System – establish minimum performance Screening System – establish minimum performance criteriacriteria

Independent Estimates – “should cost” estimates Independent Estimates – “should cost” estimates


Outputs from Source SelectionOutputs from Source Selection Contract – mutually binding Contract – mutually binding

agreement obligates seller provide agreement obligates seller provide goods and services and buyer to goods and services and buyer to make payment.make payment. Legal relationshipLegal relationship Legal review is most often necessaryLegal review is most often necessary

Chapter 12 – Project Procurement Chapter 12 – Project Procurement ManagementManagement Contract AdministrationContract Administration

Ensuring that the seller’s performance Ensuring that the seller’s performance meets contractual requirementsmeets contractual requirements

Project Team must be aware of legal Project Team must be aware of legal ramifications of all actions takenramifications of all actions taken

Apply project management processes to Apply project management processes to contractual relationships and integrate contractual relationships and integrate outputs within the projectoutputs within the project

Project Plan Execution (authorize work)Project Plan Execution (authorize work) Performance Reporting (monitor cost, Performance Reporting (monitor cost,

schedule)schedule) Quality Control (verify contractor’s output)Quality Control (verify contractor’s output) Change ControlChange Control Financial ManagementFinancial Management


Inputs to Contract AdministrationInputs to Contract Administration ContractContract Work Results – seller’s deliverables, Work Results – seller’s deliverables,

quality standards, actual costsquality standards, actual costs Change Requests – modify contract, or Change Requests – modify contract, or

description of product/servicedescription of product/service May result in disputes, claims, appealsMay result in disputes, claims, appeals

Seller Invoices Seller Invoices


Tools & Techniques for Contract Tools & Techniques for Contract AdministrationAdministration Contract Change Control System – Contract Change Control System –

defines how a contract may be defines how a contract may be modifiedmodified Includes paperwork, tracking system, Includes paperwork, tracking system,

dispute resolution procedures and dispute resolution procedures and approval levelsapproval levels

Performance Reporting Performance Reporting Payment System – Accounts Payable Payment System – Accounts Payable


Contract Close OutContract Close Out Similar to administrative closure; Similar to administrative closure;

involves product verification and involves product verification and administrative paperworkadministrative paperwork

Early termination is a special caseEarly termination is a special case Contract terms and conditions may prescribe Contract terms and conditions may prescribe

proceduresprocedures

Inputs to Contract Close OutInputs to Contract Close Out Contract Documentation – supporting Contract Documentation – supporting

schedules, documentationschedules, documentation

Chapter 12 – Project Procurement Chapter 12 – Project Procurement ManagementManagement Tools & Techniques for Contract Close Tools & Techniques for Contract Close

OutOut Procurement Audits – structured review of Procurement Audits – structured review of

entire procurement process; identify entire procurement process; identify successes and failures that warrant transfer successes and failures that warrant transfer to other procurement itemsto other procurement items

Outputs from Contract Close OutOutputs from Contract Close Out Contract File – complete index of recordsContract File – complete index of records Formal Acceptance and Closure – contract Formal Acceptance and Closure – contract

administration responsibility to provide a administration responsibility to provide a formal notice that contract has been formal notice that contract has been completedcompleted

Chapter 12 – Project Procurement Chapter 12 – Project Procurement ManagementManagement Tips from Review GuideTips from Review Guide

Most questions are process orientedMost questions are process oriented Most questions are from the buyer’s Most questions are from the buyer’s

perspectiveperspective Contracts are formal agreementsContracts are formal agreements All requirements should be specifically All requirements should be specifically

stated in the contractstated in the contract All contract requirements must be metAll contract requirements must be met Changes must be in writing and formally Changes must be in writing and formally

controlledcontrolled US Gov’t backs all contracts by providing US Gov’t backs all contracts by providing

a court systema court system


Tips from Review GuideTips from Review Guide What forms a contractWhat forms a contract

An offerAn offer An acceptanceAn acceptance Consideration - something of valueConsideration - something of value Legal Capacity – separate legal Legal Capacity – separate legal

parties, competent partiesparties, competent parties Legal Purpose – can not perform Legal Purpose – can not perform

illegal goods or servicesillegal goods or services


Project Manager’s role for procurementProject Manager’s role for procurement Risk identification and evaluationRisk identification and evaluation Work within the procurement processWork within the procurement process

Procurement ProcessProcurement Process Procurement Planning = Make or buyProcurement Planning = Make or buy Solicitation Planning = Request for ProposalSolicitation Planning = Request for Proposal Solicitation = Questions and AnswersSolicitation = Questions and Answers Source Selection = Pick vendorSource Selection = Pick vendor Contract Administration = AdminContract Administration = Admin Contract Closeout = FinishContract Closeout = Finish


Make or Buy: consider out of pocket Make or Buy: consider out of pocket costs and indirect cost of managing costs and indirect cost of managing procurementprocurement

Buy – to decrease risk (cost, schedule, Buy – to decrease risk (cost, schedule, performance, scope of work)performance, scope of work)

MakeMake Idle plant or workforceIdle plant or workforce Retain controlRetain control Proprietary information/proceduresProprietary information/procedures Buy vs. lease questions (use X = number of Buy vs. lease questions (use X = number of

days when purchase and lease costs are days when purchase and lease costs are equal)equal)


Tips from Review GuideTips from Review Guide Contract Type Selection – reasonable Contract Type Selection – reasonable

risk between the buyer and seller and risk between the buyer and seller and greatest initiative for seller’s efficient greatest initiative for seller’s efficient and economic performanceand economic performance

Scope – well defined?Scope – well defined? Amount or frequency of changes expected Amount or frequency of changes expected

after start dateafter start date Amount of effort and expertise the buyer can Amount of effort and expertise the buyer can

devote to manage the sellerdevote to manage the seller Industry standards Industry standards


Tips from Review GuideTips from Review Guide Cost Reimbursable (CR); seller’s cost Cost Reimbursable (CR); seller’s cost

are reimbursed; buyer bears highest risk are reimbursed; buyer bears highest risk (cost increases)(cost increases)

CPFF – cost plus fixed fee, buyer pays all CPFF – cost plus fixed fee, buyer pays all costs – fee (profit) establishedcosts – fee (profit) established

CPPC – cost plus percentage of costs; bad CPPC – cost plus percentage of costs; bad for buyers (seller not motivated to control for buyers (seller not motivated to control costs)costs)

CPIF – cost plus Incentive Fee; seller costs CPIF – cost plus Incentive Fee; seller costs + fee + bonus for meeting/exceeding target + fee + bonus for meeting/exceeding target (incentive clause)(incentive clause)


Time and Materials; priced on per hour Time and Materials; priced on per hour basis, elements of fixed price contract basis, elements of fixed price contract and cost reimbursable contracts – buyer and cost reimbursable contracts – buyer has medium riskhas medium risk

Fixed Price (lump sum, or firm fixed Fixed Price (lump sum, or firm fixed price) - most common (1 price for all price) - most common (1 price for all work), risk of costs is upon sellerwork), risk of costs is upon seller

FPIF – Fixed Price Incentive FeeFPIF – Fixed Price Incentive Fee FPEPA – Fixed Price Economic Price FPEPA – Fixed Price Economic Price

Adjustment – long duration projectsAdjustment – long duration projects Incentives – help bring seller’s Incentives – help bring seller’s

objectives in line with buyer’sobjectives in line with buyer’s


Tips from Review GuideTips from Review Guide Incentive Fee and Final Price CalculationsIncentive Fee and Final Price Calculations

Must Have:Must Have: Target CostTarget Cost Target FeeTarget Fee Target PriceTarget Price Sharing Ratio (buyer/seller)Sharing Ratio (buyer/seller) Actual CostActual Cost

Fee = Fee = (Target Cost – Actual Cost) x Seller Ratio (%)(Target Cost – Actual Cost) x Seller Ratio (%) Total Fee = Fee + Target FeeTotal Fee = Fee + Target Fee Final Price = Actual Cost + Total FeeFinal Price = Actual Cost + Total Fee


Tips from Review GuideTips from Review Guide Procurement Documents, Procurement Documents,

Contract Type and Scope of WorkContract Type and Scope of Work Request for Proposal – Cost Request for Proposal – Cost

Reimbursable – Performance or Reimbursable – Performance or Functional Scope (can be somewhat Functional Scope (can be somewhat loosely defined)loosely defined)

Invitation for Bid – Time & Materials – Invitation for Bid – Time & Materials – Design Scope (moderately defined)Design Scope (moderately defined)

Request for Quotation – Fixed Price Request for Quotation – Fixed Price – Any Scope (must be detailed)– Any Scope (must be detailed)


Terminology (Terms and Conditions)Terminology (Terms and Conditions) Force majeure – act of GodForce majeure – act of God Indemnification – who is liableIndemnification – who is liable Liquidated damages – estimated damages as a Liquidated damages – estimated damages as a

result of contract breachresult of contract breach Material breach – a breach so large the project Material breach – a breach so large the project

may not continuemay not continue Special Provisions – provided by the Project Special Provisions – provided by the Project

Manager to contracts so that particular needs are Manager to contracts so that particular needs are addressedaddressed

Privity – contractual relationshipPrivity – contractual relationship Single Source – contract directly with preferred Single Source – contract directly with preferred

sellerseller Sole Source – only one supplier available in Sole Source – only one supplier available in

marketmarket


Evaluation CriteriaEvaluation Criteria Understanding of needUnderstanding of need Overall or life-cycle costOverall or life-cycle cost Technical abilityTechnical ability Management ApproachManagement Approach Financial CapacityFinancial Capacity Project Management AbilityProject Management Ability

Invitation for Bids are usually not evaluated Invitation for Bids are usually not evaluated with entire criteria (lowest rate is chosen)with entire criteria (lowest rate is chosen)


Tips from Review GuideTips from Review Guide SolicitationSolicitation

Bidder’s ConferenceBidder’s Conference Benefit both buyer and sellerBenefit both buyer and seller Watch out forWatch out for

CollusionCollusion Sellers not asking questions in front of Sellers not asking questions in front of

their competitiontheir competition Make sure all questions and answers are Make sure all questions and answers are

in writing and issued to all sellers in writing and issued to all sellers (respond to same scope in work)(respond to same scope in work)


Source SelectionSource Selection Negotiation ObjectivesNegotiation Objectives

Obtain a fair and reasonable priceObtain a fair and reasonable price Development a good relationship with sellerDevelopment a good relationship with seller

Project manager must be involvedProject manager must be involved Main Terms to negotiateMain Terms to negotiate

ResponsibilitiesResponsibilities AuthorityAuthority Applicable LawApplicable Law Technical and Business Management Technical and Business Management

approachesapproaches Contract FinancingContract Financing PricePrice


Contract Administration – assure that seller’s Contract Administration – assure that seller’s performance meets contractual requirements performance meets contractual requirements

Project Managers must understand the contract Project Managers must understand the contract and manage its completionand manage its completion

Sometimes contract is in conflict with Scope of WorkSometimes contract is in conflict with Scope of Work Only the contracting officer (CO) can change Only the contracting officer (CO) can change

contract languagecontract language Often a source of conflictOften a source of conflict Need to deal with a different company’s set of Need to deal with a different company’s set of

proceduresprocedures It is not as easy to “see” problemsIt is not as easy to “see” problems Greater reliance on reports to determine if a Greater reliance on reports to determine if a

problem existsproblem exists Greater reliance on relationships between buyer Greater reliance on relationships between buyer

and seller’s project managersand seller’s project managers


Tips from Review GuideTips from Review Guide Contract Closeout – more attention to Contract Closeout – more attention to

documentation and completion of filesdocumentation and completion of files All documentation must be preserved and All documentation must be preserved and

filedfiled Centralized vs. decentralized contractingCentralized vs. decentralized contracting

Contract InterpretationContract Interpretation Based on analysis of intent Based on analysis of intent


Fee = Target Cost – Actual Cost X Seller Ratio ($)Fee = Target Cost – Actual Cost X Seller Ratio ($) Total Fee = Fee plus Target FeeTotal Fee = Fee plus Target Fee Final Price = Actual Cost plus Total FeeFinal Price = Actual Cost plus Total Fee Contractor = sellerContractor = seller Purchasing Cycle – define need, prepare and issue Purchasing Cycle – define need, prepare and issue

purchase orderpurchase order Functional Spec – delineates specific end-use Functional Spec – delineates specific end-use

capabilities that are tested in acceptance procedurecapabilities that are tested in acceptance procedure Measurable Capabilities = Performance Measurable Capabilities = Performance

SpecificationsSpecifications Requisition Cycle – review of specification Requisition Cycle – review of specification

completenesscompleteness Requirements Cycle – develops the statement of Requirements Cycle – develops the statement of

workwork

Supplement – Professional Supplement – Professional ResponsibilityResponsibility 66thth Process area added Process area added

Insuring Integrity and professionalismInsuring Integrity and professionalism Contributing to the project management knowledge Contributing to the project management knowledge

basebase Enhancing individual competenceEnhancing individual competence Balancing Stakeholders’ interestsBalancing Stakeholders’ interests Interacting with team and stakeholders in a Interacting with team and stakeholders in a

professional and cooperative mannerprofessional and cooperative manner Could be approx. 30 questions in this areaCould be approx. 30 questions in this area Understand Project Management Professional Understand Project Management Professional

Code of ConductCode of Conduct EthicsEthics Legal IssuesLegal Issues Cultural SensitivityCultural Sensitivity Managing conflicts of interestManaging conflicts of interest

Supplement – Professional Supplement – Professional ResponsibilityResponsibility Integrity and ProfessionalismIntegrity and Professionalism

Understand the legal requirements Understand the legal requirements surrounding the practice of projectssurrounding the practice of projects

Know ethical standards that should govern the Know ethical standards that should govern the behavior of project managersbehavior of project managers

Comprehend the values of the community and Comprehend the values of the community and the various project stakeholdersthe various project stakeholders

Practice proper judgment in the pursuit of Practice proper judgment in the pursuit of successful project worksuccessful project work

Compliance with all organizational rules and Compliance with all organizational rules and policiespolicies

Upon a reasonable and clear factual basis report Upon a reasonable and clear factual basis report violationsviolations

Responsibility to disclose circumstances that could Responsibility to disclose circumstances that could be construed as a conflict of interest or appearance be construed as a conflict of interest or appearance of improprietyof impropriety

Supplement – Professional Supplement – Professional ResponsibilityResponsibility Integrity and ProfessionalismIntegrity and Professionalism

Provide accurate and truthful representation Provide accurate and truthful representation to the publicto the public

Maintain and satisfy the scope and Maintain and satisfy the scope and objectives of professional servicesobjectives of professional services

Maintain the confidentiality of sensitive Maintain the confidentiality of sensitive informationinformation

Ensure a conflict of interest does not Ensure a conflict of interest does not compromise legitimate interests of compromise legitimate interests of client/customer or interfere with professional client/customer or interfere with professional judgmentjudgment

Refrain from accepting gifts, inappropriate Refrain from accepting gifts, inappropriate payments, compensation for personal gain payments, compensation for personal gain unless in conformity with applicable laws or unless in conformity with applicable laws or customscustoms

Supplement – Professional Supplement – Professional ResponsibilityResponsibility Contribute to advancing the project Contribute to advancing the project

management professionmanagement profession Overall understanding of project Overall understanding of project

management principlesmanagement principles Understand the community and media Understand the community and media

surrounding projectssurrounding projects Knowledge of research strategies available Knowledge of research strategies available

and proper communication techniquesand proper communication techniques Learn to communicate and transfer Learn to communicate and transfer

knowledge effectively as a coach and knowledge effectively as a coach and mentor and to use available research mentor and to use available research strategiesstrategies

Respect and recognize intellectual propertyRespect and recognize intellectual property

Supplement – Professional Supplement – Professional ResponsibilityResponsibility

Enhance Individual CompetenceEnhance Individual Competence Understand the project manager’s Understand the project manager’s

strengths and weaknesses and learning strengths and weaknesses and learning style – become aware of instructional style – become aware of instructional processes and toolsprocesses and tools

Know the useful competencies for Know the useful competencies for project managers and possible trainingproject managers and possible training

Be able to perform self-assessment and Be able to perform self-assessment and competencies development plancompetencies development plan

Ability to apply lessons learnedAbility to apply lessons learned


Balance Stakeholder’s ObjectivesBalance Stakeholder’s Objectives Understand the various competing Understand the various competing

stakeholders’ interests and needsstakeholders’ interests and needs Comprehend the conflict resolution Comprehend the conflict resolution

techniques useful in handling techniques useful in handling differing objectivesdiffering objectives

Be able to resolve conflicts in a fair Be able to resolve conflicts in a fair mannermanner

Exercise negotiation skills based on Exercise negotiation skills based on proper informationproper information


Interact with team and Interact with team and stakeholders in a professional stakeholders in a professional and cooperative mannerand cooperative manner Understand cultural diversity, norms Understand cultural diversity, norms

and stakeholders’ communication and stakeholders’ communication stylesstyles

Show flexibility towards diversity, Show flexibility towards diversity, tolerance and self controltolerance and self control

Becoming empathetic to differencesBecoming empathetic to differences

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