Project Management Professional (PMP)

Project Management Professional

PMP®

Ahmad H. Maharma

Master Of Engineering Management

PMP®,RMP®

Ahmad Maharma PMBOK 5th Edition 2

Getting Acquainted

• Name

• Title

• Why are you here?

• What do you want to learn from this course?

• A little known fact


Ground Rules

• Material & Book(s)

• Time & Breaks

• Smoking

• Mobile Phones

• Side Talks

• Respect

• Ask, ask, ask


How This Training is Delivered

• Lectures

• Exercises

• Group Work

• Discussions

• Quizzes


Basic definitions

• Non-for-profit Professional Association

• Started in 1969

• Over 400,000 members worldwide

• In more than 160 countries

PMI


PMI’s Membership


PMPs Certified


What is PMP®?

• A Credential initiated by PMI in 1984 “Project Management Professional”

• Demonstrate to employers, clients and colleagues that project managers possess project management knowledge, experience and skills to bring projects to successful completion

• The most recognized credential in project management worldwide


Getting CertifiedTitle PMP®

Full Name Project Management Professional

Project Role Leads and directs project teams

Eligibility Requirements Candidate holds a baccalaureate university degree.

4,500 hours of Project Management Experience.

36 non overlapping months of Project Management Experience.

At least three years of project experience within last six years of experience.

35 contact hours of Project Management training including all nine knowledge areas of project management

Exam 200 questions, 4 hours


PMP Exam

• 4 Hours Web-Based

• 200 Questions

• 175 Questions Counted

• Passing Score: 107


PMP Exam Structure

Area No. of Questions %

Initiation 26 13

Planning 48 24

Execution 60 30

Monitoring & Controlling 50 25

Closing 16 8


PMP Exam

• Exam tests:

• 1- Theoretical Knowledge (PMBOK)

• 2- Personal Skills

• 3- Practical Experience

• 4- Ethics & professional responsibility


Project Management Bodyof Knowledge (PMBOK)

• Identifies that subset of the PMBOK that is generally recognized as a good practice

• “Generally Recognized” means the knowledge and practice described are applicable to most projects most of the time. There is consensus about their value and usefulness.

• “Good Practice” means there is a general agreement that the application of these skills, tools, and techniques can enhance the chances of success over a wide range of projects.



PMP®

Project Management Fundamentals

What is a Project?

“A Temporary endeavor undertaken to create a unique Product, service, or result”


1- Temporary

• Definite Beginning (T-1)& End (T4)

• End reached when:

• Objectives reached

• Objectives cannot be met

• Need for project no longer exists

– Projects are not “ongoing” efforts

– Does not generally apply to outcomes


2- Unique

• Products

• Capability

• Results

• Repetitiveness does not change the fundamental uniqueness of the project


3- Progressively Elaborative

• Developing in steps, and continuing by increments.

• Plans get improved and clearer as more information is obtained and estimates are more accurate.


Projects Vs. Operation

20

Operation Project

Repeating process One of a kind, temporary

process

No clear beginning or ending Clear beginning and ending

Same output created each

time the work is performed

Output is unique

Everyone in work group

performs similar functions

Requires multi-disciplined team

Ahmad Maharma PMBOK 5th Edition

What is Project Management?

• Project management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements. It includes:

Identifying requirements

Establishing clear & achievable objectives

Balancing the competing demands for quality, scope, time and cost

Adapting the specifications, plans & approach


What Project Management is Not?

• Managing or buying a software.

• Preparing a schedule or a bar chart

• Preparing progress reports showing accomplishments

• Coordinating work and communicating with stakeholders

• For Engineers ONLY

• Project Management is a science and art


Project Management Context

• Programs & Program Management

• Portfolios & Portfolio Management

• Project Management Office - PMO


Program Management

• A program is a group of related projects managed in a coordinated way to obtain benefits and control that cannot be achieved from managing them individually.

• Program Management is the centralized coordinated management of a program to achieve the program’s strategic objectives and benefits.


Program Management

Project D

Project C

Project B

Project A

Objective (s)


Portfolio management

• A portfolio represents a collection of active programs, projects and other that are grouped together to facilitate effective management of that work to meet strategic business objectives.

• Portfolio management, therefore, is the centralized management of one or more portfolios in order to achieve specific strategic business objectives.

• Focuses on ensuring that projects and programs are reviewed to prioritize resource allocation, and that the management of the portfolio is consistent with and aligned to organizational strategies.


Portfolio Management

Project (E)

Program A

Project (F)

Operations


Project Management Offices (PMOs)

• An organizational unit to centralize and coordinate the management of projects under its domain

• The PMO can be understood as :

• “The organizational entity, staffed with skilled professional personnel, that provides services in core and

supporting areas during the planning and execution of a project/Program”

• Can have a wide range of authorities and responsibilities

• Takes one of 3 roles:

• 1- Providing policies, methodologies and templates

• 2- Provide support and guidance

• 3- Provide managers for projects, and coordinate managing them


PMO Types

• There are Three types of PMOs that may exist in an organization:

Supportive PMO

Controlling PMO

Directive PMO


Supportive PMO

• The most common type of PMO

• Its purpose is to empower project managers and teams to deliver their projects more successfully

• It doesn't control or direct projects, instead it focuses on supporting projects through training, mentoring, administration and reporting.


Controlling PMO

• Offers controlling services (such as project reviews, audits,

assessments and governance), in addition to the supporting

services to get project back on track

• Can influence project delivery

• It can also enforce standards, implement processes and

manage overall project risk


Directive PMO

• This is the least common, but sometimes most effective type of

PMO

• It offers directive services, where it does not just support and

control projects, but also responsible for actually running them

• Each of the Project Managers report to the PMO Director as

their supervisor. This helps to “corral” all of the project work

within an organization, to one department


Project Management Offices (PMOs)

• The PMO may:

Manage the interdependencies between projects

Help provide resources

Terminate projects

Monitor compliance with organizational processes

Help gather lessons learned

Be more heavily involved during the project initiation

Be part of the change control board

Be a stakeholder


PMOs-Requirements for Success

1. Role should be clearly defined

2. Only one role, don’t try to do it all

3. Commitment and support of top management

4. All should be PMPs

5. Improve project performance through the use of proper

processes and techniques

6. The repercussions of failure!!


The Role of Project Manager


Knowledge

What the Project Manager knows about Project Management.


Performance

What the Project Manager is able to do or accomplish while applying his/ her project management knowledge


Personal

How the Project Manager behaves when performing the project or related work.

Encompasses: Attitude Core personality characteristics Leadership


Project Manager Interpersonal Skills

Project Manager

Interpersonal Skills

Leadership

Team Building

Motivation

Com-munication

Influencing

Decision making

Political & cultural

awareness

Negotiation


PMBOK Reading

Chapter 1



PMP®

Project Management Framework

Project Lifecycle A collection of generally sequential and sometimes overlapping project phases

Phases name and number are determined by:

Management

Nature of the project

Control requirements

Area of application

Can be determined or shaped by the unique aspects of the organization, industry or technology

Can be documented by a methodology

• Provides the basic framework for managing the project


Project Lifecycle Vs. Product Lifecycle

Product lifecycle outlives project lifecycle

Project lifecycle is part of product lifecycle


Cost & Staffing Level


The project through its lifecycle


Project Phases

• Divisions within a project where extra control is needed to effectively manage the completion of a major deliverable.

• A deliverable is a measurable, verifiable work product.

• Each phase ends with a deliverable

• Number and structure of phases is determined by the organization’s control requirements

• Some organizations have established policies that standardize all projects.


Project Lifecycle- Sequential Phases


Project Lifecycle- Overlapping Phases


Project Lifecycle-The Spiral Model


TTM deliverables

• Marketing Deliverables

• Customer Journey Deliverables

• Financial & regulatory Deliverables

• ITN Deliverables

• Business processes Deliverables

• Sourcing Deliverables

• Project Deliverables


Stakeholders• Persons or organizations who are actively involved in the

project, or whose interests maybe positively or negatively affected by the performance or completion of the project

Project Stakeholders:

Sponsors

Customers/ Users

Vendors/ Suppliers

Project Manager

Project Management Team

Project Team

PMOAhmad Maharma PMBOK 5th Edition 53

Stakeholders


5 Steps to Managing Stakeholders

• Identify ALL of them

• Determine ALL their requirements

• Determine their expectations

• Communicate with them

• Manage their influence


Organizational influence

Projects don’t operate in vacuum, they are influenced by organizational:

• Culture

• Style

• Structure

Organization’s degree of project management maturity and systems can influence the project


Functional Organization

Also known as “Silo” organization

Functional managers control resources

Communication happens “vertically”

Good for operation-oriented organizations, such as banks, government


Functional Organization


Advantages & Disadvantages

Advantages

• Clear Authority• Career

Development• Controlled

Disadvantages

• Poor Coordination

• No Project Accountability

• High Politics


Projectized Organization

Also known as “No home”

Systematic approach to project management

Well defined project management methodology & lifecycle

Does not support learning & career development


Projectized Organization



Advantages

• Effective Communication

• Project Driven Coordination

• More focused

Disadvantages

• High Risk• Poor Resource

Utilization• “No Home”


Matrix organization

Also known as “Two Bosses”

Has three types:

Weak matrix

Balanced matrix

Strong matrix


Weak Matrix


Balanced Matrix


Strong Matrix



Advantages

• Project Manager Assigned.

• Communication and Coordination

• Visible Project Objectives

Disadvantages

• Two Bosses• Competition of Priorities• Hard to Control• Tough Resource

Allocation• Complex Communication


Organizational Influences on Project Management

PMBOK 5th Edition 68Ahmad Maharma

Project Management Process Groups

Monitoring &

Controlling Processes

Closing

Processes

Initiation

Processes

Planning

Processes

Execution

Processes


Project Management Process Groups

A version of Deming’s Cycle

Plan – Do – Check- Act (PDCA)


Interaction Between Process Groups

Level of

Process

Interaction

Initiation

Process

Group

Planning

Process

Group

Execution

Process

Group

Monitoring &

Control Process

Group

Closing

Process

Group


72

Project Phases

• All projects are divided into phases

• All phases together are known as the Project Life Cycle

• Each phase is marked by completion of Deliverables


Ahmad Maharma 73PMBOK 5th Edition

Project Management Framework

• The PMBOK’s 10 Knowledge areas

Time

Management

Cost

Management

Scope

Management

Quality

ManagementHR Management

Communication

Management

Procurement

Management

Integration

Management

Stakeholder

Management

Risk

Management

76Ahmad Maharma PMBOK 5th Edition

PM Knowledge Areas & Process Groups 47 processesPM Process Groups

Knowledge Area

Processes

Initiating Process

Group

Planning Process Group Executing Process Group Monitoring & Controlling Process

Group

Closing

Process Group

Project Management

Integration

Develop Project

Charter

Develop Project Management

Plan

Direct and Manage Project

Execution

Monitor and Control Project Work

Integrated Change Control

Close Project

Project Scope

Management

Plan Scope Management

Collect requirements

Define Scope

Create WBS

Validate Scope

Control Scope

Project Time

Management

Plan schedule Management

Define Activity

Sequence Activity

Estimating Resource

Estimating Duration

Develop Schedule

Schedule Control

Project Cost

Management

Plan Cost Management

Estimating Cost

Budgeting Cost

Control Cost

Project Quality

Management

Quality Planning Perform Quality Assurance Perform Quality Control

Project HR

Management

Plan HR Management Acquire Project Team

Develop Project Team

Manage Project Team

Project

Communications

Management

Plan Communications Distribute Information Performance Reporting

Project Risk

Management

Plan Risk Management

Risk Identification

Qualitative / Quantitative Risk

Analysis

Risk Response Planning

Risk Monitoring and Control

Project Procurement

Management

Plan procurement Conduct procurement Administer Contract Close

procurement

Project Stakeholder

Management

Identify Stakeholders Plan stakeholder Management Manage stakeholders

expectations

Control stakeholder


Project Scope Management

Knowledge

Area

Process

Initiating Planning ExecutingMonitoring &

ControlClosing

Scope

Plan scope Management

Collect Requirements

Define Scope

Create WBS

Validate Scope

Control Scope

Enter phase/

Start project

Exit phase/

End project

Initiating

Processes

Closing

Processes

Planning

Processes

Executing

Processes

Monitoring &



Project Time Management

Knowledge

Area

Process


ControlClosing

Time


Define Activity

Sequence Activity

Estimating Resource

Estimating Duration

Develop Schedule

Control Schedule

Enter phase/

Start project

Exit phase/

End project

Initiating

Processes

Closing

Processes

Planning

Processes

Executing

Processes

Monitoring &



Project Cost Management

Knowledge

Area

Process


ControlClosing

Cost

Plan Cost management

Estimating Cost

Determine Budget Control Costs

Enter phase/

Start project

Exit phase/

End project

Initiating

Processes

Closing

Processes

Planning

Processes

Executing

Processes

Monitoring &



Project Quality Management

Knowledge

Area

Process

Initiating Planning Executing Monitoring & Contol Closing

CostPlan Quality

Management

Perform Quality

Assurance control Quality

Enter phase/

Start project

Exit phase/

End project

Initiating

Processes

Closing

Processes

Planning

Processes

Executing

Processes

Monitoring &



Project Human Resource Management

Knowledge Area

Process


ControlClosing

Human

ResourcePlan Human Resource

Management

Acquire Project Team


Manage Project Team

Enter phase/

Start project

Exit phase/

End project

Initiating

Processes

Closing

Processes

Planning

Processes

Executing

Processes

Monitoring &



Project Communication Management

Knowledge Area

Process


ControlClosing

CommunicationPlan

Communication

Management

Manage CommunicationsControl

Communications

Enter phase/

Start project

Exit phase/

End project

Initiating

Processes

Closing

Processes

Planning

Processes

Executing

Processes

Monitoring &



Project Risk Management

Knowledge

Area

Process

Initiating Planning Executing Monitoring & Control Closing

Risk


Identify Risk

Perform Qualitative Risk Analysis

Perform Quantitative Risk Analysis

Plan Risk Response

Control Risks

Enter phase/

Start project

Exit phase/

End project

Initiating

Processes

Closing

Processes

Planning

Processes

Executing

Processes

Monitoring &



Project Procurement Management

Knowledge Area

Process


ControlClosing

Procurement

Plan Procurement

Management

Conduct

Procurement

Control

Procurement

Close Procurement

Enter phase/

Start project

Exit phase/

End project

Initiating

Processes

Closing

Processes

Planning

Processes

Executing

Processes

Monitoring &



Project Integration Management

Knowledge

Area

Process


Scope

• Develop

Project

Charter

• Develop Project

Management

Plan

• Direct and

Manage Project

Execution

• Monitor and Control

Project Work

• Perform Integrated

Change Control

• Close

Project

Enter phase/

Start project

Exit phase/

End project

Initiating

Processes

Closing

Processes

Planning

Processes

Executing

Processes

Monitoring &



Project Stakeholder Management

Knowledge

Area

Process


Scope

Identify

StakeholdersPlan

stakeholder

Management

Manage

stakeholders

expectations

Control stakeholder

Enter phase/

Start project

Exit phase/

End project

Initiating

Processes

Closing

Processes

Planning

Processes

Executing

Processes

Monitoring &



The Project Life Cycle


How do we define success?

On time

Within budget

Scope integrity

Achieving quality

Scope


Chaos Report

31.1% of projects will be cancelled before they ever get completed

52.7% of projects will cost 189% of their original estimates

Only 16.2% of projects were completed successfully


Why Projects Fail?

A subject for discussion


The Opera House Project-Sydney

Original cost estimate (in 1957) was US$ 7 million.

The original completion date was 26 January 1963.

Finally, the Opera House was formally completed in 1973, having cost $102 million.


The Three Main Ones

Among the following factors, which is the most important contributor to project failure??!!

Lack of Executive

Management Support

Unclear Objectives

No User Involvement


Reason 1

Lack of User Involvement

– Correctly identify proper user

– Develop and Maintain a quality relationship with the client

– Create and maintain a platform for communication

– Demonstrate results

– Educate the client

– Consider their feedback

– Identify and recruit an evangelist

– Conduct primary research

– Show respect

– Focus on real user needs


Reason 2

No Executive Management Support

– Have a simple vision

– Get clear commitment

– Make fast decisions

– Have a decision pipeline

– Focus of education

– Use measurements

– Understand how and why you need to negotiate

– Have a well thought plan

– Have a “kill switch”

– CELEBRATE


Reason 3 Absence of clear business objectives

– Make sure everyone understands the project's objectives

– Elevator pitch

– Consider the big picture

– Promote speed and clarity

– Have a yardstick

– Use RoI

– Collaborate with team members

– Use peer review

– Avoid having “too many cooks”

– Do your homework


Enterprise Environmental Factors

The Internal and External environmental factors surrounding and/or influencing the project negatively or positively.

Are Inputs to most of the Project Management Processes.

Can be categorized into Internal and External


Enterprise Environmental Factors Culture & structure

Regulations & Standards

Infrastructure

Existing human resources

Personnel administration

Political climate

Commercial databases

Information systems

Stakeholders risk tolerance

Marketplace Conditions


Organizational Process Assets

Include all process related assets in addition to the organization’s knowledge bases

Input to most of the project management processes

Outputs of many processes may include updating or adding to these process assets

Can be categorized into:

Processes and procedures

Corporate knowledge base


Processes and Procedures

Standard Processes.

Templates.

Communication Requirements.

Financial Controls Procedures.

Issue and Defect Management Procedures.

Change Control Procedure.

Risk Control Procedures.

Approval Procedures.Ahmad Maharma PMBOK 5th Edition 100

Corporate Knowledge

Process Measurement Database.

Project Files.

Historical Information and Lessons Learned.

Issue and Defect Management Database.

Configuration Management Knowledge Base.

Financial Database.


PMBOK Reading

Chapters 2 & 3



PMP®

Phase #1: PROJECT INITIATION

Why projects start?

A market demand,

An Organizational need,

A customer request,

A technological advance,

A legal requirement,

A social demand,

An Ecological impact.



PMP®

Phase #1 : INITIATION

Chapter 4: Integration / 4.1 Develop Project Charter

Initiation Processes

Develop ProjectCharter

Integration

Identify Stakeholders

Communication


Develop Project Charter

The process of developing a document that formally authorizes a project or a phase and documenting initial requirements that satisfy the stakeholders needs and expectations.


What is a Project Charter?

A document that formally authorizes a project or a phase and documents initial requirements that satisfy the stakeholders needs and expectations

Projects are chartered and authorized external to the project


Why a charter is needed?

Defines the reason of the project

Assigns the project manager and his/ her authority level

Linking the project to the strategy and ongoing work of the organization

Helps in starting the planning for the project


Facts about the project charter

A must for all projects and/ or phases

Communicate the project purpose or justification, high level objectives, project and product requirements and initial risks.

Should be clear enough, yet broad to a level that the charter doesn’t change over the project’s life.


Develop Project Charter

Project Statement of Work (SOW)

Business Case

Agreements


Organizational Processes Assets

Expert Judgment

Facilitation Techniques

Project Charter


Project Statement of Work

A narrative description of products or services to be supplied by the project.

References:

Business need.

Product scope description.

Strategic plan.

For external projects, provided by customer as part of a bid document.

For internal projects, provided by sponsor or initiator.


Business Case

A document that provides necessary information from a business perspective on whether or not the project is worth the investment


Agreements

MoUs

SLAs

Letters of Agreement

Letters of Intent


Expert Judgment

Stakeholders.

Consultants.

Industrial groups.

Professional and technical associations.

Other units within organization.

Subject matter experts (SMEs)

Project management office (PMO)


Facilitation Techniques

Brainstorming

Conflict Resolution

Problem Solving

Meetings


Contents of project Charter

Purpose or justification

Project Description

Project and Product Requirements

Acceptance Criteria

Initial Risks

Summary Milestones

Estimated Budget

Project Manager Authority Level

Approval Requirements

Name & authority of the person(s) authorizing the project charter



PMP®

Phase #1: PROJECT INITIATION

Chapter 13: Stakeholders / 13.1 Identify Stakeholders


Develop ProjectCharter

Integration


Communication



Project Charter

Procurement Documents



Stakeholder Analysis

Expert Judgment

Meetings

Stakeholder Register


Stakeholder Analysis

The process of systematically gathering and analyzing quantitative and qualitative information to determine whose interests should be taken into account throughout the projects.


3 Steps to Managing Stakeholders

1. Identify Your Stakeholders

2. Prioritize Your Stakeholders

3. Manage Your Stakeholders


Step1- Identify Stakeholders

Identifying all stakeholders impacted by the project and documenting relevant Information regarding their interests, involvement, and impact on the project success.

It is essential to identify all stakeholders to increase the likelihood of project success.

Should be done as early as possible.


Identify Stakeholders Purpose

Enables the project manager to focus on the relationships necessary to ensure the success of the project.



The Stakeholder Register is used to identify those people and organizations impacted by the project and document relevant information about each stakeholder.

Includes all details related to the identified stakeholders. Identification information: Name, organizational position,

location, role in project, contact information.

Assessment information: Major requirements, main expectations, potential influence, phase.

Stakeholder classification: Internal/ external, supporter/ neutral/ resistor, etc.


Step2- Prioritize YourStakeholders

Identify the potential impact or support each stakeholder could generate

Classify them according to:

1. Power/Interest Grid

2. Power/ Influence Grid

3. Influence/ Impact Grid

4. Salience Model


Power/ Interest Grid

Keep

Informed

Monitor

(Minimum

Effort)

Manage

Closely

Keep

Satisfied

High

Low

Low High

Power

InterestAhmad Maharma PMBOK 5th Edition 127

Step3: Assess Your Stakeholders

Anticipate how key stakeholders react in different situations, in order to plan how to influence them to enhance their support and mitigate potential negative impact.


PMBOK Reading

Chapter 4

- Section 4.1

Chapter 13

- Section13.1



PMP®

Phase #2: PROJECT PLANNING


PMP®


Chapter 4: Scope / 4.2 Develop Project Management Plan

Develop Project Management Plan

Documenting the actions necessary to define, prepare, integrate, & coordinate all subsidiary plans into a project management plan.


Develop Project Management Plan

Project Charter

Outputs from Planning Processes



Expert JudgmentProject

Management Plan


Project Management Plan

Integrates and consolidates all of the subsidiary management plans and baselines from the planning processes.

Includes but not limited to:

Project management processes selected by the project management team.

Level of implementation of each selected process.

Descriptions of tools & techniques

How the selected processes will be selected to manage the specific project

How work will be executed to accomplish objectives

A change management plan


Project Management Plan contents

Subsidiary Plans

Project Scope Management Plan

Requirements Management Plan

Schedule Management Plan

Cost Management Plan

Quality Management Plan

Process Improvement Plan

Staffing Management Plan

Communication management Plan

Risk Management Plan

Procurement Management Plan

Baselines

Schedule

Cost performance

Scope


Project Management Plan Vs. Project Documents

Project Management Plan Project DocumentsChange Management Plan Activity Attributes Project Staff Assignment

Communications Management Plan Activity Cost Estimates Project Statement of Work

Configuration Management Plan Activity Duration Estimates Quality Checklists

Cost Baseline Activity List Quality Control Measurements

Cost Management Plan Activity Resource Requirements Quality Metrics

Human Resource Management Plan Agreements Requirements Documentation

Process Improvement Plan Basis of Estimates Requirements Traceability Matrix

Procurement Management Plan Change Log Resource Breakdown Structure

Scope Baseline Change Requests Resource Calendars

Quality Management Plan Forecasts Risk Register

Requirements Management Plan Issue Log Schedule Data

Risk Management Plan Milestone List Seller Proposals

Schedule Baseline Procurement Documents Source Selection Criteria

Schedule Management Plan Procurement Statement of Work Stakeholder Register

Scope Management Plan Project Calendars Team Performance Assessment

Stakeholder Management Plan Project Charter Work Performance ReportsAhmad Maharma PMBOK 5th Edition 136

PMBOK Reading

Chapter 4

- Section 4.2



PMP®


Chapter 5: Scope / 5.1 Plan Scope Management

Scope Planning


CollectRequirements

Define Scope

CreateWBS


Project Scope Vs. Product Scope

Project Scope: The work that needs to be accomplished to deliver a product, service, or result with the specified features and functions

Product Scope: The features and functions that characterize a product, service, or result




CollectRequirements

Define Scope

CreateWBS


Plan Scope management

The process of creating a scope management plan that documents how the project scope will be defined, validated and controlled.

It provides guidance on how scope will be managed throughout the project.




Project Charter

Enterprise environmental factors


Expert Judgment

Meetings

Scope Management Plan



Project Scope Management Plan

Part of Develop Project Management Plan

The outcome of a planning effort that precedes performing the processes of project scope management

Documents how the scope will be defined, verified, controlled, and how the work breakdown structure (WBS) will be created and defined.

Can be formal or informal depending on needs of the project.


It Includes:

Processes for:

– Detailing the project scope statement.

– WBS creation, maintenance, and approval.

– Formal verification and acceptance of the completed project deliverables.

– Control how requests to change the detailed project

scope statement will be processed.


Requirements Management Plan (RQM)

A Plan that documents how requirements will be analyzed, document and managed (tracked, reported, prioritized…) throughout the project life cycle.


Requirements Management Plan (RQM) Components

How Requirement activities will be planned, tracked and reported

Configuration Management Activities

Requirements Prioritization Process

Product Metrics

Traceability Structure



PMP®


Chapter 5: Scope / 5.2 Collect Requirements



CollectRequirements

Define Scope

CreateWBS



The process of defining and documenting stakeholders’ needs to meet project objectives.

Requirements include the quantified and documented needs and expectations of the sponsor, customer, and other stakeholders.

WBS, cost, schedule and quality planning are all built upon these requirements.

Need to be elicited, analyzed, and recorded in enough detail to be measured once project execution begins



Project Requirements include business requirements, project management requirements, delivery requirements, etc.

Product Requirements include information on technical requirements, security requirements, performance requirements, etc.





Stakeholder Management Plan

Project Charter


Interviews Focus Groups Facilitated

WorkshopsGroup Creativity

TechniquesGroup Decision

Making TechniquesQuestionnaires and

SurveysObservationsPrototypesBenchmarking Context DiagramDocument Analysis

Requirements Documentation

Requirements Traceability Matrix


Interviews

Talking to stakeholders directly.

Asking questions and recording answers

“One-on-one”, or multiple interviewers and/ or interviewees.

Interviewing:

Experienced participants

Stakeholders

Subject matter experts


Focus Groups

Bring together prequalified stakeholders and subject matter experts.

Trained moderator guides the group through an interactive discussion.

More conservational than one-on-one


Facilitated Workshops

Focused sessions that bring key cross-functional stakeholders together to define product requirements

Helps in building trust, foster relationships, and improve communication.

Reveal and resolve issues more quickly than individual sessions.

Examples: Joint Application Development (JAD) & Quality Function Deployment (QFD)


Group Creativity Techniques

• Brainstorming. A technique used to generate and collect multiple ideas related to project and product requirements.

• Nominal group technique. This technique enhances brainstorming with a voting process used to rank the most useful ideas for further brainstorming or for prioritization.

• The Delphi Technique. A selected group of experts answers questionnaires and provides feedback regarding the responses from each round of requirements gathering. The responses are only available to the facilitator to maintain anonymity

• ldea/mind mapping. Ideas created through individual brainstorming are consolidated into a single map to reflect commonality and differences in understanding, and generate new ideas.

• Affinity diagram. This technique allows large numbers of ideas to be sorted into groups for review and analysis.


Mind Map Example


Group decision Making Techniques

Group decision making is an assessment process of multiple alternatives with an expected outcome in theform of future actions resolution. These techniques can be used to generate, classify,

and prioritize product requirements.

There are multiple methods of reaching a group decision, for example:

• Unanimity. Everyone agrees on a single course of action.

• Majority. Support from more than 50% of the members of the group.

• Plurality. The largest block in a group decides even if a majority is not achieved.

• Dictatorship. one individual makes the decision for the group.

Almost any of the decision methods described previously can be applied to the group techniques used in therequirements gathering process.


Questionnaires & Surveys

Written sets of questions.

Aim to quickly accumulate information from a broad group of respondents.

Most appropriate with broad audience, when quick turnaround is needed, and where statistical analysis is appropriate.


Observations

Viewing user performance

Also called “Job shadowing”

Helpful for detailed processes when people that use the product have difficulty or reluctant to articulate their requirements

Can uncover hidden requirements


Prototypes

Provide a working model of the expected product before actually building it.

Support the concept of progressive elaboration through use of iterative cycles of mock-up creation, user experimentation, feedback generation and prototype revision.


Benchmarking

Involves comparing actual or planned practices, such as processes and operations, to those of comparable organizations to identify best practices, generate ideas for improvement, and provide a basis for measuring performance.

Compared organizations can be external or internal.


Context Diagrams

Visually depict the product scope by showing a business system (process, equipment, computer system…etc.), and how people and other systems (actors) interact with it.

Context diagrams show inputs to the business system, the actor(s) providing the input, the outputs of the business system, and the actor(s) receiving the output.


Context Diagrams



The document including the stakeholders’ requirements to meet the business need for the project.

Usually starts at a high level and then gets elaborated within the life cycle of the project and according to the RQM


Requirements Documentation Elements

Business need or opportunity

Functional requirements and non functional requirements

Quality requirements

Acceptance criteria

Business rules

Impacts to other organizational areas, and other entities inside or outside the performing organization

Support and training requirements

Requirements assumptions and constraints


Requirements Traceability Matrix

A tool that links project objectives to requirements to deliverables to product features.

The structure and level of details of the traceability matrix to be used shall be documented in the RQM as different projects can use different structures of traceability.

This tool can be as simple as a table or as complex as a software program.


Requirements Traceability Matrix Contents

Business needs, opportunities, goals, and objectives

Project objectives

Project scope, WBS deliverables

Product design

Product development

Test strategy and test scenarios

High level requirements to more detailed requirements


Example of Requirements Traceability Matrix



PMP®


Chapter 5: Scope / 5.3 Define Scope

Define Scope


CollectRequirements

Define Scope

CreateWBS


Define Scope

The process of developing a detailed description of the project and the product

Critical to project success.

Builds upon the major deliverables, assumptions, and constraints documented in the project initiation.


Define Scope


Project Charter



Expert Judgment

Product Analysis

Alternatives Identification

Facilitated Workshops

Project Scope Statement

Project Document Updates


Product Analysis

Translating high-level product description into tangible deliverables

Includes techniques such as:

Product breakdown

System analysis

Requirements analysis

System engineering

Value engineering

Value analysis


Alternatives Identification

A technique to generate different approaches to execute and perform the work of the project.

Includes techniques such as:

Brainstorming

Lateral thinking

Pairwise comparison



The project scope statement describes in details the project deliverables, and the work required to create those deliverables.

Common understanding among stakeholders,

Enables more detailed planning,

Guides the project team’s work during execution,

Provides the baseline for evaluating changes.


Project Scope StatementContents

Product scope description

Product acceptance criteria

Project deliverables

Project exclusions

Project constraints

Project assumptions


Constraints

Applicable restrictions that will affect the performance of the project.

Factors that affect a scheduled activity or when an activity can be scheduled.


Assumptions

Are factors that, for planning purposes, are considered to be true, real, or certain.

Affect all aspects of project planning.

Part of the project’s progressive elaboration.

Generally involve a degree of RISK.

Must be identified, documented and validated.



PMP®


Chapter 5: Scope / 5.4 Create WBS

Create WBS


CollectRequirements

Define Scope

CreateWBS


Create WBS

The process of subdividing project deliverables and project work into smaller, more manageable components.

WBS is a deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives, and create the required deliverables.

Each descending level represents an increasingly detailed definition of the project work.

Organizes and defines the total scope of the project.


WBS Types

Phases- Deliverables

Deliverables-Phases

Combination of both


Example: WBS (Phases –Deliverables)


Example: WBS (Deliverables–Phases)


Create WBS






Decomposition

Expert JudgmentScope Baseline



Decomposition

Subdivision of project deliverables into smaller, more manageable components until the work and deliverables are defined to the work package level.

The level of composition varies per deliverable/ phase with the size and complexity of project.


Work Package

The “Work Package” level is the lowest level in the WBS.

Work Package is the point at which the cost and activity duration can be reliable, estimated and packaged.


Decomposition Involves

Identifying deliverables and related work.

Structuring and organizing the WBS.

Decomposing upper levels into lower level detailed components.

Developing and assigning identification codes.

Verifying that the degree of decomposition is necessary and sufficient.


WBS Dictionary Contents

Code of account identifier

Statement of work

Responsible organization

Schedule milestones

Associated activities

Resources required

Cost estimates

Quality requirements

Acceptance criteria

Technical references

Contract information


Scope Baseline

Scope statement

WBS

WBS dictionary


WBS Dictionary

A document generated by the “Create WBS” process that supports the WBS.

Provides more detailed description of the components in the WBS., including work packages and control accounts.


WBS is not

Organizational Breakdown Structure (OBS)

Bill Of Materials (BOM)

Risk Breakdown Structure (RBS)

Resource Breakdown Structure (RBS)


PMBOK Reading

Chapter 5

- Sections 5.1-5.4



PMP®


Chapter 6: Time / 6.1 Plan Schedule Management

PM Knowledge Areas & Process Groups 47 processesPM Process Groups

Knowledge Area

Processes

Initiating Process

Group

Planning Process Group Executing Process Group Monitoring & Controlling Process

Group

Closing

Process Group

Project Management

Integration

Develop Project

Charter

Develop Project Management

Plan

Direct and Manage Project

Execution

Monitor and Control Project Work

Integrated Change Control

Close Project

Project Scope

Management


Collect requirements

Define Scope

Create WBS

Validate Scope

Control Scope

Project Time

Management


Define Activity

Sequence Activity

Estimating Resource

Estimating Duration

Develop Schedule

Control Schedule

Project Cost

Management


Estimating Cost

Budgeting Cost

Control Cost

Project Quality

Management

Quality Planning Perform Quality Assurance Perform Quality Control

Project HR

Management

Plan HR Management Acquire Project Team


Manage Project Team

Project

Communications

Management

Plan Communications Distribute Information Performance Reporting

Project Risk

Management


Risk Identification

Qualitative / Quantitative Risk

Analysis

Risk Response Planning

Risk Monitoring and Control

Project Procurement

Management

Plan procurement Conduct procurement Administer Contract Close

procurement

Project Stakeholder

Management

Identify Stakeholders Plan stakeholder Management Manage stakeholders

expectations

Control stakeholder


Project Time Management

Knowledge

Area

Process


ControlClosing

Time


Define Activity

Sequence Activity

Estimating Resource

Estimating Duration

Develop Schedule

Control Schedule

Enter phase/

Start project

Exit phase/

End project

Initiating

Processes

Closing

Processes

Planning

Processes

Executing

Processes

Monitoring &



Project Time Planning

EstimateActivity

Durations

Develop Schedule

Sequence Activities

Estimate Activity

Resources

Define Activities

Plan Schedule

Management


Plan Schedule Management

EstimateActivity

Durations

Develop Schedule

Sequence Activities

Estimate Activity

Resources

Define Activities

Plan Schedule

Management



The process of establishing policies, procedures, and documentation for planning, developing, managing, executing, and controlling the project schedule.

The key benefit of the process is that it provides guidance and direction on how the project schedule will be managed throughout the project.




Project Charter

Enterprise Environmental factors

Org. Process Assets

Expert Judgment

Analytical Techniques

Meetings




Scheduling Methodology

Scheduling Tools & Techniques

Estimating Approaches

Formats

Project Management Software


Schedule Management Plans

A component of the project management plan.

Establishes the criteria and activities for developing, monitoring, and controlling the schedule.

Can be formal or informal

Can be highly detailed or broadly defined based on the needs of the project


Schedule Management Plans

Can include the following:

Project schedule model development

Level of accuracy

Units of measure

Organizational procedures links

Project schedule management maintenance

Control schedule

Rules of performance measurement

Reporting formats

Process description



PMP®


Chapter 6: Time / 6.2 Define Activities

Define Activities

EstimateActivity

Durations

Develop Schedule

Sequence Activities

Estimate Activity

Resources

Define Activities

Plan Schedule

Management


Define Activities

The process of identifying the specific actions to be performed to produce the project deliverables.

Decomposed from the “work packages” at the WBS.

Activities are the smaller components that represent the work necessary to complete the work package.

Activities provide basis for estimating, scheduling, executing, and monitoring and controlling the project work.


Define Activities


Scope Baseline


Org. Process Assets

Decomposition

Rolling Wave Planning

Expert Judgment

Activity List

Activity Attributes

Milestone List


Rolling Wave Planning

Progressive detailing of the project management plan


Activity List

A comprehensive list including all schedule activities required for the project.

Includes:

Activity identifier

Description of each activity



PMP®


Chapter 6: Time / 6.3 Sequence Activities

Sequence Activities

EstimateActivity

Durations

Develop Schedule

Sequence Activities

Estimate Activity

Resources

Define Activities

Plan Schedule

Management


Sequencing Activities


Activity List Activity

Attributes Milestone List Enterprise

Environmental Factors



Precedence Diagramming Method (PDM)

Dependency Determination

Applying Leads and Lags

Project Schedule Networking Diagram

Project Documents Update


Sequence Activities

Identifying & documenting dependencies among schedule activities

Can be done using software or manually.


Precedence Diagramming Method (PDM)

Also known as Activity-On-Node

Activities are represented in boxes (Nodes),

and arrows show dependencies


Dependencies Relationships

Finish-to-Start

Finish-to-Finish

Start-to-Start

Start-to-Finish

A

B

A

B

A

BA

BAhmad Maharma PMBOK 5th Edition 218

Dependencies Relationships

Use the following Rule of Thumb to understand the relationships better:

Activity A should _ _ _ _ _ _ Before activity B can _ _ _ _ _ _


Types of Dependencies

Mandatory

Discretionary

External

Internal


Applying Leads & Lags

Lead: The overlapping time

Lag: The waiting time

Float/ Slack: The time an activity can be delayed (wait) without affecting the project finish date

A lead allows an acceleration of the successor activity.

A lag directs a delay in the successor activity.


Applying Leads & Lags

• Leads.– May be added to start an activity before the predecessor activity is complete.

• Lags– Inserted waiting time between activities

A

B

A

B



PMP®


Chapter 6: Time / 6.4 Estimate Activity Resources

Estimate Activity Resources

EstimateActivity

Durations

Develop Schedule

Sequence Activities

Estimate Activity

Resources

Define Activities

Plan Schedule

Management



Estimating the type and quantities of resources required to perform each schedule activity


Types of Resources

Material

People

Equipment



Schedule Management PlanActivity ListActivity

AttributesResource

CalendarsRisk RegisterActivity Cost

EstimatesEnterprise

Environment Factors Org. Process

Assets

Expert Judgment

Alternatives Analysis

Published Estimating Data

Bottom-up Estimating


Activity Resource Requirements

Resource Breakdown Structure (RBS)

Project Document updates



PMP®


Chapter 6: Time / 6.4 Estimate Activity Duration

Estimate Activity Durations

EstimateActivity

Resources

Develop Schedule

Sequence Activities

Estimate Activity

Durations

Define Activities

Plan Schedule

Management



Approximating the number of work periods needed to complete individual activities with estimated resources.

Uses information on:

Activity scope of work

Required resource types

Estimated resource quantities

Resource calendar

Progressively elaborative

Takes elapsed time into account




Activity List

Activity Attributes


Resource Calendars


Risk Register Resource Breakdown

Structure

Enterprise Environment Factors

Org. Process Assets

Expert Judgment Analogous

Estimating Parametric

EstimatingThree Point

Estimates (PERT)Group Decision-

Making TechniquesReserve

Analysis

Activity Duration Estimates

Project DocumentUpdates


Estimate Activity Durations: Tools and Techniques

Expert Judgment

Expert judgment, guided by historical information, can provide duration estimate information orrecommended maximum activity durations from prior similar projects.

Analogous Estimating

Analogous estimating uses parameters such as duration, budget, size, weight, and complexity,from a previous, similar project, as the basis for estimating the same parameter or measure fora future project.

Analogous duration estimating is frequently used to estimate project duration when there is alimited amount of detailed information about the project for example, in the early phases of aproject.

Analogous estimating uses historical information and expert judgment.


Parametric Estimating

Parametric estimating uses a statistical relationship between historical data and other variables

(e.g. square footage in construction) to calculate an estimate for activity parameters,

This technique can produce higher levels of accuracy depending upon the sophistication and underlying data built into the model.

Parametric time estimates can be applied to a total project or to segments of a project, in conjunction with other estimating methods, such as cost, budget, and duration.



Three-Point Estimating

The accuracy of activity duration estimates can be improved by considering estimation uncertainty and risk.

• Triangular Distribution. tE = (tO + tM + tP) / 3

• Beta Distribution (from the traditional PERT technique). tE = (tO + 4tM + tP) / 6



Three Point (PERT) Estimates

Time Expected (te)= (to+4xtm+tp)/6

to: Optimistic Estimate

tm= Average Estimate

tp= Pessimistic Estimate

Based on a the assumption of Beta distribution


Beta Distribution


Activity Optimistic Duration

The total number of work periods in calendar units assigned to perform the schedule activity, considering all of the variables that could affect performance, and is determined to be the shortest possible activity duration

It is determined by answering the question

How long will it take in the best case scenario?


Activity Pessimistic Duration

The total number of work periods in calendar units assigned to perform the schedule activity, considering all of the variables that could affect performance, and is determined to be the longest possible activity duration

It is determined by answering the question

How long will it take in the worst case scenario?


Activity Most Likely Duration

The total number of work periods in calendar units assigned to perform the schedule activity, considering all of the variables that could affect performance, and is determined to be the most probable activity duration

It is determined by answering the question:

How long will it most likely take?


Standard Deviation & variance

Activity Std. Deviation (σactivity) = P – O

6

Variance = (P – O)2

6

Project Std Deviation (σ project)=

√ ∑ Variance Critical Path Activities


Estimates Certainty

Confidence level in the value is approximately 50%

Confidence level in the value + SD is approximately 85%

Confidence level in the value + 1.645 × SD is approximately 95%

Confidence level in the value + 2 × SD is approximately 98%

Confidence level in the value + 3 × SD is approximately 99.9%


3-Points Estimate (PERT)

Expected

6

Ο4ΜP

Standard

Deviation

6

ΟP

Variance

6

ΟP 2

varianceSD


Exercise: Tree-point estimates (PERT)

ActivityDuration Expected

Duration

(PERT)

Activity

Standard

Deviation

Variance

range

Range of

the estimate

P M O

A 3 5 1

B 8 4 2

C 15 8 5

D 20 10 5

Project (Total) -


Exercise: PERT - Most tricky question (Answer)

• See that the question says that Duration Uncertainty is Pessimistic minus Optimistic in other words P-O. We know that SD is (P-O ) / 6 , thus SD is "duration Certainty " / 6

ThusFor Path 1 : SD = 18/6 = 3Variance = 3*3 = 9

For path 2 : SD = 24 /6 = 4Variance = 4*4 = 16

Total Path Variance = 16 + 9 = 25Sqrt (25) = 5

Meaning (P-O) / 6 = 5(p-O) = 5 * 6DURATION UNCERTAINTY = 30


Schedule Uncertainty & Risk Analysis Process

Schedule risk analysis uses information about the uncertainty of activity durations to help answer the following questions:

What is the likelihood of finishing project as scheduled?

How much contingency is needed to establish a completion date with a probability of success that is acceptable to the stakeholders?

Which activities are the most likely to delay the project?

What actions can be taken to control risks in the schedule?


Schedule Uncertainty & Risk Analysis Process

If estimating activity duration involves a great deal of uncertainty, a commonly used technique is the application of probabilistic estimates


Critical Path

The longest path from the beginning to the end of the project. Activities on the critical path cannot be delayed without delaying the project.

There can be more than one critical path (riskier)

Project Manager should focus on critical path.


Network Diagram

A

2

B

3

C

1

D

4

E

3

F

2

G

4

H

2


Calculating Critical Path

Specify the individual activities.

Determine the sequence of activities.

Draw the network diagram.

Estimate activity completion time.

Identify critical path.



PMP®


Chapter 6: Time / 6.6 Develop Schedule

Develop Schedule

EstimateActivity

Resources

Develop Schedule

Sequence Activities

Estimate Activity

Durations

Define Activities

Plan Schedule

Management


Develop Schedule

The process of analyzing activity sequences, durations, resource requirements, and schedule constraints.

Provides specific start and end dates for activities.

Iterative process.


Develop Schedule


Activity List Activity Attributes Project Schedule

Network Diagrams Activity Resource

Requirements Resource Calendars Activity Duration

Estimates Project Scope

Statement Risk Register Project staff

assignment Resource

Breakdown Structure

Org. Process Assets Enterprise

Environmental Factors

Schedule Network Analysis

Critical Path Method

Critical Chain Method

Resource Optimization Techniques

Modeling techniques

Leads & Lags Schedule

Compression Scheduling Tool

Project schedule

Schedule baseline

Schedule data

Project Calendar

Project Management Plan (updates)

Project document (updates)


Resource OptimizationTechniques

Resource Leveling

Resource Smoothing


Resource leveling

Used when shared or critical resources are only available at certain times, or in limited quantities, or to keep resource usage at a constant level.

Usually changes the critical path.

Resource leveling can be used when shared or critical required resources are only available at certain times, are Only available in limited quantities, or to

keep resource usage at a constant level.

Resource leveling is necessary when resources have been

over-allocated.

Resource leveling can often cause the original critical path to change.



Resource leveling

Modeling Techniques

What-If Scenario Analysis

Simulation


6.6.2 Develop Schedule: Tools and Techniques


Resource Smoothing. A technique that adjusts the activities of a schedule model such that the

requirements for resources on the project do not exceed certain predefined resource limits. In

resource smoothing, as opposed to resource leveling, the project’s critical path is not changed

and the completion date may not be delayed. In other words, activities may only be delayed within

their free and total float. Thus resource smoothing may not be able to optimize all resources.

What-If Scenario Analysis

An analysis of the question “what if the situation represented by scenario ‘X’ happens”.

Can be used to assess the feasibility of the schedule under adverse conditions, and in preparing contingency and response plans.


Schedule Compression

Fast Tracking

Crashing


Fast Tracking

A schedule compression technique in which phases or activities normally performed in sequence are performed in parallel.

Can result in rework and increased risks.


Crashing

A schedule compression technique in which cost and schedule tradeoffs are analyzed to determine how to obtain the greatest amount of compression for the latest incremental cost.

Can result in increased cost.



Crashing

Critical Chain Method

A schedule network analysis technique that modifies the project schedule to account for limited resources (according to PMBOK…).

Combines deterministic and probabilistic approaches.


Project schedule

Milestone Chart

Bar Chart

Project schedule network chart


Schedule Baseline

Project schedule with baseline start dates and baseline finish dates.


Start & Finish Dates

ES: Earliest start time.

EF: Earliest finish time.

LF: Latest finish time.

LS: Latest start time.


Critical Path Method Basic


275

Figure 6-9. Calculating Early and Late Start and Finish Dates


Critical Path Method Basic


Forward Pass

Schedule Calculations That Identify The Early Start and Finish Dates of Tasks and The Project.

ES = EF of Preceding Task (latest if more than one).

EF = ES + Duration.


Backward Pass

Schedule Calculations That Identify The Late Start and Finish Dates of Tasks and The Project.

LF = LS of succeeding Task (earliest if more than one).

LS = LF - Duration


Float

Float or slack is the amount of time that a task in a project network can be delayed without causing a delay to:

Subsequent tasks (free float)

Project completion date (total float)

Total Float = LF – EF

OR

LS - ES

Free Float = Min ES (Succeeding Task) – EF


Critical Path


Critical Path

A

2

B

3

C

1

D

4

E

3

F

2

G

4

H

2


A

2

1 2

21

B

3

3 5

53

E

3

3 5

97

C

1

6 6

1515

D

4

6 9

96

F

2

10 11

1110

G

4

12 15

1512

H

2

16 17

1716

Critical Path


286

Figure 6-8. Determining the Critical Path for Project X


287

Using Critical Path Analysis to Make Schedule Trade-offs

• Free slack or free float is the amount of time an activity can be delayed without delaying the early start of any immediately following activities.

• Total slack or total float is the amount of time an activity can be delayed from its early start without delaying the planned project finish date.


Exercise


289

Exercise


290

Answer


291

Answer


292

Answer


293

Answer


294

Exercise


295

Exercise


296

Answer


297

Answer


298

Answer


299

Answer


300

Answer


301

GERT


Gantt Chart

• Graph or bar chart with a bar for each project activity that shows passage of time

• Provides visual display of project schedule

• Slack• amount of time an activity can be delayed without

delaying the project


| | | | |

Activity

Design house and obtain financing

Lay foundation

Order and receive materials

Build house

Select paint

Select carpet

Finish work

0 2 4 6 8 10Month

Month1 3 5 7 9

Example of Gantt Chart


Project Network

• Activity-on-node (AON)• nodes represent activities, and arrows

show precedence relationships

• Activity-on-arrow (AOA)• arrows represent activities and nodes are

events for points in time

• Event• completion or beginning of an activity in

a project

1 32

Branch

Node


PMBOK Reading

Chapter 6

- Sections 6.1 – 6.6



PMP®


Chapter 7: Cost / 7.1 Plan Cost management

Project Cost Management

Plan CostManagement

EstimateCosts

Determine Budget


Project Cost management

On smaller projects, cost estimating and cost budgeting are so tightly linked that they can be done together and by one person.

The work done in cost management is preceded by a cost planning effort by the project management team.

Techniques such as Life-Cycle Costing & Value Engineering can improve decision making and reduce cost while improving quality and performance of project deliverables.


Life-Cycle Costing

A decision making tool that involves tradeoffs between short term project costs and long term product or service operational costs.

It examines the effects of project decisions not only on project activities, but also on the cost of maintaining, using and supporting of the product, service, or result of the project.



Plan CostManagement

EstimateCosts

Determine Budget



The process of establishing policies, procedures, and documentation for planning, managing, expending, and controlling project costs.

The key benefit of the process is that it provides guidance and direction on how the project schedule will be managed throughout the project.



PMP®


Chapter 7: Cost / 7.2 Estimate Cost

Estimate Costs


Project Charter


Org. Process Assets

Expert Judgment


Meetings




Part of Develop Project Management Plan

The outcome of a planning effort that precedes performing the processes of project cost management

Sets out the format and establishes the criteria for planning, structuring, estimating, budgeting, and controlling project costs.

Documents cost management processes and their associated tools and techniques


Cost Management Plan Establishes

Level of accuracy

Level of precision

Units of measure

Organizational procedures links

Control thresholds

Rules of performance measurement

Reporting formats

Process descriptions

Additional details


Estimate Costs

Plan CostManagement

EstimateCosts

Determine Budget


Cost Estimating Vs. Cost Budgeting

Cost Estimating: Developing an approximation of the costs of the resources needed to complete project activities

Cost Budgeting: Aggregating the estimated costs of individual activities of work packages to establish a cost baseline


Estimate Costs


Scope Baseline

Project Schedule

Human Resource Plan

Risk Register


Org. Process Assets

Expert Judgment Analogous

Estimating Parametric

Estimating Bottom-up

estimating Three-Point

Estimates Reserve analysis Cost of Quality Project

Management Estimating Software

Vendor Bid Analysis

Group Decision-Making Techniques

Activity Cost Estimates

Basis of Estimates



Analogous Estimating

Using cost of previous similar projects as basis for estimating.

Less Costly BUT less accurate.

Used when information is limited (early phases).

Reliable when previous projects are similar in fact, not just in appearance.


Parametric Estimating

Uses relationship between historical data and certain parameters (cost per square meter, cost per meter, etc).


Bottom-Up Estimating

A method for estimating a component of work.

The cost is estimated for individual work packages or activities, and they are then summarized or “rolled-up” to higher levels.

Cost and accuracy are influenced by the size and complexity of the individual package or activity.


Vendor Bid analysis

Includes analysis of what the project should cost, based on responsive bids from qualified vendors.


Activity Cost Estimates

A quantitative assessment of the likely costs of the resources required to complete project activities.


Basis of Estimates

Documentation of basis of estimates (how it was developed).

Documentation of assumptions made.

Documentation of any known constraints.

Indication of range of estimates.

Indication of confidence level of the final estimate.


Cost Elements

Human Resources – Labor

Hour rate, fringe benefits, overtime, overhead, per diem

Equipment & Software

Depreciation, purchase cost, support & Maintenance

Facilities

Rent, depreciation, utilities, admin overhead

Supplies

Stationary, food, leisure, gas for cars, tickets

Special expenses


Types of Cost• Variable Costs

– Change with the amount of production/work

– e.g. material, supplies, wages

• Fixed Costs

– Do not change as production change

– e.g. set-up, rental

• Direct Costs

– Directly attributable to the work of project

– e.g. team travel, recognition, team wages

• Indirect Costs

– overhead or cost incurred for benefit of more than one project

– e.g. taxes, fringe benefit, janitorial services



PMP®


Chapter 7: Cost / 7.3 Determine Budget

Determine Budget

Plan CostManagement

EstimateCosts

Determine Budget


Determine Budget

The process of aggregating the estimated costs to individual activities or work packages to establish an authorized cost baseline.


Determine Budget

Cost Management PlanScope BaselineActivity Cost

EstimatesBasis of Cost

EstimatesProject

ScheduleRisk RegisterResource

Calendars Agreements Organizational

Process Assets

Cost Aggregation

Reserve Analysis

Expert Judgment

Historical Relationships

Funding Limit Reconciliation

Cost Performance Baseline

Project Funding Requirements



Funding Limit Reconciliation

The expenditure of funds should be reconciled with any funding limits on the commitment of funds for the project.

Variance between the funding limits and the planned expenditures sometimes necessitate the rescheduling of work to level out the rate of expenditures.

Can be accomplished by placing imposed date constraints for work into the project schedule.



Time-phased budget at completion (BAC) used as basis against which to measure, monitor, and control overall cost performance.


Cost Aggregation• Reserves & risk management are important

while estimating!

– Contingency reserves: Cost Baseline the cost impacts of the remaining risk

– Management reserves: Cost Budgetextra fund to cover unforeseen risk or changes to the project

Activity estimates

Work package estimates

Control account estimates

Project estimates

Contingency reserves

Management reserves

Cost baseline

Cost Budget


Contingency Reserves

Contingency reserves is usually percentage of total estimate or based on risk analysis, to account for the risks that are “known unknowns” of the project.

Under the control of the project manager.


Management Reserves

Budgets reserved for unplanned, but potentially required changes to project scope. These are the risks that are “unknown unknowns”.

Under the control of organization’s management.


Cost Budgeting

1. Activities

$75

$25 $25$25

$100 $100

$275$400

$675

$225

$900

$140

$1040

2. Work packages

3. Control Account

4. Project

5.Contingency Reserve

6.Cost Baseline

7.Management Reserve

8.Cost Budget


Project Selection Methods

System Description

Benefit Measurement Models (Economic Models)

Analyze the predicted value of the completed projects in different ways.May present the value in terms of:

Benefit Cost Ratio (BCR)

Return on Investment (ROI)

Present Value (PV) & Net Present Value (NPV)

Internal Rate of Return (IRR)

Opportunity Cost

Mathematical Models (Constrained Optimization)

Uses different types of mathematical formulas and algorithms to determine the optimal course of action. Linear programming

Nonlinear programming

Dynamic programming

Integer Programming

Multi-objective programming


Benefit Measurement Models (Economic Models)

Accounting Concept Description Keys for Project Selection Notes

Present value (PV)Value today of future cash flows.

The higher the PV, the better. PV= FV/(1+r)n

Net present value (NPV)Present value of cash inflow (benefits) minus present value of cash outflow (costs).

A negative NPV is unfavorable. The higher the NPV, the better.

Accounts for different project durations.

Internal rate of return (IRR)The interest rate that makes the net present value of all cash flow equal zero.

The higher the IRR, the better.

The return that a company would earn if it invests in the project.

Payback periodThe number of time periods needed to hit the break-even point.

The lower the payback period, the better.

Benefit cost ratio (BCR)

A ratio identifying the relationship between the cost and benefits of a proposed project.

A BCR less than 1 is unfavorable. The higher the BCR, the better.

Opportunity cost

The difference in return between a chosen investment and one that is passed up.

Sunk costsA cost that has been incurred and cannot be reversed.

This should not be a factor in project decisions.


Present Value (PV) and (NPV)• Present Value (PV) – Present Value of future Cash flows. Higher the better.

• NOTE: present value and NPV are only mention once or twice on the exam

• You will not have to calculate it, nor know formula, just understand the concept

• Amount of money is always more valuable sooner than later, as this enables to take advantage of investment opportunities.

• Higher PV more preferable project. A potential investment project is selected, if value of NPV is >= ZERO

• PV = FV / (1 + i) n

• Example:

• Project X is expected to make $50,000 in two years. Project Y is expected to make to $80,000 in three years. If the cost of capital is 5 percent, which project to choose?

• Using PV formula, PV = FV / (1 + i) n , PV for Project X is $69,107 and Project Y is $45,351.

• Project Y will return the highest investment to the company and should be chosen over Project X.Ahmad Maharma PMBOK 5th Edition 340

Net Present Value

The present value of total benefits (income or revenue) minus the cost over many time periods.

Allows for comparison of many projects, to select the best to initiate.

If NPV is +ve: the investment is a good choice.

The project with highest NPV is the best.


Net Present Value

NPV= (FV/ (1+i)n)

Where FV= Future Value

i= Interest Rate

n= Number of period intervals


Net Present Value Example

Note that

totals are

equal, but

NPVs are

not because

of the time

value of

money


Internal Rate of Return (IRR)• This is just another way of interpreting the benefit from the project.

• It looks at the cost of the project as the capital investment and translates the profit into the interest rate over the life of that investment.

• Calculations for IRR are not part of this certification. It is enough if you understand that the greater the value for IRR, the more beneficial the

• Example:

• You have two projects to choose from: Project A with an IRR of 21%, or project B with an IRR of 15%, which once you prefer?

• Answer: Project A.


Internal Rate of return (IRR)

Is the interest rate at which the costs of the investment lead to the benefits of the investment.

The project with highest IRR is the best.


Payback Period

The period of time required for the return on an investment to "repay" the sum of the original investment.

For example, a $1000 investment which returned $500 per year would have a two year payback period.

The project with lowest payback period is the best


Payback Period

• The payback period is the length of time required to recover the initial cash outlay on the project.

• For example, if a project involves a cash outlay of 600,000$ and generates cash inflows of. 100000$, 150000$, 150000$ and 200000$ in the first, second, third and fourth years respectively,

• its pay back period is 4 years because the sum of cash flows during the four years is equal to the initial outlay. According to the payback criterion,

• the shorter the payback period, the more desirable the project.

• Payback period = cost of period or investment / Annual cash flow

• Example:

• You have two projects to choose from , Project A with payback period of 6 months or project B with payback period of 18 months, which one would you prefer?

• Answer : Project A


Benefit Cost Ratio

• This is the value obtained by dividing the benefit by the cost.

• The greater the value, the more attractive the project

• A benefit cost ration >1 means the benefit are grater than the cost

• A benefit cost ration <1 means the cost are grater than the benefit

• A benefit cost ration =1 means the benefit are equal the cost

• For example, if the projected cost of producing a product is 10,000$, and you expect to sell it for 40,000$,

then the BCR is equal to 40,000$/10,000$, which is equal to 4. For the benefit to exceed cost, the BCR must be greater than 1.

Example:

If BCR of project A is 2.3, and the BCR of project B is 1.7, which project would you select?

Answer : Project A


Charting the Payback Period


Economic Value Added (EVA)

• Economic Value Added (EVA) – Value added to organization by the project

• Economic value should rarely appear in questions or choices


Opportunity Cost.

• Opportunity cost (opportunity lost) is the NPV of the next best project, you are not doing, because you have decided to invest in a project.

• Let us assume that you have 100,000 rupees and you are investing this money in project ‘A’, whose NPV=200,000 and because of this you are unable to do project ‘B’, whose NPV=150,000 or project ‘C’, whose NPV = 120,000, then the opportunity cost is 150,000, which is the NPV of project ‘B’, which is the next best option after ‘A’.

• Example:

• You have two projects to choose from: Project A with an NPV of 45,000$, or project B with an NPV of 85,000$, what Is the opportunity cost of selecting project B ?

• Answer : 45,000$


Sunk Cost

• Sunk Cost – Cost already incurred. This should not be taken into account while taking decision.

• Are expended costs; accounting standards that sunk costs should not be considered when deciding whether to continue with a troubled project.

Example :

You have project with an initial budget of 1,000,000 $ , you are halfway through the project and have spend 2,000,000 $, do you consider the 1,000,000 $ over budget when determining whether to continue with the project.

• Answer: NO, the money spent is gone


Law of Diminishing return

• Law of Diminishing return – After a point, adding more resources will not have proportional benefit.

• Example:

• A single programmer may produce at 1 module per hour. With second a programmer the two may produce 1.75 module/ hour. With third programmer, the group may produce 2.25 modules/ hour


Working Capital

• Working Capital – Current assets minus current liabilities.

The amount of money the company has available to invest, including investmentin project


Depreciation• Depreciation – Assets loose value over useful life.

• Depreciation methods based on timeStraight line methodDeclining balance methodSum-of-the-years'-digits method

Depreciation based on use (activity)


Straight line depreciation• Depreciation = (Cost - Residual value) / Useful life

[Example, Straight line depreciation]

On April 1, 2011, Company A purchased an equipment at the cost of $140,000. This equipment is estimated to have 5 year useful life. At the end of the 5th year, the salvage value (residual value) will be $20,000. Company A recognizes depreciation to the nearest whole month. Calculate the depreciation expenses for 2011, 2012 and 2013 using straight line depreciation method.

Depreciation for 2011= ($140,000 - $20,000) x 1/5 x 9/12 = $18,000




Double declining balance depreciation

YearBook Value

at the beginningDepreciation

RateDepreciation

ExpenseBook Value at the year-end

2011 $140,000 40%

2012

2013

2014

2015



(*1) $140,000 x 40% x 9/12 = $42,000

(*2) $98,000 x 40% x 12/12 = $39,200

(*3) $58,800 x 40% x 12/12 = $23,520

(*4) $35,280 x 40% x 12/12 = $14,112

(*5) $21,168 x 40% x 12/12 = $8,467

--> Depreciation for 2015 is $1,168 to keep book value same as

salvage value.

--> $21,168 - $20,000 = $1,168 (At this point, depreciation stops.)



YearBook Value

at the beginningDepreciation

RateDepreciation

ExpenseBook Value at the year-end

2011 $140,000 40% $42,000 (*1) $98,000

2012 $98,000 40% $39,200 (*2) $58,800

2013 $58,800 40% $23,520 (*3) $35,280

2014 $35,280 40% $14,112 (*4) $21,168

2015 $21,168 40% $1,168 (*5) $20,000


Sum-of-the-years-digits method

Depreciation expense = (Cost - Salvage value) x FractionFraction for the first year = n / (1+2+3+...+ n)Fraction for the second year = (n-1) / (1+2+3+...+ n)Fraction for the third year = (n-2) / (1+2+3+...+ n)...

Fraction for the last year = 1 / (1+2+3+...+ n)

n represents the number of years for useful life.

[Example, Sum-of-the-years-digits method]


Sum-of-the-years-digits method

[Example, Sum-of-the-years-digits method]

Company A purchased the following asset on January 1, 2011.What is the amount of depreciation expense for the year ended December 31, 2011?Acquisition cost of the asset --> $100,000Useful life of the asset --> 5 yearsResidual value (or salvage value) at the end of useful life --> $10,000Depreciation method --> sum-of-the-years'-digits method

Calculation of depreciation expenseSum of the years' digits = 1+2+3+4+5 = 15Depreciation for 2011 = ($100,000 - $10,000) x 5/15 = $30,000Depreciation for 2012 = ($100,000 - $10,000) x 4/15 = $24,000Depreciation for 2013 = ($100,000 - $10,000) x 3/15 = $18,000Depreciation for 2014 = ($100,000 - $10,000) x 2/15 = $12,000Depreciation for 2015 = ($100,000 - $10,000) x 1/15 = $6,000

Sum of the years' digits for n years = 1 + 2 + 3 + ...... + (n-1) + n = (n+1) x (n / 2)

Sum of the years' digits for 500 years = 1 + 2 + 3 + ...... + 499 + 500 = (500 + 1) x (500 / 2) = (501 x 500) / 2 = 125,250


Project selection methods – exercise

Accounting Concept Project A Project B Answer

Net present value (NPV) 1,000,000 $ 75,000 $

Internal rate of return (IRR) 13 % 17 %

Payback period 16 months 18 months

Benefit cost ratio (BCR) 2.27 1.3


Project selection methods – exercise

Accounting Concept Project A Project B Answer

Net present value (NPV) 1,000,000 $ 75,000 $ A

Internal rate of return (IRR) 13 % 17 % B

Payback period 16 months 18 months A

Benefit cost ratio (BCR) 2.27 1.3 A


PMBOK Reading

Chapter 7

- Sections 7.1 - 7.3



PMP®


Chapter 8: Quality / 8.1 Plan Quality Management

What is Quality?

Conformance to Requirements

Fitness of use

According to PMBOK

“The degree to which a set of inherent characteristics fulfill requirements.”



Plan Quality

Management


Quality Management & Project Management

Both disciplines recognize the importance of:

Customer Satisfaction

Prevention over inspection

Management Responsibility

Continuous Improvement


Quality Concepts

Quality vs. Grade

Precision vs. Accuracy

Quality Assurance vs. Quality Control


Quality Vs. Grade

Quality is the “Degree to which a set of inherent characteristics fulfill requirements”

Grade is “ Category assigned to products or services having the same functional use but different technical characteristics”.

Low grade does not necessarily cause a problem, but low quality does.


Precision vs. Accuracy

Precision is consistency that the value of repeated measurements are clustered and have little scatter.

Accuracy means that the measured value is very close to the true value.

Precise measurements are not necessarily accurate. A very accurate measurement is not necessarily precise.


Quality Assurance vs. Quality Control

Quality Assurance is applying the planned, systematic quality activities to ensure that the project employs all processes needed to meet requirements.

Quality Control is the action of monitoring specific project results to determine whether they comply with relevant quality standards and identifying ways to eliminate causes of unsatisfactory performance.



Plan Quality

Management


Plan Quality Management

Identifying which quality Standards are relevant to the project and determining how to satisfy them

Scope statement

Quality policies

Quality standards & regulations in the company, industry.

Quality is planned, designed and built in- not inspected in.


Plan Quality



Risk Register



Org. Process Assets

Cost/ Benefit Analysis Cost of Quality (COQ) Seven Basic Quality ToolsBenchmarking Design of ExperimentsStatistical SamplingAdditional Quality Planning Tools Meetings


Quality Metrics

Quality Checklists




Seven Basic Quality Tools

1. Cause & Effect Diagram

2. Flowcharts

3. Checksheets

4. Pareto Diagrams

5. Histograms

6. Control Charts

7. Scatter Diagrams


Cause & Effect Diagram

Also known as “Fish-Bone Analysis” or “Ishikawa Analysis”

Used to identify the problem, discover the underlying causes leading to it, and develop solutions and preventive actions.


Cause & Effect Diagram


Flowcharting

Diagram that shows the relationship between different elements in a system of processes

Used to assist team efforts in identifying potential quality problems and the possible affects of those problems.

Cause & Affect Diagram

Process flowcharts


ChecksheetsCategory Strokes Frequency

Attribute 1

Attribute 2

Attribute 3

Attribute 4


Control Charts

Graphic display of results, over time, of a process.

Used to determine if the process is “in control”. When a process is “in control” it should not be adjusted.

“Rule of Seven”


Histogram

A vertical bar chart showing how often a particular variable state occurred.


Histograms


Pareto Diagrams

Histogram, ordered by frequency of occurrence, that shows how many results were generated by type or categories of identified cause.

Rank ordering is used to guide corrective actions – fix the problems that are causing the greatest number of defects first.

Relates to Pareto’s Law & Principle of 80/20


Pareto Diagram


Scatter Diagram

A Scatter diagram shows the relationship between two variables.

Allows to study and identify the possible relationship between changes observed in two variables.


Scatter Diagram


BENCHMARKING

The evaluation of a groups’ business or project practices in comparison to those of other groups or projects.

Includes a number of quantitative or qualitative attributes that can be assessed in both the benchmark and the subject.


Cost of Quality

Prevention costs – up front costs to design and plan for quality.

Appraisal costs – associated with evaluation of results to make sure that they conform to quality.

Internal Failure costs – Cost of re-work associated with items that did not pass the appraisal.

External Failure costs – Cost of failures found by the customer.


Cost of Quality

Conformance:

Training.

Research.

Surveys.

Nonconformance:

Scrap.

Rework.

Warranty.

Inventory.


Check Lists

Job aid that prompts employees to perform activities according to a consistent quality standard.

Could be for quality assurance or quality control.

Two types of Checklists:

Imperative

Interrogative


Design of Experiments

A structured, organized method that is used to determine the relationship between the different factors affecting a process and the output of that process.

It involves designing a set of ten to twenty experiments, in which all relevant factors are varied systematically.

The results of these experiments are analyzed, to help identify optimal conditions



Describes how the project team will implement the performing organization’s quality policy


Quality Management Plan Contents

Purpose

Quality Policy/ Standards

Quality Assurance Procedures & Test

Quality Control Procedures & Tests

Roles & Responsibilities



Process Boundaries

Process Configuration

Process Metrics

Targets for Improved Performance


PMBOK Reading

Chapter 8

- Section 8.1



PMP®


Chapter 9: HR / 9.1 Plan HR Management

Project Human resource Management

Plan Human

ResourceManagement


Plan Human Resource Management

Identifying, documenting, and assigning project roles, responsibilities, required skills and reporting relationships, as well as creating the staffing management plan.

Identifying who we want, at which skill level, when, and for how long. Specifying their roles, and responsibilities and interactions.


Develop Human Resource Plan




Org. Process Assets

Organization Charts & Position descriptions

Networking

Organizational Theory

Expert Judgment

Meetings

Human ResourceManagementPlan


Organizational Charts & Position Descriptions

Hierarchical- type Charts

Matrix-based Charts

Text-Oriented Formats


Organizational Charts & Position Descriptions


Responsibility Assignment Matrix (RAM)

Activity Ann Ben Carlos Dina Ed

Define A R I I I

Design I A R C C

Develop I A R C C

Test A I I R I

R= ResponsibleA=Accountable C=Consult I=InformAhmad Maharma PMBOK 5th Edition 406

Organizational Theory

Provides information regarding the ways that people, teams and organizational units behave.


Halo Effect

The tendency to rate high or low on all factors due to the impression of a high or low rating on some specific factor.


Team Building Activities (Tools & Techniques)

Tuckman’s stage of team formation and development:1. FORMING

– The team meets and learns about the project and what their roles and responsibilities.

2. STORMING

– Address the project work, technical decisions and the project management approach.

Conflict/disagreement may occurs.

3. NORMING

– Work together and adjust work habits and behavior that support the team.

4. PERFORMING

– Being a well-organized unit

5. ADJOURNING

– Team completes the work and move on from the project.


Motivation Theory: Maslow’s Hierarchy of Needs

Image source: http://theskooloflife.com/wordpress/self-actualization-in-the-maslow-hierarchy/

Basic Needs

Higher Level of Needs


Motivation Theory: McGregor’s X & Y Theory

• Theory X

– People tends to be negative, passive

e.g. incapable, avoid responsibility, need

to be watched

– Extrinsic Motivation

•Theory Y

–People tends to be positive e.g. want to achieve, willing to work without

supervision, can direct their own effort

–Intrinsic Motivation


Motivation Theory: Acquired Needs Theory

• David McClelland’s Theory

People are motivated by one of the three needsNeeds Behavioral Style

Achievement

(N-Ach)

These people should be given projects that are

challenging but are reachable

They like recognition

Affiliation

(N-Affil)

These people work best when cooperating with

others

They seek approval rather than recognition

Power

(N-Pow)

People whose need for power is socially

oriented, should be allowed to manager others

These people like to organize and influence

others


Motivation Theory: Two Factors Theory

• Herzberg’s Theory– Job dissatisfaction due to lack of hygiene factors

– Job satisfaction due to motivation factors

Hygiene Factors

- Working condition- Salary- Personal life- Relationship at work- Security- Status

Motivation Factors

- Responsibility- Self actualization- Professional growth- Recognition


Human Resource Plan

Provides guidance on how project human resources should be defined, staffed, managed, controlled, and eventually released.


Human Resource Plan Contents

Roles and Responsibilities

Project Organization Charts




Staff acquisition

Resource Calendars

Staff Release Plan

Training needs

Recognition & Rewards

Compliance

Safety


PMBOK Reading

Chapter 9

- Section 9.1



PMP®


Chapter 10: Communications / 8.1 Plan Communications

Management

Project Communications Management

Plan Communications

Management


Consequences of Miscommunication


Plan Communication

The process of determining the project stakeholder information needs and defining a communication approach.

Who needs what information,

When will they need it,

In which format,

How will it be given to them,

How frequently.


Communication Body of Knowledge

Communication Process

Choice of Media

Documentation Skills

Presentation Skills

Meeting Management

Clutter, Noise, & Barriers


Effective Communication

Effective Communication

Non Verbal

Para lingual

Feedback

Effective Listening

Feedback

Active Listening

Para lingual


Communication Methods

Method When Used

Formal Written Complex Problems, PM Plans, Charter, Long Distance Communication

Formal Verbal Presentations, Speeches

Informal Written Memos, e-mails, notes

Informal Verbal Meetings, Conversations


Plan Communications Management



Enterprise environmental factors


Communication Requirements Analysis

Communication technology

Communication Models


Meetings

Communications Management Plan

Project Documents Updates


Communication Requirements Analysis

Determining the communication requirements of the project stakeholders.

Defined by combining the type and format of information needed with an analysis of the value of that information.

Project resources are expended only on communicating information that contribute to success, or where a lack of communication can lead to failure.


Number of Communication Channels

N (N-1)/2


Communication technology

Factors that affect the project communication technology:

Urgency of the need for information.

Availability of technology

Expected project staffing

Duration of the project

Project Environment



Sender ReceiverMedium

Message

Feedback –Message

Noise

Noise

AcknowledgeMessageNoise



Interactive

Push

Pull


Communication Management Plan

Stakeholder communication requirements

Information to be communicated

Reason for distribution

Responsibility

Recipients

Methods and technologies used

Frequency

Resources allocated for communication (including time and budget)

Escalation process

Method for updating

Glossary of terminology

Information flow in the project (flow chart)

Communication constraintsAhmad Maharma PMBOK 5th Edition 431

Communication Matrix

What Why By Whom Recipient When How

Status

report

Performanc

e reporting

PM Sponsor/

Steering

Committee

Weekly

basis

Email

Minutes of

meeting

Reporting

decisions

PC Steering

Committee

After each

meeting

Email

Risk forms Report &

document

risks

Any

stakeholder

PM As needed Email

Risks log Updating

risks log

Risk

Manager

Steering

Committee

Every two

weeks

Meeting &

email


PMBOK Reading

Chapter 10

- Section 10.1



PMP®


Chapter 11: Risk/ 11.1 Plan Risk Management

Is Risk Good Or Bad?


Risk…

Negative

Threat

Positive

Opportunity


Risk Definition

Risk: an uncertain event that, if it occurs, has a positive or negative effect on a project’s deliverables.


Project Risk Management

The systematic process of identifying, analyzing, and responding, monitoring, and controlling project risks


Project Risk Planning


Plan Risk Responses

Perform Quantitative

RiskAnalysis

IdentifyRisks

Perform Qualitative

RiskAnalysis



PlanRisk

Management

Plan Risk Responses


RiskAnalysis

IdentifyRisks

Perform Qualitative

RiskAnalysis



Deciding how to conduct risk management activities for a project.




Project Charter



Org. Process Assets


Expert Judgment

Meetings




Describes how risk management will be structured and performed on the project.

A subset of the project management plan.



Methodology.

Roles and responsibilities.

Budgeting.

Timing.

Risk categories.

Definitions of risk probability and impact.

Probability and impact matrix.

Revised stakeholders’ tolerances.

Reporting formats.

Tracking.


Risk Categories


Definition of Risk Probability & Impact


Exercise


Expected Monetary Value


Impact Scale

Cardinal

Linear

Non-Linear

Ordinal


Impact Scale

Cardinal Linear (0.1, 0.3, 0.7, 0.9)

Cardinal Non-Linear (.05, .1, .2, .4, .8).

Cardinal Non-Linear is used to reflect focus on high risks.

Ordinal (Very Low, Low, Medium, High, Very High)


Probability Scale

Cardinal Linear (0.05, 0.1,0.2…etc.)

Ordinal (Very unlikely, unlikely, moderate, likely, very likely, almost certain)


Probability-Impact Matrix

Each risk is rated on its probability of occurring and impact on an objective if it does occur.

The matrix shows low, moderate or high risks.

Risk Score= risk probability x risk impact


Probability-Impact Matrix (Cardinal)


Probability-Impact Matrix (Ordinal)


Identify Risks

Determining which risks may affect the project and documenting their characteristics.



PMP®


Chapter 11: Risk/ 11.2 Identify Risks

Identify Risks

PlanRisk

Management

Plan Risk Responses


RiskAnalysis

IdentifyRisks

Perform Qualitative

RiskAnalysis


Identify Risks

Risk Management Plan Activity Cost Estimates Activity Duration

Estimates Scope Baseline Stakeholder Register Cost Management Plan Schedule Management

Plan Quality Management

Plan Human Resource Plan Project Documents Procurement

Documents Enterprise

Environmental Factors Org. Process Assets

DocumentationReview Information

Gathering Techniques Checklist Analysis Assumptions

analysis Diagramming

Techniques SWOT Analysis Expert Judgment

Risk Register


Documentation Review

Structured review of project documentation, including plans, assumptions, previous project files, contracts and other information at project level and detailed scope levels.


Information Gathering Techniques

Brainstorming

Delphi Technique

Interviewing

Root cause analysis


Brainstorming

A group creativity technique designed to generate a large number of ideas for the solution of a problem.

Everyone is allowed to express ideas freely and without criticism.


Delphi Technique

A way to reach a consensus of experts who participate anonymously.

A facilitator uses a questionnaire to solicit ideas about the important risks.

Eliminates biasness and influence of individuals


Interviewing

Interviewing experienced project participants, stakeholders, and subject matter experts to identify risks.


Root Cause Analysis

Also known as “Fish-Bone Analysis” or “Ishikawa Analysis”

Used to identify the problem, discover the underlying causes leading to it, and develop solutions and preventive actions.


Root Cause Analysis


Checklist Analysis

Based on historical and project information.

Must be exhaustive (very difficult).

Important to review at project closure to improve on the checklist for future projects.

One of the easier more common first steps.

Can be grouped into categories.


Assumptions Analysis

Review project assumptions.

Explores the validity of assumptions as they apply to the project.

Identifies risks to the project from inaccuracy, inconsistency, or incompleteness of assumptions.


SWOT Analysis

Internal Factors

Strengths.

Weaknesses.

External Factors

Opportunities.

Threats.


Risk Register

A document that contains the outcomes of risk planning.

At this stage includes:

List of identified risks.

List of potential scenarios.

Risk triggers



PMP®


Chapter 11: Risk/ 11.3 Perform Qualitative Risk Analysis


PlanRisk

Management

Plan Risk Responses


RiskAnalysis

IdentifyRisks

Perform Qualitative

RiskAnalysis



Prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact.

Assesses the priority of identified risks using their relative probability or likelihood of occurrence.




Risk Register




Risk Probability and Impact Assessment

Probability and Impact Matrix

Risk Data quality assessment

Risk Categorization

Risk Urgency Assessment

Expert Judgment



Risk register Updates

Relative ranking or priority list of project risks.

Risks grouped by categories.

Causes of risk or project areas requiring particular attention.

List of risks requiring responses in the near-term.

List of risks for additional analysis and responses.

Watchlists of low-priority risks.

Trends in qualitative risk analysis results.



The process of numerically analyzing the effect of identified risks on overall project objectives.

Performed on risks that have been prioritized by the qualitative analysis.


Outcomes of Quantitative Risk Analysis

Quantify possible outcomes and their probability.

Assess probability of achieving a specific objective.

Identify risks requiring most attention.

Identify realistic and achievable targets.

Determine best decision under uncertainty.



PMP®


Chapter 11: Risk/ 11.4 Perform Quantitative Risk Analysis


PlanRisk

Management

Plan Risk Responses


RiskAnalysis

IdentifyRisks

Perform Qualitative

RiskAnalysis



Risk RegisterRisk

Management PlanCost

Management PlanSchedule

Management PlanEnterprise

Environmental FactorsOrganizational

Process Assets

Data Gathering and Representation Techniques

Quantitative Risk Analysis and Modeling Techniques

Expert Judgment

Project DocumentsUpdates


Data Gathering and Representation Techniques

Interviewing.

Probability distributions.


Quantitative Risk Analysis and Modeling Techniques

Sensitivity Analysis

Expected Monetary Value Analysis

Modeling and Simulation


Sensitivity Analysis

Helps to determine which risks have the most potential impact on the project.

It examines the extent to which the uncertainty of each project element affects the objectives being examined when all other uncertain elements are held at their baseline value.


Expected Monetary Value (EMV)

Statistical concept that calculates the average outcomes when the future includes scenarios that may or may not happen (i.e. analysis under uncertainty).

The EMV of opportunities will generally be expressed in positive values while those of threats in negative values.

Calculated by multiplying the value of each possible outcome by its probability of occurrence, and adding them together.


Expected Monetary Value (EMV) EMV = Σ Probability X Impact

All possible

outcomes

of a decision

Work Package

Probability Impact EMV

A 10% -$ 20,000 -$2,000

B 30% $45,000 $13,500

C 68% -$18,000 -$12,240

Total -$ 740


Decision Tree Analysis

Graphical means of displaying all available options, their probability, and their impact, to reach the final project objective.


Decision Tree Analysis

$335

$550

EMV In house = (1000 – 150) * 0.5 + ( -30 – 150) * 0.5 = $ 335

EMV out source = (1000 – 250) * 0.8 + ( 0 – 250) * 0.2 = $ 550


Modeling & Simulation

Uses Monte Carlo Technique

A computerized technique that uses sampling from a random number sequence to simulate characteristics or events or outcomes with multiple possible values.

Used to generate probable outcomes based on estimates processed / iterated thousands of times.


Modeling & Simulation

Provides probable project results and information for project decision-making.

For Cost Risk Analysis, use cost estimates.

For Schedule Risk Analysis, use the schedule network diagram and duration estimates.

Illustrates the likelihood of achieving specific cost / schedule targets.


Monte Carlo Simulation


Monte Carlo Simulation

Mean=$46.67m

Cost

Pro

bab

ility

(C

um

ula

tive

)

100%

75%

50%

25%

0%

$30m $38.75m $47.5m $56.25m $65m

$41m $50m

12%



PMP®


Chapter 11: Risk/ 11.5 Plan Risk Responses

Plan Risk Responses

The process of developing options and actions to enhance opportunities an to reduce threats to project objectives.


Plan Risk Responses

PlanRisk

Management

Plan Risk Responses


RiskAnalysis

IdentifyRisks

Perform Qualitative

RiskAnalysis


Plan Risk Responses


Risk Register

Strategies for Negative Risks or Threats

Strategies for Positive Risks or Opportunities

Contingent Response Strategies

Expert judgment

Project Management Plan updates



Responses for Negative Risks (Threats)

Avoidance.

Transference.

Mitigation.

Acceptance.


Avoidance

Changing project plan to eliminate the risk or condition or to protect the project objectives from its impact.


Transference

Shifting some or all of the negative impact, along with ownership of the response to a third party.

Examples of transference:

Insurance

Warranties

Guaranties

Performance bonds

Transfers risk, but does not eliminate it.


Mitigation

Reducing probability and/ or impact of risk to an acceptable level.

Does not eliminate risk completely.

Mitigates probability and/ or impact.


Acceptance

Deciding not to change the project plan, to deal with a risk, or being unable to identify suitable response strategy.

Includes active and passive acceptance:

Active acceptance: developing a contingency plan if risk occurs.

Passive acceptance: no action is taken until risk happens.


Responses for positive risks (Opportunities)

Exploit (vs. Avoid).

Share (vs. Transfer).

Enhance (vs. Mitigate).

Accept. (The same)


Outcomes From Risk Response Planning

Residual Risk: Those that remain after avoidance, transfer or mitigation responses have been taken.

Secondary Risk: That arise as a direct result of implementing a risk response.

Contingency reserve needed: The amount of buffer needed to reduce the risk of over runs.


Exercise


PMBOK Reading

Chapter 11

- Section 11.1 - 11.5



PMP®


Chapter 12: Procurement / 12.1 Plan Procurement

Management

Project ProcurementManagement

The processes necessary to purchase or acquire products, services or results from outside the project team.

Includes the contract management and change control processes required to develop and administer contracts.

Includes also administering any contracts issued by an outside organization (the buyer) that is acquiring the project from the performing organization (the seller).


Project ProcurementManagement

The organization, can be the buyer or seller of the product, service or result under a contract.

Contract can be called:

Agreement.

Subcontract.

Purchase order.



Seller can be called:

Contractor

Subcontractor

Vendor

Service provider

Supplier

Buyer can be called:

Client

Customer

Service requester

Purchaser


Seller in a project

Bidder Selected Source

Contractor, Supplier or Vendor



PlanProcurementManagement

Conductprocurements

ControlProcurements

CloseProcurements


Plan Procurements Management

PlanProcurements Management

Conductprocurements

ControlProcurements

CloseProcurements


Plan Procurements

The process of documenting project purchasing decisions, specifying the approach, and identifying potential sellers.

Should be accomplished during the scope definition effort to specify:

Whether to procure or not?

How to procure?

What to procure?

How much to procure?

When to procure?


Project Manager’s Authority in Procurement

It depends on the type of the contracting environment:

Centralized Contracting Environment

There is a procurement department & a procurement manager who handle all procurements

The project Manager contacts the procurement manager when he/she needs help regarding procurement

Decentralized Contracting Environment

There’s no procurement department

The project manager hires a procurement manager to work full time on procurement & he will be reporting directly to the Project Manager


Because they are part of the

procurement department that

focuses only on procurement,

they have high level of expertise

It provides its employees with

continuous improvement,

training & shared lessons

learned

They are more efficient & helpful

in understanding the manager’s

requirement in procurement

Employees have clear &

defined career path in

procurement profession

One procurement manager may

work on many projects, so the

attention will be divided among

many procurement projects

It may be more difficult for the

project manager to obtain

contracting help when needed

The project manager will not

have a full authority in the

procurement project

Centralized Contracting Environment

Advantages Disadvantages


The project manager has easier

access to contracting expertise

because the procurement

manager is a member of the team

The procurement manager has

more loyalty to the project

There is no “home” department for

the procurement manager to

return to after the project is

completed

It’s more difficult to maintain a high

level of contracting expertise in the

company because there’s no

procurement department

There may be an inefficient use of

procurement resources in projects

across the organization

There may be a little

standardization of procurement

practice from one project to the

next

No career path as a procurement

manager

Decentralized Contracting Environment

Advantages Disadvantages


Plan Procurements

Project Management PlanRequirements

DocumentationRisk Register Activity Resource

Requirements Project Schedule Activity Cost

Estimates Stakeholder

Register Enterprise


Process Assets

Make-or-Buy Analysis

Expert Judgment

Contract Types

Meetings

Procurement Management Plan Procurements

Statement of Work Make-or-Buy

Decisions Procurement

Documents Source Selection

Criteria Change Requests Project

Documents Updates


Make-or-Buy Analysis

A technique used to determine whether particular work can best be accomplished by the project team or must be purchased from outside sources.

If buy: Purchase or lease?

Should consider all related costs; direct and indirect.


12.1.2 Plan Procurements – Tools and Techniques


Contract Types

Fixed price

Cost reimbursable

Time and material


Fixed Price Contracts

The most common type.

A total lump sum price against a well-defined product.

Three types:

Firm Fixed Price Contracts (FFP)

Fixed Price Incentive Fee Contracts (FPIF)

Fixed Price with Economic Price Adjustment Contracts (FP-EPA)


Fixed Price Contracts

The most common type.

The buyer knows the price from the beginning.

Risk is on the seller

The buyer must prepare a detailed SOW ( more work on the buyer)

The seller might try not to do everything according to the SOW if he started loosing money

More cost on the buyer

Advantages:

Disadvantages:


Cost reimbursable Contracts

Paying the seller the actual cost, plus a fee.

Three types:

Cost-plus-fixed-fee (CPFF)

Cost plus incentive fee (CPIF)

Cost plus award fee (CPAF).


Cost reimbursable Contracts

No detailed SOW.

Less cost on the buyer than the FPC

Total cost is unknown

Risk is on the buyer

More work on the buyer ( since he has to audit the seller’s invoices )

Advantages:

Disadvantages:


Time & Material Contracts

Hybrid type of contractual agreement.

Contain aspects of both cost-reimbursable and fixed-price types.

They are open ended, but on certain rates.


Time & Material Contracts

Quick to create

Duration brief

Used when expat acquisition & staff augmentation

Only good in small projects

Needs daily oversight & reports from the buyer ( more work)

Advantages:

Disadvantages:


Type of contract


Contract Types vs. Risk

Fixed Price

FFP

FPIF

Time and Materials

Cost Reimbursable

CPIF

CPFF

CPF

CPPC

•Effect of contract type on buyer & seller risk

SELLER RISK

High

Low

BUYER

RISK

Low

High

T&M can be a high risk for buyer if contract does not include a “total not-to-exceed” (NTE)


Which Type is Better?

Depends on:

How well defined the contract statement of work is.

The amount and frequency of change expected.

The level of effort and expertise the buyer can devote to managing the seller.

Industry standards for the types of contract used.

Amount of market competition.

Amount of risk.



A buyer-prepared formal request sent to each Seller.

The Basis upon which a seller prepares a bid for the requested products.

RFP/ RFQ/RFI/IFB are used to solicit proposals to meet procurement needs.

Statement of Work (SOW): procurement item in sufficient detail to allow prospective sellers to determine if they are capable of providing the item(s).

Statement of Objective (SOO): term used for a procurement item that is presented as a problem to be solved.


Procurement Documents (RFP/ RFQ/RFI/IFB )

Once the contract type is selected & the procurement SOW has been created, the buyer can put together the procurement documents that describe their needs

Request for proposal (RFP): sometimes it’s called request for Tender, it requests a detailed proposal on how the work will be accomplished, who will do it, company experience, price, Technical requirements, etc & it allows the company to detect benefits & risks at early stage.. ( usually used with CR contracts)

Invitation for Bid ( IFB, or request for bid RFB): just to request a total price to do all the work. (usually used with FP contracts)

Request for Quotation (RFQ): request a price quote per item, hour, meter, or other unit of measure, used when price is the main factor ( usually used with T&M)

Request for Information (RFI): is simply looking for information , it might be used before procurement documents are created, the received information could help the company to identify the required in order to send RFQ, RFP or IFB Ahmad Maharma PMBOK 5th Edition 540

Collect Requirement

from all stakeholders

Define scope

Of the project

Prepare a detailed

SOW

Prepare RFP

4

3

2

1

Procurement SOW must be as

clear & concise as possible and

it must

describe all the work and

activities the seller is required to

complete

(steps for preparing RFP)


How to write (RFP) RFP usually includes:

Company

Background

Project

Definition

Project

Requirements

Audience

which include a short company overview such as a brief

history , industry background, company size, etc..

It is crucial for the vendor and project team to understand the

underlying business case for the project; that is, why the

project is being attempted. Also understand deliverables

expected from the project by the vendor

which include Technical requirements, functional

requirements, etc…

Information about the und users


(RFP Form-Example)REQUEST FOR PROPOSALS (RFP)

RFP NO. ______________

PROJECT TITLE: PROPOSAL DUE DATE: __________– Time, Pacific Standard Time or Pacific Daylight Time, Olympia, Washington, USA. E-mailed bids will be accepted. Faxed bids will not. ESTIMATED TIME PERIOD FOR CONTRACT: ________– ___________ The Agency reserves the right to extend the contract for up to two additional one-year periods at the sole discretion of the Agency. CONSULTANT ELIGIBILITY: This procurement is open to those consultants that satisfy the minimum qualifications stated herein and that are available for work in Washington State. CONTENTS OF THE REQUEST FOR PROPOSALS:

1. Introduction

2. General Information for Consultants

3. Proposal Contents

4. Evaluation and Award

5. Exhibits

A. Certifications and Assurances

B. Personal Service Contract with General Terms and Conditions 1.1. PURPOSE AND BACKGROUND

(NOTE: Provide a clear statement of the project’s purpose, present system or process, and perceived need, as well as any other background about the project, which may be appropriate.) The Washington State, <insert agency name>, hereafter called "AGENCY,” is initiating this Request for Proposals (RFP) to solicit proposals from firms interested in participating on a project to _________________. 1.2. OBJECTIVES AND SCOPE OF WORK

(NOTE: Explain what the contract is intended to accomplish.). 1.3 MINIMUM QUALIFICATIONS (NOTE: Include what is required to be able to qualify for a contract.)


Source Selection Criteria Can be only price if an off-the-shelf product. Other selection criteria take into consideration: Understanding of needs. Overall life-cycle cost Technical capability Risk Management approach Technical approach Warranty Financial capability Production capacity Past performance References IP rights

They are included in the procurement documents to give the seller an understanding of the buyer’s needs

They help the seller on how to prepare the bid

They become the basis by which the buyer evaluates the bids


PMBOK Reading

Chapter 12- Section 12.1



PMP®


Chapter 11: Stakeholder / 13.1 Plan Stakeholders

Management

Project Stakeholder Management


Plan Stakeholder Management

Manage Stakeholder Engagement

ControlStakeholderEngagement



The process of developing appropriate management strategies to effectively engage stakeholders through the project life cycle, based on the analysis of their needs, interests, and potential impact on project success.

It provides a clear, actionable plan to interact with project stakeholders to support the project’s interests.


Plan Risk Responses

Project ManagementPlan




Expert Judgment

Meetings






The engagement level of stakeholders can be classified as follows:

Unaware Unaware of project and potential impacts

Resistant Aware of project and potential impacts and resistant to change

Neutral Aware of project yet neither supportive nor resistant

Supportive Aware of project impacts and supportive for change

Leading Aware of project impacts and actively engaged in ensuring the project is a success


Stakeholder Engagement Assessment Matrix

Stakeholder Unaware Resistant Neutral Supportive Leading

Stakeholder 1 C D

Stakeholder 2 C D

Stakeholder 3 DC



A component of project management plan

Identifies the management strategies required to effectively engage stakeholders



It can also provide• Desired and current engagement levels of stakeholders• Scope and impact of change to stakeholders• Identified interrelationships and potential overlap between

stakeholders• Stakeholder communication requirements for the current project

phase• Information to be distributed to stakeholders, including language,

format, content and level of detail• Reason for the distribution of that information and expected

impact to stakeholder engagement• Time frame and frequency for the distribution of required

information to stakeholders; and• Method for refining and updating the stakeholder management

plan as the project progresses and develops


PMBOK Reading

Chapter 13

- Section 13.1



PMP®

Phase #3: PROJECT EXECUTION

The Execution Processes

Direct & Manage Project Execution

Perform Quality Assurance



Manage Project Team

Manage Communications

Conduct Procurement




PMP®


Chapter 4: Integration / 4.3 Direct and Manage Project work

Direct & Manage Project Execution

The process of performing the work defined in the project management plan to achieve project objectives.


Direct & manage Project Execution

Performing activities to accomplish project requirements.

Creating project deliverables.

Staffing, training and managing the team members assigned to the project.

Obtaining, managing, and using resources including material, tools, equipment, and facilities.

Implementing the planned methods and standard .

Establishing and managing project communication channels, both external and internal to the project team.



Generating project data, such as cost, schedule, technical and quality progress, and status to facilitate forecasting.

Issuing change requests and adapting approved changes into the project’s scope, plans and environment.

Managing risks and implementing risk response activities.

Managing sellers and suppliers; and

Collecting & documenting lessons learned, and implementing approved process improvement activities.




Approved Change Requests

Enterprise environmental Factors


Expert Judgment

Project Management Information System

Meetings

Deliverables

Work Performance Data

Change Requests

Project Management Plan Updates



Deliverables

Any unique and verifiable product, result, or capability to perform a service that is identified in the project management planning documentation, and must be produced and provided to complete the project.



PMP®


Chapter 8: Quality/ 8.2 Perform Quality Assurance


The process of auditing the quality requirements and the results from quality control measurements to ensure appropriate quality standards and operational definitions are used.



PlanQuality

Management

Perform Quality

Assurance

ControlQuality





Quality Metrics

Quality Control Measurements

Project Documents

Quality Management and Control Tools

Quality Audits

Process Analysis

Change Requests



Organizational Process Assets Updates


Quality Audits

A structured, independent review to determine whether project activities comply with organizational and project policies, processes, and procedures.

Can be scheduled or random.

Can be conducted by external or internal auditors.

Result in:

Reduced cost of quality.

Increase in sponsor or customer acceptance.


Objectives of Quality Audits

Identify all the good/ best practices being implemented.

Identify all the gaps/ shortcomings.

Share the good practices introduced or implemented in similar projects in the organization and/ or industry.

Proactively offer assistance in a positive manner to improve implementation of processes to help the team raise productivity.

Highlight contributions of each audit in the lessons learned repository of the organization.


Process Analysis

Follows steps outlined in the process improvement plan to identify needed improvements.



Quality Standards.

Processes.



Quality management plan.

Schedule management plan.

Cost management plan.



Quality audits reports.

Training plans.

Process documentation.


Gold Plating

Giving Extra

Bad and should be avoided



PMP®


Chapter 9: HR / 9.2 Acquire Project Team


The process of confirming human resources availability and obtaining the team necessary to complete project assignments.



The project management team may or may not have direct control over team members selection because of:

Collective bargaining agreements.

Use of subcontractor personnel.

Matrix project environment.

Internal or external reporting relationships.


Acquire Project TeamPlan

HumanResource

Management

AcquireProjectTeam

DevelopProjectTeam

ManageProjectTeam



Human Resource Management Plan



Pre-assignment

Negotiation

Acquisition

Virtual Teams

Multi-Criteria Decision Analysis

Project Staff Assignments

Resource Calendars



Pre-assignment

When project team members are known in advance.

If the project is a result of:

Specific people being promised as part of a proposal.

The project is dependent on the expertise of particular persons.

Some staff assignments are defined within the project charter.


Negotiation

Negotiating with:

Functional managers.

Other project management teams within the organization.

External organizations, vendors, suppliers, contractors…etc.


Acquisition

When the needed resources are not available in-house.

Can involve hiring individual consultants or subcontracting work to another organization.


Virtual Teams

Groups of people with a shared goal who fulfill their roles with little or no time spent meeting face-to-face.

The ease of communication through electronic means made virtual teams more feasible.

Communication planning becomes increasingly important in virtual team environment.


Virtual Teams

Virtual teams make it possible to:

Form teams of people from the same organization who live in widespread geographic areas.

Add expertise that can’t exist at the same location.

Incorporate employees who work from home.

Allow team members who work different shifts or hours to participate.

Include people with mobility limitations or disabilities.

Reduce travel expenses.


Multi-Criteria Decision Analysis

Criteria is developed and used to rate or score potential team members

Examples Include

– Availability

– Cost

– Experience

– Ability

– Knowledge

– Skills

– Attitude

– International Factors



PMP®


Chapter 9: HR / 9.3 Develop Project Team


The process of improving competencies, team interaction, and the overall team environment to enhance project performance.

Project managers should create an environment that facilitates teamwork.



Developing project teams include:

Improving skills of team members

Improving feelings of trust & cohesiveness

Creating a dynamic and cohesive team culture to improve both individual and team productivity, team spirit and cooperation

Examples include assisting one another, and communicate in ways that fit individual preference.


Develop Project TeamPlan

HumanResource

Management

AcquireProjectTeam

DevelopProjectTeam

ManageProjectTeam




Training

Team Building Activities

Ground Rules

Co-location

Reward & Recognition

Personnel Assessment Tools

Team Performance Assessments.

Enterprise Environmental Factors Update.

Project Staff Assignments

Human Resource Management Plan

Resource Calendars



Sometime known as “Soft Skills”

Include:

Empathy.

Influence.

Creativity.

Group facilitation.


Training

Can be:

Formal

Informal

Training methods:

Classroom.

Online.

Computer-based.

On the job

Coaching

Mentoring.


Team Building Activities

Can vary from a five-minute agenda item to an off-site, professionally facilitated experience to improve interpersonal relationships.

The objective is to help individual team members to work together effectively.

Particularly valuable when team members work from different locations.

Informal communication and activities can help in building trust and establishing good working relationships.


Team development Stages

Forming.

Storming.

Norming.

Performing.

Adjourning.


Forming

The team meets and learns about the project and what their formal roles and responsibilities are.

Team members tend to be independent and open in this phase.

Team members are usually on their best behavior but very focused on themselves.

In this stage the members of the team get to know one another, exchange some personal information, and make new friends.


Storming

Team begins to address the project work, technical decisions, and the project management approach.

If team members are not collaborative and open to differing ideas and perspectives the environment can become destructive.

In some cases, the team never leaves this stage.

The role of project manager is crucial in this stage. Tolerance and patience will help in passing through it successfully.


Norming

Team members begin to work together and adjust work habits and behaviors to support the team.

Team begins to trust each other.

Motivation increases as the team gets more acquainted with the project.

As team members get to know each other better, their views of each other begin to change


Performing

Teams should try to reach this stage as quickly as possible.

Teams that reach this stage function as a well-organized unit.

Teams at this stage are able to function as a unit as they find ways to get the job done smoothly and effectively without inappropriate conflict or the need for external supervision.


Adjourning

The team completes the work and move on from the project.

Mourning over the dissolving of the team relationship, and begin preparing for change in individual work requirements.


Ground Rules

Establishing clear expectations regarding acceptable and unacceptable behavior.

Examples include:

How team members should resolve conflicts.

Is interruption in meetings allowed or not.

Coming late to meetings.

Phone calls.

Smoking.

Who’s allowed to talk to senior management.

Who’s authorized to give directions to vendors/ subcontractors.

Work times.

Codes of dress.Ahmad Maharma PMBOK 5th Edition 600

Co-location

Involves placing many of the team members in one physical location.

Can be temporary in some cases.

Can be used in conjunction with virtual teams.

Enhances ability to perform as a team.

War rooms.


Recognition and Rewards

For desirable behaviors only.

Through performance appraisal.

Should satisfy needs valued by individuals.

Should focus on win-win instead of win-lose.

Generally, money is viewed as a very tangible aspect of a reward system.


Team performance Assessments

Formal or informal

Conducted by the project management team

The performance of successful team is measured according to agreed upon project objectives

Evaluation indicators include:

Improvements in skills

Improvements in competencies

Reduced staff turn over rate

Increased team cohesiveness

Should trigger actions such as training, changes, recommendations, etc..



PMP®


Chapter 9: HR / 9.4 Manage Project Team

Manage Project Team

The process of tracking team performance, providing feedback, resolving issues, and managing changes to optimize project performance.

The project management team:

Observes team performance.

Manages conflict.

Resolves issues.

Appraises team performance.


Manage Project TeamPlan

HumanResource

Management

AcquireProjectTeam

DevelopProjectTeam

ManageProjectTeam


Manage Project Team

Observation and Conversation

Project Performance Appraisals

Conflict Management


Enterprise Environmental Factors Updates


Change Requests



Project Staff AssignmentsHuman

Resource Management PlanTeam

Performance Assessments Issue LogWork

Performance ReportsOrganizational

Process Assets


Observation & Conversation

Used to stay in touch with the work and attitudes of project team members.

Project management team monitors progress towards:

Project deliverables.

Accomplishments.

Interpersonal issues.


Project Performance Appraisals

Can be formal or informal depending on the length of the project, organizational policy, project complexity and the amount and quality of regular communication.

Objectives include:

Clarification of roles and responsibilities.

Constructive feedback to team members.

Discovery of unknown or unresolved issues.

Development of individual training plans.

Establishment of specific goals for future time periods.


Conflict Management

Should conflict be avoided?


Conflict Management

Conflict in projects is inevitable…

Why?


Conflict Management.• Conflicts can be beneficial (an opportunities for improvement)

• Conflicts is an inevitable consequence of organizational

interactions.

• Conflicts in the team are caused due to the following reasons in

decreasing order of occurrences.1. Schedules

2. Project priorities

3. Resources

4. Technical opinions

• The most common cause of conflicts in projects are issues related

to schedules (not personality differences).

• Conflict is best resolved by those involved in the conflict.


Sources of Conflict in projects

Scarcity of resources.

Scheduling priorities.

Personalities.

Limited power of project manager.


Facts about Conflict

Natural and forces search for alternatives.

Is a team issue.

Openness resolves conflict.

Should focus on issues, not personalities.

Should focus on the present, not the past.


How Can Conflict Be Minimized?

Communication.

Planning

Ground rules.

Identification of root causes and resolving them.

Involving team members in resolution.


Conflict Resolution Techniques

Withdrawing/Avoiding.

Smoothing/ Accommodating.

Compromising.

Forcing.

Collaborating.

Confronting/ problem solving.


Conflict Management• General techniques to resolve conflict

Confronting & Problem Solving

Treating conflict as problem to be solved by examining alternatives;

Requires a give and take attitude and open dialogue.

Forcing

Pushing one’s viewpoint at the expense of others; Offers only win-

lose solutions.

Collaborating

Incorporating multiple viewpoints and insights from differing

perspectives; Leads to consensus and commitment.

Withdrawing/Avoiding

Retreating from an actual or potential conflict situation.

Smoothing/Accommodating

Emphasizing areas of agreement rather than areas of difference.

Compromising

Searching for solution that bring some degree of satisfaction to all

parties.

Behaviors that

focused on others

Beh

avio

rs t

ha

t

foc

us

ed

on

se

lf


Withdrawing/ Avoiding

Retreating from an actual or potential conflict situation.

A passive, stop-gap way of handling conflict.

Appropriate when a “cooling-off’ period is needed, and when the other party is unassertive and uncooperative.

A lose-lose technique

Generally fails to solve the problem.

Should not be used when the conflict deals with an issue that is of immediate concern or is important to the successful completion of the project.


Smoothing/ Accommodating

Emphasizing areas of agreement rather than areas of difference.

An appeasing approach.

Appropriate to keep harmony and avoid outwardly conflictive situations.

Fails to provide permanent long-term solution to the underlying conflict.

Generally, conflict reappears in a different form.

A lose-lose technique


Compromising

Searching for a solution that bring some degree of satisfaction to all parties.

Is primarily “bargaining”, receiving something in exchange for something else.

Appropriate when reached and accepted as a just solution by both parties involved in conflict.

Usually provides acceptable solutions.

Sometimes, important aspects of the project can’t be compromised to achieve personal objectives.


forcing

Pushing one’s view at the expense of others.

A win-lose situation.

Used when there is no common ground for bargaining or negotiation.

Also used when both parties are uncooperative and strong-willed.

Appropriate when time is of essence, and issue is vital for the well-being of project.

Usually takes less time than other techniques, but leaves hard feelings.

Conflict resolved by forcing may develop again and haunt the enforcer.

Should be used only as a last resort.Ahmad Maharma PMBOK 5th Edition 621

Collaborating

Incorporating multiple view points and insights from differing perspectives.

Leads to consensus and commitment.

Used when the situation is too important to be compromised.

Not very effective when more than a few players are involved and their viewpoints are mutually exclusive.


Confronting/ Problem Solving

Treating conflict as a problem to be solved by examining alternatives.

Requires a give-and-take attitude and open dialogue.

Involves pinpointing the issue and resolving it objectively by defining the problem, gathering necessary information, generating and analyzing alternatives, and selecting the best alternative.

Requires open dialogue between participants, who must be mature, understanding, and competent-both technically and managerially.

Takes longer than other techniques.

Provides ultimate solutions.


Techniques Description Solution

Forcing forcing a solution – from one side,

not the best solution.

Permanent Win-lose

Smoothing /

Accommodatin

g

attempting to underestimate the

conflict.

Temporary Lose-lose

Compromising brings some degree of satisfaction

to both parties.

Permanent:

commitmen

t

Lose-lose

Confrontation

/ Problem

Solving

Treating conflict as a problem;

solving the real problem, most

often used by project managers.

Permanent Win-win

Collaborating Incorporating multiple viewpoints

and insights from differing

perspectives; leads to consensus

and commitment.

Permanent Win-win

Withdrawal /

Avoidance

retreating or postponing a

decision never results in

resolution.

Temporary Lose-lose

SUMMARY


To Resolve a Conflict

Assure Privacy

Empathize than sympathize

Listen actively

Maintain equity

Focus on issue, not on personality

Avoid blame

Identify key theme

Re-state key theme frequently

Encourage feedback

Identify alternate solutions

Give your positive feedback

Agree on an action plan


Exercise: Conflict ManagementDescription Type of Resolving

“It seems that the real problem here is not a lack of communication, but a lack of

knowledge of what needs to be done and when. Here is a copy of the project schedule.

It should help you understand what you need to know.”

Confronting

"Do it my way!" Forcing

"Let's calm down and get the job done!" Smoothing

“Let us do a little of what both of you suggest” Compromising

“Let's deal with this issue next week" Withdrawal

“Sandy and Amanda, both of you want this project to cause as little distraction to your

departments as possible. With that in mind, I am sure we can come to an agreement

on the purchase of equipment and what is best for the project."

Smoothing

“We have talked about new computers enough. I do not want to get the computers,

and that is it!"

Forcing

"Sandy, you say that the project should include the purchase of new computers, and

Amanda, you say that the project can use existing equipment. I suggest we perform the

following test on the existing equipment to determine if it needs to be replaced."

Confronting

“Let's what everyone thinks, and try to reach a consensus” Collaborating


Problem Solving

• The important thing to realize about problems is if they are not

solved completely, they just return again and again.

• The process of problem solving has these steps

1. Define the cause of the problem

2. Analyze the problem

3. Identify solution

4. Implement a decision

5. Review the decision, and confirm that the problem

is solved.


Project Manager PowerA Project Manager may yield authority over the project team in one of the following

ways

– Formal (Legitimate) - Power due to Project Managers position

– Reward – Power stems from giving rewards.

– Penalty (Coercive) – Power due to afraid of the power the Project Manager holds.

– Expert (Technical) – Comes from being technical or project management expert.

– Referent – Power of charisma and fame. Make another person liking/respecting the

Project Manager.

The best forms of power: EXPERT and REWARD.

Earned on your own: EXPERT

The worst choice: PENALTY

Derived from position in the company: FORMAL, REWARD and PENALTY.


Management & Leadership Style

• Autocratic– Top down approach. The manager has power to do whatever she/he wants.

– Sometime appropriate when decisions must be made for emergency situation or time

pressure.

• Democratic/Participative– Encouraging team participation in the decision making process

– Best used for people whose behavior fit with theory Y

• Laissez-faire - a French term means “leave alone”

– The manager is not directly involve in the work of the team.

– Effective for highly skilled team


Important Terms• Halo Effect

The assumption that because the person is good at technical, he will be good as a project

manager.

• ArbitrationA method to resolve conflict. A neutral party hears and resolve a dispute.

• Expectancy Theory - Victor H. Vroom

This is a motivation factor. People put in more efforts because they accept to be rewarded

for their efforts.

• Perquisites (Perks)Some employees receives special rewards e.g. parking spaces, corner offices, executive

dining.

• Fringe BenefitsStandard benefits formally given to all employees, such as insurance, education benefits

and profit benefits.


Project Manager Interpersonal Skills

• Leadership

• Team building

• Motivation

• Communicating

• Influencing

• Decision Making

• Political and cultural awareness

• Negotiation



PMP®


Chapter 10: Communications / 10.2 Manage Communications


The process of making relevant information available to project stakeholders as planned.

Implementing the “Communications Management Plan”

Responding to unexpected requests for Information



Effective information distribution includes:

Sender-receiver modules.

Choice of media.

Writing style.

Meeting management techniques.

Presentation techniques.

Facilitation techniques.



Plan Communications

Management


ControlCommunications



Communication TechnologyCommunication

ModelsCommunication

Methods Information

Management SystemPerformance

Reporting

Project Communications




Communications Management Plan

Work Performance Reports





Individual and group meetings.

Video and audio conferences.

Computer chats.

Other remote communications methods.


Organizational Process Assets (update)

Stakeholder notifications.

Project reports.

Project presentations.

Project records.

Feedback from stakeholders.

Lessons learned documentation.



PMP®


Chapter 12: Procurement / 12.2 Conduct Procurement

Plan Procurements Management


Conductprocurements

ControlProcurements

CloseProcurements


Conduct Procurements

Bidder Conferences

Proposal Evaluation Techniques

Independent Estimates

Expert Judgment

Advertising


Procurement Negotiations

Selected Sellers

Agreements

Resource Calendars

Change Requests





Source Selection Criteria

Seller Proposals

Project Documents

Make or Buy Decisions

Procurement Statement of Work



Proposal

Seller-prepared Documents.

Describe the seller’s ability & willingness to provide the requested products.

Constitutes a formal and technical offer in response to a buyer’s request.


Bidder Conference

Also called: Contractor Conferences, Vendor Conferences, and Pre-Bid Conferences.

Meeting Prospective Sellers before bids preparation, to ensure clear and common understanding of procurement.

All potential sellers are given equal standing during the conference.


Advertising

Placing advertisements in general and specialty publications.


Proposal Evaluation Techniques

Can involve subjective and objective components.

Multiple reviewers.


Develop Qualified Sellers List

List of sellers asked to submit a proposal.

Developed from the organizational assets.

Or project management team can develop from own sources.


Select Sellers

Lowest price is not necessarily lowest cost.

Price might be the only factor in off the shelf items.

Proposals are split into commercial and technical sections.

Multiple sources may be required.


Select Seller

Weighed System: method for quantifying qualitative data to minimize the personal prejudice on source selection

Independent Estimates: An estimate of what the seller should price the service/ product

Screening System: establishing minimum requirements of performance for one of more of the evaluation criteria

Contract Negotiation: Clarification & mutual agreement on contract aspects


Independent Estimates

The procuring organization may either prepare its own independent estimates, or have an estimate of cost prepared by an external professional estimator.

“Should-be” price.

Significant difference between seller price and estimates might happen as a result of:

Statement of work is unclear.

Prospective seller didn’t understand or fully respond.

Change in market condition.


Select Seller Weighed System: Method for quantifying qualitative data to

minimize the personal prejudice on source selection

Criteria Weight Rate(1-100 scale)

Score

Number of years in business

5% 50 2.5

Understanding of needs 25% 80 20

Technical Ability 15% 30 4.5

Total 27

Example


Conduct Procurements

The process of obtaining seller responses, selecting a seller, and awarding a contract.


Select Seller

Independent Estimates: An estimate of what the seller should price the service/ product

The procuring organization may either prepare its own independent estimates, or have an estimate of cost prepared by an external professional estimator

Should-be” price.

Significant difference between seller price and estimates might happen as a result of:

Statement of work is unclear.

Prospective seller didn’t understand or fully respond.

Change in market condition.


Select Seller

Screening System: Establishing minimum requirements of performance for one of more of the evaluation criteria

Eliminates sellers who don’t meet the minimum requirements of the source selection criteria


Select Seller

Contract Negotiation: Clarification & mutual agreement on contract aspects, main items to negotiate on are:

Scope

Schedule

Price & terms of payment

After Sales/After service

Objectives of Negotiations

Obtain a fair &

reasonable price

Develop a good

relationships with

the seller


Select Seller

Attacks “ if your organization can’t manage the

details of the operations perhaps it should get out of the business”

Personal Insults “ if you don’t understand what you are doing

perhaps you should find another job”

Good guy/bad

guy “ One person is helpful to the other side

while the other is difficult to deal with ”

Deadline “ We have a flight at 5pm and we must finish negotiations before that time”

Negotiations Tactics


Select Seller

Limited Authority I can’t shorten the schedule I’m not

authorized, limited authority statements are not necessary true”

Missing man “ Only my boss can agree on that &my boss is not here, lets only agree on this”

Withdrawal “ To show that there’s a less interest”

Fair &

Reasonable “ Lets be reasonable just accept that offer as

it stands”

Fait accompli “ This is a done deal”

Negotiations Tactics


Seller Rating Systems

Uses information on:

Seller’s Past Performance

Quality Ratings

Delivery Performance

Contractual Compliance


Selected sellers

Those sellers who have been judged to be in a competitive range based upon the outcome of the proposal or bid evaluation, and who have negotiated a draft contract that will become the actual contract when the award is made.


Agreements

Includes terms and conditions, and may incorporate other items that the buyer specifies regarding what the seller is to perform or provide.

Mutually binding legal agreement:

Obligates the seller to provide.

Obligates the buyer to pay.

Legal relationship subject to remedy in courts.


Agreements

Components can include:

Statement of work or deliverables

Schedule baseline

Performance reporting

Period of performance

Roles and responsibilities

Pricing

Payment terms

Place of delivery

Others …


Terms to conditions (A)

• ACCEPTANCEThe act of accepting by an authorized representative; an indication of a willingness to pay; the assumption of a legal obligation by a party to the terms and conditions of a contract.

• ACQUISITIONThe act of acquiring goods and services (including construction) for the use of a governmental activity through purchase, rent, or lease. Includes the establishment of needs, description of requirements, selection of procurement method, selection of sources, solicitation of procurement, solicitation for offers, award of contract, financing, contraction administration, and related functions.

• ADDENDUMAn addition or supplement to a document; e.g., items or information added to a procurement document.

• ADVERTISETo make a public announcement of the intention to purchase goods, services or construction with the intention of increasing the response and enlarging the competition. The announcement must conform to the legal requirements imposed by established laws, rules, policies and procedures to inform the public.

• AGREEMENTA duly executed and legally binding contract; the act of agreeing.

• ALPAuthority for Local Purchase: granted by the commissioner of Administration to an individual who has successfully completed all requirements established by the Materials Management Division.

• ALTERNATE RESPONSEA substitute response; an intentional substantive variation to a basic provision or clause of a solicitation by a vendor.

• AMENDMENT/CHANGE ORDERA written modification to a contract or purchase order or other agreements.

• APPROPRIATIONSum of money from public funds set aside for a specific purpose.

• AROAfter Receipt of Order.


Terms to conditions (B)

• BEST VALUEA result intended in the acquisition of all goods and services. Price must be one of the evaluation criteria when acquiring goods and services. Other evaluation criteria may include, but are not limited to environmental considerations, quality, and vendor performance.

• BILL OF LADINGA written receipt or contract, given by a carrier, showing a list of goods delivered to it for transportation. The straight bill of lading is a contract which provides for direct shipment to a consignee. The order bill of lading is negotiable; it enables a shipper to collect for a shipment before it reaches its destination (this is done by sending the original bill of lading with a draft drawn on the consignee through a bank). When the consignee receives the lading indicating that payment has been made, the lading will be surrendered to the carrier's agent, and the carrier will then ship the goods to the consignee, and the bill of lading will be surrendered to the carrier. Note: Shippers frequently consign shipments to themselves on order bills of lading so that delivery is made only upon the shipper's order; the person or firm to be notified upon arrival of the shipment at destination must be designated.

• BLANKET ORDERA contract under which a vendor agrees to provide goods or services on a purchase-on-demand basis. The contract generally establishes prices, terms, conditions and the period covered (no quantities are specified); shipments are to be made as required by the purchaser.

• "BRAND NAME OR EQUAL" SPECIFICATIONA specification that uses one or more manufacturers brand names or catalog numbers to describe the standards of quality, performance and other characteristics needed to meet the requirements of a solicitation and provide for the submission of equivalent products.

• BROKERA business that carries no inventory and that has no written ongoing agreement with any manufacturer or manufacturer's authorized distributor to sell the products of the manufacturer.

• BUSINESSA contractor, subcontractor, supplier, consultant, or provider of technical, administrative, or physical services organized as a sole proprietorship, partnership, association, corporation, or other entity formed for the purpose of doing business for profit. Ahmad Maharma PMBOK 5th Edition 662

Terms to conditions (C)

• COMMODITYA transportable article of trade or commerce that can be bartered or sold.

• COMMODITY/SERVICE CONTRACTPreviously referred to as "M-contracts." Since the inception of MAPS, the contract number is a six-digit number assigned by the computer system. An "M" number is no longer assigned for these types of contracts.

• COMPREHENSIVE PROCUREMENT GUIDELINES (CPG)Designates items that must contain recycled content when purchased by federal, state, and local agencies, or by contractors using appropriated federal funds, when these agencies spend more than $10,000 a year on any of the designated items. For example, if a state agency spends more than $10,000 a year on copy paper, and part of that money is from appropriated federal funds, then that state agency must follow the EPS guidelines and buy 30 percent post-consumer recycled paper. (Section 6002 of the Resource Conservation and Recovery Act [RCRA] and Presidential Executive Order 13101.)

• CONSIDERATIONSomething of value given or done as recompense that is exchanged by two parties; that which binds a contract.

• CONTRACTAny written instrument or electronic document containing the elements of offer, acceptance, and consideration to which an agency is a party.

• CONTRACT ADMINISTRATIONThe management of all actions after the award of a contract that must be taken to assure compliance with the contract; e.g., timely delivery, acceptance, payment, closing contract, etc.

• CONTRACTORA person who agrees to furnish goods or services for a certain price; may be a prime contractor or subcontractor.

• COOPERATIVE PURCHASINGThe combining of requirements of two or more governmental units to obtain the benefits of volume purchases and/or reduction in administrative expenses.

• COOPERATIVE PURCHASING VENTURE (CPV)A joint purchasing program designed by the State of Minnesota where governmental units obtain the benefits of volume purchasing and/or reduction in administrative expenses by participating in the program and purchasing from existing State of Minnesota commodity contracts.


Terms to conditions (D)

• DEALER, JOBBER OR DISTRIBUTORA business that maintains a store, warehouse, or other establishment in which a line or lines of products are kept in inventory and are sold to the public on a wholesale or retail basis.

• DEBARMENTThe disqualification of a person to receive invitations for bids or requests for proposals, or the award of a contract by a government body, for a specified time commensurate with the seriousness of the offense, the failure, or the inadequacy of performance.

• DEFAULTFailure by a party to a contract to comply with contractual requirements.

• DELIVERYThe formal handing over of property; the transfer of possession, such as by carrier to purchaser.

• DEMURRAGEThe detention of a ship, railroad, car or truck beyond a specified time for loading/unloading; the payment required and made for the delay.

• DESIGN SPECIFICATIONA specification setting forth the required characteristics to be considered for award of contract, including sufficient detail to show how the product is to be manufactured.

• DESTINATIONThe place to which a shipment is consigned.

• DOCUMENT TYPEMAPS Procurement uses document type to differentiate among different functions for a requisition, solicitation, contract, or order. The document type is a field to be entered on those screens that are for requisition solicitation, contract, or order.

• DROP SHIPMENTMerchandise which is shipped by a manufacturer directly to a customer in response to the seller who collects orders but does not maintain an inventory.


Terms to conditions (E)

• ECONOMICALLY DISADVANTAGED AREA BUSINESS (ED)Small business eligible for certification as socially disadvantaged business or economically disadvantaged area business: A small business entity with its principal place of business in Minnesota organized for profit, including an individual, partnership, corporation, joint venture, association, or cooperative that is 51 percent owned and is operationally controlled on a day-to-day basis by citizens of the United States. The areas of economic disadvantage are determined by the US Department of Labor.

• EMERGENCY ACQUISITIONA threat to public health, welfare, or safety that threatens the functioning of government, the protection of property or the health or safety of people.

• ENERGY STARA federal standard applied to office equipment for the purpose of rating the energy efficiency of the equipment. Energy Star computers, monitors, and printers save energy by powering down and going to "sleep" when not in use, resulting in a reduction in electrical bills and pollution levels.

• ENVIRONMENTALLY PREFERABLE PRODUCT (EPP)A product or service that has a lesser or reduced impact on human health and the environment when compared with competing products or services that serve the same purpose. Such products or services may include, but are not limited to those which contain recycled content, minimize waste, conserve energy or water, and reduce the amount of toxics either disposed of or consumed.

• EQUAL OR APPROVED EQUALUsed to indicate that an item may be substituted for a required item if it is equal in quality, performance and other characteristics.

• ESCALATION CLAUSEA contract provision which permits the adjustment of contract prices by an amount or percent if certain specified contingencies occur, such as changes in the vendor's raw material or labor costs.

• EVALUATION OF RESPONSESThe examination of responses after opening to determine the vendor's responsibility, responsiveness to requirements, and other characteristics of the solicitation relating to the award.


Terms to conditions (F-J)

• FISCAL YEARThe 12 months between one annual settlement of financial accounts and the next; a term used for budgeting, etc. The fiscal year for the U.S. Government is October 1 to September 30; the fiscal year for the State of Minnesota is July 1 to June 30.

• FIXED ASSETSState property that is in one of four categories:

– all non-expendable property having a normal life expectancy of more than two years and a value of $2,000 or more.

– all semi-expendable property established by the owning agency's policy as fixed assets: any item having a normal life expectancy of more than two years and a value of less than $2,000.

– all firearms, regardless of their value.

– all sensitive items, as established by the agency policy.

• FORMAL SOLICITATIONA solicitation which requires a sealed response.

• GOODSAll types of personal property including commodities, materials, supplies, and equipment.

• HAZARDOUS WASTEAny waste (solid, liquid, or gas) which because of its quantity, concentration, or chemical, physical, or infectious characteristics pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of.

• INFORMAL SOLICITATIONA solicitation which does not require a sealed response.

• INSURANCEA contract between an insurance company and a person or group which provides for a money payment in case of covered loss, accident or death.

• INVOICEA list of goods or services sent to a purchaser showing information including prices, quantities and shipping charges for payment.

• JOINT VENTUREThe temporary association of two or more businesses to secure and fulfill a procurement bid award. Ahmad Maharma PMBOK 5th Edition 666

Terms to conditions (L)

• LABOR SURPLUS AREAA civil jurisdiction designated by the U.S. Department of Labor, usually updated annually in the late fall. Used as one of the criteria for designating economically disadvantaged (ED) vendors.

• LEAD TIMEThe time that it would take a supplier to delivery goods after receipt of order.

• LEASEA contract conveying from one entity to another the use of real or personal property for a designated period of time in return for payment or other consideration.

• LESS-THAN-TRUCKLOAD (LTL)A quantity of freight less than the amount necessary to constitute a truckload.

• LESSEEOne to whom a lease is granted.

• LESSOROne who grants a lease.

• LIFE CYCLE COSTINGA procurement evaluation technique which determines the total cost of acquisition, operation, maintaining and disposal of the items acquired; the lowest ownership cost during the time the item is in use.

• LINE ITEMAn item of supply or service specified in a solicitation for which the vendor must specify a separate price.

• LIQUIDATED DAMAGESA specific sum of money, agreed to as part of a contract to be paid by one party to the other in the event of a breach of contract in lieu of actual damages, unless otherwise provided by law.

• LIST PRICEThe price of an article published in a catalog, advertisement or printed list from which discounts, if any, may be subtracted.

• LOWEST RESPONSIBLE VENDORThe vendor with the lowest price whose past performance, reputation and financial capability is deemed acceptable. Ahmad Maharma PMBOK 5th Edition 667

Terms to conditions (M)

• MANDATORYRequired by the order stipulated, e.g., a specification or a specific description that may not be waived.

• MAPSThe Minnesota Accounting and Procurement System. Quite often MAPS or AGPS is referred to when speaking of the Procurement side of the system and GFS is referred to when speaking of the accounting side.

• MANUFACTURERA business that makes or processes raw materials into a finished product.

• MARKETThe aggregate forces (including economics) at work in trade and commerce in a specific service or commodity. To sell, analyze, advertise, package, etc.

• MATERIAL VARIANCE/MATERIAL DEVIATIONA variance or deviation in a response from specifications of conditions that allows a responder a substantial advantage or benefit not enjoyed by all other responders or that gives the state something significantly different from what the state requested in the solicitation document.

• MATERIALS MANAGEMENTEmbraces all functions of acquisition, standards, quality control and surplus property management.

• MODEL PROCUREMENT CODE (MPC)A publication approved by the American Bar Association which sets forth procurement statutory principles and policy guidelines for managing and controlling the procurement of supplies, services and construction for public purposes; administrative and judicial remedies for the resolution of controversies relating to public contracts; and a set of ethical standards governing public and private participants in the procurement process.

• MULTIPLE AWARDContracts awarded to more than one supplier for comparable supplies and services. Awards are made for the same generic types of items at various prices.


Terms to conditions (N)

• NAICS (NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM) CODE [FORMERLY KNOWN AS SIC (STANDARD INDUSTRIAL CLASSIFICATION) CODE]Classification of business established by type of activity for the purpose of facilitating the collection, tabulation, presentation, and analysis of data collected by various agencies of the United States government, state agencies, trade associations, and private research organizations for promoting uniformity and comparability in the presentation of statistical data relating to those establishments and their fields of endeavor.

• NAPMNational Association of Purchasing Management. A nonprofit educational and technical organization of purchasing and materials management personnel and buying agencies from the public and private sectors.

• NASPONational Association of State Purchasing Officials. An organization of state procurement representatives for the purpose of promoting efficient and effective public purchasing policies and procedures at the state level. NASPO is an affiliate of the Control of State Governments (CSG).

• NEGOTIATIONRequests for proposals are sometimes used as a starting point for negotiations to establish a contract. RFPs generally include more than just price considerations. This method is especially applicable when dealing with a single source manufacturer.

• NET PRICEPrice after all discounts, rebates, etc., have been allowed.

• NIGPNational Institute of Governmental Purchasing. A nonprofit, educational and technical assistance corporation of public purchasing agencies and activities at the federal, state and local levels of government.

• NO BIDA response to a solicitation for bids stating that respondent does not wish to submit an offer. It usually operates as a procedure consideration to prevent suspension from the vendors list for failure to submit a response.


Terms to conditions (O-P)

• OPEN MARKET REQUISITION (OMR)The requisition document type used in MAPS Procurement to request the purchase of a non-contract item when the requested item's estimated cost exceeds the authority for purchase level of the buyer. An OMR conveys the request for purchase to the person with the authority to purchase. The resulting order type is most often the Purchase Order Requisition (POR).

• OPTION TO EXTEND/RENEWA provision (or exercise of a provision) which allows a continuance of the contract for an additional time according to permissible contractual conditions.

• OSHAThe Occupational Safety and Healt

• PACKING LISTA document which itemizes in detail the contents of a particular package or shipment.

• PARTIAL PAYMENTThe payment authorized in a contract upon delivery of one or more units called for under the contract or upon completion of one or more distinct items of service called for thereunder.

• PER DIEMBy the day.

• PERFORMANCE BONDA contract of guarantee, executed subsequent to award by a successful vendor to protect the buyer from loss due to the vendor's inability to complete the contract as agreed.

• PERFORMANCE SPECIFICATIONA specification setting forth performance requirements determined necessary for the item involved to perform and last as required.

• PLANT-MATTER BASED OR BIO-BASED PRODUCTA product derived from renewable resources, including fiber crops, such as kenaf; chemical extracts from oilseeds, nuts, fruits and vegetables (such as corn and soybeans); agricultural residues, such as wheat straw and corn stover; and wood wastes generated from processing and manufacturing operations. These products stand in contrast to those made from fossil fuels (such as petroleum) and other less renewable resources (such as virgin timber). Ahmad Maharma PMBOK 5th Edition 670

Terms to conditions (P)

• POINT OF ORIGIN(shipping point)The location where a shipment is received by a transportation line from the shipper.

• POLITICAL SUBDIVISIONA subdivision of a state which has been delegated certain functions of local government. Can include counties, cities, towns, villages, hamlets, boroughs and parishes.

• POST-CONSUMER MATERIALA finished material which would normally be disposed of as a solid waste after its life cycle as a consumer item is completed. Does not include manufacturing or converting wastes. This refers to material collected for recycling from office buildings, homes, retail stores, etc.

• PRE-CONSUMER MATERIALMaterial or by-products generated after the manufacture of a product but before the product reaches the consumer, such as damaged or obsolete products. Pre-consumer material does not include mill and manufacturing trim, scrap, or broken material which is generated at a manufacturing site and commonly reused on-site in the same or another manufacturing process.

• PREFERENCEAn advantage in consideration for award for a contract granted to a vendor by reason of the vendor's residence, business location, or business classifications (e.g., minority, small business).

• PREPAIDA term denoting that transportation charges have been or are to be paid at the point of shipment.

• PREQUALIFICATION OF VENDORSThe screening of potential vendors in which such factors as financial capability, reputation and management are considered when developing a list of qualified vendors. See Vendors List, Qualified Vendor/Responsible Vendor.


Terms to conditions (P)

• PRICEThe amount of money that will purchase a definite weight or other measure of a commodity.

• PRICE AGREEMENTA contractual agreement in which a purchaser contracts with a vendor to provide the purchaser's requirements at a predetermined price. Usually involves a minimum number of units, orders placed directly with the vendor by the purchase, and limited duration of the contract. See Blanket Order and Requirements Contract.

• PRICE FIXINGAgreement among competing vendors to sell at the same price.

• PROCUREMENTThe combined functions of purchasing, inventory control, traffic and transportation, receiving, inspection, store keeping, and salvage and disposal operations.

• PROPRIETARYThe only items that can perform a function and satisfy a need. This should not be confused with "single source." An item can be proprietary and yet available from more than one source. For example, if you need a camera lens for a Nikon camera, the only lens that will fit is a Nikon lens, thus, this lens is "proprietary." However, the Nikon lens is available from more than one source, thus, it is not single source.

• PUBLIC PURCHASINGThe process of obtaining goods and services for public purpose following procedures implemented to protect public funds from being expended extravagantly or capriciously.

• PURCHASE MANUALA document that stipulates rules and prescribes procedures for purchasing with suppliers and other departments.

• PURCHASE ORDERThe signed written acceptance of the offer from the vendor. A purchase order serves as the legal and binding contract between both parties.


Terms to conditions (Q)

• QUALIFIED VENDOR/RESPONSIBLE VENDORA vendor determined by a buying organization to meet minimum set standards of business competence, reputation, financial ability and product quality for placement on the vendor list.

• QUALIFIED PRODUCTS LIST (QPL)A list of products that, because of the length of time required for test and evaluation, are tested in advance of procurement to determine which suppliers comply with the specification requirements. Also referred to as an "approved brands list."

• QUALITYThe composite of material attributes, including performance features and characteristic, of a product or service to satisfy a given need.

• QUANTITYAmount or number.

• QUANTITY DISCOUNTA reduction in the unit price offered for large volume contracts.

• RECYCLED CONTENTThe portion of a product that is made from materials directed from the waste stream; usually stated as a percentage by weight.

• RECYCLED PRODUCTA product that contains the highest amount of post-consumer material practicable, or when post-consumer material is impracticable for a specific type of product, contains substantial amounts of pre-consumer material.

• REMANUFACTURED PRODUCTAny product diverted from the supply of discarded materials by refurbishing and marketing said product without substantial change to its original form.

• RENTA rental contract giving the right to use real estate or property for a specified time in return for rent or other compensation.


Terms to conditions (R)

• REQUEST FOR BID (RFB)A solicitation in which the terms, conditions, and specifications are described and responses are not subject to negotiation.

• REQUEST FOR PROPOSAL (RFP)A solicitation in which it is not advantageous to set forth all the actual, detailed requirements at the time of solicitationand responses are subject to negotiation. Price must be a factor in the award but not the sole factor.

• REQUIREMENTMaterials, personnel or services needed for a specific period of time.

• REQUIREMENTS CONTRACTA form or contract that is used when the total long-term quantity required cannot be definitely fixed, but can be stated as an estimate or within maximum and minimum limits with deliveries on demand.

• REQUISITIONAn internal document that a functional department (stores, maintenance, production, etc.) sends to the purchasing department containing details of materials to meet its needs, replenish stocks or obtain materials for specific jobs or contracts.

• RESIDENT VENDORA person, firm, or corporation authorized to conduct business in the State of Minnesota on the date a solicitation for a contract is first advertised or announced. It includes a foreign corporation duly authorized to engage in business in Minnesota.

• RESPONDEROne who submits a response to a solicitation document.

• RESPONSEThe offer received from a vendor in response to a solicitation. A response includes submissions commonly referred to as "offers," "bids," "quotes," or "proposals."

• RESPONSIBLE BIDDERA bidder whose reputation, past performance, and business and financial capabilities are such that the bidder would be judged by an appropriate authority as capable of satisfying an organization's needs for a specific contract.


Terms to conditions (R-S)

• RESTRICTIVE SPECIFICATIONSSpecifications that unnecessarily limit competition by eliminating items capable of satisfactorily meeting actual needs. See Performance Specification.

• REUSED PRODUCTAny product designed to be used many times for the same or other purpose without additional processing other than specific requirements, such as cleaning, painting or minor repairs.

• RFP OR RFB CONFERENCEA meeting arranged by a procurement office to help potential bidders understand the requirements of an RFB or an RFP.

• SALES TAXA levy on a vendor's sale by an authorized level of government.

• SEALEDA method determined by the commissioner to prevent the contents being revealed or known before the deadline for submission of responses.

• SERVICESUnless otherwise indicated, both professional or technical services and service performed under a service contract.

• SINGLE SOURCEAn acquisition where, after a search, only one supplier is determined to be reasonably available for the required product, service or construction item.

• SMALL BUSINESSA designation for certain statutory purposes referring to a firm, corporation or establishment having a small number of employees, low volume of sales, small amount of assets or limited impact on the market.

• SOLICITATIONThe process used to communicate procurement requirements and to request responses from interested vendors. A solicitation may be, but is not limited to a request for bid and request for proposal.

• SOURCE REDUCTION PRODUCTA product that results in a net reduction in the generation of waste, and includes durable, reusable and remanufactured products; products with no packaging or reduced packaging.


Terms to conditions (S-T)

• SPECIFICATIONA concise statement of a set of requirements to be satisfied by a product, material or process that indicates whenever appropriate the procedures to determine whether the requirements are satisfied. As far as practicable, it is desirable that the requirements are expressed numerically in terms of appropriate units, together with their limits. A specification may be a standard, a part of a standard, or independent of a standard.

• STANDARDAn item's characteristic or set of characteristics generally accepted by the manufacturers and users of the item as a required characteristic for all such items.

• STANDARDIZATIONThe process of defining and applying the conditions necessary to ensure that a given range of requirements can normally be met, with a minimum of variety, in a reproducible and economic manner based on the best current techniques.

• SURPLUS PROPERTYProperty in excess of the needs of an organization and not required for its foreseeable use. Surplus may be used or new, but it possesses some usefulness for the purpose it was intended or for some other purpose.

• TABULATION OF RESPONSESThe recording of responses for the purposes of comparison, analysis and record keeping.

• TARGETED GROUP BUSINESS (TG)A certified business designated by the commissioner of Administration that is majority owned and operated by a woman, person with disabilities, or a member of a specific minority group who provides goods, products, or services within purchasing categories designated by the commissioner.

• TERMS AND CONDITIONSA phrase generally applied to the rules under which all bids must be submitted and the stipulations included in most purchase contracts; often published by the purchasing authorities for the information of all potential vendors.

• TITLEThe instrument or document whereby ownership of property is established.


Terms to conditions ( T-V)• TORT

A wrongful act, other than a breach of contract, such that the law permits compensation of damages.

• TRUCKLOAD (TL)1. A quantity of freight to which truckload rates apply or a shipment tendered as a truckload.2. A highway truck or trailer loaded to its carrying capacity. See Less-Than-Truckload.

• UNIFORM COMMERCIAL CODE (UCC)A comprehensive modernization of various statutes relating to commercial transactions, including sales, lease, negotiable instruments, bank deposits and collections, funds transfers, letters of credit, bulk sales, documents of title, investment securities and secured transactions. The Minnesota law is found in Minn. Stat. Ch. 336.

• UNIT PRICEThe price of a selected unit of a good or service (e.g., pound, labor hours, etc.).

• UNSUCCESSFUL VENDORA vendor whose response is not accepted for reasons such as price, quantity, failure to comply with specifications, etc.

• VALUE ANALYSISAn organized effort directed at analyzing the function of systems, products, specifications, standards, practices, and procedures for the purpose of satisfying the required function at the lowest total cost of effective ownership consistent with the requirements for performance, reliability, quality and maintainability.

• VENDORSomeone who sells something; a "seller."

• VENDORS LISTA list of names and addresses of suppliers from whom bids, proposals and quotations might be expected. The list, maintained by the purchasing office, should include all suppliers who have expressed interest in doing business with the government.

• VIRGIN PRODUCTA product that is made with 100 percent new raw materials and contains no recycled materials.

• VOLATILE ORGANIC COMPOUNDS (VOCs)Compounds that evaporate easily at room tempurature and often have a sharp smell. They can come from many products, such as office equipment, adhesives, carpeting, upholstery, paints, solvents, and cleaning products. Some VOCs can cause cancer in certain situations, especially when they are concentrated indoors. VOCs also create ozone, a harmful outdoor air pollutant.


Terms to conditions (W)

• WARRANTYThe representation, either expressed or implied, that a certain fact regarding the subject matter of a contract is presently true or will be true. Not to be confused with "guarantee," which means a contract or promise by one person to answer for the performance of another person.



PMP®


Chapter 13: Stakeholder / 13.3 Manage Stakeholders

Engagement

Manage Stakeholders Engagement

The process of communicating and working with stakeholders to meet their needs and addressing issues as they occur.

Increases the likelihood that project will not veer off track due to unresolved stakeholders issues and unmatched expectations.

Key benefit is that it allows project manager to increase support and minimize resistance from stakeholders.


Manage Stakeholders Expectations

Involves communication activities directed towards project stakeholders to influence their expectations, address concerns, and resolve issues. Such as:

Actively managing the expectations of stakeholders to increase the likelihood of project acceptance by negotiating and influencing their desires to achieve project goals.

Addressing concerns that have not become issues yet.

Clarifying and resolving issues that have been identified.


Manage Stakeholders Engagement



Management Skills

Issue Log

Change Requests





CommunicationsManagement Plan

Change Log



Issue Logs

Also called action item log.

Tool to document and monitor the resolution of issues.

Addressed in order to maintain good, constructive working relationships.



Building trust.

Resolving conflict.

Active listening.

Overcoming resistance to change.


The 8 Steps for Leading Change*

Establishing a sense of urgency.

Creating the guiding coalition.

Developing a vision and strategy.

Communicating the change vision.

Empowering employees for broad-based action.

Generating short-term wins.

Consolidating (accumulating) gains and producing more change.

Anchoring new approaches in the culture.

* Leading Change- John P. Kotter


Management Skills

Facilitate consensus toward project objectives

Influence people to support the project

Negotiate agreements to satisfy the project needs, and

Modify organizational behavior to accept the project outcomes


Project Document (Update)

Stakeholder management strategy.

Stakeholder register.

Issue log.


EQ vs. IQ


What is Emotions?

“


Emotions


Can we Control Our Emotions?

عند ليس الشديد بالصرعة، إنما الشديد الذي يملك نفسه”•

“الغضب

“ال تغضب”•

والكاظمين الغيظ، والعافين عن الناس، وهللا يحب ”•

“المحسنين

“ال تحزن”•


What is Emotional Intelligence?


Goleman’s Framework of Emotional Competencies

Self Other

(Personal Competence) ( Social Competence)

Recognition

Regulation

Self Awareness

-Emotional self awareness -Accurate self-assessment -Self confidence

Social Awareness

-Empathy

-Organizational awareness -Service

Self –Management-Emotional self control -Transparency -Adaptation -Achievement -Initiative- Optimism

Relationship Management

-Inspirational leadership-Influence -Developing others -Change catalyst- Conflict Management-Building bonds -Teamwork and collaboration


5.Team Leadership

-Communication

-Conflict Management

-Inspirational Leadership

EMOTIONAL INTELLIGENCE FRAMEWORK FOR PROJECT MANAGEMENT

3.Social Awareness

-Empathy -Organizational awareness - Emotional Boundaries

4. Relationship Management

-Stakeholder Relationship-Developing others -Truth Telling

1.Self Awareness


• 2.Self –

• Management

-Self -Control


Emotional Intelligence Framework for Project Management

• 2.Self –

• Management

-Self -Control

1.Self Awareness


3.Social Awareness




5.Team Leadership-Communication -Conflict Management -Inspirational leadership



• 2.Self –

• Management

-Self -Control

1.Self Awareness


3.Social Awareness




5.Team Leadership-Communication -Conflict Management -Inspirational leadership


Self Awareness

Accurate Self-Assessment

– Aware of Strengths & Weaknesses

– Reflective, learning from experience

– Open to Candid Feedback

– Able to show a sense of humor and perspective about oneself.


Self Awareness

Self Confidence

– Present self with self-assurance; have “presence”

– Can voice views and express opinion even if unpopular.

– Decisive.

– Able to make decisions despite uncertainties and pressure


Self Awareness

Emotional Self-Awareness (red flags)

– Inappropriate Humor

– Use of Sarcasm

– Passive Aggressive Behavior

– Playing the Victim

– Hostility



1.Self Awareness


3.Social Awareness



-Stakeholder Relationship-Influence -Developing others -Truth Telling

5.Team Leadership-Communication -Conflict Management Inspirational Leadership


Self- Control

Self-control is the ability to remain composed in spite of emotional state.

Self-control is for all emotions.


Hot Buttons


Techniques to Improve Self-Management

1- Identify the feeling

2- Determine the underlying cause

3- Take action to get clear


Additional Techniques

1- Reduce your stress level

2- Conduct an Inner-Dialogue

3- Take it out with someone

4- Give yourself a time out

5- Write a letter or email you will not send

6- Take care of yourself

– And Remember: It’s not worth dying for!!!



• 5.Team Leadership

• -Communication

• -Conflict Management

• Inspirational leadership

3.Social Awareness




1.Self Awareness


2.Self –Management

- Self -Control


Social Awareness

Empathetic Listening

– Let others speak

– Maintain eye contact

– Give the speaker your full attention

– Playback and summarize

– Try on their shoes

– Suspend our judgment


Social Awareness

“The ability to read the currents of emotions and political realities in groups”

- Cary Cherniss and Daniel Goleman

• Organizational Awareness


Social Awareness

Emotional Boundaries

“Good fences make good neighbors”



• 3.Social Awareness

•

• -Empathy

• -Organizational awareness

• -Emotional Boundaries

• 4. Relationship Management

• -Stakeholder Relationship

• -Influence

• -Developing others

• -Truth Telling

1.Self Awareness


2.Self –Management

-Self –Control

5.Team Leadership

• -Communication


• -Inspirational leadership


Emotional Intelligence Framework for Project Management44

• 2.Self –Management

• -Self –Control

• 1.Self Awareness

• -Emotional self awareness

- Accurate self-assessment

- Self confidence

• 3.Social Awareness

•

• -Empathy

• -Organizational awareness

• - Emotional Boundaries



5.Team Leadership

• -Communication


• -Inspirational leadership


PMBOK Reading Chapter 3

– Section 3.5

Chapter 4

– Section 4.3

Chapter 8

– Section 8.2

Chapter 9

– Sections 9.2 - 9.4

Chapter 10

– Sections 10.2

Chapter 12

– Section 12.2

Chapter 13

– Section 13.3Ahmad Maharma PMBOK 5th Edition 712


PMP®

PROJECT MONITORING & CONTROLLING


PMP®

Phase #4: PROJECT MONITORING & CONTROLLING

Chapter 4: Integration / 4.4 Monitor and Control

Project Work

Monitor & Control Project Work

The process of tracking, reviewing, and regulating the progress to meet the performance objectives defined in the project management plan.

It includes collecting, measuring, and distributing performance information, and assessing measurements and trends to effect process performance.



Comparing actual work performance against the project management plan.

Assessing performance to determine whether any corrective or preventive actions are indicated, and then recommending those actions as necessary.

Identifying new risks and analyzing, tracking, and monitoring existing project risks to make sure the risks are identified, their status is reported, and that appropriate risk response plans are being executed.



Maintaining an accurate, timely information base concerning the project’s product(s) and the associated documentation through project completion.

Providing information to support status reporting, progress measurement, and forecasting.

Providing forecasts to update current cost and current schedule information; and

Monitoring implementation of approved changes as they occur.



Expert Judgment


Project management information software

Meetings

Change Requests

Work performance reports



Project Management PlanSchedule

ForecastsCost ForecastsValidated ChangesWork

Performance ReportsEnterprise


Process Assets


Change Requests

Needed because change is inevitable.

Happen as a result of comparing actual results with planned results

May:

– Expand

– Adjust

– Reduce

– Project and product scope


Changes May Include

Corrective Actions: A documented direction for executing the project work to bring expected future performance of the project work in line with the project management plan.

Preventive Actions: A documented direction to perform an activity that can reduce the probability of negative consequences associated with project risks.

Defect Repairs: The formally documented identification of a defect in a project component with a recommendation to either repair the defect or completely replace the component.


Perform Integrated Change Control

The process of reviewing all change requests, approving changes and managing changes to the deliverable, organizational process assets, project documents, and the project management plan.

Conducted from project inception through completion.



Influencing the factors that circumvent integrated change control so that only approved changes are implemented.

Reviewing, analyzing, and approving change requests promptly, which is essential, as a slow decision may negatively affect time, cost or the feasibility of the change.

Managing the approved changes.

Maintaining the integrity of baseline by releasing only approved changes for incorporation into the project management plan and project documents.



Reviewing, approving, or denying all recommended corrective and preventive actions.

Coordinating changes across the entire project (e.g., a proposed schedule change will often affect cost, risk, quality, and staffing); and

Documenting the complete impact of change requests.


Facts About Integrated Change Control

Change control is necessary because projects seldom run exactly according to project management plan.

Changes are incorporated into a revised plan.

Corrective and preventive actions are taken to control the project performance.

Monitoring gives insight on project health & areas that require special attention.


Steps for Integrated Change Control

Prevent the root cause of change.

Identify change.

Create a change request.

Assess the change.

Assess impact.

Perform integrated change control.

Look for options.

Approve or reject change.

Adjust the project management plan and baseline.

Notify stakeholders.

Manage the project to new project management plan.


Impacts of change are

evaluated on the

schedule , cost , and/or quality

PM presents the change

to the committee for approval with impacts &

alternatives ) if any (

Details are sent to the PM

Change

Approved

Change and its impacts

are logged in the

Changes Log , necessary

amendments to the plan ,

deliverables , change

orders , and invoices are

processed

Change is either discarded , logged in

future enhancements or issues log

Decision Made

YES

NO

Risks List

Changes

Log

Project Cost

Project Plan

Change Management Procedure

Name of Project

Change Request is filled ,

with reasons , details , and

possible impacts .

Event happens to

trigger a change

to the Scope by

***** or one of its

partners

Change Request is

logged in the Changes

Log as Change

Requested

Issue

Change

Order?



PMP®


Chapter 4: Integration / 4.5 Perform Integrated

Change Control


Expert Judgment

Meetings

Change Control Tools

Approved Change Request

Change Log





Change Requests


Organizational Process Asset


Configuration Management System

A configuration management system with integrated change control provides a standardized, efficient and effective way to centrally manage approved changes and baselines within a project.

Configuration control is focused on the specifications of both the deliverables and processes,

While change control is focused on identifying, documenting and controlling changes to the project and product baselines.


Configuration management with integrated change control processes achieve the following objectives;

– Establishes an evolutionary method to consistently identify and request changes to established baselines, and to assess the value and effectiveness of those changes

– Provides opportunities to continuously validate and improve the project by considering the impact of each change, and

– Provides the mechanism for the project management team to consistently communicate all approved and rejected changes to the stakeholders

CONFIGURATION MANAGEMENT SYSTEM


Configuration Management Activities

Configuration Identification

Configuration Status Accounting

Configuration Verification and Audit


Configuration Identification

Selection and identification of a configuration item provide the basis for which product configuration is defined and verified, products and documents are labeled, changes are managed, and accountability is maintained.


Configuration Status Accounting

Information is recorded and reported as to when appropriate data about the configuration item should be provided. The information includes a listing of approved configuration identification, status of proposed changes to the configuration, and the implementation status of approved changes.


Configuration Verification and Audit

Configuration verifications and configuration audits ensure the composition of a project’s configuration items is correct and that corresponding changes are registered, assessed, approved, tracked and correctly implemented. This ensures the functional requirements defined in the configuration documentation can be met.



PMP®


Chapter 5: Scope / 5.5 Validate Scope

Validate Scope

The process of formalizing acceptance of the completed project deliverables.

Includes reviewing deliverables with the customer or sponsor to ensure that they are completed satisfactorily and obtaining formal acceptance of deliverables by the customer or sponsor.


Validate Scope Vs. Quality Control

Verify scope is concerned with acceptance of work results while perform quality control is concerned with the correctness of the work results.

Quality control is generally performed before scope verification, but the two processes can be performed in parallel.


Validate Scope


Control Scope

Validate Scope

Define Scope

Create WBS

CollectRequirements


Validate Scope

Inspection

Group decision-making techniques

Accepted Deliverables

Change Requests

Work performance information



Requirements documentation

Requirements traceability matrix

Verified deliverables

Work performance data



PMP®


Chapter 5: Scope / 5.6 Control Scope

Control Scope

The process of monitoring the status of the project and product scope and managing changes to the scope baseline.

Controlling project scope ensures all requested changes and recommended corrective or preventive actions are processed through the Perform Integrated Change Control process.


Control Scope

Project scope control is also used to manage the actual changes when they occur and is integrated with the other control processes.

Uncontrolled changes are often referred to as “project scope creep”


Control Scope


Control Scope

Validate Scope

Define Scope

Create WBS

CollectRequirements


Control Scope

Variance Analysis

Work Performance InformationOrganizationa

l Process Assets UpdatesChange

RequestsProject

Management Plan UpdatesProject

Document Updates

Project Management PlanWork

performance dataRequirements

documentationRequirements

traceability matrixOrganizational

Process Assets


Variance Analysis

Project performance measurements are used to assess the magnitude of variation from the original baseline.

It determines the cause and degree of variance relative to the scope baseline, and decides whether corrective or preventive action is required.


Control Schedule

The process of monitoring the status of the project to update project progress and manage changes to the schedule baseline.

Schedule control is concerned with:

– Determining the current status of project schedule.

– Influencing the factors that create schedule changes.

– Determining that the project schedule has changed, and

– Managing the actual changes as they occur.Ahmad Maharma PMBOK 5th Edition 746


PMP®


Chapter 6: Time / 6.7 Control Schedule

Control Schedule

DefineActivities

Develop Schedule

Estimate Activity

Durations

Sequence Activities

Estimate Activity

Resources

ControlSchedule



Control Schedule

Performance Reviews


Resource Optimization Techniques

Modeling Techniques

Leads & Lags

Schedule Compression

Scheduling Tool

Work Performance Information

Schedule Forecasts


Change Requests





Project Schedule

Project calendars

Schedule data




PMP®


Chapter 7: Cost / 7.4 Control Costs

Control Cost

The process of monitoring the status of the project to update the project budget and managing changes to the cost baseline.

Involves recording actual costs spent to date.

Important to determine:

– Cause of a variance, whether positive or negative.

– Magnitude of the variance.

– Decide if variance requires corrective action.


Control Cost Includes

Influence the factors that create changes to the cost baseline.

Ensuring requested changes are agreed upon.

Managing the actual changes when they occur.

Assuring that potential cost overruns do not exceed the authorized funding periodically and in total.

Monitoring cost performance to detect and understand variances from the cost baseline.

Recording all appropriate changes accurately against the cost baseline.

Preventing incorrect, inappropriate, or unapproved changes from being included in the reported cost or resource usage.

Informing appropriate stakeholders of approved changes.

Acting to bring expected cost overruns within acceptable limits.Ahmad Maharma PMBOK 5th Edition 752

Control Costs

Plan CostManagement

EstimateCosts

Determine Budget

ControlCosts


Control Costs

Earned Value Management

Forecasting

To-complete Performance Index

Performance Reviews

Reserve Analysis



Cost Forecasts


Change Requests





Project Funding Requirements



Earned value Management (EVM)

Methodology that measures project progress by comparing actual schedule & cost performance against planned performance as laid out in the schedule & cost baseline.

Work does not earn value until it is completed.


Earned value Management (EVM)

Relates Three Values:

– Planned Value (PV)

– Earned Value (EV)

– Actual Costs (AC)

– Budget At Completion (BAC).


Planned Value (PV)

Budgeted Cost of Work Scheduled (BCWS)


Planned Value (PV) [was Budgeted Cost of Work

Scheduled (BCWS)]

758

JAN FEB MAR APR MAY

Work Package #140 40 40 100 60

Work Package #2100 50 70 20

Work Package #340 40 60


PV = 140 180 220 240 180 BAC = 960

Cumulative PV = 540

How much work should be done (what you planned to do)


Earned Value (EV)

Budgeted Cost of Work Performed (BCWP)


Earned Value (EV) [was Budgeted Cost of Work

Performed (BCWP)]

760

JAN FEB MAR APR MAY

Work Package #140 40 40 100 60

100% Complete (280)


75% Complete (180)


50% Complete (70)


20% Complete (60)

PV = 140 180 220 240 180 BAC = 960

PV = 540

EV = 590

How much work is done on a budgeted basis (what you’ve actually

done)

Work completed during a given period of time = “Earned Value”


ACTUAL COSTS (AC)

Actual Cost of Work Performed (ACWP)


Actual Cost (AC) [was Actual Cost of Work

Performed (ACWP)]

762

JAN FEB MAR APR MAY

Work Package #140 40 40 100 60

100% Complete (280)


75% Complete (180)


50% Complete (70)


20% Complete (60)

PV = 140 180 220 240 180 BAC = 960

PV = 540

EV = 590

AC = 560 (not calculated here)

How much did the “is done” work cost (what you actually

spent or what it actually cost)


Schedule Variance

Any difference between the scheduled completion of an activity and the actual completion of that activity.

Schedule Variance is the earned value minus the planned value

Schedule Variance = Earned Value - Planned Value

SV = EV - PV


Schedule Variance (SV)

• EV - PV: “Value of Work Performed less value of Work Scheduled”

• *A Negative number indicates a “Potential Slip”

• Schedule Variance status does:– indicate the dollar value difference between

– work that is ahead or behind the plan

– reflect a given measurement method

• Schedule Variance status does not:– address impact of work sequence

– address importance of work

– reflect critical path assessment

– indicate amount of time it will slip

– identify source (labor & material) of difference

– indicate the time ahead/behind (or regain) schedule

– indicate the cost needed to regain schedule

764

Example:

PV = $250

EV = $200

SV = EV - PV

= $200 - $250

= - $50


Cost Variance

Any difference between the budgeted cost of an activity and the actual cost of that activity.

Cost Variance is the earned value minus the planned value

Cost Variance = Earned Value – Actual Cost

CV = EV - AC


Cost Variance (CV)

766

EV - AC: “Value of Work Performed for Each Dollar’s

Worth of Work Scheduled”

*A Negative number indicates an “Overrun”

Example:

EV = $200

AC = $190

CV = EV - AC

= $200 - $190

= $10


Variance Values

Schedule Variance:

– If SV= 0, then schedule is on track.

– If SV 0, then project is ahead of schedule

– If SV 0, then project is behind schedule

Cost Variance

– If CV= 0, then project is on budget.

– If CV 0, then project is below budget (Cost Saving)

– If CV 0, then project is above budget (Cost Overrun)


Schedule Performance Index (SPI)

SPI = EV / PV


Schedule Performance Index (SPI)

769

Is a Measure of Contractor “Schedule Efficiency”

SPI = EV/PV

Less Than 1.0 is unfavorable = BEHIND schedule

Greater Than 1.0 is favorable = AHEAD of schedule

Example:

PV = $250

EV = $200

SPI = EV/PV

= $200/$250

= .80


Cost Performance Index (CPI)

CPI = EV / AC


Cost Performance Index (CPI)

771

Is a Measure of Contractor “Cost Efficiency”

CPI = EV/AC

Less Than 1.0 is unfavorable = Cost is GREATER than budgeted

Greater Than 1.0 is favorable = Cost is LESS than budgeted

Example:

EV = $200

AC = $190

CPI = EV/AC

= $200/$190

= 1.05


Performance Index Values

Schedule Variance:

– If SPI= 1, then schedule is on track.

– If SPI 1, then project is ahead of schedule

– If SPI 1, then project is behind schedule

Cost Variance

– If CPI= 1, then project is on budget.

– If CPI 1, then project is below budget (Cost Saving)

– If CPI 1, then project is above budget (Cost Overrun)


Forecasting

Estimate To Complete (ETC)

Estimate At Completion (EAC)


Estimate To Complete (ETC)

When current variances are seen as atypical and similar changes will not continue to happen in the future

• ETC= BAC-EV

When current variances are seen as typical of future variances

• ETC= (BAC-EV)/CPI

When past performance show that the original estimating assumptions were fundamentally flawed, estimates to completion has to be re-calculated

• ETC= BTC


Estimate At Completion (EAC)

When past performance show that the original estimating assumptions were fundamentally flawed:

– EAC = AC + BTC When current variances are seen as atypical and similar

changes will not continue to happen in the future:

– EAC = AC + (BAC – EV) When current variances are seen as typical of future

variances

– EAC = AC + [(BAC –EV)/CPI]


Forecasting - Estimate at Completion (EAC)

776

What is Estimate at Completion (EAC)

Expected total cost for a defined scope of work

Forecast of most likely total project cost

Techniques for developing EAC:

EAC = Actuals to date plus a new estimate for all remaining work (AC + ETC)

*What is ETC? Estimate to Complete (ETC) is the cost for all remaining

work.

EAC = BAC/CPI Total project budget divided by the cost performance index

EAC = AC +BAC – EV

EAC = AC + (BAC – EV)/CPI


Variance At Completion (VAC)

How much over or under budget do we expect

to be at the end of the project

VAC = Budget at Completion - Estimate at Completion

= BAC - EAC


To-Complete Performance Index (TCPI)

This helps in determining the efficiency that must be achieved on the remaining work in order for the project to meet a specified end point such as Budget at Completion (BAC) or Estimate at completion (EAC)

TCPI= Work Remaining/ Funds Remaining

TCPI based on the BAC:

– TCPI = (BAC-EV) / (BAC-AC)

TCPI based on the EAC:

– TCPI = (BAC-EV) / (EAC-AC)


To-Complete Performance Index (TCPI)

• Helps the team determine the efficiency that must be achieved on

the remaining work for a project to meet a specified endpoint, such

as BAC or the team’s revised EAC

• TCPI AC)- (EAC or – AC)(BAC Remaining Funds

EV) – (BAC Remaining Work


7.3 Control Cost – Tools and techniques


Budget At Completion (BAC)

Project Estimated Budget


Budget at Completion (BAC)

782

What is Budget at Completion (BAC)

•Sum of the total budgets for a project

BAC = Cum PV (BCWS) for all work packages in the

project


Forecasting EAC• Common alternative way to calculate EAC

Table captured from Practice Standard for Earned Value Management, PMI © 2005Ahmad Maharma PMBOK 5th Edition 783

Earned Value Graph

784Time

Cost

BCWS (PV)(Planned)

BCWP (EV)(Accomplishment)

ACWP (AC)(Actual)

EAC(Forecast)

Spending

Variance

Schedule

Variance

Cost

Variance

40 Mos.

BAC(Total Budget)

$300M

24 Mos.

CPI

$360M

Cost Overrun

52 Mos.

Schedule

Slippage


Earned Value Technique

Terms and Formulas Definition

Budget at completion (BAC) How much did we BUDGET for the TOTAL project effort?

Estimate at Completion (EAC)

= BAC / CPI

What do we currently expect the TOTAL project cost (a

forecast)?

Estimate to Complete (ETC)

= EAC - AC

From this point on, how much MORE do we expect it to cost to

finish the project (a forecast)?

Variance at Completion (VAC)

= BAC – EAC

As of today, how much over or under budget do we expect to

be at the end of the project?

• EAC is an important forecasting value.


Earned Value: Graphical Representation

TIME

COST

ScheduleVariance

(SV)

CostVariance

(CV)

ACTUAL

PLAN

EARNVALUE

Estimate at Completion

(EAC)

Budget at Completion

(BAC)

Projection of schedule delay at completion

Projection of cost variance at completion

(VAC)

TODAY(Reporting day)

BAC

EAC

AC

EV

PV

Project is over budget &

behind schedule Ahmad Maharma PMBOK 5th Edition 786

Earned Value Management

Image captured from Practice Standard for Earned Value Management, PMI © 2005

EV can be calculated by (%progress) x (planned man-days)


Summary of Terms and Formulas

788

TERM DESCRIPTION INTERPRETATION

PV Planned ValueHow much work should be done (What you

planned to do)

EV Earned ValueHow much work is done on a budgeted basis

(What you’ve actually done)

AC Actual CostHow much did the “is done” work cost (What you

Actually spent)

BAC Budget at Completion How much you budgeted for the total project.

EAC Estimate at Completion What you currently expect the total project to cost

ETC Estimate to CompleteFrom a given point in time, what you currently

expect the remaining cost to be

VAC Variance at Completion How much over or under budget you expect to be


Summary of Terms and Formulas

789

NAME FORMULA INTERPRETATION

Cost Variance

(CV)EV-AC Negative means over budget, Positive means under budget

Schedule

Variance (SV)EV-PV Negative means behind schedule, Positive means ahead of schedule

Cost

Performance

Index (CPI)

EV/AC You are getting X cents out of every $1

Schedule

Performance

Index (SPI)

EV/PV You progressing at X% of the rate originally planned

Estimate at

Completion

(EAC)

BAC/CPI or AC

+ ETCWhat, at this time, you expect the total project to cost

Estimate to

Completion

(ETC)

EAC - AC What, at this time, you expect the remaining scope to cost

Variance at

Completion

(VAC)

BAC - EACWhat, at this time, you expect the final project cost to be more or less

then budgeted.


Present Value (PV) andNet Present Value (NPV)

790

Present Value (PV) - means the value today of future cash flows or

costs

PV = FV/(1 + r)n

Net Present Value (NPV) - means the total benefits less the costs.

NPV is done by calculating the present value of all benefits and costs,

then subtracting the total benefits from the total cost.

Note: FV = Future value,

r = interest rate

n = number of time periods


Internal Rate of Return (IRR): Payback Period and Benefit Cost Ratio (BCR)

• Payback Period– number of time periods it takes to recover your

investment. The shorter time the better.

• Benefit Cost Ratio (BCR)– Compares the cost to the benefits on a project.

When dealing with multiple project options, you would select the project with the greatest BCR. BCR > 1 means benefits are greater than costs, BCR < 1 means costs are greater than benefits, and BCR = 1 means they are the same.


Earned Value Management• Method to measure project performance against scope, schedule

and cost baseline (performance measurement baseline)

• Interpretation of basic EVM performance measures

– Cost Performance Index (CPI)

– Schedule Performance Index (SPI)


Earned Value Technique

Terms and Formulas Definition

Earned Value (EV) As of today, what is the estimated value of the

work actually accomplished?

Actual Cost (AC) As of today, what is the actual cost incurred for

the work accomplished?

Planned Value (PV) As of today, what is the estimated value of work

planned to be done?

Cost Variance (CV)

= EV - AC

Negative is over budget

Positive is under budget

Schedule Variance (SV)

= EV - PV

Negative is behind schedule

Positive is ahead schedule

Cost Performance Index

(CPI) = EV/AC

We are getting $__ worth of work out of every

$1 spent. Are funds being used efficiently?

Schedule Performance

Index (SPI) = EV/PV

We are (only) progressing at __ percent of the

rate originally planed

Example

$100K

$200K

$300K

$100K – $200K

= ($100K)

$100K - $300K

= ($200K)

$100K/$200K

= 0.5 i.e. 50%

$100K/$300K

= 0.33 i.e 33%

Example:

Project Budget: $400K

Project Schedule: 4

months

At the 3 month

checkpoint:

Spent: $200K

Work completed: $100K

Revised Total Duration Baseline Duration/Schedule Performance Index4/0.33

= 12 monthsAhmad Maharma PMBOK 5th Edition 793

Exercise

Task Progress Cost spent

Side 1 ||||||||||||||||||||||||||||||||||||||||100% $1,200

Side 2 ||||||||||||||||||||||||||||||||||||||||100% $1,000

Side 3 ||||||||||||||||||||||||||||||75% $750

Side 4 ||||||||||||||||||||50% $500

Side 5 0% $0

Side 6 0% $0

You have a project to build a box. The box is six sided. Each side is to take one day

to build and is budgeted for $1000 per side. The sides are planned to be completed

one after the other. Today is the end of day three.

Using the following project status chart, calculate PV, EV, AC, BAC, CV, CPI, SV,

SPI, EAC, ETC, VAC.

Describe your interpretation based on the calculation!


Exercise SolutionParameter Calculation Result

PVEVACBACCVCPISVSPIEACETCVAC

Project is below/over budget?

Project is late/ahead schedule?

How much more money we need?


Exercise SolutionParameter Calculation Result

PV 1000 + 1000 + 1000 3000EV (100% x 1000) + (100% x 1000) + (75% x 1000) + (50% x 1000) 3025AC 1200 + 1000 + 750 + 500 3450BAC 6 x 1000 6000CV 3025 - 3450 -425CPI 3025 / 3450 0.88SV 3025 - 3000 25SPI 3025 / 3000 1.01EAC 6000 / 0.88 6818.18ETC 6818.18 - 3450 3368.18VAC 6000 - 6818.18 -818.18

over budget, getting 0.88 dollar for every dollar we spent,

ahead schedule, progressing 101% of the rate planned,

probably will spend $6818 at the end (estimation),

need $3368 to complete,

over budget at the end for about $818 (estimation)


Earned Schedule - An emerging EVM practice

• SPI($) – At project start SPI is reliable

– At some point SPI accuracy diminishes

– Toward the project end it is useless (SPI = 1 at project end)

– Doest not show weeks/months of schedule variance

• SPI(t)– Time based schedule measures

– Create a SPI that is accurate to the of the project

SV(t) = ES – AT

SPI(t) = ES / AT

• ES = Earned Schedule (Planned time)

• AT = Actual timeSee more resources about earned schedule at http://www.earnedschedule.com Ahmad Maharma PMBOK 5th Edition 797

EVM – Hints to remember

• EV comes first in every formula

• If it’s variance, the formula is EV – something

• If it’s index, EV / something

• If it relates to cost, use Actual Cost

• If it relates to schedule, use PV

• Negative numbers are bad, positive is good

Copied from Rita’s bookAhmad Maharma PMBOK 5th Edition 798

Earned Value Chart


Basic Principles of Cost Management

• Most members of an executive board have a better understanding and are more interested in financial terms than IT terms, so IT project managers must speak their language.

– Profits are revenues minus expenses.

– Life cycle costing considers the total cost of ownership, or development plus support costs, for a project.

– Cash flow analysis determines the estimated annual costs and benefits for a project and the resulting annual cash flow.


Cash Flow, Cost Baseline and Funding

801Time

Cu

mu

lative

Va

lue

s

Cost baseline

Expected Cash Flow

Funding

Extra

reserve at

end of

project



PMP®


Chapter 8: Quality / 8.3 Control Quality

Control Quality

The process of monitoring and recording results of executing the quality activities to assess performance and recommend necessary changes.

Quality control activities identify causes of poor process or product quality and recommend and/or take action to eliminate them.


Quality Control-Related Terms

Prevention (keeping errors out of the process) and inspection (keeping errors out of the hands of the customer).

Attribute sampling (the result either conforms or not) versus variable sampling (the result is rated on a continuous scale that measure the degree of conformity).

Special causes (unusual events) and common causes (normal process variation).

Tolerances (specified range of acceptable results) and control limits (range of process in control).


Control QualityPlan

Quality Management

Perform Quality

Assurance

ControlQuality


Control Quality

Seven basic Quality Tools

Statistical sampling

Inspection

Approved Change Requests Review

Quality Control Measurements

Validated Changes

Validated Deliverables



Change Requests




Quality Metrics

Quality Checklists

Work Performance data


Deliverables

Project documents




PMP®


Chapter 10: Communications / 10.3 Control communications

Control Communications

Monitoring & controlling communications throughout the entire project lifecycle to ensure the information needs of the project stakeholders are met.

It ensures an optimal information flow among all communication participants, at any moment of time.


Plan Communications Management

Plan Communications

Management


ControlCommunications


Control Communications

Information Management System

Expert Judgment

Meetings



Change Requests

Project Management Plan Update




Project Communications

Issue Log




PMP®


Chapter 11: Risks/ 11.6 Control Risks

Control Risks

The process of implementing risk response plans, tracking identified risks, monitoring residual risks, identifying new risks, and evaluating risk process effectiveness throughout the project.


Control Risks

It determines if:

Project assumptions are still valid.

Analysis shows an assessed risk has change or can be retired.

Risk Management policies and procedures are being followed.

Contingency reserves of cost or schedule should be modified in alignment with the current risk assessment.


Control Risks


Plan Risk Responses


RiskAnalysis

IdentifyRisks

Perform Qualitative

RiskAnalysis

Control Risks


Control Risks

Risk Register

ProjectManagement Plan


Performance Reports

Risk Reassessment

Risk Audits

Variance & Trend Analysis

Technical Performance Measurement

Reserve Analysis

Meetings



Change Requests

Project Management Plan updates



Risk Reassessment

Should be scheduled regularly.

Should be an agenda item at project team status meetings.


Risk Register Updates

Outcomes of risk reassessments.

Actual outcomes of risks and risk responses.



PMP®


Chapter 12: Procurement / 12.3 Control Procurement

Control Procurements

The process of managing procurement relationships, monitoring contract performance, and making changes and corrections as needed


Control Procurements-Highlights

Reviewing and documenting how a seller is performing or has performed to establish required corrective actions and provide a basis for future relationships with the seller

Managing contract related changes

When appropriate managing the contractual relationship with the outside buyer of the project.

Can include managing interfaces across providers.

For some organizations, might be separate from project organization. In this case a contract administrator on the project team reports to a different department.




Conductprocurements

ControlProcurements

CloseProcurements



• Contract change control system

• Procurement performance reviews

• Inspections and audits

• Performance reporting

• Payment systems

• Claims administration

• Records management system



Change Requests





Agreements





Procurement Performance Review

A structured review of seller’s progress to deliver project scope and quality within cost and on schedule, as compared to contract.

It can include a review of seller-prepared documentation and buyer inspections, as well as quality audits conducted during seller’s execution of the work.

Objectives are:

Identify performance success or failure.

Identify progress compared to contract statement of work.

Identify contract non-compliance to determine seller’s ability or inability to deliver.


Payment Systems

Processed by the “Accounts Payable” system of the buyer

After certification of satisfactory work by an authorized person on the project team.

All payments are made in accordance with contract terms.


Claims Administration

The process of documenting, processing, managing, and monitoring claims throughout the contract lifecycle, in accordance with terms of contract.

Contested changes and potential constructive changes are those requested changes where the buyer and seller cannot reach an agreement on compensation for the change.

If parties involved cannot resolve claims, it maybe handled in accordance with Alternative Dispute Resolution (ADR) or through negotiation.


Records Management System

Used by project manager to manage contract documents and records.

It consists of a specific set of processes, related control functions, and automation tools that are consolidated and combined into a whole, as part of the project management information system.

The system contains a retrievable archive of contract documents and correspondence.



PMP®


Chapter 13: Stakeholders/ 13.4 Control Stakeholders

Engagement

Control Stakeholder Engagement

The process of monitoring overall project stakeholders relationship and adjusting strategies and plans for engaging stakeholders.

It maintains and increases the efficiency and effectiveness of stakeholder engagement activities as the project evolves and its environment changes.



Information Management System

Expert Judgment

Meetings


Change Requests





Issue Log


Project Documents


PMBOK Reading

Chapter 3

Section 3.6

Chapter 4

Section 4.4, 4.5

Chapter 5

Section 5.5, 5.6

Chapter 6

Section 6.7

Chapter 7

Section 7.4

Chapter 8Section 8.3

Chapter 10

Sections 10.3

Chapter 11

Section 11.6

Chapter 12

Section 12.3

Chapter 13

Section 13.4



PMP®

Phase #5: PROJECT CLOSING

Closing Processes

Close ProjectOr Phase

Close Procurements

Integration Procurement



PMP®


Chapter 4: Integration / 4.6 Close Project or Phase

Close Project or Phase

The process of finalizing all activities across all of the Project Management Process Groups to formally complete the project or phase.

When closing a project, project manager reviews all prior information from the previous phase closure to ensure all project work is completed and that the project has met its objectives.

Formally establishes that the project or project phase is finished.

Also establishes the procedures to investigate and document the reasons for actions taken if a project is terminated before completion




Close Procurements




Completing the project scope doesn’t mean that the project is done.

What remains is:

Collecting & finalizing paperwork.

Verifying that project product is acceptable.

Transferring completed project product to those who will use it & return resources back.


Activities taken to Close a Project or Phase

Confirm all requirements are met.

Verify and document that project or phase meet exit criteria.

Obtain formal (legal) sign-off from customer.

Prepare final payments & cost reports.

Update records.

Finish lessons learned.


Activities taken to Close a Projector Phase (Cont’d)

Update procedures and templates based on lessons learned.

Analyze and document project success and effectiveness.

Prepare final report.

Index & archive records.

Measure customer satisfaction.

Hand off completed project deliverables to user(s)

Release resources


Final Report The final report is a report that summarizes what happened

in the project .

It is prepared for all projects , irrespective of weather the project has been completed successfully or not.

Includes:

Overview of the project.

Evaluation of the team's performance.

List of issues encountered.

A summary of what went right and what wrong.

Deviations from the original plan and budget.

Summary of major accomplishments.

Recommendations for future projects.

Is made available to the senior management, stakeholders, and other project managers.


How to Create a Final Report

Make a summary of how the project was carried out.

Evaluate the performance of the project team.

Explain the issues encountered.

Provide recommendations for future projects.

Example: A project to create a website for a client.

The final report includes:

An overview of the project's initial objectives and specification.

Key changes to the objectives.

Recommendations for similar projects.



PMP®


Chapter 4: Integration/ 4.5 Close Project or Phase


Expert Judgment


Meetings

Final product, service, or result

Organizational process assets updates

Project management plan

Accepted deliverables

Organizational process assets


Close procurements

The process of completing each project procurement.

It supports the “Close Project or Phase” process, since it involves verification that all work and deliverables were acceptable.


Close procurements

For all procurements and contracts.

Happens when:

A contract ends.

A contract is terminated before work completion.

All contracts must be closed, no matter what.

Closing a contract provides a formal written verification that work and deliverables were accepted.


Close Procurement Vs. Close a Project or Phase

Closing procurement occurs first.

Closing a project or phase maybe done at the end of project or phase, while closing a procurement happens at the end of the contract.

Closing contracts require more record keeping due to legal implications.



Close Procurements




Contract Terminations

Contracts are terminated usually by buyers due to:

Cause (seller doesn’t perform)

Convenience (work no more needed)

Contracts should have provisions for stopping work before completion.

Rights and responsibilities of parties in early termination are contained in a termination clause in the contract



PMP®


Chapter 12: Procurement / 12.4 Close Procurement

Close Procurements

Procurement Audits.

Procurement Negotiations

Records Management System

Closed Procurements

Organizational process assets updates

Project management plan

Procurement Document


Activities taken to Close a Procurement

Verify Product.

Close financial records.

Update records.

Prepare final contract performance report.

Close contract file.

Perform procurement audit.

Finalize lessons learned.

Final acceptance and closure.


Contents of Contract File

Contract.

Change requests.

Seller performance reports.

Financial information.

Inspection (audit) results.

Lessons learned.


PMBOK Reading

Chapter 4

Section 4.6

Chapter 12

Section 12.4



PMP®

PROFESSIONAL RESPONSIBILITY

Code of Ethics and Professional Conduct

Describes the expectations that we have of ourselves and our fellow practitioners in the global project management community

It articulates the ideals to which we aspire as well as the behaviors that are mandatory in our professional and volunteer roles


Purpose & Target Group

Purpose

Instil confidence in the project management profession

Help individuals become better practitioners

Target Group

All PMI members

All PMI credential holders

Individuals in the process of application for PMI credentials

PMI volunteers


Structure

4 Values

Responsibility

Respect

Fairness

Honesty

Each value has:

Mandatory Conduct

Aspirational Conduct


Mandatory Vs. AspirationalConduct

Mandatory

Establish firm requirements, and in some cases, limit or prohibit practitioner behavior.

Aspirational

Describe the conduct that we strive to uphold as practitioners

Although adherence to the aspirational standards is not easily measured, conducting ourselves in accordance with it is not optional

The conduct covered under the aspirational standards and conduct covered under the mandatory standards are not mutually exclusive


Responsibility

Definition

Our duty to take ownership for the decisions we make or fail to make, the actions we take or fail to take, and the consequences that result.


Responsibility-AspirationalStandards

We make decisions and take actions based on the best interests of society, public safety, and the environment

We accept only those assignments that are consistent with our background, experience, skills, and qualifications

We fulfill the commitments that we undertake – we do what we say we will do.

When we make errors or omissions, we take ownership and make corrections promptly.

When we discover errors or omissions caused by others, we communicate them to the appropriate body as soon they are discovered.

We protect proprietary or confidential information that has been entrusted to us


Responsibility – Mandatory Responsibility

We report unethical or illegal conduct to appropriate management and, if necessary, to those affected by the conduct.

We report unethical or illegal conduct to appropriate management and, if necessary, to those affected by the conduct.

We bring violations of this Code to the attention of the appropriate body for resolution

We only file ethics complaints when they are substantiated by facts.

We pursue disciplinary action against an individual who retaliates against a person raising ethics concerns.


Respect

Description

Our duty to show a high regard for ourselves, others, and the resources entrusted to us


Respect- Aspiriational Standard

We inform ourselves about the norms and customs of others and avoid engaging in behaviors they might consider disrespectful.

We listen to others’ points of view, seeking to understand them.

We approach directly those persons with whom we have a conflict or disagreement.

We conduct ourselves in a professional manner, even when it is not reciprocated.


Respect – Mandatory Standard

We negotiate in good faith.

We do not exercise the power of our expertise or position to influence the decisions or actions of others in order to benefit personally at their expense.

We do not act in an abusive manner toward others.

We respect the property rights of others.


Fairness

Description

Our duty to make decisions and act impartially and objectively. Our conduct must be free from competing self interest, prejudice, and favoritism.


Fairness- AspirationalResponsibility

We demonstrate transparency in our decision-making process.

We constantly reexamine our impartiality and objectivity, taking corrective action as appropriate.

We provide equal access to information to those who are authorized to have that information.

We make opportunities equally available to qualified candidates


Fairness – Mandatory Responsibility

We proactively and fully disclose any real or potential conflicts of interest to the appropriate stakeholders.

When we realize that we have a real or potential conflict of interest, we refrain from engaging in the decision-making process or otherwise attempting to influence outcomes

We do not hire or fire, reward or punish, or award or deny contracts based on personal considerations, including but not limited to, favoritism, nepotism, or bribery.

We do not discriminate against others based on, but not limited to, gender, race, age, religion, disability, nationality, or sexual orientation.


Honesty

Description

Our duty to understand the truth and act in a truthful manner both in our communications and in our conduct.


Honesty – AspirationalResponsibility

We earnestly seek to understand the truth.

We are truthful in our communications and in our conduct.

We provide accurate information in a timely manner.

We make commitments and promises, implied or explicit, in good faith.

We strive to create an environment in which others feel safe to tell the truth.


Honesty – Mandatory Standard

We do not engage in or condone behaviour that is designed to deceive others, including but not limited to:

Making misleading or false statements

Stating half-truths,

Providing information out of context, or

withholding information that, if known, would render our statements as misleading or incomplete.

We do not engage in dishonest behaviour with the intention of personal gain or at the expense of another



PMP®

EXAM PREPERATION

GETTING STARTED

The Certificates

About the exam

Applying to take the exam

Preparing for the exam

How does the exam look like

Taking the exam

Take a sample exam


THE CERTIFICATES

There are a number of project management certificates, taking this course qualifies you to take one of the following certificates:

Project Management Professional – PMP®

Certified Associate in Project Management – CAPM®


THE CERTIFICATES

Code of

Conduct

Time of

ExamQuestions

PM

Experience

PM

TrainingEducationCertificate

Yes3 hours150None 25 hoursBachelor

Degree CAPM

Yes 4 hours 200

4500 hour

(3 years) 35 hours

Bachelor

Degree PMP


ABOUT THE EXAM

% of Questions# of QuestionsPMI Process

13%26Initiation

24%48Planning

30%60Execution

25%50Control

8%16Closing


ABOUT THE EXAMS

PMI exams require certain procedures to qualify for taking the exam – eligibility

Eligibility letters can be acquired online.

The exam measures the following:

Project Management knowledge

Practical experience

Common sense

Ethics & principles


Applying for the Exam

Apply for the Eligibility Online

Visit PMI’s website

https://certification.pmi.org/

Log in using username and password

You have 3 months to complete the process

Fill all the required information:

Address

Education

Experience

Details of completed projects

Contact Information for Managers and Supervisors

Project management education


Applying for The Exam

In the experience section: fill in all the information about your project management related experience.

Project Title

Role in project

Primary Industry

Time spent on the project

Summary of tasks

Only Project-related work counts, operational work is not considered part of the required experience.


Contact Prometric® Center to schedule for the exam.

Specify a time, date, and exam center

Make sure you know where the exam center is ahead of time, visit before the day of the exam

Applying for The Exam


Application Rules A new and improved online application.

Collection of project contact information.

Instant audit notification.

One-year eligibility period.

Limit on the number of times candidates will be permitted to test. Candidates will have three opportunities to take and pass the PMP® examination within their one-year eligibility period. If candidates do not succeed on the third attempt, candidates will have to wait one year from their third unsuccessful attempt before being permitted to test again.


Few Tips

The exam measures the capability of using knowledge and experience in real life, therefore most of the questions are situational

Only few questions require that you MEMORIZE the inputs, outputs, tools and techniques.

Don’t waste your time trying to memorize inputs, outputs, tools and techniques. It’ll do you no good.

Time of the exam is enough, no one ever complained about time.

You might use the same data for more than one question


Expect 18-22 formula based questions (CPM, EVM and others)

The length of the question does not indicate that it’s a difficult one. And the length of the answer does not necessarily indicate that it’s the right one.

Many questions have more than one right answer, you have to choose the BEST.

A right statement does not make it the right answer to the question.

The questions jump from one topic to another without a specific sequence.

Few Tips


TYPES OF QUESTIONS

Situational questions

You received Notification that a major item you are purchasing for a project will be delayed, what is the BEST Thing to do?

Ignore it, it will go away

Notify your boss

Let the customer know about it and talk over options

Meet with the team to identify alternatives.


TYPES OF QUESTIONS

Two or more right answers

Extraneous information

Questions using made up terms

Where understanding is important

New approach to known topic

Questions with more than one item in each choice

Excessively wordy questions


Extraneous information

Your company is a major manufacturer of doors, and has received numerous awards for quality. As the head of manufacturing department, you have 230 people reporting to you on 23 different projects. Experience shows that each time you double the production of doors, unit costs decrease by 10 percent. Based on this, the company determines that production of 3,000 doors costs $ 21,000. This case illustrates:

Learning cycle

Law of diminishing return

80/20 rule

Parametric estimating


Questions Using Made Up Terms

A form of project organization where power is evenly shared between the functional manager and the project manager is called:

A tight matrix

A weak matrix

A balanced matrix

A strong matrix


Where Understanding is Important

The process of decomposing deliverables into smaller, more manageable components is complete when:

Project justification has been established

Change requests have occurred

Cost and duration estimates can be developed for each work element at this detail

Each work element can be found in the WBS Dictionary


New approach to know topic

In a matrix organization, information dissemination is MOST likely to be effective when:

Information flows both horizontally and vertically

The communications flows are kept simple

There is an inherent logic in the type of matrix shown

Project managers and functional managers socialize


Questions with more than one item in each choice

The seller on the project has presented the project manager with a formal notification that the seller has been damaged by the buyers activities. The seller claims that the buyer’s slow response to sending the seller approvals has delayed the project, and has caused the seller unexpected expense. The FIRST things the project manager should do are:

Collect all relevant data, send the data to the company lawyer, and consult with him about legal actions

Review the contract for specific agreed-upon terms that relate to the issue, see if there is a clear response, and consult with the lawyer if needed

Review the statement of work for requirements, send a receipt of claim response, and meet to resolve the issue without resorting to legal actions if possible

Hold a meeting with the team to review why the acceptances have been late, make a list of the specific reasons, and resolve those reasons


STUDYING FOR THE EXAM

Reading the material

Reviewing PMBOK® - Project Management Body of Knowledge

Processes in each knowledge area

Inputs, tools & techniques, outputs of processes

Review code of professional conduct

Solve a lot of practice questions


STUDYING FOR THE EXAM

Rule of Threes

Test-taking mode

Step-by-step

Take a comprehensive exam

Go back to the areas you scored less in, and study them in concentration

Review other areas

Review answers

Retake the entire exam


BEFORE THE EXAM

Review material

Eat a good meal, see some TV, go out with friends

Get a good night sleep (don’t study material, don’t stay up all night)

Take the day of the exam off work (or at least the morning)

Eat a good meal, drink some coffee, juice.


THE DAY OF THE EXAM

Schedule the exam between 9-10

Wear comfortable cloths, shoes

Leave the house at least 45 minutes before the exam starts

Take two Identification cards and the eligibility letter

No calculator, no cell phone, no review notes, no smoking

Take a snack (they might allow it)


DURING THE EXAM

Watch the time regularly

Skip questions you can’t answer instantly

Use “Mark” function

At the middle mark of the exam, stand up, and do some exercise

Use your time wisely

Control your frustration



For more information do not hesitate to contact me.

Ahmad H. Maharma

Master Of Engineering Management

PMP®,RMP®

Ramallah, Palestine

E-Mail: [email protected]

www.linkedin.com/in/ahmadmaharma/

mailto:[email protected]

http://www.linkedin.com/in/ahmadmaharma/

Project Management Professional (PMP)

Education

Transcript of Project Management Professional (PMP)