PMP Student Guide

Project Management Professional Exam Preparation Course

PMP Exam Preparation Course

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Copyrights

This book is produced by Techno Management®, a project management consulting company, registered in Canada. This document may not be reproduced, stored in a retrieval system, or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of Techno Management®. PMBOK and PMP are trademarks registered by the Project Management Institute (PMI) in the United States and other nations.

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1- Introduction

Table of Contents 1.

Introduction ............................................................................................................ 5

2.

Project Management Framework ........................................................................... 7

2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13

3. 3.1 3.2

4. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20

5. 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8

TERMS AND DEFINITIONS .................................................................................................. 7 COMPARATIVE OVERVIEW ................................................................................................ 9 PROJECT CHARACTERISTICS ............................................................................................ 9 PROJECTS VS. OPERATIONAL W ORK: .............................................................................. 11 PROJECT CONSTRAINTS ................................................................................................. 11 ROLE OF A PROJECT MANAGER ....................................................................................... 14 PROJECT STAKEHOLDERS .............................................................................................. 14 PROJECT ORGANIZATION STRUCTURE ............................................................................ 15 ORGANIZATIONS CHARACTERISTICS ................................................................................ 18 LIFE CYCLES AND PROCESS GROUPS ............................................................................. 19 PROCESS GROUPS ........................................................................................................ 19 INTERACTION BETWEEN PHASES ..................................................................................... 20 PMI KNOWLEDGE AREAS ............................................................................................... 21

Project Initiation Phase ........................................................................................ 29 DEVELOP PROJECT CHARTER......................................................................................... 30 IDENTIFY STAKEHOLDERS ............................................................................................... 35

Project Planning Phase ......................................................................................... 40 DEVELOP PROJECT MANAGEMENT PLAN ......................................................................... 41 COLLECT REQUIREMENTS .............................................................................................. 45 DEFINE SCOPE .............................................................................................................. 51 CREATE WBS................................................................................................................ 58 DEFINE ACTIVITIES ......................................................................................................... 63 SEQUENCE ACTIVITIES ................................................................................................... 69 ESTIMATE ACTIVITY RESOURCES .................................................................................... 75 ESTIMATE ACTIVITY DURATIONS ..................................................................................... 80 DEVELOP SCHEDULE ...................................................................................................... 85 ESTIMATE COSTS ........................................................................................................... 94 DETERMINE BUDGET .................................................................................................... 100 PLAN QUALITY ............................................................................................................. 104 DEVELOP HUMAN RESOURCE PLAN .............................................................................. 117 PLAN COMMUNICATIONS............................................................................................... 123 PLAN RISK MANAGEMENT............................................................................................. 129 IDENTIFY RISKS............................................................................................................ 133 PERFORM QUALITATIVE RISK ANALYSIS ........................................................................ 139 PERFORM QUANTITATIVE RISK ANALYSIS ...................................................................... 144 PLAN RISK RESPONSES ............................................................................................... 149 PLAN PROCUREMENTS ................................................................................................. 155

Project Execution Phase ..................................................................................... 167 DIRECT AND MANAGE PROJECT EXECUTION .................................................................. 168 PERFORM QUALITY ASSURANCE ................................................................................... 172 ACQUIRE PROJECT TEAM ............................................................................................. 176 DEVELOP PROJECT TEAM............................................................................................. 180 MANAGE PROJECT TEAM.............................................................................................. 187 DISTRIBUTE INFORMATION ............................................................................................ 191 MANAGE STAKEHOLDER EXPECTATIONS ....................................................................... 194 CONDUCT PROCUREMENT ............................................................................................ 197

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6. 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10

7. 7.1 7.2

Project Monitor and Control Phase .................................................................... 203 MONITOR AND CONTROL PROJECT W ORK ..................................................................... 204 PERFORM INTEGRATED CHANGE CONTROL ................................................................... 207 VERIFY SCOPE............................................................................................................. 210 CONTROL SCOPE ......................................................................................................... 212 CONTROL SCHEDULE ................................................................................................... 216 CONTROL COSTS ......................................................................................................... 219 PERFORM QUALITY CONTROL ....................................................................................... 231 REPORT PERFORMANCE............................................................................................... 241 MONITOR AND CONTROL RISKS .................................................................................... 246 ADMINISTER PROCUREMENTS ....................................................................................... 250

Project Closing Phase ........................................................................................ 254 CLOSE PROJECT OR PHASE.......................................................................................... 255 CLOSE PROCUREMENT................................................................................................. 258

8.

Appendix-1 Case Study ..................................................................................... 261

9.

Appendix-2 Exercise Forms .............................................................................. 262

9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9

PROJECT CHARTER...................................................................................................... 262 SCOPE STATEMENT ..................................................................................................... 263 ASSUMPTION LIST ........................................................................................................ 264 W ORK BREAKDOWN STRUCTURE .................................................................................. 265 ACTIVITY LIST, RESOURCE ASSIGNMENT, DEPENDENCY & TIME ESTIMATE ..................... 266 QUALITY MANAGEMENT PLAN ....................................................................................... 267 RISK ANALYSIS ............................................................................................................ 268 RISK ANALYSIS ............................................................................................................ 269 CHANGE CONTROL....................................................................................................... 270

10.

Appendix-3 List of Figures ............................................................................. 271

11.

Appendix-4 List of Tables .............................................................................. 274

12.

Appendix-5 List of Exercises.......................................................................... 275

13.

Appendix-6 List of Group Discussions........................................................... 276

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1- Introduction

1. Introduction This book is directed to the project management professionals who are seeking the Project Management Professional certification. It covers al the material that needed to be covered to help passing the PMP exam and covered in the PMBOK®. The approach taken here to present the material is different than the one taken in the PMBOK® in that the material goes through the project phase rather than the knowledge areas. This will help presenting the knowledge in a better logical flow that will make it more clear and logical to understand. This book addresses the practical side of the project management by having a case study that will be taken from the very initial project stage to its completion. This will bone through comprehensive group workshops that will facilitate explaining the material in a clear and practical approach. The book is structured as follow: 1- Project Framework 2- Project Initiation Phase 3- Project Planning Phase 4- Project Executing Phase 5- Project Monitor and Control Phase 6- Appendix-1, Case Study 7- Appendix-2, Exercise Forms 8- Appendix-3, List of Figures 9- Appendix-4, List of Tables 10- Appendix-5, List of Exercises 11- Appendix-6, List of Group Discussions

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Group Discussion 1.1– Student’s Expectations Please write down your expectations out of the course. This sheet will be collected, compiled to produce the overall class expectations and will be reviewed by the end of the course.

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Group Discussion ‎1-1-Student’s‎Expectations

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2. Project Management Framework This section provides an introduction to the key concepts covered by the PMBOK® Guide. These concepts are valid to manage any project in any size. It will cover the following areas: 1234-

The purpose of the PMBOK® Guide Project definition Project management definition Relationship among the Project Management, Program management and Portfolio Management 5- Project Management and Operations Management 6- The role of the project manager 7- Project management body of knowledge

2.1 Terms and Definitions 1. Project A project is a temporary endeavor undertaken to create a unique product or service. (Source: PMBOK® Guide - Fourth Edition, page 5) A project is a sequence of unique and connected activities having one goal that must be completed by a specific time, within a budget and according to specification. 2. Program A program is a group of related projects managed in a coordinated way to obtain benefits not available from managing them individually. (Source: PMBOK® Guide - Fourth Edition, page 9) 3. Portfolio A program is a collection of projects or programs and other work that are grouped together to facilitate effective management of that work to meet strategic business objectives. (Source: PMBOK® Guide - Fourth Edition, page 8) 4. Project management Project management is the application of knowledge, skills, tools, and techniques to project activities to meet projects requirements. (Source: PMBOK® Guide – Release 4, page 6) 5. Project Portfolio Management

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Project portfolio management refers to the selection and support of projects or program investments, which are guided by the organization's strategic plan and available resources. 6. Standards It is a document established by consensus and approved by recognized body that provides for common and repeated use rules, guidelines and regulations. They are imposed requirement which specifies product, process or service characteristics. 7. Project Management Office A project management office (PMO) is an organizational unit to centralize and coordinate the management of projects under its domain. PMOs can operate on a continuum, from providing project management support functions in the form of training, software, standardized policies, and procedures, to actual direct management and responsibility for achieving the project objectives. (Source: PMBOK® Guide – Release 4, page 11)

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2.2 Comparative Overview PROJECT Scope

Change

Project have defend objectives, Scope is progressively elaborated throughout the project life cycle Project managers expect change and implement processes to keep change managed and controlled.

Planning

Project mangers progressively elaborate highlevel information into detailed plans throughout the project life cycle.

Management

Project managers manage the project team to meet the project objectives

Success

Success is measured by product and project quality, timeliness, budget compliance, and degree of customer satisfaction. Project managers monitor and control the work of producing the products, service or results that the project was undertaken to produce.

Monitoring

PROGRAMS Programs have a larger scope and provide more significant benefits.

PORTFOLIOS Portfolios have a business scope that change with the strategic goals of the organization.

The program manager must expect change from both inside and outside the program and be prepared to manage it. Program managers develop the overall program plan and create high-level plans to guide detailed planning at the component level.

Portfolio managers continually monitor changes in the broad environment.

Program managers manage the program staff and the project managers; they provide vision and overall leadership. Success is measured by the degree to which the program satisfies the needs and benefits for which it was undertaken. Program managers monitor the progress of program components to ensure the overall goals, schedules, budget, and benefits of the program will be met.

Portfolio managers may manage or coordinate portfolio management staff.

Portfolio managers create and maintain necessary processes and communication relative to the aggregate portfolio.

Success is measured in terms of aggregate performance of portfolio components. Portfolio managers monitor aggregate performance and value indicators.

Table ‎2-1- Comparative Overview

Source: PMBOK® Guide - Fourth Edition, page 9

2.3 Project Characteristics Projects vary in size and complexity. Regardless the project nature, they all share common characteristics that should be maintained throughout the project life cycle. These characteristics are:      

Unique. There is no two identical projects One time efforts. No second chance. Defined duration Defined output Defined Budget Use Resources

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Group Discussion 2.1 – Which one is not a project? Which one of the following list is not a project? I.e. does not match the project definition criteria? Justify your answers: 1. 2. 3. 4. 5. 6.

Building a bridge. Painting the house. Learning Tango dance. Having a Family. Implementing National Social Number. Preparing a morning coffee.

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Group Discussion ‎2-1- Which one is not a project

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2.4 Projects vs. Operational Work: Projects in nature are one time effort, as opposed to operations, which is a repetitive effort that is systematically repeated on periodical way. Although they are different in their nature, and hence in the way they are managed, yet they share the following characteristics:  Performed by people  Constrained by limited resources  Planned, executed, and controlled. Also, Projects and operations differ in that:  Operations are ongoing and repetitive, while projects are temporary and unique. Operational work can be thought of repetitive work that each one is comprised of many related small projects.

2.5 Project Constraints They are the known factors that limit the project teams’ options. Three main constraints from which, other derivates are produced: 1- Time (Schedule) 2- Budget (Cost) 3- Specifications (Quality)

Project Success Criteria Projects are said to be successful when the project team manages to complete the project within the agreed upon (contracted) constrains. Generally speaking the project is successful if it is completed:  Within time (schedule)  Within cost (budget)  Within specifications (requirements)

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A project may be sensitive to one of those constraints, but once contract is signed, they are all important and the project manager should adhere to all constraints.

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Group Discussion 2.2– Project Constraints From your perspective, and considering the nature of business of your organization, which of the following constraints is more important? 1. Cost 2. Time 3. Budget

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Group Discussion ‎2-2-Project Constraints

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2.6 Role of a Project Manager The project manager is the maestro who orchestrates all the project activities. By doing the analogy with the maestro, the project team will never perform in harmony unless the project manager leads the team and guides each team member to his / her role of the project. The project manager job is a full time job that requires the project manager doing many activities that are not limited to, but include the following:     

Acts as the single point of contact on the project. Planning and organizing the work Managing the day-to-day activities of a project Delivering the project deliverables to the client Identifying potential stakeholders

2.7 Project Stakeholders Projects are done by people, for people to produce products that will be used by other people. The combined people of these three groups (done by, for, to be used) is called “Stakeholders”. Stakeholders are defined as “any one impacts the project positively or negatively”. The stakeholder list includes, but not limited to:         

Project Manager Customer Performing organization, owners, government agencies Project Sponsor Developing Team Internal external users End user Society, citizens Others: owners, funders, suppliers

It is the project manager’s responsibility to identify the project stakeholders, as he will need to communicate with them throughout the project life cycle. Missing any stakeholders may lead to miscommunication problems that may jeopardize the project success.

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2.8 Project Organization Structure Organization structure influences the way how projects are managed. The degree of the project management maturity and its project management system also has a high impact on the project success. Organization structure is an organizational environmental factor which affects the resources availability and how they are controlled. It also affects the degree of the authorities of the project manager in the decision making process. Below are the basic organization structures that PMBOK® Guide identifies:  Functional  Matrix  Weak matrix  Balanced matrix  Strong matrix  Projectized  Composite The PMBOK® Guide is addressing the “Project” organization structure and not the “Company” organization structure. Most companies are based on Functional organization structure, but a project manager in this company can manage a project(s) based on Functional project organization and at the same time other project(s) based on Matrix organization structure. 2.8.1 Functional Project Organization This is the classical functional organization. In this structure, each employee has one clear superior. Staff members are grouped by specialty area that is called departments or divisions. These areas may be divided further down to a lower level of hierarchy, but they all share the fact that each employee has one clear superior. Chief Executive Officer Project Coordination

Functional Manager 1

Functional Manager 2

Functional Manager 3

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Figure ‎2-1- Functional Origination

Source: PMBOK® Guide - Fourth Edition, page 29

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2.8.2 Matrix Organization Projects that need to be implemented and managed across divisions need an organizational model that allows communication across divisions. The classical functional organizational will not fit here, as communication between the project manager and the team members should be very fast and does not tolerate the bureaucracy of the functional organization. A new organizational structure is applied here. It is called Matrix, as it works across organization in rows and columns like the mathematical matrix structure. There are three types of matrix organizations: 1. Weak 2. Strong 3. Balanced 1- Weak Matrix Organization In this organizational structure, many of the functional organization features are maintained. The project manager role is more of a coordinator or expeditor. The project manager can work in this model on part time basis.

Chief Executive Officer

Functional Manager 1

Functional Manager 2

Functional Manager 3

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Project Coordination

Figure ‎2-2- Weak Matrix Origination

Source: PMBOK® Guide - Fourth Edition, page 29

2- Strong Matrix Organization This structure requires a full time project manager with considerable authority. Based on the project size, he may be assisted with a full time administrative staff to help in the different project administration functions. This model fits with projects that need high authority project manager. In many cases, the company needs to be structured in a PMP Exam Preparation Course

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certain way to serve this model. A PMO “Project Management Office” is an example of this implementation. Chief Executive Officer

Functional Manager 1

Functional Manager 2

Functional Manager 3

Staff

Staff

Staff

Project Manager

Staff

Staff

Staff

Project Manager

Staff

Staff

Staff

Project Manager

Manager of Project Managers

Project Coordination

Figure ‎2-3- Strong Matrix Origination ®

Source: PMBOK Guide - Fourth Edition, page 30

3- Balanced Matrix Organization This model does not provide a full authority to the project manager, yet, it gives him/her enough authority to manage the resources. This model fits with projects that require managing projects across divisions and do not need a high authority project manager.

Chief Executive Officer

Functional Manager 1

Functional Manager 2

Functional Manager 3

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Project Manager

Project Coordination

Figure ‎2-4- Balanced Matrix Origination

Source: PMBOK® Guide - Fourth Edition, page 30

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2.8.3 Projectized Organization This is the model that the project manager exercises the highest level of authority. Most of the company employees are co-located and involved in the project work. Chief Executive Officer

Project Manager 1

Project Manager 2

Project Manager 3

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Project Coordination

Figure ‎2-5- Projectized Origination

Source: PMBOK® Guide - Fourth Edition, page 31

2.9 Organizations Characteristics Functional

Matrix

Projectized

Weak

Balanced

Strong

Project Manager’s Authority

Little or None

Limited

Low to Moderate

Moderate to High

High to Almost Total

Resource Availability

Little or None

Limited

Low to Moderate

Moderate to High

High to Almost Total

Who controls the Budget?

Functional Manager

Functional Manager

Mixed

Project Manager

Project Manager

Project manager’s role

Part-Time

Part-Time

Full-Time

Full-Time

Full-Time

PM admin. Staff

Part-Time

Part-Time

Part-Time

Full-Time

Full-Time

Table ‎2-2- Organizational Influence on Projects

Source: PMBOK® Guide - Fourth Edition, page 28

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2.10 Life Cycles and Process Groups Projects are exactly like people. They grow over time. They are created (incepted), grow (managed) and die (close out). This forms a typical life cycle that projects go through. There two interdependent life cycles: 1- Project Life Cycle 2- Project Management Life Cycle

2.10.1 The Project Life Cycle This is a product based cycle, through which the product of the project goes through. People involved in this are technical people (accountants, engineers, programmers, architect, lawyers etc.) They need to have a strong technical knowledge in their expertise area and they do not need to possess strong project management knowledge, although having it is a plus. Figure ‎2-6- Project Life Cycle

2.10.2 The Project Management Life Cycle This is a project based cycle, through which the project goes through. The project manager will manage the project based on this cycle. Each phase will contain many project management activities. Project managers need to have a strong knowledge in the different project management knowledge areas, and do not need, although will be a plus, to have a strong business knowledge. Figure ‎2-7- Management Project Life Cycle

2.11 Process Groups 1- Initiating Process Group. Defines and authorizes the project or a project phase.

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2- Planning Process Group. Defines and refines objectives, and plans the course of action required to attain the objectives and scope that the project was undertaken to address. 3- Executing Process Group. Integrates people and other resources to carry out the project management plan for the project 4- Monitoring and Controlling Process Group. Regularly measures and monitors progress to identify variances from the project management plan so that corrective actions can be taken when necessary to meet project objectives. 5- Closing Process Group. Formalizes acceptance of the product, service or result and brings the project or a project phase to an orderly end.

Figure ‎2-8- Project Process Groups

2.12 Interaction between Phases The process groups explained above are not to be performed one time only across the project life cycle, but also will be done within each project phase. From the project management perspective, each phase is treated as a complete project that includes all the project management process groups as illustrated in the following figure.

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Figure ‎2-9- Project Process Groups Interaction

Process groups are not discrete. In other words, they should not be done and completed sequentially. There are some overlaps between them as illustrated in the following figure.

Figure ‎2-10- Process Group Overlapping

2.13 PMI Knowledge Areas Project Management Institute (PMI) defined the following knowledge areas that are needed to be known by the professional project managers: 123456789-

Project Integration Management Project Scope Management Project Time Management Project Cost Management Project Quality Management Project Human Resources Management Project Communication Management Project Risk Management Project Procurement Management

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On top of the above areas, the “Professional Responsibility” supplement was added. It is not considered as a tenth area, but will be included in the PMP exam preparation test with a relatively low weight.

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Project Management Process Groups and Knowledge Area Mapping Note: Numbering starts form 4, to match the numbering of the PMBOK® Guide

Knowledge Areas

4. Project Integration Management

Project Management Process Groups Initiating Process Group

Planning Process Group

4.1 Develop Project Charter

4.2 Develop Project Management Plan

5. Project Scope Management

5.1 Collect Requirements 5.2 Define Scope 5.3 Create WBS 6.1 Define Activities 6.2 Sequence Activities 6.3 Estimate Activity Resources 6.4 Estimate Activity Durations 6.5 Develop Schedule 7.1 Estimate Costs 7.2 Determine Budget 8.1 Plan Quality

6. Project Time Management

7. Project Cost Management 8. Project Quality Management 9. Project Human Resource Management

10. Project Communications Management

11. Project Risk Management

12. Project Procurement Management

9.1 Develop Human Resource Plan

10.1 Identify Stakeholders

10.2 Plan Communications

11.1 Plan Risk Management 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis 11.5 Plan Risk Responses 12.1 Plan Procurements

Executing Process Group 4.3 Direct and Manage Project Execution

Monitoring & Controlling Process Group 4.4 Monitor and Control Project Work 4.5 Perform Integrated Change Control 5.4 Verify Scope 5.5 Control Scope

Closing Process Group 4.6 Close Project or Phase

6.6 Control Schedule

7.3 Control Costs

8.2 Perform Quality Assurance 9.2 Acquire Project Team 9.3 Develop Project Team 9.4 Manage Project Team 10.3 Distribute Information 10.4 Manage Stakeholder Expectations

8.3 Perform Quality Control

10.5 Report Performance

11.6 Monitor and Control Risks

12.2 Conduct Procurements

12.3 Administer Procurements

12.4 Close Procurements

Table ‎2-3- Project Management Process Groups and Knowledge Area Mapping

Source: PMBOK® Guide - Fourth Edition, page 43

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Initiating Process Group 4.1 Develop Project Charter 10.1 Identify Stakeholders

Figure ‎2-11- Initiating Process Group

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Planning Process Group 4.2 Develop Project Management Plan 5.1 Collect Requirements 5.2 Define Scope 5.3 Create WBS 6.1 Define Activities 6.2 Sequence Activities 6.3 Estimate Activity Resources 6.4 Estimate Activity Durations 6.5 Develop Schedule 7.1 Estimate Costs 7.2 Determine Budget 8.1 Plan Quality 9.1 Develop Human Resource Plan 10.2 Plan Communications 11.1 Plan Risk Management 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis 11.5 Plan Risk Responses 12.1 Plan Procurements

Figure ‎2-12- Planning Process Group

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Executing Process Group 4.3 Direct and Manage Project Execution 8.2 Perform Quality Assurance 9.2 Acquire Project Team 9.3 Develop Project Team 9.4 Manage Project Team 10.3 Distribute Information 10.4 Manage Stakeholder Expectations 12.2 Conduct Procurements

Figure ‎2-13- Executing Process Group

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Monitoring & Controlling Process Group 4.4 Monitor and Control Project Work 4.5 Perform Integrated Change Control 5.4 Verify Scope 5.5 Control Scope 6.6 Control Schedule 7.3 Control Costs 8.3 Perform Quality Control 10.5 Report Performance 11.6 Monitor and Control Risks 12.3 Administer Procurements

Figure ‎2-14- Monitor and Control Process Group

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Closing Process Group 4.6 Close Project or Phase 12.4 Close Procurements

Figure ‎2-15- Closing Process Group

Project Management Process Interaction

Figure ‎2-16- Project Management Process Interaction

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3. Project Initiation Phase Project initiation phase is the phase in which the project idea is incepted and a decision is made whether the project will be selected by the organization for implementation or will be postponed for a later date or will be rejected. This phase combines the following two processes, within the initiation process group: 4.1 Develop Project Charter 10.1 Identify Stakeholders

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3.1 Develop Project Charter Definition Develop Project Charter is the process of developing a document that formally authorizes a project or a phase and documenting initial requirements that satisfy the stakeholders' needs and expectations. Source: PMBOK® Guide – Fourth Edition, page 73

Figure ‎3-1- Develop Project Charter Process

Source: PMBOK® Guide – Fourth Edition, page 73

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Process Interaction

Figure ‎3-2 - Develop Project Charter – Process Interaction

3.1.1 Inputs to Develop Project Charter 1. 2. 3. 4. 5.

Project statement of work Business case Contract (if available) Enterprise environmental factors Organizational process assets

1. Project statement of work Statement of work is the document that describes the project work. It contains the following:  Business needs  Product scope description  Strategic plan 2. Business case It is the document that includes the necessary information from the business perspective. It contains:  Market demand  Organizational need

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    

Customer request Technologies advance Legal requirement Ecological impacts Social need

3. Contract (if available) A contract from the customer’s acquiring organization is an input if the project is being done for an external customer. 4. Enterprise environmental factors  Governmental or industry standards  Organization infrastructure  Marketplace conditions 5. Organizational process assets  Organizational standard processes, policies, and standardized process definitions for use in the organization  Templates (e.g. project charter template)  Historical information and lessons learned knowledge base

3.1.2 Tools and Techniques for Develop Project Charter 1. Expert judgment 1. Expert judgment Expert judgment is used to assess the input used to develop the charter. The expertise is obtained from:  Other units from the organization  Consultants  Stakeholders, including customers or sponsors  Professional and technical associations  Industry groups  Subject matter experts  Project management office (PMO)

3.1.3 Outputs of Develop Project Charter 1. Project charter 1. Project charter The project charter documents the business needs and the current customer requirements by addressing: PMP Exam Preparation Course

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         

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 (what constitutes project success, who decides the project is successful and who signs off on the project) Assigned project manager, responsibility and authority level Name and authority of the sponsor or other person (s) authorizing the project charter.

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Exercise 3.1 – Develop Project Charter In the provided case study in Appendix 1, develop the project charter. Note: use the following form.

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎3-1 - Develop Project Charter

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3.2 Identify Stakeholders Definition Identify Stakeholders is the process of identifying all people or organizations impacted by the project, and documenting relevant information regarding their interests, involvement, and impact on project success. Source: PMBOK® Guide – Fourth Edition, page 246

Inputs

Tools & Techniques

1.Project charter 2.Procurement documents 3.Enterprise environmental factors 4.Organizational process assets

1. Stakeholder analysis 2. Expert judgment

Outputs 1.Stakeholder register 2.Stakeholder management strategy

Figure ‎3-3- Identify Stakeholders Process

Source: PMBOK® Guide – Fourth Edition, page 246

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Process Interaction

Figure ‎3-4 Identify Stakeholders – Process Interaction

Dimensions of Communication Activities The project manager is the center of the communication hub within the project. He communicates will all project stakeholders in many different levels, as follows:  Internal and External  Formal and Informal  Vertical and Horizontal  Official and unofficial  Written and Oral  Verbal and Non-Verbal

3.2.1 Inputs to Identify Stakeholders 1. 2. 3. 4.

Project charter Procurement documents Enterprise environmental factors Organizational process assets

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3.2.2 Tools and Techniques for Identify Stakeholders 1. Stakeholder analysis 2. Expert judgment 1. Stakeholder analysis It is the technique of systematically gathering and analyzing qualitative and quantitative information to determine whose interest should be taken into account. It defines the interest, expectations and influence of stakeholders and relate them to the purpose of the project. Steps of Stakeholders Analysis Step 1: Identify all potential project stakeholders and relevant information. Step 2: Identify the potential impact or support each stakeholder could generate:  Power/interest grid  Power/influence grid  Influence/impact grid  Salience model Step 3: Assess how key stakeholders are likely to react or respond in various situations. Power / Interest Grid Power interest grid is the method of grouping the stakeholders based on their level of authority (power) and their level of concern (interest) regarding the project outcome.

High Keep Satisfied

B

A F

Power

G

Monitor C E

Low

Manage Closely

H Keep Informed D

Interest

High

Figure ‎3-5 Power / Interest Grid

2. Expert judgment

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Identifying the project stakeholders requires high level of knowledge and expertise in order not to miss any one who could be with an important role in the project and missing him/her may damage the project outcome. Experts include, but not limited to the following:  Senior management  Other units within the organization  Identified key stakeholders  Project managers who have worked on projects in the same area  Subject matter experts (SMEs) in business or project area  Industry groups and consultants, and  Professional and technical associations

3.2.3 Outputs of Identify Stakeholders 1. Stakeholder register 2. Stakeholder management strategy 1. Stakeholder register Stakeholder register is the repository that contains all the details about each stakeholder, including the following:  Identification information  Assessment information  Stakeholder classification 2. Stakeholder management strategy Based in the identified stakeholders, included in eth stakeholders’ register, a strategy will be assigned to each key stakeholder. The strategy will include elements such as:  Key stakeholders who can significantly impact the project  Level of participation in the project desired for each identified stakeholder, and  Stakeholder groups and their management (as groups)

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Exercise 3.2 – Stakeholder Analysis In the provided case study, analyze the stakeholder and communication needs by providing the following information: 1. Stakeholder 2. Organization 3. Position 4. Communication Needs

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎3-2 - Stakeholder Analysis

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4. Project Planning Phase Project planning phase is the phase where all the project plans are created. It is the time where all project activities are identified, assigned and scheduled. During the phase, the following twenty planning processes are executed: 4.2 Develop Project Management Plan 5.1 Collect Requirements 5.2 Define Scope 5.3 Create WBS 6.1 Define Activities 6.2 Sequence Activities 6.3 Estimate Activity Resources 6.4 Estimate Activity Durations 6.5 Develop Schedule 7.1 Estimate Costs 7.2 Determine Budget 8.1 Plan Quality 9.1 Develop Human Resource Plan 10.2 Plan Communications 11.1 Plan Risk Management 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis 11.5 Plan Risk Responses 12.1 Plan Procurements

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4.1 Develop Project Management plan

Definition Develop Project Management Plan is the process of documenting the actions necessary to define, prepare, integrate and coordinate all subsidiary plans. Source: PMBOK® Guide – Fourth Edition, page 78

Inputs

Tools & Techniques

1.Project charter 2.Outputs from planning processes 3.Enterprise environmental factors 4.Organizational process assets

1. Expert judgment

Outputs 1.Project management plan

Figure ‎4-1 - Develop Project Management plan Process

Source: PMBOK® Guide – Fourth Edition, page 78

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Process Interaction

Figure ‎4-2 Develop Project Management plan – Process Interaction

4.1.1 Inputs to Develop Project Management plan 1234-

Project charter Outputs from all planning processes Enterprise environmental factors Organizational process assets

4.1.2 Tools and Techniques for Develop Project Management plan 1- Expert judgment 1. Expert judgment In this process, expert judgment is utilized to:  Tailor the process to meet the project needs  Develop technical and management details  Determine the requires resources and skill levels  Define the required level of configuration management

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4.1.3 Outputs of Develop Project Management plan 1- Project management plan 1. Project management plan The project management plan integrates and consolidates all of the subsidiary management plans and baselines from the planning processes and includes the project baseline and subsidiary plans Project Baseline Project baselines include, but are not limited to:  Schedule baseline  Cost performance baseline, and  Scope baseline

Subsidiary Plans Subsidiary plans include, but are not limited  Scope management plan  Requirements management plan  Schedule management plan  Cost management plan  Quality management plan  Process improvement plan  Human resource plan  Communications management plan  Risk management plan  Procurement management plan

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Exercise 4.1 – Change Management Process Change management plan is part of the overall project plan, discuss the below change management process and reflect it to your environment.

START Initiator

Raise Change Request Form Tech. Lead Initial assessment, appoint assessor

Initial review & discussion

Assessor Analysis, evaluation, assess Impact Assessor Complete chg. req. Impact Study

Stop

Tech. Lead

Review assessment

File Change Request

Discuss/ negotiate with Tech.Lead

Dev. Team No Agree

Call Change Mgnt. Meeting

Yes Change has an Impact

Yes Agree

Make changes Yes No Impact

No Amend Agreements Update Proj. Plan Re-baseline

Will it affect Cost or timescales

Yes

No Change Reqest Endorsement by Steering Committee

Stop

Exercise ‎4-1 - Change Management Process

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4.2 Collect Requirements

Definition Collect requirements is the process of defining and documenting stakeholders’ needs to meet the project objectives. Source: PMBOK® Guide – Fourth Edition, page 103

Tools & Techniques

Outputs

1. Interviews 2. Focus groups 3. Facilitated workshops 4. Group creativity techniques 5. Group decision making techniques 6. Questionnaires and surveys 7. Observations 8. Prototypes

1.Requirements documentation 2. Requirements management plan 3.Requirements traceability matrix

Inputs 1.Project charter 2.Stakeholder register

Figure ‎4-3- Collect Requirements Process

Source: PMBOK® Guide - Fourth Edition, page 105

4.2.1 Inputs to Collect Requirements 1- Project Charter 2- Stakeholder Register 1- Project Charter: is used to provide the high-level project requirements that can be developed. 2- Stakeholder Register: is used to identify stakeholders that can provide information on detailed project and product requirements. 4.2.2 Tools and Techniques for Collect Requirements 1- Interviews 2- Focus Groups PMP Exam Preparation Course

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3- Facilitated Workshops 4- Group Creativity Techniques

1. Interviews They are 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. Interviews are often conducted “one-on-one”, but may involve multiple interviewers and/or multiple interviewees. Interviewing experienced project participants, stakeholders and subject matter experts can aid in identifying and defining the features and functions of the desired project deliverables. 2. Focus Groups Bring together pre-qualified stakeholders and subject matter experts to learn about their expectations about a proposed product. A trained moderator guides the group through an interactive discussion, designed to be more conversational than a one-on-one interview. 3. Facilitated Workshops Requirements workshops are focused sessions that bring key crossfunctional stakeholders together to define product requirements. Workshops are considered as primary techniques for quickly defining cross-functional requirements and reconciling stakeholder differences. These differences can be discovered and resolved more quickly than in individual interviews 4.     

Group Creativity Techniques Brainstorming Nominal group technique Delphi Technique Idea/mind mapping Affinity diagram

4.2.3 Outputs of Collect Requirements 1- Requirements documentation 2- Requirements management plan 3- Requirements traceability matrix

1. Requirements documentation Requirements Documentation describes how individual requirements meet the business need of the project. Requirements may start out at a PMP Exam Preparation Course

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high level and become progressively more detailed as more information is known. Before being baselined, requirements must be unambiguous, traceable, complete, consistent, and acceptable to key stakeholders. Requirements Documentation Components There is no standard template to produce the requirements document. But below are its The Delphi Technique general components: It is an anonymous way  Business need or opportunity to be to reach a consensus of seized. experts on a subject. It involves the following:  Business and project objectives for  Questionnaire to solicit traceability ideas from the experts  Functional requirements, describing  Responses are business process, information and submitted interaction with the product as anonymously, compiled, and then appropriate which can be documented circulated to the textually in a requirements list experts for review  Non-functional requirements such as level of service, performance, safety, security, compliance, supportability, retention etc.  Quality requirements  Acceptance criteria.  Business rules stating the guiding principles of the organization  Impacts to other organizational areas  Impacts to other entities inside or outside  Support and training requirements  Requirements assumptions and constraints

2. Requirements management plan It documents how requirements will be analyzed, documented and managed throughout the project. It contains the following components:     

How requirements activities will be planned, tracked and reported. Configuration management activities such as how changes to the product, service or result requirements will be initiated, how impacts will be analyzed Requirements prioritization process Product metrics that will be used and the rationale for using them Traceability structure that is which requirements attributes will be captured on the traceability matrix and to which other project documentation requirements will be traced.

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3. Requirements traceability matrix It is a table that links requirements to their original business objective. This process includes:  Requirements to business needs, opportunities, goals, and objectives  Requirements to project objectives  Requirements to project scope/WBS deliverables  Requirements to product design  Requirements to product development  Requirements to test strategy and test scenarios, and  High-level requirements to more detailed requirements

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Group Discussion 4.1 – Requirements Gathering Challenges Highlight the most problematic areas in the process of gathering requirements in your organization. Use the following as guidelines: 1. Lacking time to complete the requirement gathering process 2. Customers may not know what they really want 3. Too many changes

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Group Discussion ‎4-1-Requirements Gathering Challenges

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Exercise 4.2 – Create Project Charter Based on the supplied case study, create the Project Charter that will provide a high authority for the project manager. Consider specifying the following: 1. 2. 3. 4. 5. 6.

Customer Project Name Project Description Project Manager: Name and Authority Level Business Needs Issued By Manager

Note: Use form 9.1 in Appendix 2

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎4-2-Create Project Charter

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4.3 Define Scope

Definition Define Scope is the process of developing a detailed description of the project and product. Source: PMBOK® Guide – Fourth Edition, page 103

Inputs

Tools & Techniques

1.Project charter 2.Requirements documentation 3.Organizational process assets

1. Expert judgment 2. Product analysis 3. Alternatives identification 4. Facilitated workshops

Outputs 1.Project scope statement 2.Project document updates

Figure ‎4-4- Define Scope Process

Source: PMBOK® Guide - Fourth Edition, page 112

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Group Discussion 4.2– Scope Creep Indicators From your perspective, what do you think of the following three statements? 1. Exceeding Customer Expectations 2. Delivering State of the art products 3. Providing low cost items, that may not cost anything free of charge

Your Notes 1. Exceeding Customer Expectations _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ 2. Delivering State if the art products _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ 3. Providing low cost items, that may not cost anything free of charge _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Group Discussion ‎4-2- Scope Creep Indicators

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4.3.1 Inputs of Define Scope 123456-

Project charter Requirements documentation Organizational process assets: Policies, procedures, and templates for a project scope statements Project files from previous projects, and Lessons learned from previous phases or project

4.3.2 Tools and Techniques for Define Scope 1234-

Expert judgment Product analysis Alternatives identification Facilitated workshops

1. Expert judgment This is the tools of getting the opinion of experts who have had previous experience in similar projects. Experts can be obtained from the following categories:  Other units within the organization  Consultants  Stakeholders including customers or sponsors  Professional and technical associations  Industry groups and  Subject matter experts 2. Product analysis Each application area has one or more generally accepted methods for translating high-level product descriptions into tangible deliverables. Product analysis includes techniques such as:  Product breakdown  Systems analysis  Requirements analysis  System engineering  Value engineering  Value analysis. 3. Alternatives identification Identifying alternatives is a technique used to generate different approaches to execute and perform the work of the project. A variety of general management techniques can be used such as brainstorming, lateral thinking, pair wise comparisons, etc.

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4.3.3 Outputs of Define Scope 1- Project scope statement 2- Project document updates

1. Project scope statement This document describes, in detail, the projects deliverables and the work required to create those deliverables. It also provides a common understanding of Constraints: the project scope among project Are known factors, which stakeholders. The Project Scope Statement limit the project team’s may contain explicit scope exclusions that options. can assist in managing stakeholder expectations. Below are some of the Assumptions: Are factors that, for benefits of the project scope statement: planning purposes, are  Help the project team to perform considered to be true, real, more detailed planning or certain. They need to be  Guides the project team’s work validated during the during execution course of project planning  Provides the baseline for evaluating whether requests for changes or additional work are contained within or outside the project’s boundaries Scope Statement Content As the details are not always ready from day one of the project, so this document may be compiled progressively over a period of time. The contents of this document include, but not limited to the following:  Product scope description  Product acceptance criteria  Project deliverables  Work breakdown structure  Project exclusions  Project constraints  Project assumptions  Project boundaries  Project resources  Project milestones  Project stakeholders  Project Risks Identifying Constraints Examples of constraints that may be faced during a project:  Budget  Schedule  People  Facilities and Equipment PMP Exam Preparation Course

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  

Fault tolerant objectives Portability requirements The real world

Identifying Assumptions Assumptions are identified and documented during the planning process as they affect all aspects of planning. They need to be verified to ensure that they are true. In case if it is proven to be false, then replanning is needed. They always carry a certain degree of risk Unquantifiable Expectations Some expectations “requirements” may be difficult to quantify, they need to be quantified as much as possible, and otherwise they become a risk item of unclear requirements. Examples of these are:  Customer satisfaction  Company Image  Community Perception 2. Project Document Updates As mentioned earlier, the project management team does not always have answers to all planning questions. Facts come up during different times during the project life cycle. This entails changing the project related documents as and when new facts come up. Changes also come due handling authorized change requests. Examples of the documents that will be changed in this process are:   

Stakeholder register Requirements documentation Requirements traceability matrix.

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Exercise 4.3 – Create Scope Statement Based on the supplied case study, create the Project Scope Statement that will highlight the minimum project information. Consider this as the business case used in your organization. Include the following information: 1. 2. 3. 4. 5. 6. 7. 8.

Project Name Project Manager Business Needs (project justification) Summary of Product Description Deliverables Objectives (cost, schedule, quality measures, other) Project Constraints Project Risks (high level)

Note: Use form 9.2 in Appendix 2

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎4-3-Create Scope Statement

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Exercise 4.4 – Create Project Assumptions Based on the supplied case study and the developed scope statement, create the Project Assumptions List. Include the following information: 1. Area: the area of the assumption, can be technical, financial, business etc. 2. The Assumption that you see true or false and that will be verified later on. Note: Use form 9.3 in Appendix 2

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎4-4-Create Project Assumptions

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4.4 Create WBS

Definition Create WBS is the process of subdividing project deliverables and project work into smaller. Source: PMBOK® Guide – Fourth Edition, page 103

Create WBS is the process of subdividing project deliverables and project work into smaller, more manageable components. It is a deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required deliverables. Each descending level of the WBS represents an increasingly detailed definition of the project work. The WBS organizes and defines the total scope of the project and represents the work specified in the current approved project scope statement. The planned work is contained within the lowest level WBS components, which are called work packages. A work package can be scheduled, cost estimated, monitored and controlled. In the context of the WBS, work refers to work products or deliverables that are the result of effort and not to the effort itself.

Outputs

Tools & Techniques

Inputs 1.Project scope statement 2.Requirements documentation 3.Organizational process assets

1. Decomposition

1.WBS 2.WBS dictionary 3.Scope baseline 4.Project document updates

Figure ‎4-5- Create WBS Process

Source: PMBOK® Guide - Fourth Edition, page 115

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Example of a WBS 1. Hardware 1.1 Servers 1.1.1 Head Office Server 1.1.2 Branch Server 1.2 Network 1.2.1 Switches 1.2.2 Routers 1.2.2.1 Head Office Router 1.2.2.1 Branch Router 2. Software 2.1 Application 2.1.1 Portfolio Management 2.1.2 Real Estate Management 2.1.3 Asset Management 2.2 Licenses 2.2.1 Windows Server 2.2.2 SharePoint Portal 3.2.3 Office 2003. 3. Training 3.1 Windows Training 3.1.1 Windows Server Admin 3.1.2 Office Training 3.2 Application Training 3.2.1 DB Admin 3.2.2 Application Admin Why WBS is so Important It is the base of all other planning activities. The following diagram shows that the activity list, resources, duration, dependencies, cost and schedule are all dependants on the WBS.

Figure ‎4-6- Example of WBS

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4.4.1 Inputs to Create WBS 1- Project scope statement 2- Requirements documentation 3- Organizational process assets 4.4.2 Tools and Techniques for Create WBS 1- Decomposition 1. Decomposition It is the subdivision of project deliverables into smaller, more manageable components Work Package: until the work and deliverables are defined to It is the smallest level of the work package level. Decomposition of the WBS breakdown. It is the total project work into work packages the result of breaking down the deliverables to generally involves the following activities: the smallest necessary (i.e.  identifying and analyzing the not too much of deliverables and related work unnecessary breakdown)  Structuring and organized the WBS and sufficient (not very little of break down) level  Decomposing the upper WBS levels into lower level detailed components  Developing and assigning identification codes to the WBS components  Verifying that the degree of decomposition of the work is necessary and sufficient.  Reaching to the lowest level of decomposition “Work Package”

4.4.3 Outputs of Create WBS 1234-

Work Breakdown Structure (WBS) WBS dictionary Scope baseline Project document updates

1. Work Breakdown Structure (WBS) The WBS is a deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required deliverables. Each descending level of the WBS represents an increasingly detailed definition of the project work. The WBS is finalized by establishing control accounts for the work packages and a unique identifies from a code of accounts. A control account is a management control point where scope, cost, and schedule are integrated and compared to the earned value for performance measurement.

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2. WBS dictionary The WBS dictionary provides more detailed descriptions of the components in the WBS including work packages and control accounts. It may contain the following information:  code of account identifies  Description of work  Responsible organization  List of schedule milestones  Associated schedule activities  Resources required  Cost estimates  Quality requirements  Acceptance criteria  Technical references  Contract information 3. Scope baseline The scope baseline is a component of the project management plan. The components of the scope baseline include:  Project scope statement  WBS  WBS dictionary 4. Project document updates Project documents that may be updated include:  Requirements documentation  Change requests results from the create WBS process Other Breakdown Structures The WBS should not be confused with other kinds of breakdown structures, like:  Organizational Breakdown Structure (OBS)  Bill of Materials (BOM)  Risk Breakdown Structure (RBS)  Resource Breakdown Structure (RBS).

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Exercise 4.5 – Create WBS Based on the supplied case study, create the Project Work Breakdown Structure. Note: Use form 9.4 in Appendix 2

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎4-5- Create WBS

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4.5 Define Activities Definition Define Activities is the process of identifying the specific actions to be performed to produce the project deliverables. Source: PMBOK® Guide – Fourth Edition, page 133

Activities vs. WBS   

Both use decomposition tool The decomposition in the “Define Activities” process breaks down the work packages into activities. The result is activity “verb” oriented The decomposition in the “Create WBS” process breaks down the deliverables into work pancakes. The result is deliverable “noun” oriented

Inputs

Tools & Techniques

1.Scope baseline 2.Enterprise environmental factors 3.Organizational process assets

1. Decomposition 2. Rolling wave planning 3. Templates 4. Expert judgment

Outputs 1.Activity list 2.Activity attributes 3.Milestone list

Figure ‎4-7- Define Activities Process

Source: PMBOK® Guide – Fourth Edition, page 133

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Process Interaction Involved Documents (IN) ØScope baseline ØEnterprise environmental factors ØOrganizational process assets Involved Documents (OUT) ØActivity list ØActivity attributes ØMilestone list

5.3 Create WBS

Ø Scope baseline Ø Milestone List

6.2 Sequence Activities 6.1 Define Activities

6.4 Estimate Activity Durations

Source: PMBOK® Guide – Fourth Edition Diagram Developed by Techno Management Ø

Ø Activity List Ø Activity attributes

6.3 Estimate Activity Resources

6.5 Develop Schedule

Ø Organizational process assets Ø Enterprise environmental factors

Enterprise/ Organization

Figure ‎4-8- Define Activities – Process Interaction

4.5.1 Inputs to Define Activities 1. 2. 3. 4.

Scope baseline Enterprise environmental factors Organizational process assets: Existing formal and informal activity planning-related policies, procedures and guidelines.

4.5.2 Tools and Techniques for Define Activities 1. 2. 3. 4.

Decomposition Rolling wave planning Templates Expert judgment

1. Decomposition The technique of decomposition as applied to defining activates, involves subdividing the project work packages into smaller, more manageable components called activities. Activities represent the effort needed to complete a work package. The Define Activities process defines the final outputs as activities rather than deliverables as in the work packages. PMP Exam Preparation Course

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2. Rolling wave planning It is a form of progressive elaboration planning where the work to be accomplished in the near term is planned in detail and future work is planned at a higher level of the WBS. Therefore, work can exist at various levels of detail depending on where it is in the project life cycle. 3. Templates Experience from previous projects can be used as templates to be used in similar projects. 4. Expert judgment Generally speaking, the project manager is not supposed to acquire the skills and knowledge to produce the activities of the project. He may have a limited experience in one or more domains, but he should rely on others who are experts n their domains to produce the activities of that particular domain. Even if the project manager has an experience in any of the domains, it is recommended to take the activities from the member who is in charge of this domain to grant his commitment to the activities, and later on, the schedule that he will be in charge.

4.5.3 Outputs of Define Activities 1. Activity list 2. Activity attributes 3. Milestone list 1. Activity list The activity list is a comprehensive list including all schedule activities required on the project. The activity list includes the activity identifier and a scope of work description for each activity in sufficient detail to ensure that project team members understand what work is required to be completed 2. Activity attributes This is an explanation of the activity that adds more information to help further activity planning. This information will help in assigning the resources, identify the dependencies, etc. it may include the following information.    

Responsibility (who will do the work) Geographic Area (where the work will be performed) Activity Type (summary or detailed) WBS Classification (for ordering and

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The Activity List  Must include all activities in the project  Should be organized as an extension to WBS to help ensure that it is complete.  Should include descriptions of each activity.

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sorting) 3. Milestone list A milestone is a significant point or event in the project. A milestone list identifies all milestones and indicates whether the milestone is mandatory, such as those required by contract, or optional such as those based upon historical information.

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Group Discussion 4.3– Creating Activities Do you have a standard process or templates you use in your organization that helps you to create project activities? What are the challenges you and your organization have in this regard?

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Group Discussion ‎4-3-Creating Activities

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Exercise 4.6 – Create Activity List Based on the supplied case study and the produced WBS, create the detailed activity list for only one work package. You may consider the following WBS: 1 Hardware 1.1 Servers 1.1.1 Head Office Serve 1.1.2 Branch Server 1.2 Network 1.2.1 Switches 1.2.2 Routers 1.2.2.1 Head Office Router 1.2.2.1 Branch Router 2 Software 2.1 Application 2.1.1 Portfolio Management 2.1.2 Real Estate Management 2.1.3 Asset Management

2.2 Licenses 2.2.1 Windows Server 2.2.2 SharePoint Portal 3.2.3 Office 2003. 3 Training 3.1 Windows Training 3.1.1 Windows Server Admin 3.1.2 Office Training 3.2 Application Training 3.2.1 DB Admin 3.2.2 Application Admin

Note: Use form 9.5 in Appendix 2

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎4-6-Create Activity List

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4.6 Sequence Activities

Definition Sequence Activities is the process of identifying and documenting relationships among the project activities. Source: PMBOK® Guide – Fourth Edition, page 136

Tools & Techniques

Inputs

1. Precedence diagramming method (PDM) 2. Dependency determination 3. Applying leads and lags 4. Schedule network templates

1.Activity list 2.Activity attributes 3.Milestone list 4.Project scope statement 5.Organizational process assets

Outputs 1.Project schedule network diagrams 2.Project document updates

Figure ‎4-9 - Sequence Activities Process

Source: PMBOK® Guide – Fourth Edition, page 136

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Process Interaction Involved Documents (IN) ØActivity list ØActivity attributes ØMilestone list ØProject scope statement ØOrganizational process assets

Enterprise / Organization

5.2 Define Scope Ø Project Scope Statement

Ø Organizational process assets

Involved Documents (OUT) ØProject schedule network diagrams ØProject document updates

Ø Activity list Ø Activity attributes Ø Milestone list

6.1 Define Activities

6.2 Sequence Activities

6.5 Develop Schedule

Source: PMBOK® Guide – Fourth Edition Diagram Developed by Techno Management Ø

Ø Project schedule network diagrams

Ø Project Documents Updates

Project ` Documents

Figure ‎4-10- Sequence Activities – Process Interaction

4.6.1 Inputs of Sequence Activities 12345-

Activity list Activity attributes Milestone list Project scope statement Organizational process assets

4.6.2 Tools and Techniques for Sequence Activities 1234-

Precedence diagramming method (PDM) Dependency determination Applying leads and lags Schedule network templates

1. Precedence diagramming method (PDM) PDM is a method used in Critical Path Methodology (CPM) for constructing a project schedule network diagram. It uses boxes or rectangles referred to as nodes, to represent activities, and connect them with arrows that show the logical relationships that exist between them. This technique is called Activity-On-Node (AON) and is the method used by most project management software packages.

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B

A

Finish

Start

C

D

Figure ‎4-11- Precedence Diagram (Activity on the node)

Activity on the Arrow (AOA) – An old Technique This is an old technique which shows the activities on the arrows and the relationships between the activities are made by joints (circles) connecting the arrows. This model shows only Finish to Start relationship. In the below diagram, in order to make a dependency between task B and C, a dummy activities (new arrow) is created.

A

C E

End

Dummy Activity

Start B

D

Figure ‎4-12- Activity on the arrow

Task Dependencies Relationships between tasks are determined by the dependencies that link these tasks together. There are mainly four types of tasks, they are: 1- Finish-to-start (FS) 2- Finish-to-finish (FF) 3- Start-to-Start (SS) 4- Start-to-finish (SF)

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Type of interdependency or Precedence Relationship Finish to start (FS) The finish of Task1 drives the start of Task2

Description

1 2

Start to Start (SS) The start of Task1 drives the start of Task2

1

Finish to Finish (FF) The finish of Task1 drives the finish of Task2

1

Start to Finish (SF) The start of Task1 drives the finish of Task2

2

2

1 2

Figure ‎4-13- Task Dependencies

2. Dependency determination Three types of dependencies are used to define the sequence among the activities:  Mandatory dependencies: Also known as hard logic. It is applied when one dependency type must be used. For example, we have to use a finish to start relationship between task1 (building floor 1) and task 2 (building floor 3). This dependency, once identified cannot be changed. 

Discretionary dependencies: Also known as soft logic or preferred logic. It is applied when the project team have the option of applying more than dependency on two tasks, then they prefer to use on the over and keep the right to change it as necessary.



External dependencies: Tasks dependant on other tasks that are performed by external parties are highlighted as External dependencies to give it more wait to be monitored and controlled to avoid problems.

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Group Discussion 4.4– Dependencies What is the usefulness of identifying dependencies as mandatory or discretionary?

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Group Discussion ‎4-4-Creating Activities

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3. Applying leads and lags A lead allows an acceleration of the successor activity, while a lag directs a delay in the successor activity Lag Time is a delay between a task and its predecessor. It is usually expressed using a specific amount of time.

1

2 Days

2

Figure ‎4-14- Lag Time

Lead Time is an overlap between a task and its predecessor. In project management software, lead time may be expressed as a negative number in the lag field.

1 2 Days

2 Figure ‎4-15- Lead Time

4.6.3 Outputs of Sequence Activities 1- Project schedule network diagrams 2- Project document updates:  Activity lists,  Activity attributes, and  Risk register

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4.7 Estimate Activity Resources Definition Estimate Activity Resources is the process of estimating the type and quantities of material, people, equipment or supplies required to perform each activity. Source: PMBOK® Guide – Fourth Edition, page 141

Inputs

Tools & Techniques

1.Activity list 2.Activity attributes 3.Resource calendars 4.Enterprise environmental factors 5.Organizational process assets

1. Expert judgment 2. Alternatives analysis 3. Published estimating data 4. Bottom-up estimating 5. Project management software

Outputs 1.Activity resource requirements 2.Resource breakdown structure 3.Project document updates

Figure ‎4-16- Estimate Activity Resources Process

Source: PMBOK® Guide - Fourth Edition, page 142

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Process Interaction 9.2 Acquire Project Team

12.2 Conduct Procurements

Enterprise / Organization Ø Organizational process assets Ø Enterprise environmental factors

Ø Resource Calendars

6.4 Estimate Activity Durations 6.1 Define Activities

6.3 Estimate Activity Resources

Project ` Documents

Involved Documents (OUT) ØActivity resource requirements ØResource breakdown structure ØProject document updates

Ø Activity resource requirements

Ø Activity list Ø Activity attributes

Ø Resource breakdown structure Ø Project Documents Updates

Involved Documents (IN) ØActivity list ØActivity attributes ØResource calendars ØEnterprise environmental factors ØOrganizational process assets

6.5 Develop Schedule

9.1 Develop Human Resource Plan

Source: PMBOK® Guide – Fourth Edition Diagram Developed by Techno Management Ø

12.1 Plan Procurements

Figure ‎4-17- Estimate Activity Resources – Process Interaction

4.7.1 Inputs to Estimate Activity Resources 12345-

Activity list Activity attributes Resource calendars Enterprise environmental factors Organizational process assets

1. Activity list This is the output on the Define Activities process. 2. Activity attributes Activity attributes plays a role in defining the required resources. Based on the type and nature of the task, team members may decide to perform it with certain recourses that may have specific skills or does not conflict with another type of activities he is also involved in within the same project or others. 3. Resource calendars The resource calendar determines the resources that will be assigned, based on their availability. Each resource will have a resource calendar that shows their assignments and availability.

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4. Enterprise environmental factors This is all the enterprise environmental factors that have an impact on deciding the required resources. This includes, but not limited to: - Resource availability - Resources skills - Multi-culture structure

5. Organizational process assets This is all the organizational process assets that have an impact on deciding the required resources. This includes, but not limited to: - Staffing policy and procedures - Procurement policy and procedures - Outsourcing policy and procedures - Job market conditions 4.7.2 Tools and Techniques for Estimate Activity Resources 12345-

Expert judgment Alternatives analysis Published estimating data Bottom-up estimating Project management software

1. Expert judgment All inputs related to the resource need to be assessed by an expert to decide on the way how the resources are identified and assigned. Experts can be team members, other team members within the organization or external consultants. 2. Alternatives analysis Analyzing the tasks and which resources and skills can be applied may result in options to the project team that they find useful in terms of schedule and budget optimization. 3. Published estimating data Some companies rely on published resources estimates that are either done internally or purchased from third parties. 4. Bottom-up estimating In case if the resource requirements to a certain activity could not be estimated to an acceptance level of confidence, this activity is decomposed (broken down) into further small activities that can be easily analyzed and identify their resource requirements. Once this is doe, the resource requirements are aggregated upward. 5. Project management software

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Many project management software provide the automation of planning, organizing and optimizing resources. Some also allow creating resources pools that can be managed across the organization.

4.7.3 Outputs of Estimate Activity Resources 1. Activity resource requirements It identifies the types and quantities of resources required for each activity in a work package. These requirements can then be aggregated to determine the estimated resources for each work package. The amount of detail and the level of specificity of the resource requirements descriptions can vary by application area. The resource requirements documentation for each activity can include the basis of estimate for each resource, as well as the assumption that were made in determining which types of resources are applied, their availability and what quantities are used. 2. Resource breakdown structure The Resource Breakdown Structure is a hierarchical structure of the identified resources by resource category and resource type. Resource categories include labor, material, equipment, and supplies. Resource types can include the skill level, grade level or other information as appropriate to the project. The resource breakdown structure is useful for organizing and reporting project schedule data with resource utilization information.

3. Project document updates  Activity list  Activity attributes  Resource calendars

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Exercise 4.7 – Resource Assignment Based on the supplied case study and the produced activity list, identify the required resources for each task. Note: Use form 9.5 in Appendix 2

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎4-7-Resource Assignment

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4.8 Estimate Activity Durations

Definition Estimate Activity Durations is the process of approximating the number of work periods needed to complete individual activities with estimated resources. Source: PMBOK® Guide – Fourth Edition, page 146

Inputs

Tools & Techniques

Outputs

1. Activity list 2. Activity attributes 3. Activity resource requirements 4. Resource calendars 5. Project scope statement 6. Enterprise environmental factors 7. Organizational process assets

1. Expert judgment 2. Analogous estimating 3. Parametric estimating 4. Three-point estimates 5. Reserve analysis

1. Activity duration estimates 2. Project document updates

Figure ‎4-18- Estimate Activity Durations Process

Source: PMBOK® Guide - Fourth Edition, page 146

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Process Interaction 9.2 Acquire Project Team

5.2 Define Scope

Ø Project scope statement

12.2 Conduct Procurements

Enterprise / Organization Ø Organizational process assets Ø Enterprise environmental factors

Ø Resource Calendars

Ø Activity resource requirements

6.3 Estimate Activity Resources

6.4 Estimate Activity Durations 6.1 Define Activities

Ø Activity duration estimates

6.5 Develop Schedule

Involved Documents (IN) ØActivity resource requirements ØActivity list ØActivity attributes ØProject scope statement ØResource calendars ØEnterprise environmental factors ØOrganizational process assets Involved Documents (OUT) ØActivity duration estimates ØProject document updates

Ø Activity list Ø Activity attributes

Source: PMBOK® Guide – Fourth Edition Diagram Developed by Techno Management Ø

Ø Project Document s Updates

Project ` Documents

11.2 Identify Risks

Figure ‎4-19- Estimate Activity Duration – Process Interaction

Activity Duration compared to Effort  Elapsed time: The time that shows on the calendar. Includes the holidays and weekends.  Duration: The number of working days. It does not include holidays or week ends  Working time (Effort): The actual aggregated time, It adds the working time of all the involved resource. 4.8.1 Inputs to Estimate Activity Durations 1. 2. 3. 4. 5. 6. 7.

Activity list Activity attributes Activity resource requirements Resource calendars Project scope statement Enterprise environmental factors Organizational process assets

4.8.2 Tools and Techniques for Estimate Activity Durations 1. 2. 3. 4. 5.

Expert judgment Analogous estimating Parametric estimating Three-point estimates Reserve analysis

1. Expert judgment PMP Exam Preparation Course

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All inputs related to the resource need to be assessed by an expert to decide on the way how the resources are identified and assigned. Experts can be team members, other team members within the organization or external consultants.

2. Analogous estimating Actual duration of a previous, similar activity is basis for estimating the future activity. It is a form of Expert Judgment. It is most reliable when:  Activities are really similar.  Individuals preparing the estimates have needed expertise

3. Parametric estimating Parametric estimating uses a statistical relationship between historical data and other variables to calculate an estimate for activity parameters, such as cost, budget and duration. Activity durations can be quantitatively determined by multiplying the quantity of work to be performed by labor hours per unit of work. This technique can produce higher levels of accuracy depending upon the sophistication and underlying data built into the model.

4. Three-point estimates This concept originated with the Program Evaluation and Review Technique (PERT), PERT uses three estimates to define an approximate range for an activity’s duration:  Most likely  Optimistic  Pessimistic PERT analysis calculated an Expected activity duration using a weighted average of these three estimates. It uses the following formulas: Estimated Time:

Standard Deviation:

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Final Time Estimate:

Where: tE = Expected time tO = Optimistic time tM = Most likely time tP = Pessimistic Time SD = Standard Deviation

Determine Probability of Achievement Estimated time = tE + 1 x SD with 68% confidence Estimated time = tE + 2 x SD with 95% confidence Estimated time = tE + 3 x SD with 99% confidence 5. Reserve analysis It is also called time buffer, reserve, or contingency. It is Added by project team to an activity as a recognition of project risk. It can be either a percent of estimated duration, or fixed duration. It should be documented in order to facilitate future reference. 4.8.3 Outputs of Estimate Activity Durations 1- Activity duration estimates 2- Project document updates

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Exercise 4.8 – Task Duration Estimate The following information and questions 1 through 4 refer to below network diagram and table B

D

F

G

A

I C

E

H

Activity

Optimistic

Pessimistic

Most Likely

A

1

1

1

B

2

3

3

C

10

13

12

D

5

15

5

E

3

6

4

F

1

1

1

G

5

8

6

H

9

13

10

I

5

5

5

1. What is the expected value of the number of days to complete the project? 2. What is the expected value of the duration for activity B? 3. What is the standard deviation for the duration of activity B? 4. It is desirable to make an estimate that has a greater than 95% chance of being correct. Which of the following ranges of time for the completion of the project best describes this probability of being correct?

Exercise ‎4-8-Task Duration Estimate

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4.9 Develop Schedule

Definition Develop Schedule is the process of analyzing activity sequences, durations, resource requirements, and schedule constraints to create the project schedule. Source: PMBOK® Guide – Fourth Edition, page 152

Inputs

Tools & Techniques

1. Activity list 2. Activity attributes 3. Project schedule network diagrams 4. Activity resource requirements 5. Resource calendars 6. Activity duration estimates 7. Project scope statement 8. Enterprise envi. factors 9. Organizational process assets

1. Schedule network analysis 2. Critical path method 3. Critical chain method 4. Resource leveling 5. What-if analysis 6. Applying leads and lags 7. Schedule compression 8. Scheduling tool

Outputs 1.Project schedule 2.Schedule baseline 3.Schedule data 4.Project Document Updates

Figure ‎4-20- 6.5 Develop Schedule Process

Source: PMBOK® Guide - Fourth Edition, page 152

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Process Interaction 9.2 Acquire Project Team

5.2 Define Scope

Enterprise / Organization

12.2 Conduct Procurements

Ø Resource Calendars

Ø Organizational process assets Ø Enterprise environmental factors

Ø Project Scope Statement

6.3 Estimate Activity Resources

6.1 Define Activities Ø Activity list Ø Activity attributes

Ø Project schedule network diagrams

6.2 Sequence Activities

Involved Documents (OUT) ØProject schedule ØSchedule baseline ØSchedule data ØProject documents updates

Ø Activity resource requirements

6.5 Develop Schedule

6.6 Control Schedule Ø Project Schedule

Ø Activity duration estimates

Involved Documents (IN) ØActivity list ØActivity attributes ØProject schedule network diagrams ØActivity resource requirements ØActivity duration estimates ØProject scope statement ØResource calendars ØEnterprise environmental factors ØOrganizational process assets

Source: PMBOK® Guide – Fourth Edition Diagram Developed by Techno Management

6.4 Estimate Activity Duration

Ø

Ø Schedule baseline

Ø Schedule data Ø Project Documents Updates

Project ` Documents

4.2 Develop Project Management Plan

7.1 Estimate Costs

7.2 Determine Budget

12.1 Plan Procurements

8.1 Plan Quality

Figure ‎4-21- Develop Schedule – Process Interaction

Schedule Constraints Two categories of constraints are directly related to scheduled development: Imposed Dates, they are: - Key Events - Major Milestones Example of Constraints: Constraint Type

Description

Start No Later Than

The task must start before or on that date.

Start No Earlier Than

The task may not start before this date.

Finish No Later Than

The task must be completed by that date.

Finish No Earlier Than

The task may not be completed before this date.

4.9.1 Inputs to Develop Schedule 1. Activity list 2. Activity attributes 3. Project schedule network diagrams PMP Exam Preparation Course

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4. 5. 6. 7. 8. 9.

Activity resource requirements Resource calendars Activity duration estimates Project scope statement Enterprise environmental factors Organizational process assets

Project Calendars Project and resource calendars identify when work is allowed. They affect all resources. Resource calendars affect only that resource or group of resources.

4.9.2 Tools and Techniques for Develop Schedule 1. 2. 3. 4. 5. 6. 7. 8.

Schedule network analysis Critical path method Critical chain method Resource leveling What-if analysis Applying leads and lags Schedule compression Scheduling tool

1. Schedule network analysis Schedule network analysis is a technique that generates the project schedule. It employs various analytical techniques, such as:  Critical path method  Critical chain method  What-if analysis  Resource leveling

2. Critical path method The critical path method calculates the theoretical early start and finish dates and late start and finish dates without regard for any resource limitations. This is done by performing a forward and backward pass analysis through the schedule network. The resulting early and late start and finish dates are not necessarily the project schedule; rather they indicate the time periods within which the activity could be scheduled. Float Total Float: is the amount of time that an activity may be delayed from its early start without delaying the project finish date.

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Free Float: is the amount of time that an activity can be delayed without delaying the early start of any immediately following activities.

Calculating Path and Float Forward Pass:  Early Start (ES) = Total of task durations for all precedent (necessary) tasks  Early Finish (EF) = ES + Task Duration Backward Pass:  Late Finish (LF) = Last day of project – Duration of sequential (necessary) tasks to end of project  Late Start (LS) = LF – Task Duration Float = LF – ES – Task Duration Task Coding Convention - Early Start = ES - Early Finish = EF - Late Start = LS - Late Finish = LF - Duration = DU

ES

LS

EF

DU

LF

Process a. b. c. d. e.

Construct the Network Diagram Apply the Task Duration Calculate the Forward Pass Calculate the Backward Pass Calculate Floats

a. Construct the Network Diagram

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B

C

D

G

A

E

F 58

b. Apply the Task Duration

B

C

D

3

1

3

A

G

1

2

E

F

6

6 59

c. Calculate the Forward Pass 1

0

4

4

7

5

10

B

C

D

3

1

3 13

1

15

A

G

1

2

1

7

7

13

E

F

6

6 60

d. Calculate the Backward Pass

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4

4

9

9

B 6 0

5

7

10

10

C

3

1

10

D 3

13

1

13

1

13

G

A 0

1

15

1

7

7

7

7

E 1

6

2

15

13

F 6

13

61

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e. Calculate Floats

1

4

4

9

9

B 0

1

10

10

10

D

TF=5 FF=2

TF=5 FF=0

1

7

C

3

6

5

3

13

TF=3 FF=3

13

G

A 0

1

15

13

1

TF=0 FF=0

1

7

7

7

7

E 1

6 TF=0 FF=0

2

15

TF=0 FF=0

13

F 63

6

13

TF=0 FF=0

3. Critical chain method The critical path methods calculates the theoretical early start and finish dates, and late start and finish dates without regard for any resource limitations. This is done by performing a forward and backward pass analysis through the schedule network. The resulting early and late start and finish dates are not necessarily the project schedule; rather they indicate the time periods within which the activity could be scheduled.

4. Resource leveling Resource leveling is necessary when resources are over-allocated such as when the resource is: - Assigned to two or more activities during the same time period - Shared or critical required resources are only available at certain times - Only available in limited quantities. Resource leveling can often cause the original critical path to change. It mostly results in extended schedule 4 Days

3 Days

2

2

2

2 After

Before 65

Figure ‎4-22- Resource Leveling

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5. What-if analysis This is based on the calculation of multiple project durations with different sets of activity assumptions. “What-if analysis” using the logic in the network diagram. A well known technique of “What if analysis” is called Monte Carlo Analysis, it is: - The most common technique. - Distribution of probable results is defined for each activity, and then used to determine the distribution of probable results for the total project. - Also used in Project Risk Management

6. Applying leads and lags A lead allows an acceleration of the successor activity, while a lag directs a delay in the successor activity

7. Schedule compression The two main techniques that are used to compress schedules are: a- Fast tracking: A schedule compression technique in which phases or activities normally performed in sequence are performed in parallel. b- Crashing: It is a schedule compression technique in which cost and schedule tradeoffs are analyzed to determine how to obtain the greatest amount of compression for the least incremental cost. 8. Scheduling tool  MS Project  Primavera

4.9.3 Outputs of Develop Schedule 1. Project schedule: - Milestones charts - Bar charts - Project schedule network diagrams 2. Schedule baseline 3. Schedule data 4. Project document updates: - Activity resource requirements - Activity attributes - Calendar - Risk register

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Exercise 4.9 – Develop Schedule The following information and questions 1 through 9 refer to below network diagram Assume that the work is on a single shift basis and will seven days per week until the job is done. The project is to begin on May 1. B

D

3

2

FS-2

F 4

A

E

H

1

7

5

C

G

3

4

1. 2. 3. 4. 5. 6. 7. 8.

What day in May will activity D have for its early finish date? What is the free float for activity F? What is the free float for activity D? What is the critical path of the project? What is the late start for activity F? How long is the project in days? What is the early start for activity F? If there is a delay in activity F of six days, what is the effect on the project completion date? 9. What is the early finish date of activity A?

Exercise ‎4-9- Develop Schedule

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4.10 Estimate Costs Definition Cost Estimating is the determination of approximately how much will it cost the performing organization to provide the product or service involved. Source: PMBOK® Guide – Fourth Edition, page 168

Inputs

Tools & Techniques

1.Scope baseline 2.Project schedule 3.Human resource plan 4.Risk register 5.Enterprise environmental factors 6.Organizational process assets

1. Expert judgment 2. Analogous estimating 3. Parametric estimating 4. Bottom-up estimating 5. Three-point estimates 6. Reserve analysis 7. Cost of quality 8. PM Estimating software 9. Vendor bid analysis

Outputs 1.Activity cost estimates 2.Basis of estimates 3.Project document updates

Figure ‎4-23- Estimate Costs Process

Source: PMBOK® Guide – Fourth Edition, page 169

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Process Interaction

Figure ‎4-24- Estimate Costs – Process Interaction

Life Cycle Costing vs. Value Engineering Project cost can be seen from different perspectives, and important perspective is the cost of the project during its whole life cycle. The process of evaluating the project cost over its life cycle is called Life Cycle Costing process. Life-Cycle Costing (LCC) is the total cost to the organization for the ownership and acquisition of the product over its full life cycle. LCC = R&D costs + production cost + construction cost + operation and maintenance cost + product retirement and phase-out cost. Value Engineering (VE) is a creative approach used to optimize life-cycle costs, save time, increase profits, improve quality, expand market share, solve problems, and/or use resources more effectively.

Cost Estimate as an Iterative Process Cost estimate is refined during the course of the project. Cost Estimate increase as the project progresses over time. This is part of the progressive elaboration concept.

Types of Estimates and Degree of Accuracy

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Depending on the project phase, different levels of estimates with different levels f accuracy are applied. Below are examples of these levels.

Type

Accuracy

Project Phase

Rough Order of Magnitude (ROM)) or Ball Park

50%

Initiation

Budget Estimate

10%

Early Planning

Definitive Estimate

5%

Late Planning & Execution

Table ‎4-1 - Estimate Accuracy

4.10.1 Inputs to Estimate Costs 1. 2. 3. 4. 5. 6.

Scope baseline Project schedule Human resource plan Risk register Enterprise environmental factors Organizational process assets

4.10.2 Tools and Techniques for Define Activities 1. 2. 3. 4. 5. 6. 7. 8. 9.

Expert judgment Analogous estimating Parametric estimating Bottom-up estimating Three-point estimates Reserve analysis Cost of quality PM Estimating software Vendor bid analysis

5. Analogous Estimating It is based on using the actual cost of previous and similar projects as the basis for estimating the cost of the current project. This technique is frequently used to estimate costs when there is a limited amount of detailed information about the project. It relies heavily on expert judgment and it is generally less costly and less accurate than other techniques. 6. Parametric Estimating PMP Exam Preparation Course

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This technique uses a statistical relationship between historical data and other variables. It can produce higher levels of accuracy depending upon the sophistication. It also involves multiplying the planned quantity of work to be performed by the historical cost per unit to obtain the estimated cost. 7. Bottom-up Estimating It involves estimating the cost of individual work packages or individual schedule activities. This detailed cost is then rolled up to higher levels for reporting and tracking purposes. The cost and accuracy of bottomup cost estimating is typically motivated by the size and complexity of the individual schedule activity or work package. Generally, activities with smaller effort increase the accuracy of the schedule activity cost estimates.

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8. Three-Point Estimates It is also called “Probabilistic Estimate” or “Weighted Average”. This concept originated with the Program Evaluation and Review Technique (PERT). PERT uses three estimates to define an approximate range for an activity’s duration: o Most likely o Optimistic o Pessimistic PERT analysis calculates an Expected activity duration using a weighted average of these three estimates. It uses the following formulas: Estimated Cost:

Standard Deviation:

Final Cost Estimate:

Where: cE = Expected Cost cO = Optimistic Cost cM = Most likely Cost cP = Pessimistic Cost SD = Standard Deviation

Determine Probability of Achievement Estimated cost = cE + 1 x SD with 68% confidence Estimated cost = cE + 2 x SD with 95% confidence Estimated cost = cE + 3 x SD with 99% confidence

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4.10.3 Outputs of Estimate Costs 1. Activity cost estimates 2. Basis of estimates 3. Project document updates 1. Activity Cost Estimates A quantitative assessment of the likely costs of the resources required to complete schedule activities. This type of estimate can be presented in summary form or in detail. Costs are estimated for all resources that are applied to the activity cost estimate. This includes, but is not limited to:  Labor  Materials  Equipment  Services  Facilities  Information technology  Special categories such as an inflation allowance or cost contingency reserve. 2. Basis of estimates It is mandatory for the project manager to keep records for the supporting documents that proves the information on which he based his estimates on. These supporting documents include, but not limited to:  Documentation of the basis of the estimate (i.e. how it was developed)  Documentation of all assumptions made  Documentation of any known constraints  Indication of the range of possible estimates (e.g. $10,000(+10%) to indicate that the item is expected to cost between a range of values)  Indication of the confidence level of the final estimate. 3. Project Document Updates Depending on which phase the project is in, all project documents related to the cost estimates are subject to be updated based on the estimates and its type.

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4.11 Determine Budget

Definition Determine Budget is the process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline. Source: PMBOK® Guide – Fourth Edition, page 147

Inputs

Tools & Techniques

Outputs

1.Activity cost estimates 2.Basis of estimates 3.Scope baseline 4.Project schedule 5.Resource calendars 6.Contracts 7.Organizational process assets

1. Cost aggregation 2. Reserve analysis 3. Expert judgment 4. Historical relationships 5. Funding limit reconciliation

1.Cost performance baseline 2.Project funding requirements 3.Project document updates

Figure ‎4-25 - Determine Budget Process

Source: PMBOK® Guide – Fourth Edition, page 175

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Process Interaction

Figure ‎4-26- Determine Budget – Process Interaction

4.11.1 Inputs of Determine Budget 1234567-

Activity cost estimates Basis of estimates Scope baseline Project schedule Resource calendars Contracts Organizational process assets

4.11.2 Tools and Techniques for Determine Budget 12345-

Cost aggregation Reserve analysis Expert judgment Historical relationships Funding limit reconciliation

1. Cost aggregation

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Schedule activity cost estimates are aggregated by work packages in accordance with the WBS. The work package cost estimates are then aggregated for the higher component levels of the WBS, such as control accounts, and ultimately for the entire project. 2. Reserve analysis Budget reserve analysis can establish both the contingency reserves and the management reserves for the project. Contingency reserves are allowances for unplanned but potentially required changes that can result from realized risks identified in the risk register. Management reserves are budgets reserved for unplanned changes to project scope and cost. Management reserves are not a part of the project cost baseline, but may be included in the total budget for the project. They are not included as a part of the earned value measurement calculations. 3. Expert Judgment Expert judgment is based on any of the following:  Other units within the performing organization  Consultants  Stakeholders, including customers  Professional and technical associations, and  Industry groups 4. Historical Relationships Any historical relationship that results in parametric or analogous estimates that will help in develop a mathematical model to predict the total project cost The model will be accurate when:  The historical information used to develop the model is accurate  The parameters used in the model are readily quantifiable  The model is scalable, such that it works for a large project as well as a small one. 5. Funding Limit Reconciliation The expenditure of funds is reconciled with the funding limits set by the customer. Reconciliation will necessitate the scheduling of work to be adjusted to smooth or regulate those expenditures. Rescheduling can impact the allocation of resources. The final product of these planning iterations is a cost baseline 4.11.3 Outputs of Determine Budget 1- Cost performance baseline 2- Project funding requirements 3- Project document updates

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1. Cost Performance Baseline A time-phased budget that is used as a basis against which to measure, monitor, and control overall cost performance on the project. It is developed by summing estimated costs by period and is usually displayed in the form of an S-curve. The cost baseline is a component of the project management plan. Many projects, especially large ones, have multiple cost or resource baselines. For example, management may require that the project manager track internal costs (labor) separately from external costs (contractors and construction materials) or total labor hours. 2. Project Funding Requirements Funding requirements, total and periodic (e.g., annual or quarterly), are derived from the cost baseline. They can be established to exceed, usually by a margin, to allow for either early progress or cost overruns. Funding usually occurs in incremental amounts that are not continuous The total funds required are those included in the cost baseline plus the management contingency reserve amount.

Cumulative Values

Funding Requirements

Cost Baseline

Expenditures

Time Figure ‎4-27- Project Funding Requirements

3. Project Document Updates All related cost documents such as:  Risk register  Cost estimates  Project Schedule

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4.12 Plan Quality Definition Plan Quality is the process of identifying quality requirements and/or standards for the project and product and documenting how the project will demonstrate compliance. Source: PMBOK® Guide – Fourth Edition, page 192

Outputs

Tools & Techniques

Inputs 1. Scope baseline 2. Stakeholder register 3. Cost performance baseline 4. Schedule baseline 5. Risk register 6. Enterprise environmental factors 7. Organizational process assets

1. Cost-benefit analysis 2. Cost of quality 3. Control charts 4. Benchmarking 5. Design of experiments 6. Statistical sampling 7. Flowcharting 8. Proprietary quality management methodologies 9. Additional quality planning tools

1. Quality management plan 2. Quality metrics 3. Quality checklists 4. Process improvement plan 5. Project document updates

Figure ‎4-28- Plan Quality Process

Source: PMBOK® Guide – Fourth Edition, page 192

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Process Interaction 10.1 Identify stakeholders

5.3 Create WBS

7.2 Determine budget Ø Cost performance baseline

Ø Stakeholder register

Ø Scope baseline

Ø Quality checklists

8.1 Plan Quality

Ø Project Documents Updates

Project ` Documents

Ø Quality metrics

6.5 Develop Schedule Ø Schedule baseline

8.3 Perform Quality Control

8.2 Perform Quality Assurance

Ø Quality management plan

11.2 Identify Risks

4.2 Develop Project Management Plan

Enterprise / Organization

11.2 Identify Risks Ø Risk register

Ø Organizational process assets Ø Enterprise environmental factors

Involved Documents (IN) ØScope baseline ØStakeholder register ØCost performance baseline ØSchedule baseline ØRisk register ØEnterprise environmental factors ØOrganizational process assets Involved Documents (OUT) ØQuality metrics ØQuality checklists ØQuality management plan ØProcess improvement plan ØProject document updates Source: PMBOK® Guide – Fourth Edition Diagram Developed by Techno Management Ø

Ø Process improvement plan

Figure ‎4-29- Plan Quality – Process Interaction

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Group Discussion – Quality vs. Grade Two persons went to purchase electrical bulbs on bulk basis, a box of 100 pieces. The first one went for a high price brand, he purchased a box of 100 bulbs with 5% out of the box faulty rate. This means that there is 5 faulty bulbs may be found in each 100 bulbs. The second person went for a cheaper brand; he purchased a box of 100 bulbs with 20% faulty specifications. When the second person returned back home, he found that 19 bulbs were out of order, while the first person found only 6 bulbs were out of order. Which lot is higher quality? a- The higher price brand b- The low price brand

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Group Discussion ‎4-5-Quality vs. Grade

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Quality vs. Grade Quality and grade are closely related terms, but it is important to understand the distinction between the two in order to understand the requirements of each for a specific project. Quality requirements and grade requirements vary from one project to another. However, low quality should always be avoided. Quality: is the degree to which a set of inherent characteristics fulfills requirements. Grade: is a category or rank given to entities having the same functional use but different technical characteristics. Precision vs. Accuracy Precision: The values of repeated measurements are cluster and have little scatter Accuracy: The measurement value is very close to the true value Quality Improvement Initiatives Over years, many initiatives were developed to help defining and managing the project quality, examples are:  International Standard: o ISO 9000  Proprietary Approaches: o Deming, Juran, Crsoby and others’ recommendations  Non Proprietary Approaches: o Total Quality Management (TQM) o Six Sigma o Failure mode and Effect Analysis (FMEA) o Design Reviews o Voice of the Customer o Cost of Quality (COQ) o Continuous Improvement (KAIZEN) o Just-in-time (JIT)

Quality Management Complements Project Management Both Quality Management and Project Management aim to eh same objective, finishing the project as per the required quality. Both concepts agree the same basics as follows:  Customer satisfaction: o Meeting the customer requirements, conformance to requirements and fitness for use.  Prevention over inspection: o Quality is planned in , not inspected in PMP Exam Preparation Course

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



Continuous improvement: o Plan, Do, Check and Act is the basis of quality improvement. o Process improvement models include Malcolm Baldridge, OPM3 ® and CMMI® Management Responsibility: o Management is responsible for providing the required resources for success.

Statistical Quality Control Terms Term A

Term B

Prevention Keeping errors out of the process

Inspection Keeping errors out of the deliverable to the customer

Attribute sampling Result does or does not conform (binary, pass/fail, conformance/nonconformance) An attribute is the measurement.

Variables sampling Result is rated on a continuous scale measuring the degree of conformity A variable is the characteristic.

Special causes Unusual events

Random causes Normal process variation

Tolerances Result is acceptable within a specified range

Control limits Process is in control if the result is within the control limits

Table ‎4-2- Statistical Quality Control Terms

4.12.1 Inputs to Plan Quality 1. 2. 3. 4. 5. 6. 7.

Scope baseline Stakeholder register Cost performance baseline Schedule baseline Risk register Enterprise environmental factors Organizational process assets

4.12.2 Tools and Techniques for Plan Quality 1. Cost-benefit analysis 2. Cost of quality PMP Exam Preparation Course

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3. Control charts 4. Benchmarking 5. Design of experiments 6. Statistical sampling 7. Flowcharting 8. Proprietary quality 9. management methodologies 10. Additional quality planning tools

1. Cost-Benefit Analysis Quality planning must consider cost-benefits tradeoffs. The primary benefit of meeting quality requirements is less rework, which means:  Higher productivity  Lower costs  Increased stakeholder satisfaction. The primary cost of meeting quality requirements is the expense associated with Project Quality Management activities. 2. Cost of Quality Quality costs are the total costs incurred by:  Investment in preventing nonconformance to requirements  Appraising the product or service for conformance to requirements  Failing to meet requirements (rework).  Failure costs are often categorized into internal and external.  Failure costs are also called cost of poor quality.

Examples of Cost of Conformance •

•

Prevention (build a quality product): – Training – Documenting processes – New equipment – Allow time to do it right – Briefing – Maintenance – Audit Appraisal (asses the quality): – Testing – Inspection

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Examples of Cost of NonConformance • •

Internal Failure – Rework – Scrap External Failure – Recalls – Warranty costs – Handling customer complaints – Lost Business

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–

Destructive testing loss

Table ‎4-3- Cost Conformance

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Exercise 4.10 – Cost of Quality Define examples of each of the following type of cost: 1. Prevention 2. Appraisal 3. Internal failure 4. External failure

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎4-10 - Cost of Quality

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3. Control Charts It is used to determine whether or not a process is stable or has predictable performance. It serves as a data gathering tool to show when a process is subject to special cause variation, which creates an out-of-control condition. Illustrate how a process behaves over time. Below are the main attributes of the control charts:  They are a graphic display of the interaction of process variables on a process to answer the question: Are the process variables within acceptable limits?  Examination of the non-random pattern of data points on a control chart may reveal wildly fluctuating values, sudden process jumps or shifts, or a gradual trend in increased variation.  By monitoring the output of a process over time, a control chart can be employed to assess whether the application of process changes resulted in the desired improvements.  When a process is within acceptable limits, the process need not be adjusted.  When a process is outside acceptable limits, the process should be adjusted.  The upper control limit and lower control limit are usually set at +/- 3 sigma (i.e., standard deviation).

Upper Specification Limit (USL)

Upper Control Limit (UCL)

X

Lower Control Limit (LCL)

Lower Specification Limit (LSL) Figure ‎4-30- Control Chart

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4. Benchmarking Benchmarking involves comparing actual or planned project practices to those of other projects. This is to generate ideas for improvement and to provide a basis by which to measure performance. These other projects can be within the performing organization or outside of it, and can be within the same or in another application area. 5. Design of Experiments It is a statistical method that helps identify which factors may influence specific variables of a product or process. It also plays a role in the optimization of products or processes. It provides a statistical framework for systematically changing all of the important factors. 6. Statistical Sampling Statistical sampling involves choosing part of a population of interest for inspection. Appropriate sampling can often reduce the cost of quality control. There is a substantial body of knowledge on statistical sampling; in some application areas, it may be necessary for the project management team to be familiar with a variety of sampling techniques. 7. Flowcharting Flowcharting helps to analyze how problems occur. A flowchart is a graphical representation of a process. There are many styles, but all process flowcharts show activities, decision points, and the order of processing. They show how various elements of a system interrelate. Pressurization test X-ray the weld to detect micro-fractures C

Fractures detected ?

Yes

Grind out the old weld

Prepare the weld surface

No Connect pressure unit to open end of pipe

Apply the new weld

Pressurization test A

Pressurization test

No B

Leaks detected?

Time elapsed?

Yes

Test complete

22

Figure ‎4-31- Flow Chart

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8. Proprietary Quality Management Methodologies Many organizations in different industries developed quality approaches to manage quality in specific industries of line of business. Some of them are:  Six Sigma  Lean Six Sigma  CMMi  Others 9. Additional Quality Planning Tools  Brainstorming  Affinity diagrams  Force field analysis  Nominal group techniques  Matrix diagrams  Flowcharts  Prioritization matrices 4.12.3 Outputs of Plan Quality 1. 2. 3. 4.

Quality Management Plan Quality Metrics Quality Checklists Process Improvement Plan: o Process boundaries o Process configuration o Process metrics o Targets for improved performance 5. Project Documents Updates: o Stakeholder register o Responsibility Assignment Matrix 1. Quality Management Plan It describes how the project management team will implement the performing organization’s quality policy. The quality management plan is a component or a subsidiary plan of the project management plan. The quality management plan provides input to the overall project management plan and must address:  Quality control (QC)  Quality assurance (QA)  Continuous process improvement for the project. 2. Quality Metrics A metric is an operational definition that describes, in very specific terms, what something is and how the quality control process measures it. A measurement is an actual value. Quality metrics are used in the QA and QC processes. Some examples of quality metrics

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include Defect density, Failure rate, Availability, Reliability and Test coverage. 3. Quality Checklists A checklist is a structured tool, used to verify that a set of required steps has been performed. They are usually phrased as imperatives (“Do this”) or interrogatories (“Have you done this?”). Many organizations have standardized checklists available to ensure consistency in frequently performed tasks. Checklists are also available from professional associations or commercial service providers. Quality checklists are used in the quality control process. 4. Process Improvement Plan It is a subsidiary of the project management plan. It details the steps for analyzing processes that will facilitate the identification of waste and non-value added Activity. It increases customer value, such as:  Process boundaries.  Process configuration.  Process metrics.  Targets for improved performance.

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Exercise 4.11 – Create Quality Management Plan For the case study provided by the instructor, create the project quality management plan. Note: Use form 9.6 in Appendix 2

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎4-11 - Create Quality Management Plan

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4.13 Develop Human Resource Plan

Definition Develop Human Resource Plan is the process of identifying and documenting project roles, responsibilities, and required skills, reporting relationships, and creating a staffing management plan. Source: PMBOK® Guide – Fourth Edition, page 218

Outputs

Tools & Techniques

Inputs 1.Activity resource requirements 2.Enterprise environmental factors 3.Organizational process assets

1. Organization charts and position descriptions 2. Networking 3. Organizational theory

1.Human resource plan

Figure ‎4-32- Develop Human Resource Plan Process

Source: PMBOK® Guide – Fourth Edition, page 218

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Process Interaction

Figure ‎4-33- Develop Human Resource Plan – Process Interaction

The Project Management Team The project management team is subset of the project team. This group is referred to as, the core, executive or leadership team. Their main role is the project management and leadership activities. The figure below shows the position of the project management team with respect to the other stakeholders.

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Project Stakeholders

Portfolio Manager

Program Manager

Other StakeHolders

Project Team

Operations Mngt.

Project Sponsor Function al Managers

Project Manager P Project Management Team

Project Mngt. Office

Other Project Team Members

Sellers / Business Partners

Customers / Users

Source: PMBOK® Guide – Fourth Edition, page 24 Figure ‎4-34 - Develop Human Resource Plan Process

4.13.1 Inputs to Develop Human Resource Plan 1. Activity resource requirements 2. Enterprise environmental factors 3. Organizational process assets 4.13.2 Tools and Techniques for Develop Human Resource Plan 1. Organization charts and position descriptions 2. Networking 3. Organizational theory 1. Organization Charts and Position Descriptions These are tools used to document roles and responsibilities of each team member with respect to the project tasks. Unclear roles and responsibilities are a major source of team conflicts. It is very important to document them clearly, and maintain the clarity by a continuous update and review. They may be documented in any of the following formats:

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John

Jimmy

Name: ________ Role: ___________ Responsibility: _______ Authority: ________

Text oriented

Matrix

Hierarchical

Figure ‎4-35- Organization Charts and Position Descriptions

Hierarchical This is a top-down graphical format that is used to represent the team members’ positions and their relationships with each other. Like the work Breakdown Structure (WBS), this is an Organization Breakdown Structure (OBS) Matrix A responsibility assignment matrix is used to show the relationship between the project work packages or activities and the project team members. Below is an example of the responsibility matrix in RACI (Responsibility, Accountability, Consult and Inform) format. RACI Chart Activity

John

Jimmy

Person Sarah

Andrew

Ben

Produce functional requirements

A

R

I

I

I

Produce system Pilot (first branch)

I

A

R

C

C

I

A

R

C

C

A

I

I

R

I

Roll our remaining branches

Roll our remaining branches

R=Responsible A=Accountable C=Consult I=Inform RACI= Responsible, Accountable, Consult and Inform

Table ‎4-4- Human Resource Management Process Mapping

Text oriented A routinely produced text documents; that describe the responsibility of each team member. They can be given many names, like position description, job description, job responsibilities etc.

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2. Networking Interaction with others in the organization, either in formal or informal way can be done by the following: - Information interaction with others. - Proactive correspondences. - Luncheon meetings. - Informal conversations. - Trade conferences. 3. Organizational Theory Organizational theory provides information regarding the ways that people, teams, and organizational units behave. Applying proven principles shortens the amount of time needed to create the Human Resource Planning outputs and improves the likelihood that the planning will be effective. 4.13.3 Outputs of Develop Human Resource Plan 1. Human resource plan, that includes: - Roles and responsibilities - Project organization charts - Staffing management plan Roles and Responsibilities: Role: The label describing the portion of a project for which a person is accountable. Authority: The right to apply project resources makes decisions, and sign approvals. Responsibility: The work that a project team member is expected to perform in order to complete the project's activities. Competency: The skill and capacity required to complete project activities. Project Organization Charts Graphics display of the project team members that shows the communication and reporting lines, below are examples.

Project Team

Project Sponsor

Project Manager P Project Management Team

Other Project Team Members

Figure ‎4-36- Develop Human Resource Plan – Process Interaction

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Staffing Management Plan Staffing management plan includes, but not limited to the following: - Staff acquisition - Resource calendars - Staff release plan - Training needs - Recognition and rewards - Compliance - Safety

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4.14 Plan Communications

Definition Plan Communications is the process of determining the project stakeholder information needs and defining a communication approach. Source: PMBOK® Guide – Fourth Edition, page 251

Inputs

Tools & Techniques

Outputs

1.Stakeholder register 2.Stakeholder management strategy 3.Enterprise environmental factors 4.Organizational process assets

1. Communication requirements analysis 2. Communication technology 3. Communication models 4. Communication methods

1.Communication management plan 2.Project document updates

Figure ‎4-37 - Plan Communications Process

Source: PMBOK® Guide – Fourth Edition, page 252

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Process Interaction

Figure ‎4-38 Plan Communications – Process Interaction

4.14.1 Inputs to Plan Communications 1234-

Stakeholder register Stakeholder management strategy Enterprise environmental factors Organizational process assets

4.14.2 Tools and Techniques for Plan Communications 1234-

Communication requirements analysis Communication technology Communication models Communication methods

1. Communication requirements analysis The analysis of the communications requirements results in the sum of the information needs of the project stakeholders. These requirements are defined by combining the type and format of information needed with an analysis of the value of that information. Project resources are expended only on communicating information that contributes to success, or where a lack of communication can lead to failure. This

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does not mean that “Bad news” should not be shared; rather, the intent is to prevent overwhelming stakeholders with minutiae. Information typically required to determine project communications requirements includes:  Organization charts  Project organization and stakeholder responsibility relationships  Disciplines, departments, and specialties involved in the project  Logistics of how many persons will be involved with the project and cat which locations  Internal information needs (e.g., communicating across organizations)  External information needs (e.g., communicating with the media or contractors)  Stakeholder information. Communication Channels Project team members communicate with each other through channels. The ore the members are, the more channels exist. Every party has its own communication needs. The number of Communication channel can be determined by the following equation:

2. Communication technology Communications technology factors that can affect the project include:  The urgency of the need for information  The availability of technology  The expected project staffing  The length of the project  The project environment 3. Communication models Both the sender and receiver of a message have responsibilities in communication. The sender of information is responsible for making information clear and complete. The receiver is responsible for making sure that all of the information has been received and understood. Communication Model Components   

Encode Message and feedback-message Medium

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 

Noise Decode

Sender / Receiver Model The communication model states the following:  An idea is translated in the brain into words (encode)  The lips spell out the message in words that are understood by the receiving party  The words travel in the medium to the receiver  The message is received by the receiving party and translated back into the idea (encoding)

Receiver

1- Idea

2- Encode

3- Message 4- Decode

Sender

5- Encode 6- Message Feedback 30

Figure ‎4-39- Sender / Receiver Model

It is important to note here that the responsibility of ensuring the successful message delivery is on the sender. He has to ensure that a feedback happens from the receiver to confirm his understanding.

4. Communication Methods Many communication methods exist for the project team to communicate, depending on the need and situation, as follows:  Interactive Communication: a Multidirectional, most efficient to ensure a common understanding.  Push communication: Sent to specific recipient, ensure that information is distributed but does not ensure that it reached or understood.  Pull communication: for a large volume of information or audience, intranet, e-learning etc.

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4.14.3 Outputs of Plan Communications 1- Communication management plan 2- Project document updates

1. Communication management plan The communication management plan includes, but not limited to:  Stakeholder communication requirements  Information to be communicated, including language, format, content, and level of detail;  Reason for the distribution of that information  Time frame and frequency for the distribution of required information  Person responsible for communicating the information  Person responsible for authorizing release of confidential information  Person or groups who will receive the information  Methods or technologies used to convey the information, such as memos, e-mail, and/or press releases  Resources allocated for communication activities, including time and budget  Escalation process identifying time frames and the management chain (names) for escalation of issues that cannot be resolved at a lower staff level.  Method for updating and refining the communications management plan as the project progresses and develops;  Glossary of common terminology  Flow charts of the information flow in the project, workflows with possible sequence of authorization, list of reports and meeting plans, etc.  Communication constraints usually derived from specific legislation or regulation, technology, and organizational policies, etc. 2. Project document updates This planning process may result into changing some of the already prepared documents, like:  Project schedule  Stakeholder register  Stakeholder management strategy

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Exercise 4.12 – Number of Communication Channels How many communication channels exist in a project with a project manager, three team members and another three stakeholders?

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎4-12 - Number of Communication Channels

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4.15 Plan Risk Management Definition Risk Management Planning is the process of defining how to conduct risk management activities for a project. Source: PMBOK® Guide – Fourth Edition, page 276

Outputs

Tools & Techniques

Inputs 1. Project scope statement 2. Cost management plan 3. Schedule management plan 4. Communication management plan 5. Enterprise environmental factors 6. Organizational process assets

1. Planning meetings and analysis

1.Risk management plan

Figure ‎4-40- Plan Risk Management Process

Source: PMBOK® Guide – Fourth Edition, page 277

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Process Interaction

Figure ‎4-41 - Plan Risk Management – Process Interaction

Uncertainty Risks are originated from uncertainties. Many decisions are taken while most of the information is not complete or “uncertain”, so the nature of decision is that they are taken with certain amount of uncertainty involved. Only when things are “certain”, the decision id found wrong or right. Risk Management as a Proactive Approach Risks are events that “May or May not” happen in the future. Project managers are working on influencing the risk before they happen, once a risk is realized “happened”, then it is not any more a risk, it is a “certain” event that requires corrective actions (contingencies). Risk Tolerance Risk tolerance is the degree to which organizations are willing to accept risks. Organizations may accept risks if they are within the tolerance they set. Risks should be balanced with the rewards that may be gained by taking them. Known / Unknown Risks Known risks:  Those that have been identified and analyzed.  It may be possible to plan for known risks. Unknown risks:  Cannot be managed

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

Project managers may address them by applying a general contingency plan, based on past experience with similar projects.

Threats and Opportunities Organizations perceive risk as:  Threats to project success  Opportunities to enhance chances of project success Risks that are threats to the project may be accepted if the risk is in balance with the reward that may be gained by taking the risk. 4.15.1 Inputs to Plan Risk Management 1. 2. 3. 4. 5. 6.

Project scope statement Cost management plan Schedule management plan Communication management plan Enterprise environmental factors Organizational process assets

4.15.2 Tools and Techniques for Plan Risk Management 1. Planning meetings and analysis 1. Planning meetings and analysis Project teams hold planning meetings to develop the risk management plan. Attendees at these meetings may include:  Project manager  Selected project team members  Stakeholders  Anyone in the organization with responsibility to manage the risk planning and execution activities  Others, as needed. General organizational templates for risk categories and definitions of terms will be tailored to the specific project such as:  Levels of risk  Probability by type of risk  Impact by type of objectives  Probability and impact matrix The outputs of these activities will be summarized in the risk management plan. 4.15.3 Outputs of Plan Risk Management 1. Risk management plan 1. Risk management plan

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The risk management plan describes how risk management will be structured and performed on the project. It becomes a subset of the project management plan and will include the following:  Methodology  Roles and responsibilities  Budgeting  Timing  Risk categories  Definitions of risk probability and impact  Probability and impact matrix  Revised stakeholders’ tolerances  Reporting formats  Tracking

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4.16 Identify Risks

Definition Identify risk determines which risks might affect the project and documents their characteristics. Source: PMBOK® Guide – Fourth Edition, page 282

Identify Risk Team Participants in risk identification activities can include the following:  Project manager  Project team members  Risk management team (if assigned)  Subject matter experts from outside the project team  Customers  End users  Other project managers  Stakeholders  Risk management experts Identify Risk is Iterative Identify Risk is an iterative process because new risks may become known as the project progresses through its life cycle. The frequency of iteration and who participates in each cycle will vary from case to case. The project team should be involved in the process so that they can develop and maintain a sense of ownership of, and responsibility for, the risks and associated risk response actions. Stakeholders outside the project team may provide additional objective information. Identify Risk Following Process The Identify Risk process usually leads to the Qualitative Risk Analysis process. Alternatively, it can lead directly to the Quantitative Risk Analysis process when conducted by an experienced risk manager.

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Inputs

Tools & Techniques

1. Risk MP 2. Activity cost estimates 3. Activity duration estimates 4. Scope baseline 5. Stakeholder register 6. Cost MP 7. Schedule MP 8. Quality MP 9. Project documents 10. Enterprise env. factors 11.Organizational process assets

1. Documentation reviews 2. Information gathering techniques 3. Checklist analysis 4. Assumptions analysis 5. Diagramming techniques 6. SWOT analysis 7. Expert judgment

Outputs 1. Risk register

Figure ‎4-42 - Identify Risks Process

Source: PMBOK® Guide – Fourth Edition, page 282

Process Interaction

Figure ‎4-43 Identify Risks – Process Interaction

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4.16.1 Inputs to Identify Risks 1- Risk management plan 2- Activity cost estimates 3- Activity duration estimates 4- Scope baseline 5- Stakeholder register 6- Cost management plan 7- Schedule management plan 8- Quality management plan 9- Project documents 10- Enterprise environmental factors 11- Organizational process assets 4.16.2 Tools and Techniques for Identify Risks 1234567-

Documentation reviews Information gathering techniques Checklist analysis Assumptions analysis Diagramming techniques SWOT analysis Expert judgment

1. Documentation reviews A structured review may be performed of project documentation, including:  Plans  Assumptions  Prior project files  Other information The quality of the plans, as well as consistency between those plans and with the project requirements and assumptions, can be indicators of risk in the project. 2. Information gathering techniques Information gathering techniques that include but not limited to the following:  Brainstorming  Delphi technique  Interviewing  Root cause identification  Strengths, weaknesses 3. Checklist analysis Risk identification checklists can be developed based on historical information and knowledge that has been accumulated from previous PMP Exam Preparation Course

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similar projects and from other sources of information. The lowest level of the RBS can also be used as a risk checklist. While a checklist can be quick and simple, it is impossible to build an exhaustive one. Care should be taken to explore items that do not appear on the checklist. The checklist should be reviewed during project closure to improve it for use on future projects. 4. Assumptions analysis Every project is conceived and developed based on a set of hypotheses, scenarios, or assumptions. Assumptions analysis is a tool that explores the validity of assumptions as they apply to the project. It identifies risks to the project from inaccuracy, inconsistency, or incompleteness of assumptions 5. Diagramming techniques The following techniques will be used in this process:  Cause-and-effect diagrams (Ishikawa or fishbone diagrams)  System or process flow charts  Influence diagrams 6. SWOT analysis When used in Risk Identification, SWOT analysis involves examining the project from each of the SWOT perspectives in order to increase the breadth of risks considered. Depending upon the magnitude of impact to the organization, SWOT analysis for the project can parallel SWOT analysis as applied to strategic planning for the organization and will use many of the same elements. This approach uses the following components:    

Strengths Weaknesses Opportunities Threats

The above can also be seen as internal and external components, as follows: Internal Components - Strengths and weaknesses Strengths and weaknesses are internal to your project and organization, and can be assessed through:  Internal surveys  Focus Groups  Open Forums  Internal reports: finance, performance, quality, production capabilities External Components - Opportunities and Threats

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Opportunities and threats are external to your project and/or organization, and can be assessed through:  Internal and external surveys  Industry research on global trends and competition  Marketing research on customer needs and preferences Opportunities and Threats can be identified by examining the following factors:  The Competition  Markets  Technological Advances  Political and Economic Climate 7. Expert judgment Subject matter experts internal or external to the organization, such as engineering or statistical experts, validate data and techniques. 4.16.3 Outputs of Identify Risks 1- Risk register 1. Risk Register The primary outputs from Risk Identification are the initial entries into the risk register, which becomes a component of the project management plan. The risk register ultimately contains the outcomes of the other risk management processes as they are conducted. The preparation of the risk register begins in the Risk Identification process with the following information, and then becomes available to other project management and Project Risk Management processes.

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Exercise 4.13 – Identify Risks In the provided case stud, identify 10 potential risks that may come up during the project execution. Note: Use form 9.7 in Appendix 2 Do not fill the Probability, Impact and Overall Impact columns.

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎4-13 - Risk List

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4.17 Perform Qualitative Risk Analysis

Definition Perform Qualitative Risk Analysis includes methods for prioritizing the identified risks for further action, such as Quantitative Risk Analysis or Risk Response Planning. Source: PMBOK® Guide – Fourth Edition, page 289

Inputs

Tools & Techniques

1.Risk register 2.Risk management plan 3.Project scope statement 4.Organizational process assets

1. Risk probability and impact assessment 2. Probability and impact matrix 3. Risk data quality assessment 4. Risk categorization 5. Risk urgency assessment 6. Expert judgment

Outputs 1.Risk register updates

Figure ‎4-44- Perform Qualitative Risk Analysis Process

Source: PMBOK® Guide - Fourth Edition, page 289

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Process Interaction

Figure ‎4-45- Perform Qualitative Risk Analysis – Process Interaction

4.17.1 Inputs to Perform Qualitative Risk Analysis 1234-

Risk register Risk management plan Project scope statement Organizational process assets

4.17.2 Tools and Techniques for Perform Qualitative Risk Analysis 123456-

Risk probability and impact assessment Probability and impact matrix Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment

1. Risk probability and impact assessment Risk probability assessment investigates the likelihood that each specific risk will occur. Risk impact assessment investigates the potential effect on a project objective such as time, cost, scope, or quality, including both negative effects for threats and positive effects for opportunities. 2. Probability and impact matrix Risks can be prioritized for further quantitative analysis and response, based on their risk rating. Ratings are assigned to risks based on their assessed probability and impact. Evaluation of each risk’s importance PMP Exam Preparation Course

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and, hence, priority for attention is typically conducted using a look-up table or a probability and impact matrix.

0.5 Medium 0.1 Very Low

Probability

0.9 Very High

Such a matrix specifies combinations of probability and impact that lead to rating the risks as low, moderate, or high priority. The organization should determine which combinations of probability and impact result in a classification of high risk “red condition”, moderate risk “yellow condition”, and low risk “green condition”. Impact can be ordinal (low, moderate, high, and very high) or cardinal (.1/ .3/ .5/ .7/ .9). Below is s sample probability and impact matrix

1.5

5.0

9.0

1.0

3.0

6.0

0

.5

1.9

Very Low 1.5

Medium 5.5

Very High 8.5

51 Impact

Figure ‎4-46- Probability and Impact Matrix

3. Risk data quality assessment A qualitative risk analysis requires accurate and unbiased data if it is to be credible. Analysis of the quality of risk data is a technique to evaluate the degree to which the data about risks is useful for risk management. It involves examining the degree to which the risk is understood and the accuracy, quality, reliability, and integrity of the data about the risk. The use of low-quality risk data may lead to a qualitative risk analysis of little use to the project. If data quality is unacceptable, it may be necessary to gather better data. Often, collection of information about risks is difficult, and consumes time and resources beyond that originally planned. 4. Risk categorization Risks to the project can be categorized by:  Sources of risk  The area of the project affected  Other useful category

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To determine areas of the project most exposed to the effects of uncertainty. Grouping risks by common root causes can lead to developing effective risk responses.

5. Risk urgency assessment Risks requiring near-term responses may be considered more urgent to address. Indicators of priority can include time to affect a risk response, symptoms and warning signs, and the risk rating. 6. Expert judgment Subject matter experts internal or external to the organization, such as engineering or statistical experts, validate data and techniques. 4.17.3 Outputs of Perform Qualitative Risk Analysis 1- Risk register updates 1. Risk register updates The risk register is initiated during the Risk Identification process. The risk register is updated with information from Qualitative Risk Analysis and the updated risk register is included in the project management plan. The risk register updates from Qualitative Risk Analysis include:  Relative ranking or priority list of project risks  Risks grouped by categories  Causes of risks or project areas requiring particular attention  List of risks requiring response in the near-term  List of risks for additional analysis and response  Watch lists of low priority risks  Trends in qualitative risk analysis results The following table shows a sample of prioritized risks *

RISK Item

Prb. Impact Overall Risk

1

Poor understanding of customer’s requirements

L

H

H

2

Unavailable H/W before 3rd party arrival

M

L

L

3

Unavailable resources during Ramadan

M

M

M

4

Hardware component de-release

H

M

H

5

Management change

M

H

H

6

Requirements Change

L

H

H

Figure ‎4-47- Qualitatively Sorted Risks

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Exercise 4.14 – Qualitative Risk Prioritization Based on the previous exercise, study each risk and assign a value (L, M, H) to each of the following parameter for each risk: 1- Probability 2- Impact 3- Overall Impact `

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎4-14 - Qualitative Risk Prioritization

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4.18 Perform Quantitative Risk Analysis Definition Perform Quantitative Risk Analysis is the process of numerically analyzing the effect of the identified risks on overall project objectives. Source: PMBOK® Guide – Fourth Edition, page 294

Perform Quantitative Risk Analysis is performed on risks that have been prioritized by the Qualitative Risk Analysis process as potentially and substantially impacting the project’s competing demands. The Perform Quantitative Risk Analysis process analyzes the effect of those risk events and assigns a numerical rating to those risks. It also presents a quantitative approach to making decisions in the presence of uncertainty.

Inputs

Tools & Techniques

1.Risk register 2.Risk management plan 3.Cost management plan 4.Schedule management plan 5.Organizational process assets

1. Data gathering and representation techniques 2. Quantitative risk analysis and modeling techniques 3. Expert judgment

Outputs 1.Risk register update

Figure ‎4-48- Perform Quantitative Risk Analysis Process

Source: PMBOK® Guide - Fourth Edition, page 295

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Process Interaction

Figure ‎4-49- Perform Quantitative Risk Analysis – Process Interaction

4.18.1 Inputs to Perform Quantitative Risk Analysis 1. 2. 3. 4. 5.

Risk register Risk management plan Cost management plan Schedule management plan Organizational process assets

4.18.2 Tools and Techniques for Perform Quantitative Risk Analysis 1. Data gathering and representation techniques 2. Quantitative risk analysis and modeling techniques 3. Expert judgment 1. Data gathering and representation techniques Interviewing Interviewing techniques are used to quantify the probability and impact of risks on project objectives. The information needed depends upon the type of probability distributions that will be used Probability distributions Continuous probability distributions represent the uncertainty in values, such as durations of schedule activities and costs of project PMP Exam Preparation Course

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components. Discrete distributions can be used to represent uncertain events, such as the outcome of a test or a possible scenario in a decision tree. Continuous Distribution Examples:  Asymmetrical distributions  Uniform distributions Probability distribution types are:  Uniform  Normal  Triangular

Impact

Uniform

Probability

Probability

Probability

Below is example for each:

Impact

Normal

Impact

Triangular

Figure ‎4-50- Probability distributions

2. Quantitative risk analysis and modeling techniques This includes the following techniques: Sensitivity analysis Sensitivity analysis helps to determine which risks have the most potential impact on the project. It examines the extent to which the uncertainty of each project element affects the objective being examined when all other uncertain elements are held at their baseline values. Expected monetary value analysis Expected monetary value (EMV) analysis is a statistical concept that calculates the average outcome when the future includes scenarios that may or may not happen. The EMV of opportunities will generally be expressed as positive values, while those of risks will be negative. EMV is calculated by multiplying the value of each possible outcome by its probability of occurrence, and adding them together. The EMV is calculated by multiplying the value of the event with its probability of happening. Decision tree analysis Decision tree analysis is usually structured using a decision tree diagram that describes a situation under consideration, and the implications of each of the available choices and possible PMP Exam Preparation Course

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scenarios. It incorporates the cost of each available choice, the probabilities of each possible scenario, and the rewards of each alternative logical path. Solving the decision tree provides the EMV for each alternative, when all the rewards and subsequent decisions are quantified. Modeling and simulation A project simulation uses a model that translates the uncertainties specified at a detailed level of the project into their potential impact on project objectives. Simulations are typically performed using the Monte Carlo technique.

4.18.3 Outputs of Perform Quantitative Risk Analysis 1- Risk register update 1. Risk register update The risk register is initiated in the Risk Identification process and updated in Qualitative Risk Analysis. It is further updated in Quantitative Risk Analysis. The risk register is a component of the project management plan. Updates include the following main components:  Probabilistic analysis of the project  Probability of achieving cost and time objectives  Prioritized list of quantified risks  Trends in quantitative risk analysis results By the end of this process a risk list with the quantified values will be produced, as the following sample list. *

RISK Element

Prb.

Impact Overall Risk

1

Wrong Track 2 Data on Credit Card

50%

1,000

500

2

Installing Cables by Unqualified Team

40%

2,000

800

3

Delay in Visa Certification

30%

1,500

500

4

In-Operable Encryption S/W

40%

2,000

800

5

In-Availability of Comms from SP

30%

1,000

300

TOTAL

2,900

Figure ‎4-51- Quantitatively Sorted Risks

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Exercise 4.15 – Expected Monetary Value What is the Expected Monetary Value of an event that has 60% chance of making profit? In the case of achieving profit, the profit value will be US$ 10,000, while in the case of loss; the loss value will be US$ 3,000.

You’re Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎4-15 - Expected Monetary Value

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4.19 Plan Risk Responses Definition Risk Response Planning is the process of developing options, and determining actions to enhance opportunities and reduce threats to the project’s objectives. Source: PMBOK® Guide – Fourth Edition, page 302

Outputs

Tools & Techniques

Inputs 1.Risk register 2.Risk management plan

1. Strategies for negative risks or threats 2. Strategies for positive risks or opportunities 3. Contingent response strategies 4. Expert judgment

1.Risk register updates 2.Risk-related contract decisions 3.Project management plan updates 4.Project document updates

Figure ‎4-52- Plan Risk Responses Process

Source: PMBOK® Guide - Fourth Edition, page 302

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Process Interaction

Figure ‎4-53- Plan Risk Responses – Process Interaction

4.19.1 Inputs to Plan Risk Responses 1. Risk register 2. Risk management plan

4.19.2 Tools and Techniques for Plan Risk Responses 1. 2. 3. 4.

Strategies for negative risks or threats Strategies for positive risks or opportunities Contingent response strategies Expert judgment

1. Strategies for negative risks or threats Below are the strategies for the negative risks Risk Avoidance Risk avoidance involves changing the project management plan to:  Eliminate the threat posed by an adverse risk  Isolate the project objectives from the risk’s impact  Relax the objective that is in jeopardy, such as extending the schedule or reducing scope. Risk Transference Risk transference requires shifting the negative impact of a threat, along with ownership of the response, to a third party.

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Transferring the risk simply gives another party responsibility for its management; it does not eliminate it. Transferring liability for risk is most effective in dealing with financial risk exposure. Risk transference nearly always involves payment of a risk premium to the party taking on the risk. Risk Mitigation Risk mitigation implies a reduction in the probability and/or impact of an adverse risk event to an acceptable threshold. Taking early action to reduce the probability and/or impact of a risk occurring on the project is often more effective than trying to repair the damage after the risk has occurred. Risk Acceptance This is a strategy that is adopted because it is seldom possible to eliminate all risk from a project. This strategy indicates that the project team has decided not to change the project management plan to deal with a risk, or is unable to identify any other suitable response strategy.

2. Strategies for positive risks or opportunities Exploit This strategy may be selected for risks with positive impacts where the organization wishes to ensure that the opportunity is realized. This strategy seeks to eliminate the uncertainty associated with a particular upside risk by making the opportunity definitely happen. Exploiting responses include assigning more talented resources to the project to reduce the time to completion, or to provide better quality than originally planned. Share Sharing a positive risk involves allocating ownership to a third party who is best able to capture the opportunity for the benefit of the project. Enhance This strategy modifies the “size” of an opportunity by increasing probability and/or positive impacts, and by identifying and maximizing key drivers of these positive-impact risks. Accept Being willing to take an advantage of the opportunity if it comes along, but will not actively pursuing it. 3. Contingent response strategies

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Some responses are designed for use only if certain events occur. For some risks, it is appropriate for the project team to make a response plan that will only be executed under certain predefined conditions. Events that trigger the contingency response (triggers), such as missing intermediate milestones or gaining higher priority with a supplier, should be defined and tracked. 4. Expert judgment Subject matter experts internal or external to the organization, such as engineering or statistical experts, validate data and techniques. 4.19.3 Outputs of Plan Risk Responses 1. 2. 3. 4.

Risk register updates Risk-related contract decisions Project management plan updates Project document updates

1. Risk register updates These updates include:  Identified risks, their descriptions, area(s) of the project (e.g., WBS element) affected, their causes (e.g., RBS element), and how they may affect project objectives  Risk owners and assigned responsibilities  Outputs from the Qualitative and Quantitative Risk Analysis processes, including prioritized lists of project risks and probabilistic analysis of the project  Agreed-upon response strategies  Specific actions to implement the chosen response strategy  Symptoms and warning signs of risks’ occurrence  Budget and schedule activities required to implement the chosen responses  Contingency reserves of time and cost designed to provide for stakeholders’ risk tolerances  Contingency plans and triggers that call for their execution  Fallback plans for use as a reaction to a risk that has occurred, and the primary response proves to be inadequate  Residual risks that are expected to remain after planned responses have been taken, as well as those that have been deliberately accepted  Secondary risks that arise as a direct outcome of implementing a risk response  Contingency reserves that are calculated based on the quantitative analysis of the project and the organization’s risk thresholds. 2. Risk-related contract decisions

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Contractual agreements, such as agreements for insurance, services, and other items as appropriate, can be prepared to specify each party’s responsibility for specific risks, should they occur. 3. Project management plan updates  Schedule management plan  Cost management plan  Quality management plan  Procurement management plan  Human Resources management plan  Work breakdown structure  Schedule baseline  Cost performance baseline

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Exercise 4.16 – Risk Response Based on the previous exercises, document at least five risks and provide the following: 1- Quantitative Probability, Impact and Overall Impact 2- Risk response (strategy) use all of the following: a. Avoidance b. Transference c. Acceptance d. Mitigation e. Exploit 3- For risks that will have mitigation strategy, identify the mitigation plans and the contingency plans. ` Note: Use form 9.8 in Appendix 2

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ Exercise ‎4-16 - Risk Response

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4.20 Plan Procurements Definition Plan Procurement is the process of documenting project purchases decision Source: PMBOK® Guide – Fourth Edition, page 317

Inputs

Tools & Techniques

Outputs

1. Scope baseline 2. Req. documentation 3. Teaming agreements 4. Risk register 5. Risk-related contract decisions 6. Activity resource req. 7. Project schedule 8. Activity cost estimates 9. Cost performance baseline 10.Enterprise env. factors 11. Organizational PA

1. Make-or-buy analysis 2. Expert judgment 3. Contract types

1.Procurement management plan 2.Procurement statements of work 3.Make-or-buy decisions 4.Procurement documents 5.Source selection criteria 6.Change requests

Figure ‎4-54- Plan Procurements Process

Source: PMBOK® Guide – Fourth Edition, page 317

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Process Interaction

Figure ‎4-55- Plan Procurements Data Flow

Contracts 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 pay the seller. Buyer Seller Model The seller can be called a contractor, subcontractor, vendor, service provider, or supplier, depending on the buyer’s position in the project acquisition cycle. The buyer can be called a client, customer, prime contractor, contractor, acquiring organization, governmental agency, service requestor, or purchaser. The seller can be viewed during the contract life cycle first as a bidder, then as the selected source, and then as the contracted supplier.

4.20.1 Inputs to Plan Procurements 1. 2. 3. 4. 5. 6. 7. 8. 9.

Scope baseline Req. documentation Teaming agreements Risk register Risk-related contract decisions Activity resource req. Project schedule Activity cost estimates Cost performance baseline

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10. Enterprise environmental factors 11. Organizational process assets 4.20.2 Tools and Techniques for Plan Procurements 1. Make-or-buy analysis 2. Expert judgment 3. Contract types 1. Make-or-Buy Analysis Some general rules to keep in mind during the decision-making process are:  Leverage internal resources first (staff, factories, etc.) and supplement with procured resources as needed.  Consider both the direct costs and indirect costs during makeor-buy analysis.  Primary contractors may subcontract parts of the work. Considering that overhead expenses will be charged by both parties, it may not be advantageous to the primary contractor to subcontract the majority (over half) of the work. Reasons to Make over Buy Sometimes, the organization may decide to make the product internally, rather than outsourcing it from outside based on many factors, like:  Protect proprietary information that provides competitive advantage  Surplus staff  Surplus plant capacity  Ease of project control Make-or-buy decisions should always take into consideration both the direct costs to the buyer and the indirect costs to the buyer Make Product •

•

Buy Product

Direct Costs: Labor Material Other Indirect Costs: Overhead Salaries of Executives General Administrative Other

• •

Direct Costs: Purchase price Other Indirect Costs: Contract administration Other

Table ‎4-5 - Reasons to Make over Buy

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Exercise 4.17 –Make or Buy Decision Based on the supplied case study, which part of the project will your organization prefer to make and which part your organization will prefer to buy? Provide your reasons.

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎4-17 - Make or Buy Decision

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2. Expert Judgment Expert technical judgment will often be required to assess the inputs to and outputs from this process. Expert purchasing judgment can also be used to develop or modify the criteria that will be used to evaluate offers or proposals made by sellers. 3. Contract Types The three major types of contracts are:  Fixed-price or lump-sum contracts.  Cost-reimbursable contracts.  Cost-Plus-Fee (CPF) or Cost-Plus-Percentage of Cost (CPPC).  Cost-Plus-Fixed-Fee (CPFF).  Cost-Plus-Incentive-Fee (CPIF).  Time and Material (T&M) contracts. Although there are three choices of contract type from which to choose, the “default” choice commonly selected is fixed-price. This may cause problems for the project if the conditions under which to use this contract type are not true. For example, fixed-price contracts are most useful when no scope changes are expected Purchase Order (PO) Purchase Order (PO) is a legal document (contract) issued by the buyer authorizing a purchase. It is a unilateral document in that only one party; the buyer in this case, need sign the document. PO’s are used for simple procurements.

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Fixed Price Contract Fixed Price Other Names

Lump-sum, Firm Fixed Price, FP

When to Use

• •

Scope of work is well defined Substantial changes are not expected

Advantages

•

Requires least amount of managerial oversight by buyer Least cost risk to buyer if scope is well defined Seller has incentive to control costs Project budget is known at the beginning

• • • Disadvantages

• •

Takes greatest effort to create scope of work Scope changes are difficult to accommodate and typically expensive

Forms of Contract Type

• • •

Firm Fixed Price Contracts (FFP) Fixed Price Incentive Fee Contracts (FPIF) Fixed Price with Economic Price Adjustment Contracts (FP-EPA)

Cost Risk Carried By…

Seller – assuming that the product is well defined, the seller carries the most risk for higher costs Table ‎4-6 - Fixed Price Contract

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Cost-Reimbursable Contract Fixed Price Other Names

CR •

When to Use

•

Desired results are known but requirements to achieve results are not known Flexibility in change control is needed

Advantages

• •

Takes less effort to create scope of work than FP Provides more flexibility to the buyer in accommodating scope changes than FP

Disadvantages

• •

Requires greater amount of managerial oversight by buyer than FP Seller has less incentive to control costs than in FP

Forms of Contract Type

• • •

Cost plus Fixed Fee Contracts (CPFF) Cost Plus Incentive Fee Contracts (CPIF) Cost Plus Award Fee Contracts (CPAF)

Cost Risk Carried By…

Buyer – total costs are not known until project completion

Table ‎4-7 - Cost Reimbursable Contract

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Time and Material Contract Fixed Price Other Names

T&M, Unit Price, Hybrid of FP and CR

When to Use

   

Advantages

 

Disadvantages

 

Short-term project Scope of work is not well defined Cost is small Buyer wants more control Takes least effort to create scope of work and contract Ease of use when the item being purchased is skilled labor (engineering or technical) or when work must begin immediately (repairs, emergencies, etc.) Seller has no incentive to control costs Requires greatest amount of day-to-day oversight by buyer

Buyer – medium risk because T&M typically used for short-term delivery. The seller has no financial risk on T&M contracts.

Cost Risk Carried By…

Table ‎4-8 - Time and Material Contract

4.20.3 Outputs of Plan Procurements 1. 2. 3. 4. 5. 6.

Procurement management plan Procurement statements of work Make-or-buy decisions Procurement documents Source selection criteria Change requests

1. Procurement Management Plan The Procurement Management plan document contains the guidelines of how the organization will go about the procurement in this project, it contains the following information:  Types of contracts to be used  Risk management issues  Whether independent estimates will be used and if they are needed as evaluation criteria;

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           

Those actions the project management team can take unilaterally, if the performing organization has a prescribed procurement, contracting, or purchasing department. Standardized procurement documents Managing multiple suppliers Coordinating procurement with other project aspects, such as scheduling and performance reporting. Any constraints and assumptions that could affect planned procurements. Handling the make-or-buy decisions and linking them into the Administer Procurements and Close Procurements Setting the scheduled dates in each contract for the contract deliverables and coordinating with the schedule development and control processes Identifying requirements for performance bonds or insurance contracts to mitigate some forms of project risk; Establishing the direction to be provided to the sellers on developing and maintaining a work breakdown structure (WBS) Establishing the form and format to be used for the procurement/contract statements of work Identifying pre-qualified sellers, if any to be used Procurement metrics to be used to manage contracts and evaluate sellers

2. Procurement Statements of Work Each procurement statement of work defines, for those items being purchased or acquired, just the portion of the project scope that is included within the related contract. The statement of work (SOW) for each contract is developed from:  The project scope statement  The project work breakdown structure (WBS)  WBS dictionary. The procurement SOW describes the procurement item in sufficient detail to allow prospective sellers to determine if they are capable of providing the item. 3. Make-or-Buy Decisions The documented decisions of what project products, services, or results will be either acquired or will be developed by the project team. 4. Procurement Documents A term such as proposal is generally used when other considerations, such as technical skills or technical approach, are paramount. However, the terms are often used interchangeably and care is taken not to make unwarranted assumptions about the implications of the term used. PMP Exam Preparation Course

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A term such as proposal is generally used when other considerations, such as technical skills or technical approach, are paramount. However, the terms are often used interchangeably and care is taken not to make unwarranted assumptions about the implications of the term used. Common Names for Different Types of Procurement Documents  Invitation for bid (IFB)  Request for proposal (RFP)  Request for quotation (RFQ)  Tender notice  Invitation for negotiation  Contractor initial response. Comparison of Procurement Documents Types Type

When to use

IFB, ITB, RFB

 

For simple procurements To obtain best price from prospective seller(s)

RFI

•

To obtain information on a specific company or product from prospective seller(s)

RFQ

 

For less complex procurements To obtain information and firm quotes from prospective seller(s). Takes less time than RFP to: write, receive response from sellers, and evaluate



RFP, RFT

 



Used for complex procurements – such as new development To obtain firm quotes from prospective seller(s), but also a description in detail of the seller’s approach to fulfilling requirements: management approach, key human resource requirements, technical specifications, special provisions, terms and conditions, etc. Takes more time than RFQ to: write, receive response from sellers, and evaluate

Table ‎4-9 - Comparison of Procurement Documents Types

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5. Source Selection Criteria During the planning phase, the project team will identify the selection criteria, on which the project source or vendor selection will be based on. Below are some factors of a typical selection criteria:  Understanding of need  Overall or life-cycle cost  Technical capability  Risk  Management approach  Technical approach  Warranty  Financial capacity  Production capacity and interest  Business size and type  Past performance of sellers  References  Intellectual property rights  Proprietary rights

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Exercise 4.18 –Contract Types 1- Based on the supplied case study, what contract should your organization engage with the supplier? Provide your reasons. 2- What are the project circumstance that will make your organization go in this project in the following contracts: a. Fixed Price b. Time and Material

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎4-18-Contract Types

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5. Project Execution Phase This is the phase where all the project plans are executed and moved from being on paper to reality on the ground. During this phase, the following eight execution processes are executed: 4.3 Direct and Manage Project Execution 8.2 Perform Quality Assurance 9.2 Acquire Project Team 9.3 Develop Project Team 9.4 Manage Project Team 10.3 Distribute Information 10.4 Manage Stakeholder Expectations 12.2 Conduct Procurements

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5.1 Direct and Manage Project Execution

Definition Direct and Manage Project Execution is the process of performing the work defined in the project management plan to achieve the project objectives. Source: PMBOK® Guide – Fourth Edition, page 83

Inputs

Tools & Techniques

1.Project management plan 2.Approved change requests 3.Enterprise environmental factors 4.Organizational process assets

1. Expert judgment 2. Project management information system

Outputs 1.Deliverables 2.Work performance information 3.Change requests 4.Project management plan updates 5.Project document updates

Figure ‎5-1- Direct and Manage Project Execution Process

Source: PMBOK® Guide - Fourth Edition, page 84

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Process Interaction

Figure ‎5-2- Direct and Manage Project Execution – Process Interaction

5.1.1 Inputs to Direct and Manage Project Execution 1234-

Project management plan Approved change requests Enterprise environmental factors Organizational process assets

1  

Enterprise Environmental Factors Organizational, company or customer culture and structure Infrastructure (e.g. existing facilities and capital equipment) Personnel administration (e.g. hiring and firing guidelines, employee performance reviews and training records) Stakeholder risk tolerances Project management information systems

 

2- Organizational Process Assets  Standardized guidelines and work instructions  Communication requirements defining allowed communication media, record retention, and security requirements  Issue and defect management procedures defining issue and defect controls, issue and defect identification and resolution , and action item tracking  Process measurement database used to collect and make available measurement data on processes and products  Project files from prior projects

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

Issue and defect management database containing historical issue and defect status, control information, issue and defect resolution, and action item results. 5.1.2 Tools and Techniques for Direct and Manage Project Execution 1- Expert judgment 2- Project management information system 1. Expert judgment  Other units from the organization  Consultants  Stakeholders, including customers or sponsors  Professional and technical associations 2. Project management information system  It is an automated system, is used by the project management team to:  Support generation of a preliminary project scope statement  Facilitate feedback as the document is refined  Control changes to the project scope statement  Release the approved document 5.1.3 Outputs of Direct and Manage Project Execution 12345-

Deliverables Work performance information Change requests Project management plan updates Project document updates

1. Deliverables  Unique and verifiable product  Must be produced to complete the process, phase or a cycle 2. Work performance information  Deliverable status  Schedule progress  Costs incurred 3. Change requests  Corrective action  Preventive action  Defect repair  Updates 4. Project management plan updates PMP Exam Preparation Course

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        

Requirements management plan Schedule management plan Cost management plan Quality management plan Human resource plan Communications management plan Risk management plan Procurement management plan Project baseline

5. Project document updates  Requirements documents  Project logs (issue, assumptions. etc.)  Risk register  Stakeholder register

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5.2 Perform Quality Assurance

Definition Perform Quality Assurance is the process of auditing the quality requirements and the results from quality control measurements to ensure appropriate quality standards and operational definitions are used. Source: PMBOK® Guide – Fourth Edition, page 202

Inputs

Tools & Techniques

Outputs

1.Project management plan 2.Quality metrics 3.Work performance information 4.Quality control measurements

1. Plan Quality and Perform Quality Control tools and techniques 2. Quality audits 3. Process analysis

1.Organizational process asset updates 2.Change requests 3.PM plan updates 4.Project document updates

Figure ‎5-3 - Perform Quality Assurance Process

Source: PMBOK® Guide – Fourth Edition, page 202

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Process Interaction 4.2 Develop Project Management Plan

Ø Project management plan updates

Ø Quality management plan Ø Process improvement plan

8.1 Plan Quality

4.3 Direct and Manage Project Execution Ø Work Performance information

Involved Documents (OUT) ØOrganizational process assets updates ØChange requests ØProject management plan updates ØProject document updates

Ø Quality Metrics

8.2 Perform Quality Assurance 8.3 Perform Quality Control

Involved Documents (IN) ØQuality control measurements ØQuality metrics ØQuality management plan ØProcess improvement plan ØWork performance information

Ø Quality Control measurements

Source: PMBOK® Guide – Fourth Edition Diagram Developed by Techno Management Ø

Ø Project Documents Updates

Project ` Documents

Ø Change requests

4.5 Perform Integrated change Control

Ø Organizational process assets updates

Enterprise/ Organization

Figure ‎5-4- Perform Quality Assurance– Process Interaction

5.2.1 Inputs of Perform Quality Assurance 1234-

Project management plan Quality metrics Work performance information Quality control measurements

5.2.2 Tools and Techniques for Perform Quality Assurance 1- Plan Quality and Perform Quality Control tools and techniques 2- Quality audits 3- Process analysis 1. Plan Quality and Perform Quality Control  Cost-benefit analysis  Cost of quality  Control charts  Benchmarking  Design of experiments  Statistical sampling  Flowcharting  Proprietary quality  management methodologies  Additional quality planning tools

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2. Quality Metrics Structured, independent review to determine whether project activities comply with policies, processes, and procedures. The objective of a quality audit is to identify inefficient and ineffective policies, processes, and procedures in use on the Quality audits may be scheduled or at random, and may be carried out by properly trained in-house auditors or by third parties. Quality audits confirm the implementation of approved change requests, corrective actions, defect repairs, and preventive actions. 3. Process Analysis Process analysis follows the steps outlined in the process improvement plan to identify any needed improvements. This analysis also examines:  Problems experienced  Constraints experienced  Non-value-added activities Includes root cause analysis, a specific technique to analyze a problem / situation, determine the underlying causes that lead to it, and create preventive actions for similar problems.

5.2.3 Outputs of Perform Quality Assurance 2345-

Organizational process asset updates Change requests PM plan updates Project document updates

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Exercise 5.1 – Quality Assurance Activities Based on the provided case study, identify some activates that you need to perform to ensure the adherence to the required quality

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎5-1 - Quality Assurance Activities

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5.3 Acquire Project Team Definition Acquire Project Team is the process of confirming human resource availability and obtaining the team necessary to complete project assignments. Source: PMBOK® Guide – Fourth Edition, page 225

Inputs

Tools & Techniques

1.Project management plan 2.Enterprise environmental factors 3.Organizational process assets

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

Outputs 1.Project staff assignments 2.Resource calendars 3.Project management plan updates

Figure ‎5-5 - Sequence Activities Process

Source: PMBOK® Guide – Fourth Edition, page 226

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Process Interaction

Figure ‎5-6- Acquire Project Team – Process Interaction

5.3.1 Inputs of Acquire Project Team 1- Project management plan 2- Enterprise environmental factors 3- Organizational process assets Enterprise Environmental Factors - Existing information for human resources including who is available - Personnel administration policies such as those that affect outsourcing - Organizational structure - Location or multiple locations

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5.3.2 Tools and Techniques for Acquire Project Team 1234-

Pre-assignment Negotiation Acquisition Virtual teams

1. Pre-assignment In some cases, project team members are known in advance. This situation can occur if: - The project is the result of specific people being promised as part of a competitive proposal. - The project is dependent on the expertise of particular persons. - Some staff assignments are defined within the project charter. 2. Negotiation The project management team may need to negotiate with: - Functional managers to ensure that the project receives appropriately competent staff in the required time frame. - Other project management teams within the performing organization to appropriately assign scarce or specialized resources. 3. Acquisition When the performing organization lacks the in-house staff needed to complete the project, the required services can be acquired from outside sources. This can involve hiring individual consultants or subcontracting work to another organization. 4. Virtual Team Virtual team creates new possibilities when acquiring project team members. Virtual teams can be defined as groups of people with a shared goal, who fulfill their roles with little or no time spent meeting face to face. The availability of electronic communication, such as email and video conferencing, has made such teams feasible. The virtual team format makes it possible to:  Form teams of people from the same company who live in widespread geographic areas.  Add special expertise to a project team, even though the expert is not in the same geographic area.  Incorporate employees who work from home offices.  Form teams of people who work different shifts or hours  Include people with mobility handicaps.  Move forward with projects that would have been ignored due to travel expenses.

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5.3.3 Outputs of Acquire Project Team 1- Project staff assignments. 2- Resource calendars. 3- Project management plan updates. 1. Project Staff Assignments The project is staffed when appropriate people have been assigned to work on it. Documentation can include: - Project team directory - Memos to team members - Names inserted into other parts of the project management plan, such as project organization charts and schedules. 2. Resource calendars Each resource will have a calendar that documents the time period he or she will be available during the project life cycle. 3. Project management plan updates As part of the project management plan, updates to the human resource plan may reflect any changes or additions that respond to any planning output.

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5.4 Develop Project Team Definition Develop Project Team is the process of improving the competencies, team interaction, and the overall team environment to enhance project performance. Source: PMBOK® Guide – Fourth Edition, page 229

Inputs 1.Project staff assignments 2.Project management plan 3.Resource calendars

Tools & Techniques

Outputs

1. Interpersonal skills 2. Training 3. Team-building activities 4. Ground rules 5. Co-location 6. Recognition and rewards

1.Team performance assessments 2.Enterprise environmental factors updates

Figure ‎5-7- Develop Project Team Process

Source: PMBOK® Guide - Fourth Edition, page 230

Objectives of Developing Project Team - Improve knowledge and skills of team members - Improve feelings of trust and agreement among team members - Create a dynamic and cohesive team culture

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Process Interaction

Figure ‎5-8- Develop Project Team – Process Interaction

5.4.1 Inputs to Develop Project Team 1- Project staff assignments 2- Project management plan 3- Resource calendars 5.4.2 Tools and Techniques for Develop Project Team 123456-

Interpersonal skills Training Team-building activities Ground rules Co-location Recognition and rewards

1. Interpersonal skills Interpersonal skills, sometimes known as Soft skills, are particularly important to team development. The following aspects are part of the soft skills the project manager should practice: - Understanding the sentiments of project team members - Anticipating their actions

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- Acknowledging their concerns - Following up on their issues Key interpersonal skills include, but not limited to the following: - Leadership - Team Building - Motivation - Communication - Influencing - Decision Making - Political and Cultural Awareness - Negotiations Source: PMBOK® Guide – Fourth Edition, page 417 Leadership Leadership involves focusing the efforts of a group of people towards a common goal. The key elements are respect and trust rather than fear and submission. Team Building It is the process of helping a group of individuals to work interdependently with each other. Team building activities: - Establish goals - Define and negotiate roles and procedures Team building Processes: - Communication - Conflict management - Motivation - Leadership Motivation Project success depends highly on the team commitment, which is related to their level of motivation. It involves creating the environment to meet the project objectives. Communication It is identified as one of the single biggest reason for project success (or failure). Project manager should be aware of: - Communication styles of other parties - Cultural issues - Relationships - Personalities - Situational context Influencing It is the strategy of sharing power. It involves relying on the interpersonal skills to get others to cooperate towards a common goal like: PMP Exam Preparation Course

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-

Lead by example Clarify how eh decision will be made Use flexible interpersonal style Apply the power skillfully and cautiously

Decision Making Four basic decision making styles: - Command - Consultation - Consensus - Coin Flip (random) A decision making model (Six Phase): - Problem definition - Problem solution generation - Ideas to action - Solution action planning - Evaluation of the outcome and process Political and Cultural Awareness Politics are inevitable in project environments. Skillful use of politics and power will help the project managers to succeed. Ignoring project politics will lead to difficulty in managing people Negotiations It is the strategy of conferring with parties of shared or opposed interests. The focus is on compromising or reaching an agreement. It is an integral part of project management, if done well, increases the chances of success

2. Training Training includes all activities designed to enhance the competencies of the project team members. Training can be formal or informal. Examples of training methods include: - Classroom - Online - Computer-based - On-the-job training from another project team member - Mentoring - Coaching 3. Team-Building Activities Team building activities include management and individual actions taken specifically and primarily to improve team performance. Enhancing team performance can result from various activities. A few examples are: - Involving team members in the planning process - Establishing rules for dealing with conflict PMP Exam Preparation Course

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- Improving the climate for team discussions - Improving stakeholder interaction by holding an off-site, professionally facilitated event. Team Formation Stage Forming: Initial judgments about teammates are made Storming: Control issues emerge Norming: Productive works begins Performing: Optimum productivity reached Adjourning: Project is done, team moves out of the project 4. Ground Rules Ground rules establish clear expectations regarding acceptable behavior by project team members. Early commitment to clear guidelines decreases misunderstandings and increases productivity. The process of discussing ground rules allows team members to discover values that are important to one another. All project team members share responsibility for enforcing the rules once they are established. 5. Co-Location Co-location involves placing many or all of the most active project team members in the same physical location. This is to enhance their ability to perform as a team. Co-location can be temporary, such as at strategically important times during the project, or for the entire project. Co-location strategy can include a meeting room, sometimes called a war room, with electronic communication devices, places to post schedules, and other conveniences that enhance communication and a sense of community. 6. Recognition and Rewards Part of the team development process involves recognizing and rewarding desirable behavior. Only desirable behavior should be rewarded. Willingness to work overtime to meet an aggressive schedule objective should be rewarded. Needing to work overtime as the result of poor planning should not be rewarded. Win-lose (zero sum) rewards that only a limited number of project team members can achieve, such as team member of the month, can hurt team cohesiveness. Rewarding win-win behavior that everyone can achieve, such as turning in progress reports on time, tends to increase support among team members.

5.4.3 Outputs of Develop Project Team 1- Team performance assessments 2- Enterprise environmental factors updates

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Motivational Theories When planning reward and recognition activities, as well as when using a project manager’s reward power, motivational theory is an important consideration. What motivates people to perform? Consider the theories of: - Maslow - McGregor - Herzberg. Maslow’s Hierarchy of Needs According to Maslow’s theory: - Once a level of need is satisfied, it is no longer a motivational factor. - One cannot ascend to the next level until the levels below are fulfilled. - People do not perform for security or money, but rather to get a chance to contribute (self-actualization).

SelfActualizat ion

Esteem Social

Safety Physiological

Self-fulfillment, growth, learning

Accomplishment, respect

Love, affection, approval Security, stability, free from harm Air, water, food, housing, clothing

Figure ‎5-9- Maslow’s‎Hierarchy‎of‎Needs

McGregor’s Theory of X & Y Theory X: Workers are lazy and require close and constant supervision. Theory Y: Workers want to work and do not require constant supervision. Herzberg’s Theory

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Motivating Agents: Motivators are mostly intrinsic to the job and serve as motivators. Hygiene Factors (Demotivators): Are mostly environmental, the absence of which demotivate, however when present do not necessarily serve to motivate.

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5.5 Manage Project Team

Definition Manage Project Team is the process of tracking team member performance, providing feedback, resolving issues, and managing changes to optimize project performance. Source: PMBOK® Guide – Fourth Edition, page 236

Inputs

Tools & Techniques

Outputs

1.Project staff assignments 2.Project management plan 3.Team performance assessments 4.Performance reports 5.Organizational process assets

1. Observation and conversation 2. Project performance appraisals 3. Conflict management 4. Issue log 5. Interpersonal skills

1.Enterprise environmental factors updates 2.Organizational process assets updates 3.Change requests 4.Project management plan updates

Figure ‎5-10- Manage Project Team Process

Source: PMBOK® Guide - Fourth Edition, page 236

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Process Interaction

Figure ‎5-11- Manage Project Team – Process Interaction

5.5.1 Inputs to Manage Project Team 1. 2. 3. 4. 5.

Project staff assignments Project management plan Team performance assessments Performance reports Organizational process assets

5.5.2 Tools and Techniques for Manage Project Team 1. 2. 3. 4. 5.

Observation and conversation Project performance appraisals Conflict management Issue log Interpersonal skills

1. Observation and conversation The project manager needs to stay in touch with the work and attitudes of project team members. Monitors indicators such as: - Progress toward project deliverables - Accomplishments - Interpersonal issues. 2. Project Performance Appraisals

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The need for formal or informal project performance appraisals depends on: - The length of the project - Complexity of the project - Organizational policy - Labor contract requirements - The amount and quality of regular communication. Objectives for conducting performance appraisals during the course of a project can include: - Re-clarification of roles and responsibilities - Structured time to ensure team members receive positive feedback in what might otherwise be a hectic environment - Discovery of unknown or unresolved issues - Development of individual training plans - Establishment of specific goals for future time periods. 3. Conflict Management Successful conflict management results in greater productivity and positive working relationships. Sources of conflict include scarce resources, scheduling priorities, and personal work styles. Team ground rules, group norms, and solid project management practices, like communication planning and role definition, reduce the amount of conflict. When managed properly, differences of opinion are healthy, and can lead to increased creativity and better decision-making. When the differences become a negative factor, project team members are initially responsible for resolving their own conflicts. If conflict escalates, the project manager should help facilitate a satisfactory resolution. Conflict should be addressed early and usually in private, using a direct, collaborative approach. If disruptive conflict continues, increasingly formal procedures will need to be used, including the possible use of disciplinary actions. The term “conflict” often carries negative connotations. Conflict is inevitable on most projects due to many factors: - Competing needs of stakeholders - Competition for limited resources - Limited power of the project manager Unnecessary conflict can be avoided to some extent through: - Communication to stakeholders of project objectives, status, and changes - Clearly and separately assigned tasks Examples of Sources of Conflict - Personalities - Cost Objectives - Schedule Objectives PMP Exam Preparation Course

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Administrative procedures Project Priorities Limited Human Resources (Personnel) Technical Opinions

Conflict Resolution Approaches - Withdrawing / Avoiding: Retreating from the area of disagreement or postponing a decision that will likely cause conflict - Smoothing / Accommodating: Emphasizes areas of agreement, not differences of opinion - Compromising: Give and take approach that brings some degree of satisfaction to all parties - Forcing: Imposing one viewpoint at the expense of another - Collaborating: Including multiple viewpoints from different perspectives. - Confronting / Problem Solving: identify the real problem, then solve it 4. Issue log A written log should document persons responsible for resolving specific issues by a target date. The log helps the project team monitor issues until closure. Issue resolution addresses obstacles that can block the team from achieving its goals. These obstacles can include factors such as differences of opinion, situations to be investigated, and emerging or unanticipated responsibilities that need to be assigned to someone on the project team.

5. Interpersonal Skills High command on interpersonal skills is required from the project team to properly handling conflicts. Detailed skills are included in section 9.3.2 above, however the following ones are important to be applied to resolve team conflicts within the project: - Leadership - Influencing - Decision making

5.5.3 Outputs of Manage Project Team 1234-

Enterprise environmental factors updates Organizational process assets updates Change requests Project management plan updates

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5.6 Distribute Information

Definition Distribute information is the process of making relevant information available to project stakeholders as planned. Source: PMBOK® Guide – Fourth Edition, page 258

Effective Information Distribution Effective information distribution includes a number of techniques including:  Sender-receiver models  Choice of media  Writing style  Meeting management techniques  Presentation techniques  Facilitation techniques

Inputs

Tools & Techniques

Outputs

1.Project management plan 2.Performance reports 3.Organizational process assets

1. Communication methods 2. Information Distribution tools

1.Organizational process assets updates

Figure ‎5-12- Distribute Information Process

Source: PMBOK® Guide - Fourth Edition, page 258

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Process Interaction

Figure ‎5-13- Distribute Information – Process Interaction

5.6.1 Inputs to Distribute Information 1- Project management plan 2- Performance reports 3- Organizational process assets

5.6.2 Tools and Techniques for Distribute Information 1- Communication methods 2- Information Distribution tools 1. Communication methods To achieve the effective communication, the project team has to use all possible and available communication methods. This includes, but limited to:     

Individual meetings Group meetings Video and audio conferences Computer chats Remote communication methods

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2. Information Distribution tools Project information can be distributed by many tools, including:  Project meetings  Hard-copy document distribution  Manual filing systems  Shared-access electronic databases  E-mail  Fax Voice mail  Telephone  Video  Web conferencing  Web publishing  Electronic tools for project management, such as Web interfaces to scheduling and project management software, meeting and virtual office support software, portals, and collaborative work management tools.

5.6.3 Outputs of Distribute Information 1- Organizational process assets updates 1. Organizational process assets updates The following documents may be updated as a result of this process:  Stakeholder notifications  Project reports  Project presentations  Project records  Feedback from stakeholders  Lessons learned documentation

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5.7 Manage Stakeholder Expectations

Definition Manage stakeholder expectations is the process of communicating and working with stakeholders to meet their needs and addressing issues as they occur. Source: PMBOK® Guide – Fourth Edition, page 261

Proactive Approach Managing stakeholders is a proactive approach in the following perspectives:  Managing stakeholders expectations increase the chance of project acceptance  Proactively managing concerns before turning into issues  Resolve identified issues before they become concerns, problems and then disasters

Figure ‎5-14- Manage Stakeholder Expectations Process

Source: PMBOK® Guide - Fourth Edition, page 146

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Process Interaction

Figure ‎5-15- Manage Stakeholder Expectations – Process Interaction

5.7.1 Inputs to Manage Stakeholder Expectations 1. 2. 3. 4. 5. 6.

Stakeholder register Stakeholder management strategy Project management plan Issue log Change log Organizational process assets

5.7.2 Tools and Techniques for Manage Stakeholder Expectations 1. Communication methods 2. Interpersonal skills 3. Management skills

1. Interpersonal Skills Managing stakeholders need applying interpersonal skills, like:  Building trust  Resolve conflicts  Active listening

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

Overcoming resistance to change

5.7.3 Outputs of Manage Stakeholder Expectations 1234-

Organizational process assets updates Change requests Project Management plan updates Project document updates

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5.8 Conduct Procurement

Definition Conduct Procurement is the process of obtaining seller responses, selecting a seller, and awarding a contract. Source: PMBOK® Guide – Fourth Edition, page 329

Inputs

Tools & Techniques

Outputs

1. PM plan 2. Procurement documents 3. Source selection criteria 4. Qualified seller list 5. Seller proposals 6. Project documents 7. Make-or-buy decisions 8. Teaming agreements 9. Organizational PA

1. Bidder conferences 2. Proposal evaluation techniques 3. Independent estimates 4. Expert judgment 5. Advertising 6. Internet search 7. Procurement negotiations

1.Selected sellers 2.Procurement contract award 3.Resource calendars 4.Change requests 5.Project management plan updates 6.Project document updates

Figure ‎5-16 - Conduct Procurement Process

Source: PMBOK® Guide – Fourth Edition, page 329

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Process Interaction

Figure ‎5-17- Conduct Procurement Data Flow

5.8.1 Inputs of Conduct Procurement 123456789-

Project Management plan Procurement documents Source selection criteria Qualified seller list Seller proposals Project documents Make-or-buy decisions Teaming agreements Organizational process assets

5.8.2 Tools and Techniques for Conduct Procurement 1234567-

Bidder conferences Proposal evaluation techniques Independent estimates Expert judgment Advertising Internet search Procurement negotiations

1. Bidder Conferences Bidder conferences are meetings with prospective sellers prior to preparation of a bid or proposal. They are used to ensure that all prospective sellers have a clear, common understanding of the procurement. Responses to questions can be incorporated into the PMP Exam Preparation Course

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procurement documents as amendments. All potential sellers are given equal standing during this initial buyer and seller interaction to produce the best bid. 2. Proposal Evaluation Techniques Proposals are seller-prepared documents that describe the seller’s ability and willingness to provide the requested products, services, or results described in the procurement documentation. Proposals are prepared in accordance with the requirements of the relevant procurement documents and reflect the application of applicable contract principles. The seller’s proposal constitutes a formal and legal offer in response to a buyer’s request. After a proposal is formally submitted, the buyer sometimes requests the seller to supplement its proposals with an oral presentation. The oral presentation is meant to provide additional information with respect to the seller’s proposed staff, management proposal, and technical proposal, which can be used by the buyer in evaluating the seller’s proposal. Evaluation Criteria Evaluation criteria are developed and used to rate or score proposals. They can be Objective or subjective Evaluation criteria are often included as part of the procurement documents. Selection criteria can be identified and documented to support an assessment for a more complex product or service. Evaluation criteria can be as straightforward as price only. It can also be complex, based on ratings in several categories:  Demonstrated understanding of requirements  Management Approach  Technical capacity  Life cycle cost  Financial capacity (stability )  Project management capacity (Organizational pm maturity)  Past performance on similar projects Weighting System It is a method for quantifying qualitative data to minimize the effect of personal prejudice on seller selection. Most such systems involve assigning a numerical weight to each of the evaluation criteria, rating the prospective sellers on each criterion, multiplying the weight by the rating, and totaling the resultant products to compute an overall score. Weighting systems typically involve four steps:  Assign a numerical weight (percentage) to each of the evaluation criteria  Rate prospective sellers, or their proposal, on each criterion  Multiply the weight from step 1 by the rate from step 2 to derive the score for that criterion

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

Add all scores from step 3 to derive the total score for each seller

Below is an example of an evaluation sheet that compares between two proposals: Proposal 1 Evaluation Criteria Demonstrated understanding requirements

Weight

Rating

Score

Proposal 2 Rating

Score

20% of

Management Approach  Project management capacity (Organizational pm maturity)  Key human resource requirements

20%

Technical capacity  Skills  Knowledge

15%

Life cycle cost  Purchase price  Operating cost

20%

Financial (stability )

10%

capacity

Past performance similar projects Total

on

15% 100 %

Table ‎5-1 - Weighting System

3. Independent Estimates The procuring organization can either prepare its own independent estimates or have prepared an independent estimate of the costs as a check on proposed pricing. This independent estimate is sometimes PMP Exam Preparation Course

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referred to as a Should-cost estimate. Significant differences from these cost estimates can be an indication that the contract statement of work was not adequate

4. Expert Judgment May include:  Multi-discipline review teams  Cross-functional discipline 5. Advertising Existing lists of potential sellers can often be expanded by placing advertisements in general circulation publications. Some government jurisdictions require public advertising of certain types of procurement items; most government jurisdictions require public advertising of pending government contracts.

6. Internet Search Internet is considered to be a very good source for small commodities procurement. It may not be appropriate for large projects where close monitoring is required. 7. Procurement Negotiations It clarifies the structure and requirements of the contract so that mutual agreement can be reached prior to signing the contract. The final contract language reflects all agreements reached. The subjects covered include:  Responsibilities and authorities  Applicable terms and law  Technical and business management approaches  Proprietary rights  Contract financing  Technical solution  Overall schedule  Payments and price. 5.8.3 Outputs of Conduct Procurement 123456-

Selected sellers Procurement contract award Resource calendars Change requests Project management plan updates Project document updates

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Exercise 5.2 –Evaluation Criteria Based on the provided case study; set evaluation criteria to select between the proposals. Use the format shown in the “Weighting System” section. Assign weight to each criterion, make sure that a total is 100%.

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎5-2 - Evaluation Criteria

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6. Project Monitor and Control Phase Nothing is easier than putting mice plans on paer and hanging project schedules on the ealls. But the realy challenge is ensuring that these plans are really implemented as the way they are planned. Control is needed to ensure that all planned activeitoes hat are being executed ae really achieving their planned tarher. This is the main functin of the following ten Monitor and Control process group: 4.4 Monitor and Control Project Work 4.5 Perform Integrated Change Control 5.4 Verify Scope 5.5 Control Scope 6.6 Control Schedule 7.3 Control Costs 8.3 Perform Quality Control 10.5 Report Performance 11.6 Monitor and Control Risks 12.3 Administer Procurements

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6.1 Monitor and Control Project Work

Definition Monitor and Control Project Work is the process of tracking, reviewing, and regulating the progress to meet the performance objectives defined in the project management plan. Source: PMBOK® Guide – Fourth Edition, page 89

Monitoring is an aspect of project management performed throughout the project. Monitoring includes collecting, measuring and distributing performance information, and assessing measurements and trends to effect process improvements. The Monitor and Control Project Work process is concerned with:  Comparing actual project performance against the project management plan  Assessing performance to determine whether any corrective or preventive actions are indicated and then recommending those actions as necessary  Identifying new risks and analyzing, tracking, and monitoring existing project risks  Maintaining an accurate, timely information base concerning the project's product (s) and their associated documentation through project completion.  Provide information to support status reporting, progress measurement, and forecasting  Providing forecasts to update current cost and schedule information  Monitoring implementation of approved changes as they occur

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Inputs

Tools & Techniques

1.Project management plan 2.Performance reports 3.Enterprise environmental factors 4.Organizational process assets

1. Expert judgment

Outputs 1.Change requests 2.Project management plan updates 3.Project document updates

Figure ‎6-1- Monitor and Control Project Work Process

Source: PMBOK® Guide - Fourth Edition, page 89

Process Interaction

Figure ‎6-2- Monitor and Control Project Work – Process Interaction

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6.1.1 Inputs to Monitor and Control Project Work 1. 2. 3. 4.

Project management plan Performance reports Enterprise environmental factors Organizational process assets

6.1.2 Tools and Techniques for Monitor and Control Project Work 1. Expert judgment 6.1.3 Outputs of Monitor and Control Project Work 1- Change requests 2- Project management plan updates 3- Project document updates 1. Change requests  Corrective action  Preventive action  Defect repair 2. Project management plan updates Not limited to:  Schedule management plan  Cost management plan  Quality management plan  Scope baseline  Schedule baseline  Cost performance baseline 3. Project document updates Not limited to:  Forecasts  Performance reports  Issue log

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6.2 Perform Integrated Change Control

Definition Perform Integrated Change Control is the process of reviewing all change requests, approving changes and managing changes to the deliverables, organizational process assets, project documents and the project management plan. Source: PMBOK® Guide – Fourth Edition, page 93

Change Management Activities       

Influencing the factors that circumvent integrated change control so that only approved changes are implemented' Reviewing analyzing and approving change requests promptly, which is essential, as a slow decision may negatively affect time, cost, or the feasibility of a change Managing the approved changes Maintaining the integrity of baseline by releasing only approved changes for incorporations into the project management plan and project documents. Reviewing, approving, or denying all recommended corrective and preventive actions. Coordinating changes across the entire project (e.g. a proposed schedule change will often affect cost, risk, quality and staffing) Documenting the complete impact of change requests

Configuration Management Activities   

Configuration identification Configuration status accounting Configuration verification and audit

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Inputs

Tools & Techniques

1.Project management plan 2.Work performance information 3.Change requests 4.Enterprise environmental factors 5.Organizational process assets

1. Expert judgment 2. Change control meetings

Outputs 1.Change requests 2.Project management plan updates 3.Project document updates

Figure ‎6-3- Perform Integrated Change Control Process

Source: PMBOK® Guide - Fourth Edition, page 95

Process Interaction

Figure ‎6-4- Perform Integrated Change Control – Process Interaction

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6.2.1 Inputs to Perform Integrated Change Control 1. 2. 3. 4. 5.

Project management plan Work performance information Change requests Enterprise environmental factors Organizational process assets

6.2.2 Tools and Techniques for Perform Integrated Change Control 1. Expert judgment 2. Change control meetings 6.2.3 Outputs of Perform Integrated Change Control 1. Change requests 2. Project management plan updates 3. Project document updates

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6.3 Verify Scope

Definition Verify Scope is the process of formalizing acceptance of the completed project deliverables. Source: PMBOK® Guide – Fourth Edition, page 103

Verifying scope includes reviewing deliverables with the customer or sponsor to ensure that they are completed satisfactorily and obtaining formal acceptance of deliverables by the customer or sponsor. Verify scope does not happen only at the end of the project, but it is at the end of each phase and at the key milestones.

Outputs

Tools & Techniques

Inputs 1.Project management plan 2.Requirements documentation 3.Requirements traceability matrix 4.Validated deliverables

1. Inspection

1.Accepted deliverables 2.Change requests 3.Project document updates

Figure ‎6-5- Verify Scope Process

Source: PMBOK® Guide - Fourth Edition, page 123

6.3.1 Inputs to Verify Scope 1. 2. 3. 4.

Project management plan Requirements documentation Requirements traceability matrix Validated deliverables

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6.3.2 Tools and Techniques for Verify Scope 1. Inspection 1. Inspection This is the tool that includes activities such as measuring, examining, and verifying to determine whether work and deliverables meet requirements and product acceptance criteria. Inspections are sometimes called reviews, product reviews, audits and walkthroughs. 6.3.3 Outputs of Verify Scope 1- Accepted deliverables 2- Change requests 3- Project document updates 1. Accepted deliverables Deliverables that are signed off after passing the acceptance testing are documented and made ready to be used during the “Close Project or Phase” process. 2. Change requests Unaccepted deliverables for not meeting the acceptance criteria will be handled by issuing change requests. These change requests will be processed by further processes until the deliverable is accepted and signed off. 3. Project document updates Based on the verification process, some documents may be updated. These include, but not limited to the following documents:  Project budget  Project schedule  Scope statement  Requirement document  Different project plans

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6.4 Control Scope

Definition Control Scope is the process of monitoring the status of the project and product scope and managing changes to the scope baseline. Source: PMBOK® Guide – Fourth Edition, page 103

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

Outputs

Tools & Techniques

Inputs 1.Project management plan 2.Work performance information 3.Requirements documentation 4.Requirements traceability matrix 5.Organizational process assets

1. Variance analysis

1.Work performance measurements 2.Organizational process assets updates 3.Change requests 4.Project management plan updates 5. Project document updates

Figure ‎6-6- Control Scope Process

Source: PMBOK® Guide - Fourth Edition, page 125

Scope Change Considerations While doing the scope change process, the following issues should be considered:  Will the request to change project scope affect the project schedule?  Will the request to change project scope affect the project cost?  Will the request to change project scope affect the project quality?  Is the total impact a significant change to the project overall?  What is the impact of no change? PMP Exam Preparation Course

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 

What are all the alternative methods of accommodating the requested change? Does the individual requesting the scope change have the authority to approve resulting changes to project cost, schedule, quality, or other considerations?

6.4.1 Inputs to Control Scope 1. 2. 3. 4. 5.

Project management plan Work performance information Requirements documentation Requirements traceability matrix Organizational process assets

1. Project Management Plan The Control Scope process will use different control information set in the different project plans. Below is some of this information.  Scope baseline  Scope management plan  Change management plan  Configuration management plan  Requirements management plan 6.4.2 Tools and Techniques for Control Scope 1. Variance analysis 1. Variance analysis Project performance measurements are used to assess the magnitude of variation from the original scope baseline. Important aspects of project scope include determining the cause and degree of variance relative to the scope baseline and deciding whether corrective or preventive action is required.

6.4.3 Outputs of Control Scope 1. 2. 3. 4. 5.

Work performance measurements Organizational process assets updates Change requests Project management plan updates Project document updates

1. Work performance measurements These are the measures that will determine if the deliverable is conformant with the acceptance criteria or not. Measures are normally in the form of variance analysis between the plan and the actual; these measures will be used to decide on the deliverable acceptance. PMP Exam Preparation Course

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2. Organizational process assets updates Below are some examples of the organizational process assets that will be updated:  Cause of variance  Corrective actions chosen  Lessons learned 3. Change requests Analysis of the scope performance may result in change requests that will remedy the problem and bring back the scope into the baseline by issuing the proper change request that handles the cause of the problem. 4. Project management plan updates If the approved change request have an effect on the project scope, then the following baselines may be affected also and need to be considered (updated):  Cost baseline  Schedule baseline  WBS  WBS Dictionary 5. Project document updates Some project documents may need to be updated, including, but not limited to:  Requirements documents  Requirement traceability matrix Scope Change Control System A scope change control system is used to define the procedures by which the project scope can be changed. It may include the paper work, tracking systems, and approval levels necessary for authorizing changes. Start

Assess Priority

Propose Change to the Baseline

Identify Change

Assess Impact of no Change

Negotiate Proposal

Raise Change Control Form

Assess Impact on Cost (Resources)

Urgent?

Yes

Assess Impact on Schedule Assess Impact on Quality

No

Accepted ?

Yes Change the Baseline

No Implement Change

File the Change

End

Figure ‎6-7- A Typical Change Management Process

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Exercise 6.1 – Simulate Requirement Change Based on the provided case study, simulate a change and complete a change request form. Consider the following information: 1. Customer 2. Project Name 3. Project Manager 4. Change Request Date 5. WBS Task Number 6. Change Request ID 7. Priority (1-low to 5-high) 8. Requested by: 9. Identified by: 10. Assigned to: 11. Description 12. Impact of no change 13. Estimated impact on cost, schedule, quality and others 14. Supporting documentation Note: Use form 9.9 in Appendix 2

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ Exercise ‎6-1-Simulate Requirement Change

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6.5 Control Schedule Definition Control Schedule is the process of monitoring the status of the project to update project progress and manage changes to the schedule baseline. Source: PMBOK® Guide – Fourth Edition, page 160

Inputs

Tools & Techniques

Outputs

1.Project management plan 2.Project schedule 3.Work performance information 4.Organizational process assets

1. Performance reviews 2. Variance analysis 3. PM software 4. Resource leveling 5. What-if analysis 6. Adjusting leads and lags 7. Schedule compression 8. Scheduling tool

1.Work performance measurements 2.Organizational process assets updates 3.Change requests 4.PM plan updates 5.Project documents updates

Figure ‎6-8- Control Schedule Process

Source: PMBOK® Guide - Fourth Edition, page 160

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Process Interaction 4.3 Direct and Manage Project Execution

4.2 Develop Project Management Plan

Ø Work performance information

Ø Project management plan

Enterprise/ Organization

Ø Project management plan updates

Ø Organizational Process assets Ø Project schedule Ø Schedule baseline

6.5 Develop Schedule

6.6 Control a Schedule

Ø Organizational process assets updates

Involved Documents (IN) ØProject schedule ØSchedule baseline ØWork performance information ØProject management plan ØOrganizational process assets Involved Documents (OUT) ØWork performance measurements ØChange requests ØProject management plan updates ØOrganizational process assets updates ØProject documents updates Source: PMBOK® Guide – Fourth Edition Diagram Developed by Techno Management

Ø Change requests

Ø Project Documents Updates

Ø

Ø Work performance Ø measurements

Project ` Documents

8.3 Perform Quality Control

10.5 Report Performance

4.5 Perform Integrated Change Control

Figure ‎6-9- Control Schedule– Process Interaction

6.5.1 Inputs to Control Schedule 1234-

Project management plan Project schedule Work performance information Organizational process assets

6.5.2 Tools and Techniques for Control Schedule 12345678-

Performance reviews Variance analysis PM software Resource leveling What-if analysis Adjusting leads and lags Schedule compression Scheduling tool

1. Performance reviews Performance Reviews measure, compare, and analyze schedule performance such as actual start and finish dates, percent complete, and remaining duration for work in progress. If earned value management (EVM) is utilized the schedule variance (SV) and schedule performance index (SPI) are used to assess the PMP Exam Preparation Course

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magnitude of schedule variations. An important part of schedule control is to decide if the schedule variation requires corrective action or not. 2. Variance analysis Schedule performance measurements (SV, SPI) are used to assess the magnitude of variation to the original schedule baseline. The total float variance is also an essential planning component to evaluate project time performance. Important aspects schedule control include determining the cause and degree of variance relative to the schedule baseline and deciding whether corrective or preventive action is required. Sample Tracking Chart

Figure ‎6-10- Schedule Valiance on Microsoft Project

6.5.3 Outputs of Control Schedule 1- Work performance measurements - SV - SPI 2- Organizational process assets updates - Causes of variances - Corrective action chosen and the reasons - Other types of lessons learned from project schedule control 3- Change requests 4- PM plan updates 5- Project documents updates

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6.6 Control Costs Definition Control Costs is the process of monitoring the status of the project to update the project budget and managing changes to the cost baseline. Source: PMBOK® Guide – Fourth Edition, page 179

Outputs

Tools & Techniques

Inputs 1.Project management plan 2.Project funding requirements 3.Work performance information 4.Organizational process assets

1. Earned value management 2. Forecasting 3. To-complete performance index (TCPI) 4. Performance reviews 5. Variance analysis 6. Project management software

1. Work Performance measurements 2. Budget forecasts 3. Organizational process assets updates 4. Change requests 5. PM plan updates 6. Project document updates

Figure ‎6-11- Control Costs Process

Source: PMBOK® Guide - Fourth Edition, page 180

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Process Interaction

Figure ‎6-12- Estimate Activity Resources – Process Interaction

Control Costs Objectives Cost control does not necessary mean cost reduction, rather ensuring that expenditures are done as planned. It includes the following:  Influencing the factors that create changes to the authorized cost baseline.  Ensuring that all change requests are acted on in a timely manner  Managing the actual changes when and as they occur  Ensuring that cost expenditures do not exceed the authorized funding, by period and in total for the project  Monitoring cost performance to isolate and understand variances from the approved cost baseline  Monitoring work performance against funds expended.  Preventing unapproved changes from being included in the reported cost or resource usage  Informing appropriate stakeholders of all approved changes and associated cost.  Acting to bring expected cost overruns within acceptable limits.

6.6.1 Inputs to Control Costs 1- Project management plan PMP Exam Preparation Course

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2- Project funding requirements 3- Work performance information 4- Organizational process assets 6.6.2 Tools and Techniques for Control Costs 123456-

Earned value management Forecasting To-complete performance index (TCPI) Performance reviews Variance analysis Project management software

1. Earned Value Management Earned Value management (EVM) in its various forms is a commonly used method of performance measurement. It integrates project scope, cost and schedule measures to help the project management team assess and measure project performance and progress. EVM develops and monitors three key dimensions for each work package and control account:  Planned value  Earned value  Actual cost  Schedule variance  Cost variance  Schedule performance index  Cost performance index Earned Value Components          

Planned Value (PV) – Old name was (BCWS) Earned Value (EV) – Old name was (BCWP) Actual Costs (AC) – Old name was (ACWP) Budget at Completion (BAC) Estimate at Completion (EAC) Management Reserve (MR) Schedule Variance (SV) Cost Variance (CV) Schedule Performance Index (SPI) Cost Performance Index (CPI)

S Curve

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EAC Contract Budget Base NOW

BAC

MR

PV

AC

$$ EV

Time 48

Figure ‎6-13 - S Curve

Earned Value Variances Cost Variance: CV = EV – AC Schedule Variance: SV = EV – PV

EAC Contract Budget Base NOW

BAC

MR

AC

Cost Variance Schedule Variance

$$ PV

EV

Time Figure ‎6-14 - Earned Value Diagram

AC= Actual Cost PV= Planned Value EV= Earned value BAC= Budget at Completion EAC= Estimate at Completion MR= Management Reserve

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Schedule Variance

SV= EV – PV Scheduled

Today $100

Actual

$200

Planned Value (PV) = $ 100 Earned Value (EV) = $ 100 SV = EV - PV SV = 100 – 100 = $ 0 Figure ‎6-15 - Schedule Variance

Cost Variance

CV= EV – AC Today Scheduled

$100

Actual

$200

Actual Cost (AC) = $ 200 Earned Value (EV) = $ 100 CV = EV – AC = 100 – 200 = $ -100 Figure ‎6-16 - Cost Variance

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The 50 - 50 Rule The 50 - 50 rule was established to overcome the problem of making subjective estimates of how far along we are on, say, a task. Upon beginning a task, charge 50% of its BCWS to its account. When the task is finally completed, charge the remaining 50% to its account. Schedule Variance –Incomplete Tasks

SV= EV - PV

Today

Scheduled

$100

Actual

Today:

Earned Value (EV) = $ 50 Planned Value (PV) = $ 100 SV= EV – PV 50-100 = $ -50 Figure ‎6-17 - Schedule Variance, Incomplete Tasks

Cost Variance–Incomplete Tasks

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CV = EV - AC

Today

Scheduled

$100 Expected Cost to Complete is

Actual

$200 $80 Till today

Today:

Earned Value (EV) = $ 50 Actual Cost of (AC) = $ 80 CV = EV – AC 50-80 = $ -30 Figure ‎6-18 - Cost Variance, Incomplete Tasks

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Multiple Tasks - Schedule Variance

SV= EV - PV

Today

$700 $300 $200

EV PV SV

Scheduled Actual

= $ 1,200 = - $ 1,000 = $ 200

Figure ‎6-19 - Schedule Variance, Multiple Tasks

Multiple Tasks - Cost Variance

CV = EV - AC Today

$700 $350

$300

$400 $200 $100 EV AC CV

Scheduled Actual

= ==

$ 1,200 $ 850 $ 350

Figure ‎6-20 - Cost Variance, Multiple Tasks

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The Four Quadrants

Under

Over

+CV +SV

-CV +SV

+CV -SV

-CV -SV

Ahead Schedule Behind

Budget Figure ‎6-21 - The Four Quadrants

Earned Value Equations Term

Equation

Indicates

Schedule Variance

SV = EV - PV

Good if >=0

Cost Variance

CV = EV - AC

Good if >=0

Schedule Performance Index

SPI = EV/PV

Good if >=1

Cost Performance Index

CPI = EV/AC

Good if >=1

Estimate at Completion

EAC = BAC/CPI

Actual cost

Estimate to Complete

ETC = EAC – AC

How much more will be spent

Variance at Completion

VAC = BAC - EAC

Good if >=0

Table ‎6-1 - Earned Value Parameters

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Exercise 6.2 – Schedule & Cost Variance

For the above example, calculate the Schedule & Cost Variances, Assume 50-50 approach

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎6-2-Schedule & Cost Variance

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2. Forecasting Estimate at completion (EAC) that may differ from the budget at completion (BAC) based on the project performance as follows: 

EAC forecast for ETC work performed at the budget rate o EAC=AC+(BAC-EV)



EAC forecast for ETC work performed at the present CPI o EAC=BAC/Cumulative CPI



EAC forecast for ETC work considering both SPI and CPI factors o EAC=AC+[(BAC-EV)/(cumulative CPI X cumulative SPI)]

3. To-Complete Performance Index (TCPI) The “To-Complete performance index” (TCPI) is the calculated projection of cost performance that must be achieved on the remaining work to meet a specified management goal, such as the BAC or the EAC as follows: 

Equation for the TCPI based on the BAC: o TCPI= (BAC-EV) / (BAC-AC)



Equation for the TCPI based on the EAC: o TCPI= (BAC-EV) / (EAC-AC)

4. Performance Reviews Reviewing the project performance is done through the following:  Variance analysis  Trend analysis  Earned value performance 5. Variance Analysis Cost performance measurements (CV, CPI) are used to assess the magnitude of variation to the original cost baseline.

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6. Project Management Software

Figure ‎6-22 - MS Project Showing Earned Value

6.6.3 Outputs of Estimate Control Costs 1. 2. 3. 4. 5. 6.

Work Performance measurements Budget forecasts Organizational process assets updates Change requests PM plan updates Project document updates

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6.7 Perform Quality Control Definition Perform Quality Control is the process of monitoring and recording results of executing the quality activities to assess performance and recommend necessary changes. Source: PMBOK® Guide – Fourth Edition, page 206

Inputs

Tools & Techniques

Outputs

1. Project management plan 2. Quality metrics 3. Quality checklists 4. Work performance measurements 5. Approved change requests 6. Deliverables 7. Organizational process assets

1. Cause and effect diagrams 2. Control charts 3. Flowcharting 4. Histogram 5. Pareto chart 6. Run chart 7. Scatter diagram 8. Statistical sampling 9. Inspection 10.Approved change requests review

1. Quality control measurements 2. Validated changes 3. Validated deliverables 4. Organizational process assets updates 5. Change requests 6. PM plan updates 7. Project document updates

Figure ‎6-23- Estimate Activity Resources Process

Source: PMBOK® Guide - Fourth Edition, page 206

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Process Interaction 4.2 Develop Project Management Plan

4.3 Direct and Manage Project Execution

Ø Quality management plan

Ø Deliverables

4.5 Perform Integrated Change Control

5.5 Control Scope

6.6 Control Schedule

7.3 Control Cost

Enterprise / Organization

Ø Approved change requests Ø Work performance measurements

Ø Organizational process assets

Ø Organizational process assets updates

8.1 Plan Quality

8.3 Perform Quality Control

Ø Quality checklists Ø Quality metrics

Ø Validated changes Ø Project document updates

Project ` Documents Updates

Ø Project management plan updates

4.2 Develop Project Management Plan

8.2 Perform Quality Assurance

Ø Quality control measurements

Ø Change requests

4.5 Perform Integrated Change Control

Ø Validated deliverables

5.4 Verify Scope

Involved Documents (IN) ØQuality checklists ØQuality metrics ØQuality management plan ØDeliverables ØApproved change requests ØWork performance measurements ØOrganizational process assets Involved Documents (OUT) ØQuality control measurements ØValidated deliverables ØChange requests ØProject management plan updates ØValidated changes ØProject documents updates ØOrganizational process assets updates Source: PMBOK® Guide – Fourth Edition Diagram Developed by Techno Management Ø

Figure ‎6-24- Perform Quality Control – Process Interaction

6.7.1 Inputs to Perform Quality Control 1234567-

Project management plan Quality metrics Quality checklists Work performance measurements Approved change requests Deliverables Organizational process assets

6.7.2 Tools and Techniques for Perform Quality Control 1- Cause and effect diagrams 2- Control charts 3- Flowcharting 4- Histogram 5- Pareto chart 6- Run chart 7- Scatter diagram 8- Statistical sampling 9- Inspection 10- Approved change requests review PMP Exam Preparation Course

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1. Cause and Effect Diagrams Also called:  Ishikawa  Fishbone  Root Cause.

Figure ‎6-25- Cause and Effect Diagram

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Exercise 6.3 – Fishbone Diagram A recent report shows that your organization’s customers are moving to another competitor in increasing rate. You have been assigned the task to study and address this problem to achieve two objectives: 1. 2. 3.

Analyze the problem Identify the root cause of the problem Suggest the solution roadmap.

Use the fishbone diagram to help you identify the root cause of the problem

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise ‎6-3 - Fishbone Diagram

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2. Control Charts It is used to determine whether or not a process is stable or has predictable performance. It serves as a data gathering tool to show when a process is subject to special cause variation, which creates an out-of-control condition. Illustrate how a process behaves over time. Below are the main attributes of the control charts:

Figure ‎6-26- Control Chart - Stable Process

Process Stability A process is said to be in control of they:  The measures are within the acceptable limits, between the UCL and LCL  Less than 7 consecutive points exist on one side of the mean

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Figure ‎6-27- Control Chart - Unstable Process

3. Flowcharting Flowcharting helps to analyze how problems occur. A flowchart is a graphical representation of a process. There are many styles, but all process flowcharts show activities, decision points, and the order of processing. Flowcharts show how various elements of a system interrelate.

Figure ‎6-28Flow Chart

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4. Histogram A histogram is a bar chart showing a distribution of variables. Each column represents an attribute or characteristic of a problem/situation. The height of each column represents the relative frequency of the characteristic. This tool helps identify the cause of problems in a process by the shape and width of the distribution.

90 80 70 60 50 40 30 20 10 0

Defects

Unit

Integrate

System

Accept

Figure ‎6-29- Histogram

5. Pareto Chart A Pareto chart is a specific type of histogram. It is ordered by frequency of occurrence, which shows how many defects were generated by type or category of identified cause. The Pareto technique is used primarily to identify and evaluate nonconformities.

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40

100

30

75

Number of Defective 20 Cases

Cumulative Percentage

Percent of 50 Defective Cases

Frequency by Cause

10

25

Car Problems

0

0

Improper Rotation

Noise

Wobble

Pressure

Axle Case Caulking Wobbles

Other

Figure ‎6-30- Pareto Diagram

6. Run Chart A run chart shows the history and pattern of variation. A run chart is a line graph that shows data points plotted in the order in which they occur. Run charts show trends in a process over time, variation over time, or declines or improvements in a process over time. Trend analysis is performed using run charts. Trend analysis involves using mathematical techniques to forecast future outcomes based on historical results.

7. Scatter Diagram A scatter diagram shows the pattern of relationship between two variables. This tool allows the quality team to study and identify the possible relationship between changes observed in two variables. Dependent variables versus independent variables are plotted. The closer the points are to a diagonal line, the more closely they are related.

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Figure ‎6-31- Scattered Diagram

8. Statistical Sampling Statistical sampling involves choosing part of a population of interest for inspection. Appropriate sampling can often reduce the cost of quality control. There is a substantial body of knowledge on statistical sampling; in some application areas, it may be necessary for the project management team to be familiar with a variety of sampling techniques. 9. Inspection An inspection is the examination of a work product to determine whether it conforms to standards. Generally, the results of an inspection include measurements. Inspections can be conducted at any level. Inspections are also used to validate defect repairs. 6.7.3 Outputs of Perform Quality Control 1234567-

Quality control measurements Validated changes Validated deliverables Organizational process assets updates Change requests PM plan updates Project document updates

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Exercise 6.4 – Quality Control Activities For the case study provided by the instructor, identify some activates that you need to perform to control the project quality.

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Exercise 6-4 - Quality Control Activities

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6.8 Report Performance Definition Report Performance is the process of collecting and distributing performance information, including status reports, progress information and forecasts. Source: PMBOK® Guide – Fourth Edition, page 266

Audience Performance reports need to provide information at an appropriate level for each audience. The format may range from a simple status report might show performance information, such as percent compete, or status dashboards for each area. More elaborate reports may include:  Analysis of past performance  Current Status of risks and issues  Work completed during the period  Work to be completed next  Summary of changes approved in the period  Other relevant information which must be reviewed and discussed

Inputs

Tools & Techniques

Outputs

1.PM plan 2.Work performance information 3.Work performance measurements 4.Budget forecasts 5.Organizational process assets

1. Variance analysis 2. Forecasting methods 3. Communication methods 4. Reporting systems

1.Performance reports 2.Organizational process assets updates 3.Change requests

Figure ‎6-32- Report Performance Process

Source: PMBOK® Guide - Fourth Edition, page 152

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Process Interaction

Figure ‎6-33- Report Performance – Process Interaction

6.8.1 Inputs to Report Performance 1. 2. 3. 4. 5.

Project management plan Work performance information Work performance measurements Budget forecasts Organizational process assets

6.8.2 Tools and Techniques for Report Performance 1. 2. 3. 4.

Variance analysis Forecasting methods Communication methods Reporting systems

1. Variance analysis The variance represents the “After-the-fact” look of what caused the difference between the planned and actual. Analyzing the variance involves the following:  Verify the quality of collected information  Determine the variance between the baseline and the actual PMP Exam Preparation Course

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

Determine the impact of the variance

2. Forecasting methods  Time series method  Casual / econometric method  Judgmental method  Simulation  Probabilistic forecasting  Ensemble forecasting 6.8.3 Outputs of Report Performance 1. Performance reports 2. Organizational process assets updates 3. Change requests

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Group Activity – 6.1 Paper Tower In a group activity, use the material provided by the instructor to build a paper tower. The winning team will be the one with the tower with the following specifications: 1- Highest in length 2- Strongest Team members must build the tower without talking; only signs and body language should be used.

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Group Discussion ‎6-1 - Paper Tower

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Group Activity – 6.2 – Telephone Casse A message, that will be provided by the instructors, cross the class, should be passed through the students from to the other in whisper. The objective is to see how much distortion will happen to the message between the starting point to the final point.

Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

Group Discussion ‎6-2 - Telephone Casse

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6.9 Monitor and Control Risks Definition Monitor and Control Risks is the process of:  Implementing risk response plans  Tracking identified risks  Monitoring residual risks  Evaluating risk process effectiveness through the project Source: PMBOK® Guide – Fourth Edition, page 308

Inputs 1.Risk register 2.Project management plan 3.Work performance information 4.Performance reports

Tools & Techniques

Outputs

1. Risk reassessment 2. Risk audits 3. Variance and trend analysis 4. Technical performance measurement 5. Reserve analysis 6. Status meetings

1.Risk register updates 2.Organizational process assets updates 3.Change requests 4.Project management plan updates 5.Project document updates

Figure ‎6-34- Monitor and Control Risks Process

Source: PMBOK® Guide - Fourth Edition, page 308

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Process Interaction

Figure ‎6-35- Monitor and Control Risks – Process Interaction

6.9.1 Inputs to Monitor and Control Risks 1. 2. 3. 4.

Risk register Project management plan Work performance information Performance reports

6.9.2 Tools and Techniques for Monitor and Control Risks 1. 2. 3. 4. 5. 6.

Risk reassessment Risk audits Variance and trend analysis Technical performance measurement Reserve analysis Status meetings

1. Risk Reassessment Risk Monitoring and Control often requires identification of new risks and reassessment of risks. Project risk reassessments should be regularly scheduled. Project Risk Management should be an agenda item at project team status meetings.

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2. Risk Audits Risk audits examine and document the effectiveness of risk responses in dealing with identified risks and their root causes, as well as the effectiveness of the risk management process. 3. Variance And Trend Analysis Trends in the project’s execution should be reviewed using performance data. Earned value analysis and other methods of project variance and trend analysis may be used for monitoring overall project performance. 4. Technical Performance Measurement Technical performance measurement compares technical accomplishments during project execution to the project management plan’s schedule of technical achievement. Deviation, such as demonstrating more or less functionality than planned at a milestone, can help to forecast the degree of success in achieving the project’s scope. 5. Reserve Analysis Throughout execution of the project, some risks may occur, with positive or negative impacts on budget or schedule contingency reserves. Reserve analysis compares the amount of the contingency reserves remaining to the amount of risk remaining at any time in the project, in order to determine if the remaining reserve is adequate. 6. Status Meetings Project risk management can be an agenda item at periodic status meetings. That item may take no time or a long time, depending on the risks that have been identified, their priority, and difficulty of response. Risk management becomes easier the more often it is practiced, and frequent discussions about risk make talking about risks, particularly threats, easier and more accurate. 6.9.3 Outputs of Monitor and Control Risks 1. 2. 3. 4. 5.

Risk register updates Organizational process assets updates Change requests Project management plan updates Project document updates

1. Risk register updates This includes the outcomes of the risk reassessments, risk audits, and periodic risk reviews. These outcomes may include updates to:  Probability  Impact  Priority

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 Response plans  Ownership  Other elements of the risk register. Outcomes can also include closing risks that are no longer applicable. 2. Organizational process assets updates Implementing contingency plans or workarounds frequently results in a requirement to change the project management plan to respond to risks. Requested changes are prepared and submitted to the Integrated Change Control process as an output of the Risk Monitoring and Control process. Approved change requests are issued and become inputs to the Direct and Manage Project Execution process and to the Risk Monitoring and Control process. 3. Change Requests This includes contingency plans and workaround plans. The latter are responses that were not initially planned, but are required to deal with emerging risks that were previously unidentified or accepted passively. Workarounds should be properly documented. Recommended corrective actions are inputs to the Integrated Change Control process 4. Project management plan updates Recommended preventive actions are used to bring the project into compliance with the project management plan. 5. Project document updates The six Project Risk Management processes produce information that can be used for future projects, and should be captured in the organizational process assets. The templates for the risk management plan, including the probability and impact matrix, and risk register, can be updated at project closure. Risks can be documented and the RBS updated. Lessons learned from the project risk management activities can contribute to the lessons learned knowledge database of the organization. Data on the actual costs and durations of project activities can be added to the organization’s databases. The final versions of the risk register and the risk management plan templates, checklists, and RBSs are included.

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6- Monitor and Control Phase

6.10 Administer Procurements Definition Administer Procurements is the process of:  Managing procurement relationships  Monitoring contract performance Source: PMBOK® Guide – Fourth Edition, page 335

During this process, both the buyer and the seller will administer the procurement contract for similar purposes. Each must ensure that both parties meet their contractual obligations and that their own legal rights are protected.

Inputs

Tools & Techniques

Outputs

1. Procurement documents 2. Project management plan 3. Contract 4. Performance reports 5. Approved change requests 6. Work performance information

1. Contract change control system 2. Procurement performance reviews 3. Inspections and audits 4. Performance reporting 5. Payment systems 6. Claims administration 7. Records management system

1.Procurement documentation 2.Organizational process assets updates 3.Change requests 4.Project management plan updates

Figure ‎6-36 -Procurements Process

Source: PMBOK® Guide - Fourth Edition, page 335

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Process Interaction

Figure ‎6-37- Administer Procurements – Process Interaction

6.10.1 Inputs to Administer Procurements 12345-

Procurement documents Project management plan Contract Performance reports Approved change requests Work performance information

6.10.2 Tools and Techniques for Administer Procurements 1234567-

Contract change control system Procurement performance reviews Inspections and audits Performance reporting Payment systems Claims administration Records management system

1. Contract Change Control System A contract change control system defines the process by which the contract can be modified. It includes the paperwork, tracking systems, dispute resolution procedures, and approval levels necessary for authorizing changes. The contract change control system is integrated with the integrated change control system.

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2. Procurement Performance Reviews A procurement performance review is a structured review of the seller’s progress to deliver project scope and quality, within cost and on schedule, as compared to the contract. It can include a review of sellerprepared documentation and buyer inspections, as well as quality audits conducted during seller’s execution of the work. The objective of a performance review is to identify performance successes or failures, progress with respect to the contract statement of work, and contract non-compliance that allows the buyer to quantify the seller’s demonstrated ability or inability to perform work. 3. Inspections And Audi Inspections and audits required by the buyer and supported by the seller as specified in the contract documentation, can be conducted during execution of the project to identify any weaknesses in the seller’s work processes or deliverables. If authorized by contract, some inspection and audit teams can include buyer procurement personnel. 4. Performance Reporting Performance reporting provides management with information about how effectively the seller is achieving the contractual objectives. Contract performance reporting is integrated into performance reporting. 5. Payment Systems Payments to the seller are usually handled by the accounts payable system of the buyer. On larger projects with many or complex procurement requirements, the project can develop its own payment system. In either case, the payment system includes appropriate reviews and approvals by the project management team, and payments are made in accordance with the terms of the contract. 6. Claims Administration Contested changes and constructive changes are those requested changes, where the buyer and seller cannot agree on compensation for the change, or cannot agree that a change has even occurred. These contested changes are variously called claims, disputes, or appeals. 7. Records Management System A records management system is a specific set of processes, related control functions, and automation tools that are consolidated and combined into a whole, as part of the project management information system. 6.10.3 Outputs of Administer Procurements 1. Procurement documentation

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2. Organizational process assets updates 3. Change requests 4. Project management plan updates 1. Procurement Documentation Procurement documentation includes, but is not limited to, the contract, along with all supporting schedules, requested unapproved contract changes, and approved change requests. 2. Organizational Process Assets Updates Below are the main items of the Organizational Process Assets that may be updated during this process:  Correspondence  Payment Schedules and requests  Seller performance evaluation documentation 3. Change Requests Change requests need to be tracked and monitored. Before changes are made, they should be complaints with what has been defined in the procurement management plan. Once they are approved, changes to the baselines should be done. 4. Project Management Plan Updates Procurement management plan: The procurement management plan is updated to reflect any approved change requests that affect procurement management. Contract management plan: Each contract management plan is updated to reflect any approved change requests that affect contract administration.

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7- Close Out Phase

7. Project Closing Phase Although, at this point of time, the project technically is finished, but many loop holes will always remain and need to be closed out. This is the objectives of the following two Close Out process group: 4.6 Close Project or Phase 12.4 Close Procurements

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7- Close Out Phase

7.1 Close Project or Phase Definition Close Project or Phase is the process of finalizing all project activities across all the project management process groups to formally complete the project or phase. Source: PMBOK® Guide – Fourth Edition, page 99

Inputs

Tools & Techniques

Outputs

1.Project management plan 2.Accepted deliverables 3.Organizational process assets

1. Expert judgment

1.Final product, service, or result transition 2.Organizational process assets updates

Figure ‎7-1- Close Project or Phase Process

Source: PMBOK® Guide - Fourth Edition, page 100

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Process Interaction

Figure ‎7-2- Close Project or Phase – Process Interaction

7.1.1 Inputs to Close Project or Phase 1. Project management plan 2. Accepted deliverables 3. Organizational process assets

7.1.2 Tools and Techniques for Close Project or Phase 1. Expert judgment 7.1.3 Outputs of Close Project or Phase 1. Final product, service, or result transition 2. Organizational process assets updates

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Exercise 7.1 – Develop Project Management Process Based on the PMI project management process group, suggest the project management methodology for your organization.

Exercise ‎7-1 - Develop Project Management Process

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7.2 Close Procurement

Definition Close Procurements is the process of completing each project procurement. Source: PMBOK® Guide – Fourth Edition, page 342

Outputs

Tools & Techniques

Inputs 1.Project management plan 2.Procurement documentation

1. Procurement audits 2. Negotiated settlements 3. Records management system

1.Closed Procurements 2.Organizational process assets updates

Figure ‎7-3- 6.5 Close Procurement Process

Source: PMBOK® Guide - Fourth Edition, page 342

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Process Interaction

Figure ‎7-4- Close Procurement Data Flow

7.2.1 Inputs to Close Procurement 1. Project management plan 2. Procurement documentation 7.2.2 Tools and Techniques for Close Procurement 1. Procurement audits 2. Negotiated settlements 3. Records management system 1. Procurement Audits A procurement audit is a structured review of the procurement process from the Plan Purchases and Acquisitions process through Contract Administration. 2. Negotiated Settlements

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Negotiate the final settlement of all outstanding issues. Whenever settlement by negotiations is not reached, other means (Alternative Dispute Resolutions ADR) may be chosen, like:  Mediation  Arbitration

7.2.3 Outputs of Close Procurement 1. Closed Procurements 2. Organizational process assets updates

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Appendix 1 – Case Study

8. Appendix-1 Case Study Your organization is considering the installation of a new generation of General Packet Radio Services (GPRS) system as an upgrade to the existing services. This upgrade is meant to provide better and faster services that will highly position the company against the competition. The engineering department has submitted a project proposal that estimates the investment requirements as follows: an initial investment of $80,000 to be paid up-front, an additional investment of $30,000 to install servers and applications, and another $20,000 to integrate with the existing system. These payments will be for these three milestones over three years from the project start. Delivery and installation is estimated to take one year, and integrating the entire system should require an additional year. Thereafter, the engineers predict that scheduled equipment maintenance and licenses fees will require further expenditures of about $10,000 every second year, beginning in the fourth year. They will not, however, pay these fees in the last year of its life. The proposed schedule is to begin production in the third year and to up-tospeed by the end of that year. Projected revenue is estimated to be $50,000 in the first year of operation and are expected to peak at $120,000 in the second year of operation, and then to 115,000 – 105,000 – 97,000 – 90,000 – 82,000 – 65,000 in the following years. Equipment life is expected to be 10 years from project inception, at which time the proposed system will be obsolete and will have to be replaced. It is estimated that the machinery will have a salvage value of $35,000. Below are some factors that need to be considered: 1. This is a new technology to your organization 2. Extensive training is needed by both the technical team who will install and support the system as well as the customer service team 3. It is not known if the existing billing system supports this new upgrade or not. 4. The competition is about to start the same project soon

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Appendix 2 – Exercise Forms

9. Appendix-2 Exercise Forms 9.1 Project Charter Customer Project Name Project Description

Project Manager: Name and Authority Level

Business Need

Issued By Manager

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9.2 Scope Statement Customer Project Name Project Manager Business Need (project justification) Summary of Product Description Deliverables (list of summarylevel sub products)

Project Risks

Objectives (cost, schedule, quality measures, other)

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9.3 Assumption List No.

Area

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9.4 Work Breakdown Structure No

Outline No.

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WBS Item

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9.5 Activity List, Resource Assignment, Dependency & Time Estimate No

Outline No.

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Resources

Dependency

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Duration

Appendix 2 – Exercise Forms

9.6 Quality Management Plan Quality Approach & Standards

Quality Assurance Process

Quality Control Process

Test & Acceptance Approach

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9.7 Risk Analysis No

Risk

Probability

Impact

Overall Impact

1

2

3

4

5

6

7

8

9

10

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9.8 Risk Analysis No

Risk

Prob.

Impact

Overall Impact

Strategy

Mitigation Plans

Contingency Plans

1

2

3

4

5

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Appendix 2 – Exercise Forms

9.9 Change Control Customer Project Name Project Manager Change Request Date WBS Task Number Change Request ID Priority (1-low to 5-high) Requested by: Identified by: Assigned to: Description

Impact of no change

Estimated impact on cost Estimated impact on Schedule Estimated impact to quality Other impacts

Supporting documentation

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Appendix 3 – List of Figures

10. Appendix-3 List of Figures Figure 2-1- Functional Origination .......................................................................... 15 Figure 2-2- Weak Matrix Origination ...................................................................... 16 Figure 2-3- Strong Matrix Origination ..................................................................... 17 Figure 2-4- Balanced Matrix Origination ................................................................ 17 Figure 2-5- Projectized Origination......................................................................... 18 Figure 2-6- Project Life Cycle .................................................................................. 19 Figure 2-7- Management Project Life Cycle ......................................................... 19 Figure 2-8- Project Process Groups....................................................................... 20 Figure 2-9- Project Process Groups Interaction ................................................... 21 Figure 2-10- Process Group Overlapping ............................................................. 21 Figure 2-11- Initiating Process Group .................................................................... 24 Figure 2-12- Planning Process Group ................................................................... 25 Figure 2-13- Executing Process Group ................................................................. 26 Figure 2-14- Monitor and Control Process Group ................................................ 27 Figure 2-15- Closing Process Group ..................................................................... 28 Figure 2-16- Project Management Process Interaction ...................................... 28 Figure 3-1- Develop Project Charter Process....................................................... 30 Figure 3-2 - Develop Project Charter – Process Interaction .............................. 31 Figure 3-3- Identify Stakeholders Process ............................................................ 35 Figure 3-4 Identify Stakeholders – Process Interaction ...................................... 36 Figure 3-5 Power / Interest Grid.............................................................................. 37 Figure 4-1 - Develop Project Management plan Process ................................... 41 Figure 4-2 Develop Project Management plan – Process Interaction .............. 42 Figure 4-3- Collect Requirements Process ........................................................... 45 Figure 4-4- Define Scope Process ......................................................................... 51 Figure 4-5- Create WBS Process ........................................................................... 58 Figure 4-6- Example of WBS................................................................................... 59 Figure 4-7- Define Activities Process ..................................................................... 63 Figure 4-8- Define Activities – Process Interaction .............................................. 64 Figure 4-9 - Sequence Activities Process ............................................................. 69 Figure 4-10- Sequence Activities – Process Interaction ..................................... 70 Figure 4-11- Precedence Diagram (Activity on the node) .................................. 71 Figure 4-12- Activity on the arrow........................................................................... 71 Figure 4-13- Task Dependencies ........................................................................... 72 Figure 4-14- Lag Time .............................................................................................. 74 Figure 4-15- Lead Time ............................................................................................ 74 Figure 4-16- Estimate Activity Resources Process ............................................. 75 Figure 4-17- Estimate Activity Resources – Process Interaction ...................... 76 Figure 4-18- Estimate Activity Durations Process ............................................... 80 Figure 4-19- Estimate Activity Duration – Process Interaction .......................... 81 Figure 4-20- 6.5 Develop Schedule Process ..................................................... 85 Figure 4-21- Develop Schedule – Process Interaction ....................................... 86 Figure 4-22- Resource Leveling ............................................................................. 91

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Appendix 3 – List of Figures

Figure 4-23- Estimate Costs Process .................................................................... 94 Figure 4-24- Estimate Costs – Process Interaction ............................................. 95 Figure 4-25 - Determine Budget Process ............................................................ 100 Figure 4-26- Determine Budget – Process Interaction ...................................... 101 Figure 4-27- Project Funding Requirements....................................................... 103 Figure 4-28- Plan Quality Process ....................................................................... 104 Figure 4-29- Plan Quality – Process Interaction ................................................ 105 Figure 4-30- Control Chart ..................................................................................... 112 Figure 4-31- Flow Chart ......................................................................................... 113 Figure 4-32- Develop Human Resource Plan Process ..................................... 117 Figure 4-33- Develop Human Resource Plan – Process Interaction ............. 118 Figure 4-34 - Develop Human Resource Plan Process .................................... 119 Figure 4-35- Organization Charts and Position Descriptions ........................... 120 Figure 4-36- Develop Human Resource Plan – Process Interaction ............. 121 Figure 4-37 - Plan Communications Process ..................................................... 123 Figure 4-38 Plan Communications – Process Interaction ................................ 124 Figure 4-39- Sender / Receiver Model................................................................. 126 Figure 4-40- Plan Risk Management Process .................................................... 129 Figure 4-41 - Plan Risk Management – Process Interaction ........................... 130 Figure 4-42 - Identify Risks Process .................................................................... 134 Figure 4-43 Identify Risks – Process Interaction ............................................... 134 Figure 4-44- Perform Qualitative Risk Analysis Process .................................. 139 Figure 4-45- Perform Qualitative Risk Analysis – Process Interaction ........... 140 Figure 4-46- Probability and Impact Matrix ......................................................... 141 Figure 4-47- Qualitatively Sorted Risks ............................................................... 142 Figure 4-48- Perform Quantitative Risk Analysis Process ............................... 144 Figure 4-49- Perform Quantitative Risk Analysis – Process Interaction ........ 145 Figure 4-50- Probability distributions.................................................................... 146 Figure 4-51- Quantitatively Sorted Risks............................................................. 147 Figure 4-52- Plan Risk Responses Process ....................................................... 149 Figure 4-53- Plan Risk Responses – Process Interaction ................................ 150 Figure 4-54- Plan Procurements Process ........................................................... 155 Figure 4-55- Plan Procurements Data Flow ....................................................... 156 Figure 5-1- Direct and Manage Project Execution Process ............................. 168 Figure 5-2- Direct and Manage Project Execution – Process Interaction ...... 169 Figure 5-3 - Perform Quality Assurance Process .............................................. 172 Figure 5-4- Perform Quality Assurance– Process Interaction ......................... 173 Figure 5-5 - Sequence Activities Process ........................................................... 176 Figure 5-6- Acquire Project Team – Process Interaction................................. 177 Figure 5-7- Develop Project Team Process ........................................................ 180 Figure 5-8- Develop Project Team – Process Interaction................................. 181 Figure 5-9- Maslow’s Hierarchy of Needs ........................................................... 185 Figure 5-10- Manage Project Team Process ...................................................... 187 Figure 5-11- Manage Project Team – Process Interaction............................... 188 Figure 5-12- Distribute Information Process ....................................................... 191 Figure 5-13- Distribute Information – Process Interaction ................................ 192 Figure 5-14- Manage Stakeholder Expectations Process ................................ 194 Figure 5-15- Manage Stakeholder Expectations – Process Interaction ......... 195 PMP Exam Preparation Course

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Appendix 3 – List of Figures

Figure 5-16 - Conduct Procurement Process ..................................................... 197 Figure 5-17- Conduct Procurement Data Flow ................................................... 198 Figure 6-1- Monitor and Control Project Work Process .................................... 205 Figure 6-2- Monitor and Control Project Work – Process Interaction ............. 205 Figure 6-3- Perform Integrated Change Control Process ................................. 208 Figure 6-4- Perform Integrated Change Control – Process Interaction .......... 208 Figure 6-5- Verify Scope Process......................................................................... 210 Figure 6-6- Control Scope Process ...................................................................... 212 Figure 6-7- A Typical Change Management Process ....................................... 214 Figure 6-8- Control Schedule Process................................................................. 216 Figure 6-9- Control Schedule– Process Interaction........................................... 217 Figure 6-10- Schedule Valiance on Microsoft Project ....................................... 218 Figure 6-11- Control Costs Process ..................................................................... 219 Figure 6-12- Estimate Activity Resources – Process Interaction .................... 220 Figure 6-13 - S Curve ............................................................................................. 222 Figure 6-14 - Earned Value Diagram ................................................................... 222 Figure 6-15 - Schedule Variance .......................................................................... 223 Figure 6-16 - Cost Variance .................................................................................. 223 Figure 6-17 - Schedule Variance, Incomplete Tasks ........................................ 224 Figure 6-18 - Cost Variance, Incomplete Tasks ................................................. 225 Figure 6-19 - Schedule Variance, Multiple Tasks .............................................. 226 Figure 6-20 - Cost Variance, Multiple Tasks....................................................... 226 Figure 6-21 - The Four Quadrants ....................................................................... 227 Figure 6-22 - MS Project Showing Earned Value .............................................. 230 Figure 6-23- Estimate Activity Resources Process ........................................... 231 Figure 6-24- Perform Quality Control – Process Interaction ............................ 232 Figure 6-25- Cause and Effect Diagram .............................................................. 233 Figure 6-26- Control Chart - Stable Process ...................................................... 235 Figure 6-27- Control Chart - Unstable Process .................................................. 236 Figure 6-28Flow Chart ............................................................................................ 236 Figure 6-29- Histogram .......................................................................................... 237 Figure 6-30- Pareto Diagram ................................................................................. 238 Figure 6-31- Scattered Diagram ........................................................................... 239 Figure 6-32- Report Performance Process ......................................................... 241 Figure 6-33- Report Performance – Process Interaction .................................. 242 Figure 6-34- Monitor and Control Risks Process ............................................... 246 Figure 6-35- Monitor and Control Risks – Process Interaction ........................ 247 Figure 6-36 -Procurements Process .................................................................... 250 Figure 6-37- Administer Procurements – Process Interaction ......................... 251 Figure 7-1- Close Project or Phase Process ...................................................... 255 Figure 7-2- Close Project or Phase – Process Interaction ............................... 256 Figure 7-3- 6.5 Close Procurement Process ...................................................... 258 Figure 7-4- Close Procurement Data Flow ......................................................... 259

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Appendix 4 – List of Tables

11. Appendix-4 List of Tables

Table 2-1- Comparative Overview ............................................................................ 9 Table 2-2- Organizational Influence on Projects .................................................. 18 Table 2-3- Project Management Process Groups and Knowledge Area Mapping ...................................................................................................................... 23 Table 4-1 - Estimate Accuracy ................................................................................ 96 Table 4-2- Statistical Quality Control Terms ....................................................... 108 Table 4-3- Cost Conformance ............................................................................... 110 Table 4-4- Human Resource Management Process Mapping......................... 120 Table 4-5 - Reasons to Make over Buy ............................................................... 157 Table 4-6 - Fixed Price Contract ........................................................................... 160 Table 4-7 - Cost Reimbursable Contract ............................................................. 161 Table 4-8 - Time and Material Contract ............................................................... 162 Table 4-9 - Comparison of Procurement Documents Types ............................ 164 Table 5-1 - Weighting System ............................................................................... 200 Table 6-1 - Earned Value Parameters ................................................................. 227

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Appendix 5 – List of Exercises

12. Appendix-5 List of Exercises Exercise 3-1 - Develop Project Charter ................................................................. 34 Exercise 3-2 - Stakeholder Analysis ...................................................................... 39 Exercise 4-1 - Change Management Process ...................................................... 44 Exercise 4-2-Create Project Charter ...................................................................... 50 Exercise 4-3-Create Scope Statement .................................................................. 56 Exercise 4-4-Create Project Assumptions ............................................................ 57 Exercise 4-5- Create WBS....................................................................................... 62 Exercise 4-6-Create Activity List ............................................................................. 68 Exercise 4-7-Resource Assignment ....................................................................... 79 Exercise 4-8-Task Duration Estimate .................................................................... 84 Exercise 4-9- Develop Schedule ............................................................................ 93 Exercise 4-10 - Cost of Quality ............................................................................. 111 Exercise 4-11 - Create Quality Management Plan ............................................ 116 Exercise 4-12 - Number of Communication Channels ...................................... 128 Exercise 4-13 - Risk List ........................................................................................ 138 Exercise 4-14 - Qualitative Risk Prioritization ..................................................... 143 Exercise 4-15 - Expected Monetary Value .......................................................... 148 Exercise 4-16 - Risk Response............................................................................. 154 Exercise 4-17 - Make or Buy Decision................................................................. 158 Exercise 4-18-Contract Types............................................................................... 166 Exercise 5-1 - Quality Assurance Activities ........................................................ 175 Exercise 5-2 - Evaluation Criteria ......................................................................... 202 Exercise 6-1-Simulate Requirement Change ..................................................... 215 Exercise 6-2-Schedule & Cost Variance ............................................................. 228 Exercise 6-3 - Fishbone Diagram ......................................................................... 234 Exercise 6-4 - Quality Control Activities ......................................................... 240 Exercise 7-1 - Develop Project Management Process ..................................... 257

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Appendix 6 – List of Group Discussions

13. Appendix-6 List of Group Discussions Group Discussion 1-1-Student’s Expectations ....................................................... 6 Group Discussion 2-1- Which one is not a project............................................... 10 Group Discussion 2-2-Project Constraints ............................................................ 13 Group Discussion 4-1-Requirements Gathering Challenges ............................. 49 Group Discussion 4-2- Scope Creep Indicators ................................................... 52 Group Discussion 4-3-Creating Activities .............................................................. 67 Group Discussion 4-4-Creating Activities .............................................................. 73 Group Discussion 4-5-Quality vs. Grade ............................................................. 106 Group Discussion 6-1 - Paper Tower................................................................... 244 Group Discussion 6-2 - Telephone Casse .......................................................... 245

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