Pmp presentations pmbok4

Professional
Responsibility
• The PMP Code of Professional Conduct is the
authoritative guide on how the PMP should
act as a professional, and how the PMP should
behave with customers and the public in
general.
• The PMP exam candidate will be tested on
their knowledge of the PMP Code of
Professional Conduct.

Professional
Responsibility
The five areas of professional responsibility
consist of the following:
• Ensuring integrity
• Contributing to the knowledge base
• Applying professional knowledge
• Balancing stakeholder interests
• Respecting differences

Responsibilities to the
profession
• The PMP/ CAPM must adhere to a high set of
principles, rules, and policies.
• This includes the organizational rules and policies,
the certification process, and the advancement of
the profession.
• On the exam, always choose the answer which best
supports the PMP profession and the higher set of
principles the candidate is expected to adhere to.

Balancing Stakeholders
needs
• Balance Stakeholder’s Objectives
– Understand the various competing stakeholders’
interests and needs
– Comprehend the conflict resolution techniques
useful in handling differing objectives
– Be able to resolve conflicts in a fair manner
– Exercise negotiation skills based on proper
information

Complying with Rules and
Policies
Honesty is expected in all areas regarding the PMP
examination process including:
• Exam applications must be honest and reflect actual
education and work experience.
• Test items, questions, answers, and scenarios are not to
be shared with other PMP/ CAPM candidates.
• PMP renewal information must reflect an honest
• assessment of education and experience.
• Continuing education information must be honest and
accurate; continuing education reporting must reflect
actual courses completed

Applying Honesty to the
Profession
• The candidate is expected, at all times, to
provide honesty in experience
documentation, the advertisement of skills,
and the performance of services.
• The PMP must, of course, adhere to and
abide by all applicable laws governing the
project work. In addition, the ethical
standards within the trade or industry should
also be adhered to.

Advancing the Profession
• The PMP/ CAPM must respect and recognize
the intellectual work and property of others.
• The PMP/ CAPM can’t claim others’ work as
their own.
• He/ She must give credit where credit is due.
• Work, research, and development sources
must be documented and acknowledged by
the PMP when relying on others’ work.

Responsibilities to the Customer
and to the Public
• The candidate also has a responsibility to the
customer of the project and the public.
• Projects that affect internal customers are expected
to meet requirements and standards, and fulfill the
business need of the performing organization.
• Essentially, the candidate is working for the
customer.

Enforcing Project
Management Truth &
Honesty
• The candidate must represent themselves and their
projects truthfully to the general public.
• This includes statements made in advertising, press
• releases, and in public forums.
• When project managers are involved in the creation of
estimates, truth is also expected.
• The candidate must provide accurate estimates on
time, cost, services to be provided—and realistic
outcomes of the project work.

Eliminating Inappropriate
Actions
• A PMP/ CAPM must avoid conflicts of interest
and scenarios where conflicts of interest could
seem apparent, opportunistic, or questionable
to the customer or other stakeholders.
• In addition, the candidate must not accept any
inappropriate gifts, inappropriate payments,
or any other compensation for favors, project
management work, or influence of a project.

Respecting Differences
• Interact with team and stakeholders in a
professional and cooperative manner
– Understand cultural diversity, norms and
stakeholders’ communication styles
– Show flexibility towards diversity, tolerance and
self control
– Becoming empathetic to differences

Project Management
Framework
Introduction to Project Management

What is the PMBOK Guide
The Project Management Book of Knowledge
(pmbok) is a recognised standard for the
project management profession.
• A standard is a formal document, it describes
norms, methods, processes and practices.

What is a project
According to PMBOK a project ''is a
temporary endeavor undertaken to create
a unique product, service or result.’’

Project Characteristics
You’ve just learned that a project has several
characteristics:
• Projects are unique.
• Projects are temporary in nature and have a definite
beginning and ending date.
• Projects are completed when the project goals are achieved
or it’s determined the project is no longer viable.
• A successful project is one that meets or exceeds the
expectations of your stakeholders

Operational Work
Operational Works are quite opposite in nature to
Projects. Operations are ongoing and repetitive.
They involve work that is continuous without an
ending date, and you often repeat the same
processes and produce the same results.

Project Management vs. Operations
The purpose of operations is to keep the
organization functioning, while the purpose of a
project is to meet its goals and to conclude.
At the completion of a project, the end product
(or result) may get turned over to the organization’s
operational areas for ongoing care and
maintenance.

What is Project Management
Project Management is the application of
knowledge, skills, tools and techniques to
meet the project requirements. It is the
responsibility of the project manager to
ensure that project management techniques
are applied and followed.

What is a Portfolio
Portfolios are a collections of programs
and projects grouped together to support
a strategic business goal or objective. The
programs may not be related other than
the fact that they are helping to achieve
that common goal.

What is a Program
• Programs are groups of related projects that are
managed using the same techniques in a coordinated
fashion. When projects are managed collectively as
programs, it’s possible to capitalize on benefits that
wouldn’t be achievable if the projects were managed
separately.
• A project may or may not be part of a program but a
program will always have projects.

SUBPROJECT
Projects are frequently divided into more
manageable components or subprojects.
Subproject are often contracted to an external
enterprise or to another functional unit in the
performing organization.
Subprojects can be referred to as projects and
managed as such

What is a Project Management Office
The project management office (PMO) is an
organisational body or entity assigned to
oversee the management of projects and
programs throughout the organization.

Primary Function of PMO
A Primary function of PMO is to support project managers in a
variety of ways which may include, but are not limited to:
• Managing shared resources across all the projects administered by the
PMO.
• Identifying and developing project management methodology, practices &
standards.
• Coaching, mentoring , training and oversight.
• Monitoring compliance with project management standard policies,
procedures , and templates via project audits.
• Developing and managing project policies, procedures, templates, and
other shared documentation ( organizational process assets);
• Co coordinating communication across projects

Role of a Project Manager
• The Project Manager is the person responsible for accomplishing the
project objectives.
• Project managers strive to meet the triple constraint by balancing project
scope, time, and cost goals.
• Depending on the organization structure , a project manager may report to
functional manager.
• In other cases project manager may be one of the several project managers
who report to a portfolio or program manager that is ultimately responsible
for enterprise wide projects . In this type of structure, the project manager
works closely with the portfolio or program manager to achieve the project
objectives

Project Manager Skills
Skills every good project manager should have:
• Integration Skills
• Communication skills
• Planning and Organizational skills
• Leadership Skills
• Team Building and Motivational Skills
• Budgeting Skills
• Conflict Management Skills
• Negotiation and Planning Skills

Organisational Structure
Just as projects are unique, so are the organizations
in which they’re carried out. Organizations have their
own styles and cultures that influence how project
work is performed.
.
One of the keys to determining the type of organization you work in is measuring how much
authority senior management is willing to delegate to project managers

Types of Organisational
Structure
Although uniqueness abounds in business
cultures, all organizations are structured in one of
three ways:
• Functional
• Projectized
• Matrix

Functional Organisation
One common type of organization is the functional
organization. Chances are you have worked in this type of
organization. This is probably the oldest style of organization
and is therefore known as the traditional approach to
organizing businesses.
Functional organizations are centered on specialties and
grouped by function, which is why it’s called functional
organization. As an example, the organization might have a
human resources department, finance department,
marketing department, and so on.

Functional Organisation Structure

Projectized Organisations
In this type structure, organisational resources are dedicated to
projects and project work in purely projectized organizations. Project
managers almost always have ultimate authority over the project in
this structure and report directly to the CEO.
In a purely projectized organization, supporting functions such as
human resources and accounting might report directly to the project
manager as well. Project managers are responsible for making
decisions regarding the project and acquiring and assigning
resources. They have the authority to choose and assign resources
from other areas in the organization or to hire them from outside if
needed.

Projectized Organisational Structure

Matrix Organisations
This form is an attempt to maximize the strengths of both the
functional and projectised forms. Team members report to two
bosses, the project manager and functional manager (i.e., VP
Engineering). Communication goes from team member to both
bosses. Team member do project work in addition to normal
departmental work.
• In a strong matrix, power rests with the project manager, in a weak
matrix power rests with the functional manager and the power is
comparable to that of a coordinator or expediter.
• In a balanced matrix, the power is shared between the functional
manager and the project manager.

Project Expediter and Coordinator
• Project Expediter- The project expediter acts
primarily as a staff assistant and communications
coordinator. The expediter cannot personally make or
enforce decisions.
• Project Coordinator- This position is similar to the
project expediter except the coordinator has some
power to make decisions, have some amount of
authority and reports to a higher- level manager.

Who are project Stakeholders
• Stakeholders are persons or organizations who are actively involved in
the project or whose interests may positively or negatively be
affected by the performance or completion of the project.
• Stakeholders have varying levels of responsibility and authority and
can change over the project life cycle.
• Project management team must continuously identify both external
and internal stakeholders.
• Project manager must manage the influence of various stakeholders in
relation to the requirements and balance stakeholders’ interest.

Stakeholders
• Some examples of project stakeholders

Enterprise Environmental Factors
• Refer to both internal & external environmental factors that surround or
influence a project’s success.
• As an input in almost all project management process.
• May enhance or constrain project management options.
• May have positive or negative influence on the outcome.
• Examples:
 Organizational culture, structure, and processes
 Government or industry standards
 Infrastructure
 Existing human resources
 Personnel administration
 Company work authorization systems
 Marketplace conditions
 Stakeholder risk tolerances
 Political climate
 Organization’s established communications channels
 Commercial databases
 Project management information

Organizational Process Assets
• Processes & Procedures
 Organizational standard processes such as standards, policies
 Standardized guidelines, work instruction, proposal evaluation criteria, and
performance measurement criteria
 Templates
 Financial control procedures
 Procedures for prioritizing, approving, and issuing work authorization, etc.
• Corporate Knowledge Base
 Process measurement databases
 Project files
 Historical information & lesson learned knowledge bases
 Issue and defect management databases
 Configuration management knowledge bases
 Financial databases, etc.

Project Management Process
Groups
Project management processes organize and
describe the work of the project. The
PMBOK®Guide describes five process groups
used to accomplish this end. These processes
are performed by people and, much like
project phases, are interrelated and
dependent on one another.

The five process groups are:
• Initiating
• Planning
• Executing
• Monitoring and Controlling
• Closing

Project Management Processes
All these process groups have individual processes that collectively
make up the group. For example, the Initiating process group has
two processes called Develop Project Charter and Identify
Stakeholders.
Collectively, these process groups—including all their individual
processes—make up the project management process.
Projects start with the Initiating process and progress through all the
processes in the Planning process group, the Executing process
group, and so on, until the project is successfully completed or it’s
canceled. All projects must complete the Closing processes, even if
a project is killed.

Knowledge Areas
There are nine knowledge areas and they are:
• Integration Management
• Scope Management
• Time Management
• Cost Management
• Quality Management
• Human Resource Management
• Communication Management
• Risk Management
• Procurement Management

Knowledge Areas
• Each Knowledge area has further Processes.
There are a total of 42 processes. Each
process has inputs, outputs and "tools and
techniques" (ITTO’s). The PMBOK primarily
covers each of the processes and it's ITTO’s in
detail. You need to understand the concepts
related to each of the input, output and "tools
and techniques".

Project Life cycle
The project life cycle is the agglomeration of
all phases in the project.
All projects are divided into phases, and all
projects, large or small, have a similar life cycle
structure: These are:
• Starting the project
• Organizing and preparing
• Carrying out the project work
• Closing the project

Characteristics of the Project Life
Cycle
The project life cycle serves to define the beginning and the
end of a project.
Phases are generally sequential and are usually defined
by some form of technical information or technical
component handoff.
Deliverables from the preceding phase are usually approved
before work starts on the next phase.

Characteristics of the Project Life Cycle
Most project life-cycles share a number of common
characteristics:
Cost and staffing levels are low at the start, higher
toward the end, and drop rapidly as the project draws to a
conclusion.
The ability of the stakeholders to influence the final
characteristics of the project’s product and the final
cost of the project is highest at the start and gets
progressively lower as the project continues.

The probability of successful completion generally
gets progressively higher as the project continues.
Characteristics of the Project Life Cycle
The probability of successfully completing the
project is lowest, and hence risk and uncertainty are
highest, at the start of the project.

Project Phases and the Project Life
Cycle
A project life cycle is a collection of project
phases that defines:
 What work will be performed in each phase.
 What deliverables will be produced and when.
 Who is involved in each phase.
 How management will control and approve work produced in
each phase.
 A deliverable is a product or service produced or provided as
part of a project

Identification
Formulation
Financing
Implementation
Evaluation
Programming
European Commission
Project Cycle

Handoffs
Project phases evolve through the life cycle in
a series of phase sequences called handoffs, or
technical transfers. The end of one phase
sequence typically marks the beginning of the
next.

Phase-to-Phase Relationships
There are three basic types of phase–to Phase
relationships:
• A Sequential relationship : where a phase can only start
once the previous phase is complete.
• An Overlapping relationship : where the phase starts prior
to completion of the previous one (Fast tracking).
Overlapping phase may increase risk and can result in
rework.
• An Iterative relationship : where only one phase is planned
at any given time and the planning for the next is carried out
as work progresses on the current phase and deliverables

PROJECT INTEGRATION
MANAGEMENT
Project Management Training

Project Integration
Management
Integration management
is an element of project
management that
coordinates all aspects of
a project.

The Key to Overall Project Success:
Good Project Integration Management
• Project managers must coordinate all of the other
knowledge areas throughout a project’s life cycle.
• Many new project managers have trouble looking at
the “big picture” and want to focus on too many
details.

Project Integration Management
Integration

Project Integration Management Processes:
• Develop the project charter: Work with stakeholders to
create the document that formally authorizes a project—
the charter.
• Develop the project management plan: Coordinate all
planning efforts to create a consistent, coherent
document—the 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’d)
• Monitor and control the project work: Oversee
project work to meet the performance objectives of
the project.
• Perform integrated change control: Coordinate
changes that affect the project’s deliverables and
organizational process assets.
• Close the project: Finalize all project activities to
formally close the project.

How do Projects come about:
• As a result of Needs and Demands, namely:
Market need
Customer Request
Strategic opportunity/business need
Technological advance
Legal requirement
Ecological impacts
Social need

Strategic Planning and Project Selection
• Strategic planning involves determining long-term objectives, predicting
future trends, and projecting the need for new products and services.
• Organizations often perform a SWOT analysis:
– Strengths, Weaknesses, Opportunities, and Threats
• As part of strategic planning, organizations should:
– Identify potential projects.
– Use realistic methods to select which projects to work on.
– Formalize project initiation by issuing a project charter.

Project Selection Methods
There are many ways to select a project to be
initiated from among many possible projects.
Project selection methods measure the value of
what the product, service, or result of the project
will produce and how it will benefit the
organization.

Methods for Selecting Projects
• There is usually not enough time or
resources to implement all projects.
• Methods for selecting projects include:
– Focusing on broad organizational needs.
– Categorizing projects.
– Performing net present value or other financial
analyses.
– Using a weighted scoring model.
– Implementing a balanced scorecard.
65

Project Selection Methods
There are generally two categories of
selection methods:
• Benefit Measurement Methods (Comparative
approach).
• Constrained Optimization Methods
(Mathematical models).

Benefit Measurement Method
• Murder Board
A panel of people who try to shoot down a new
project idea.
• Peer Review
• Economic Models
• Benefit Compared to Cost

Constrained Optimization Method
• Linear Programming
• Integer Programming
• Dynamic Programming
• Multi-objective Programming

Economic Models for Project
Selection
• Present Value
• Net Present Value
• Internal Rate of Return
• Payback Period
• Benefit Cost Ratio

Net Present Value
• Net present value (NPV) analysis is a method of
calculating the expected net monetary gain or loss from
a project by discounting all expected future cash inflows
and outflows to the present point in time.
Note:
• Projects with a positive NPV should be considered if
financial value is a key criterion.
• The higher the NPV, the better.

Internal Rate of Return
• The internal rate of return (IRR) is the most difficult
equation to calculate of all the cash flow
techniques.
• It is a complicated formula and should be
performed on a financial calculator or computer.
• Technically speaking, IRR is the discount rate when
the present value of the cash inflows equals the
original investment.

Internal Rate of Return cont’d
Note:
When choosing between projects or when
choosing alternative methods of doing the
project, projects with higher IRR values are
generally considered better than projects
with low IRR values.

Payback Period
• The payback analysis/payback period is another important
financial consideration.
• The payback period is the amount of time (number of time
periods) it will take to recoup your investment in the project
before you start accumulating profit.
• Many organizations want IT projects to have a fairly short
payback period.

Project Selection – Economic Models
Concepts you should know:
• Present value (PV): The value today of future cash flows.
• Net present value (NPV): Project with positive & greater NPV
value is better.
• Internal rate of return (IRR): Project with greater IRR value is
better.
• Payback period: The shorter the payback period the better.
• Benefit-cost ratio: compares the benefits to the costs of different
options relates to costing projects and to determining what work
should be done. Project with greater benefit-cost ratio value is
better.

Project Selection – Economic Models
Method MAIN POINT
Present value (PV): value today of future cash flows
Net present value
(NPV):
greater NPV value is better
Internal rate of
return (IRR):
greater IRR value is better
Payback Period time periods it takes to recover your investment
SHORTER Payback Period THE BETTER
Benefit-cost ratio ABOVE 1; greater benefit-cost ratio value is better.

Weighted Scoring Model
• A weighted scoring model is a tool that provides a systematic
process for selecting projects based on many criteria.
• Steps in identifying a weighted scoring model:
1. Identify criteria important to the project selection
process.
2. Assign weights (percentages) to each criterion so they
add up to 100 percent.
3. Assign scores to each criterion for each project.
4. Multiply the scores by the weights to get the total
weighted scores.
• The higher the weighted score, the better.
76

Sample Weighted Scoring Model for Project Selection
77
Weighted Scoring Model

Implementing a Balanced Scorecard
• Drs. Robert Kaplan and David Norton developed this
approach to help select and manage projects that align
with business strategy.
• A balanced scorecard is a methodology that converts an
organization’s value drivers, such as customer service,
innovation, operational efficiency, and financial
performance, to a series of defined metrics.
• See www.balancedscorecard.org for more.

Project Selection – Key Terms
• Economic Value Added (EVA): concerned with whether the
project returns to the company more value than it costs.
• Opportunity Cost: the opportunity given up by selecting one
project over another.
• Sunk Costs: Are expended costs, should not be considered
when deciding whether to continue with a troubled project.
• Law of Diminishing Returns: after a certain point, adding
more input/resource will not produce a proportional increase
in productivity.

Why have a Project Charter
• It formally recognises (authorise) the existence of the
project, without it a project does not exist.
• It gives the project manager authority to spend money
and commit corporate resources.
• It provides high level requirements for the project. The
project charter is broad enough so it does not need to
change as the project changes.

Why have a Project Charter
• It provides direction on the project’s objectives and
management.
• Key project stakeholders should sign a project
charter to acknowledge agreement on the need and
intent of the project; a signed charter is a key output
of project integration management.

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

Develop Project Charter
• Projects are authorized by someone external to the
project such as sponsor, PMO, portfolio steering
committee.
• The project charter can be created by them or
delegated to Project Manager.

Develop Project Charter: Inputs
• Statement of Work (SOW)
A narrative description of products or services to be
delivered by the project. The SOW references:
 Business need
 Product scope description
 Strategic plan
• Business case
Provide the necessary information from business
standpoint to determine whether or not the project is
worth the required investment.

Develop Project Charter: Inputs cont’d
• Contract
Applicable when the project is being done for an external
customer.
• Enterprise Environmental Factors
 Organization infrastructure
 Marketplace conditions
• Organizational Process Assets
 Organizational standard processes, policies
 Templates
 Historical information and lessons learned

Develop Project Charter: Tools & Techniques
• Expert Judgment
The expertise of individuals or groups with specialized
knowledge or training to assist with the technical or
management details.
They include:
 Internal customers – people within the organization
 Consultants
 Stakeholders
 Professional & technical associations
 Industry groups
 PMO

Develop Project Charter: Outputs
• The Project Charter
The project charter documents the business
needs, current understanding of the customer’s
needs, and the new product,
service, or result that it is intended to satisfy.

Develop Project Charter: Outputs cont’d
The project charter documents :
– Project purpose or justification
– Measurable project objectives and related success criteria
– High-level requirements
– High-level project description
– High-level risks
– Summary milestone schedule
– Summary budget
– Project approval requirements
– Assigned project manager, responsibility and authority level
– Name and authority of the sponsor or other person(s) authorizing
the project charter

Develop Project Management Plan
• The Develop Project Management Plan process includes
the actions necessary to define, integrate, and coordinate
all subsidiary plans into a project management plan.
• The Develop Project Management Plan process brings all
these subsidiary plans together, along with the outputs of
the Planning group processes, into one document called
the project management plan.
• The project management plan defines how the project is
executed, monitored and controlled, and closed.

Develop Project Management Plan
The process of documenting the actions necessary to define,
prepare, integrate and coordinate all subsidiary plans.

Develop Project Management Plan:
Inputs
• Project Charter
• Outputs from Planning Processes
 Outputs from many of the planning processes described in
chapter 5 through 12 are integrated to create the project
management plan.
 Any baselines and subsidiary management plans that are an
output from the other planning processes are inputs to this
process.
 In addition, updates to these documents can necessitate
updates to the project management plan.

Subsidiary Management Plans
These subsidiary plans include, but are not limited to:
• Project scope management plan
• Schedule management plan
• Cost management plan
• Quality management plan
• Process improvement plan
• Staffing management plan
• Communication management plan
• Risk management plan
• Procurement management plan

Develop Project Management Plan:
Inputs
• EEF
 PMIS
 Organizational structure and culture
 Infrastructure
 Personnel administration
• OPA
 Standardized guidelines, work instructions, evaluation criteria, etc.
 Project management plan template
 Change control procedures
 Project files re: past projects

Project Management Plan (Output)
• The strategy for managing the project and the processes in
each knowledge area.
• Covers how you will define, plan, manage, and control the
project.
• How to handle a problem on a project?
look at your management plan to see how you planned to
handle such a problem.
• The project management plan can be either summary level or
detailed, and can be composed of one or more subsidiary
plans and other components. Each of the subsidiary plans and
components is detailed to the extent required by the specific
project.

The Project Management Plan
A Project Management Plan includes:
• Project Charter
• Budget
• Schedule
• Resources
• Scope Statement
• Responsibility charts/assignments
• Subsidiary Management Plans

Develop Project Management Plan (cont…)
Those other components include, but are not
limited to:
 Milestone list
 Resource calendar
 Schedule baseline
 Cost baseline
 Quality baseline
 Risk register

Project Baseline
Project baseline refers to the original version of
the project management plan. Once the project
management plan is base-lined, it may only be
changed by raising a change request.

Baseline (Performance measurement baseline)
• The project management plan contains scope, schedule, and cost baselines,
against which the project manager will need to report project
performance.
• Baseline created during planning.
 Scope baseline
The project scope statement, work breakdown structure (WBS), and WBS
dictionary.
The agreed-upon schedule, including the start and stop times.
 Cost baseline
The time-phased cost budget.
• Deviations from baselines are often due to incomplete risk identification
and risk management.

Configuration Management Plan
This plan describes how configuration
management will be performed on the
project.
The configuration management system
defines configurable items, such as product
specifications, and the change control
procedures on those items.

Configuration Management
• Ensures that the descriptions of the project’s products
are correct and complete.
• Involves identifying and controlling the functional and
physical design characteristics of products and their
support documentation.
• Configuration management specialists identify and
document configuration requirements, control changes,
record and report changes, and audit the products to
verify conformance to requirements.

Change Management Plan
• Describes how changes will be managed and controlled.
• Covers for the project as whole.
• May include:
- Change control procedures (how and who)
- The approval levels for authorizing changes
- The creation of a change control board to approve changes.
- A plan outlining how changes will be managed and controlled.
- Who should attend meetings regarding changes.
- Tools to use to track and control changes
Each knowledge area are described in the individual management plans

Requirements Management Plan
Describes how the requirements will be elicited,
analyzed, documented, prioritized, and managed
throughout the project.
Requirements drive the features and
characteristics of the project’s deliverables. This
plan is created in the Collect Requirements
process.

Stakeholder Analysis
• A stakeholder analysis documents important (often sensitive)
information about stakeholders such as:
– Stakeholders’ names and organizations.
– Their roles on the project.
– Unique facts about each stakeholder.
– Their level of influence on and interest in the project.
– Suggestions for managing relationships with each
stakeholder.

Progressive Elaboration
Progressive Elaboration involves the
process of taking a project from
concept to detailed design.

Kickoff Meeting
Kick-off meeting happens after the planning
phase and before the project execution. It is
typically used to communicate responsibilities
of key stakeholders.

Project Execution
• During project execution the project team
focuses on completing the tasks assigned.
• The Sponsor protects the project from
changes and loss of resources.
• The Project Manager integrates all the pieces
into the project as a whole.

Project Execution (Cont…)
• Project execution involves managing and
performing the work described in the project
management plan.
• The majority of time and money is usually
spent on execution.
• The products of the project are produced
during project execution.

Coordinating Planning and Execution
• Project planning and execution are intertwined
and inseparable activities.
• Those who will do the work should help to plan
the work.
• Project managers must solicit input from the
team to develop realistic plans.

Important Skills for Project Execution
• General management skills such as
leadership, communication, and political
skills.
• Product, business, and application area skills
and knowledge.
• Use of specialized tools and techniques.

Direct and Manage Project Execution
This process requires implementation of
approved changes covering:
• Corrective action
• Preventive action
• Defect repair

Direct & Manage Project Execution
This is the process for performing the work defined in the project management
plan to achieve the project’s objectives

Using Software to Assist in Project Integration Management
• Several types of software can be used to assist in project
integration management:
– Word processing software creates documents.
– Presentation software creates presentations.
– Spreadsheets or databases perform tracking.
– Communication software such as e-mail and Web authoring
tools facilitate communications.
• Project management software can pull everything together and
show detailed and summarized information. The exam does not focus
on any specific system (for example Microsoft Project ).

Project Execution: Tools and Techniques
• Project Management Information Systems:
Hundreds of project management software
products are available on the market today,
and many organizations are moving toward
powerful enterprise project management
systems that are accessible via the Internet.

Project Management
Information System (PMIS)
Project Management Information System
(PMIS) is a system that keeps track of status
of all the project tasks. It is used to track the
status of the project.

Change Requests
• When a change request is received, the following
steps must be taken (in this order):
• Evaluate (assess) the impact of change to the project
• Create alternatives including cutting other tasks,
crashing, fast-tracking etc.
• Meet with management, sponsors etc.
• Meet with the customer if necessary

Monitoring and Controlling Project
Work
• Changes are inevitable on most projects, so it’s
important to develop and follow a process to
monitor and control changes.
• Monitoring project work includes collecting,
measuring, and disseminating performance
information.
• Outputs of monitoring and controlling project work
include Change Requests, Project management plan
updates and project document updates.

Monitor & Control Project Work
•This process includes tracking, reviewing and regulating the progress to meet the
performance objectives defined in the project management plan.

Monitor & Control Project Work: Input
• Performance Reports : Reports should be prepared by
the project team detailing activities ,
accomplishments ,milestones ,identified issues and
problems . Performance reports can be used to report
the key information , but not limited to :
– Current status
– Significant accomplishments for the period
– Scheduled activities
– Forecasts
– Issues

Perform Integrated Change Control
The process of reviewing all change requests,
approving changes, and managing changes to
the deliverables, organisational process
assets, project documents and the project
management plan.

Perform Integrated Change
Control
• The integrated change control process is a control function
that is done from project initiating through project closing.
• This is where all the recommendations for changes,
corrective actions, preventive actions and defect repairs
are evaluated across all the knowledge areas and either
approved or rejected.
• Changes to any part of the project management plan or the
product of the project are handled in the integrated change
control process.

Integrated Change Control
• Three main objectives are:
– Influence the factors that create changes to
ensure that changes are beneficial.
– Determine that a change has occurred.
– Manage actual changes as they occur.
• A baseline is the approved project
management plan plus approved changes.

Perform Integrated Change Control

Change Control System
A formal, documented process that
describes when and how official
project documents and work may
be changed.
Describes who is authorized to make
changes and how to make them.

Change Control Board
Change Control Board is formed to review
change requests. It is used to approve or
reject change requests. After the project
scope has been baselined, each requested
change must go through a change control
review process.

Change Control Boards (CCBs)
• A formal group of people responsible for
approving or rejecting changes on a project.
• CCBs provide guidelines for preparing change
requests, evaluate change requests, and manage
the implementation of approved changes.
• CCBs include stakeholders from the entire
organization.

Configuration Management
• Ensures that the descriptions of the project’s products are
correct and complete.
• Involves identifying and controlling the functional and
physical design characteristics of products and their support
documentation.
• Configuration management specialists identify and document
configuration requirements, control changes, record and
report changes, and audit the products to verify conformance
to requirements.

Defines how you will manage changes to the deliverables and the resulting
documentation, including which organizational tools you will use.
PMIS
Configuration
Management System
Change Control System

Closing Projects
• To close a project, you must finalize all
activities and transfer the completed or
cancelled work to the appropriate people.
• Main outputs include:
– Administrative closure procedures.
– Contract closure procedures.
– Final products, services, or results.
– Organizational process asset updates.

Close Project or Phase
Projects come to an end for several reasons:
• They’re completed successfully.
• They’re canceled or killed prior to completion.
• They evolve into ongoing operations and no longer exist as
projects.
There are four formal types of project endings you might
need to know for the exam:
• Addition
• Starvation
• Integration
• Extinction

• Addition- Projects that evolve into ongoing
operations are considered projects that end due to
addition; in other words, they become their own
ongoing business unit.
• Starvation- When resources are cut off from the
project or are no longer provided to the project, it’s
starved prior to completing all the
requirements and you’re left with an unfinished
project on your hands.

• Integration- Integration occurs when the resources of the
project—people, equipment, property, and supplies— are
distributed to other areas in the organization or are
assigned to other projects.
• Extinction- This is the best kind of project end because
extinction means the project has been completed and
accepted by the stakeholders. As such, it no longer exists
because it had a definite ending date, the goals of the
project were achieved, and the project was closed out.

Close Project
The Close Project or Phase is the process of formal completion of all project related
activities.

Lessons Learned
At the end of each phase of a project, a lessons
learned document must be prepared. The lessons
learned document defines what was done right,
wrong etc. It is required to be completed in order
for the project to be completed.
Also called “Post – Mortem”

Assumptions
Assumptions are beliefs held to be true for the purposes
of the project – you don’t have to prove them, but they
must be documented in the Project Plan. As they are
assumptions then be aware that they have an element of
risk attached to them. If assumptions later turn out to be
false during the execution of the project then this may
lead to changes in project scope.

Project Constraints
Every project has to manage at least
three basic constraints; time, cost and
scope. The success of a project depends
on the skills and knowledge of a project
manager to take into consideration
these constraints and develop the plans
and processes to keep them in balance.

Scope Management

Project Scope Management
• Processes required to ensure that project includes all
the work required, and only the work required, to
complete the project.
• Managing a project scope is primarily concerned with
defining and controlling what is and is not included in
the project.
• Scope management defines how the deliverables of
project will be verified and accepted.
• Develop project management plan, under integration
produces the scope management plan which will
define how the scope shall be defined, verified and
controlled.

Scope management means:
• Not letting people randomly add to the scope
without a structured change control system.
• Making sure all changes fit within the project
charter.
• Preventing extra work or “gold plating”.
• Uncontrolled scope is called scope creep.

In the project context the term scope may refer to:
• Product scope : the features and functions that are to be
included in a product or service. Completion of product scope
is measured against requirements.
• Project scope : The work that must be done in order to deliver
a product with the specified features and functions.
Completion of project scope is measured against the project
management plan.
Both types of scope management must be well integrated to
ensure the work of the project will result in the delivery of the
specified product.

project scope, product scope & requirements
Example: Lets say you have a plot of land and you want to build a house
on it.
Product: The house
Product Scope: The house should have 3 storey's, 1000 sq. m of
built up area, 4 bedrooms with attached baths, 2 living room, a
kitchen, basement and a garage. The exteriors should be white.
Project Scope: Hiring a building contractor, an architect and an
interior designer, acquiring legal permits, estimating the cost, taking
bank loan, planning for risks such as rains and storms, designing the
house, buying building materials,

Example: project scope, product scope & requirements
constructing the house, conducting inspections, conducting
regular site visits to track the progress, resolving disputes,
Making payments and compensations, closing contracts and
moving in.
Requirements: In addition to product scope, there could be
other requirements for the house. Using a particular grade of
cement could be your quality requirements. Making the house
earthquake- proof could be a performance requirement. Getting
a weekly progress update from your contractor, and making
monthly payments could be your project management
requirements.

Documenting the Scope Management Plan
The scope management plan describes how the
project team will go about defining project scope,
verifying the work of the project, and managing and
controlling scope. The PMBOK Guide does not go
into detail regarding this plan, but there are some
things you may need to know about this plan for the
exam.

Project Scope Management Plan
The project scope management plan should contain the
following:
• The process you’ll use to prepare the project scope
statement.
• A process for creating the work breakdown structure
(WBS).
• A definition of how the deliverables will be verified for
accuracy and the process used for accepting
deliverables.
• A description of the process for controlling scope change
requests, including the procedure for requesting changes
and how to obtain a change request form.

Project Scope Management Processes:
• Collect Requirements : the process of defining and
documenting stakeholder’s needs to meet the project
objectives.
• Define Scope : the process of developing a detailed
description of the project and the product.
• Create WBS: the process of subdividing the project
deliverables and the project work into smaller, more
manageable components
• Verify Scope : the process of formalizing acceptance of the
completed project deliverables
• Control Scope : the process of monitoring the status of the
project and product scope and managing changes to the
scope baseline.

Requirements
• Requirements describe the characteristics of the
deliverables. They might also describe functionality
that a deliverable must have or specific conditions a
deliverable must meet in order to satisfy the
objective of the project.
• Requirements are typically conditions that must be
met or criteria that the product or service of the
project must possess in order to satisfy the
objectives of the project.

Collect Requirements• Collect requirements is the process of defining and
documenting stakeholders’ needs to meet the project
objectives .
• Requirements include the quantified and documented needs
and expectations of the sponsor, customer, and other
stakeholders.
• These requirements need to be elicited , analyzed, and
recorded in enough detail to be measured once project
execution begins .
• Collecting requirements is defining and managing customer
expectations . Requirements become the foundation of the
WBS. Cost , Schedule, and quality planning are all built upon
these requirements

Collect Requirements
• The development of requirements begins with an
analysis of the information contained in the project
charter and the stakeholder register .
• Many organizations categorize requirements into
project requirements and product requirements
• Project requirements : business requirements, project
management requirements ,delivery requirements etc
• Product requirements: technical, security,
performance , etc

Collect Requirements
Collect Requirements is the process of defining and documenting stakeholders
needs to meet the project objectives.

Collect Requirements: Tools &
Techniques
Interviews :
• Is a formal or informal approach to discover information
from stakeholders by talking to them directly
• It is typically performed by asking prepared and
spontaneous questions and recording the responses .
• Interviewing experienced project participants,
stakeholders and subject matter experts can aid in
identifying and the defining the features and the
functions of the desired project deliverables .

Collect Requirements – Tools &
Techniques
Focus Groups :
• Focus groups bring together prequalified
stakeholders and subject matter experts to learn
about their expectations and attitudes about a
proposed product, service, or result .
• A trained moderator guides the group through an
interactive discussion , designed to be more
conversational than a one-on-one interview

Techniques
Facilitated workshops:
Cross-functional stakeholders come together in a
facilitated workshop to discuss and define requirements
that affect more than one department. For example, if
you’re implementing a software package that impacts
several business units, you’ll need representatives from
each unit together in a workshop so that each of their
needs are represented and prioritized. This way, all the
participants understand the various needs and have
a facilitated forum to discuss and resolve their issues.

Techniques
Group Creativity Techniques : Group creativity
involves several techniques, like brainstorming,
nominal group technique, the delphi technique, and
affinity diagrams.
• Brainstorming : a technique used to generate and
collect multiple ideas related to the project and
product requirements .

Techniques
Group Creativity Techniques :
• Nominal Group Technique : enhances
brainstorming with a voting process used to
rank the most useful ideas for further
brainstorming or prioritization (Brainstorming
+ Voting)

Techniques
• The Delphi Technique is an anonymous
method to query experts. Delphi technique
uses an experienced Facilitator.
• The responses are only available to the
facilitator.
• Participants can express ideas or opinions
without fear or being intimidated.

Techniques
• Idea/mind mapping : ideas created through
individual brainstorming are consolidated into a
single map to reflect commonality and differences in
understanding , generate new ideas (Brainstorming
+Map).
• Affinity Diagram : this technique allows large
number of ideas to be sorted into groups for review
and analysis

Techniques
Group Decision Making Techniques : there are
multiple
methods of reaching a group decision :
• Unanimity :everyone agrees on a single course of
action
• Majority : support from more than 50% of the
members of the group.
• Plurality : the largest block in a group decides even
if a majority is not achieved.
• Dictatorship : one individual makes the decision for
the group

Techniques
Questionnaires and Surveys:
This technique involves querying a large
group of participants via questionnaires or
surveys. These tools allow you to gather
information quickly and apply statistical
analysis, if needed, to the results.

Collect Requirement : Tools &
TechniquesObservation:
This technique is typically a one-on-one experience
where an observer sits side by side with the
participant to observe how the participant interacts
with the product or service. This technique is also
known as job shadowing. For example, you may use
this technique to determine requirements for an
upgrade to a software product. Sitting with the user
and watching their interactions with the product
enables the observer to uncover requirements they
would not have ordinarily discovered.

Techniques
Prototypes :
Prototyping is a technique involving constructing a
working model or mock-up of the final product for
participants to experiment with. The prototype does not
usually contain all the functionality the end product
does, but it gives participants enough information that
they can provide feedback regarding the mock-up. This is
an iterative process where participants experiment and
provide feedback and the prototype is revised and the
cycle starts again

Balance Stakeholder’s Requirement
• There is a need to balance stakeholder’s requirement.
• Some issue are so complex they cannot be resolved by PM alone.
• Facilitate the resolution of competing requirement, consider:
1. business case,
2. project charter,
3. project scope statement,
4. project constraints
What you can do:
Conflict resolution, team building, meeting, problem solving skills, escalation,
approval from stakeholder.
• Stakeholder request to do or add something that is not related to the reason
of project created should be rejected!

Collect Requirements: Outputs
Requirements Documentation
As mentioned earlier, requirements quantify and prioritize
the wants, needs, and expectations of the project sponsor
and stakeholders. Requirements typically start out high-level
and are progressively elaborated as the project progresses.
You must be able to track, measure, test, and trace the
requirements of the project. If you can’t measure or test
whether the requirement satisfies the business need of the
project, the definition of success is left to the subjective
opinions of the stakeholders and team members.

Requirements Documentation
The requirements document may include the following elements:
• Business need for the project and why it was undertaken
• Objectives of the project and the business objectives the
project hopes to fulfill
• Functional requirements and Nonfunctional requirements
• Quality requirements
• Acceptance criteria
• Business rules
• Organizational areas and outside entities impacted
• Support and training requirements
• Assumptions and constraints

Collect Requirements- Outputs
Requirements Management Plan :
• Documents how requirements will be analyzed , documented
and managed throughout the project.
• The type of phase relationship you choose to manage the
project will determine how requirements are managed
throughout the project. For example, in a sequentially phased
project, it’s possible to define requirements in later phases of
the project after some work has been completed. In an
overlapping phased relationship, you’ll need to define and
document most all the requirements early in the life cycle.
• Configuration management is often used to manage and track
changes to deliverable (product, service or result)
requirements.

Requirements Management Plan
The Requirements Management Plan should include the following:
• How planning, tracking, and reporting of requirements activities
will occur
• How changes to the requirements will be requested, tracked, and
analyzed along with other configuration management activities
• How requirements will be prioritized
• What metrics will be used to trace product requirements
• What requirements attributes will be documented in the
traceability matrix
• Remember that the requirements management plan can be
considered a subsidiary management plan and be included in the
project management plan.

Requirements Traceability Matrix
It is a matrix that links requirements to their origin and traces
them throughout the project life cycle .It helps to ensure that
requirements approved in the requirements documentation are
delivered at the end of the project. It can include:
• Unique identifier
• Textual description
• Rationale
• Owner source
• Status
• Date Completed

Requirements Traceability Matrix

Define Scope
Scope is collectively the product, service, or result of the
project.
Now that you’ve documented the project requirements,
you’re ready to further define the needs of the project in the
Define Scope process. The project scope statement (an output
of this process) is what you’ll use to develop and document a
detailed description of the deliverables of the project and the
work needed to produce them. This process is progressively
elaborated as more detail becomes known.

Define Scope
This is the process of developing a detailed description of the project and
product

Define Scope – Tools and Techniques
1. Product Analysis
• The purpose of product analysis is to analyze the objectives stated
by the customer or sponsor and turn them into real requirements.
(Product breakdown, systems analysis, value engineering,
requirements analysis and value analysis).
2.Alternative Identification
• Identifying alternatives is a technique used to generate different
approaches to execute and perform the work of the project.
 Brainstorming
 Lateral Thinking
 Pair wise comparison

Lateral Thinking
Lateral thinking is a form of alternatives
identification that can be used to help define scope.
Edward de Bono created this term and has done
extensive research and writing on this topic. The
simplest definition is that it’s thinking outside the
box.
Lateral thinking is a process of separating the problem, or in
our case the components of project scope (the deliverables
and requirements), looking at them from angles other than
their obvious presentation and encouraging team members
to come up with ways to solve problems or look at scope that
are not apparently or obvious.

Lateral Thinking Example
Question: How could your pet Yorkie fall from the
window of an 18-story building and live?
Answer: The question asks how your pet could fall
from an 18-story building and live; however, the
question doesn’t state that your pet fell from the
18th floor. So, your pet Yorkie fell from the
basement-level window.

Define Scope - Outputs
Project Scope Statement
• Project scope statements describes, in detail
(remember SOW), project deliverables and
work required to create these deliverables.
• It helps to create a common understanding
among stakeholders (avoid scope creep)
• Project team can perform detailed planning
now

Project Scope Statement
The project scope statement contains the
following:
• Project objectives
• Project scope descriptions
• Project requirements
• Project exclusions
• Project deliverables
• Project acceptance criteria
• Project constraints & assumptions

What is Work Breakdown Structure (WBS)?
The PMBOK Guide describes a WBS as “a deliverable-oriented
hierarchical decomposition of the work to be executed by the project
team, to accomplish the project objectives and create the required
deliverables…the WBS defines the total scope of the project.” Like the
Scope statement, the WBS serves as a foundational agreement among
The stakeholders and project team members regarding project scope.
Work that doesn’t fit into the WBS does not fit within the project.
• Projects are normally too big to manage and WBS breaks the project
works into smaller more manageable components arranged according
to deliverables.
• This is a top down effort, break works down from top to bottom.

Create WBS
• Each level of WBS is a smaller piece of the level
above.
• The top most level of each WBS is the total project
itself.
• Work is broken down to the lowest level possible till
further division is logically not possible or the work
can be confidently estimated and scheduled.
• WBS represents total work specified in the current
approved scope statement and shall be revised if a
major scope change occurs.

Create WBS Cont’
• Work package: lowest level WBS component which can
be scheduled, cost estimated, monitored and controlled.
• WBS Structure can be organized by
- Phases
- Major deliverables
- Subprojects e.g. contracted work.
• Beware of excessive decomposition. It can lead to non-
productive management effort, inefficient use of
resources (performing work)

Control Accounts
• Unique identifiers are normally taken from the
organization’s code of accounts to track cost by category.
• Each item in WBS need to be estimated, resourced,
budgeted and controlled. If management need to measures
Performance (budget & time), WBS shall be linked to
accounting system.
• Normally control account is placed in WBS for this purpose.
• Control account is placed above work package level in WBS
• Each control account may have more than one work
package but one work package shall only be linked to one
control account.

100% Rule
• Each WBS levels represents a breakdown of WBS
level above.
• Lowest level in the WBS is called work package
• If the lowest levels are rolled up to the higher levels,
the total must represents the total work of the
project. This is called 100% rule.
• This ensures that no work is left out or no extra work
is added.

Develop WBS
100% rule: WBS includes 100% of the work defined by project scope and capture ALL deliverables (external,
internal, interim) in term of work to be completed including project management.

Develop WBS: Tool & Technique
Decomposition
• This technique involves breaking down the
deliverables into smaller, more manageable
components of work.
• The idea here is to break down the deliverables to a
point where you can easily plan, execute, monitor
and control, and close out the project deliverables.
• Each level of WBS is a more detailed definition of the
level above it.

WBS Dictionary
In order to more clearly define the work necessary for project completion the WBS Dictionary is
used. The WBS Dictionary includes but not limited to the following: level, WBS element, element
name, description of work, deliverable.

WBS Dictionary
WBS dictionary should include the following elements for each
component of the WBS:
• Code of accounts identifier
• Description of the work of the component
• Organization responsible for completing the component
• List of schedule milestones
• Required resources
• Cost estimates
• Quality requirements
• Criteria for acceptance
• Technical references
• Contract information

Scope Baseline
The Scope Baseline is a component of the
project management plan and include the
following:
• Project scope statement
• Work Breakdown Structure (WBS)
• WBS Dictionary

Verify Scope
• It is the process of obtaining formal
acceptance of the project scope by the
stakeholders.
• It requires reviewing deliverables and work
results to ensure that all were completed
correctly and satisfactorily
• If the project is terminated early, the scope
verification process should establish and
document the level and extent of completion

Verify Scope Cont’d.
• Scope verification is concerned with
acceptance of deliverables but Quality control
is concerned with meeting the quality
requirements specified.
• Quality control is normally performed prior to
scope verification but both may be performed
in parallel.

Verify Scope : Tools & Techniques
Inspection
• To complete scope verification, the work must be inspected.
• This may require measuring, examining, and testing the
product to prove it meets customer requirements.
• Inspection usually involves the project manager and customer
inspecting the project work for verification, which in turn
results in acceptance.
• Depending on the industry, inspection may also be known as:
Reviews, Product Reviews, Audits & Walkthroughs.

Verify Scope : Outputs
• Accepted Deliverables: This is a formal process that requires
signed documentation of the acceptance by the sponsor or
customer.
• Change Requests : those completed deliverables that have
not been accepted are documented , along with the reasons
for non-acceptance . Those deliverables may require a change
request for defect repair .
• Project Document Updates : Project documents that may be
updated include any documents that define the product or
report status on product completion

Control Scope
• Monitor the status of project and product
scope and manages any changes to scope
baseline.
• Is part of integrative change control.
• Uncontrolled scope changes result in scope
creep.

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

Control Scope – Tools &
Techniques
1. Variance Analysis :
• Project performance measurements are used to assess
the magnitude of variation from the original scope
baseline .
• Important aspects of the project scope control include
determining the cause and the degree of variance
relative to the scope baseline and deciding whether
corrective or preventive action is required

Control Scope - Outputs
1.Work Performance Measurements: Measurements can include
planned vs. actual technical performance or other scope
performance measurements. This information is documented and
communicated to the stakeholders.
2. Change Requests : change requests to the scope baseline or other
components of the project management plan. Change requests can
include preventive or corrective actions or defect repairs .
3. Project Management Plan Updates :
• Scope Baseline Updates
• Other Baseline Updates
4. Project Document Updates : requirements documentation update,
requirements traceability matrix updates , etc

Scope Change
Changes to scope will likely require that you repeat
some of the project planning processes and make
any needed adjustments, including updating the
project documents. Scope changes require an update
to the project scope statement. This may require an
update to the WBS and WBS dictionary as well.
Scope baseline updates are part of the project
management plan updates.

Scope Change Cont’d
Scope changes include any changes to the project
scope as defined by the agreed upon WBS. This in
turn might require changes or updates to project
objectives, costs, quality measures or controls,
performance measurements baselines, or time in the
form of schedule revisions. Scope changes almost
always affect project costs and/or require schedule
revisions

You are the project manager of a project.
You have just completed the Collect
Requirements and Define Scope. What
should you do next?
A. Control Scope
B. Create WBS
C. Value analysis
D. Verify Scope
QUESTION NO: 1

QUESTION NO: 2
A summary WBS is usually developed in the:
A. close-out phase
B. Conceptual phase
C. implementation phase
D. planning phase

QUESTION NO: 3
The work that must be done in order to deliver
a product with the specified features and
functions is:
A. Project verification
B. Project scope
C. Project control
D. Product scope

QUESTION NO: 4
The project manager is assigned in the?
A. Management Plan
B. SOW
C. Charter (contract)
D. Planning Stage

QUESTION NO: 5
You are a project manager for Dutch Harbor Consulting. Your
latest project involves the upgrade of an organization's operating
system on 236 servers. You performed this project under contract.
You are in the closing process and know that product verification
is for what purpose?
A. To verify that all the work was completed correctly and satisfactorily
B. To evaluate project goals and ensure that the product of the project
meets the requirements
C. To verify the goals of the project and ensure that the product of the
project is complete
D. To evaluate all the work of the project and compare the results to
project scope

TIME MANAGEMENT
The PMBOK states that Project Time
Management is the Knowledge Area that
“includes the processes required to
accomplish timely completion of the project.

TIME MANAGEMENT
Project Time Management Processes:
• Activity Definition
• Activity Sequencing
• Activity Resource Estimating
• Activity Duration Estimating
• Schedule Development
• Schedule Control

Process Groups & Time ManagementProcess Groups & Time Management
ActivitiesActivities
Initiating PlanningPlanning Executing ControllingControlling Closing
Activity DefinitionActivity Definition
Activity SequencingActivity Sequencing
Resource EstimatingResource Estimating
Duration EstimatingDuration Estimating
ScheduleSchedule
DevelopmentDevelopment
Schedule ControlSchedule Control

Project Time Management Processes
• Activity definition: Identifying the specific activities that the project
team members and stakeholders must perform to produce the
project deliverables.
• Activity sequencing: Identifying and documenting the relationships
between project activities.
• Activity resource estimating: Estimating how many resources a
project team should use to perform project activities.
• Activity duration estimating: Estimating the number of work periods
that are needed to complete individual activities.
• Schedule development: Analyzing activity sequences, activity
resource estimates, and activity duration estimates to create the
project schedule.
• Schedule control: Controlling and managing changes to the project
schedule.
211

Define Activity
• Involves identifying and documenting the work that
is planned to be performed
• This process identifies the deliverables at the lowest
level of the work breakdown structure (WBS), called
the work package
• The work package is then broken down into smaller
components called schedule activities
*These provide a basis for estimating, scheduling, executing, and
monitoring and controlling the project work

1.Define Activity1.Define Activity
Inputs
01. Scope
Baseline
02. OPA
03. EEF
04. Constraints
05. Assumptions
Outputs
01. Activity list
02. Activity
Attributes
03. Milestones list
Tools & Techniques
01. Decompositions
02. Templates
03. Rolling Wave
Planning
04. Expert Judgment
Identifying the specific activities that must be performed to produce the various
project deliverables.

– The Project Management Plan contains the
schedule management plan, which provides
guidance on the development and planning of
schedule activities.
– Decomposition: The process of subdividing the
project work packages into smaller, more
manageable components called schedule
activities.

Define Activity ( Tools & Techniques)
Templates
• A standard activity list or a portion of an activity list
from a previous project can often be used as a
template.
Rolling Wave Planning
• A form of progressive elaboration planning where
the work to be accomplished at the near term is
planned in detail at a low level of the WBS, while
the work far in the future is planned at relatively
high levels of the WBS.

Rolling Wave Plan
• Detailed decomposition of work may not be
possible for works that will be completed in
the future since project team is not fully
aware of details of work. Team waits for the
more details and only work in the near future
is decomposed. This is called Rolling Wave
Planning
• Work in the near term is elaborated in more
detail than work to performed in the future.

Expert judgment, in the form of project team
members with prior experience developing project
scope statement
Milestone list (Output) are typically major
accomplishments of the project and mark the
completion of major deliverables or some other
key event in the project. For example, approval and
sign-off on project deliverables might be
considered milestones.

Define Activity (Outputs)
• An activity list is a tabulation of activities to be included on
a project schedule. The list should include:
– The activity name
– An activity identifier or number
– A brief description of the activity
• Activity attributes provide more information about each
activity, such as predecessors, successors, logical
relationships, leads and lags, resource requirements,
constraints, imposed dates, and assumptions related to the
activity.

2. Sequence Activity2. Sequence Activity
Inputs
01. Activity list
02. Activity
Attributes
03. Milestone List
04. Project Scope
Statement
05. Organizational
Process
Assets (OPA)
Outputs
Project Schedule
Network diagrams
Project document
updates
Tools & Techniques
01. Precedence
diagramming
method (PDM)
02. Arrow diagramming
method (ADM)
03. Dependency
Determination
04. Applying leads and
lags
05.Schedule network
templates
- Involves reviewing activities and determining dependencies.

Sequence Activities
• Activity list prepared are now logically sequenced.
• A dependency or relationship between activities established.
• Dependencies shall be determined in order to use critical
path analysis.
• Can be performed by using manual or automated techniques
or project management software

Dependency Determination
Three types of dependencies:
• Mandatory dependencies
• Discretionary dependencies
• External dependencies

Dependency Determination
• Mandatory dependencies: Also referred to as hard logic Required
as per contract or inherent in the nature of the work. Usually involve
physical limitations (e.g., you cannot build the ceiling until walls are
constructed) Are determined by the project management team during
the activity sequencing process.
• Discretionary dependencies: Also referred to as preferred logic,
preferential logic, or soft logic Are determined by the project
management team during the activity sequencing process Should be
used with care and well documented, since they may limit later
scheduling options.

External Dependency
• External dependencies: Are determined by the
project management team during the activity
sequencing process. Involve a relationship
between project and non-project activities
such as activities outside the project team’s
control (e.g., dependence on external sources
for deliveries, environmental factors governed
by statutes, etc

Network Diagrams
• Network diagrams are the preferred
technique for showing activity sequencing.
• A network diagram is a schematic display of
the logical relationships among, or sequencing
of, project activities.
• Two main formats are the Arrow and
Precedence diagramming methods.
224

Precedence Diagramming MethodPrecedence Diagramming Method
(PDM)(PDM)
• Activities are represented by boxes
• Arrows show relationships between activities
• More popular than ADM method as used by PM software
• Better at showing different types of dependencies
• In PDM, finish-to-start is the most common relationship

Precedence Diagramming
Method(PDM)
Includes four types of dependencies or logical relationships:
– Finish-to-start (FS)
– Finish-to-finish (FF)
– Start-to-start (SS)
– Start-to-finish (SF)
The PDM is also called Activity–On-Node (AON) and it does not
use dummy activities nor does it allow for loops or
conditional branches.

Arrow Diagramming Method (ADM)Arrow Diagramming Method (ADM)
• Uses arrows to represent activities
• Connects activities with nodes
• Uses only finish-to-start dependencies
• May require dummy activities to define relationships

PERT( Program Evaluation and Review
Technique)
• Program Evaluation and Review Technique (PERT) has the following
characteristics.
– It uses three estimates per activity - optimistic, pessimistic and most
likely
– It can be drawn only using AOA diagrams
– It can have dummy events
• PERT utilizes more information than CPM as it considers the "Pessimistic"
and "Optimistic" values in addition to the "Most Likely" value in its
calculations. The following are formula used by PERT -
Mean = (P + 4M + O)/6
Standard Deviation = (P-O)/6
Variance = ((P-O)/6)2
• GERT is another type of network diagram. It can support looping.

Applying Leads and Lags
• A Lead may be added to start an activity before the
predecessor activity is finished. Ex: Furniture may be
installed 2 weeks prior to completion of painting (Finish
to start relationship with 2 weeks lead)
• Lag introduces waiting period between activities. Lag
introduces a delay in the successor activity.

Sequence Activities : Outputs
1. Project Schedule Network Diagrams :
• It can be produced manually or by using a project
management software
• Project Schedule Network Diagrams are not final
schedule For the exam, know that, in its pure form, the
network diagram shows just dependencies.
2. Project Document Updates

Estimate Activity Resources
• All projects, from the smallest to the largest, require
resources. Before estimating activity durations, you must
have a good idea of the quantity and type of resources
that will be assigned to each activity
• The term resources in this case does not mean just
people; it means all the physical resources required to
complete the project.
• People
• Equipment
• Materials

3. Estimate Activity Resources3. Estimate Activity Resources
Inputs
01. Activity list
02. Activity Attribute
03. Resource calendars
04. EEF
05. O.P.A
Outputs
01. Activity Resource
Requirements
02. Resource Breakdown
Structure (R.B.S)
03. Project Document Updates
Tools & Techniques
01. Expert judgment
02. Alternative Analysis
03. Published Estimating Data
04. Bottom Up Estimating
05. Project Management Software
-this process is concerned with determining the types of resources needed and in
what quantities for each schedule activity.

Resource Calendars( Input)- is a calendar that is used
To reflect specific working hours, vacations, leaves of
absence, and planned personal time for individual
resources. Resource calendars can be used for human
resources as well as equipment.
Alternative Analysis (Tool & Technique)-is used
When thinking about the methods you might use to
accomplish the activities your resources have been
assigned. Many times, you can accomplish an activity in
more than one way, and alternatives analysis helps
decide among the possibilities.

Estimate Activity ResourcesEstimate Activity Resources(Tools &
Techniques)
Published Estimating data- Estimating data may
include organizational guidelines, industry rates or
estimates, production rates, and so on.
Bottom Up Estimating-Bottom-up estimating is
A process of estimating individual schedule
activities or costs and then adding these
together to come up with a total estimate for the
work package.

Activity Resource EstimatingActivity Resource Estimating
(Outputs)(Outputs)
Activity Resource Requirements – Activity resource
requirements provide an estimate of the type and quantity
of resources needed to complete activities. The Schedule
Development process considers when the required
Resources will be used.
Resource Breakdown Structure (RBS) - The Resource
Breakdown Structure (RBS) displays the hierarchical
structure of the categories and types of resources needed.

Estimate Activity Durations
• Here the network diagram is updated by estimating duration
for each activities.
• The Activity Duration Estimating process attempts to estimate
the work effort and number of work periods needed to
complete each schedule activity.
• A person or team most familiar with work of the project shall
estimate duration to make it more accurate.
• All data and assumptions used for estimation shall be
documented for future analysis (remember this, we need this
information during the risk management process)

4.4. Estimate Activity Durations
Inputs
01. Activity list
02. Activity Attribute
Requirements
04. Resource
calendars
05. Project Scope
Statement
06. O.P.A
07. E.E.F
Outputs
01. Activity duration
estimates
02. Project Document
updates
Tools & Techniques
01. Expert judgment
02. Analogous
estimating
03. Parametric
Estimating
04. Three Point
Estimates
04. Reserve Analysis
(contingency)
- estimating the number of work periods that will be needed to complete
individual activities.

Analogous Estimating
Analogous Estimating, is a form of expert judgment
and is also known as Top-down Estimating.
Analogous estimates are typically less time
consuming and less costly than other estimating
techniques, but it’s also less accurate.

Estimate Activity Durations : Tools &
Techniques
Parametric Estimating
• Parametric estimate uses a statistical relationship between
historical data and other variables.
• More accurate than analogous estimate
• Example : A resource will take 20hrs per module and hence
1000 modules will take 50hrs (50X20 = 1000hrs)
• Estimation is done by multiplying quantity of work by labor
hours per unit of work.

Three-Point Estimates
Three-point estimates, as you can probably
guess, use three estimates that when
averaged come up with a final estimate. The
three estimates you’ll use in this technique are the
most likely estimate, an optimistic estimate, and a
pessimistic estimate.
Three-point estimates are needed for PERT estimates and Monte Carlo simulations

Three-Point Estimates
PERT analysis calculates An Expected t(E)
activity duration using a weighted average of
three estimates : t(E) = [to+4tm+tp]/6
• PERT analysis consider estimation
uncertainties and risks and hence accuracy of
estimate is improved.

Reserve Analysis
Reserve time, also called buffers, time reserves, or
contingency reserve in the PMBOK Guide, means a
portion of time that is added to the activity to
account for schedule risk or uncertainty. You might
choose to add a percentage of time or a set number
of work periods to the activity or the overall
schedule.
For example, you know it will take 100 hours to run new cable, you also know that sometimes you hit problem
areas when running the cable. To make sure you don’t impact the project schedule, you build in a reserve time of 10
percent of your original estimate to account for the problems you might encounter.

Activity Duration Estimates
You use the inputs and tools and techniques to
establish these estimates. Activity duration
estimates are an estimate of the required work
periods needed to complete the activity. This is a
quantitative measure usually expressed in hours,
weeks, days, or
months.

Develop Schedule
• The Develop Schedule process is the heart of
the Planning process group.
• The creation of the project schedule is
iterative. It’s rare for a schedule to get
created, approved, and implemented without
some iterative examination, arrangement, and
management input—though on smaller
projects it may be possible.

Develop Schedule
Schedule Management Plan
• A Guide to the PMBOK notes that the schedule
management plan (a subsidiary of the project
management plan) is produced as part of the
Develop Project Management Plan process and
contains the criteria for formatting, developing,
and controlling the project schedule.

5. Develop Schedule5. Develop Schedule
Inputs
1. Activity List
2. Activity Attributes
3. Project Schedule
Network Diagrams
Requirements
5. Resource Calendars
6. Activity Duration
Estimates
7. Project Scope Statement
8. O.P.A
9. E.E.F
Outputs
1. Project Schedule
2. Schedule Baseline
3. Schedule data
4. Project Document
updates
Tools & Techniques
1. Schedule Network
analysis
2. Critical Path Method
3. Critical Chain Method
4. Resource leveling
5. What if Scenarios
6. Applying Leads and
Lags
7. Schedule Compression
8. Scheduling Tool
- analyzing activity sequences, activity durations, and resource requirements to
create the project schedule.

Develop Schedule (tools &
Techniques)
Schedule Network Analysis
• Schedule network analysis is a technique that
generates the project schedule. It employs a
schedule model and various analytical
techniques, such as critical path method,
critical chain method, what-if analysis, and
resource leveling to develop the schedule.

Develop Schedule (Tools &
Techniques)
Critical path method (CPM) is a schedule network analysis
technique. It determines the amount of float, or schedule
flexibility, for each of the network paths by calculating the
earliest start date, earliest finish date, latest start date, and
latest finish date for each activity.
The critical path (CP) is generally the longest full path on the
project. Any project activity with a float time that equals zero
is considered a critical path task.

Determining the Critical Path for
Project X

Floats
• Floats are not the same as lead or lag.
• Lead or lags are introduced (manually) to correct the
sequence while float is calculated in CPM method
• Float for all activities on critical path will be zero value.
• A forward pass through the network diagram determines the
early start and finish dates.
• A backward pass determines the late start and finish dates

Types of Floats (or Slacks)
Float time is also called slack time and there are three
types of float:
• Total Float – The amount of time an activity can be delayed
without delaying the project end date or milestone.
• Free Float – The amount of time an activity can be delayed
without delaying the early start date of successor activity.
• Project Float – The amount of time a project can be delayed
without delaying an externally imposed project completion
date (other than calculated by CPM) by customer.

Calculating Early and Late Start and
Finish Dates

Critical Chain Method
Critical chain method is a schedule network analysis
technique that will modify the project schedule by
accounting for limited or restricted resources. After the
project schedule network diagram is constructed using
duration estimates, dependencies, and constraints,
resource availability is entered into the scheduling tool.
The modified schedule is calculated and you’ll find that it
often changes the critical path. The new critical path
showing the resource restrictions is called the critical
chain.

Schedule Compression
Schedule compression is the method of shortening the
project schedule without changing the scope. Need for
compression occurs if a customer need a date
prior to the end date shown in original schedule or to
bring back a project schedule back to baseline.
• Crashing – This approach adds more resources to activities on
the critical path to complete the project earlier. Crashing
almost always result in increased cost. Many options are
considered and the option with maximum compression with
minimum cost impact is selected.

Schedule Compression
• Fast Tracking –Critical activities that would
normally be done in sequence are allowed to
be done in parallel or with some overlap. Fast
track may result in rework and increases risk.
Communication requirements increases
during fast tracking.

Develop Schedule: Outputs
The schedule can be displayed in a variety of
ways:
• Project Schedule Network Diagram
• Gantt Charts/ Bar Charts
• Milestone Charts
The purpose of the Schedule Development process is to
determine the start and finish date for the each of the project
activity. The project schedule should be approved and
signed off by stakeholders and functional managers.
 This assures that they have read the schedule, understand the dates and resource
commitments, and will likely cooperate

Control Schedule
Schedule Control is concerned with:
1. Determining the current status of the project
schedule
2. Influencing the factors that create schedule changes.
3. Determining that the project schedule has changed,
and
4. Managing the actual changes as they occur.

6. Control Schedule6. Control Schedule
Inputs
1.ProjectManagement
Plan
2. Project Schedule
3. Work Performance
Information
4. O. P.A
Outputs
1. Work performance
Measurements
2. Project Management
Plan Updates
3. Organizational
Process Assets
Updates
4. Change Requests
5. Project Document
Updates
Tools & Techniques
1. Performance reviews
2. Variance Analysis
3. Project management
software
4. Resource Leveling
5. What if Scenarios
6. Adjusting Leads &
Lags
7. Schedule Compression
8. Scheduling Tool
- controlling changes to the project schedule.

Control Schedule ( Tools & Techniques)
• Performance Reviews- Performance reviews
measure , compare, and analyze schedule performance
such as actual start and finish dates, percent complete, and
the remaining duration for the work in progress .
• Variance Analysis- Variance analysis is a key factor
in monitoring and controlling project time because this
technique helps determine variances in schedule start and
end dates.

Control Schedule : Outputs
The Schedule Control process has the following outputs:
1. Work Performance Measurements- Calculated
Schedule Variance (SV) and Schedule Performance Index
(SPI) are documented and communicated with
Stakeholders.
2. Organizational process asset updates (lessons
learned)
3. Change Requests – Approved schedule baselines shall
be only updated through integrative change control. SV &
SPI may result in change requests for baseline update for
baseline update.
4. Project Management Plan Update
5. Project Document updates – Schedule data

Schedule Control
• Perform reality checks on schedules.
• Allow for contingencies.
• Don’t plan for everyone to work at 100 percent
capacity all the time.
• Hold progress meetings with stakeholders and be
clear and honest in communicating schedule
issues.

Sample PMPSample PMP
Certification QuestionsCertification Questions

Solution: SD = (P-O)/6 = (7-3)/6 = 2/3
Source: PMP Exam Prep by Rita Mulcahy
Q1. The estimate for a task is O = 3
days, P = 7 days, M = 4 days. What
is the standard deviation of the
task?
A. 5/6 of a day
B. 2/3 of a day
C. 1 ½ days
D. 5 2/3 days

Q2. A project has three critical paths.
Which of the following BEST
describes how this affects the
project?
A. It makes it easier to manage
B. It increases the project risk
C. It requires more people
D. It makes it more expensive

Q3. You are taking over a project and determine
the following: Task B has an early finish of
day 3, a late finish of day 6, and an early start
of day 2. Task L is being done by a hard-to-
get resource. The CPI is 1.1 and the SPI is 0.8.
Based on the information above, what would
you be most concerned about?
A. Float
B. Resources
C. Cost
D. Schedule

Project Cost Management

According to PMBOK, Project Cost Management
includes the processes involved in estimating,
budgeting, and controlling so that the project can be
completed within the approved budget costs. Project
Cost Management include the following processes:
• Estimate cost- The process of developing an
approximation of the monetary resources needed to
complete project activities.

• Determine Budget- The process of
aggregating the estimated cost of individual
activities or work packages to establish an
authorized cost baseline.
• Control Cost- The process of monitoring the
status of the project to update the project
budget and managing changes to the cost
baseline

Quick Facts Cost Management
• Costing is different from Pricing. Costing includes the
monetary resource required to complete the project
and pricing normally include a profit margin.
• Costing is based on WBS and controlled by Control
Accounts
• Costing shall be ideally done by the team who perform
the work
• Schedule get affected by funding and project manager
shall manage the link with organization.
• Final schedule can be done only after costing and final
costing can only be done after risk since risk
management involves budget for handling risk.

Life cycle costing
Project cost management should also consider the effect of project
decisions on the subsequent recurring cost of using, maintaining, and
supporting the product, service or result of the project.
• Value analysis (value engineering)
- Looking at less costly way to do the same work within the same scope.
• Law of Diminishing Returns
- E.g. adding twice resource to task may not get the task done in half
cost/time.
• Cost will also affect the schedule
• Cost risk vs. Type of contract
• Time value of money (depreciation)

Types of Cost
• Variable Costs
Change with the amount of production/work e.g. material,
supplies, wages.
• Fixed Costs
Do not change as production change e.g. set-up, rental.
• Direct Costs
Directly attributable to the work of project e.g. team travel,
recognition, team wages.
• Indirect Costs
overhead or cost incurred for benefit of more than one project.
E.g. taxes, fringe benefit, janitorial services

Estimate CostDeveloping an approximation or estimate of the costs of the resources
needed to complete a project.

Estimate Cost: Tools & Techniques
Bottom-up Estimating
• Cost estimation starts from bottom level.
• Each WBS work package is estimated and
rolled up to higher level.
• While this method is more expensive, it is also
one of the most accurate.

Estimate Costs : Tools & Techniques
Analogous Estimating
• Analogous estimating relies on historical information
to predict the cost of the current project. It is also
known as top-down estimating.
• The process of analogous estimating takes the actual
cost of a historical project as a basis for the current
project.
• Analogous estimating uses historical data and expert
judgment.
• It is faster and less costlier than other methods, but
less accurate.

Parametric Estimating
• Parametric estimate uses statistical relationship
between historical data and other variables
• Per sq.ft cost of previous project of similar nature
was XYZ and hence the new project shall cost XYZ
multiplied by new total area.
• Parametric estimate can be applied to total project
or part of project.

Three Point Estimates
• PERT analysis calculates An Expected c(E)
activity cost using a weighted average of
three estimates :
• c(E) = [cO+4cM+cP]/6
• PERT analysis consider estimation
uncertainties and risks and hence accuracy of
estimate is improved.

Reserve Analysis
• Reserves are added to costing to manage risks,
cost overruns and errors associated with costing.
• The contingency reserve may be a percentage of
the estimated cost, a fixed number, or may be
developed by using quantitative analysis
methods.
• More details about reserve analysis in Risk
Management
• Padding is not a good project management
practice.

Cost of Quality (COQ)
• Assumptions about cost of quality may be used to
prepare the activity cost estimates..
Project Management Estimating Software
• Several different computer programs are available
that can streamline project work estimates and
increase their accuracy.
• These tools can include project management
software, spreadsheet programs, and simulations.

Vendor Bid Analysis
• Sometimes it’s just more cost effective to hire
someone else to do the work. Other times, the
project manager has no choice because the needed
skill set doesn’t exist within the organization.
• In either condition, the vendors’ bids need to be
analyzed to determine which vendor should be
selected based on their ability to satisfy the project
scope, the expected quality, and the cost of their
services.

Estimate Costs :Outputs
• The output of cost estimating is the actual cost
estimates of the resources required to complete the
project work.
• Each resource in the project must be accounted for and
assigned to a cost category. Categories include the
following:
 Labor costs
 Material costs
 Travel costs
 Supplies
 Hardware costs
 Software costs
 Special categories (inflation, cost reserve, and so on)

Quality/ Accuracy of Cost Estimation

Project Cost Estimating - Estimating Accuracy
• Accuracy of estimate is normally refined during the course of
project to reflect additional details as it becomes available.
• Rough order of magnitude- This estimate is “rough” and is
used during the initiating processes and in top-down
estimates. The range of variance for the estimate can be from
+/- 50%.
• Later the estimate can be refined to a range of +/- 10%
• Refinements and range of accuracy depends on policies of
individual organizations.

Estimate Costs :Outputs
• Basis of estimates
Once the estimates have been completed,
supporting documentation should provide a
clear and complete of how the estimates
were derived.

Determine Budget
• Cost of completing individual activities are now
completed.
• During budgeting, the cost of individual activities are
aggregated to generate a complete time phased budget.
• Cost of individual activities are rolled up to work package
level and as the work packages are now part of schedule
baseline, this will result in a time phased cost.
• Schedule, estimate and risk analysis shall be complete
prior to budgeting
• This cost is now linked to organization accounting system
through control accounts placed above work package.

Determine Budget
• Allocating the overall cost estimate to individual work items
to establish a baseline for measuring performance.

Determine Budget: Tool & Technique
• Reserves are dollars included in a cost estimate to
mitigate cost risk by allowing for future situations
that are difficult to predict. Budget reserves are kept
for both contingency reserve and management
reserve.
• Contingency reserves allow for future situations that
may be partially planned for (sometimes called
known unknowns ) and are included in the project
cost baseline. Project manager will normally have the
authority to utilize contingency reserves.

Determine Budget: Tool & Technique• Management reserve - Budget set aside to cover unforeseen
risks or changes (unknown unknowns) to the project.
• Management reserve will not be part of project budget and
hence project manager need approval from management for
using this reserve.
• The cost baseline will contain the contingency reserve and the
cost budget will include the management reserve.
• Management reserves are not part of earned value
calculations (since it is not part of cost baseline &
measurements are based on baselines)

Determine Budget: Tool & Technique
Funding Limit Reconciliation
• Funding limit reconciliation involves reconciling
the amount of funds to be spent with the amount
of funds budgeted for the project. The
organization or the customer sets these limits.
Reconciling the project expenses will require
adjusting the schedule so that the expenses can
be smoothed. You do this by placing imposed
date constraints on work packages or other WBS
components in the project schedule.

Determine Budget: Outputs
• Cost Performance Baseline
The cost performance baseline is a time-phased
budget that is used for project cost management,
monitoring, and reporting. It is commonly shown as an
S-curve graph. The cost baseline is a component of the
project performance baseline.
• Project Funding Requirements
Project funding requirements refers to the entire
estimated cost of the budget, including any
contingency or management reserves.

Cost Aggregation
Activity costs are rolled up
to work package costs.
Work package costs are
rolled up to control account
costs and finally into project
costs.

How to Control Cost
• Follow the cost management plan
• Look at any organizational process assets that are
available.
• Manage change
- recording all appropriate change
- preventing incorrect change
- ensuring requested changes are agreed upon
- Managing the actual changes when and as they occur
• Measure and measure and measure (monitoring)

Control Cost
Controlling changes to the project budget.

Progress Report
• Progress/ performance report (output from
communications management)
• Where work cannot be measured, estimate could be
done by a guess.
• Percent complete
- 50/50 Rule
- 20/80 Rule
- 0/100 Rule
Activity is considered X percent complete when it
begins and get credit for the last Y percent only when it is
Completed.

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 is meeting its
goals.
– You must enter actual information periodically to use
EVM.
– More and more organizations around the world are using
EVM to help control project costs.

Control Cost: Tools & Technique
Earned Value Management
• Earned value management will indicate status
and health of project at any time and can predict
possible outcomes.
• EVM can be used for analysis of cost and
schedule baselines
• Earned Value Management is carried out using
the three main inputs:
 Planned Value (PV)
 Earned Value (EV)
 Actual Cost (AC)

Control Cost: Tools & Technique
• Forecasting
• Using the earned value analysis, team can now forecast the
project performance.
• Estimate at completion (EAC) may now differ from Budget at
Completion (BAC)

Terms & Formulas Definition
Budget at Completion (BAC) How much did we budget for the total project
effort.
Estimate at Completion(EAC)
= BAC/ CPI
What do we currently expect the project to cost (a
forecast)
Estimate to Complete (ETC)
= EAC- AC
From this point on, how much more do we expect
it to cost to finish the project
Variance at Completion
= BAC-EAC
As of today, how much over or under budget do
we expect to be at the end of the project.
Earned Value Technique

Cost Control: Tools and
Techniques• Performance Reviews
Performance reviews compare cost
performance over time, schedule activities or
work packages overrunning and under
running the budget and estimated funds
needed to complete work in progress.

Cost Control: Tools and
Techniques• Variance Analysis
Cost performance measurements (CV, CPI) are used
to assess the magnitude of variation to the original
cost baseline. Important aspects of project cost
control include determining the cause and degree of
variance relative to the cost performance baseline
and deciding whether corrective or preventive action
is required.

QUESTION
Activity % Complete Cost
Side1 100% 1200
Side2 100% 1000
Side3 75% 750
Side4 50% 500
Side5 0% 0
Side6 0% 0
You are the Project Manager for a small project.
You need to build a structure with 6 sides in 6 days.
Each side should cost $1000.00. Today is the end of
day 3.
The following is an
extract from the Site
Manager’s Report
Solve the following

Parameter Calculation Result
PV
EV
AC
BAC
CV
CPI
SV
SPI
EAC
ETC
VAC
Exercise Solution

Forecasting EAC
• There are many ways to calculate EAC, depending on the
assumptions made.
• Simple EAC calculation( EAC= BAC/CPI) assume that the cumulative
CPI adequately reflects past performance that will continue to the
end of the project.
• AC+(BAC-EV)
- used when current variances are thought to be atypical of the
future.
• AC+(BAC-EV)/(Cumulative CPI + Cumulative SPI)
- it assumes poor cost performance and need to hit a firm
completion date.

Cost Control: Tools and Techniques
• To-Complete Performance Index(TCPI)
Helps the determine the efficiency that must
be achieved on the remaining work for a
project to meet a specified endpoint, such as
BAC or the team’s revised EAC.
• TCPI= Work Remaining (BAC- EV)
Funds Remaining (BAC- AC) or EAC - AC

Earned Value Management hints to
remember:
• EV comes first in every formula
• If its variance, it will be EV minus something
• If its index, it will be EV divide something
• If it relates to cost use Actual Cost
• If it relates to schedule use Planned Value
• Negative numbers are bad, positive ones are
good

QUESTION NO: 1A Project with a total funding of $70,000 finished with a BAC value of
$60,000. What term can best describe the difference of $10,000?
• A. Management Contingency Reserve
• B. Cost Variance
• C. Schedule Variance
• D. Management Overhead
Explanation:
The difference between the Cost Baseline and Funding requirement at
Project completion is Management Contingency Reserve. BAC
represents the revised Cost baseline for the project. So Management
Contingency Reserve is true.

QUESTION NO: 2
Your project sponsor has requested a cost estimate for the project on which
you're working. This project is similar in scope to a project you worked on last
year. She would like to get the cost estimates as soon as possible. Accuracy is
not her primary concern right now. She needs a ballpark figure by tomorrow.
You decide to use ___________________.
• A. parametric modeling techniques
• B. analogous estimating techniques
• C. bottom-up estimating techniques
• D. computerized modeling techniques
Explanation:
Analogous-or top-down-estimating techniques are a form of expert judgment.
Since this project is similar to another recent project, you can use the cost
estimates from the previous project to help you quickly determine estimates
for the current project.

QUESTION NO: 123
You know that PV = 470, AC = 430, EV = 480, EAC =
500, and BAC = 525. What is VAC?
A. 25
B. 30
C. 20
D. 70
Explanation:
VAC is calculated this way: VAC = BAC - EAC.
Therefore, 525 - 500 = 25.

Project Quality Management

What is Quality ?
• Car Quality
– Ride, Reliability, Fit & Furnish, Audio System ?
• Food Quality
– Taste, Smell, Colour, Texture, Freshness ?
• Shoe Quality
– Fit, Stitching, Comfort, Wear?
• Baby Furniture
Safety, Reputable, Durability, Easy to Assemble ?

What Is Quality?
Quality can be defined as “the
degree to which project fulfils
requirements.”
314

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

Quality Theorists
• Joseph Juran- developed the 80/20 principle,
advocated top management involvement,
defined quality as “fitness for use.’’
• W. Edwards Deming- developed 14 Steps to
Total Quality Management, advocated the
Plan-Do-Check- Act cycle as the basis for
quality improvement.

Quality Theorists
• Phillip Crosby- popularized the concept of
cost of poor quality, advocated prevention
over inspection and “zero defects.” He
believed that quality is “conformance to
requirements.’’
• Kaizen approach- Quality technique from
Japan. (Continuous improvement)Improve the
quality of people first. Then quality of
products or service.

Precision vs. Accuracy
• Precision is the degree to which repeated
measurements under unchanged conditions show
the same results.
• Accuracy is the degree of closeness of
measurements of a quantity to its actual (true) value.
• The Project Management Team must determine how
much accuracy or precision or both are required.

Quality vs. Grade
The degree to which a set of inherent
characteristics fulfill requirements
• Quality≠ Grade
–Grade = a category assigned to product /
service or a category or rank given to
entities having the same functional use, but
different technical characteristics.

Quality vs. Grade
Quality is the degree to which a set of inherent
characteristics fulfills requirement.
- Quality level that fails to meet quality requirements are
always a PROBLEM.
• Grade is a category assigned to a product or service
having the same functional use but different technical
characteristics.
- Low grade may not be a problem.
• A camera with lots of functions is high grade and a camera which
takes bad pictures is low quality

What is Project Quality Management ?
“Project Quality Management processes include
all activities of the performing organization
that determine quality policies, objectives,
and responsibilities, so that the project will
satisfy the needs for which it was
undertaken.”
PMBOK4 ®

Purpose of Project Quality
Management
• To ensure that the Project will satisfy the
needs for which it was undertaken.
– Scope
– Cost
– Performance
– Meet or exceed Customer Satisfaction
• The customer ultimately decides if Quality is
Acceptable.

• Addresses (i) the management of the project
and (ii) the product of the project.
–Meeting customer requirements by
overworking the project team may result in
increased employee attrition, errors or
rework.
–Meeting project schedule objectives by
rushing planned quality inspections may
result in undetected errors.

PMI’s Quality Management
Philosophy
Customer Satisfaction
“Understanding, evaluating, defining and
managing expectations so that the customer’s
requirements are met.”

Philosophy
Prevention over Inspection
“The cost of preventing mistakes is much less
than the cost of correcting them, as is
revealed by inspection.”

Philosophy
Continuous Improvement
“Plan-Do-Check-Act.”
Plan to bring
about
improvement
Do changes on
a small scale
first
Act to get the
greatest
benefit from
changes
Check to see
if changes
are working

Philosophy
Management Responsibility
“Success requires the participation of all
members of the team, but it remains the
responsibility of management to provide the
resources needed to succeed.”

Common understanding
Quality management should complement modern project
management as they both recognize the importance of :
• Customer satisfaction- Conformance to requirements, fitness
for use.
• Prevention over inspection - Cost of preventing mistakes or
cost of correcting.
• Management responsibility – to provided resources needed
to succeed.
• Processes within phases - (plan- do- check- act cycle).
• Continuous Improvement (Kaizen)- small improvements to
reduce costs and ensure consistency, uses quality initiatives
such as 6 sigma, TQM.

Processes
• Quality Planning
• Quality Assurance
• Quality Control

Quality Management includes:
• 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.
• Quality Control - Monitoring specific project results
to ensure that they comply with the relevant quality
standards.

Quality Planning
• Quality Planning involves identifying with quality
standards
• It is a key facilitating process during the Project
planning Process
• In modern quality management quality is planned in
and not inspected in
• Prior to the development of ISO 9000 series, quality
planning concepts were widely discussed as part of
quality assurance.

Plan Quality
Quality Planning is identifying which quality standards are relevant to the
project and determining how to satisfy them.

Processes
• Plan Quality: identifying which quality
requirements and/or standards for the
project and product;
• & documenting how project will
demonstrate compliance. i.e. Intends
to satisfy the standards

What is “Plan Quality” focused on…
• Find existing standards and requirements for
product and project mgt
• Create additional project specific standards
• Determine what work you will do to meet the
standards
• Determine how you will measure to make sure you
meet the standards
• Balance the needs of quality, scope, cost, time,
risk, resources and customer satisfaction
• Create a quality management plan as part of the
project mgt plan.

Quality Planning (Tools & Techniques)
– Benefit/Cost Analysis - weight the benefit versus
the cost of meeting quality requirements.
– Benchmarking - comparing actual or planned
practices to those of other projects.
– Flowcharting - Use to see a process or system
flow and find potential quality problems.
– Design of Experiments (DOE) – use
experimentation to statistically determine what
variable will determine quality standard
– Statistical Sampling- we need it since studying
entire population will take too long, cost too much
and be too destructive.

The Cost of Quality
• The cost of quality is the cost of conformance
plus the cost of nonconformance.
– Conformance means delivering products that meet
requirements and fitness for use.
– Cost of nonconformance means taking
responsibility for failures or not meeting quality
expectations.
.

The Cost of Quality
• Refers to the total cost of all efforts related to
quality throughout the product life cycle.
• Ultimately impacts on product returns,
warranty claims, recall campaigns etc.

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 non-conformance 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 acceptable error range
– Costs less to prevent during development than fix later in the life cycle
• 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
have to be corrected after customer receives the product.
• Measurement and test equipment costs: capital cost of equipment
used to perform prevention and appraisal activities

Activity 1
• Identify four(4) Cost of Conformance & four
(4) Cost of Non-Conformance.

Activity 1 Response
Cost of Conformance
• TRAINING
• STUDIES
• SURVEYS
• EFFORTS TO ENSURE
EVERYONE KNOWS THE
PROCESSES TO COMPLETE
THEIR WORK
Cost of Non-Conformance
• Rework
• Scrap
• Inventory costs
• Warranty costs
• Lost business

The Cost of Quality (CoQ)
.
Prevention Costs
(Build a quality product)
•Training
•Document Processes
•Equipment
•Time to do it right
Appraisal Costs
(Assess the Quality)
•Testing
•Destructive testing loss
•Inspection
Internal Failure Costs
(Failures found by the project)
•Rework
•Scrap
External Failure Costs
(Failures found by the customer)
•Testing
•Destructive testing loss
•Inspection
Cost of Conformance Cost of Non-Conformance
<
Should be
less than

D.O.E.
• It is important to design in quality and communicate
important factors that directly contribute to meeting
the customer’s requirements
e.g. Design of Experiments helps identify which variables
have the most influence on the overall outcome of a
process
DOE uses experimentation to statistically determine
which variables improve quality….allows systematic
change of all important factors in a process and see
which combination has a lower impact on project.

Quality Control Charts
• A control chart is a graphic display of data that
illustrates the results of a process over time.
• The main use of control charts is to prevent defects,
rather than to detect or reject them.
• Quality control charts allow you to determine whether
a process is in control or out of control.

Normal Distribution curve
showing 3 sigmas

Standard Deviation
• ± 1 σ = 68.3%
• ± 2 σ = 95.46%
• ± 3 σ = 99.8%

Standard Deviation
• A small standard deviation means that data
cluster closely around the middle of a
distribution and there is little variability
among the data
• A normal distribution is a bell-shaped curve
that is symmetrical about the mean or
average value of a population

Standard Deviation
• PERT FORMULA
(Triangular Distribution)
Expected Value / Duration =
(Optimistic time + 4 (most likely time) + pessimistic time) =
___________________________________________
6
OT + 4MT +PT
__________________
6

Standard Deviation for PERT
• Std Dev =
Pessimistic duration - optimistic duration
_________________________________
6

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

Proprietary Quality mgt
methodologies
Six sigma
An extension of TQM
Achieved by improving
process performance so
that all customer
requirements are met.
3 sigma=2700 defects in 1
million
6 sigma=0.002 defects occur in
1 million
Quality Function Deployment
A practice of designing
manufacturer processes to
respond to customer needs.
Allows one to find
innovative responses to
those needs, and improve
processes to maximum
effectiveness.

Quality Planning
• Outputs • Quality
Management Plan
• Quality Metrics
• Quality Checklists
• Process
Improvement Plan
• Project
Management Plan
(updates)

Quality Planning (Outputs)
Quality Metrics – defines how an item is measured by
the quality control process. Also known as Operational
Definitions.
Quality Checklists
A list of items to inspect, steps to be performed and note
if any defects are found.
• Quality metrics is input for Quality Assurance AND
Quality Control
• Quality checklist is input for Quality Control ONLY

Quality Planning (Outputs)
Quality Management Plan Contains:
Project management method
Role and responsibility in managing quality
Deliverable measurement
Standard for monitoring & control purpose
Process review
Major check points
Inspection & acceptance criteria

Perform Quality Assurance
• Perform Quality assurance is the process of
auditing the quality requirements and results from
quality control measurements to ensure that
appropriate quality standards and operations
definitions are met.
• Another goal of quality assurance is continuous
quality improvement.
• Normally done by a third party

Perform Quality Assurance
Quality assurance is evaluating the overall project performance on a regular basis to
provide a confidence that the project will satisfy the relevant quality standards.

Project Quality Management Processes
• Quality Assurance: the process of auditing
requirements and the results of quality control
measurements to ensure appropriate quality
standards and operational definitions are used.
(from PMBOK4®)
• Applies planned, systemic quality activities to
ensure that the project employs all processes
needed to meet the requirements and satisfy the
relevant quality standards.

Inputs To Quality Assurance
Quality management plan as previously described
Results of quality control measurements which are
records of quality control testing and measurement
in a format of comparison or analysis
Operational definitions as previously described in the
output of the Quality Planning

Quality Assurance (Tools &
Techniques)
Are we using the standard?
Can we improve the standard?
• Quality Audits which are a structured review of
other quality management activities that identify
lessons learned.
• Process Analysis – includes root cause analysis.

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

Processes
• Quality Control: the process of monitoring
and recording results of executing the
quality activities to assess performance and
recommend changes.
• Monitoring specific project results to
ensure that they comply with relevant
quality standards while identifying ways to
improve overall quality.

Perform Quality Control
QC involves monitoring specific project results to
determine:
• Whether they comply with relevant quality
standards.
• Identifying ways to eliminate causes of
unsatisfactory results.
• QC should be performed throughout the project.
• Project results include deliverables and PM results,
such as cost and schedule performance.
• QC is often performed by a quality control
Department.

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

Quality Control (Tools & Techniques)
Inspection
• Inspection includes activities such as measuring,
examining and testing undertaken to determine
whether results conform to requirements
• Inspection can be carried out on the level of a single
activity or a final product
• Inspections can be called reviews, product reviews,
audits, and walk-throughs

Flowcharting
• A graphical presentation of a process
showing the relationships among process
steps.
• Process flowcharts show activities, decision
points and order of processing.
• Helps anticipate problems that might occur.
• Can develop approaches to deal with
potential problems

Quality Control(Tools & Techniques)
Flowcharting

Flowcharting
• It helps to analyze how problems occur.
• A flowchart is a graphical representation
of a process.
• It shows how various elements of a
system interrelated and the order of
processing.
• It helps the project team anticipate what
and where quality problems might occur.

Quality Control Charts
• A control chart is a graphic display of
data that illustrates the results of a
process overtime. It helps prevent
defects and allows you to determine
whether a process is in a control or
out of control.

Data
• Data is shown between the UCL and LCL, while
varying about the central line or average, as long as
the variation is the result of common causes
• Whenever a special cause impacts a process:
– A plot point will penetrate the UCL or LCL
– There will be a run of points on the row above or
below the average line, implies the process is out
of control

Control Chart
It determines whether or not a process is stable or has
Predictable performance.
When a process is outside acceptable limits the
process should be adjusted.
 The upper control limits and lower control limits are
usually set at +/- 3 sigma (i.e. standard deviation).
• Specification limit – are normally drawn from
contract or customer requirement. It may be more
stringent than control limits
• Mean represent the average of control limits or
specification limits

375
Sample Quality Control Chart

Control Chart Cont.
• Out of control – A process is considered out of
control if:
- A data point falls out of control limits
- Breaks the rule of seven
• Rule of seven – Is a rule of thumb or heuristic. A
consecutive seven data points one single side of
mean is considered out of control, even though the
data points are within control limits.
• Assignable cause / Special Cause Variation – is a
data point that requires investigation (either out of
control limits or breaks rule of seven)

The Seven Run Rule
• The seven run rule states that if seven data
points in a row are all below the mean , above
the mean or increasing or decreasing, then
the process needs to be examined for non-
random problems.

QC (Tools & Techniques)
Run Chart
• It shows the history and pattern of variation.
• It is a line graph that shows data points
plotted in the order in which they occur.
• Can be used to perform trend analysis to
forecast future outcomes based on historical
patterns

Run Charts vs Control Charts
• The run chart records the output results of a process
overtime.
• The problem: it does not help differentiate the
variations due to special causes and common causes
• Special causes:
– Changes in materials
– Machine problems
– Lack of employee training
• Common causes: purely random

TREND ANALYSIS
• A statistical method for determining the equation that best
fits the data of a scatter plot
• Used to determine the relationship between two or more
pieces of corresponding data
• Data plotted on a X Y axis to provide correlation
• Can assist in forecasting or providing trend analysis
predictions
– Highly negative scatter
– Highly positive scatter
– No core relation
– Low to moderate core relation

QC Tools and Techniques
Scatter Diagram
 Shows the pattern of the relationships between two variables.

Scatter Diagrams
• The simplest way to determine if a cause and
effect relationship exists between 2 variables.

QC Tools and Techniques
- Cause and Effect Diagram
• Ishikawa or fishbone diagram
• Used to show how various factors are linked to
identify problems/ adverse effects
• Diagnostic
• Analyses data
• Determines defects
• Employs brainstorming technique

Cause and Effect Diagram
Fishbone / Ishikawa Diagram

QC: Tools & Techniques
• Histogram: it is a bar chart showing the
distribution of variables.
• Each column represents an attribute or
characteristics of a problem or situation
• The height of each column represents the
relative frequency of the characteristics.
• Histogram helps identify the cause of the
problem in a process by the shape and width of
the distribution

QC Tools & Techniques
Pareto Diagram
• A Pareto diagram is a histogram ordered by
frequency of occurrence which shows how
many which shows how many defects were
generated by type/category of identified
cause.
• The project management team should take
action to fix the problems that are causing the
greatest number of defects first

Pareto Chart/ Juran Diagram
Vilfredo Pareto (economist) credited for the 80-
20 rule concept states that 80% of wealth of
region is concentrated in 20% of population.
Pareto’s Law/ Law of the vital few states that
many events, 80% of the effects, come from 20%
of the causes.
Primarily used to identify/ evaluate
nonconformities.

Pareto Diagram – 80/20 Rule
• Vilfredo Pareto: Credited for discovering the rule.
• PARETO’S PRINCIPLE: 20% of activities cause 80% of
problems => a small no. of causes (20%) create the majority
of problems (80%)
• Pareto chart is a bar chart where the data is arranged in order
of importance… most significant problem is listed first and
other problems fall in descending order
• The Benefit is to spend the majority of your time fixing, THE
MOST IMPORTANT problem.

Pareto Analysis
• Pareto analysis involves identifying the vital
contributions that account for the most quality
problems in a system
• Also called the 80-20 rule, meaning that 80% of the
problems are often due to 20% of the causes
(Vilfredo Pareto developed Principle – adapted to
quality by Juran)
• Pareto diagrams are histograms that help identify
problem areas

Activity 2
• Take a minute to go through PMBOK 4. See the
different tools and techniques that are used in each
of the Quality Management Processes. Write the
names of the tools & techniques in a tabulated form
as shown below: (3 minutes)
• Did you notice any similarities
PLAN QUALITY PERFORM Q.A. PERFORM Q.C.

PLAN QUALITY PERFORM Q.A. PERFORM Q.C.
Cost benefit analysis Any quality tools are used
to check if proper
processes were followed or
if processes need to be
improved.
Checklists used
Cost of quality Statistical sampling done
Control charts created Cause & effect diagrams
Benchmarking Flowcharting used
Design of experiments histogram
Statistical sampling
planning
Pareto chart
Flowcharting created Run chart
Checklists created Scatter diagram
Control charts used

Sampling Methods
• A method of determining the value of a product or
service when it is not practical to examine the entire
population
– Random sampling
– Acceptance sampling
– Attributes sampling
– Special attributes sampling
– Variables sampling

QC: Terminology
• Prevention – keeping errors out
• Inspection – keeping errors out of the hands of
customers
• Attribute sampling – involves “yes” or “no” decision
• Variable sampling – involves rating the sample on a
continuous scale that measures the degree to which
it conforms to specifications

QC: Terminology
• Special Causes – involves unusual events
• Random Causes – involves normal process variations
• Tolerances - indicates that the result is acceptable if
it falls within a specified tolerance range
• Control Limits – indicates that the process is in
control limits

Quality Control
• The outputs are
• Quality Control measures
• Validated changes
• Organizational Process Assets updates
• Change Requests
• Project Management Plan Updates
• Project Document Updates

Perform Quality Control: Outputs
Quality Control Measurements
• These measurements are the result of the QC
activities
• These measurements are fed back to the QA to
reevaluate and analyze the quality standards &
processes.
Validate Changes :
• Any changed or repaired items are inspected and will
be either accepted or rejected before notification of
the decision is provided .
• Rejected items may require rework

Perform Quality Control: Outputs
Validated Deliverables
• QC aims to determine the correctness of deliverables
• The result of the execution quality control process
are validated deliverables.
Change Requests :
• If the recommended corrective or preventive actions
or a defect repair requires a change to the project
management plan , a change request should be
initiated in accordance with the defined Perform
Integrated Change Control process

Quality Concepts
– Philosophy: definition of quality, avoidance of “Gold
plating” – giving customer extras, this practice is not
recommended.
– Marginal Analysis – optimal quality is reached at the
point when revenue from improvement equals the costs
to secure it.
– Just in Time (JIT) - just when they are needed or just
before, it decrease amount of inventory/decrease
investment.
– Total Quality Management (TQM) – company and their
employees focus on finding ways to continuously
improvement the quality of their business practices and
products.

Quality vs. Grade
The degree to which a set of inherent characteristics
fulfill requirements
• Quality≠ Grade
– Grade = a category or rank given to entities having the
same functional use, but different technical
characteristics.

Quality defines…
• Precision ≠ Accuracy
– Precision = consistency of the value of repeated
measurements - very little scatter i.e.
measurements tend to be clustered
– Accuracy = correctness that the measured value is
very close to the true value

• Tips for the Review
– ISO 9000– standards to ensure that corporations follow
their own quality procedures.
– Normal Distribution – most common probability – used to
measure variations
– Standard deviation (sigma) – measure how far away from
the mean (dotted vertical line)
– 3 or 6 sigma – represents level of quality
• +/- 1 sigma equal to 68.26%

W. Edwards Deming
• Suggested that as much as 85% of the Cost of
Quality is a management problem.
• Once the quality issue gets to the level of the
worker, there is little control.
• Workers need to be shown what is acceptable
quality and made to understand its
importance.

• 85% OF QUALITY CONTROL RESTS WITH
MANAGEMENT; 15% WITH PROJECT TEAM

Deming’s PDCA Cycle
• Plan- improvements to present practices
• Do- implement the plan
• Check – test to see if the desired results are achieved
• Act – implement corrective action

Joseph M. Juran
• Noted for “Fitness for Use”
• This means that stakeholders’ and customers
expectations must be met or exceeded
• The product of the project is what was set out to be
produced
• Proposed that there can be grades of quality =>
strive for HIGH QUALITY at the acceptable Grade
level

Philip B. Crosby
• Devised the “Zero Defects” Practice
• Means “do it right the first time”
• Costs will increase when quality planning isn’t
done up front => Engage in rework, thus
affecting productivity.
• To prevent the defect implies conformance to
requirements is easily met.

• Product returns, warranty claims and recall
campaigns can impact on operational
costs
• Because project is temporary, quality costs
are often borne by the acquiring
organization

KAIZEN Approach
• Quality technique from Japan
• KAIZEN = Continuous Improvement
• All project team members and managers
should constantly be looking for quality
improvement opportunities
• Kaizen states one should improve the quality
of the people first, then products and services.

Summary of Quality Concepts
• DEMING – conformance to specifications (85 % of
poor quality is due to management)
• JURAN – fitness for use
• CROSBY – zero defects = conformance to
requirements
• KAIZEN – conformity around target – towards
continuous improvement
• PMI ® - conformance to requirement

Quality Philosophy
DEMING
JURAN
CROSBY
Kaizen
PMI
• Conformance to specs
• Fitness for use
• Conformance requirements
• Uniformity around target
• Conformance to requirements

Cost Of Quality Categories
• Prevention costs
• Appraisal costs (cost of ensuring that the product is
error-free)
• Internal failure costs (cost of correcting defect before
product reaches customer)
• External failure cost ( recall, warranty costs)
• Measurement and test equipment (capital
expenditure to perform prevention and appraisal
activities)

Quality Concepts And Terms
• Four absolutes of quality
Definition  conformance of requirements
System  prevention
Performance standards  zero defects
Measurement  cost of non conformance

10. Project Human Resource
Management

Project Human Resource Management
Knowledge Area
Process
Initiating Planning Executing
Monitoring &
Control
Closing
Human
Resource
Management
Develop Human
Resource Plan
Acquire Project
Team
Develop Project
Team
Manage Project
Team
Enter phase/
Start project
Exit phase/
End project
Initiating
Processes
Closing
Processes
Planning
Processes
Executing
Processes
Monitoring &
Controlling Processes

Develop Human Resource Plan
• This is the process of identifying and documenting roles, responsibilities and
required skills, reporting relationship and create the staffing management plan.

Organizational Chart & Position Desc. (Tools and Techniques)
• Ensure that each work package has an unambiguous owner.
• All team member have a clear understanding of their roles and responsibility.
• Types of Roles and Responsibility:
-Hierarchal e.g. Organizational Breakdown Structure (OBS)
- Matrix e.g. Responsibility Assignment Matrix (RAM) e.g. RACI (Responsible,
Accountable, Consult and Inform)
- Text -oriented

Develop Human Resource Plan: Tools &
Techniques
• Organizational Theory
Organizational theory refers to all the theories
that attempt to explain what makes people,
teams, and work units perform the way they
do. I’ll talk more about motivation techniques
(which are a type of organizational theory) in
“Developing the Project Team.”

Human Resource Plan(Output)
HR Plan includes but (not limited to)
1. Roles and Responsibility
• Role
• Authority
• Responsibility
• Competency
2. Project Organizational Chart
3. Staffing Management Plan
• Staff Acquisition
• Resource calendars
• Staff Release Plan
• Training needs
• Recognition and Rewards
• Compliance, Safety
• Resource Histograms
Bar chart shows number of resource
used per time period.
Resource calendars are an output of the
Acquire Project team process.

Acquire Project Team
• The process of confirming human resource availability and obtaining the
team necessary to complete project assignments.

Acquire project team
• Pre –assignment
- Resources who are assigned in advance.
• Negotiation
- For gaining resources within the organization, vendors, suppliers,
contractors, etc (in contract situation)
• Acquisition
- Acquiring or hiring resources from outside (outsource).
• Virtual Teams
- This is the possibility of having groups of people in different
geographic locations, with little or no time spent to meet face
to face.

Develop Project team
• The process of improving the competencies, team interactions, and the
overall team environment to enhance project performance.

Develop Project Team (tools & techniques)
• Interpersonal skills( soft skills)
• Training
- Can be formal(classroom or online) or non formal(on-the job
training, mentoring, coaching).
• Ground rules
- Guidelines that establish clear expectations regarding acceptable behavior by
teams.
- Discussion to create it by all team members.
• Co-location/ War Room
- Placing many or all the most active team members in the same physical
location.
- Can be temporary for strategy or to enhance communication & build sense of
community.
• Recognition and Rewards
- It will only be effective if it is satisfied or valued by individual

Team Building Activities (Tools and Techniques)
Tuckman’s stages of team formation and development:
• Forming
- The team meets and learn about the project and their roles and responsibilities.
• Storming
- Address the project work, technical decisions and the project management approach.
Conflict/ disagreement may occur.
• Norming
- Work together and adjust work habits and behavior that support the team.
• Performing
- Being a well organized unit.
• Adjourning
- Team completes the work and move on from the project.

Motivational Theory: Maslow’s Hierarchy of
Needs

Motivational Theory: Mc Gregors X & Y Theory
• Theory X
- People tend to be negative, impassive, e.g. incapable, avoid
responsibility, need to be watched
- Extrinsic Motivation
• Theory Y
-People tend to be positive e.g. want to achieve, willing to work
without supervision, can direct their own effort
- Intrinsic Motivation
x
y

Motivational Theory: Acquired
Needs Theory
•David McClelland Theory
People are motivated by one of the three needs.

Motivational Theory: Two Factors Theory
• Herzberg’s Theory
- Job dissatisfaction due to hygiene factors.
- Job satisfaction due to motivational factors

Manage Project Team
• The process of tracking team member performance, providing feedback,
resolving issues and managing changes to optimize project performance.

Manage Project Team: Tools & Techniques
• Project Performance Appraisal
Project performance appraisals are typically annual
or semiannual affairs where managers let their
employees know what they think of their
performance over the past year and rate them
accordingly. These are usually manager-to-employee
exchanges but can incorporate a 360-degree review,
which takes in feedback from just about everyone
the team member interacts with, including
stakeholders, customers, project manager, peers,
subordinates etc.

Conflict Management
• Conflicts can be beneficial(an opportunity for improvement).
• Conflicts are an inevitable consequence of organizational interactions.
• Conflicts in the team are caused due to the following reasons in
decreasing order of consequence.
1. Schedules
2. Project Priorities
3. Resources
4. Technical opinions
• The most common cause of conflicts on projects are issues related to
schedules (not personality differences).
• Conflicts are best resolved by the persons or team members involved in
the conflict.

Conflict Management
• General Techniques to resolving conflicts

Problem Solving
• The important thing to realize about problems is if they are
not resolved completely they just return, again and again.
• The process of problem solving has these steps:
1. Defining the cause of the problem
2. Analyze the problem
3. Identify Solution
4. Implement a decision
5. Review the decision and confirm that the problem is solved.

• Issue Log
The issue log is a place to document the issues that
keep the project team from meeting project goals.
These can range from differences of opinion to newly
surfaced responsibilities that need to be assigned to
a project team member. Each issue should be
recorded in the log along with the person
responsible for resolving it. You should also note the
date the resolution is needed

Project Manager Power
A project manager may yield authority over the project team in
one of the following ways:
• Formal (Legitimate)- power due to project manager position.
• Reward- Power stems from giving rewards
• Penalty (coercive)- Power due to people being afraid of the power the project
manager holds. (punish, penalize).
• Expert Power (Technical)- comes from being a technical or project
management expert.
• Referent- Power due to charisma or fame, make another person like or
respect the project manager.
The best forms of power are Expert and Reward.
Earned on your own: Expert
The worst type of power: Penalty
These forms of power are derived from positions within the company: Formal,
Reward and Penalty.

Management & Leadership Styles
• Autocratic
- Top down approach, the manager has the power to do whatever he/she
wants.
- Sometimes appropriate when decisions must be made in a emergency
situation or under time pressure.
• Democratic(Participative)
- Encourage team participation in the decision making process.
- Best used for people whose behavior fit with theory Y.
• Laissez-Faire – a French term means ‘’leave alone.’’
- The manager is not directly involved in the work of the team.
- Effective for highly skilled teams.

Important Terms
• Halo Effect
The assumption of because a person is good in a technical field, they will be a
good project manager.
• Arbitration
A method to resolve conflict. A neutral party hears and resolve a dispute.
• Expectancy Theory- Victor. H. Vroom
This is a motivational theory, which states that people put in more effort
because they expect to be rewarded for their efforts.
• Perquisites (Perks)
Some employees receive special rewards e.g. parking spaces, corner offices,
executive dining.
• Fringe Benefits
Standard benefits formally given to all employees, such as insurance,
educational benefits and profit benefits.

CAPM Preparatory Course
Communications Management

Project Communication Management
Knowledge Area
Process
Initiating Planning Executing
Monitoring &
Control
Closing
Communication
Indentify
Stakeholder
Plan
Communication
Distribute Information
Manage Stakeholders -
Expectations
Report
Performance
Enter phase/
Start project
Exit phase/
End project
Initiating
Processes
Closing
Processes
Planning
Processes
Executing
Processes
Monitoring &
Controlling Processes

What is project Communications Management
• Project Communications Management includes the
processes required to ensure timely and
appropriate generation, collection, distribution,
storage, retrieval and ultimate disposition of project
information.

Communications management
includes:
Identify Stakeholders
Plan Communications
Distribute Information
Manage Stakeholder Expectations
Report Performance

Communications Planning
• 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

Communication can take various
methods :
• Internal i.e. within the project and external to the project such as with
the customer, other projects, the media, the public etc.
• Formal, such as reports, memos and briefings and informal such as
emails, ad-hoc discussions.
• Vertical (up and down the organization and horizontal (with peers),
• Verbal and Non-verbal ( voice inflections and body language).
• Written and Oral

Identify Stakeholders
• Identify Stakeholders is the process of
identifying all people or organizations impacted
by the project and documenting relevant
information regarding their interest, involvement
and impact on project success.

Stakeholder Analysis
• A technique of systematically gathering and analyzing
quantitative & qualitative information to determine whose
interests should be taken into account throughout the project.
• Step 1: Identify all potential project
stakeholders and relevant
information
• Step 2: Identify the potential impact or
support each stakeholder could
generate and classify them so as to
define an approach strategy.
• Step 3: Assess how key stakeholder
are likely to react or respond in
various situation
Sample grid showing classification model
Keep
Satisfied
Manage
Closely
Keep
Informed
Monitor
(Minimum Effort)
Interest
Power
Low High
High
• A
• B
• C
• D
• E
• F
• G
• H

Sample Stakeholder Analysis
Stakeholders Document Name Document
Format
Contact Person Due
Customer
Management
Monthly Status
Report
Hard copy Gail Feldman,
Tony Silva
First of month
Customer
Business Staff
Monthly Status
Report
Hard copy Julie Grant,
Jeff Martin
First of month
Customer
Technical Staff
Monthly Status
Report
E-mail Evan Dodge,
Nancy Michaels
First of month
Internal
Management
Monthly Status
Report
Hard copy Bob Thomson First of month
Internal
Business and
Technical Staff
Monthly Status
Report
Intranet Angie Liu First of month
Training
Subcontractor
Training Plan Hard Copy Jonathan Kraus 11/1/1999
Software
Subcontractor
Software
Implementation
Plan
E-mail Barbara Gates 6/1/2000

Stakeholder Register
• This is the main output of the identify stakeholders process
and it contains all details related to the stakeholders such
as name, organizational position, location, role in the
project, contact information.
• It also contains the major requirements, main expectations,
potential influence in the project. It also classify them as
internal, external, supporter, neutral, resistor etc.

Output of Identify Stakeholder
• Stakeholder Register
Stakeholder Stakeholder interest(s)
in the project
Assessment of
impact
Potential strategies for gaining
support or reducing obstacles
Name
Contact
Informa
tion
Role in
Project
Departme
nt/
Superviso
r
Company Impact Influence
Main
expectations
Attitude
about the
project
Major
requirement
• Stakeholder Management Strategy
- Defines an approach to increase the support and minimize negative
impacts of stakeholder.
- The information could be too sensitive to be shared.
- A common way of representing is by using a stakeholder analysis
matrix.

Plan Communications
• Plan Communications is the process of
determining the project stakeholder information
needs and defining a communications
approach.
• For example who needs what information, when will
they need it, how it will be given to them and by
whom.

Communication Requirement
Analysis
• Includes communicating in
all directions
• Determine and limit who will
communicate with whom
and who will receive what
information.
Customer, sponsor, Functional
managers, and Team Members
Other
Project
Managers
Other
Projects
Other
Stakeholders
The
Project
2
)1( −NN
• Consider the number of potential
communication channels or paths
• Formula:

The Impact of the Number of People on Communications
Channels

Communication Model
• Basic Communication Model
– The components in the model need to be taken into account when discussing project communications.
– The sender is responsible for making information clear and complete so that the receiver can receive it correctly, and for confirming that it is properly understood.
ReceiverReceiverSenderSender
Encode
Decode
Encode
Decode
Noise
Noise
Medium
• To make effective communication, sender/receiver need to be aware of these factors:
- Nonverbal: 55% of all communication is nonverbal
- Paralingual: pitch and tone of voice
- Effective listening

Communication Methods
• Interactive Communication
– Most efficient way to ensure a common understanding
– E.g. meetings, phone calls, video conferencing
• Push Communication
– Does not certify that it reached or understood
– E.g. letters, email, press release, faxes, voice mail
• Pull communication
– Used for very large information volumes, very large audiences
– E.g. intranet site, e-learning
Project manager cannot control all communications but should try to control to
prevent miscommunication, unclear directions, and scope creeps.

Communications Management Plan
The output of plan communications is the
communications management plan, and this plan
documents how you will manage and control
communications on your project.

Distribute Information
This is the process of making relevant information available to project stakeholders as
planned in the communications management plan

Managing Stakeholder Expectations
This is the process of communicating and working with stakeholders to meet their
needs and addressing issues as they occur

Managing Stakeholder Expectations
• Actively managing the expectation of stakeholders.
– Increase the likelihood of project acceptance by negotiating.
– Influencing their desire to achieve & maintain project goals.
• Addressing concerns that have not become issues yet
(anticipation).
• Clarifying and resolving issues that have been identified.

Report Performance
The process of collecting and distributing performance
information, including:
Status Report
Progress Report
Trend Report
Forecasting Report
Variance Report
Earned Value
Lessons Learned

Project Risk Management
• Risk is an uncertain event or condition, that if
it occurs has an effect on at least one project
objective.
• Risk Management Objectives
- Increase the probability and impact of positive
events (opportunities).
- Decrease the probability and impact of
negative events (threats)

Terms and concepts
• Uncertainty: a lack of knowledge about an event
that reduces confidence.
• Risk averse: someone who does not want to take
risks.
• Risk tolerances: area of risk that are
acceptable/unacceptable.
• Risk thresholds: the point at which a risk become
unacceptable.
– Remember that in this area there is no activity in
executing process group

Plan Risk Management
• The process of defining how to conduct risk management activities for a project.

Plan Risk Management
• Importance of Risk Management Planning
-Ensure that the degree, type, and visibility of risk management are
commensurate.
-Provide sufficient resource and time for risk management activities.
-Establish an agreed-upon basis for evaluating risk.
• Risk Categories
-A standard list of risk categories can help to make sure areas of risk are not
forgotten.
-Companies and PMO should have standard list of risk categories to help
identify risk.
• 2 Main type of Risk
-Business – Risk of gain or loss
-Pure (insurable) risk – Only a risk of loss (i.e. fire, theft, personal injury, etc)
– Sources of risk = risk categories
– Risk categories may be structured into Risk Breakdown Structure (RBS)

Risk Breakdown Structure
Risk Breakdown Structure (RBS) - A hierarchically -organized depiction of the
identified project risks arranged by category.

Risk Management Plan
• Risk management plan describe how risk management will be
structured and performed on the project.
Subset of project management plan.
May include:
– Methodology
– Roles & responsibilities
– Budgeting
– Timing
– Risk categories.
– Definition of probability and impact
– Stakeholder tolerances
– Reporting formats
– Tracking
– Probability and impact matrix (?)

Identify Risk
• The process of determining which risk may affect the project and documenting
their characteristics.

Identify Risks (Tools &
Techniques)Risk should be continually reassessed (iterative) such as in integrated change
control activity, when working with resources, when dealing with issues.
Information gathering techniques
• Brainstorming
• Delphi technique: Expert participate anonymously; facilitator use
questionnaire; consensus may be reached in a few rounds; Help reduce
bias in the data and prevent influence each others.
• Interviewing: interviewing experts, stakeholders, experienced PM
• Root cause analysis: Reorganizing the identified risk by their root cause
may help identify more risks.

Identify Risks cont’d
• Checklist analysis: checklist developed based on
accumulated historical information from previous
similar project.
• Assumption analysis: identify risk from
inaccuracy, instability, inconsistency,
incompleteness.
• SWOT analysis – Strengths, Weaknesses,
Opportunities, Threats.

Diagramming techniques
• System or process flow charts.
• Influence diagrams
-show the casual influences among project variables, the
timing or time -ordering of events, and the relationships
among other project variables and their outcomes.
-excellent for displaying a decision’s structure
-Described in Quality Management
•Cause & Effect diagrams
(fish-bone / Ishikawa
diagram)

Identify Risk(Output)
Risk Register
After Indentify Risk process the output is initial
entries into the risk register.
It includes:
– List of risk
– List of POTENTIAL responses
– Root causes of risks
– Updated risk categories

Perform Qualitative Risk Analysis
• The process of prioritizing risks for further analysis of action by assessing
and combining their probability of occurrence and impact.

Qualitative Risk Analysis
• Help to focus on high priority risks
• A subjective analysis (High, Medium, Low)
• Analysis using…
-Relative probability or likelihood of occurrence
-Impact on project objective
-Time frame response
-Organization’s risk tolerance
-Etc.
• Can be also used to:
-Compare risk to the overall risk of other projects
-Determine whether the project should be selected, continued
or terminated.
-Determine whether to proceed to Perform

Risk Register Updates
• Update/add additional information to previous output i.e. Risk Register,
which include:
-Relative ranking/priority
-Risk grouped by categories
-List of risk requiring additional analysis in the near term
-List of risk for additional analysis and response
-Watch-list (non-critical or non-top risks)
-Trends, Since risk analysis process is iterative, PM should know if risk is
increasing, decreasing or staying the same
-Cause of risk requiring particular attention

Perform Quantitative Risk Analysis
• The process of numerically analyzing the effect of identified risks on
overall project objectives. If not necessary, this process may be skipped.

Quantitative Risk Analysis
• Is a numerical evaluation (more objective)
• This process may be skipped.
• Purpose of this process:
-Determine which risk events warrant a response.
-Determine overall project risk (risk exposure).
-Determine the quantified probability of meeting project
objectives.
-Determine cost and schedule reserves.
-Identify risks requiring the most attention.
-Create realistic and achievable cost, schedule, or scope
targets.

Quantitative Risk Analysis: Tools &
Techniques
Determining Quantitative Probability and Impact might
be done by:
• Interviewing
• Cost and time estimating
• Delphi technique
• Use of historical records from previous projects
• Expert judgment
• Sensitivity analysis – tornado diagram
• Expected monetary value (EMV) analysis
• Decision tree
• Monte Carlo analysis (simulation)

Sensitivity Analysis
• To determine which risks
have the most potential
impact to the project.
• Changing one or more
elements / variables and set
other elements to its baseline
and then see the impact.
• One typical display of the
sensitivity analysis is the
tornado diagram.
• Tornado diagram

Decision Tree and Expected Monetary
Value (EMV)
– A decision tree is a diagramming analysis
technique used to help select the best course of
action in situations in which future outcomes are
uncertain.
– Estimated monetary value (EMV) is the product of
a risk event probability and the risk event’s
monetary value.
– You can draw a decision tree to help find the EMV.

Risk Register Updates
Update/add additional information to previous
output i.e. Risk Register, which include:
• Prioritize list of quantified risks
• Amount of contingency time and cost reserve needed.
• Possible realistic and achievable completion dates,
project cost, with confidence level.
• The quantified probability of meeting project objectives.
• Trends

Plan Risk Responses
• The process of developing option and action to enhance opportunities and to
reduce threats to project objectives.

Plan Risk Responses
• Do something to eliminate threats before they happens.
• Do something to make sure the opportunities happens.
• Decrease the probability and/or impact of threats.
• Increase the probability and/or impact of opportunities.
• For the remaining (residual) threats that cannot be
eliminated:
-Do something if the risk happens (contingency plan).
-Do something if contingency plan not effective (fallback
plan)

Strategies for Threats
• Avoid
Eliminate the threat entirely
Isolate project objectives from the risk’s impact
• Transfer (Deflect, Allocate)
Shift some or all the negative impact of a threat to a third party.
• Mitigate
Implies a reduction in the probability and/or impact of an
adverse risk event to be within acceptable threshold limits.
• Accept
Deal with the risks
Project management plan is not changed
Transferring a risk will leave some risk behind.

Strategies for Opportunities
• Exploit
Seek to ensure the opportunities definitely happen.
• Share
Allocate some or all of the ownership of the opportunity to
a third party who is best able to capture the opportunity
for the project benefit.
• Enhance
Increase the probability and/or the positive impacts of an
opportunity.
• Accept
Not actively pursuing an opportunity

Monitor & Control Risk
• The process of implementing: risk response plans, tracking identified
risks, monitoring residual risks, identifying new risks, and evaluating risk
process effectiveness throughout the project.

Residual and Secondary Risks
– It’s also important to identify residual and
secondary risks.
– Residual risks are risks that remain after all of the
response strategies have been implemented.
– Secondary risks are a direct result of
implementing a risk response.

Tools for Monitor & Control Risk
– Risk Re-Assessment
• Identify new risks, closing of outdated risks (status
mtgs.)
– Risk Audits
• Examine the documents for effectiveness
• Internal or External to the project
– Variance & Trend Analysis / Performance
Measurements.
• Comparing the planned result to the actual
– Reserve Analysis
• Compares the amount of contingency reserves to
the remaining risk left in the project

Risk Monitoring and Control
– Involves executing the risk management process
to respond to risk events.
– Workarounds are unplanned responses to risk
events that must be done when there are no
contingency plans.
– Main outputs of risk monitoring and control are:
• Requested changes.
• Recommended corrective and preventive actions.
• Updates to the risk register, project management plan,
organizational process assets and project documents.

Important Terms
• Mutual Exclusive: if two events cannot both occur in a single trial.
• Probability: something will occur.
• Normal Distribution: common probability density distribution chart .
• Statistical Independence: the probability of one event occurring does
not affect the probability of another event occurring.
• Standard deviation (or Sigma): how far you are from the mean.
• 3 or 6 sigma.
-Represent the level of quality has decided to try to achieve
-6σ is higher quality standard than 3σ
-Used to calculate the upper and lower control limits in a control chart

506
PROCUREMENT
MANAGEMENT

507
PROCUREMENT
The acquisition or purchase of materials,
goods, services and equipment from
outside the organization.

Project Procurement
Management
• Project procurement management is the
process of purchasing the products for
meeting the needs of the project scope.
• It involves planning, acquiring the products
or services from sources, choosing a
source, administering the contract, and
closing out the contract.

Project Manager's Role in Procurement
The project manager must be involved in the creation
Of contracts and fulfills the following key roles:
• Know the procurement process
• Understand contract terms and conditions
• Make sure the contract contains all the project
management requirements such as attendance at
meeting, reports, actions and communications
deemed necessary
• Identify risks and incorporate mitigation and
allocation of risks into the contract

510
PROCUREMENT MANAGEMENT
• Many project managers lack the knowledge
and skills to procure goods and services
effectively.
• Poor procurement often results in poorly
delivered scope, schedule delays, cost
overruns and poor quality of the goods and
services that the project is intended to deliver.

The Sequential Procurement Processes
• Plan Procurements
• Conduct Procurements
• Administer Procurement
• Close Procurements

Plan Procurements
• Is the process of documenting project
purchasing decisions, specifying the approach,
and identifying potential sellers.
• Procurement planning is the process of
identifying which part of the project should be
procured from resources outside of the
organization. It is concerned with determining
what to procure, when, and how.

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

Plan Procurements: Inputs
• Teaming Agreements : are legal contractual
agreements between two or more entities to form a
partnership or joint venture , or some other
arrangement as defined by the parties .the
agreement defines the buyer seller roles for each
party . Whenever a teaming agreement is in place for
a project, the roles of buyer and seller are
predetermined.

Plan Procurements: Inputs
• Activity Cost Estimates: developed by the
procuring activity are used to evaluate the
reasonableness of the bids or the proposals
received from potential sellers
• Cost Performance Baseline: provides details of
the planned budget overtime
• Enterprise Environmental Factors
• Organizational Process Assets: How the
procurement process work within the performing
organization

Plan Procurements – Tools &
Techniques
Make-or-buy analysis: general management
Technique used to determine whether an
organization should make or perform a particular
product or service inside the organization or buy
from someone else.
• Often involves financial analysis
• Experts, both internal and external, can provide
valuable inputs in procurement decisions.

Plan Procurement ( Tools & Techniques)
Contract types:
• Fixed Price (lump sum)
• Cost Reimbursable Contracts
• Unit Price

Plan Procurements – Tools &
Techniques
• Fixed Price Contract
• In this type of contract one price is agreed
upon for all the work.
• The buyer has the least cost risk, provided the
• buyer has a completely defined scope,
because the risk of higher costs is borne by
the seller.
• The seller is most concerned with the contract
statement of work in this type of contract.

Fixed Price Contract Variations
Fixed Price Incentive Fee Contracts (FPIF)
• There are also incentives for fixed price contracts.
• Contract = $ 1,100,000. For every month early the
project is finished, an additional $10, 000 is paid to the
seller.
• Fixed Price Economic Price Adjustment (FPEPA)
• Sometimes a fixed price contract allows for price
increases if the contract is for multiple years.
• Contract = $ 1,100,00 but a price increase will be
allowed in year two based on the Consumer Price
Increase report for year one. Or the contract price is $
1,100,000 but a price increase will be allowed in year
two to account for increases in specific material costs.

Purchase Order
• A purchase order is the simplest type of fixed
price contract.
• This type of contract is normally unilateral
(signed by one party) instead of bilateral.
• It is usually used for simple commodity
procurements.
• Example Contract to purchase 30 linear
meters of wood at $ 40 per meter.

Cost-reimbursable Contract
• The seller's cost are reimbursed, plus an
additional amount.
• The buyer has the most cost risk because the
total costs are unknown.
• This form of contract is often used when the
buyer can only describe what is needed,
rather than what to do.
• The seller will therefore write the detailed
contract statement work.

Cost-reimbursable Contract -
Variations
Cost plus Fixed Fee (CPFF)
• This is the most common type of cost reimbursable
contract.
• In this type, the buyer pays all costs, but the fee (or
profit) is fixed at a specific amount.
• This helps to keep the seller's costs in line because a
cost overrun will not generate any additional fee or
profit. Fees only change with approved change
orders.
• Example Contract = Cost + Fee of $ 100,000

Cost-reimbursable Contract - Variations
Cost Plus Fee (CPF) or Cost Plus Percentage of
Costs (CPPC)
• This type of cost reimbursable contract
requires the buyer to pay for all costs plus a
percent of costs as a fee. Sellers are not
motivated to control costs because the seller
will get paid profit on every cost without limit.
• Example, Contract = Cost + 10% of costs as
fee.

Cost-reimbursable Contract - Variations
• Cost Plus Incentive Fee (CPIF)
This type of cost reimbursable contract pays all
costs and an agreed upon fee, plus a bonus for
beating the performance objectives stated in the
contract.
Cost Plus Award Fee Contracts ( CPAF) :
• The seller is reimbursed for all legitimate costs ,
but the majority of the fees is only earned based
on the satisfaction of certain broad subjective
performance criteria defined and incorporated
into the contract.
• The determination of the fee is solely on the subjective determination of seller
performance by the buyer, and is generally not subject to appeals.

Time and Material (T&M) or Unit
Price
• This type of contract is usually used for small amounts.
• The contract is priced on a per hour or per item basis
and has elements of fixed price contract (in the fixed
price per hour) and a cost reimbursable contract (in
the material costs and the fact that the total cost is
unknown).
• In this type of, the buyer has a medium amount of
cost risks compared to CR and FP because the contract
is usually for small amounts and for a shorter length of
time.
• Example, Contract = $ 100 per hour + expenses or
materials at cost or $10 per linear meter of wood.

Contract Type vs. Risk
• Effect of contract type on buyer and seller risk.

Outputs from Procurement Planning
–Procurement Management Plan – describes
how procurement process will be managed
• Type of contract
• Independent estimates needed?
• Autonomy of project team
• Standardized documents
• Multiple provider management?
• Incorporate with other project aspects
(scheduling and performance reporting)

Plan Procurements - Outputs
• A procurement statement of work (SOW) contains
the details of the procurement item in clear, concise
terms. It includes the following elements:
• The project objectives
• A description of the work of the project and any
post-project operational support needed
• Concise specifications of the product or
• services required
• The project schedule, time period of services, and
work location.

Plan Procurements – Outputs
• Source Selection Criteria: Source Selection
criteria are included in the procurement
document to give the seller an understanding of
the buyer's needs and help them decide if they
should bid or make a proposal on the work.
• During Select sellers, this criteria become the
basis by which the bids or proposal are evaluated
by the buyer.
• Selection criteria can be limited to purchase price
if the procurement item is readily available from
a number of acceptable sellers.

Plan Procurement: Output
Procurement Documents may include the following:
• Information for Sellers
• Background information
• Procedures for replying
• Guidelines for preparation of the response
• Form of response required
• Evaluation Criteria
• Pricing forms
• Contract Statement of work
• Proposed terms and conditions of the contract (legal
and business)

Procurement Documents
• Non-Disclosure Agreement - This is an agreement
between the buyer and any prospective sellers stating
what information or documents they will hold
confidential and control, and who in their organization
will gain access to the confidential information.
• Standard Contract - Companies frequently have
standard, preauthorized contracts for the purchase of
goods or services. These types of standard contracts
need no further legal review if used as they are.

Procurement Documents
• Special Provisions (Special Conditions)
• The project manager should determine what needs to
be added, changed or removed from the standard
provisions, so that the resulting contract addresses the
particular needs of the project.
• Letter of Intent- NOT a contract but a letter, without
legal binding, that says the buyer intends to hire the
seller.
• Privity- Contractual relationship.
• Example - Company A hires company B to do some work for
them. Company B subcontracts to company C. The project
manager for A is at the job site and tells company C to stop
work. Generally, does company C have to listen?

Conduct Procurements
• Is the process of obtaining seller responses,
selecting a seller and awarding a 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.
•

Conduct Procurements – Tools &
Techniques
• Bidder Conferences : Bidder conferences are meetings with
prospective vendors or sellers that occur prior to the completion of
their response proposal.
• Proposal evaluation techniques
• Independent estimates / Should-Cost Estimate : Comparing the
cost to an estimate created in house or with outside assistance.
• Expert judgment
• Advertising: Advertising is letting potential vendors know that an
RFP is available.
• Internet search
• Procurement Negotiations: The project manager may be involved
during negotiations to clarify project requirements, and if for no
other reason than to protect the relationship to clarify project
requirements, and if for no other reason than to protect the
relationship with the other side.

Conduct Procurements – Outputs
Selected Sellers
• A seller may simply be selected and asked to sign a
standard contract
• A seller may be asked to make a presentation and
then, if all goes well, go on to negotiations
• The list of sellers may be narrowed down to a few
• The short-listed sellers may be asked to make
presentations and the selected seller then asked to
go on to negotiations
• The buyer can negotiate with more than one seller
• Or some combination of presentations and
negotiations

2. Procurement Contract Award:
• Contracts are known by many names: Agreement,
Subcontract, Purchase order, Memorandum of
understanding
• Is awarded to each selected seller .
• A contract can be in the form of a simple purchase
order or a complex document.
• A contract is a mutually binding legal agreement that
obligates the seller to provide the specified products,
services or results and obligates the buyer to
compensate the seller.

Contracts
What do you need to have a legal contract?
• An offer
• Acceptance
• Consideration - Something of value, not
necessarily money
• Legal capacity - Separate legal parties,
competent parties
• Legal purpose - You cannot have a contract for
the sale of illegal goods

• Resource Calendars: the quantity and the availability of contracted
resources and those dates on which each specific resource can be active
or idle are documented
• Change Requests
• Project Management Plan Updates : components of the plan that may
get updated include, but are not limited to :
 Cost baseline
 Scope baseline
• Project Document Updates : docs that may get updated include, but are
not limited to :
 Requirements documentation
 Requirements traceability documentation , and ,
 Risk register

Administer Procurements
• This process consists of assuring that the
performance of both parties to the contract
meets contractual requirements.
• The Contract Administration process concerns
monitoring the vendor’s performance and
ensuring that all the requirements of the contract
are met.
• Contracts are legal relationships, so it is
important that legal and contracting
professionals be involved in writing and
administering contracts.

Administer Procurements: Inputs
• Contract
• Project Management Plan
• Contract management plan
• Procurement Documents: contain complete supporting records
for administration of the procurement processes. This includes
procurement contract awards and the statement of work
• Performance reports: seller performance related
documentation includes:
• Seller developed technical documentation and other
deliverable information provided in accordance with the terms
of the contract
• Seller performance reports that indicate which deliverables
have been completed and which have not

Administer Procurements: Inputs
• Approved change requests: can include
modifications to the terms & conditions of the
contract.
• Work performance Information: the extent to
which the quality standards are being
satisfied, what costs have been incurred,
which seller invoices have been paid, etc
•

Administer Procurements – Tools &
Techniques
Contract change control system
• The contract change control system defines the
procedures for how the contract may be changed.
• The system is part of integrated change control.
• It documents how to submit changes, establishes the
approval process, and outlines authority levels.
• It includes a tracking system to number the change
requests and record their status

Procurement performance reviews
• Buyer conducted performance reviews examine
the seller’s performance on the contract to date.
• These reviews may be conducted at the end of
the contract or at intervals during the contract
period.
• Buyer reviews examine the contract terms and
seller performance for elements such as these:
• Meeting project scope
• Meeting project quality
• Staying within project budgets
• Meeting the project schedule

Techniques
• Inspections and audits
•  As the vendor completes the contracted work, the buyer
will need to inspect the work for progress, compliance with
contract requirements, and adherence to agreed-to time,
cost, and quality constraints.
•
• Performance reporting
•  This tool and technique entails providing your managers
and stakeholders with information about the vendor’s
progress meeting the contract objectives.
•  Performance reporting is part of communications and
should be documented within the communications
management plan.

Techniques
• Payment system
• Seller submit invoices as an input to this process, and
the payment system is the tool and technique used to
issue payment.
• The organization may have a dedicated department,
such as accounts payable, that handles vendor
payments, or it might fall to the project manager.
• In either case, follow the policies and procedures the
organization established regarding vendor payments.

Techniques
• Claims administration
• A claim is an assertion that the buyer did something
that has hurt the seller and the seller asking for
compensation.
• Another way of looking at claims is that they are a
form of seller's change requests
• Claims can get nasty. Imagine a seller that is not
making as much profit as he hoped for, issuing claims
for every action taken by the buyer.
• Claims administration involves documenting,
monitoring, and managing changes to the contract.
•

Claims administration
• Changes that cannot be agreed upon are
called contested changes.
• Contested changes usually involve a
disagreement about the compensation to the
vendor for implementing the change.
• You might believe the change is not significant
enough to justify additional compensation,
whereas the vendor believes they’ll lose
money by implementing the change free of
charge.

Claims
• Contested changes are also known as disputes,
claims, or appeals. These can be settled directly
between the parties themselves, through the
court system, or by a process called arbitration.
• Arbitration involves bringing all parties to the
table with a third, disinterested party who is not
a participant in the contract to try to reach an
agreement.
• The purpose of arbitration is to reach an
agreement without having to go to court.

Records Management System
• A contract is a formal, legal document. Recording keeping
can be critical if actions taken or situations faced during a
project are ever in question after the work is completed.
• This can happen related to unresolved claims or legal
actions, or even in order to satisfy insurance needs.
• A record management system can be quite extensive, with
one person assigned just to manage these records.
• They can also include indexing systems, archiving systems
and information retrieval systems for projects with
extensive documentation.

Administer Procurements - Outputs
• Administer Procurements - Outputs
• Procurement documentation
• Change Requests
• Organizational process asset updates:
correspondence, payment schedules and requests ,
seller performance evaluation documentation
• Project management plan updates: docs that can get
updated include: but are not limited to: procurement
management plan , baseline schedule , etc

Procurement documentation
This output includes (but isn’t limited to) all of
the following:
• Contract
• Performance information
• Warranties
• Financial information (like invoices and payment
records)
• Inspection and audit results
• Approved and unapproved changes

Close Procurements
•  This process consists of finishing all the loose ends of the
contract.
•  This process is part of the close project process described in
integration.
•  Contract closure is done:
•  When a contract ends
•  When a contract is terminated before the work
• is completed
•  This process is concerned with
• completing and settling the terms of the contract.
•  It supports the Close Project process because the Contract
Closure process determines if the work described in the contract
was completed accurately and satisfactorily.
•  This is called product verification

Close Procurements
• Close Project verifies and documents the project
outcomes just like the Contract Closure process.
•  Keep in mind that not all projects are performed
under contract so not all projects require Contract
Closure.
•  However, all projects do require the Close Project
process.
•  Since verification and documentation of the project
outcomes occur in both of these processes, projects
that are performed
• under contract need to have project results verified
only one time.

Close Procurements : Inputs, Tools &
Techniques
• The Contract Closure process has two inputs:
•  Project Management Plan – Procurement management plan
•  Procurement Documentation
• Close Procurements – Tools & Techniques
•  The Contract Closure process has three tools and techniques:
•
• Procurement audits
•
• Records management system.
•
• Negotiated Settlements: In all procurement relationships the final equitable settlement of all
outstanding issues, claims, and disputes by negotiations is a primary goal. Whenever settlement
cannot be achieved by direct
• negotiation, some form of alternative dispute
• resolution (ADR) including mediation or arbitration may be explored .
• When all else fails, litigation

Chapter 12 – Project Procurement
Management
• Tools & Techniques for Contract Close Out
– Procurement Audits – structured review of entire
procurement process; identify successes and failures that
warrant transfer to other procurement items
• Outputs from Contract Close Out
– Contract File – complete index of records
– Formal Acceptance and Closure – contract administration
responsibility to provide a formal notice that contract has
been completed

Close Procurements - Outputs
1. Closed Procurements:
•  This is formal acceptance and closure of the
contract.
•  The buyer provides the seller with a formal
written notice that the contract has been
completed .Requirements for formal
procurement closure are usually defined in the
terms and conditions of the contract and are
included in the procurement management plan

•  It’s your responsibility as project manager to document the formal
acceptance of the contract.
•  Many times the provisions for formalizing acceptance and closing the
contract are spelled out in the contract itself.
•
• Close Procurements - Outputs
• 1. Organizational process assets (updates) : assets that may get updated ,
include but are not limited to :
•  Procurement File: a complete set of indexed contract documentation,
including the closed contract, is prepared for inclusion with the final
• project files.
•  Deliverable acceptance: the buyer provides the seller with a formal
written notice that the deliverables have been accepted or rejected .
•  Lessons learned documentation

561
CONTRACTS
• An agreement between competent parties for
the consideration to accomplish lawful
purpose with the terms clearly set forth.
• The Procurement Process is sometimes
referred to as the Contract Process
• One of the main output of the Procurement
Process

562
RULES OF CONTRACTS
• A formal agreement – buyer and seller
• Oral or written – written is preferred
• Clearly state all requirements
• Changes –formally approved, controlled,
documented
• Not fulfilled until all requirements are met
• Be executed by someone with capacity and
authority.

563
RULES OF CONTRACTS Cont.
• Contain an offer
• Have been accepted
• Provide for a consideration/payment
• Be for legal purpose
• Terms and conditions should define breaches,
copyrights, intellectual rights, force majeure.

564
BASIC ELEMENTS OF CONTRACTS
1. Mutual Agreement
– There must be an offer and agreement
2.Consideration
– There must be a down payment
3.Contract Capability
– The contract is binding only if the contractor has the
capability to perform the work

565
BASIC ELEMENTS OF CONTRACTS Cont.
4. Legal Purpose
– The contract must be for a legal purpose
5. Form Provided by Law
– The contractor must reflect the contractor’s legal
obligation to deliver end products

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