PMP Notes5 Goods

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PMP Project Management Professional Course Ware

Spearhead EduOnline Pvt Ltd.
PROJECT MANAGEMENT
&
PMI
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1. Introduction to PMP
2. Seven steps in the Journey towards PMP
3. Introduction to Project
List of Topics
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INTRODUCTION TO PMP

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References
A Guide to Project Management Body of Knowledge, Fifth Edition,
Project Management Institute, Pennsylvania
S. Chandramouli. PMP Certification Excel with Ease. PEARSON
Publication., Second Edition.
Jack R. Meredith, Samuel J. Mantel, Jr. Project management A
Managerial Approach. John Wiley & Sons, Fourth Edition, 2000.
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Purpose of Training
Prepare you for the PMP Certification Examination
Provide you with the knowledge needed to successfully complete the
exam and also to manage the Projects successfully
Provide practical hints for answering questions correctly
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PMI History
Started in 1969 with few Project Managers
First Edition of A Guide to PMBOK in 1996
Second Edition of A Guide to PMBOK in 2000
Third Edition of A Guide to PMBOK in 2004
Fourth Edition of A Guide to PMBOK in 2009
Fifth Edition of A Guide to PMBOK in 2012
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PMI Activities
REP Program Training orgs/Courses
Online Communities
Professional Standards (PMBOK, OPM3,PMCDF)
Educational Seminars/ Conferences
Professional Certifications
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PMP Certification
PMI provides certification as a Project Management Professional (PMP)
PMP means: sufficient project experience, agreed to follow a code of
ethics, passed PMP exam
Number of PMPs community is growing very fast.
Other groups, like the Gartner Group and the Singapore Computer
Society, have their own IT PM Certification programs
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What Certifications PMI offers?
Program Management Professional (PgMP)
Agile Certified Professional (ACP)
Project Management Professional ( PMP)
PMI Risk management professional (PMI-RMP)
PMI Scheduling Professional ( PMI-SP)
Certified associate in project Management (CAPM)
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Advantage PMP
Demonstrates your seriousness in the profession.
Certifies that you have FORMAL knowledge of the methodology of PM,
rather than just relying on hard work and organization skills.
Distinguishes you from other PM candidates.
Screening tool for companies looking for PM candidates
Average PMPs gets paid higher than non-PMPs
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The PMP Certification Says
I am:
o Able
o Capable
o Trained
o Interested
o Up-to-date
The PMP offers external validation beyond experience
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SEVEN STEPS IN THE JOURNEY
TOWARDS PMP

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Seven
steps in
the
journey
towards
PMP
PMP
Become a PMI member. Cost 129 US $.
Time span : On line
1
Mandatory training/PM education for
35 hours of credits (chapter, university, institute or REP)
2
Submit PMP Examination Application.
Cost : 405 US $ Time : Two weeks
3
Receipt of PMP examination eligibility letter
from PMI (Time : two weeks)
4
Prepare for the exam
Time : 1 to 3 months
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Contact local Prometric center to
fix up examination date
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Execute, Succeed & Celebrate
Time : 4 Hours
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R
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F
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C
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B
O
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Step 1-PMI Membership and Benefits
Reconfirm the need to become a PMP
If yes, become a PMI member by simple online enrollment at:
www.pmi.org
PMI membership is not mandatory for the PMP certification, but
recommended. You get monthly magazine - PM Network, a quarterly
research journal and monthly news letter (for a year) + discounts on
PMI books
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Step 1-PMI Membership and Benefits Cont.
Membership is annual (129US $ for the initial membership and 119 US
$ for renewals)
Keep the e-receipt for reimbursement purpose
Also become the member of your nearest local chapter for assistance in
PMP certification. Add local chapter subscription to the initial
membership enrollment
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Step 2-Mandatory Training/PM Education
Mandatory to have 35 hours of formal PMBOK education covering all
process groups
You can attend classroom training or complete 35 hours trough e-
learning
While submitting the application kit for PMP exam, the details of this
training need to be furnished
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Program Management Professional (PgMP
SM
) Examination Fees
Examination and Renewal Fees
Member Nonmember
Computer-based Testing $1,500.00(US)/ 1,250.00 $1,800.00(US)/ 1,500.00
Paper-based Training $1,200.00(US)/ 1,000.00 $1,500.00(US)/ 1,250.00
Re-examination Computer-based $500.00(US)/ 420.00 $600.00(US)/ 500.00
Re-examination Paper-based $400.00(US)/ 335.00 $500.00(US)/ 420.00
Multi-rater assessment Retake $400.00(US)/ 335.00 $500.00(US)/ 420.00
Project Management Professional (PMP
) Examination Fees
Member Nonmember
Computer-based Testing $405.00(US)/ 340.00 $555.00(US)/ 465.00
Paper-based Training $250.00(US)/ 205.00 $400.00(US)/ 335.00
Re-examination Computer-based $275.00(US)/ 230.00 $375.00(US)/ 315.00
Re-examination Paper-based $150.00(US)/ 125.00 $300.00(US)/ 250.00
Certified Associate in Project Management (CAPM
) Examination Fees
Member Nonmember
Initial Certification Fee $225.00(US)/ 185.00 $300.00(US)/ 250.00
Re-examination Fee $150.00(US)/ 125.00 $200.00(US)/ 170.00
Renewal Fees
Member Nonmember
Certification Renewal Fee $60.00(US) $150.00(US)
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Step 3-Submit PMP Examination Application
Fill up online application for examination registration. Before filling up the
application, keep the following details:
o A detailed split of for the 4500 hours of PM experience project wise (name of
the project, reporting line, brief description and hours split up according to
initiation/planning/execution/monitoring & controlling and closure)
o PMI membership ID
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Application fee is 405 US$ for PMI Member
Keep the e-receipt for reimbursement purpose
You can save the information in-between and continue later also
After submission you will get acknowledgement through email
Step 3-Submit PMP Examination Application
Contd.
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Step 4 Receipt of PMP Examination Eligibility
Letter from PMI
After submitting the application within a week you get the eligibility
letter through e-mail
This letter is valid for 12 months to appear for the examination
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Step-5 Prepare for the Exam
Key step: requires substantial TIME investments from you (100 150
Hours)
Prepare systematically through various references
Main focus should be on PMBOK with supporting info from other
references
Map with real life experiences while reading. The questions will not be
direct. Most questions focus on ability of Project Manager to take a
decision in a situation
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How to Prepare for the Exam
Read the PMBOK (at least thrice) and pay special attention to the Glossary
Buy some PM reference and study books and/or materials, e.g.,
o PMP Certification Excel with ease by S. Chandramouli
Take as many practice exams as you can get your hands on (some are available
through the internet)
Take a refresher class
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Step-6 Contact local Prometric center and fix up
examination date
When confident for examination, contact the nearest Prometric center and fix
up appointment for examination (10-15 days)
For details about the location and other details in India, call: 91-124 514 7700
Examination centers are available at the following locations
o AHMEDABAD, ALLAHABAD, BANGALORE
o CALCUTTA, CHENNAI, HYDERABAD
o MUMBAI, NEW DELHI, TRIVANDRUM
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Step-7 Execute, Succeed and Celebrate
Examination is for four hours, to answer 200 questions
Out of 200 questions, 25 questions will be for pretest and will not be
included in your score
To pass you must get 106 correct out of 175 score able questions
No negative marks
The result will be announced soon after the exam (online)
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Execute, Succeed and Celebrate Contd.
You can go back to questions that are giving you trouble so skip over them
(mark them for Review Later) and answer the ones you know the answer to
first. Sometimes a subsequent question or answer can jog your memory! Two
ways to review later:
o Take your best guess and mark for later review (best) or
o Leave blank and call up unanswered questions later.
o You get your score immediately after completing the test.
o Certification documentation will be sent to you within 3 to 4 weeks.
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Tips/Suggestions
Do all the sample exams that you can find! Shoot to score 90% or better on
them.
STUDY! Allow 40 to 80 hours to read the PMBOK and other study material.
Hint:
o Form a self-study group and take advantage of the groups synergy to take sample
tests together.
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Tips/Suggestions Contd.
Remember it is a pass-fail exam. You have to get the passing Score
and no one but you ever knows your score! So dont worry about not
knowing everything about everything!
RELAX! Taking the test is stressful! But you have 240 minutes to
answer 200 questions. (And an additional 15 minutes at beginning for a
demonstration of the testing software is also allocated.) Most people
finished the test in two and a half hours so you have plenty of time.
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Program Overview
Introduction and Project Management Framework
Project Management Process overview
o Initiation
o Planning
o Execution
o Monitoring and Control
o Closure
Project Manager tasks, roles and responsibilities
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INTRODUCTION TO PROJECT
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What is a Project
A temporary endeavor undertaken to create a unique product or service
Temporary Has a definite beginning and end, not an
on-going effort.
Ceases when objectives have been attained.
Team disbanded upon completion.
Unique The product or service is different in
some way from other products or services.
Product characteristics are progressively
elaborated.
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Progressive Elaboration
Progressive elaboration
o Developing in steps; and
o Continuous improvement
Project scope will be broadly described early in the project and made more
explicit and detailed as the project team develops a better and more
complete understanding of the objectives and deliverables.
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Project Vs.. Operation
Operation
Ongoing
Repetitive
People Performs
Limited Resources
Planned, Executed and
Controlled
Common Characteristics
Project
Temporary
Unique
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Projects Vs.. Operational Work
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Projects and Strategic Planning
Projects are a means of organizing activities that cannot be addressed
within the organizations normal operational limits
Projects are often utilized as a means of achieving an organizations
strategic plan, whether the project team is employed by the organization
or is a contracted service provider
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Projects and Strategic Planning Contd.
Strategic considerations
o A market demand
o An organization need
o A customer request
o A technological advance
o A legal requirement
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Project Management
Project Management is the application of knowledge, skills, Tools and Techniques
to project activities in order to meet project requirements
Project Management is accomplished through the application and integration of
PM processes of initiation, planning, executing, monitoring and controlling, and
closing
The project manager is the person responsible for accomplishing the project
objectives
Source: A Guide to Project Management Body of Knowledge, fifth Edition, Project Management Institute, Pennsylvania, USA.
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Managing a Project
Includes:
o Identifying requirements
o Establishing clear and achievable objectives.
o Balancing the competing demands for quality, scope, time and cost.
o Adapting the specifications, plans, and approach to the different concerns
and expectations of the various stakeholders.
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Understanding Project Management Environment
Cultural and social environment. The team needs to understand how the
project affects people and how people affect the project.
International and political environment. Some team members may need to
be familiar with applicable international, national, regional, and local laws and
customs, as well as the political climate that could affect the project.
Physical environment. If the project will affect its physical surroundings, some
team members should be knowledgeable about the local ecology and physical
geography that could affect the project or be affected by the project.
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Enterprise Environmental Factors
It refers both internal and External environmental factors that surround
or influence Project Success
These factors may come from any or all of the enterprise involved in
the Project
It may have Positive or negative influence on the outcome of the
Project
They are considered as input to most of the Planning process
Example : Infrastructure , Existing human resources , Organization Culture
, structure, Process, Political Climate, Commercial databases.
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General Management Knowledge and Skills
Financial management and accounting
Purchasing and procurement
Sales and marketing
Contracts and commercial law
Manufacturing and distribution
Logistics and supply chain
Strategic planning, tactical planning, and operational planning
Organizational structures, organizational behavior, personnel administration,
compensation, benefits, and career paths
Health and safety practices
Information technology.
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Interpersonal Skills (Soft skills)
Effective communication. The exchange of information
Influencing the organization. The ability to get things done
Leadership. Developing a vision and strategy, and motivating people to achieve that
vision and strategy
Motivation. Energizing people to achieve high levels of performance and to overcome
barriers to change
Negotiation and conflict management. Conferring with others to come to terms with
them or to reach an agreement
Problem solving. The combination of problem definition, alternatives identification and
analysis, and decision-making.
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Advantages of Using Formal Project Management
Better control of financial, physical, and human resources
Improved customer relations
Shorter development times
Lower costs
Higher quality and increased reliability
Higher profit margins
Improved productivity
Better internal coordination
Higher worker morale
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Benefits of Project Management for the
Organization
Identifies problem areas
Clarifies project goals and project scope
Quantifies project risk
Constant monitoring and corrections
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Benefits of PM for the Individual
Provides future source of company leaders
Creates high visibility of project results
Enhances both professional and personal
growth opportunities
Builds ones reputation and network
Develops portable skills and experience
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A good Project Manager
Spends time upfront understanding project and getting commitment from
stakeholders
Communicates with all stakeholders openly and honestly
Explains and gets agreement from people on what they need to do and when
Listens
Understand scope and objectives and keeps them in mind when making
decisions
Builds the team and makes the most of members skills
Keeps Project Team involved and motivated
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A good Project Manager Contd.
Plans thoroughly keeps workload, resources and timescales in balance at all times
Is accountable for all aspects of the project
Makes decisions based on the information available
Puts the project before any other allegiances
Is honest with themselves and others
Uses common sense
Is prepared to take calculated risks
Is a good negotiator
Anticipates, prioritizes and addresses potential and real problems as soon as they
become apparent
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A Guide to PMBOK Fifth Edition - Knowledge Areas
Project Integration Management
Project Scope Management
Project Time Management
Project Cost Management
Project Quality Management
Project Human Resource Management
Project Communications Management
Project Risk Management
Project Procurement Management
Project Stakeholder Management
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Program
A Program is a group of Projects managed in a coordinated way to obtain
benefits not available from managing them individually. Programs also
includes some elements of ongoing operations.
Source: A Guide to Project Management Body of Knowledge, Fifth Edition, Project Management Institute, Pennsylvania, USA.
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Project Portfolio Management
A Portfolio refers to a collection of Projects or Programs and other work that are
grouped together to facilitate effective management of that work to meet
strategic business Objectives.
Source: A Guide to Project Management Body of Knowledge, Fifth Edition, Project Management
Institute, Pennsylvania, USA.
50
Organizational Project
Management
PROJECTS PROGRAMS PORTFOLIOS
Scope
Projects have defined objectives.
Scope is progressively elaborated
throughout the project lifecycle.
Programs have a larger scope
and provide more significant
benefits.
Portfolios have an
organizational scope that
changes with the strategic
objectives of the
organization.
Change
Project managers expect change
and implement processes to keep
change managed and controlled .
Project managers expect change
from both inside and outside
the program and are prepared
to manage it.
Portfolio managers
continuously monitor
changes in the broader
internal and external
environment.
Planning
Project managers progressively
elaborate high-level information
into detailed plans throughout the
project life cycle.
Program managers develop the
overall program plan and create
high-level plans to guide
detailed planning at the
component level.
Portfolio managers create
and maintain necessary
processes and
communication relative to
the aggregate portfolio.
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PROJECTS PROGRAMS PORTFOLIOS
Management
Project managers manage the project
team to meet the project objectives.
Program managers manage the
program staff and the project
managers; they provide vision and
overall leadership.
Portfolio managers may manage or
coordinate portfolio management
staff, or program and project staff
that may have reporting
responsibilities into aggregate
portfolio.
Success
Success is measured by product and
project quality, timeliness, budget
compliance and degree of customer
satisfaction.
Success is measured by degree to
which the program satisfies the
needs and benefits for which it was
undertaken.
Success is measured in terms of
the aggregate investment
performance and benefit
realization of the portfolio.
Monitoring
Project managers monitor and control
the work of producing the products,
services or results that the project was
undertaken to produce.
Program managers monitor the
progress of the program component
to ensure the overall goals,
schedules, budget and benefits of the
program will be met .
Portfolio managers monitor
strategic changes and aggregate
resource allocation, performance
results and risk of the portfolio.
Organizational Project
Management-Contd.
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Project Management Office (PMO)
A Project Management Office is an organizational unit to centralize and
coordinate the management of projects under its domain
PMOs can operate on a continuum, from providing project
management support functions in the form of training, software,
standardized policies and procedures, to actual direct management and
responsibility for achieving the project objectives
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Standard Vs.. Regulation
A standard is a document established by consensus and approved by a
recognized body that provides, for common and repeated use, rules,
guidelines or characteristics for activities or their results, aimed at the
achievement of the optimum degree of order in a given context.
A regulation is a government-imposed requirement, which specifies
product, process or service characteristics,
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PM Plan Vs.. Project Documents
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END OF THE SESSION
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PROJECT LIFE CYCLE AND
ORGANIZATION CONTEXT
57
List of Topics
1. Project Lifecycle
2. Models of Project Lifecycle
3. What Helps Projects Succeed?
4. Organizational Influences
58
PROJECT LIFECYCLE
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Projects cannot be run in Isolation
Projects must operate in a broad organizational environment
Project managers need to take a holistic or systems view of a project
and understand how it is situated within the larger organization
Senior managers must make sure projects continue to support current
business needs
60
Project Life Cycle
Collection of project phases
Serves to define the beginning and end of a project
Helps to define the processes for a specific project product
Top management is responsible for the periodic review of a project.
This should be accomplished, at a minimum, at the completion of
each life-cycle phase.
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Project Life Cycle Contd.
Defines
o What technical work to do in each phase
o When the deliverables are to be generated in each phase and how each
will be reviewed, verified and validated
o Who is involved in each phase
o How to control and approve each phase
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Project Lifecycle Characteristics
Projects vary in Size and Complexity. All Projects can be mapped to the following
Life Cycle Structure
1. Starting the Project
2. Organizing and preparing
3. Carrying out the Project work , and
4. Closing the Project
This generic Life Cycle structure is often referred to when communicating with
upper management or other entities less familiar with the details of the Project
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Project Lifecycle Characteristics-Contd.
Cost and staffing levels
Risk and uncertainty
Stakeholders ability to influence
Cost of changes
Probability of completing the project
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Why Project Phases?
To provide appropriate link to
ongoing operations of performing
organizations for Resource
requirements, Funds requirements
and common functionalities like-
Purchase, Stores, Administration, HR
etc.
Projects are
Unique
Phasing
facilitate
better
Management &
Control
Projects
involves
Uncertainty
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Need for Phases in Project Life Cycle
Each phase gives a tangible and verifiable work product
Projects are divided into phases for better management and control
At the end of each phase, stakeholders can
o Decide if project should continue
o Detect and correct errors cost effectively
These points are Phase Exits, Stage Gates or Kill Points
66
Project Governance across the life Cycle
Project Governance provide comprehensive and consistent method of
controlling the Project and ensuring the success
Phase structure provides formal basis for Control
A Phase end review can achieve the combined goal of obtaining
authorization to close the current phase and start the subsequent one
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Phase to Phase relationship
There are 3 different types of Phase to Phase relationship
1. Sequential Relationship
2. Overlapping Relationship (may increase Risk and result in Rework)
3. An iterative Relationship (useful in largely undefined , uncertain or rapidly
changing environments such as Research)
For multiphase Projects more than one relationship can occur during the Project
Life Cycle
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MODELS OF PROJECT
LIFECYCLE
69
Waterfall Model
Requirements
Design
Coding
Testing
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Iterative Model
Requirements
Design
Coding
Testing
Requirements
Design
Coding
Testing
Requirements
Design
Coding
Testing
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Incremental Model
Systems Analysis
Design
Plan and Budget
Release Systems Analysis Build Test
Design
Plan and Budget Build Test Release
Project
Completion
Project
Commencement
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WHAT HELPS PROJECTS
SUCCEED?
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What helps Projects Succeed?
According to the Standish Groups report CHAOS 2001: A Recipe for Success, the
following items help IT projects succeed, in order of importance:
Executive support
User involvement
Experience project manager
Clear business objectives
Minimized scope
Standard software infrastructure
Firm basic requirements
Formal methodology
Reliable estimates
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Predictive and Adaptive
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Project Stakeholders
Project stakeholders are individuals and organizations who are actively
involved in the project, or whose interests may be positively or negatively
affected as a result of project execution or successful project completion.
Source: A Guide to Project Management Body of Knowledge, Fifth Edition, Project Management
Institute, Pennsylvania, USA.
76
Project Stakeholders Contd.
Project Manager
Customer: Individual or Org that will use the project's product
Performing organization
Project team members
Sponsor
Shareholders
Govt./statutory agencies
Suppliers and contractors
Media, general public and society at large
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Identifying Stakeholders
It is a Continuous Process and difficult
Understanding their degree of influence on the Project is critical
An important part of a Project managers responsibility is to manage
stakeholder expectations
Stakeholders are often have very different and Conflicting Objectives
Project manager occupies the center of interactions between
stakeholders and the Project itself
78
Project Stakeholders
Managing stakeholders expectations is very difficult because stakeholders
often have very different objectives that may come into conflict.
For example, a customer wants to set up a process industry at a close proximity
of a city. Even though they satisfy the pollution control norms some lobbying
organization may not be willing to accept the proposal. Public may have a mixed
opinion. It is a challenge for the project manager to integrate the expectations of
all the stakeholders to a common platform.
79
Recognize the Importance of Project Stakeholders
Recall that project stakeholders are the people involved in or affected
by project activities
Project managers must take time to identify, understand, and manage
relationships with all project stakeholders
Senior executives are very important stakeholders
80
Skills Project Managers Need
Communication
Organizational
Budgeting
Problem solving
Negotiation and influencing
Leading
Team building
81
ORGANIZATIONAL INFLUENCES
82
Organizational Influences
On micro level, virtually all organizations are either marketing-,
engineering, or manufacturing-driven. But on a macro level, organizations
are either project- or non-project-driven.
Not all companies need project management, Ex slow evolving technology
(cement, steel)
Some companies can do with informal project management
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Organizational Influences-Contd.
Organizations can be defined as groups of people who must coordinate
their activities to meet Organizational objectives.
Organizational structures are dictated by such factors as technology and
its rate of change, complexity, resource availability, products and/or
services, completion and decision making requirements.
There is no such thing as a good and bad organizational structure; there
are only appropriate or inappropriate ones.
84
Forms of Organization
Functional
Projectized
Matrix
o Weak
o Balance
o Strong
85
Functional, Project, & Matrix Organizational
Structures
86
PM Framework
Weak Matrix Organization
87
PM Framework - Contd.
Strong Matrix Organization
88
PM Framework - Contd.
Balanced Matrix Organization
89
Functional Organization Potential Advantages
Easier budgeting and cost control are possible
Clear reporting relationships and good control over personnel
Communication channel are vertical and well established
Highly specialized & drive for technical excellence
Specialist can be grouped to share knowledge and responsibility.
Clear career path
90
Functional Organization Potential Issues
No one individual is directly responsible for the total project (i.e. no
formal authority; committee solutions)
Does not provide the project-oriented emphasis necessary to
accomplish project tasks
Response to customer need is slow
Hierarchical decision and communication processes
Decisions normally favor the strongest functional group
Multiple projects compete for limited resources and priority.
91
Matrix Organization Potential Advantages
The project manager maintains maximum project control (through the line
managers) over resources
Policies and procedures can be set up independently for each project
PM has the authority to commit company resources
Rapid responses are possible to changes, conflict resolution, and project needs (as
technology or schedule)
A functional organizations exists primarily as support for the project
Each person has a home after project completion. People are susceptible to
motivation and end - item identification
92
Matrix Organization
Potential Advantages Contd.
As key people can be shared, the program cost is minimized
A strong technical base can be developed, and much more time can be
devoted to complex problem solving
Knowledge is available to all projects on an equal basis
Conflicts are minimized and those requiring hierarchical referrals are more
easily resolved
There is a better balance among time cost, and performance
Authority and responsibility are shared
Stress is distributed among the team (and the functional managers)
93
Matrix Organization Potential Issues
Multidimensional information and work flow
Dual reporting leading to difficulty in monitoring and control
Potential for continuous conflict and conflict resolution
Each project organization operated independently. Care must be taken
that duplication of efforts does not occur
Employees and managers are more susceptible to role ambiguity than
in traditional form
More effort and time are needed initially to define policy and
procedure, compared to traditional form
94
Project-Based Organization Potential Advantages
Provides complete line authority over project
A focal point is developed for out of company customer relations
Strong communication channel
Flexibility in determining schedule, cost and performance
Interface management becomes easier as unit size is reduced
Personnel demonstrate loyalty to the project
Participants work directly for the PM. Unprofitable product lines are
easily identified and can be eliminated.
95
Project-Based Organization Potential Issues
Inefficient usage of resources
A tendency to retain personnel on a project long after they are needed.
Technology suffers because, without strong functional groups outlook
of future to improve companys capabilities for new programs would be
hampered
Control of functional (i.e. organizational) specialties require top level
coordination
Lack of career continuity and opportunities for project personnel
96
Organizational Process Assets
It also includes completed schedules, Risk data and earned Value data
Updating OPA is generally the responsibility of the Project team
members
It is generally Grouped into 2 Categories
1. Process and Procedure
2. Corporate Knowledge Base
97
END OF THE SESSION
98
PM PROCESSES AND
INTEGRATION MANAGEMENT
99
List of Topics
Project Management Process
Process Group Interactions
Project Integration Management (Knowledge Area)
Introduction to other Knowledge Areas
100
PROJECT MANAGEMENT
PROCESS
101
Major Sections
1. Project processes
2. Process groups
3. Process interactions
4. Customizing process interactions
5. Mapping of project management processes
102
Project Management Processes
Highlights
Number of processes 47
Number of Process Groups 5
Number of knowledge areas 10
103
Project Processes
Project are composed of processes
A process is a series of actions bringing about a result.
Project process generally falls into one of two major categories
Describe, Organize and complete the work of the project
Applicable to most of the projects, most of the time
Product oriented processes
Specify and creates the projects product
Generally referred as Project Life Cycle (PLC)
104
Project Processes
Project Management Process and Product oriented Process overlap and
interact throughout the Life cycle of the Project
Product Oriented Process should not be ignored by the Project Manager
PMI standardize the Project Management Process
105
Project Management Processes
Process is a set of interrelated actions and activities performed to achieve a
pre-specified product, service or result.
Each process is characterized by its inputs, Tools and Techniques that are
applied and the resulting outputs.
For a project to be successful, the project team must::
o Select appropriate processes required to meet the project objectives
o Use a defined approach that can be adopted to meet requirements
o Comply with requirements to meet stakeholder needs and expectations
and
o Balance the competing demands of scope, time, cost, quality, resources
and risk to produce the specified product, service or result.
106
PM Process Groups
Project Management Processes are organized into five process groups
Initiating Processes Defines and authorizes a project or a project phase
Planning Processes Establish the scope, Refine the objectives, define the course of action
required to attain the objectives that the project was undertaken to achieve
Executing Processes Complete the work defined in the project management plan to
satisfy the project specifications
Monitoring and Controlling Processes Track, review and regulate the progress and
performance of the project; Regularly monitor and measure project progress to identify
changes and initiate changes when required
Closing Processes Formalizes acceptance of the project or a phase and brings an orderly
end to the project
107
Process Groups
Process
Groups
Initiation
Planning
Executing
Monitoring
and
Controlling
Closing
108
Knowledge Areas
Integration
Management(6)
Scope
Management (6)
Time
Management (7)
Cost
Management (4)
Quality
Management(3)
Risk
Management (6)
Procurement
Management (4)
Communication
Management(3)
Stakeholder
Management (4)
HR
Management(4)
109
Distribution
110
PROCESS GROUP INTERACTIONS
111
Common Project Management Process Interactions
Source: A Guide to Project Management Body of Knowledge, Fifth Edition, Project Management Institute, Pennsylvania, USA.
Exit Phase/
End Project
Initiating
Process
Closing
Process
Planning Processes
Executing Processes
Monitoring &
Controlling Processes
Enter Phase/
Start Project
112
Common Project Management Process Interactions-
Contd.
The application of Project Management Process is both iterative and
Integrative
The integrative nature of Project Management requires the Monitoring
and Control Process Groups to interact with other Process groups
113
Overlap of Process Groups
Source: A Guide to Project Management Body of Knowledge, Fifth Edition, Project Management Institute,
Pennsylvania, USA.
Executing
Process
Group
Planning
Process
Group
Initiating
Process
Group
Time
Phase start Phase end
Closing
Process
Group
Monitoring
And Control
Process Group
114
Overlap of Process Groups
in Phases
Executing Process Executing Process Executing Process
Planning
Process
Planning
Process
Planning
Process
Closing
Process
Controlling
Process
Initiating
Process
Level
of
Activity
Phase Start Time Phase Finish
115
PM Processes Interactions
Exit Phase/
End Project
Initiating
Process
Closing
Process
Planning Processes
Executing Processes
Monitoring &
Controlling Processes
Enter Phase/
Start Project
116
Project Initiating Process
Project Initiating Process is about
Recognizing that a project or phase should begin and committing of
financial resources to do so
Project Phase Initiating Process (Project Phase) involves
Committing the organization to begin the next phase of the project
Initiating processes may be formal or informal
117
Project Initiating Process Group
118
Project Planning Process
Project Planning process involves processes performed to establish the total scope and
effort, define and refine the objectives, and develop the course of action required to attain
those objectives.
This process is of major importance because the project involves doing something which has
not been done before. It creates project management plan which is a key document
throughout the life of the project
As more and more information is gathered on the project, there is a need to revisit the
planning processes and this iterative detailing of the project management plan is called
rolling wave planning.
Highest number of Project Management Processes are with planning.
119
Project Planning Process -Contd.
120
Project Execution Process
Project Execution process involves those processes performed to complete the
work defined in the project management plan to satisfy the specifications
Involves coordinating people and resources as well as integrating and performing
the activities of the project in accordance with the project management plan.
During project execution, results may require planning updates and re-baselining.
This includes variance that may affect the project management plan.
121
Project Execution Process -Contd.
The dashed circular arrow indicates that the process is part of the project integration
management knowledge area. This knowledge area coordinates and unifies the processes from
other knowledge area.
Project Human Resource
management
Project Integration management
4.3
Direct and Manage
Project work
Project Procurement
management
12.2
Conduct Procurements
Project Quality management
8.2
Perform Quality
Assurance
Project Stakeholder management
13.3
Manage Stakeholder
Engagement
9.2
Acquire Project Team
9.3
Develop Project Team
9.4
Manage Project Team
Project Communications
management
10.2
Manage Communications
Project Human
Resource management
122
Project Monitoring and Control Process
Project Monitoring and control process involves those processes required to track, review and
regulate the progress and performance of the project, identify the areas where changes to the plan
are required and make those changes.
The project performance is observed and measured regularly and consistently to identify variances
and take corrective actions
The Monitoring and controlling process group includes:
Controlling changes and recommending preventive action in anticipation of possible problems
Monitoring the ongoing project activities against the project management plan and the project
performance baseline, and
Influencing the factors that could circumvent integrated change control so only approved
changes are implemented.
123
Project Monitoring and Control Process
-Contd.
Project Integration
management
4.4. Monitor and
control Project
Project Stakeholder
management
13.4 Control
Stakeholder
Management
Project Procurement
management
12.3 Control
Procurement
Project Stakeholder
management
13.3
Manage Stakeholder
Engagement
5.5 Validate Scope
5.5 Control Scope
management
10.35
Control Communications
Project Scope
Management
Project Risk
management
11.6 Control Risks
10.2
Manage Communications
Project Quality management
8.3 Control Quality
4.5 Perform
Integrated Change
control
The dashed circular arrow indicates that the process is part of the project integration management knowledge area. This knowledge area
coordinates and unifies the processes from other knowledge area.
124
Project Closing Process
Project Closing process involves those processes required to finalize all activities across all
project management groups to formally complete the project, phase or contractual obligations.
This process group verifies that the defined processes are completed within all the process
groups to close the project or a phase and formally establishes that the project or phase is
complete.
At project or phase closure, the following may occur
Obtain acceptance by the customer or sponsor
Conduct post project or phase-end review
Record impacts of tailoring to any process
Document lessons learned
Apply appropriate updates to organizational process assets
Archive all relevant project documents
Close out procurements.
125
Project Closing Process -Contd.
126
PROJECT INTEGRATION
MANAGEMENT (KNOWLEDGE
AREA)
127
PROJECT INTEGRATION MANAGEMENT
128
Project Integration Management (PIM)
Is crucial to project completion
Includes processes and activities that are PRIMARILY INTEGRATIVE
o Identifies, defines, combines, unifies, and coordinates the various
processes and project management activities within the Project
Management Process Groups
Use of decision making to meet/exceed stakeholder expectations
Facilitates coordination of the project and the operations
129
Project Integration Management describes the process
required to ensure that the various elements of the
project are properly coordinated. It includes unification,
consolidation, articulation, project integrative actions,
making trade-offs among competing objectives and
alternatives to meet the stakeholders expectations.
Project Integration management entails managing
interdependencies amongst the knowledge areas.
130
Project Integration Management -Contd.
131
4.1 Development Project Charter
Inputs
Project Statement of work
Business case
Agreements
Enterprise environmental
factors
Tools and Techniques
Expert judgment
Facilitation techniques
Outputs
Project charter
4.2 Development Project Management
Plan
Inputs
Project Charter
Outputs from other processes
factors
Organizational process assets
Expert judgment
Facilitation techniques
Outputs
Project Management Plan
4.3 Direct and Manage Project work
Inputs
Project management plan
Approved change request
Enterprise environmental factor
Expert judgment
Project management information
system
Meetings
Outputs
Deliverables
Work performance data
Change requests
Updates project documents updates
Project Integration Management Overview
132
4.4 Monitor and Control Project Work
Inputs
Schedule forecast
Cost forecast
Validated changes
Work performance information
Enterprise environmental factors
Expert judgment
Analytical techniques
systems
Meetings
Outputs
Change requests
Work performance reports
Project management plan updates
Project documents updates
4.5 Perform Integrated Control
Inputs
Change requests
Expert judgment
Meetings
Change control tools
Outputs
Final product, service or result
transition
updates
4.6 Close Project Phase
Inputs
Acceptable deliverables
Expert Judgment
Analytical techniques
Meetings
Outputs
Final, product, service or result
transition
updates
Project Integration Management Overview
133
Things to know in Integration Management
Project manager as integrator
Project planning methodology, Project
plan
system
Work authorization, change control,
managing change
Integrated change control
Corrective action, Preventive action,
defect repair
Project Charter has
o Project Purpose or justification
o Measurable project objectives and
success criteria
o High level requirements
o High level project description
o High level risks
o Summary milestone schedule
o Summary budget
o Project approval requirements
o Assigned PM
o Sponsor details
134
Project Management Plan includes
Selected Project life cycle and the processes that will be applied to each life
cycle
Tools and Techniques selected to accomplish the processes
Management of dependencies, interactions, outputs and inputs
Methodology of work execution
Change management plan
Configuration management plan
135
Project Management Plan Contd.
How integrity of performance management baselines will be maintained
Techniques of stakeholder communication
How to manage open issues and pending decisions
Project baselines (cost, schedule, scope)
Subsidiary plans (scope, requirements management, schedule, cost, quality,
process improvement plan, HR, communication, risk and procurement)
136
Develop Project Charter
Inputs
Project statement of work
Business Case
Agreements
Tools & Techniques
Expert judgment
Facilitation Techniques
Outputs
Project Charter
137
Project Charter Template
Project Charter
Project Name:
Date:
Point of Contact:
Organization Strategic Goals Project Objectives
Milestone Name Milestone Date
Summary of Scope Statement
Project Resource Details
Project Manager assigned and authority level.
Resources pre-assigned.
Project Assumptions
Project Constraints/High level Risks
Summary Budget
138
Planning Process Group
Planning Process develop Project Management Plan and the Project documents that will be used
to carry out the Project.
The Progressive detailing of the Project Management Plan is called Rolling wave Planning
The planning process helps gather information from many sources with each having varying level
of completeness and confidence.
These processes also identify, define and mature the projects scope, project cost and schedule
the project activities that occur within the project.
As new project information is discovered, additional dependencies, requirements, risks,
opportunities, assumptions and constraints will be identified or resolved.
It is an iterative process. While planning the project the project team should involve all
appropriate stake holders.
139
Initiating Develop Project Charter
Planning Develop Project Management Plan
Executing Direct and Manage Project Work
Monitoring and Controlling Monitor and Control Project work
Monitoring and Controlling Perform Integrated Change Control
Closing Close Project or Phase
140
Develop Project Management Plan
Inputs
Project Charter
Outputs from other processes
Tools & Techniques
Expert judgment
Facilitation Techniques
Outputs
141
Develop Project Management Plan -Contd.
Includes the actions necessary to define, integrate and coordinate all
subsidiary plans into a project management plan
Project management plan defines how the project is executed,
monitored and controlled, and closed.
Project Management Plan documents the collection of outputs of the
planning process of the Planning Process Group
142
Develop Project Management Plan
Activities performed for creating a Project Management Plan
The project management processes selected by the project management team
The level of implementation of each selected process
The descriptions of the Tools and Techniques to be used for accomplishing those processes
How the selected processes will be used to manage the specific project, including the
dependencies and interactions among those processes, and the essential inputs and
outputs
How work will be executed to accomplish the project objectives
How changes will be monitored and controlled
How configuration management will be performed
143
Develop Project Management Plan-Contd.
Activities performed for creating a Project Management Plan
How integrity of the performance measurement baselines will be
maintained and used
The need and Techniques for communication among stakeholders
The selected project life cycle and the associated project phases
Key management reviews for content, extent, and timing to facilitate
addressing open issues and pending decisions
144
Executing process Group
Process performed to Complete the work defined in the Project Management Plan
to satisfy the Project specifications.
It involves coordinating people and resources , as well as integrating and
performing the activities of the Project in accordance with the Project
Management Plan.
During Project execution the results may require planning updates and rebase
lining.
A large portion of the projects Budget will be expended in performing the
executing Process Group Process.
145
146
Direct and Manage Project Work
This process requires the project manager and project team to perform
multiple actions to execute the project management plan to accomplish the
work defined in the project scope statement.
Some of the actions include:
o Perform activities to accomplish project objectives
o Expend effort and spend funds to accomplish the project objectives
o Staff, train, and manage the project team members assigned to the project
o Obtain quotations, bids, offers, or proposals as appropriate
147
Direct and Manage Project Work -Contd.
o Select sellers by choosing from among potential sellers
o Obtain, manage and use resources including materials, Tools equipment
and facilities
o Implement the planned methods and standards
o Create, control, verify and validate project deliverables
o Manage risks and implement risk response activities
o Manage Sellers
o Adapt approved changes into the projects scope, plans and environment
148
o Establish and manage project communication channels, both external and internal to the project team
o Collect project data and report cost, schedule, technical and quality progress and status information to
facilitate forecasting
o Collect and document lessons learned and implement approved process improvement activities
The project manager, along with the project management team and the project team directs
the performance of the planned project objectives, and manage the various technical and
organizational interfaces in the project
Deliverables are produced as outputs from the processes performed to accomplish the
project work planned and scheduled in the project management plan
This process also includes implementation of approved corrective, preventive actions and
approved defect repair requests.
149
Project Management Information System
PMIS consists of Tools and Techniques to gather, integrate and
disseminate the outputs of project management processes.
Used to support all aspects of the project from initiating to closing.
Can include both manual and automated systems.
Is integral part of Communication Management Plan.
150
Inputs
Approved change requests
Tools & Techniques
Expert judgment
Project Management
Information systems
Meetings
Outputs
Deliverables
Work Performance Data
Change Requests
Project Management Plan updates
151
Monitoring and Controlling Process Group
Process required to track , review and regulate the Progress and
performance of the Project
Identify any areas in which Changes to the Plan are required.
The Key Benefit of this Process Group is that the Project Performance is
observed and measured regularly and consistently to identify the
variances from the Project Management Plan.
152
153
Monitor and Control Project Work
It is performed to monitor project processes associated with initiating,
planning, executing and closing. Corrective or preventive actions are taken to
control the project performance.
Monitoring is an aspect of project management performed throughout the
project.
Monitoring includes collecting, measuring, and disseminating performance
information, and assessing measurements and trends to effect process
improvements.
154
Monitor and Control Project Work -Contd.
Monitor and Control Project Work is concerned with:
o Comparing actual project performance against the project management plan
o Assessing performance to determine whether any corrective or preventive actions are
indicated and recommending those actions as necessary
o Analyzing, tracking, and monitoring project risks to make sure the risks are identified, their
status is reported and appropriate risk response plans are being executed
o Maintaining an accurate, timely information base concerning the projects product and their
associated documentation through project completion
o Providing information to support status reporting, progress measurement, and forecasting
o Providing forecasts to update current cost and current schedule information
o Monitoring implementation of approved changes when and as they occur
155
Monitor and Control Project Work
Inputs
Schedule forecasts
Cost forecasts
Validated changes
Tools & Techniques
Expert judgment
Analytical Techniques
Project Management
Information systems
Meetings
Outputs
Change Requests
Work Performance reports
156
157
Perform Integrated Change Control
Perform Integrated Change Control is the process of reviewing all change
requests; approving changes and managing changes to deliverables,
organizational process assets, project documents, and the project
management plan; and communicating their disposition. Perform Integrated
Change Control is the process of reviewing all change requests; approving
changes and managing changes to deliverables, organizational process assets,
project documents, and the project management plan; and communicating
their disposition. It reviews all requests for changes or modifications to project
documents, deliverables, baselines, or the project management plan and
approves or rejects the changes.
158
Perform Integrated Change Control -Contd.
Inputs
Change requests
Tools & Techniques
Expert judgment
Meetings
Change Control Tools
Outputs
Approved Change Requests
Change Log
updates
159
Perform Integrated Change Control Flow
Different
Process
Perform
Integrated
Change
Control
Direct and
Manage
Project Work
Change
Request
Approved
Change
Request
Implemented
Change
Request
160
This process is performed from project inception through completion.
It includes the following change management activities:
o Identifying that a change needs to occur or has occurred
o Influencing the factors that circumvent integrated change control so that
only approved changes are implemented
o Reviewing and approving requested changes
o Managing the approved changes when and as they occur, by regulating
the flow of requested changes
161
o Maintaining the integrity of baselines by releasing only approved changes for
incorporation into project products or services and maintaining their related
configurations and planning documentation
o Reviewing and approving all recommended corrective and preventive actions
o Controlling and updating the scope, cost, budget, schedule, and quality
requirements based upon approved changes.
o Documenting the complete impact of requested changes
o Validating defect repair
o Controlling project quality to standards based on quality reports
Perform Integrated Change Control -Contd.
162
A Configuration Management System with integrated Change Control provide a standardized ,
effective and efficient way to centrally manage approved Changes and baselines within a Project
Configuration Control is focused on the specification of both the deliverables and Processes while
Change Control is focused on identifying , documenting and Controlling Changes to the Produce
and the Project Baseline.
Some of the Configuration management activities included in the integrated Change control
Process are
1. Configuration identification
2. Configuration Status accounting
3. Configuration Verification and Audit
163
Change Control Process
Project manager
or review board
makes decision
Change analysis
performed
Recommendations
forwarded
Change is
incorporated
No further action
Approved
R
Not Approved
T
Change request
submitted
Communicate status
164
Steps to be Followed if a Change is Requested by a
Customer
1. Evaluate and Assess the change how is the change going to impact the project?
2. Discuss with team members about the best way to handle the changes (is it possible
to crash, fast track etc.)? Also, try to determine what would be the implication of the
change e.g. change in scope, schedule, cost, quality etc.
3. Inform customer about the implication of the changes.
4. If customer still wants the changes, discuss with the management, sponsor and other
stakeholders.
5. Based on their inputs, if the change is warranted, a change control will need to be
formally opened, necessary approvals received and then the team can work on the
required changes.
165
Change Control System
There are about 15 questions referring to Change Control System in the
exam so, this topic should be studied carefully.
Change control system is a collection of formal (note: not informal)
documented procedures that defines how project performance will be
monitored and evaluated.
Includes the a) paperwork, b) tracking systems, c) processes, and d)
approval levels needed for authorizing change.
In many cases, the Change Control System of the performing
organization can be adopted as is for use by the project.
166
Change Control System Contd.
Includes a group responsible for approving or rejecting proposed
changes.
Defined classes of changes can be Automatically approved.
All changes must be documented.
Changes change the project baselines.
167
Closing Process Group
Consists of those processes performed to finalize all activities across all Project
Management Process groups to formally complete the Project or Phase or Contractual
Obligations
1. Obtain acceptance by the Customer or Sponsor
2. Conduct Post Project or Phase end Review
3. Record impacts of tailoring
4. Document Lessons Learnt
5. Archive all Project documents
6. Close out Procurements
168
169
Close Project or Phase
Includes finalizing all activities completed across all Project Management
Process Groups to formally close the project or project phase, and transfer the
completed or cancelled project
It establishes the procedures to coordinate and interact to formalize
acceptance of those deliverables by the customer or sponsor, and to
investigate and document the reasons for actions taken if a project is
terminated before completion.
Procedures adopted are:
o Administrative closure procedure
o Contract closure procedure
170
Close Project or Phase -Contd.
Inputs
Accepted deliverables
Tools & Techniques
Expert judgment
Meetings
Outputs
Final product, service or result
transition
Organization process assets updates
171
INTRODUCTION TO OTHER
KNOWLEDGE AREAS
172
Project Scope Management includes the processes required to ensure that the
project includes all the work and only the work required to complete the project
successfully. Project scope management involves
Constantly checking to ensure that all work gets completed
Saying No to work not within project scope and preventing extra work or gold
plating
173
Project Scope Management (PSM) Processes
Plan scope
management
Process of defining how project scope will be defined, validated and controlled.
Collect
Requirements
Defining and documenting stakeholders needs to meet the project objectives
Define Scope Developing detailed project scope statement as the basis of future project decision
Create Work
Breakdown
Structure (WBS)
Sub-dividing major project deliverables and project work into smaller manageable
components
Verify Scope Formalizing acceptance of completed project deliverables
Control Scope Controlling changes to project scope
Project Scope Management -Contd.
174
Things to know in Scope Management
Project scope Vs. Product scope
Group creativity, group decision making ,Workshops are some Techniques for
stakeholder requirements gathering
Project selection methods Benefit measurement methods, constrained
optimization methods
Initiating a project Project selection, history collection, documentation,
scope analysis, resource identification, estimation, formal decision from
stakeholders on the charter etc.
Project Constraints, scope statement, scope management plan
175
Things to know in Scope Management Contd.
Delphi technique to obtain expert information on issues, estimates,
risks etc.
Scope definition and decomposition defining and sub dividing major
project deliverables into smaller manageable components
Decomposing project deliverables to create Work breakdown structure
Activity definition. Work package is the lowest level in WBS
Scope Verification Formalizing acceptance, work product review,
audits, conformance, sign-off etc.
176
Sample WBS
1.0
Value Management
System Project
1.1
Node Assessment
1.2
Standards Development
1.3
Systems Engineering
1.4
Project Management
1.1.2
Requirements
Determination
1.1.3
Alternatives
Development
1.1.1
Control System Audit
1.1.4
System Requirement
Development
1.1.1.1
Components
Identification
1.1.1.2
Components Analysis
1.1.2.1
Gap
Assessments
1.1.2.2
Requirements Charges
identification
1.1.3.1
Alternatives
identification
1.1.3.2
Alternatives
Analysis
The WBS is illustrative only. It is not intended to represent the full project scope of any specific project, nor to imply that is the only
way to organize a WBS on this type of project.
177
Project Time Management
Project Time Management describes the processes required to ensure timely completion of the project.
Project Time Management (PTM) Processes
Plan schedule management Process of establishing the policies, procedure and documentation for planning,
developing, managing, executing and controlling the project schedule.
Define Activities Identify specific schedule activities that should be performed to provide project
deliverables
Sequence Activities Identifying and documenting dependencies among schedule activities
Estimate Activity Resource Estimate the type and no. of resources required to perform schedule activity
Estimate Activity duration Estimating the duration / period to complete individual schedule activity
Develop Schedule Analyzing activity sequences, durations, resource requirements and schedule
constraints to create project schedule
Control Schedule Controlling changes to the project schedule
178
Things to know in Time Management -Contd.
Scheduling Tools and their benefits Milestone charts, flowcharts, Gantt
charts, network diagram and charts
Methods to draw network diagrams
Schedule development Precedence diagramming methods
Dependencies, Leads and Lags
Estimating, resource calendars
Estimating methods CPM (Critical Path Method), PERT (Program Evaluation
and Review Technique) Monte Carlo simulation (iterative)
179
Critical path, LAG, FLOAT
Analogous estimation use of parameters such as duration, budget
from a similar project as a basis for estimating
Parametric estimating, 3 point estimation
Shortening schedule duration compression, resource levelling, what if
scenario analysis
Re-estimating, crashing, fast tracking
Schedule compression (crashing, fast tracking)
Things to know in Time Management
180
Scheduling Overview
181
Project Cost Management describes the processes required to ensure that the
project gets completed within the approved budget.
Project Cost Management (PCM) Processes
Plan Cost management Process of establishing the policies, procedure and documentation for
planning, developing, managing, executing and controlling the project
cost.
Estimate Costs Developing an approximation of the costs of resources required to
complete the project
Determine Budget Aggregating the estimated costs of individual activities or work
packages to establish cost baseline
Control Costs Influencing the factors that create cost variances and controlling
changes to the project budget
182
Things to know in Cost Management
Control account WBS component used for project cost accounting
Cost risk, resource planning, cost management plan
Reserve analysis, cost of quality
Cost estimating analogous estimating, bottom-up estimating, parametric
estimating, computerized estimating Tools, 3 point estimation (most likely,
optimistic, pessimistic)
Earned value analysis (EVA), net present value (NPV), Internal rate of return
(IRR), Benefit cost ratio (BCR)
Life cycle costing, Accuracy of estimates
183
Project Quality Management
Project Quality Management describes the processes required to ensure that the project satisfies the needs
for which it was undertaken. It ensures conformance to requirements and fitness of use
Project Quality Management (PQM) Processes
PQM Process Purpose / Activities
Plan Quality management Identifying which quality standards are relevant to the project
and determining how to satisfy them
Perform Quality
Assurance
Apply planned, systematic quality activities to ensure that the
project meets all the requirements
Control Quality Monitoring specific project results to determine whether they
comply with the relevant quality standards to identifying ways
to eliminate unsatisfactory performance
184
Things to know in Quality Management
Gold plating Not to give customer extras, prevention over inspection,
Marginal analysis
Cost of Quality, 7 basic quality Tools
Kaizen Continuous improvement to reduce costs and improve performance
Just In Time Approach to decrease the amount of inventory, improve quality
ISO 9000 International standard to help organizations to ensure that quality
procedures are in place and are followed
TQM Total quality management - Encourage companies and employees to
find ways to improve quality
Standard deviation Measure of how far the actuals are from the
mean
185
3 or 6 SIGMA Level of quality, half curve above mean, +/-1
sigma68.26%,+/-2 sigma95.46%,+/-3 sigma99.73%, +/-6
sigma99.99%
Responsibility for quality, Impact of poor quality, Cost of conformance and
Non-conformance
Quality planning, benchmarking, cost/benefit analysis, flowchart, cost of
quality, fishbone diagram
Quality assurance, audits, Quality control their variables and attributes
Quality control Tools Inspection, Pareto diagram, fishbone diagram,
checklists, sampling, control charts, flowcharts, trend analysis
Things to know in Quality Management -Contd.
186
Project Human Resource Management
Project Human Resource Management describes the processes required to make the
most effective use of the people involved with the project. This entails processes that
organize, manage and lead the project team.
Project Human Resource Management (PHRM) Processes
PHRM Process Purpose / Activities
Plan Human Resource
management
Identifying and documenting project roles, responsibilities,
reporting relationships and staffing management plan
Acquire Project Team Obtaining the human resource needed to complete the project
Develop Project Team Improving the competencies and interaction of team members
to enhance project performance
Manage Project Team Tracking team member performance, providing feedback,
resolving issues and coordinating changes to enhance project
performance
187
Things to know in Human Resource Management
Roles and Responsibilities Project sponsor, senior management, team, stakeholders,
functional manager, project manager
Responsibility chart responsibility matrix, resource histogram, resource gantt chart
Staffing management plan
Team building
Leadership styles Directing, facilitating, coaching, supporting, autocratic, consultative,
consensus
188
Things to know in Human Resource Management
Contd.
Conflict Management
Conflict Resolution Techniques Confronting (problem solving), compromising,
withdrawal (avoidance), smoothing, forcing
War room, expectancy theory, arbitration, perquisites, fringe benefits
Motivation theory McGregors theory of X and Y, Maslows hierarchy of needs,
Herzbergs theory
189
Project Communication Management
Project Communication Management describes the processes required to ensure
timely and appropriate generation, collection, dissemination, storage and ultimate
disposition of project information.
Project Communication Management (PCM) Processes
PCM Process Purpose / Activities
Plan Communications
management
Determining the information and communication needs of the project
stakeholders
Manage Communications Process of creating, collecting, distributing, storing, retrieving project information
in accordance with communication plan.
Control Communications Monitoring and controlling communications throughout the entire project life
cycle
190
Things to know in Communication Management
Communication management plan, information distribution
Communication technology, communication model encode, transmit
message, decode, acknowledge, feedback
Communication methods interactive , push, pull
Manage communication
Control of communication
Communication blockers
Meetings Rules for meetings
191
Project Risk Management
Project Risk Management describes the processes involved in identifying, analyzing and responding to the project
risk. It is a discrete occurrence that may affect the project for good or bad
Project Risk Management (PRM) Processes
PRM Process Purpose / Activities
Plan Risk Management Deciding on the approach, plan and execution of risk management activities for a
project
Identify Risk Determining and documenting projects risks
Perform Qualitative Risk Analysis Prioritizing risks for further analysis by assessing and combining their probability of
occurrence and impact
Perform Quantitative Risk
Analysis
Numerically analyzing the effect on overall project objectives of identified risks
Plan Risk Responses Developing options and actions to enhance opportunities and reduce threat to project
objectives
Monitor and Control Risk Tracking identified risks, monitoring residual risks, identifying new risks, executing risk
response plans and evaluating their effectiveness throughout the project life cycle
192
Things to know in Risk Management
Risk, Risk event, uncertainty
Risk factors, risk averse, risk tolerances
Risk management
Risk management process Risk management planning, Risk identification,
Qualitative risk analysis, Quantitative risk analysis, Risk response planning, risk
monitoring and control
Risk categories Technical, project management, organizational, external
Identification of risks Information gathering Techniques brainstorming,
Delphi, interviewing, SWOT analysis
193
Things to know in Risk Management Contd.
Assumptions testing, data precision ranking, risk rating matrix
Expected monetary value, Monte Carlo simulation
Risk owner, risk response strategies-avoidance, mitigation, acceptance,
transference
Insurance, contracting, residual risks, secondary risks, contingency planning,
fallback planning, risk response plan, revised project plan, reserves
Risk response audits, risk reviews
194
Project Procurement Management
Project Procurement Management deals with the processes required to acquire goods and
services from outside the performing organization.
Project Procurement Management (PPM) Processes
PPM Process Purpose / Activities
Plan Procurement
management
Determine what to purchase or acquire and determine when and how. Also includes
documenting products, services and results requirements and identifying potential
sellers
Conduct Procurements Obtaining information, quotations, bids, offers or proposals and awarding a
contract
Control Procurements Managing contract and relationship between buyer and seller, reviewing and
documenting performance, managing contract related changes
Close Procurements Completing each project procurement
195
Things to know in Procurement Management
Procurement management definition
Procurement management plan
Contract
PMs role in procurement
Centralized / decentralized contracting
Procurement management process Procurement planning, solicitation
planning, solicitation, source selection, contract administration, Contract
closeout
196
Make or buy, contract type selection Cost reimbursable, time and
material, fixed price, purchase order
Procurement documents, standard contract, letter of intent, privity
Bidders conference Meeting with prospective sellers
Presentation, negotiation, negotiation tactics-attacks, personal insults,
good guy/bad guy, deadline, lying, limited authority, missing man, fair
and reasonable, delay, extreme demands, withdrawal
Things to know in Procurement Management -Contd.
197
Project Stakeholder Management
Project Stakeholder Management deals with the processes required to identify people , groups or
organization that could impact or impacted by the project, to analyze stakeholder expectations and their
impact on the project and to develop appropriate management strategies for effectively engage stakeholder
in project decision and execution.
Project Stakeholder Management (PPM) Processes
PPM Process Purpose / Activities
Identify stakeholders Process of identifying the people or group that could impact or be impacted by the
decision , activity or outcome of the project.
Plan stakeholder management Process of developing strategies to effectively engage the stakeholders throughout the
project life cycle
Manage stakeholder
management
Process of communicating and working with stakeholders to meet their expectations
in project activities throughout the life cycle
Control stakeholder
management
Process of monitoring overall stakeholder relationship and adjusting the plans for
engaging stakeholders.
198
Things to know in Stakeholder Management
Stakeholder analysis and its models ( power/interest grid,
power/influence grid, influence/impact grid, salience model)
Stakeholder register
Engagement levels of stakeholder
Stakeholder management plan
Interpersonal and management skills
199
END OF THE SESSION
200
SCOPE MANAGEMENT
201
List of Topics
1. Scope Management
2. Planning Project Scope Management
Plan Scope Management
Collect Requirements
Define Scope
WBS
3. Monitoring & Controlling Project Scope Management.
Validate Scope
Control Scope
202
INTRODUCTION TO SCOPE
MANAGEMENT
203
Top Ten Reasons why Projects Fail
Inadequately trained and or inexperienced project managers
Failure to set and manage expectations
Poor leadership at any and all levels
Failure to adequately identify, document and track requirements
Poor plans and planning processes
Poor effort estimation
Cultural and ethical misalignment
Misalignment between the project team and the business or other
organization it serves
Inadequate or misused methods
Inadequate communication, including progress tracking and reporting
204
Scope
Product scope The features and functions that are to be included in a
product or service
Project scope The work that must be done in order to deliver a
product with the specified features and functions
Successful completion of product scope is measured against the
requirements; project scope is measured against the plan
205
Scope Management
Includes the processes required to ensure that the project includes all the
work and only the work required to complete the project successfully. It
primarily concerned with controlling what is and what is not in the project.
206
Overview of Scope Management Process
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.
Process of collecting
requirements from the
stakeholders. Documenting and
managing them and tracing the
requirements till the completion
of the project
Define Scope
Developing the project and
product scope. Performing the
work that is required to complete
the project
207
Overview of Scope Management Process-Contd.
Create WBS
Subdividing major project
deliverables into smaller
pieces which can be managed
easily
Validate Scope
Customer or the sponsor
verifies that the Project is
complete by accepting the
deliverables after verification
Monitoring & Controlling
Process Group
Control Scope
Ensuring that all changes are
documented and tracked. Required
corrective and preventive action are
taken whenever required.
Unnecessary changes are
prevented.
Process Group
208
PLANNING PROJECT SCOPE
MANAGEMENT
209
Planning Monitoring and Controlling
Plan Scope Management Validate Scope
Collect Requirements Control Scope
Define Scope
Create WBS
210
The process of creating a Scope management
plan. It documents how the project and
product scope will be defined, validated and
controlled.
211
Plan Scope Management Contd.
Outputs
Scope Management
Plan
Requirement
Management Plan
Inputs
Project Charter
Enterprise Environmental
factors
Expert Judgment
Meetings
212
Inputs for Plan Scope Management Process
Project Charter
This is an output from Develop project charter
The project charter is used to provide the project context needed to plan the scope
management processes.
It provides the high-level project description and product characteristics.
The project management plan is used to create the scope management plan to ensure
consistency.
213
Inputs for Plan Scope Management Process-Contd.
The enterprise environmental factors that can influence the Plan Scope
Management process include, but are not limited to:
o Organizations culture,
o Infrastructure,
o Personnel administration, and
o Marketplace conditions.
Organization Process Asset
The organizational process assets that can influence the Plan Scope Management
process include, but are not limited to: Policies and procedures, and Historical
information and lessons learned knowledge base.
214
Tools and Techniques Plan Scope Management Process
Expert Judgment
Expert judgment based on how equivalent projects have managed scope is used in
developing the project scope management plan.
Meetings
Project teams may hold planning meetings to develop the scope management
plan. Attendees at these meetings may include the project manager, the project
sponsor, selected project team members, selected stakeholders, anyone with
responsibility for any of the scope management process, and others as needed.
215
Outputs Plan Scope Management Process
Scope Management Plan The scope management plan is a component
of the project management plan that describes how the project scope
will be defined, developed, monitored, controlled, and validated.
216
The components of a scope management plan include::
Process for preparing a detailed project scope statement;
Process that enables the creation of the WBS from the detailed project scope
statement;
Process that establishes how the WBS will be maintained and approved;
Process that specifies how formal acceptance of the completed project
deliverables will be obtained;
Process to control how requests for changes to the detailed project scope
statement will be processed.
This process is directly linked to the Perform Integrated Change Control process.
Outputs Plan Scope Management Process-Contd.
217
The scope management plan is a subsidiary plan of the project
management plan. The scope management plan can be informal and
broadly framed, or formal and highly detailed, based on the needs of the
project.
218
Requirement Management Plan is a component of the project or program
management plan that describes how the project requirements will be
analyzed, documented, and managed. The project manager must choose the
most effective relationship for the project and document this approach in the
requirements management plan. Many of the requirements management plan
components are based on that relationship.
219
Components of the requirements management plan can include, but are not
limited to:
How requirements activities will be planned, tracked, and reported;
Configuration management activities such as: how changes to the product will
be initiated, how impacts will be analyzed, how they will be traced, tracked,
and reported, as well as the authorization levels required to approve these
changes;
Requirements prioritization process;
Product metrics that will be used and the rationale for using them; and
Traceability structure to reflect which requirement attributes will be captured
on the traceability matrix.
220
Define Scope
Create WBS
221
The process of defining & documenting the
stakeholders needs to meet the Project
Objectives.
Collecting requirements is defining and
managing Customer Expectations.
222
If the requirements are incorrectly, inaccurately or incompletely
specified there is little chance the solution will be what is needed.
Requirements are the basis on which potential solutions are assessed.
Requirements identify what is needed. They are not the solution,
rather they provide definition of what the solution needs to address.
Why Requirements Gathering is Key
223
Identify the people who can determine the requirements. They must have
knowledge of the business need.
Hold requirements gathering workshops and interviews or other Techniques
Obtain and analyze any relevant documentation.
Document the requirements.
Circulate requirements for review and feedback.
Make updates and seek sign-off.
Requirements Gathering Activities
224
Inputs
Scope Management
Plan
Requirements
Management plan
Stakeholders
Management plan
Project charter
Stakeholder Register
Interviews
Focus Groups
Facilitated workshops
Group creativity
Techniques
Group decision making
Techniques
Questionnaires and
Surveys
Observations
Prototypes
Bench marking
Context diagram
Document analysis
Outputs
Requirements
documentation
Requirements
Traceability matrix
225
Scope Management Plan
The Scope Management Plan describes how the project scope will be defined,
developed, and validated. This document describes the process of Collecting
requirements, Define Scope, Create WBS, Validate Scope, Control Scope. In
general Scope Management plan will discuss the process (how part) of the
requirements. The Scope Management Plan defines who is responsible for
managing the projects scope and acts as a guide for managing and controlling
the scope.
Inputs Collect Requirement Process
226
Requirement Management Plan
Process of managing the requirement is the content of Requirement management
Plan. The Requirements Management Plan discusses how requirements will be
collected, analyzed, documented throughout the project lifecycle.
Requirement management plan also addresses the following tasks:
o Configuration management activities
o Requirement Prioritization Process
o Traceability Structure.
Inputs Collect Requirement Process-Contd.
227
Stakeholder Management Plan
Project Communication with stakeholders is an important part of any project. A
project manager needs to establish lines of communication with all the
stakeholders and also a mechanism to keep them involved and aware of the
projects progress and status.
Stakeholder management Plan define an approach to communications and
approach and mechanism to provide project data to stakeholders.
It may be necessary to develop different strategies for the different groups
identified during the Collect requirement process.
228
Some possible methods of communication are: -
Progress reports
Meetings and briefings
User groups(email Groups)
Access to documentation (Requirements)
229
Project Charter
This is an output from Develop project charter
This provides high level project and product requirements
Stake holder Register
It is used to identify stakeholders who can provide information on detailed project
and product requirements .
This will have the contact details of the customer(s) and the end users who will give
the requirements.
230
Interviews
It is a formal approach to discover key information by talking to the
stakeholders directly. It is conducted on a one-on-one. Interviewing subject
matter experts help defining the features and functions of project deliverables
Focus Groups
It brings together all the qualified stakeholders and SMEs to learn more about
the expectation of the product, service or result
Tools and Techniques Collect Requirement Process
231
Facilitated Workshop
These requirements bring key cross-functional stakeholders together to define product
requirements. They improve communication among the group and leads to increased
stakeholder consensus. Quick and effective resolutions are expected in these sessions
Group Creativity Techniques
These are activities organized to identify project and product requirements
Brainstorming It helps in collecting multiple ideas from the stakeholders related to the
project and product requirements
Nominal Group Technique This is an enhanced form of brainstorming which involves
voting process. It ranks and prioritizes the ideas that are generated
Tools and Techniques Collect Requirement Process-
Contd.
232
Delphi Technique - A questionnaire is provided to a group of experts and feedbacks are
gathered by the facilitator . He is responsible for maintaining the anonymity of the responses
Idea/Mind Mapping Ideas created from brainstorming are analyzed and consolidated to
reflect the differences and similarities
Affinity Diagram Allows large number of ideas to be sorted into groups for review and
analysis
Group Decision Making Techniques
It is the process of assessing multiple alternatives with an expected outcome
Unanimity Everyone agrees for a specific action
Majority - Support is received from more than 50% of group members
Plurality The largest block in a group decides if majority is not achieved
Dictatorship Individual takes a decision
Contd.
233
Questionnaires and Surveys
Questionnaires and Surveys are written set of questions designed to
quickly accumulate information from wider audience
Contd.
234
Observations
Observations allow individuals to view the jobs that are done in an environment.
This observation is also called job shadowing . The observer uncovers hidden
requirements
Prototypes
A working model is created before the expected product. This allows the
stakeholder to obtain early feedback about the product. Prototypes are tangible
and allows the stakeholders to experiment the model before obtaining the final
product.
Contd.
235
Prototypes
Obtains early feedback on requirements by providing a working model of the final
product.
Context Diagrams
A scope model which visually depicts the product scope by showing a business
system and how people and other systems interact with it
Contd.
236
Document Analysis
Elicits requirements by analyzing existing documentation and identifying
information relevant to the requirements working model is created before the
expected product. This allows the stakeholder to obtain early feedback about
the product. Prototypes are tangible and allows the stakeholders to
experiment the model before obtaining the final product.
Contd.
237
Requirements Documentation
It describes how individual requirements meet the business need for the
project. The requirements should be testable and measurable, traceable,
complete and consistent. It includes Business opportunity, Business
Objective, Quality requirements , Acceptance criteria, Assumptions &
constraints.
Outputs Collect Requirement Process
238
Requirement Traceability Matrix
It is a table that links the requirements throughout their origin and traces
them throughout the life cycle of the project. This process include
o Requirements to business need
o Requirement to Project Objectives
o Requirement to product design
o Requirement to product development
Outputs Collect Requirement Process-Contd.
239
Interview when:
Requirements are detailed
Requirements cover many areas of
knowledge that have specific
individuals who are the experts
Differing opinions are likely or are
sought
Workshop when:
Requirements are high level
Requirements are focused on one
area of business in which the
participants have knowledge
Consensus is being sought
Interview or workshop?
240
Group Creativity Techniques
Look for similar kind of Ideas
Look for Ideas for a requirement
Group each ideas under different Heading
GROUP
A
GROUP
B
IDEAS
SIMILAR
IDEAS
IDEAS
SIMILAR
IDEAS
241
Make sure the requirement is
Specific clearly states what is required
Measurable to confirm when it has been met
Achievable can be done, e.g.. technically possible
Realistic is reasonable, e.g.. cost is not prohibitive
Timely achievable within an acceptable timeframe.
If the requirements do not conform to these criteria the Business Analyst must discuss
this and reach agreement with the requester.
Develop SMART requirements
242
PROJECT SCOPE MANAGEMENT
Define Scope
Create WBS
243
Define Scope
It involves preparation of a detailed project scope
statement critical to project success and builds up
on major deliverables, assumptions and constraints
defined earlier.
244
Define Scope-Contd.
Inputs
Scope Management
Plan
Project charter
Organization Process
Assets
Requirements
documentation
Tools
Product Analysis
Alternative
identification
Expert judgment
Facilitated
Workshops
Outputs
Project scope
statement
Project Document
(updates)
245
It describes the process of managing the scope of the process which includes
the process of collecting requirements, process of defining scope, process of
creating WBS, Process of Validating Scope, and process of controlling Scope.
Project Charter
High level project description
High level product characteristics
Project approval requirements
Inputs Define Scope Process
246
Business need or opportunity
Functional requirements, describing business processes
Quality requirements
Acceptance Criteria
Organization process assets
Policies & Procedures for Scope statement
Project files from previous projects
Lessons learned from previous projects
Inputs Define Scope Process-Contd.
247
Expert Judgment
It is used to analyze the information needed to develop Scope statement
Consultants
Stakeholders, including customers or sponsors
Industry groups and Subject matter experts
Product Analysis
It is done for projects which has product as a deliverable
Product breakdown
Systems analysis
Value engineering or value analysis
Each application area translates high level product description into tangible deliverables
Tools and Techniques Define Scope Process
248
Alternative identification
Applying different approach to execute and perform work
Brainstorming
Lateral thinking
Facilitated workshop
These are focused sessions aimed to bring key cross functional stakeholders to define
requirements
They build trust, foster relationship and improve communication
Joint application development sessions (JAD) are used in software development industry
Quality function deployment (QFD) are used in manufacturing department. It starts by
collecting the Voice of the customer
Tools and Techniques Define Scope Process-Contd.
249
Project Scope statement
It describes in detail about the project deliverables and the work required to create those
deliverables
Product scope description progressively elaborates characteristics of product, service or
result.
Product acceptance criteria defines accepting completed products, services or results
Project deliverables include both the outputs that comprise both the product or service of
project
Project exclusion defines what is excluded from the project
Project constraints describes the project constraints that limits the teams option.
Predefined budget and schedule is an example of a project constraint
Project assumptions lists and describes specific project assumptions. Project teams
frequently identify and document assumptions
Outputs Define Scope Process
250
Project Document updates
Some of the project document includes
Requirement documentation
Requirement traceability matrix
Outputs Define Scope Process-Contd.
251
Define Scope
Create WBS
252
Create WBS
Subdividing major project deliverables into
manageable components, in order to improve the
accuracy of cost, time, and resources estimates
Provides a baseline and assigns responsibility
A scope baseline is the original plan, plus or minus
approved changes
253
Create WBS-Contd.
Outputs
Scope baseline
Project document update
Inputs
Project scope statement
Requirement
documentation
Organizational Process
Assets
Tools
Decomposition
Expert Judgment
254
Scope Management Plan : It describes the process of managing the scope of the
process which includes the process of collecting requirements, process of
defining scope, process of creating WBS, Process of Validating Scope, and process
of controlling Scope.
Project Scope Statement
The project statement describes project deliverables and work required to create
the deliverables
Inputs Create WBS Process
255
It describes how individual requirements meet the business need for the project.
It also documents the project scope, constraints, assumptions, acceptance criteria
Organizational Process assets
Policies and procedures and templates for WBS
Inputs Create WBS Process-Contd.
256
Decomposition
It is the process of subdividing deliverables to manageable pieces.
The work package is the lowest level in which the cost & activity durations are
estimated
It involves identifying and analyzing work deliverables
It structures and organizes the WBS
Decomposes WBS levels into detailed components
Assigns identification codes for WBS components
Verifying the degree of decomposition is necessary and sufficient
WBS can be structured as Organizational chart or a fishbone diagram or method
Tools and Techniques Create WBS Process
257
Decomposition is performed for deliverables that can be accomplished in the present
state
Rolling wave planning technique is used for deliverables that are accomplished in
future. The deliverable or subproject is clarified to get the details of WBS
Excessive decomposition of WBS may lead to decrease in efficiency
Expert Judgment
Used to analyze the information needed to decompose the project deliverables down
into smaller, more manageable parts
Tools and Techniques Create WBS Process-Contd.
258
Scope Baseline
The scope baseline includes component of project management plan
Project scope statement includes product cope description and project deliverables
WBS. Defines the decomposition of each deliverable into work packages
WBS dictionary It contains the detailed description of work and technical
documentation
WBS
It is hierarchical decomposition work to be executed by project team
Descending level of WBS represents increasingly detailed definition of work
The WBS is finalized by control accounts for work packages and unique identifier from
code of accounts
Outputs Create WBS Process
259
WBS dictionary
WBS dictionary is document generated from Create WBS and supports the WBS. It
includes
Code of account identifier
Description of work
Milestones
Schedule activities
Resource requirements
Cost estimates
Outputs Create WBS Process-Cont.
260
WBS can be created in many forms
Using Phases of the Project Life Cycle at the first level of decomposition
with the Product and Project deliverables at the second level
Using major deliverables at the first level of decomposition
Using Sub Projects which may be developed outside the Organization
WBS
261
Decomposition may not be possible for all the deliverables accomplished
into the future. The Project Management Team usually waits until the
deliverables is clarified so the details of the WBS can be developed. This
Technique is referred to as rolling Wave Planning
Rolling Wave Planning
262
WBS includes Product and Project Work including Project Management
Work. The total of the Work at the lowest level is rolled up to the higher
levels so that nothing is left out and no extra work is completed.
This is sometimes called 100% Rule
100% Rule
263
WBS
BOOK
Literature
Search
Phase 1
Feasibility
Market
research
Locate
publisher
Collect
Data
Phase 2
Planning
Plan
Approach
Chapter
summaries
Engage
Publisher
Phase 3
Writing
Sort
Data
Write
Draft
Write
Introduction
Write
Conclusion
Edit
Final Draft
Phase 4
Publish
Submit
Copy
Desktop
Publish
Final
Edit
Final
Approval
Print
Phase 5
Market
Arrange
Distributor
Arrange Publicity
Launch
264
Created by team
1-level created completely before breaking down
Each level is a smaller segment of the level above
Work toward project deliverables
Work not in the WBS is not part of the project
Can become a template for future projects
WBS rules
265
Break down project into work packages:
o Can be realistically and confidently estimated
o Cannot be logically subdivided
o Can be completed quickly (relative to entire project)
o Can be completed without disruption (without the need for more
information)
WBS rules-Contd.
266
A WBS dictionary contains detailed information about each element in the WBS. The
information should include an unambiguous description of the WBS element along with
cost, time and resource information that will be used to measure performance and
completeness.
The WBS dictionary helps project team determine what it will take to complete the
work.
WBS dictionary also makes future planning by providing an additional framework for
cost and time estimates, staffing assignments and performance monitoring.
WBS Dictionary
267
A Typical WBS Dictionary
Project Name: ____ Task No: ______ Date Issued: ____ Person Assigned: __
Task Description: (What work is authorized?)
Quantified Objectives: (See the description in the project charter)
Product Description: (What is the end result of the task or the work package?)
Acceptance Criteria (How will the team member be able to check their own work?)
Deliverables (See the description in the project charter)
Assumptions
Resources Assigned
Duration
Cost
Due Date
Interdependencies: Before the task __________ After the task __________
Approved By: Project Manager ___________ Date ____________
268
A work package is the lowest level of the WBS.
It is output-oriented in that it:
o Defines work (what).
o Identifies time to complete a work package (how long)
o Identifies a time-phased budget to complete a work package (cost)
o Identifies resources needed to complete a work package (how much)
o Identifies a single person responsible for units of work (who)
o Identifies monitoring points (milestones) for measuring success.
Work Packages
269
Organizational Breakdown Structure (OBS)
Depicts how the firm is organized to discharge its work responsibility for
a project.
o Provides a framework to summarize organization work unit performance.
o Identifies organization units responsible for work packages.
o Ties the organizational units to cost control accounts.
o Traditional organizational structure could be used
Integrating the WBS with the Organization
270
Responsibility Matrix (RM)
Also called a linear responsibility chart.
Summarizes the tasks to be accomplished and who is responsible for what on the
project.
o Lists project activities and participants.
o Clarifies critical interfaces between units and individuals that need coordination.
o Provide an means for all participants to view their responsibilities and agree on their
assignments.
o Clarifies the extent or type of authority that can be exercised by each participant.
Responsibility Matrices
271
MONITORING & CONTROLLING
272
Define Scope
Create WBS
273
Validate Scope-Contd.
Inputs
Requirements documentation
Requirement Traceability Matrix
Verified deliverables
Tools
Inspections
Techniques
Outputs
Accepted deliverables
Change Requests
Work Performance
Information
274
Project scope statement Includes product scope description and project deliverables
WBS: It defines each deliverable and decomposition of it into work packages
WBS dictionary: The WBS dictionary has a detailed description of work and technical
documentation of each WBS element
The requirements documentation includes project, product and technical and other
acceptance criteria for the project
Inputs Validate Scope Process
275
Requirements Traceability Matrix
The requirements traceability matrix links the requirements to the origin and it is
helpful in tracking it till the entire project lifecycle
Includes degree of compliance with requirements, number and severity of
nonconformities
Verified Deliverables
Completed and checked internally for correctness through the Control Quality
process.
Inputs Validate Scope Process-Contd.
276
Validate Scope
Process of formalizing stakeholders
acceptance of the project scope
Reviewing work products and results
Primarily concerned with acceptance of the
work results
277
Inspection
Inspection activities include measuring, examine and verifying whether the
deliverables meet the product acceptance criteria
Inspections are also called as audits, walkthroughs and product reviews
Inspections are also a part of quality control which helps in identifying the defects
in the deliverables before it reaches the hands of the customer
Used to reach a conclusion when the validation is performed by the project team
and other stakeholders
Tools and Techniques Validate Scope Process
278
Accepted Deliverables
Deliverables which meet the acceptance criteria are formally signed off by the Project
or Sponsor
Formal Stakeholders acceptance of the deliverables are forwarded to Close Project or
Phase
Change Requests
The deliverables which are not accepted are documented along with the reasons
Those deliverables may require change request
The Change requests are dealt through Perform Integrated Change Control process
Outputs Validate Scope Process
279
Work Performance information
Information about which deliverables have been started, their progress, which
deliverables have been finished, or which have been accepted.
Project Document Updates
These are all the documents that are updated as a result of Verify Scope which includes
any document that define product or report status on product completion
Outputs Validate Scope Process-Contd.
280
Define Scope
Create WBS
281
Control Scope
A process for controlling changes to project scope
by:
o Influencing factors which create scope changes, in
order to ensure the changes are beneficial
o Determining that a scope change has occurred
o Managing the changes when they occur
The system includes the paperwork, tracking systems, and
approval levels necessary for authorizing changes
282
Control Scope-Contd.
Outputs
Work Performance
Information
Assets Updates
Change Requests
Update
Project documents Update
Inputs
Requirements Traceability
Matrix
Tools
Variance Analysis
283
It contains the following information
Scope baseline: It is used to compare actual results to baseline and a
corrective or preventive action is recommended
Scope management plan: The Scope management plan describes how
scope will be managed and controlled
Change management plan: Manages changes in the project
Inputs Control Scope Process
284
Configuration management plan: It defines the items that are configurable
and it requires change control, process for controlling changes
Requirements management plan: It describes the activity that can be planned
tracked and reported and how changes to the product be initiate
Work performance Information
It provides information about the progress of the project, such as which
deliverables have started and which have been finished
Inputs Control Scope Process-Contd.
285
Variance Analysis
The performance measurements are used to assess the variation from
the scope baseline
It helps to decide whether to take a corrective action or preventive
action
Tools and Techniques Control Scope Process
286
Work Performance Measurements
These include planned Vs. technical performance. This information is
documented and communicated to Stakeholders
Organizational Process asset updates
Organizational process asset update include
Cause of variance
Corrective action
Lessons learned from Project Scope
Outputs Control Scope Process
287
Change Request
Scope performance analysis might result in change request
Change request includes preventive or corrective actions
Change requests are process by Perform Integrated change control process
Outputs Control Scope Process-Contd.
288
Project Management Plan Updates
Scope Baseline Updates. Approved change requests will have an effect on Scope
statement, WBS and WBS dictionary
Other Baseline Updates. If the change requests have an effect on scope, it has an
effect on cost and schedule baselines
Document updates include
Requirements traceability matrix
Outputs Control Scope
Process-Contd.
289
Formal Change Request
Project Name
Date
Requestor
Change No
Description
Reason for change
Impact of change
CCRB review date
Accepted
Rejected
290
Develop a good project selection process and insist that sponsors are
from the user organization
Have users on the project team in important roles
Have regular meetings with defined agendas, and have users sign off on
key deliverables presented at meetings
Deliver something to users and sponsors on a regular basis
Dont promise to deliver when you know you cant
Co-locate users with developers
Suggestions for Improving
User Input
291
Keep the scope realistic: Dont make projects so large that they cant be completed;
break large projects down into a series of smaller ones
Involve users in project scope management: Assign key users to the project team and
give them ownership of requirements definition and scope verification
Use off-the-shelf hardware and software whenever possible: Many IT people enjoy
using the latest and greatest technology, but business needs, not technology trends,
must take priority
Follow good project management processes: As described in this chapter and others,
there are well-defined processes for managing project scope and others aspects of
projects
Best Practices for Avoiding
Scope Problems
292
END OF THE SESSION
293
TIME MANAGEMENT
294
List of Topics
1. Introduction to Time Management
2. Planning Time Management
Plan Schedule Management
Define Activities
Sequence Activities
Estimate Activity Resources
Estimate Activity Duration
Develop Schedule
3. Monitoring Time Management
Control Schedule
295
INTRODUCTION TO TIME
MANAGEMENT
296
Time Management
Processes required to ensure timely completion of the project
Define Activities
Sequence Activities
Estimate Activity Durations
Develop Schedule
Control Schedule
297
Overview of Time Management Process
Plan Schedule Management Establish processes that provide guidance and
direction to manage project schedule through out the project
Define Activities - Come up with a list of activities that will need to be completed
Sequence Activities - Figure out which activities need to come before the others
and put them in the right order. Main output is a network diagram of activities
Estimate Activity Resources - Estimate the resources (human + material) needed
to do the job and create a list of them
298
Overview of Time Management Process Contd.
Estimate Activity Durations - Once resource estimates are done,
estimate the time it will take to do each activity
Develop Schedule - Then you build a schedule from all of the estimates
and the resource and activity information youve created
Control Schedule - Finally, you monitor and control changes to the
schedule to make sure that it is kept up to date.
299
Time Management
Estimate
Activity
Resource
Plan
Schedule
Management
Define
Activities
Sequence
Activities
Develop
Schedule
Estimate
Activity
Duration
Control
Schedule
Planning
Monitoring and
Controlling
300
PLANNING TIME MANAGEMENT
301
PROJECT TIME MANAGEMENT
302
Process of planning how the project schedule will
be managed
303
Plan Schedule Management -Contd.
Inputs
Project Charter
Tools & Techniques
Expert judgment
Meetings
Outputs
Schedule Management
Plan
304
Inputs for Plan Schedule Management Process
Scope Baseline provides Project Scope
Statement and WBS details that can be used
for defining activities, duration estimation and
schedule management
Other Information like cost, risk and
communication decisions from the Project
Management Plan are used to develop the
schedule
Organizational Process Assets that influence
the Plan Schedule Management Process
includes
Monitoring and reporting Tools
Historical information
Formal and information schedule control
policies, procedures, guidelines, etc.
Project closure guidelines, templates, change
control process
Risk control procedures, risk categorization,
probability and impact definition, probability
and impact matrix, etc.
305
Inputs for Plan Schedule Management Process -Contd.
Project Charter
Project charter defines the summary milestones and necessary project approvals which
influences the management of the project schedule
Enterprise Environmental factors
The enterprise environmental factors that influences the Plan Schedule Management Process are
Organizational Structure and Culture
Resource availability and skills influencing the scheduling process
PM software and Tools available to manage the schedule
Published commercial information like resource productivity, etc.
Work authorization system with in the performing organization.
306
Plan Schedule Management Process Tools & Techniques
Expert Judgment
Expert judgment guided with historical information from prior similar projects, expertise in
application areas, industries, domain, etc. should be used in development of schedule
management plan.
The Plan Schedule Management process may involve choosing strategic options to like
scheduling methodology, scheduling Tools and Techniques, PM software, estimating
approaches, etc. to schedule the project
The Schedule Management Plan may detail ways to crash or fast track schedule slippages
The scheduling Techniques may be influenced by the organizational process, procedures and
guidelines like applying leads and lags, rolling wave planning, alternate analysis, etc.
307
Plan Schedule Management Process Tools &
Techniques Contd.
Meetings
Team meetings with selected participants like project manager, project
sponsor, selected stakeholders, etc. shall be useful to develop Schedule
Management Plan
308
Plan Schedule Management Process - Outputs
Schedule Management Plan
Schedule Management Plan is a component of Project Management Plan that establishes
the criteria and the activities for developing, monitoring and controlling the schedule.
Schedule Management Plan shall establish
Scheduling methodology and Tools used for scheduling to get the required Project
Schedule Model
Level of accuracy in determining the activity duration estimates and the associated
contingencies.
309
Plan Schedule Management Process Outputs -Contd.
Unit of measures for each type of resource used in the project.
The process used to update the schedule based on the status and
record progress during execution of the project to reflect the right
information in the project schedule model
Monitor variance from baseline plan and start taking action to control
variance with in the threshold limits.
Establish criteria for performance measurement
Define reporting formats
310
311
Define Activities
Identify the activities that must be performed to produce
the project deliverables
Define the activities that must be performed to meet the
project objectives
312
Define Activities -Contd.
Inputs
Scope Baseline
Tools & Techniques
Decomposition
Rolling wave planning
Expert judgment
Outputs
Activity list
Activity attributes
Milestone list
313
Decomposition
Involves subdividing the project work packages into smaller, more
manageable components to provide better management control.
Differs from decomposition in scope definition because final outputs
here are described as activities rather than deliverables.
WBS is the basis for developing the final activity list. (I.E. WBS is
developed first followed by the activity list).
314
Inputs for Define Activities Process
Schedule Management Plan provides the level of details that is required
for managing the work and hence influencing the Define Activities
process
The Scope Baseline
Scope Statement provides details of deliverables, constraints and
assumptions
WBS and WBS dictionary helps with work packages detailed that are to
be further decomposed
315
Inputs for Define Activities Process -Contd.
Project management information system - because thats where you
store information about your activities.
Policies, Procedures and guidelines related to activity planning
Historical information from previous projects
Templates for Activity list and milestone list
Lessons learnt
316
Define Activities Process Tools & Techniques
Decomposition
Subdivide the work packages into smaller and more manageable
components called activities
Activities represent the effort needed to complete a work package.
Output of the Define activities process is activities, rather than
deliverables (as from create WBS)
WBS and WBS dictionary form the basis for developing the final activity
list however they can be developed sequentially or concurrently
317
Define Activities Process Tools & Techniques -Contd.
Rolling Wave Planning
You decompose only the activities that you need to plan for because
theyre coming up soon first. You leave everything else planned at the
milestone level until it gets closer to the time when youll do it
Is a form of progressive elaboration planning
Expert Judgment
Project team members or other experts can provide valuable insights in
defining activities
318
Define Activities process - Outputs
Activity List
Its all the activities that must be accomplished to deliver the work packages.
Activity Attributes
Heres where the description of each activity is kept.
All of the information you need to figure out the order of the work should be
here, too.
So any predecessor activities, successor activities, or constraints should be
listed in the attributes along with descriptions and any other information
about resources or time that you need for planning.
Used for schedule development
319
Define Activities process Outputs -Contd.
Milestone List
All of the important checkpoints of your project are tracked as
milestones. Some of them could be listed in your contract as
requirements of successful completion; some could just be significant
points in the project that you want to keep track of.
A milestone list identifies all milestones and indicates whether they are
mandatory (required by contract) or optional etc.
320
321
Sequence Activities
Identifying and documenting interactivity logical
relationships
322
Sequence Activities -Contd.
Inputs
Activity list
Activity attributes
Milestones
Tools & Techniques
Precedence diagramming
method (PDM)
leads and lags
Dependency determination
Outputs
Project Schedule network
diagram
Project Documents Update
323
Inputs for Sequence Activities Process
Provides insight on scheduling methods and Tools to be used in the project which will
guide sequencing of activities
Activity List
List of activities created by define activities process
Activity Attributes
This includes information about each activity, including known predecessors and
successors.
Milestone List
Milestone list may have scheduled dates which may have influence in sequencing
324
Inputs for Sequence Activities Process Contd.
Review project scope statement to ensure accuracy
Project scope statement contains product scope description that has product
characteristics that may impact activity sequencing
Standards, PMIS, Company work authorization systems, etc.
325
Sequence Activities Process Tools & Techniques
Precedence Diagramming Method (PDM)
PDM is a method of constructing a project schedule network diagram (in Critical Path
method) that uses boxes or rectangles, referred to as nodes, to represent activities and
connects them with arrows that shows dependencies. This is also called AON.
PDM uses four types to relations
Finish to Start (FS) an activity must finish before the successor can start. Most commonly
used relationship
Start to Start (SS) - an activity must start before the successor can start
Finish to Finish (FF) - an activity must finish before the successor can finish
Start to Finish (SF) - an activity must start before the successor can finish. Rarely used
326
Sequence Activities Process Tools & Techniques -Contd.
Dig Hole
Plant Tree
Design
Code
Testing
Documentation
Graphical Evaluation and review technique (GERT) is a computer simulation
technique for network diagram that allows loops between activities.
Remember this as GERT may appear as one of the choices in the exam.
327
Sequence Activities Process
Tools & Techniques -Contd.
Dependency Description
Mandatory dependencies: Dependencies that are contractually required or are inherent in the
nature of work being done. For example, in a construction project, it is impossible to erect the
superstructure until the foundation has been built
Discretionary dependencies: They are also called preferred, preferential or soft logic
Dependencies based on experience, desire, or performances. E.g. code review before testing
These are important when analyzing how to compress schedule to decrease the project
duration
External dependencies: Dependencies outside project teams control based on needs or
desire of a party outside the project (the testing schedule activity in a software project can be
dependent on delivery of hardware from an external source.)
328
Sequence Activities Process
Tools & Techniques -Contd.
Internal dependencies: Dependencies inside project teams control based on needs or desire of a
party inside the project (testing of a machine has to be preceded by assembling the machine which
can be purely internal and managed by the project team.)
Applying Lead and Lag
Lead and lag may be applied to accurately define the logical relationship
Applying lead and lag should not replace the schedule logic
Lead accelerates the successor activity, e.g. Design can start before requirements gathering is
completed.
Lag delays a successor by inserting a waiting time. E.g. A lag of 3 days needs to be introduced after
the pouring of concrete to allow for curing
329
Sequence Activities
Precedence diagramming method (PDM) Nodes
represent activities and arrows show dependencies
Integration
of codes
System
Test
Requirements Design
Coding
Module-1
Coding
Module-2
Coding
Module-3
Unit
Test-1
Unit
Test-2
Unit
Test-3
330
Finish-to-Start Activity A must finish before Activity B can
start
A B
Start-to-Start Activity A must start before Activity B can
start
A B
331
Finish-to-Finish Activity A must finish before Activity B can
finish
A
B
Start-to-Finish Activity A must start before Activity B can finish
A
B
332
Types of Dependencies
Mandatory dependencies:
o Inherent in the nature of the work.
o Usually involve physical limitations.
e.g. You cannot build the ceiling until walls of a house are completed.
Discretionary dependencies:
o Defined by the project management team.
o Should be used with care and well documented since they may limit later scheduling
options.
e.g. Best practices.
External dependencies:
o Involve a relationship between project activities and non-project activities (i.e. Activities
out of scope for the project).
e.g. Dependency on the economy, environmental factors etc.
333
Sequence Activities process - Outputs
Project Schedule network Diagrams
Schematic displays of project activities and their dependencies
Can be produced manually or by project management software
Can have full project details or have one or more summary activities
Should be accompanied by a summary narrative that describes the
basic approach of sequencing and justifies any unusual activity
sequence
334
Sequence Activities process Outputs -Contd.
Project Document Update
Activity List / Milestone List - If you find a new activity while sequencing,
updates need to be made to the activity list.
Activity Attributes - Sometimes sequencing will show that two tasks rely on
each other. If you find new predecessors or successors, their attributes will
need to be changed
Risk register - When you sequence your activities, you can find activities that
carry a lot of risk to the project. Any risks you find in the process need to be
added to your risk register.
335
336
For example, an activity takes one and half day to complete
and it starts on Friday morning. Saturday and Sunday being
holidays, it will be completed on Monday afternoon. Though
the activity duration is one and half day, the elapsed time
will be three and half day.
Process of determining what resources (includes
equipment's, materials) are required and what quantities
of each resource will be used and when each resource will
be available to perform project activities
337
Estimate Activity Resources -Contd.
Inputs
Activity list
Activity attributes
Resource Calendar
Risk Register
Activity Cost Estimates
Tools & Techniques
Expert judgment
Alternatives analysis
Published estimating data
PM software
Bottom-up estimating
Outputs
Activity resource requirements
Resource breakdown structure
338
Inputs for Estimate Activity Resources Process
Schedule Management Plan identifies the level of accuracy and the unit of measure for
the resources to be estimated
Activity List
Activity Attributes
successors.
339
Inputs for Estimate Activity Resources Process -
Contd.
Resource Calendars
Specifies when and for how long identified project resources will
be available during the project
Includes availability, capability and skills of human resources
340
Inputs for Estimate Activity Resources Process -Contd.
Risk Register
Risk event may trigger resource selection
and availability
Cost of resource may impact the
resource selection
Resource availability, location and skills
Policies and procedures regarding
staffing, rental / purchase of material
and equipment
Historical information regarding type of
resources used in similar past projects
341
Estimate Activity Resources Process
Tools & Techniques
Expert Judgment
Expert judgment, along with past records provides valuable insight about the
environment & information from past similar projects
Alternatives Analysis
Means considering several different options for how you assign resources. This includes
varying the number of resources as well as the kind of resources you use.
Published Estimating Data
Is something that project managers in a lot of industries use to help them figure out
how many resources they need. They rely on articles, books, journals, and periodicals
that collect, analyze, and publish data from other peoples projects.
342
Estimate Activity Resources Process
Tools & Techniques-Contd.
Project Management Software
You may rely on articles, books, journals, and periodicals that collect,
analyze, and publish data from other peoples projects to figure out
how many resources you need
Bottom-Up Estimating
It means breaking down complex activities into pieces, and working
out the resource assignments for each of those simpler pieces using
the other four Tools and Techniques.
343
Estimate Activity Resources Process Outputs
Activity Resource Requirements
Type and quantity of resources required for
each activity in a work package
Can include basis of estimate, assumptions,
resource skill and availability information
Resource Breakdown Structure
Hierarchical structure that identifies
resources by resource category and
resource type
Helps organizing and reporting schedule
data with resource utilized information
Activity List
Activity Attributes
Resource Calendars
344
345
Estimate Activity Duration
Process of taking information on project scope and resources
and then developing durations for input to schedules
346
Estimate Activity Duration -Contd.
Inputs
Activity list
Activity attributes
Resource calendar
Schedule management plan
Tools & Techniques
Expert judgment
Analogous estimating
Parametric estimating
Three point estimating
Techniques
Reserve analysis
Outputs
Activity duration
estimates
Project Document
Update
347
Inputs for Estimate Activity Duration Process
Schedule Management Plan identifies the level of accuracy along with other criteria
required to estimate activities
Activity List
Activity Attributes
successors.
348
Inputs for Estimate Activity Duration Process -Contd.
Resource assignment and availability will greatly impact the duration
Resource Calendars
Specifies when and for how long identified project resources will be available during the
project
Includes availability, capability and skills of human resources
Provides an hierarchical structure of the identified resource by resource category and
resource type
349
Inputs for Estimate Activity Duration Process -Contd.
Constraints
Available skilled resources
Contract terms
Assumptions
Existing conditions
Availability of information
Length of reporting period
Risk Register
List of risk along with risk analysis and risk
response planning
Duration estimating database & reference
data
Published commercial information
Productivity metrics
Historical duration information
Lessons learnt
Project calendars
Scheduling methodologies
350
Estimate Activity Duration Process
Tools & Techniques
Expert Judgment
Expert judgment, along with past records provides valuable insight about the environment &
information from past similar projects such as maximum activity durations from past similar
projects
Analogous Estimating
Relies on actual activity durations of past similar projects as the basis of estimating duration for the
current project activities
Its a gross value estimation approach
Uses historical data and expert judgment its a top-down estimation approach
Less time consuming and less accurate
351
Tools & Techniques Contd.
Parametric Estimating
Uses statistical relationship between variables on an activity to calculate estimates
Could be highly accurate if underlying data is of high quality
E.g. 100 lines of code per day, 20 square feet of floor tiles installation per hour
Two varieties of parametric estimate
Regression Analysis (Scatter Diagram) Tracks two variables to see if they are related. It
establishes a mathematical formula to use in future parametric estimating
Learning Curve Installing floor tiles in the 50th room will take less time due to improved
productivity
352
Three-point Estimates
Accuracy of single-point estimates can be improved by considering the uncertainties and risk
Originated from Program Evaluation and Review Technique (PERT)
Considers Optimistic (To), Pessimistic (TP) and most likely (TM) duration estimate scenarios
to define an approximate range for estimation
Expect Activity Duration Estimate (TE) = (To + 4* TM + TP)/6
Activity standard deviation = (TP To) /6
Activity variance = [(TP To) /6] squared == standard deviation squared
353
Group Decision-Making Techniques
Team based approaches like brainstorming, Delphi Techniques, etc. will help in not only improving
the accuracy on estimates, but also will improvement the commitment of the performing team if
they are part of the decision making group.
Reserve Analysis
Reserve connects estimating with risk management
Some time reserves or buffers need to be considered in project schedule for schedule
uncertainties to accommodate for the risks that remain in the project after the risk management
planning processes are completed
This contingency time reserve may be a percentage of estimated activity duration or a fixed work
period or developed by using quantitative analysis methods
354
Outputs
Activity Duration Estimates
The Activity Duration Estimates are estimates of how long each activity in the activity list will
take. The estimate
Can be in hours, days, weeks... any work period is fine, and youll use different work periods
for different jobs.
May include some range for possible results. For e.g. 2 weeks +/- 1 day indicates that the
activity duration could take between 13 day to 15 days.
Another way to specify range is to predict a probability e.g. 10% chance that the shopping
will take more than 2 weeks. That means theres a 90% probability that the shopping will be
done within 2 weeks or less
Activity Attributes
Assumptions made in developing the activity duration estimate such as skills and availability
355
356
Develop Schedule
If start and finish dates are not realistic, the project is
unlikely to be finished on schedule
Determining the start and finish dates of project activities
357
Develop Schedule -Contd.
Inputs
Activity list
Activity attributes
Project Schedule network diagrams
Resource calendars
Activity duration estimates
Risk Register
Project staff assignments
Resource breakdown structure
Tools & Techniques
Schedule network analysis
Critical path method
Critical Chain method
Resource Optimization
Techniques
Modeling Techniques
Leads and lags
Schedule Compression
Scheduling Tool
Outputs
Schedule Baseline
Project schedule
Schedule data
Project Calendars
Project Management
Plan Updates
Project Document
Updates
358
PERT Estimations
For more than one Tasks (e.g. for a project where all tasks lie on the critical path)
359
PERT Example
Calculate Expected Time
Optimistic time = 15 minutes
Most likely time = 30 minutes
Pessimistic time = 60 minutes
What is the Expected Time? And what is the variance in commuting
time?
360
Basic Terminology
Activity An element of work performed during the course of project
Tasks Subdivision of activities.
Events Culmination (climax) of a set of activities which has
insignificant duration in comparison to the activities itself.
Path Set of activities connected sequentially.
Critical path Longest path, float less than or equal to specified value
mostly Zero.
361
Basic Terminology -Contd.
Total float (Slack) Amount of time an activity can be delayed without
delaying the project finish date
Free Float Amount of time an activity can be delayed without
delaying the early start of the follow-on activity
Negative Float - Amount of time the project is behind, as determined
by the total time for the tasks on the critical path exceeding the time
available for the project.
362
Network Calculation
0
A
B
C
D E
5
5
10
10 5
Start Date 6/1
6/1 6/5
6/6 6/15
6/6 6/10
6/16 6/25 6/26 6/30
Finish Date 6/30
6/26 6/30 6/16 6/25
6/6 6/15
6/1 6/5
6/11 6/15
5
0 0
0
Calculations
Forward Pass Determine early start and early finish dates
Backward Pass Determine late start and late finish dates and float
363
Gantt Charts
Bar chart Displays activity start and end dates, as well as expected
durations
Milestone chart Displays scheduled start or completion of major
deliverables
Combination chart Displays events and activities as a function of time
364
Typical Gantt Chart
Time
Activity
Task A
Task B
Task C
Task D
June July Aug Sep Oct
Nov
365
Schedule Optimization
Crashing Decreasing the total project duration with the least cost possible
Fast tracking Doing activities in parallel that, normally, would be done in
sequence
Reduce critical path To fast track, shorten the duration of critical activities, or
increase working hours
Resource leveling Reducing peak overloads by
re-distributing allocations to activities with float (Can result in increased duration)
366
Crashing
= $1000/week
= $500/week
= $1500/week
Assume P,Q and T are in the critical path
How to get the maximum duration compression by spending minimum
extra cost?
367
Resource Leveling
Assign Resources ( Labor..) to schedule
Study Fluctuations in Resources requirements
Mismatch between required and available ?
o Subcontract
o Delay non-critical activities
o Hire more, temporarily
o Delay the Project
Many Rules of Thumb !!
368
Resource Leveling Heuristics
Done because mathematical analysis produces a preliminary early-start schedule that
requires more resources during certain time periods than are available.
e.g. Rule of thumb allocate scarce resources to critical path activities first.
Often results in a project duration that is longer than the preliminary schedule. (Also
called resource based method).
Resource reallocation: used to bring the schedule back or as close as possible to the
originally intended duration.
369
Resource Leveling Heuristics Contd.
Reverse resource allocation: if projects have a finite and critical project
resource, requiring that the resource be scheduled in reverse from the
project ending date.
Critical chain: A technique that modifies the project schedule to
account for limited resources.
370
Resource Leveling- a simple example
Before Resource Leveling
Days
A
c
t
i
v
i
t
y
a
b
c
1 2 3 4 5
a
c
b
c
b
c
W
o
r
k
e
r
s
Days
1 2 3 4 5
0
2
4
6
8
371
Resource Leveling- a simple example
After Resource Leveling
Days
A
c
t
i
v
i
t
y
a
b
c
1 2 3 4 5
a
c
b
c
b
c
W
o
r
k
e
r
s
Days
1 2 3 4 5
0
2
4
6
8
372
Inputs for Develop Schedule Process
Schedule Management Plan identifies the
scheduling methods and Tools used to create
the schedule
Activity List
List of activities created by define activities
process
Activity Attributes
This includes information about each activity,
including known predecessors and
successors.
Project Schedule Network Diagram
Created through sequencing the activities
Resource Calendars
Specifies when and for how long identified
project resources will be available during the
project
Includes availability, capability and skills of
human resources
Resource assignment and availability
373
Inputs for Develop Schedule Process-Contd.
Activity Duration Estimates
Estimated work period (duration) for each activity considering the number of
resources assigned
Constraints and assumptions
Risk Register
List of risk along with the characteristics that affect the schedule model
Scheduling Tool
374
Inputs for Develop Schedule Process-Contd.
Project calendars
Scheduling methodologies
Provides resource analysis and organizational reporting
Project Staff Assignment
Provides which resource is assigned to which assignment
375
Develop Schedule Process
Tools & Techniques
Schedule Network Analysis
To generate project schedule, analyze the path convergence or
divergence (to be used for schedule compression). May use various
analysis Techniques such as
Critical path method
Critical Chain method
What-if analysis
Resource leveling
376
Critical Path Method
Involves determining the longest path through the network diagram called the
critical path
Critical path is the longest duration path through a network diagram and
determines the shortest time to complete the project
Find all the paths in network diagram and add the activity durations in each path.
The path with longest duration is the critical path
CPM Calculates the earliest and latest each activity can start and the earliest and
latest each activity can finished
377
Near Critical Path
The path is close in duration to the critical path. If the critical path gets
somehow shortened or the near critical path lengthens, a near critical
path can become the new critical path
Both critical path and near critical paths must be closely monitored
The closer in length the near-critical and critical paths are, the more risk
the project has.
Develop Schedule Process Tools & Techniques
Continued Critical Path Method
378
Float (Slack)
Total Float is the amount of time an activity can be delayed without delaying the project
end date or an intermediary milestone
Free float - is the amount of time an activity can be delayed without delaying the early start
date of its successor
Project Float - is the amount of time the project can be delayed without delaying the
externally imposed project completion date required by the customer / management /
previously committed date
Activities on critical path has zero float. If any of the critical path activities get delayed or
they have dictated dates, can result in negative float
Knowledge of float help team members to juggle their work on multiple projects
Continued Critical Path Method Contd.
379
Float = Late finish Early finish (or)
Float = Late start Early start
The early figures are calculated from the beginning f the project to the end of
the project by a forward pass through the network diagram
The late figures are calculated by moving from the end of the project following
the dependencies to the beginning by a backward pass through the network
diagram
380
1st activity in a diagram has an early start of zero
For critical path activities, the early start time is the same as the late
start time. (Float = 0)
There could be more than one critical path on a Network diagram.
The higher the number of critical paths, the larger the project risk.
381
Tools & Techniques Continued
Critical Chain Method
Critical chain is a resource-constrained critical path.
Starting at the end date, you build duration buffers into the chain at
critical milestones. These reserves will provide cushions for schedule
delays.
You manage these buffers to manage individual milestone date and
project final completion date
382
Resource Optimization Techniques
Resource Leveling
Resource leveling adjust start and finish date of the activities based on resource
constraints based on demand Vs.. supply.
Critical resources are available only at certain times or are only available in limited
quantities or over-allocated and It may cause the original critical path to change.
Resource Smoothing
A technique that adjust the activities of a schedule model such that the requirements
of resources on the project do not exceed certain predefined resource limits.
Activities are delayed only with in their free and total float
Not all resources are used in this technique.
383
Modeling Techniques
What-If Scenario Analysis
A schedule network analysis is done using questions such as what if the
situation represented by scenario X happens? Such as delay due to
strike, late delivery of equipment etc.
The outcome of What-If scenario analysis can be used to assess project
schedule under adverse conditions and prepare contingency or
response plans to mitigate the adverse impact
384
Simulation
Involves calculating multiple project durations with different sets of
assumptions.
Monte Carlo Analysis is most popular one in which a distribution of possible
activity duration is defined for each activity and used to calculate a distribution
of possible outcomes.
Applying Leads and Lags
Apply leads and lags to activities to create a viable schedule
385
Shortens the project schedule without changing the project scope to meet
schedule constraints, imposed dates or other schedule objectives. Can include
Crashing
o Analyze cost and schedule tradeoffs and figure out how to compress schedule
the most for the least cost while maintaining project scope.
o Bring in additional resource, approve overtime, buy an automated tool etc.
o Results in increased cost / risk only works when adding additional resources
will compress the activity duration
386
Fast Tracking
o Activities planned in sequence are performed in parallel
o May result in rework and increased risk
o Only works if activities can be overlapped to shorten the duration
Scheduling tool
o Automated scheduling Tools can expedite the schedule creation process
387
Develop Schedule Process Outputs
Project Schedule
All of that analysis and modeling should produce a schedule that everyone can
get behind.
Schedule development will run in iteration to create a realistic and acceptable
schedule
Various schedule representation formats could be used. Such as
Milestone Chart
o Bar charts identifying the scheduled start / completion of major events
o Good Tools for reporting the progress to customer and management
o Milestones have ZERO duration
388
Bar Chart (Gantt Charts)
o Shows activity start and end dates and expected durations.
Easy to read and good for progress reporting.
o For control and management presentations, broader summary
activity (hammock activity) is displayed in bar chart reports
389
Project Schedule
Project Schedule Network Diagrams
o Usually depicted in Activity On Node diagrams showing both
the project network logic and critical path schedule activities
390
Develop Schedule Process Outputs Continued
Schedule Baseline
Accepted and approved version of project schedule with baseline start and finish date
Is a part of project management plan (performance measurement baseline)
Schedule Data
Includes schedule milestones, activities, activity attributes, and documentation of
identified assumptions and constraints.
May also include resource requirements over time, alternative schedules (best case / worst
case, resource leveled), scheduling of contingency reserve, cash flow projection, resource
histogram, order and delivery schedules etc.
391
Develop Schedule Process Outputs Contd.
Project Calendar
Working days
Shifts for performing activities
Activity Attributes
Calendar
Risk register
Schedule baseline
392
MONITORING TIME
MANAGEMENT
393
394
Control Schedule
Monitoring the Status of the Project to update
Project progress and manage changes to the
Schedule Baseline
395
Control Schedule
Inputs
Project Management
Plan
Project Schedule
Work Performance
Data
Project calendars
Schedule Data
Assets
Tools & Techniques
Performance Reviews
Project management
software
Resource Optimization
Techniques
Modeling Techniques
Leads and Lags
Scheduling Tool
Outputs
Work Performance
Information
Schedule forecasts
Change Requests
update
Project documents update
Organization Process Assets
updates
396
Inputs for Control Schedule Process
Schedule baseline
Project Schedule
Most recent version of project schedule
with progress information
Information about project progress
Project Calendar
Schedule model require project
calendar(s) for calculating the schedule
forecasts
397
Inputs for Control Schedule Process Contd.
Schedule data
Review of schedule data happens in the Control Schedule process
Policies, Procedures and guidelines related to schedule control
Schedule control Tools
Reporting formats to be used
398
Control Schedule Process Tools & Techniques
Performance Reviews
Earned value method could be used to measure, compare and analyze schedule performance (SPI
and SV)
For critical chain method, compare buffer remaining to buffer needed to protect delivery dates
Trend analysis help to the see improving or deteriorating trend in project progress
Variance on the CPM will have direct impact on the project schedule
Project Management software
Helps tracking actual Vs.. planned
Resource Optimization Technique
Helps to optimize the remaining project time with the available resources.
399
Control Schedule Process Tools & Techniques Contd.
Leads and lags
Find ways to bring project activities that are behind schedule into alignment with plan
Schedule compression
To bring project activities that are behind schedule into alignment with plan
Scheduling Tools
Schedule progress data and scheduling Tools are used to perform schedule network analysis to
generate updated schedule
Modeling Techniques
Review scenarios to bring back schedule into alignment with plan
400
Control Schedule process - Outputs
Work Performance Information
Schedule variance (SV) and Schedule
performance index (SPI) of work
packages and control accounts
Schedule forecasts
Prediction of schedule completion based
on the current performance information
Change requests
May include preventive and corrective
actions for schedule variances
Will be processed through integrated
change control process
401
Control Schedule process Outputs
Contd.
Schedule baseline with approved
changes
Cost baseline due to schedule
compression
Schedule data
Project schedule
Organizational Process Asset updates
Lessons learnt
Cause of variances
Corrective action chosen and reasons
402
To understand the value of time
Value Every Minute
Author Unknown
To realize the value of one year: Ask a student who has failed a final exam.
To realize the value of one month: Ask a mother who has given birth to a premature baby.
To realize the value of one week: Ask an editor of a weekly newspaper.
To realize the value of one hour: Ask the lovers who are waiting to meet.
To realize the value of one minute: Ask the person who has missed the train, bus or plane.
To realize the value of one second: Ask a person who has survived an accident.
To realize the value of one millisecond: Ask the person who has won a silver medal in the Olympics.
Time waits for no one.
Treasure every moment you have. You will treasure it even more when you can share it with
someone special.
403
Critical Path
Consider the following diagram of activities (time is given in days)
1. How many paths are on this network diagram?
2. How long is each path in days?
3. Which is the critical path?
4. What is the least amount of time needed to finish this project?
Start Finish
A=2 B=5
C=2
D=7
E=1
F=2
404
PERT
PERT (Problem)
What's the expected time to complete an activity given these times?
Optimistic = 15 min. Most Likely =30 min. Pessimistic = 60 min. Weighted
Average (Expected) Time using PERT calculations:
{Optimistic + ( 4 x Most Likely) + Pessimistic} divided by 6
Answer: (15 + 120 + 60) /6 = 32.5 min
405
Representation of Node
Standard Node or Activity Presentation *
ES
LF LS
EF
Early
Start 1
Late
Finish 4
Late Start
2
Early
Finish 3
Duration 3
Activity #
Float - 1
Forward Pass
Backward
Pass
Float equals either LS-ES or LF-EF
* But many types exist so dont rely to heavily on
anyone
406
Critical Path
Schedule Exercise -Draw a network diagram based on this information to answer these
questions.
Task A can start immediately & is estimated at 3 weeks
Task B can start after Task A is completed & is estimated at 3 weeks
Task C can start after Task A is completed & is estimated at 6 weeks
Task D can start after Task B is completed & is estimated at 8 weeks
Task E can start after Tasks C & 0 are finished & IS estimated at 4 weeks
1. How long is the critical path?
2. What's the float of Task C?_______ and Task B?
3. What's the total float (between all nodes) of the path with the longest float?
407
Diagram to find Critical Path
Exercise Answers 1,2 & 3
1. Paths A,B,D,E = 18 & A,C,E =13. 18 is longest
2. 5 weeks & 0 weeks
3. 5 weeks
Start
End
Task A
Float=0
1
3
3 1
3
3
Task B
Float=0
4
6
6 4
Task C
Float=5
4
9
14
9
6
Task D
Float=0
7
14 7
8
14
Task D
Float=0
18
4
18 15
15
408
More Exercise Questions
4. If Task C changes to 10 weeks, how will the schedule dates be
affected?
5. Task F, which is estimated at 11 weeks, has been added to the project.
It must be completed before Task E & after Task C. The customer is
concerned that this will add an additional 11 weeks to the elapsed time
of the project. How many weeks will be added?
(Assume question 4 above didn't happen.)
409
Answers to Questions 4&5
4. No effect. Task C is on a path with a 5 week total float so adding another
4 weeks will still leave 1 week of total float on its path.
5. Task F is added to a path with a 5 week float. Adding this 11 week
activity will use up all 5 of the float weeks and delay the project by an
additional 6 weeks. The critical path will move to the bottom with a 6 week
float on the top path.
410
Critical path
2
3
4
1 6 5 8 7
5
4
9
4
4
6
10
8
3
4
Critical path is 5+8+10+4+3+4 = 34 days.
Critical path =Longest path, float Zero for all Activities
411
Calculate Slack Time
A,5 E,4
H,4
F,4
C,6
D,3
B,7
I, 8
G,3
412
Calculate Earliest Time (TE)
A,5 E,4
H,4
F,4
C,6
D,3
B,7
I, 8
G,3
T
E
= 28
T
E
= 24
T
E
= 20
T
E
= 12
T
E
= 5
T
E
= 0
T
E
= 18
T
E
= 9
Step 1
413
Calculate Latest Time (TL)
A,5 E,4
H,4
F,4
C,6
D,3
B,7
I, 8
G,3
T
L
= 28
T
L
= 24
T
L
= 20
T
L
= 12
T
L
= 5 T
L
= 0
T
L
= 21
T
L
= 17
Step 2
414
The Critical Path
T
L
= 28
T
E
= 28
T
L
= 0
T
E
= 0
T
E
= 20
A,5 E,4
H,4
F,4
C,6
D,3
B,7
I, 8
G,3
T
L
= 24
T
L
= 20
T
L
= 12
T
L
= 5
T
L
= 21
T
L
= 17
T
E
= 24
T
E
= 12
T
E
= 5
T
E
= 18
T
E
= 9
Float/Slack time = Latest Time Earliest Time
Step 3
415
Network Diagram
D FINISH
START
A
B
C
A Duration 3 days
B Duration 5 days
C Duration 11 days
D Duration 8 days
1. Calculate Early Start
2. Calculate Early Finish
3. Calculate Late Start
4. Calculate Late Finish
416
Network Diagram-Contd.
D FINISH
START
A
B
C
Step 1
417
Network Diagram-Contd.
D FINISH
START
A
B
C
Step 2
418
Critical Path ..once more
What is the length of the
critical path?
A. 12
B. 10
C. 11
D. 14
TASK Preceding
Activity
Estimate in
Months
Start - 0
A Start 3
B A 4
C Start 2
E C 5
D Start 7
E D 1
END B 3
END E 4
419
SAMPLE EXAM QUESTION
Start
A
C
D
B
E
End
3
2
7
4
5
1
3
4
Answer 2- A(12) 7+1+4
420
Task A
3 days
Task B
10 days
Task C
6 days
Task D
8 days
Task E
4 days
Question 3 - What is the late finish date for Task B?
A. 15
B. 17
C. 13
D. 3
If the project must end by July 30
th
, what is the late start date of the Project?
421
Task A
3 days
Task B
10 days
Task C
6 days
Task D
8 days
Task E
4 days
1 3
7/10 7/12
4 13
18 21
7/27 7/30
4 9
7/13 7/18 7/19 7/26
10 17
Answer 3- B-17 (Just before the start of Task E)
Using the backward path, late start date is July 10
th
, (notice bottom dates)
422
Critical Path - A twist
A,5
E,4
H,4
C,6
D,3
I, 8
G,3
F,4
B,7
Q : Would crashing of task F by 2 weeks reduce the project duration? NO
Q : Would crashing of task B by 2 weeks reduce the project duration? Yes
Q : Which tasks should the project manager look at as candidates for
crashing? A,B,I,H or E
423
Early Start and Early Finish
Q Activity L has an early start time of _____ weeks and an early finish
time of _______ weeks
15
17
A,7
B,3
G,2
N,3
M,3
K,7
F,6
D,8
C,6
E,5
H,4
J,3
I,7
L,2
424
Slack time
Q Using the figure below, the slack time in activity G is ____ weeks
Zero
L,2
N,3
M,3
K,7
F,6
D,8
C,6
E,5
H,4
J,3
I,7
G,2
425
Critical Path
Q3 Using the figure below, the critical path is ____ weeks.
20
A,7
B,3
G,2
L,2
N,3
M,3
K,7
F,6
D,8
E,5
H,4
J,3
I,7
426
Allowable Slip
Q3 Using the figure below, how many weeks activity F be allowed to slip?
A,3
B,4
G,2
E,4
C,8 D,1
H,0
F,3
Answer : 3 Weeks
427
PERT Calculations
ACTIVITY Optimistic
estimate
Most likely
estimate
Pessimistic
estimate
A 2 3 4
B 4 5 6
C 5 5.5 6
D 4 4 4
Calculate
1.Expected time, assuming A,B,C and D are in the critical path.
2.Standard deviation.
3.With 95% probability what is the Range
428
PERT Calculations-Contd.
ACTIVITY Optimistic
estimate
Most likely
estimate
Pessimistic
estimate
PERT Time
(OT+4*MLT
+PT)/6
A 2 3 4
B 4 5 6
C 5 5.5 6
D 4 4 4
Calculate
1. Expected time, assuming A,B,C and D are in the critical path.
2. Standard deviation.
3. With 95% probability what is the Range
(2 + 4*3 + 4)/6 = 3
= 5
= 5.5
= 4
Step 1
429
ACTIVITY Optimistic
estimate
Most likely
estimate
Pessimistic
estimate
PERT Time
(OT+4*MLT+PT)/6
Std Dev
(PT-OT)/6
A 2 3 4 3
B 4 5 6 5
C 5 5.5 6 5.5
D 4 4 4 4
Step 2
Calculate
0.333
0.333
0.1666
0
430
Step 3
Calculate
ACTIVITY Optimistic
estimate
Most likely
estimate
Pessimistic
estimate
PERT Time
(OT+4*MLT+
PT)/6
Std Dev
(PT-OT)/6
A 2 3 4 3 0.333
B 4 5 6 5 0.333
C 5 5.5 6 5.5 0.1666
D 4 4 4 4 0
431
ACTIVITY Optimistic
estimate
Most likely
estimate
Pessimistic
estimate
PERT Time
(OT+4*MLT+
PT)/6
Std Dev
(PT-OT)/6
A 2 3 4 3 0.333
B 4 5 6 5 0.333
C 5 5.5 6 5.5 0.1666
D 4 4 4 4 0
Step 3
= 3+5+5.5+4 = 17.5
= Sqrt(0.11+0.11+0.027+0) =Sqrt(0.25)=0.5
= 16.5 to 18.5 weeks (2sd)
1. Expected time, assuming A,B,C and D are in the critical path
2. Standard deviation
3. With 95% probability what is the Range
Calculate
432
Free Slack / Project Slack / Total Slack
Task Estimate (weeks)
Start-A 3
Start-B 9
A-C 3
B-C Dummy
B-E 2
C-D 2
C-E 1
E-End 4
D-End 2
Q1- Find Free slack for Task CD ?
Q2- Total slack for Task CD ?
Q3- If the management tells you to complete the
project two weeks early what is the project float?
433
Find - Free Slack / Total Slack / Project Slack
T
E
= 3
T
E
= 9
T
E
= 0
Start
A
B
C
E
D
End
T
E
= 11
T
E
= 9
T
E
= 11
T
E
= 15
3
9
3
2
2
1
4
2
T
L
= 15
T
L
= 13
T
L
= 11
T
L
= 10
T
L
= 9
T
L
= 7
T
L
= 0
1. Free Slack of task CD = 11- (9+2)= 0
2. Total Slack of task CD= 13-(9+2) = 2
3. Project Float = -2
Steps:
1. Find TE as the maximum value at a node while
making a forward pass.
2. Find TL as the minimum values at a node while
making a backward pass.
3. Mark the path where TE=TL
434
PMBOK
Project Management Professional Study Guide Kim Heldman
Quantitative Methods for Project Management Dr. Frank T Anbari
Rita Mulcahy
References
435
END OF THE SESSION
436
COST MANAGEMENT
437
List of Topics
1. Introduction Cost Management
2. Planning Cost Management
1. Project Cost Management
2. Estimate Costs
3. Determine Budget
3. Monitoring and Controlling
1. Control Costs
438
INTRODUCTION COST
MANAGEMENT
439
What is Cost and Project Cost Management
Cost is a resource sacrificed or foregone to achieve a specific objective or
something given up in exchange.
Cost is usually measured in monetary units
Project Cost Management describes the processes involved in planning,
estimating, budgeting and controlling cost to ensure that the project is
completed within the approval budget.
440
Introduction Cost Management
Project Cost Management is about getting things done WITHIN BUDGET
Since there are so many different people involved in making a project
successful, it takes a lot of planning to do.
No project plan is complete until you come up with a budget
You start figuring out
o What work is to be done and in what order?
o What resources you will use?
o How long it will take?
441
Introduction Cost Management Contd.
You can aggregate all estimates of individual activities and prepare a
baseline for cost just similar to what you do for scope/ schedule
baseline
Progress has to be monitored and cost has to be controlled as you
execute.
So you always compare your actuals to your planned and make
adjustments
442
Planning
Monitoring &
Controlling
Determine
Budget
Control
Costs
Estimate
Costs
Plan Cost
Management
443
Overview of Cost Management Process
Plan Cost
Management
Identify the
policies, procedures
and documentation
Planning Process
Group
Estimate Costs
Plan out how much
you expect each
activity to cost.
Planning Process
Group
Determine Budget
Add up all
estimates from
individual activities
and create a
baseline to be
used as a reference
for comparing
future expenditures
Planning Process
Group
Control Costs
Track the actual
performance
compared to your
budget and make
adjustments as
required
Monitoring &
controlling
Process Group
444
Types of Cost
Fixed Cost
o No change when amount of production / amount of work changes. E.g. Rent, set up etc.
Variable Cost
o Varies with amount of production / amount of work. E.g. salary, cost of material etc.
A different way to categorize
Direct Cost
o Costs directly attributable to the work on the project. E.g. travel, salary, hardware etc.
Indirect Cost
o Overhead, incurred for benefit of more than one projects. E.g. support services, taxes, fringe
benefits etc.
445
PLANNING COST
MANAGEMENT
446
PROJECT COST MANAGEMENT
447
Plan Cost Management
Inputs
Project Charter
Tools & Techniques
Expert Judgment
Meetings
Outputs
Cost Management Plan
448
Inputs for Plan Cost Management Process
Scope statement
WBS and WBS dictionary
Project Schedule - Time-phased
implementation plan which helps understand
the methodology, risks etc.
Other Information - Related to scheduling, Risks
and communication
Project Charter
Summary Budget
Approval Requirements
Organizational culture
Marketplace conditions
Currency exchange rates
Commercial cost databases for material /
supply / labor
Financial control Procedures
Historical information & lessons learned
knowledge data bases
Financial data bases
Existing Policies, procedures and guidelines
449
Plan Cost Management Tools & Techniques
Expert Judgment
information from past similar projects
Strategic options to fund the project like self funding, funding with equity, debt etc.
Resource options such as make or buy, Renting or leasing etc.
Decision making Techniques like Payback period, ROI, IRR, Discounted cash flow, NPV
Project meetings to involve the different stake holders for the preparation of the cost
management plan
450
Answers questions such as
o How to plan cost for the project?
o How to effectively manage cost to the baseline?
o How to control cost and manage variances?
Includes
o Units of measures currency, effort hours, staff days
o Levels of precision
o Level of accuracy for estimates
o Organizational Procedural links WBS component used for cost accountings
are called Control accounts and are linked to org accounting systems
451
Cost Management Plan-Contd.
o Control thresholds agreed upon variance limits
o Rules for performance measurement earned value measurement
o Reporting formats to be used
o Process Description. E.g.
Processes for establishing cost baseline
Processes for cost change control
o Additional details like
Strategic funding choices
Procedure to handle fluctuations in currency exchange rate
Procedure for project cost recording
452
453
Estimate Costs
Process of developing an approximation (or estimate) for
the cost of the resources necessary to complete the project
activities
Difference between cost estimating and pricing:
Cost estimating: Assessing how much it will cost the organization to provide the product
or service
Pricing: Assessing how much the organization will charge for the product or service
Cost estimating also includes identifying and considering cost alternatives
454
Four common estimating style:
Subjective personal experience
Statistical comprehensive historical data
Comparative similar projects
Empirical base on real data, including quotes, tender, etc.
455
Estimate Costs
Inputs
factors
Scope Baseline
Project Schedule
Human Resource Plan
Risk Register
Tools & Techniques
Analogous estimating
Expert Judgment
Parametric modeling
Bottom-up estimating
Three Point Estimates
Reserve analysis
Cost of quality
Project Management
Estimating Software
Vendor Bid Analysis
Group decision
making skills
Outputs
Activity cost estimates
Basis of Estimates
Project Document
Update
456
Inputs for Estimate Costs Process
How the project will be managed and
controlled
Human Resource Plan
Labor rates
Cost of Reward & Recognition
Scope Baseline
Scope statement lists objectives and
deliverables of the projects
WBS (and WBS dictionary) lists all work
packages in scope that helps in
understanding what we are estimating
Also helps to understand whats out of
scope, if there are any constraints etc.
Risk Register
Cost for risk responses, risk control activity
Threats and Opportunities negative and
positive risks
457
Inputs for Estimate Costs Process
Project schedule
Contains details of activities, resource
assigned, details about when any activity
will occur
Timing of procurement
Need to create a time-phased expenditure
plan to control project spends
Planning is iterative hence cost will also
affect the schedule.
E.g. if something costs more when its
expected in the schedule, you may change the
schedule to be able to purchase that
equipment for lower price
Estimation Policies, templates
Historical cost records from past projects
Market conditions
Commercial cost databases for material /
supply / labor
458
Estimate Costs Tools & Techniques
Expert Judgment
information from past similar projects
Analogous Estimating
Relies on actual cost of past similar projects as the basis of estimating costs for the current
project
Its a gross value estimation approach used during project initiation
Uses historical data and expert judgment its a top-down estimation approach
Less time consuming and less accurate
459
Estimate Costs Tools & Techniques Contd.
Parametric Estimating
Uses statistical relationship between variables on an activity to calculate estimates
Could be highly accurate if underlying data is of high quality
E.g. $20 per 100 lines of code, $500 per square feet of floor tiles installation
Two varieties of parametric estimate
Regression Analysis (Scatter Diagram) Tracks two variables to see if they are related. It
establishes a mathematical formula to use in future parametric estimating
Learning Curve Installing floor tiles in the 50th room will take less time due to improved
productivity
460
Bottom-Up estimating
Creates detailed estimate for each granular activity
Rolls up / summarizes the estimates into higher levels (say, control account,
overall project estimate) for reporting & tracking
Accuracy depends on size & complexity of individual task package needs an
accurate and detailed WBS
461
Three-point Estimates
Accuracy of single-point estimates can be improved by considering the uncertainties and risk
Originated from Program Evaluation and Review Technique (PERT)
Considers Optimistic (Co), Pessimistic (CP) and most likely (CM) cost estimate scenarios to
define an approximate range for estimation
Expect Activity Cost Estimate (CE) = (Co + 4* CM + CP)/6
Activity standard deviation = (CP Co) /6
Activity variance = [(CP Co) /6] squared == standard deviation squared
The above Tools and Techniques are also common for
time (activity duration) estimations
462
Reserve Analysis
Money needs to be kept aside for cost overruns to accommodate for the risks that remain in the project
after the risk management planning processes are completed
Adding reserve is not adding padding. Its about calculating additional funds that may be required as
justified by risk management planning processes related data points
There are two types of reserves: Contingency reserve (Known Unknowns), Management reserve
(Unknown Unknowns)
Cost of Quality
Cost of quality related activities to be estimated and included in budgeting
Is about how much money it takes to do the project right
463
Project Management Estimating Software
Spreadsheet, estimating software, simulation & statistical Tools can greatly assist in cost
estimating
Vendor Bid Analysis
For outsourcing, bids of the vendors need be analyzed to examine price of individual
deliverables and to derive a cost that supports the final projects cost.
Team based approaches such as Brainstorming, Delphi or nominal group Techniques
Getting a buy in from the team members for the estimates being collated
464
Estimate Costs - Outputs
Cost estimates for all the activities in your task list
Contains direct labor, set up, equipment, reserve, indirect costs etc.
Basis of Cost Estimates
Supporting documentation to provide clear and complete understanding of how cost estimates
was derived
Reasoning and justifications for your cost numbers
May update risk register
465
Typical problems with Cost Estimates
Developing an estimate for large project is a complex task.
-requiring significant amount of effort
Many people doing estimates have little experience doing them
-need training and mentoring
People have a bias toward underestimation. Review estimates and ask important
questions to make sure estimates are not biased.
Management wants a number for a bid, not a real estimate. Project managers must
negotiate with project sponsors to create realistic cost estimates
466
467
Determine Budget Process what do we do here?
Calculate total cost of the project from individual estimates obtained in
estimate costs process
Task level costs are aggregated to higher levels to create a budget
Total cost of the project must include reserves so before budget can be
finalized risk management planning process activities are to be completed
Cost BASELINE includes contingency reserve
Project BUDGET = Cost BASELINE + Management reserve, the latter is
additional funds set aside for unforeseen risks
468
Determine Budget Process what do we do here?
Contd.
Meeting the cost baseline is a measure of project success
Once baseline and budget are created, project manager should compare these to estimation
Techniques to ensure that estimates are correct
Also budget is to be time-phased and availability of cash flow is to be checked note that
activities may have to be shifted depending upon when fund is available.
Time phased budget is represented as S-curve.
Also the project manager needs to reconcile the proposed Project budget or baseline with
any known cost constraints in the charter. Remember, an unrealistic budget is the PMs
fault!
469
Determine Budget
Outputs
Cost Performance
Baseline
Project Funding
Requirements
Project document
Updates
Inputs
Basis of Estimates
Project schedule
Scope Baseline
Resource Calendar
Agreements
Organization Process
Assets
Risk Register
Tools & Techniques
Cost aggregation
Reserve analysis
Expert Judgment
Historical Relationships
Funding Limit
Reconciliation
470
Inputs for Determine Budget Process
How the project will be managed and controlled
Scope Baseline
Scope statement lists any funding constraints such
as limitation by period for the expenditure of
project funds etc.
WBS (and WBS dictionary) lists all work packages
in scope
Individual activity estimates are aggregated at
higher levels (WBS, Control account, overall
project)
Basis of Estimates
Supporting details for cost estimates
471
Inputs for Determine Budget Process Contd.
Resource Calendars
Lists resources assignment details
Can be used to indicate resource cost over the project duration
Project schedule
Contains details of activities, resource assigned, details about when any activity is will occur
Can be used to aggregate costs to the calendar periods
Helps to create a time-phased expenditure plan to control project spends
472
Inputs for Determine Budget Process Contd.
Agreements
Cost of outsourced / contracted work relating to purchased products, services or
results are to be included in the budget
Policies & Procedures related to budgeting
Cost budgeting Tools
Reporting methods
473
Determine Budget Tools & Techniques
Cost Aggregation
Rolling up costs from the activity to the work package level then to the control account level and
ultimately for the entire project
Reserve Analysis
Establish reserves to be included in your budget
Contingency reserve is included in cost baseline and accounts for potentially required changes that
may result from realized risks identified in risk register
Management reserve is for unplanned changes due to realization of unforeseen risks this is not a
part of the cost baseline and needs management approval before it can be expensed.
474
Determine Budget Tools & Techniques Contd.
Management reserve is included in project budget this is not included in
Earned value measurement calculations
Expert Judgment
Expert judgment, along with past records provides valuable insight about the
environment & information from past similar projects
Experts could be project stakeholders, other org units, consultants, industry
groups etc.
475
Determine Budget Tools & Techniques Contd.
Historical Relationships
Historical data used in Parametric & analogous estimates can help to develop mathematical
model to predict total project cost
Historical data should be accurate.
Models should be scalable and its parameters should be quantifiable
Funding Limit Reconciliation
Expenditure of funds needs be reconciled with any funding limits
Tasks may have to be shifted if fund is not available when a particular expenditure is planned (e.g.
purchasing an equipment etc.)
476
Determine Budget Process Outputs
Cost baseline
Snapshot of the planned
budget at completion
Used to measure, monitor &
control overall cost
performance of the project
Its developed as a summation
of approved budget by time
period displayed as a S-curve
Change control process is
initiated when the situation
warrants the usage of
Management reserve
477
Determine Budget Process Outputs Contd.
Project Funding Requirement
Cost baseline includes projected
expenditures & anticipated
liabilities helps calculate
funding requirements
Funding is often available in
incremental amounts at
discrete intervals hence appear
as steps as below**
Total fund required will also
include management reserve
**Source: PMBOK, 5
th
edition
478
Determine Budget Process Outputs Contd.
Once budget and baseline are created, you may update
Cost management plan with any lessons learnt
Risk Register
Project Schedule
Cost Estimates
479
MONITORING AND
CONTROLLING
480
481
Control Costs
Influencing the factors that create changes to the cost baseline to ensure that changes are agreed
upon
Determining that the cost baseline has changed
Managing the actual changes when and as they occur
Monitoring cost performance to detect variances from the plan. Ensuring that all
appropriate changes are recorded
Preventing incorrect, inappropriate, or unauthorized changes. Informing the appropriate
stakeholders of authorized changes. Analyzing positive and negative variances and how
they affect the other control processes
482
Control Costs
Tools & Techniques
Earned Value Management
Forecasting
To Complete Performance
Index
Performance Reviews
Variance analysis
Project Management Software
Inputs
Project funding requirements
Work performance Data
Outputs
Work Performance
Information
Budget Forecasts
Change Requests
updates
updates
Project document updates
483
Control Costs Inputs
Contains
Cost performance baseline to which actual performance is compared
Cost Management Plan Describes how cost will be managed and controlled
Project Funding Requirements
Budget is time-phased and expenditures are reconciled with fund availability
484
Control Costs Inputs Contd.
Work Performance data
Project Actuals Activities planned, started, their progress and the
deliverables there on.
Costs that have been authorized and incurred
Organizational process Assets
Cost control related policies & procedures
Cost Control Tools
Reporting formats
485
Earned Value Management (EVM)
A method of measuring project performance by comparing the amount of
work planned with that actually accomplished, in order to determine if
cost and schedule performance are as planned
486
EVM Terms
Data Element Term Old Term
Scheduled Work Planned Value (PV) Budgeted Cost of Work
Scheduled (BCWS)
Work Accomplished Earned Value (EV) Budgeted Cost of Work
Performed (BCWP)
Actual Cost of Work
Accomplished
Actual Costs (AC) Actual Cost of Work Performed
(ACWP)
Authorized Work Budget at Completion Same
Forecasted Cost Estimate at Completion Same
Work Variance Schedule Variance Same
Cost Variance Cost Variance Same
Completion Variance Variance at Completion Same
487
Schedule Variance (SV)
Comparing the EV, the amount originally budgeted for the work that has
been completed or is in-process, to the PV, the amount budgeted for the
work that was planned to have been accomplished
SV = EV PV
A negative result means less work has been performed than was planned
488
Schedule Variance Example
PV = $42,000
EV = $38,000
AC = $48,000
SV = EV PV
= $38,000 $42,000 = - $4,000
SV% = SV / PV
= - $4000 / $42,000 = - 0.095
= - 9.5%
489
Cost Variance (CV)
Comparing the amount originally budgeted for the work completed or
in-process, the EV, to the actual costs of that work, the AC
CV = EV AC
A negative CV means more dollars were spent to accomplish the work
than was planned
490
Cost Variance Example
PV = $42,000
EV = $38,000
AC = $48,000
CV = EV -AC
= $38,000 $48,000 = - $10,000
CV% = CV / EV
= - $10,000 / $38,000
= - 26%
491
Performance Indices
Definition: Cost- and schedule-performance efficiency calculations;
expressed in $
Cost Performance Index (CPI)
o CPI = EV/AC
Schedule Performance Index (SPI)
o SPI = EV/PV
492
CPI Example
PV = $42,000
EV = $38,000
AC = $48,000
CPI = EV / AC
= $38,000 / $48,000 = 0.79
$0.79 worth of work was actually done for each $1.00 spent
493
SPI Example
PV = $42,000
EV = $38,000
AC = $48,000
SPI = EV / PV
= $38,000 / $42,000 = 0.90
$0.90 worth of work has been done for each $1.00 worth of work
that was planned to be done
494
EVM Example
495
Estimate at Completion (EAC)
Definition: The managements assessment of the cost of the project at
completion
After variance analysis, the estimated cost at completion is determined
496
EAC Example
One methodology:
EAC = BAC / CPI
BAC = $80,000
CPI = 0.79
EAC = $80,000 / 0.79 = $101,265
497
Variance at Completion
BAC = $80,000
EAC = $101,265
VAC = BAC EAC
= $80,000 $101,265
= -$21,265
Based on past performance, project will exceed planned budget by $21,265
498
To Complete Performance Index (TCPI)
Work Remaining / Cost Remaining
TCPI = (BAC EV) / (EAC AC)
= ($80,000 $38,000) / ($101,265 $48,000)
= $42,000 / $53,265
= 0.79
499
Earned Value Examples
PV EV AC
$1 $1 $1 On schedule On cost
$2 $2 $1 On schedule Under cost
$1 $1 $2 On schedule Over cost
$1 $2 $2 Ahead of schedule On cost
$1 $2 $3 Ahead of schedule Over cost
$1 $2 $1 Ahead of schedule Under cost
$3 $2 $1 Behind schedule Under cost
$2 $1 $3 Behind schedule Over cost
$2 $1 $1 Behind schedule On cost
500
PV EV AC
501
PV EV AC
502
PV EV AC
503
PV EV AC
504
PV EV AC
505
PV EV AC
506
PV EV AC
507
PV EV AC
508
Sample Cost Problem
BAC = $ 40k
EV = $ 20k
PV = $ 28k
AC = $ 26k
Calculate
% of Work Scheduled
% of Budget Spent
% of Work Accomplished
Cost Variance
Schedule Variance
509
Solution to the Sample Problem
Calculate
% of Work Scheduled PV / BAC = $28K / $40K = 70 %
% of Budget Spent AC / BAC = $26K / $40K = 65 %
% of Work Accomplished EV / BAC = $20K / $40K = 50 %
Cost Variance EV AC = $20K $26K = - $ 6K
Schedule Variance EV PV = $20K $28K = - $ 8K
510
EARNED VALUE MANAGEMENT
Determining Earned value Progress Reporting
The major difficulty encountered in the determination of EV is the evaluation of in-process work.
Project manager can use any of the following rules depending on various conditions:
50/50 Rule: Activity is 50% complete when it begins and 100% complete when its finished
20/80 Rule: Activity is 20% complete when it begins and 100% complete when its finished
0/100 Rule: No value is earned until the activity is complete. Usually limited to work packages of
small duration.
Milestone: Value is earned when the milestone is completed. Used for long work packages.
511
Control Costs Tools & Techniques
Contd.
Performance Reviews
EVM may be used to calculate and track the variances. Following is
determined
o Variance Analysis Cost & schedule variances are most frequently
analyzed
o Trend Analysis Examine project performance over time graphical
analysis Techniques could be used
o Earned value performance Compares the baseline plan to actual cost &
schedule performance
512
Control Costs Tools & Techniques
Contd.
Project management software can be used to
Monitor EVM dimensions (EV, AC, PV)
Display graphical trends
Forecast project performance
Reserve Analysis
Understanding the usage of the planned reserves
Still needed or additional reserves required?
513
Control Costs Outputs
Calculated CV, SV, CPI, SPI values are
calculated and communicated to
stakeholders
Cost Forecasts
EAC and ETC
Change Requests
Can result in change requests to the
cost baseline or other part of the
project management plan
Could include corrective &
preventive actions to be processed
through integrated change control
process
514
Approves changes can result in
updates to the cost baseline or other
part of the project management plan
Updates to cost estimates
Updates to basis of estimates
Organizational process asset updates
Corrective action & reason
Variance cause
Any other lesson learnt
Control Costs Outputs
515
END OF THE SESSION
516
QUALITY MANAGEMENT
517
List of Topics
1. Introduction to Quality Management
2. Plan Quality Management
3. Perform Quality Assurance
4. Control Quality
518
INTRODUCTION TO
QUALITY MANAGEMENT
519
Introduction Quality Management
Project Quality Management is about getting it right
Its not enough to get your project done on time and under budget
You also need to be sure you make the right product to suit your stakeholders
needs
Quality means that the project fulfills the requirements
This means trying not to make too many mistakes and always keeping your projects
towards the goal of creating the right product or deliver the desired service / result
You manage quality on your project by setting goals and taking measurements
520
Introduction Quality Management-Contd.
Delivering a Product that is acceptable to the Customer
And that your project will need to meet these targets just like
for budget and schedule!
Product quality management Techniques depend on specific
product being produced, whereas project quality management
applies to all projects no matter what product or service is being
developed
521
Overview of Quality Management Process
Plan Quality Management
What is quality for your
project? How will you
measure it? Plan how to
prevent defects
Planning Process
Group
Perform Quality Assurance
Are you following the
quality processes and
procedures as planned?
How to make sure you
are doing the work
efficiently and with as
few defects as possible?
Track the way you work
and try to improve it all
the times
Executing Process
Group
Control Quality
Are the results of your
work meeting the
planned standard?
Inspect work products to
find defects
Monitoring &
Controlling Process
Group
522
Some Important Concepts on Quality Management
The Quality Management Process
Quality The degree to which the project fulfills requirement
(Stated and implied needs are the inputs to developing project
requirements)
Project Quality Management includes creating and following policies
and procedures so that the project satisfies the needs for which it was
undertaken
Means project is completed with no deviation from the requirements
523
Some Important Concepts on Quality Management-
Contd.
Quality Management focuses on
Customer Satisfaction Understanding, evaluating, defining & managing customer
expectations
Prevention over inspection - Quality is planned, designed and built in not
inspected in.
Management Responsibility - Success requires the participation of all members of
the project team, but remains the responsibility of the management
Continuous improvement
o Plan-Do-Check-Act Cycle - defined by Shewhart and modified by Deming
o Total Quality Management
o Six Sigma
524
Contd.
Responsibility for Quality
Entire organization has responsibility
Each team member must inspect his own work
Project Manager is ultimately responsible for quality of product /
service / result
Senior Management has ultimate responsibility for quality of the whole
organization
525
Total Quality Management
Company & its associates look for ways to continuously improve quality
at every level of organization
Just in Time (JIT)
An inventory strategy that reduces in-process inventory to increase ROI
Raw materials are delivered just when they are needed
Company using JIT must have high quality standards
Contd.
526
Continuous Improvement (KAIZEN)
Continuously looking for small quality improvements
Marginal Analysis
Benefits from improving quality equals the incremental cost to achieve
the quality
At this point, team should stop trying improving quality
Contd.
527
Gold Plating
Giving customers extra
Discouraged by PMI
Six Sigma
Measurement-based system that focuses on process improvement and
variation reduction
Requires that no more than 3.4 defects per million are produced.
Contd.
528
Precision Vs.. Accuracy
Precision A measure of exactness - Precision means the value of repeated
measurements are clustered and have little scatter
Precision is often characterized in terms of the standard deviation from a
norm A precise process will have a small deviation from the norm
Accuracy An assessment of Correctness - denotes how close the
measured value is to the true value
Precise measurements are not necessarily accurate. A very accurate
measurement is not necessarily precise
Contd.
529
Contd.
Situation Precision /
Accuracy?
The size of the widgets created by the machine is
always between 1 to 2 inches
Precision
The machine that tests resilience for steel specifies
its exact breaking strain
Accuracy
The code retrieves correct data each time it is run Accuracy
530
Quality Vs.. Grade
Quality The degree to which a set of inherent characteristics fulfills requirements
Grade Category assigned to products or services having the same functional use
but different technical characteristics. So grade covers number of features present
in the product or service
(For example, a software product can be of high quality (no obvious defects, readable
manual) and low grade (a limited number of features), or of low quality (many defects,
poorly organized user documentation) and high grade (numerous features).
Contd.
531
Contd.
Situation Quality / Grade ?
A piece of furniture designed to last a lifetime Quality
A software program that allows customers to carry
out a wide range of tasks
Grade
A gaming console that has many features Grade
A database that has a guaranteed 99% uptime Quality
532
Project Management &
Quality Management
Customer satisfaction Understanding, managing and influencing
needs so that customer expectations are met or exceeded
Prevention over inspection The cost of avoiding mistakes is much less
than the cost of correcting them
Management responsibility Success requires participation of all
members of the team, but it is the responsibility of management to
provide resources needed
Processes within phases Plan, Do, Check, Act cycle defined by
Shewhart and modified by Deming
533
Process Improvement
Process improvements Model include
1. Malcolm Baldridge
2. OPM3
3. CMMi Model
534
Quality Policy
Overall intentions and direction of an organization with regard to
quality as formally expressed by the top management.
Quality policy of the performing organization can often be adopted As
is for use by the project.
If the performing organization lacks a formal quality policy, or if the
project involves multiple performing organizations, then project
management team will need to develop a quality policy for the project.
Project Management team is responsible for ensuring that the project
stakeholders are fully aware of it.
535
PLAN QUALITY
MANAGEMENT
536
PROJECT QUALITY MANAGEMENT
Planning Plan Quality
Management
Executing Perform Quality Assurance
Monitoring and Controlling Control Quality
537
Plan Quality Management
Inputs
Risk Register
Factors
Tools & Techniques
Benefit/cost analysis
Cost of quality
7 Basic Quality Tools
Bench Marking
Design Of Experiment
Statistical Sampling
Additional Planning Tools
Meetings
Outputs
Quality management plan
Process improvement plan
Quality metrics
Quality Checklists
538
Inputs for Plan Quality Management Process
Scope baseline Project Scope statement, WBS, WBS dictionary
Schedule baseline
Cost baseline
Other management plans
Stakeholders involved in the project and their particular interest in, or impact
on, quality
Risk register
Threats / Opportunities may impact quality
539
Requirements pertaining to Stakeholder expectation
Govt. / Industry regulations
Guidelines & standards
Working / Operating conditions
Cultural perceptions
Org policies / procedures
History database
Lessons learnt
Inputs for Plan Quality Management Process-
Contd.
540
Fundamental Relationships of Quality Assurance and
Control Quality to IPECC, PDCA, Cost of Quality Models
and Project Management Process Groups
541
Plan Quality Management Process
Tools & Techniques
Cost Benefit Analysis
Compares costs of quality efforts to its expected results / benefits
Quality benefit include less rework, higher productivity
Benchmarking
Compares current project actual / planned metrics with the past / comparable
projects to identify best practice / improvement, measure performance
Design Of Experiments
Statistical method to identify various factors influencing quality
DOE allows to systematically change all important factors and see which
combination has lowest impact on quality
542
Cost of Quality
Includes all cost incurred over the life of the product in
o Preventing nonconformance
o Appraising the product or service
o Failing to meet the requirements (rework) cost of poor quality
Cost of Conformance Cost of Non-Conformance
Prevention Cost Appraisal Cost Failure Cost
Internal External
Training
Documentation
Equipment
Time to do it right
Testing
Destructive
Testing loss
Inspections
Rework
Scrap
Liabilities
Warranty
Lost business
543
Seven basic Quality Tools
Cause and Effect diagrams Fishbone diagrams , Ishikawa
Flow Charts - Show activities, decision points, branching loops, parallel
paths, and the overall order of processing
Check sheets Tally sheets used to gather effective data on a potential
Quality problem.
Pareto diagrams - Help to identify vital few sources that are
responsible for causing most of the problems effects.
544
Histograms Bar charts to describe central tendency, dispersion, and shape
of a statistical distribution, does not consider the influence of Time on the
variations on distribution
Control Charts Identify is a process is stable or has predictable performance.
Scatter Diagrams Correlation Charts , Seek to explain a change in the
dependent variable Y in relationship to a change observed in the
corresponding independent variable X.
545
FLOW CHART
546
Control Charts
Used to determine whether or not the process is stable or has predictable performance
Setup in PLAN quality process and UTLILIZED in Perform Quality Control
Upper and Lower Control Limits
Acceptable range of variation for the process
Usually calculated at +- 3 sigma (standard variation)
Mean
Middle of range of acceptable deviation
Specification Limit
Customers expectation on performance / quality
Ideally should reside outside control limit
547
Out of Control
When a data point falls outside CLs
Seven nonrandom data points are on one side of mean Rule of seven
Assignable Cause / Special Cause Variation
The data points causing Out of control need be investigated to determine cause of variation
548
Cause & Effect Diagram (Ishikawa / Fishbone diagram)
Illustrate how various factors might be linked to a potential problems or effects
Are also used in risk analysis
Helps stimulate thinking, generate idea
549
Histogram
Vertical bar chart showing how often a particular variable state occurred
The height of each column represents the relative frequency of the characteristic
550
Pareto Chart
Histogram ordered by decreasing frequency of occurrence
Basis 80% problems are due to 20% root causes
Helps focus attention on the problems causing greatest number of defects
551
Run Chart
Similar to control chart without displayed limits, it shows the history
and pattern of variation
Shows trend in process over time
552
Scatter Diagram
Shows the relationship between two variables
The dependent and independent variables are plotted
The closer the points are to the diagonal, the more closely they are related
553
Choosing a population for inspection
Inspecting the whole population would take too long, cost too much and be too destructive
Additional Quality Planning Tools
Brainstorming
Force Field Analysis Diagrams for forces for and against changes
Nominal Group Techniques
Quality Management and control Tools
Meetings
Planning Meetings to develop the Quality Management Plan
554
Plan Quality Management Process - Outputs
Quality Management Plan
Component of Project Management plan
that describes how Org. Quality policies
will be implemented.
Style and detail depend on Project
requirements
Process Improvement Plan
Details the steps fro analyzing Project
Management and Product development
processes
Process boundaries
Process Configuration
Process Metrics
Targets for Improved performance
Quality Metrics
Describes a project / product attribute and
how the quality control process will
measure it
Measurement of metrics is actual value
Allowable variation in metrics is tolerance
value
555
Quality Checklists
Structured tool and is usually
component specific
Used to verify that a set of required
steps have been performed
Responsibility Matrix
Plan Quality Management Process - Outputs
556
PERFORM QUALITY
ASSURANCE
557
Planning Plan Quality Management
Monitoring and
Controlling
Control Quality
558
Perform Quality Assurance
Planned and systematic activities implemented within
the quality system in order to provide confidence that
the project will satisfy the relevant quality standards
It also provides umbrella for Continuous Process
improvement , which is an iterative means of improving
the quality of all Processes
559
Perform Quality Assurance-Contd.
What
o Managerial audit function
How
o Prepare and implement an organization QA program
o Tailor a practical program to meet requirements
Why
o Quality improvement
o Increase effectiveness and efficiency
560
Perform Quality Assurance-Contd.
Inputs
Process Improvement Plan
Quality Metrics
Quality Control measurements
Project Documents
Tools & Techniques
Quality Management and Control
Tools
Quality audits
Process analysis
Outputs
Change requests
Project management
plan (updates)
Project document
Update
Organizational
process assets
(updates)
561
Inputs for Perform Quality Assurance Process
Quality Management Plan Describes quality assurance and continuous
process improvement
Process Improvement Plan Quality assurance activities should be
supportive of and Consistent with the performing Org. process
improvement plans.
Quality Metrics
Attributes that should be measured and the allowable variations.
562
Project documents :
Project documents influence Quality assurance and should be
monitored within the context of a system for Configuration
Management.
Quality Control Measurements
Results from perform quality control activities
Used to assess the success of the quality control methods that have
been instituted
Inputs for Perform Quality Assurance Process-
Contd.
563
Perform Quality Assurance Process
Tools & Techniques
Quality Management and Control Tools
Uses the Tools and Techniques of Plan Quality Management and Control Quality
process.
Affinity diagrams
Process decision program Charts (PDPC)
Interrelationship digraphs
Tree diagrams
Prioritization Matrices
Activity Network diagrams
Matrix diagrams
564
Process Analysis
Follows the processes outlined in the process improvement plan to
identify the needed improvements
Examines problems and constraints experienced
Examines non-value added activities identified during process operation
Also performs root-cause analysis to discover the underlying cause and
develop preventive
565
Quality Audit
Structured & independent review of work
Checks if planned standards, policies, processes are followed
Checks if the processes being followed are efficient & effective
Identifies non conformance, gaps / shortcomings
Identifies / shares lessons learnt & best practices
Proactively offer assistance to improve implementation of Process
Highlight contributions of each audit in the lessons learned repository of
the Organization.
566
Perform Quality Assurance Process - Outputs
The perform quality assurance process ensures that your project is
doing all it should to meet projects quality requirements
The outputs of perform QA process document the results of these
activities carried out in line with the quality management plan
They also trigger corrective actions where necessary
567
Change request - Includes recommended
Corrective & Preventive action & defect repair,
proposes alterations to policies, processes and
procedures
Project management Plan updates Quality
Management plan, Scope management plan,
Cost Management plan, Schedule
Management plan
Project Documents Update Audit reports,
training plan, process documentation
Org Process Asset updates Lessons learnt,
best practices, policies & standards
Perform Quality Assurance Process Outputs-
Contd.
568
CONTROL QUALITY
569
Planning Plan Quality Management
Monitoring and Controlling Control Quality
570
Control Quality
Monitoring results to determine if they comply
with relevant quality standards and identifying
ways to eliminate problem causes.
Control Quality is performed throughout the Project
571
Control Quality-Contd.
Prevention (keeping Errors out of the Process)
Inspection (keeping Errors out of the hands of Customer)
Attribute Sampling (The results either Conform or not Conform)
Variables Sampling (The results are rated on Continuous Scale that
measure the degree of conformity)
Tolerances (Specified range of acceptable results)
Control Limits (Thresholds , which can indicate whether the process is
out of Control)
572
Control Quality-Contd.
Inputs
Quality metrics
Quality Checklist
Work performance Data
Deliverables
Organization process
assets
Tools & Techniques
Seven Basic Quality
Tools
Statistical sampling
Inspection
Approved Change
Requests Review
Outputs
Quality control
measurements
Validated Changes
Validated deliverables
Work Performance
Information
Change Requests
updates
Project documents update
Organizational process
assets updates
573
Inputs for Control Quality Process
Quality Metrics
Defines how the quality will be
measured
Quality Checklists
Structured tool and is usually
component specific
Used to verify that a set of required
steps have been performed
Work Performance data
Used to produce project activity
metrics
Used to compare actual progress to
planned
May include
Technical performance
Schedule performance
Cost performance
574
Deliverables
Unique and verifiable product, result, or
capability
Approved Change request
From Perform Integrated Change control
May include defect repair, revised schedule,
revised processes
Timely implementation needs to be verified
Quality standards & policies
Standard work guidelines
Issue and defect reporting procedure and
communication policies
Project Documents
Agreements
Quality Audit reports and change logs
Training plans and Assessments of
effectiveness
Process documentation
Inputs for Control Quality Process-Contd.
575
Prevention Vs.. Inspections
Prevention is to keep errors out of the process
Inspection is to keep errors out of the hands of the customer
Attribute sampling Vs.. Variables sampling
Attribute sampling The result either confirms or does not confirm. Imagine you are sorting a box of ribbons. If
all you want is to collect red colored ones, you reject all yellow and blue ribbons.
Variables sampling - The result is rated on a continuous scale that measures the degree of conformity. For
example, you record the number of brass screws containing an acceptable ratio of copper and zinc and reject
screws that falls outside this predefined range of alloy
Attribute sampling is black of white, variable sampling are shades of gray
Some Important Concepts on Quality Management
576
Mutual Exclusivity
Two events that cannot both happen in single trial
E.g. tossing a coin once, which can result in either heads or tails, but not both
Normal Distribution
Most common probability distribution chart
Has the shape of bell curve
Used to measure variation
Tolerances Vs.. Control Limits
Tolerances means a specified range of acceptable results range of allowable deviation
from a required standard
Control Limits is thresholds, which can indicate whether the process is out of control
Contd.
577
Statistical Independence
Probability of one event does not
affect the probability of another
event occurring
If two cards are drawn with
replacement from a deck of cards,
the event of drawing a red card on
the first trial and that of drawing a
red card on the second trial are
independent.
Standard Deviation (sigma)
It shows how much variation or
"dispersion" there is from the
average (mean, or expected value)
SD = (P-O)/6 in 3 point estimation
3 or 6 sigma defines level of quality
the org wants to achieve
Taken on both side of the mean
Contd.
578
Memorize -
+/- 1 sigma = 68.27% (% of occurrences to fall between the 2 control limits)
+/- 2 sigma = 95.45%
+/- 3 sigma = 99.73%
+/- 6 sigma = 99.99999985 %
Contd.
579
Perform Control Quality Concepts Matching
Game
Assessing the quality of a shipment of newly picked apples before delivery
Reviewing the processes involved in manufacturing widgets before mass
production starts
Testing that the caffeine levels in a batch of soft drinks fall within a specified
range
Examining a batch of newly assembled computers to make sure each has a
hard disk
Rolling a dice can once only produce one value between 1 to 6
Probability of rolling a six on a dice is statistically independent from the
probability of getting a five on the next roll
580
A. Variable sampling
B. Mutual exclusivity
C. Statistical independence
D. Inspection
E. Prevention
F. Attribute sampling
1>D, 2>E, 3>A, 4>F, 5>B, 6>C
Perform Control Quality Concepts Matching
Game-Contd.
581
Perform Control Quality Process
Tools & Techniques
Seven basic Tools of quality
Cause and effect diagrams
Control Charts
Flowcharting
Pareto Chart
Histogram
Run Chart
Scatter Diagram
Samples are selected and tested as per the quality plan
582
Inspection
Review/examination of a work product to confirm if it produced as
per the documented standards
The result of an inspection is usually a measurement
Can be called reviews / peer reviews / audits / walkthroughs
Approved Change request review
Review of all approved change requests for their implementation as
per the approval
Perform Control Quality Process
583
Quality Control Measurements
Documented results of quality control tasks
Documented in formats as planned
Validated changes
Changed / repaired items are inspected
Either accepted or rejected
Rejected items may require rework
Verified Deliverables
Correctness of deliverables is the ultimate
aim of quality control
The input to verify scope for its formal
acceptance
Performance data collected from various
controlling processes, analyzed in context
and integrated based on relationships
across areas
Perform Control Quality Process - Outputs
584
Change requests
If a recommended corrective action /
preventive action / defect repair requires
change to PM plan, a change request is
initiated (as per Integrated change control
process)
Process Improvement plan
Quality standards
Agreements
Quality Audit reports and change logs
Training plans and assessments of
effectiveness
Process documentation
Completed checklists becomes part of
project records
Lesson learnt documentation
Perform Control Quality Process Outputs-Contd.
585
END OF THE SESSION
586
HUMAN RESOURCE
MANAGEMENT
587
List of Topics
1. Introduction to Human Resource Management
2. Plan Human Resource Management
3. Acquire Project Team
4. Develop Project Team
5. Manage Project Team
6. Important Concepts on Human Resource Management
588
INTRODUCTION TO
HUMAN RESOURCE
MANAGEMENT
589
Introduction Human Resource Management
Project Human Resource Management is about getting the team together
Behind every successful project is a great team
To get the best possible team for your project, you need to
o Plan carefully
o Set up a good working environment
o Negotiate for the best people you can find
Once you have put together a good team, you need to
o Keep your team motivated
o Manage conflicts
Project Human Resource Management provides the tool you need to get the best team for the
job and lead them through a successful project
590
Overview of Human Resource Management Process
Plan Human Resource
Management
Plan out exactly
which resources
youll need, what
their roles &
responsibilities will
be and how youll
train your team and
make sure they stay
motivated
Planning Process
Group
Bring your team on-
board. Negotiate
with functional
managers to put
together the best
team
Executing Process
Group
How to keep your
team motivated and
up & running? Make
sure they have the
skills they need, set
up a good working
environment and
keep them
motivated
Executing Process
Group
Manage Project Team
Manage and resolve
conflicts so that they
dont delay or
damage the project
Executing Process
Group
591
PLAN HUMAN RESOURCE
MANAGEMENT
592
PROJECT HUMAN RESOURCE MANAGEMENT
Planning Plan Human Resource
Management
Executing Acquire Project Team
Executing Develop Project Team
Monitoring and Controlling Manage Project Team
593
Plan Human Resource Management
Planning, identifying, documenting, and assigning project
roles, responsibilities, and reporting relationships
It is used to determine and identify human resources with necessary skills required
for Project Success
It may also include identification of training needs, team building strategies, plans for
recognition and reward Programs, safety issues and the impact of Staffing
management Plan on the Organization
594
Tools & Techniques
Organization charts &
position descriptions
Organizational theory
Networking
Expert Judgment
Meetings
Outputs
Human Resource
Management Plan
Inputs
Project
Management Plan
Activity Resource
Requirements
Enterprise
environmental
factors
Organizational
process assets
595
Inputs for Plan Human Resource Management Process
o The project life cycle and the processes that will be applied to each phase,
o How work will be executed to accomplish the project objectives,
o A change management plan
o A configuration management plan
o How integrity of the project baselines will be maintained
o Needs and methods of communication among stakeholders
o This is an output from Estimate Activity Resources process
o This helps to determine human resource needs for the project
596
Inputs for Plan Human Resource Management Process
Contd.
o Policies & Procedures
o Standard role descriptions
o Historical info on org. structures from previous projects
o Templates for org chart and role descriptions
o Organizational culture and structure
o Marketplace conditions
o Personnel administration policies
o Existing human resources
597
Process Tools & Techniques
Organization Charts and Position Descriptions
Used to document team members roles and responsibilities
All efforts the project team might expend should be determined in advance
Objective is
o To ensure that each work package has an unambiguous owner
o Each team member has a clear understanding of their roles and responsibilities
The formats as follows
598
Process Tools & Techniques Contd.
Hierarchical-type charts
Shows positions in graphical, top-down format
Example is Organization Breakdown Structure (OBS) which shows responsibilities by department
Another example is Resource Breakdown Structure (RBS) which breaks down the project by type of
resources (e.g. all welders and welding equipment being used in different parts of a ship even though they
are scattered among different branches in WBS and OBS)
599
Organization Charts and Position Descriptions Contd
Matrix-type charts
Responsibility Assignment Matrix (RAM) is used to connect work packages to team members
One example is RACI (Responsible, Accountable, Consult and Inform) matrix
RACI is important when the team has internal as well as external resources to ensure clear division of
responsibilities
600
Text oriented formats
Forms with detailed team members responsibilities, authorities, competencies,
qualifications
Other sections of Project management plan
E.g. Risk owners, team members responsible for communication activities, quality assurance /
control activities etc.
601
Networking
Formal and informal interaction with others helps improving knowledge of and access to human
resource assets
Organizational Theory
Provides information regarding the way in which people, teams, and organizational units behave.
Effective use of common theme can shorten the amount of time, cost, and effort needed to create
the Plan Human Resource Management process outputs and improve planning efficiency
May help in exercising a flexible leadership style that adapts to the changes in a teams maturity
level
602
Meetings
Helps to allow for all project management team members to reach consensus on the
human resource management plan.
603
Plan Human Resource Management Process - Outputs
Human Resource Plan
Provides guidance about how project human resources should be defined, staffed, managed and controlled and
eventually released. Contains
Roles and Responsibilities
o Role: Label for the portion of project for which the person is accountable (e.g. developer, architect, business
analyst, tester, DBA etc.)
o Authority: Right to apply project resources, make decisions, and sign approvals
o Responsibility: The work that the project team member is expected to perform
o Competency: Skill and capacity required to complete project activities
Project Organization Chart
o Graphical display of project team members and their reporting relationships
604
Plan Human Resource Management Process Outputs -
Contd.
Human Resource Plan Contd
Staffing Management Plan
Describes when and how resource requirements will be met. Is a subset of a project
plan. Includes the following data:
o Staff acquisition (where will staffs come from)
o Resource calendars; e.g. resource histogram (bar chart depicting resource requirement
over calendar period).
o Staff release plan (when will resources be released and no longer charged to the project?)
o Training needs (what trainings do they need?)
605
Plan Human Resource Management Process Outputs -
Contd.
Recognition and rewards (criteria for reward)
Compliance (how to comply with any rule related to human resources?)
Safety (what policies protect the resources?)
606
ACQUIRE PROJECT TEAM
607
Management
608
Getting the needed human resources assigned to
and working on the project
609
Acquire Project Team-Contd.
Inputs
Human Resource Management Plan
Tools & Techniques
Negotiations
Pre-assignment
Acquisition
Virtual teams
Multi Criteria Decision
Analysis
Outputs
Resource Calendar
update
610
Inputs for Acquire Project Team Process
Human resource management plan
o Roles & responsibilities
o Project Organization Charts
o Staffing management plan
Organizational culture and structure
Personnel administration policies such as policies related to outsourcing
Existing information about human resources such as availability, rate, competency, experience, interest
Location(s)
Policies & Procedures related to hiring, staff assignments etc.
611
Acquire Project Team Process
Tools & Techniques
Pre-assignment
Resources are selected in advance pre-assigned. Possible reasons could be -
o Specific resources promised as part of a competitive proposal
o Staff assignment defined in charter
o Project depends on particular SMEs expertise
Negotiation
Resources who are not pre-assigned may be acquired through negotiation with
o Functional managers
o Other projects in the organization
o External vendors for appropriate specialized resources
Project managers ability to influence others plays a major role here
612
Acquisition
Acquiring required service from outside through
o Hiring experts
o Subcontracting work to another organization
Virtual Teams
Teams that do not meet face-to-face and work from different locations are called
virtual teams
Uses electronic communications such as phone, email, instant messaging, audio /
video conferencing, web based meetings and other collaboration Tools to work
together
Communication planning is extremely important in virtual teams
613
Multi-Criteria Decision Analysis
Use Member selection criteria such as availability, cost, experience, ability, knowledge,
skills, attitude, international factors to rate / score potential team members
614
Acquire Project Team Process - Outputs
Project Staff Assignments
Staff assignment is the whole point of this process.
Documentation of the assignment may include creating a project team directory, update
project management plan with new members names, roles and responsibilities.
Resource Calendars
Documents the time period that each of the team members will work on the project. It also
tells the organization when team members will be available for other assignments.
Project Management plan updates
Updates to human resource plan refine team structure, add more information
615
DEVELOP PROJECT TEAM
616
Management
617
Process of improving competencies , team interaction and the
overall team environment to enhance Project Performance)
Team work is a Critical Factor for Project Success
High team performance can be achieved by Open and effective Communication , developing
trust, encouraging collaborative Problem solving.
618
Inputs
HR management plan
Project staff assignment
Resource Calendar
Tools & Techniques
Team-building activities
Reward and recognition systems
Co-location
Training
Inter personal skills
Ground rules
Personnel Assessment Tools
Outputs
Team performance assessments
Enterprise Environmental Factor
update
619
Inputs for Develop Project Team Process
Team development starts with list of project team members the list can be found
in Project Staff Assignments document
Human resource plan contains training strategy, reward & recognition guidelines
etc.
Resource Calendars
Notes when team members are available for the team development activities
620
Develop Project Team Process
Tools & Techniques
Inter-personal Skills
Soft skills are very important to team development.
Some of the required skills are empathy, influence, creativity and group facilitation etc.
Training
Includes activities to enhance team members competencies. Examples are : classroom, virtual,
computer-based, on-the-job etc.
Could be formal or informal
Scheduled trainings are arranged as noted in human resource plan
Unplanned trainings could be required as a result of observation, conversation, performance
appraisal feedback etc.
621
Ground Rules
Sets clear expectations about expected behaviors by project team members
Once ground rules are established, all team members share responsibilities to
enforce these
Co-Location
Many or all of the team are in the same physical location
Helps increase the sense of community although virtual teams are sometimes
unavoidable
A central location for project coordination is called war room
622
Rewards and Recognition
Recognize and reward desirable behavior
Consider cultural differences when determining rewards
Win-lose rewards that only a limited number of team members can achieve (e.g.
employee of the month) may affect team cohesiveness
Personnel Assessment Tools
Gives insight into areas of strength and weakness.
Helps assess the team preferences, aspirations, how they process and organize
information, how they tend to make decisions etc.
623
Team building Activities
Form the project team into a cohesive group working for the best interest of the project to
enhance project performance
Team building is project managers responsibility should start early in the life of the project
Formally identified stages of team formation and development are :
o Forming People are bought together as a team team members tend to be
independent and are not as open
o Storming There are disagreements as people learn to work together
o Norming The team members begin to work together and adjust their work
habits to help each other out. They start trusting each other
624
Remember that team building is an ongoing activity. Some team-building activities are:
o Creating WBS
o Getting everyone involved in planning the project
o Taking classes together
o Holiday, birthday celebrations, Milestone parties
o Trips
o Performing Team starts working as a cohesive unit and being efficient. Now the team is working as a
well-oiled machine
o Adjourning The project nears completion, the team moves on from the project
625
Develop Project Team Process - Outputs
Team Performance Assessments
Formal or informal assessments of the project teams effectiveness
Criteria should be defined and incorporated in the develop project team inputs
especially important for contracted work
May include indicators such as
o Improvement in individual skills and competencies
o Reduced staff attrition rate
o Increased team cohesiveness knowledge sharing and collaboration
626
Develop Project Team Process Outputs- Contd.
Enterprise Environmental Factors Update
Personnel Administration records
Employee training data
Skill assessments
627
MANAGE PROJECT
TEAM
628
Management
629
Manage Project Team
Tracking team member performance, providing
feedback, resolving issues and coordinating changes to
enhance project performance.
Team management involves combination of skills with special
emphasis on communication , Conflict management ,
negotiation, Leadership.
Project Manager should provide challenging assignments to
team members and provide recognition for high performance
630
Manage Project Team Contd.
Inputs
Project staff assignment
Human Resource
management plan
Team performance Assessments
Issue Log
Tools & Techniques
Observation & conversation
Project performance
appraisals
Conflict management
Interpersonal Skills
Outputs
Change requests
Organizational process assets (updates)
Project management plan (updates)
(updates)
631
Inputs for Manage Project Team Process
Documents list of project team members
Human resource plan contains roles & responsibilities, project org. chart, staffing
management plan
Team Performance Assessments
By continuously assessing team performance formally and / or informally, actions can
be taken to resolve issues, modify communications, address conflict, and improve team
interaction
632
Inputs for Manage Project Team Process Contd.
Performance Reports
Provide documentation about the current project status compared to project forecasts.
Performance areas include results from schedule control, cost control, quality Control,
scope Verification
Assists in determining future human resource requirements, recognition and rewards,
and updates to staffing management plan
Certificates of Appreciation, newsletter, websites, bonus structure, corporate apparel,
other organization perquisites
633
Inputs for Manage Project Team Process Contd.
Issue log
A written log document and helps monitor who is responsible for resolving specific
issues by a target date.
Issue resolution addresses obstacles that can block the team from achieving its goals.
634
Manage Project Team Process
Tools & Techniques
Observation and conversation
Watch whats happening
Talk to people to understand how things are going
Project Performance Appraisals
Evaluation of employees performance by their supervisors more sophisticated way could be to conduct a
360 degree review
Objectives for conducting performance appraisals during the course of a project can include
o Clarification of roles and responsibilities
o Constructive feedback to team members
o Discovery of unknown or unresolved issues
o Development of individual training plans
o Establishment of specific goals for future time periods.
635
Interpersonal Skills
Help team to solve problems. Some interpersonal skills project manager uses most
often are
Leadership
Influencing
o Ability to be persuasive and clearly articulate points and positions
o High levels of active and effective listening skills
o Consideration of the various perspectives
o Gathering relevant and critical information to address important issues
636
Effective Decision Making - is how you handle issues. Few Techniques are
o Command Youll decide and team will do what you say
o Consultation Youll talk your decision over with your team and ask for their
opinions before you decide
o Consensus To talk about a few options with your team and get everyone to agree
on one of them before you decide
o Coin Flip Just randomly choose one of the options
637
Conflict Management
Conflict is INEVITABLE because
o Project is trying to address needs and requirements of many stakeholders
o Power of project manager is limited
o Functional manager provides the resources
Successful conflict management results in greater productivity and positive working relationships.
When managed properly differences of opinion will lead to increased creativity and better
decision making.
If conflict escalates, the project manager should help facilitate a satisfactory resolution.
Conflict should be addressed early and usually in private using a direct and collaborative approach.
If disruptive conflict continues, formal procedures may be used, including disciplinary actions.
638
Conflict is natural and forces a search for alternatives
Conflict is a team issue
Openness resolves conflict
Conflict resolution should focus on issues, not personalities; on
present and not the past
639
Conflict Management Contd
Some of the common reasons that conflicts happen
o Schedule decides who gets what, when. E.g. Stakeholders getting upset because your project
wont come in as early as they wanted to.
o Project Priorities one project or person is more important and hence gets more budget,
resources, time, prestige or other perks
o Resources are scarce. E.g. All video conference rooms are booked!, top-performing members
are always never available to you!, Project X always uses the photocopier and hence your team
have to wait!
o Technical Options causes conflict because its hard to get experts change their mindsso when
two of them disagree, watch out!
640
Administrative procedures also causes a lot of conflicts
Cost disagreements seem to come up a lot, especially for contracted works.
Personalities are always clashing. Sometimes two people just dont go along
and you have to make them work together to get your project done.
641
Remember that personality is last in the order of frequency in the above list
Conflict is best resolved by those involved in the conflict. PM can help to
resolve conflicts as long as (s)he has authority over those in conflict or the
issues in conflict
642
Conflict Management Contd
Factors that influence conflict resolution methods include
o Relative importance and intensity of the conflict
o Time pressure for resolving the conflict
o Position taken by players involved
o Motivation to resolve conflict on a long-term or a short-term basis
Collaborate (Problem Solve) Incorporating multiple viewpoints and insights
from differing perspectives; requires a cooperative attitude and open dialogue
that typically leads to consensus and commitment.
Compromise / Reconcile Finding solutions that brings some degree of
satisfaction to both parties it means that each person gives up something. Its
a Lose-lose solution
643
Withdraw (Avoid) Parties retreat or postpone the decision. Dealing with
the problem is a PMI-ism therefore withdrawal is not usually the best
choice for resolving conflict
Smooth (Accommodate) Trying to play down the problem and make it
seem that its not so bad. Emphasizes agreement rather than difference of
opinion
Force / Direct Pushing one viewpoint at the expense of another. Means
putting your foot down and making a decision. Its a Win-lose situation
644
Tools & Techniques
Collaborating or problem solving choices as generally the best
answer and forcing the worst. However choice will definitely vary
based on situation
645
Manage Project Team Process - Outputs
Enterprise Environmental Factors Update
Input to organizational performance appraisals
Personnel skill updates
Organizational Process Assets Updates
Lessons learnt and historical data
Templates
Organizational standard processes
Change requests
Staffing changes can affect rest of the project management plans
Change requests are processed through integrated change control process
646
Manage Project Team Process Outputs Contd.
Updates to staffing management plans
Issue Log
Role description
647
IMPORTANT CONCEPTS ON
HUMAN RESOURCE
MANAGEMENT
648
Some Important Concepts on Human Resource
Management
Steps for problem solving
Define what the real or root problem is, not what is presented to you or
what appears to be the problem
Analyze the problem
Identify solutions
Pick a solution
Implement a solution
Review the solution and confirm that the solution solved the problem
649
Some Important Concepts on Human
Resource Management-Contd.
Perquisites (Perks)
Some employees receive special rewards such as assigned parking space, corner office,
executive dining
Arbitration
A neutral party hears and resolves a dispute
Fringe Benefits
Standard benefits formally given to all employees such as education benefits, insurance
and profit sharing
650
Resource Management Contd.
Halo Effect
Because someone is good at one job, it does not mean that (s)he has the skills to do
another equally hard job. E.g. top programmer getting promoted to a management
position but if (s)he does not have the management or leadership roles, then the
company just lost their best programmer and gained a lousy manager!
651
Resource Management
Powers of the project manager
Formal / legitimate - Power is based on your position assigning a task to one of your direct reports. For
matrix organizations, youll also need to use other kinds of power to influence your team
Reward power is what you have when you can award a bonus or another kind of reward in order to
motivate team members.
Penalty (Coercive) This power comes from the ability to penalize team members for poor behavior.
Always remember to do this one-on-one and in private.
Expert This power comes from being an expert in a specific area (say technical / project management)
Referent Means that people admire you, are loyal to you and want to do what you do. Its the power of
charisma and fame. If you buy something because a celebrity does, thats referent power
652
Best forms of power are expert and reward
Penalty is the worst form
Formal, reward and penalty are powers derived from your position in
the company
Expert power is earned
For the exam, penalty is usually an incorrect choice
653
Motivational Theories what do people really want?
Expectancy theory
States that employees motivation is an outcome of how much an individual wants a
reward, the assessment that the likelihood that the effort will lead to expected
performance (Expectancy) and the belief that the performance will lead to reward
(Instrumentality).
If rewards are unachievable, this will not work, rather will demotivate the team
654
Resource Management
McClellands Theory of needs (or acquired needs theory)
Says that people are most motivated by one of the below -
655
McGregors theory of X and Y
McGregor believes that all workers fit into two categories X and Y.
A Theory X manager believes that people need to be watched every minute. People are
incapable, avoid responsibility and avoid work whenever possible.
656
A Theory Y manager believes that people are willing to work without
supervision and want to achieve. People can direct their own efforts.
657
Maslows Hierarchy of Needs
Higher Order Needs
Lower Order Needs
Self-Actualization Need to grow and use abilities to the fullest
and most creative extent
Esteem - Need for respect, prestige, recognition,
sense of competence
Physiological Need for biological maintenance (food, water etc.)
Safety Need for security, protection and
stability
Social Need for love, affection, sense of
belonging
658
Some Important Concepts on Human Resource
Management
Herzbergs Motivation-hygiene theory
Herzberg says that there are a set of hygiene factors that dont motivate one but needs to be
present before one can be motivated. Poor hygiene factors may destroy motivation. Examples are
o Working conditions
o Salary
o Personal life
o Work relationships
o Security
o Status
659
There are a set of motivating agents what motivates people such as
o Responsibility
o Self-actualization
o Personal growth
o Career advancement
o Recognition
660
Leadership Styles
STYLE DEFINITION
Directing Telling others what to do
Facilitating Coordinating input of others
Coaching Instructing others
Supporting Providing assistance along the way
Autocratic Making decisions without input
Consultative Inviting ideas from others
Consensus Decision making based on group agreement
661
Powers of the Project Manager
for Perfect Project Management
POWER DEFINITION
Formal Legitimate based on position
Reward Ability to give rewards
Penalty Coercive ability to penalize
Expert Technical or Project Manager expert
Referent Based on personality or anothers authority
662
END OF THE SESSION
663
COMMUNICATION
MANAGEMENT
664
List of Topics
1. Introduction to Communication Management
2. Plan Communication Management
3. Manage Communication
4. Control Communication
665
INTRODUCTION TO
COMMUNICATION
MANAGEMENT
666
Introduction Communication Management
Project Communication Management is about getting the word out it ensures that everybody
receives right information at the right time so that they stay on the same page
Project Communication Management includes the processes required to ensure timely and
appropriate generation, collection, dissemination, storage, retrieval and ultimate disposition of
project information.
Communicating is sometimes a more important skill than technical skills
The outcome of communication is getting things done
Good communication fosters an open, trusting environment
One of the most important assets a project manager can have
667
Introduction Communication Management-Contd.
An effective project manager will spend 80% to 95% of the project
management effort communicating
The ability to influence through effective communication is the most powerful
tool available to the project manager
668
Communication Channels
No. of Communication Channels= N(N-1)/2
You had 5 members on your team and there is a scope change. Two more
new members have been added to your team. How many communication
channels do you have now ?
669
Communication Channels-Contd.
If there are only 2 members in the team then number of Communication
Channel=(2*1)/2=1
If there are only 3 members in the team then number of Communication
Channel=(3*2)/2=3
670
Communication Channels-Contd.
If there are only 4 members in the team then number of
Communication Channel=(4*3)/2=6
671
Overview of Communication Management Process
Plan Communications
Management
Manage
Communications
Control
Communications
You determine the
information and
communications needs
of the project's
stakeholders. This is
documented in a
communications
management plan.
You send out
relevant information
to stakeholders using
the formats that are
described in the
communications
management plan.
Executing Process
Group
You collect information
about project
performance and
accomplishments. This
information can refer
to factors such as costs,
schedule, scope, and
quality.
Process Group
672
Dimensions of Communication
Internal (within the project) and external (customers, other projects, public, media)
Written and oral
Formal (reports, memos, briefing) and informal (emails, ad-hoc discussions)
Verbal and non-verbal (voice inflections, body language)
Vertical (up and down the organization) and Horizontal (with peers)
Official (newsletters, annual reports) and unofficial (off the record communications)
673
PLAN COMMUNICATION
MANAGEMENT
674
PROJECT COMMUNICATION MANAGEMENT
Planning Plan Communication
Management
Executing Manage Communication
Monitoring and Controlling Control Communication
675
Plan Communication Management
Determining the Project Stakeholder information needs and defining a communications
approach : who needs what information, when they will need it, and how it will be given
to them and by whom.
Effective Communication means that the information is provided in the right format , at the
right time and with the right impact.
Efficient information means providing only the information needed.
Organization structure will have major impact on Project Communications requirements.
Efficient information means providing only the information needed.
Organization structure will have major impact on Project Communications requirements.
676
Plan Communication Management Contd.
Inputs
Tools & Techniques
Communications requirements analysis
Communications technology
Communication Models
Communication Methods
Meetings
Outputs
Communication management plan
677
Plan Communications Management Inputs
Identification, assessment and classification info for project stakeholders
This ensures consistency with other management plan while preparing the communication management plan
Organizational or Company culture and structure
Governmental or Industry Standards
Infrastructure, existing Human Resources and skill set
Personnel administration: example - hiring and firing, employee performance reviews, training records
Market place conditions etc.
Stakeholder risk tolerances
Project Management Information System: example - Schedule software tool, Configuration Management
System
678
Plan Communications Management Inputs Contd.
Standard policies, processes and procedures
Templates
Lessons learnt
Historical data from past projects
679
Plan Communications Management
Tools & Techniques
Communication requirement Analysis
Determines information need for project stakeholders
As number of stakeholders increases, project communication becomes more
complex.
Total number of potential communication channels in a project with n stakeholders
is : n*(n-1)/2
To effectively plan actual communications, determine and limit who will
communicate with whom and who will receive what information
680
Communication Technology
Different methods are used to transfer information among project stakeholders.
Factors that can affect project communications are
How urgently the information is needed?
Is any communication systems (technology) already available and accessible to
the stakeholders?
Are projects proposed communication systems compatible with the
experience and expertise of project staffs?
Is the available technology likely to get changed before the project is over?
Is the team co-located or virtual?
681
Communication Model
Demonstrates how information is sent and received by two parties
The Sender
o Responsible for putting together a clear and concise message, observing
response, and seeking feedback
o Ensures that the receiver has received and understood
The Receiver
o Responsible for listening, understanding, checking, and providing feedback
682
Key components include
Encode Translate thoughts into a language understood by others
Message & Feedback message The output of encoding
Medium Method used to convey the message
Noise Anything that interferes with the transmission and understanding of the
message
Decode To translate the message back to meaningful thoughts and ideas
683
Communication Process
Sender
Encode Transmit Decode
Feedback
Receive
684
Communication Model
Encoder/
Filter
Filter/
Decoder
Internet/
Medium
Sender
Receivers
Filter/
Decoder
Filter/
Decoder
Feedback
685
Forms of Communication
Reference: Project Management - A Systems Approach To Planning, Scheduling
And Controlling, Page 273
Form of Communication Characteristic Examples
Written Formal Precise
Transmitted through the medium
of correspondence
Project Charter, Scope Statement, Project Plan, WBS, project
status
Complex issues
Contract related communication
Written Informal Email, Notes, Memos, Letters
Regular communication with team members
Oral Formal High Degree of Flexibility
Use the medium of personal
contact, group meetings or
telephone
Presentations, speeches,
Negotiations, conflict resolution
Oral Informal Conversation with team members
Project Meetings
Break-room or war-room conversations
Non-verbal
communication
About 55% of total
communication
Facial expressions, hand movements, tone of voice while
speaking etc.
686
Tools & Techniques
Interactive communication Includes a multidirectional exchange of information
This is the most efficient way to ensure that all participants maintain a common
understanding. Examples meetings, teleconference, video conference etc.
Push communication Involves sending information to specific recipients
This ensures the information is distributed, but not that it was necessarily received
or understood by the intended recipients. Examples letters, memos, faxes,
emails, press releases etc.
687
Pull communication Involves sending information only to people who
specifically request it
This is useful when a large amount of information must be accessible to many
recipients and it's appropriate for the recipients to use their own discretion about
which parts of the information they want to access. Examples intranet sites, e-
learning, knowledge repositories etc.
688
Plan Communications Management Outputs
Communication Management Plan
The primary Output of the Plan Communications process is communication management plan.
Contains information such as
o What are the various communication requirements of the stakeholders?
o Why is the information needed?
o Between whom?
o Best method for communicating
o Who is responsible for sending?
o When and how often?
o Resources allocated to communication activities
o Escalation process
o Communication constraints
o Methods for updating and refining communication plan
689
Plan Communications Management Outputs Contd.
Stakeholder management strategy
Project schedule
690
Some important concepts before we move ahead
The Project
Lateral communications to
other projects and other
organizations.
Lateral communications to
peers and project managers
Communication to other
stakeholders
Communication to
Management, functional
managers, sponsor,
customers and team
Communication Directions
691
Some important concepts before we move aheadContd.
Communication Types degree of formality
Formality is the amount of rigor and structure imposed on the
communication
Formal Informal
Complete formality would be written
contracts
Complete informality would be casual
conversation
Formal In Formal
692
The degree of formality must be carefully selected based on:
o The impact of the subject on the project success
o The importance of the message
o The timeliness of the communication
o The duration of the communication impact
o The relationship with the other party
o The level of trust between the parties
o The time available
693
Effective Communication
Communication is about more than just what you write and say. Your facial expressions, gestures,
tone of voice, and the context you are in have a lot to do with whether or not people will
understand you. Effective communication takes the way you act and sound into account.
Nonverbal communication means your gestures, facial expressions, and physical appearance
while you are communicating your message. About 55% of all communications are nonverbal.
Para-lingual Communication is the tone and pitch of your voice when youre talking to people
Feedback is when you respond to communication. Some ways of giving feedback are summarizing
their main points back to them, letting them know that you agree with them, or asking questions
for clarification When you give a lot of feedback to someone who is speaking, thats called active
listening.
694
Control of communication
Can the PM control all the communications? NO
Should the PM try to control communications? Yes, otherwise
miscommunication, unclear direction, scope creep can occur.
What % of the PMs time is spent in communicating? About 90%
695
MANAGE
COMMUNICATION
696
Planning Plan Communication Management
697
Manage Communication
This process enables effective and efficient communication
flow between the stakeholders
698
Manage Communication Contd.
Inputs
Communication management plan
Work Performance Reports
Tools & Techniques
Communication Models
Information Management
systems
Performance reporting
Outputs
Project communications
Organizational process asset Updates
699
Manage Communications Process Inputs
How to manage communication is part of it
Work Performance Reports
Distribute information regarding project performance and status. Should be
available prior to meetings
Forecasts are updated and issued based on work performance information.
Forecast can be generated using
o Earned value
o Re-estimating remaining work
o Drawing analogy with past projects
o Including impact of external events onto the project
700
Manage Communications Process Inputs-Contd.
Standard policies, processes and procedures related to information distribution
Templates
Lessons learnt
Historical data from past projects
701
Manage Communications Process
Tools & Techniques
Meetings, conferences, mails, chats and others as applicable
Different methods are used to transfer information among project stakeholders. Factors that can
affect project communications are
How urgently the information is needed?
Is any communication systems (technology) already available and accessible to the
stakeholders?
Are projects proposed communication systems compatible with the experience and
expertise of project staffs?
Is the available technology likely to get changed before the project is over?
Is the team co-located or virtual?
702
Manage Communications Process
Information Management System
Hard copy document distribution
Manual filing systems
Press releases
Electronic communication and conferencing Tools such as email, fax, voice mail
Electronic Tools for project management (software, portal, collaborative platforms)
703
Manage Communications Process Outputs
Project Communication
This can be in any form but happens as per the communication management plan
Project Management Plan Update & Project Document Update
Communication management plan is updated if required
Communication related documents also updated if required
704
Manage Communications Process Outputs Contd.
Lessons learned documentation
Project records
Project reports
Project presentations
Feedback from stakeholders
Stakeholder notifications
705
CONTROL
COMMUNICATION
706
Planning Plan Communication Management
707
Control Communication
The process which details how the communication will be
controlled
708
Control Communication- Contd.
Inputs
Issue Log
Tools & Techniques
Information management systems
Expert Judgments
Meetings
Outputs
Change Requests
Organizational process assets (Updates)
709
Control Communications Process Inputs
Performance management baselines
Schedule progress, deliverables status, costs authorized and incurred, estimation to
completion, resource utilization
Work Performance Measurements
Planned Vs.. actual schedule performance
Planned Vs.. actual cost performance
Planned Vs.. actual technical performance
710
Control Communications Process Inputs Contd.
Budget forecasts
The additional funds that are expected to be required for the remaining
work,
Estimates for the completion of the total project work.
Report templates
Policies and procedures that define the measures and indicators to be
used
Organizationally defined variance limits
711
Control Communications Process
Tools & Techniques
Expert Judgments
Here the expertise being used on how similar kind of projects managed and Controlled
the Communication/ process of Communication management. Dos and Don's are
implemented based on the expertise gained from previous projects.
712
Meetings
In order to Control the communication and also the to make the control realistic
and accepted by the entire team, it is better to conduct team meetings , this
meeting also attending by other stakeholders like Project Sponsors, others. Project
manager can also conduct this meeting with the selected team members to control
the communication. project manager will also ensure thru the selected few the
communication is happening as per the Communication Management Plan.
713
Reporting systems
System to keep track of how much time and money people spend doing work
Provides a standard tool for the project manager to capture, store, and distribute
information to stakeholders about the project cost, schedule progress, and
performance.
Software packages allow the project manager to consolidate reports from several
systems and facilitate report distribution to the project stakeholders.
714
Control Communications Process Outputs
Work performance data collected in analyzed in context to infer an information
from it based on its relationship and is called as Work Performance Information
(WPI).
Examples:
1. Schedule Variance
2. Cost Variance
3. Estimate At Complete (EAC)
4. Estimate to Complete (ETC)
715
Control Communications Process Outputs Contd.
Lessons learnt cause of issues, reasoning behind corrective action chosen
Change requests
Recommended corrective and preventive actions
716
Communication Blockers
Noisy surroundings
Distance between those trying to communicate
Improper encoding
Making negative statements
Hostility
Language
Culture
717
END OF THE SESSION
718
RISK MANAGEMENT
719
List of Topics
1. Introduction to Risk Management
2. Plan Risk Management
3. Identify Risk
4. PerformQualitative Risk Analysis
5. PerformQuantitative Risk Analysis
6. Plan Risk Performance
7. Control risks
720
INTRODUCTION TO RISK
ANALYSIS
721
Risk: Definition
Project risk is an uncertain event or condition which, if occurs, has a positive or a
negative effect on at least one project objectives, such as time, cost, scope, or quality.
A risk, when it occurs, has a cause and consequence.
The cumulative effect of the chances of uncertain occurrences, which will adversely
affect project objectives. It is the degree of exposure to negative events and their
probable consequences.
A risk may have one or more causes and when occurs it may have one or more
impacts. A cause may be requirement, assumption, constraint or condition that creates
the possibility of negative or positive outcomes.
722
Risk: More Definitions
Risk is a measure of the probability and consequence of not achieving a defined project
Risk involves the notion of uncertainty
It measured by probability and damage/gain (impact)
Knowledge of the source of the danger/opportunity
Risk is the cumulative effect of a number of events
Future events that are favorable are called opportunities
Every expression of risk can also be expressed as its alternative - an opportunity
Project risk has its origins in the uncertainty, but present in all projects.
723
Risk: Character
Known risks are those that have been identified and analyzed, making it possible to plan
responses for those risks.
Specific unknown risks cannot be managed proactively, which suggests that the project
team should create a contingency plan.
Project risk is characterized by three factors: risk event, risk probability, and the impact.
Project risk is always in the future.
Issue: A Project risk that has occurred can also be considered an issue.
Risk Tolerance- Organizations perceive risk as the effect of uncertainty on their project and
organizational objectives. Organizations and stakeholders are willing to accept varying
degrees of risk
724
Project Risk Management:
The objectives of Project Risk Management are to increase the probability and impact of positive events
and decrease the probability and impact of negative events in the project.
Project Risk Management includes the processes of conducting risk management planning,
identification, analysis, response planning, and monitoring and control on a project.
Risk Management
Processes
Plan Risk
Management;
Identify Risks;
Perform Qualitative
Risk Analysis;
Perform Quantitative
Risk Analysis;
Plan Risk Responses;
Control Risks.
725
Risk Management
Identify
Risks
Plan Risk
Response
Control
Risks
Perform
Qualitative
Risk Analysis
Plan Risk
Management
Perform
Quantitative
Risk Analysis
Planning
Monitoring &
Controlling
726
Risk Management Processes: Definitions
Plan Risk management : The process of deciding how to approach and plan risk
management activities for a project. It is necessary that the level, type, and
visibility of risk management are commensurate with both the risk and importance
of the project.
Identify Risks: It involves determining which risks might affect the project and
documenting their characteristics. It is an iterative process.
Qualitative risk analysis: The process of analyzing the impact and likelihood of
identified risks. This process prioritizes risks according to their potential effect on
project objectives. One way to determine the importance of addressing specific
risks and guiding risk responses.
727
Risk Management Processes: Definitions -Contd.
Quantitative Risk Analysis
This process aims to analyze numerically the probability of each risk and its
consequence on project objectives, as well as the extent of overall project risk.
The objectives are to:
Determine the probability of achieving a specific objective
Quantify risk exposure of the project
Identify risks requiring the most attention by quantifying their relative
contribution to the project risk
Identify realistic and achievable costs, schedule / scope targets
728
Risk Management Processes: Definitions -Contd.
Plan Risk Response
The process of developing options and determining actions to enhance opportunities
and reduce threats to the projects objectives. Identified risks are addressed properly.
Control Risk
The process of keeping track of the identified risks, monitoring residual risks and
identifying new risks, ensuring the execution of risk plans and evaluating their
effectiveness in reducing risk.
729
PLAN RISK MANAGEMENT
730
PROJECT RISK MANAGEMENT
Plan Risk Management Control Risks
Identify Risks
Perform Qualitative Risks Analysis
Perform Quantitative Risks Analysis
Plan Risk Response
731
Plan Risk Management
Deciding how to approach and plan the risk management activities for a
project.
This Process should begin as a Project is conceived and should be completed
early during Project Planning
732
Process of defining how to conduct risk management activities for a project
Plan Risk Management process should begin as the project is conceived and should be completed early
during project planning.
Careful and explicit planning enhances the probability to ensure that the degree, type, and visibility of
risk management are commensurate with both risks and importance of the project
Planning is also important to provide sufficient resources and time for risk management activities and
to establish an agreed upon basis for evaluating risks
Plan Risk
Management
Identify
Risks
Qualitative Risk
Analysis
Quantitative Risk
Analysis
Plan Risk
Reponses
Control Risks
733
Outputs
Risk Management Plan
Inputs
Project Management plan
Project charter
Tools & Techniques
Expert Judgment
Meetings
734
Plan Risk Management - Input
o During planning risk management, we need to consider all the approved
subsidiary management plan in order to make the risk management plan
consistent with them.
Project Charter
o It provides high level information such as risks, project description and
requirements
o It contains all the details on the project stakeholders and also provide the
overview of their roles.
735
Plan Risk Management - Input
o Influences the risk attitudes and tolerances that describe the degree of risk
that an organization will withstand.
o Risk Categories
o Common definitions of concepts and terms
o Risk Statement formats
o Standard Templates
o Roles and Responsibilities
o Authority levels for decision-making
o Lesson Learned
736
Plan Risk Management - T&T
Analytical Techniques:
o Analytical Techniques are used to understand and define the overall risk
management context of the project. Risk management context is the
combination of stakeholder risk attitudes and strategic risk exposure on
the overall project.
Expert judgment:
o To ensure a comprehensive judgment, expertise should be considered from
the groups or individual within specialized training or knowledge on
subject area.
737
Plan Risk Management - T&T Contd.
Meetings:
o Project team hold planning meetings to develop risk management plan
with the project manager, selected project team members and other
stakeholders.
738
Risk Management Plan - Outputs
Describes how risk management will be structured and performed on the project. It
contains the following:
Methodology: Defines approaches, Tools and data sources, different types of
assessments may be appropriate, depending upon the stage and information
available and flexibility remaining in risk management
Roles and responsibilities: Defines the lead, support, and risk management team
membership for each type of action in risk management plan
Budgeting: Establishes budget for risk management plan
Timing: How often the risk management process will be performed throughout the
life cycle
739
Risk Management Plan Outputs Contd.
Risk Categories: Provides a structure that ensures a comprehensive process of
systematically identifying risks to a consistent level of detail and contributes to the
effectiveness and quality of the Identify Risks process.
Definition of risk probability and impact: The quality and credibility of
Perform Qualitative Risk Analysis process requires that different levels of the risks
probabilities and impacts be defined.
Probability and Impact matrix: Risks are prioritized according to their
potential implications for having an effect on the projects objectives. A typical
approach to prioritizing risks is to use a look-up table.
740
Risk Management Plan Outputs Contd.
Revised stakeholders tolerances: Stakeholders tolerances may be revised in the
Plan Risk Management process.
Reporting formats: Describes the content and format of the risk response plan
Tracking: Documents how all facets of risk activities will be recorded for the benefit
of the current project, future needs, and lessons learned
741
IDENTIFY RISKS
742
Identify Risks
Plan Risk Response
743
Identify Risks
Determining which risks are likely to affect the project and documenting
the characteristics of each. It is an iterative Process
Internal risks Things that the project team can control or influence
External risks Things beyond the control or influence of the project team
Risk identification is concerned with opportunities (positive outcomes), as well as with
threats (negative outcomes)
744
Identify Risks Contd.
Types
Business (profit or loss) and insurable (loss)
Known known Total certainty
Known unknown Degree of uncertainty
Unknown unknown Total uncertainty
Categories
External, unpredictable Regulatory, etc.
External, predictable Market risks
Internal, non-technical Management
Technical Design
Legal Contractual
Unforeseeable
745
Identify Risks Contd.
Inputs
Cost management plan
Human resource management plan
Scope Baseline
Activity duration estimates
Project Documents
Procurement documents
Tools & Techniques
Documentation Reviews
Information Gathering Techniques
Checklist analysis
Assumptions Analysis
Diagramming Techniques
SWOT Analysis
Expert Judgment
Outputs
Risk register
746
Identify Risks: Features
Consists of determining which risks are likely to affect the project and documenting the
characteristics of each
Addresses internal risks and external risks
Published information, including commercial databases, academic studies,
benchmarking, or other industry studies, may also be useful in identifying risks
Information on prior projects may be available from previous project files, including
actual data, and lessons learned
747
Identify Risks: Features Contd.
The process of systematically identifying all possible risks events that may
impact a project. They may be conveniently classified according to their cause
or source and ranked roughly according to the ability to manage effective
responses. Not all risk events will impact all projects but the cumulative effect
of several risk events occurring in conjunction may well be more severe than
examination of individual risks might suggest
748
Identify Risks - Input
Risk Management Plan: Key inputs from the risk management plan to the Risk
Identification process are the:
o Assignments of roles and responsibilities, provision for risk management activities.
o In the budget and schedule and categories of risk.
Cost Management Plan: Project specific approach to cost management may
generate or alleviate risk by its nature or structure.
Schedule Management Plan: Requires an understanding of the schedule
management plan and identify the potential risks.
749
Identify Risks Input Contd.
Quality Management Plan: Provides a baseline of quality measures and
metrics for use in identifying risks.
Human resource Management Plan: Provides guidance on how project
human resources should be defined, staffed , managed and eventually released.
Scope Baseline: Project assumptions; uncertainty in project assumptions should
be evaluated as potential causes of project risk. WBS is a critical input to identifying
risks as it facilitates an understanding of the potential risks at the micro and macro
levels. Risks can be identified and subsequently tracked at summary, control
account and or work package levels.
750
Activity Cost Estimates: Useful in identifying risk as they provide a quantitative
assessment of the likely cost to complete scheduled activities.
Activity Duration Estimates: Useful in identifying risks related to the time allowances
for the activities or project as a whole.
Stakeholder Register: Useful in soliciting inputs for identifying risks as this will ensure
that key stakeholders are interviewed or otherwise participated during the Identify Risks
process.
751
Project documents; like assumptions log; work performance reports; earned value
reports; network diagrams; baselines and other project information proven to be
valuable in identifying risks.
Enterprise Environmental Factors: Published information, including commercial
databases, academic studies, benchmarking, or other industry studies, may also be
useful in identifying risks.
Organizational Process Assets: Information on prior projects may be available from
previous project files, including actual data and lessons learned.
752
Risk Identification: Types
Identification of risk by sources: External predictable, external unpredictable (but
uncertain), internal non-technical, and legal
Identification risk by impact: Scope risk, quality risk, schedule risk, and cost risk
Identifying risk in business terms: Business risk and pure/insurable risk.
753
Identify Risks T&T
Documentation reviews: review may be performed of project documentation,
including plans, assumptions, previous project files, contracts and other
information.
Information gathering Techniques - Brainstorming, Delphi technique, interviewing
and Root Cause Analysis
o Brainstorming: to obtain a comprehensive list of project risks. Project team with experts
of multidisciplinary perform brainstorming.
o Delphi Technique: way to reach consensus of experts.
o Interviewing: interviewing experienced project participants, stakeholders, and subject
matter experts
o Root cause analysis: is specific technique to identify a problem, discover the underlying
causes that lead to it, and develop preventive action.
754
Identify Risks T&T Contd.
Checklists Analysis- Risk identification checklists can be developed base don
historical information and knowledge that bas been accumulated from previous similar
projects. Lowest level of RBS can also be used as a risk checklist.
755
Assumptions analysis: Every identified risk is conceived and developed based on a
set of hypotheses, scenarios, or assumptions. Assumptions analysis explores the
validity of assumptions as they apply to the project. It identifies risks from inaccuracy,
instability, inconsistency, or incompleteness of assumptions.
Diagramming Techniques Risk diagramming technique may include:
Cause and effect diagrams known as Ishikawa or fishbone diagrams used for
identifying causes of risks.
System or process flow charts shows how various elements of a system
interrelated, and mechanism of causation.
Influence diagrams- graphical representations of situations showing causal
influence, time ordering of events, and other relationships among variables and
outcomes.
756
SWOT Analysis: Techniques examines from each of SWOT (Strengths, Weaknesses,
Opportunities and Threats) perspectives to increase the breadth of identified risks by
including internally generated risks. Technique starts with identification of strengths
and weaknesses of the organization focusing on either the project organization or
wider business. These are identified using brainstorming. SWOT analysis then
identifies any opportunities for the project that arise from organizational strengths and
any threats arising from weaknesses.
757
Identify Risks - Output
Risks Register
The primary outputs from Risk Identification are the initial entries into the risk register, which
becomes a component of the project management plan.
The risk register ultimately contains the outcomes of the other risk management processes as
they are conducted.
The preparation of the risk register begins in the risk identification process with the information,
and becomes available to other Project Management and Project Risk Management processes.
o List of identified risks: structure for risks in the list such as EVENT may occur, causing IMPACT, or If
CAUSE, EVENT may occur, leading to EFFECT. The root causes of those risks may become more
evident. The fundamental conditions or events may give risk to one or more identified risks.
o List of potential responses: potential responses to a risk may sometimes be identified during the
Identify Risks process. These responses may be useful as inputs to the Plan Risk Responses process.
758
PERFORM QUALITATIVE RISKS
ANALYSIS
759
Identify Risks
Plan Risk Response
760
Perform Qualitative Risk Analysis
The process of assessing the impacts and likelihood of
identified risks.
Qualitative risk analysis requires that the probability and consequences of the risks be
evaluated using established qualitative-analysis method and Tools.
It forms the foundation of Perform Quantitative Risk Analysis
761
Perform Qualitative Risk Analysis Contd.
Outputs
Inputs
Risk management plan
Scope baseline
Risk register
Tools & Techniques
Risk probability & impact assessment
Probability & impact matrix
Risk data quality assessment
Risk categorization
Risk urgency assessment
Expert Judgment
762
Perform Qualitative Risk Analysis Contd.
These risk attitudes introduce bias into the assessment of identified risks, attention should be paid
to evaluating bias and correcting for it.
Establishing definitions of the levels of probability and impact can reduce the influence of bias.
The time criticality of risk-related actions magnify the importance of a risk.
An evaluation of the quality of the available information on project risks help clarify the
assessment of the risks importance to the project.
Perform Qualitative Risk Analysis is a rapid and cost-effective means of establishing priorities for
Plan Risk Responses and lay the foundation for Perform Quantitative Risk Analysis.
The process should be revisited during the projects life cycle to stay current with changes in the
project risks.
763
Perform Qualitative Risk Analysis T&T
Risk Probability and Impact Assessment
Risk probability assessment investigates the likelihood that each specific risk will
occur.
Risk Impact assessment investigates the potential effect on a project objectives
such as schedule, cost, quality or performance including both negative effects for
threats and positive effects for opportunities.
Probability and impact are assessed for each identified risks. Risks can be assessed
in interviews or meetings with participants selected for their familiarity with the
risk categories on the agenda.
The level of probability for each risk and its impact on each objective is evaluated
during the interview or meeting.
764
Perform Qualitative Risk Analysis T&T -Contd.
Probability / Impact Risk Rating Matrix - Rising Impacts of a Risk
Evaluating Impact of a Risk an Manor Project Objectives
(ordinal scale or cardinal, non-linear scale)
Project Objective Very Low .05 Low .1 Moderate .2 High .4 Very High .8
Cost Insignificant cost increase <5% cost increase 5-10% cost increase 10-20% cost increase <20% cost increase
Schedule Insignificant schedule
slippage
Schedule
slippage <5%
Overall project
slippage5-10%
Overall project
slippage
10-20%
Overall project
Schedule slips >20%
Scope Scope decreases barely
noticeable
Minor areas of
scope are
affected
Major areas of
scope are affected
Scope reduction
unacceptable to the
client
Project end item is
effectively useless
Quality Quality degradation barely
noticeable
Only very
demanding
application are
affected
Quality reduction
requires client
approval
Quality reduction
unacceptable to the
client
Project end item is
effectively unusable
The impacts on project objectives can be assessed on a scale from very low to very high or on a numerical scale. The numerical
(cardinal) scale shown here is non-linear. Indicating that the organization wishes specifically to avoid risks with high and very-high
impact.
765
766
Probability / Impact risk rating matrix: Risks can be prioritized for further quantitative
analysis and response based on their risk rating. These risk rating rules are specified by
the organization in advance of the project and included in organizational process
assets. Evaluation of each risks importance and priority for attention conducted using
a look-up table or probability and impact matrix. Such matrix specifies combinations of
probability and impact that leads to rating of the risks as low, moderate or high
priority. The risk rating helps guide risk responses.
767
Risk Data Quality Assessment: A qualitative risk analysis requires accurate and
unbiased data if it is to be credible. Analysis of the quality of risk data is a technique to
evaluate the degree to which the data about risks is useful for risk management.
Risk Categorization: Risks to the project can be categorized by sources of risk, the area of
the project affected, or other useful category to determine areas of the project most
exposed to the effects of uncertainty.
Risk Urgency Assessment: Risks requiring near-term responses may be considered more
urgent to address. Indicators of priority can include time to effect a risk response,
symptoms and warning signs, and the risk rating.
768
Perform Qualitative Risk Analysis Output
Risk register updates
o As the project evolves and new information becomes available through qualitative risk
assessment the risk register is updated such as probability and impact of risk, risk ranking or
scores, urgency of risk, etc.
Assumption log updates
o As the project evolves and new information becomes available through qualitative risk
assessment, assumptions could change and these changes needs to be recorded.
769
PERFORM QUANTITATIVE RISK
ANALYSIS
770
Identify Risks
Plan Risk Response
771
Perform Quantitative Risk Analysis
Measuring numerically the probability and consequences of
risks and estimating their implication for project objectives
Determine probability of achieving a specific project objective. Quantify the
risk exposure for the project, and determine the size of cost and schedule
contingency reserves required. Identify risks requiring the most attention by
quantifying their relative contribution to project risk. Identify achievable and
realistic cost, schedule, or scope targets
772
Perform Quantitative Risk Analysis Contd.
Outputs
Inputs
Cost management plan
Risk register
Tools & Techniques
Data gathering & representation
Techniques
Quantitative risk analysis & modeling
Techniques
Expert Judgment
773
Perform Quantitative Risk Analysis T&T
Data Gathering and Representation Techniques
Interviewing: Interviewing Techniques draw on experience and historical data to
quantify the probability and impact of risks on the project objectives.
o The information needed depends upon the type of probability distributions that will be used.
Information gathered on Optimistic (high) and pessimistic (low) and the most likely scenarios.
o Three Point estimates (PERT)for costs are used during Estimate Activity Durations and
Estimate Costs.
o Documenting the rationale of the risk ranges and the assumptions behind them are important
components of the risk interview because they can provide insight on the reliability and
credibility of the analysis.
774
Perform Quantitative Risk Analysis T&T Contd.
775
Probability distributions: Continuous probability distributions, used
extensively in modeling and simulation represent the uncertainty in values
such as durations of schedule activities and costs of project components.
Discrete distributions can be used to represent uncertain events such as the
outcome of a test or a possible scenario in a decision tree.
776
777
Quantitative Risk Analysis and Modeling Technique
Sensitivity analysis: Helps to determine which risk have the most potential
impact on the project. It examines the extent to which the uncertainty of each
project elements affects the objective being examined when all other uncertain
elements are held at their baseline values.
o Tornado Diagram Is useful for comparing relative importance and impact of
variables that have a high degree of uncertainty to those that are more stable.
778
Expected monetary value (EMV)analysis - Is a statistical concept that calculates
the average outcome when the future includes scenarios that may or may not
happen.
o The EMV of opportunities will generally be expressed as positive values, while
those of risks will be negative.
o EMV requires a risk neutral assumption, neither risk averse nor risk seeking.
o EMV for a project is calculated by multiplying the value of each possible
outcome by its probability of occurrence and adding the products together.
o Decision Tree Analysis is one such analysis.: Is a diagram that describes a
decision under consideration and the implications of choosing one or another
of the available alternatives.
779
NPV Net Present Value
Tornado diagrams, also called tornado
plots or tornado charts, Tornado
diagrams graphically display the result
of single-factor analysis, is a special
type of Bar chart, where the data
categories are listed vertically instead
of the standard horizontal
presentation, and the categories are
ordered so that the largest bar appears
at the top of the chart, the second
largest appears second from the top,
and so on. They are so named because
the final chart appears to be one half
of a tornado.
780
781
Modeling and simulation
o Project simulation uses a model that translates the specified detailed
uncertainties of the project into their potential impact on project objectives.
o Iterative simulations are typically performed using the Monte Carlo technique
o In a simulation, the project model is computed many times , with the input
values chosen at random for each iteration from the probability distribution of
these variables.
o A probability distribution is calculated from the iterations.
o Cost risk analysis is a simulation uses cost estimates.
o Schedule risk analysis the schedule network diagram and duration estimates
are used.
782
Cost risk simulation:
783
Perform Quantitative Risk Analysis Output
Project document updates:
Project documents are further updated to include a quantitative risk report
detailing quantitative approaches, outputs, and recommendations. Updates
include the following main components:
Probabilistic analysis of the project. Estimates are made of potential project
schedule and cost outcomes, listing the possible completion dates and costs
with their associated confidence levels. This output, typically expressed as a
cumulative distribution, is used with stakeholder risk tolerances to permit
quantification of the cost and time contingency reserves. Such contingency
reserves are needed to bring the risk of overrunning stated project objectives
to a level acceptable to the organization.
784
Perform Quantitative Risk Analysis Output Contd.
Probability of achieving cost and time objectives. With the risks facing the project, the
probability of achieving project objectives under the current plan can be estimated
using quantitative risk analysis results.
Prioritized list of quantified risks. This list of risks includes those that pose the greatest
threat or present the greatest opportunity to the project. This includes the ones that
have greatest effect on cost contingency and influence critical path.
Trends in quantitative risk analysis results: As the analysis is repeated, a trend may
become apparent that leads to conclusions affecting risk responses.
785
PLAN RISK PERFORMANCE
786
Identify Risks
Plan Risk Response
787
Plan Risk Response
Process of developing options and determining actions to
enhance opportunities and reduce threats to the projects
objectives
Risk response planning must be appropriate to the severity of the risk, cost effective in
meeting the challenge, timely to be successful, realistic within the project context, agreed
upon by all parties involved, and owned by a responsive person
788
Plan Risk Response Contd.
Inputs
Risk register
Tools & Techniques
Strategies for negative risks or threats
Strategies for positive risks or opportunities
Contingent response strategies
Expert Judgment
Outputs
Project Documents Update
789
Plan Risk Response Contd.
Risk Response Planning is the process of developing options and determining actions to
enhance opportunities and reduce threats to the projects objectives. This process ensures
that the identified risks are properly addressed. It must be:
Appropriate to the severity of the risk
Cost effective in meeting the challenge
Timely to be successful
Realistic within the project context
Agreed upon by all parties
And owned by responsible person
790
Plan Risk Responses T&T
Strategies for negative risks or threats: Three strategies typically deal with
threats or risks that may have negative impacts on project objectives if they occur.
These strategies are to avoid, transfer, or mitigate:
Avoidance: Risk avoidance is changing the project plan to eliminate the risk or
condition or to protect the project objectives from its impact. All risk may not be
possible to avoid but some can be.
Transfer: Risk transfer is seeking to shift the consequence of a risk to third party
together with ownership of response. It does not mean that we can eliminate the
risk.
791
Plan Risk Responses T&T
Mitigate: Seeks to reduce the probability / or consequences of an adverse risk event
to an acceptable threshold. Taking early action to reduce impacts more effective than
trying to repair the situation later.
Accept. Indicates that the project team decided not to change the plan to deal with a
risk or is unable to identify any other suitable response strategy.
792
Plan Risk Responses T&T Contd.
Strategies for positive risks or opportunities: Three responses are suggested
to deal with risks with potentially positive impacts on project objectives. These
strategies are to exploit, share, or enhance:
Exploit: This strategy may be selected for risks with positive impacts,
where the organization wishes to ensure that the opportunity is realized.
This strategy seeks to eliminate the uncertainty associated with a
particular upside risk by making the opportunity definitely happen.
Directly exploiting responses include assigning more talented resources to
the project to reduce the time to completion, or to provide better quality
than originally planned.
793
Share: Sharing a positive risk involves allocating ownership to a third party who is best
able to capture the opportunity for the benefit of the project. Examples of sharing actions
include forming risk-sharing partnerships, teams, special-purpose companies, or joint
ventures, which can be established with the express purpose of managing opportunities.
794
Enhance: This strategy modifies the size of an opportunity by increasing probability and/or
positive impacts, and by identifying and maximizing key drivers of these positive-impact
risks. Seeking to facilitate or strengthen the cause of the opportunity, and proactively
targeting and reinforcing its trigger conditions, might increase probability. Impact drivers
can also be targeted, seeking to increase the projects susceptibility to the opportunity.
795
Some Definitions
Residual risk: That remain well after avoidance, transfer, mitigation. Includes minor
risks that have been addressed/accepted.
Secondary risk: A rise as direct result of implementing a risk response are termed
secondary risk. They need to be identified and responses planned.
796
Risk Response Strategy
Remove a task from the project
Assign a team member to visit the suppliers manufacturing facilities frequently to
learn about a problem with delivery as early as possible
Notify management that there could be a major cost increase if a risk occurs
because no action is being taken to prevent the risk
Remove a troublesome resource from the project
Provide a team member who is less experienced with additional training
Train the team on conflict resolution strategies
Out source difficult work to a more experienced company
Ask the customer to handle some of the work
Decide to prototype a difficult piece of the software
797
Suggest the Cost Reserve?
You are planning the manufacture of an existing products modifications. Your analysis has
come up with the following:
20% probability that the parts will be $10,000 cheaper
30% probability of delay in receipt of parts with a cost of $9000
25% probability of two parts not fitting when installed, costing an extra of $3500
30% probability that manufacture may be simpler saving $2500
5% probability of design defect causing $5000 of rework
798
CONTROL RISKS
799
Identify Risks
Plan Risk Response
800
Control Risks
The process of keeping track of the identified risks,
monitoring residual risks and identifying new risks, ensuring
the execution of risk plans and evaluating their effectiveness
in reducing risk.
It applies technique such as variance and trend Analysis which require the use of
performance information generated during Project execution.
Project assumptions are still valid?
801
Objectives of Controlling Risks
Monitoring
And
Controlling
Risks
Identify
New Risks
Monitoring
Residual
Risks
Ensuring
Execution of
Risk Plan
Evaluate
Effectiveness
of Risk Plan
Change
Risk Plan
if required
802
Control Risks
It can involve
1. Choosing alternative Strategies
2. Executing a Contingency or fallback Plan
3. Taking corrective action and
4. Modifying Project Management Plan
803
Control Risks Contd.
Inputs
Risk register
Tools & Techniques
Risk audits
Risk assessment
Variance & trend analysis
Technical performance measurement
Reserve analysis
Meetings
Outputs
Change Requests
OPA Updates
804
Control Risk T&T
Risk reassessment: Risk monitoring and control often requires identification of new
risks and reassessment of risks, using the processes of this chapter as appropriate.
Project risk reassessments should be regularly scheduled. Project Risk Management
should be an agenda item at project team status meetings. The amount and detail of
repetition that is appropriate depends on how the project progresses relative to its
objectives. For instance, if a risk emerges that was not anticipated in the risk register or
included on the watch-list, or if its impact on objectives is different from what was
expected, the planned response may not be adequate. It will then be necessary to
perform additional response planning to control the risk.
805
Control Risk T&T Contd.
Risk audits: Risk audits examine and document the effectiveness of risk responses in
dealing with identified risks and their root causes, as well as the effectiveness of the
risk management process.
Variance and trend analysis: Trends in the projects execution should be reviewed
using performance data. Earned value analysis and other methods of project variance
and trend analysis may be used for monitoring overall project performance. Outcomes
from these analyses may forecast potential deviation of the project at completion from
cost and schedule targets. Deviation from the baseline plan may indicate the potential
impact of threats or opportunities.
806
Technical performance measurement: Technical performance measurement
compares technical accomplishments during project execution to the project
management plans schedule of technical achievement. Deviation, such as
demonstrating more or less functionality than planned at a milestone, can help to
forecast the degree of success in achieving the projects scope.
807
Reserve analysis: Throughout execution of the project, some risks may occur, with
positive or negative impacts on budget or schedule contingency reserves. Reserve
analysis compares the amount of the contingency reserves remaining to the amount of
risk remaining at any time in the project, in order to determine if the remaining reserve
is adequate.
808
Status meetings: Project risk management can be an agenda item at periodic status
meetings. That item may take no time or a long time, depending on the risks that have
been identified, their priority, and difficulty of response. Risk management becomes easier
the more often it is practiced, and frequent discussions about risk make talking about risks,
particularly threats, easier and more accurate.
809
Conclusion..
There will always be risks in your project
Identify risks
Identify risk consequences
Identify risk probability
Identify risk containment
Identify risk contingency
Then go
SELL IT TO THE SPONSORS
810
Project Risk Management: Summary
Risk management planning is determining how the risk management activities within the
project will take place. It is not the response or identification of risks, but the determination
of how to manage project risks.
Risk management planning is accomplished through planning meetings with the project
team, management, customers, and other key stakeholders.
The output of risk management planning is the risk management plan
Risks are uncertain events that can affect a projects objectives for good or bad.
Risks can be placed into four different categories:
o Technical, quality, or performance risks
o Project management risks
o Organizational risks
o External risks
811
Project Risk Management: Summary Contd.
Project files from published information and previous projects can serve as input to risk
identification.
The Delphi Technique allows participants to identify risk anonymously without fear of
embarrassment. A survey allows results to be shared with all participants for comments
on each others anonymous input. Rounds of surveying and analysis can create
consensus on the major project risks.
Triggers are warning signs that a risk is about to happen or has happened.
Risks are evaluated for their impact and likelihood.
812
Risks can be ranked by ordinal ranking by using such indicators as very low,
moderate, high, and very high.
Risks can also be analyzed using a cardinal ranking system of numerical values that
are assigned to each risk based on its impact and probability.
An overall project risk ranking can be used to compare the current projects with
other projects in the organization.
The risks can be moved into quantitative analysis for further study.
Risks are assigned numeric values. Such as: there is a 50 percent likelihood that the
risk will occur, causing a $10,000 cost.
The Monte Carlo simulation can determine the likelihood of the projects success,
predict the costs of a specific risk exposure, and identify realistic time, scope and
cost objectives.
813
Interviews with stakeholders and subject matter experts are an excellent start for
quantitative risk analysis.
Decision trees help determine the cost, benefit and value of multiple decisions.
They are based on the cost of the decision and the probability of completing an
objective.
Risk response planning focuses on reducing threats and increasing opportunities as a
result of risks. Risk thresholds, defined in risk management planning, describe the
acceptable level of risk within a company.
Risk owners are the individuals or groups that are responsible for a risk response, and
should participate in the risk response planning.
814
Risk avoidance changes the project plan to avoid the risk, as well as conditions that
promote the risk, or it attempts to reduce the risks impact on the projects success.
Risk transference moves the risk consequence to a third party. The risk doesnt go
away, just the responsibility of the risk. Though ultimately, the performing organization
still retains the ultimate accountability and results of the risk event.
Risk mitigation involves actions designed to reduce the likelihood of a risk occurring,
reduce the impact of a risk on the project objectives, or both.
Risk acceptance acknowledges the risk exists but the risk is not worthy of a more in-
depth response, or a more in-depth response is not available for the risk.
815
Residual risks are risks that remain after avoidance, transference, mitigation, and
acceptance. Secondary risks are new risks that arise from a risk response.
Identified risks must be tracked, monitored for warning signs, and documented. The
responses to the risks are monitored and documented as successful or less successful than
expected.
Issue logs, action-item lists, jeopardy warnings, and escalation notices are all types of
communication reports the project team and risk owners must use to document and track
identified risks.
Risk response audits measure the success of the responses and the effectiveness of the
cost, scope, and quality values gained or lost by the risk responses.
816
Earned value analysis can measure project performance, but it can also predict and
signal pending risks within the project.
As unexpected risks arise, the project team may elect to use workarounds to diminish
the impact and probability of those risks. Workarounds, however, should be
documented and incorporated into the project plan and risk response plan as they
occur.
817
END OF THE SESSION
818
PROCUREMENT MANAGEMENT
819
List of Topics
1. Introduction to Procurement Management
2. Plan Procurement Management
3. Conduct Procurements
4. Control Procurements
5. Close Procurements
820
INTRODUCTION TO
PROCUREMENT
MANAGEMENT
821
Introduction Procurement Management
Project Procurement Management includes the processes to purchase or acquire the Products or services
needed from outside the organization.
In a procurement, there are two parties involved
Buyer Company / person purchasing / procuring required product or service
Seller Company / person providing service / goods. Also called Contractor / vendor /
consultant. Seller is external to the project team
Unless explicitly specified, assume questions are asked from buyers perspective
Contracts require formality take a more formal approach while answering questions for
the procurement processes
822
Procurement Management
Plan
Procurement
Management
Planning
Control
Procurements
Conduct
Procurements
Executing
Monitoring &
Controlling
Closing
Close
Procurements
823
Overview of Procurement Management Process
Plan Procurement
Management
Plan out what
youll purchase and
how and when you
will need the
contracts to be
negotiated for your
project
Planning Process
Group
Conduct
Procurements
Decide on the
seller(s) you want
to work with.
Finalize and sign
the contract
Executing Process
Group
Control
Procurements
Keep tabs on the
contract. Make
sure your company
(buyer) is getting
what you have paid
for (from the
sellers)
Monitoring &
Controlling
Process Group
Close
Procurements
Confirm that the
work was done
right and that all
obligations are
fulfilled on both
sides
Closing Process
Group
824
Role of the Project Manager in Procurement
Management Process
Know the procurement process
Understand contract terms & clauses
Carefully prepare the procurement SOW
Incorporate risk mitigation / allocation in contract to decrease risk
Make realistic project schedule by allowing adequate time for procurement process completion
Clarify questions during bidders conference
Participate in contract negotiation to protect relationship with seller
Ensure all works in the contract are done
Work with procurement manager to manage contract changes
825
Project Procurement Cycle
Make
or
Buy
Create SOW
Issue RFQ
Receive
Proposals
Control
Procurement
Formally
Accept and close
Procurement
Award
Project
No Procurement
required
Buy
Make
826
PLAN PROCUREMENT
MANAGEMENT
827
PROJECT PROCUREMENT MANAGEMENT
Planning Plan Procurement Management
Executing Conduct Procurements
Monitoring and Controlling Control Procurements
Closing Close Procurements
828
Plan Procurement Management
The Process of documenting the Project purchasing decisions , specifying the
approach and identifying potential sellers
Determining whether to acquire outside Support , if so
1.What to Acquire
2. How to Acquire
3. When to Acquire
4. How much is needed
It includes consideration of Risks involved with each make or buy decisions
829
Plan Procurement Management Contd.
Inputs
Risk register
Project schedule
Tools & Techniques
Make-or-buy analysis
Expert judgment
Market research
Meetings
Outputs
Procurement management plan
Procurement SOW
Source Selection Criteria
Make-or-buy decision
Change Requests
830
What do we do in Plan Procurement?
Perform Make-buy analysis figure out whether or not you should do the work yourself
or contract it out
Create procurement management plan Plan out each contract and how you will
manage it
Create procurement Statement Of Work - list of work to be contracted
Select Contract type
Create procurement documents - send to sellers who would bid for your work
Determine source selection criteria how do you select seller?
831
Inputs for Plan Procurement Management
Process
Project management Plan
Project requirements
Requirements with Contractual and legal implications
Risk register
Risk analysis must be complete before contracts are signed
People, Tools, location
832
Inputs for Plan Procurement Management
Process Contd.
Project schedule
When procurements are needed
Initial cost estimates of procured
activities
Details of Project participants and their
interests in the project
Marketplace conditions
Availability of services to be purchased
Policies & Procedures
Lessons learnt
List of prequalified sellers
833
Tools & Techniques
Make or Buy analysis
Buy
To decrease risk
Save Cost
Niche skill not available in-house
Make if there is
Idle resources
confidential / proprietary info
To gain higher control
834
You are trying to figure out whether or not to contract a prototyping job for a health-care tool. To do it in-
house, you need to include one architect for $3500 (for the entire prototyping engagement) and pay the
solutions team $1500 per week.
A contractor quotes you a price of $1900 per week and this seems to be the best deal in market. The
prototype will take 16 weeks. What do you do?
oJust find out how much it costs to make it or buy it and choose the lower number
Cost to Make
= $3500 + ($1500*16) = $27500
Cost to Buy
= $1900*16 = $30400
Decision: MAKE
835
Expert Judgment
Seek expert help in evaluating technology, obtain insight about how your work might be done in
various sourcing scenarios
Market Research
Understand the industry and specific vendor capabilities
Source of information Conferences, online reviews
Refine procurement objectives using the information collected
Meetings
In addition to the market research, meeting with the potential bidders to provide the required
information
Mutually beneficial approach or product
836
Contract Types
Contract type selection to help support the procurement objectives
Whats being procured
How complete is the scope?
How closely will buyer manager the seller?
Any industry standard for such contract?
Will seller offer incentives to buyers?
Economy / marketplace conditions
837
More about contract types
Contract Type When should be used? Pros Cons
Fixed Price /
Lump Sum
Complete scope
Buyer does not want to micro
manage Seller / audit invoices
Less work for buyer
Total cost known beforehand
Commonly used
Seller inclined to control cost
Seller has highest cost risk
Procurement SOW must be complete
Seller may not complete all work, if
making loss
Buyer needs to carefully monitor the
CRs
Retention of key resources
Time & Material Effort is unknown at inception
Maintenance task
Work should start right away
For Short duration procurements
Quick & easy to create
Good for staff augmentation
mode
Seller has no incentive to control cost
Only effective for small projects
Profit for seller is in-built in every
effort-unit billed
Cost
Reimbursable
Scope is uncertain
Inaccurate cost estimate
Buyer must have system to track
costs submitted closely
R & D projects
Simpler procurement SOW
Lower cost than FP as seller
does not add costs for risk /
contingency
Less work to define scope
than FP
Thorough audit of invoices
Seller moderately inclined to control
cost
Total price unknown
Buyer bears cost risk
838
More about contract types -Contd.
Fixed Price Contract variants:
Firm Fixed price / Fixed price (FFP / FP) contract for $1M
Fixed Price plus Incentive Fee (FFIF) - $1M plus addition $5000 bonus per every
month early the project is finished
Fixed Price plus award Fee (FFAF) - Similar to FFIF but total possible reward is
determined in advance. E.g. $1M plus addition $5000 bonus per every month early
the project is finished, with a maximum award of $25000
Fixed Price Economic Price Adjustment (FPEPA) For multi-year contracts. E.g.
Contract for $1M with a price increase being allowed every 2 year for increase in
operating cost
Purchase Order Simplest FP, used for commodity procurement. E.g. 100 boxes of
chocolate at $25 per box
839
Cost Reimbursable Contract variants:
Cost Contract Only cost is reimbursed, no profit. Appropriate for non-profit
organizations
Cost plus fee (CPF) / Cost plus percentage of Cost (CPPC) Cost plus 15% of cost as fee.
Cost plus fixed Fee (CPFF) Cost plus $50000 as fee
Cost plus incentive fee (CPIF) Fee is based on specific target performance objective
being satisfied. Seller shares % of profit or cost overrun along with buyer. E.g. $1M
target cost plus $60K target fee. Sharing ratio is 4:1.
Cost plus award fee (CPAF) Cost plus a base fee of $4K every month when defects are
<2%. Max fee is $40K
840
Terms to remember
Price Amount the seller charges the buyer
Profit Planned into the price the seller quotes. Actual profit may be different than planned
profit
Cost How much an item costs for the seller to create / develop / purchase.
Target Price Expected price. Target cost plus target fee
Sharing ratio Describes how the cost savings / overrun will be shared by buyers and sellers
Ceiling Price Highest price that buyer will pay.
Point of Total Assumption (PTA) = (Ceiling price target price)/buyers share ratio + target cost
Most cost risk for seller : Fixed Price (FP)
Most cost risk for buyer : Cost plus percentage of cost (CPPC)
Learn Fee calculation and PTA calculation for exam
841
Plan Procurement Management - Outputs
Procurement Mgt Plan
How procurements are planned, executed, controlled & closed?
Procurement SOW
Contains work to be purchased from the seller
Must be complete and clear must include all work the seller should perform
Can be revised during negotiation but finalized when contract is signed
Nature depends on industry type
o Performance tells what should the result accomplish, not how
e.g. web apps with 2 sec response time
o Functional - features / characteristics of product
e.g. storage Cabinet with 5 drawers
o Design Exactly whats to be done, extremely specific requirement, work schedule
e.g. Build the tool exactly as mentioned in the drawing
842
Plan Procurement Management - Outputs Contd.
Procurement Documents - RFP, RFQ, IFB, Tender
Info for sellers includes background, process, timelines, formats, source selection criteria
etc.
Contains Procurement SOW
Contains Proposed contract terms & conditions
Decide in advance on how you want to select the sellers. May include
Goodwill
History of past performance
Total life cycle cost
Understanding of need
Technical / Mgt approach
843
Plan Procurement Management - Outputs Contd.
Make or Buy Decision
Work accomplished by project team or purchased from outside sources ?
Procurement plan to address the internal processes or processes to reach an agreement with external
suppliers
Change requests
For Project management plan and its subsidiary plans
Processed and disposed through integrated change control process
Requirements traceability matrix
Risk Register
844
CONDUCT PROCUREMENTS
845
846
Conduct Procurements
Process of obtaining Seller responses, Selecting Seller, Awarding Contract.
In this Process the team will receive bids or proposals and will apply
previously defined selection Criteria to select one or more sellers who
are qualified to perform the work and acceptable as a seller
847
Conduct Procurements Contd.
Inputs
Procurement Management Plan
Seller Proposals
Project documents
Make or Buy decisions
Procurement statement of work
Tools & Techniques
Bidder conference
Proposal evaluation Techniques
Independent Estimates
Expert Judgment
Advertising
Procurement negotiations
Outputs
Selected Sellers
Agreements
Resource Calendars
Change Requests
Updates
Project Documents Updates
848
Conduct Procurement Tools & Techniques
Bidders Conference
Buyer initiated Conference of all prospective sellers to answer all sellers questions
Ensures all answers are sent to all sellers every one has same information
available
Proposal evaluation Techniques
Proposal review
Screening System short-select
Weighting system objective & weighed evaluation of selection criteria
Past Performance history
Presentations
849
Conduct Procurement Tools & Techniques Contd.
Independent estimates
Performed by buyer
Significant difference between sellers and buyers estimate may mean
o Seller did not understand the scope
o Procurement SOW was unclear
Expert Judgment
For evaluation of sellers response
850
Advertising
Advertisement in newspaper / internet to select seller
May be mandatory for Govt. procurements
To analyze the readiness of the vendors to provide the desired end state
Examine past performance
851
Procurement Negotiations
To obtain a fair and reasonable price
Establish good relationship with seller
What to negotiate
o Scope
o Schedule
o Price
o Responsibilities
o Authorities to make changes
o Terms & Conditions
o Payment
o Applicable Laws
Price may not be the primary selection criterion for negotiating.
852
Conduct Procurement Outputs
Agreement
Agreement between buyer & seller
Legally binding
Contains -
o Procurement SOW
o Schedule baselines
o Performance reporting
o Period of performance
o Pricing
o Payment terms
o Place of delivery
o Warranty
o Product Support
o Inspection & Acceptance criteria
o Fee & Retainer
o Penalties and incentives
o Termination Clause and Alternate dispute
resolution (ADR) mechanism
853
Conduct Procurement Outputs Contd.
Some important Contract Terms & Conditions
Arbitration Dispute resolved by third party. Faster & cheaper
Breach / Default Contract obligations are not met
Force Majeure - Neither partys fault (act of God natural disaster, war, riot etc..)
Indemnification Liability clauses
Material Breach Breach is so huge that work may not be completed
Retainage Money withheld from each payment. Paid at final completion
Risk of Loss Who bears the cost if goods are lost / damaged?
Time is of the Essence On time delivery is critical
Waivers Rights under the contract may not be waived or modified other than by express interests of the parties
Work for hire Work provided in owned by buyer
Privity Contractual relationship
854
Selected Seller(s)
The objective of conduct procurement process is selecting seller(s). This is the most
important output
Resource Calendar
Histogram for contracted resources. Update staffing management plan with sellers
resources.
Change requests
To Project Management plan & Its subsidiary plans
Processed through Integrated change control
855
Updates to performance baselines
Updates to other parts of Project Management plan
Project documents Updates
Risk Register update
Requirement doc / traceability update
Stakeholder register update
856
Some procurement concepts before we move ahead
Non-competitive procurements can be used when
The project may be under extreme schedule pressure
Buyer may have preferred vendors and they may not want to advertise for
sellers
There could be only one seller in the market who could do the work
Buyer has verified by other means that the sellers price is reasonable
Buyer needs a patented item
Following types of non competitive procurement can be used
o Single source Preferred seller
o Sole source There is only one seller
857
Some procurement concepts before we move
aheadContd.
Letter of Intent
Seller may ask the buyer for an interim letter of approval if contract negotiation and
finalization takes time
Its not a contract simply a letter without legal binding that says that buyer intends to
hire the seller
Gives seller confidence to kick-start processes to assemble the team, order Tools &
materials etc..
858
CONTROL PROCUREMENTS
859
860
Control Procurements
Managing Procurement relationships ,monitoring Contract
Performance and making changes and corrections as needed
The legal nature of the contractual relationship makes it imperative that the project
team be acutely aware of the legal implications of actions they take during
administration of the contract
Payment terms should be defined within the contract and should link progress made
with compensation paid
861
Control Procurements Contd.
Project Management Process that are applied may include but not
limited to
1. Direct and Manage Project Work to authorize the sellers work at appropriate time
2. Manage communications to monitor Contract Scope , Cost, Schedule and technical
Performance
3. Control Quality
4. Perform Integrated Change Control
5. Control Risks
862
Control Procurement also contains a Financial management component that
involves monitoring payment to the Seller
Contract can be amended any time prior to the Contract Closure by mutual
consent , in accordance with the Change Control terms of the Contract. Such
amendments may not always be equally beneficial to both the buyer and the
seller
863
Inputs
Agreements
Tools & Techniques
Contract change control
system
Procurement
performance review
Inspections & audits
Performance reporting
Payment systems
Claims administration
Records management
system
Outputs
Work performance
information
Change Requests
Update
Project documents
updates
Organizational process
assets updates
864
Control procurements Key inputs
Seller puts these together so that buyer can judge how well the project is going
o Seller developed tech spec / other deliverables
o Seller performance reports
o Quality standards satisfied
o Costs that have been incurred
o Identification of the invoices that have been paid
Approved Change requests
o Changes to contract terms & conditions
o Changes in contract SOW, pricing etc..
o Must be formally documented and approved before implementation
865
Control procurement Tools & Techniques
Contract Change Control System
Defines the process by which the contract can be modified.
Includes the paper work, tracking systems, dispute resolution procedures, and approval
levels necessary for authorizing changes.
Is integrated with the integrated change control system
All changes must be done formally & documented
If there are too frequent changes, may be better to terminate the existing contract & find a
new seller
Procurement performance review
Is a structured review of the sellers progress as compared to the contract.
To identify performance successes or failures
May result in formal change requests of contract
866
Control procurement Tools & Techniques Contd.
Inspections and audits
Required by the buyer and supported by the sellers as specified in
contract documentation
Conducted during execution of the project to identify any weakness in
the sellers work processes / deliverables
Performance Reporting
How effectively seller is meeting contract obligations?
Integrated in project performance reports
867
Payment system
How buyers company pays its sellers
Handled by the accounts payable system of the buyer
Includes appropriate reviews and approvals by the project management team
Payments are made in accordance with the terms of the contract
Claims administration
Disputes/Claims/appeals - contested changes where the buyer and seller cannot agree on
compensation for the change, or cannot agree that a change has been occurred.
Claims are documented, processed, monitored, and managed throughout the contract life
cycle, usually in accordance with the terms of contract.
Best way to settle claims negotiation / ADR
868
Records management system
Since Contract is legal document, imperative to keep all changes / communication /
documentation
RMS is used by the project manager to manage contract documentation and records
RMS can include indexing, archiving, retrieval systems
Part of the project management information system (PMIS)
869
Control Procurements - Outputs
Track the progress of deliverables expected and received by vendor
Help to address potential issues in time
Change requests
Requested changes in Project Management / subsidiary plan
Processed through integrated change control process
Procurement Doc update
Contract, approved / unapproved change request, schedule, seller deliverable
Organizational process assets (updates)
Correspondence, payment schedule, seller performance evaluation document
870
Some procurement concepts before we move ahead
Collective Bargaining Agreement
A seller that you have contracted may have an existing contract with a union. That
contract is called a collective bargaining agreement
o If the agreement impacts the work the seller is going to do for you, you need to
ensure that your legal department considers it when they work out the terms
of the contract
As a buyer, your company may also have collective bargaining agreement with a
union
o In such case, union may need to be considered as a stakeholder
o For your planning (developing the team, budgeting etc.), union rules and
agreements are to be considered as external constraints
871
Some procurement concepts before we move ahead -
Contd.
Contract Termination
Contract should have provision for termination
Can be terminated before work finishes
Buyer can terminate for cause (breach by seller) or convenience (work is no longer
required)
Termination puts the procurement into closing process group
872
CLOSE PROCUREMENTS
873
874
Close Procurements
Completion and settlement of the contract, including resolution
of any open items
Involves product verification and administrative closeout
875
Close Procurements Contd.
Inputs
Tools & Techniques
Procurement audits
Procurement Negotiations
Records Management System
Outputs
Closed Procurements
updates
876
Close Procurement Input
o Verify that work is done w.r.t procurement management plan
Procurement Documentation
o To close procurement, all procurement documents are to be collected,
indexed and filed
o Information on schedule, cost, quality performance, contract changes,
payment records and inspection results are cataloged
o Used as lessor learnt for future contracts
877
Close Procurement Tools & Techniques
Procurement Audits
Structured review of procurement process
To identify & document lessons learnt for future improvements
Involves buyer procurement manager, project manager. Should also include
seller
Procurement negotiations
Final settlement of all claims, invoices, other issues that can be negotiated or
handled through ADR process
Record Management System
Contract & all procurement documents & communications are to be archived
in record management system to be used by future procurements
878
Close Procurement Outputs
Closed Procurements
Formal acceptance - The buyer provides the seller with formal written notice that the
contract has been completed.
Requirements for formal contract closure are usually defined in the terms of the contract.
Procurement Files
o Complete set of indexed contract documentation, including the closed contract is prepared
to be included with the final project files
Deliverable acceptance
o Buyer provides formal written notice to seller that the deliverables are accepted or rejected
Lessons learnt
o Lessons learnt and process improvement recommendations
879
Close Procurement Vs.. Close Projects
There can be many procurements in a project hence many procurement
closure, but project closure happens only at the end of the project or phase
Procurement closure needs to happen before project / phase closure
Procurement closure requires more formal approach for it is associated with
legal binding
Project closure happens at end of each phase and finally at the end of project.
Procurement closure happens at the end of each procurement
880
Tips and tricks
Take a formal approach while answering questions from this knowledge area
Assume buyers role until otherwise specified
Remember that seller is external to buyers team
Practice mathematical problems on Make/buy analysis, PTA, fee / price calculation
Remember contract is legally binding
Remember the key outputs of the processes to identify the process being referred
881
Tips and tricks Contd.
Know difference between FP, TNM, CR contracts
Know competitive and non-competitive procurement process
Know briefly about various negotiation technique
Learn about important contract clauses
Understand difference between procurement audit and inspections & audit
Understand difference between procurement performance review and inspections &
audit
Understand difference between close project and close procurement
882
END OF THE SESSION
883
STAKEHOLDER MANAGEMENT
884
List of Topics
1. Introduction to Stakeholder Management
2. Identify Stakeholder
3. Plan Stakeholder Management
4. Manage Stakeholder Management
5. Control Stakeholder Management
885
INTRODUCTION TO
STAKEHOLDER MANAGEMENT
886
Stakeholder Management
Identify Stakeholders
Plan Stakeholders Management
Manage Stakeholders Engagement
Control Stakeholders Engagement
Process of identifying the stakeholders that could impact or be impacted by the project
to analyze their expectations and their impact on the project, to develop strategies for
effectively engaging them in project decisions and execution.
887
Stakeholder Management-Contd.
Planning
Monitoring
&
Controlling
Initiating
Plan
Stakeholders
Management
Manage
Stakeholders
Engagement
Control
Stakeholders
Engagement
Identify
Stakeholders
888
IDENTIFY STAKEHOLDER
889
PROJECT STAKEHOLDER MANAGEMENT
Initiation Identify Stakeholders
Planning Plan Stakeholders Management
Controlling Manage Stakeholders Engagement
Controlling Control Stakeholders Engagement
890
Identify Stakeholders
Process of identifying the people, groups, or organizations that could
impact or be impacted by a decision, activity, or outcome of the
project, analyzing and documenting relevant information regarding
their interests, involvement, interdependencies, influence, and
potential impact on project success.
891
Identify Stakeholders Contd.
Inputs
Project Charter
Factors
Tools & Techniques
Stakeholder Analysis
Expert Judgment
Meetings
Outputs
892
Inputs Identify Stakeholders
Project Charter:
Project charter can provide information about internal and external parties related with the
project and affected by the result or the execution of the project, such as project sponsor,
customers, team members, groups and departments participating in the project, and other
people or organizations affected by the project.
Procurement documents.:
If a project is the result of a procurement activity or is based on an established contract, the
parties in that contract are key project stakeholders. Other relevant parties, such as suppliers,
should also be considered as part of the project stakeholder list.
893
Inputs Identify Stakeholders Contd.
The enterprise environmental factors can include but not limited to the following.
o Organizational culture and structure.
o Governmental or industry standards (e.g., regulations, product standards).
o Global, regional or local trends, and practices or habits.
The organizational process assets may include but not limited to the following.
o Stakeholder register templates.
o Lessons learned from previous projects or phases.
o Stakeholder registers from previous projects.
894
Tools and Techniques Identify Stakeholders
Stakeholder Analysis.
Stakeholder analysis is a technique of systematically gathering and analyzing
quantitative and qualitative information to determine whose interests should be taken
into account throughout the project. It identifies the interests, expectations, and
influence of the stakeholders and relates them to the purpose of the project. It also
helps to identify stakeholder relationships (with the project and with other
stakeholders) that can be leveraged to build coalitions and potential partnerships to
enhance the projects chance of success, along with stakeholder relationships that need
to be influenced differently at different stages of the project or phase.
895
Stakeholder Analysis
Stakeholder analysis involves the following steps.
1.Identify all Potential Stakeholder and their relevant information such as roles , departments ,
interests , knowledge levels , expectations and influence levels
2. Identify the potential impact or support each stakeholder could generate and classify them so
as to define an approach strategy.
3. Assess how Key stakeholders and likely to react or respond in various situations, in order to
plan how to influence them to enhance their support and mitigate Potential negative impacts
896
Stakeholder Classification Models
Power / Interest Grid
Power / Influence Grid
Influence / Impact Grid
Salience Model ( Based on Power , Urgency , Legitimacy(their involvement is
appropriate) )
897
Stakeholder Classification Models-Contd.
POWER
(LEVEL OF
AUTHORITY)
INTEREST
(LEVEL OF
CONCERN)
INFLUENCE
(LEVEL OF
INVOLVEMENT)
IMPACT
(EFFECT OF
INVOLVEMENT)
POWER
MODEL1 MODEL2
MODEL3
INTEREST
MODEL1
INFLUENCE
MODEL2
IMPACT
MODEL3
898
Stakeholder Classification Models Contd.
POWER
URGENCY
LEGITIMACY
899
Tools and Techniques Identify Stakeholders
Expert Judgment:
To ensure comprehensive identification and listing of stakeholders, judgment and expertise should be sought from groups or
individuals with specialized training or subject matter expertise, such as the following.
Senior management.
Other units within the organization.
Identified key stakeholders.
Project managers who worked on projects in the same area.
Consultants.
Professional and technical associations.
Meetings:
Profile analysis meetings are project meetings designed to develop an understanding of major project stakeholders, and they
can be used to exchange and analyze information about roles, interests, knowledge, and the overall position of each
stakeholder facing the project.
900
Outputs Identify Stakeholders
Stakeholder Register.
The main output of the Identify Stakeholders process is the stakeholder register. This contains all
details related to the identified stakeholders including, but not limited to the following.
Identification information. Name, organizational position, location, role in the project, contact
information.
Assessment information. Major requirements, main expectations, potential influence in the
project, phase in the life cycle with the most interest.
Stakeholder classification. Internal or external, supporter or neutral or resistor, etc. The
stakeholder register should be consulted and updated on a regular basis, as stakeholders may
change or new ones identified throughout the life cycle of the project.
901
Stakeholder Register Template
Name Designation Influence
stage
Classification
John Application
Manager
All Supporter
Jane Technical
Consultant
Design ,
Coding
Neutral
Richard Architect Design Resistor
Kristen Business
Manager
All Neutral
902
PLAN STAKEHOLDER
MANAGEMENT
903
904
Plan Stakeholders Management
This process is to develop a management strategy to effectively engage
stakeholders throughout the project life cycle , based on the analysis
of their needs, interests, and potential impact on project success.
905
Plan Stakeholders Management Contd.
Inputs
Tools & Techniques
Analysis Techniques
Expert Judgment
Meetings
Outputs
906
Inputs Plan Stakeholder Management
Project Management Plan:
The Project Management Plan contents used for planning stakeholders management but
not limited to the following.
Life cycle selected for the project and the processes that will be applied to each phase.
Description of how work will be executed to accomplish the project objectives.
Description of how human resources requirements will be met
How roles and responsibilities, reporting relationships, and how staffing management will
be addressed and structured for the project
How staffing management will be addressed and structured for the project.
Change management plan that documents how changes will be monitored and controlled.
Need and Techniques for communication among stakeholders.
907
Inputs Plan Stakeholder Management Contd.
Stakeholder Register:
The stakeholder register provides the information needed to plan appropriate ways to engage project
stakeholders.
Enterprise environmental factors:
All enterprise environmental factors are used as inputs to this process, because the management of
stakeholders should be adapted to the project environment. Of these, organizational culture, structure,
and political climate are of particular importance, because they help in determining the best options to
support a better adaptive process for managing stakeholders.
908
Inputs Plan Stakeholder Management Contd.
Organizational process assets:
All organizational process assets are used as inputs for the Plan Stakeholder Management
process. Of these, lessons learned database and historical information are of particular
importance, because they provide insights on previous stakeholder management plans and
their effectiveness. These can be used to plan the stakeholder management activities for
the current project.
909
Tools and Techniques Plan Stakeholder Management
Analysis Techniques:
The current engagement level of all stakeholders needs to be compared to the planned engagement
levels required for successful project completion. Stakeholder engagement throughout the life cycle of
the project is critical to project success.
The engagement level of the 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 and potential impacts and supportive to change.
Leading. Aware of project and potential impacts and actively engaged in ensuring the project is a
success.
The current engagement can be documented using Stakeholders Engagement Assessment Matrix.
910
Stakeholders Engagement
Assessment Matrix
Stakeholder Unaware Resistant Neutral Supportive Leading
Stakeholder
1
C D
Stakeholder
2
C D
Stakeholder
3
D C
911
Expert Judgment:
Based on the project objectives, the project manager should apply expert
judgment to decide upon the level of engagement required at each stage of the
project from each stakeholder. For example, at the beginning of a project, it may be
necessary for senior stakeholders to be highly engaged in order to clear away any
obstacles to success. Once these have been successfully removed, it may be
sufficient for senior stakeholders to change their level of engagement from leading
to supportive, and other stakeholders, such as end users, may become more
important.
912
Contd.
Meetings:
Meetings should be held with experts and the project team to define the required
engagement levels of all stakeholders. This information can be used to prepare the
stakeholder management plan.
913
Outputs Plan Stakeholder Management
Stakeholder management plan:
The stakeholder management plan is a component of the project management plan
It identifies the management strategies required to effectively engage stakeholders.
The stakeholder management plan can be formal or informal, highly detailed or broadly
framed, based on the needs of the project
914
Outputs Plan Stakeholder Management Contd.
In addition to the data gathered in the stakeholder register, the stakeholder
management plan often provides
Desired and current engagement levels of key 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 the expected impact to stakeholder engagement.
Time frame and frequency for the distribution of required information to stakeholders.
Method for updating and refining the stakeholder management plan as the project progresses and
develops.
915
Outputs Plan Stakeholder Management Contd.
Project Documents Updates:
The Project Documents Updates may include but not limited to the following.
Project schedule.
Stakeholder register.
916
MANAGE STAKEHOLDER
MANAGEMENT
917
918
Manage Stakeholders Engagement
Process of communicating and working with stakeholders to meet
their needs or expectations, address issues as they occur , and
foster appropriate stakeholder engagement in project activities
throughout the project life cycle.
919
Manage Stakeholders Engagement Contd.
Inputs
Change Log
Tools & Techniques
Interpersonal skills
Management skills
Outputs
Issue Log
Change Request
920
Inputs Manage Stakeholder Engagement
Stakeholder management plan:
The stakeholder management plan provides guidance on how the various stakeholders can
be best involved in the project. The stakeholder management plan describes the methods
and technologies used for stakeholder communication. This plan is used to determine the
level of interactions of various stakeholders andtogether with other documentshelps
define a strategy for identifying and managing stakeholders throughout the project life
cycle.
921
Inputs Manage Stakeholder Engagement Contd.
Communication Management Plan:
The communications management plan provides guidance and information on
managing stakeholder expectations.
The information used includes, but is not limited to the following
Stakeholder communications requirements.
Information to be communicated, including language, format, content, and level of
detail.
Reason for distribution of information.
Person or groups who will receive information.
Escalation process.
922
Inputs Manage Stakeholder Engagement Contd.
Change log.:
A change log is used to document changes that occur during a project. These changes and their
impact on the project in terms of time, cost, and risk are communicated to the appropriate
stakeholders.
Organizational Process Assets.
The organizational process assets include, but not limited to the following.
Organizational communication requirements.
Issue management procedures.
Change control procedures.
Historical information about previous projects.
923
Tools and Techniques Manage Stakeholder Engagement
Communication Methods.:
The methods of communication identified for each stakeholder in the communications
management plan are utilized during stakeholder engagement management. Based on the
stakeholders communication requirements, the project manager decides how, when, and
which of these communication methods are to be used in the project.
924
Contd.
Interpersonal skills:
The project manager applies interpersonal skills to manage stakeholders expectations. For
example.
Building trust.
Resolving conflict.
Active listening.
Overcoming resistance to change.
925
Contd.
Management skills:
The project manager applies management skills to coordinate and harmonize the
group toward accomplishing the project objectives. For example.
Facilitate consensus toward project objectives.
Influence people to support the project.
Negotiate agreements to satisfy the project needs.
Modify organizational behavior to accept the project outcomes.
926
Outputs Manage Stakeholder Engagement
Issue Log:
Managing stakeholder engagement may result in the development of an issue log. This
log is updated as new issues are identified and current issues are resolved.
Change Request:
Managing stakeholder engagement may result in a change request to the product or
the project. It may also include corrective or preventive actions to the project itself or
to the interaction with the impacted stakeholders, as appropriate.
927
Outputs Manage Stakeholder Engagement Contd.
The Project Management Plan Updates may include but not limited to the
following.
The stakeholder management plan. This plan is updated when new or changed
stakeholders requirements are identified. For example, some communications may
no longer be necessary, an ineffective communication method may be replaced by
another method, or a new communication requirement may be identified. It is also
updated as a result of addressing concerns and resolving issues. For example, it
may be determined that a stakeholder has additional informational needs.
928
Project document updates:
The Project document updates may include but not limited to the following.
The stakeholder register. This is updated as information on stakeholders change, when
new stakeholders are identified, or if registered stakeholders are no longer involved in
or impacted by the project, or other updates for specific stakeholders are required.
929
Organization process assets updates.
The Organization process assets updates may include but not limited to the following.
Stakeholder notifications information may be provided to stakeholders about
resolved issues, approved.
Project reports. Formal and informal project reports describe project status and
include lessons learned, issue logs, project closure reports, and outputs from other
Knowledge Areas.
Project presentations. Information formally or informally provided by the project
team to any or all project stakeholders.
930
Project records. Project records include correspondence, memos, meeting minutes, and
other documents describing the project.
Feedback from stakeholders. Information received from stakeholders concerning project
operations can be distributed and used to modify or improve future performance of the
project.
Lessons learned documentation. Documentation includes the root cause analysis of issues
faced, reasoning behind the corrective action chosen, and other types of lessons learned
about stakeholder management. Lessons learned are documented and distributed, and
become part of the historical database for both the project and the performing organization.
931
CONTROL STAKEHOLDER
MANAGEMENT
932
933
Control Stakeholders Engagement
Process is of monitoring overall stakeholder relationships and
adjusting strategies and plans for engaging stakeholders
934
Control Stakeholders Engagement Contd.
Inputs
Issue Log
Project Documents
Tools & Techniques
Information Management systems
Expert Judgments
Meetings
Outputs
Change Requests
935
Inputs Control Stakeholder Engagement
Project Management Plan:
The project management plan contents used to control the stakeholder engagement includes, but not
limited to the following.
The life cycle selected for the project and the processes that will be applied to each phase.
How work will be executed to accomplish the project objectives.
How human resources requirements will be met,
How roles and responsibilities, reporting relationships and staffing management will be addressed
A change management plan that documents how changes will be monitored and controlled.
Needs and Techniques for communication among stakeholders.
936
Inputs Control Stakeholder Engagement Contd.
Issue Log:
The issue log is updated as new issues are identified and current issues are resolved.
Work Performance Data:
The work performance data are the primary observations and measurements identified
during activities being performed to carry out the project work. Various measurements on
project activities and deliverables are collected during various controlling processes. Data
are often viewed as the lowest level of abstraction from which information is derived by
other processes.
Examples of work performance data include reported percentage of work completed,
technical performance measures, start and finish dates of schedule activities, number of
change requests, number of defects, actual costs, actual durations etc.
937
Inputs Control Stakeholder Engagement Contd.
Project Documents.
The Project Documents used may include but not limited to the following.
Project schedule.
Stakeholder register.
Issue log.
Change log.
Project communications.
938
Tools and Techniques Control Stakeholder Engagement
Information Management systems:
An information management system provides a standard tool for the project
manager to capture, store, and distribute information to stakeholders about the
project cost, schedule progress, and performance. It also allows the project
manager to consolidate reports from several systems and facilitate report
distribution to the project stakeholders. Examples of distribution formats may
include table reporting, spreadsheet analysis, and presentations. Graphical
capabilities can be used to create visual representations of project performance
information.
939
Tools and Techniques Control Stakeholder Engagement
Contd.
Expert Judgments.
The Expert Judgments helps to ensure comprehensive identification and listing of new
stakeholders and reassessment of current stakeholders.
Meetings.
Status review meetings are used to exchange and analyze information about stakeholder
engagement.
940
Outputs Control Stakeholder Engagement
Work Performance Information:
The work performance information is the performance data collected from
various controlling processes, analyzed in context, and integrated based on
relationships across areas. Thus work performance data have been
transformed into work performance information. Data per se are not used in
the decision-making process, because the meaning may be misinterpreted.
Information, however, is correlated and contextualized and provides a sound
foundation for project decisions. Work performance information is circulated
through communication processes. Examples of performance information are
status of deliverables, implementation status for change requests, and
forecasted estimates to complete.
941
Outputs Control Stakeholder Engagement Contd.
Change Requests.:
Analysis of project performance and interactions with stakeholders often
generates change requests. These change requests are processed through the
Perform Integrated Change Control process as follows.
Recommended corrective actions include changes that bring the expected future
performance of the project in line with the project management plan.
Recommended preventive actions can reduce the probability of incurring future
negative project performance.
942
Project Management Plan Updates.
The Project Management Plan Updates may include but not limited to the following.
Change management plan.
Communications management plan.
Cost management plan.
Human resource management plan.
Procurement management plan.
Quality management plan.
Requirements management plan.
Risk management plan.
Schedule management plan.
Scope management plan.
Stakeholder management plan.
943
Project Documents Updates.
The Project documents Updates may include but not limited to the following.
Stakeholder register. This s updated as information on stakeholders change, when
new stakeholders are identified, or if registered stakeholders are no longer involved in
or impacted by the project, or other updates for specific stakeholders are required.
Issue log. This is updated as new issues are identified and current issues are resolved.
944
The Organization process assets updates, may include but not limited to the following.
Stakeholder notifications. Information may be provided to stakeholders about resolved
issues, approved changes, and general project status.
Project reports. Formal and informal project reports describe project status and include
lessons learned, issue logs, project closure reports, and outputs from other Knowledge
Areas.
Project presentations. Information formally or informally provided by the project team
to any or all project stakeholders.
945
Project records. Project records include correspondence, memos, meeting minutes, and other
documents describing the project.
Feedback from stakeholders. Information received from stakeholders concerning project
operations can be distributed and used to modify or improve future performance of the project.
Lessons learned documentation. Documentation includes the root cause analysis of issues faced,
reasoning behind the corrective action chosen, and other types of lessons learned about
stakeholder management. Lessons learned are documented and distributed so that they become
part of the historical database for both the project and the performing organization.
946
END OF THE SESSION

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