Consolidated PPTs

WELCOME TO
PMP Exam Prep by Simplilearn
Course e‐Book
1
Lesson 1
Introduction to PMP Certification Course
Based on PMBOK Version 4
2
Agenda
9 What is PMP and PMI
9 PMP Exam Syllabus
9 How is PMP Exam Like
9 About this Tutorial
3
What is PMP and PMI ?
9 PMP: Project Management Professional
9 PMI: Project Management Institute
9 PMI is an Organization. PMP is a certification.
9 PMI conducts PMP Examination.
9 PMP is valid for 3 Years.
9 PDU: Professional Development Unit
9 PMBOK: Project Management Body of Knowledge.
9 PMBOK is a Text Book for PMP Exam
4
Pre‐requisite for the PMP Exam
Category College PM Training PM Experience Total Experience

Education
One Bachelors 35 Contact 4,500 hours 3 Years within
Degree Hours last 6 years
Two High School 35 Contact 7,500 hours Five Years
Graduate Hours within last 8
years
9 REP: Registered Education Provider
9 Application can be submitted online.
9 Once you pay the Exam fee, PMI sends Authorization Letter.
9 You must write the exam within one year of getting the Authorization Letter.
5
About the PMP Exam
9Total No of Questions: 200. But, out of this 25 questions are test question for future tests.
9 Only 175 questions are scored.
9 PMI grades students on each of the Nine Knowledge area and based on this grading they declare PMP pass or fail.
How many grades one has to score to pass the PMP exam is not made public by PMI. The grading is Proficient,
Above Proficient and Below Proficient in each of the Nine Knowledge area.
9 Total duration of the exam is 4 hours.
9 You get 1 Point for every right questions. There is no penalty for wrong answer.
Project Management Process Percentage of

Questions
Project Initiating 11
Project Planning 23
Project Executing 27
Project Monitoring & Control 21
Project Closing 9
Professional and Social Responsibility 9
6
PMP Exam Syllabus
9 There are 5 Process Groups. They are: 9 There are 9 Knowledge Areas. They are:
9 Integration Management
Project Initiation 9 Scope management
Project Planning 9 Time Management
Project Execution 9 Cost Management
Project Monitoring & Control 9 Quality Management
Project Closing 9 Human Resource Management
9 Communications Management
9 Risk Management
9 Procurement Management
There are 42 Project Management process areas. For example, “Develop Schedule” is
one of these 42 process, which is part of Project Planning Process Area and is also part
of Time Management Knowledge Area.
7
About this Tutorial
9 There are total of 14 lessons. This being the first one.
9 The other Lessons are:
9 Lesson 2: Project Management Framework
9 Lesson 3: Project Management Processes Groups
9 Lesson 4: Integration Management
9 Lesson 5: Scope Management
9 Lesson 6: Time Management
9 Lesson 7: Cost Management
9 Lesson 8: Quality Management
9 Lesson 9: Human Resource Management
9 Lesson 10: Communication Management
9 Lesson 11: Risk Management
9 Lesson 12: Procurement Management
9 Lesson 13: Professional and Social Responsibility
9 Lesson 14: PMP Examination Tricks and PMI‐ism
8
Lesson 2
Project Management Framework
9
Agenda
9 Definition of a Project
9 What is Project Management
9 What is Program Management
9 What is Portfolio Management
9 Project Management Office (PMO)
9 The Triple Constraints
9 Stakeholder Management
9 Organization Structure
9 Project Life Cycle vs. Product Life Cycle
9 Quiz
10
What is a Project ?
9 A project is a temporary endeavor undertaken to create a unique product,
service or result.
9 Temporary means that a Project has a definite start and end date.
9 Temporary does not necessarily mean short in duration.
9 A Project End is met when either its objectives are met or it can not be met
because of various reasons.
9 Project is different than Operation. Operation is doing ongoing repetitive
work. For example, the work of an office receptionist can be classified as
Operation.
11
What is Project Management ?
9 Project Management is the application of Knowledge, skills, tools &
technique to project activities to meet the project requirements.
9 Project Management is accomplished through the appropriate application
and integration of the 42 logically grouped project management processes
compromising the 5 process groups.
9 Managing a Project typically requires,
9 Identifying Project Requirements
9 Managing Stakeholders
9 Balancing the Project Constraints ( ie Cost, Time, Quality etc)
12
What is Program Management?
9 A Program is a group of Projects, which when managed as a group, provides
decreased risk, economies of scale and improved management.
9 For a group of Project to be classified as Program, there must be some value
add in managing them together as Program. If there is no value add, it can not
be classified as Program.
9 Various Projects in a Program may use the same resources.
9 Program Management focuses on the project interdependencies and helps
to determine the optimal approach for managing them.
13
What is a Portfolio Management ?
9 A Portfolio refers to a collection of projects or programs and other works
that are grouped together to facilitate effective management of that work to
meet strategic business objectives.
9 The Projects or Programs of the portfolio may not necessarily be
interdependent or directly related.
9 A typical example of a Portfolio may be “Japanese Projects”, where in a
company puts all its projects from Japan in one portfolio to give more focus
and attention to its Japanese projects and grow its business in Japan.
9 Portfolio management refers to the centralized management of one or more
portfolios, which includes identifying, prioritizing, authorizing, managing and
controlling projects, programs and other related work to achieve strategic
business objectives.
14
Project Management Office (PMO)
9 PMO is an Organization Structure, its not a person like Project Manager.
9 PMO usually takes one of the three roles mentioned below:
9 Provide the policies , methodologies and tools & templates for managing
projects within the Organization.
9 Provide support and training to others in Organization on how to manage
projects.
9 Provide Project Managers for different ongoing projects in the
Organization.
9 Some of the specific activities that PMO does is:
9 Manage interdependencies between the Projects
9 Help Provide resources
9 Terminate Projects
9 Help gather lessons learned, etc
15
Triple Constraint
9 Triple Constraint originally included cost, time and scope.
9 The current explanation of Triple Constraint includes, but not limited to
9 Scope
9 Quality
9 Cost
9 Time
9 Resources
9 Risk
9 Customer satisfaction
9 The Project Manager is supposed the manage the Project’s Triple Constraint.
16
Stakeholder Management
9 A stakeholder is some one whose interests may be positively or negatively
impacted by the Project.
9 The stakeholder include: The Project Manager, The Project Team, The
customer, The PMO, The Project Sponsor, The Performing Organization.
9 Stakeholder management requires:
9 Identifying All Stakeholder
9 Determining All of their requirements
9 Determine Stakeholder Expectations
9 Communicating with Stakeholders
17
Organization Structure
9 There are three types of Organization based on the authority that a Project
Manager has.
9 Functional: The organization is grouped by areas of specialization within
different functional areas, e.g, accounting, marketing, Sales. Team member
report to functional Manager.
9 Projectized: The entire company is Organized by Project. There is no

department as such. Team member report to Project Manager.
9 Matrix: This is a mix of both the above types. This has three forms, Strong
Matrix, Weak Matrix and Balanced Matrix.
9 In strong Matrix, power rests with the Project Manager. In weak matrix,
power rests with the functional manager. In balanced Matrix, the power is
shared between the functional manager and the Project Manager.
18
Advantages and Disadvantages of Org. Type
9 Functional
9 Advantages 9 Disadvantages
Specialist can be grouped together Departmental work get more priority than
Only one manager, so no confusion Project Work
Clearly defined career paths. No career path in Project Management
9 Projectized
Better communication within Projects Less efficient use of resources
Loyalty to Projects No home when Project is completed.
9 Matrix
Better coordination Higher potential for conflict
Maximum utilization of resources Extra Administration required
19
Project Lifecycle Vs Product Lifecycle
9 A typical Product lifecycle starts with the conception of the Product till its
withdrawal from the market, when it becomes obsolete.
9 A Product can require or spawn many projects over its life. For example, a
Project during Product conception would be determine customer’s need and
project during product maturity phase can be to do competition analysis.
9 A Project has its own lifecycle. The lifecycle depends upon the Industry within
which the project is being executed or the Organization preference of their
project execution methodology.
9 For example, typically in IT industry, the Project Lifecycle is Requirement
Analysis Æ High Level Design Æ Detailed Design Æ Coding Æ Testing Æ
Installation Æ Hand over to Operation.
20
Quiz‐1
1. A Project Manager is working on constructing a new Bridge., but he is not
getting enough project attention. Resources are occupied in doing process
related work and project manager has no authority to properly assign
resources. What form of Organization is the Project being performed ?
A. Functional
B. Projectized
C. Strong Matrix
D. Weak Matrix
2. Which of the following is not a characteristics of a Project ?
A. Repeats Every Week

B. Temporary
C. Definite Beginning and End
D. Interrelated Activities
21
Quiz‐2
3. You Just started a new Project as a Project manager, when couple of
stakeholder, with whom you have worked in the past, came to you, raising
concern about the utility of the new Project Management Package being
used and the way project changes would be logged into the new Software.
As a Project Manager what should you do?
A. Supply with Training Material on new Project Management Software
B. Inform the Project Management Office about stakeholder’s concern
C. Since they are friends, conduct informal training session
D. Assume stakeholders that he will keep them engaged in the Project and
new Software will not way impact their functioning
4. Whom does the Project Team report in a Projectized Organization?
A. Does not report to any one

B. Project Manager
C. Functional Manager
D. CEO
22
Quiz‐3
5. How is Project Lifecycle different than a Product Lifecycle ?
A. Project Lifecycle has no methodology

B. Project life cycle is different for different Industry
C. Project Lifecycle sees through many Product lifecycle
D. Project Lifecycle talks about specific Project management Activities
6. In a matrix Organization, a Project Manager can expect the communication

to be
A. Complex
B. Difficult to Understand
C. Simple
D. Open and Accurate
23
Answer Explanation‐1
Answer 1: If you marked the Answer as A, you are right. In a Functional
Organization, Team
Members are more concerned about their daily functional activities than the
Project activities.
Answer 2: This should have been easy for you. Its based on the Project
definition. Except Choice A, everything is part of the Project definition
itself. So the right Answer is Choice A.
If you got this Answer Wrong. You should repeat Lesson 2, once again.
Answer 3: Now this is a tricky question. You should expect lot of such questions
in your PMP Examination. Do you think all of them are right? If yes, you
need to identify the best Answer.
And the best answer is choice B. Inform the Project Manager Office, because
they are the one who control the project management procedures and
tools. By directing stakeholders to PMO, the Project Manager is helping
them know of the right authority .
24
Answer 4: Now, this one was again simple. The right answer is choice B, the
Project manager.
If you got this wrong, consider going through lesson 2 once again.
Answer 5: The right answer choice is B. Project Lifecycle is different for different
Industry. Choice C is just the opposite, ie a Product Lifecycle sees many
project through its lifecycle, not the other way round.
Choice D is also wrong. A Project Management Plan has various project
activities, not the Project Lifecycle.
Answer 6: The right answer is A. Why the communication in a matrix

organization is complex, one of the key reason is presence of two boss for
the team members.
25
Lesson 3
Project Management Processes
26
Agenda
9 Project Life Cycle vs Project Management Process
9 The Five Project Management Process Groups
9 Process Groups, Knowledge Areas and Project Management process
Mapping
9 What happens in Each Process Groups
9 Quiz
27
Project Life Cycle Vs Project Management Process
9 Project Life Cycle – “What to do” to “get the work done”.
9 Project Management Process – “What to do” to “Manage the Project”.
9 Project Management Processes are grouped in 5 categories:
9 Initiating Process Groups
9 Planning Process Groups
9 Executing Process Groups
9 Monitoring & Control Process Groups
9 Closing Process Groups
28
Project Management Process Groups
29
Process Groups Interaction
30
Project Management Process Group, Knowledge Area and
Project Management Process Mapping
31
Knowledge Areas Monitoring &
Initiating Planning Planning Process Execution Process Closing Process
Control Process
Group Group Group Group
Group
4.4 Monitor &
4.3 Direct and Control Project work
4. Project Integration 4.1 Develop Project 4.2 Develop Project 4.6 Close Project or
Manage Project 4.5 Perform
Management Charter Management Plan Phase
Execution Integrated Change
Control
5.1 Collect
Requirement 5.4 Verify Scope
5. Project Scope
Management 5.2 Define Scope 5.5 Control Scope
5.3 Create WBS
6.1 Define Activities
6.2 Sequence
Activities
6.3 Estimate Activity
6. Project Time
Resource 6.6 Control Schedule
Management
6.4 Estimate Activity
Durations
6.5 Develop
Schedule
7.1. Estimate Costs
7. Project Cost
7.2 Determine 7.3 Control Costs
Management
Budget
32
Knowledge Areas Monitoring &
Initiating Planning Planning Process Execution Process Closing Process
Control Process
Group Group Group Group
Group
8. Project Quality 8.2 Perform Quality 8.3 Perform Quality
8.1 Plan Quality
Management Assurance Control
9. Project Human 9.1 Develop Human 9.2 Acquire Project
Resource Resource Plan Team
Management
9.3 Develop Project
Team
9.4 Manage Project
Team
10. Project 10.1 Identify 10.2 Plan 10.3 Distribute 10.5 Report
Communication Stakeholders Communications Information Performance
Management
10.4 Manage
Stakeholders
Expectation
11. Project Risk 11.1 Plan Risk 11.6 Monitor &
Management Management Control Risks
11.2 Identify Risks
11.3 Perform
Qualitative Risk
Analysis
11.4 Perform
Quantitative Risk
Analysis
11.5 Plan Risk
Responses
12. Project 12.1 Plan 12.2 Conduct 12.3 Administer 12.4 Close
Procurement Procurements Procurements Procurements Procurements33
Management
Initiating Process Group
9 Formally starts a Project by incorporating all the needs of the Organization
into the Project Charter.
Inputs to Initiating Process Groups Actions taken during Initiation Process
9 Business Need 9 Select the Project among the list of
9 Contract, if work is done under a potential Projects
contract 9 Select Project Manager
9 Potential Stakeholders 9 Determine Project Manager’s
9 High level Product description authority
9 Project Role vs Company strategic 9 Document Known Risk, assumptions
vision 9 Divide Project into Phases
9 Organization’s Culture 9 Determine Initial Project Organization.
9 Organization’s project Archive 9 Finalize & Get Approval of the Project
9 Possible Team members Charter
9 Industry Standards
34
Planning Process Group
9 Project Planning determines if the project charter can or can not be

delivered and also how the project will be accomplished.
Inputs to Planning Actions taken during Planning process
Process Groups
9 Refine requirements to make it more specific
9 Project Charter 9 Define Project deliverables and work required to
complete them
9 Get Stakeholder approval on Scope
9 Select Project Team
9 Break down work into smaller manageable pieces
9 Determine Project Quality standards
9 Determine Project Team’s Roles & Responsibility
9 Complete Risk Identification, Analysis and Risk
Response Planning
9 Determine what needs to be purchased
9 Determine how to execute and control project
9 etc
35
Executing Process Group
9 The purpose of the executing Processes is to complete work in the project
management Plan and to meet the project objectives.
Inputs to Executing Actions taken during Executing process
Process Groups
9 Manage Stakeholder’s expectation(s)
9 Project 9 Complete Work packages
Management Plan 9 Implement Quality Assurance
9 Produce Project Report
9 Remove Project bottleneck(s)
9 Organize Team building Activities
9 Organize Training for the team members
9 Conduct Project progress meeting(s)
9 Implement Approved Changes, corrective actions,
preventive actions and defect repair
9 Get Sellers respond to procurement requests
9 etc
36
Monitoring & Controlling Process Group
9 Monitoring and controlling means measuring the performance of the
Project to the Project Management Plan, approving change requests,
preventive actions and defect repair and managing changes.
Inputs to Monitoring Actions taken during Monitoring & Controlling process
& Controlling Process
Groups 9 Measure against the performance baseline
9 Determine variance and take appropriate action
9 Project 9 Recommend changes, preventive and corrective
Management Plan action
9 Change Request 9 Facilitate conflict resolution
9 Status Reports 9 Identify Root Cause of the Problem
9 Obtain formal acceptance of the deliverables
9 Administer Contract with sellers
9 Control changes
9 Conduct Status review meetings
9 etc
37
Closing Process Group
9 The Closing Processes are performed when the project’s product scope is
completed., ie when the Project is completed.
Inputs to Closing Actions taken during Closing Process
Process Groups
9 Confirm all Project requirements are met
9 Project Scope 9 Obtain formal signoff from customer
9 Project 9 Make Payment to all parties and update cost records
Deliverables 9 Complete Contract closure
9 Update lesson learnt database
9 Measure Customer Satisfaction
9 Handover Project deliverables to Operations team
9 etc
38
Quick Recap of Process Groups
39
Quick Recap of Process Groups..contd
Change Request, Initiating Process Group to
Corrective & review Project Charter
Preventive
Action Planning Process Group to re‐
Monitoring &
Control Process plan the project
Group
Project Executing Process Group to
Deliverables work on defects
Closing Process Group if the
Project / Project
Project is completed.
Phase is
Complete
Closing Process
Group
Project is
terminated
40
Quiz‐1
1. A Project Manager is making sure that Product of the Project is as per the
Project Management Plan. Which part of the Project Management Process
he is in?
A. Planning
B. Monitoring & Control
C. Initiating
D. Closing
2. Which of the following is an output of the Initiating Process Group?
A. Project Charter
B. Company processes
C. Company culture
D. Historical Project Data
41
Quiz‐2
3. Who is in control of the Project during Project Planning Phase?
A. Project Manager
B. Functional Manager
C. Team Member
D. Stakeholder
4. The high level Project Schedule constraints are just determined. Which
process is the project in?
A. Planning
B. Closing
C. Monitoring & Control
D. Initiating
42
Answer 1: The right answer is D. Closing. The Project’s Product is verified during
the closing phase of the Project. If you got it wrong, consider going trough
lesson 3 all over again.
Answer 2: The right answer is A. Project Charter. All other options are input to
Initiating Process Group.
Answer 3: Don’t get confused with the mention of Project Planning Phase. The
Project manager is in control of the Project throughout the Project… be it
any phase. So the right answer is A. Project Manager.
Answer 4: The right answer is D. Initiating. The high level constraints of

schedule. Cost are determined during Initiating Process group. The detailed
planning is done during Planning Phase.
43
Lesson 4
Project Integration Management
44
Agenda
9 What is Project Integration Management
9 The Key role of Project Manager, Project Team and Project Sponsor
9 Project Selection Methods
9 The Integration Management Knowledge Area.
Develop Project Charter
Develop Project Management Plan
Direct and Manage Project Execution
Monitor & Control Project work
Perform Integrated Change Control
Close Project or Phase
9Quiz
45
What is Project Integration Management
9 Project Integration Management involves unification, consolidation,

articulation and integrative actions that are crucial for successfully completing
the Project.
9 The Project Integration Management is a high level work that Project

manager does and it involves managing interdependencies among the other
knowledge areas.
46
The Key role of Project Manager, Project Team and Project
Sponsor
9 The Key role of the Project Manager is to Perform Integration.
9 The Key role of the Project Team is to concentrate on completing the

Project Activities.
9 The Key role of the Project Sponsor is to protect the Project Team from
unnecessary changes and loss of resources.
47
Project Selection Methods
Why a new Project ?
9 Contract
9 Business Need
9 Benefit Measurement Methods‐ >This is a comparative Approach

9 Murder Board‐ A panel of expert try to shoot down a new project idea.
9 Peer Review
9 Scoring Models
9 Economic Models
9 Benefit compared to Cost
9 Constrained Optimization Methods ‐> This is a Mathematical Approach

9 Linear Programming
48
Project Integration Management Processes
S.No. Project Integration Management Process Done During
1 Develop Project Charter Initiating Process Group
2 Develop Project Management Plan Planning Process Group
3 Direct and Manage Project Execution Execution Process Group
4 Monitor & Control Project work Monitoring & Control
Process Group
5 Perform Integrated Change Control Monitoring & Control
Process Group
6 Close Project or Phase Closing Process Group
49
Develop Project Charter
9 What is a Project Charter ? 9 Inputs to Create Project Charter
9 Formally Authorizes the 9 Project Statement of Work

existence of the Project 9 Enterprise Environmental
9 Provides authority to the factors
Project Manager to spend money 9 Constraint's and Assumptions
and other corporate resources 9 Organization Process Assets
9 Provides high level Project Process, Procedure &
requirements Policies
9 It is issued by the Project Corporate Knowledge Base
Sponsor Lessons Learned
9 It is broad enough to be not Historical Information
requiring any change during 9 Contract
Project Execution
50
Develop Project Management Plan
9 Develop Project Management Plan is the Process of documenting the actions

necessary to define, prepare ,integrate and co‐ordinate all the subsidiary plans.
9 The subsidiary plans are Cost Management Plan, Time Management Plan,
Human Resource Management Plan etc.
9 The Project Management Plan defines how the project is executed, monitored &
controlled and closed.
9 It contains all the other management plans and the performance measurement
baselines.
Inputs to Develop Project Management Plan
9 Project Charter
9 Output from Planning Process
9 Enterprise Environmental factors
9 Organization Process Assets
51
Few New Terms
9 Work Authorization System

9 A System for authorizing work, i.e. notifying team members or contractors
that they may begin work on a project work package or a project activity
9 Corrective Action
9 Any action taken to bring expected future project performance in line with
the Project Management Plan.
9 Preventive Action
9 While corrective action involves implementing actions to deal with actual
deviations from the performance baselines, preventive action deals with
anticipated or possible deviation from performance baselines.
9 Change Control System

9 A collection of formal, documented procedures, paperwork, tracking systems
for authorizing changes.
52
Direct and Manage Project Execution
9 Direct and Manage Project Execution is the process of performing the

Work defined in the Project Management Plan to achieve the Project
objective
53
Monitor & Control Project Work
9 Monitor & control Project work is the process of tracking, reviewing and
regulating the progress to meet the performance objective defined in the
Project Management Plan.
9 The results of the monitoring & control are recommended changes to the
project as well as recommended corrective actions, preventive actions and
defect repair.
Inputs to Monitor & Control Project Work
9 Project Management Plan
9 Work Performance Information
54
Perform Integrated Change Control
9 Perform Integrated Change Control Process is the process of reviewing all change
requests, approving & managing changes to the Project deliverables, organizational
process assets, project documents and the project management plan.
9 Process of Making Change

Evaluate Impact
Create Options
Get Internal Buy in
Get Customer Buy‐in
9 Change Control Board
Inputs to Perform Integrated Change Control
9 Change Requests
55
Close Project or Phase
9 Close Project or Phase is the process of finalizing all activities across all
the project management process groups to formally complete the Project
or phase.
9 The project is not closed when all the technical work is done but when
it is formally closed.
9 The project should always be closed no matter the circumstance in

which it was stopped or terminated.
Inputs to Close Project or Phase
9 Accepted deliverables
56
Recap: Corrective Action and Integrated Change Control
57
Quiz‐1
1. What is the most important activity with respect to change for a Project
Manager to focus attention on?
A. Do the change
B. Track & Record the change
C. Prevent unnecessary change
D. Inform Project Sponsor of the change
2. In the middle of a project, you are informed that resources promised in the
beginning of the project is no longer available to the project. As a Project
Manager what would you do?
A. Raise hand that you can no longer execute this project
B. Evaluate the impact of not having the promised resources
C. Re‐plan the project without promised resources
D. Identify other resources that can be provided to you in compensation of
earlier promised resources.
58
Quiz‐2
3. A customer is well known for making lot of changes in a Ongoing project. You
have been assigned as the Project Manager for a new Project from this
customer. What would you do in the beginning of the Project to manage this
customer?
A. Check who is the Customer’s manager and inform him about the
customer past record
B. Involve the customer as early in the project as possible
C. Say No to the customer couple of times strictly
D. Send a copy of your company change control procedure.
4. Who does the Project Integration?

A. Project Sponsor
B. Project Manager
C. Project Team
D. Stakeholder
59
Quiz‐3
5. As a project Manager you received a change that does not impact the project
schedule. What would you do?
A. Go ahead and do the change
B. Evaluate Impact on the other components of Triple constraints
C. Get in touch with Change control board
D. Ask your boss’s permission
6. You have been assigned as the Project Manager of a Project when the project
is half way in execution. You meet the customer and inform him that project
is within the baselines. But the customer informs you that he is not happy
with the performance of the project. What would be the first thing that you
would do?
A. Meet the Project Team to understand what can be done
B. Meet the Project Sponsor and explain him customer concern
C. Inform customer that there is nothing wrong from project team side
D. Show customer the performance of similar other project
60
Answer 1: The right answer is C. Prevent unnecessary changes. The changes are
actually done by the Project Team.
Answer 2: Now this is a tricky question. You might be doing all the mentioned
option, but the right thing to do in such cases is to first evaluate the impact.
So the right option is B. Evaluate the impact of not having the promised
resources.
Answer 3: This one is again a tricky question. In real project you might be doing
all the options listed, but the best way to handle such scenario is to involve
the customer as early in the project as possible. The right option is B.
Involve the customer as early in the project as possible
Answer 4: This is pretty simple and straight forward. The right answer is B. The
Project Manager. If you got this question wrong, please do go through
lesson once again.
61
Answer 5: This question requires some knowledge of previous lessons as well.

When ever there is a change and impact is known only one constraints.
That’s not the complete analysis. You should look at the impact on all the
Triple constraints factors. So the right answer is B. Evaluate the other
components of Triple constraints
Answer 6: This one is a tough question. The answer depends upon the scenario.
If you heard that customer is unhappy from some one else, the best thing
would be to be meet the customer. But in this case, the customer is himself
saying this to you that he is not happy. So the best option is to meet the
Project Team and discuss customer’s concern, before doing any thing else.
The right option is A. Meet the Project Team to understand what can be
done
62
Lesson 5
Project Scope Management
63
Agenda
9 What is Project Scope Management
9 Product Scope vs. Project Scope
9 The Key terms in Project Scope Management
9 The Project Scope Management Processes.
Collect Requirements
Define Scope
Create WBS
Verify Scope
Control Scope
9 Quiz
64
What is Project Scope Management ?
9 Project Scope management includes the processes required to ensure

that the project includes all the work required and only the work required
to complete the project successfully.
9 Managing the Project scope is primarily concerned with defining and

controlling what is and is not included in the Project.
9 The key activities that happens as part of Project Scope Management
9 Constantly checking to make sure that all the work is being

completed.
9 Not letting people randomly add to the project scope
9 Preventing Gold Plating, i.e. doing more than what is required as
part of Project Scope
65
Product Scope vs. Project Scope
9 Product Scope : The features and functions that characterize a product,

service or result.
9 Project Scope: The Work that needs to be accomplished to deliver a

product, service or result with the specified features and functions.
9 The Project Scope Management deals with managing both the Product
Scope as well as Project Scope.
66
The Key terms in Project Scope Management
9 WBS: Work Breakdown Structure
The WBS breaks the work Project into smaller and more manageable pieces called
work Packages.
Each level of the WBS is a smaller piece of the level above.
Work not in WBS is not part of the Project.
9 WBS Dictionary:
Since work can not be explained in detail in WBS. For every WBS, a WBS dictionary
is created to explain the WBS work package.
It has details like description of WBS, person responsible, schedule etc
A Typical WBS
67
The Project Scope Management Processes
S. No. Project Scope Management Process Done During

1 Collect Requirements Planning Process Group
2 Define Scope Planning Process Group
3 Create WBS Planning Process Group
4 Verify Scope Monitoring & Control
Process Group
5 Control Scope Monitoring & Control
Process Group
68
Collect Requirements
9 Collect Requirements is the process of defining and documenting

stakeholder's need to meet the project objectives.
Inputs Tools & Techniques

9 Project Charter 9 Interview
9 Stakeholder register 9 Prototyping
9 Questionnaire & surveys
9 Facilitated workshops
9 Group creativity Techniques
Outputs
9 Requirements Document
9 Requirement Management Plan
9 Requirement Traceability Matrix
69
Define Scope
9 Define Scope is the process of developing a detailed description of the

Project and product.

9 Project Charter 9 Expert Judgment
9 Requirements Document 9 Product Analysis
9 Organization’s Process Assets 9 Alternative Identification
9 Facilitated Workshops
Outputs
9 Project Scope Statement
9 Project document update
70
Create WBS
9 Create WBS is the process of subdividing project deliverables and project

work into smaller, more manageable components.

9 Project Scope Statement 9 Decomposition
9 Organization’s Process Assets
Outputs
9 WBS
9 WBS dictionary
9 Scope baseline
9 Project document updates
71
Verify Scope
9 Verify Scope is the process of formalizing acceptance of the completed

project deliverables.

9 Project Management Plan 9 Inspection
9 Validated deliverables
Outputs
9 Accepted deliverables
9 Change Requests
72
Control Scope
9 Control Scope is the process of monitoring the status of the project and
product scope and managing changes to the scope baseline.

9 Project Management Plan 9 Variance Analysis
Outputs
9 Work Performance Measurements
9 Change Requests
9 Project Management Plan updates
9 Organization Process Assets updates
73
Quiz‐1
1. During What part of the Project Management Process is the Project Scope
created ?
A. Planning
B. Initiating
C. Executing
D. Monitoring & Control
2. During a regular project meeting, one of the team members suggests a nice
feature that customer may like. But the Project Manager says No to this nice
feature saying project should concentrate on only on what is required for
the project to get completed and nothing else. This is an example of :
A. Scope Management
B. Change Management
C. Project Management
D. Quality Management
74
Quiz‐2
3. A Software project is under construction Phase. After this only Testing &
Implementation phase is done. The Project is 3 weeks ahead of the
Schedule. As a Project manger, what would you be most concerned about?
A. Quality Control
B. Scope Verification
C. Cost Control
D. Change Control
4. Another Project Manager asks you about the software to be used to create
the WBS. He is too much concerned about the graphical representation of
the WBS. As an experienced Project manager, you suggest him that key
result of creating WBS is not the graphical representation but:
A. Team Buy‐in
B. Bar Chart
C. List of activities
D. The WBS numbering System
75
Quiz‐3
5. Which of the following is not True regarding subdividing the work in the WBS
A. Subdivide until it has meaningful conclusion
B. Subdivide until it can be done by a single person
C. Subdivide until it can not be logically subdivided further
D. Subdivide until it can be realistically estimated
6. As a Project Manager what can you use to clearly communicate what work is
included in the Work Packages.
A. Requirements Document
B. Scope Statement
C. Project Management Plan
D. WBS dictionary
76
Answer 1: The right answer is A. Planning. There are only 5 processes in Scope
management, 3 in Planning and 2 in Monitoring & Control.
Answer 2: If you answered A. Scope Management. You are right. This is what
Scope Management is all about.
Answer 3: The right answer is B. Scope Verification. Unless the deliverables is

accepted by the customer or sponsor as part of Scope verification process,
you will not be sure, if Project is really 3 weeks ahead of schedule.
77
Answer 4: The right answer is A. Team Buy‐in. WBS should be created with the
Project Team and all the team members should have confidence that all
work and only work required to complete the Project is captured in the
WBS.
Answer 5: The right answer is B. Subdivide until it can be done by a single

person. All other are important properties to be considered while coming
with a WBS.
Answer 6: The right answer is D. WBS dictionary
WBS dictionary has detailed work description of each of the team members.
78
Lesson 6
Project Time Management
79
Agenda
9 What is Project Time Management
9 What is Project Schedule
9 The Key terms in Project Time Management
9 The Project Time Management Processes.
Define Activities
Sequence Activities
Estimate Activity Resources
Estimate Activity Durations
Develop Schedule
Control Schedule
Schedule Network Analysis Techniques
9 Quiz
80
What is Project Time Management ?
9 Project Time Management includes processes required to manage timely
completion of the Project.
9 Project Time Management is primarily concerned with developing a realistic

Project Schedule and controlling changes to the schedule.
9 Schedule Management Plan: This plan contains details like, How to go about
planning the Project Schedule and how to effectively manage and control the
project to the schedule baseline.
9 The key activities that happens as part of Project Time Management are:
9 Identifying the list of project activities

9 Estimating the time and resource required to complete each of the
identified activities
9 Sequencing the activities to occur one after the other in a logical
manner.
81
What is Project Schedule ?
9 A schedule wherein activities are assigned a duration and sequenced in a logical order .
9 it’s the Project Schedule that informs about the Project Start date and Project End date.
9 Its is very common to use Software to develop the Project Schedule.
9 The Microsoft Project is the most popular tool used for Project Schedule development.
9 Many people confuse Project Schedule as the Project Management Plan. But its not true. The Project
Management Plan is much more than a Project Schedule.
A Typical Schedule
82
GANTT Chart
9 GANTT Chart: A Gantt chart is a type

of bar chart that illustrates a project
schedule .
9 A Gantt chart showing three kinds of
schedule dependencies (in red) and
percent complete indications.
9 Dependency:
9 Finish to Start: An activity must finish before successor can start.
9 Start to Start: An activity must start before the successor can start.
9 Finish to Finish: An activity must finish before the successor can finish
9 Start to Finish: An Activity must start before the successor can finish.
9 Finish to Start is the most commonly used dependency.
9 Start to Finish is the rarely used dependency.
83
Network Diagram
Precedence Diagramming Model (PDM) or
Activity on Node (AON)
9 Boxes are used to show activities and arrow
to show dependency.
9 This types of Network can have all four
types of dependencies between the activities.
Start to Start Finish to Start
Start Activity A Activity B

Painting
Start Construct Start

Furnishing Wall Painting
84
Estimation
9 One time Estimate: When estimating using a one time estimate, one estimate
per activity is received. For example, the person doing the estimate says that the
activity would take 2 weeks.
9 In real life, people make their best guess and just double the estimate to take
care of any uncertainties. Adding this extra is also called “Padding”
9 This techniques should be used to only get the high level estimate.
9 Analogous Estimating: Estimating based on previous projects or previous

activities
9 The last 5 similar projects took 6 months, so this one should also take 6 months.
9 Analogous estimating is a kind of expert Judgment.
9 Parametric Estimating: This uses a mathematical model to calculate projected

times for an activity based on historical records from previous projects and other
information.
9 Heuristics: A heuristic means rule of thumb. An example of heuristic is the 80/20

rule that in quality suggests that 80 percent of quality problems are caused by 20
percent of potential sources of problem.
85
The Project Time Management Processes
S. No. Project Time Management Process Done During

1 Define Activities Planning Process Group
2 Sequence Activities Planning Process Group
3 Estimate Activity Resources Planning Process Group
4 Estimate Activity Durations Planning Process Group
5 Develop Schedule Planning Process Group
6 Control Schedule Monitor & Control
Process Group
86
Define Activities
9 Define Activities is the process of identifying the specific actions to be

performed to produce the project deliverables.

9 Scope Baseline 9 Decomposition
9 Enterprise Environmental factors 9 Templates
9 Organizational Process Assets 9 Expert Judgment
Outputs
9 Activity List
9 Activity Attributes
9 Milestone List
87
Sequence Activities
9 Sequence Activities is the process of identifying and documenting

relationship among the project activities.

9 Activity List 9 Precedence Diagramming
9 Activity Attributes requirements (PDM)
9 Milestone List 9 Dependency determination
9 Project Scope Statement 9 Applying Leads and lags
9 Organizational Process Assets
Outputs
9 Project Schedule network diagram
9 Project Document Updates
88
Estimate Activity Resources
9 Estimate Activity Resources is the process of estimating the type and

quantities if material, people, equipment or supplies required to perform
each activity.

9 Activity List 9 Expert Judgment
9 Activity Attributes 9 Alternative Analysis
9 Resource Calendars 9 Published Estimating data
9 Enterprise Environmental factors 9 Bottom up estimating
9 Organizational Process Assets 9 Project Management Software
Outputs
9 Activity Resource Requirements
9 Resource Breakdown Structure
89
Estimate Activity Durations
9 Estimate Activity Durations is the process of approximating the number of

Work periods needed to complete individual activities with estimated
resources.

9 Activity List 9 Expert Judgment
9 Activity Attributes 9 Analogous Estimating
9 Activity Resource Requirements 9 Parametric Estimating
9 Resource Calendars 9 Three Point Estimate
9 Project Scope Statement 9 Reserve Analysis
Outputs
9 Activity Duration Estimates
90
Develop Schedule
9 Develop Schedule is the process of analyzing activity sequences, durations,

resource requirements and schedule constraints to create the Project Schedule.

9 Activity List 9 Schedule Network Analysis
9 Activity Attributes 9 Critical Path Method
9 Project Schedule Network diagrams 9 Critical Chain Method
9 Activity Resource Requirements 9 Resource Leveling
9 Resource Calendars 9 What‐if scenario Analysis
9 Activity Duration estimates 9 Applying Leads and Lags
9 Project Scope Statement 9 Schedule Compression
9 Enterprise Environmental factors 9 Scheduling Tool
Outputs
9 Project Schedule
9 Schedule Baseline
9 Schedule Data
9 Project Document Update.
91
Schedule Network Analysis Techniques
9 Schedule Network Analysis is a 9 PERT

Technique that generates Project
Schedule. These techniques are: Expected Duration= (P+4M+O)/6
Standard Deviation of an Activity=

9 PERT
9 Critical Path Method (P‐O)/6
9 Schedule Compression
9 What if Scenario Analysis Variance of an Activity = [(P‐O)/6]^2
9 Resource Leveling
9 Critical Chain Method P= Pessimistic Estimate
M= Most Likely Estimate
O= Optimistic Estimate
92
PERT Example
Activity O M P Expected Standard Activity Range of

or PERT Deviation Variance the
Duration Estimate
A 16 26 48 28 5.5 30.25 28,+/‐5.5
B 40 59 88 60.6 8 64 60.6,+/‐8
C 40 45 49 44.83 1.5 2.25 44.83,+/‐
1.5
D 30 38 42 37.33 2 4 37.33,+/‐2
Project 170.76 10 100.5
9 If A, B, C, D are the only activities in the Project, what's the Project Duration?
9 The Answer is 170.76 with a standard deviation of 10, so the minimum project duration
is 160.76 and maximum duration is 180.76
9 The Project standard deviation is calculated by adding all activity variances and taking
the square root of project variance
93
Critical Path Method
9 Critical Path: The longest duration path through a network diagram and
determines the shortest time to complete the project.
9 Float (Slack):
9 Total Float (Slack): The amount of time an activity can be delayed

without delaying the project end date or an intermediary milestone.
9 Free Float (Slack): The amount of time an activity can be delayed

without delaying the early start date of its successor's).
9 Project Float (slack): The amount of time a Project can be delayed

without delaying the externally imposed project completion date required
by the customer or previously committed by the Project Manager.
94
How to Calculate Float ?
Forward
ES EF Pass
Float
Backward LS LF
Pass
9 ES: Early Start 9 Float= LS‐ES

9 LS: Late Start 9 Float= EF‐LF
9 EF: Early Finish
9 LF: Late Finish
95
Critical Path Example
3 6 6 14
Activity 2 Activity 4
Float=0 Float=0
0 3
Star 3 6 6 14
Activity 1
t Float=0 14 18
Activity 5
0 3 Float=0
3 9 14 18
Activity 3
Activity Duration Float=5
Activity 1 3 8 14
Activity 2 3
Paths Duration
Activity 3 6
Start, 1, 2, 4,5, End 18
Activity 4 8
Start, 1, 3, 5, End 13 End
Activity 5 4
96
Schedule Compression
Schedule Compression: Schedule compression is done during project planning to see if
the desired completion date can be met and what will have to change to meet that
date.
Two techniques:
9 Fast Tracking
9 Crashing
Fast Tracking: Crashing:
A B C 9 Making cost and schedule tradeoffs

to determine how to obtain the
greatest amount of schedule
To
compression for the least incremental
B cost while maintaining project scope.
A
C
97
Schedule Compression Example
Activity Original Crash Time Original Crash Extra Crash

Duration Duration Savings Cost in Cost Cost Cost Per
(in (in Dollars Month
Months) Months)
A 14 12 2 12,000 14,000 2,000 1,000
B 10 8 2 16,000 26,000 10,000 5,000
C 3 2 1 15,000 17,000 2,000 2,000
D 7 5 2 12,000 18,000 6,000 3,000
9 Assuming the Project has a float of ‐1 month. Which activity would you crash?
9 The answer is Activity A, as it has the minimum crash cost.
98
Impact of Schedule Compression
Option General Impact to the Project
Fast Track 9 Adds Risks
9 Increases management time for the Project Manager
Crash 9 Adds Costs
9 Increases management time for the Project Manager
Reduce Scope 9 Save time and cost
9 Increases customer dissatisfaction
Cut Quality 9 Saves cost and Resources

9 Increases Risks
99
Other Schedule Network Analysis Techniques
What if Scenario Analysis: In this method following questions are asked to produce a
realistic schedule.
9 What if a particular thing changed on the project, would that produce a shorter
schedule?
Monte Carlo Analysis: This method of estimating uses a computer to simulate the
outcome of a project making use of the three point estimates (optimistic, pessimistic
and most likely).
Resource Leveling: Resource leveling is used to produce a resource limited schedule. It

results is in more stable no of resources used in the project.
Critical Chain Method: Critical Chain Method is another technique to develop the
Project Schedule that takes into account both the activity and resource dependencies.
We will not go into detail of this technique, just remember that one such technique
exists.
100
Control Schedule
9 Control Schedule is the process monitoring the status of the Project to update
project progress and managing changes to the schedule baseline.

9 Project Management Plan 9 Performance Reviews
9 Project Schedule 9 Variance Analysis
9 Work Performance Information 9 Project Management Software
9 Organization Process Assets 9 Resource Leveling
9 What‐if Scenario
9 Adjusting Leads and Lags
9 Schedule Compression
Outputs 9 Schedule Tool
9 Change Requests
9 Project Management Plan updates
9 Project Document Updates.
101
Quiz‐1
1. Assume that the Management has asked you to get the Project completed
two weeks early. What is the BEST thing for you to do?
A. Consult the Project Sponsor

B. Crash
C. Fast Track
D. Advise the management of the Impact of the Change
2. A dependency requiring that design be completed before manufacturing can

start is an example of a:
A. Scope Dependency
B. Mandatory Dependency
C. External Dependency
D. Discretionary Dependency
102
Quiz‐2
3. Which of the following is the BEST thing to do to try to complete a Project

two days earlier?
A. Meet the team and look for options for crashing or fast tracking the
critical path
B. Motivate the team to work hard and look for status next month
C. Tell your boss that its not possible
D. Inform customer that critical path does not allow early completion
4. A Project Manager has received activity duration estimates from his team.
Which of the following does he need in order to complete schedule
development.
A. Change Request
B. Reserves
C. List of Preventive Actions
D. Change Control Procedure
103
Quiz‐3
5. During the Project Execution, a large no of changes are made to the Project.
The Project Manager should:
A. Talk to management before any changes are made
B. Make only the changes approved by the Management
C. Make approved changes and retain Schedule baseline
D. Wait for all the changes to happen and print a new Schedule
6. Which of the following is the BEST project management tool to determine the
longest time the project will take?
A. Project Charter
B. Milestone Chart
C. Network Diagram
D. WBS
104
Answer 1: The right answer is D. Advise the management of the Impact of the
Change. Yes, Fast Tracking, Crashing etc are done to reduce the project
schedule, but first thing is to understand the impact of the change.
Answer 2: If you answered B. Mandatory Dependency. You are right. As the

name suggest, this is an example of mandatory dependency.
Answer 3: The right answer is A. Meet the team and look for options for crashing
or fast tracking the critical path . The first option always is to understand
what best can be done, before going ahead to any other task. Also, when it
comes to schedule compression, Crashing or fast tracking are the two
options.
105
Answer 4: The right answer is B. Reserves . Refer to your Develop Schedule

process area knowledge, once the team member give their estimate, a
good project manager should add some extra estimate to it, which is called
Reserves. This is also called Padding the estimate.
Answer 5: The right answer is C. Make approved changes and retain Schedule
baseline. Note that its not bad to have changes, but changes must be
managed and baseline should also be maintained.
Answer 6: The right answer is C. Network Diagram. I hope you found it pretty
straightforward.
106
Lesson 7
Project Cost Management
107
Agenda
9 What is Project Cost Management
9 Difference Between Cost Estimating and Cost Budgeting
9 Control Account
9 The Project Cost Management Processes.
Estimate Costs
Determine Budget
Control Costs
9 Earned Value Management
9 Project Selection Methods
9 Quiz
108
What is Project Cost Management ?
9 Project Cost Management includes the processes involved in estimating ,

budgeting and controlling costs so that the project can be completed within the
approved budget.
9 Cost Management Plan: This plan contains details like, How to go about
planning the Project cost and how to effectively manage and control the project
to the cost baseline and manage cost variance.
9 Cost Management Plan is the part of the Project Management Plan.
9 The techniques of Estimating the cost involved in performing each of the

project activities are same as estimating the Time required.
9 For example, Expert Judgment, Analogous Estimating, Bottom up Estimating,

Reserve Analysis are used in Cost Management as well.
109
What is Control Account ?
9 In Larger Project, its is difficult to do cost management at each individual

activity level and hence costs are managed at a higher level.
9 Usually its is done at one level higher than the Work Package. Remember,
Project is broken into WBS. WBS is further broken down into Work Packages
and Work Packages are finally broken into activities.
110
The Project Cost Management Processes
S. No. Project Cost Management Process Done During

1 Estimate Cost Planning Process Group
2 Determine Budget Planning Process Group
3 Control Costs Monitoring & Control
Process Group
111
Estimate Cost
9 Estimate cost is the process of developing an approximation of the monetary
resources needed to complete project activities.
9 Cost estimates are a predication that is based on the information known at a given
point in time.

9 Scope Baseline 9 Expert Judgment
9 Project Schedule 9 Analogous Estimating
9 Human Resource Plan 9 Parametric Estimating
9 Risk Register 9 Bottom up estimating
9 Enterprise Environmental Factors 9 Three Point Estimates
9 Organization Process Assets 9 Reserve Analysis
9 Project Management Software
Outputs 9 Vendor Bid Analysis
9 Activity Cost Estimates
9 Basis of Estimates
112
Determine Budget
9 Determine Budget is the Process of aggregating the estimated costs of individual

activities or work packages to establish an authorized cost baseline.
9 Cost baseline includes all authorized budgets but excludes management reserves.

9 Activity Cost Estimates 9 Cost Aggregation
9 Basis of Estimates 9 Reserve Analysis
9 Scope baseline 9 Expert Judgment
9 Project Schedule 9 Historical relationships
9 Resource Calendars 9 Funding Limit Reconciliation
9 Contracts
Outputs
9 Cost Performance Baseline
9 Project Funding Requirements
9 Project Document Updates
113
Control Costs
9 Control cost is the process of monitoring the status of the Project to update the
Project budget and managing changes to the cost baseline.
9 Any increase to the authorized budget can only be approved through the Perform
Integrated Change Control Process.

9 Project Management Plan 9 Earned Value Management
9 Project Funding Requirements 9 Forecasting
9 Work Performance Information 9 Performance Reviews
9 Organizational Process Assets 9 Variance Analysis
9 Project Management Software
Outputs
9 Budget Forecasts
Updates
9 Change Requests
9 Project Management Plan Updates
114
Earned Value Technique
9 The Earned Value Technique is a method to measure project performance against

the Project baseline. Result from an Earned Value analysis indicate potential deviation
of the Project from cost and schedule baselines.
Acronym Term Explanation
PV Planned Value Estimated Value of the Work Planned to be done
EV Earned Value Estimated Value of the Work Actually accomplished
AC Actual Value Actual Cost incurred in work accomplished
BAC Budget At The Budgeted amount for the total Work
Completion
EAC Estimate At The current estimate for the Total Project Cost
Completion
ETC Estimate to From this point, how much more the Project Would
Complete cost to complete
VAC Variance at How much over or under budget we expect to be at
Completion the end of the Project.
115
Earned Value Formulas
Acronym Formula Explanation
Cost Variance (CV) EV‐AC Negative is over budget, positive is under

budget.
Schedule Variance (SV) EV‐PV Negative is behind schedule, Positive is
ahead of schedule.
Cost Performance Index EV/AC We are getting $_____ worth of work out
(CPI) of every $1 spent.
Schedule Performance EV/PV We are progressing at ________ percent
Index (SPI) of the rate originally planned.
Estimate At Completion BAC/CPI How much more do we expect the Project
(EAC) to cost
Estimate to complete (ETC) EAC‐AC How much more the Project would cost.
Variance at Completion BAC‐EAC How much over or under budget we

expect to be at the end of the Project.
116
Earned Value Problem Example
9 Lets take the example of a Project to build a compound wall. It’s a four side wall
and each side is to take one day to build and its budgeted for $500 per side. The walls
are planned to be completed one after the other. Today is end of day 3, calculate the
CPI and SPI of this project.
Activity Day 1 Day 2 Day 3 Day 4 Status at

the End of
Day 3
Side 1 S‐‐‐‐‐‐‐‐‐F Complete,
spent $500
Side 2 S‐‐‐‐‐‐‐PF ‐‐‐F Complete,
spent $700
Side 3 S—PF 50% done,
spent $300
Side 4 Not yet
Started
117
Earned Value Problem Solution
Term Calculation Value Interpretation of the Answer
PV 500+500+500 $1500 By third day, we should have done

$1500 worth of Work.
EV Complete, Complete, half $1250 We have actually accomplished only
done work worth $1250
500+500+250=$1250
AC 500 plus 700 plus $1500 We have actually spent $1500
300=$1500
CV $1250 minus $1500 ‐$250 We are over budget by $250
SV $1250 minus $1500 ‐$250 We are behind Schedule

CPI $1250 divided by $1500 .83 We are getting 83 cent out of every
dollar spent
SPI $1250 divided by $ 1500 .83 We are progressing at 83% of the
rate originally planned.
118
Project Selection Methods
9 Present Value: Present Value means

9 Present Value value today of future cash flows.
9 Net Present Value
9 Internal Rate of Return 9 Net Present Value (NPV): Present
9 Payback Period value of the total benefits (income or
9 Benefit Cost Ratio revenue) less the costs over time
period.
Q: You have two Projects to choose from. Project X will 2 years to complete and has a
NPV of $35,000. Project Y will take 5 years to complete and has NPV of $95,000. Which
one will you take up?
A: The answer is Project Y, because it has a higher NPV. Don’t get confused with longer
duration of the Project, what is important is that NPV should be more.
119
Project Selection Methods..contd.
9 Internal Rate of Return (IRR): If doing project is like putting money in a bank
account and earning interest, you will put money in the Bank that gives
maximum interest. Same is with the case of Project.
9 For example: If you have to choose from Project A and Project B. Project A
with an IRR of 25% or Project B with an IRR of 15%.
The Answer is Project A. The IRR is better for Project A.
9 Payback Period: The number of time periods it takes to recover your
investment in the Project before your start accumulating profits.
9 For Example: You have two projects to choose from. Project A with a payback
period of 5 months or Project B with a payback period of 12 months. Which one
would you go for?
The Answer is Project A.
120
Project Selection Methods..contd
9 Opportunity Cost: The Opportunity given up by selecting one project over

another.
9 For Example: You have two projects to choose from. Project A with an NPV of
$ 55,000 and Project B with an NPV of $ 85,000. What is the Opportunity cost
of selecting Project B ?
The Answer is $ 55,000. This is NPV of Project A, which we selected over

Project B.
9 Benefit Cost Ratio: A benefit cost Ratio of more than 1 means that benefits
are greater than the costs.
9 For Example: If the benefit cost ratio of Project A is 2.5 and benefit cost ratio
of Project B is 1.5, which Project would you select.
The answer is Project A…as the Benefit cost ratio is higher in Project A.
121
Some other Cost Related Terms
9 Law of Diminishing Return: The more you put into some thing, the less you
get out of it. For example, doubling the no of resources working on a Project,
cant get it done in half the time.
9 Working Capital: The amount of money the company has to invest on the
Project and for the day to day company operations.
9 Depreciation: Large assets purchased by the company lose value time. This is
called depreciation. They are two forms of depreciation.
9 Straight Line Depreciation: Same amount of depreciation is taken every

year,. So, a Car with a price tag of $10,000 and useful life of 10 years, is
depreciated $1000 per year.
9 Accelerated Depreciation: Depreciates faster than straight line

depreciation. So, a Car with a price tag of $10,000 depreciates $3000 the
first year, $1500 next year, $1000 the third year and so on….
122
Quiz‐1
1. If Earned Value (EV) is $550, Actual Cost is $650, planned value is $600, what
is cost variance (CV) ?
A. ‐100
B. +50
C. ‐50
D. +100
2. The difference between cost baseline and cost budget can be best described
as?
A. The Management Reserve

B. The Sunk cost
C. Project Cost Estimate
D. The contingency Reserve
123
Quiz‐2
3. A Cost performance Index (CPI) of 0.73 means?

A. The Project would cost 73% more than originally planned
B. The Project would cost 37% more than originally planned
C. The Project is progressing at only 73% of the originally planned
D. The Project is only getting 73 cents out of every $1 spent
4. A Schedule Performance Index (SPI) of 0.67 means?

A. You are ahead of the Schedule by 33%
B. You are behind schedule by 32.9%
C. You are progressing at only 67% of the rate originally planned
D. You are progressing at only 37% of the rate originally planned
124
Quiz‐3
5. As a Project Manager, you present your cost estimate to the Project Sponsor
and he asks to cut cost by 10%. What would you do?
A. Replace originally planned resources with new resources at lower rates
B. Cut some of the Project Activities and inform sponsor about the same
C. Strongly say NO to Sponsor and walk out from the Project
D. Ask all team members to reduce cost of their activities by 10%
6. A Project Manager is allocating overall cost estimates to individual activities

to establish a baseline for measuring project performance. What process is
he performing?
A. Cost Estimation
B. Cost Management
C. Cost Control
D. Cost Budgeting
125
Answer 1: The right answer is A. ‐100. Apply the formula to get the
answer. Also note that Planned value is also provided, which is not
used in solving this problem. This was just to confuse you.
Answer 2: The right answer is A. Management Reserve. This was a

pretty simple question and if you got it wrong, you should read this
lesson all over again.
Answer 3: The right answer is D. The Project is only getting 73 cents out
of every $1 spent. I have specifically informed about this earlier also.
But I repeated this question again to give emphasis that
understanding CPI is very important.
126
Answer 4: The right answer is C. You are progressing at only 67% of the rate
originally planned. I have specifically informed about this earlier also. But I
repeated this question again to give emphasis that understanding SPI is
very important.
Answer 5: The right answer is B. Cut some of the Project Activities and inform
sponsor about the same. Note that Project Manager has the responsibility
of cost overrun, so if you have estimated it in a certain way and its
required to be reduced, you should look at reducing scope by removing
some activities.
Answer 6: The right answer is D. Cost Budgeting . I hope you found it pretty
straightforward.
127
Lesson 8
Project Quality Management
128
Agenda
9 What is Quality ?
9 What is Quality Management ?
9 Cost of Quality
9 The Project Quality Management Processes.
Plan Quality
Perform Quality Assurance
Perform Quality Control
9 Seven Basic tools of Quality
9 Introduction to Six Sigma
9 Quiz
129
What is Quality?
9 Quality is defined as “Conformance to Requirement and fitness for use””
9 So, if all the Project requirements are met and the resulting product / service is
usable as well, quality is supposed to have been met.
9 Quality is the responsibility of each and everyone at the Organization.
9 Project Manager is responsible for Project Quality, where as Senior management is

responsible for quality of the whole organization.
9 Quality comes at a cost.
9 Optimal Quality is reached at the point

where the incremental revenue from
improvement equals the incremental cost
to secure it.
130
What is Quality Management?
9 Quality Management includes creating and Impact of Poor Quality

following policies, procedures in order that a 9 Increased Cost
Project meets the defined needs it was 9 Low customer Satisfaction
intended to meet.
9 So, the aim of Quality Management is to

ensure that Project gets completed with no
deviation from the Project requirements.
9 There are three aspects to Quality

Management and they are:
9 Quality Planning
9 Quality Assurance, and
9 Quality Control.
131
Quality Planning vs. Quality Assurance vs. Quality Control
Quality Planning Quality Assurance Quality Control
Determine a Plan for the Determine if the Project is Measure specific project
Quality. complying with the results against standards.
Organizational ( as well as
Project) policies and
procedures.
Major task is preparation Major task is conducting Major activity is defect

of Quality Management regular project Audits. repair and measuring
Plan. whether the quality
Results of the Audit are indicators are improving
corrective and preventive or not.
actions.
132
Cost of Quality
9 Cost of quality includes all costs incurred over the life of the Product by
investing in preventing nonconformance to requirements and ensuring that
the product conforms to requirements.
Cost of Conformance Cost of Non Conformance
9 Quality Training 9 Rework
9 Inspection 9 Scrap
9 Testing 9 Warranty Cost
This is money spent during the This is money spent during and after
Project to avoid failures. the Project because of failures.
133
The Project Quality Management Processes
S. No. Project Quality Management Done During

Process
1 Plan Quality Planning Process Group
2 Perform Quality Assurance Execution Process Group
3 Perform Quality Control Monitoring & Control
Process Group
134
Plan Quality
9 Plan Quality is the process of identifying quality requirements and/or standards for
the project or product, and documenting how the project will demonstrate
compliance.

9 Scope baseline 9 Cost benefit Analysis
9 Cost baseline 9 Cost of Quality
9 Schedule baseline 9 Benchmarking
9 Enterprise Environmental factors 9 Design of experiments
Outputs
9 Quality Management Plan
9 Quality Metrics
9 Quality Checklists
9 Process Improvement Plans
135
Perform Quality Assurance
9 Perform Quality Assurance is the process of determining whether quality standards

are being met, work is continuously improving and deficiencies are being corrected.

9 Project Management Plan 9 Quality Audits
9 Quality Metrics 9 Process Analysis
Outputs
9 Change Request to the Project Management Plan
9 Organization Process Assets Updates
9 Recommendation for corrective Actions
136
Perform Quality Control
9 Perform Quality Control is the process of monitoring and recording results of
executing the quality activities to assess performance and recommend necessary
changes.
9 Quality Control is performed throughout the Project.

9 Project Management Plan 9 Cause and effect diagram
9 Quality Metrics 9 Control Charts
9 Quality Checklist 9 Flowcharting
9 Work performance measurements 9 Histogram
9 Approved Change request 9 Pareto Chart
9 Deliverable 9 Run Chart
9 Organization Process Asset 9 Scatter diagram
Outputs
9 Quality Control Measurements
9 Validated Deliverables
9 Validated Changes
137
Seven Quality Tools
9 Cause and effect diagram Control Charts:

9 Control Charts
9 Flowcharting 9 Control Chart graphically help you to
9 Histogram determine if the process is within
9 Pareto Chart acceptable limit.
9 Run Chart 9 A control chart can be used to monitor
9 Scatter diagram project performance figures such as cost
or schedule variance.
138
Cause and Effect Diagram (Fishbone diagram or Ishikawa
Diagram)
A Typical Fishbone Diagram
9 Used to find the root cause of a defect.
9 Helps stimulate thinking and organizes thoughts.
9 Can be used in Quality Planning as well as Quality Control.
139
Seven Quality Tools
Flowcharting Pareto Chart
9 Flowchart shows how a process or 9Also called 80/20 rule.
system flows from beginning to end 9Helps focus attention to the most
and how the elements interrelate critical issues.
9 Prioritizes potential cause of the
9 Graphically represent the process problem.
and helps analyze how the problems 9 Helps identify the critical few from
occur. the uncritical many.
Histogram Run Chart

9 It is a vertical bar chart showing
how often a particular variable 9 Used to identify a pattern of variation.
occurred. 9 Used to identifying trend.
9 The height of each column
Scatter diagram
represents the relative frequency of
9 Tracks two variables to see if they are
the variable
correlated
140
Introduction to Six Sigma
9 If the data volume is huge, it is
difficult to study the whole data and
what is done to is to study the sample
data.
9 Generally if large volume of data are

plotted, the graph takes the form of a
Bell as shown here.
9 Such distribution of data is also called

“Normal Distribution”. The line
corresponding to the tip of the bell is
the median of the data sample.
9 Standard deviation is used to measure how far the data is from the mean. Sigma is
another name for Standard deviation.
9 In any such distribution, if you go one sigma above or below the mean, it covers 68%
data.
9 At Six sigma, the distribution covers 99.99985% of the data. So if a company operates
at 6 sigma, less than3.4 defects are expected from a sample of 1 million.
141
Quiz‐1
1. Which of the following is an Example of the Quality Assurance?
A. Fishbone Diagram
B. Pareto Chart
C. Inspection
D. Process Analysis
2. Standard deviation is a measure of how:
A. How good the sample data is

B. Far the measurement is from the mean
C. Far the estimate is from highest estimate
D. How less the estimate is from highest estimate
142
Quiz‐2
3. As a Project Manager, what would you give the highest priority: Quality, Cost
or Schedule?
A. It would depend upon the Project
B. Quality is of uttermost important. Cost and Schedule comes later
C. Cost is most important. Everything else comes afterwards
D. Completing the project as per schedule is most important
4. A Project Manager is encountering too many problem in his Project. He

wants to identify the root cause of the Problems so that he can focus his
attention to those causes. Which of the following tools should he use?
A. Fishbone Diagram
B. Control Chart
C. Pareto Chart
D. Histogram
143
Quiz‐3
5. You are currently working as a Project Manager of a major Software Project,

which is going under severe time pressure, when some one from the Quality
department comes up for quality Audit of the Project. The team members
are not co‐operating for the Audit. As a Project Manager, what do you
explain them about the purpose of the Audit?
A. It’s a management decision and we must allow them to audit
B. To check if the project is following any ineffective or inefficient policies
C. To check the time sheet of all team members
D. To check if customer is aware about the Project process
6. Which of the following is an example of cost of conformance?

A. Quality Training
B. Cost of Rework
C. Warranty cost
D. Scrap
144
Answer 1: The right answer is D. Process Analysis. This was a straight forward
question and I hope you got it right. Audit and Process analysis are key
Quality Assurance activities.
Answer 2: The right answer is B. Far the measurement is from the mean. The
Bell curve that you learn is all about the data only.
Answer 3: The right answer is A. It would depend upon the Project. Quality, Cost
and Schedule, all of them are part of Triple Constraints and equally
important. Which one to compromise on a particular project can be a
project specific call.
145
Answer 4: The right answer is A. Fishbone Diagram. This helps in

understanding the root cause of the defect by plotting all possible reasons
of a Defect.
Answer 5: The right answer is B. To check if the project is following any

ineffective or inefficient policies. Please note that the quality Audit is not
supposed to be a burden but of help to the Project.
Answer 6: The right answer is A. Quality Training . Training helps in direct

increase of productivity and hence listed as cost of conformance.
146
Lesson 9
Project Human Resource Management
147
Agenda
9 What is Human Resource Management
9 Roles and Responsibilities of the Project Sponsor
9 Functional Manager vs. Project Manager
9 The Project Human Resource Management Processes.
Develop Human Resource Plan
Acquire Project Team
Develop Project Team
Manage Project Team
Conflict Management
Powers of Project Manager
Motivation Theory
9 Quiz
148
What is Human Resource Management ?
9 Project Human Resource Management includes the processes that

organize, manage and lead the Project Team.
9 The Project Team is compromised of the people with assigned roles and
responsibilities for completing the project.
9 The Project Management is a subset of the Project Team and is responsible

for the project management and leadership activities such as initiating,
planning, executing, monitoring, controlling and closing the project.
149
Roles and Responsibility: Project Sponsor
During Initiation During Project Planning
9 Provide financial resources to the
Project 9 Determine the reports needed by the
9 Issue the Project Charter management to oversee the Project
9 Provide Authority to the Project 9Approve the Project Management
Manager Plan
9 Prioritize between the triple constraints
During Project Execution and Monitoring During Project Closing
& control
9 Enforce Quality Policies 9 Formal Acceptance of the Project
9 Protect the Project from outside deliverables
influences 9 Update Organization Process
9 Handle escalations Database.
9 Provide clarity on Project Scope
9 Approve changes to Project Charter
150
Functional Manager vs. Project Manager
Functional Manager Project Manager
9 Manages and owns resources in a 9 In charge of the Project but not

specific department like “Engineering”, necessarily the resources.
“HR”.
9 Is not necessarily the technical
9 Generally the subject matter expert expert.
of the functional area that he/she
heads. 9 Negotiates with functional manager
for the best available resources.
9 Exact roles and responsibility of a
Functional Manager depends upon the 9 Is Responsible for the Project Quality.
Org type, i.e. matrix, projectized etc
9 Is Accountable for Project Failure.
9 Assign specific Individuals to the However, the Project success belongs to
Project team and negotiates with the the whole team.
Project manager regarding resources.
151
The Project Human Resource Management Processes
S. No. Project Human Management Done During

Process
1 Develop Human Resource Plan Planning Process Group
2 Acquire Project Team Execution Process Group
3 Develop Project Team Execution Process Group
4 Manage Project Team Execution Process Group
152
Develop Human Resource Plan
9 Develop Human Resource Plan is the process of identifying and documenting

project roles, responsibilities, reporting relationships and creating a staffing
management plan.

9 Activity Resource Requirements 9 Organization Chart
9 Enterprise Environmental Factors 9 Networking
Outputs
9 Human Resource Plan
153
Acquire Project Team
9 Acquire Project Team is the process of confirming human resource availability and
obtaining the team necessary to complete project assignments.

9 Enterprise Environmental Factors 9 Pre‐assignment
9 Organization Process Assets 9 Negotiation
9 Acquisition
9 Virtual Teams
Outputs
9 Project Team Assignments
9 Resource Calendars
154
Develop Project Team
9 Develop Project Team is the process of improving the competencies, team
interaction and the overall team environment to enhance project performance.

9 Project Team Assignments 9 Interpersonal skills
9 Project Management Plan 9 Training
9 Team building Activities
9 Ground Rules
9 Co‐location
9 Recognition and Rewards
Outputs
9 Team Performance Assessments
155
Manage Project Team
9 Manage Project Team is the process of tracking performance, providing feedback,
resolving issues and managing changes to optimize project performance.

9 Project Team Assignments 9 Observations and Conversations
9 Project Management Plan 9 Project Performance Appraisals
9 Team Performance Assessments 9 Conflict Management
9 Performance Reports 9 Interpersonal skills
Outputs
9 Recommended corrective Actions
9 Change Requests
9 Organization Process Asset Updates
156
Conflict Management
9 Conflict is inevitable consequences of Organizational interactions.

9 Conflict is best resolved by people involved in it and their immediate
managers.
9 Conflict can be beneficial too!!
9 Conflict can be avoided by:
Keeping team informed of the Exact Project status
Clearly assigning work with no overlapping responsibilities.
Continuously motivating team about the work challenges
Sources of Conflict : Conflict Resolution Technique :
9 Schedule 9 Confronting (Problem Solving).
9 Project Priorities 9 Compromising
9 Resources 9 Withdrawal (Avoidance)
9 Technical Issues 9 Smoothing
9 Administrative Issues 9 Forcing
9 Cost
9 Personality
157
Powers of the Project Manager
9 Here are some of the ways in which Project Manager can get the team members
perform on a Project:
Formal or Legitimate
Reward
Penalty
Expert
Referent
9 The best form of powers are Expert and Reward. Penalty is the worst way of getting
the work done.
9 Formal, Reward and Penalty are powers derived from Project Manager’s position in the
company. Expert Power is earned on your own.
158
Motivation Theory
9 How can a Project Manager reward team members if he or she does not
understand what motivates them?
McGregor’s Theory of X and Y: Maslow Hierarchy for Needs

All workers fit into two
category, either X or Y.
9 Theory X: People should be

watched every minute. People are
incapable, avoid work whenever
possible.
9 Theory Y: People are willing to

work without Supervision and
they want to achieve some thing.
159
Quiz‐1
1. Which Conflict Resolution Technique is the best for long lasting solution?
A. Smoothing
B. Forcing
C. Problem Solving
D. Withdrawal
2. What conflict resolution technique is when a Project Manager says “I can no

longer deal with this escalation”.
A. Withdrawal
B. Compromise
C. Problem Solving
D. Forcing
160
Quiz‐2
3. How is Project Performance Appraisals different than Team Performance

Assessments?
A. Project Performance Appraisal focuses on Team member performance
B. Project Performance Appraisal is evaluation of the team effectiveness
C. It’s a tool for reducing employee turnover
D. It’s used for team building
4. You have been assigned as the Project Manager of an ongoing Project

involving 50 Employees of your company and 10 Sub contractors. You want
to know who is assigned to do what. Where should you look for this
information?
A. Responsibility Assignment Matrix
B. Project Organization Chart
C. Pareto Chart
D. Resource Histogram
161
Quiz‐3
5. A team member is not performing well on a Project…because of

inexperience. But there is nobody else better qualified to do the Job. As a
Project Manager, what should you do?
A. Escalate the matter to higher authority
B. Try doing it on your own
C. Wait till the team member fails to deliver
D. Arrange Training for the team member
6. As a Project Manager, you noticed that one of the Subcontractor is

continuously sending late deliverables. When you pointed this, he agrees for
a cost reduction but still wants you to accept late deliverable. This is an
example of ?
A. Forcing
B. Smoothing
C. Compromising
D. Confronting
162
Answer 1: The right answer is C. Problem Solving. This was a straight forward
question and I hope you got it right. Problem Solving is the best way to
resolve conflict.
Answer 2: The right answer is A. Withdrawal. I think it is obvious looking at the

statement by the Project Manager.
Answer 3: The right answer is A. Project Performance focuses on Team member

performance. I have clarified it in detail while discussing the Manage
Project Team Process. If you got this question wrong, you may like to refer
that section again.
163
Answer 4: The right answer is A. Responsibility Assignment Matrix. Who is

assigned to work on what is listed in Responsibility Assignment Matrix
Answer 5: The right answer is D. Arrange Training for the team member.
Remember the question asked for the best option, among the existing
options, even though it might not be the best option in real life.
Answer 6: The right answer is C. Compromising. This must have been easy
question for you. Here both parties are giving up some thing.
164
Lesson 10
Project Communication Management
165
Agenda
9 What is Communication
9 Communication Methods, Technology and Channels
9 Basic Communication Model
9 The Communication Management Knowledge Area.
Identify Stakeholders
Plan Communications
Distribute Information
Manage Stakeholder Expectations
Report Performance
9Quiz
166
What is Communication ?
9 Communication is a two way process of transferring information from one entity to

another. Communication is a two way process of transferring information from one entity to
another.
9 A Project Manager spends almost 90% of his /her time on communication.
Other Project
Managers
Sr. The Project Stakeholders

Management
Other Projects
167
Communication Methods , Technology & Channel
Communication Methods When Used
Formal Written Project Management Plans, Project Charter,
Communicating over long distance
Formal Verbal Presentations
Informal Written Emails, Notes
Informal Verbal Conversations
Communication Technology: Communication Channel:
9 Face to Face
9 Telephone
9 Fax
9 Email
9 Meetings.
168
Basic Communication Model
9 Encode: To translate thoughts or ideas into a language that is understood by others.

9 Message / Feedback Message: Output of Encoding
9 Medium: The communication method to convey the message
9 Noise: Anything that interfaces with the transmission and understanding of the
messages, for example, distance, unfamiliar technology
9 Decode: To translate the message back into meaningful thoughts or ideas.
Message
Encode Decode
Sender Noise Nois Receiver

e
Decode Encode
Feedback Message
169
Project Communication Management Processes
9 Project communication Management includes the processes required to

ensure timely and appropriate generation, collection, distribution, storage and
ultimate disposition of project information.
S.No. Project Communication Management Done During

Process
1 Identify Stakeholder Initiating Process Group
2 Plan Communications Planning Process Group
3 Distribute Information Execution Process Group
4 Manage Stakeholder Expectations Execution Process Group
5 Report Performance Monitoring & Control
Process Group
170
Identify Stakeholder
9 Identify Stakeholder is the process of identifying all people or Organizations

impacted by the Project and documenting relevant information regarding their
interests, involvement and impact on project success.

9 Project Charter 9 Stakeholder Analysis
9 Procurement Documents 9 Expert Judgment
Outputs
9 Stakeholder Register
9 Stakeholder management strategy
171
Plan Communications
9 Plan communication is the process of determining the project stakeholder

information needs and defining a communication approach.

9 Stakeholder Register 9 Communication Requirement Analysis
9 Stakeholder Management Strategy 9 Communication Technology
9 Enterprise Environmental Factors 9 Communication Methods
Outputs
9 Communication Management Plan
172
Distribute Information
9 Distribute Information is the process of making relevant information

available to project stakeholders as planned.

9 Project Management Plan 9 Communication Methods
9 Performance Reports 9 Information Distribution Tools
Outputs
9 Organization Process Assets Update
173
Manage Stakeholder Expectations
9 Manage stakeholder expectations is the process of communicating and

working with stakeholders to meet their needs and addressing issues as they
occur.

9 Stakeholder Register 9 Communication Methods
9 Stakeholder management strategy 9 Interpersonal skills
9 Project Management Plan 9 Management skills
9 Issue log
9 Change log
Outputs
9 Change Request
9 Project Management Plan Updates
174
Report Performance
9 Report Performance is the process of collecting and distributing

performance information, including status reports, progress measurements
and forecasts.

9 Project Management Plan 9 Variance Analysis
9 Work performance Information 9 Forecasting methods
9 Work performance Measurements 9 Communication Methods
9 Budget forecasts 9 Reporting Systems
Outputs
9 Performance Reports
9 Change Request
175
Quiz‐1
1. As a Project Manager, you have a problem with a team member’s

performance. Which is the best way of communicating this problem with
the team member?
A. Informal Verbal
B. Formal Verbal
C. Formal Written
D. Informal Written
2. Lessons Learnt are best completed by whom?

A. Project Manager
B. Team
C. Customer
D. Stakeholders
176
Quiz‐2
3. As a Project Manager, you have team working for you across 5 different
countries. What is the best communication method that you should follow.
A. Informal Written
B. Informal Verbal
C. Formal Written
D. Formal Verbal
4. You were asked to sit as an observer in another project’s status review

meeting. You observed that everyone present in the meeting is talking at
the same time about different issues. The whole meeting is in a chaos. What
do you think was not done?
A. Meeting Agenda was not set.
B. The right people were not invited for the meeting
C. The Project Manager was ineffective
D. There were cultural issues with people with different background
attending the meeting
177
Quiz‐3
5. When shall you go for Formal Written communication with the Customer?
A. When customers ask for work not covered in contract
B. When customer reports defect
C. When customer compliments a team member for good work
D. When customers asks for weekly status report to be resent.
6. What's the use of creating Lessons learnt database.

A. Should be done as it’s a company policy
B. It serves as historical record for future projects
C. Project Manager can show this as his accomplishment
D. All the above
178
Answer 1: The right answer in this case is A. Informal Verbal. If this does not
solve the problem, than you should for Formal Written communication.
Answer 2: If you think Project Manager alone should prepare lesson learnt, you
are wrong. The right answer is D. Stakeholders. Since Stakeholders as a term
include everyone.
Answer 3: You should look for many such practice questions. In this case, the
right answer is C. Formal Written. Communication is a big issues, if team
members are geographically distributed and its always a good practice to
use formal written communication in such cases.
Answer 4: Remember, you need to select the Best answer among the available
answer. In this case, the right answer is A. Meeting Agenda was not set.
People were talking about various issues, so meeting agenda must not have
been set.
179
Answer 5: This should have been an easy question for you. The right answer is A.
When customers ask for work not covered in contract. You must have record
for any extra work done, as you might have to bill for that work and get paid
for it.
Answer 6: The right answer is B. It serves as historical record for future projects
This must have been an easy question as all other options are obviously wrong.
180
Lesson 11
Project Risk Management
181
Agenda
9 What is Risk
9 How is risk calculated
9 Risk Categorization
9 Decision Tree
9 Risk Reserve
9 The Risk Management Knowledge Area.
Plan Risk Management
Identify Risk
Perform Qualitative Risk Analysis
Perform Quantitative Risk Analysis
Plan Risk Responses
Monitor & Control Risks
9Quiz
182
What is Risk ?
9 Risk is an uncertainty that can positively or negatively impact a Project.
Example: Positive Uncertainties Example: Negative Uncertainties
9 You ordered a new software which is 9 Government mandates a compulsory
cheaper than your old software holiday due to Swine flue attack. The
because of budget constraint..but the project delivery gets delayed.
new Software turns out to be more
efficient.
9 Positive uncertainties are also called Opportunities or Good Risks.

9 One who does not take risk is called “Risk Averse”.
9Risk Tolerance: means whether the risk can be tolerated or not. For example, a
company might have a policy that any risk that impacts their customer relationship will
not be tolerated.
9 Risk Threshold: This means the amount of risk that is acceptable. For example, a
company may have a policy that a risk that increases the project cost by 10% or less is
OK, but not more than that.
183
How is Risk Calculated?
Risk = Probability * Impact
Work Package Probability Impact Monetary Value

X 25% $10,000 $2,500
Y 40% $2,000 $800
184
Risk Categorization
9 External: Regulatory, governmental
9 Internal: Time, cost, scope, people, planning
9 Technical: Requirements, Technology, Quality
9 Project Management: Estimating, Planning
9 Schedule Risk: ?
9 Cost Risk: ?
9 Quality Risk: ?
9 Scope Risk: Looks like you have not understood the work properly and you might
have to redo the whole thing!
9 Resource Risk: CEO has asked our Tech Architect, to work on another project. In
such cases, who would make design decision on our project?
185
Decision Tree: Which is more riskier ?
Failure :
Probability=10%
Impact= $15,000
Initial cost of buying
new car= $20,000
Pass :
Probability=90%
Impact= $000
Decision: To buy
a new Car or old
Car Failure :
Probability=70%
Impact= $10,000
Initial cost of buying old
Pass :
car= $15,000
Probability=30%
Impact= $000
New Car $20,000+$15,000*10%= $21,500
Old Car $15,000+$10,000*.7= $22,000
186
Risk Reserve
187
Project Risk Management Processes
9 Project Risk Management includes the processes of conducting risk management

planning, identification, analysis, response planning and Risk monitoring & control
on a Project.
9 The objective of Risk Management is to increase the probability and impact of

positive events and decrease the probability and impact of negative events.
S.No. Project Risk Management Processes Done During

1 Plan Risk Management Planning Process Group
2 Identify Risks Planning Process Group
3 Perform Qualitative Risk Analysis Planning Process Group
4 Perform Quantitative Risk Analysis Planning Process Group
5 Plan Risk Responses Planning Process Group
6 Monitor and Control Risks Monitoring & Control Process
Group
188
Plan Risk Management
9 Plan Risk Management is the process of defining how to conduct risk

management activities for a Project.

9 Project Scope Statement 9 Planning Meeting & Analysis
9 Enterprise Environmental Factors
Outputs
9 Risk Management Plan
189
Identify Risks
9 Identify Risks is the process of determining which risks may affect the
project and documenting their characteristics.

9 Risk Management Plan 9 Documentation Reviews
9 Activity Cost Estimates 9 Information Gathering Techniques
9 Activity Duration Estimates 9 Checklist Analysis
9 Scope Baseline 9 Assumption Analysis
9 Project Management Plan 9 SWOT Analysis
9 Enterprise Environmental factors 9 Expert Judgment
Outputs
9 Risk Register
190
Perform Qualitative Risk Analysis
9 Perform qualitative Risk Analysis is the process of prioritizing risks for

further analysis or action by assessing their probability of occurrence and
impact.

9 Risk Register 9 Risk Probability and Impact
9 Risk Management Plan Assessment
9 Organization Process Assets 9 Probability and Impact Matrix
9 Risk Categorization
9 Risk urgency Assessment
9 Expert Judgment
Outputs
9 Risk Register updates
191
Perform Quantitative Risk Analysis
9 Perform quantitative Risk Analysis is the process of numerically analyzing

the effect of identified risks on overall project objectives.

9 Risk Register 9 Data Gathering and Representation
9 Risk Management Plan techniques
9 Organization Process Assets 9 Quantitative Risk Analysis and
Modeling Techniques
9 Expert Judgment
Outputs
192
Plan Risk Responses
9 Plan Risk Responses is the process of developing options and actions to

enhance opportunities and to reduce threats to project objectives.

9 Risk Register 9 Strategies for negative risks
9 Risk Management Plan Avoid
Transfer
Mitigate
Accept
Outputs 9 Strategies for positive risks
9 Risk Register updates Exploit
Residual Risks Share
Contingency Plans Enhance
Risk Response Owner Accept
Reserves
193
Monitor and Control Risks
9 Monitor and Control Risk 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.

9 Risk Register 9 Risk Re‐assessment
9 Risk Management Plan 9 Risk Audits
9 Performance Reports 9 Variance and Trend Analysis
9 Reserve Analysis
9 Status Meetings
Outputs
9 Corrective and Preventive Action
9 Organization Process Asset Updates
194
Quiz‐1
1. Purchasing Insurance cover for your project equipment is a example of

what?
A. Transfer
B. Mitigation
C. Acceptance
D. Avoidance
2. You have been assigned as the Project Manager of a new e‐Business Project.
There appears to be many risk in the project but no body has evaluated
them to assess the range of possible outcomes. According to you, what was
not done?
A. Risk Identification
B. Risk Response Planning
C. Risk Management Planning
D. Risk Register not updated
195
Quiz‐2
3. During Risk Response Planning, you identified few new Risks..what should
you do?
A. Just document as contingency reserve would take care of it
B. Follow the Risk Management Processes of calculating risk probability
and impact
C. Ask for increasing the contingency reserve to take care of these new
risks
D. None of the Above
4. During Project Execution you encountered a major problem. What should

you do?
A. Work towards solving the Problem
B. Inform your Manager about it
C. Try to identify how this problem was not identified earlier
D. Do something to ensure that nobody gets to know of this problem
196
Quiz‐3
5. You are executing a Project when the customer asks for a change that’s going
to increase the schedule risk. What should you do first?
A. Go ahead and accept the change
B. Inform the customer that project would get delayed
C. Analyze the impact of the change with your team
D. Inform your manager about customer request
197
Answer 1: The right answer in this case is A. Transfer. You transferred your risk
to the Insurance company.
Answer 2: The right answer is C. Risk Management Planning

I hope this was an easy question for you.
Answer 3: The right answer is B. Follow the Risk Management Processes of

calculating risk probability and impact. At any stage, when new risks are
identified, you should follow the risk management process. Once the risk
identification is done, the next step is analyzing the probability and impact
of the risk.
198
Answer 4: The right answer is A. Work towards solving the Problem. Whenever
any problems happens on the project, as a certified project manager, you
should deal with the problem and solve it.
Answer 5: The right answer is C. Analyze the impact of the change with your
team. This is the first thing that you should do, because unless you know the
impact, you will really not be sure on what should get communicated to
either your manager or to the customer.
199
Lesson 12
Project Procurement Management
200
Agenda
9 What is a Contract
9 Centralized vs. Decentralized contracting
9 Different Types of Contract
9 Key terms in Procurement Management
9 The Procurement Management Knowledge Area.
Plan Procurements
Conduct Procurements
Administer Procurements
Close Procurements
9Quiz
201
What is a Contract ?
9 A contract represents a mutually binding agreement that obligates the seller

to provide the specified products, service or results and obligates the buyer to
provide the monetary or other valuable consideration.
Important Points you should know about Who is responsible for creating
contract: and managing contracts?
9Contracts should be formal
9Contract is a legally binding document 9 Contract Manager
9Contract must be in writing
9If some thing is not written in contract, it can Contract Manager is also called
be done only by issuing a change request Procurement Manager,
9Changes to contract should be signed both Procurement Officer or
by the buyer and the seller Contract Officer.
202
Centralized vs. Decentralized Contracting
9In centralized contracting, a single contract manager handles multiple projects, where
as in Decentralized contracting, a contract manager is assigned to the Project full time,
and reports to the Project Manager.
Centralized
Advantages Disadvantages
Increased expertise in Contracting Difficult to get contracting help as the
person may be busy in multiple projects.
Standardized company practices
Decentralized
More loyalty to the Project Duplication of expertise.
Easier access to contracting experience. Less standardization of contracting
practices from one project to another.
203
Different Types of Contract
Contract Types Details
Cost Reimbursable (CR) 9 Cost plus Fee (CPF)
9 Cost plus Percentage of Costs (CPPC)
Example: 9 Cost plus Fixed Fee (CPFF)
Cost plus a fee of $50,000
Time and Material (T&M) 9 Generally used for small amount
Example: $25 per hour +
material cost.
Fixed Price (FP) 9 Fixed Price Incentive Fee (FPIF)
9 What are the advantages and disadvantages of each type?
204
Advantages and Disadvantages of contract types
Cost Reimbursable
9 Less costly than Fixed Price, because 9 Requires auditing all the seller invoices
seller does not have to account for their and thus increases buyer efforts.
risk.
9 Such contracts are simple to draft. 9 Seller has less incentive to control cost,
and hence such contracts are inefficient.
Fixed Price
9 Seller has strong incentive to control 9 Seller may under quote initially and later
cost and hence these contract are efficient. try to make high margins on CRs
9 Requires less effort by buyer to manage 9 Not having a proper SOW can result in
contract. seller not providing some of the
deliverables.
205
Advantages and Disadvantages of contract types…
Time and Material
9 Easy to create 9 Seller has no incentive to control cost
9 Good for resource augmentation kind 9 Requires monitoring of daily output
of assignment
9 Good for small projects only
206
Key Terms in Procurement Management
9 RFQ: Request for Quotation
9 RFP: Request for Proposal
9 RFI: Request for Information
9 RFB: Request for Bids
9 PO: Purchase Order:
9 SOW: Statement of Work
9 Quotation
9 NDA: Non disclosure Agreement
9 LOI: Letter of Intent
9 T&C: Terms and Conditions
207
Project Procurement Management Processes
9 Project Procurement Management includes the processes necessary to

purchase or acquire products, services or results needed from outside the
project team.
S.No. Project Procurement Management Done During

Process
1 Plan Procurements Planning Process Group
2 Conduct Procurements Executing Process Group
3 Administer Procurements Monitoring & Control
Process Group
4 Close Procurements Closing Process Group
208
Plan Procurements
9 Plan Procurement is the process of documenting project purchasing decisions,

specifying the approach and identifying potential sellers.

9 Scope Baseline 9Make or buy Analysis
9 Risk Register 9 Expert Judgment
9 Activity Resource Requirements 9 Contract Types
9 Activity Cost Estimates
9 Project Schedule
9 Enterprise Environmental Factors
9 Organization Process Asset Outputs
9 Procurement Management Plan
9 Procurement Statement of Work
9 Make or buy decision
9 Procurement Documents
9 Source Selection Criteria
209
Conduct Procurements
9 Conduct Procurements is the process of obtaining seller responses,

selecting a seller and awarding a contract.

9 Project Management Plan 9Bidder Conference
9 Procurement Documents 9 Proposal Evaluation Techniques
9 Source Selection Criteria 9 Independent Estimates
9 Qualified Seller List 9 Expert Judgments
9 Seller Proposals 9 Advertising
9 Organization Process Asset 9 Internet Search
9 Procurement Negotiation
Outputs
9 Selected Seller
9 Procurement Contract
Award
210
Administer Procurement
9 Administer Procurements is the process of managing procurement

relationships, monitoring contract performance and making changes and
corrections as needed.

9 Procurement Documents 9 Contract Change Control System
9 Project Management Plan 9 Procurement Performance Reviews
9 Contract 9 Inspection and Audits
9 Performance Reports 9 Payment Systems
9 Approved Change Requests 9 Claims Administration
Outputs
9 Procurement Documentation
9 Project Management Plan Update
9 Change Request
211
Close Procurements
9 Close Procurement is the process of completing each Project Procurement.

9 Project Management Plan 9Procurement Audits
9 Procurement Documentation 9 Negotiated Settlements
Outputs
9 Closed Procurements
9 Organization Process Assets Updates
212
Quiz‐1
1. What is the Primary Objective of Negotiation?

A. Find a win‐win proposition for both parties
B. Get the best deal
C. Define the exact responsibility of each party
D. Clarify the contract scope
2. You have to fast track your project to meet the schedule deadline and hence
you decide to use your Software Development Vendor for developing the
eLearning content as well, without going through the process of issuing the
RFP and looking for the right vendor. What should be the main concern in
such scenario?
A. Organization’s code of conduct violation
B. The Vendor Qualification
C. Too much dependence on same vendor
D. None of the above
213
Quiz‐2
3. You have been asked as a Project Manager to assist the contract manager in
drafting the contract of a large project with limited scope clarity. What type
of contract would you suggest so that your Organization does not make any
financial losses?
A. Times and Material
B. Fixed Fee
C. Cost Plus Fixed Fee
D. Cost plus percentage of Cost
4. How is contract closure different than administrative closure.

A. Contract closure involves customer as well
B. Contract closure is not mandatory
C. Contract closure can be done many a times in a contract
D. Contract Closure is done before Administrative Closure
214
Quiz‐3
5. A customer asked you to work on a contract scope of work for 6 months and
come back to him only after 6 months when the work is over. As a Project
Manager of the Vendor Organization, what should you do?
A. Complete the work as Requested but keep verifying scope with the
customer
B. Meet the customer at the end of six month with deliverables
C. Ask your Sr. management to check if the customer is genuine
D. Complete the work and also keep a written record that customer has
asked not to contact
215
Answer 1: The right answer in this case is A. Find a win‐win proposition for
both parties.. Remember, only a win‐win contract can be long term.
Answer 2: The right answer is B. The Vendor Qualification. The Software solution
vendor might not be the right vendor to work on eLearning as well.
Answer 3: The right answer is C. Cost Plus Fixed Fee. Please note that Time and
Material type of contract is best suited for the smaller projects.
216
Answer 4: The right answer is D. Contract Closure is done before Administrative

Closure. All other options are wrong including Option A. Customer may be
involved in even Administrative closure (e.g., contributing to lesson learnt)
Answer 5: The right answer is A. Complete the work as Requested but keep
verifying scope with the customer. Even though customer has requested not
to contact, but you should keep verifying what you are doing to ensure that
there is no gap in understanding the requirement.
217
Lesson 13
Professional and Social Responsibility
218
Agenda
9 Ensure Individual Integrity
9 Contribute to Project Management Knowledge Base
9 Enhance self Professional competence
9 Promote Stakeholder collaboration
9 Quiz
219
Ensure Individual Integrity
1. Always create true report. Even if it shows the project in bad state.
2. Follow the copy right rules. Never use unlicensed product.
3. When a conflict does occur. Deal with it. Don’t shy away.
4. Don’t accept any kind of bribe.
5. Treat everyone with respect.
6. Always give more importance to project needs than personal gains.
7. Always do the right thing and follow the right process.
8. Never divulge company information to un‐authorized parties.
9. Respect Intellectual property rights.
10. Follow PMI’s code of Professional conduct. Refer it on PMI website.
220
Contribute to Project Management Knowledge Base
1. Share best practices learned on your project with other Project managers in
your Organization.
2. Mentor junior team members on Project Management related topics.
3. Write or blog about Project Management. Participate in Project
Management discussions groups.
4. Actively participate in analyzing past project data and come up with project
management related metrics to be used within the Organization.
221
Enhance Self Professional Competence
Q. Project Manager’s are busy managing Project, when do they do this?

A. The fact that you are reading this tutorial shows that you care about your
professional competence!
Few things that as a Project Manager you can do:
1. Analyze your strength and weakness.

2. Look for a Senior Project Manager to mentor you on your weak areas.
3. Actively look for applying Project Management Knowledge on your projects.
4. Read Project Management books for new ideas or techniques.
5. Discuss with other project managers the challenges you face on your projects.
222
Promote Stakeholder Collaboration
Q. Why do the Project Manager needs to promote Stakeholder collaboration?

A. So that Stakeholders are aware of the true benefits of the Project and help in
whatever way they can to make the project successful.
This is what Project Manager can do for Stakeholder collaboration:
1. Resolve Competing Interest.

2. Deal with conflicting scenarios. Take charge!
3. Respect cultural differences. More true when projects occur across geographies.
4. Keep Stakeholders always informed about the true picture of the Project.
223
Quiz‐1
1. You were about to send a deliverable to your customer and that point you
realized that there is one defect, which customer would not notice and is
technically against the contract, but still is a defect. What would you do?
A. Discuss with the customer
B. Go ahead and send the deliverable
C. Inform your Sr. management and seek their guidance
D. Extend the Project deliverable timeframe
2. You have to catch a flight to submit a tender document for a strategic project
for your company. You are running late for the flight, but there is a possibility
that you can over speed and catch the flight. What would you do?
A. Over speed and catch the flight
B. Don’t over speed as its dangerous and against law
C. Ask your Manager for guidance
D. None of the above
224
Quiz‐2
3. You were sent by your company to execute a Project in a foreign country. All
your equipments are detained at the airport and airport authority asks for a
fee to release the equipment. You are getting late for your project. What
would you do?
A. Don’t pay as it’s a bribe
B. Establish whether such payment is legal in that country
C. Pay and get the money from management reserve
D. Ask your boss for the next step
4. You were competing with another colleague of yours to become the project
manager of a prestigious new project in the organization, but unfortunately
your colleagues gets that assignment. Later he comes to you for some
documentation. What would you do.
A. Don’t give him the document. Create problems for him.
B. Give him the document and also co‐operate with him by all possible
means
C. Just avoid him and let him keep coming back to you
D. Tell him that the document is not all useful and you have lost it
225
Quiz‐2
5. There was a pre‐scheduled project status review meet and one of your team
Lead sends his report just an hour before. You find too many issues with the
report. What would you do?
A. Let him present the report and thrash him in front of everyone to teach
him a lesson
B. Cancel the meeting and prepare the report yourself
C. Postpone the meeting and ask him to fix the issues
D. Do nothing..just wait and see what happens.
226
Answer 1: The right answer in this case is A. Discuss with the customer.. Its
ethically not right to send a deliverable with defect to the customer. In the
present case, the best thing is to speak to the customer and if he is ok,
send the deliverable.
Answer 2: The right answer is B. Don’t over speed as its dangerous and against
law . Remember PMI is against violating any applicable law, including traffic
rules.
Answer 3: The right answer is B. Establish whether such payment is legal in that
company. Before jumping the gun, establish whether what they are asking is
a fee or a bribe. If it’s a bribe, don’t pay. If it’s a airport usage fee, please go
ahead and pay.
227
Answer 4: The right answer is B. Give him the document and also co‐operate him
by all possible means. Once your colleague is selected as a Project Manager,
you should co‐operate with him by all means.
Answer 5: The right answer is C. Postpone the meeting and ask him to fix the
issues. There is no point wasting everyone’s time with a wrong report. Also,
its not a good idea to scold a team member in front of other. Remember, you
need to respect everyone including your sub‐ordinates.
228
Thank You
229

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WELCOME TO

Category College PM Training PM Experience Total Experience

Project Management Process Percentage of

9 Projectized: The entire company is Organized by Project. There is no

2. Which of the following is not a characteristics of a Project ?

A. Repeats Every Week

4. Whom does the Project Team report in a Projectized Organization?

A. Does not report to any one

5. How is Project Lifecycle different than a Product Lifecycle ?

A. Project Lifecycle has no methodology

6. In a matrix Organization, a Project Manager can expect the communication

Answer 6: The right answer is A. Why the communication in a matrix

9 Project Planning determines if the project charter can or can not be

2. Which of the following is an output of the Initiating Process Group?

Answer 4: The right answer is D. Initiating. The high level constraints of

9 Project Integration Management involves unification, consolidation,

9 The Project Integration Management is a high level work that Project

9 The Key role of the Project Manager is to Perform Integration.

9 The Key role of the Project Team is to concentrate on completing the

9 Benefit Measurement Methods‐ >This is a comparative Approach

9 Constrained Optimization Methods ‐> This is a Mathematical Approach

S.No. Project Integration Management Process Done During

9 What is a Project Charter ? 9 Inputs to Create Project Charter

9 Formally Authorizes the 9 Project Statement of Work

9 Develop Project Management Plan is the Process of documenting the actions

9 Work Authorization System

9 Change Control System

9 Direct and Manage Project Execution is the process of performing the

9 Process of Making Change

9 Change Control Board

9 The project should always be closed no matter the circumstance in

4. Who does the Project Integration?

Answer 5: This question requires some knowledge of previous lessons as well.

9 Project Scope management includes the processes required to ensure

9 Managing the Project scope is primarily concerned with defining and

9 The key activities that happens as part of Project Scope Management

9 Constantly checking to make sure that all the work is being

9 Product Scope : The features and functions that characterize a product,

9 Project Scope: The Work that needs to be accomplished to deliver a

S. No. Project Scope Management Process Done During

9 Collect Requirements is the process of defining and documenting

Inputs Tools & Techniques

9 Define Scope is the process of developing a detailed description of the

Inputs Tools & Techniques

9 Create WBS is the process of subdividing project deliverables and project

Inputs Tools & Techniques

9 Verify Scope is the process of formalizing acceptance of the completed

Inputs Tools & Techniques

Inputs Tools & Techniques

Answer 3: The right answer is B. Scope Verification. Unless the deliverables is

Answer 5: The right answer is B. Subdivide until it can be done by a single

Answer 6: The right answer is D. WBS dictionary

9 Project Time Management is primarily concerned with developing a realistic

9 Identifying the list of project activities

9 Its is very common to use Software to develop the Project Schedule.

9 GANTT Chart: A Gantt chart is a type

Start Activity A Activity B

Start Construct Start

9 Analogous Estimating: Estimating based on previous projects or previous

9 Parametric Estimating: This uses a mathematical model to calculate projected

9 Heuristics: A heuristic means rule of thumb. An example of heuristic is the 80/20

S. No. Project Time Management Process Done During

9 Define Activities is the process of identifying the specific actions to be