Post on 22-Jan-2018
PMP® Exam Preparation Training
PRESENTED BY:
LEARNERSTREET INTERNATIONAL PVT LTD .
Disclaimer
PMP® is a registered trade mark of the PMI.
PMBOK® is a registered trade mark of the PMI.
This course material is based on PMBOK® 5
This course should be used in combination with eLearning
2© LEARNERSTREET INTERNATIONAL PVT LTD.
Introduction
Name
Company
Role
Experience as PM
Objective
Certification
Structured learning
Implementation of learning
3© LEARNERSTREET INTERNATIONAL PVT LTD.
Ground Rules
Mobile Phone - Silent
Active Participation
One discussion at a time
Respect difference in opinion
Breaks
Nature’s Call – As Many
Important Phone Calls – Go out and take
Tea/Coffee – Morning / Evening
Lunch
4© LEARNERSTREET INTERNATIONAL PVT LTD.
Agenda
Introduction & Framework
Project Integration Management
Project Scope Management
Project Time Management
Project Cost Management
Project Quality Management
Project Human Resource Management
Project Communication Management
Project Risk Management
Project Procurement Management
Project Stakeholder Management
5© LEARNERSTREET INTERNATIONAL PVT LTD.
PMP Information
PMI Membership – $139 (Optional)
Exam fee for Member is $405 & Non Member is $555
Eligibility – Graduate with 3 years experience & 4500 hours of Project Management experience or Non-graduates with 5 years experience & 7500 hours of PM experience & 35 Credit Hours Training
PMI Member gets discount in following attempt in certification
PMP Certification is valid for 3 years. Candidate need to earn and report 60 PDU and pay certification renewal fee to renew for next 3 years
Certification Exam - Computer based, Objective type, 200 Question, 175 Carries mark, 25 test questions, Approximately 61% passing marks, 4 hours duration
6© LEARNERSTREET INTERNATIONAL PVT LTD.
IntroductionMODULE - 1
Introduction
Key Learning Objectives
What is a Project?
Key characteristics of Project
Project Management
Project v/s Operations
Programs and Program Management
Portfolios and Portfolio Management
Project Management Office (PMO)
Project Life Cycle
Product Life Cycle
8© LEARNERSTREET INTERNATIONAL PVT LTD.
What is a Project?
“A temporary endeavor undertaken to create a unique product, service, or result”
A project is:
Temporary
Unique
Has a definite start and end date
Progressively elaborated
Project end state in reached when
Its objectives have been achieved
Project is terminated because the objectives are not achieved
Client wishes to cancel the project
Need for project no longer exists.
9© LEARNERSTREET INTERNATIONAL PVT LTD.
What is Project Management?
The application of knowledge, skills, tools, and techniques to projectactivities to meet the project requirements.
Project management is accomplished through the appropriateapplication and integration of the 47 logically grouped projectmanagement processes from 10 knowledge area under 5 processgroups
Project Management includes
Identifying Requirements
Address needs, concerns and expectations of Stakeholders
Setup, Maintain and carry out Communication among Stakeholders
Manage Stakeholders to meet project requirements and create project deliverables.
Balance the competing project constraints.
10© LEARNERSTREET INTERNATIONAL PVT LTD.
Project v/s Operations
Project The purpose of a project is to attain
its objective and then terminate
Project is catalyst for change
Project concludes when its specific objectives have been attained
Does have a definitive start and end date
Examples:
Developing a new product or service
Discovery of a new drug
Operations The objective of an ongoing
operation is to sustain the business
Operation is maintaining status quo
Operations adopt a new set of objectives and the work continues
Does not have a end date
Examples:
Production support services
Claims processing
Monthly Pay-roll
Verification of new applications
11© LEARNERSTREET INTERNATIONAL PVT LTD.
Program Management
A program is defined as a group of related projects, subprograms, and program activities managed in a coordinated way to obtain benefits not available from managing them individually.
Program management focuses on the project interdependencies and helps to determine the optimal approach for managing them.
Resolving resource constraints and/or conflicts that affect multiple projects within the program,
Aligning organizational/strategic direction that affects project and program goals and objectives, and
Resolving issues and change management within a shared governance structure.
An example of a program is a new communications satellite system with projects for design of the satellite and the ground stations, the construction of each, the integration of the system, and the launch of the satellite.
12© LEARNERSTREET INTERNATIONAL PVT LTD.
Portfolio Management
A portfolio refers to projects, programs, sub portfolios, andoperations managed as a group to achieve strategic objectives.
The projects or programs of the portfolio may not necessarily beinterdependent or directly related.
Portfolio management is driven by business imperatives, market demands and need to maximize value of the organization
Key advantages:
Minimize redundancy, optimally allocated resources, close monitoring etc.
13© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Management Office (PMO)
A project management office (PMO) is a management structure thatstandardizes the project-related governance processes and facilitates thesharing of resources, methodologies, tools, and techniques.
Responsibilities:
Managing shared resources across all projects administered by thePMO;
Identifying and developing project management methodology, bestpractices, and standards;
Coaching, mentoring, training, and oversight;
Monitoring compliance with project management standards, policies,procedures, and templates by means of project audits;
Developing and managing project policies, procedures, templates, andother shared documentation (organizational process assets); and
Coordinating communication across projects.
14© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Life Cycle v/s Product Life Cycle
A project life cycle is the series of phases that a project passesthrough from its initiation to its closure.
The phases can be broken down by functional or partial objectives,intermediate results or deliverables, specific milestones within theoverall scope of work, or financial availability.
A product life cycle is collection of generally sequential, non-overlapping product phases whose name and number aredetermined by the manufacturing and control needs of theorganization.
The last product life cycle phase for a product is generally theproduct’s retirement. Generally, a project life cycle is containedwithin one or more product life cycles.
15© LEARNERSTREET INTERNATIONAL PVT LTD.
16© LEARNERSTREET INTERNATIONAL PVT LTD.
1. You are involved in the activity of designing software that will be used to link the GPS of the latest model of a car that is under prototype to its internal navigation systems. This would be a
A. Program
B. Project
C. Production
D. Portfolio
2. You were in-charge of creating prototype of a car and the prototype was accepted by the management. Now the car is getting manufactured. This state can be
A. Program
B. Project
C. Operations
D. Portfolio
3. How is a project lifecycle different from a product lifecycle ?
A. A project lifecycle has no methodology
B. A project lifecycle depends on the control needs of the performing organization
C. A project lifecycle can contain many product lifecycles
D. A project lifecycle only includes specific project management activities
17© LEARNERSTREET INTERNATIONAL PVT LTD.
4. Which of these is not an attribute of a project?
A. Start Date
B. Is a continuous process
C. Produces something unique
D. Temporary
5. Which of the following is not a common attribute between a project and an operation?
A. Unique Outcome
B. Performed by people
C. Planned
D. Executed and controlled
6. Program Management in the context of project management refers to managing
A. A group of projects that are interlinked to enable better control
B. A group of programs developed during the development phase – being managed as a group
C. A project - Another term for Project Management
D. A group of projects being managed within an organization
Organizational Influences and Project Life Cycle
MODULE-2
Agenda
To understand the organization culture, communication and structure.
To learn the enterprise environment factors and organizational process assets.
To understand enterprise environmental factors.
To be able to identify stakeholders and setup project governance.
To understand project organization structure.
To understand project lifecycle and project phases.
19© LEARNERSTREET INTERNATIONAL PVT LTD.
Organization Culture
Organization culture and style affect how it conduct projects. Organizational culture is shaped by the common experience of members of the organization.
Shared vision, mission and value
Policies, Process, Procedure, Methods etc.
Motivation & reward system
Risk tolerance
View of leadership, hierarchy, and authority relationship
Code of conduct, work ethics, and work hours
Operating environments
20© LEARNERSTREET INTERNATIONAL PVT LTD.
Enterprise Environment Factors
Enterprise environment factors refer to conditions, not under the control of the project team, that influence, constraint, or direct the project.
Organizational culture, structure and governance
Geographic distribution of facilities and resources
Government or industry standards and regulations
Company work authorization system
Stakeholder risk tolerance
Political climate
Organizations communication channel
Commercial databases
Project management information system
21© LEARNERSTREET INTERNATIONAL PVT LTD.
Organization Process AssetsOrganization process assets are the plans, process, policies, procedures, andknowledge bases specific to and used by the performing organization.
Processes and Procedures
Tailoring process to fit specific requirement
Policies – human resource, health and safety, ethics, process audits, checklistsetc.
Templates – risk register, contract template, work breakdown structure andproject schedule network diagram
Procedure – Change control procedure, time reporting procedure, expenditurereviewing procedure, issue and defect management procedure.
Corporate Knowledge Base
Configuration management knowledge base
Financial, commercial database and historical lesson learned knowledge base.
Defect management database, risk register, and project file from previousprojects.
22© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Stakeholder
A stakeholder is an individual, group or organization who may be affected by the decision, activity, or outcome of a project.
Example : Customer, Supplier, Agencies, Employee etc.
Positive Stakeholder
Supporter of project
Example - Sponsor
Negative Stakeholder
Resister of project
Example – Person loosing job
Neutral Stakeholder
Neither supporter nor resister
Example – Daily wage labour on the project
23© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Governance
Project governance framework provides the project manager and team withstructure, processes, decision-making models and tools for managing theproject, while supporting and controlling the project for successful delivery.
Making project decision
Defines roles, responsibilities, and accountabilities
Removing roadblocks on the way of project
Project success and deliverable acceptance criteria
Escalation and resolution process
Review and approval of changes to budget, scope, schedule and quality
Process for stage gate or phase review
24© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Constraint
Projects are executed in constraints. PMBOK 5’th edition recognize many constraints:
Scope – What is the project trying to accomplish?
Time – How long should it take to complete?
Cost - What should it cost?
Quality - What are the quality specification to be delivered?
Resource - What man, material and equipment required?
Risk – What are the potential risks?
It is the project manager’s job to balance these often competing constraints
25© LEARNERSTREET INTERNATIONAL PVT LTD.
Organization Structure
26© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Lifecycle
A Project bicycle is the series of phases that a project passes through from its initiation to its closure.
1. Initiation
2. Planning
3. Execution
4. Monitoring & Control
5. Closure
27© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Phases
A Project may be divided into any number of phases for ease of management, planning, and control.
Generally each phase produce major deliverable
Each phase end has review which is called: Phase exit, Phase gate, Kill point, decision gate and stage gate etc.
Phases can be sequential or over lapping
Phases can be iterative
Adaptive lifecycle are intended to respond to high levels of changes and ongoing stakeholder involvement.
28© LEARNERSTREET INTERNATIONAL PVT LTD.
Cost of Change & Risk
Risk and uncertainty are very high at beginning. As projectprogress those uncertainties goes away when risk do not occur.
Cost of change becomes higher as project progress as at the laterstage changes will cost more money and time.
29© LEARNERSTREET INTERNATIONAL PVT LTD.
Management by Objective (MBO)
Management philosophy stating that organization should be managed by objectives.
Management by objectives are:
Establish SMART objectives
Regularly review Actual v/s Target
Define & implement corrective action
30© LEARNERSTREET INTERNATIONAL PVT LTD.
Summary
To understand the organization culture, communication and structure
To learn the enterprise environment factors and organizational process assets
To understand enterprise environmental factors
To be able to identify stakeholders and setup project governance
To understand project organization structure
To understand project lifecycle and project phases
31© LEARNERSTREET INTERNATIONAL PVT LTD.
32© LEARNERSTREET INTERNATIONAL PVT LTD.
1. You have requested that several of the stakeholders participate in the different phases of the project. Why is this important?A. It prevents scope creepB. It allows for scope constraintsC. It improves the probability of satisfying the customer requirementsD. It allows for effective communications
2. Of the following which of them is not a key stakeholder for an internal project A. External CustomerB. End userC. DeveloperD. Management
3.Who does the project team report to in a projectized organization? A. No one B. Project manager C. Functional manager D. CEO
33© LEARNERSTREET INTERNATIONAL PVT LTD.
4. A key to successful Management by Objectives (MBO) isA. Insuring that employees have clearly defined objectivesB. Permitting employees to set their own objectivesC. Involving employees in decision meetingsD. Allowing employees to perform their own evaluations
5. Your company is constructing a dam and your project (which is being performed under a contract) mandates that you should be paying compensation to any person displaced because of the project. What kind of constraint is this?A. SocialB. LegalC. EnvironmentalD. Humanity
6. In the contract for your project, the time schedules and deliverables in each phase are clearly specified. From a project perspective, this is a(an) :A. RiskB. AssumptionC. ConstraintD. Issue
Project Management ProcessesMODULE-3
Agenda
Project Management Process Groups
Initiating
Planning
Executing
Monitoring and controlling
Closing
Process Group Interactions
Process Groups and Project Phases
35© LEARNERSTREET INTERNATIONAL PVT LTD.
Project management process groups
Project management processes have been bundled into 5 groups and these groups are called project management process groups
Initiating
Planning
Executing
Monitoring and controlling
Closing
These process groups are common to most of the projects across variousdomains – construction, technology, IT, life sciences etc.
Process groups are different than the Phases
Process groups may overlap / repeat based on the activities in the project
36© LEARNERSTREET INTERNATIONAL PVT LTD.
Initiating Process Group
Processes within this group launches the project or a project phase
Key activities associated with Initiation includes:
Creating a feasibility study
Identifying business needs
Creating a Product description
Creating a Project Charter
Selecting a Project Manager
Formal authorization to start project/phase
Carried out of each phase in multi phase project
Articulate the high-level project scope, deliverables, duration, cost, assumption and constrain etc.
37© LEARNERSTREET INTERNATIONAL PVT LTD.
Planning Process Group
The Planning process group collects information from variousconstituent processes up to the degree of completion andconfidence
PM should include stakeholders in the planning process to:
Get buy-in to the project deliverables
Provide shared ownership of the project
Ensure deliverables are in alignment with what the stakeholdersand the project team expect to receive
Project Management plan integrates scope, cost, schedule, risk etc.to produce a realistic plan which is acceptable to the stakeholders
Perform the ongoing iterative planning to progressively detail theproject management plan (Rolling wave planning)
38© LEARNERSTREET INTERNATIONAL PVT LTD.
Executing Process Group
Executing process group consists of processes to complete the workin each of the phases
Helps the PM coordinate and direct project resources to meet theobjectives of the project plan
Key activities would include:
Direct and manage project execution
Acquire project team
Perform quality assurance
Develop project team
Vendor solicitation and selection
Dispersing project information
39© LEARNERSTREET INTERNATIONAL PVT LTD.
Monitoring and Controlling Process Group
Controlling processes
Ensure that the project goes according to plan
What actions to implement when project is not going as per the plan
Variances from the project baselines are identified and necessary correctivemeasures are undertaken
Key activities would include:
Ensuring Quality Control
Providing scope verification
Implementing change control
Configuration management
Controlling key parameters like cost, schedule and scope
Monitoring risk response
Recommend preventive/corrective actions
40© LEARNERSTREET INTERNATIONAL PVT LTD.
Closing Process Group
This process group includes all processes to close all activities in a project or project phase
Closing activities to be performed even for the aborted / terminated projects
Key activities would include:
Auditing procurement documents
Scope verification
Closing vendor contracts
Closing administrative duties
Submitting final reports
Archiving project records
Celebrating!!!
41© LEARNERSTREET INTERNATIONAL PVT LTD.
Summary
Project Management Process Groups
Initiating
Planning
Executing
Monitoring and controlling
Closing
Process Group Interactions
Process Groups and Project Phases
42© LEARNERSTREET INTERNATIONAL PVT LTD.
43© LEARNERSTREET INTERNATIONAL PVT LTD.
1. Which of the project management processes is progressively elaborated?A. PlanningB. CommunicatingC. Contract AdministrationD. Closing
2. What is a project process? A. The creation of a product or service B. The progressive elaboration resulting in a productC. A series of actions that bring about a resultD. series of actions that allow the project to move from concept to deliverable
3. You are a project manager working on gathering requirements and establishing estimates for theproject. Which process group are you in?A. Monitoring and ControllingB. InitiatingC. ExecutingD. Planning
44© LEARNERSTREET INTERNATIONAL PVT LTD.
4. What are the five project management process groups, in order?A. Initiating, Planning, Monitoring and Controlling, Executing, and ClosingB. Initiating, Planning, Executing, Monitoring and Controlling, and ClosingC. Initiating, Monitoring and Controlling, Planning, Executing, and ClosingD. Initiating, Executing, Planning, Monitoring and Controlling, and Closing
5.Which process group is responsible for authorizes the project in organization?A. InitiatingB. ControllingC. ExecutingD. Planning
6.Which project management process groups takes maximum time and resource in a project?A. planningB. initiationC. executionD. closing
Project Integration Management
MODULE-4
Agenda
Integration management process
Develop Project Charter
Develop Project Management Plan
Direct and Manager Project Work
Monitor and Control Project Work
Perform integrated change control
Close Project or Phase
Best Practice
46© LEARNERSTREET INTERNATIONAL PVT LTD.
Integration Management Process
Integration Management includes processes and activities necessary to Identify, define, combine and coordinate the various processes and project management activities within the Project Management Process Groups.
47© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Project Charter
Develop project charter is the process of developing a documentthat formally authorizes a project or a phase and documentinginitial requirement that satisfy the stakeholder’s need andexpectations.
48© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project statement of work Expert Judgment Project charter
Business case Facilitation techniques
Agreements
Enterprise environment factors
Organization process assets
Develop Project Charter - Input
Project Statement of work – Is a narrative description of product, services, or results to be delivered by a project.
Internal Project – Project initiator or sponsor provides SOW
External Project – Customer provides (Sometime part of bid)
Business Case
Helps in providing necessary information and identifying whether or not the project is worth the required investment / effort
Derived from market demand, business / customer or legal requirement, technological progress , social needs etc.
Agreement
Agreements are used to define initial intentions for a project. Agreement may take the form of contracts, MOUs, SLAs, LOA, LOI, verbal agreement, email or written agreement.
49© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Project Charter – T&T
Expert Judgement – Judgment provided based upon expertise in an application area, knowledge area, discipline, industry etc. as appropriate for the activity being performed. Expert judgment can be provided by: Other units within the organization,
Consultants,
Stakeholders, including customers or sponsors,
Professional and technical associations,
Industry groups,
Subject matter experts (SME), and
Project management office (PMO).
50© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Project Charter – T&T
Facilitation Technique:
Facilitation techniques have broad application within project management processes and guide the development of the project charter. Brainstorming, conflict resolution, problem solving, and meeting management are examples of key techniques used by facilitators to help teams and individuals accomplish project activities.
51© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Project Charter - Output
Project Charter - The project charter is the document issued by the projectinitiator or sponsor that formally authorizes the existence of a project andprovides the project manager with the authority to apply organizationalresources to project activities.
Project purpose or justification,
Measurable project objectives and related success criteria,
High-level requirements, Assumptions and constraints,
High-level project description and boundaries,
High-level risks, Summary milestone schedule, Summary budget,
Stakeholder list,
Assigned project manager, responsibility, and authority level, and
Name and authority of the sponsor or other person(s) authorizing the project charter.
52© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Selection Methodologies
Non-Numerical Model Sacred Cow - project is suggested by a senior and powerful
official in the organization.
Operating Necessity - the project is required to keep thesystem running.
Competitive Necessity - project is necessary to sustain acompetitive position.
Comparative Benefit Model - several projects are consideredand the one with the most benefit to the firm is selected.
53© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Selection Methodologies
Numerical Model
Cost Benefit Ratio - Is a systematic process for calculating and comparing benefits and costs of a project.
Net Present Value – It compares the present value of money today to the present value of money in the future, taking inflation and returns into account.
54© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Selection Methodologies Numerical Model
Payback Period - The Payback period is the length of time that it
takes the company to recover the initial costs.
Initial investment = $5000, Cash inflows- 1’st Year $3000, 2’nd Year
$2000. Payback period is 2 years, however $5000 in 2’nd year is not
worth $5000 today.
Internal Rate of Return - Discount rate where the present value of
all cash inflows exactly equals the initial investment. Highest IRR
project should be sleeted.
55© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Selection Methodologies
Example:
56© LEARNERSTREET INTERNATIONAL PVT LTD.
Method Project A Project B Selection
NPV $85,000 $45,000 A
IRR 13% 17% B
Payback Period 20 Months 30 Months A
Cost Benefit Ratio 2.5 1.5 A
Develop Project Management Plan
Develop Project Management Plan is the process of defining,preparing, and coordinating all subsidiary plans and integrating theminto a comprehensive project management plan. The key benefit ofthis process is a central document that defines the basis of all projectwork.
57© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project charter Expert judgment Project management plan
Outputs from otherprocesses
Facilitation techniques
Enterprise environmentalfactors
Organizational processassets
Develop Project Management Plan - Output
The project management plan is the document that describes how theproject will be executed, monitored, and controlled. It integrates andconsolidates all of the subsidiary plans and baselines from the planningprocesses:
58© LEARNERSTREET INTERNATIONAL PVT LTD.
Scope baseline
Schedule baseline
Cost baseline
Scope management plan
Requirements management plan
Schedule management plan
Cost management plan
Quality management plan
Process improvement plan
Human resource management plan
Communications management plan
Risk management plan
Procurement management plan
Stakeholder management plan
Direct and Manage Project Work
Direct and Manage Project Work is the process of leading and performingthe work defined in the project management plan and implementingapproved changes to achieve the project’s objectives.
60© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Expert judgment Deliverables
Approved changerequests
Project managementinformation system
Work performance data
Enterprise environmentalfactors
Meetings Change requests
Organizational processassets
Project management planupdates
Project documentsupdates
Direct and Manage Project Work - Input
Approved Change Requests - Approved change requests are an outputof the Perform Integrated Change Control process, and include thoserequests reviewed and approved for implementation by the changecontrol board (CCB). The approved change request may be a correctiveaction, a preventative action, or a defect repair.
Corrective action—An intentional activity that realigns theperformance of the project work with the project management plan
Preventive action—An intentional activity that ensures the futureperformance of the project work is aligned with the projectmanagement plan
Defect repair—An intentional activity to modify a nonconformingproduct or product component.
61© LEARNERSTREET INTERNATIONAL PVT LTD.
Direct and Manage Project Work – T&T
Project Management Information System - An information systemconsisting of the tools and techniques used to gather, integrate,and disseminate the output of project management process. It isused to support all aspect of project from initiating throughclosing, and can include both manual and automated system.
Meeting - Meetings are used to discuss and address specifictopics of the project when directing and managing project work.Meetings tend to be one of three types: Information exchange;
Brainstorming and option evaluation;
Decision making.
62© LEARNERSTREET INTERNATIONAL PVT LTD.
Direct and Manage Project Work – Output
Deliverables - A deliverable is any unique and verifiable product, resultor capability to perform a service that is required to be produced tocomplete a process, phase, or project. Deliverables are typicallytangible components completed to meet the project objectives and caninclude elements of the project management plan.
Work Performance Data - Work performance data are the rawobservations and measurements identified during activities beingperformed to carry out the project work. Work completed
Start and finish dates of schedule activities
Number of change requests
Number of defects
Actual costs and actual durations
63© LEARNERSTREET INTERNATIONAL PVT LTD.
Monitor and Control Project Work
Monitor and Control Project Work is the process of tracking, reviewing, andreporting the progress to meet the performance objectives defined in the projectmanagement plan. The key benefit of this process is that it allows stakeholders tounderstand the current state of the project, the steps taken, and budget,schedule, and scope forecasts.
64© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Expert judgment Change requests
Schedule forecasts Analytical techniques Work performance reports
Cost forecasts Project management information system
Project management plan updates
Validated changes Meetings Project documents updates
Work performance information
Enterprise environmental factors
Organizational process assets
Monitor and Control Project Work - Input
Schedule & Cost Forecasts - The forecasts are derived from progress against the baseline. They are presented as: Schedule - SV, SPI
Cost – CV, CPI
Validated Changes - Approved changes that result from thePerform Integrated Change Control process require validation toensure that the change was appropriately implemented.
65© LEARNERSTREET INTERNATIONAL PVT LTD.
Monitor and Control Project Work – T&T
Analytical Techniques - Analytical techniques are applied inproject management to forecast potential outcomes based onpossible variations of project or environmental variables andtheir relationships with other variables.
66© LEARNERSTREET INTERNATIONAL PVT LTD.
Monitor and Control Project Work – Output
Change Requests - As a result of comparing planned results toactual results, change requests may be issued to expand, adjust,or reduce project scope, product scope, or quality requirementsand schedule or cost baselines.
67© LEARNERSTREET INTERNATIONAL PVT LTD.
Perform Integrated Change Control
Perform Integrated Change Control is the process of reviewing all changerequests; approving changes and managing changes to deliverables,organizational process assets, project documents, and the project managementplan; and communicating their disposition.
68© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Expert judgment Approved changerequests
Work performance reports Meetings Change log
Change requests Change control tools Project management planupdates
Enterprise environmentalfactors
Project documents updates
Organizational processassets
Perform Integrated Change Control – T&T
Change Control Tools
In order to facilitate configuration and change management,manual or automated tools may be used. Tool selection shouldbe based on the needs of the project stakeholders includingorganizational and environmental considerations and/orconstraints.
69© LEARNERSTREET INTERNATIONAL PVT LTD.
Perform Integrated Change Control – Output
Change LogA change log is used to document changes that occur during aproject. These changes and their impact to the project in terms oftime, cost, and risk, are communicated to the appropriatestakeholders. Rejected change requests are also captured in thechange log.
70© LEARNERSTREET INTERNATIONAL PVT LTD.
Close Project or Phase
Close Project or Phase is the process of finalizing all activities across all of theProject Management Process Groups to formally complete the project orphase. The key benefit of this process is that it provides lessons learned, theformal ending of project work, and the release of organization resources topursue new endeavours.
71© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Expert judgment Final product, service, orresult transition
Accepted deliverables Analytical techniques Organizational processassets updates
Organizational processassets
Meetings
Close Project or Phase - Input
Accepted Deliverables Accepted deliverables may include approved product specifications,
delivery receipts, and work performance documents. Partial or interim deliverables may also be included for phased or cancelled projects.
72© LEARNERSTREET INTERNATIONAL PVT LTD.
Close Project or Phase - Output
Final Product, Service, or Result Transition
This output refers to the transition of the final product, service, or result that the project was authorized to produce (or in the case of phase closure, the intermediate product, service, or result of that phase).
73© LEARNERSTREET INTERNATIONAL PVT LTD.
Summary
Integration management process
Develop Project Charter
Develop Project Management Plan
Direct and Manager Project Work
Monitor and Control Project Work
Perform integrated change control
Close Project or Phase
Best Practice
74© LEARNERSTREET INTERNATIONAL PVT LTD.
75© LEARNERSTREET INTERNATIONAL PVT LTD.
1. With respect to Project Integration management, all of the following are true except:
A. Integration is required as processes overlap and interact with each other
B. A project manager needs to constantly make trade-off between competing objectives
C. A change due to one process may require to revisit one or more of other processes
D. PM may choose not to address certain project management processes if he feels its not
applicable to his project.
2. A project manager creates a project charter for her project. Which of the following best
describes how the charter will help the project manager
A. It will provide the project manager authority
B. It will clearly describe what needs to be done for the project
C. It will have the names of all team members
D. It will show the profitability of the project
3. During Direct and Manage Project Execution you would do all of the following except:
A. Use the WBS
B. Identify and implement changes
C. Implement approved process improvement activities
D. Compare actual project performance against the project management plan
76© LEARNERSTREET INTERNATIONAL PVT LTD.
4. A project management plan is best described by which of the following:A. Communication, Risk, Resource, Quality and other management plans B. Scope of the projectC. Detailed schedule of all deliverablesD. Name of the team members with their responsibilities
5. A project is complete when:A. The project scope is completed and administrative closure doneB. The customer gives a formal acceptance and all closure conditions as per the contract have been met.C. Customer is happy and has made the final paymentD. Documentation of lessons learnt is completed
6. The Project Integration Management Knowledge Area consists of some of the following processes. Which of these belong to Project Integration Management?A. Scope Definition, Close Project, and Integrated Change ControlB. Develop Project Management Plan, Direct and Manage Project Execution, and Integrated Change ControlC. Preliminary Scope Statement, Direct and Manage Project Execution, and Manage StakeholdersD. Preliminary Scope Statement, Scope Planning, and Close Project
Project Scope ManagementMODULE-5
Agenda
Project Scope Management
Product Scope & Project Scope
Plan Scope Management
Collect Requirements
Define Scope
Create WBS
Validate Scope
Control Scope
78© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Scope Management
Includes the processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully. Managing the project scope is primarily concerned with defining and controlling what is and is not included in the project.
Product Scope :The features and functions that characterize a product, Service orResult. Completion of the product scope is measured against theproduct requirements.
Project Scope :The work that needs to be accomplished to deliver a product,service or result with the specified features and functions.Completion of the project scope is measured against the ProjectManagement Plan.
79© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Scope Management
The process of creating a scope management plan that documentshow the project scope will be defined, validated, and controlled. Thekey benefit of this process is that it provides guidance and direction onhow scope will be managed throughout the project. This plan helpsreduce the risk of project scope creep.
80© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Expert judgment Scope management plan
Project charter Meetings Requirementsmanagement plan
Enterprise environmentalfactors
Organizational processassets
Plan Scope Management - Output
Scope Management Plan - The scope management plan is acomponent of the project or program management plan thatdescribes how the scope will be defined, developed, monitored,controlled, and verified. The scope management plan is a majorinput into the Develop Project Management Plan process, and theother scope management processes.
Requirements Management Plan - The requirements managementplan is a component of the project management plan that describeshow requirements will be analysed, documented, and managed.
© LEARNERSTREET INTERNATIONAL PVT LTD. 81
Collect Requirements
Collect Requirements is the process of determining, documenting, and managing stakeholder needs and requirements to meet project objectives. The key benefit of this process is that it provides the basis for defining and managing the project scope including product scope.
82© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Scope management plan Interviews Requirements documentation
Requirements management plan Focus groups Requirements traceability matrix
Stakeholder management plan Facilitated workshops
Project charter Group creativity techniques
Stakeholder register Group decision-making techniques
Questionnaires and surveys
Observations
Prototypes
Benchmarking
Context diagrams
Document analysis
Collect Requirements - Input
Stakeholder Register - The stakeholder register is used to identifystakeholders who can provide information on the requirements. Thestakeholder register also captures major requirements and mainexpectations stakeholders may have for the project.
83© LEARNERSTREET INTERNATIONAL PVT LTD.
Name Designation Department Role in Project Requirement Type of Communication
Collect Requirements – T&T
Interviews:• Formal or Informal Approach
• Prepared and Spontaneous Questions
• Record the Responses
• One-on-One, Multiple Interviewers or Interviewees
Focus Groups• Bring Prequalified Stakeholders and SME’s together• Trained Moderator• More Conversational
84© LEARNERSTREET INTERNATIONAL PVT LTD.
Collect Requirements – T&T
Facilitated Workshops• Bring Key Cross Functional Stakeholders together• Quickly define the cross functional requirements• Quickly reconcile the stakeholder differences• Increased stakeholders consensus
Delphi Technique:• A selected group of experts answer questionnaires and provides
feedback regarding the response from each round of requirement gathering.
• The responses are only available to the facilitator to maintain anonymity
• After few rounds of feedback requirements are firmed.
85© LEARNERSTREET INTERNATIONAL PVT LTD.
Collect Requirements – T&T
Group Creativity Techniques - Several group activities can be organized to identify project and product requirements.
Brainstorming - Used to generate and collect multiple ideas related to project and product requirements. Although brainstorming by itself does not include voting or prioritization, it is often used with other group creativity techniques that do.
Nominal group technique - Enhances brainstorming with a voting process used to rank the most useful ideas for further brainstorming or for prioritization.
Idea/mind mapping - Ideas created through individual brainstorming sessions are consolidated into a single map to reflect commonality and differences in understanding, and generate new ideas.
86© LEARNERSTREET INTERNATIONAL PVT LTD.
Collect Requirements – T&T
Group Creativity Techniques
Affinity diagram - Allows large numbers of ideas to be classified into groups for review and analysis.
Multicriteria decision analysis - Utilizes a decision matrix to provide a systematic analytical approach for establishing criteria, such as risk levels, uncertainty, and valuation, to evaluate and rank many ideas.
Group Decision-Making Techniques
Unanimity - Everyone agrees on a single course of action
Majority - More then half agree on a single course of action
Plurality - Largest block in a group decides, even if a majority is not achieved
Dictatorship - One individual makes the decision for the group
87© LEARNERSTREET INTERNATIONAL PVT LTD.
Collect Requirements – T&T
Questionnaires and Surveys - To quickly accumulate theinformation from wide number of respondents. Used when there isBroad Audience, Quick Turnaround is needed, Statistical Analysis isappropriate
Observations - Used when the stakeholder has the difficulty orreluctant to articulate the requirements.
Example - Job Shadowing, Participant Observer
Prototype - Used to get the early feedback on requirements byproviding a working model of the expected product
Benchmarking – Comparing actual practice to those of comparable organizations to identify best practices
88© LEARNERSTREET INTERNATIONAL PVT LTD.
Collect Requirements – T&T
Context Diagrams – The context diagram is an example of a scopemodel. Context diagrams visually depict the product scope by showinga business system (process, equipment, computer system, etc.), andhow people and other systems (actors) interact with it.
Document Analysis - Document analysis is used to elicit requirementsby analyzing existing documentation and identifying informationrelevant to the requirements. There are a wide range of documentsthat may be analyzed to help elicit relevant requirements.
Examples: Business Plans, agreements, requests for proposal, current process flows, logical data models, business rules repositories, application software documentation, business process or interface documentation, use cases etc.
89© LEARNERSTREET INTERNATIONAL PVT LTD.
Collect Requirements: Outputs
Requirements Documentation
Requirements documentation describes how individual requirements meet the business need for the project. Requirements may start out at a high level and become progressively more detailed as more about the requirements is known.
Before being baselined, requirements need to be unambiguous (measurable and testable), traceable, complete, consistent, and acceptable to key stakeholders.
Requirements Traceability Matrix
The requirements traceability matrix is a grid that links product requirements from their origin to the deliverables that satisfy them.
It provides a means to track requirements throughout the project life cycle, helping to ensure that requirements approved in the requirements documentation are delivered at the end of the project.
90© LEARNERSTREET INTERNATIONAL PVT LTD.
Define Scope
Define Scope is the process of developing a detailed description of theproject and product. The key benefit of this process is that it describesthe project, service, or result boundaries by defining which of therequirements collected will be included in and excluded from theproject scope.
91© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Scope management plan Expert judgment Project scope statement
Project charter Product analysis Project documentsupdates
Requirementsdocumentation
Alternatives generation
Organizational processassets
Facilitated workshops
Define Scope – T&T
Product Analysis
For projects that have a product as a deliverable, as opposed to aservice or result, product analysis can be a effective tool.
Each application area has one or more generally accepted methods fortranslating high-level product description into tangible deliverables.
Alternatives Generation
Alternatives generation is a technique used to develop as manypotential options as possible in order to identify different approachesto execute and perform the work of the project. A variety of generalmanagement techniques can be used, such as brainstorming, lateralthinking, analysis of alternatives, etc.
92© LEARNERSTREET INTERNATIONAL PVT LTD.
Define Scope – T&T
Facilitated Workshops
The participation of key players with a variety of expectations and/or fields of expertise in these intensive working sessions helps to reach a cross-functional and common understanding of the project objectives and its limits.
93© LEARNERSTREET INTERNATIONAL PVT LTD.
Define Scope – Output
Project Scope Statement - The project scope statement is the description of the project scope, major deliverables, assumptions, and constraints. The project scope statement documents the entire scope, including project and product scope. Product scope description
Acceptance criteria
Deliverable
Project exclusion
Assumptions and Constraints
94© LEARNERSTREET INTERNATIONAL PVT LTD.
Create WBS
Create WBS is the process of subdividing project deliverables and project work into smaller, more manageable components.
95© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Scope management plan Decomposition Scope baseline
Project scope statement Expert judgment Project documentsupdates
Requirementsdocumentation
Enterprise environmentalfactors
Organizational processassets
Create WBS – T&T
Decomposition - Decomposition is a technique used for dividing andsubdividing the project scope and project deliverables into smaller,more manageable parts. The work package is the work defined at thelowest level of the WBS for which cost and duration can be estimatedand managed.
96© LEARNERSTREET INTERNATIONAL PVT LTD.
Create WBS - Outputs
Scope Baseline - The scope baseline is the approved version of a scopestatement, work breakdown structure (WBS), and its associated WBSdictionary, that can be changed only through formal change controlprocedures and is used as a basis for comparison. It is a component of theproject management plan.
Project scope statement. The project scope statement includes thedescription of the project scope, major deliverables, assumptions, andconstraints.
WBS. The WBS is a hierarchical decomposition of the total scope of workto be carried out by the project team to accomplish the project objectivesand create the required deliverables. Each descending level of the WBSrepresents an increasingly detailed definition of the project work.
WBS dictionary. The WBS dictionary is a document that provides detaileddeliverable, activity, and scheduling information about each componentin the WBS.
97© LEARNERSTREET INTERNATIONAL PVT LTD.
Validate Scope
Validate Scope is the process of formalizing acceptance of thecompleted project deliverables. The key benefit of this process is thatit brings objectivity to the acceptance process and increases thechance of final product, service, or result acceptance by validatingeach deliverable.
98© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Inspection Accepted deliverables
Requirementsdocumentation
Group decision-makingtechniques
Change requests
Requirements traceabilitymatrix
Work performanceinformation
Verified deliverables Project documentsupdates
Work performance data
Validate Scope - Input
Verified deliverables:
Verified deliverables are project deliverables that are completed and checked for correctness through the Control Quality process before submitting to customer.
Work Performance Data: Work performance data can include the degree of compliance
with requirements, number of nonconformities, severity of the nonconformities, or the number of validation cycles performed in a period of time.
Validate Scope - Concerned with acceptance of deliverables
Quality Control - Concerned with correctness of the deliverables
99© LEARNERSTREET INTERNATIONAL PVT LTD.
Validate Scope - T&T
Inspection• Inspection includes activities such as measuring, examining, and
validating to determine whether work and deliverables meet requirements and product acceptance criteria. Inspections are sometimes called reviews, product reviews, audits, and walkthroughs.
• This process is done by customer. As output of this activity is either accepted deliverables or change request.
Group Decision Making
100© LEARNERSTREET INTERNATIONAL PVT LTD.
Validate Scope - Output
Accepted Deliverables
• Deliverables that meet the acceptance criteria are formally signed off and approved by the customer or sponsor.
• Formal documentation received from the customer or sponsor acknowledging formal stakeholder acceptance of the project’s deliverables is forwarded to the Close Project or Phase process
Change Requests
• The completed deliverables that have not been formally accepted are documented, along with the reasons for non acceptance of those deliverables.
• Those deliverables may require a change request for defect repair. The change requests are processed for review and disposition through the Perform Integrated Change Control process
101© LEARNERSTREET INTERNATIONAL PVT LTD.
Control Scope
Control Scope is the process of monitoring the status of the project and product scope and managing changes to the scope baseline.
It ensures all the recommended corrective or preventive actions are processedthrough the Integrated Change Control Process.
Uncontrolled changes are often referred as Scope Creep.
102© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Variance analysis Work performance information
Requirements documentation Change requests
Requirements traceabilitymatrix
Project management planupdates
Work performance data Project documents updates
Organizational process assets Organizational process assets updates
Control Scope – T&T
Variance Analysis:• Variance analysis is a technique for determining the cause and
degree of difference between the baseline and actual performance.
• Project performance measurements are used to assess the magnitude of variation from the original scope baseline.
• Important aspects of project scope control include determining the cause and degree of variance relative to the scope baseline and deciding whether corrective or preventive action is required.
103© LEARNERSTREET INTERNATIONAL PVT LTD.
Key Terms & Definition
Constrains : Constrains are limitation within which project must be executed.
Assumption : This tool is used where information is not clear and decision has to be made. It is important that all assumption need to be documented and validated.
Control Account - Is a management control point at which budgets (resource plans) and actual costs are accumulated and compared to earned value.
Work packages - Are a subdivision of a control account and consist of a discrete, or level-of-effort set of tasks that have been planned and budgeted in detail.
Planning packages - Are created to describe work within a control account that will occur in the future.
104© LEARNERSTREET INTERNATIONAL PVT LTD.
WBS Structure
105© LEARNERSTREET INTERNATIONAL PVT LTD.
Summary
Project Scope Management
Product Scope & Project Scope
Plan Scope Management
Collect Requirements
Define Scope
Create WBS
Validate Scope
Control Scope
106© LEARNERSTREET INTERNATIONAL PVT LTD.
107© LEARNERSTREET INTERNATIONAL PVT LTD.
1. Identify which is not true about Decomposition? A. It is used to create a WBSB. It divides major deliverables into smaller componentsC. It is used for identifying and analysing the deliverables and related workD. It is one of the tools and techniques of Define Scope process
2. Which of the following statement is not true about Collect Requirements processA. Collect requirement is the process of defining stakehodlers needs to meet the project objectivesB. One of the important inputs of Collect Requirements process is WBSC. Requirement Traceability Matrix helps to track the project requirementsD. Many organizations categorize requirements into project requirements and product requirements
3. You have been informed by your senior manager that your project will not continue any further and needs to be closed in the next 15 days. You should? A. Remove non-critical tasks to reduce decrease costs B. Stop work and release all resources C. Validate the completed scope and start project closure activities D. Decrease team-size to bare minimum and improve the operating margin
108© LEARNERSTREET INTERNATIONAL PVT LTD.
4. As a Project manager, you are responsible for managing the scope of work to be done. As a part of Scope management, you will do all of the following, EXCEPT?A. Define what work is required to be doneB. Define the resources required to do this workC. Make sure that only the work within the scope is completedD. Define what work is not required to be done
5. The work breakdown structure (WBS) is first developed in which scope management process?A. Scope planningB. Scope verificationC. Scope change controlD. Scope Definition
6. You are the project manager for your organization. You need to ensure the customer formally accepts the deliverables of each project phase. This process is known as __________________?A. Earned Value ManagementB. Scope VerificationC. Quality ControlD. Quality Assurance
Project Time ManagementMODULE-6
Agenda
Plan Schedule Management
Define Activities
Sequence Activities
Estimate Activity Resources
Estimate Activity Durations
Develop Schedule
Control Schedule
110© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Time Management
Project Time Management includes the processes required to manage the timely completion of the project.
111© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Schedule Management
The process of establishing the policies, procedures, and documentation for planning, developing, managing, executing, and controlling the project schedule.
112© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Expert judgment Schedule management plan
Project charter Analytical techniques
Enterprise environmentalfactors
Meetings
Organizational processassets
Plan Schedule Management - Output
Schedule management plan:• A component of the project management plan that
establishes the criteria and the activities for developing, monitoring, and controlling the schedule.
• The schedule management plan may be formal or informal, highly detailed or broadly framed, based upon the needs of the project, and includes appropriate control thresholds.
113© LEARNERSTREET INTERNATIONAL PVT LTD.
Define Activities
Define Activities is the process of identifying and documenting the specific actions to be performed to produce the project deliverables.
Break down work packages into activities that provide a basis for estimating, scheduling, executing, monitoring, and controlling the project work.
114© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Schedule managementplan
Decomposition Activity list
Scope baseline Rolling wave planning Activity attributes
Enterprise environmentalfactors
Expert judgment Milestone list
Organizational processassets
Define Activities - T&T
Decomposition:• Decomposition is a technique used for dividing and
subdividing the project scope and project deliverables into smaller, more manageable parts.
• It defines the final outputs as activities rather than deliverables, as done in the Create WBS process.
Rolling Wave Planning:• Rolling wave planning is an iterative planning technique in which
the work to be accomplished in the near term is planned in detail, while the work in the future is planned at a higher level.
• It is a form of progressive elaboration.
115© LEARNERSTREET INTERNATIONAL PVT LTD.
Define Activities - Output
Activity List:• The activity list is a comprehensive list that includes all
schedule activities required on the project.
• Each activity should have a unique title that describes its place in the schedule.
• The activity list also includes the activity identifier and a scope of work description for each activity.
Milestone List:
• A milestone list is a list identifying all project milestones and indicates whether the milestone is mandatory, such as those required by contract, or optional, such as those based upon historical information
116© LEARNERSTREET INTERNATIONAL PVT LTD.
Define Activities - Output
Activity Attributes:
Activity attributes extend the description of the activity by identifying the multiple components associated with each activity.
During the initial stages of the project, they include the activity identifier (ID), WBS ID, and activity label or name
And when completed, may include Activity codes, activity description, predecessor activities,
successor activities, logical relationships, leads and lags resource requirements, imposed dates, constraints, and assumptions.
117© LEARNERSTREET INTERNATIONAL PVT LTD.
Sequence Activities
Sequence Activities is the process of identifying and documenting relationships among the project activities. It defines the logical sequence of work to obtain the greatest efficiency given all project constraints.
118© LEARNERSTREET INTERNATIONAL PVT LTD.
Inputs Tools & Techniques Outputs
Schedule managementplan
Precedence diagrammingmethod (PDM)
Project schedule networkdiagrams
Activity list Dependency determination Project documents updates
Activity attributes Leads and lags
Milestone list
Project scope statement
Enterprise environmentalfactors
Organizational processassets
Sequence Activities - T&T
Precedence Diagramming Method:• The precedence diagramming method (PDM) is a technique
used for constructing a schedule model in which activities are represented by nodes and are graphically linked by one or more logical relationships to show the sequence in which the activities are to be performed.
• Activity-on-node (AON) is one method of representing a precedence diagram. This is the method used by most project management software packages.
• A predecessor activity is an activity that logically comes before a dependent activity in a schedule. A successor activity is a dependent activity that logically comes after another activity in a schedule.
119© LEARNERSTREET INTERNATIONAL PVT LTD.
Sequence Activities - T&T
PDM includes four types of dependencies or logical relationships.
Finish-to-start (FS) - A successor activity cannot start until a predecessor activity has finished.
Finish-to-finish (FF) - A successor activity cannot finish until a predecessor activity has finished.
Start-to-start (SS) – A successor activity cannot start until a predecessor activity has started.
Start-to-finish (SF) - A successor activity cannot finish until a predecessor activity has started.
In PDM, finish-to-start is the most commonly used type of precedence relationship. The start-to-finish relationship is very rarely used.
120© LEARNERSTREET INTERNATIONAL PVT LTD.
Precedence Diagramming Method
121© LEARNERSTREET INTERNATIONAL PVT LTD.
Sequence Activities - T&T
Dependency determination: Dependency has four attributes, but two can be applicable at the same time in following ways –
• Mandatory dependencies - Those that are legally or contractually required or inherent in the nature of the work.
• Discretionary dependencies – Identified by project team based on knowledge of best practices, even though there may be other acceptable sequences.
• External dependencies - These dependencies are usually outside the project team’s control. Ex: Vendor delivery
• Internal dependencies - Internal dependencies involve a precedence relationship between project activities and are generally inside the project team’s control. Ex: Team cannot test a machine until they assemble
122© LEARNERSTREET INTERNATIONAL PVT LTD.
Sequence Activities - T&T
Leads and Lags:
• A lead is the amount of time whereby a successor activity can be advanced with respect to a predecessor activity.
• A lag is the amount of time whereby a successor activity will be delayed with respect to a predecessor activity.
123© LEARNERSTREET INTERNATIONAL PVT LTD.
Sequence Activities - Outputs
Project Schedule Network Diagrams:
A project schedule network diagram is a graphical representation of the logical relationships, also referred to as dependencies, among the project schedule activities.
124© LEARNERSTREET INTERNATIONAL PVT LTD.
Estimate Activity Resources
Estimate Activity Resources is the process of estimating the type and quantities of material, human resources, equipment, or supplies required to perform each activity.
It identifies the type, quantity, and characteristics of resources required to complete the activity which allows more accurate cost and duration estimates.
The Estimate Activity Resources process is closely coordinated with the Estimate Costs process.
125© LEARNERSTREET INTERNATIONAL PVT LTD.
Estimate Activity Resources
Estimate Activity Resources is the process of estimating the type and quantities of material, human resources, equipment, or supplies required to perform each activity.
126© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Schedule management plan Expert Judgement Activity resource requirements
Activity list Alternative analysis Resource breakdown structure
Activity attributes Published estimating data Project documents updates
Resource calendar Bottom-up estimates
Risk register Project management software
Activity cost estimates
Enterprise environment factors
Organization process assets
Estimate Activity Resources – Inputs
Resource Calendars:• A resource calendar is a calendar that identifies the working days
and shifts on which each specific resource is available.
• Information on which resources (such as human resources,equipment, and material) are potentially available during aplanned activity period, is used for estimating resourceutilization.
• Resource calendars specify when and how long identified projectresources will be available during the project.
• This knowledge includes consideration of attributes such asresource experience and/or skill level, as well as variousgeographical locations from which the resources originate andwhen they may be available.
127© LEARNERSTREET INTERNATIONAL PVT LTD.
Estimate Activity Resources - T&T
Alternative Analysis:
Many schedule activities have alternative methods ofaccomplishment. They include using various levels of resourcecapability or skills, different size or type of machines, differenttools (hand versus automated), and make-rent-or-buy decisionsregarding the resource.
Published Estimating Data:
Several organizations routinely publish updated production ratesand unit costs of resources for an extensive array of labor trades,material, and equipment for different countries and geographicallocations within countries.
128© LEARNERSTREET INTERNATIONAL PVT LTD.
Estimate Activity Resources - T&T
Bottom-Up Estimating:
When an activity cannot be estimated with a reasonable degree ofconfidence, the work within the activity is decomposed into moredetail. The resource needs are estimated. These estimates are thenaggregated into a total quantity for each of the activity’s resources.
Project Management Software:
Project management software, has the capability to help plan,organize, and manage resource pools and develop resourceestimates.
129© LEARNERSTREET INTERNATIONAL PVT LTD.
Estimate Activity Resources - Outputs
Activity Resource Requirements:• Activity resource requirements identify the types and
quantities of resources required for each activity in a workpackage.
• Aggregated to determine the estimated resources for eachwork package and each work period.
• The resource requirements documentation for each activitycan include the basis of estimate for each resource, as well asthe assumptions that were made in determining which typesof resources are applied, their availability, and what quantitiesare used.
130© LEARNERSTREET INTERNATIONAL PVT LTD.
Estimate Activity Resources - Outputs
Resource Breakdown Structure:• The resource breakdown structure is a hierarchical
representation of resources by category and type.
• Resource types may 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.
131© LEARNERSTREET INTERNATIONAL PVT LTD.
Estimate Activity Durations
Estimate Activity Durations is the process of estimating the number of work periods needed to complete individual activities with estimated resources.
132© LEARNERSTREET INTERNATIONAL PVT LTD.
Inputs Tools & Techniques Outputs
Schedule management plan Expert judgment Activity duration estimates
Activity list Analogous estimating Project documents updates
Activity attributes Parametric estimating
Activity resource requirements Three-point estimating
Resource calendars Group decision-making techniques
Project scope statement Reserve analysis
Risk register
Resource breakdown structure
Enterprise environmental factors
Organizational process assets
Estimate Activity Durations - T&T
Analogous Estimating – Estimates based on similar past project. This is less costly, time consuming and less accurate.
Parametric Estimating – Based on statistical method. Highly accurate depending on the sophistication and underlying data built into the model.
Bottom-up Estimating – The estimate for the project is arrived at by estimating the cost of work packages and rolling them up.
Three Point Estimating – Based on optimistic, pessimistic and most probably estimates.
133© LEARNERSTREET INTERNATIONAL PVT LTD.
Estimate Activity Durations - T&T
Group Decision-Making Techniques:
• Team-based approaches, such as brainstorming, the Delphi or nominal group techniques, are useful for engaging team members to improve estimate accuracy and commitment to the emerging estimates.
• By involving a structured group of people who are close to the technical execution of work in the estimation process, additional information is gained and more accurate estimates obtained.
• When people are involved in the estimation process, their commitment towards meeting the resulting estimates increases.
134© LEARNERSTREET INTERNATIONAL PVT LTD.
Estimate Activity Durations - T&T
Reserve Analysis:
• Duration estimates may include contingency reserves, sometimes referred to as time reserves or buffers, into the project schedule to account for schedule uncertainty.
• The contingency reserve may be a percentage of the estimated activity duration, a fixed number of work periods, or may be developed by using quantitative analysis methods.
• As more precise information about the project becomes available, the contingency reserve may be used, reduced, or eliminated.
• Contingency should be clearly identified in schedule documentation.
135© LEARNERSTREET INTERNATIONAL PVT LTD.
Estimate Activity Durations - Outputs
Activity Duration Estimates:
• Activity duration estimates are quantitative assessments of the likely number of time periods that are required to complete an activity.
• Activity duration estimates may include some indication of the range of possible results. For example: 2 weeks ± 2 days, which indicates that the activity will take at least eight days and not more than twelve (assuming a five-day workweek);
136© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Schedule
Develop Schedule is the process of analyzing activity sequences,durations, resource requirements, and schedule constraints tocreate the project schedule model.
By entering schedule activities, durations, resources, resourceavailabilities, and logical relationships into the scheduling tool, itgenerates a schedule model with planned dates for completingproject activities.
137© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop ScheduleInputs Tools & Techniques Outputs
Schedule management plan Schedule network analysis Schedule baseline
Activity list Critical path method Project schedule
Activity attributes Critical chain method Schedule data
Project schedule network diagrams Resource optimization techniques Project calendars
Activity resource requirements Modeling techniques Project management plan updates
Resource calendars Leads and lags Project documents updates
Activity duration estimates Schedule compression
Project scope statement Scheduling tool
Risk register
Project staff assignments
Resource breakdown structure
Enterprise environmental factors
Organizational process assets
138© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Schedule – T&T
Schedule Network Analysis:
Schedule network analysis is a technique that generates theproject schedule model. It employs various analyticaltechniques, such as critical path method, critical chain method,what-if analysis, and resource optimization techniques tocalculate the early and late start and finish dates for theuncompleted portions of project activities.
Some network paths may have points of path convergence orpath divergence that can be identified and used in schedulecompression analysis or other analyses.
139© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Schedule – T&T
Critical Path Method:
Method used to estimate the minimum project duration and determine the amount of scheduling flexibility on the logical network paths within the schedule model.
On any network path, the schedule flexibility is measured by the positive difference between early and late dates, and is termed “ total float”.
Critical paths have either a zero or negative total float on the critical path. Networks can have multiple near critical paths.
Adjustments to activity durations, logical relationships, leads and lags or other schedule constraints may be necessary to produce network paths with a zero or positive total float.
140© LEARNERSTREET INTERNATIONAL PVT LTD.
Critical Path Method
141© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Schedule – T&T
Critical Chain Method:
The critical chain method (CCM) is a schedule method that allows the project team to place buffers on any project schedule path to account for limited resources and project uncertainties.
It is developed from the critical path method approach and considers the effects of resource allocation, resource optimization, resource leveling, and activity duration uncertainty on the critical path determined using the critical path method.
The resource-constrained critical path is known as the critical chain.
142© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Schedule – T&T
Resource Optimization Techniques: Resource optimization techniques that can be used to adjust the schedule model due to demand and supply of resources included:
Resource leveling • A technique in which start and finish dates are adjusted based
on resource constraints with the goal of balancing demand forresources with the available supply.
• Resource leveling can be used when shared or critically requiredresources are only available at certain times, or in limitedquantities, or over-allocated, such as when a resource has beenassigned to two or more activities during the same time period.
• Resource leveling can often cause the original critical path tochange, usually to increase.
143© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Schedule – T&T
Resource Smoothing
• A technique that adjusts the activities of a schedule model such that the requirements for resources on the project do not exceed certain predefined resource limits.
• In resource smoothing, as opposed to resource leveling, the project’s critical path is not changed and the completion date may not be delayed.
• Resource smoothing may not be able to optimize all resources.
144© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Schedule – T&T
Modeling Techniques:
Examples of modeling techniques include –
What-If Scenario Analysis –• What-if scenario analysis is the process of evaluating
scenarios in order to predict their effect, positively or negatively, on project objectives.
• The outcome of the what-if scenario analysis can be used to assess the feasibility of the project schedule under adverse conditions, and in preparing contingency and response plans to overcome or mitigate the impact of unexpected situations.
145© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Schedule – T&T
Simulation:
• Simulation involves calculating multiple project durations with different sets of activity assumptions, usually using probability distributions constructed from the three-point estimates to account for uncertainty.
• The most common simulation technique is Monte Carlo analysis, in which a distribution of possible activity durations is defined for each activity and used to calculate a distribution of possible outcomes for the total project.
146© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Schedule – T&T
Schedule Compression:
Schedule compression techniques are used to shorten the schedule duration without reducing the project scope. Schedule compression techniques include
Crashing
• A technique used to shorten the schedule duration for the least incremental cost by adding resources.
• Crashing works only for activities on the critical path where additional resources will shorten the activity’s duration.
• Crashing does not always produce a viable alternative and may result in increased risk and/or cost.
147© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Schedule – T&T
Fast tracking• A schedule compression technique in which activities or
phases normally done in sequence are performed in parallelfor at least a portion of their duration.
• Fast tracking may result in rework and increased risk.
• Fast tracking only works if activities can be overlapped toshorten the project duration.
Scheduling Tool• Help expedite the scheduling process by generating start and
finish dates based on the inputs of activities, networkdiagrams, resources and activity durations using schedulenetwork analysis.
148© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Schedule - Outputs
Schedule Baseline
• A schedule baseline is the approved version of a schedule model that can be changed only through formal change control procedures and is used as a basis for comparison to actual results.
• The schedule baseline is a component of the project management plan.
Schedule Data
• The schedule data for the project schedule model is the collection of information for describing and controlling the schedule. The schedule data includes at least the schedule milestones, schedule activities, activity attributes, and documentation of all identified assumptions and constraints.
149© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Schedule - Outputs
Project Schedule The project schedule is an output of a schedule model that
presents linked activities with planned dates, durations, milestones, and resources.
A project schedule model can be presented in tabular form, it is more often presented graphically, using one or more of the following formats, which are classified as presentations:
Bar charts (Gantt Charts)
Milestone charts
Project schedule network diagrams.
150© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Schedule - Outputs
Project Calendars:• A project calendar identifies working days and shifts that are
available for scheduled activities.
• A schedule model may require more than one project calendar to allow for different work periods for some activities to calculate the project schedule.
151© LEARNERSTREET INTERNATIONAL PVT LTD.
Control Schedule
Inputs Tools & Techniques Outputs
Project management plan Performance reviews Work performance information
Project schedule Project management software Schedule forecasts
Work performance data Resource optimization techniques Change requests
Project calendars Modeling techniques Project management plan updates
Schedule data Leads and lags Project documents updates
Organizational process assets Schedule compression Organizational process assets updates
Scheduling tool
152© LEARNERSTREET INTERNATIONAL PVT LTD.
Control Schedule is the process of monitoring the status of projectactivities to update project progress and manage changes to theschedule baseline to achieve the plan. It provides the means to recognizedeviation from the plan and take corrective and preventive actions andthus minimize risk.
Control Schedule – T&T
Performance Reviews :
Performance reviews measure, compare, and analyze schedule performancesuch as actual start and finish dates, percent complete, and remaining durationfor work in progress. Various techniques may be used, among them:
• Trend analysis - Trend analysis examines project performance over timeto determine whether performance is improving or deteriorating.
• Critical path method - Comparing the progress along the critical pathcan help determine schedule status.
• Critical chain method - Comparing the amount of buffer remaining tothe amount of buffer needed to protect the delivery date can helpdetermine schedule status.
• Earned value management - Earned value management Scheduleperformance measurements such as schedule variance (SV) andschedule performance index (SPI), are used to assess the magnitude ofvariation to the original schedule baseline.
153© LEARNERSTREET INTERNATIONAL PVT LTD.
Control Schedule - Outputs
Schedule Forecasts:
Schedule forecasts are estimates or predictions of conditions and events in the project’s future based on information and knowledge available at the time of the forecast.
Organizational Process Assets Updates:
Organizational process assets that may be updated include:
Causes of variances
Corrective action chosen and the reasons, and
Other types of lessons learned from project schedule control.
154© LEARNERSTREET INTERNATIONAL PVT LTD.
Summary
Plan Schedule Management
Define Activities
Sequence Activities
Estimate Activity Resources
Estimate Activity Durations
Develop Schedule
Control Schedule
155© LEARNERSTREET INTERNATIONAL PVT LTD.
156© LEARNERSTREET INTERNATIONAL PVT LTD.
1. Which of the following statements is not true about critical path:A. Critical path changes during project executionB. Multiple critical paths are not possible in any network diagramC. All tasks on critical path will have zero slackD. Critical path is the longest duration path in the network
2. Time management is the allocation of time in a project's life cycle through the process of:A. SchedulingB. All of the other alternatives applyC. PlanningD. Estimating
3. During what Time Management Process are the specific activities that must be performed to produce the deliverables in the WBS identified and documented?A. Estimate Activity DurationsB. Define ActivitiesC. Sequence ActivitiesD. Develop Schedule
157© LEARNERSTREET INTERNATIONAL PVT LTD.
4. Which of the following statements are FALSE regarding Project Time Management?A. Schedule cost involving changes to the project scheduleB. Schedule development involves analyzing activity sequences, durations, resource requirements in order to create project scheduleC. Activity resource estimating involves estimating type and qualities of resources required to perform each schedule activityD. None of the above
5. Which of the following statement is true about PDM (Precedence Diagramming Method)? A. PDM places activities on arrows B. PDM is also known as AOA (Activities on Arrow) C. PDM places activities on nodes D. PDM supports only FS (Finish-to-Start) relationship
6. Where is a project manager most likely to experience a subnet? A. WBS B. Kill points C. GERT charts D. A network templates
Project Cost ManagementMODULE - 7
Agenda
Why manage costs?
What are the characteristics of cost in a project?
Project Cost Management processes
• Cost Estimation
• Cost Budgeting
• Cost Control
• Earn Value Management
159© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Cost Management
Project Cost Management includes the processes involved inplanning, estimating, budgeting, financing, funding, managing, andcontrolling costs so that the project can be completed within theapproved budget.
Plan Cost Management
Estimate Costs
Determine Budget
Control Costs
160© LEARNERSTREET INTERNATIONAL PVT LTD.
Basic Concept of Cost Management Profits are revenues minus expenses.
Life cycle costing is the total cost of ownership, or development plussupport costs, for a project.
Cash flow analysis determines the estimated annual costs and benefits fora project and the resulting annual cash flow.
Tangible costs or benefits are those costs or benefits that an organizationcan easily measure in dollars.
Intangible costs or benefits are costs or benefits that are difficult tomeasure in monetary terms.
Direct costs are costs that can be directly related to producing theproducts and services of the project.
Indirect costs are costs that are not directly related to the products orservices of the project, but are indirectly related to performing the project.
Sunk cost is money that has been spent in the past; when deciding whatprojects to invest in or continue, you should not include sunk costs.
161© LEARNERSTREET INTERNATIONAL PVT LTD.
Basic Concept of Cost Management
Learning curve theory states that when many items are produced (or tasks areperformed) repetitively, the unit cost of those items decreases in a regularpattern as more units are produced (or more tasks performed).
Reserves are dollars included in a cost estimate to mitigate cost risk byallowing for future situations that are difficult to predict.
Contingency reserves allow for future situations that may be partiallyplanned for (sometimes called known unknowns) and are included in theproject cost baseline.
Example: Recruiting and training costs for expected personnel turnover duringa project.
Management reserves allow for future situations that are unpredictable(sometimes called unknown unknowns).
Example: Extended absence of a manager; supplier goes out of business.
162© LEARNERSTREET INTERNATIONAL PVT LTD.
Basic Concept of Cost Management
Capital Budgeting is the process in which a business determines whether projects such as building a new plant or investing in a long-term venture are worth pursuing.
A prospective project's lifetime cash inflows and outflows are assessed in order to determine whether the returns generated meet a sufficient target benchmark
Methods of capital budgeting include:
• Payback period
• Net present value (NPV)
• Internal rate of return (IRR)
163© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Cost Management
Plan Cost Management is the process that establishes the policies,procedures, and documentation for planning, managing, expending,and controlling project costs.
The key benefit of this process is that it provides guidance anddirection on how the project costs will be managed throughout theproject.
164© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Expert judgment Cost management plan
Project charter Analytical techniques
Enterprise environmentalfactors
Meetings
Organizational processassets
Plan Cost Management – T&T
Analytical Techniques
Developing the cost management plan may involve choosing strategic options to fund the project such as: self-funding, funding with equity, or funding with debt
The cost management plan may also detail ways to finance project resources such as making, purchasing, renting, or leasing.
Organizational policies and procedures may influence which financial techniques are employed in these decisions.
• Payback period
• Return on investment
• Internal rate of return
• Discounted cash flow
• Net present value.
165© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Cost Management – Output
Cost management plan The cost management plan is a component of the project management plan and describes how the project costs will be planned, structured, and controlled.
166© LEARNERSTREET INTERNATIONAL PVT LTD.
Estimate Costs
Estimate Costs is the process of developing an approximation of the monetary resources needed to complete project activities. The key benefit of this process is that it determines the amount of cost required to complete project work.
167© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Cost management plan Expert judgment Activity cost estimates
HR management plan Analogous estimating Basis of estimates
Scope baseline Parametric estimating Project documents updates
Project schedule Bottom-up estimating
Risk register Three-point estimating
Enterprise environmental factors Reserve analysis
Organizational process assets Cost of quality
Project management software
Vendor bid analysis
Group decision-making techniques
Estimate Costs – Type of Estimates
The accuracy of a project estimate will increase as the projectprogresses through the project life cycle.
A project in the initiation phase may have a rough order ofmagnitude (ROM) estimate in the range of −25% to +75%.
Later in the project, as more information is known, definitiveestimates could narrow the range of accuracy to -5% to +10%.
In some organizations, there are guidelines for when suchrefinements can be made and the degree of confidence oraccuracy that is expected.
168© LEARNERSTREET INTERNATIONAL PVT LTD.
Estimate Costs – T&T
Cost of Quality (COQ)
Assumptions about cost of quality (will be discussed in qualitysection) may be used to prepare the activity cost estimate.
Project Management SoftwareProject management software applications, computerizedspreadsheets, simulation, and statistical tools are used to assist withcost estimating.
Vendor Bid AnalysisAnalysis of what the project should cost, based on the responsivebids from qualified vendors.
169© LEARNERSTREET INTERNATIONAL PVT LTD.
Estimate Costs - Output
Activity Cost Estimates• Activity cost estimates are quantitative assessments of the
probable costs required to complete project work.
• Cost estimates can be presented in summary form or in detail.
• Costs are estimated for all resources that are applied to the activity cost estimate.
Example : Direct labour, materials, equipment, services, facilities, information technology, and special categories such as cost of financing (including interest charges), an inflation allowance, exchange rates, or a cost contingency reserve.
Basis of Estimates
• supporting documentation should provide a clear and complete understanding of how the cost estimate was derived.
170© LEARNERSTREET INTERNATIONAL PVT LTD.
Determine Budget
Determine Budget is the process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline.
171© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Cost management plan Cost aggregation Cost baseline
Scope baseline Reserve analysis Project funding requirements
Activity cost estimates Expert judgment Project documents updates
Basis of estimates Historical relationships
Project schedule Funding limit reconciliation
Resource calendars
Risk register
Agreements
Organizational process assets
Determine Budget – T&T Cost Aggregation
• 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 finally for the entire project.
Historical Relationships
• Any historical relationships that result in parametric estimates or analogous estimates involve the use of project characteristics (parameters) to develop mathematical models to predict total project costs.
Funding Limit Reconciliation
• The expenditure of funds should be reconciled with any funding limits on the commitment of funds for the project.
• A variance between the funding limits and the planned expenditures will sometimes necessitate the rescheduling of work to level out the rate of expenditures.
172© LEARNERSTREET INTERNATIONAL PVT LTD.
Determine Budget – Output
Cost Baseline
• The cost baseline is the approved version of the time-phased project budget (BAC), excluding any management reserves.
• It can only be changed through formal change control procedures and is used as a basis for comparison to actual results.
• It is developed as a summation of the approved budgets for the different schedule activities.
• It is typically displayed in the form of an S-curve.
Project Funding Requirement
173© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Budget Components
174© LEARNERSTREET INTERNATIONAL PVT LTD.
Control Costs
Control Costs is the process of monitoring the status of the project toupdate the project costs and managing changes to the cost baseline. Thekey benefit of this process is that it provides the means to recognizevariance from the plan in order to take corrective action and minimizerisk.
175© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Earned value management Work performance information
Project funding requirements Forecasting Cost forecasts
Work performance data To-complete performance index (TCPI)
Change requests
Organizational process assets Performance reviews Project management plan updates
Project management software Project documents updates
Reserve analysis Organizational process assets updates
Control Costs – T&T
Earned Value Management
Earned value management (EVM) is a methodology thatcombines scope, schedule, and resource measurements to assessproject performance and progress.
It is a commonly used method of performance measurement forprojects.
It integrates the scope baseline with the cost baseline, along withthe schedule baseline, to form the performance baseline, whichhelps the project management team assess and measure projectperformance and progress.
EVM develops and monitors three key dimensions for each workpackage and control account: PV, AC, and EV.
176© LEARNERSTREET INTERNATIONAL PVT LTD.
Earned Value Management
Planned value - Estimated value of the work planned to be done. Itdoesn’t include management reserve.
Earned value - Value of the work actually accomplished.
Actual cost - Actual cost incurred in accomplishing work
Schedule variance - Is a measure of schedule performanceexpressed as the difference between the earned value and theplanned value.SV = EV - PV
Cost variance - is the amount of budget deficit or surplus at a givenpoint in time, expressed as the difference between earned valueand the actual cost.CV = EV - AC
177© LEARNERSTREET INTERNATIONAL PVT LTD.
Earned Value Management
Schedule performance index
Is a measure of schedule efficiency expressed as the ratio of earned value to planned value. SPI = EV/PV
Less then 1 behind schedule, more then 1 ahead of schedule
Cost performance index
Is a measure of the cost efficiency of budgeted resources, expressed as a ratio of earned value to actual cost. CPI = EV/AC
Less then 1 cost overrun, more then 1 cost underrun
178© LEARNERSTREET INTERNATIONAL PVT LTD.
Earned Value, Planned Value, and Actual Costs
179© LEARNERSTREET INTERNATIONAL PVT LTD.
Forecasting
Budget at Completion (BAC) – Sum of all planned value or approved total cost at any given point is time.
When it becomes clear that project can’t be completed in approved budget, forecasting of new total project cost (EAC).
Estimate at Completion (EAC) – EACs are typically based on the actual costs incurred for work completed, plus an estimate to complete (ETC) the remaining work.
1. Actual cost + New bottom up estimate -> EAC = AC + Bottom-up ETC.
2. All future work will be done at planned budget -> EAC = AC + (BAC – EV)
3. Same project cost performance will continue ->EAC = BAC / CPI
4. Same project cost and schedule performance will continue ->
EAC = AC + [(BAC – EV) / (CPI × SPI)]
180© LEARNERSTREET INTERNATIONAL PVT LTD.
Forecasting
Variance at Completion - A projection of the amount of budget deficit or surplus, expressed as the difference between the budget at completion and the estimate at completion.
VAC = BAC – EAC
Estimate to Complete - The expected cost to finish all the remaining project work.
ETC = EAC – AC
To Complete Performance Index - A measure of the cost performance that must be achieved with the remaining resources in order to meet a specified management goal.
TCPI = (BAC – EV)/(BAC – AC)
181© LEARNERSTREET INTERNATIONAL PVT LTD.
Earn Value Example
182© LEARNERSTREET INTERNATIONAL PVT LTD.
Activity
Budgeted
Man hours % complete
Actual Man
hours Earned Value
A 120 75 103
B 200 80 190
C 100 50 60
D 300 90 260
=90 (120*75 /100 )
=160 (200*80 /100 )
=50 (100*50 /100 )
=270 (300*90 /100 )
570 SUM 720 613
CPI = EV/AC = 570/613 = 0.93
SPI = EV/PV = 570/720 = 0.79
BAC = 720
EAC = BAC/CPI = 720/ 0.93= 774.32
SV = EV-PV = 570 – 720 = -150
CV = EV-AC = 570 – 613 = -43
VAC = BAC-EAC = -54.32
ETC = EAC – AC = 774.32-613 =161.32
TCPI based on EAC = Work remaining (BAC-EV)/Funds remaining (EAC-AC) = (720-570)/(774.32-613) = 0.93
Summary
Why manage costs?
What are the characteristics of cost in a project?
Project Cost Management processes
• Cost Estimation
• Cost Budgeting
• Cost Control
• Earn Value Management
183© LEARNERSTREET INTERNATIONAL PVT LTD.
184© LEARNERSTREET INTERNATIONAL PVT LTD.
1. The Cost Baseline is an output from:A. Cost Management PlanningB. Estimating Cost C. Determining BudgetingD. Control Cost
2. An estimating technique that uses mathematical model to predict total project cost isA. Analogous EstimationB. Expert JudgmentC. Parametric EstimationD. Vendor Bid Analysis
3. The two phases used in Project Cost Management are:A. Planning and executingB. Executing and controllingC. Planning and close outD. Controlling and planning
185© LEARNERSTREET INTERNATIONAL PVT LTD.
4. Project Cost Management includes all of the following except:A. Resource levelingB. Resource planningC. Cost estimatingD. Cost budgeting
5. The value of BAC can be equated withA. ETCB. ACC. Summation of all PVD. VAC
6. Calculate the Cost Variance, if the PV = 25000, EV = 8000, AC =12000, SV = 15000A. +3000B. +13000C. -4000D. +4000
Project Quality ManagementMODULE - 8
Agenda
Project Quality Management
• Plan Quality
• Perform Quality Assurance
• Quality Control
187© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Quality Management
Includes the processes and activities of the performing organization that determine quality policies, objectives, and responsibilities so that the project will satisfy the needs for which it was undertaken.
Plan Quality Management
Perform Quality Assurance
Control Quality
188© LEARNERSTREET INTERNATIONAL PVT LTD.
Basic Concepts
Prevention over inspection
• Quality should be planned, designed, and built into, not inspected into the project’s management or the project’s deliverables.
• The cost of preventing mistakes is generally much less than the cost of correcting mistakes when they are found by inspection or during usage.
Continuous improvement
• The PDCA (plan-do-check-act) cycle is the basis for quality improvement as defined by Shewhart and modified by Deming.
Management Responsibility
• Success requires the participation of all members of the project team. Nevertheless, management retains, within its responsibility for quality, a related responsibility to provide suitable resources at adequate capacities.
189© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Quality Management
Plan Quality Management is the process of identifying quality requirements and/or standards for the project and its deliverables, and documenting how the project will demonstrate compliance with relevant quality requirements.
190© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Cost-benefit analysis Quality management plan
Stakeholder register Cost of quality Process improvement plan
Risk register Seven basic quality tools Quality metrics
Requirements documentation Benchmarking Quality checklists
Enterprise environmental factors Design of experiments Project documents updates
Organizational process assets Statistical sampling
Additional quality planning tools
Meetings
Plan Quality Management – T&T
Cost-Benefit Analysis
The primary benefits of meeting quality requirements include less rework, higher productivity, lower costs, increased stakeholder satisfaction, and increased profitability.
A cost-benefit analysis for each quality activity compares the cost of the quality step to the expected benefit.
Cost of Quality (COQ)
Includes all cost incurred over the life of the product by investment in preventing non-conformance to requirement, upgrading product or service for conformance to requirement, and failing to meet requirement (rework).
Failure cost are often categorized into internal (Found by the project) and external (Found by customer). Failure costs are also called cost of poor quality.
191© LEARNERSTREET INTERNATIONAL PVT LTD.
Cost of Quality
192© LEARNERSTREET INTERNATIONAL PVT LTD.
Quality Tools – Cause-and-effect
Cause-and-effect diagrams, which are also known as fishbonediagrams or as Ishikawa diagrams. The problem statement placed atthe head of the fishbone is used as a starting point to trace theproblem’s source back to its actionable root cause.
193© LEARNERSTREET INTERNATIONAL PVT LTD.
Quality Tools – Flowchart
Flowcharts, which are also referredto as process maps because theydisplay the sequence of steps andthe branching possibilities that existfor a process that transforms one ormore inputs into one or moreoutputs.
194© LEARNERSTREET INTERNATIONAL PVT LTD.
Quality Tools – Check sheet
Check sheets, which are also known as tally sheets and may beused as a checklist when gathering data.
Check sheets are used to organize facts in a manner that willfacilitate the effective collection of useful data about a potentialquality problem.
195© LEARNERSTREET INTERNATIONAL PVT LTD.
Quality Tools – Pareto Diagram
Pareto diagrams, exist as a special form of vertical bar chart and are used to identify the vital few sources that are responsible for causing most of a problem’s effects.
196© LEARNERSTREET INTERNATIONAL PVT LTD.
Quality Tools – Histogram
Histograms, are a special form of bar chart and are used to describe the central tendency, dispersion, and shape of a statistical distribution.
197© LEARNERSTREET INTERNATIONAL PVT LTD.
Quality Tools – Control Chart
Control charts, are used to determine whether or not a process isstable or has predictable performance. Upper and lowerspecification limits are based on requirements of the agreement.Upper and lower control limit is set by performing organization.
198© LEARNERSTREET INTERNATIONAL PVT LTD.
Quality Tools – Scatter Diagram
Scatter diagrams, plot ordered pairs (X, Y) and are sometimes called correlation charts because they seek to explain a change in the dependent variable, Y, in relationship to a change observed in the corresponding independent variable, X.
199© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Quality Management – T&T
Design of Experiments
Design of experiments (DOE) is a statistical method foridentifying which factors may influence specific variables of aproduct or process under development or in production. DOEmay be used during the Plan Quality Management process todetermine the number and type of tests and their impact on costof quality.
Statistical Sampling
Statistical sampling involves choosing part of a population ofinterest for inspection (for example, selecting ten engineeringdrawings at random from a list of seventy-five).
200© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Quality Management – Output
Process Improvement Plan• Process boundaries: Describe the purpose of the process, the
start and end of the process, its inputs and outputs, the process owner, and the stakeholders of the process.
• Process configuration: Provides a graphic depiction of processes, with interfaces identified, used to facilitate analysis.
• Process metrics: Along with control limits, allows analysis of process efficiency.
• Targets for improved performance: Guide the process improvement activities.
201© LEARNERSTREET INTERNATIONAL PVT LTD.
Perform Quality Assurance
Perform Quality Assurance is the process of auditing the qualityrequirements and the results from quality control measurements toensure that appropriate quality standards and operational definitionsare used.
202© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Quality management plan Quality management andcontrol tools
Change requests
Process improvementplan
Quality audits Project management planupdates
Quality metrics Process analysis Project documentsupdates
Quality controlmeasurements
Organizational processassets updates
Project documents
Perform Quality Assurance – T&T
Quality Audits
A quality audit is a structured, independent process to determine ifproject activities comply with organizational and project policies,processes, and procedures.
Process Analysis
•Process analysis follows the steps outlined in the processimprovement plan to identify needed improvements.
•This analysis also examines problems experienced, constraintsexperienced, and non-value-added activities identified duringprocess operation.
203© LEARNERSTREET INTERNATIONAL PVT LTD.
Control Quality
Control Quality is the process of monitoring and recording results of executing the quality activities to assess performance and recommend necessary changes.
204© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Seven basic quality tools Quality control measurements
Quality metrics Statistical sampling Validated changes
Quality checklists Inspection Verified deliverables
Work performance data Approved change requests review Work performance information
Approved change requests Change requests
Deliverables Project management plan updates
Project documents Project documents updates
Organizational process assets Organizational process assets updates
Control Quality – T&T
Inspection
An inspection is the examination of a work product to determine if it conforms to documented standards.
Inspections may be called reviews, peer reviews, audits, or walkthroughs. In some application areas, these terms have narrow and specific meanings. Inspections also are used to validate defect repairs.
Example : The results of a single activity can be inspected, or the final product of the project can be inspected.
205© LEARNERSTREET INTERNATIONAL PVT LTD.
Control Quality - Output
Validated Changes
Any changed or repaired items are inspected and will be either accepted or rejected before notification of the decision is provided. Rejected items may require rework.
Verified Deliverables
A goal of the Control Quality process is to determine the correctness of deliverables. The results of performing the Control Quality process are verified deliverables.
206© LEARNERSTREET INTERNATIONAL PVT LTD.
Key Concepts
Quality
The degree to which a set of inherent characteristics satisfies the stated or implied needs of the customer.
To measure quality successfully, it is necessary to turn implied need into stated needs via project scope management.
Quality Objective
A statement of desired results to be achieved within a specified time frame.
Quality Policy
As endorsed by senior management, sets the organization’s intended direction on implementing its quality management approach.
207© LEARNERSTREET INTERNATIONAL PVT LTD.
Summary
Project Quality Management
• Plan Quality
• Perform Quality Assurance
• Quality Control
208© LEARNERSTREET INTERNATIONAL PVT LTD.
209© LEARNERSTREET INTERNATIONAL PVT LTD.
1. Modern Quality Management means:A. Meeting or exceeding customer expectationsB. Conformance to requirements and fitness for useC. Decreasing total cost of ownership of the projectD. None of the above
2. Which of the following is NOT included in the quality management plan?A. Definitions.B. Assurance.C. Control.D. Planning.
3. All of the following is true about Quality Metrics except:Is an output of Quality Planning processIs an input to Quality Assurance processIs an input to Quality Control processIs an input to Quality Planning process
210© LEARNERSTREET INTERNATIONAL PVT LTD.
4. How can a Process flow chart help in Quality management?A. A process flow chart may help reacting later.B. A process flow chart may help anticipating problems.C. A process flow chart may help spotting staff accountable.D. A process flow chart may help identifying outliers.
5. Which quality management tool would be used to determine potential causes of a production problem?A. scatter diagram.B. histogram.C. control chart.D. Ishikawa diagram.
6. Two variables are plotted on a graph and a relationship is derived, this is an example ofA. Pareto diagramB. Scatter DiagramC. Control ChartD. Flow Chart
Project Human Resource Management
MODULE - 9
Agenda
Why manage Human Resources?
What is Human Resource management?
Project Human Resource Management processes
Plan Human Resource
Acquire Project Team
Develop Project Team
Manage Project Team
Motivation Theories
212© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Human Resource Management
Project Human Resource Management includes the processes that organize, manage, and lead the project team.
213© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Human Resource Management
Plan Human Resource Management is the process of identifying and documenting project roles, responsibilities, required skills, reporting relationships, and creating a staffing management plan.
214© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Organization charts andposition descriptions
Human resourcemanagement plan
Activity resourcerequirements
Networking
Enterprise environmentalfactors
Organizational theory
Organizational processassets
Expert judgment
Meetings
Plan Human Resource Management – T&T
Organization Charts and Position Descriptions - Various formats exist to document team member roles and responsibilities.
215© LEARNERSTREET INTERNATIONAL PVT LTD.
Breakdown Structure
Work Breakdown Structure (WBS) - Shows a breakdown of project deliverables
Organization Breakdown Structure (OBS) - Arranged according to an organization’s existing departments, units, or teams with the project activities or work packages listed under each department.
Resource Breakdown Structure (RBS) - Hierarchical list of resources related by category and resource type that is used to facilitate planning and controlling of project work.
Risk Breakdown Structure (RBS) - Hierarchically organized depiction of the identified project risks arranged by risk category.
216© LEARNERSTREET INTERNATIONAL PVT LTD.
Responsibility Assignment Matrix
RACI Matrix - Is a grid that shows the project resources assigned to each work package and what role they will play for those activities. Important rule to remember is that never have two people accountable for any activity.
217© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Human Resource Management – T&T
Networking
Networking is the formal and informal interaction with others inan organization, industry, or professional environment.
It is a constructive way to understand political and interpersonalfactors that will impact the effectiveness of various staffingmanagement options.
Organizational Theory
Organizational theory provides information regarding the way inwhich people, teams, and organizational units behave.
Effective use of common themes identified in organizationaltheory can shorten the amount of time, cost, and effort neededto create the Plan and improve planning efficiency.
218© LEARNERSTREET INTERNATIONAL PVT LTD.
Acquire Project Team
Acquire Project Team is the process of confirming human resource availability and obtaining the team necessary to complete project activities.
219© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Human resourcemanagement plan
Pre-assignment Project staff assignments
Enterprise environmentalfactors
Negotiation Resource calendars
Organizational processassets
Acquisition Project management planupdates
Virtual teams
Multi-criteria decisionanalysis
Acquire Project Team – T&T
Pre-assignment - When project team members are selected inadvance, they are considered pre-assigned.
Negotiation - Staff assignments are negotiated on many projects.The project management team may need to negotiate withfunctional manager, other project manager or external vendors.
Acquisition - When the performing organization is unable to providethe staff needed to complete a project, the required services maybe acquired from outside sources.
Virtual Teams - Virtual teams can be defined as groups of peoplewith a shared goal who fulfil their roles with little or no time spentmeeting face to face.
220© LEARNERSTREET INTERNATIONAL PVT LTD.
Acquire Project Team – T&T
Multi-Criteria Decision Analysis - Selection criteria are often used as a part of acquiring the project team. By use of a multi-criteria decision analysis tool, criteria are developed and used to rate or score potential team members.• Availability
• Cost
• Experience
• Ability
• Knowledge
• Skills
• Attitude
• International factors
221© LEARNERSTREET INTERNATIONAL PVT LTD.
Acquire Project Team – Output
Project Staff Assignments
The project is staffed when appropriate people have been assigned to the team.
Resource Calendars
Resource calendars document the time periods that each project team member is available to work on the project.
222© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Project Team
Develop Project Team is the process of improving competencies, team member interaction, and overall team environment to enhance project performance.
223© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Human resourcemanagement plan
Interpersonal skills Team performanceassessments
Project staff assignments Training Enterprise environmentalfactors updates
Resource calendars Team-building activities
Ground rules
Colocation
Recognition and rewards
Personnel assessmenttools
Develop Project Team – T&T
Interpersonal Skills
Interpersonal skills, sometimes known as “soft skills,” are behavioural competencies:
Example : Communication skills, emotional intelligence, conflict resolution, negotiation, influence, team building, and group facilitation.
Training
Training includes all activities designed to enhance the competencies of the project team members. Training can be formal or informal.
Example : Training methods include classroom, online, computer-based, on-the-job training from another project team member, mentoring, and coaching.
224© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Project Team – T&T
Team-Building Activities:
Forming - This phase is where the team meets and learns about the project and their formal roles and responsibilities.
Storming - The team begins to address the project work, technical decisions, and the project management approach. If team members are not collaborative and open to differing ideas and perspectives, the environment can become counterproductive.
Norming - Team members begin to work together and adjust their work habits and behaviours to support the team.
Performing - Teams that reach the performing stage function as a well-organized unit.
Adjourning - The team completes the work and moves on from the project.
225© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Project Team – T&T
Ground Rules - Ground rules establish clear expectations regarding acceptable behaviour by project team members.
Colocation - Colocation, also referred to as “tight matrix,” involves placing many or all of the most active project team members in the same physical location to enhance their ability to perform as a team.
Recognition and Rewards - Part of the team development process involves recognizing and rewarding desirable behaviour.
Personnel Assessment Tools - Personnel assessment tools give the project manager and the project team insight into areas of strength and weakness.
226© LEARNERSTREET INTERNATIONAL PVT LTD.
Develop Project Team – Output
Team Performance Assessments
As project team development efforts such as training, team building, and colocation are implemented, the project management team makes formal or informal assessments of the project team’s effectiveness.
Improvements in skills that allow individuals to perform assignments more effectively
Improvements in competencies that help the team perform better as a team
Reduced staff turnover rate
Increased team cohesiveness where team members share information and experiences openly and help each other.
227© LEARNERSTREET INTERNATIONAL PVT LTD.
Manage Project Team
Manage Project Team is the process of tracking team member performance, providing feedback, resolving issues, and managing team changes to optimize project performance.
228© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Human resource management plan
Observation and conversation Change requests
Project staff assignments Project performance appraisals
Project management planupdates
Team performance assessments
Conflict management Project documents updates
Issue log Interpersonal skills Enterprise environmentalfactors updates
Work performance reports Organizational process assets updates
Organizational process assets
Manage Project Team - Input
Issue Log Issues arise in the course of managing the project team. An issue log can be used to document and monitor who is responsible for resolving specific issues by a target date.
229© LEARNERSTREET INTERNATIONAL PVT LTD.
Manage Project Team – T&T
Observation and Conversation
Observation and conversation are used to stay in touch with the work andattitudes of project team members.
Project Performance Appraisals
Objectives for conducting performance appraisals during the course of aproject can include clarification of roles and responsibilities, constructivefeedback to team members, discovery of unknown or unresolved issues,development of individual training plans, and the establishment of specificgoals for future time periods.
230© LEARNERSTREET INTERNATIONAL PVT LTD.
Manage Project Team – T&T
Conflict Management - Conflict is inevitable in a project environment.
Withdraw/Avoid. Retreating from an actual or potential conflict situation;postponing the issue to be better prepared or to be resolved by others.
Smooth/Accommodate. Emphasizing areas of agreement rather than areas ofdifference; conceding one’s position to the needs of others to maintain harmonyand relationships.
Compromise/Reconcile. Searching for solutions that bring some degree ofsatisfaction to all parties in order to temporarily or partially resolve the conflict.
Force/Direct. Pushing one’s viewpoint at the expense of others; offering onlywin-lose solutions, usually enforced through a power position to resolve anemergency.
Collaborate/Problem Solve. Incorporating multiple viewpoints and insights fromdiffering perspectives; requires a cooperative attitude and open dialogue thattypically leads to consensus and commitment.
231© LEARNERSTREET INTERNATIONAL PVT LTD.
Conflict Resolution Matrix
232© LEARNERSTREET INTERNATIONAL PVT LTD.
Power to Project Manager
legitimate power – This power comes with position as PM. He canassign work and ask report from project team members.
Reward power - PM can award a bonus or another kind of reward inorder to motivate team members.
Punishment power – PM has power to penalize a team member forpoor behaviour or performance. Always remember to do this one-on-one and in private!
Expert power – Being expert in specific area project manager canenjoy expert power.
Referent power - People admire PM, are loyal to you, and want to dowhat you do because you’re part of the cool crowd.
233© LEARNERSTREET INTERNATIONAL PVT LTD.
Motivation Theories
Maslow’s Hierarchy of Needs says that people have needs, and until the lower ones are satisfied they won’t even begin to think about the higher ones.
234© LEARNERSTREET INTERNATIONAL PVT LTD.
Motivation Theories
McGregor’s Theory X and Theory Y - McGregor tells us that there are two kinds of managers:
Theory X Manager - Who assume that everyone on the team is selfish and unmotivated. A Theory X manager will micromanage the team, looking over everyone’s shoulder all the time and making them feel like they aren’t trusted.
Theory Y Manager - Who trust their team to do a good job. It’s much better and easier to be a Theory Y manager. If you trust the team to do their jobs, they won’t let you down!
William Ouchi's Theory Z - People who develop a leadership style based on theory Z, use different styles of leadership with different people, depending on the situation.
235© LEARNERSTREET INTERNATIONAL PVT LTD.
Motivation Theories
Herzberg’s Motivation-Hygiene Theory – Employee need things like goodworking conditions, a satisfying personal life, and good relations withmanager and co-workers. They don’t motivate employee, but they areneeded before employee can be motivated. Until employee have them,they don’t really care about “motivation factors” like achievement,recognition, personal growth, or career advancement.
Achievements
Recognitions
Work Itself
Responsibility
Advancement
Possibility of growth
236© LEARNERSTREET INTERNATIONAL PVT LTD.
Motivation Theories
Management Style – Refers to the ways managers interact with team members.
Autocratic - Traditional figure of a boss who makes binding decision regardless of what subordinates think or desire.
Laissez Fare - The team takes decision, enhances free thinking.
Democratic - Participative, decisions made jointly by management and staff.
237© LEARNERSTREET INTERNATIONAL PVT LTD.
Motivation Theories
Victor Vroom's Expectancy Theory - The level of expectation of their efforts will result in a desired outcome.
Is this work important - The expectation that good work will be rewarded.
Will i be rewarded - Attractiveness of the reward.
What is the value of the reward - Motivation will be high when all three factors are high.
238© LEARNERSTREET INTERNATIONAL PVT LTD.
Motivation Theories
Oldham Hackman's Job Satisfaction Theory
Skills Variety - The number of job skills that the job holder hasthe opportunity to exercise
Task Identity - The degree to which your work and its result areidentifiable as belonging to you
Task Significance - The degree to which your job has an influenceon others
Autonomy - The discretion you have about the way that you dothe job
Feedback - The information that you get back about the result ofyour work
239© LEARNERSTREET INTERNATIONAL PVT LTD.
Summary
Why manage Human Resources?
What is Human Resource management?
Project Human Resource Management processes
• Plan Human Resource
• Acquire Project Team
• Develop Project Team
• Manage Project Team
Motivation Theories
240© LEARNERSTREET INTERNATIONAL PVT LTD.
241© LEARNERSTREET INTERNATIONAL PVT LTD.
1. You are a project manager in an organization that has a weak matrix organization. Who is the person with authority in the projectA. Project SponsorB. CustomerC. Project ManagerD. Functional Manager
2. One example of a Roles and Responsibilities chart is the RACI Chart. Which of the following is not depicted by the RACI chartA. InformB. RiskC. AccountableD. Consult
3. As a project manager, you are preparing the Human Resource plan. You are considering all the factors that need to be a part of the plan. Which of these would not form a part of this plan?A. Project RolesB. Project ResponsibilitiesC. Management ReserveD. Responsibilities
242© LEARNERSTREET INTERNATIONAL PVT LTD.
4. Which of the following is not an input into the Develop Human Resource Plan?A. Enterprise Environmental factorsB. Organizational Process AssetsC. Staffing Management PlanD. Activity Resource Requirement
5. Which of the following is not a factor that will influence the selection of a resource into a project team?A. Budget allocated and the cost of the resourceB. The project is delayed and would have a cost overrunC. The Time Management System in use within the organisationD. Availability and skills of the resource being considered
6. Which of the following conflict resolution methods provides for a win-win situation.A. Problem SolvingB. WithdrawalC. CompromisingD. Smoothing
Project Communications Management
MODULE - 10
Agenda
Project Communication Management
Plan Communications Management• Stakeholder Register
• Communication Channel
• Communication Model
• Communication Method
Manage Communications
Control Communications
244© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Communications Management
Project Communications Management includes the processes that are required to ensure timely and appropriate planning, collection, creation, distribution, storage, retrieval, management, control, monitoring, and the ultimate disposition of project information.
245© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Communications Management
Plan Communications Management is the process of developing an appropriate approach and plan for project communications based on stakeholder’s information needs and requirements, and available organizational assets.
246© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Communicationrequirements analysis
Communicationsmanagement plan
Stakeholder register Communicationtechnology
Project documentsupdates
Enterprise environmentalfactors
Communication models
Organizational processassets
Communication methods
Meetings
Stakeholder Register
247© LEARNERSTREET INTERNATIONAL PVT LTD.
Stakeholder Influence Expectations of Stakeholders Plan to manage expectations
Client
Manager
Decision on project
continuation
• Proactive in issue resolution
• Business orientation
• Identify areas for automation and
present within 3 months
• Schedule monthly client meetings
Senior
Management
Internal support for
project execution
• Provide experience resources for
other groups over a period of time
• Formulate a resource release plan and
review with senior manager
Project team Key stakeholder to
ensure success of
project execution
• Individual aspirations
• Opportunity for growth
• Visibility to Sr. management
• Identify individual aspirations and
proactively plan for those
• Create opportunities within and
outside the project for team to
participate.
• Highlight achievements to sr.
management
Client team
member
In-depth
application
knowledge
• Fears for job security • Involve in all team meetings for the
project
• Be proactive in communication and
ensure transparency
Plan Communications Management – T&T
Communication Requirements Analysis
The analysis of the communication requirements determines the informationneeds of the project stakeholders. These requirements are defined by combiningthe type and format of information needed with an analysis of the value of thatinformation.
Communication Channel - The project manager should also consider the numberof potential communication channels or paths as an indicator of the complexityof a project’s communications.
Formula N = N x ( N – 1 ) / 2
N = Number of people
Example 1 : 3 = 3 x ( 3 – 1 ) / 2
Example 2 : 10 = 5 x ( 5 – 1 ) / 2
Increase of 2 people adds 7 more communication channels in above example.
248© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Communications Management – T&T
Communication Technology
The methods used to transfer information among project stakeholders mayvary significantly.
Example : A project team may use techniques from brief conversations toextended meetings, or from simple written documents to extensive materialswhich are accessible online as methods of communication.
Urgency of the need for information
Availability of technology
Ease of Use
Project environment
Sensitivity and confidentiality of the information
249© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Communications Management – T&T
Communication Model
The communication models used to facilitate communications and the exchangeof information may vary from project to project and also within different stagesof the same project.
250© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Communications Management – T&T
Communication Method
There are several communication methods that are used to share information among project stakeholders.
Interactive communication - Between two or more parties performing a multidirectional exchange of information.
Push communication - Sent to specific recipients who need to receive the information.
Pull communication. Used for very large volumes of information, or for very large audiences, and requires the recipients to access the communication content at their own discretion.
251© LEARNERSTREET INTERNATIONAL PVT LTD.
Manage Communications
Manage Communications is the process of creating, collecting, distributing, storing, retrieving, and the ultimate disposition of project information in accordance to the communications management plan.
252© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Communicationsmanagement plan
Communicationtechnology
Project communications
Work performancereports
Communication models Project management planupdates
Enterprise environmentalfactors
Communication methods Project documentsupdates
Organizational processassets
Information managementsystems
Organizational processassets updates
Performance reporting
Manage Communications – T&T
Information management systems - Project information is managed and distributed using a variety of tools, including:
Hard-copy document management: letters, memos, reports, and press releases;
Electronic communications management: e-mail, fax, voice mail, telephone, video and web conferencing, websites, and web publishing; and
Electronic project management tools: web interfaces to scheduling and project management software, meeting and virtual office support software, portals, and collaborative work management tools.
253© LEARNERSTREET INTERNATIONAL PVT LTD.
Control Communications
Control Communications is the process of monitoring and controllingcommunications throughout the entire project life cycle to ensure theinformation needs of the project stakeholders are met.
254© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Information managementsystems
Work performanceinformation
Project communications Expert judgment Change requests
Issue log Meetings Project management planupdates
Work performance data Project documentsupdates
Organizational processassets
Organizational processassets updates
Control Communications – T&T
Information Management Systems
An information management system provides a set of standard tools for the project manager to capture, store, and distribute information to stakeholders about the project’s costs, schedule progress, and performance.
Some software packages allow the project manager to consolidate reports from several systems and facilitate report distribution to the project stakeholders.
255© LEARNERSTREET INTERNATIONAL PVT LTD.
Summary
Project Communication Management
Plan Communications Management Stakeholder Register
Communication Channel
Communication Model
Communication Method
Manage Communications
Control Communications
256© LEARNERSTREET INTERNATIONAL PVT LTD.
257© LEARNERSTREET INTERNATIONAL PVT LTD.
1. Of the following, which one is not an example of formal communications?A. Presentations to groupsB. Ad hoc conversationsC. Contractual agreementsD. Presentations to management
2. Which one of the following can use EVM in its preparation for management?A. Status reportsB. Trend reportsC. Performance reportsD. All of the above
3. You are in a meeting with someone who just ate a slice of garlic bread. Your are distracted by his pungent breath. Which of the following communication barriers describe these distractions?A. Selective PerceptionB. Sensory LimitationsC. Varying Alertness of PerceptionD. Sign Detection
258© LEARNERSTREET INTERNATIONAL PVT LTD.
4. Which one is not a filter for receivers of communication?A. CultureB. ConflictC. KnowledgeD. Language
5. Which one of the following is an output of Report Performance?A. Trend analysisB. EVMC. Variance analysisD. Change requests
6.You are the project manager for the PMU Project. Your project has 13 members. You have been informed that next week your project will receive the seven additional members you requested. How many channels of communications will you have next week?A. 1B. 78C. 190D. 112
Project Risk ManagementMODULE - 11
Agenda
260© LEARNERSTREET INTERNATIONAL PVT LTD.
Basic Concept Plan Risk Management Probability & Impact Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Decision Tree Plan Risk Responses Positive and Negative Risk Response Strategies Control Risks
Project Risk Management
Project Risk Management includes the processes of conducting riskmanagement planning, identification, analysis, response planning, andcontrolling risk on a project.
The objectives of project risk management are to increase the likelihoodand impact of positive events, and decrease the likelihood and impact ofnegative events in the project.
261© LEARNERSTREET INTERNATIONAL PVT LTD.
Basic Concepts
Project risk is an uncertain event or condition that, if it occurs, has apositive or negative effect on one or more project objectives such asscope, schedule, cost, and quality.
Known risks are those that have been identified and analysed,making it possible to plan responses for those risks.
Known risks that cannot be managed proactively, should beassigned a contingency reserve.
Unknown risks cannot be managed proactively and therefore maybe assigned a management reserve.
A negative project risk that has occurred is considered an issue.
262© LEARNERSTREET INTERNATIONAL PVT LTD.
Basic Concepts
Risk appetite, which is the degree of uncertainty an entity is willingto take on in anticipation of a reward.
Risk tolerance, which is the degree, amount, or volume of risk thatan organization or individual will withstand.
Risk threshold, which refers to measures along the level ofuncertainty or the level of impact at which a stakeholder may have aspecific interest. Below that risk threshold, the organization willaccept the risk.
Above that risk threshold, the organization will not tolerate the risk.
Positive and negative risks are commonly referred to asopportunities and threats.
263© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Risk Management
Plan Risk Management is the process of defining how to conduct risk management activities for a project.
264© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Analytical techniques Risk management plan
Project charter Expert judgment
Stakeholder register Meetings
Enterprise environmentalfactors
Organizational processassets
Plan Risk Management – T&TAnalytical Techniques
Analytical techniques are used to understand and define the overall risk
management context of the project.
Risk management context is a combination of stakeholder risk attitudes and the
strategic risk exposure of a given project based on the overall project context.
Meetings
High-level plans for conducting the risk management activities are defined in these
meetings.
Risk contingency reserve application approaches will be established
Risk management responsibilities are assigned
Organization templates for risk categories and definitions of terms such as levels of
risk, probability of by type of risk etc. will be tailored to specific project.
If templates or other processes do not exist, they may be generated in these
meetings.
265© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Risk Management - Output
The risk management plan is a component of the project managementplan and describes how risk management activities will be structured andperformed.
Methodology. Defines the approaches, tools, and data sources that willbe used to perform risk management on the project.
Roles and responsibilities. Defines roles and responsibility of peopleplaying role in risk management.
Budgeting. Estimates funds needed, based on assigned resources, forinclusion in the cost baseline.
Timing. Defines when and how often the risk management processeswill be performed.
Risk categories. Provide a means for grouping potential causes of risk.
266© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Risk Management - Output
Definitions of risk probability and impact
Probability and impact matrix
Revised stakeholders’ tolerances
267© LEARNERSTREET INTERNATIONAL PVT LTD.
Identify Risks
Identify Risks is the process of determining which risks may affect the project and documenting their characteristics.
268© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Risk, Cost & Schedule management plan
Documentation reviews Risk register
Quality & HR management plan Information gatheringtechniques
Scope baseline Checklist analysis
Activity cost estimates Assumptions analysis
Activity duration estimates Diagramming techniques
Stakeholder register SWOT analysis
Project documents Expert judgment
Procurement documents
EEF & OPA
Identify Risks – T&T
Documentation Reviews - A structured review of the project documentation may be performed, including plans, assumptions, previous project files, agreements, and other information.
Information Gathering Techniques – Brainstorming, Delphi technique, Interviewing, Root cause analysis
Checklist Analysis
Assumptions Analysis
Diagramming Techniques - Cause and effect diagrams, System or process flow charts, Influence diagrams
SWOT Analysis
269© LEARNERSTREET INTERNATIONAL PVT LTD.
Identify Risks - Output
The output of the risk identification process is the document that lists all the project risks identified and related information
Risk Register typically has the following information:
• List of identified risks
• List of potential responses
• Root causes of risks
• Updated risk categories
Risk Register might have additional information for performing organization
270© LEARNERSTREET INTERNATIONAL PVT LTD.
Perform Qualitative Risk Analysis
Perform Qualitative Risk Analysis is the process of prioritizing risks for furtheranalysis or action by assessing and combining their probability of occurrence andimpact.
271© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Risk management plan Risk probability andimpact assessment
Project documentsupdates
Scope baseline Probability and impactmatrix
Risk register Risk data qualityassessment
Enterprise environmentalfactors
Risk categorization
Organizational processassets
Risk urgency assessment
Expert judgment
Perform Qualitative Risk Analysis – T&T
Risk Probability and Impact Assessment• Investigates the likelihood of the risk to occur.• Investigates the Potential effect on the project objectives like Schedule,
Time and Quality.• Investigates both negative and positive effects • Assessed for each identified Risk• Assessments performed through interviews and meetings involving the
selective participants• Risks with low Probability and Impact are added to the watch list
Probability and Impact Matrix (see diagram in next slide)• Includes a look-up table with pre-defined probability and Impact values• Rating based on combination of Probability and Impact as Low,
Moderate or High• Helps Guide Risk Responses
272© LEARNERSTREET INTERNATIONAL PVT LTD.
Probability & Impact Definition
273© LEARNERSTREET INTERNATIONAL PVT LTD.
Probability Description Category Probability
Value
Probability of event occurring is more than 50/50 Very Likely 0.8
Probability of event occurring is around 50/50 Probable 0.5
Probability of event occurring is less than 50/50 Less Likely 0.3
Impact on Schedule Impact on Effort Technical
Performance
Overall Impact Weightage (Scale –
1 to 10)
More than 50% slippage More than 50% slippage Not achieved Catastrophic 8
30% to 50% slippage 30% to 50% slippage Significant Critical 5
10% to 30% slippage 10% to 30% slippage Some
reduction
Marginal 3
None Less than 10% Minimal Negligible 1
Perform Qualitative Risk Analysis – T&T
Risk Data Quality Assessment• Evaluates the degree to which the Risk Data is accurate and
useful for Risk management.
Risk Categorization• Categorization by “Sources of Risk”, “Area of the Project
affected” etc.• May involve Grouping of risks by common root cause.
Risk Urgency Assessment• Address the Risks needing near term responses first.
274© LEARNERSTREET INTERNATIONAL PVT LTD.
Perform Quantitative Risk Analysis
Perform Quantitative Risk Analysis is the process of numerically analysing the effect of identified risks on overall project objectives.
275© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Risk management plan Data gathering and representation techniques
Project documents updates
Cost management plan Quantitative risk analysisand modelling techniques
Schedule management plan Expert judgment
Risk register
Enterprise environmental factors
Organizational process assets
Perform Quantitative Risk Analysis – T&T
Data Gathering and Representation Techniques
Interviewing. Interviewing techniques draw on experience and historical data to quantify the probability and impact of risks on project objectives.
276© LEARNERSTREET INTERNATIONAL PVT LTD.
Data Gathering and Representation Techniques
Probability Distribution Techniques
Continuous probability distribution (Beta and Triangular distribution)
Continuous probability distribution is an examination of the probability of all possibilities within a given range e.g. a dart thrown at a dartboard
Discrete distributions (Decision Tree)
The values must cover all of the possible outcomes of the event, while the total probabilities must sum to exactly 1, or 100%. Ex. a single coin flip
277© LEARNERSTREET INTERNATIONAL PVT LTD.
Quantitative Risk Analysis and Modelling Techniques
Sensitivity Analysis
• Helps determine which risks have the most potential impact
• It examines each uncertainty on its own merit
• It is also called “What if” analysis
Expected Monetary Value (EMV) Analysis
• The EMV value of a project or event is based on the probability of outcomes that are uncertain
• Example - One risk may cost the project an additional $20,000 if it occurs, but there is only a 20% probability of the event happening
• So EMV for above example would be $4,000
• EMV of opportunities is expressed as +Ve values
• EMV of risks is expressed as –Ve values
• Decision Tree use EMV
278© LEARNERSTREET INTERNATIONAL PVT LTD.
Decision Tree
279© LEARNERSTREET INTERNATIONAL PVT LTD.
Perform Quantitative Risk Analysis – T&T
Modelling and Simulation
• Simulations are used to identify the potential impact of the uncertainties specified at project level on key objectives
• Simulations are useful when there are a number of project variables to be considered
• Simulations are typically performed using the Monte Carlo technique
• Uses a large number of random probabilistic inputs
• E.g. total cost or completion date
• Schedule risk simulations are usually performed using Precedence Diagramming Method (PDM)
• Cost risk simulation typically uses WBS as its basis
280© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Risk Responses
Plan Risk Responses is the process of developing options and actions to enhance opportunities and to reduce threats to project objectives.
281© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Risk management plan Strategies for negativerisks or threats
Project management planupdates
Risk register Strategies for positiverisks or opportunities
Project documentsupdates
Contingent responsestrategies
Expert judgment
Strategies for Negative risks or Threats
Avoid - Involves changing the project management plan to eliminate the threat. Extending the schedule, Changing the strategy, reducing the scope.
Transfer - Involves shifting some or all the negative impact of a threat, along with ownership to a third party. Risk is not eliminated but management of the risk is transferred to another party. Most effective in financial risk exposure
Examples : Use of Insurance, Warranties, Guarantees etc.
Mitigate - Implies Reduction in the probability and impact of the risk. Taking early action to reduce the probability of the risk.
Examples : Adopting less complex processes, Conducting more tests, choosing more stable supplier
Accept - Adopted because it is not possible to eliminate all the threats from the project. Strategy can be either Passive or Active.
282© LEARNERSTREET INTERNATIONAL PVT LTD.
Strategies for Positive risks or Opportunities
Exploit - This strategy seeks to eliminate the uncertainty associated with a positive risk by ensuring the opportunity happens.
Example : Assigning the most talented resource to the project to reduce the time to completion.
Share - Involves allocating some or all of the ownership of the opportunity to a third party who is best able to capture the opportunity.
Examples : Joint ventures, Partnerships etc.
Enhance - Used to increase the probability and/or positive impact of the opportunity.
Example : Adding more resources to an activity to finish early.
Accept - Accepting an opportunity as it comes along. Not pursuing it.
283© LEARNERSTREET INTERNATIONAL PVT LTD.
Control Risks
Control Risks is the process of implementing risk response plans, tracking identified risks, monitoring residual risks, identifying new risks, and evaluating risk process effectiveness throughout the project.
284© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Risk reassessment Work performanceinformation
Risk register Risk audits Change requests
Work performance data Variance and trendanalysis
Project management planupdates
Work performancereports
Technical performancemeasurement
Project documentsupdates
Reserve analysis Organizational processassets updates
Meetings
Control Risks – T&T
Risk Reassessment
• Control Risks often results in identification of new risks, reassessment of current risks, and the closing of risks that are outdated.
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.
• The project manager is responsible for ensuring that risk audits are performed at an appropriate frequency, as defined in the project’s risk management plan.
Reserve Analysis
• 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.
285© LEARNERSTREET INTERNATIONAL PVT LTD.
Summary Basic Concept Plan Risk Management Probability & Impact Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Decision Tree Plan Risk Responses Positive and Negative Risk Response Strategies Control Risks
286© LEARNERSTREET INTERNATIONAL PVT LTD.
287© LEARNERSTREET INTERNATIONAL PVT LTD.
1. With respect to a project risk, all of the following are true except A. It may have a negative impact on schedule or costB. It may have a positive impact on costC. It is sure to have impact in subsequent phase of the projectD. It may have one or more causes
2. Risks in a project are identified during which of the following processesA. Plan Risk Management B. Project Planning processC. Identify RiskD. Plan Risk Response
3. You are managing a very large and complex project for an offshore oil drilling company. How often should you do risk identification?A. Use a suitable thumb rule to arrive at a weekly or monthly schedule B. At the end of each project phaseC. Throughout the projectD. All risks should be identified in the beginning as failure can be expensive
288© LEARNERSTREET INTERNATIONAL PVT LTD.
4. Monte Carlo is aA. Name of a simulation techniqueB. Is a Probability distribution C. Is an decision tree analysis technique D. Is a method of seeking expert judgment
5. All of the following are true about risk except:A. May have a positive or negative impactB. Some risks are desired in a businessC. The event associated with the risk may or may not happenD. Risks can be eliminated
6. You have identified a new, previously unidentified, risk in the project. What would you doA. Determine the value of the risk and add it to the project costB. Increase the contingency of the projectC. Analyse the risk for its probability and impact. Document the EMV of this riskD. Increase the project price equal to the risk value
Project Procurement Management
MODULE - 12
Agenda
Project Procurement Management
Type of Contract
Plan Procurement Management
Make or Buy Analysis
Conduct Procurement
Control Procurement
Close Procurement
290© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Procurement Management
Project Procurement Management includes the processes necessary to purchase or acquire products, services, or results needed from outside the project team.
291© LEARNERSTREET INTERNATIONAL PVT LTD.
Basic Concept
Contract:
A Contract represents a legal document between a buyer and a seller. It represents a mutually binding agreement that obligates the seller to provide the specified products, services or results and obligates the buyer to provide monetary or other valuable compensation.
Type of Contract:
Fixed-price contracts
Cost-reimbursable contracts
Time and Material Contracts
292© LEARNERSTREET INTERNATIONAL PVT LTD.
Fixed Price Contracts
Fixed total price for a defined product, service, or result to be provided
May include incentive for achieving or exceeding target
Seller is legally obligated to complete such contracts, if not then pay damage
Buyer need to precisely specify the product or services being procured
Any change in scope attract extra cost and time etc.
Following are three type of fixed price contracts:
• Firm Fixed Price Contracts (FFP)
• Fixed Price Incentive Fee Contracts (FPIF)
• Fixed Price with Economic Price Adjustment Contracts (FP-EPA)
293© LEARNERSTREET INTERNATIONAL PVT LTD.
Fixed Price Contracts
Firm Fixed Price Contracts (FFP) - This is most common type contract which is preferred by companies when they have fixed scope information. Cost increase due to poor performance is responsibility of seller
Fixed Price Incentive Fee Contracts (FPIF) - Seller gets incentive if performance is good. Under FPIF contracts, a price ceiling is set, and all costs above the price ceiling are the responsibility of the seller, who is obligated to complete the work.
Fixed Price with Economic Price Adjustment Contracts (FP-EPA) –This type contact is used when projects are long term. EPA take care of inflation or currency value fluctuation etc.
294© LEARNERSTREET INTERNATIONAL PVT LTD.
Cost Reimbursable Contracts
In this type contact all legitimate seller cost is reimbursed, plus a fee representing seller profit is also given.
It can also includes incentive based on performance.
A cost-reimbursable contract provides the project flexibility to redirect a seller whenever the scope of work cannot be precisely defined at the start and needs to be altered, or when high risks may exist in the effort.
Following are three type of cost reimbursable contracts:
• Cost Plus Fixed Fee Contracts (CPFF).
• Cost Plus Incentive Fee Contracts (CPIF).
• Cost Plus Award Fee Contracts (CPAF).
295© LEARNERSTREET INTERNATIONAL PVT LTD.
Cost Reimbursable Contracts
Cost Plus Fixed Fee Contracts (CPFF) - The seller is reimbursed cost, andreceives a fixed-fee payment calculated as a percentage of the initialestimated project costs. A fee is paid only for completed work and does notchange due to seller performance. Fee amounts do not change unless theproject scope changes.
Cost Plus Incentive Fee Contracts (CPIF) - The seller is reimbursed cost, andreceives a predetermined incentive fee based performance. In CPIF contracts,if the final costs are less or greater than the original estimated costs, thenboth the buyer and seller share costs from the departures based upon a pre-negotiated cost-sharing formula, for example, an 80/20 split over/under targetcosts based on the actual performance of the seller.
Cost Plus Award Fee Contracts (CPAF) - The seller is reimbursed costs, but themajority of the fee is earned only based on the satisfaction of certain broadsubjective performance criteria defined and incorporated into the contract.The determination of fee is based solely on the subjective determination ofseller performance by the buyer, and is generally not subject to appeals.
296© LEARNERSTREET INTERNATIONAL PVT LTD.
Time and Material Contracts
Seller is paid their hourly rate and they are reimbursed for the cost of material
This type of contract is used for staff augmentation
This type of contract us used where scope of work can’t be defined precisely
This type of contract may increase time and cost value based on changes
Many organizations require not-to-exceed values and time limits placed in all T&M contracts to prevent unlimited cost growth
297© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Procurement Management
Plan Procurement Management is the process of documenting project procurement decisions, specifying the approach, and identifying potential sellers.
298© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Make-or-buy analysis Procurement management plan
Requirements documentation Expert judgment Procurement statement of work
Risk register Market research Procurement documents
Activity resource requirements Meetings Source selection criteria
Project schedule Make-or-buy decisions
Activity cost estimates Change requests
Stakeholder register Project documents updates
EEF & OPA
Make-or-buy analysis
299© LEARNERSTREET INTERNATIONAL PVT LTD.
Make
• Proven in-house capability
• Better control on time and cost and quality
• Less costly
• Ensures Trade Mark and Intellectual Property
• Required Capital Investments available
• Key skills and resources available
• Supplier base unreliable
• Adds new (important and desired) skills to the org
• Is core to the organization
• Ensures better integration with other processes
• Utilizes available capacity and skills
• Required volume (high/low) fit for in-house
• Opportunity cost
Buy
• Expertise nor available in-house
• Requires very high capital expenditure
• High opportunity cost
• Non-core activity
• Volume too low (not cost effective)
• Volume too high (not enough capacity)
• Supplements internal capabilities
• Reduces risk
• Create multiple sourcing channels
• Direct control not critical to success
• Intellectual Property not an issue
• You have enough lead time
Procurement Plan Management – T & TMarket Research
Market research includes examination of industry and specific vendor capabilities.
Procurement teams may leverage information gained at conferences, online reviews and a variety of sources to identify market capabilities.
The team may also refine particular procurement objectives to leverage maturing technologies while balancing risks associated with the breadth of vendors who can provide the materials or services desired.
300© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Procurement Management – Output
Statement of Work defines in detail the work to be performed by the seller.
• It gives detail of only the work applicable to the contracted
• It is developed from the project scope and WBS
• Information includes, specification, quantity, quality, required performance, duration of performance, location etc.
• Any additional services, like transportation, post implementation support, warranty
SoW should be complete and concise to enable seller to clearly evaluate what is needed and map to their own capabilities
The contact SoW prepared at this stage need not be final
• It may get modified, by the time contract is signed
• Increase or decrease of scope in consultation/negotiation with seller
• Seller may propose an acceptable alternative
301© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Procurement Management – Output
Procurement Documents
• Used to solicit proposals from prospective buyers.
• Common terms used are: Request for information (RFI), Request for proposal (RFP), Invitation for bid (IFB), Request for quotation (RFQ)
• Must be complete and accurate to ensure appropriate responses.
• The buyer structures procurement documents to facilitate an accurate and complete response from each prospective seller and to facilitate easy evaluation of the responses.
• Issuing a procurement request to potential sellers to submit a proposal or bid is normally done in accordance with the policies of the buyer’s organization
302© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Procurement Management – Output
Source Selection Criteria
For simple purchases it may only be decided by overall price
For complex purchases, lowest price may not be the best deal; such deals may need to be evaluated on multiple factors
• Confidence that seller understands your need
• Overall or life cycle cost
• Technical capability and credentials
• Technical and management approach
• Financial stability and capability
• Correct business type and compatibility with your business
• Intellectual Property and Proprietary Rights
• Geographical presence
303© LEARNERSTREET INTERNATIONAL PVT LTD.
Conduct Procurements
Conduct Procurements is the process of obtaining seller responses, selecting a seller, and awarding a contract.
304© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Procurement management plan
Bidder conference Selected sellers
Procurement documents Proposal evaluation techniques
Agreements
Source selection criteria Independent estimates Resource calendars
Seller proposals Expert judgment Change requests
Project documents Advertising Project management plan updates
Make-or-buy decisions Analytical techniques Project documents updates
Procurement statement of work
Procurement negotiations
Organizational process assets
Conduct Procurements – T & T
Bidder Conferences (Contract Conferences, Vendor Conferences, pre-bid Conferences):
• Meetings between the buyer and all prospective sellers prior to submittal of a bid or proposal. Conducted to ensure clear and common understanding
Proposal evaluation techniques:
• A formal evaluation review process. Involves buyer’s Evaluation committee
Independent estimates:
• Serves as a benchmark on proposed response
• Used to identify significant differences in cost estimates.
Advertising:
• Placing advertisements in general circulation publication
• Selected newspapers etc.
305© LEARNERSTREET INTERNATIONAL PVT LTD.
Conduct Procurements – T & T
Analytical Techniques: Analytical techniques can help organizations identify the readiness of a vendor to provide the desired end state, determine the cost expected to support budgeting, and avoid cost overruns due to changes
Procurement Negotiations: Procurement negotiations clarify the structure, requirements, and other terms of the purchases so that mutual agreement can be reached prior to signing the contract.
306© LEARNERSTREET INTERNATIONAL PVT LTD.
Conduct Procurements – Output
Selected Sellers
The selected sellers are those who have been judged to be in a competitive range based upon the outcome of the proposal or bid evaluation, and who have negotiated a draft contract that will become the actual contract when an award is made. Final approval of all complex, high-value, high-risk procurements will generally require organizational senior management approval prior to award.
Agreements
A procurement agreement includes terms and conditions, and may incorporate other items that the buyer specifies regarding what the seller is to perform or provide
307© LEARNERSTREET INTERNATIONAL PVT LTD.
Control Procurements
Control Procurements is the process of managing procurement relationships,monitoring contract performance, and making changes and corrections tocontracts as appropriate.
308© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Contract change controlsystem
Work performanceinformation
Procurement documents Procurement performance reviews
Change requests
Agreements Inspections and audits Project management planupdates
Approved change requests Performance reporting Project documents updates
Work performance reports Payment systems Organizational process assets updates
Work performance data Claims administration
Records management system
Control Procurements – T & T
Contract change control system
• Process by which Procurement can be modified.
• Integrated with the integrated change control system.
Procurement Performance reviews
• Review of seller’s progress to deliver project scope and quality, within cost and on schedule.
• The objective of a performance review is to identify performance successes or failures, progress with respect to the procurement statement of work, and contract noncompliance
Inspections and Audits
• Required by the Buyer and supported by the Seller, as specified in the procurement contract.
• conducted during execution of the project to verify compliance in the seller’s work processes or deliverables
309© LEARNERSTREET INTERNATIONAL PVT LTD.
Control Procurements – T & T
Performance Reporting - Work performance data and reports supplied by sellers
are evaluated against the agreement requirements
Payment systems - Used to process payments to the sellers. All payments are
documented in accordance with the terms of contract.
Claims administration - Contested changes where buyer ands seller don’t reach
an agreement or cannot agree a change has occurred. If the parties themselves
do not resolve a claim, it may have to be handled in accordance with alternative
dispute resolution (ADR) typically following procedures established in the
contract. Settlement of all claims and disputes through negotiation is the
preferred method
Records management system - Used by Project manager to manage contract
and procurement records. It consists of a specific set of processes, related
control functions, and automation tools that are consolidated and combined as
part of the project management information system
310© LEARNERSTREET INTERNATIONAL PVT LTD.
Close Procurements
Close Procurements is the process of completing each procurement.
311© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Procurement audits Closed procurements
Procurement documents Procurement negotiations Organizational processassets updates
Records managementsystem
Close Procurements – T & T
Procurement Audits
The objective of a procurement audit is to identify successes andfailures that warrant recognition in the preparation or administration ofother procurement contracts on the project, or on other projectswithin the performing organization.
Procurement Negotiations
In all procurement relationships, the final equitable settlement of alloutstanding issues, claims, and disputes by negotiation is a primarygoal. Whenever settlement cannot be achieved through directnegotiation, some form of alternative dispute resolution (ADR)including mediation or arbitration may be explored. When all else fails,litigation in the courts is the least desirable option.
312© LEARNERSTREET INTERNATIONAL PVT LTD.
Close Procurements – Output
Closed Procurements
The buyer, usually through its authorized procurement administrator, provides the seller with formal written notice that the contract has been completed. Requirements for formal procurement closure are usually defined in the terms and conditions of the contract and are included in the procurement management plan.
313© LEARNERSTREET INTERNATIONAL PVT LTD.
Summary
Project Procurement Management
Type of Contract
Plan Procurement Management
Make or Buy Analysis
Conduct Procurement
Control Procurement
Close Procurement
314© LEARNERSTREET INTERNATIONAL PVT LTD.
315© LEARNERSTREET INTERNATIONAL PVT LTD.
1. Sandeep a project manager, has sent a Letter of Intent to ABC consulting. Sandeep has…A. Committed himself to buying services and is obliged to pay the applicable costB. Shown interest in purchasing goods or services from ABCC. Shown interest in working for ABC consultingD. Sent them a feedback on a service he took from them and intends to take legal action against ABC
2. Rahul is negotiating a contract with a vendor. During negotiation Rahul should try toA. Ensure that he negotiates a prices substantially lesser than quoted by the sellerB. Ensure a fair deal with adequate risk-reward for both sidesC. Ensure that all or as many of the project risks are transferred to the vendorD. Clearly state his authority as PM for taking decisions
3. Once a contract is signed, it is legally binding on all sides unlessA. Vendor declares it cannot finish the workB. Either side's lawyers declares it null and void C. It violates an applicable lawD. Buyer is unable to finance the work
316© LEARNERSTREET INTERNATIONAL PVT LTD.
4. All of the following are tools and techniques of the Contract Administration process except for which one?A. Contract change control system, buyer-conducted performance review, and inspections and auditsB. Records management system and information technologyC. Contract performance information gathering and contract reporting systemsD. Performance reporting, payment system, and claims administration
5. In a fixed priced contract the profit of the seller is:A. Discussed and agreed during negotiations and are part of the contractB. UnknownC. knownD. Discussed and agreed at the end of the project
6.Your vendors have submitted their proposal with a price. Which of the following is a technique to check the proposal pricing?A. Evaluation criteriaB. Independent estimatesC. Seller rating systemD. Contract negotiation
Project Stakeholder Management
MODULE - 13
Agenda
Project Stakeholder Management
Identify Stakeholders
Plan Stakeholder Management
Manage Stakeholder Engagement
Control Stakeholder Engagement
318© LEARNERSTREET INTERNATIONAL PVT LTD.
Project Stakeholder Management
It includes the processes required to identify the people, groups, or organizations that could impact or be impacted by the project, to analyse stakeholder expectations and their impact on the project, and to develop appropriate management strategies for effectively engaging stakeholders in project decisions and execution.
319© LEARNERSTREET INTERNATIONAL PVT LTD.
Identify Stakeholders
Identify Stakeholders is the process of identifying the people,groups, or organizations that could impact or be impacted by adecision, activity, or outcome of the project, analysing anddocumenting relevant information regarding their interests,involvement, interdependencies, influence, and potential impacton project success.
320© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project charter Stakeholder analysis Stakeholder register
Procurement documents Expert judgment
Enterprise environmentalfactors
Meetings
Organizational processassets
Identify Stakeholders – T & T
Stakeholder Analysis
A technique of systematically gathering and analysing information to determine whose interests should be taken into account throughout the project.
Identify all potential project stakeholders and relevant information
Analyse the potential impact or support each stakeholder could generate, and classify them so as to define an approach strategy.
Assess how key stakeholders are likely to react or respond in various situations, in order to plan how to influence them to enhance their support and mitigate potential negative impacts.
321© LEARNERSTREET INTERNATIONAL PVT LTD.
Identify Stakeholders – T & T
Power/Interest grid
Power/Influence grid
Influence/impact grid
Salience model –Power, Urgency & Legitimacy
322© LEARNERSTREET INTERNATIONAL PVT LTD.
Identify Stakeholders - Outputs
Stakeholder Register - The output of this process is the stakeholder register. This contains following details:
• Identification information. Name, organizational position, location, role in the project, contact information;
• Assessment information. Major requirements, main expectations, potential influence in the project, phase in the life cycle with the most interest; and
• Stakeholder classification. Internal/external, supporter/neutral/resistor, etc.
The stakeholder register should be consulted and updated on a regular basis, as stakeholders may change—or new ones identified—throughout the life cycle of the project.
323© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Stakeholder Management
Plan Stakeholder Management is the process of developingappropriate management strategies to effectively engagestakeholders throughout the project life cycle, based on theanalysis of their needs, interests, and potential impact on projectsuccess.
324© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Expert judgment Stakeholder managementplan
Stakeholder register Meetings Project documentsupdates
Enterprise environmentalfactors
Analytical techniques
Organizational processassets
Plan Stakeholder Management – T & T
Analytical Techniques - The current engagement level of all stakeholders needs to be compared to the planned engagement levels required for successful project completion. The engagement level of the stakeholders can be classified as follows:
Unaware. Unaware of project and potential impacts.
Resistant. Aware of project and potential impacts and resistant to change.
Neutral. Aware of project yet neither supportive nor resistant.
Supportive. Aware of project and potential impacts and supportive to change.
Leading. Aware of project and potential impacts and actively engaged in ensuring the project is a success.
325© LEARNERSTREET INTERNATIONAL PVT LTD.
Plan Stakeholder Management – T & T
A Stakeholder Management Plan comprises of the following components :
Desired and current engagement levels of key stakeholders
Scope and impact of change to stakeholders
Identified interrelationships and potential overlap between stakeholders
Stakeholder communication requirements for the current project phase
Information to be distributed to stakeholders, including language, format, content, and level of detail;
Reason for the distribution of that information and the expected impact to stakeholder engagement;
326© LEARNERSTREET INTERNATIONAL PVT LTD.
Manage Stakeholder Engagement
Manage Stakeholder Engagement is the process of communicating and working with stakeholders to meet their needs/expectations, address issues as they occur, and foster appropriate stakeholder engagement in project activities throughout the project life cycle.
327© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Stakeholder managementplan
Communication methods Issue log
Communications management plan
Interpersonal skills Change requests
Change log Management skills Project management planupdates
Organizational processassets
Project documentsupdates
Organizational processassets updates
Manage Stakeholder Engagement - Input
Communications Management Plan - Provides guidance and information on managing stakeholder expectations.
• Stakeholder communications requirements
• Information to be communicated, including language, format, content, and level of detail
• Reason for distribution of information
• Person or groups who will receive information
• Escalation process
328© LEARNERSTREET INTERNATIONAL PVT LTD.
Manage Stakeholder Engagement – T & T
Communication Methods - The methods of communication identified for each stakeholder in the communications management plan are utilized during stakeholder engagement management.
Interpersonal Skills
• Building trust
• Resolving Conflicts
• Active Listening, and
• Overcoming resistance to change
Management Skills
• Facilitate consensus toward project objectives,
• Influence people to support the project,
• Negotiate agreements to satisfy the project needs, and
• Modify organizational behaviour to accept the project outcomes.
329© LEARNERSTREET INTERNATIONAL PVT LTD.
Control Stakeholder Engagement
Control Stakeholder Engagement is the process of monitoring overallproject stakeholder relationships and adjusting strategies and plans forengaging stakeholders.
330© LEARNERSTREET INTERNATIONAL PVT LTD.
Input Tools & Techniques Output
Project management plan Information managementsystems
Work performance information
Issue log Expert judgment Change requests
Work performance data Meetings Project management planupdates
Project documents Project documents updates
Organizational processassets updates
Summary
Project Stakeholder Management
Identify Stakeholders
Plan Stakeholder Management
Manage Stakeholder Engagement
Control Stakeholder Engagement
331© LEARNERSTREET INTERNATIONAL PVT LTD.
332© LEARNERSTREET INTERNATIONAL PVT LTD.
1. The process of Manage Stakeholder Expectations is part of which process?A. ExecutingB. Monitoring and ControlC. PlanningD. QA
2. Which of the following is NOT part of stakeholder's management?A. Identify stakeholder's needB. make sure all the stakeholders are in project planC. Identify stakeholdersD. make sure all the stakeholders are in communication plan
3.You are a project manager of ABC company and you are working for a large project with more than hundreds of stakeholders. Which of the following BEST course of action you are going to take?A. Consider needs of important stakeholders.B. Ask your manager to manage the stakeholders.C. Eliminate some of them.D. Consider needs of all stakeholders.
333© LEARNERSTREET INTERNATIONAL PVT LTD.
4. You are a project manager of ABC company. You are currently finalizing requirements with two stakeholders BUT both stakeholder has different view on requirements for the same project. How can you resolve the issue?A. look at why there is different view on requirements and discuss with both of themB. look at why there is different view on requirements and finalize which looks good to youC. ask your manager to deal with thisD. finalize requirement which looks good to you
5. As a project manager, you know that the most important activity to ensure customer and stakeholder satisfaction is which of the following?A. Documenting and meeting the performance measurementsB. Documenting and meeting the requirementsC. Reporting project status regularly and in a timely mannerD. Reporting changes and updating the project plan and other project documents where appropriate
6.All of the following are true regarding stakeholder analysis except for which one?A. It determines communication needs and methods for updating stakeholders.B. It's a tool and technique of the Scope Definition process.C. It prioritizes and quantifies needs and wants to create project requirements.D. It documents the needs, wants, and expectations of the stakeholders.
We Thank You For Your Valuable Time
Please Feel Free To Contact Us
Call Us:+16072471354 (USA)+44-20-3773-8653 (UK)+61-285-203-689 (AUS)
Email Us:Support@LearnerStreet.comCorporate@LearnerStreet.com