PMP Student Guide

Project Management Professional
Exam Preparation Course
PMP Exam Preparation Course
Page 1
Copyrights
This book is produced by Techno Management, a project management consulting company, registered in Canada. This document may not be reproduced, stored in a retrieval system, or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of Techno Management. PMBOK and PMP are trademarks registered by the Project Management Institute (PMI) in the United States and other nations.
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1- Introduction
Table of Contents
1. 2.
2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13
Introduction ............................................................................................................ 5 Project Management Framework ........................................................................... 7

TERMS AND DEFINITIONS .................................................................................................. 7 COMPARATIVE OVERVIEW ................................................................................................ 9 PROJECT CHARACTERISTICS ............................................................................................ 9 PROJECTS VS. OPERATIONAL W ORK: .............................................................................. 11 PROJECT CONSTRAINTS ................................................................................................. 11 ROLE OF A PROJECT MANAGER ....................................................................................... 14 PROJECT STAKEHOLDERS .............................................................................................. 14 PROJECT ORGANIZATION STRUCTURE ............................................................................ 15 ORGANIZATIONS CHARACTERISTICS ................................................................................ 18 LIFE CYCLES AND PROCESS GROUPS ............................................................................. 19 PROCESS GROUPS ........................................................................................................ 19 INTERACTION BETWEEN PHASES ..................................................................................... 20 PMI KNOWLEDGE AREAS ............................................................................................... 21
3.
3.1 3.2
Project Initiation Phase ........................................................................................ 29

DEVELOP PROJECT CHARTER......................................................................................... 30 IDENTIFY STAKEHOLDERS ............................................................................................... 35
4.
4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20
Project Planning Phase ......................................................................................... 40

DEVELOP PROJECT MANAGEMENT PLAN ......................................................................... 41 COLLECT REQUIREMENTS .............................................................................................. 45 DEFINE SCOPE .............................................................................................................. 51 CREATE WBS................................................................................................................ 58 DEFINE ACTIVITIES ......................................................................................................... 63 SEQUENCE ACTIVITIES ................................................................................................... 69 ESTIMATE ACTIVITY RESOURCES .................................................................................... 75 ESTIMATE ACTIVITY DURATIONS ..................................................................................... 80 DEVELOP SCHEDULE ...................................................................................................... 85 ESTIMATE COSTS ........................................................................................................... 94 DETERMINE BUDGET .................................................................................................... 100 PLAN QUALITY ............................................................................................................. 104 DEVELOP HUMAN RESOURCE PLAN .............................................................................. 117 PLAN COMMUNICATIONS............................................................................................... 123 PLAN RISK MANAGEMENT............................................................................................. 129 IDENTIFY RISKS............................................................................................................ 133 PERFORM QUALITATIVE RISK ANALYSIS ........................................................................ 139 PERFORM QUANTITATIVE RISK ANALYSIS ...................................................................... 144 PLAN RISK RESPONSES ............................................................................................... 149 PLAN PROCUREMENTS ................................................................................................. 155
5.
5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8
Project Execution Phase ..................................................................................... 167

DIRECT AND MANAGE PROJECT EXECUTION .................................................................. 168 PERFORM QUALITY ASSURANCE ................................................................................... 172 ACQUIRE PROJECT TEAM ............................................................................................. 176 DEVELOP PROJECT TEAM............................................................................................. 180 MANAGE PROJECT TEAM.............................................................................................. 187 DISTRIBUTE INFORMATION ............................................................................................ 191 MANAGE STAKEHOLDER EXPECTATIONS ....................................................................... 194 CONDUCT PROCUREMENT ............................................................................................ 197
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1- Introduction
6.
6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10
Project Monitor and Control Phase .................................................................... 203

MONITOR AND CONTROL PROJECT W ORK ..................................................................... 204 PERFORM INTEGRATED CHANGE CONTROL ................................................................... 207 VERIFY SCOPE............................................................................................................. 210 CONTROL SCOPE ......................................................................................................... 212 CONTROL SCHEDULE ................................................................................................... 216 CONTROL COSTS ......................................................................................................... 219 PERFORM QUALITY CONTROL ....................................................................................... 231 REPORT PERFORMANCE............................................................................................... 241 MONITOR AND CONTROL RISKS .................................................................................... 246 ADMINISTER PROCUREMENTS ....................................................................................... 250
7.
7.1 7.2
Project Closing Phase ........................................................................................ 254

CLOSE PROJECT OR PHASE.......................................................................................... 255 CLOSE PROCUREMENT................................................................................................. 258
8. 9.
9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9
Appendix-1 Case Study ..................................................................................... 261 Appendix-2 Exercise Forms .............................................................................. 262
PROJECT CHARTER...................................................................................................... 262 SCOPE STATEMENT ..................................................................................................... 263 ASSUMPTION LIST ........................................................................................................ 264 W ORK BREAKDOWN STRUCTURE .................................................................................. 265 ACTIVITY LIST, RESOURCE ASSIGNMENT, DEPENDENCY & TIME ESTIMATE ..................... 266 QUALITY MANAGEMENT PLAN ....................................................................................... 267 RISK ANALYSIS ............................................................................................................ 268 RISK ANALYSIS ............................................................................................................ 269 CHANGE CONTROL....................................................................................................... 270
10. 11. 12. 13.
Appendix-3 List of Figures ............................................................................. 271 Appendix-4 List of Tables .............................................................................. 274 Appendix-5 List of Exercises.......................................................................... 275 Appendix-6 List of Group Discussions........................................................... 276
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1- Introduction
1. Introduction
This book is directed to the project management professionals who are seeking the Project Management Professional certification. It covers al the material that needed to be covered to help passing the PMP exam and covered in the PMBOK. The approach taken here to present the material is different than the one taken in the PMBOK in that the material goes through the project phase rather than the knowledge areas. This will help presenting the knowledge in a better logical flow that will make it more clear and logical to understand. This book addresses the practical side of the project management by having a case study that will be taken from the very initial project stage to its completion. This will bone through comprehensive group workshops that will facilitate explaining the material in a clear and practical approach. The book is structured as follow: 1- Project Framework 2- Project Initiation Phase 3- Project Planning Phase 4- Project Executing Phase 5- Project Monitor and Control Phase 6- Appendix-1, Case Study 7- Appendix-2, Exercise Forms 8- Appendix-3, List of Figures 9- Appendix-4, List of Tables 10- Appendix-5, List of Exercises 11- Appendix-6, List of Group Discussions
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1- Introduction
Group Discussion 1.1 Students Expectations Please write down your expectations out of the course. This sheet will be collected, compiled to produce the overall class expectations and will be reviewed by the end of the course.
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Group Discussion -1-StudentsExpectations 1
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2. Project Management Framework

This section provides an introduction to the key concepts covered by the PMBOK Guide. These concepts are valid to manage any project in any size. It will cover the following areas: 1234The purpose of the PMBOK Guide Project definition Project management definition Relationship among the Project Management, Program management and Portfolio Management 5- Project Management and Operations Management 6- The role of the project manager 7- Project management body of knowledge
2.1 Terms and Definitions

1. Project A project is a temporary endeavor undertaken to create a unique product or service. (Source: PMBOK Guide - Fourth Edition, page 5) A project is a sequence of unique and connected activities having one goal that must be completed by a specific time, within a budget and according to specification. 2. Program A program is a group of related projects managed in a coordinated way to obtain benefits not available from managing them individually. (Source: PMBOK Guide - Fourth Edition, page 9) 3. Portfolio A program is a collection of projects or programs and other work that are grouped together to facilitate effective management of that work to meet strategic business objectives. (Source: PMBOK Guide - Fourth Edition, page 8) 4. Project management Project management is the application of knowledge, skills, tools, and techniques to project activities to meet projects requirements. (Source: PMBOK Guide Release 4, page 6) 5. Project Portfolio Management
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Project portfolio management refers to the selection and support of projects or program investments, which are guided by the organization's strategic plan and available resources. 6. Standards It is a document established by consensus and approved by recognized body that provides for common and repeated use rules, guidelines and regulations. They are imposed requirement which specifies product, process or service characteristics. 7. Project Management Office A project management office (PMO) is an organizational unit to centralize and coordinate the management of projects under its domain. PMOs can operate on a continuum, from providing project management support functions in the form of training, software, standardized policies, and procedures, to actual direct management and responsibility for achieving the project objectives. (Source: PMBOK Guide Release 4, page 11)
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2.2 Comparative Overview

PROJECT Scope Project have defend objectives, Scope is progressively elaborated throughout the project life cycle Project managers expect change and implement processes to keep change managed and controlled. Project mangers progressively elaborate highlevel information into detailed plans throughout the project life cycle. Project managers manage the project team to meet the project objectives PROGRAMS Programs have a larger scope and provide more significant benefits. PORTFOLIOS Portfolios have a business scope that change with the strategic goals of the organization. Portfolio managers continually monitor changes in the broad environment. Portfolio managers create and maintain necessary processes and communication relative to the aggregate portfolio. Portfolio managers may manage or coordinate portfolio management staff.
Change
Planning
The program manager must expect change from both inside and outside the program and be prepared to manage it. Program managers develop the overall program plan and create high-level plans to guide detailed planning at the component level. Program managers manage the program staff and the project managers; they provide vision and overall leadership. Success is measured by the degree to which the program satisfies the needs and benefits for which it was undertaken. Program managers monitor the progress of program components to ensure the overall goals, schedules, budget, and benefits of the program will be met.
Management
Success
Monitoring
Success is measured by product and project quality, timeliness, budget compliance, and degree of customer satisfaction. Project managers monitor and control the work of producing the products, service or results that the project was undertaken to produce.
Success is measured in terms of aggregate performance of portfolio components. Portfolio managers monitor aggregate performance and value indicators.
Table -1- Comparative Overview 2
Source: PMBOK Guide - Fourth Edition, page 9
2.3 Project Characteristics

Projects vary in size and complexity. Regardless the project nature, they all share common characteristics that should be maintained throughout the project life cycle. These characteristics are: Unique. There is no two identical projects One time efforts. No second chance. Defined duration Defined output Defined Budget Use Resources
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Group Discussion 2.1 Which one is not a project? Which one of the following list is not a project? I.e. does not match the project definition criteria? Justify your answers: 1. 2. 3. 4. 5. 6. Building a bridge. Painting the house. Learning Tango dance. Having a Family. Implementing National Social Number. Preparing a morning coffee.
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Group Discussion -1- Which one is not a project 2
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2.4 Projects vs. Operational Work:

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

They are the known factors that limit the project teams options. Three main constraints from which, other derivates are produced: 1- Time (Schedule) 2- Budget (Cost) 3- Specifications (Quality)
Project Success Criteria Projects are said to be successful when the project team manages to complete the project within the agreed upon (contracted) constrains. Generally speaking the project is successful if it is completed: Within time (schedule) Within cost (budget) Within specifications (requirements)
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A project may be sensitive to one of those constraints, but once contract is signed, they are all important and the project manager should adhere to all constraints.
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Group Discussion 2.2 Project Constraints From your perspective, and considering the nature of business of your organization, which of the following constraints is more important? 1. Cost 2. Time 3. Budget
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Group Discussion -2-Project Constraints 2
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2.6 Role of a Project Manager

The project manager is the maestro who orchestrates all the project activities. By doing the analogy with the maestro, the project team will never perform in harmony unless the project manager leads the team and guides each team member to his / her role of the project. The project manager job is a full time job that requires the project manager doing many activities that are not limited to, but include the following: Acts as the single point of contact on the project. Planning and organizing the work Managing the day-to-day activities of a project Delivering the project deliverables to the client Identifying potential stakeholders
2.7 Project Stakeholders

Projects are done by people, for people to produce products that will be used by other people. The combined people of these three groups (done by, for, to be used) is called Stakeholders. Stakeholders are defined as any one impacts the project positively or negatively. The stakeholder list includes, but not limited to: Project Manager Customer Performing organization, owners, government agencies Project Sponsor Developing Team Internal external users End user Society, citizens Others: owners, funders, suppliers
It is the project managers responsibility to identify the project stakeholders, as he will need to communicate with them throughout the project life cycle. Missing any stakeholders may lead to miscommunication problems that may jeopardize the project success.
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2.8 Project Organization Structure

Organization structure influences the way how projects are managed. The degree of the project management maturity and its project management system also has a high impact on the project success. Organization structure is an organizational environmental factor which affects the resources availability and how they are controlled. It also affects the degree of the authorities of the project manager in the decision making process. Below are the basic organization structures that PMBOK Guide identifies: Functional Matrix Weak matrix Balanced matrix Strong matrix Projectized Composite The PMBOK Guide is addressing the Project organization structure and not the Company organization structure. Most companies are based on Functional organization structure, but a project manager in this company can manage a project(s) based on Functional project organization and at the same time other project(s) based on Matrix organization structure. 2.8.1 Functional Project Organization This is the classical functional organization. In this structure, each employee has one clear superior. Staff members are grouped by specialty area that is called departments or divisions. These areas may be divided further down to a lower level of hierarchy, but they all share the fact that each employee has one clear superior.
Chief Executive Officer
Project Coordination
Functional Manager 1
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Figure -1- Functional Origination 2
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2.8.2 Matrix Organization Projects that need to be implemented and managed across divisions need an organizational model that allows communication across divisions. The classical functional organizational will not fit here, as communication between the project manager and the team members should be very fast and does not tolerate the bureaucracy of the functional organization. A new organizational structure is applied here. It is called Matrix, as it works across organization in rows and columns like the mathematical matrix structure. There are three types of matrix organizations: 1. Weak 2. Strong 3. Balanced 1- Weak Matrix Organization In this organizational structure, many of the functional organization features are maintained. The project manager role is more of a coordinator or expeditor. The project manager can work in this model on part time basis.
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Figure -2- Weak Matrix Origination 2
2- Strong Matrix Organization This structure requires a full time project manager with considerable authority. Based on the project size, he may be assisted with a full time administrative staff to help in the different project administration functions. This model fits with projects that need high authority project manager. In many cases, the company needs to be structured in a
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3- Initiation Phase
certain way to serve this model. A PMO Project Management Office is an example of this implementation.
Staff
Staff
Staff
Manager of Project Managers

Project Manager Project Manager
Staff
Staff
Staff
Staff
Staff
Staff
Project Manager
Figure -3- Strong Matrix Origination 2
3- Balanced Matrix Organization This model does not provide a full authority to the project manager, yet, it gives him/her enough authority to manage the resources. This model fits with projects that require managing projects across divisions and do not need a high authority project manager.
Staff
Staff
Staff
Staff
Staff
Staff
Project Manager
Staff
Staff
Figure -4- Balanced Matrix Origination 2
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2.8.3 Projectized Organization This is the model that the project manager exercises the highest level of authority. Most of the company employees are co-located and involved in the project work.
Project Manager 1
Staff
Project Manager 2
Staff
Project Manager 3
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Figure -5- Projectized Origination 2
2.9 Organizations Characteristics

Functional Weak Project Managers Authority Resource Availability Who controls the Budget? Project managers role PM admin. Staff Little or None Limited Matrix Balanced Low to Moderate Low to Moderate Mixed Strong Moderate to High Moderate to High Project Manager Full-Time High to Almost Total High to Almost Total Project Manager Full-Time Projectized
Little or None
Limited
Functional Manager Part-Time
Functional Manager Part-Time
Full-Time
Part-Time
Part-Time
Part-Time
Full-Time
Full-Time
Table -2- Organizational Influence on Projects 2
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2.10 Life Cycles and Process Groups

Projects are exactly like people. They grow over time. They are created (incepted), grow (managed) and die (close out). This forms a typical life cycle that projects go through. There two interdependent life cycles: 1- Project Life Cycle 2- Project Management Life Cycle
2.10.1 The Project Life Cycle This is a product based cycle, through which the product of the project goes through. People involved in this are technical people (accountants, engineers, programmers, architect, lawyers etc.) They need to have a strong technical knowledge in their expertise area and they do not need to possess strong project management knowledge, although having it is a plus.
Figure -6- Project Life Cycle 2
2.10.2 The Project Management Life Cycle This is a project based cycle, through which the project goes through. The project manager will manage the project based on this cycle. Each phase will contain many project management activities. Project managers need to have a strong knowledge in the different project management knowledge areas, and do not need, although will be a plus, to have a strong business knowledge.
Figure -7- Management Project Life Cycle 2
2.11 Process Groups

1- Initiating Process Group. Defines and authorizes the project or a project phase.
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2- Planning Process Group. Defines and refines objectives, and plans the course of action required to attain the objectives and scope that the project was undertaken to address. 3- Executing Process Group. Integrates people and other resources to carry out the project management plan for the project 4- Monitoring and Controlling Process Group. Regularly measures and monitors progress to identify variances from the project management plan so that corrective actions can be taken when necessary to meet project objectives. 5- Closing Process Group. Formalizes acceptance of the product, service or result and brings the project or a project phase to an orderly end.
Figure -8- Project Process Groups 2
2.12 Interaction between Phases

The process groups explained above are not to be performed one time only across the project life cycle, but also will be done within each project phase. From the project management perspective, each phase is treated as a complete project that includes all the project management process groups as illustrated in the following figure.
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Figure -9- Project Process Groups Interaction 2
Process groups are not discrete. In other words, they should not be done and completed sequentially. There are some overlaps between them as illustrated in the following figure.
Figure -10- Process Group Overlapping 2
2.13 PMI Knowledge Areas

Project Management Institute (PMI) defined the following knowledge areas that are needed to be known by the professional project managers: 123456789Project Integration Management Project Scope Management Project Time Management Project Cost Management Project Quality Management Project Human Resources Management Project Communication Management Project Risk Management Project Procurement Management
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On top of the above areas, the Professional Responsibility supplement was added. It is not considered as a tenth area, but will be included in the PMP exam preparation test with a relatively low weight.
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Project Management Process Groups and Knowledge Area Mapping

Note: Numbering starts form 4, to match the numbering of the PMBOK Guide
Knowledge Areas
Initiating Process Group 4. Project Integration Management 4.1 Develop Project Charter
Project Management Process Groups

Planning Process Group 4.2 Develop Project Management Plan Executing Process Group 4.3 Direct and Manage Project Execution Monitoring & Controlling Process Group 4.4 Monitor and Control Project Work 4.5 Perform Integrated Change Control 5.4 Verify Scope 5.5 Control Scope Closing Process Group 4.6 Close Project or Phase
5. Project Scope Management
6. Project Time Management
7. Project Cost Management 8. Project Quality Management 9. Project Human Resource Management
5.1 Collect Requirements 5.2 Define Scope 5.3 Create WBS 6.1 Define Activities 6.2 Sequence Activities 6.3 Estimate Activity Resources 6.4 Estimate Activity Durations 6.5 Develop Schedule 7.1 Estimate Costs 7.2 Determine Budget 8.1 Plan Quality
6.6 Control Schedule
7.3 Control Costs
8.2 Perform Quality Assurance 9.2 Acquire Project Team 9.3 Develop Project Team 9.4 Manage Project Team 10.3 Distribute Information 10.4 Manage Stakeholder Expectations
8.3 Perform Quality Control
9.1 Develop Human Resource Plan
10. Project Communications Management
10.1 Identify Stakeholders
10.2 Plan Communications
10.5 Report Performance
11. Project Risk Management
12. Project Procurement Management
11.1 Plan Risk Management 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis 11.5 Plan Risk Responses 12.1 Plan Procurements
11.6 Monitor and Control Risks
12.2 Conduct Procurements
12.3 Administer Procurements
12.4 Close Procurements
Table -3- Project Management Process Groups and Knowledge Area Mapping 2
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Initiating Process Group 4.1 Develop Project Charter 10.1 Identify Stakeholders
Figure -11- Initiating Process Group 2
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Planning Process Group 4.2 Develop Project Management Plan 5.1 Collect Requirements 5.2 Define Scope 5.3 Create WBS 6.1 Define Activities 6.2 Sequence Activities 6.3 Estimate Activity Resources 6.4 Estimate Activity Durations 6.5 Develop Schedule 7.1 Estimate Costs 7.2 Determine Budget 8.1 Plan Quality 9.1 Develop Human Resource Plan 10.2 Plan Communications 11.1 Plan Risk Management 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis 11.5 Plan Risk Responses 12.1 Plan Procurements
Figure -12- Planning Process Group 2
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Executing Process Group 4.3 Direct and Manage Project Execution 8.2 Perform Quality Assurance 9.2 Acquire Project Team 9.3 Develop Project Team 9.4 Manage Project Team 10.3 Distribute Information 10.4 Manage Stakeholder Expectations 12.2 Conduct Procurements
Figure -13- Executing Process Group 2
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Monitoring & Controlling Process Group 4.4 Monitor and Control Project Work 4.5 Perform Integrated Change Control 5.4 Verify Scope 5.5 Control Scope 6.6 Control Schedule 7.3 Control Costs 8.3 Perform Quality Control 10.5 Report Performance 11.6 Monitor and Control Risks 12.3 Administer Procurements
Figure -14- Monitor and Control Process Group 2
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Closing Process Group 4.6 Close Project or Phase 12.4 Close Procurements
Figure -15- Closing Process Group 2
Project Management Process Interaction
Figure -16- Project Management Process Interaction 2
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3. Project Initiation Phase

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

Definition Develop Project Charter is the process of developing a document that formally authorizes a project or a phase and documenting initial requirements that satisfy the stakeholders' needs and expectations.
Source: PMBOK Guide Fourth Edition, page 73
Figure -1- Develop Project Charter Process 3
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3- Initiation Phase
Process Interaction
Figure -2 - Develop Project Charter Process Interaction 3
3.1.1 Inputs to Develop Project Charter 1. 2. 3. 4. 5. Project statement of work Business case Contract (if available) Enterprise environmental factors Organizational process assets
1. Project statement of work Statement of work is the document that describes the project work. It contains the following: Business needs Product scope description Strategic plan 2. Business case It is the document that includes the necessary information from the business perspective. It contains: Market demand Organizational need
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Customer request Technologies advance Legal requirement Ecological impacts Social need
3. Contract (if available) A contract from the customers acquiring organization is an input if the project is being done for an external customer. 4. Enterprise environmental factors Governmental or industry standards Organization infrastructure Marketplace conditions 5. Organizational process assets Organizational standard processes, policies, and standardized process definitions for use in the organization Templates (e.g. project charter template) Historical information and lessons learned knowledge base
3.1.2 Tools and Techniques for Develop Project Charter 1. Expert judgment 1. Expert judgment Expert judgment is used to assess the input used to develop the charter. The expertise is obtained from: Other units from the organization Consultants Stakeholders, including customers or sponsors Professional and technical associations Industry groups Subject matter experts Project management office (PMO)
3.1.3 Outputs of Develop Project Charter 1. Project charter 1. Project charter The project charter documents the business needs and the current customer requirements by addressing:
3- Initiation Phase
Project purpose or justification Measurable project objectives and related success criteria High-level requirements High-level project description High-level risks Summary milestone schedule Summary budget Project approval requirements (what constitutes project success, who decides the project is successful and who signs off on the project) Assigned project manager, responsibility and authority level Name and authority of the sponsor or other person (s) authorizing the project charter.
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Exercise 3.1 Develop Project Charter In the provided case study in Appendix 1, develop the project charter. Note: use the following form.
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -1 - Develop Project Charter 3
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3.2 Identify Stakeholders

Definition Identify Stakeholders is the process of identifying all people or organizations impacted by the project, and documenting relevant information regarding their interests, involvement, and impact on project success.
Inputs
1.Project charter 2.Procurement documents 3.Enterprise environmental factors 4.Organizational process assets
Tools & Techniques

1. Stakeholder analysis 2. Expert judgment
Outputs
1.Stakeholder register 2.Stakeholder management strategy
Figure -3- Identify Stakeholders Process 3
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Process Interaction
Figure -4 Identify Stakeholders Process Interaction 3
Dimensions of Communication Activities The project manager is the center of the communication hub within the project. He communicates will all project stakeholders in many different levels, as follows: Internal and External Formal and Informal Vertical and Horizontal Official and unofficial Written and Oral Verbal and Non-Verbal
3.2.1 Inputs to Identify Stakeholders 1. 2. 3. 4. Project charter Procurement documents Enterprise environmental factors Organizational process assets
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3.2.2 Tools and Techniques for Identify Stakeholders 1. Stakeholder analysis 2. Expert judgment 1. Stakeholder analysis It is the technique of systematically gathering and analyzing qualitative and quantitative information to determine whose interest should be taken into account. It defines the interest, expectations and influence of stakeholders and relate them to the purpose of the project. Steps of Stakeholders Analysis Step 1: Identify all potential project stakeholders and relevant information. Step 2: Identify the potential impact or support each stakeholder could generate: Power/interest grid Power/influence grid Influence/impact grid Salience model Step 3: Assess how key stakeholders are likely to react or respond in various situations. Power / Interest Grid Power interest grid is the method of grouping the stakeholders based on their level of authority (power) and their level of concern (interest) regarding the project outcome.
High Keep Satisfied A Manage Closely B G H Keep Informed D
Power
Monitor C E
Low
Interest
Figure -5 Power / Interest Grid 3
High
2. Expert judgment
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Identifying the project stakeholders requires high level of knowledge and expertise in order not to miss any one who could be with an important role in the project and missing him/her may damage the project outcome. Experts include, but not limited to the following: Senior management Other units within the organization Identified key stakeholders Project managers who have worked on projects in the same area Subject matter experts (SMEs) in business or project area Industry groups and consultants, and Professional and technical associations
3.2.3 Outputs of Identify Stakeholders 1. Stakeholder register 2. Stakeholder management strategy 1. Stakeholder register Stakeholder register is the repository that contains all the details about each stakeholder, including the following: Identification information Assessment information Stakeholder classification 2. Stakeholder management strategy Based in the identified stakeholders, included in eth stakeholders register, a strategy will be assigned to each key stakeholder. The strategy will include elements such as: Key stakeholders who can significantly impact the project Level of participation in the project desired for each identified stakeholder, and Stakeholder groups and their management (as groups)
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Exercise 3.2 Stakeholder Analysis In the provided case study, analyze the stakeholder and communication needs by providing the following information: 1. Stakeholder 2. Organization 3. Position 4. Communication Needs
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -2 - Stakeholder Analysis 3
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4- Planning Phase
4. Project Planning Phase

Project planning phase is the phase where all the project plans are created. It is the time where all project activities are identified, assigned and scheduled. During the phase, the following twenty planning processes are executed: 4.2 Develop Project Management Plan 5.1 Collect Requirements 5.2 Define Scope 5.3 Create WBS 6.1 Define Activities 6.2 Sequence Activities 6.3 Estimate Activity Resources 6.4 Estimate Activity Durations 6.5 Develop Schedule 7.1 Estimate Costs 7.2 Determine Budget 8.1 Plan Quality 9.1 Develop Human Resource Plan 10.2 Plan Communications 11.1 Plan Risk Management 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis 11.5 Plan Risk Responses 12.1 Plan Procurements
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4- Planning Phase
4.1 Develop Project Management plan
Definition Develop Project Management Plan is the process of documenting the actions necessary to define, prepare, integrate and coordinate all subsidiary plans.
Inputs
1.Project charter 2.Outputs from planning processes 3.Enterprise environmental factors 4.Organizational process assets
Tools & Techniques

1. Expert judgment
Outputs
1.Project management plan
Figure -1 - Develop Project Management plan Process 4
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4- Planning Phase
Process Interaction
Figure -2 Develop Project Management plan Process Interaction 4
4.1.1 Inputs to Develop Project Management plan 1234Project charter Outputs from all planning processes Enterprise environmental factors Organizational process assets
4.1.2 Tools and Techniques for Develop Project Management plan 1- Expert judgment 1. Expert judgment In this process, expert judgment is utilized to: Tailor the process to meet the project needs Develop technical and management details Determine the requires resources and skill levels Define the required level of configuration management
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4.1.3 Outputs of Develop Project Management plan 1- Project management plan 1. Project management plan The project management plan integrates and consolidates all of the subsidiary management plans and baselines from the planning processes and includes the project baseline and subsidiary plans Project Baseline Project baselines include, but are not limited to: Schedule baseline Cost performance baseline, and Scope baseline
Subsidiary Plans Subsidiary plans include, but are not limited Scope management plan Requirements management plan Schedule management plan Cost management plan Quality management plan Process improvement plan Human resource plan Communications management plan Risk management plan Procurement management plan
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4- Planning Phase
Exercise 4.1 Change Management Process Change management plan is part of the overall project plan, discuss the below change management process and reflect it to your environment.
START
Initiator
Raise Change Request Form Tech. Lead Initial review & discussion Initial assessment, appoint assessor Assessor Analysis, evaluation, assess Impact Assessor Complete chg. req. Impact Study Tech. Lead
Stop
Review assessment
File Change Request
Discuss/ negotiate with Tech.Lead No Agree Yes No Impact Yes Change has an Impact
Dev. Team
Make changes
Call Change Mgnt. Meeting
Yes Agree
No Amend Agreements Update Proj. Plan Re-baseline

Will it affect Cost or timescales
Yes
Change Reqest Endorsement by Steering Committee
No
Stop
Exercise -1 - Change Management Process 4
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4- Planning Phase
4.2 Collect Requirements
Definition Collect requirements is the process of defining and documenting stakeholders needs to meet the project objectives.
Inputs
1.Project charter 2.Stakeholder register
Tools & Techniques

1. Interviews 2. Focus groups 3. Facilitated workshops 4. Group creativity techniques 5. Group decision making techniques 6. Questionnaires and surveys 7. Observations 8. Prototypes
Outputs
1.Requirements documentation 2. Requirements management plan 3.Requirements traceability matrix
Figure -3- Collect Requirements Process 4
4.2.1 Inputs to Collect Requirements 1- Project Charter 2- Stakeholder Register 1- Project Charter: is used to provide the high-level project requirements that can be developed. 2- Stakeholder Register: is used to identify stakeholders that can provide information on detailed project and product requirements. 4.2.2 Tools and Techniques for Collect Requirements 1- Interviews 2- Focus Groups
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3- Facilitated Workshops 4- Group Creativity Techniques
1. Interviews They are formal or informal approach to discover information from stakeholders by talking to them directly. It is typically performed by asking prepared and spontaneous questions and recording the responses. Interviews are often conducted one-on-one, but may involve multiple interviewers and/or multiple interviewees. Interviewing experienced project participants, stakeholders and subject matter experts can aid in identifying and defining the features and functions of the desired project deliverables. 2. Focus Groups Bring together pre-qualified stakeholders and subject matter experts to learn about their expectations about a proposed product. A trained moderator guides the group through an interactive discussion, designed to be more conversational than a one-on-one interview. 3. Facilitated Workshops Requirements workshops are focused sessions that bring key crossfunctional stakeholders together to define product requirements. Workshops are considered as primary techniques for quickly defining cross-functional requirements and reconciling stakeholder differences. These differences can be discovered and resolved more quickly than in individual interviews 4. Group Creativity Techniques Brainstorming Nominal group technique Delphi Technique Idea/mind mapping Affinity diagram
4.2.3 Outputs of Collect Requirements 1- Requirements documentation 2- Requirements management plan 3- Requirements traceability matrix
1. Requirements documentation Requirements Documentation describes how individual requirements meet the business need of the project. Requirements may start out at a
4- Planning Phase
high level and become progressively more detailed as more information is known. Before being baselined, requirements must be unambiguous, traceable, complete, consistent, and acceptable to key stakeholders. Requirements Documentation Components There is no standard template to produce the requirements document. But below are its The Delphi Technique general components: It is an anonymous way Business need or opportunity to be to reach a consensus of seized. experts on a subject. It involves the following: Business and project objectives for Questionnaire to solicit traceability ideas from the experts Functional requirements, describing Responses are business process, information and submitted interaction with the product as anonymously, compiled, and then appropriate which can be documented circulated to the textually in a requirements list experts for review Non-functional requirements such as level of service, performance, safety, security, compliance, supportability, retention etc. Quality requirements Acceptance criteria. Business rules stating the guiding principles of the organization Impacts to other organizational areas Impacts to other entities inside or outside Support and training requirements Requirements assumptions and constraints
2. Requirements management plan It documents how requirements will be analyzed, documented and managed throughout the project. It contains the following components: How requirements activities will be planned, tracked and reported. Configuration management activities such as how changes to the product, service or result requirements will be initiated, how impacts will be analyzed Requirements prioritization process Product metrics that will be used and the rationale for using them Traceability structure that is which requirements attributes will be captured on the traceability matrix and to which other project documentation requirements will be traced.
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3. Requirements traceability matrix It is a table that links requirements to their original business objective. This process includes: Requirements to business needs, opportunities, goals, and objectives Requirements to project objectives Requirements to project scope/WBS deliverables Requirements to product design Requirements to product development Requirements to test strategy and test scenarios, and High-level requirements to more detailed requirements
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Group Discussion 4.1 Requirements Gathering Challenges Highlight the most problematic areas in the process of gathering requirements in your organization. Use the following as guidelines: 1. Lacking time to complete the requirement gathering process 2. Customers may not know what they really want 3. Too many changes
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Group Discussion -1-Requirements Gathering Challenges 4
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4- Planning Phase
Exercise 4.2 Create Project Charter Based on the supplied case study, create the Project Charter that will provide a high authority for the project manager. Consider specifying the following: 1. 2. 3. 4. 5. 6. Customer Project Name Project Description Project Manager: Name and Authority Level Business Needs Issued By Manager
Note: Use form 9.1 in Appendix 2
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -2-Create Project Charter 4
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4.3 Define Scope
Definition Define Scope is the process of developing a detailed description of the project and product.
Inputs
1.Project charter 2.Requirements documentation 3.Organizational process assets
Tools & Techniques

1. Expert judgment 2. Product analysis 3. Alternatives identification 4. Facilitated workshops
Outputs
1.Project scope statement 2.Project document updates
Figure -4- Define Scope Process 4
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Group Discussion 4.2 Scope Creep Indicators From your perspective, what do you think of the following three statements? 1. Exceeding Customer Expectations 2. Delivering State of the art products 3. Providing low cost items, that may not cost anything free of charge
Your Notes 1. Exceeding Customer Expectations _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ 2. Delivering State if the art products _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ 3. Providing low cost items, that may not cost anything free of charge _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Group Discussion -2- Scope Creep Indicators 4
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4.3.1 Inputs of Define Scope 123456Project charter Requirements documentation Organizational process assets: Policies, procedures, and templates for a project scope statements Project files from previous projects, and Lessons learned from previous phases or project
4.3.2 Tools and Techniques for Define Scope 1234Expert judgment Product analysis Alternatives identification Facilitated workshops
1. Expert judgment This is the tools of getting the opinion of experts who have had previous experience in similar projects. Experts can be obtained from the following categories: Other units within the organization Consultants Stakeholders including customers or sponsors Professional and technical associations Industry groups and Subject matter experts 2. Product analysis Each application area has one or more generally accepted methods for translating high-level product descriptions into tangible deliverables. Product analysis includes techniques such as: Product breakdown Systems analysis Requirements analysis System engineering Value engineering Value analysis. 3. Alternatives identification Identifying alternatives is a technique used to generate different approaches to execute and perform the work of the project. A variety of general management techniques can be used such as brainstorming, lateral thinking, pair wise comparisons, etc.
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4.3.3 Outputs of Define Scope 1- Project scope statement 2- Project document updates
1. Project scope statement This document describes, in detail, the projects deliverables and the work required to create those deliverables. It also provides a common understanding of Constraints: the project scope among project Are known factors, which stakeholders. The Project Scope Statement limit the project teams may contain explicit scope exclusions that options. can assist in managing stakeholder expectations. Below are some of the Assumptions: Are factors that, for benefits of the project scope statement: planning purposes, are Help the project team to perform considered to be true, real, more detailed planning or certain. They need to be Guides the project teams work validated during the during execution course of project planning Provides the baseline for evaluating whether requests for changes or additional work are contained within or outside the projects boundaries Scope Statement Content As the details are not always ready from day one of the project, so this document may be compiled progressively over a period of time. The contents of this document include, but not limited to the following: Product scope description Product acceptance criteria Project deliverables Work breakdown structure Project exclusions Project constraints Project assumptions Project boundaries Project resources Project milestones Project stakeholders Project Risks Identifying Constraints Examples of constraints that may be faced during a project: Budget Schedule People Facilities and Equipment
4- Planning Phase
Fault tolerant objectives Portability requirements The real world
Identifying Assumptions Assumptions are identified and documented during the planning process as they affect all aspects of planning. They need to be verified to ensure that they are true. In case if it is proven to be false, then replanning is needed. They always carry a certain degree of risk Unquantifiable Expectations Some expectations requirements may be difficult to quantify, they need to be quantified as much as possible, and otherwise they become a risk item of unclear requirements. Examples of these are: Customer satisfaction Company Image Community Perception 2. Project Document Updates As mentioned earlier, the project management team does not always have answers to all planning questions. Facts come up during different times during the project life cycle. This entails changing the project related documents as and when new facts come up. Changes also come due handling authorized change requests. Examples of the documents that will be changed in this process are: Stakeholder register Requirements documentation Requirements traceability matrix.
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Exercise 4.3 Create Scope Statement Based on the supplied case study, create the Project Scope Statement that will highlight the minimum project information. Consider this as the business case used in your organization. Include the following information: 1. 2. 3. 4. 5. 6. 7. 8. Project Name Project Manager Business Needs (project justification) Summary of Product Description Deliverables Objectives (cost, schedule, quality measures, other) Project Constraints Project Risks (high level)
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -3-Create Scope Statement 4
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Exercise 4.4 Create Project Assumptions Based on the supplied case study and the developed scope statement, create the Project Assumptions List. Include the following information: 1. Area: the area of the assumption, can be technical, financial, business etc. 2. The Assumption that you see true or false and that will be verified later on. Note: Use form 9.3 in Appendix 2
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -4-Create Project Assumptions 4
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4.4 Create WBS
Definition Create WBS is the process of subdividing project deliverables and project work into smaller. Source: PMBOK Guide Fourth Edition, page 103
Create WBS is the process of subdividing project deliverables and project work into smaller, more manageable components. It is a deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required deliverables. Each descending level of the WBS represents an increasingly detailed definition of the project work. The WBS organizes and defines the total scope of the project and represents the work specified in the current approved project scope statement. The planned work is contained within the lowest level WBS components, which are called work packages. A work package can be scheduled, cost estimated, monitored and controlled. In the context of the WBS, work refers to work products or deliverables that are the result of effort and not to the effort itself.
Inputs
1.Project scope statement 2.Requirements documentation 3.Organizational process assets
Tools & Techniques

1. Decomposition
Outputs
1.WBS 2.WBS dictionary 3.Scope baseline 4.Project document updates
Figure -5- Create WBS Process 4
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Example of a WBS 1. Hardware 1.1 Servers 1.1.1 Head Office Server 1.1.2 Branch Server 1.2 Network 1.2.1 Switches 1.2.2 Routers 1.2.2.1 Head Office Router 1.2.2.1 Branch Router 2. Software 2.1 Application 2.1.1 Portfolio Management 2.1.2 Real Estate Management 2.1.3 Asset Management 2.2 Licenses 2.2.1 Windows Server 2.2.2 SharePoint Portal 3.2.3 Office 2003. 3. Training 3.1 Windows Training 3.1.1 Windows Server Admin 3.1.2 Office Training 3.2 Application Training 3.2.1 DB Admin 3.2.2 Application Admin Why WBS is so Important It is the base of all other planning activities. The following diagram shows that the activity list, resources, duration, dependencies, cost and schedule are all dependants on the WBS.
Figure -6- Example of WBS 4
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4- Planning Phase
4.4.1 Inputs to Create WBS 1- Project scope statement 2- Requirements documentation 3- Organizational process assets 4.4.2 Tools and Techniques for Create WBS 1- Decomposition 1. Decomposition It is the subdivision of project deliverables into smaller, more manageable components Work Package: until the work and deliverables are defined to It is the smallest level of the work package level. Decomposition of the WBS breakdown. It is the total project work into work packages the result of breaking down the deliverables to generally involves the following activities: the smallest necessary (i.e. identifying and analyzing the not too much of deliverables and related work unnecessary breakdown) Structuring and organized the WBS and sufficient (not very little of break down) level Decomposing the upper WBS levels into lower level detailed components Developing and assigning identification codes to the WBS components Verifying that the degree of decomposition of the work is necessary and sufficient. Reaching to the lowest level of decomposition Work Package
4.4.3 Outputs of Create WBS 1234Work Breakdown Structure (WBS) WBS dictionary Scope baseline Project document updates
1. Work Breakdown Structure (WBS) The WBS is a deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required deliverables. Each descending level of the WBS represents an increasingly detailed definition of the project work. The WBS is finalized by establishing control accounts for the work packages and a unique identifies from a code of accounts. A control account is a management control point where scope, cost, and schedule are integrated and compared to the earned value for performance measurement.
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2. WBS dictionary The WBS dictionary provides more detailed descriptions of the components in the WBS including work packages and control accounts. It may contain the following information: code of account identifies Description of work Responsible organization List of schedule milestones Associated schedule activities Resources required Cost estimates Quality requirements Acceptance criteria Technical references Contract information 3. Scope baseline The scope baseline is a component of the project management plan. The components of the scope baseline include: Project scope statement WBS WBS dictionary 4. Project document updates Project documents that may be updated include: Requirements documentation Change requests results from the create WBS process Other Breakdown Structures The WBS should not be confused with other kinds of breakdown structures, like: Organizational Breakdown Structure (OBS) Bill of Materials (BOM) Risk Breakdown Structure (RBS) Resource Breakdown Structure (RBS).
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Exercise 4.5 Create WBS Based on the supplied case study, create the Project Work Breakdown Structure. Note: Use form 9.4 in Appendix 2
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -5- Create WBS 4
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4.5 Define Activities

Definition Define Activities is the process of identifying the specific actions to be performed to produce the project deliverables.
Activities vs. WBS Both use decomposition tool The decomposition in the Define Activities process breaks down the work packages into activities. The result is activity verb oriented The decomposition in the Create WBS process breaks down the deliverables into work pancakes. The result is deliverable noun oriented
Inputs
1.Scope baseline 2.Enterprise environmental factors 3.Organizational process assets
Tools & Techniques

1. Decomposition 2. Rolling wave planning 3. Templates 4. Expert judgment
Outputs
1.Activity list 2.Activity attributes 3.Milestone list
Figure -7- Define Activities Process 4
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4- Planning Phase
Process Interaction
Involved Documents (IN) Scope baseline Enterprise environmental factors Organizational process assets Involved Documents (OUT) Activity list Activity attributes Milestone list
Source: PMBOK Guide Fourth Edition Diagram Developed by Techno Management
5.3 Create WBS
Scope baseline Milestone List
6.2 Sequence Activities 6.1 Define Activities

Activity List Activity attributes
6.4 Estimate Activity Durations
6.3 Estimate Activity Resources

Organizational process assets Enterprise environmental factors
6.5 Develop Schedule
Enterprise/ Organization
Figure -8- Define Activities Process Interaction 4
4.5.1 Inputs to Define Activities 1. 2. 3. 4. Scope baseline Enterprise environmental factors Organizational process assets: Existing formal and informal activity planning-related policies, procedures and guidelines.
4.5.2 Tools and Techniques for Define Activities 1. 2. 3. 4. Decomposition Rolling wave planning Templates Expert judgment
1. Decomposition The technique of decomposition as applied to defining activates, involves subdividing the project work packages into smaller, more manageable components called activities. Activities represent the effort needed to complete a work package. The Define Activities process defines the final outputs as activities rather than deliverables as in the work packages.
4- Planning Phase
2. Rolling wave planning It is a form of progressive elaboration planning where the work to be accomplished in the near term is planned in detail and future work is planned at a higher level of the WBS. Therefore, work can exist at various levels of detail depending on where it is in the project life cycle. 3. Templates Experience from previous projects can be used as templates to be used in similar projects. 4. Expert judgment Generally speaking, the project manager is not supposed to acquire the skills and knowledge to produce the activities of the project. He may have a limited experience in one or more domains, but he should rely on others who are experts n their domains to produce the activities of that particular domain. Even if the project manager has an experience in any of the domains, it is recommended to take the activities from the member who is in charge of this domain to grant his commitment to the activities, and later on, the schedule that he will be in charge.
4.5.3 Outputs of Define Activities 1. Activity list 2. Activity attributes 3. Milestone list 1. Activity list The activity list is a comprehensive list including all schedule activities required on the project. The activity list includes the activity identifier and a scope of work description for each activity in sufficient detail to ensure that project team members understand what work is required to be completed 2. Activity attributes This is an explanation of the activity that adds more information to help further activity planning. This information will help in assigning the resources, identify the dependencies, etc. it may include the following information. Responsibility (who will do the work) Geographic Area (where the work will be performed) Activity Type (summary or detailed) WBS Classification (for ordering and
The Activity List Must include all activities in the project Should be organized as an extension to WBS to help ensure that it is complete. Should include descriptions of each activity.
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sorting) 3. Milestone list A milestone is a significant point or event in the project. A milestone list identifies all milestones and indicates whether the milestone is mandatory, such as those required by contract, or optional such as those based upon historical information.
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Group Discussion 4.3 Creating Activities Do you have a standard process or templates you use in your organization that helps you to create project activities? What are the challenges you and your organization have in this regard?
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Group Discussion -3-Creating Activities 4
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4- Planning Phase
Exercise 4.6 Create Activity List Based on the supplied case study and the produced WBS, create the detailed activity list for only one work package. You may consider the following WBS:
1 Hardware 1.1 Servers 1.1.1 Head Office Serve 1.1.2 Branch Server 1.2 Network 1.2.1 Switches 1.2.2 Routers 1.2.2.1 Head Office Router 1.2.2.1 Branch Router 2 Software 2.1 Application 2.1.1 Portfolio Management 2.1.2 Real Estate Management 2.1.3 Asset Management 2.2 Licenses 2.2.1 Windows Server 2.2.2 SharePoint Portal 3.2.3 Office 2003. 3 Training 3.1 Windows Training 3.1.1 Windows Server Admin 3.1.2 Office Training 3.2 Application Training 3.2.1 DB Admin 3.2.2 Application Admin
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -6-Create Activity List 4
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4- Planning Phase
4.6 Sequence Activities
Definition Sequence Activities is the process of identifying and documenting relationships among the project activities.
Inputs
1.Activity list 2.Activity attributes 3.Milestone list 4.Project scope statement 5.Organizational process assets
Tools & Techniques

1. Precedence diagramming method (PDM) 2. Dependency determination 3. Applying leads and lags 4. Schedule network templates
Outputs
1.Project schedule network diagrams 2.Project document updates
Figure -9 - Sequence Activities Process 4
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Process Interaction
Involved Documents (IN) Activity list Activity attributes Milestone list Project scope statement Organizational process assets Involved Documents (OUT) Project schedule network diagrams Project document updates
5.2 Define Scope

Project Scope Statement
Enterprise / Organization
Organizational process assets
Activity list Activity attributes Milestone list
Project schedule network diagrams
Project Documents Updates
Project ` Documents
Figure -10- Sequence Activities Process Interaction 4
4.6.1 Inputs of Sequence Activities 12345Activity list Activity attributes Milestone list Project scope statement Organizational process assets
4.6.2 Tools and Techniques for Sequence Activities 1234Precedence diagramming method (PDM) Dependency determination Applying leads and lags Schedule network templates
1. Precedence diagramming method (PDM) PDM is a method used in Critical Path Methodology (CPM) for constructing a project schedule network diagram. It uses boxes or rectangles referred to as nodes, to represent activities, and connect them with arrows that show the logical relationships that exist between them. This technique is called Activity-On-Node (AON) and is the method used by most project management software packages.
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4- Planning Phase
Start
Finish
Figure -11- Precedence Diagram (Activity on the node) 4
Activity on the Arrow (AOA) An old Technique This is an old technique which shows the activities on the arrows and the relationships between the activities are made by joints (circles) connecting the arrows. This model shows only Finish to Start relationship. In the below diagram, in order to make a dependency between task B and C, a dummy activities (new arrow) is created.
A
Start B
C
E
Dummy Activity D
End
Figure -12- Activity on the arrow 4
Task Dependencies Relationships between tasks are determined by the dependencies that link these tasks together. There are mainly four types of tasks, they are: 1- Finish-to-start (FS) 2- Finish-to-finish (FF) 3- Start-to-Start (SS) 4- Start-to-finish (SF)
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Type of interdependency or Precedence Relationship Finish to start (FS) The finish of Task1 drives the start of Task2
Start to Start (SS) The start of Task1 drives the start of Task2 Finish to Finish (FF) The finish of Task1 drives the finish of Task2
Description
1 2 1 2 1 2
Start to Finish (SF) The start of Task1 drives the finish of Task2
Figure -13- Task Dependencies 4
1 2
2. Dependency determination Three types of dependencies are used to define the sequence among the activities: Mandatory dependencies: Also known as hard logic. It is applied when one dependency type must be used. For example, we have to use a finish to start relationship between task1 (building floor 1) and task 2 (building floor 3). This dependency, once identified cannot be changed. Discretionary dependencies: Also known as soft logic or preferred logic. It is applied when the project team have the option of applying more than dependency on two tasks, then they prefer to use on the over and keep the right to change it as necessary. External dependencies: Tasks dependant on other tasks that are performed by external parties are highlighted as External dependencies to give it more wait to be monitored and controlled to avoid problems.
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4- Planning Phase
Group Discussion 4.4 Dependencies What is the usefulness of identifying dependencies as mandatory or discretionary?
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Group Discussion -4-Creating Activities 4
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3. Applying leads and lags A lead allows an acceleration of the successor activity, while a lag directs a delay in the successor activity Lag Time is a delay between a task and its predecessor. It is usually expressed using a specific amount of time.
2 Days
Figure -14- Lag Time 4
Lead Time is an overlap between a task and its predecessor. In project management software, lead time may be expressed as a negative number in the lag field.
1
2 Days
2
Figure -15- Lead Time 4
4.6.3 Outputs of Sequence Activities 1- Project schedule network diagrams 2- Project document updates: Activity lists, Activity attributes, and Risk register
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4- Planning Phase

Definition Estimate Activity Resources is the process of estimating the type and quantities of material, people, equipment or supplies required to perform each activity. Source: PMBOK Guide Fourth Edition, page 141
Inputs
1.Activity list 2.Activity attributes 3.Resource calendars 4.Enterprise environmental factors 5.Organizational process assets
Tools & Techniques

1. Expert judgment 2. Alternatives analysis 3. Published estimating data 4. Bottom-up estimating 5. Project management software
Outputs
1.Activity resource requirements 2.Resource breakdown structure 3.Project document updates
Figure -16- Estimate Activity Resources Process 4
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Process Interaction
9.2 Acquire Project Team 12.2 Conduct Procurements Enterprise / Organization
Resource Calendars
Involved Documents (IN) Activity list Activity attributes Resource calendars Enterprise environmental factors Organizational process assets Involved Documents (OUT) Activity resource requirements Resource breakdown structure Project document updates
6.4 Estimate Activity Durations 6.1 Define Activities 6.3 Estimate Activity Resources
Activity list Activity attributes Activity resource requirements
Project ` Documents
Resource breakdown structure Project Documents Updates
12.1 Plan Procurements
Figure -17- Estimate Activity Resources Process Interaction 4
4.7.1 Inputs to Estimate Activity Resources 12345Activity list Activity attributes Resource calendars Enterprise environmental factors Organizational process assets
1. Activity list This is the output on the Define Activities process. 2. Activity attributes Activity attributes plays a role in defining the required resources. Based on the type and nature of the task, team members may decide to perform it with certain recourses that may have specific skills or does not conflict with another type of activities he is also involved in within the same project or others. 3. Resource calendars The resource calendar determines the resources that will be assigned, based on their availability. Each resource will have a resource calendar that shows their assignments and availability.
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4. Enterprise environmental factors This is all the enterprise environmental factors that have an impact on deciding the required resources. This includes, but not limited to: - Resource availability - Resources skills - Multi-culture structure
5. Organizational process assets This is all the organizational process assets that have an impact on deciding the required resources. This includes, but not limited to: - Staffing policy and procedures - Procurement policy and procedures - Outsourcing policy and procedures - Job market conditions 4.7.2 Tools and Techniques for Estimate Activity Resources 12345Expert judgment Alternatives analysis Published estimating data Bottom-up estimating Project management software
1. Expert judgment All inputs related to the resource need to be assessed by an expert to decide on the way how the resources are identified and assigned. Experts can be team members, other team members within the organization or external consultants. 2. Alternatives analysis Analyzing the tasks and which resources and skills can be applied may result in options to the project team that they find useful in terms of schedule and budget optimization. 3. Published estimating data Some companies rely on published resources estimates that are either done internally or purchased from third parties. 4. Bottom-up estimating In case if the resource requirements to a certain activity could not be estimated to an acceptance level of confidence, this activity is decomposed (broken down) into further small activities that can be easily analyzed and identify their resource requirements. Once this is doe, the resource requirements are aggregated upward. 5. Project management software
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4- Planning Phase
Many project management software provide the automation of planning, organizing and optimizing resources. Some also allow creating resources pools that can be managed across the organization.
4.7.3 Outputs of Estimate Activity Resources 1. Activity resource requirements It identifies the types and quantities of resources required for each activity in a work package. These requirements can then be aggregated to determine the estimated resources for each work package. The amount of detail and the level of specificity of the resource requirements descriptions can vary by application area. The resource requirements documentation for each activity can include the basis of estimate for each resource, as well as the assumption that were made in determining which types of resources are applied, their availability and what quantities are used. 2. Resource breakdown structure The Resource Breakdown Structure is a hierarchical structure of the identified resources by resource category and resource type. Resource categories include labor, material, equipment, and supplies. Resource types can include the skill level, grade level or other information as appropriate to the project. The resource breakdown structure is useful for organizing and reporting project schedule data with resource utilization information.
3. Project document updates Activity list Activity attributes Resource calendars
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Exercise 4.7 Resource Assignment Based on the supplied case study and the produced activity list, identify the required resources for each task. Note: Use form 9.5 in Appendix 2
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -7-Resource Assignment 4
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4.8 Estimate Activity Durations
Definition Estimate Activity Durations is the process of approximating the number of work periods needed to complete individual activities with estimated resources. Source: PMBOK Guide Fourth Edition, page 146
Inputs
1. Activity list 2. Activity attributes 3. Activity resource requirements 4. Resource calendars 5. Project scope statement 6. Enterprise environmental factors 7. Organizational process assets
Tools & Techniques

1. Expert judgment 2. Analogous estimating 3. Parametric estimating 4. Three-point estimates 5. Reserve analysis
Outputs
1. Activity duration estimates 2. Project document updates
Figure -18- Estimate Activity Durations Process 4
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Process Interaction
5.2 Define Scope 9.2 Acquire Project Team
Resource Calendars
12.2 Conduct Procurements
Project scope statement
Activity resource requirements Activity duration estimates
Involved Documents (IN) Activity resource requirements Activity list Activity attributes Project scope statement Resource calendars Enterprise environmental factors Organizational process assets Involved Documents (OUT) Activity duration estimates Project document updates
6.4 Estimate Activity Durations 6.1 Define Activities

Activity list Activity attributes
Project Document s Updates
Project ` Documents
11.2 Identify Risks
Figure -19- Estimate Activity Duration Process Interaction 4
Activity Duration compared to Effort Elapsed time: The time that shows on the calendar. Includes the holidays and weekends. Duration: The number of working days. It does not include holidays or week ends Working time (Effort): The actual aggregated time, It adds the working time of all the involved resource. 4.8.1 Inputs to Estimate Activity Durations 1. 2. 3. 4. 5. 6. 7. Activity list Activity attributes Activity resource requirements Resource calendars Project scope statement Enterprise environmental factors Organizational process assets
4.8.2 Tools and Techniques for Estimate Activity Durations 1. 2. 3. 4. 5. Expert judgment Analogous estimating Parametric estimating Three-point estimates Reserve analysis
1. Expert judgment
4- Planning Phase
All inputs related to the resource need to be assessed by an expert to decide on the way how the resources are identified and assigned. Experts can be team members, other team members within the organization or external consultants.
2. Analogous estimating Actual duration of a previous, similar activity is basis for estimating the future activity. It is a form of Expert Judgment. It is most reliable when: Activities are really similar. Individuals preparing the estimates have needed expertise
3. Parametric estimating Parametric estimating uses a statistical relationship between historical data and other variables to calculate an estimate for activity parameters, such as cost, budget and duration. Activity durations can be quantitatively determined by multiplying the quantity of work to be performed by labor hours per unit of work. This technique can produce higher levels of accuracy depending upon the sophistication and underlying data built into the model.
4. Three-point estimates This concept originated with the Program Evaluation and Review Technique (PERT), PERT uses three estimates to define an approximate range for an activitys duration: Most likely Optimistic Pessimistic PERT analysis calculated an Expected activity duration using a weighted average of these three estimates. It uses the following formulas: Estimated Time:
Standard Deviation:
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Final Time Estimate:
Where: tE = Expected time tO = Optimistic time tM = Most likely time tP = Pessimistic Time SD = Standard Deviation
Determine Probability of Achievement Estimated time = tE + 1 x SD with 68% confidence Estimated time = tE + 2 x SD with 95% confidence Estimated time = tE + 3 x SD with 99% confidence 5. Reserve analysis It is also called time buffer, reserve, or contingency. It is Added by project team to an activity as a recognition of project risk. It can be either a percent of estimated duration, or fixed duration. It should be documented in order to facilitate future reference. 4.8.3 Outputs of Estimate Activity Durations 1- Activity duration estimates 2- Project document updates
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Exercise 4.8 Task Duration Estimate The following information and questions 1 through 4 refer to below network diagram and table
B D F G
A C E H
Activity A B C D E F G H I
Optimistic 1 2 10 5 3 1 5 9 5
Pessimistic 1 3 13 15 6 1 8 13 5
Most Likely 1 3 12 5 4 1 6 10 5
1. What is the expected value of the number of days to complete the project? 2. What is the expected value of the duration for activity B? 3. What is the standard deviation for the duration of activity B? 4. It is desirable to make an estimate that has a greater than 95% chance of being correct. Which of the following ranges of time for the completion of the project best describes this probability of being correct?
Exercise -8-Task Duration Estimate 4
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Definition Develop Schedule is the process of analyzing activity sequences, durations, resource requirements, and schedule constraints to create the project schedule. Source: PMBOK Guide Fourth Edition, page 152
Inputs
1. Activity list 2. Activity attributes 3. Project schedule network diagrams 4. Activity resource requirements 5. Resource calendars 6. Activity duration estimates 7. Project scope statement 8. Enterprise envi. factors 9. Organizational process assets
Tools & Techniques

1. Schedule network analysis 2. Critical path method 3. Critical chain method 4. Resource leveling 5. What-if analysis 6. Applying leads and lags 7. Schedule compression 8. Scheduling tool
Outputs
1.Project schedule 2.Schedule baseline 3.Schedule data 4.Project Document Updates
Figure -20- 6.5 Develop Schedule Process 4
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Process Interaction
5.2 Define Scope 9.2 Acquire Project Team 12.2 Conduct Procurements Enterprise / Organization
Resource Calendars Project Scope Statement

Activity list Activity attributes

Activity resource requirements
Involved Documents (IN) Activity list Activity attributes Project schedule network diagrams Activity resource requirements Activity duration estimates Project scope statement Resource calendars Enterprise environmental factors Organizational process assets Involved Documents (OUT) Project schedule Schedule baseline Schedule data Project documents updates
Project schedule network diagrams

Activity duration estimates Project Schedule
6.4 Estimate Activity Duration
Schedule data Project Documents Updates
Schedule baseline
Project ` Documents
4.2 Develop Project Management Plan
7.1 Estimate Costs
7.2 Determine Budget
8.1 Plan Quality
Figure -21- Develop Schedule Process Interaction 4
Schedule Constraints Two categories of constraints are directly related to scheduled development: Imposed Dates, they are: - Key Events - Major Milestones Example of Constraints:
Constraint Type Start No Later Than Start No Earlier Than Finish No Later Than Finish No Earlier Than Description The task must start before or on that date. The task may not start before this date. The task must be completed by that date. The task may not be completed before this date.
4.9.1 Inputs to Develop Schedule 1. Activity list 2. Activity attributes 3. Project schedule network diagrams
4- Planning Phase
4. 5. 6. 7. 8. 9.
Activity resource requirements Resource calendars Activity duration estimates Project scope statement Enterprise environmental factors Organizational process assets
Project Calendars Project and resource calendars identify when work is allowed. They affect all resources. Resource calendars affect only that resource or group of resources.
4.9.2 Tools and Techniques for Develop Schedule 1. 2. 3. 4. 5. 6. 7. 8. Schedule network analysis Critical path method Critical chain method Resource leveling What-if analysis Applying leads and lags Schedule compression Scheduling tool
1. Schedule network analysis Schedule network analysis is a technique that generates the project schedule. It employs various analytical techniques, such as: Critical path method Critical chain method What-if analysis Resource leveling
2. Critical path method The critical path method calculates the theoretical early start and finish dates and late start and finish dates without regard for any resource limitations. This is done by performing a forward and backward pass analysis through the schedule network. The resulting early and late start and finish dates are not necessarily the project schedule; rather they indicate the time periods within which the activity could be scheduled. Float Total Float: is the amount of time that an activity may be delayed from its early start without delaying the project finish date.
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Free Float: is the amount of time that an activity can be delayed without delaying the early start of any immediately following activities.
Calculating Path and Float Forward Pass: Early Start (ES) = Total of task durations for all precedent (necessary) tasks Early Finish (EF) = ES + Task Duration Backward Pass: Late Finish (LF) = Last day of project Duration of sequential (necessary) tasks to end of project Late Start (LS) = LF Task Duration Float = LF ES Task Duration Task Coding Convention - Early Start = ES - Early Finish = EF - Late Start = LS - Late Finish = LF - Duration = DU Process a. b. c. d. e. Construct the Network Diagram Apply the Task Duration Calculate the Forward Pass Calculate the Backward Pass Calculate Floats
ES
EF
LS
DU
LF
a. Construct the Network Diagram
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E
58
b. Apply the Task Duration
B
3
C
1
D
3
A
1
G
2
E
6
59
F
6
c. Calculate the Forward Pass

1 4 4 5 7 10
B
3
0 1
C
1
D
3
13 15
A
1
1 7 7 13
G
2
E
6
60
F
6
d. Calculate the Backward Pass
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1 4 4 5 7 10
B
6
0 1
C
9 9 1 10 10
D
3 13
13 15
A
0 1 1 13
1 7 7 13
G
2 15
E
1 6 7
61
F
7 6 13
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e. Calculate Floats
10
B
6
0 1
C
9 9 1
TF=5 FF=2
D
10 10 3
TF=3 FF=3
3
TF=5 FF=0
13
13 15
A
0 1
TF=0 FF=0
G
1 13 2
TF=0 FF=0
15
13
E
1 6
TF=0 FF=0
F
7
63
6
TF=0 FF=0
13
3. Critical chain method The critical path methods calculates the theoretical early start and finish dates, and late start and finish dates without regard for any resource limitations. This is done by performing a forward and backward pass analysis through the schedule network. The resulting early and late start and finish dates are not necessarily the project schedule; rather they indicate the time periods within which the activity could be scheduled.
4. Resource leveling Resource leveling is necessary when resources are over-allocated such as when the resource is: - Assigned to two or more activities during the same time period - Shared or critical required resources are only available at certain times - Only available in limited quantities. Resource leveling can often cause the original critical path to change. It mostly results in extended schedule
3 Days 4 Days
2 2
Before
65
2 2
After
Figure -22- Resource Leveling 4
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5. What-if analysis This is based on the calculation of multiple project durations with different sets of activity assumptions. What-if analysis using the logic in the network diagram. A well known technique of What if analysis is called Monte Carlo Analysis, it is: - The most common technique. - Distribution of probable results is defined for each activity, and then used to determine the distribution of probable results for the total project. - Also used in Project Risk Management
6. Applying leads and lags A lead allows an acceleration of the successor activity, while a lag directs a delay in the successor activity
7. Schedule compression The two main techniques that are used to compress schedules are: a- Fast tracking: A schedule compression technique in which phases or activities normally performed in sequence are performed in parallel. b- Crashing: It is a schedule compression technique in which cost and schedule tradeoffs are analyzed to determine how to obtain the greatest amount of compression for the least incremental cost. 8. Scheduling tool MS Project Primavera
4.9.3 Outputs of Develop Schedule 1. Project schedule: - Milestones charts - Bar charts - Project schedule network diagrams 2. Schedule baseline 3. Schedule data 4. Project document updates: - Activity resource requirements - Activity attributes - Calendar - Risk register
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Exercise 4.9 Develop Schedule The following information and questions 1 through 9 refer to below network diagram Assume that the work is on a single shift basis and will seven days per week until the job is done. The project is to begin on May 1.
B
3
D
2
FS-2
F
4
A
1
E
7
H
5
C
3
G
4
1. 2. 3. 4. 5. 6. 7. 8.
What day in May will activity D have for its early finish date? What is the free float for activity F? What is the free float for activity D? What is the critical path of the project? What is the late start for activity F? How long is the project in days? What is the early start for activity F? If there is a delay in activity F of six days, what is the effect on the project completion date? 9. What is the early finish date of activity A?
Exercise -9- Develop Schedule 4
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4.10 Estimate Costs

Definition Cost Estimating is the determination of approximately how much will it cost the performing organization to provide the product or service involved.
Inputs
1.Scope baseline 2.Project schedule 3.Human resource plan 4.Risk register 5.Enterprise environmental factors 6.Organizational process assets
Tools & Techniques

1. Expert judgment 2. Analogous estimating 3. Parametric estimating 4. Bottom-up estimating 5. Three-point estimates 6. Reserve analysis 7. Cost of quality 8. PM Estimating software 9. Vendor bid analysis
Figure -23- Estimate Costs Process 4
Outputs
1.Activity cost estimates 2.Basis of estimates 3.Project document updates
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Process Interaction
Figure -24- Estimate Costs Process Interaction 4
Life Cycle Costing vs. Value Engineering Project cost can be seen from different perspectives, and important perspective is the cost of the project during its whole life cycle. The process of evaluating the project cost over its life cycle is called Life Cycle Costing process. Life-Cycle Costing (LCC) is the total cost to the organization for the ownership and acquisition of the product over its full life cycle. LCC = R&D costs + production cost + construction cost + operation and maintenance cost + product retirement and phase-out cost. Value Engineering (VE) is a creative approach used to optimize life-cycle costs, save time, increase profits, improve quality, expand market share, solve problems, and/or use resources more effectively.
Cost Estimate as an Iterative Process Cost estimate is refined during the course of the project. Cost Estimate increase as the project progresses over time. This is part of the progressive elaboration concept.
Types of Estimates and Degree of Accuracy
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Depending on the project phase, different levels of estimates with different levels f accuracy are applied. Below are examples of these levels.
Type
Rough Order of Magnitude (ROM)) or Ball Park Budget Estimate
Accuracy
50%
Project Phase
Initiation
10%
Early Planning
Definitive Estimate
5%
Late Planning & Execution
Table -1 - Estimate Accuracy 4
4.10.1 Inputs to Estimate Costs 1. 2. 3. 4. 5. 6. Scope baseline Project schedule Human resource plan Risk register Enterprise environmental factors Organizational process assets
4.10.2 Tools and Techniques for Define Activities 1. 2. 3. 4. 5. 6. 7. 8. 9. Expert judgment Analogous estimating Parametric estimating Bottom-up estimating Three-point estimates Reserve analysis Cost of quality PM Estimating software Vendor bid analysis
5. Analogous Estimating It is based on using the actual cost of previous and similar projects as the basis for estimating the cost of the current project. This technique is frequently used to estimate costs when there is a limited amount of detailed information about the project. It relies heavily on expert judgment and it is generally less costly and less accurate than other techniques. 6. Parametric Estimating
4- Planning Phase
This technique uses a statistical relationship between historical data and other variables. It can produce higher levels of accuracy depending upon the sophistication. It also involves multiplying the planned quantity of work to be performed by the historical cost per unit to obtain the estimated cost. 7. Bottom-up Estimating It involves estimating the cost of individual work packages or individual schedule activities. This detailed cost is then rolled up to higher levels for reporting and tracking purposes. The cost and accuracy of bottomup cost estimating is typically motivated by the size and complexity of the individual schedule activity or work package. Generally, activities with smaller effort increase the accuracy of the schedule activity cost estimates.
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8. Three-Point Estimates It is also called Probabilistic Estimate or Weighted Average. This concept originated with the Program Evaluation and Review Technique (PERT). PERT uses three estimates to define an approximate range for an activitys duration: o Most likely o Optimistic o Pessimistic PERT analysis calculates an Expected activity duration using a weighted average of these three estimates. It uses the following formulas: Estimated Cost:
Standard Deviation:
Final Cost Estimate:
Where: cE = Expected Cost cO = Optimistic Cost cM = Most likely Cost cP = Pessimistic Cost SD = Standard Deviation
Determine Probability of Achievement Estimated cost = cE + 1 x SD with 68% confidence Estimated cost = cE + 2 x SD with 95% confidence Estimated cost = cE + 3 x SD with 99% confidence
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4.10.3 Outputs of Estimate Costs 1. Activity cost estimates 2. Basis of estimates 3. Project document updates 1. Activity Cost Estimates A quantitative assessment of the likely costs of the resources required to complete schedule activities. This type of estimate can be presented in summary form or in detail. Costs are estimated for all resources that are applied to the activity cost estimate. This includes, but is not limited to: Labor Materials Equipment Services Facilities Information technology Special categories such as an inflation allowance or cost contingency reserve. 2. Basis of estimates It is mandatory for the project manager to keep records for the supporting documents that proves the information on which he based his estimates on. These supporting documents include, but not limited to: Documentation of the basis of the estimate (i.e. how it was developed) Documentation of all assumptions made Documentation of any known constraints Indication of the range of possible estimates (e.g. $10,000(+10%) to indicate that the item is expected to cost between a range of values) Indication of the confidence level of the final estimate. 3. Project Document Updates Depending on which phase the project is in, all project documents related to the cost estimates are subject to be updated based on the estimates and its type.
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4.11 Determine Budget
Definition Determine Budget is the process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline.
Inputs
1.Activity cost estimates 2.Basis of estimates 3.Scope baseline 4.Project schedule 5.Resource calendars 6.Contracts 7.Organizational process assets
Tools & Techniques

1. Cost aggregation 2. Reserve analysis 3. Expert judgment 4. Historical relationships 5. Funding limit reconciliation
Outputs
1.Cost performance baseline 2.Project funding requirements 3.Project document updates
Figure -25 - Determine Budget Process 4
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Process Interaction
Figure -26- Determine Budget Process Interaction 4
4.11.1 Inputs of Determine Budget 1234567Activity cost estimates Basis of estimates Scope baseline Project schedule Resource calendars Contracts Organizational process assets
4.11.2 Tools and Techniques for Determine Budget 12345Cost aggregation Reserve analysis Expert judgment Historical relationships Funding limit reconciliation
1. Cost aggregation
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Schedule activity cost estimates are aggregated by work packages in accordance with the WBS. The work package cost estimates are then aggregated for the higher component levels of the WBS, such as control accounts, and ultimately for the entire project. 2. Reserve analysis Budget reserve analysis can establish both the contingency reserves and the management reserves for the project. Contingency reserves are allowances for unplanned but potentially required changes that can result from realized risks identified in the risk register. Management reserves are budgets reserved for unplanned changes to project scope and cost. Management reserves are not a part of the project cost baseline, but may be included in the total budget for the project. They are not included as a part of the earned value measurement calculations. 3. Expert Judgment Expert judgment is based on any of the following: Other units within the performing organization Consultants Stakeholders, including customers Professional and technical associations, and Industry groups 4. Historical Relationships Any historical relationship that results in parametric or analogous estimates that will help in develop a mathematical model to predict the total project cost The model will be accurate when: The historical information used to develop the model is accurate The parameters used in the model are readily quantifiable The model is scalable, such that it works for a large project as well as a small one. 5. Funding Limit Reconciliation The expenditure of funds is reconciled with the funding limits set by the customer. Reconciliation will necessitate the scheduling of work to be adjusted to smooth or regulate those expenditures. Rescheduling can impact the allocation of resources. The final product of these planning iterations is a cost baseline 4.11.3 Outputs of Determine Budget 1- Cost performance baseline 2- Project funding requirements 3- Project document updates
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1. Cost Performance Baseline A time-phased budget that is used as a basis against which to measure, monitor, and control overall cost performance on the project. It is developed by summing estimated costs by period and is usually displayed in the form of an S-curve. The cost baseline is a component of the project management plan. Many projects, especially large ones, have multiple cost or resource baselines. For example, management may require that the project manager track internal costs (labor) separately from external costs (contractors and construction materials) or total labor hours. 2. Project Funding Requirements Funding requirements, total and periodic (e.g., annual or quarterly), are derived from the cost baseline. They can be established to exceed, usually by a margin, to allow for either early progress or cost overruns. Funding usually occurs in incremental amounts that are not continuous The total funds required are those included in the cost baseline plus the management contingency reserve amount.
Cumulative Values
Funding Requirements
Cost Baseline
Expenditures
Time Figure -27- Project Funding Requirements 4
3. Project Document Updates All related cost documents such as: Risk register Cost estimates Project Schedule
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4.12 Plan Quality

Definition Plan Quality is the process of identifying quality requirements and/or standards for the project and product and documenting how the project will demonstrate compliance.
Inputs
1. Scope baseline 2. Stakeholder register 3. Cost performance baseline 4. Schedule baseline 5. Risk register 6. Enterprise environmental factors 7. Organizational process assets
Tools & Techniques

1. Cost-benefit analysis 2. Cost of quality 3. Control charts 4. Benchmarking 5. Design of experiments 6. Statistical sampling 7. Flowcharting 8. Proprietary quality management methodologies 9. Additional quality planning tools
Outputs
1. Quality management plan 2. Quality metrics 3. Quality checklists 4. Process improvement plan 5. Project document updates
Figure -28- Plan Quality Process 4
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4- Planning Phase
Process Interaction
5.3 Create WBS
Scope baseline
10.1 Identify stakeholders
7.2 Determine budget

Cost performance baseline

Schedule baseline
11.2 Identify Risks

Risk register
Stakeholder register
Quality checklists
8.1 Plan Quality
Quality metrics
8.2 Perform Quality Assurance
Involved Documents (IN) Scope baseline Stakeholder register Cost performance baseline Schedule baseline Risk register Enterprise environmental factors Organizational process assets Involved Documents (OUT) Quality metrics Quality checklists Quality management plan Process improvement plan Project document updates
Quality management plan
Project ` Documents
11.2 Identify Risks
Process improvement plan
Figure -29- Plan Quality Process Interaction 4
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Group Discussion Quality vs. Grade Two persons went to purchase electrical bulbs on bulk basis, a box of 100 pieces. The first one went for a high price brand, he purchased a box of 100 bulbs with 5% out of the box faulty rate. This means that there is 5 faulty bulbs may be found in each 100 bulbs. The second person went for a cheaper brand; he purchased a box of 100 bulbs with 20% faulty specifications. When the second person returned back home, he found that 19 bulbs were out of order, while the first person found only 6 bulbs were out of order. Which lot is higher quality? a- The higher price brand b- The low price brand
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Group Discussion -5-Quality vs. Grade 4
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Quality vs. Grade Quality and grade are closely related terms, but it is important to understand the distinction between the two in order to understand the requirements of each for a specific project. Quality requirements and grade requirements vary from one project to another. However, low quality should always be avoided. Quality: is the degree to which a set of inherent characteristics fulfills requirements. Grade: is a category or rank given to entities having the same functional use but different technical characteristics. Precision vs. Accuracy Precision: The values of repeated measurements are cluster and have little scatter Accuracy: The measurement value is very close to the true value Quality Improvement Initiatives Over years, many initiatives were developed to help defining and managing the project quality, examples are: International Standard: o ISO 9000 Proprietary Approaches: o Deming, Juran, Crsoby and others recommendations Non Proprietary Approaches: o Total Quality Management (TQM) o Six Sigma o Failure mode and Effect Analysis (FMEA) o Design Reviews o Voice of the Customer o Cost of Quality (COQ) o Continuous Improvement (KAIZEN) o Just-in-time (JIT)
Quality Management Complements Project Management Both Quality Management and Project Management aim to eh same objective, finishing the project as per the required quality. Both concepts agree the same basics as follows: Customer satisfaction: o Meeting the customer requirements, conformance to requirements and fitness for use. Prevention over inspection: o Quality is planned in , not inspected in
4- Planning Phase
Continuous improvement: o Plan, Do, Check and Act is the basis of quality improvement. o Process improvement models include Malcolm Baldridge, OPM3 and CMMI Management Responsibility: o Management is responsible for providing the required resources for success.
Statistical Quality Control Terms Term A Prevention Keeping errors out of the process Attribute sampling Result does or does not conform (binary, pass/fail, conformance/nonconformance) An attribute is the measurement. Special causes Unusual events Tolerances Result is acceptable within a specified range Term B Inspection Keeping errors out of the deliverable to the customer Variables sampling Result is rated on a continuous scale measuring the degree of conformity A variable is the characteristic. Random causes Normal process variation Control limits Process is in control if the result is within the control limits
Table -2- Statistical Quality Control Terms 4
4.12.1 Inputs to Plan Quality 1. 2. 3. 4. 5. 6. 7. Scope baseline Stakeholder register Cost performance baseline Schedule baseline Risk register Enterprise environmental factors Organizational process assets
4.12.2 Tools and Techniques for Plan Quality 1. Cost-benefit analysis 2. Cost of quality
4- Planning Phase
3. Control charts 4. Benchmarking 5. Design of experiments 6. Statistical sampling 7. Flowcharting 8. Proprietary quality 9. management methodologies 10. Additional quality planning tools
1. Cost-Benefit Analysis Quality planning must consider cost-benefits tradeoffs. The primary benefit of meeting quality requirements is less rework, which means: Higher productivity Lower costs Increased stakeholder satisfaction. The primary cost of meeting quality requirements is the expense associated with Project Quality Management activities. 2. Cost of Quality Quality costs are the total costs incurred by: Investment in preventing nonconformance to requirements Appraising the product or service for conformance to requirements Failing to meet requirements (rework). Failure costs are often categorized into internal and external. Failure costs are also called cost of poor quality.
Examples of Cost of Conformance Prevention (build a quality product): Training Documenting processes New equipment Allow time to do it right Briefing Maintenance Audit Appraisal (asses the quality): Testing Inspection
Examples of Cost of NonConformance Internal Failure Rework Scrap External Failure Recalls Warranty costs Handling customer complaints Lost Business
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Destructive testing loss
Table -3- Cost Conformance 4
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Exercise 4.10 Cost of Quality Define examples of each of the following type of cost: 1. Prevention 2. Appraisal 3. Internal failure 4. External failure
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -10 - Cost of Quality 4
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3. Control Charts It is used to determine whether or not a process is stable or has predictable performance. It serves as a data gathering tool to show when a process is subject to special cause variation, which creates an out-of-control condition. Illustrate how a process behaves over time. Below are the main attributes of the control charts: They are a graphic display of the interaction of process variables on a process to answer the question: Are the process variables within acceptable limits? Examination of the non-random pattern of data points on a control chart may reveal wildly fluctuating values, sudden process jumps or shifts, or a gradual trend in increased variation. By monitoring the output of a process over time, a control chart can be employed to assess whether the application of process changes resulted in the desired improvements. When a process is within acceptable limits, the process need not be adjusted. When a process is outside acceptable limits, the process should be adjusted. The upper control limit and lower control limit are usually set at +/- 3 sigma (i.e., standard deviation).
Upper Specification Limit (USL)
Upper Control Limit (UCL)
Lower Control Limit (LCL)
Lower Specification Limit (LSL)

Figure -30- Control Chart 4
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4. Benchmarking Benchmarking involves comparing actual or planned project practices to those of other projects. This is to generate ideas for improvement and to provide a basis by which to measure performance. These other projects can be within the performing organization or outside of it, and can be within the same or in another application area. 5. Design of Experiments It is a statistical method that helps identify which factors may influence specific variables of a product or process. It also plays a role in the optimization of products or processes. It provides a statistical framework for systematically changing all of the important factors. 6. Statistical Sampling Statistical sampling involves choosing part of a population of interest for inspection. Appropriate sampling can often reduce the cost of quality control. There is a substantial body of knowledge on statistical sampling; in some application areas, it may be necessary for the project management team to be familiar with a variety of sampling techniques. 7. Flowcharting Flowcharting helps to analyze how problems occur. A flowchart is a graphical representation of a process. There are many styles, but all process flowcharts show activities, decision points, and the order of processing. They show how various elements of a system interrelate.
Pressurization test X-ray the weld to detect micro-fractures
C
Fractures detected ? No
Yes
Grind out the old weld
Prepare the weld surface

Apply the new weld
Connect pressure unit to open end of pipe

Pressurization test
Pressurization test
No B
Leaks detected?
Time elapsed?
Yes
Test complete
22
Figure -31- Flow Chart 4
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8. Proprietary Quality Management Methodologies Many organizations in different industries developed quality approaches to manage quality in specific industries of line of business. Some of them are: Six Sigma Lean Six Sigma CMMi Others 9. Additional Quality Planning Tools Brainstorming Affinity diagrams Force field analysis Nominal group techniques Matrix diagrams Flowcharts Prioritization matrices 4.12.3 Outputs of Plan Quality 1. 2. 3. 4. Quality Management Plan Quality Metrics Quality Checklists Process Improvement Plan: o Process boundaries o Process configuration o Process metrics o Targets for improved performance 5. Project Documents Updates: o Stakeholder register o Responsibility Assignment Matrix 1. Quality Management Plan It describes how the project management team will implement the performing organizations quality policy. The quality management plan is a component or a subsidiary plan of the project management plan. The quality management plan provides input to the overall project management plan and must address: Quality control (QC) Quality assurance (QA) Continuous process improvement for the project. 2. Quality Metrics A metric is an operational definition that describes, in very specific terms, what something is and how the quality control process measures it. A measurement is an actual value. Quality metrics are used in the QA and QC processes. Some examples of quality metrics
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include Defect density, Failure rate, Availability, Reliability and Test coverage. 3. Quality Checklists A checklist is a structured tool, used to verify that a set of required steps has been performed. They are usually phrased as imperatives (Do this) or interrogatories (Have you done this?). Many organizations have standardized checklists available to ensure consistency in frequently performed tasks. Checklists are also available from professional associations or commercial service providers. Quality checklists are used in the quality control process. 4. Process Improvement Plan It is a subsidiary of the project management plan. It details the steps for analyzing processes that will facilitate the identification of waste and non-value added Activity. It increases customer value, such as: Process boundaries. Process configuration. Process metrics. Targets for improved performance.
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Exercise 4.11 Create Quality Management Plan For the case study provided by the instructor, create the project quality management plan. Note: Use form 9.6 in Appendix 2
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -11 - Create Quality Management Plan 4
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Definition Develop Human Resource Plan is the process of identifying and documenting project roles, responsibilities, and required skills, reporting relationships, and creating a staffing management plan.
Inputs
1.Activity resource requirements 2.Enterprise environmental factors 3.Organizational process assets
Tools & Techniques

1. Organization charts and position descriptions 2. Networking 3. Organizational theory
Outputs
1.Human resource plan
Figure -32- Develop Human Resource Plan Process 4
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Process Interaction
Figure -33- Develop Human Resource Plan Process Interaction 4
The Project Management Team The project management team is subset of the project team. This group is referred to as, the core, executive or leadership team. Their main role is the project management and leadership activities. The figure below shows the position of the project management team with respect to the other stakeholders.
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Project Stakeholders
Other StakeHolders
Operations Mngt.
Portfolio Manager
Project Team
Project Sponsor Project Manager P

Function al Managers
Program Manager
Project Management Team
Other Project Team Members
Sellers / Business Partners
Project Mngt. Office
Customers / Users

Figure -34 - Develop Human Resource Plan Process 4
4.13.1 Inputs to Develop Human Resource Plan 1. Activity resource requirements 2. Enterprise environmental factors 3. Organizational process assets 4.13.2 Tools and Techniques for Develop Human Resource Plan 1. Organization charts and position descriptions 2. Networking 3. Organizational theory 1. Organization Charts and Position Descriptions These are tools used to document roles and responsibilities of each team member with respect to the project tasks. Unclear roles and responsibilities are a major source of team conflicts. It is very important to document them clearly, and maintain the clarity by a continuous update and review. They may be documented in any of the following formats:
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Activity John Jimmy Sara John Jimmy
Name: ________ Role: ___________ Responsibility: _______ Authority: ________
Hierarchical
Matrix
Text oriented
Figure -35- Organization Charts and Position Descriptions 4
Hierarchical This is a top-down graphical format that is used to represent the team members positions and their relationships with each other. Like the work Breakdown Structure (WBS), this is an Organization Breakdown Structure (OBS) Matrix A responsibility assignment matrix is used to show the relationship between the project work packages or activities and the project team members. Below is an example of the responsibility matrix in RACI (Responsibility, Accountability, Consult and Inform) format.
RACI Chart Activity Produce functional requirements Person Sarah
John
Jimmy
Andrew
Ben
A
I
R
A
I
R
I
C
I
C
Produce system Pilot (first branch)

Roll our remaining branches
I A
A I
R I
C R
C I
Roll our remaining branches
R=Responsible A=Accountable C=Consult I=Inform RACI= Responsible, Accountable, Consult and Inform
Table -4- Human Resource Management Process Mapping 4
Text oriented A routinely produced text documents; that describe the responsibility of each team member. They can be given many names, like position description, job description, job responsibilities etc.
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2. Networking Interaction with others in the organization, either in formal or informal way can be done by the following: - Information interaction with others. - Proactive correspondences. - Luncheon meetings. - Informal conversations. - Trade conferences. 3. Organizational Theory Organizational theory provides information regarding the ways that people, teams, and organizational units behave. Applying proven principles shortens the amount of time needed to create the Human Resource Planning outputs and improves the likelihood that the planning will be effective. 4.13.3 Outputs of Develop Human Resource Plan 1. Human resource plan, that includes: - Roles and responsibilities - Project organization charts - Staffing management plan Roles and Responsibilities: Role: The label describing the portion of a project for which a person is accountable. Authority: The right to apply project resources makes decisions, and sign approvals. Responsibility: The work that a project team member is expected to perform in order to complete the project's activities. Competency: The skill and capacity required to complete project activities. Project Organization Charts Graphics display of the project team members that shows the communication and reporting lines, below are examples.
Project Sponsor
Project Team
Project Manager P
Project Management Team Other Project Team Members
Figure -36- Develop Human Resource Plan Process Interaction 4
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Staffing Management Plan Staffing management plan includes, but not limited to the following: - Staff acquisition - Resource calendars - Staff release plan - Training needs - Recognition and rewards - Compliance - Safety
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4.14 Plan Communications
Definition Plan Communications is the process of determining the project stakeholder information needs and defining a communication approach.
Inputs
1.Stakeholder register 2.Stakeholder management strategy 3.Enterprise environmental factors 4.Organizational process assets
Tools & Techniques

1. Communication requirements analysis 2. Communication technology 3. Communication models 4. Communication methods
Outputs
1.Communication management plan 2.Project document updates
Figure -37 - Plan Communications Process 4
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Process Interaction
Figure -38 Plan Communications Process Interaction 4
4.14.1 Inputs to Plan Communications 1234Stakeholder register Stakeholder management strategy Enterprise environmental factors Organizational process assets
4.14.2 Tools and Techniques for Plan Communications 1234Communication requirements analysis Communication technology Communication models Communication methods
1. Communication requirements analysis The analysis of the communications requirements results in the sum of the information needs of the project stakeholders. These requirements are defined by combining the type and format of information needed with an analysis of the value of that information. Project resources are expended only on communicating information that contributes to success, or where a lack of communication can lead to failure. This
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does not mean that Bad news should not be shared; rather, the intent is to prevent overwhelming stakeholders with minutiae. Information typically required to determine project communications requirements includes: Organization charts Project organization and stakeholder responsibility relationships Disciplines, departments, and specialties involved in the project Logistics of how many persons will be involved with the project and cat which locations Internal information needs (e.g., communicating across organizations) External information needs (e.g., communicating with the media or contractors) Stakeholder information. Communication Channels Project team members communicate with each other through channels. The ore the members are, the more channels exist. Every party has its own communication needs. The number of Communication channel can be determined by the following equation:
2. Communication technology Communications technology factors that can affect the project include: The urgency of the need for information The availability of technology The expected project staffing The length of the project The project environment 3. Communication models Both the sender and receiver of a message have responsibilities in communication. The sender of information is responsible for making information clear and complete. The receiver is responsible for making sure that all of the information has been received and understood. Communication Model Components Encode Message and feedback-message Medium
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Noise Decode
Sender / Receiver Model The communication model states the following: An idea is translated in the brain into words (encode) The lips spell out the message in words that are understood by the receiving party The words travel in the medium to the receiver The message is received by the receiving party and translated back into the idea (encoding)
1- Idea
Receiver 2- Encode
3- Message Sender 4- Decode
5- Encode 6- Message Feedback

30
Figure -39- Sender / Receiver Model 4
It is important to note here that the responsibility of ensuring the successful message delivery is on the sender. He has to ensure that a feedback happens from the receiver to confirm his understanding.
4. Communication Methods Many communication methods exist for the project team to communicate, depending on the need and situation, as follows: Interactive Communication: a Multidirectional, most efficient to ensure a common understanding. Push communication: Sent to specific recipient, ensure that information is distributed but does not ensure that it reached or understood. Pull communication: for a large volume of information or audience, intranet, e-learning etc.
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4.14.3 Outputs of Plan Communications 1- Communication management plan 2- Project document updates
1. Communication management plan The communication management plan includes, but not limited to: Stakeholder communication requirements Information to be communicated, including language, format, content, and level of detail; Reason for the distribution of that information Time frame and frequency for the distribution of required information Person responsible for communicating the information Person responsible for authorizing release of confidential information Person or groups who will receive the information Methods or technologies used to convey the information, such as memos, e-mail, and/or press releases Resources allocated for communication activities, including time and budget Escalation process identifying time frames and the management chain (names) for escalation of issues that cannot be resolved at a lower staff level. Method for updating and refining the communications management plan as the project progresses and develops; Glossary of common terminology Flow charts of the information flow in the project, workflows with possible sequence of authorization, list of reports and meeting plans, etc. Communication constraints usually derived from specific legislation or regulation, technology, and organizational policies, etc. 2. Project document updates This planning process may result into changing some of the already prepared documents, like: Project schedule Stakeholder register Stakeholder management strategy
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Exercise 4.12 Number of Communication Channels How many communication channels exist in a project with a project manager, three team members and another three stakeholders?
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -12 - Number of Communication Channels 4
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4.15 Plan Risk Management

Definition Risk Management Planning is the process of defining how to conduct risk management activities for a project.
Inputs
1. Project scope statement 2. Cost management plan 3. Schedule management plan 4. Communication management plan 5. Enterprise environmental factors 6. Organizational process assets
Tools & Techniques

1. Planning meetings and analysis
Outputs
1.Risk management plan
Figure -40- Plan Risk Management Process 4
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Process Interaction
Figure -41 - Plan Risk Management Process Interaction 4
Uncertainty Risks are originated from uncertainties. Many decisions are taken while most of the information is not complete or uncertain, so the nature of decision is that they are taken with certain amount of uncertainty involved. Only when things are certain, the decision id found wrong or right. Risk Management as a Proactive Approach Risks are events that May or May not happen in the future. Project managers are working on influencing the risk before they happen, once a risk is realized happened, then it is not any more a risk, it is a certain event that requires corrective actions (contingencies). Risk Tolerance Risk tolerance is the degree to which organizations are willing to accept risks. Organizations may accept risks if they are within the tolerance they set. Risks should be balanced with the rewards that may be gained by taking them. Known / Unknown Risks Known risks: Those that have been identified and analyzed. It may be possible to plan for known risks. Unknown risks: Cannot be managed
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Project managers may address them by applying a general contingency plan, based on past experience with similar projects.
Threats and Opportunities Organizations perceive risk as: Threats to project success Opportunities to enhance chances of project success Risks that are threats to the project may be accepted if the risk is in balance with the reward that may be gained by taking the risk. 4.15.1 Inputs to Plan Risk Management 1. 2. 3. 4. 5. 6. Project scope statement Cost management plan Schedule management plan Communication management plan Enterprise environmental factors Organizational process assets
4.15.2 Tools and Techniques for Plan Risk Management 1. Planning meetings and analysis 1. Planning meetings and analysis Project teams hold planning meetings to develop the risk management plan. Attendees at these meetings may include: Project manager Selected project team members Stakeholders Anyone in the organization with responsibility to manage the risk planning and execution activities Others, as needed. General organizational templates for risk categories and definitions of terms will be tailored to the specific project such as: Levels of risk Probability by type of risk Impact by type of objectives Probability and impact matrix The outputs of these activities will be summarized in the risk management plan. 4.15.3 Outputs of Plan Risk Management 1. Risk management plan 1. Risk management plan
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The risk management plan describes how risk management will be structured and performed on the project. It becomes a subset of the project management plan and will include the following: Methodology Roles and responsibilities Budgeting Timing Risk categories Definitions of risk probability and impact Probability and impact matrix Revised stakeholders tolerances Reporting formats Tracking
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4.16 Identify Risks
Definition Identify risk determines which risks might affect the project and documents their characteristics.
Identify Risk Team Participants in risk identification activities can include the following: Project manager Project team members Risk management team (if assigned) Subject matter experts from outside the project team Customers End users Other project managers Stakeholders Risk management experts Identify Risk is Iterative Identify Risk is an iterative process because new risks may become known as the project progresses through its life cycle. The frequency of iteration and who participates in each cycle will vary from case to case. The project team should be involved in the process so that they can develop and maintain a sense of ownership of, and responsibility for, the risks and associated risk response actions. Stakeholders outside the project team may provide additional objective information. Identify Risk Following Process The Identify Risk process usually leads to the Qualitative Risk Analysis process. Alternatively, it can lead directly to the Quantitative Risk Analysis process when conducted by an experienced risk manager.
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Inputs
1. Risk MP 2. Activity cost estimates 3. Activity duration estimates 4. Scope baseline 5. Stakeholder register 6. Cost MP 7. Schedule MP 8. Quality MP 9. Project documents 10. Enterprise env. factors 11.Organizational process assets
Tools & Techniques 1. Documentation reviews 2. Information gathering techniques 3. Checklist analysis 4. Assumptions analysis 5. Diagramming techniques 6. SWOT analysis 7. Expert judgment
Outputs
1. Risk register
Figure -42 - Identify Risks Process 4
Process Interaction
Figure -43 Identify Risks Process Interaction 4
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4.16.1 Inputs to Identify Risks 1- Risk management plan 2- Activity cost estimates 3- Activity duration estimates 4- Scope baseline 5- Stakeholder register 6- Cost management plan 7- Schedule management plan 8- Quality management plan 9- Project documents 10- Enterprise environmental factors 11- Organizational process assets 4.16.2 Tools and Techniques for Identify Risks 1234567Documentation reviews Information gathering techniques Checklist analysis Assumptions analysis Diagramming techniques SWOT analysis Expert judgment
1. Documentation reviews A structured review may be performed of project documentation, including: Plans Assumptions Prior project files Other information The quality of the plans, as well as consistency between those plans and with the project requirements and assumptions, can be indicators of risk in the project. 2. Information gathering techniques Information gathering techniques that include but not limited to the following: Brainstorming Delphi technique Interviewing Root cause identification Strengths, weaknesses 3. Checklist analysis Risk identification checklists can be developed based on historical information and knowledge that has been accumulated from previous
4- Planning Phase
similar projects and from other sources of information. The lowest level of the RBS can also be used as a risk checklist. While a checklist can be quick and simple, it is impossible to build an exhaustive one. Care should be taken to explore items that do not appear on the checklist. The checklist should be reviewed during project closure to improve it for use on future projects. 4. Assumptions analysis Every project is conceived and developed based on a set of hypotheses, scenarios, or assumptions. Assumptions analysis is a tool that explores the validity of assumptions as they apply to the project. It identifies risks to the project from inaccuracy, inconsistency, or incompleteness of assumptions 5. Diagramming techniques The following techniques will be used in this process: Cause-and-effect diagrams (Ishikawa or fishbone diagrams) System or process flow charts Influence diagrams 6. SWOT analysis When used in Risk Identification, SWOT analysis involves examining the project from each of the SWOT perspectives in order to increase the breadth of risks considered. Depending upon the magnitude of impact to the organization, SWOT analysis for the project can parallel SWOT analysis as applied to strategic planning for the organization and will use many of the same elements. This approach uses the following components: Strengths Weaknesses Opportunities Threats
The above can also be seen as internal and external components, as follows: Internal Components - Strengths and weaknesses Strengths and weaknesses are internal to your project and organization, and can be assessed through: Internal surveys Focus Groups Open Forums Internal reports: finance, performance, quality, production capabilities External Components - Opportunities and Threats
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Opportunities and threats are external to your project and/or organization, and can be assessed through: Internal and external surveys Industry research on global trends and competition Marketing research on customer needs and preferences Opportunities and Threats can be identified by examining the following factors: The Competition Markets Technological Advances Political and Economic Climate 7. Expert judgment Subject matter experts internal or external to the organization, such as engineering or statistical experts, validate data and techniques. 4.16.3 Outputs of Identify Risks 1- Risk register 1. Risk Register The primary outputs from Risk Identification are the initial entries into the risk register, which becomes a component of the project management plan. The risk register ultimately contains the outcomes of the other risk management processes as they are conducted. The preparation of the risk register begins in the Risk Identification process with the following information, and then becomes available to other project management and Project Risk Management processes.
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Exercise 4.13 Identify Risks In the provided case stud, identify 10 potential risks that may come up during the project execution. Note: Use form 9.7 in Appendix 2 Do not fill the Probability, Impact and Overall Impact columns.
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -13 - Risk List 4
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4.17 Perform Qualitative Risk Analysis
Definition Perform Qualitative Risk Analysis includes methods for prioritizing the identified risks for further action, such as Quantitative Risk Analysis or Risk Response Planning. Source: PMBOK Guide Fourth Edition, page 289
Inputs
1.Risk register 2.Risk management plan 3.Project scope statement 4.Organizational process assets
Tools & Techniques

1. Risk probability and impact assessment 2. Probability and impact matrix 3. Risk data quality assessment 4. Risk categorization 5. Risk urgency assessment 6. Expert judgment
Outputs
1.Risk register updates
Figure -44- Perform Qualitative Risk Analysis Process 4
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Process Interaction
Figure -45- Perform Qualitative Risk Analysis Process Interaction 4
4.17.1 Inputs to Perform Qualitative Risk Analysis 1234Risk register Risk management plan Project scope statement Organizational process assets
4.17.2 Tools and Techniques for Perform Qualitative Risk Analysis 123456Risk probability and impact assessment Probability and impact matrix Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment
1. Risk probability and impact assessment Risk probability assessment investigates the likelihood that each specific risk will occur. Risk impact assessment investigates the potential effect on a project objective such as time, cost, scope, or quality, including both negative effects for threats and positive effects for opportunities. 2. Probability and impact matrix Risks can be prioritized for further quantitative analysis and response, based on their risk rating. Ratings are assigned to risks based on their assessed probability and impact. Evaluation of each risks importance
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and, hence, priority for attention is typically conducted using a look-up table or a probability and impact matrix. Such a matrix specifies combinations of probability and impact that lead to rating the risks as low, moderate, or high priority. The organization should determine which combinations of probability and impact result in a classification of high risk red condition, moderate risk yellow condition, and low risk green condition. Impact can be ordinal (low, moderate, high, and very high) or cardinal (.1/ .3/ .5/ .7/ .9). Below is s sample probability and impact matrix
0.9 Very High
1.5
5.0
9.0
Probability
0.5 Medium
1.0
3.0
6.0
0.1 Very Low
.5
1.9
Very Low 1.5
Medium 5.5
Very High 8.5
51 Impact
Figure -46- Probability and Impact Matrix 4
3. Risk data quality assessment A qualitative risk analysis requires accurate and unbiased data if it is to be credible. Analysis of the quality of risk data is a technique to evaluate the degree to which the data about risks is useful for risk management. It involves examining the degree to which the risk is understood and the accuracy, quality, reliability, and integrity of the data about the risk. The use of low-quality risk data may lead to a qualitative risk analysis of little use to the project. If data quality is unacceptable, it may be necessary to gather better data. Often, collection of information about risks is difficult, and consumes time and resources beyond that originally planned. 4. Risk categorization Risks to the project can be categorized by: Sources of risk The area of the project affected Other useful category
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To determine areas of the project most exposed to the effects of uncertainty. Grouping risks by common root causes can lead to developing effective risk responses.
5. Risk urgency assessment Risks requiring near-term responses may be considered more urgent to address. Indicators of priority can include time to affect a risk response, symptoms and warning signs, and the risk rating. 6. Expert judgment Subject matter experts internal or external to the organization, such as engineering or statistical experts, validate data and techniques. 4.17.3 Outputs of Perform Qualitative Risk Analysis 1- Risk register updates 1. Risk register updates The risk register is initiated during the Risk Identification process. The risk register is updated with information from Qualitative Risk Analysis and the updated risk register is included in the project management plan. The risk register updates from Qualitative Risk Analysis include: Relative ranking or priority list of project risks Risks grouped by categories Causes of risks or project areas requiring particular attention List of risks requiring response in the near-term List of risks for additional analysis and response Watch lists of low priority risks Trends in qualitative risk analysis results The following table shows a sample of prioritized risks
* 1 2 3 4
5 6
RISK Item Poor understanding of customers requirements Unavailable H/W before 3rd party arrival Unavailable resources during Ramadan
Hardware component de-release Management change Requirements Change
Prb. Impact Overall Risk

L M M H M L H L M M H H H L M H H H
Figure -47- Qualitatively Sorted Risks 4
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Exercise 4.14 Qualitative Risk Prioritization Based on the previous exercise, study each risk and assign a value (L, M, H) to each of the following parameter for each risk: 1- Probability 2- Impact 3- Overall Impact `
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -14 - Qualitative Risk Prioritization 4
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4.18 Perform Quantitative Risk Analysis

Definition Perform Quantitative Risk Analysis is the process of numerically analyzing the effect of the identified risks on overall project objectives. Source: PMBOK Guide Fourth Edition, page 294
Perform Quantitative Risk Analysis is performed on risks that have been prioritized by the Qualitative Risk Analysis process as potentially and substantially impacting the projects competing demands. The Perform Quantitative Risk Analysis process analyzes the effect of those risk events and assigns a numerical rating to those risks. It also presents a quantitative approach to making decisions in the presence of uncertainty.
Inputs
1.Risk register 2.Risk management plan 3.Cost management plan 4.Schedule management plan 5.Organizational process assets
Tools & Techniques

1. Data gathering and representation techniques 2. Quantitative risk analysis and modeling techniques 3. Expert judgment
Outputs
1.Risk register update
Figure -48- Perform Quantitative Risk Analysis Process 4
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Process Interaction
Figure -49- Perform Quantitative Risk Analysis Process Interaction 4
4.18.1 Inputs to Perform Quantitative Risk Analysis 1. 2. 3. 4. 5. Risk register Risk management plan Cost management plan Schedule management plan Organizational process assets
4.18.2 Tools and Techniques for Perform Quantitative Risk Analysis 1. Data gathering and representation techniques 2. Quantitative risk analysis and modeling techniques 3. Expert judgment 1. Data gathering and representation techniques Interviewing Interviewing techniques are used to quantify the probability and impact of risks on project objectives. The information needed depends upon the type of probability distributions that will be used Probability distributions Continuous probability distributions represent the uncertainty in values, such as durations of schedule activities and costs of project
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components. Discrete distributions can be used to represent uncertain events, such as the outcome of a test or a possible scenario in a decision tree. Continuous Distribution Examples: Asymmetrical distributions Uniform distributions Probability distribution types are: Uniform Normal Triangular
Below is example for each:

Probability
Probability
Probability
Impact
Impact
Impact
Uniform
Normal
Figure -50- Probability distributions 4
Triangular
2. Quantitative risk analysis and modeling techniques This includes the following techniques: Sensitivity analysis Sensitivity analysis helps to determine which risks have the most potential impact on the project. It examines the extent to which the uncertainty of each project element affects the objective being examined when all other uncertain elements are held at their baseline values. Expected monetary value analysis Expected monetary value (EMV) analysis is a statistical concept that calculates the average outcome when the future includes scenarios that may or may not happen. The EMV of opportunities will generally be expressed as positive values, while those of risks will be negative. EMV is calculated by multiplying the value of each possible outcome by its probability of occurrence, and adding them together. The EMV is calculated by multiplying the value of the event with its probability of happening. Decision tree analysis Decision tree analysis is usually structured using a decision tree diagram that describes a situation under consideration, and the implications of each of the available choices and possible
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scenarios. It incorporates the cost of each available choice, the probabilities of each possible scenario, and the rewards of each alternative logical path. Solving the decision tree provides the EMV for each alternative, when all the rewards and subsequent decisions are quantified. Modeling and simulation A project simulation uses a model that translates the uncertainties specified at a detailed level of the project into their potential impact on project objectives. Simulations are typically performed using the Monte Carlo technique.
4.18.3 Outputs of Perform Quantitative Risk Analysis 1- Risk register update 1. Risk register update The risk register is initiated in the Risk Identification process and updated in Qualitative Risk Analysis. It is further updated in Quantitative Risk Analysis. The risk register is a component of the project management plan. Updates include the following main components: Probabilistic analysis of the project Probability of achieving cost and time objectives Prioritized list of quantified risks Trends in quantitative risk analysis results By the end of this process a risk list with the quantified values will be produced, as the following sample list.
* 1
2 3 4 5
RISK Element
Wrong Track 2 Data on Credit Card Installing Cables by Unqualified Team Delay in Visa Certification In-Operable Encryption S/W In-Availability of Comms from SP
Prb.
50% 40% 30%
Impact Overall Risk 1,000 2,000 1,500 2,000

1,000 500 800 500 800 300 2,900
40% 30%
TOTAL
Figure -51- Quantitatively Sorted Risks 4
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Exercise 4.15 Expected Monetary Value What is the Expected Monetary Value of an event that has 60% chance of making profit? In the case of achieving profit, the profit value will be US$ 10,000, while in the case of loss; the loss value will be US$ 3,000.
Youre Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -15 - Expected Monetary Value 4
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4.19 Plan Risk Responses

Definition Risk Response Planning is the process of developing options, and determining actions to enhance opportunities and reduce threats to the projects objectives. Source: PMBOK Guide Fourth Edition, page 302
Inputs
1.Risk register 2.Risk management plan
Tools & Techniques

1. Strategies for negative risks or threats 2. Strategies for positive risks or opportunities 3. Contingent response strategies 4. Expert judgment
Outputs
1.Risk register updates 2.Risk-related contract decisions 3.Project management plan updates 4.Project document updates
Figure -52- Plan Risk Responses Process 4
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Process Interaction
Figure -53- Plan Risk Responses Process Interaction 4
4.19.1 Inputs to Plan Risk Responses 1. Risk register 2. Risk management plan
4.19.2 Tools and Techniques for Plan Risk Responses 1. 2. 3. 4. Strategies for negative risks or threats Strategies for positive risks or opportunities Contingent response strategies Expert judgment
1. Strategies for negative risks or threats Below are the strategies for the negative risks Risk Avoidance Risk avoidance involves changing the project management plan to: Eliminate the threat posed by an adverse risk Isolate the project objectives from the risks impact Relax the objective that is in jeopardy, such as extending the schedule or reducing scope. Risk Transference Risk transference requires shifting the negative impact of a threat, along with ownership of the response, to a third party.
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Transferring the risk simply gives another party responsibility for its management; it does not eliminate it. Transferring liability for risk is most effective in dealing with financial risk exposure. Risk transference nearly always involves payment of a risk premium to the party taking on the risk. Risk Mitigation Risk mitigation implies a reduction in the probability and/or impact of an adverse risk event to an acceptable threshold. Taking early action to reduce the probability and/or impact of a risk occurring on the project is often more effective than trying to repair the damage after the risk has occurred. Risk Acceptance This is a strategy that is adopted because it is seldom possible to eliminate all risk from a project. This strategy indicates that the project team has decided not to change the project management plan to deal with a risk, or is unable to identify any other suitable response strategy.
2. Strategies for positive risks or opportunities Exploit This strategy may be selected for risks with positive impacts where the organization wishes to ensure that the opportunity is realized. This strategy seeks to eliminate the uncertainty associated with a particular upside risk by making the opportunity definitely happen. Exploiting responses include assigning more talented resources to the project to reduce the time to completion, or to provide better quality than originally planned. Share Sharing a positive risk involves allocating ownership to a third party who is best able to capture the opportunity for the benefit of the project. Enhance This strategy modifies the size of an opportunity by increasing probability and/or positive impacts, and by identifying and maximizing key drivers of these positive-impact risks. Accept Being willing to take an advantage of the opportunity if it comes along, but will not actively pursuing it. 3. Contingent response strategies
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Some responses are designed for use only if certain events occur. For some risks, it is appropriate for the project team to make a response plan that will only be executed under certain predefined conditions. Events that trigger the contingency response (triggers), such as missing intermediate milestones or gaining higher priority with a supplier, should be defined and tracked. 4. Expert judgment Subject matter experts internal or external to the organization, such as engineering or statistical experts, validate data and techniques. 4.19.3 Outputs of Plan Risk Responses 1. 2. 3. 4. Risk register updates Risk-related contract decisions Project management plan updates Project document updates
1. Risk register updates These updates include: Identified risks, their descriptions, area(s) of the project (e.g., WBS element) affected, their causes (e.g., RBS element), and how they may affect project objectives Risk owners and assigned responsibilities Outputs from the Qualitative and Quantitative Risk Analysis processes, including prioritized lists of project risks and probabilistic analysis of the project Agreed-upon response strategies Specific actions to implement the chosen response strategy Symptoms and warning signs of risks occurrence Budget and schedule activities required to implement the chosen responses Contingency reserves of time and cost designed to provide for stakeholders risk tolerances Contingency plans and triggers that call for their execution Fallback plans for use as a reaction to a risk that has occurred, and the primary response proves to be inadequate Residual risks that are expected to remain after planned responses have been taken, as well as those that have been deliberately accepted Secondary risks that arise as a direct outcome of implementing a risk response Contingency reserves that are calculated based on the quantitative analysis of the project and the organizations risk thresholds. 2. Risk-related contract decisions
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Contractual agreements, such as agreements for insurance, services, and other items as appropriate, can be prepared to specify each partys responsibility for specific risks, should they occur. 3. Project management plan updates Schedule management plan Cost management plan Quality management plan Procurement management plan Human Resources management plan Work breakdown structure Schedule baseline Cost performance baseline
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Exercise 4.16 Risk Response Based on the previous exercises, document at least five risks and provide the following: 1- Quantitative Probability, Impact and Overall Impact 2- Risk response (strategy) use all of the following: a. Avoidance b. Transference c. Acceptance d. Mitigation e. Exploit 3- For risks that will have mitigation strategy, identify the mitigation plans and the contingency plans. ` Note: Use form 9.8 in Appendix 2
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ Exercise -16 - Risk Response 4
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Definition Plan Procurement is the process of documenting project purchases decision
Inputs
1. Scope baseline 2. Req. documentation 3. Teaming agreements 4. Risk register 5. Risk-related contract decisions 6. Activity resource req. 7. Project schedule 8. Activity cost estimates 9. Cost performance baseline 10.Enterprise env. factors 11. Organizational PA
Tools & Techniques 1. Make-or-buy analysis 2. Expert judgment 3. Contract types
Outputs
1.Procurement management plan 2.Procurement statements of work 3.Make-or-buy decisions 4.Procurement documents 5.Source selection criteria 6.Change requests
Figure -54- Plan Procurements Process 4
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Process Interaction
Figure -55- Plan Procurements Data Flow 4
Contracts A contract is a mutually binding legal agreement that obligates the seller to provide the specified products, services, or results, and obligates the buyer to pay the seller. Buyer Seller Model The seller can be called a contractor, subcontractor, vendor, service provider, or supplier, depending on the buyers position in the project acquisition cycle. The buyer can be called a client, customer, prime contractor, contractor, acquiring organization, governmental agency, service requestor, or purchaser. The seller can be viewed during the contract life cycle first as a bidder, then as the selected source, and then as the contracted supplier.
4.20.1 Inputs to Plan Procurements 1. 2. 3. 4. 5. 6. 7. 8. 9. Scope baseline Req. documentation Teaming agreements Risk register Risk-related contract decisions Activity resource req. Project schedule Activity cost estimates Cost performance baseline
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10. Enterprise environmental factors 11. Organizational process assets 4.20.2 Tools and Techniques for Plan Procurements 1. Make-or-buy analysis 2. Expert judgment 3. Contract types 1. Make-or-Buy Analysis Some general rules to keep in mind during the decision-making process are: Leverage internal resources first (staff, factories, etc.) and supplement with procured resources as needed. Consider both the direct costs and indirect costs during makeor-buy analysis. Primary contractors may subcontract parts of the work. Considering that overhead expenses will be charged by both parties, it may not be advantageous to the primary contractor to subcontract the majority (over half) of the work. Reasons to Make over Buy Sometimes, the organization may decide to make the product internally, rather than outsourcing it from outside based on many factors, like: Protect proprietary information that provides competitive advantage Surplus staff Surplus plant capacity Ease of project control Make-or-buy decisions should always take into consideration both the direct costs to the buyer and the indirect costs to the buyer
Make Product Direct Costs: Labor Material Other Indirect Costs: Overhead Salaries of Executives General Administrative Other Buy Product Direct Costs: Purchase price Other Indirect Costs: Contract administration Other
Table -5 - Reasons to Make over Buy 4
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Exercise 4.17 Make or Buy Decision Based on the supplied case study, which part of the project will your organization prefer to make and which part your organization will prefer to buy? Provide your reasons.
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -17 - Make or Buy Decision 4
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2. Expert Judgment Expert technical judgment will often be required to assess the inputs to and outputs from this process. Expert purchasing judgment can also be used to develop or modify the criteria that will be used to evaluate offers or proposals made by sellers. 3. Contract Types The three major types of contracts are: Fixed-price or lump-sum contracts. Cost-reimbursable contracts. Cost-Plus-Fee (CPF) or Cost-Plus-Percentage of Cost (CPPC). Cost-Plus-Fixed-Fee (CPFF). Cost-Plus-Incentive-Fee (CPIF). Time and Material (T&M) contracts. Although there are three choices of contract type from which to choose, the default choice commonly selected is fixed-price. This may cause problems for the project if the conditions under which to use this contract type are not true. For example, fixed-price contracts are most useful when no scope changes are expected Purchase Order (PO) Purchase Order (PO) is a legal document (contract) issued by the buyer authorizing a purchase. It is a unilateral document in that only one party; the buyer in this case, need sign the document. POs are used for simple procurements.
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Fixed Price Contract Fixed Price Other Names When to Use Disadvantages Lump-sum, Firm Fixed Price, FP Scope of work is well defined Substantial changes are not expected Requires least amount of managerial oversight by buyer Least cost risk to buyer if scope is well defined Seller has incentive to control costs Project budget is known at the beginning Takes greatest effort to create scope of work Scope changes are difficult to accommodate and typically expensive Firm Fixed Price Contracts (FFP) Fixed Price Incentive Fee Contracts (FPIF) Fixed Price with Economic Price Adjustment Contracts (FP-EPA) Seller assuming that the product is well defined, the seller carries the most risk for higher costs
Table -6 - Fixed Price Contract 4
Advantages
Forms of Contract Type Cost Risk Carried By
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Cost-Reimbursable Contract Fixed Price Other Names When to Use CR Advantages Desired results are known but requirements to achieve results are not known Flexibility in change control is needed Takes less effort to create scope of work than FP Provides more flexibility to the buyer in accommodating scope changes than FP
Disadvantages
Requires greater amount of managerial oversight by buyer than FP Seller has less incentive to control costs than in FP Cost plus Fixed Fee Contracts (CPFF) Cost Plus Incentive Fee Contracts (CPIF) Cost Plus Award Fee Contracts (CPAF)
Forms of Contract Type Cost Risk Carried By
Buyer total costs are not known until project completion
Table -7 - Cost Reimbursable Contract 4
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Time and Material Contract Fixed Price Other Names When to Use T&M, Unit Price, Hybrid of FP and CR Short-term project Scope of work is not well defined Cost is small Buyer wants more control Takes least effort to create scope of work and contract Ease of use when the item being purchased is skilled labor (engineering or technical) or when work must begin immediately (repairs, emergencies, etc.) Seller has no incentive to control costs Requires greatest amount of day-to-day oversight by buyer
Advantages
Disadvantages
Cost Risk Carried By
Buyer medium risk because T&M typically used for short-term delivery. The seller has no financial risk on T&M contracts.
Table -8 - Time and Material Contract 4
4.20.3 Outputs of Plan Procurements 1. 2. 3. 4. 5. 6. Procurement management plan Procurement statements of work Make-or-buy decisions Procurement documents Source selection criteria Change requests
1. Procurement Management Plan The Procurement Management plan document contains the guidelines of how the organization will go about the procurement in this project, it contains the following information: Types of contracts to be used Risk management issues Whether independent estimates will be used and if they are needed as evaluation criteria;
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Those actions the project management team can take unilaterally, if the performing organization has a prescribed procurement, contracting, or purchasing department. Standardized procurement documents Managing multiple suppliers Coordinating procurement with other project aspects, such as scheduling and performance reporting. Any constraints and assumptions that could affect planned procurements. Handling the make-or-buy decisions and linking them into the Administer Procurements and Close Procurements Setting the scheduled dates in each contract for the contract deliverables and coordinating with the schedule development and control processes Identifying requirements for performance bonds or insurance contracts to mitigate some forms of project risk; Establishing the direction to be provided to the sellers on developing and maintaining a work breakdown structure (WBS) Establishing the form and format to be used for the procurement/contract statements of work Identifying pre-qualified sellers, if any to be used Procurement metrics to be used to manage contracts and evaluate sellers
2. Procurement Statements of Work Each procurement statement of work defines, for those items being purchased or acquired, just the portion of the project scope that is included within the related contract. The statement of work (SOW) for each contract is developed from: The project scope statement The project work breakdown structure (WBS) WBS dictionary. The procurement SOW describes the procurement item in sufficient detail to allow prospective sellers to determine if they are capable of providing the item. 3. Make-or-Buy Decisions The documented decisions of what project products, services, or results will be either acquired or will be developed by the project team. 4. Procurement Documents A term such as proposal is generally used when other considerations, such as technical skills or technical approach, are paramount. However, the terms are often used interchangeably and care is taken not to make unwarranted assumptions about the implications of the term used.
4- Planning Phase
A term such as proposal is generally used when other considerations, such as technical skills or technical approach, are paramount. However, the terms are often used interchangeably and care is taken not to make unwarranted assumptions about the implications of the term used. Common Names for Different Types of Procurement Documents Invitation for bid (IFB) Request for proposal (RFP) Request for quotation (RFQ) Tender notice Invitation for negotiation Contractor initial response. Comparison of Procurement Documents Types Type IFB, ITB, RFB RFI When to use For simple procurements To obtain best price from prospective seller(s) To obtain information on a specific company or product from prospective seller(s) For less complex procurements To obtain information and firm quotes from prospective seller(s). Takes less time than RFP to: write, receive response from sellers, and evaluate Used for complex procurements such as new development To obtain firm quotes from prospective seller(s), but also a description in detail of the sellers approach to fulfilling requirements: management approach, key human resource requirements, technical specifications, special provisions, terms and conditions, etc. Takes more time than RFQ to: write, receive response from sellers, and evaluate
RFQ
RFP, RFT
Table -9 - Comparison of Procurement Documents Types 4
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5. Source Selection Criteria During the planning phase, the project team will identify the selection criteria, on which the project source or vendor selection will be based on. Below are some factors of a typical selection criteria: Understanding of need Overall or life-cycle cost Technical capability Risk Management approach Technical approach Warranty Financial capacity Production capacity and interest Business size and type Past performance of sellers References Intellectual property rights Proprietary rights
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Exercise 4.18 Contract Types 1- Based on the supplied case study, what contract should your organization engage with the supplier? Provide your reasons. 2- What are the project circumstance that will make your organization go in this project in the following contracts: a. Fixed Price b. Time and Material
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -18-Contract Types 4
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5. Project Execution Phase

This is the phase where all the project plans are executed and moved from being on paper to reality on the ground. During this phase, the following eight execution processes are executed: 4.3 Direct and Manage Project Execution 8.2 Perform Quality Assurance 9.2 Acquire Project Team 9.3 Develop Project Team 9.4 Manage Project Team 10.3 Distribute Information 10.4 Manage Stakeholder Expectations 12.2 Conduct Procurements
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5.1 Direct and Manage Project Execution
Definition Direct and Manage Project Execution is the process of performing the work defined in the project management plan to achieve the project objectives. Source: PMBOK Guide Fourth Edition, page 83
Inputs
1.Project management plan 2.Approved change requests 3.Enterprise environmental factors 4.Organizational process assets
Tools & Techniques 1. Expert judgment 2. Project management information system
Outputs
1.Deliverables 2.Work performance information 3.Change requests 4.Project management plan updates 5.Project document updates
Figure -1- Direct and Manage Project Execution Process 5
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Process Interaction
Figure -2- Direct and Manage Project Execution Process Interaction 5
5.1.1 Inputs to Direct and Manage Project Execution 12341 Project management plan Approved change requests Enterprise environmental factors Organizational process assets Enterprise Environmental Factors Organizational, company or customer culture and structure Infrastructure (e.g. existing facilities and capital equipment) Personnel administration (e.g. hiring and firing guidelines, employee performance reviews and training records) Stakeholder risk tolerances Project management information systems
2- Organizational Process Assets Standardized guidelines and work instructions Communication requirements defining allowed communication media, record retention, and security requirements Issue and defect management procedures defining issue and defect controls, issue and defect identification and resolution , and action item tracking Process measurement database used to collect and make available measurement data on processes and products Project files from prior projects
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Issue and defect management database containing historical issue and defect status, control information, issue and defect resolution, and action item results. 5.1.2 Tools and Techniques for Direct and Manage Project Execution 1- Expert judgment 2- Project management information system 1. Expert judgment Other units from the organization Consultants Stakeholders, including customers or sponsors Professional and technical associations 2. Project management information system It is an automated system, is used by the project management team to: Support generation of a preliminary project scope statement Facilitate feedback as the document is refined Control changes to the project scope statement Release the approved document 5.1.3 Outputs of Direct and Manage Project Execution 12345Deliverables Work performance information Change requests Project management plan updates Project document updates
1. Deliverables Unique and verifiable product Must be produced to complete the process, phase or a cycle 2. Work performance information Deliverable status Schedule progress Costs incurred 3. Change requests Corrective action Preventive action Defect repair Updates 4. Project management plan updates
5- Execution Phase
Requirements management plan Schedule management plan Cost management plan Quality management plan Human resource plan Communications management plan Risk management plan Procurement management plan Project baseline
5. Project document updates Requirements documents Project logs (issue, assumptions. etc.) Risk register Stakeholder register
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Definition Perform Quality Assurance is the process of auditing the quality requirements and the results from quality control measurements to ensure appropriate quality standards and operational definitions are used.
Inputs
1.Project management plan 2.Quality metrics 3.Work performance information 4.Quality control measurements
Tools & Techniques

1. Plan Quality and Perform Quality Control tools and techniques 2. Quality audits 3. Process analysis
Outputs
1.Organizational process asset updates 2.Change requests 3.PM plan updates 4.Project document updates
Figure -3 - Perform Quality Assurance Process 5
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Process Interaction
Project management plan updates

Work Performance information
Quality management plan Process improvement plan
Involved Documents (IN) Quality control measurements Quality metrics Quality management plan Process improvement plan Work performance information Involved Documents (OUT) Organizational process assets updates Change requests Project management plan updates Project document updates
8.1 Plan Quality
Quality Metrics
8.2 Perform Quality Assurance 8.3 Perform Quality Control

Quality Control measurements
Change requests
Organizational process assets updates
Project ` Documents
4.5 Perform Integrated change Control
Figure -4- Perform Quality Assurance Process Interaction 5
5.2.1 Inputs of Perform Quality Assurance 1234Project management plan Quality metrics Work performance information Quality control measurements
5.2.2 Tools and Techniques for Perform Quality Assurance 1- Plan Quality and Perform Quality Control tools and techniques 2- Quality audits 3- Process analysis 1. Plan Quality and Perform Quality Control Cost-benefit analysis Cost of quality Control charts Benchmarking Design of experiments Statistical sampling Flowcharting Proprietary quality management methodologies Additional quality planning tools
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2. Quality Metrics Structured, independent review to determine whether project activities comply with policies, processes, and procedures. The objective of a quality audit is to identify inefficient and ineffective policies, processes, and procedures in use on the Quality audits may be scheduled or at random, and may be carried out by properly trained in-house auditors or by third parties. Quality audits confirm the implementation of approved change requests, corrective actions, defect repairs, and preventive actions. 3. Process Analysis Process analysis follows the steps outlined in the process improvement plan to identify any needed improvements. This analysis also examines: Problems experienced Constraints experienced Non-value-added activities Includes root cause analysis, a specific technique to analyze a problem / situation, determine the underlying causes that lead to it, and create preventive actions for similar problems.
5.2.3 Outputs of Perform Quality Assurance 2345Organizational process asset updates Change requests PM plan updates Project document updates
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Exercise 5.1 Quality Assurance Activities Based on the provided case study, identify some activates that you need to perform to ensure the adherence to the required quality
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -1 - Quality Assurance Activities 5
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5.3 Acquire Project Team

Definition Acquire Project Team is the process of confirming human resource availability and obtaining the team necessary to complete project assignments.
Inputs
1.Project management plan 2.Enterprise environmental factors 3.Organizational process assets
Tools & Techniques

1. Pre-assignment 2. Negotiation 3. Acquisition 4. Virtual teams
Outputs
1.Project staff assignments 2.Resource calendars 3.Project management plan updates
Figure -5 - Sequence Activities Process 5
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Process Interaction
Figure -6- Acquire Project Team Process Interaction 5
5.3.1 Inputs of Acquire Project Team 1- Project management plan 2- Enterprise environmental factors 3- Organizational process assets Enterprise Environmental Factors - Existing information for human resources including who is available - Personnel administration policies such as those that affect outsourcing - Organizational structure - Location or multiple locations
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5.3.2 Tools and Techniques for Acquire Project Team 1234Pre-assignment Negotiation Acquisition Virtual teams
1. Pre-assignment In some cases, project team members are known in advance. This situation can occur if: - The project is the result of specific people being promised as part of a competitive proposal. - The project is dependent on the expertise of particular persons. - Some staff assignments are defined within the project charter. 2. Negotiation The project management team may need to negotiate with: - Functional managers to ensure that the project receives appropriately competent staff in the required time frame. - Other project management teams within the performing organization to appropriately assign scarce or specialized resources. 3. Acquisition When the performing organization lacks the in-house staff needed to complete the project, the required services can be acquired from outside sources. This can involve hiring individual consultants or subcontracting work to another organization. 4. Virtual Team Virtual team creates new possibilities when acquiring project team members. Virtual teams can be defined as groups of people with a shared goal, who fulfill their roles with little or no time spent meeting face to face. The availability of electronic communication, such as email and video conferencing, has made such teams feasible. The virtual team format makes it possible to: Form teams of people from the same company who live in widespread geographic areas. Add special expertise to a project team, even though the expert is not in the same geographic area. Incorporate employees who work from home offices. Form teams of people who work different shifts or hours Include people with mobility handicaps. Move forward with projects that would have been ignored due to travel expenses.
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5.3.3 Outputs of Acquire Project Team 1- Project staff assignments. 2- Resource calendars. 3- Project management plan updates. 1. Project Staff Assignments The project is staffed when appropriate people have been assigned to work on it. Documentation can include: - Project team directory - Memos to team members - Names inserted into other parts of the project management plan, such as project organization charts and schedules. 2. Resource calendars Each resource will have a calendar that documents the time period he or she will be available during the project life cycle. 3. Project management plan updates As part of the project management plan, updates to the human resource plan may reflect any changes or additions that respond to any planning output.
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5.4 Develop Project Team

Definition Develop Project Team is the process of improving the competencies, team interaction, and the overall team environment to enhance project performance. Source: PMBOK Guide Fourth Edition, page 229
Inputs
1.Project staff assignments 2.Project management plan 3.Resource calendars
Tools & Techniques

1. Interpersonal skills 2. Training 3. Team-building activities 4. Ground rules 5. Co-location 6. Recognition and rewards
Outputs
1.Team performance assessments 2.Enterprise environmental factors updates
Figure -7- Develop Project Team Process 5
Objectives of Developing Project Team - Improve knowledge and skills of team members - Improve feelings of trust and agreement among team members - Create a dynamic and cohesive team culture
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Process Interaction
Figure -8- Develop Project Team Process Interaction 5
5.4.1 Inputs to Develop Project Team 1- Project staff assignments 2- Project management plan 3- Resource calendars 5.4.2 Tools and Techniques for Develop Project Team 123456Interpersonal skills Training Team-building activities Ground rules Co-location Recognition and rewards
1. Interpersonal skills Interpersonal skills, sometimes known as Soft skills, are particularly important to team development. The following aspects are part of the soft skills the project manager should practice: - Understanding the sentiments of project team members - Anticipating their actions
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- Acknowledging their concerns - Following up on their issues Key interpersonal skills include, but not limited to the following: - Leadership - Team Building - Motivation - Communication - Influencing - Decision Making - Political and Cultural Awareness - Negotiations Source: PMBOK Guide Fourth Edition, page 417 Leadership Leadership involves focusing the efforts of a group of people towards a common goal. The key elements are respect and trust rather than fear and submission. Team Building It is the process of helping a group of individuals to work interdependently with each other. Team building activities: - Establish goals - Define and negotiate roles and procedures Team building Processes: - Communication - Conflict management - Motivation - Leadership Motivation Project success depends highly on the team commitment, which is related to their level of motivation. It involves creating the environment to meet the project objectives. Communication It is identified as one of the single biggest reason for project success (or failure). Project manager should be aware of: - Communication styles of other parties - Cultural issues - Relationships - Personalities - Situational context Influencing It is the strategy of sharing power. It involves relying on the interpersonal skills to get others to cooperate towards a common goal like:
5- Execution Phase
Lead by example Clarify how eh decision will be made Use flexible interpersonal style Apply the power skillfully and cautiously
Decision Making Four basic decision making styles: - Command - Consultation - Consensus - Coin Flip (random) A decision making model (Six Phase): - Problem definition - Problem solution generation - Ideas to action - Solution action planning - Evaluation of the outcome and process Political and Cultural Awareness Politics are inevitable in project environments. Skillful use of politics and power will help the project managers to succeed. Ignoring project politics will lead to difficulty in managing people Negotiations It is the strategy of conferring with parties of shared or opposed interests. The focus is on compromising or reaching an agreement. It is an integral part of project management, if done well, increases the chances of success
2. Training Training includes all activities designed to enhance the competencies of the project team members. Training can be formal or informal. Examples of training methods include: - Classroom - Online - Computer-based - On-the-job training from another project team member - Mentoring - Coaching 3. Team-Building Activities Team building activities include management and individual actions taken specifically and primarily to improve team performance. Enhancing team performance can result from various activities. A few examples are: - Involving team members in the planning process - Establishing rules for dealing with conflict
5- Execution Phase
- Improving the climate for team discussions - Improving stakeholder interaction by holding an off-site, professionally facilitated event. Team Formation Stage Forming: Initial judgments about teammates are made Storming: Control issues emerge Norming: Productive works begins Performing: Optimum productivity reached Adjourning: Project is done, team moves out of the project 4. Ground Rules Ground rules establish clear expectations regarding acceptable behavior by project team members. Early commitment to clear guidelines decreases misunderstandings and increases productivity. The process of discussing ground rules allows team members to discover values that are important to one another. All project team members share responsibility for enforcing the rules once they are established. 5. Co-Location Co-location involves placing many or all of the most active project team members in the same physical location. This is to enhance their ability to perform as a team. Co-location can be temporary, such as at strategically important times during the project, or for the entire project. Co-location strategy can include a meeting room, sometimes called a war room, with electronic communication devices, places to post schedules, and other conveniences that enhance communication and a sense of community. 6. Recognition and Rewards Part of the team development process involves recognizing and rewarding desirable behavior. Only desirable behavior should be rewarded. Willingness to work overtime to meet an aggressive schedule objective should be rewarded. Needing to work overtime as the result of poor planning should not be rewarded. Win-lose (zero sum) rewards that only a limited number of project team members can achieve, such as team member of the month, can hurt team cohesiveness. Rewarding win-win behavior that everyone can achieve, such as turning in progress reports on time, tends to increase support among team members.
5.4.3 Outputs of Develop Project Team 1- Team performance assessments 2- Enterprise environmental factors updates
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Motivational Theories When planning reward and recognition activities, as well as when using a project managers reward power, motivational theory is an important consideration. What motivates people to perform? Consider the theories of: - Maslow - McGregor - Herzberg. Maslows Hierarchy of Needs According to Maslows theory: - Once a level of need is satisfied, it is no longer a motivational factor. - One cannot ascend to the next level until the levels below are fulfilled. - People do not perform for security or money, but rather to get a chance to contribute (self-actualization).
SelfActualizat ion
Self-fulfillment, growth, learning
Esteem
Social
Accomplishment, respect
Love, affection, approval Security, stability, free from harm

Air, water, food, housing, clothing
Safety Physiological
Figure -9- MaslowsHierarchyofNeeds 5
McGregors Theory of X & Y Theory X: Workers are lazy and require close and constant supervision. Theory Y: Workers want to work and do not require constant supervision. Herzbergs Theory
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Motivating Agents: Motivators are mostly intrinsic to the job and serve as motivators. Hygiene Factors (Demotivators): Are mostly environmental, the absence of which demotivate, however when present do not necessarily serve to motivate.
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5.5 Manage Project Team
Definition Manage Project Team is the process of tracking team member performance, providing feedback, resolving issues, and managing changes to optimize project performance. Source: PMBOK Guide Fourth Edition, page 236
Inputs
1.Project staff assignments 2.Project management plan 3.Team performance assessments 4.Performance reports 5.Organizational process assets
Tools & Techniques

1. Observation and conversation 2. Project performance appraisals 3. Conflict management 4. Issue log 5. Interpersonal skills
Outputs
1.Enterprise environmental factors updates 2.Organizational process assets updates 3.Change requests 4.Project management plan updates
Figure -10- Manage Project Team Process 5
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Process Interaction
Figure -11- Manage Project Team Process Interaction 5
5.5.1 Inputs to Manage Project Team 1. 2. 3. 4. 5. Project staff assignments Project management plan Team performance assessments Performance reports Organizational process assets
5.5.2 Tools and Techniques for Manage Project Team 1. 2. 3. 4. 5. Observation and conversation Project performance appraisals Conflict management Issue log Interpersonal skills
1. Observation and conversation The project manager needs to stay in touch with the work and attitudes of project team members. Monitors indicators such as: - Progress toward project deliverables - Accomplishments - Interpersonal issues. 2. Project Performance Appraisals
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The need for formal or informal project performance appraisals depends on: - The length of the project - Complexity of the project - Organizational policy - Labor contract requirements - The amount and quality of regular communication. Objectives for conducting performance appraisals during the course of a project can include: - Re-clarification of roles and responsibilities - Structured time to ensure team members receive positive feedback in what might otherwise be a hectic environment - Discovery of unknown or unresolved issues - Development of individual training plans - Establishment of specific goals for future time periods. 3. Conflict Management Successful conflict management results in greater productivity and positive working relationships. Sources of conflict include scarce resources, scheduling priorities, and personal work styles. Team ground rules, group norms, and solid project management practices, like communication planning and role definition, reduce the amount of conflict. When managed properly, differences of opinion are healthy, and can lead to increased creativity and better decision-making. When the differences become a negative factor, project team members are initially responsible for resolving their own conflicts. If conflict escalates, the project manager should help facilitate a satisfactory resolution. Conflict should be addressed early and usually in private, using a direct, collaborative approach. If disruptive conflict continues, increasingly formal procedures will need to be used, including the possible use of disciplinary actions. The term conflict often carries negative connotations. Conflict is inevitable on most projects due to many factors: - Competing needs of stakeholders - Competition for limited resources - Limited power of the project manager Unnecessary conflict can be avoided to some extent through: - Communication to stakeholders of project objectives, status, and changes - Clearly and separately assigned tasks Examples of Sources of Conflict - Personalities - Cost Objectives - Schedule Objectives
5- Execution Phase
Administrative procedures Project Priorities Limited Human Resources (Personnel) Technical Opinions
Conflict Resolution Approaches - Withdrawing / Avoiding: Retreating from the area of disagreement or postponing a decision that will likely cause conflict - Smoothing / Accommodating: Emphasizes areas of agreement, not differences of opinion - Compromising: Give and take approach that brings some degree of satisfaction to all parties - Forcing: Imposing one viewpoint at the expense of another - Collaborating: Including multiple viewpoints from different perspectives. - Confronting / Problem Solving: identify the real problem, then solve it 4. Issue log A written log should document persons responsible for resolving specific issues by a target date. The log helps the project team monitor issues until closure. Issue resolution addresses obstacles that can block the team from achieving its goals. These obstacles can include factors such as differences of opinion, situations to be investigated, and emerging or unanticipated responsibilities that need to be assigned to someone on the project team.
5. Interpersonal Skills High command on interpersonal skills is required from the project team to properly handling conflicts. Detailed skills are included in section 9.3.2 above, however the following ones are important to be applied to resolve team conflicts within the project: - Leadership - Influencing - Decision making
5.5.3 Outputs of Manage Project Team 1234Enterprise environmental factors updates Organizational process assets updates Change requests Project management plan updates
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5.6 Distribute Information
Definition Distribute information is the process of making relevant information available to project stakeholders as planned. Source: PMBOK Guide Fourth Edition, page 258
Effective Information Distribution Effective information distribution includes a number of techniques including: Sender-receiver models Choice of media Writing style Meeting management techniques Presentation techniques Facilitation techniques
Inputs
1.Project management plan 2.Performance reports 3.Organizational process assets
Tools & Techniques

1. Communication methods 2. Information Distribution tools
Outputs
1.Organizational process assets updates
Figure -12- Distribute Information Process 5
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Process Interaction
Figure -13- Distribute Information Process Interaction 5
5.6.1 Inputs to Distribute Information 1- Project management plan 2- Performance reports 3- Organizational process assets
5.6.2 Tools and Techniques for Distribute Information 1- Communication methods 2- Information Distribution tools 1. Communication methods To achieve the effective communication, the project team has to use all possible and available communication methods. This includes, but limited to: Individual meetings Group meetings Video and audio conferences Computer chats Remote communication methods
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2. Information Distribution tools Project information can be distributed by many tools, including: Project meetings Hard-copy document distribution Manual filing systems Shared-access electronic databases E-mail Fax Voice mail Telephone Video Web conferencing Web publishing Electronic tools for project management, such as Web interfaces to scheduling and project management software, meeting and virtual office support software, portals, and collaborative work management tools.
5.6.3 Outputs of Distribute Information 1- Organizational process assets updates 1. Organizational process assets updates The following documents may be updated as a result of this process: Stakeholder notifications Project reports Project presentations Project records Feedback from stakeholders Lessons learned documentation
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5.7 Manage Stakeholder Expectations
Definition Manage stakeholder expectations is the process of communicating and working with stakeholders to meet their needs and addressing issues as they occur. Source: PMBOK Guide Fourth Edition, page 261
Proactive Approach Managing stakeholders is a proactive approach in the following perspectives: Managing stakeholders expectations increase the chance of project acceptance Proactively managing concerns before turning into issues Resolve identified issues before they become concerns, problems and then disasters
Figure -14- Manage Stakeholder Expectations Process 5
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Process Interaction
Figure -15- Manage Stakeholder Expectations Process Interaction 5
5.7.1 Inputs to Manage Stakeholder Expectations 1. 2. 3. 4. 5. 6. Stakeholder register Stakeholder management strategy Project management plan Issue log Change log Organizational process assets
5.7.2 Tools and Techniques for Manage Stakeholder Expectations 1. Communication methods 2. Interpersonal skills 3. Management skills
1. Interpersonal Skills Managing stakeholders need applying interpersonal skills, like: Building trust Resolve conflicts Active listening
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Overcoming resistance to change
5.7.3 Outputs of Manage Stakeholder Expectations 1234Organizational process assets updates Change requests Project Management plan updates Project document updates
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5.8 Conduct Procurement
Definition Conduct Procurement is the process of obtaining seller responses, selecting a seller, and awarding a contract.
Inputs
1. PM plan 2. Procurement documents 3. Source selection criteria 4. Qualified seller list 5. Seller proposals 6. Project documents 7. Make-or-buy decisions 8. Teaming agreements 9. Organizational PA
Tools & Techniques

1. Bidder conferences 2. Proposal evaluation techniques 3. Independent estimates 4. Expert judgment 5. Advertising 6. Internet search 7. Procurement negotiations
Outputs
1.Selected sellers 2.Procurement contract award 3.Resource calendars 4.Change requests 5.Project management plan updates 6.Project document updates
Figure -16 - Conduct Procurement Process 5
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Process Interaction
Figure -17- Conduct Procurement Data Flow 5
5.8.1 Inputs of Conduct Procurement 123456789Project Management plan Procurement documents Source selection criteria Qualified seller list Seller proposals Project documents Make-or-buy decisions Teaming agreements Organizational process assets
5.8.2 Tools and Techniques for Conduct Procurement 1234567Bidder conferences Proposal evaluation techniques Independent estimates Expert judgment Advertising Internet search Procurement negotiations
1. Bidder Conferences Bidder conferences are meetings with prospective sellers prior to preparation of a bid or proposal. They are used to ensure that all prospective sellers have a clear, common understanding of the procurement. Responses to questions can be incorporated into the
5- Execution Phase
procurement documents as amendments. All potential sellers are given equal standing during this initial buyer and seller interaction to produce the best bid. 2. Proposal Evaluation Techniques Proposals are seller-prepared documents that describe the sellers ability and willingness to provide the requested products, services, or results described in the procurement documentation. Proposals are prepared in accordance with the requirements of the relevant procurement documents and reflect the application of applicable contract principles. The sellers proposal constitutes a formal and legal offer in response to a buyers request. After a proposal is formally submitted, the buyer sometimes requests the seller to supplement its proposals with an oral presentation. The oral presentation is meant to provide additional information with respect to the sellers proposed staff, management proposal, and technical proposal, which can be used by the buyer in evaluating the sellers proposal. Evaluation Criteria Evaluation criteria are developed and used to rate or score proposals. They can be Objective or subjective Evaluation criteria are often included as part of the procurement documents. Selection criteria can be identified and documented to support an assessment for a more complex product or service. Evaluation criteria can be as straightforward as price only. It can also be complex, based on ratings in several categories: Demonstrated understanding of requirements Management Approach Technical capacity Life cycle cost Financial capacity (stability ) Project management capacity (Organizational pm maturity) Past performance on similar projects Weighting System It is a method for quantifying qualitative data to minimize the effect of personal prejudice on seller selection. Most such systems involve assigning a numerical weight to each of the evaluation criteria, rating the prospective sellers on each criterion, multiplying the weight by the rating, and totaling the resultant products to compute an overall score. Weighting systems typically involve four steps: Assign a numerical weight (percentage) to each of the evaluation criteria Rate prospective sellers, or their proposal, on each criterion Multiply the weight from step 1 by the rate from step 2 to derive the score for that criterion
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5- Execution Phase
Add all scores from step 3 to derive the total score for each seller
Below is an example of an evaluation sheet that compares between two proposals: Proposal 1 Evaluation Criteria Demonstrated understanding requirements Weight 20% of 20% Rating Score Proposal 2 Rating Score
Management Approach Project management capacity (Organizational pm maturity) Key human resource requirements Technical capacity Skills Knowledge Life cycle cost Purchase price Operating cost Financial (stability ) capacity
15%
20%
10%
Past performance similar projects Total
on
15% 100 %
Table -1 - Weighting System 5
3. Independent Estimates The procuring organization can either prepare its own independent estimates or have prepared an independent estimate of the costs as a check on proposed pricing. This independent estimate is sometimes
5- Execution Phase
referred to as a Should-cost estimate. Significant differences from these cost estimates can be an indication that the contract statement of work was not adequate
4. Expert Judgment May include: Multi-discipline review teams Cross-functional discipline 5. Advertising Existing lists of potential sellers can often be expanded by placing advertisements in general circulation publications. Some government jurisdictions require public advertising of certain types of procurement items; most government jurisdictions require public advertising of pending government contracts.
6. Internet Search Internet is considered to be a very good source for small commodities procurement. It may not be appropriate for large projects where close monitoring is required. 7. Procurement Negotiations It clarifies the structure and requirements of the contract so that mutual agreement can be reached prior to signing the contract. The final contract language reflects all agreements reached. The subjects covered include: Responsibilities and authorities Applicable terms and law Technical and business management approaches Proprietary rights Contract financing Technical solution Overall schedule Payments and price. 5.8.3 Outputs of Conduct Procurement 123456Selected sellers Procurement contract award Resource calendars Change requests Project management plan updates Project document updates
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5- Execution Phase
Exercise 5.2 Evaluation Criteria Based on the provided case study; set evaluation criteria to select between the proposals. Use the format shown in the Weighting System section. Assign weight to each criterion, make sure that a total is 100%.
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -2 - Evaluation Criteria 5
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6- Monitor and Control Phase
6. Project Monitor and Control Phase

Nothing is easier than putting mice plans on paer and hanging project schedules on the ealls. But the realy challenge is ensuring that these plans are really implemented as the way they are planned. Control is needed to ensure that all planned activeitoes hat are being executed ae really achieving their planned tarher. This is the main functin of the following ten Monitor and Control process group: 4.4 Monitor and Control Project Work 4.5 Perform Integrated Change Control 5.4 Verify Scope 5.5 Control Scope 6.6 Control Schedule 7.3 Control Costs 8.3 Perform Quality Control 10.5 Report Performance 11.6 Monitor and Control Risks 12.3 Administer Procurements
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6.1 Monitor and Control Project Work
Definition Monitor and Control Project Work is the process of tracking, reviewing, and regulating the progress to meet the performance objectives defined in the project management plan. Source: PMBOK Guide Fourth Edition, page 89
Monitoring is an aspect of project management performed throughout the project. Monitoring includes collecting, measuring and distributing performance information, and assessing measurements and trends to effect process improvements. The Monitor and Control Project Work process is concerned with: Comparing actual project performance against the project management plan Assessing performance to determine whether any corrective or preventive actions are indicated and then recommending those actions as necessary Identifying new risks and analyzing, tracking, and monitoring existing project risks Maintaining an accurate, timely information base concerning the project's product (s) and their associated documentation through project completion. Provide information to support status reporting, progress measurement, and forecasting Providing forecasts to update current cost and schedule information Monitoring implementation of approved changes as they occur
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Inputs
1.Project management plan 2.Performance reports 3.Enterprise environmental factors 4.Organizational process assets
Tools & Techniques

1. Expert judgment
Outputs
1.Change requests 2.Project management plan updates 3.Project document updates
Figure -1- Monitor and Control Project Work Process 6
Process Interaction
Figure -2- Monitor and Control Project Work Process Interaction 6
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6.1.1 Inputs to Monitor and Control Project Work 1. 2. 3. 4. Project management plan Performance reports Enterprise environmental factors Organizational process assets
6.1.2 Tools and Techniques for Monitor and Control Project Work 1. Expert judgment 6.1.3 Outputs of Monitor and Control Project Work 1- Change requests 2- Project management plan updates 3- Project document updates 1. Change requests Corrective action Preventive action Defect repair 2. Project management plan updates Not limited to: Schedule management plan Cost management plan Quality management plan Scope baseline Schedule baseline Cost performance baseline 3. Project document updates Not limited to: Forecasts Performance reports Issue log
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6.2 Perform Integrated Change Control
Definition Perform Integrated Change Control is the process of reviewing all change requests, approving changes and managing changes to the deliverables, organizational process assets, project documents and the project management plan. Source: PMBOK Guide Fourth Edition, page 93
Change Management Activities Influencing the factors that circumvent integrated change control so that only approved changes are implemented' Reviewing analyzing and approving change requests promptly, which is essential, as a slow decision may negatively affect time, cost, or the feasibility of a change Managing the approved changes Maintaining the integrity of baseline by releasing only approved changes for incorporations into the project management plan and project documents. Reviewing, approving, or denying all recommended corrective and preventive actions. Coordinating changes across the entire project (e.g. a proposed schedule change will often affect cost, risk, quality and staffing) Documenting the complete impact of change requests
Configuration Management Activities Configuration identification Configuration status accounting Configuration verification and audit
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Inputs
1.Project management plan 2.Work performance information 3.Change requests 4.Enterprise environmental factors 5.Organizational process assets
Tools & Techniques 1. Expert judgment 2. Change control meetings
Outputs
1.Change requests 2.Project management plan updates 3.Project document updates
Figure -3- Perform Integrated Change Control Process 6
Process Interaction
Figure -4- Perform Integrated Change Control Process Interaction 6
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6.2.1 Inputs to Perform Integrated Change Control 1. 2. 3. 4. 5. Project management plan Work performance information Change requests Enterprise environmental factors Organizational process assets
6.2.2 Tools and Techniques for Perform Integrated Change Control 1. Expert judgment 2. Change control meetings 6.2.3 Outputs of Perform Integrated Change Control 1. Change requests 2. Project management plan updates 3. Project document updates
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6.3 Verify Scope
Definition Verify Scope is the process of formalizing acceptance of the completed project deliverables. Source: PMBOK Guide Fourth Edition, page 103
Verifying scope includes reviewing deliverables with the customer or sponsor to ensure that they are completed satisfactorily and obtaining formal acceptance of deliverables by the customer or sponsor. Verify scope does not happen only at the end of the project, but it is at the end of each phase and at the key milestones.
Inputs
1.Project management plan 2.Requirements documentation 3.Requirements traceability matrix 4.Validated deliverables
Tools & Techniques

1. Inspection
Outputs
1.Accepted deliverables 2.Change requests 3.Project document updates
Figure -5- Verify Scope Process 6
6.3.1 Inputs to Verify Scope 1. 2. 3. 4. Project management plan Requirements documentation Requirements traceability matrix Validated deliverables
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6.3.2 Tools and Techniques for Verify Scope 1. Inspection 1. Inspection This is the tool that includes activities such as measuring, examining, and verifying to determine whether work and deliverables meet requirements and product acceptance criteria. Inspections are sometimes called reviews, product reviews, audits and walkthroughs. 6.3.3 Outputs of Verify Scope 1- Accepted deliverables 2- Change requests 3- Project document updates 1. Accepted deliverables Deliverables that are signed off after passing the acceptance testing are documented and made ready to be used during the Close Project or Phase process. 2. Change requests Unaccepted deliverables for not meeting the acceptance criteria will be handled by issuing change requests. These change requests will be processed by further processes until the deliverable is accepted and signed off. 3. Project document updates Based on the verification process, some documents may be updated. These include, but not limited to the following documents: Project budget Project schedule Scope statement Requirement document Different project plans
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6.4 Control Scope
Definition Control Scope is the process of monitoring the status of the project and product scope and managing changes to the scope baseline. Source: PMBOK Guide Fourth Edition, page 103
Controlling the project scope ensures all requested changes and recommended corrective or preventive actions are processed through the Perform Integrated Change Control process.
Inputs
1.Project management plan 2.Work performance information 3.Requirements documentation 4.Requirements traceability matrix 5.Organizational process assets
Tools & Techniques

1. Variance analysis
Outputs
1.Work performance measurements 2.Organizational process assets updates 3.Change requests 4.Project management plan updates
5. Project document updates
Figure -6- Control Scope Process 6
Scope Change Considerations While doing the scope change process, the following issues should be considered: Will the request to change project scope affect the project schedule? Will the request to change project scope affect the project cost? Will the request to change project scope affect the project quality? Is the total impact a significant change to the project overall? What is the impact of no change?
What are all the alternative methods of accommodating the requested change? Does the individual requesting the scope change have the authority to approve resulting changes to project cost, schedule, quality, or other considerations?
6.4.1 Inputs to Control Scope 1. 2. 3. 4. 5. Project management plan Work performance information Requirements documentation Requirements traceability matrix Organizational process assets
1. Project Management Plan The Control Scope process will use different control information set in the different project plans. Below is some of this information. Scope baseline Scope management plan Change management plan Configuration management plan Requirements management plan 6.4.2 Tools and Techniques for Control Scope 1. Variance analysis 1. Variance analysis Project performance measurements are used to assess the magnitude of variation from the original scope baseline. Important aspects of project scope include determining the cause and degree of variance relative to the scope baseline and deciding whether corrective or preventive action is required.
6.4.3 Outputs of Control Scope 1. 2. 3. 4. 5. Work performance measurements Organizational process assets updates Change requests Project management plan updates Project document updates
1. Work performance measurements These are the measures that will determine if the deliverable is conformant with the acceptance criteria or not. Measures are normally in the form of variance analysis between the plan and the actual; these measures will be used to decide on the deliverable acceptance.
2. Organizational process assets updates Below are some examples of the organizational process assets that will be updated: Cause of variance Corrective actions chosen Lessons learned 3. Change requests Analysis of the scope performance may result in change requests that will remedy the problem and bring back the scope into the baseline by issuing the proper change request that handles the cause of the problem. 4. Project management plan updates If the approved change request have an effect on the project scope, then the following baselines may be affected also and need to be considered (updated): Cost baseline Schedule baseline WBS WBS Dictionary 5. Project document updates Some project documents may need to be updated, including, but not limited to: Requirements documents Requirement traceability matrix Scope Change Control System A scope change control system is used to define the procedures by which the project scope can be changed. It may include the paper work, tracking systems, and approval levels necessary for authorizing changes.
Start Assess Priority Propose Change to the Baseline
Identify Change
Assess Impact of no Change Assess Impact on Cost (Resources) Assess Impact on Schedule Assess Impact on Quality
Negotiate Proposal
Raise Change Control Form
No
Accepted ?
Urgent?
Yes
Yes Change the Baseline
No Implement Change
File the Change
End
Figure -7- A Typical Change Management Process 6
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Exercise 6.1 Simulate Requirement Change Based on the provided case study, simulate a change and complete a change request form. Consider the following information: 1. Customer 2. Project Name 3. Project Manager 4. Change Request Date 5. WBS Task Number 6. Change Request ID 7. Priority (1-low to 5-high) 8. Requested by: 9. Identified by: 10. Assigned to: 11. Description 12. Impact of no change 13. Estimated impact on cost, schedule, quality and others 14. Supporting documentation Note: Use form 9.9 in Appendix 2
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -1-Simulate Requirement Change 6
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Definition Control Schedule is the process of monitoring the status of the project to update project progress and manage changes to the schedule baseline. Source: PMBOK Guide Fourth Edition, page 160
Inputs
1.Project management plan 2.Project schedule 3.Work performance information 4.Organizational process assets
Tools & Techniques 1. Performance reviews 2. Variance analysis 3. PM software 4. Resource leveling 5. What-if analysis 6. Adjusting leads and lags 7. Schedule compression 8. Scheduling tool
Outputs
1.Work performance measurements 2.Organizational process assets updates 3.Change requests 4.PM plan updates 5.Project documents updates
Figure -8- Control Schedule Process 6
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Process Interaction
Work performance information

Project management plan Project management plan updates
Involved Documents (IN) Project schedule Schedule baseline Work performance information Project management plan Organizational process assets Involved Documents (OUT) Work performance measurements Change requests Project management plan updates Organizational process assets updates Project documents updates
Organizational Process assets Project schedule Schedule baseline
6.6 Control a Schedule
Project Documents Updates Work performance measurements
Change requests
Project ` Documents
Figure -9- Control Schedule Process Interaction 6
6.5.1 Inputs to Control Schedule 1234Project management plan Project schedule Work performance information Organizational process assets
6.5.2 Tools and Techniques for Control Schedule 12345678Performance reviews Variance analysis PM software Resource leveling What-if analysis Adjusting leads and lags Schedule compression Scheduling tool
1. Performance reviews Performance Reviews measure, compare, and analyze schedule performance such as actual start and finish dates, percent complete, and remaining duration for work in progress. If earned value management (EVM) is utilized the schedule variance (SV) and schedule performance index (SPI) are used to assess the
magnitude of schedule variations. An important part of schedule control is to decide if the schedule variation requires corrective action or not. 2. Variance analysis Schedule performance measurements (SV, SPI) are used to assess the magnitude of variation to the original schedule baseline. The total float variance is also an essential planning component to evaluate project time performance. Important aspects schedule control include determining the cause and degree of variance relative to the schedule baseline and deciding whether corrective or preventive action is required. Sample Tracking Chart
Figure -10- Schedule Valiance on Microsoft Project 6
6.5.3 Outputs of Control Schedule 1- Work performance measurements - SV - SPI 2- Organizational process assets updates - Causes of variances - Corrective action chosen and the reasons - Other types of lessons learned from project schedule control 3- Change requests 4- PM plan updates 5- Project documents updates
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6.6 Control Costs

Definition Control Costs is the process of monitoring the status of the project to update the project budget and managing changes to the cost baseline. Source: PMBOK Guide Fourth Edition, page 179
Inputs
1.Project management plan 2.Project funding requirements 3.Work performance information 4.Organizational process assets
Tools & Techniques 1. Earned value management 2. Forecasting 3. To-complete performance index (TCPI) 4. Performance reviews 5. Variance analysis 6. Project management software
Outputs
1. Work Performance measurements 2. Budget forecasts 3. Organizational process assets updates 4. Change requests 5. PM plan updates 6. Project document updates
Figure -11- Control Costs Process 6
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Process Interaction
Figure -12- Estimate Activity Resources Process Interaction 6
Control Costs Objectives Cost control does not necessary mean cost reduction, rather ensuring that expenditures are done as planned. It includes the following: Influencing the factors that create changes to the authorized cost baseline. Ensuring that all change requests are acted on in a timely manner Managing the actual changes when and as they occur Ensuring that cost expenditures do not exceed the authorized funding, by period and in total for the project Monitoring cost performance to isolate and understand variances from the approved cost baseline Monitoring work performance against funds expended. Preventing unapproved changes from being included in the reported cost or resource usage Informing appropriate stakeholders of all approved changes and associated cost. Acting to bring expected cost overruns within acceptable limits.
6.6.1 Inputs to Control Costs 1- Project management plan

2- Project funding requirements 3- Work performance information 4- Organizational process assets 6.6.2 Tools and Techniques for Control Costs 123456Earned value management Forecasting To-complete performance index (TCPI) Performance reviews Variance analysis Project management software
1. Earned Value Management Earned Value management (EVM) in its various forms is a commonly used method of performance measurement. It integrates project scope, cost and schedule measures to help the project management team assess and measure project performance and progress. EVM develops and monitors three key dimensions for each work package and control account: Planned value Earned value Actual cost Schedule variance Cost variance Schedule performance index Cost performance index Earned Value Components S Curve Planned Value (PV) Old name was (BCWS) Earned Value (EV) Old name was (BCWP) Actual Costs (AC) Old name was (ACWP) Budget at Completion (BAC) Estimate at Completion (EAC) Management Reserve (MR) Schedule Variance (SV) Cost Variance (CV) Schedule Performance Index (SPI) Cost Performance Index (CPI)
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EAC Contract Budget Base NOW

AC PV
BAC
MR
$$
EV
Time
48
Figure -13 - S Curve 6
Earned Value Variances Cost Variance: CV = EV AC Schedule Variance: SV = EV PV
EAC Contract Budget Base NOW

AC
BAC
MR
$$
PV EV
Cost Variance Schedule Variance
Time
Figure -14 - Earned Value Diagram 6
AC= Actual Cost PV= Planned Value EV= Earned value BAC= Budget at Completion EAC= Estimate at Completion MR= Management Reserve
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Schedule Variance
SV= EV PV Scheduled Actual $100 $200
Today
Planned Value (PV) = $ 100 Earned Value (EV) = $ 100 SV = EV - PV SV = 100 100 = $ 0
Figure -15 - Schedule Variance 6
Cost Variance
CV= EV AC Today Scheduled Actual $100 $200
Actual Cost (AC) = $ 200 Earned Value (EV) = $ 100 CV = EV AC = 100 200 = $ -100
Figure -16 - Cost Variance 6
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The 50 - 50 Rule The 50 - 50 rule was established to overcome the problem of making subjective estimates of how far along we are on, say, a task. Upon beginning a task, charge 50% of its BCWS to its account. When the task is finally completed, charge the remaining 50% to its account. Schedule Variance Incomplete Tasks
SV= EV - PV Scheduled Actual $100
Today
Today:
Earned Value (EV) = $ 50 Planned Value (PV) = $ 100 SV= EV PV 50-100 = $ -50
Figure -17 - Schedule Variance, Incomplete Tasks 6
Cost VarianceIncomplete Tasks
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CV = EV - AC
Scheduled $100
Today
Actual
$80 Till today
Expected Cost to Complete is
$200
Today:
Earned Value (EV) = $ 50 Actual Cost of (AC) = $ 80 CV = EV AC 50-80 = $ -30

Figure -18 - Cost Variance, Incomplete Tasks 6
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Multiple Tasks - Schedule Variance
SV= EV - PV
Today
$700
$300 $200
Scheduled Actual
EV PV SV
= $ 1,200 = - $ 1,000 = $ 200
Figure -19 - Schedule Variance, Multiple Tasks 6
Multiple Tasks - Cost Variance
CV = EV - AC Today
$700 $350 $400
$300 $200 $100
Scheduled Actual
EV AC CV
= ==
$ 1,200 $ 850 $ 350
Figure -20 - Cost Variance, Multiple Tasks 6
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The Four Quadrants
Under Ahead Schedule Behind
Over
+CV +SV +CV -SV

Budget
-CV +SV -CV -SV
Figure -21 - The Four Quadrants 6
Earned Value Equations

Term
Schedule Variance
Equation
SV = EV - PV
Indicates
Good if >=0
Cost Variance Schedule Performance Index

Cost Performance Index Estimate at Completion Estimate to Complete
CV = EV - AC SPI = EV/PV
CPI = EV/AC EAC = BAC/CPI ETC = EAC AC
Good if >=0 Good if >=1

Good if >=1 Actual cost How much more will be spent
Variance at Completion
VAC = BAC - EAC
Good if >=0
Table -1 - Earned Value Parameters 6
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Exercise 6.2 Schedule & Cost Variance
For the above example, calculate the Schedule & Cost Variances, Assume 50-50 approach
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -2-Schedule & Cost Variance 6
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2. Forecasting Estimate at completion (EAC) that may differ from the budget at completion (BAC) based on the project performance as follows: EAC forecast for ETC work performed at the budget rate o EAC=AC+(BAC-EV) EAC forecast for ETC work performed at the present CPI o EAC=BAC/Cumulative CPI EAC forecast for ETC work considering both SPI and CPI factors o EAC=AC+[(BAC-EV)/(cumulative CPI X cumulative SPI)]
3. To-Complete Performance Index (TCPI) The To-Complete performance index (TCPI) is the calculated projection of cost performance that must be achieved on the remaining work to meet a specified management goal, such as the BAC or the EAC as follows: Equation for the TCPI based on the BAC: o TCPI= (BAC-EV) / (BAC-AC) Equation for the TCPI based on the EAC: o TCPI= (BAC-EV) / (EAC-AC)
4. Performance Reviews Reviewing the project performance is done through the following: Variance analysis Trend analysis Earned value performance 5. Variance Analysis Cost performance measurements (CV, CPI) are used to assess the magnitude of variation to the original cost baseline.
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6. Project Management Software
Figure -22 - MS Project Showing Earned Value 6
6.6.3 Outputs of Estimate Control Costs 1. 2. 3. 4. 5. 6. Work Performance measurements Budget forecasts Organizational process assets updates Change requests PM plan updates Project document updates
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Definition Perform Quality Control is the process of monitoring and recording results of executing the quality activities to assess performance and recommend necessary changes. Source: PMBOK Guide Fourth Edition, page 206
Inputs
1. Project management plan 2. Quality metrics 3. Quality checklists 4. Work performance measurements 5. Approved change requests 6. Deliverables 7. Organizational process assets
Tools & Techniques

1. Cause and effect diagrams 2. Control charts 3. Flowcharting 4. Histogram 5. Pareto chart 6. Run chart 7. Scatter diagram 8. Statistical sampling 9. Inspection 10.Approved change requests review
Outputs
1. Quality control measurements 2. Validated changes 3. Validated deliverables 4. Organizational process assets updates 5. Change requests 6. PM plan updates 7. Project document updates
Figure -23- Estimate Activity Resources Process 6
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Process Interaction
Quality management plan

Deliverables

Approved change requests
5.5 Control Scope
7.3 Control Cost
Work performance measurements
Organizational process assets
8.1 Plan Quality
Quality checklists Quality metrics
Quality control measurements
Involved Documents (IN) Quality checklists Quality metrics Quality management plan Deliverables Approved change requests Work performance measurements Organizational process assets Involved Documents (OUT) Quality control measurements Validated deliverables Change requests Project management plan updates Validated changes Project documents updates Organizational process assets updates
Validated changes Project document updates
Project management plan updates
Change requests
Validated deliverables
Project ` Documents
Updates
5.4 Verify Scope
Figure -24- Perform Quality Control Process Interaction 6
6.7.1 Inputs to Perform Quality Control 1234567Project management plan Quality metrics Quality checklists Work performance measurements Approved change requests Deliverables Organizational process assets
6.7.2 Tools and Techniques for Perform Quality Control 1- Cause and effect diagrams 2- Control charts 3- Flowcharting 4- Histogram 5- Pareto chart 6- Run chart 7- Scatter diagram 8- Statistical sampling 9- Inspection 10- Approved change requests review
1. Cause and Effect Diagrams Also called: Ishikawa Fishbone Root Cause.
Figure -25- Cause and Effect Diagram 6
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Exercise 6.3 Fishbone Diagram A recent report shows that your organizations customers are moving to another competitor in increasing rate. You have been assigned the task to study and address this problem to achieve two objectives: 1. 2. 3. Analyze the problem Identify the root cause of the problem Suggest the solution roadmap.
Use the fishbone diagram to help you identify the root cause of the problem
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise -3 - Fishbone Diagram 6
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2. Control Charts It is used to determine whether or not a process is stable or has predictable performance. It serves as a data gathering tool to show when a process is subject to special cause variation, which creates an out-of-control condition. Illustrate how a process behaves over time. Below are the main attributes of the control charts:
Figure -26- Control Chart - Stable Process 6
Process Stability A process is said to be in control of they: The measures are within the acceptable limits, between the UCL and LCL Less than 7 consecutive points exist on one side of the mean
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Figure -27- Control Chart - Unstable Process 6
3. Flowcharting Flowcharting helps to analyze how problems occur. A flowchart is a graphical representation of a process. There are many styles, but all process flowcharts show activities, decision points, and the order of processing. Flowcharts show how various elements of a system interrelate.
Figure -28Flow Chart 6
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4. Histogram A histogram is a bar chart showing a distribution of variables. Each column represents an attribute or characteristic of a problem/situation. The height of each column represents the relative frequency of the characteristic. This tool helps identify the cause of problems in a process by the shape and width of the distribution.
90 80 70 60 50 40 30 20 10 0 Unit Integrate System Accept

Figure -29- Histogram 6
Defects
5. Pareto Chart A Pareto chart is a specific type of histogram. It is ordered by frequency of occurrence, which shows how many defects were generated by type or category of identified cause. The Pareto technique is used primarily to identify and evaluate nonconformities.
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40
100
30
75 Cumulative Percentage
Percent of 50 Defective Cases
Number of Defective 20 Cases
10
Frequency by Cause
25
0
Improper Rotation
Car Problems
0
Noise Wobble Pressure Axle Case Caulking Wobbles Other
Figure -30- Pareto Diagram 6
6. Run Chart A run chart shows the history and pattern of variation. A run chart is a line graph that shows data points plotted in the order in which they occur. Run charts show trends in a process over time, variation over time, or declines or improvements in a process over time. Trend analysis is performed using run charts. Trend analysis involves using mathematical techniques to forecast future outcomes based on historical results.
7. Scatter Diagram A scatter diagram shows the pattern of relationship between two variables. This tool allows the quality team to study and identify the possible relationship between changes observed in two variables. Dependent variables versus independent variables are plotted. The closer the points are to a diagonal line, the more closely they are related.
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Figure -31- Scattered Diagram 6
8. Statistical Sampling Statistical sampling involves choosing part of a population of interest for inspection. Appropriate sampling can often reduce the cost of quality control. There is a substantial body of knowledge on statistical sampling; in some application areas, it may be necessary for the project management team to be familiar with a variety of sampling techniques. 9. Inspection An inspection is the examination of a work product to determine whether it conforms to standards. Generally, the results of an inspection include measurements. Inspections can be conducted at any level. Inspections are also used to validate defect repairs. 6.7.3 Outputs of Perform Quality Control 1234567Quality control measurements Validated changes Validated deliverables Organizational process assets updates Change requests PM plan updates Project document updates
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Exercise 6.4 Quality Control Activities For the case study provided by the instructor, identify some activates that you need to perform to control the project quality.
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Exercise 6-4 - Quality Control Activities
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Definition Report Performance is the process of collecting and distributing performance information, including status reports, progress information and forecasts. Source: PMBOK Guide Fourth Edition, page 266
Audience Performance reports need to provide information at an appropriate level for each audience. The format may range from a simple status report might show performance information, such as percent compete, or status dashboards for each area. More elaborate reports may include: Analysis of past performance Current Status of risks and issues Work completed during the period Work to be completed next Summary of changes approved in the period Other relevant information which must be reviewed and discussed
Inputs
1.PM plan 2.Work performance information 3.Work performance measurements 4.Budget forecasts 5.Organizational process assets
Tools & Techniques

1. Variance analysis 2. Forecasting methods 3. Communication methods 4. Reporting systems
Outputs
1.Performance reports 2.Organizational process assets updates 3.Change requests
Figure -32- Report Performance Process 6
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Process Interaction
Figure -33- Report Performance Process Interaction 6
6.8.1 Inputs to Report Performance 1. 2. 3. 4. 5. Project management plan Work performance information Work performance measurements Budget forecasts Organizational process assets
6.8.2 Tools and Techniques for Report Performance 1. 2. 3. 4. Variance analysis Forecasting methods Communication methods Reporting systems
1. Variance analysis The variance represents the After-the-fact look of what caused the difference between the planned and actual. Analyzing the variance involves the following: Verify the quality of collected information Determine the variance between the baseline and the actual
Determine the impact of the variance
2. Forecasting methods Time series method Casual / econometric method Judgmental method Simulation Probabilistic forecasting Ensemble forecasting 6.8.3 Outputs of Report Performance 1. Performance reports 2. Organizational process assets updates 3. Change requests
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Group Activity 6.1 Paper Tower In a group activity, use the material provided by the instructor to build a paper tower. The winning team will be the one with the tower with the following specifications: 1- Highest in length 2- Strongest Team members must build the tower without talking; only signs and body language should be used.
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Group Discussion -1 - Paper Tower 6
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Group Activity 6.2 Telephone Casse A message, that will be provided by the instructors, cross the class, should be passed through the students from to the other in whisper. The objective is to see how much distortion will happen to the message between the starting point to the final point.
Your Notes _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________
Group Discussion -2 - Telephone Casse 6
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6.9 Monitor and Control Risks

Definition Monitor and Control Risks is the process of: Implementing risk response plans Tracking identified risks Monitoring residual risks Evaluating risk process effectiveness through the project Source: PMBOK Guide Fourth Edition, page 308
Inputs
1.Risk register 2.Project management plan 3.Work performance information 4.Performance reports
Tools & Techniques

1. Risk reassessment 2. Risk audits 3. Variance and trend analysis 4. Technical performance measurement 5. Reserve analysis 6. Status meetings
Outputs
1.Risk register updates 2.Organizational process assets updates 3.Change requests 4.Project management plan updates 5.Project document updates
Figure -34- Monitor and Control Risks Process 6
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Process Interaction
Figure -35- Monitor and Control Risks Process Interaction 6
6.9.1 Inputs to Monitor and Control Risks 1. 2. 3. 4. Risk register Project management plan Work performance information Performance reports
6.9.2 Tools and Techniques for Monitor and Control Risks 1. 2. 3. 4. 5. 6. Risk reassessment Risk audits Variance and trend analysis Technical performance measurement Reserve analysis Status meetings
1. Risk Reassessment Risk Monitoring and Control often requires identification of new risks and reassessment of risks. Project risk reassessments should be regularly scheduled. Project Risk Management should be an agenda item at project team status meetings.
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2. Risk Audits Risk audits examine and document the effectiveness of risk responses in dealing with identified risks and their root causes, as well as the effectiveness of the risk management process. 3. Variance And Trend Analysis Trends in the projects execution should be reviewed using performance data. Earned value analysis and other methods of project variance and trend analysis may be used for monitoring overall project performance. 4. Technical Performance Measurement Technical performance measurement compares technical accomplishments during project execution to the project management plans schedule of technical achievement. Deviation, such as demonstrating more or less functionality than planned at a milestone, can help to forecast the degree of success in achieving the projects scope. 5. Reserve Analysis Throughout execution of the project, some risks may occur, with positive or negative impacts on budget or schedule contingency reserves. Reserve analysis compares the amount of the contingency reserves remaining to the amount of risk remaining at any time in the project, in order to determine if the remaining reserve is adequate. 6. Status Meetings Project risk management can be an agenda item at periodic status meetings. That item may take no time or a long time, depending on the risks that have been identified, their priority, and difficulty of response. Risk management becomes easier the more often it is practiced, and frequent discussions about risk make talking about risks, particularly threats, easier and more accurate. 6.9.3 Outputs of Monitor and Control Risks 1. 2. 3. 4. 5. Risk register updates Organizational process assets updates Change requests Project management plan updates Project document updates
1. Risk register updates This includes the outcomes of the risk reassessments, risk audits, and periodic risk reviews. These outcomes may include updates to: Probability Impact Priority
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Response plans Ownership Other elements of the risk register. Outcomes can also include closing risks that are no longer applicable. 2. Organizational process assets updates Implementing contingency plans or workarounds frequently results in a requirement to change the project management plan to respond to risks. Requested changes are prepared and submitted to the Integrated Change Control process as an output of the Risk Monitoring and Control process. Approved change requests are issued and become inputs to the Direct and Manage Project Execution process and to the Risk Monitoring and Control process. 3. Change Requests This includes contingency plans and workaround plans. The latter are responses that were not initially planned, but are required to deal with emerging risks that were previously unidentified or accepted passively. Workarounds should be properly documented. Recommended corrective actions are inputs to the Integrated Change Control process 4. Project management plan updates Recommended preventive actions are used to bring the project into compliance with the project management plan. 5. Project document updates The six Project Risk Management processes produce information that can be used for future projects, and should be captured in the organizational process assets. The templates for the risk management plan, including the probability and impact matrix, and risk register, can be updated at project closure. Risks can be documented and the RBS updated. Lessons learned from the project risk management activities can contribute to the lessons learned knowledge database of the organization. Data on the actual costs and durations of project activities can be added to the organizations databases. The final versions of the risk register and the risk management plan templates, checklists, and RBSs are included.
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6.10 Administer Procurements

Definition Administer Procurements is the process of: Managing procurement relationships Monitoring contract performance Source: PMBOK Guide Fourth Edition, page 335
During this process, both the buyer and the seller will administer the procurement contract for similar purposes. Each must ensure that both parties meet their contractual obligations and that their own legal rights are protected.
Inputs
1. Procurement documents 2. Project management plan 3. Contract 4. Performance reports 5. Approved change requests 6. Work performance information
Tools & Techniques

1. Contract change control system 2. Procurement performance reviews 3. Inspections and audits 4. Performance reporting 5. Payment systems 6. Claims administration 7. Records management system
Outputs
1.Procurement documentation 2.Organizational process assets updates 3.Change requests 4.Project management plan updates
Figure -36 -Procurements Process 6
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Process Interaction
Figure -37- Administer Procurements Process Interaction 6
6.10.1 Inputs to Administer Procurements 12345Procurement documents Project management plan Contract Performance reports Approved change requests Work performance information
6.10.2 Tools and Techniques for Administer Procurements 1234567Contract change control system Procurement performance reviews Inspections and audits Performance reporting Payment systems Claims administration Records management system
1. Contract Change Control System A contract change control system defines the process by which the contract can be modified. It includes the paperwork, tracking systems, dispute resolution procedures, and approval levels necessary for authorizing changes. The contract change control system is integrated with the integrated change control system.
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2. Procurement Performance Reviews A procurement performance review is a structured review of the sellers progress to deliver project scope and quality, within cost and on schedule, as compared to the contract. It can include a review of sellerprepared documentation and buyer inspections, as well as quality audits conducted during sellers execution of the work. The objective of a performance review is to identify performance successes or failures, progress with respect to the contract statement of work, and contract non-compliance that allows the buyer to quantify the sellers demonstrated ability or inability to perform work. 3. Inspections And Audi Inspections and audits required by the buyer and supported by the seller as specified in the contract documentation, can be conducted during execution of the project to identify any weaknesses in the sellers work processes or deliverables. If authorized by contract, some inspection and audit teams can include buyer procurement personnel. 4. Performance Reporting Performance reporting provides management with information about how effectively the seller is achieving the contractual objectives. Contract performance reporting is integrated into performance reporting. 5. Payment Systems Payments to the seller are usually handled by the accounts payable system of the buyer. On larger projects with many or complex procurement requirements, the project can develop its own payment system. In either case, the payment system includes appropriate reviews and approvals by the project management team, and payments are made in accordance with the terms of the contract. 6. Claims Administration Contested changes and constructive changes are those requested changes, where the buyer and seller cannot agree on compensation for the change, or cannot agree that a change has even occurred. These contested changes are variously called claims, disputes, or appeals. 7. Records Management System A records management system is a specific set of processes, related control functions, and automation tools that are consolidated and combined into a whole, as part of the project management information system. 6.10.3 Outputs of Administer Procurements 1. Procurement documentation
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2. Organizational process assets updates 3. Change requests 4. Project management plan updates 1. Procurement Documentation Procurement documentation includes, but is not limited to, the contract, along with all supporting schedules, requested unapproved contract changes, and approved change requests. 2. Organizational Process Assets Updates Below are the main items of the Organizational Process Assets that may be updated during this process: Correspondence Payment Schedules and requests Seller performance evaluation documentation 3. Change Requests Change requests need to be tracked and monitored. Before changes are made, they should be complaints with what has been defined in the procurement management plan. Once they are approved, changes to the baselines should be done. 4. Project Management Plan Updates Procurement management plan: The procurement management plan is updated to reflect any approved change requests that affect procurement management. Contract management plan: Each contract management plan is updated to reflect any approved change requests that affect contract administration.
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7- Close Out Phase
7. Project Closing Phase

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

Definition Close Project or Phase is the process of finalizing all project activities across all the project management process groups to formally complete the project or phase. Source: PMBOK Guide Fourth Edition, page 99
Inputs
1.Project management plan 2.Accepted deliverables 3.Organizational process assets
Tools & Techniques

1. Expert judgment
Outputs
1.Final product, service, or result transition 2.Organizational process assets updates
Figure -1- Close Project or Phase Process 7
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7- Close Out Phase
Process Interaction
Figure -2- Close Project or Phase Process Interaction 7
7.1.1 Inputs to Close Project or Phase 1. Project management plan 2. Accepted deliverables 3. Organizational process assets
7.1.2 Tools and Techniques for Close Project or Phase 1. Expert judgment 7.1.3 Outputs of Close Project or Phase 1. Final product, service, or result transition 2. Organizational process assets updates
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7- Close Out Phase
Exercise 7.1 Develop Project Management Process Based on the PMI project management process group, suggest the project management methodology for your organization.
Exercise -1 - Develop Project Management Process 7
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7- Close Out Phase
7.2 Close Procurement
Definition Close Procurements is the process of completing each project procurement. Source: PMBOK Guide Fourth Edition, page 342
Inputs
1.Project management plan 2.Procurement documentation
Tools & Techniques

1. Procurement audits 2. Negotiated settlements 3. Records management system
Outputs
1.Closed Procurements 2.Organizational process assets updates
Figure -3- 6.5 Close Procurement Process 7
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7- Close Out Phase
Process Interaction
Figure -4- Close Procurement Data Flow 7
7.2.1 Inputs to Close Procurement 1. Project management plan 2. Procurement documentation 7.2.2 Tools and Techniques for Close Procurement 1. Procurement audits 2. Negotiated settlements 3. Records management system 1. Procurement Audits A procurement audit is a structured review of the procurement process from the Plan Purchases and Acquisitions process through Contract Administration. 2. Negotiated Settlements
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7- Close Out Phase
Negotiate the final settlement of all outstanding issues. Whenever settlement by negotiations is not reached, other means (Alternative Dispute Resolutions ADR) may be chosen, like: Mediation Arbitration
7.2.3 Outputs of Close Procurement 1. Closed Procurements 2. Organizational process assets updates
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Appendix 1 Case Study
8. Appendix-1 Case Study

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

9.1 Project Charter
Customer Project Name Project Description
Project Manager: Name and Authority Level
Business Need
Issued By Manager
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9.2 Scope Statement

Customer Project Name Project Manager Business Need (project justification) Summary of Product Description Deliverables (list of summarylevel sub products)
Project Risks
Objectives (cost, schedule, quality measures, other)
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9.3 Assumption List

No. Area Assumption
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9.4 Work Breakdown Structure

No Outline No. WBS Item
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9.5 Activity List, Resource Assignment, Dependency & Time Estimate

No Outline No. Activity Resources Dependency Duration
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9.6 Quality Management Plan

Quality Approach & Standards
Quality Assurance Process
Quality Control Process
Test & Acceptance Approach
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9.7 Risk Analysis

No Risk Probability Impact Overall Impact
10
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9.8 Risk Analysis

No Risk Prob. Impact Overall Impact Strategy Mitigation Plans Contingency Plans
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9.9 Change Control

Customer Project Name Project Manager Change Request Date WBS Task Number Change Request ID Priority (1-low to 5-high) Requested by: Identified by: Assigned to: Description
Impact of no change
Estimated impact on cost Estimated impact on Schedule Estimated impact to quality Other impacts
Supporting documentation
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Appendix 3 List of Figures
10. Appendix-3 List of Figures

Figure 2-1- Functional Origination .......................................................................... 15 Figure 2-2- Weak Matrix Origination ...................................................................... 16 Figure 2-3- Strong Matrix Origination ..................................................................... 17 Figure 2-4- Balanced Matrix Origination ................................................................ 17 Figure 2-5- Projectized Origination......................................................................... 18 Figure 2-6- Project Life Cycle .................................................................................. 19 Figure 2-7- Management Project Life Cycle ......................................................... 19 Figure 2-8- Project Process Groups....................................................................... 20 Figure 2-9- Project Process Groups Interaction ................................................... 21 Figure 2-10- Process Group Overlapping ............................................................. 21 Figure 2-11- Initiating Process Group .................................................................... 24 Figure 2-12- Planning Process Group ................................................................... 25 Figure 2-13- Executing Process Group ................................................................. 26 Figure 2-14- Monitor and Control Process Group ................................................ 27 Figure 2-15- Closing Process Group ..................................................................... 28 Figure 2-16- Project Management Process Interaction ...................................... 28 Figure 3-1- Develop Project Charter Process....................................................... 30 Figure 3-2 - Develop Project Charter Process Interaction .............................. 31 Figure 3-3- Identify Stakeholders Process ............................................................ 35 Figure 3-4 Identify Stakeholders Process Interaction ...................................... 36 Figure 3-5 Power / Interest Grid.............................................................................. 37 Figure 4-1 - Develop Project Management plan Process ................................... 41 Figure 4-2 Develop Project Management plan Process Interaction .............. 42 Figure 4-3- Collect Requirements Process ........................................................... 45 Figure 4-4- Define Scope Process ......................................................................... 51 Figure 4-5- Create WBS Process ........................................................................... 58 Figure 4-6- Example of WBS................................................................................... 59 Figure 4-7- Define Activities Process ..................................................................... 63 Figure 4-8- Define Activities Process Interaction .............................................. 64 Figure 4-9 - Sequence Activities Process ............................................................. 69 Figure 4-10- Sequence Activities Process Interaction ..................................... 70 Figure 4-11- Precedence Diagram (Activity on the node) .................................. 71 Figure 4-12- Activity on the arrow........................................................................... 71 Figure 4-13- Task Dependencies ........................................................................... 72 Figure 4-14- Lag Time .............................................................................................. 74 Figure 4-15- Lead Time ............................................................................................ 74 Figure 4-16- Estimate Activity Resources Process ............................................. 75 Figure 4-17- Estimate Activity Resources Process Interaction ...................... 76 Figure 4-18- Estimate Activity Durations Process ............................................... 80 Figure 4-19- Estimate Activity Duration Process Interaction .......................... 81 Figure 4-20- 6.5 Develop Schedule Process ..................................................... 85 Figure 4-21- Develop Schedule Process Interaction ....................................... 86 Figure 4-22- Resource Leveling ............................................................................. 91
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Figure 4-23- Estimate Costs Process .................................................................... 94 Figure 4-24- Estimate Costs Process Interaction ............................................. 95 Figure 4-25 - Determine Budget Process ............................................................ 100 Figure 4-26- Determine Budget Process Interaction ...................................... 101 Figure 4-27- Project Funding Requirements....................................................... 103 Figure 4-28- Plan Quality Process ....................................................................... 104 Figure 4-29- Plan Quality Process Interaction ................................................ 105 Figure 4-30- Control Chart ..................................................................................... 112 Figure 4-31- Flow Chart ......................................................................................... 113 Figure 4-32- Develop Human Resource Plan Process ..................................... 117 Figure 4-33- Develop Human Resource Plan Process Interaction ............. 118 Figure 4-34 - Develop Human Resource Plan Process .................................... 119 Figure 4-35- Organization Charts and Position Descriptions ........................... 120 Figure 4-36- Develop Human Resource Plan Process Interaction ............. 121 Figure 4-37 - Plan Communications Process ..................................................... 123 Figure 4-38 Plan Communications Process Interaction ................................ 124 Figure 4-39- Sender / Receiver Model................................................................. 126 Figure 4-40- Plan Risk Management Process .................................................... 129 Figure 4-41 - Plan Risk Management Process Interaction ........................... 130 Figure 4-42 - Identify Risks Process .................................................................... 134 Figure 4-43 Identify Risks Process Interaction ............................................... 134 Figure 4-44- Perform Qualitative Risk Analysis Process .................................. 139 Figure 4-45- Perform Qualitative Risk Analysis Process Interaction ........... 140 Figure 4-46- Probability and Impact Matrix ......................................................... 141 Figure 4-47- Qualitatively Sorted Risks ............................................................... 142 Figure 4-48- Perform Quantitative Risk Analysis Process ............................... 144 Figure 4-49- Perform Quantitative Risk Analysis Process Interaction ........ 145 Figure 4-50- Probability distributions.................................................................... 146 Figure 4-51- Quantitatively Sorted Risks............................................................. 147 Figure 4-52- Plan Risk Responses Process ....................................................... 149 Figure 4-53- Plan Risk Responses Process Interaction ................................ 150 Figure 4-54- Plan Procurements Process ........................................................... 155 Figure 4-55- Plan Procurements Data Flow ....................................................... 156 Figure 5-1- Direct and Manage Project Execution Process ............................. 168 Figure 5-2- Direct and Manage Project Execution Process Interaction ...... 169 Figure 5-3 - Perform Quality Assurance Process .............................................. 172 Figure 5-4- Perform Quality Assurance Process Interaction ......................... 173 Figure 5-5 - Sequence Activities Process ........................................................... 176 Figure 5-6- Acquire Project Team Process Interaction................................. 177 Figure 5-7- Develop Project Team Process ........................................................ 180 Figure 5-8- Develop Project Team Process Interaction................................. 181 Figure 5-9- Maslows Hierarchy of Needs ........................................................... 185 Figure 5-10- Manage Project Team Process ...................................................... 187 Figure 5-11- Manage Project Team Process Interaction............................... 188 Figure 5-12- Distribute Information Process ....................................................... 191 Figure 5-13- Distribute Information Process Interaction ................................ 192 Figure 5-14- Manage Stakeholder Expectations Process ................................ 194 Figure 5-15- Manage Stakeholder Expectations Process Interaction ......... 195
Figure 5-16 - Conduct Procurement Process ..................................................... 197 Figure 5-17- Conduct Procurement Data Flow ................................................... 198 Figure 6-1- Monitor and Control Project Work Process .................................... 205 Figure 6-2- Monitor and Control Project Work Process Interaction ............. 205 Figure 6-3- Perform Integrated Change Control Process ................................. 208 Figure 6-4- Perform Integrated Change Control Process Interaction .......... 208 Figure 6-5- Verify Scope Process......................................................................... 210 Figure 6-6- Control Scope Process ...................................................................... 212 Figure 6-7- A Typical Change Management Process ....................................... 214 Figure 6-8- Control Schedule Process................................................................. 216 Figure 6-9- Control Schedule Process Interaction........................................... 217 Figure 6-10- Schedule Valiance on Microsoft Project ....................................... 218 Figure 6-11- Control Costs Process ..................................................................... 219 Figure 6-12- Estimate Activity Resources Process Interaction .................... 220 Figure 6-13 - S Curve ............................................................................................. 222 Figure 6-14 - Earned Value Diagram ................................................................... 222 Figure 6-15 - Schedule Variance .......................................................................... 223 Figure 6-16 - Cost Variance .................................................................................. 223 Figure 6-17 - Schedule Variance, Incomplete Tasks ........................................ 224 Figure 6-18 - Cost Variance, Incomplete Tasks ................................................. 225 Figure 6-19 - Schedule Variance, Multiple Tasks .............................................. 226 Figure 6-20 - Cost Variance, Multiple Tasks....................................................... 226 Figure 6-21 - The Four Quadrants ....................................................................... 227 Figure 6-22 - MS Project Showing Earned Value .............................................. 230 Figure 6-23- Estimate Activity Resources Process ........................................... 231 Figure 6-24- Perform Quality Control Process Interaction ............................ 232 Figure 6-25- Cause and Effect Diagram .............................................................. 233 Figure 6-26- Control Chart - Stable Process ...................................................... 235 Figure 6-27- Control Chart - Unstable Process .................................................. 236 Figure 6-28Flow Chart ............................................................................................ 236 Figure 6-29- Histogram .......................................................................................... 237 Figure 6-30- Pareto Diagram ................................................................................. 238 Figure 6-31- Scattered Diagram ........................................................................... 239 Figure 6-32- Report Performance Process ......................................................... 241 Figure 6-33- Report Performance Process Interaction .................................. 242 Figure 6-34- Monitor and Control Risks Process ............................................... 246 Figure 6-35- Monitor and Control Risks Process Interaction ........................ 247 Figure 6-36 -Procurements Process .................................................................... 250 Figure 6-37- Administer Procurements Process Interaction ......................... 251 Figure 7-1- Close Project or Phase Process ...................................................... 255 Figure 7-2- Close Project or Phase Process Interaction ............................... 256 Figure 7-3- 6.5 Close Procurement Process ...................................................... 258 Figure 7-4- Close Procurement Data Flow ......................................................... 259
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Appendix 4 List of Tables
11. Appendix-4 List of Tables
Table 2-1- Comparative Overview ............................................................................ 9 Table 2-2- Organizational Influence on Projects .................................................. 18 Table 2-3- Project Management Process Groups and Knowledge Area Mapping ...................................................................................................................... 23 Table 4-1 - Estimate Accuracy ................................................................................ 96 Table 4-2- Statistical Quality Control Terms ....................................................... 108 Table 4-3- Cost Conformance ............................................................................... 110 Table 4-4- Human Resource Management Process Mapping......................... 120 Table 4-5 - Reasons to Make over Buy ............................................................... 157 Table 4-6 - Fixed Price Contract ........................................................................... 160 Table 4-7 - Cost Reimbursable Contract ............................................................. 161 Table 4-8 - Time and Material Contract ............................................................... 162 Table 4-9 - Comparison of Procurement Documents Types ............................ 164 Table 5-1 - Weighting System ............................................................................... 200 Table 6-1 - Earned Value Parameters ................................................................. 227
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Appendix 5 List of Exercises
12. Appendix-5 List of Exercises

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

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

Exam Preparation Course

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Introduction ............................................................................................................ 5 Project Management Framework ........................................................................... 7

Project Initiation Phase ........................................................................................ 29

Project Planning Phase ......................................................................................... 40

Project Execution Phase ..................................................................................... 167

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Project Monitor and Control Phase .................................................................... 203

Project Closing Phase ........................................................................................ 254

10. 11. 12. 13.

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Group Discussion -1-StudentsExpectations 1

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2. Project Management Framework

2.1 Terms and Definitions

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2.2 Comparative Overview

Table -1- Comparative Overview 2

Source: PMBOK Guide - Fourth Edition, page 9

2.3 Project Characteristics

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

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2.4 Projects vs. Operational Work:

2.5 Project Constraints

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Group Discussion -2-Project Constraints 2

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2.6 Role of a Project Manager

2.7 Project Stakeholders

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2.8 Project Organization Structure

Figure -1- Functional Origination 2

Source: PMBOK Guide - Fourth Edition, page 29

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Chief Executive Officer

Figure -2- Weak Matrix Origination 2

Source: PMBOK Guide - Fourth Edition, page 29

Manager of Project Managers

Figure -3- Strong Matrix Origination 2

Source: PMBOK Guide - Fourth Edition, page 30

Chief Executive Officer

Figure -4- Balanced Matrix Origination 2

Source: PMBOK Guide - Fourth Edition, page 30

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Figure -5- Projectized Origination 2

Source: PMBOK Guide - Fourth Edition, page 31

2.9 Organizations Characteristics

Functional Manager Part-Time

Functional Manager Part-Time

Table -2- Organizational Influence on Projects 2

Source: PMBOK Guide - Fourth Edition, page 28

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2.10 Life Cycles and Process Groups

2.11 Process Groups

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Figure -8- Project Process Groups 2

2.12 Interaction between Phases