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Project Management : The application of knowledge, skills, tools, and techniques

to project activities to meet the project requirements.

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MUMBAI CHAPTER

MAPPING OF PROJECT MANAGEMENT PROCESSES TO

KNOWLEDGE AREAS AND PROCESS GROUPS
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Initiating

4.1 Develop
Project Charter

Integration

..

Planning

Executing

4.2 Develop Project

Management Plan

4.3 Direct & Manage

Project Work

Monitoring &
Controlling

4.4 Monitor & Control

Project Work

Closing

4.6 Close Project

or Phase

4.5 Perform Integrated

Change Control

Scope

5.1 Plan Scope Management

5.5 Veriy Scope

5.2 Collect Requirements

5.6 Control Scope

5.3 Define Scope

5.4 Create WBS
6.7 Control Schedule

Time

6.1 Plan Schedule

Management
6.2 Define Activities
6.3 Sequence Activities
6.4 Estimate Activity Resource
6.5 Estimate Activity Duration
6.6 Develop Schedule
7 .1 Plan Cost Management
7.2 Estimate Costs
7.3 Determine Budget

7.4 Control Costs

Cost

Quality

8.1 Plan Quality Management

8.2 Perform Quality

Assurance

9.1 Develope Human

Resource Plan

9.2 Acquire Project Team

9.3 Develop Project Team
9.4 Manage Project Team

Human
Resources

10.1 Plan Communications

Management

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

Risk
Procurement

Stakeholder
Management

10.2 Manage
Communication

13 .1 Identify
Stakeholders

8.3 Perform Quality

Control

10.3 Control
Communications
11.6 Control Risks

12.1 Plan Procurement

12.2 Conduct
Procurements

12.3 Administer
Procurements

13.2 Plan Stakeholder

Management

13.3 Manage Stakeholder

Engagement

13.4 Control Stakeholder

Engagement

--

--

12.4 Close
Procurements

Program Evaluation & Review Technique (PERT):

SCOPE
In Project Context, Scope Refer to :
Product Scope :
Features and Functions that characterise a
product.
Projed Scope :

Requirements

The Work that needs to be accomplished to

deliver the product.

Standard Deviation:
(P - 0)/6 or Square Root of Variance
PERT Variance: [(P - 0)/6)]2

Describes how individual

Documentation

Probabilistic network analysis technique to estimate when there is a

high degree of uncertainty.

Task Variance: Variance = Standard Deviotion2

requirement meet the business need.

Protect Standard Deviation: Square Root of Project Variance

Requirement Traceability Mathe : Tabular format that links

requirements to their origin and traces them throughout the life cycle.

Sigma Values

+/-1 Sigma = 68.23%

ESTIMATION

+/- 2 Sigma = 95.46%

+/- 3 Sigma = 99.73%

Range of Estimates :

Rough order of Magnitude (ROM)

Definitive Estimate

-25% + 75%
- 05% +10%

+/- 6 Sigma= 99.99%

COST
Estimate Types
Expert Judgment: Internal or external expert opinion.
Analogous: Using actual results from a previous similar project.
Parametric: Statistical estimating technique that utilizes historical data

and variables to calculate an estimate for on activity.

Bottom-up: Estimating cost of individual activities.

TIME
Precedence Diagramming Method (PDM): Nodes (boxes or circles)

ore used to represent activities. Uses logical relationships of Finish to

Start, Finish to Finish; Start to Start; Start to Finish to link activities.
Activity ON Node (AON).
Schedule Development
Critical Path Method (CPM): A schedule network analysis technique

used to determine the amount of schedule flexibility (float) on various

paths and determine the minimum total project duration.
CPM Forward Pass: EF = ES + Activity Duration
EF = Early Finish; ES = Early Start
Rule: Multiple predecessors, use latest EF to determine successor ES
CPM Backward Pass: LS = LF - Activity Duration
LS = Late Start; LF = Late Finish
Rule: Multiple successors, use earliest LS to determine predecessor LF
Float: Total = LF EF. The amount of time on activity may be delayed
from its early start without delaying the project finish.
Critical Path: The sequence of schedule activities that determines
the duration of the project. Normally the poth(s) with zero float.
Critical Chain: Modification of schedule to account for limited
resources.
Resource Leveling: Analysis of the critical path based on critical
and limited resources.
Resource Smoothing: Adjusting resources considering floats
available without disturbing the critical path or delaying the project
Schedule Compression
Crashing: Decreasing total project duration to get maximum

compression for least cost; relates to increased costs.

Fast-tracking: Compressing project schedule by paralleling activities
normally done sequentially; relates to increased rework and risk.
Beto Distribution(PERT): te = (to + 4tm + tp)/6
Triangular Distribution: te = (to + 'tm + tp)/3
tm = most likely time
tp = pessimistic time ,

FV = Future Value; R = Interest Rote; PY = Present Value;

N = Number of Years or Periods

EARNED VALUE

Adlvlty Sequencing Methods

Three Point Estimate:

Present Value of Money (PV): FV/(1 +R)N

Future Value of Money (FV): PV(1 +R)N

Earned Value Elements:

Planned Value (PV): The work scheduled to be done.
Earned Value (EV}: The value of the work done.
Actual Costs (AC): The actual cost of the work done.

Superscript C Stands for Cumulative

Schedule Variance (SV): SY= EV-PV
A measure of schedule performance on a project. A negative number
indicates the project is behind schedule.
Cost Variance (CV): CV = EV-AC
A measure of cost performance on a project. A negative number
indicates the project is over budget.

In earned value variance problems the EV component is always first

with the exception of Estimate to Completion and Variance at
Completion.
Schedule Performance Index (SPI): SPI = EV/PY
A measure of schedule efficiency on a project. A value less than l
indicates schedule problems.
Cost Performance Index (CPI): CPI = EV/AC
A measure of cost efficiency on a project. A value less than l indicates
cost problems.
Cumulative CPI (CPI') : CPlc = Eve / Ace

Forecasts project cost at completion.

In CPI and SPI ratio (indices) problems EV is always the numerator.
To Complete Performance Index (TCPI) :

TCPI = Work remaining

Funds Remaining

TCPI =
BAC EV

(BAC-AC) or (EACAC)

Estimate to complete (ETC) :

Work performed at Budgeted Rote :

ETC= BAC - EV
ii Work performed at present CPI :
ETC = (BAC-EV)/CPI
iii Work Considering both SPI and CPI :
ETC = (BAC -EV)/(CPI X SPI)

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Estimate at complete (EAC) :

EAC =AC+ ETC

Variance At Completion (VAC): VAC = BAC-EAC

Actual or possible difference at completion from the budgeted plan.

Budget At Completion (BAC): BAC = Sum of pyc at Completion
The sum of all the budget values established for the work to be
performed; the total planned value for the project.

Rule of Seven: Non-random data points on a control chart grouped

together in a series of seven on only one side of the mean, either in
the Upper Control Limit (UCL) area or the Lower Control Limit (LCL)
area but not in both. The process is said to be "Out of Control".
Tolerances : Specific range of acceptable limits.
Precision : Consistency of output.
Accuracy : Correctness of measured value.

QUALITY

HUMAN RESOURCES

Quality: Degree to which a set of inherent characteristics fulfill

Types of Organizations
Functional: Grouped by functions. Advantage: Management of

requirements; Conformance to requirements and fitness of use.

Fishbone Diagram (Ishikawa Diagram) : Also called a Causeand-Effect diagram; shows relationships among potential causes.

specialists. Disadvantage: Project manager has no authority.

Matrix: Report to more than one boss. Advantage: Better control

other projects to generate ideas for improvements.

over project. Disadvantage: More than one boss.

Projectized: Project manager controls. Advantage: Loyalty to project.
Disadvantage: No home when project complete.

lshikawa's 4M's & 4P's : Machine - Material - Measurement Methods; People - Procedures -Policies-Plant.

Technical Opinions.

Benchmarking : Comparing actual or planned project practices to

Top Four Sources of Conflict: Schedules; Project Priorities; Resources;

Pareto's Law: A small number of causes will produce a large majority

of the defects (80/20).

Types of Power: Legitimate, Reward, Referent, Expert, Punishment.

Pareto Diagram: Histogram of problems or defects ranked in order

Conflict Resolution Techniques: Confronting; Compromising;

Withdrawal; Smoothing; Forcing. Confronting is favored over others.

of occurrence.

Maslow's Hierarchy of needs

lshikawa's Seven Basic Tools of Quality:

Self Actualization
Esteem
Social
Safety & Security
Physiological

Histograms; Poreto Charts; Cause-and-Effect Diagrams; Run Charts;

Scatter Diagrams; Flowcharts; Control Charts.
Cost of Quality : Determining the costs incurred to ensure quality.
Total costs from investment in preventing non-conformance, appraisal,
rework, and failures.
Grade : Category assigned to products or services with the same
functional use but different technical characteristics. Grade is not an
indication of quality.
Prevention : Keeping errors out of the process.
Inspection: Examine or measure. Keeping errors out of the hands of
the Customer.
Statistical Sampling

Choosing a part of the population for

inspection.

McGregor's Theory X: People are not responsible and need to be

watched constantly at work. Frown Face.
McGregor's Theory Y: People are responsible and do not require

supervision at work. Happy Face.

William ()uchi's Theory Z: Focuses on a strong company philosophy,
a district Corporate Culture, long-range staff development &

consensus decision making.

The Ingredients are Trust, Subtlety and Intimacy
General Management: Planning, Organizing, Staffing, Executing,

Attribute Sampling: Measurement results conform or do not

and Controlling.

conform.

Leading: Establish direction, Align people, Motivate, and Inspire.

Variable Sampling : Results rated on a continuous scale that

Managing: Consistently producing key results.

measure the degree of conformity.

Communicating: The exchange of information.

Special Causes: Unusual events.

Negotiating: Conferring with others to come to terms or agreement.

Random Causes : Normal process variations.

Problem Solving: Problem definition and decision making.

Control Limits: The area composed of three standard deviations on

Problem Definition: Distinguishing between causes and symptoms.

either side of the mean in a control chart. The process is in control if

results fall within UCL & LCL.

Influencing: The ability to get things done.

Out of Control : One data point falls outside control limits.

Interpersonal Skills : Leadership, Team Building, Motivation,

Communication, Influencing, Decision Making, Political and Cultural
Awareness, Negotiation.

Assignable Cause: Data point that requires investigation to

determine the cause of the variation.

Expectancy Theory: The Expectancy Theory says that the expectation

of a positive outcome drives motivation.

&I -

PROCUREMENT

Achievement Theory: The Achievement theory says that people are

motivated by the need for three things: achievement, power, and

affiliation.
Contingency Theory: The Contingency Theory, says that people are

motivated to achi.eve levels of competency and will continue ot be

motivated by this need even after competency is reached.

Statements, questions, and incentives are viewed from the

BUYER'S perspective unless otherwise stated.
Contract: Mutually binding agreement that obligates the seller to

provide and the buyer to pay; a legal relationship.

Request For Information (RFI): Request to the seller for information

Herzberg's Theory: Poor hygiene factors may destroy motivation

but improving them will not improve motivation. Presence of a

motivator motivates but absence does not de-motivate. People are
motivated by the work itself.

related to proposed work.

Request For Proposal (RFP): Request to the seller for a proposal on

work; used when skill or technical capabilities are required.

Invitation For Bid (IFB): Invitation for potential sellers to bid on work;

Responsibility Assignment Matrix (RAM): Identifies connection

between work and resources. A=Accountable, I = Input Required, P

used when selection is based on price.

Request For Quotation (RFQ): Request to the seller for a cost quote

= Participant, R = Review, S = Sign off.

on proposed work; Normally used when selection is based on price.

Team Building: Forming, Storming, Norming, Performing and

Contract Types

Adjourning

Fixed Price or Lump Sum: Payment to the seller of a fixed total price
for the work of a well defined product; seller is at risk. If the product is
not well defined buyer and seller are at risk.

COMMUNICATIONS
Communications Formula: N(N- l) /2

Fixed Price Incentive Fees (FPIF): Fixed price contracts may include

incentive fees.

RISK
Risk Register : Contains outcomes of other risk management

processes and can include list of identified risks, potential responses etc.
Quantitative Analysis
Expected Monetary Value (EMV) :
EMV is The average outcome of the decision = Value of each outcome X
probability of occurence
EMV can be used for Decision Tree Analysis.

Fixed Price with Economic Price Adjustment (FP-EPA) :

Fixed Price Contract with provision allowing for pre-defined final

adjustments to the contract price due to changed conditions such as
inflation changes. Generally applicable for contract spanning multiple
years.
Cost Plus Fixed Fee: Payment to the seller for seller's allowable cost

of the work plus a fixed fee.

Cost Plus Incentive Fee: Buyer reimburses the seller for seller's

allowable costs and seller earns its profit if it meets defined performance
criteria.

Strong Demand
False
Make

65%
SOM
$200

EMV$41.5M
-$120

Cost plus award fee (CPAF) :

Seller is reinbursed for all legitimate costs but the majority of fee is
earned only based on the satisfaction of certain performance criteria
mentioned in the contract.
Time and Materials: Hybrid type of contract with aspects of Fixed

Weak Demand
Make or Buy

Price and Cost Reimbursable; payment for all cost and material
expended on the work, opened ended; usually a risk to the buyer.

PROFESSIONAL RESPONSIBILITY
Strong Demand 65% '70M
$120
EMV $49.0M
Weak Demand

Simplified Decision Tree Analysis

Code of Conduct : based on four ethical values : responsibility, fairness,

honesty & respect.

Integrity of actions; Legally correct; Balance stakeholder interests;
Respect differences; Socially responsibility; Apply professional
knowledge; Do the right thing; Follow the processes; Act fairly; Prevent
conflict of interest; Deal with problems; Contribute to the profession;
Report violations.

,.

Sensitivity Analysis : Study of the risk impact varying one uncertain

parameter of a time
Scenario Analysis : Study of risk impact for a given scenario (multiple

parameters are varied at one time).

Risk Handling Str~tegies :
Negative risks or Threats : Avoid, transfer, mitigate, accept
Positive risks or Opportunities : expoit, share, enhance, accept.
Residual Risk : the risk remaining after risk responses and accepted by
management.
Secondary Risk : The risk resulting due to handling of primary risks.

MUMBAI CHAPTER
Unit No. 642, Mainframe,
Royal Palm India, Nr. Aarey milk Colony,
Goregaon(E), Mumbai - 400065, India
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