PROJECT PLANNING

MANAGEMENT

CADD CENTRE

MOHAN MISHRA

PMI

Established in 1969
Global Organization Headquartered in
Newtown Square, Pennsylvania USA
Regional centers
Asia-Pacific: Singapore
EMEA: Brussels
South America: Brazil

Members in more than 140 countries

Periodicals

Quarterly Project Management Journal

Monthly PMI Today
Monthly PM Network
PM Standards
Reference Books
Discount in Seminars and book purchase

What is a PMI Standard

A Document that defines what to
measure.
A document created by an appropriate
diverse group thro an open consensusbuilding process.
A document covering commonly
accepted knowledge and/or practices and
dealing with core concepts for the
practice of the profession.
A document consistent with PMIs
standards setting process and published
as a project management standard.

PMP & CAPM

Certification
PgMP

Program Management
Professional

PMP-Project Management Professional

CAPM- Certified Associate in Project
Management

Eligibility criteria
PMP Exam

Bachelors Degree
4500 Hrs Project Experience
35 hrs of Project Management Education
4hrs online exam /200 Qs

Bachelors Degree
2500 Hrs Project Experience
23 hrs of Project Management Education
3hrs online exam /150 Qs

CAPM Exam

PMP Credential
Examination

Computer based
200 multiple choice questions
25 questions used for statistical analysis
4 hours
Fee
PMI Member - $405 (Rs. 15,948/-)

Re attempt
Three opportunities to take and pass the
PMP examination within their one-year
eligibility period.
Wait one year

Why
PMP/CAPMCertification?
Demonstrates the proof of professional
Achievement
Demonstrates the knowledge, experience in
Project Management
Provides greater opportunity in your field
Raises customer confidence in you
Makes you a better Project Manager
GOLD Standard Global Project Management certification
ISO 9001:2000 Compliant

Benefits of CAPM
Certification
Earning a CAPM (Certified Associate Project
Management) certification is one of the Fastest
way to enhance your employment
opportunities and affirm your commitment to
Project Management Excellence
CAPM (Certified Associate Project
Management) certification can serve as a first
step towards earning your PMP (Project
Management Professional) certification
Any project coordinator or project team
member can become more valuable to their
employers and customers by earning CAPM.

Benefits of PMP
Apply the best project management
practices
Apply the most effective tools and
techniques in project management
Manage projects more efficiently

Benefits of PMP Cont

Recognizes your Expertise in Project Management : The PMP
is the project management credential of choice for numerous
industries and companies. By attaining the PMP credential, your
name will be included in the largest and most prestigious group of
certified professionals in the project management community. The
PMP designation following your name tells current and potential
employers that you have a solid foundation of project management
knowledge that can be readily applied in the workplace.
Better Salary : Based on a survey carried out by PMI, PMP
Certified project managers get an average starting salary of $
90,000. Moreover the salaries of PMP Certified Project Managers is
about 20% more than similarly qualified Project Managers who do
not have the prestigious PMP credentials
Better Job Opportunities : This has created an extremely good
job market for Project Managers who have the PMP credentials.
With the requirements for qualified Project Managers expected to
increase exponentially in the future, the job market for PMP
Certified managers will get better.
Officially recognized by leading companies: PMP certification
is officially recognized by several leading organizations (e.g.
Microsoft, IBM, American Express, Satyam, Infosys, Accenture,
Bechtel etc to name a few) who actively endorse the PMP

Benefits of PMP certification for

individuals
Provides professional/personal recognition
Creates job growth/opportunities
Consistent measure of professionalism in
project management (worldwide recognition)

Benefits of PMP certification for

organization
Continuously improves project success
Expands communication among participants
Provides a basis for organizational maturity
development

What Is a Project?
Temporary endeavor
Every project has a definite beginning and a definite end
Does not mean short duration
Undertaken to create a unique product, service or result
A product or artifact that is produced, is quantifiable, and can
be either an end item in itself or a component item
A capability to perform a service, such as business functions
supporting production or distribution
A result, such as outcomes or documents
Progressive Elaboration
Developing in steps, and continuing in increments

Project Management
It is the application of knowledge, skills, tools & techniques
to project activities to meet project requirements.
Knowledge ???
Skills ???
Tools & Techniques???

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Knowledge Areas
A project manager juggles 9 balls
(knowledge areas), using many tools and
techniques

Skills
Communications
Problem solving
Negotiation skills
Motivating
Budgeting Skills
Leading & Managing
Organizing

18

Tools & Techniques

Primavera/Ms projects
AutoCAD
Crane, Concrete Mixer
Project management templates
CPM- Brainstorming etc

19

What Is Project
Management?
Application of knowledge, skills, tools, and
techniques to project activities to meet
project requirements

Time

Quality
Risk
Scope

Cost/Resources

The Triple Constraint of Project

Management
Every project is constrained in different ways by its
Scope: What is the project trying to accomplish?
Time: How long should it take to complete?
Cost: What should it cost?

It is the project managers duty to balance these three

often competing goals

The Definition of a Program

Program: an exceptionally large, long-range

objective that is broken down into a set of
projects
Project: a specific, finite task to be accomplished
Task: set of activities comprising a project

Organizations and work

Organizations perform work to achieve
objectives
Work is:
Performed by people
Constrained by limited resources
Planned, executed and controlled

Work generally involves either:

Operations, which are ongoing and repetitive, or
Projects, which are temporary and unique

What Is a Program?
A group of projects
Managed in a coordinated way
To obtain benefits not available from managing them
individually

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What Is a Subproject?

A manageable component of a project

May be performed by a separate organization
Could be a project phase
Subprojects are typically referred to as projects
and managed as such

Project Life Cycle

what you need to do to do the work on the
project
Project Specific
Example :
Construction

Substructure, Superstructure, Electrical

Works, Plumbing, Landscaping

Automobile Design ??

26

Project Life Cycle

A collection of generally sequential project phases

whose name and number are determined by the
needs of the organizations

Project Life Cycle

Project Phases

Improve monitoring and control

Ensure proper definition of the project
Focus on deliverables
Control project progression
Sequence of phases produces project life cycle

Project Life Cycle

All projects have a . . .

Beginning
Initiating
Planning

Middle

Executing
Controlling

End

Closing

A project life cycle

Project Management Life cycle

what you need to do to manage the project?

Common for All Projects

Initiating
Planning
Executing
Controlling
Closing

Also called project management process

groups
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What Is a Deliverable?
A tangible, verifiable product, result
or capability to perform a service that
must be produced to complete a
process, phase, or project.
A deliverable often marks the end of a
phase of the project
Phase end = Phase exit, stage gates,
or kill points
32

Project Stakeholders
People involved in project
Direct & Indirect
Draftsman, site engineers, Sponsors, customers,
vendors etc..

33

Roles & Responsibilities

Senior Management
Sponsor
Functional Manager
Project Manager

34

Senior Management
Provides resources, time to the project
Determine the key constraints
Approve Project Plan
Transfers authority to Project Manager
Resolve conflicts that extend beyond the project
mangers control
Must know Project Management concepts

35

SPONSOR
Provides the financial resources for the project.
(Customers)
Along with the customer, the sponsor formally
accepts the product of the project.
Provide key events milestones

36

FUNCTIONAL MANAGERS
manages and owns the resources.
assigning & negotiating with the project manager
team member performance.
Letting the project manager know of other projects that
may impact the project.
Improving their staff utilization.

37

PROJECT MANAGER
manages the project.
accountable for project failure
need not be a technical expert
Controls the project (measuring performance/
corrective action)
in charge of the project, but not necessarily the
resources.

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Project Management Life Cycle

Initiation

Planning

Controllin
g

Executio
n

Closure

39

Project Management Process

Groups
Initiating Process Group
Defines and authorizes the project or a project phase
Planning Process Group
Defines and refines objectives, and plans the course of
action required to attain the objectives and scope that
the project was undertaken to address
Executing Process Group
Integrates people and other resources to carry out the
project management plan for the project
Monitoring and Controlling Process Group
Regularly measures and monitors progress to identify
variances from the project management plan so that
corrective action can be taken when necessary to meet
project objectives
Closing Process Group
Formalizes acceptance of the product, services or result
and brings the project or a project phase to an orderly
end

Knowledge Area 1
Project Scope Management

What is Project Scope

Management?
Scope refers to all the work involved in creating
the products of the project and the processes used
to create them. It defines what is or is not to be
done
Deliverables are products produced as part of a
project, such as hardware or software, planning
documents, or meeting minutes
The project team and stakeholders must have the
same understanding of what products will be
produced as a result of a project and how theyll be
produced

Project Scope Management Processes

Collect Requirements: Deciding how the scope
will be defined, verified, and controlled.
Define Scope : Reviewing the project charter
and preliminary scope statement and adding
more information as requirements are
developed and change requests are approved.
Creating WBS: Subdividing the major project
deliverables into smaller, more manageable
components.
Verify Scope : Formalizing acceptance of the
project scope.
Control Scope : Controlling changes to project
scope.

Collect Requirement - Inputs

1.Project Charter
2. Stakeholder Register

Collect Requirement - Tools and Techniques

1.Interviews
2.Focus Groups
3.Facilitated Workshops
4.Group Creativity Techniques
5.Questionnaries and Surveys
6.Prototypes

The Scope Management Plan

The Scope Management Plan is part of the

project plan. It describes how scope will be
managed in this project.
How is scope determined?
Who determines the scope?
How will the scope be controlled during the
project execution?
How will scope changes be handled?

Define Scope
After completing scope planning, the next
step is to further define the work by
breaking it into manageable pieces
Good scope definition

helps improve the accuracy of time, cost, and

resource estimates
defines a baseline for performance measurement
and project control
aids in communicating clear work responsibilities

Stakeholder Analysis
A stakeholder analysis documents
important (often sensitive) information
about stakeholders such as

stakeholders names and organizations

roles on the project
unique facts about stakeholders
level of influence and interest in the project
suggestions for managing relationships

The Scope Statement

A scope statement is a document used to
develop and confirm a common
understanding of the project scope. It
should include

a project justification
a brief description of the projects products
a summary of all project deliverables
a statement of what determines project
success

Create WBS- Tools and Techniques

1.Decomposition
OUTPUTS:
1.WBS
2.WBS Dictionary
3.Scope baseline
4.Project Document Updates

The Work Breakdown Structure

(WBS)
A work breakdown structure (WBS) is a
deliverable-oriented grouping of the work
involved in a project that defines the total
scope of the project
It is a foundation document in project
management because it provides the basis
for planning and managing project
schedules, costs, and changes

Sample WBS Organized by

Product

Approaches to Developing
WBS
Using standards: Some organizations, like
the DoD, provide guidelines for preparing
WBSs
The analogy approach: Review WBSs of
similar projects and tailor to your project
The top-down approach: Start with the
largest items of the project and break them
down
The bottom-up approach: Start with the
detailed tasks and roll them up
Mind-mapping approach: Write down tasks
in a non-linear format and then create the
WBS structure

Work Breakdown Structure

Dictionary
After building the WBS, you need to write the WBS
Dictionary
The goal of the WBS dictionary is to clearly explain
each box (line item) in the diagram (outline).
Include all items at all levels but place emphasis on
the lowest level.

Work Breakdown Structure

Dictionary
Typical information for each WBS item in the
dictionary:

An item identifier
Associated cost/activity control item
A description of the work to be done
Item owner

Add milestones

Scope Verification and Scope Change

Control
It is very difficult to create a good scope statement
and WBS for a project
It is even more difficult to verify project scope and
minimize scope changes
Most IT projects suffer from scope creep and poor
scope verification

Knowledge Area 2
Project Time Management

Project Time Management

Processes
Project time management involves the
processes required to ensure timely completion
of a project.
The Processes:

Define Activities

Sequence Activities

Estimate Activity resources time

Estimate Activity Durations

Develop Schedule

Control Schedule

Define Activities
Project schedules grow out of the basic
documents that initiate the project

Project charter includes start and end dates and

budget information
Scope statement and WBS help define what will
be done

Activity definition involves developing a

more detailed WBS and supporting
explanations to understand all the work to
be done so you can develop realistic
duration estimates

Define Activities
Start by breaking each item in the lowest level of
the WBS further into finer tasks.
The granularity of the activities should be such
that it will be practical to represent and track in a
schedule.
Often, the lowest level of the WBS is sufficient to
become the Activity List.
The activity list is usually captured in a tabular
form.
Typically, each activity will become a line in the
scheduling tool (such as MS Project)

Rolling Wave Planning

It is often difficult or downright impossible to know
the entire set of activities at the beginning of the
project.
This might happen if:
The project is executed via sequential sub-projects.
The project uses Extreme Programming.

Use Rolling Wave Planning

Activity Attributes
Each activity on the Activity List should be
accompanied with attributes that will help
building the schedule.
Activity Attributes provide schedule related
information, such as:

Dependencies
Leads and lags
Resource requirements
Constraints
Assumptions
Imposed dates

Milestone List
A milestone is an activity with zero duration.
A milestone is a useful tool to signify important
events in the project such as:

Completion of a series of related task (for example,

all the activities for a single WBS item)
Release of a significant deliverable.
Completion of a gate review.

Milestones
You can follow the SMART criteria in
developing milestones. They should be:

Specific
Measurable
Assignable
Realistic
Time-framed

Milestone List
Be sure to include milestones in your activity list
although technically, they are not activities.

Sequence Activities
We now have created a comprehensive list of all
the activities that will have to happen in the
project.
The next step is to figure out the order in which
these activities will have to be carried out.

Sequence Activities
Except for the simplest of projects, there are
always some dependencies between various
activities in the project.
We have already captured dependencies between
activities in the Activity Definition process.
Now we want to build some model that represents
the flow of project activities as dictated by the
dependencies.

Task Dependency Types

Sequence Activities
Involves reviewing activities and determining
dependencies
Mandatory dependencies: inherent in the nature
of the work; hard logic
Discretionary dependencies: defined by the
project team; soft logic
External dependencies: involve relationships
between project and ex-project activities

Project Network Diagrams

Project network diagrams are the preferred
technique for building and showing activity
sequences
A project network diagram is a schematic
display of the logical relationships among, or
sequencing of, project activities

Arrow Diagramming Method

(ADM)
Also called activity-on-arrow (AOA) project
network diagrams
Activities are represented by arrows
Nodes or circles are the starting and ending
points of activities
Can only show finish-to-start dependencies

Example Activity-on-Arrow (AOA)

Network Diagram for a Project

Process for Creating AOA

Diagrams
1. Find all of the activities that start at node 1. Draw
their finish nodes and draw arrows between node 1
and those finish nodes. Put the activity letter or
name and duration estimate on the associated
arrow
2. Continue drawing the network diagram, working
from left to right. Look for bursts and merges.
Bursts occur when a single node is followed by two
or more activities. A merge occurs when two or
more nodes precede a single node
3. Continue drawing the project network diagram
until all activities are included on the diagram
4. As a rule of thumb, all arrowheads should face
toward the right, and no arrows should cross

Precedence Diagramming Method

(PDM)
Activities are represented by boxes
Arrows show relationships between activities
More popular than ADM method and used by
project management software
Better at showing different types of
dependencies

Sample PDM Network Diagram

Resource Planning
Resource requirements and availability have a
critical impact on the schedule of the project. That is
why we need to plan the resources as part of time
planning.
Resources include people, equipment and materials.
The nature of the project and the organization will
affect resource planning

Resource Planning
Some questions to consider:
How difficult will it be to do specific tasks on the
project?
Is there anything unique in this projects scope
statement that will affect resources?
What is the organizations history in doing similar
tasks?
Does the organization have or can they acquire
the people, equipment, and materials that are
capable and available for performing the work?

Activity Resource
Requirements
In this process, you need to define all the resource
requirements.
For each activity in the Activity List provide:

Who needs to do it?

If possible names. If not roles
More than one person?
Different disciplines?

Resource Breakdown
Structure
A Resource Breakdown Structure provides a list of
all the resources that will be required in the project
by roles

Resource Breakdown Structure

Simple Example
1. Project Manager
2. Engineering
2.1 Engineering Manager
2.1.1 Technical Requirements Specialist
2.1.2 Architect
2.1.3 Engineer
2.2 QA Manager
2.2.1 QA Engineer

Estimate Activity Duration

After defining activities and determining their

sequence, the next step in schedule planning is
duration estimating
People doing the work should help create
estimates, and an expert should review them

Estimate Activity Duration

Duration estimating in the IT industry is
notoriously problematic.
Usually, the people who know best what work is
required:

Have very poor knowledge/experience in SW engineering

in general and in effort estimation in particular.
Do not appreciate the importance of good estimates
Are under pressure to squeeze the schedule
Have no interest in planning activities
Are reluctant to make commitments
Dont know enough about the work involved

Estimate Activity Duration

Yet, time estimation is a crucial component of
project planning.
What can the project manager do?

Estimate Activity Duration

Insist
Educate/help/support
Use Tools and Techniques
Look for those who know and are willing
Give ample time
Give as much info as possible
Work together (interactive)
Use your own judgment and experience
Confirm with experts
Prevent padding
Incorporate reserve (later)

Estimate Activity Duration

Important terms:

Effort is the number of workdays or work hours

required to complete a task.
Duration is the elapsed calendar time. Effort is not
the same as and does not usually equal duration

For duration estimation, start with obtaining

efforts. Later activities will yield durations

One-Time Estimate
A single time estimate is provided for each
activity
Requires reliable estimator
Drawback - Encourages padding

Hides risks
No confidence in schedule
Estimator interest (be safe) conflicts with project
manager interest (provide true estimate)

Analogous Estimation
In analogous estimating, we try to use historical
information to draw an analogy between a
previous project and this one
Last year we did a very similar project and it took 7
months. Therefore, its reasonable to expect that
this project will require approximately 7 months
too.

Three-Point Estimates
Instead of assigning a single estimate to each
activity, we can assign estimates
Optimistic
Pessimistic
Most likely

We can then use some formula to calculate some

average.

Program Evaluation and Review

Technique (PERT)
PERT is a network analysis technique using
three-point estimates.
PERT is used to estimate project duration when
there is a high degree of uncertainty about the
individual activity duration estimates
PERT uses probabilistic time estimates based
on using optimistic, most likely, and
pessimistic estimates of activity durations

PERT Calculation
PERT formula:

(O + 4M + P) / 6

O - optimistic time estimate

M - most likely time estimate
P - pessimistic time estimate

Example (in days):

optimistic estimate = 8, most likely estimate = 10, pessimistic estimate

= 24

8 + 4 x 10 + 24
6
Answer: 12 days

Develop Schedule
Schedule development uses results of the
other time management processes to
determine the start and end date of the
project and its activities
Ultimate goal is to create a realistic project
schedule that provides a basis for
monitoring project progress for the time
dimension of the project
Important tools and techniques include
Gantt charts, PERT analysis and critical
path analysis (or critical chain scheduling)

Gantt Charts
Gantt charts provide a standard format for
displaying project schedule information by
listing project activities and their
corresponding start and finish dates in a
calendar format
Symbols include:

A black diamond: milestone or significant event

on a project. Has zero duration
Thick black bars: summary tasks
Lighter horizontal bars: tasks
Arrows: dependencies between tasks

Gantt Chart Example

Sample Gantt Chart for Software

Launch Project

Sample Tracking Gantt Chart

Resource Loading and

Leveling
Resource loading refers to the amount of
individual resources required by an existing
project during specific time periods
Resource histograms show resource loading
Over-allocation means more resources than
are available are assigned to perform work
at a given time

Sample Histogram Showing an Over

allocated Individual

Resource Leveling
Resource leveling is a technique for resolving
resource conflicts by delaying tasks
The main purpose of resource leveling is to
create a smoother distribution of resource
usage and reduce over-allocation

Resource Leveling Example

Critical Path Method (CPM)

CPM is a project network analysis technique used
to manage total project duration
A critical path for a project is the series of
activities that determines the earliest time by
which the project can be completed
The critical path is the longest path through the
network diagram and has the least amount of
slack or float

Finding the Critical Path

First develop the project network diagram

Calculate the durations for all paths on the
project network diagram
The path with the longest duration is the
critical path

Simple Example of Determining

the Critical Path
Consider the following project network diagram.
Assume all times are in days.

a. How many paths are on this network diagram?

b. How long is each path?
c. Which is the critical path?
d. What is the shortest amount of time needed to
complete this project?

Determining the Critical Path for

Project X

More on the Critical Path

If one or more activities on the critical path
takes longer than planned, the whole project
schedule will slip unless corrective action is
taken
Misconceptions:

The critical path is the one with all the critically

important activities. Wrong: Critical path considers
only task durations for criticality
There can be only one critical path. Wrong: If the
lengths of multiple paths are the same and they are
the longest, they are all critical.
The critical path cannot change as the project
progresses. Wrong: Yes, it can.

Using Critical Path Analysis to Make

Schedule Trade-offs
Knowing the critical path helps you make schedule
trade-offs
Free slack or free float is the amount of time an
activity can be delayed without delaying the early
start of any dependent activities
Total slack or total float is the amount of time
activities may be delayed from their early start
without delaying the planned project finish date
A forward pass through the network diagram
determines the early start and finish dates
A backward pass determines the late start and
finish dates

Calculating Early and Late Start and

Finish Dates

Techniques for Shortening a Project

Duration

If necessary, shorten durations of critical

tasks by adding more resources or changing
their scope
Crashing adding more resources - obtaining
schedule compression for the least incremental
cost
Fast tracking arranging tasks in parallel or
overlapping them

Knowledge Area 3
Project Cost Management

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
Costs are usually measured in monetary units like
dollars, Rupees. Etc.
Project cost management includes the processes
required to ensure that the project is completed
within an approved budget

Project Cost Management Processes

Estimate Cost : Developing an
approximation or estimate of the costs of
the resources needed to complete a project.
Determine Budget: Allocating the overall
cost estimate to individual work items to
establish a baseline for measuring
performance.
Control Cost : Controlling changes to the
project budget.

Basic Principles of Cost

Management
Most CEOs and boards are strongly
interested in project finances, so project
managers must speak their language
Profits are revenues minus expenses
Life cycle costing is estimating the cost of a
project plus the maintenance costs of the
products it produces
Cash flow analysis is determining the estimated
annual costs and benefits for a project
Benefits and costs can be tangible or intangible,
direct or indirect

Estimate Cost
An important deliverable of project cost
planning is a cost estimate
There are several types of cost estimates
and tools and techniques to help create
them
It is also important to develop a cost
management plan that describes how cost
variances will be managed on the project

Cost Types
Variable costs. Accumulate over time due to
production (salaries, materials, supplies, etc.)
Fixed costs. Do not change over time. (setup,
rental)
Direct costs. Derive directly from the project
activities.
Indirect costs. Costs common to more than 1
project

Estimate Cost Tools and

Techniques
3 basic tools and techniques for cost estimates:

analogous or top-down: use the actual cost of a

previous, similar project as the basis for the new
estimate
bottom-up: estimate individual work items and sum
them to get a total estimate
parametric: use project characteristics in a
mathematical model to estimate costs

Cost Budgeting
Cost budgeting involves allocating the project cost
estimate to individual work items and providing a
cost baseline
Decide what reserve you require for the project.

Baseline
The completed scope, schedule and cost for your
project constitute the project baseline.
The project baseline will be your reference for the
remainder of the project. You will compare the
project status against the baseline.

Control cost
Project cost control includes

Monitoring cost performance

Ensuring that only appropriate project changes are
included in a revised cost baseline
Informing project stakeholders of authorized
changes to the project that will affect costs

Earned value management is an important tool

for cost control

The Importance of Human

Resource Management
People determine the success and failure of
organizations and projects

Knowledge Area 4
Project Human Resource
Management

What is Project Human Resource

Management?
Project human resource management
includes the processes required to make
the most effective use of the people
involved with a project. Processes include
1.Develop Human resource Plan
2. Acquire project team
3.Develop project team
4.Manage project team

Keys to Managing People

Psychologists and management theorists
have devoted much research and thought to
the field of managing people at work
Important areas related to human resources
management include
Motivation
Influence and power
Effectiveness

Organizational Planning
Organizational planning involves identifying,
documenting, and assigning project roles,
responsibilities, and reporting relationships

Sample Organizational Chart for a

Large IT Project

Sample Resource Histogram

Acquire Project Team- Tools and Techniques

1.Pre assignment
2.Negotiation
3.Acquisition
4.Virtual teams

Staff Acquisition
Staffing plans and good hiring procedures are
important in staff acquisition, as are incentives for
recruiting and retention
Some companies give their employees one dollar
for every hour a new person they helped hire works
Some organizations allow people to work from
home as an incentive
Research shows that people leave their jobs
because they dont make a difference, dont get
proper recognition, arent learning anything new,
dont like their coworkers, and want to earn more
money

Develop Project Team - Tools and Techniques

1.
2.
3.
4.
5.

General management skills

Training
Team-building activities
Co-location
Recognition and rewards

Team Development
It takes teamwork to successfully complete
most projects
Training can help people understand
themselves, each other, and how to work
better in teams
Team building activities include
physical challenges
psychological preference indicator tools

Reward and Recognition

Systems
Team-based reward and recognition systems can
promote teamwork
Focus on rewarding teams for achieving specific
goals
Allow time for team members to mentor and help
each other to meet project goals and develop
human resources

Motivation Theory
Motivation theories help the project manager
handle human resources problems. Some
popular theories:

Maslows Hierarchy of Needs

Herzbergs Theory
McClellands Acquired-Needs Theory
McGregors Theory of X and Y
Thamhain and Wilemons

Maslows Hierarchy of
Needs
Abraham Maslow developed a hierarchy of
needs to illustrate his theory that peoples
behaviors are guided by a sequence of
needs
Maslow argued that humans possess unique
qualities that enable them to make
independent choices, thus giving them
control of their destiny

Maslows Hierarchy of
Needs

Herzbergs Theory
Frederick Herzberg wrote several famous
books and articles about worker motivation.
He distinguished between

motivational factors: achievement, recognition, the

work itself, responsibility, advancement, and
growth, which produce job satisfaction
hygiene factors: cause dissatisfaction if not
present, but do not motivate workers to do more.
Examples include larger salaries, more supervision,
and a more attractive work environment

McClellands Acquired-Needs
Theory
Specific needs are acquired or learned over
time and shaped by life experiences,
including:

Achievement : Achievers like challenging projects

with achievable goals and lots of feedback
Affiliation : People with high desire harmonious
relationships and need to feel accepted by others,
so managers should try to create a cooperative
work environment for them
Power: : People with a need for power desire
either personal power (not good) or institutional
power (good for the organization). Provide
institutional power seekers with management
opportunities

McGregors Theory X and Theory Y

Douglas McGregor popularized the human relations
approach to management in the 1960s
Theory X: assumes workers dislike and avoid work,
so managers must use coercion, threats, and
various control schemes to get workers to meet
objectives
Theory Y: assumes individuals consider work as
natural as play or rest and enjoy the satisfaction of
esteem and self-actualization needs
Theory Z: introduced in 1981 by William Ouchi and
is based on the Japanese approach to motivating
workers, emphasizing trust, quality, collective
decision making, and cultural values

Power
Power is the potential ability to influence
behavior to get people to do things they
would not otherwise do
You mean there is more to it than begging
or threatening?*

Power
Various theories of HR management have different
classifications for the types of power a manager
has over the team members.

Expert
Reward
Formal
Referent
Penalty

Best
Best
Worst
Worst
Worst

Conflict Handling Modes (in

Preference Order)

Confronting (problem-solving): directly

face a conflict - best
Compromising: use a give-and-take
approach
Smoothing: de-emphasize areas of
differences and emphasize areas of
agreement
Withdrawal (Avoidance): retreat or
withdraw from an actual or potential
disagreement
Forcing: the win-lose approach - worst

Conflict Can Be Good

Conflict often produces important results, such
as new ideas, better alternatives, and
motivation to work harder and more
collaboratively
Groupthink can develop if there are no
conflicting viewpoints
Research by Karen Jehn suggests that taskrelated conflict often improves team
performance, but emotional conflict often
depresses team performance

Project Resource Management Involves

Much More Than Using Software
Project managers must
Treat people with consideration and respect
Understand what motivates them
Communicate carefully with them

Focus on your goal of enabling project team

members to deliver their best work

Managing the Project Team

Project managers must lead their teams in
performing various project activities.
After assessing team performance and
related information, the project manager
must decide:
If changes should be requested to the project.
If corrective or preventive actions should be
recommended.
If updates are needed to the project management
plan or organizational process assets.

Knowledge Area 5
Project Communication
Management

Importance of Good
Communications
The greatest threat to many projects is a failure to
communicate
Our culture does not portray IT professionals as
being good communicators
Research shows that IT professionals must be able
to communicate effectively to succeed in their
positions
Strong verbal skills are a key factor in career
advancement for IT professionals

Project Communications
Management Processes
Plan communication : Determining the
information and communications needs of the
stakeholders.
Distribute Information : Making needed
information available to project stakeholders in a
timely manner.
Manage Stakeholders Expectation :
Managing communications to satisfy the needs
and expectations of project stakeholders and to
resolve issues.
Reporting Performance : Collecting and
disseminating performance information, including
status reports, progress measurement, and
forecasting.

Plan Communication
Every project should include some type of
communications management plan, a
document that guides project
communications
Creating a stakeholder analysis for project
communications also aids in communications
planning

Stakeholder analysis for Planning

Communications
Use the project team to help do the
stakeholder analysis. Ask them:

Who needs to know anything about the project?

What do they need to know?
When do they need to know it?
What form of communications works best for
the audience?
How do I know they understand what I told
them?

Sample Stakeholder Analysis for

Project Communications

Information Distribution

Getting the right information to the right people at

the right time and in a useful format is just as
important as developing the information in the first
place
Important considerations include
using technology to enhance information distribution
formal and informal methods for distributing
information

Communications Model
The project manager should carefully plan the
communication mechanisms the
Communications Model.

Communications Model
Sender:
Encodes. Encoding is based on the receivers
characteristics
Uses chosen communication method
Confirms message was understood

Recipient:
Decodes message
Confirms message is understood

Communications Model
Nonverbal (body language)
Para lingual pitch and tone
Active listening
Confirm you are listening
Confirm agreement
Ask for clarification

Effective listening be attentive and

involved
Feedback sender requests confirmation

Communications Methods

Formal written
Formal verbal
Informal written
Informal verbal

Communications Blockers

Noise
Distance
Wrong encoding
Negativism, condescension, hostility
Language
Culture

Communications - Meetings

Set a time limit and keep it.

Schedule sufficiently in advance
Meet regularly
Set a goal and drive to achieve it
Prepare an agenda (with input) and distribute it in advance
Stick to the agenda
Define people responsibilities in advance
Bring the right people (minimum number)
Set and enforce rules
Assign action items with time limits
Publish meeting minutes

Number of People on Communications

Channels

Managing Stakeholders
Project managers must understand and
work with various stakeholders.
Need to devise a way to identify and
resolve issues.
Two important tools include:
Expectations management matrix
Issue log

Issue Log

Performance Reporting
Performance reporting keeps stakeholders
informed about how resources are being used
to achieve project objectives

Status reports describe where the project stands at

a specific point in time
Progress reports describe what the project team has
accomplished during a certain period of time
Project forecasting predicts future project status
and progress based on past information and trends
Status review meetings often include performance
reporting

Sample Template for a Monthly

Progress Report

Knowledge Area 6
Project Quality
Management

What Is Quality?
The International Organization for
Standardization (ISO) defines quality as the
totality of characteristics of an entity that
bear on its ability to satisfy stated or implied
needs
Other experts define quality based on
conformance to requirements: meeting written
specifications
fitness for use: ensuring a product can be used as
it was intended

Modern Quality
Management
Modern quality management
Aims at customer satisfaction
Prefers prevention to inspection
Recognizes management responsibility for
quality

Improving Project Quality

Several suggestions for improving quality for
IT projects include
Leadership that promotes quality
Understanding the cost of quality
Focusing on organizational influences and
workplace factors that affect quality
Following maturity models to improve quality

Leadership
It is most important that top management
be quality-minded. In the absence of sincere
manifestation of interest at the top, little will
happen below. (Juran, 1945)
A large percentage of quality problems are
associated with management, not technical
issues

Project Quality Management

Processes
Plan Quality: Identifying which quality standards
are relevant to the project and how to satisfy
them.
Perform Quality Assurance : Periodically
evaluating overall project performance to
ensure the project will satisfy the relevant
quality standards.
Perform quality control: Monitoring specific
project results to ensure that they comply with
the relevant quality standards.

Quality Planning
The goal of quality planning is to generate the
Quality Management Plan.
The Quality Management Plan describes how
quality is going to handled in the project.

Quality Planning
The Quality Management Plan includes:
Review of existing quality standards
Creation of quality standards (as necessary)
What work will be done to achieve the required
quality
How will you measure that you meet the quality
standards
Balance quality with the triple constraint

Fishbone or Ishikawa
Diagram

The Cost of Quality

The cost of quality is
the cost of conformance or delivering products
that meet requirements and fitness for use
the cost of nonconformance or taking
responsibility for failures or not meeting quality
expectations

Five Cost Categories Related to

Quality
Prevention cost: the cost of planning and
executing a project so it is error-free or within an
acceptable error range
Appraisal cost: the cost of evaluating processes
and their outputs to ensure quality
Internal failure cost: cost incurred to correct an
identified defect before the customer receives the
product
External failure cost: cost that relates to all errors
not detected and corrected before delivery to the
customer
Measurement and test equipment costs: capital
cost of equipment used to perform prevention and
appraisal activities

Quality Assurance
Quality assurance includes all the activities
related to satisfying the relevant quality
standards for a project
Another goal of quality assurance is
continuous quality improvement
Benchmarking can be used to generate ideas
for quality improvements
Quality audits help identify lessons learned
that can improve performance on current or
future projects

Quality Assurance Plan

Pareto Analysis
Pareto analysis involves identifying the
vital few contributors that account for the
most quality problems in a system
Also called the 80-20 rule, meaning that
80% of problems are often due to 20% of
the causes
Pareto diagrams are histograms that help
identify and prioritize problem areas

Sample Pareto Diagram

Statistical Sampling and

Standard Deviation
Statistical sampling involves choosing part of a
population of interest for inspection
The size of a sample depends on how
representative you want the sample to be
Sample size formula:
Sample size = .25 X (certainty Factor/acceptable
error)2

Knowledge Area 7
Project Procurement
Management

Importance of Project
Procurement Management

Procurement means acquiring goods and/or

services from an outside source
Other terms include purchasing and outsourcing
Procurement management is a project within the
project

Why Outsource?
To reduce both fixed and recurrent costs
To allow the client organization to focus on
its core business
To access skills and technologies
To provide flexibility
To increase accountability

Project Procurement
Management Processes

Plan Procurements: Determining what to procure, when,

and how.
Conduct Procurements:
Administer Procurements:
Close Procurements:
Plan Contracting: Describing requirements for the
products or services desired from the procurement and
identifying potential sources or sellers (contractors,
suppliers, or providers who provide goods and services to
other organizations).
Request Seller Responses: Obtaining information, quotes,
bids, offers, or proposals from sellers, as appropriate.
Select sellers: Choosing from among potential suppliers
through a process of evaluating potential sellers and
negotiating the contract.
Contract Administration : Managing the relationship with
the selected seller.
Closing the Contract: Completing and settling each

Plan Procurements - Tools and Techniques

1.Make or buy analysis

2.Expert judgment
3.Contract type

Plan Procurements
Procurement planning involves
identifying which project needs can be
best met by using products or services
outside the organization. It includes
deciding

whether to procure
how to procure
what to procure
how much to procure
when to procure

Procurement management
Plan
The Procurement Management Plan
describes how the project is going to handle
the entire procurement process:

Planning
Solicitation
Source Selection
Contract Administration
Contract Closeout

Make or Buy
Make-or-buy analysis: determining whether a
particular product or service should be made
or performed inside the organization or
purchased from someone else. Often
involves financial analysis
Experts, both internal and external, can
provide valuable inputs in procurement
decisions

Make or Buy Example

Assume you can lease an item you need
for a project for $150/day. To purchase the
item, the investment cost is $1,000, and
the daily cost would be another $50/day.
How long will it take for the lease cost to
be the same as the purchase cost?
If you need the item for 12 days, should
you lease it or purchase it?

Types of Contracts
Cost-reimbursable: involve payment to the
seller for direct and indirect costs
Time and material: hybrid of both fixed-price
and cost-reimbursable, often used by
consultants
Fixed-price or lump-sum: involve a fixed total
price for a well-defined product or service
Unit price: requires the buyer to pay the
seller a predetermined amount per unit of
service

Cost Reimbursable
Contracts

Cost plus fixed fee (CPFF): the buyer pays the

seller for all costs plus a fixed fee payment
usually based on a percentage of estimated
costs
Cost plus incentive fee (CPIF): the buyer pays
the seller for all costs plus a predetermined fee
plus an incentive bonus
Cost plus percentage of costs (CPPC): the buyer
pays the seller for all costs plus a predetermined
percentage based on total costs (bad for Buyer.
Not acceptable with USA government)

Statement of Work (SOW)

A statement of work is a description of the
work required for the procurement
Many contracts, or mutually binding
agreements, include SOWs
A good SOW gives bidders a better
understanding of the buyers expectations

Statement of Work (SOW) Template

I.

Scope of Work: Describe the work to be done to detail. Specify the hardware and
software involved and the exact nature of the work.

II.

Location of Work: Describe where the work must be performed. Specify the
location of hardware and software and where the people must perform the work

III.

Period of Performance: Specify when the work is expected to start and end,
working hours, number of hours that can be billed per week, where the work must
be performed, and related schedule information.

IV.

Deliverables Schedule: List specific deliverables, describe them in detail, and

specify when they are due.

V.

Applicable Standards: Specify any company or industry-specific standards that

are relevant to performing the work.

VI.

Acceptance Criteria: Describe how the buyer organization will determine if the
work is acceptable.

VII.

Special Requirements: Specify any special requirements such as hardware or

software certifications, minimum degree or experience level of personnel, travel
requirements, and so on.

Solicitation Planning
Solicitation planning involves preparing
several documents:
Request for Proposals (RFP): used to solicit
proposals from prospective sellers (when
work is not well defined).
Requests for Quotes (RFQ): used to solicit a
price per item or unit of work (for welldefined procurements)
Invitations for bid (IFB): used to solicit one
price for the entire work (for well-defined
procurements).

Outline for a Request for

Proposal (RFP)
I.

Purpose of RFP

II.

Organizations Background

III.

Basic Requirements

IV.

Hardware and Software Environment

V.

Description of RFP Process

VI.

Statement of Work and Schedule Information

VII.

Possible Appendices
A. Current System Overview
B. System Requirements
C. Volume and Size Data
D. Required Contents of Vendors Response to RFP
E. Sample Contract

Solicitation

Solicitation involves obtaining proposals or bids

from prospective sellers
Organizations can advertise to procure goods
and services in several ways

approaching the preferred vendor

approaching several potential vendors
advertising to anyone interested

A bidders conference can help clarify the

buyers expectations

Bidders Conference
A bidders conference can help clarify the
buyers expectations.
Bring all bidders together to:
Explain the procurement
Allow to ask questions

Make sure that:

There is no collusion among bidders
Sellers dont ask questions in front of
competitions
Summarize and distribute.

Qualified Seller List

Publish qualification criteria

Select qualified sellers
Build Qualified Seller List
Continue to communicate only to sellers on the
list.

Source Selection
Source selection involves

evaluating bidders proposals

choosing the best one
negotiating the contract
awarding the contract

It is helpful to prepare formal evaluation

procedures for selecting vendors
Buyers often create a short list as an
intermediate step to selection

Source Selection Techniques

Weighting systems - scoring

Screening systems elimination of the unfit
Independent estimate compare sellers proposal
to buyers estimates
Past performance history who did the best

Selection
The result of the selection process is to
choose a single seller to negotiate with.
Keep backup seller(s) in case negotiations
fail.

Negotiation
After a seller is selected, the negotiation
phase begins
The objectives of the negotiations are:
Reach a fair and reasonable price
Develop a good relationship with the seller

Negotiation Tactics

Attacks Emphasize weaknesses

Personal Insults Doubt ability
Good Guy/Bad Guy Police interrogation style
Deadline time pressure
Lying
Limited Authority excuse for being inflexible
Missing Man - excuse for being inflexible
Fair and Reasonable Psychological pressure
Delay dodge the bullet
Extreme Demands Put the enemy on defense
Withdrawal total loss
Fait Accompli Force Majeure

Negotiation Items

Responsibilities
Authority
Applicable law
Technical and business management
approaches
Contract financing
Price

Contract Administration
Contract administration ensures that the
sellers performance meets contractual
requirements
Contracts are legal relationships, so it is
important that legal and contracting
professionals be involved in writing and
administering contracts
Many project managers ignore
contractual issues, which can result in
serious problems

Suggestions on Change Control for

Contracts

Changes to any part of the project need

to be reviewed, approved, and
documented by the same people in the
same way that the original part of the
plan was approved
Evaluation of any change should include
an impact analysis. How will the change
affect the scope, time, cost, and quality of
the goods or services being provided?
Changes must be documented in writing.
Project team members should also
document all important meetings and
telephone calls

Contract Closeout
Contract closeout includes
product verification to determine if all work was
completed correctly and satisfactorily
administrative activities to update records to reflect
final results
archiving information for future use

Procurement audits identify lessons learned in the

procurement process

Knowledge Area 8
Project Risk Management

The Importance of Project Risk

Management
Project risk management is the art and science of
identifying, assigning, and responding to risk
throughout the life of a project and in the best
interests of meeting project objectives
Risk management is often overlooked on projects,
but it can help improve project success by helping
select good projects, determining project scope,
and developing realistic estimates
KPMG study found that 55 percent of runway
projects did no risk management at all

What is Risk?
A dictionary definition of risk is the
possibility of loss or injury
The PMI recognizes also positive risk
Project risk involves understanding potential
problems that might occur on the project
and how they might impede project success
Risk management is like a form of insurance;
it is an investment

Risk Utility
Risk utility or risk tolerance is the amount
of satisfaction or pleasure received from a
potential payoff
Utility rises at a decreasing rate for a person
who is risk-averse
Those who are risk-seeking have a higher
tolerance for risk and their satisfaction
increases when more payoff is at stake
The risk-neutral approach achieves a balance
between risk and payoff

What is Project Risk

Management?
The goal of project risk management is to minimize potential risks while maximizing
potential opportunities. Major processes include

Plan Risk Management: Deciding how to approach and plan the risk
management activities for the project.

Indentify Risk : Determining which risks are likely to affect a project and
documenting the characteristics of each.
Perform Qualitative analysis: Prioritizing risks based on their probability and
impact of occurrence.
Perform Quantitative analysis: Numerically estimating the effects of risks on
project objectives.
Plan Risk Responses: Taking steps to enhance opportunities and reduce
threats to meeting project objectives.
Monitor and control Risks: Monitoring identified and residual risks, identifying
new risks, carrying out risk response plans, and evaluating the effectiveness of
risk strategies throughout the life of the project.

Risk Management Planning

The main output of risk management
planning is a risk management plan
The project team should review project
documents and understand the
organizations and the sponsors approach
to risk
The level of detail will vary with the needs
of the project

Content of Risk Management

Plan
Methodology
Roles and Responsibilities
Budget
Timing
Scoring and interpretation
Thresholds
Reporting
Tracking

Risk Categories

Technical, quality, performance

Project management
Organizational
External regulatory, environmental market shift

General Categories of Risk

Market risk: Will the new product be useful to the
organization or marketable to others? Will users
accept and use the product or service?
Financial/cost risk: Can the organization afford to
undertake the project? Is this project the best
way to use the companys financial resources?
Technology risk: Is the project technically
feasible? Could the technology be obsolete before
a useful product can be produced?
Internal risk: time, cost, scope, quality, skills,
planning, HR, materials/equipment

Risk Identification
Risk identification is the process of
understanding what potential unintentional
(bad and good) outcomes are associated
with a particular project
Several risk identification tools and
techniques include

Brainstorming
The Delphi technique
Interviewing
SWOT analysis

Qualitative Risk Analysis

Assess the likelihood and impact of identified
risks to determine their magnitude and priority
Risk quantification tools and techniques include
Probability/Impact matrixes
The Top 10 Risk Item Tracking technique
Expert judgment

Top 10 Risk Item Tracking

Top 10 Risk Item Tracking is a tool for
maintaining an awareness of risk
throughout the life of a project
Establish a periodic review of the top 10
project risk items
List the current ranking, previous ranking,
number of times the risk appears on the
list over a period of time, and a summary
of progress made in resolving the risk item

Example of Top 10 Risk Item

Tracking
Monthly Ranking
Risk Item

This

Last

Number
of Months

Risk Resolution
Progress

Month

Month

Inadequate
planning

Working on revising the

entire project plan

Poor definition
of scope

Holding meetings with

project customer and
sponsor to clarify scope

Absence of
leadership

Just assigned a new

project manager to lead
the project after old one
quit

Poor cost
estimates

Revising cost estimates

Poor time
estimates

Revising schedule
estimates

Expert Judgment
Many organizations rely on the intuitive
feelings and past experience of experts to
help identify potential project risks
Experts can categorize risks as high,
medium, or low with or without more
sophisticated techniques

Quantitative Risk Analysis

Often follows qualitative risk analysis,
but both can be done together or
separately
Large, complex projects involving
leading edge technologies often
require extensive quantitative risk
analysis

Decision Trees and Expected

Monetary Value (EMV)
A decision tree is a diagramming method
used to help you select the best course of
action in situations in which future outcomes
are uncertain
EMV is a type of decision tree where you
calculate the expected monetary value of a
decision based on its risk event probability
and monetary value

Simulation
Simulation uses a representation or model
of a system to analyze the expected
behavior or performance of the system
Monte Carlo analysis simulates a models
outcome many times to provide a statistical
distribution of the calculated results
To use a Monte Carlo simulation, you must
have three estimates (most likely,
pessimistic, and optimistic) plus an estimate
of the likelihood of the estimate being
between the optimistic and most likely
values

Risk Response Planning

After identifying and quantifying risks, you
must decide how to respond to them
Four main strategies:

Risk avoidance: eliminating a specific threat or

risk, usually by eliminating its causes
Risk acceptance: accepting the consequences
should a risk occur
Risk transference: shifting the consequence of a
risk and responsibility for its management to a
third party
Risk mitigation: reducing the impact of a risk
event by reducing the probability of its
occurrence

Contingency and Fallback Plans,

Contingency Reserves
Contingency plans are predefined actions that
the project team will take if an identified risk
event occurs
Fallback plans are developed for risks that
have a high impact on meeting project
objectives
Contingency reserves or allowances are
provisions held by the project sponsor that can
be used to mitigate cost or schedule risk if
changes in scope or quality occur

Monitoring & Control Risk

Monitoring risks involves knowing their status

Controlling risks involves carrying out the risk
management plans as risks occur
Workarounds are unplanned responses to risk
events that must be done when there are no
contingency plans
The main outputs of risk monitoring and
control are corrective action, project change
requests, and updates to other plans

Risk Response Control

Risk response control involves executing the risk
management processes and the risk management
plan to respond to risk events
Risks must be monitored based on defined milestones
and decisions made regarding risks and mitigation
strategies
Sometimes workarounds or unplanned responses to
risk events are needed when there are no
contingency plans

Knowledge Area 9
Project Integration
Management

Project Integration Management:

Processes
Develop Project Charter : Work with stakeholders to
create the document that formally authorizes a
projectthe charter.
Develop Preliminary Project Scope Statement: Work
with stakeholders, especially users of the projects
products, services, or results, to develop the highlevel scope requirements and create a preliminary
project scope statement.
Develop Project Management Plan: Coordinate all
planning efforts to create a consistent, coherent
documentthe project management plan.
Direct and Manage Project Execution: Carry out the
project management plan by performing the
activities included in it.

Project Integration Management:

Processes (cont.)
Monitor and Control Project Work:
Oversee project work to meet the
performance objectives of the project.
Perform Integrated Change Control:
Coordinate changes that affect the
projects deliverables and
organizational process assets.
Close Project: Finalize all project
activities to formally close the project.

Develop Project Charter- Inputs

1. Contract (if applicable)

2. Project Statement of Work

Project Initiation: Strategic

Planning and Project Selection
Sources for project requests can be external or
internal.
Several problems several projects
One problem several solutions

Before a project can be initiated, the organizations

first needs to choose which project(s) to work on.

Financial Analysis of
Projects
Financial considerations are often an
important consideration in selecting projects
Several primary methods for determining
the projected financial value of projects:

Net present value (NPV) analysis

Return on investment (ROI)
Internal Rate of Return (IRR)
Payback analysis
Development Productivity Index (DPI)

Net Present Value (NPV)

The higher the NPV, the better
Net present value (NPV) analysis is a method
of calculating the expected net monetary
gain or loss from a project by netting all
expected cash inflows and outflows to the
present point in time
Projects with a positive NPV should be
considered if financial value is a key criterion
MS Excel has a built-in function (NPV)

DEVELOPMENT PRODUCTIVITY
INDEX (DPI)
The higher the DPI, the better
The NPV does not change during the lifetime of the
project. However, the projects attractiveness
increases as we approach its completion.
The DPI adjusts the NPV for remaining time and
probability of success.

Return on Investment
(ROI)
The higher the ROI, the better
Return on investment (ROI) is calculated by
subtracting the project costs from the benefits and
then dividing by the costs
ROI = NPV / initial cost (expressed in percent)
Initial cost total cost until start of revenue

Many organizations have a required rate of return

or minimum acceptable rate of return on an
investment

Payback Period
The shorter the Payback Period, the better
Another important financial consideration is
payback period
The payback period is the amount of time it
will take to recoup, in the form of net cash
inflows, the net dollars invested in a project
Payback period ends when the cumulative
discounted benefits catch up with the costs.
Many organizations want IT projects to have a
fairly short payback period

Weighted Scoring Model

The higher the score, the more beneficial the
project.
A weighted scoring model is a tool that provides a
systematic process for selecting projects based on
multiple criteria

Building the Weighted

Scoring Model
Identify criteria important to the project selection
process
Assign weights (percentages) to each criterion so
they add up to 100%
Assign scores to each criterion for each project
Multiply the scores by the weights and get the total
weighted scores

Building the Weighted

Scoring Model
Allow multiple experts to score the projects for all
their parameters.
For each parameter, use the average score of all
experts

STAGE / PHASE-GATE
REVIEWS

Investigatio
n
Stage

Feasibility
Stage

Developmen
t
Stage

Pilot/Test
Stage

Launch
Stage

Manufacturin
g/
Deployment
Stage

Stage/phase-gate evaluations provide information for

portfolio evaluation and ranking
Initial screening of project proposals for adequate
business case & fit rigor prevents expenditure of
resources for less desirable projects
Subsequent gate reviews ensure resources are only
applied to projects that fit the portfolio criteria and have
a high priority

Project Charters
After deciding what project to work on, it is
important to formalize it
A project charter is a document that formally
recognizes the creation of a project and provides
direction on the projects objectives and
management
Key project stakeholders should sign a project
charter to acknowledge agreement on the need
and intent of the project

Sample Project Charter

Preliminary
Scope Statements
A scope statement is a document used to
develop and confirm a common
understanding of the project scope.
It is an important tool for preventing scope
creep:
The tendency for project scope to keep getting
bigger.

A good practice is to develop a preliminary

or initial scope statement during project
initiation and a more detailed scope
statement as the project progresses.

Contents of a Preliminary Scope

Statement
Project objectives
Product or service
requirements and
characteristics
Project boundaries
Deliverables
Product acceptance
criteria
Project assumptions
and constraints
Organizational
structure for the project

Initial list of defined

risks
Summary of schedule
milestones
Rough order of
magnitude cost
estimate
Configuration
management
requirements
Description of approval
requirements

Preliminary
Scope Statement - Assignment
Write the Preliminary Scope Statement for your
project.
Owner: Project Manager

Project Plan Development

A project plan is a document used to
coordinate all project planning documents
Its main purpose is to guide project
execution
Project plans assist the project manager in
leading the project team and assessing
project status
Project performance should be measured
against a baseline project plan

Attributes of Project Plans

Just as projects are unique, so are project

plans
Plans should first and foremost guide project
execution
Plans should be flexible
Plans should be updated as changes occur

Common Elements of a
Project Plan
Introduction or overview of the project
Description of how the project is organized
Management and technical processes used on the
project
Work to be done, schedule, and budget
information

Project Plan Execution

Project plan execution involves managing and
performing the work described in the project plan
The majority of time and money is usually spent
on execution

Important Skills for Project

Execution
General management skills like leadership,
communication, and political skills
Product skills and knowledge
Use of specialized tools and techniques

Tools and Techniques for Project

Execution
Work Authorization System: a method for
ensuring that qualified people do work at the right
time and in the proper sequence
Status Review Meetings: regularly scheduled
meetings used to exchange project information
Project Management Software: special software to
assist in managing projects

Monitoring and Controlling

Project Work

Changes are inevitable on most projects,

so its important to develop and follow a
process to monitor and control changes.
Monitoring project work includes
collecting, measuring, and disseminating
performance information.
Two important outputs of monitoring and
controlling project work include
recommended corrective and preventive
actions.

Earned Value Management

(EVM)
EVM is a project performance measurement
technique that integrates scope, time, and cost
data
Given a baseline (original plan plus approved
changes), you can determine how well the project
progresses and is meeting its goals
You must enter actual information periodically to
use EVM.

Earned Value Basics

What is it?
It is the value of the work that has been
accomplished

What does it do?

It separates an expenditure variance into its two
components:
that due to schedule variance
that due to cost variance

EVM When to Use?

EVM can be used at any time point during the
project execution.
It provides:
A Snapshot of the project progress at the specific
point in time
Projections for project completion

Earned Value Key Data

Points
To perform EV calculations, it is required
to generate 3 key data points:
Planned Value PV
Actual Cost - AC
Earned Value EV

We also use a couple of known

quantities:
BAC Budget At Completion
TAC Time At Completion

Planned Value - PV
Planned value is the project budgeted work
Old name: Budgeted Cost of Work Scheduled
(BCWS)
PV is usually described graphically as a
cumulative budget

EVM - PV
BAC

PV

Time

TAC

Actual Cost - AC
Actual Cost reflects the level of expenditure to
achieve the current work performed.
Old name: Actual Cost of Work Performed
(ACWP)
Here is how its shown graphically

Actual Cost - AC
BAC
AC

PV

Time

TAC

Earned Value - EV
Earned Value shows the value (not cost nor
budget) of the work accomplished so far
Old name: Budgeted Cost of Work Performed
(BCWP)
Here is how its shown graphically

Earned Value - EV
BAC

AC

PV

EV
Time

TAC

Rules of Thumb for Earned Value

Numbers
Negative numbers for cost and schedule
variance indicate problems in those areas.
The project is costing more than planned or
taking longer than planned
CPI and SPI less than 1 indicate problems

THANK YOU

MOHAN MISHRA
SR. PROJECT MANAGEMENT