LSI - PMP - Training material

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


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


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


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


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


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.


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.


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


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.


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.


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.


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.



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


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.


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


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


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.


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


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


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


Organization Structure


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


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.


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.


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


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



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


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


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


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


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.


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)


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


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


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


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


Auditing procurement documents

Scope verification

Closing vendor contracts

Closing administrative duties

Submitting final reports

Archiving project records

Celebrating!!!


Summary

Project Management Process Groups

Initiating

Planning

Executing


Closing

Process Group Interactions

Process Groups and Project Phases



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


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


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.



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.


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.


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).


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.


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.


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.



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.


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.



Example:


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 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.



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:


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.



Project management plan Expert judgment Deliverables

Approved changerequests

Project managementinformation system

Work performance data


Meetings Change requests


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.


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.


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



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.



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.


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.


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.


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.



Project management plan Expert judgment Approved changerequests

Work performance reports Meetings Change log

Change requests Change control tools Project management planupdates


Project documents updates


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.


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.



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.



Project management plan Expert judgment Final product, service, orresult transition

Accepted deliverables Analytical techniques Organizational processassets updates


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.


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).


Summary

Integration management process



Direct and Manager Project Work


Perform integrated change control


Best Practice



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


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


Product Scope & Project Scope

Plan Scope Management

Collect Requirements

Define Scope

Create WBS

Validate Scope

Control Scope



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.



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.



Project management plan Expert judgment Scope management plan

Project charter Meetings Requirementsmanagement plan



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 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.



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.


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



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.



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.



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



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



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.


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.


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.



Scope management plan Expert judgment Project scope statement

Project charter Product analysis Project documentsupdates

Requirementsdocumentation

Alternatives generation


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.


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.


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


Create WBS

Create WBS is the process of subdividing project deliverables and project work into smaller, more manageable components.



Scope management plan Decomposition Scope baseline

Project scope statement Expert judgment Project documentsupdates




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.


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.


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.



Project management plan Inspection Accepted deliverables


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


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


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


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.



Project management plan Variance analysis Work performance information

Requirements documentation Change requests

Requirements traceabilitymatrix


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.


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.


WBS Structure


Summary


Product Scope & Project Scope



Define Scope

Create WBS

Validate Scope

Control Scope



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


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


Project Time Management

Project Time Management includes the processes required to manage the timely completion of the project.



The process of establishing the policies, procedures, and documentation for planning, developing, managing, executing, and controlling the project schedule.



Project management plan Expert judgment Schedule management plan

Project charter Analytical techniques


Meetings


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.


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.



Schedule managementplan

Decomposition Activity list

Scope baseline Rolling wave planning Activity attributes


Expert judgment Milestone list


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.


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


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.


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.


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



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.



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.


Precedence Diagramming Method



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



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.


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.



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.


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Estimate Activity Resources is the process of estimating the type and quantities of material, human resources, equipment, or supplies required to perform each activity.



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.


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.


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.


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.


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.



Estimate Activity Durations is the process of estimating the number of work periods needed to complete individual activities with estimated resources.



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



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.



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.



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.


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);


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.


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




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.



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.


Critical Path Method



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.



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.



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.



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.



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.



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.



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.


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.



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.



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.


Control Schedule


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


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.


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.


Summary


Define Activities

Sequence Activities



Develop Schedule

Control Schedule



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


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


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


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.


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.


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)


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.



Project management plan Expert judgment Cost management plan

Project charter Analytical techniques


Meetings


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.


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.


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.



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.


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.


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.


Determine Budget

Determine Budget is the process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline.



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


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.


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


Project Budget Components


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.



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.



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



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


Earned Value, Planned Value, and Actual Costs


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)]


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)


Earn Value Example


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



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


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


• Plan Quality

• Perform Quality Assurance

• Quality Control



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


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.


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.



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.


Cost of Quality


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.


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.


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.


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.


http://en.wikipedia.org/wiki/File:Pareto.PNG

http://en.wikipedia.org/wiki/File:Pareto.PNG

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.


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.


http://www.projmasters.com/wp-content/uploads/control-chart.png

http://www.projmasters.com/wp-content/uploads/control-chart.png

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.


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).


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.


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.



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.


Control Quality

Control Quality is the process of monitoring and recording results of executing the quality activities to assess performance and recommend necessary changes.



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.


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.


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.


Summary


• Plan Quality

• Perform Quality Assurance

• Quality Control



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


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


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



Project Human Resource Management includes the processes that organize, manage, and lead the project team.


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.



Project management plan Organization charts andposition descriptions

Human resourcemanagement plan

Activity resourcerequirements

Networking


Organizational theory


Expert judgment

Meetings

Plan Human Resource Management – T&T

Organization Charts and Position Descriptions - Various formats exist to document team member roles and responsibilities.


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.


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.


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.


Acquire Project Team

Acquire Project Team is the process of confirming human resource availability and obtaining the team necessary to complete project activities.




Pre-assignment Project staff assignments


Negotiation Resource calendars


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.


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


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.


Develop Project Team

Develop Project Team is the process of improving competencies, team member interaction, and overall team environment to enhance project performance.




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.



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.



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.


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.


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.



Human resource management plan

Observation and conversation Change requests

Project staff assignments Project performance appraisals


Team performance assessments

Conflict management Project documents updates

Issue log Interpersonal skills Enterprise environmentalfactors updates

Work performance reports Organizational process assets updates


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.


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.


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.


Conflict Resolution Matrix


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.


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.


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.


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


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.


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.


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


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



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


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


Plan Communications Management• Stakeholder Register

• Communication Channel

• Communication Model

• Communication Method

Manage Communications

Control Communications


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.


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.



Project management plan Communicationrequirements analysis

Communicationsmanagement plan

Stakeholder register Communicationtechnology



Communication models


Communication methods

Meetings

Stakeholder Register


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.



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



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.



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.



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.



Communicationsmanagement plan

Communicationtechnology

Project communications

Work performancereports

Communication models Project management planupdates


Communication methods Project documentsupdates


Information managementsystems


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.



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.



Project management plan Information managementsystems


Project communications Expert judgment Change requests

Issue log Meetings Project management planupdates

Work performance data Project documentsupdates



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.


Summary


Plan Communications Management Stakeholder Register

Communication Channel

Communication Model

Communication Method





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


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


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.


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.


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.


Plan Risk Management

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



Project management plan Analytical techniques Risk management plan

Project charter Expert judgment

Stakeholder register Meetings



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.


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.


Plan Risk Management - Output

Definitions of risk probability and impact

Probability and impact matrix

Revised stakeholders’ tolerances


Identify Risks

Identify Risks is the process of determining which risks may affect the project and documenting their characteristics.



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


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


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.



Risk management plan Risk probability andimpact assessment


Scope baseline Probability and impactmatrix

Risk register Risk data qualityassessment


Risk categorization


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


Probability & Impact Definition


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.


Perform Quantitative Risk Analysis

Perform Quantitative Risk Analysis is the process of numerically analysing the effect of identified risks on overall project objectives.



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



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.


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


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


Decision Tree


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


Plan Risk Responses

Plan Risk Responses is the process of developing options and actions to enhance opportunities and to reduce threats to project objectives.



Risk management plan Strategies for negativerisks or threats


Risk register Strategies for positiverisks or opportunities


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.


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.


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.



Project management plan Risk reassessment Work performanceinformation

Risk register Risk audits Change requests

Work performance data Variance and trendanalysis


Work performancereports

Technical performancemeasurement


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.


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



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


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


MODULE - 12

Agenda


Type of Contract

Plan Procurement Management

Make or Buy Analysis

Conduct Procurement

Control Procurement

Close Procurement



Project Procurement Management includes the processes necessary to purchase or acquire products, services, or results needed from outside the project team.


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


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)


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.


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).


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.


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



Plan Procurement Management is the process of documenting project procurement decisions, specifying the approach, and identifying potential sellers.



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


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.


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



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



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


Conduct Procurements

Conduct Procurements is the process of obtaining seller responses, selecting a seller, and awarding a contract.



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


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.


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.


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


Control Procurements

Control Procurements is the process of managing procurement relationships,monitoring contract performance, and making changes and corrections tocontracts as appropriate.



Project management plan Contract change controlsystem


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


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


Close Procurements

Close Procurements is the process of completing each procurement.



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.


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.


Summary


Type of Contract


Make or Buy Analysis

Conduct Procurement

Control Procurement

Close Procurement



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


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


MODULE - 13

Agenda


Identify Stakeholders

Plan Stakeholder Management

Manage Stakeholder Engagement

Control Stakeholder Engagement



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.



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.



Project charter Stakeholder analysis Stakeholder register

Procurement documents Expert judgment


Meetings


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.


Identify Stakeholders – T & T

Power/Interest grid

Power/Influence grid

Influence/impact grid

Salience model –Power, Urgency & Legitimacy


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.



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.



Project management plan Expert judgment Stakeholder managementplan

Stakeholder register Meetings Project documentsupdates


Analytical techniques


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.


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;



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.



Stakeholder managementplan

Communication methods Issue log

Communications management plan

Interpersonal skills Change requests

Change log Management skills Project management planupdates




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


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.



Control Stakeholder Engagement is the process of monitoring overallproject stakeholder relationships and adjusting strategies and plans forengaging stakeholders.



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


Summary








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.


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.

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LSI - PMP - Training material

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