The Project Management Framework (Ch 1-3)

Definition of a Project

Progressive Elaboration: Scope of work remains constant as characteristics of product are drilled-down. (Temporary/Unique)

Project Plan is developed through Rolling Wave planning (iterative and ongoing)

• Hierarchy: Strategic Plan -> Program -> Project -> Subproject

• It is important to agree on definitions of Project and Program Management

• Subproject: Often by phase, process, skill, technology area.

• Project Portfolio Management: Overall support (resources, investments) to all projects based on strategic plan, etc.

Process: Series of actions bringing about a result

• Project Management Process: Describe, organize, complete the work of the project

• PRODUCT-Oriented Process: Specify and create the project’s PRODUCT

• Note that these (PMBOK) processes are focused on project scope

Definition of Project Management

Project Management: Application of knowledge, skills, tools, techniques to project activities to meet requirements

• Competing demands for scope, time, cost, risk, quality

• Stakeholders with differing needs and expectations

• Identified requirements

• Integrative: Actions in one area will usually affect other areas

• Tradeoffs between objectives

• Managing Triple Constraint: Cost, Time, Scope (three baselines)

• Differs from “Managing by projects” (treating ongoing operations as projects)

PROJECT MANAGER ATTRIBUTES: (KEY: Planning, Organizing, Leading and Controlling)

Project Phases & Life Cycle

Deliverable: Tangible, verifiable work product (e.g. feasibility study, detail design, working prototype)

Life Cycle General Characteristics:

• Cost and staffing low at start, higher toward end, drop rapidly prior to conclusion

• Probability of success lower at start (higher risk and uncertainty), increases as project proceeds

• Ability of stakeholders to influence final characteristics is highest at the start and diminishes

• Cost of changes and error correction increases

Stakeholders

Individuals/orgs actively involved or whose interests may be affected by project execution or completion. May exert influence over project or results. May have differing or conflicting requirements.

Organizational Influences

Types of Power:

• Legitimate Power (Formal): Position power (use with expert and reward power when possible)

• Coercive Power: Predicated on fear (based on control over project and project personnel) (AVOID)

• Reward Power: Positive reinforcement (PREFERRED)

• Expert Power: Particular esteem because of knowledge or skill; based on reputation, knowledge, experience (PREFERRED)

• Referent Power: cite the authority of a more powerful person; based on position in organizational hierarchy

• Other terms: Purse-string, Bureaucratic, charismatic, penalty

General Management Skills (Essential for building Project Management Skills)

Leading (vs Managing)

Communicating

Negotiating

Problem Solving

Influencing the Organization

• Both essential

• Leading to establish direction, aligning, motivating, inspiring

• Managing to consistently produce expected results

• Exchange of information

• Sender (unambiguous, clear, complete)

• Receiver (received and understood correctly)

• Feedback loops, barriers, appropriate use of media, writing style, presentation technical, meeting mgmt, written / oral, internal / external, formal / informal, vertical / horizontal

• PM’s spend 90% of their time here!

• 55% of communication is non-verbal (most important part of conversation)

• Conferring with others to reach agreement on issues/topics

• Directly or assisted (mediation, arbitration)

• E.g: scope, cost, schedule, changes, T&C, resources, assignments

• Definition (distinguish between cause/symptom)

• Decision making (analyze/decide)

• “Getting things done”

• Formal and informal

• Politics, influence behavior

• Key in matrix organizations

Social-economic-environmental influences

• Standards: Approved by recognized body, provides for common and repeated use, rules, guidelines, characteristics for products, processes, services. Compliance not mandatory.

• Regulations: Similar to above (with administrative provisions) for which compliance is mandatory

• Standards can often become defacto regulations

• Compliance may be mandated at different levels (government, organization, team)

• Internationalization: Time zone, holidays, travel logistics, political situations. (take international focus)

• Cultural influences: Totality of socially transmitted behavior patterns, arts, beliefs, institutions and all other products of human work and thought. Operate within context of cultural norms. Political, economic, demographic, educational, ethical, ethnic, religious, other.

• Social-economic-environment sustainability: need to consider these contexts and potential impacts resulting from a project (e.g. construction and damage)

Project Evaluation

• Midproject: determine if project is meeting objectives and if objectives are still relevant/worthwhile. Often external. Problems (Managers use to ID/punish or drive political agendas, team doesn’t cooperate, resource drain, worry about poor survey process with invalid results)

• Final/postproject: ID lessons learned for sharing with other teams.

Customer Satisfaction

Careful and accurate needs analysis is key! Need to identify and then satisfy expectations.

ID stakeholders

Determine requirements

Manage process to ensure project success

Difficult to manage conflicting/contradictory expectations

Customizing Process Interaction

Outputs may be defined as constraints (e.g. target completion date)

Identify any needed processes, even if not listed here

Larger projects may need more detail or subsection breakout

Some area may be streamlined depending on size of project, etc.

KNOWLEDGE AREAS: Project Integration Management (Ch 4)

• Critical project management functions that ensure coordination of various project elements.

• Meet/exceed stakeholder needs/expectations

• Making trade-offs among competing objectives

• Primarily integrative

• Focus on project management process integration

• Integration has broad meaning with other work in ongoing org, other deliverables, etc

• Interact with other areas and processes

• Project vs PRODUCT scope

Process 4.1: Project Plan Development (GROUP: Planning Processes)

Taking the results of other planning processes and putting them into a coherent, consistent document

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Other Planning Outputs: Planning processes in other knowledge areas; base WBS; supporting detail; cash-flow forecast; strategic planning

• Historical Information: Estimates; past performance

• Organizational Policies: Formal/informal; quality management; Personnel administration; financial controls (reviews, oversight, contracts)

• Constraints: Applicable restrictions (predefined budget, contract provisions, due date); factors that limit project mgmt team options

• Assumptions: Factors assumed to be true/certain for planning purposes (e.g. availability of an SME)

• Project Planning Methodology: Structured approach (Simple or complex) to preparing the project plan

  • Forms/templates

  • Simulations

  • Hard tools (software packages)

  • Soft tools (facilitated kickoff meeting)

• Stakeholder Skills and Knowledge: Encourage stakeholders to contribute appropriately

  • Who, what, when will vary by project.

• Project Management Information System (PMIS):

  • Tools and techniques used to gather, integrate and disseminate the outputs of other PM processes

  • All phases

  • Manual and automated systems

• Earned Value Management (EVM): Technique to integrate the project scope, schedule, resources and to measure and report project performance from initiation to closeout.

  • Control Account Plans (CAPs)

  • Planned Value (PV)

  • Earned Value (EV)

  • Actual Costs (AC)

• Project Plan: Formal, approved document used to manage execution (see description below); almost always iterated several times (generic -> increasingly specific)

  • Project Charter

  • Description of project management approach

  • Scope Statement (objectives & deliverables)

  • WBS to level of control (baseline for scope)

  • Cost estimates

  • Scheduled start/finish dates (schedule)

  • Responsibility assignments within WBS

  • Performance measurement baselines for scope (WBS), schedule (project schedule), cost (time-phase budget, s-curve)

  • Key milestones and target dates

  • Key staff with expected cost/effort

  • Risk management plan (assumptions, constraints, responses, contingencies)

  • Secondary management plans (Scope, Schedule, Cost, Quality, Staffing, Communication, Procurement Mgmt; Risk Response)

  • Open issues

• Supporting Detail:

  • Output from other planning processes

  • Additional information or documentation

  • Technical documentation (history of requirements, specs)

  • Standards documentation

  • Specifications from early development planning

Note that this process is the final (integrating) process in the Planning Processes area.

Project plan is not just the project schedule or the Performance Measurement Baselines (which are relatively static)

Project plan changes over time as info becomes available

PM is responsible for plan accomplishment, but all stakeholders make contributions.

Process 4.2 Project Plan Execution (GROUP: Executing Processes)

Carrying out the project plan by performing the activities included therein

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Project Plan: APD.

• Supporting Detail: APD.

• Organizational POLICIES: APD.

• Preventive Action: Anything that reduces the probability of potential consequences of potential risk events.

• Corrective Action: Anything done to bring expected future performance in line with plan; Output of control processes; closure to feedback loop.

• General Management Skills: APD.

• PRODUCT Skills and Knowledge: Appropriate skills/knowledge of PRODUCT; defined as part of planning; provided through staff acquisition.

• Work Authorization System: Formal procedure for sanctioning project work (including correct time and sequence); Verbal or written; Work cannot commence w/o authorization

• Status Review Meetings: Regularly scheduled to exchange information; frequency and level of detail varies by audience

• PMIS: APD.

• Organizational PROCEDURES: Used for accomplishing particular functions (vs policies)

• Work Results: Outcome of activities performed to accomplish project; deliverables, measurements, reporting, tangible/intangible

• Change Requests: Expand/contract scope; modify cost or schedule estimates. Driven by:

  • External Events

  • Error or omission in scope

  • Value-add

Process during which:

• Project plan is carried out

• Majority of budget spent

• PM and team spend majority of time.

Performance against baseline must be continuously monitored

Process 4.3 Integrated Change Control (GROUP: Controlling Processes)

Coordinating changes across the entire project and across knowledge areas

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Project Plan: Utilize baselines for assessment

• Performance Reports: Project performance and potential future issues (trends)

• Change Requests: Various forms

  • Oral/Written

  • Direct/Indirect

  • Internal/External initiation

  • Mandated/Optional

Can expand or contract project scope

Potentially driven by

• External event

• Error/omission in definition of project/PRODUCT

• Value-add change

• Risk response(contingency / workaround)

• Change Control System:

  • Formal, documented procedures; document how performance is monitored/evaluated

  • Steps by which official docs may be changed

  • Includes paperwork, tracking, processes, and approval requirements.

  • Three basic objectives

1. Screen user requests (collect, assess, accept/submit to CCB)

2. Track accepted changes (file, update specs)

3. Update development process (baseline, project staff)

   • Change Control Board: Review / approve / reject changes.

• Configuration Management

  • Carefully identify/define an item

  • Rigorously control changes

  • Record/report change & implementation status

  • Audit the items to verify conformance to requirements (defined system & changes)

• Performance Measurement: Assess if variance from plans require corrective action

• Additional Planning: Revised cost estimates; modified activity sequences; schedules; resources; risk

• PMIS: APD.

• Project Plan Updates: Any modifications to project plan contents or supporting detail; includes notification to appropriate stakeholders

• Corrective Action: APD.

• Lessons Learned: Documented to show causes of variances and reasons for selected corrective action

  • Basis for knowledge management

  • Leads to professional responsibility area

PM can typically approve changes within time and budget reserves

Changes in PRODUCT scope reflected in project scope

KNOWLEDGE AREAS: Project Scope Management (Ch 5)

Ensure that the project includes all the work required, and only the work required, to complete the project successfully.

Defining and controlling what is/is not included in project

Processes typically repeated each phase.

Process 5.1: Initiation (GROUP: Initiating Processes)

Formally authorizing new project or continuation to next phase

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• PRODUCT Description: Characteristics of product

  • Detail increases through progressive elaboration

• Strategic Plan: Projects should support strategic goals and align to strategic plan

• Project Selection Criteria: Typically defined in terms of PRODUCT merits and mgmt concerns (Financial return, market share, public perception)

• Historical Information: Results of previous selection decisions, previous performance

  • Can include data from previous phases.

• Project Selection Methods: Measure value/attractiveness to project owner; considering decision criteria (multiple criteria consolidated into one value function); Means to calculate value under uncertainty; Decision model and calculation method; Alternate ways of doing the project; Optimizing alternatives.

  • Benefit Measurement Methods: Comparative Approach, scoring, benefit contribution, economic

  • Present Value: Value in current $$ of work to be performed in future

PV = Mt / ( 1 + r ) ^t

Mt = Amnt of pmnt in “t” yrs

r = Interest rate

t = Time period

• Benefit / Cost ratio (higher is better)

• Internal Rate of Return (IRR): Percentage measured against internal threshold rate.

• Payback Period: Number of time periods until cumulative revenue > cumulative cost (NOT magnitude of total profit)

• Opportunity Cost: One project vs another

• Sunk Cost: expended costs over which no longer have control (don’t consider as part of continued investment?)

• Constrained Optimization Methods: This is a Mathematical Approach

• Linear, non-linear, dynamic, integer, multi objective models

• General Models: Decision Trees, forced choice

• Specialized Models: Analytic Hierarchy, Logical Framework Analysis

• Expert Judgment: Input based on specialized knowledge / training (consultants, stakeholders, industry groups, etc); Documented lessons vs anecdotes!

• Project Charter: Formally authorizes project (business need, PRODUCT description)

  • Issued by manager external to project at appropriate level

  • Authorizes project manager to apply resources

  • Normally during Concept phase of Life Cycle

  • Serves as an input to all project management processes

• Project Manager Identified/Assigned: As soon as possible; prior to execution of project plan; ideally prior to most planning

• Constraints: Factors that limit team options (predefined budget, contract provisions)

• Assumptions: APD.

Key: Project Charter output

Links project to ongoing work in performing organization

May require: Needs assessment, feasibility study, preliminary plan, other analysis

Driven by: Market Demand, Business Need, Customer Request, Technological Advance, Legal Requirement, Social need

Process 5.2: Scope Planning (GROUP: Planning Processes)

Developing a written scope statement as the basis for future decisions

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• PRODUCT Description: APD.

• Project Charter: APD.

• Constraints: APD.

• Assumptions: APD.

• PRODUCT Analysis: Develop better understanding of PRODUCT

  • PRODUCT Breakdown Analysis (decompose)

  • Systems Engineering,

  • Value Engineering (more effective way to achieve)

  • Value Analysis (optimize costs)

  • Function Analysis

  • Quality Function Deployment (matrix customer needs vs different areas House of Quality)

• Benefit/Cost Analysis: Tangible/intangible costs (outlays) vs benefits (returns) of various project/PRODUCT alternatives

  • Evaluate items such as ROI, payback period.

• Alternatives Identification: Generate different approaches to project (brainstorming, lateral thinking)

• Expert Judgment: APD.

• Scope Statement: Documented basis for making future project decisions, developing common understanding; may be revised to reflect approved changes.

  • Project Justification: business need. Used to evaluate future tradeoffs

  • Project’s PRODUCT: Brief summary of PRODUCT description

  • Project Deliverables: list of summary-level subPRODUCTs. Full and satisfactory delivery marks completion. Exclusions should be ID’ed, but anything not included is implicitly excluded

  • Project Objectives: Quantifiable criteria that must be met for success. Must include: Cost, Schedule, Quality. Unquantified objectives are high risk!!!

• Supporting Detail: As needed, include assumptions/constraints

• Scope Management Plan: Formal/informal; broad/detailed

  • How scope changes will be integrated

  • Assessment of scope stability (how likely, how often, how much)

  • How changes will be identified and classified;

Key: Scope Statement output

Progressively elaborating and documenting project work that produces the PRODUCT.

Process 5.3: Scope Definition (GROUP: Planning Processes)

Subdividing major deliverables, into more manageable components

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Scope Statement: APD.

• Constraints: APD.

• Assumptions: APD.

• Other Planning Outputs: From other knowledge areas—review for impact

• Historical Information: From previous projects—especially errors and omissions.

• Work Breakdown Structure Templates: from previous projects; similar project lifecycles; organizations may have standards for structure.

• Decomposition: Subdividing deliverables to level sufficient to support development of project activities (plan, execute, control, close)

  • Major deliverables defined in terms of project organization (e.g. phases of project life cycle)

  • Determine if adequate cost/duration estimates can be developed

  • Break down deliverable to constituent components (tangible, verifiable results)

  • Verify correctness (components necessary and sufficient, clearly and completely defined, can they be scheduled/budgeted/assigned).

  • DELIVERABLE-focused

  • Differs from Activity Definition (6.1): Focused on Deliverables NOT Activities

• Work Breakdown Structure: DELIVERABLE-ORIENTED grouping of project components;

  • Decomposition is typical approach to development

  • Typically a chart, but not dictated by format of presentation. Unstructured activity list in chart format is not a WBS

  • Code of Accounts: Unique identifiers

  • Highest level = Project Life Cycle Phases

  • Lowest level = Work Packages (must be manageable units that can be planned, budgeted, scheduled, controlled, 80 hour rule; assignable by the PM; above task/activity level)

  • WBS Dictionary: Descriptions of work components (dates, costs, assignments).

• Scope Statement Updates: Modifications to scope, notify stakeholders as needed

Key: Work Breakdown Structure output

• Improve accuracy of cost, duration, resource estimates

• Define baseline for performance measurement and control

• Facilitate clear responsibility assignments

• WBS is Not the same as:

  • Contractual WBS (CWBS): Defines level of detail seller provides to the buyer (less detail)

  • Organizational Breakdown Structure (OBS): work components assigned to organization units

  • Resources Breakdown Structure (RBS): Variation of OBS mapped to individuals

  • Bill of Materials (BOM): Hierarchical view of the physical assemblies, components of a manufactured PRODUCT (PRODUCT-focused)

  • Project Breakdown Structure (PBS): Fundamentally same as WBS, used when WBS incorrectly refers to BOM

Process 5.4: Scope Verification (GROUP: Controlling Processes)

Formal acceptance of scope from Stakeholders.

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Work Results: Fully/partially completed deliverables from Project Plan Execution

• PRODUCT Documentation: Available for review; varies by application area

• Work Breakdown Structure: APD.

• Scope Statement: APD.

• Project Plan: APD.

• Inspection: Measuring, examining, testing to determine if results conform to requirements; Reviews, audits, walkthroughs

• Formal Acceptance: Documentation that the PRODUCT or major deliverables have been accepted. May be conditional.

Key: Acceptance output

• Scope Verification: Acceptance of Work Results

• Quality Control: Correctness of Work Results

As complexity increases, risk/uncertainty in defining scope increases

Can/Should be performed at the end of each phase. Similar to PRODUCT verification @ closure

Process 5.5: Scope Change Control (GROUP: Controlling Processes)

Controlling changes to project scope (as defined by approved WBS)

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Work Breakdown Structure: APD.

• Performance Reports: Provide information on scope performance; deliverable status; potential issues

• Change Requests: APD.

• Scope Management Plan: APD.

• Scope Change Control System: Procedures by which scope is changed; paperwork, tracking system, approvals.

• Performance Measurement: Assess magnitude of variations; determine causes of variance and what to do

• Additional Planning: Modifications to WBS, analysis of alternatives, etc.

• Scope Changes: Modification to agreed upon scope as defined by approved WBS; Adjustments to cost, time, quality, objectives; fed back through planning process.

• Corrective Action: Bring expected future performance back in line with plan

• Lessons Learned: Causes of variances, reasoning behind corrective action, etc.

• Adjusted Baseline: As needed due to scope changes. (Note: Loss of historical data will result)

Influencing factors that create scope changes to ensure that they are agreed upon

Determining that a scope change has occurred

Managing the change when/if it occurs

KNOWLEDGE AREAS: Project Time Management (Ch 6)

Ensure timely completion of the project.

Order of processes: Define Activities -> Sequence and Estimate Duration -> Develop Schedule

Activity Sequencing, Duration Estimating and Schedule Development may be consolidated on smaller projects.

Activity: Consumes time

Event: Specified accomplishment / does NOT consume time

Process 6.1: Activity Definition (GROUP: Planning Processes)

Identifying and documenting specific activities required to produce deliverables in the WBS

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• WBS: APD.

• Scope Statement: APD. Project Justification and Project Objectives used here

• Historical Information: information from previous, similar projects

• Constraints: APD. E.g. Maximum activity durations

• Assumptions: APD.

• Expert Judgment: APD.

• Decomposition: Breaking down into more manageable components to improve management control.

  • Differs from Scope Definition (5.3): Focused on Activities NOT Deliverables.

  • WBS (deliverables) is usually developed before Activity List

• Templates: Leverage from other, similar projects (skills, hours of effort, risks, deliverables, etc)

• Activity List: All activities performed on project; extension to WBS

• Supporting Detail: APD.

• WBS Updates: Refinements to WBS based on Activity Definition (new deliverables, changed deliverables)

Process 6.2: Activity Sequencing (GROUP: Planning Processes)

Identifying and documenting interactivity logical relationships/dependencies

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Activity List: APD.

• PRODUCT Description: Review to determine if it impacts sequencing

• Mandatory Dependencies: Inherent in the nature of the work being done; physical limitations, etc. Hard logic

• Discretionary Dependencies: Defined by project management team; used with care since they limit scheduling options (best practices, specific order preferred). Soft Logic, preferential logic, preferred logic

• External Dependencies: Relationship between project and non-project activities (material deliveries, etc)

• Milestones: Need to be included to ensure that requirements for meeting milestone are met.

• Precedence Diagramming Method (PDM):

  • Finish to Start (successor start depends on predecessor completion) MOST COMMON

  • Finish to Finish (successor completion depends on predecessor completion)

  • Start to Start (successor start depends on predecessor start)

  • Start to Finish (successor completion depends on predecessor start) RARE

• Arrow Diagramming Method (ADM):

  • Only uses Finish to Start

  • May require dummy activities.

• Conditional Diagramming Methods: Graphical Evaluation and Review Technique (GERT) and System Dynamics (includes non-sequential activities such as test loops or conditional execution)

• Network Templates: Use standardized networks/subnets for identical sections

• Project Network Diagrams: Describes project activities and logical relationships; Full details vs summary; include summary narrative. Project Evaluation and Review Technique (PERT)

• Activity List Updates: Network development may identify needed changes or divisions to activities.

Critical Path: Longest Path through network / shortest time to complete project (project duration) Almost always no float

Bar Chart (Gantt): Weak planning, effective reporting; easy to read; no logical relationships defined between relationships (in most cases)

Milestone Chart: Shows significant events; ID’s only scheduled start/end of majkor deliverables; good for communicating status to upper mgmt/customer; zero duration

Network Chart (PERT, CPM, PDM): shows how project activities and events are related; ID critical path, duration, activity sequences

Process 6.3: Activity Duration Estimating (GROUP: Planning Processes)

Estimating the number of work periods required to complete individual activities

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Activity List: APD.

• Constraints: APD.

• Assumptions: APD.

• Resource Requirements: As resources increase—communication overload reduces productivity

• Resource Capabilities: Capability of staff and materials. (Senior vs junior)

• Historical Information: Project files from previous projects; commercial databases; project team knowledge

• Identified Risks: Can be threats OR opportunities. High probability and high impact

• Expert Judgment: APD. Due to difficulty with estimating, this is valuable with historical information

• Analogous Estimating: Top-Down Estimating; using previous, similar activities; especially when limited information is available. Is a form of expert judgment

• Quantitatively Based Durations: Quantity of work * productivity unit rate (miles of cable * miles of cable/hour)

• Reserve time (contingency): Reserve, contingency, buffer; recognition of risk; percentage of time; fixed number of work units; document with other assumptions

• Activity Duration Estimates: Quantitative estimate of number of work periods; should always include a range:

  • 2 weeks +/- 2 days

  • 15% chance of exceeding 3 weeks

• Basis of Estimates: document assumptions made in generating estimates

• Activity List Updates: APD.

Taking information on project scope and resources and developing durations to input into schedules

May need to consider elapsed time as well (Day of Work)

Project Duration is outgrowth of 6.4 Schedule development

Probability distribution (probabilistic techniques) vs single-point estimate (deterministic techniques)

Range estimating (2 wk +/- 2d; 85% prob of 3 weeks)

Process 6.4: Schedule Development (GROUP: Planning Processes)

Analyzing activity sequences, durations and resource requirements to create the schedule

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Project Network Diagrams: APD.

• Activity Duration Estimates: APD.

• Resource Requirements: APD.

• Resource Pool Description: What resources available when; availability patterns;

• Calendars: Periods when work is allowed

  • Project calendars affect all resources

  • Resource calendars affect specific resources/class of resources.

• Constraints:

  • Imposed dates: restrict start/finish (market window, weather, mandated, etc)

  • Key events/major milestones: Requested by customer, sponsor, etc.

• Assumptions: APD.

• Leads and Lags:

  • Lags: Schedule 2 week delay (lag) between ordering and using equipment. (Wait for paint to dry) (negative lead)

  • Leads: in FS successor starts 10 days before predecessor finishes. (Clean brushes while waiting for paint to dry)

• Risk Management Plan: APD.

• Activity Attributes: Responsibility, geographic area, building, activity type.

• Mathematical Analysis: Theoretical early/late start/finish dates w/o regard to resource pools.

  • Critical Path Method (CPM): Single, deterministic early/late start/finish dates for each activity based on sequential network and single duration. Focus on calculating float and identifying least flexible activities. Emphasis on meeting costs w/flexibility in schedule.

  • Graphical Evaluation & Review Technique (GERT): Probabilistic of network logic and activity duration (including conditional)

  • Program Evaluation & Review Technique (PERT): Weighted average; uses distribution mean instead of most likely estimate. Emphasis on meeting schedule w/flexibility in costs. Rarely used today.

• Duration Compression: Shorten schedule w/o changing scope

  • Crashing: Improve time at increased cost; Look at cost/schedule to determine greatest compression for least incremental cost. Not always viable, usually increases cost. Add resources to critical path. (See SLOPE)

  • Fast Tracking: parallel typically sequential activities (before predecessors complete); focus on critical path; increase rework & risk; aggressive use of S-S relationship, etc.

• Simulation: multiple durations with different assumptions.

  • Monte Carlo: distribution of probable results for each activity used to calculate distribution for total project. Uses PERT estimates and shows on an S-curve. Can a project finish on a particular day or under adverse conditions

  • What-If: testing scenarios to develop contingencies, etc.

• Resource Leveling Heuristics: Address mathematical model weakness of overscheduling during certain time periods

  • Resource-Based Method: Apply scarce resources to critical path; extended hours, non-work periods, productivity increases

  • Reverse Resource Scheduling: Finite/critical resource scheduled in reverse from end-date. Resource constrained vs time constrained; Critical chain

• Project Management Software: helps perform these activities; display output

• Coding Structure: Allow sorting/extractions based on different attributes (responsibility, geography, phase, schedule level, activity type, WBS classification)

• Project Schedule: Minimum: Planned start/expected finish for activities. Preliminary until resource assignments; Summary (master) or detail; graphical/tabular

  • Project network with date information: Interdependencies; how related

  • Bar Chart (GANTT): start/finish; duration; dependencies (often for management)

  • Milestone: Similar to GANTT, but only scheduled start or completion of major deliverables and key external interface

• Supporting Detail: Varies by application area

  • Responsibility Assignment Matrix: Who does what

  • Resource Spreadsheet: Amount of effort for each resource by period.

  • Resource Gantt: ID periods mapping resource to task.

  • Resource histograms/loading chart: total resources by period

  • Other: cash flow; order/delivery schedules; resource requirements by time period; schedule contingencies; alternative schedules)

• Schedule Management Plan: How changes to the schedule will be managed. Approach varies by project.

• Resource Requirement Updates: May have significant effect on preliminary estimates.

Determining start/finish dates for project activities—typically iterated

Heuristic: Rule of thumb

Process 6.5: Schedule Control (GROUP: Controlling Processes)

Controlling changes to project schedule

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Project Schedule: Approved schedule is schedule baseline.

• Performance Reports: Information on schedule performance; dates met/not met; potential future issues

• Change Requests: Oral/written; direct/indirect; external/internal; mandated/optional

• Schedule Management Plan: APD.

• Schedule Change Control System: Procedures by which project schedule may be changed; paperwork; tracking; approvals

• Performance Measurement: Does schedule variation require corrective action?

• Additional Planning: Revised duration estimates; modified activity sequences; analysis of alternative schedules

• Project Management Software: Planned vs actual; forecast effect of schedule changes

• Variance Analysis: Target vs actual/forecast; identify deviations and corrective actions; critical and subcritical; float variance

• Schedule Updates: any modification to schedule; may not require modifications to other part of plan

  • Revisions: Changes to schedule start and finish dates in approved schedule

  • Rebaselining: Should only be used after severe changes to allow realistic assessment. Will lose historical data

• Corrective Action: Expediting; root-cause analysis to identify the cause of variation; propagation to later activities

• Lessons Learned: Causes of variance, reasoning behind corrective action, etc.

Influencing factors that create schedule changes to ensure that they are agreed upon

Determining that the schedule has been changed

Managing changes when/as they occur

KNOWLEDGE AREAS: Project Cost Management (Ch 7)

Ensure that the project is completed within the approved budget.

Should also consider effect of project decisions on the cost of using the PRODUCT (LCC: life-cycle costing) Project, operations, maintenance

Predicting/analyzing financial performance may be performed outside of the project team

Information may need to be reported to stakeholders in different fashions and times (committed, ordered, delivered, incurred, etc)

Controllable/uncontrollable costs should be tracked due to potential impact on reward and recognition system

Operating Profit: Amount of money earned (Revenue – (Direct + indirect costs))

Process 7.1: Resource Planning (GROUP: Planning Processes)

Determining what resources (people, equipment, materials) and how much of each are required

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Work Breakdown Structure: APD. Primary input

• Historical Information: APD.

• Scope Statement: APD.

• Resource Pool Description: What resources are potentially available. Later phases may require previous experience on the project and limit the pool.

• Organizational Policies: Staffing, rental, purchase of resources

• Activity Duration Estimates: APD.

• Expert Judgment: APD.

• Alternatives Identification: APD.

• Project Management Software: APD. May include pools, rates, availability, calendars

• Resource Requirements: Description of what resources required and quantities for each element at lowest level of WBS

Process 7.2: Cost Estimating (GROUP: Planning Processes)

Developing an approximation of the costs of the resources required

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Work Breakdown Structure: APD.

• Resource Requirements: APD.

• Resource Rates: Unit rates (actual or estimated)

• Activity Duration Estimates: APD. May need to include cost of financing

• Estimating Publications: Commercially available data on cost estimating

• Historical Information: APD.

• Chart of Accounts: Coding structure for reporting financial information on general ledger

• Risks: APD. (Threat/opportunity, likelihood, impact)

• Analogous Estimating: Top-down estimating; actuals from previous, similar project; expert judgment; less costly to perform; less accurate; improved by project similarity, team experience

• Parametric Modeling: Project parameters and mathematical model; Accurate with historical data, quantifiable parameters, scalable model (Regression Analysis: plot relationship data on a scattergram)

• Bottom-up Estimating: rollup of cost of activities; accuracy driven by size/complexity; expensive approach (most accurate)

• Computerized Tools: PM tools; simulation; statistical

• Other Cost-Estimating Methods: Vendor bid analysis

• Cost Estimates: Quantitative assessment of likely cost; unit of currency; unit of measure; include risk response. Five estimates: Order of Magnitude, Conceptual, Preliminary, Definitive, Control

  • Order of Magnitude: -25% / + 75%

  • Budgetary: -10% / +25%

  • Definitive: -5% / +10%

• Supporting Detail:

  • Description of work (ref: WBS)

  • Basis of Estimate

  • Assumptions

  • Range of results

• Cost Management Plan: How variance will be managed

• Consider causes of variation.

• Cost estimating: how much to provide the PRODUCT or services involved.

• Pricing: How much to charge for the PRODUCT or service.

• Control Account Plan (CAP): Integrates scope, budget, schedule. Management control point. Monitoring and control purposes

• Working Capital = Current Assets – Current Liabilities

• Value Analysis: Identify all functions and their costs, determine if function is needed or can be done at less cost

Process 7.3: Cost Budgeting (GROUP: Planning Processes)

Allocating the overall cost estimate to individual work activities

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Cost Estimates: APD.

• Work Breakdown Structure: APD.

• Project Schedule: APD. Assign costs to time period.

• Risk Management Plan: APD. Includes cost contingency based on expected accuracy of estimate.

• Cost Budgeting Tools and Techniques: APD.

• Cost Baseline: Time-phased budget.

  • Measure/monitor cost performance

  • Sum of estimated costs/period

  • Displayed as S-curve

Cost Accounts: One level above WBS work packages; basic level at which project performance is measured

Process 7.4: Cost Control (GROUP: Controlling Processes)

Controlling changes to project budget

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Cost Baseline: APD.

• Performance Reports: APD. Scope and cost performance (vs budget)

• Change Requests: APD. Could increase or decrease.

• Cost Management Plan: APD.

• Cost Change Control System: Procedures, paperwork, tracking, approval.

• Performance Measurement: Assess the magnitude of change. EVM is useful. Determine cause of variance and if corrective action is required.

• Earned Value Management (EVM): Control Account Plans (CAPs) measure performance through three independent variables

  • Planned Value

  • Earned Value

  • Actual Costs incurred for Earned Value

• Additional Planning: New/revised cost estimates or alternative approaches

• Computerized Tools: PM software, spreadsheets, etc.

• Revised Cost Estimates: Stakeholder notification, mods to other project documents

• Budget Updates: Changes to approved cost baseline; usually driven by scope change; Severe changes require rebaselining (Note: Loss of historical data will result)

• Corrective Action: APD.

• Estimate at Completion (EAC): Forecast of total costs based on project performance and risk quantification.

• Project Closeout: Processes and procedures for closing out or canceling a project (incurring costs, etc)

• Lessons Learned: APD.

Influence factors that create change to cost baseline to ensure that agreed upon

Determining that baseline has changed

Managing the changes

Cost / Progress Reporting: Charge 50% of PV to account at startup and 50% of PV at completion (20/80, 0/100)

CPI (Cost Performance Index): Cumulative CPI does not change by more than 10% once a project is approximately 20% complete. Quick Statistical forecast of final project costs

EV = PV [BCWP = BCWS]: When a project is completed

To Complete Performance Index (TCPI) = Value of Work Remaining / Value of Funds Remaining

How much work should be done?

Planned Value

($ budgeted)

PV

Portion of approved cost estimate (budget) planned to be spent on the activity in a given period

Performance Measurement Baseline

Old: Budgeted Cost for Work Scheduled (BCWS)

How much work is done?

Earned Value

EV

Value of work actually completed (at budgeted cost)

“Task A scheduled to cost $1000, I’m 85% done, therefore EV is $850”

Old: Budgeted Cost for Work Performed (BCWP)

How much did the “is done” work cost?

Actual Cost

AC

Total of costs incurred in accomplishing work on activity in a given period

Old: Actual Cost for Work Performed (ACWP)

What was the total job supposed to cost

Budget at Completion

BAC

(Total PV)

What do we now expect the total job to cost?

Estimate at Completion

EAC

Based on project performance and quantitative risk analysis

AC + BAC – EV

AC + Remaining PV

Current variances are atypical and will cease; Actuals plus remaining budget

AC + ((BAC – EV) / CPI)

AC + (Remaining PV / CPI)

Current variances are typical and will continue; Actuals plus remaining budget modified by performance factor

AC + ETC

AC + ETC

Original assumptions were flawed or no longer relevant; Actuals plus new estimate for remaining (variation of “typical” formula)

BAC / CPI

Cost Variance

CV

EV – AC

BCWP – ACWP

Negative = Bad; MEASURED IN $$$

START WITH EARNED VALUE (vs ACTUAL)

Cost Variance (in %)

CV / EV

Schedule Variance

SV

EV – PV

BCWP – BCWS

Negative = Bad; MEASURED IN $$$

START WITH EARNED VALUE (vs PLANNED)

Schedule Variance (in %)

SV / PV

Cost Performance Index

CPI

EV / AC

BCWP / ACWP

Bad < 1 < Good

I’m getting ___ out of each dollar.

EARNED ON TOP (over ACTUAL)

Schedule Performance Index

SPI

EV / PV

BCWP / BCWS

Bad < 1 < Good

I’m progressing at ____% of the planned rate

EARNED ON TOP (over PLANNED)

Estimate to Complete

ETC

EAC – AC

(BAC – EV) / CPI

Original estimate for remaining modified by performance index

Variance at Completion

VAC

BAC – EAC

Supposed to Cost – Expected to Cost

% Spent

AC / BAC

Slope

(Crash cost – Norm cost) / (Crash time – Norm time)

If < 0 as the time required for a project/task decrease, the cost increase

Activity Duration

AD

Work Quantity / Production Rate

Work Quantity (scope of the activity)

KNOWLEDGE AREAS: Project Quality Management (Ch 8)

Ensure that the project will satisfy the needs for which it was undertaken.

All activities in overall management function that determine quality policy, objectives, responsibilities and implements by Quality Planning, Assurance, Control, Improvement.

Address quality of project and PRODUCT (understand interactions/ramifications of tradeoffs here; impact to project team; impact to customers)

Modern Quality Management: Customer satisfaction (conformance to requirements, fitness for use); Prevention over Inspection (Quality is Planned in, not Inspected in);

Cost of project quality management may be carried over through ongoing operations since project is temporary

Taguchi Method: Estimate loss associated with controlling or failing to control process variability. Select good design parameters, you can produce products that are more forgiving/tolerant. Helps determine the value or break-even point for process improvement

Process 8.1 Quality Planning (GROUP: Planning Processes)

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

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Quality Policy: Overall intentions and direction of organization from top mgmt. Adopt “as is”

• Scope Statement: APD.

• PRODUCT Description: APD.

• Standards and Regulations: APD.

• Other Process Outputs: APD. Procurement Planning, etc.

• Benefit/Cost Analysis: APD. Benefit: less rework; Cost: expense of QM activities

• Benchmarking: Comparing actual/planned practices to other projects to assess performance.

• Flow-Charting: Shows how various elements relate:

  • Cause-and-effect (Ishikawa, fishbone): bones lead to effect.

  • System/process flow charts: How elements of system interrelate

• Design of Experiments: Statistical analysis of which factors influence specific variables

• Cost of Quality: Total cost of all efforts to achieve PRODUCT quality including conformance and fixing nonconformance.

  • Prevention: up-front, satisfy customer requirements (conformance)

  • Appraisal: evaluation of product to see if satisfies requirements (conformance)

  • Failure: Internal: before leaving organization, External (after customer receipt) (non-conformance)

• Quality Management Plan: How team implements the Quality Policy (ISO 9000: Org structure, responsibilities, procedures, processes, resources needed to implement QM)

• Operational Definitions: Specific; what it is; how it is measured (id particular items, etc); metrics

• Checklists: Structured tool; item specific; verify that set of required steps have been performed.

• Inputs to Other Processes: May identify need for future activities in other area.

Process 8.2 Quality Assurance (GROUP: Executing Processes)

Planned and systematic activities for evaluating overall project performance on a regular basis to provide confidence that the project will satisfy relevant quality standards

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Quality Management Plan: APD.

• Results of Quality Control Measurements: Records of quality control tests for comparison and analysis

• Operational Definitions: APD.

• Quality Planning Tools and Techniques: APD.

• Quality Audits: Structured review of other QM activities; lessons learned; scheduled or random; internal/external

• Quality Improvement: Taking action to increase effectiveness/efficiency of project; change requests; corrective actions; link to integrated change control.

Primarily reactive

Individual performing task has ultimate responsibility

Self-inspection: person performing task also performs conformance measurements

MANAGEMENT FUNCTION

Process 8.3 Quality Control (GROUP: Controlling Processes)

Monitoring specific results to determine if they comply with relevant quality standards and identifying ways to eliminate unsatisfactory performance

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Work Results: APD. Process results; PRODUCT results; Planned vs actual

• Quality Management Plan: APD.

• Operational Definitions: APD.

• Checklists: APD.

• Inspections: Measuring, examining, testing if results conform to requirements

• Control Charts: Graphic display of results over time. Evaluate if process is “in control” (Average, range, # defects, % defective, etc.)

  • UCL/LCL: Upper/lower control limits describe normal variation; based on data from the process itself; beyond control limits special events with assignable or random cause

  • Rule of 7: 7 events on same side of mean (even within UCL/LCL), must investigate

  • Sigma: std deviation for UCL/LCL

• Pareto Diagrams: Histogram by frequency of occurrence. 80/20 principle.

• Statistical Sampling: Part of population for inspection.

• Flow-Charting: APD. Top-down (high-level); detailed

• Trend Analysis: Forecast future outcome based on historical results: Technical performance; cost/schedule performance.

• Quality Improvement: APD.

• Acceptance Decisions: APD. Accepted / rejected.

• Rework: Bring defective or non-conforming into compliance.

• Completed Checklists: APD. Kept as part of project records.

• Process Adjustments: Immediate corrective or preventive action as a result of QM measurements.

KNOWLEDGE AREAS: Project Human Resource Management (Ch 9)

Make the most effective use of the people involved with the project.

Process 9.1 Organizational Planning (GROUP: Planning Processes)

Identifying, documenting and assigning project roles, responsibilities and reporting relationships

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Project Interfaces:

  • Organizational: formal/informal reporting relationships between units

  • Technical: formal/informal reporting relationships across disciplines

  • Interpersonal: formal/informal reporting relationships between individuals

• Staffing Requirements: what skills and timeframes

• Constraints: Organizational structure; collective bargaining; preferences of the team; Expected staff assignments

• Templates: leverage from other projects or standards

• Human Resources Practices: Policies, guidelines, procedures

• Organizational Theory

• Stakeholder Analysis: Identification of stakeholders; analysis of their needs

• Role and Responsibility Assignments:

  • Roles (who DOES what)

  • Responsibilities (who DECIDES what)

  • Responsibility Assignment Matrix (RAM): Phase x Person description of responsibility

  • Linear Responsibility Chart (LRC): like RAM

• Staffing Management Plan: When/how resources brought onto / removed from project

  • Appropriate reassignment: Reduces costs due to makework

  • Improves morale by reducing uncertainty about employment

  • Resource Histogram: Resource units per time period for a given job

• Organization Chart: Project reporting relationships

• Supporting Detail: APD. Organizational impact; job descriptions; training needs

Conflict is Unavoidable: High-stress environment; Ambiguous roles; Multiple bosses; Prevalence of advanced technology concerns

Process 9.2 Staff Acquisition (GROUP: Planning Processes)

Getting the human resources needed assigned to and working on the project

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Staffing Management Plan: APD.

• Staffing Pool Description: Previous experience; personal interest; personal characteristics; availability; competencies and proficiencies

• Recruitment Practices: Policies, guidelines, procedures from the organization

• Negotiations: With functional managers and other project managers

• Preassignment: Specific staff assigned as part of a contract, etc.

• Procurement: Hiring staff, consultants, etc.

• Project Staff Assigned: Appropriate people reliably assigned to work. Full time, part time, variable

• Project Team Directory: Team members and other stakeholders

May/may not have choice on staff or ability to get “best” staff

PM as a role model for desired behaviors

Process 9.3 Team Development (GROUP: Executing Processes)

Developing individual and group competencies to enhance project performance

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Project Staff: APD.

• Project Plan: APD.

• Staffing Management Plan: APD.

• Performance Reports: APD.

• External Feedback: Measurements of team performance vs external expectations

• Team-Building Activities: Improve team performance as a primary effect. Others have secondary effect.

• General Management Skills: APD.

• Reward and Recognition Systems: Formal systems to promote/reinforce desired behavior. Clear, explicit, achievable links between performance and reward; recognize cultural differences.

• Collocation: Most in same location (Tight Matrix)

• Training: Enhance team competencies

• Performance Improvements: Individual skills; team behaviors; Individual/team competencies; PM should update Employee Records

• Input to Performance Appraisals: When significant interaction occurs

Reward/Recognition:

• Motivated in relation to value placed upon them; rewards/recognition promote and reinforce behavior

• Link between performance and reward: Clear, explicit, achievable

Motivation:

KNOWLEDGE AREAS: Project Communications Management (Ch 10)

Ensure timely and appropriate generation, collection, dissemination, storage and ultimate disposition of project information.

Sender -> Encoding -> Transmission -> Decoding -> Receiver -> Feedback

Types of Communication: Formal Written; Informal Written; Formal Verbal; Informal Verbal

Number of Channels grows geometrically (greater than linear rate): n * (n – 1) / 2

Periodic team meetings as an effective way to accelerate Project Integration

Process 10.1 Communications Planning (GROUP: Planning Processes)

Determining the information and communication needs of the stakeholders (who, what, when, how, whom)

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Communications Requirements: Sum of information requirements by stakeholders: Project organization, stakeholder responsibility; Disciplines, departments, specialties; Logistics (individuals, locations); External information needs

• Communications Technology: Immediacy of information needs, availability of technology, staffing, length of project

• Constraints: APD.

• Assumptions: APD.

• Stakeholder Analysis: Info needs of stakeholders to develop a methodical and logical view of their needs and sources to meet them.

• Communications Management Plan:

  • Collection and filing structure

  • Distribution Structure: what, how, whom

  • Description of info: format, content, detail, conventions

  • Production schedules

  • Information access methods

  • Updating/refining Management Plan

The prevailing measurement of what information to collect and communicate is that it contributes to project success

Process 10.2 Information Distribution (GROUP: Executing Processes)

Making needed information available to project stakeholders in a timely fashion

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Work Results: APD.

• Communications Management Plan: APD.

• Project Plan: APD.

• Communications Skills: As described in General Management Skills

• Information Retrieval System: Variety of methods.

• Information Distribution Methods: Variety of methods.

• Project Records: Maintained in an organized fashion; correspondence, memos, documentation

• Project Reports: Project status and/or issues

• Project Presentations: Formal / informal; relevant to audience; appropriate mechanism

Implementing communications management plan as well as responding to unexpected requests

Process 10.3 Performance Reporting (GROUP: Controlling Processes)

Collecting and disseminating performance information: (scope, schedule, cost, quality)

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Project Plan: APD.

• Work Results: Deliverable status; resource consumption; performed within context of communication plan

• Other Project Records: APD.

• Performance Reviews: Assess project status and progress

• Variance Analysis: Often cost and schedule but can include scope, resource, quality, risk

• Trend Analysis: Results vs time to determine if performance is improving / deteriorating

• Earned Value Analysis: Uses scope, cost, schedule to assess performance.

  • PV (Planned Value) (Budgeted Cost of Work SCHEDULED): PLANNED cost expenditures in a given period

  • AC (Actual Cost) (Actual Cost of Work Performed): ACTUAL cost incurred in given period. Must use same assumptions as budget (e.g. Direct Cost, All costs, etc.)

  • EV (Earned Value) (Budgeted Cost of Work PERFORMED): Value of work COMPLETED

  • CV (Cost Variance) = EV – AC

  • SV (Schedule Variance = EV – PV

  • CPI (Cost Perf Index) = EV / AC

  • SPI (Schedule Perf Index = EV / PV

• Information Distribution Tools and Techniques: APD.

• Performance Reports: Organize/summarize information, results of analysis

  • Bar Charts (Gantt)

  • S-Curves

  • Histograms

  • Tables

• Change Requests: APD.

• Status: Schedule, budget

• Progress: What has been accomplished, percent complete, complete vs in progress (determine if on target—compare to plan; ID problems and issues so that corrective action can be taken)

• Forecasting: Projecting future status and progress

• Key Documentation: Progress Reports; Project Plan

Process 10.4 Administrative Closure (GROUP: Closing Processes)

Generating, gathering and disseminating information to formalize project/phase completion; including evaluation and compiling lessons learned

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Performance Measurement Documentation: All docs produced to analyze performance and planning docs

• PRODUCT Documentation: Plans, specs, technical docs, etc.

• Other Project Records: APD.

• Performance Reporting Tools and Techniques: APD.

• Project Reports: APD.

• Project Presentations: APD.

• Project Archives: Complete set of indexed docs.

• Project Closure: Confirmation that project has met all customer requirements for PRODUCT (customer formal acceptance and meeting results of delivering organization)

• Lessons Learned: APD.

Achieving project objectives or terminated for other reasons.

Each phase should be closed; information resources updated

KNOWLEDGE AREAS: Project Risk Management (Ch 11)

Identifying, analyzing and responding to project risk.

Risk: Uncertain event or condition that, if it occurs, has a positive or negative effect on an objective; has cause and consequence

Maximizing probability and consequences of positive events/ minimizing for adverse events

Contingency Plan: Planned action steps to be taken if an identified risk occurs

Uncertainty: An uncommon state of nature, characterized by the absence of any information related to a desired outcome

Workaround: Unplanned response to negative risk events (after impacted by risk)

Risk Portfolio: Risk data assembled for the management of the project

Risk Auditor: Investigate effectiveness of risk owner

Risk Tolerance: Risk Taker, Risk Adverse, Risk Neutral

Process 11.1 Risk Management Planning (GROUP: Planning Processes)

Deciding how to approach and plan for risk management activities for a project

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Project Charter: APD.

• Organization’s Risk Management Policies: May need to be tailored to the project

• Defined Roles and Responsibilities: Authority levels for decision making.

• Stakeholder Risk Tolerances: Different levels may be expressed by policy or through actions

• Template for the Organization’s Risk Management Plan: Templates, standards, previous examples

• WBS: APD.

• Planning Meetings: Project manager, team leaders, anyone responsible for managing risk planning/execution, key stakeholders

• Risk Management Plan: Identification, qualitative/quantitative analysis, response planning, monitoring, control. NOT Response to individual risks.

  • Methodology: Approaches, tools, data sources

  • Roles & Responsibilities

  • Budgeting

  • Timing: Frequency of activity

  • Scoring and interpretation: Evaluating risks

  • Thresholds: Criteria for action, who, how

  • Reporting Formats: Documentation, analysis, communicated

  • Tracking: How activities will be recorded

Process 11.2 Risk Identification (GROUP: Planning Processes)

Determining what risks may affect the project and documenting their characteristics

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Risk Management Plan: APD.

• Project Planning Outputs: Project Charter; WBS; PRODUCT Description; Schedule and Cost Estimates; Resource/Staffing Plan; Procurement Plan; Assumptions; Constraints

• Risk Categories:

  • Technical, Quality, Performance: Unrealistic goals, technology changes

  • Project Management: Poor resource allocation, poor plan

  • Organizational: Internal inconsistencies, lack of prioritization, resource conflicts

  • External: Legal, labor, changing owner priorities. Force Majeure usually invokes DR instead of risk management

• Historical Information: Previous project files, published information

• Documentation Reviews: Structured review of plans, etc.

• Information-Gathering Techniques:

  • Brainstorming: Broad lists -> Categorized

  • Delphi Technique: Consensus of experts (anonymous, iterative)

  • Interviewing: Experienced PMs, SMEs

  • SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis

• Checklists: Quick & simple, limited to items on list

• Assumptions Analysis: Validate assumptions

• Diagramming Techniques: Cause and Effect (Fishbone); System/process Flow; Influence Diagrams (Causal influence, time ordering)

• Risks: Listing

• Triggers: Symptoms/warning signs

• Inputs to Other Processes

Should be accomplished at the beginning of the project and updated regularly (iterative)

Process 11.3 Qualitative Risk Analysis (GROUP: Planning Processes)

Performing a qualitative analysis of risks and conditions to prioritize their effects on project objectives

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Risk Management Plan: APD.

• Identified Risks: Risks plus potential impacts

• Project Status: Risk varies with point in project life cycle

• Project Type: Common, reoccurring vs complex, new technology

• Data Precision: Amount of data, reliability, data sources

• Scales of Probability and Impact: Assess two key dimensions

• Assumptions: APD.

• Risk Probability and Impact: Likelihood and consequences/severity

• Probability/Impact Risk Rating Matrix:

  • Probability: between 0.0 and 1.0

  • Impact: Ordinal/rank-ordered (Low-Moderate-High); Cardinal/numeric value (Linear vs Non-linear)

  • Probability/Impact (P-I) Matrix: Multiply ratings (determine thresholds)

• Project Assumptions Testing: Determine stability of assumption, assess consequences if assumption is false

• Data Precision Ranking: Extent of understanding of risk; data availability about risk; quality, reliability, integrity of data

• Overall Risk Ranking for the Project: Used for comparison of project relative to other projects

• List of Prioritized Risks: By rank, WBS level, time to respond, etc.

• List of Risks for Additional Analysis and Management

• Trends in Qualitative Risk Analysis Results: As analysis is repeated, understanding trends.

Process 11.4 Quantitative Risk Analysis (GROUP: Planning Processes)

Measuring the probability and impact of risks and estimating their implication for project objectives

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Risk Management Plan: APD.

• Identified Risks: APD.

• List of Prioritized Risks: APD.

• List of Risks for Additional Analysis and Management: APD.

• Historical Information: Risk databases, industry, proprietary sources

• Expert Judgment: Including engineering or statistical experts

• Other Planning Outputs: Duration estimates, WBS list of cost elements

• Interviewing: Different types of information (L/M/H; standard deviation) required depending on analysis (triangular, normal/log normal)

• Sensitivity Analysis: Which have most potential impact (measure impact by adjusting a single variable)

• Decision Tree Analysis: Decisions and alternatives; probability/cost/reward of branches

  • Act/Decision (Box) -> Events (Circles) -> Outcomes

  • Compute cost * probability for branches (Expected Monetary Value)

• Simulation: Translate uncertainty into potential impact (Cost Risk: use WBS; Schedule Risk: Use AON (Activity on Node), PDM (Precedence Diagramming Method))

  • Monte Carlo: Superior to PERT/CPM (which don’t account for path convergence and underestimate durations) Choice of statistical distribution can have important impact

• Prioritized List of Quantified Risks: Greatest threat/opportunity with impact

• Probabilistic Analysis of the Project: Forecast of potential schedule and cost results; confidence levels.

• Probability of Achieving the Cost and Time Objectives: Description

• Trends in Quantitative Risk Analysis Results: Due to repeated analysis

Probability of achieving a specific objective

Quantify the risk exposure for the project; determine size of cost/schedule contingencies needed

Identify risks requiring most attention

Determine realistic and achievable scope, cost, schedule targets

Statistical Independence: Occurrence of one is not related to the occurrence of the other

Path Convergence: Tendency of parallel paths of equal duration to delay the completion of the milestone where they meet

Mutually exclusive and collectively exhaustive if they are all independent and sum of probabilities is 1.0

Simple Measure: Probability * Impact

Probability of n independent events: P1 * P2 * … * Pn

Expected Monetary Value: Sum of possible Value * Probability (gambling example) (Statistical assessment of value, not prediction of revenue or cost)

Utility Theory: How our perception of risk goes +/- as value increases (Lottery example)

Process 11.5 Risk Response Planning (GROUP: Planning Processes)

Developing procedures and techniques to enhance opportunities and reduce threats to objectives

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Risk Management Plan: APD.

• List of Prioritized Risks: APD.

• Risk Ranking of the Project: APD.

• Prioritized List of Quantified Risks: APD.

• Probabilistic Analysis of the Project: APD.

• Probability of Achieving the Cost and Time Objectives: APD.

• List of Potential Responses: Potentially developed in the risk ID process

• Risk Thresholds: From the organization

• Risk Owners: Stakeholders who act as owners of risk responses

• Common Risk Causes: Opportunities to mitigate multiple risks with single response

• Trends in Qualitative and Quantitative Risk Analysis Results: APD.

• Avoidance: Changing plan to eliminate the risk or condition or to protect the project objectives from its impact (Eliminate/abate)

• Transference: Shift risk consequences and response ownership to a third party (insurance, warranty, etc); different cost/price contract strategies

• Mitigation: Reduce probability/consequences of an adverse risk event to acceptable threshold. (reduction)

• Acceptance:

  • Passive: do not change plan to deal with risk or unable to identify any other strategy.

  • Active: Contingency plan, fallback plan, contingency allowance/reserve

• Risk Response Plan: Risk register

  • ID’ed risks, causes, impact

  • Risk owners/responsibility

  • Results of Qualitative/Quantitative risk analysis

  • Agreed responses

  • Level of residual risk

  • Budget/time for response

  • Contingency/fallback plans

• Residual Risks: Remaining after other response plans

• Secondary Risks: From implementing a risk plan

• Contractual Agreements: Insurance. etc

• Contingency Reserve Amounts Needed

• Inputs to Other Processes

• Inputs to a Revised Project Plan: Ensure that agreed actions are implemented and monitored

Understanding the Risk strategies (in Tools & Techniques) is critical!

Process 11.6 Risk Monitoring and Control (GROUP: Controlling Processes)

Keeping track of identified risks, monitoring residual risks and identifying new risks, ensuring execution of risk plans and evaluating their effectiveness

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Risk Management Plan: APD.

• Risk Response Plan: APD.

• Project Communication: Issue Logs; AI Lists; Escalation Notices, etc.

• Additional Risk Identification and Analysis: For additional risks ID’ed during the project (use all risk processes)

• Scope Changes: May trigger new risk analysis and response

• Project Risk Response Audits: Examine effectiveness of risk response in Avoiding, Transferring, Mitigating risk; effectiveness of risk owner

• Periodic Project Risk Reviews: May change risk ratings and priority

• Earned Value Analysis: If significant deviation, updated risk identification and analysis is required

• Technical Performance Measurement: Compare technical accomplishment vs project plan schedule

• Additional Risk Response Planning: New risks or impact greater than expected

• Workaround Plans: Unplanned responses to risks that were not identified or accepted. Update project plan and risk response plan

• Corrective Action: Performing contingency plan or workaround

• Project Change Requests: May be triggered by above

• Updates to the Risk Response Plan: Based on risks that occur, implementation of risk control, updated risk rankings, risks that do not occur

• Risk Database: Collect, maintain and analyze risk information for future lessons learned.

• Updates to Risk Identification Checklists: Based on project experience

KNOWLEDGE AREAS: Project Procurement Management (Ch 12)

Process 12.1 Procurement Planning (GROUP: Planning Processes)

Determine what project needs can be best met through procurement (and when)

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Scope Statement: APD.

• PRODUCT Description: Information about technical issues/concerns r.e. PRODUCT. Broader than Statement of Work (describing portion provided by seller)

• Procurement Resources: If needed by performing organization

• Market Conditions: What’s available, suppliers, conditions

• Other Planning Outputs: Cost/schedule estimates; quality management; cash-flow; WBS; risks; staffing

• Constraints: APD.

• Assumptions: APD.

• Make-or-Buy Analysis:

  • Include direct and indirect costs

  • Consider needs of performing organization vs just project (ongoing usefulness of purchase)

  • Can be single or multiple suppliers and varying percentage of needed items

• Expert Judgment: APD.

• Contract Type Selection: Three broad categories.

  • Fixed-price/lump-sum: If PRODUCT not well defined risk of not getting desired item; additional costs to seller to provide it. May include incentives. Shared risk if not well defined. Seller risk if well defined.

  • Cost-reimbursement: Cost plus fees (direct/indirect costs); may include incentives. Buyer most risk

  • Time & Materials: Hybrid of above. Open ended like cost-reimbursement; but fixed if set rates for units. Buyer most risk

• Procurement Management Plan:

  • What type of contract

  • How estimates prepared

  • Role of procurement department vs project team

  • Links to procurement standards

  • How will procurement be coordinated

• Statement(s) of Work: Describes procurement item in sufficient detail to allow prospective sellers if they are capable of providing

Whether to procure, how to procure, what to procure, how much, when

Specification: A precise description of a physical item, procedure, services, or result for the purpose of purchase and/or implementation of an item or service

Specification produced by technologists, but responsibility of project manager

Pay attention to the role of the Project Manager as a Buyer or Seller

Design Scope: Detailed project requirements used in FP contracts

Time and Materials: For work to start quickly, scope not defined. Profit built into rate

Fixed Price Award Fee: Bonus to the seller based on performance (e.g. 100k + 10k for each incremental quality level reached)

Purchase Order: Unilateral, for simple commodity purchases

In a cost plus contract, the only firm figure is the fee

Contract Incentives are usually cost-effective

Process 12.2 Solicitation Planning (GROUP: Planning Processes)

Documenting product requirements and identifying potential sources

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Procurement Management Plan: APD.

• Statement(s) of Work: APD.

• Other Planning Outputs: APD. Ensure alignment with project schedule and any modified docs

• Standard Forms: Standard contracts, descriptions of procurement items, other bid documents

• Expert Judgment: APD.

• Procurement Documents: Solicit and facilitate accurate and complete responses from prospective sellers (SOW, description of form of response, contractual provisions)

  • Bid & Quotation: Based on price

  • Proposal: Based on other consideration (technical skills)

• Evaluation Criteria: Used to rate/score; objective or subjective; if widely available can just use purchase price

  • Understanding of need (seller understands?)

  • Overall/life-cycle cost

  • Technical capability

  • Management approach

  • Financial capacity

• Statement of Work Updates: APD. Modifications may occur during this process

Always the SOW, description of the desired form of response, required contractual provisions

Contract: Mutually binding agreement that obligates the seller to provide a specific product and obligates the buyer to pay for it

• Unilateral: Purchase order (standardized form listing routine items at standard prices)

• Bilateral: Initiated through

  • Invitation to bid (routine items, no negotiation, usually price based)

  • RFQ (relatively low monetary purchases of commodity)

  • RFP (complex, non-standard, high monetary value, negotiation, etc)

Process 12.3 Solicitation (GROUP: Executing Processes)

Obtaining quotations, bids, offers or proposals as appropriate

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Procurement Documents: APD.

• Qualified Seller Lists: Organization may already have; use additional sources

• Bidder Conferences: Ensure that all prospective sellers have clear understanding; all on equal standing; may modify procurement docs

• Advertising: Solicit additional sellers, may be required by government, etc.

• Proposals: Seller prepared doc describing ability and willingness to provide PRODUCT; in accordance with requirements in procurement docs.

Most effort is expended by sellers, normally at no cost to the project

Process 12.4 Source Selection (GROUP: Executing Processes)

Application of evaluation criteria to choose from among potential sellers

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Proposals: APD.

• Evaluation Criteria: APD. May include samples of previously produced items, review of supplier history

• Organizational Policies: Formal policies may impact procurement

• Contract Negotiation: Clarification and mutual agreement on structure and requirements prior to contract signature.

  • Protocol: introductions and atmosphere

  • Probing: ID key issues; strengths/weaknesses

  • Scratch bargaining: Actual bargaining and concessions

  • Closure: Positions summed up, final decisions made

  • Agreement: Final agreement documented

• Weighting System: Used to quantify qualitative data to remove bias. Assign weight to criteria, rate sellers, multiply weight by rating, compute score.

• Screening System: Establish minimum requirements and screen against them

• Independent Estimates: Use as a check on proposed pricing (“should cost” estimates)

• Contract: Mutually binding agreement that obligates seller to provide and buyer to pay; a legal relationship subject to remedy in the courts. Contract, agreement, purchase order, memorandum of understanding. Often extensive review due to legally binding nature

  • Delivery schedule

  • Payment Schedule

  • Method of determining the price

  • Handling of changes

  • Warranties

  • Insurance

  • Inspections

  • Delays

  • Termination

  • Subcontracts

  • Performance Bonds

Technical (approach) and commercial (price) sections

Multiple source for critical PRODUCTS

Competitive Process is usually best. Noncompetitive may be best if seller has unique qualifications, other mechanisms exist to ensure price is reasonable, due to project schedule pressure

Project Manager objectives: Obtain fair and reasonable price while getting the contract performed within certain time and performance parameters; Develop a good relationship with the seller

Process 12.5 Contract Administration (GROUP: Executing Processes)

Managing the relationship with the seller ensuring that performance meets contractual requirements

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Contract: APD.

• Work Results: Deliverables completed or not; quality standards; costs incurred/committed

• Change Requests: Mods to terms of contract or description of PRODUCT; can be disputed (claims, disputes, appeals)

• Seller Invoices: Requests for payment for work performed.

• Contract Change Control System: Process for modifying contract; docs, tracking, dispute resolution, approval

• Performance Reporting: information on how effectively the seller is achieving contractual objectives

• Payment System: Usually handled by AP system, includes reviews and approvals

• Correspondence: written documentation of key aspects; warnings for non-performance, etc.

• Contract Changes: approved and unapproved, updating other docs as relevant

• Payment Requests: Links to external payment system. If internal, simply “payment”

Managing the interfaces between various providers

Legal nature of the contractual relationship makes it imperative that the project team be very aware of the implications of actions taken when administering the contract

Project Plan Execution; Performance Reporting; Quality Control; Change Control; Financial Management

Retainage: Withholding of funds under contract

Contract may have specific descriptions of communication requirements for various areas

Standard Clauses:

• Changes: Major area of cost growth; how is change managed

• Warranties: Level of Quality; Express warranty (explicitly stated quality); Implied Warranty (Merchantability, fitness for purpose)

• Doctrine of Waiver: Reliquishing of rights because of lack of enforcement

• Delays: Who caused, nature, impact

• Bonds: Performance bond (secures performance and fulfillment for buyer); payment bond (secures payment to subcontractors, etc by prime)

• Breach: failure to perform contractual obligation (measure for damage is amount of loss); material breach (MORE SERIOUS, nonfaulted party discharged from further obligations);

Privity of Contract: Contract relationship exists between buyer and prime contractor. Legally improper for buyer to bypass prime and deal directly with subs.

Foreign Currency Exchange: Set forth process for dealing with currency rate changes

Process 12.6 Contract Closeout (GROUP: Closing Processes)

Completion and settlement of contract including resolution of open items

INPUTS

TOOLS & TECHNIQUES

OUTPUTS

• Contract Documentation: Contract with supporting schedules, changes, documentation, financial and performance docs

• Procurement Audits: Structured review of procurement process

• Contract File: Complete set of indexed records (similar to administrative closure and project archives)

• Formal Acceptance and Closure: Formal written notice that contract has been completed. Requirements are usually defined in the contract

PRODUCT verification: Work done completely, correctly, satisfactorily

Administrative closeout: updating of contract records. (note the use of Procurement Audit in Contract Closeout)

PROFESSIONAL RESPONSIBILITY

Ensuring Individual Integrity and Professionalism

Responsibility to PMI, yourself, profession, your organization

Legal, ethical, professional behavior

Use commonly held ethical and legal examples due to cultural/regional variances

No Grey areas (only right/wrong), Answer must satisfy ALL of:

• Legal requirements

• Ethical standards

• Community and stakeholder values

• PMI Member Code of Ethics: Function ethically, maintain high standard of conduct, behave responsibly, accept responsibility, fair and honest, encourage others in the profession to do the same.

• PMI Member Standards of Conduct: Identifies specific behaviors, no conflict of interest, no unfair business dealings, respect others’ IP, deal fairly, behavior with public, etc.

• PMI Member Ethics Case Procedures: Procedures for processing possible violations of ethics standards

Follow the Law, Follow the Bylaws, Cooperate on Ethics investigations

PMI prefers consensual rather than legal channels, minor ethics infractions without resorting to formal procedures

Simple cessation of unethical behavior may bring inquiry to a conclusion

Entitled to legal representation

Actions: Denial of membership, private (public) reprimand/censure, probation, suspension, termination, expulsion

Routine Government Fee (Transfer Fee): Only government official can collect routine government fees (this is not a bribe)

Company Policies: PM is responsible to ensure that these are followed

Copyright Laws: Do not voiolate

Contributing to the Project Management Knowledge Base

• Gathering and sharing lessons learned in appropriate communities

• Do not violate non-disclosure

Enhancing Individual Competence

Self-assessment is important. Know the following

• Personal Strengths/weaknesses

• Which instructional tools and techniques work best

• Your professional competencies

• How you learn

• Training options available to improve your knowledge and skills

Development Planning

Getting and using new information

Recognize key similarities and differences between oneself and others

Visual and aural cues are not as important as experiential cues

Balancing Stakeholders’ Interests

Fair resolution to satisfy competing needs and objectives

Conflict resolution techniques

Make fair judgments

Using alternative analysis methods

Negotiating

Communicating effectively

Gathering information

Interacting in a Professional and Cooperative Manner

Standards for professional communication

Ethnic and cultural norms for team members and stakeholders

Communication preferences of stakeholders and team members

If a behavior or activity is acceptable in a culture and does not violate our personal or corporate norms and mores we will accept it as a function of business.

Culture: creates dynamics, creates communication issues, respects different values, changes negotiations

Five success factors: Cultural understanding, cross-cultural journeys, communication, negotiation, global management

To deal with transnational: Controlling your behavior; maintaining an open mind; communicating effectively; embracing diversity; exercising tolerance; exhibiting empathy.

Ethics and principles are not situational.

Multifaceted approaches and strategies that enable multiple cultures and attitudes to coexist productively