56445815-pmp
TRANSCRIPT
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PMP Prep – Integration Slide 1
DAY 1
PROJECT INTEGRATION
MANAGEMENT
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AGENDAAGENDA
Day 1
PMP Exam Prep Introduction
Project Management Framework
*Project Life Cycle & Organisation
Project Management Processes
Project INTEGRATION Management
DAY 2
Project SCOPE ManagementProject TIME Management
Project COST Management
Project QUALITY Management
DAY 3
Project COMMUNICATION Management
Project HUMAN RESOURCE Management
Project RISK Management
Project PROCUREMENT Management
DAY 4
Professional & Social Responsibility
REVISION & QUIZ
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MAJOR PROJECTMAJOR PROJECTDOCUMENTSDOCUMENTS
Before we begin Integration, let's summarize theproject's major documents:
Major Project Documents - generated by the project
• Project Charter – formally authorizes a project or a phaseand documents initial requirements that satisfy thestakeholder’s needs and expectations. (never changes)
• Project Management Plan – documents the actionsnecessary to define, prepare, integrate, and coordinate allsubsidiary management plans (changes a lot)
PMP Prep - Integration Slide 2
ALL are formallyapproved
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MAJOR PROJECTMAJOR PROJECTDOCUMENTSDOCUMENTS
Other Project Documents (or Systems) Used by the Project
These systems could include tools, techniques, methodologies, resources(i.e. templates), procedures, documentation, tracking systems, approvallevels, etc.
Project Management Information System(PMIS)
• an information system, consisting of the tools and techniques used togather, integrate, and disseminate the outputs of project managementprocesses.
• It is used by project management team to support all aspects of theproject from initiating through closing, and can include both manual andautomated systems.
PMP Prep - Integration Slide 3
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MAJOR PROJECTMAJOR PROJECT
DOCUMENTSDOCUMENTS Configuration Management System
It is a sub-system of the overall PMIS. It is a collection of formal documented proceduresused to apply technical and administrative direction and surveillance to:
- identify and document the functional and physical characteristics of aproduct, result, service, or component;
- control any changes to such characteristics;- record & report each changes and its implementation status; and- support the audit of the products, results, or components to verify conformance torequirements
- it includes the documentation, tracking systems, and defined approval levelsnecessary for authorizing and controlling changes.
Change Control System - is a collection of formal documented procedures thatdefine how deliverables and documentation are controlled, changed and approvedIn most application areas CCS is a subset of the configuration management system.
PMP Prep - Integration Slide 4
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PROJECT INTEGRATIONPROJECT INTEGRATION
MANAGEMENTMANAGEMENT
Coordinate all knowledge areaprocesses
WHAT DOES THE INTEGRATION KNOWLEDGE AREA DO?• It's about the entire project - processes & activities needed to
identify, define, combine, unify, and coordinate the variousprocesses and project management activities within the projectmanagement process groups
• Projects start and close here.• Project plan is made here.• Product, service or result is made here.
PMP Prep - Integration Slide 5
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PROJECT INTEGRATIONPROJECT INTEGRATION
MANAGEMENTMANAGEMENT
The integrative nature of projects and project managementcan be understood by thinking of other types of activitiesperformed while completing a project. Examples of someactivities performed by the PM team are:
• Analyze and understand the scope. This includes the project andproduct requirements, criteria, assumptions, constraints, and other influences related to a project, and how each will be managed or addressed within the project.
• Understand how to take the identified information and then transform itinto a project management plan using a structured approach as
described in PMBOK Guide.• Perform activities to produce project deliverables.• Measure and monitor all aspects of the project’s progress and take
appropriate action to meet project objectives.
PMP Prep – Integration Slide 6
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INTEGRATION PROCESSESINTEGRATION PROCESSES
INTEGRATION PROCESS DEFINITIONS 4.1 Develop Project Charter
• that formally authorizes a project or a project phase.
4.2 Develop Project Management Plan• the process of documenting the actions necessary to define,prepare, integrate, and coordinate all subsidiary plan.
4.3 Direct & Manage Project Execution• the process of performing the work defined in the project
management plan to achieve the project’s objectives.
PMP Prep – Integration Slide 7
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INTEGRATION PROCESSESINTEGRATION PROCESSES
4.5 Monitor & Control Project Work• The process of tracking, reviewing, and regulating the progress to
meet the performance objectives defined in the projectmanagement plan.
4.6 Perform Integrated Change Control• Review all change requests, approve changes, and manage
changes to the deliverables, organizational process assets, projectdocuments, and the project management plan.
4.7 Close Project or Phase• Finalize all activities across all Project Management Process Groups
to formally complete the project or phase.
PMP Prep – Integration Slide 8
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INTEGRATION PROCESSESINTEGRATION PROCESSES
PMP Prep – Integration Slide 9
PROCESSES BY PROCESS GROUPInitiating Planning Executing Monitoring and
controllingClosing
4.1 DevelopProject
Charter
4.3 DevelopProject
ManagementPlan
4.4 Direct andManageProject
Execution
4.5 Monitorand Control
Project work
4.7 CloseProject or
Phase
4.6 Perform
IntegratedChangeControl
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What should a project charter address?
• 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,• Assigned project manager, responsibility, and authority level, and• Name and authority of the sponsor or other person(s) authorizing the
project charter.
PMP Prep – Integration Slide 10
PROJECT CHARTERPROJECT CHARTER
Formallyauthorizes
a project (never changes)
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DEVELOP PROJECTDEVELOP PROJECTCHARTERCHARTER
PMP Prep – Integration Slide 11
Inputs• Project statement of work• Business Case• Contract
• Enterpriseenvironmental
factor• Organizational process
assets
Outputs
• Project Charter
Tools & Techniques
• Expert judgement
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INPUTSContract (when applicable)• A contract from the customer’s acquiring organization is an input if theproject is being done for an external customer.
Project Statement of Work• Narrative description of products or services to be supplied by the
project• For internal projects, the project initiator or sponsor provides the
statement of work based on business needs, products or servicerequirements.
• For external projects, the SOW can be received from the customer aspart of a bid document, for example, request for proposal, request for information, request for bid, or as part of a contract.
PMP Prep – Integration Slide 12
DEVELOP PROJECT CHARTER-DEVELOP PROJECT CHARTER-
INPUTSINPUTS
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DEVELOP PROJECTDEVELOP PROJECT
CHARTER-INPUTSCHARTER-INPUTSThe SOW references:
• Business need - an organization’s business need can be based on neededtraining, market demand, technological advance, legal requirement, or governmental standard
• Product scope description – documents the product requirements andcharacteristics of the product or service that the project will be undertaken tocreate
• Strategic plan -all projects should support the organization's strategic goals.The strategic plan of the performing organization should be considered as afactor when making project selection decisions.
PMP Prep – Integration Slide 13
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DEVELOP PROJECTDEVELOP PROJECTCHARTER-INPUTSCHARTER-INPUTS
Business Case:• Business case or similar document provides the necessary information from abusiness standpoint to determine whether or not the project is worth the requiredinvestment.
• Typically the business need and the cost-benefit analysis are contained in thebusiness case to justify the project.
• For external project, the requesting organization or customer may write thebusiness case.
• Business case is created as a result of one or more of the following:
- Market demand
- Organizational need
- Customer request
- Technological advance
- Legal requirement
- Ecological impacts
- Social need
PMP Prep – Integration Slide 14
DEVELOP PROJECT CHARTERDEVELOP PROJECT CHARTER
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Enterprise Environmental Factors
• Governmental or industry standards
• Organization Infrastructure, and
• Marketplace conditions
DEVELOP PROJECT CHARTER-DEVELOP PROJECT CHARTER-
INPUTSINPUTS
These are examplesand not specific to
Project Charter – aninput to all
knowledge areas
DEVELOP PROJECT CHARTERDEVELOP PROJECT CHARTER
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Organizational Process Assets
• Organizational standard processes, policies, and standardized processdefinitions for use in the organization;
• Templates (e.g. project charter template); and
• Historical information and lessons learned knowledge base.
DEVELOP PROJECT CHARTER-DEVELOP PROJECT CHARTER-
INPUTSINPUTSNot specific to
project Charter – an input to allknowledge
areas
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DEVELOP PROJECTDEVELOP PROJECT
CHARTER- T & TCHARTER- T & TExpert Judgement
It is available from many sources, including:
• Other units within the organization,
• Consultants,
• Stakeholders, including customers or sponsors,
• Professional and technical associations,
• Industry groups,
• Subject matter experts, and
• Project management office (PMO)
PMP Prep – Integration Slide 17
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TOOLS & TECHNIQUES
Project Selection Methods
• Mostly financial considerations are used.• Project selection is generally the responsibility of Portfolio Managers,
Steering Committees. In smaller companies, Presidents and Vice-Presidents
These methods generally fall into one of two broad categories:• Benefit measurement methods that are comparative approaches,
scoring models, benefit contribution, or economic models.
• Mathematical models that use linear, nonlinear, dynamic, integer, or multi-objective programming algorithms
PMP Prep – Integration Slide 18
DEVELOP PROJECTDEVELOP PROJECTCHARTER-T & TCHARTER-T & T
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Weighted Scoring Model (benefit measurement method)
A systematic process for selecting projects based on criteria (example on nextslide)
• First, decide on a list of criteria used for project selection• Assign weights (percentages) to each so that they add up to 100%• Assign scores to each for each project• Multiply scores by weights to get total weighted scores for each
project• Highest weighted score wins
Note: Also used for selecting contractors/sellers (Procurement)
PMP Prep – Integration Slide 19
DEVELOP PROJECTDEVELOP PROJECTCHARTER-T & TCHARTER-T & T
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DEVELOP PROJECTDEVELOP PROJECTCHARTER-T & TCHARTER-T & T
PMP Prep – Integration Slide 20
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Other Benefit Measurement Methods:
Cash Flow Techniques
a) Payback Period
• Length of time it will take to get back the initial investment• Time value of money is ignored here, i.e. no interest, so this is
the least precise of the cash flow techniques
Example:
Initial Investment (P) = $200,000Cash Inflow (C) =$25,000 I quarter for 3 yearsn = # of periodsPayback period (n) = P/C= $ 200,000 I $25,000 = 8 quarters or two years
PMP Prep – Integration Slide 21
DEVELOP PROJECTDEVELOP PROJECTCHARTER- T&TCHARTER- T&T
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b) Discounted Cash Flow (or Net Present Value method)Calculates the present worth of future money (called netpresent value)
Example -Which project is worth more?
Project X expects to make $250K 1 year from nowProject Y expects to make $300K 2 years from now
i= 12% (or 0.12)
Given this formula, calculate present value & pick one.PV = FV/ (1 +i)n or FV = PV(1 +i)n
Where FV is future value, PV is present value, n is number of periods , i is
interest rateProject X, PV=250/1.12= 223.2 ; Project Y, PV=300/(1.12)2 = 239.2
Project Y is worth more.
PMP Prep – Integration Slide 22
DEVELOP PROJECTDEVELOP PROJECTCHARTER- T&TCHARTER- T&T
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Net Present ValueCalculates the expected net value of a project in today's money
To do this, discount all anticipated cash inflows and outflows to thepresent day
If Interest (i) = 12% & Initial Investment (P) = $20,000, what's the NPV of this? NPV=Total of all PVs-P
PMP Pre –Inte ration Slide 23
DEVELOP PROJECTDEVELOP PROJECTCHARTER- T&TCHARTER- T&T
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Question
You're managing a software project for a manufacturingcompany. A new computer, which costs $50,000 includingshipping and installation, will speed up the development
process and cause a gross savings of $100,000 after one yearof purchase of the computer.
Assuming an interest rate of 10% per annum, what's the NPV of the savings ?
A. $90,000B. $40,909C. $45,555D. $91,110
DEVELOP PROJECTDEVELOP PROJECTCHARTER- T&TCHARTER- T&T
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Answer is B
You know:FV of the investment == $100,000i = 10% or 0.1n= 1 (year)
P (initial investment) == $50,000
NPV =PVc - P (initial investment), we need all the PV's (in this problem onlyone).
Since PV=FV/(1 +i)n Or, PV= $100,000/ (1 + 0.1 )1 = $90,909.09 ( is the present value )
Therefore, NPV = $90,909 -$50,000 == $40,909
PMP Prep – Integration Slide 25
DEVELOP PROJECTDEVELOP PROJECTCHARTER- T&TCHARTER- T&T
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Accounting Terms
Sunk Cost (Incurred Cost):• In project selection method, when comparing projects for continuity,
costs already incurred should be considered as sunk costs and should
not be taken in to account in any calculation
Opportunity Cost :• The cost of the opportunity that you picked• What did you give up (your cost) for the project you selected?• The amount you would have made if you picked the project with the
next best NPV (expected value in today's money)• Opportunity cost is always the second best alternative (doesn't take
the third or subsequent projects into account)
PMP Prep - Integration Slide 26
DEVELOP PROJECTDEVELOP PROJECTCHARTER- T&TCHARTER- T&T
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Internal Rate of Return (IRR)
• IRR is the interest rate when NPV equals zero (0) • Net present value of all cash inflows (revenue) and outflows(investments) are the same
• Choose projects with highest IRR
PMP Prep - Integration Slide 27
DEVELOP PROJECTDEVELOP PROJECTCHARTER- T&TCHARTER- T&T
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Question
Four projects are being considered.
A. NPV is negative, its IRR is 16%, and its payback period is 13 months.
B. NPV is positive, its IRR is 14%, and its payback period is 2 months.C. NPV is negative, its IRR is 9%, and its payback period is 16 months.D. NPV is positive, its IRR is 16%, and its payback period is 18 months.
Which project should you choose if financial consideration is important?
PMP Prep - Integration Slide 28
DEVELOP PROJECTDEVELOP PROJECTCHARTER- T&TCHARTER- T&T
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Answer is D.
If IRR is greater than 0 and NPV is positive, you shouldn't give payback periodmuch consideration as its the least precise calculation. Don't select projects A or C with negative NPV. Project D has a higher IRR than Project B and should be
chosen, even though Project B has a shorter payback period.
Consideration in order of priority:
1. IRR (highest positive)
2. NPV (highest positive)
3. Payback period (shortest)
PMP Prep - Integration Slide 29
DEVELOP PROJECTDEVELOP PROJECTCHARTER- T&TCHARTER- T&T
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2. Project Management Methodology • Defines a set of project management process groups, their related
processes and the related control functions that are consolidated andcombined into a functioning unified whole.
3. Project Management Information System (PMIS)
4. Expert Judgment• Expert judgment is often used to assess inputs used to make the
Project Charter • Available from many sources, including:• Other departments in your organization• Consultants• Stakeholders• Professional or technical associations and industry groups, i.e. PMI
PMP Prep - Integration Slide 30
DEVELOP PROJECTDEVELOP PROJECTCHARTER- T&TCHARTER- T&T
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OUTPUT
Project Charter
PMP Prep - Integration Slide 31
DEVELOP PROJECT CHARTER -DEVELOP PROJECT CHARTER -
OUTPUTSOUTPUTS
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INTEGRATION PROCESSESINTEGRATION PROCESSES
PMP Prep – Integration Slide 32
PROCESSES BY PROCESS GROUPInitiating Planning Executing Monitoring
andcontrolling
Closing
4.1 Develop
Project
Charter
4.2 DevelopProject
ManagementPlan
4.3 Directand Manage
ProjectExecution
4.4 Monitorand Control
Project work
4.6 CloseProject
4.5 PerformIntegrated
ChangeControl
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INTEGRATION PROCESSESINTEGRATION PROCESSES
PMP Prep – Integration Slide 38
PROCESSES BY PROCESS GROUPInitiating Planning Executing Monitoring
andcontrolling
Closing
4.1 Develop
Project
Charter
4.2 DevelopProject
ManagementPlan
4.3 Directand Manage
ProjectExecution
4.4 Monitorand Control
Project work
4.6 CloseProject
4.5Integrated
ChangeControl
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What’s in a Project Management Plan?
• Documents/defines 'how' a project is executed, monitored andcontrolled
• Generally includes subsidiary management plans & other planning documents
• May be summary or detailed plan (changes often)
• Formally approved
• Updates are approved through the Integrated Change Controlprocess and implemented in the Direct and Manage ProjectExecution process
PMP Prep - Integration Slide 39
PROJECT MANAGEMENTPROJECT MANAGEMENTPLANPLAN
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Specifically the plan includes:
• Which processes have been selected• Level of implementation of each of the processes (how thorough
each should be)• Which inputs, tools & techniques and outputs are to be used for
each process• How processes will be used, their dependencies & interactions• How work will be executed• How changes will be monitored & controlled• How configuration management will be performed• How baseline integrity will be maintained (i.e. approved budget or
schedule )• Stakeholder communication needs & techniques to be used• Project life cycle (if needed for phases)• Key management reviews
PMP Prep - Integration Slide 40
PROJECT MANAGEMENTPROJECT MANAGEMENTPLANPLAN
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Subsidiary management plans (if required), such as:
• Scope
• Schedule
• Cost
• Quality
• Process Improvement (in Quality)
• Staffing
• Communication
• Risk• Procurement
PMP Prep - Integration Slide 41
PROJECT MANAGEMENTPROJECT MANAGEMENTPLANPLAN
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Other components, such as:
• Milestone list
• Resource calendar
• Schedule baseline
• Quality baseline
• Risk register
All these give explicit details of 'how' to produce the requirement(s)
PMP Prep - Integration Slide 42
PROJECT MANAGEMENTPROJECT MANAGEMENTPLANPLAN
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DEVELOP PROJECTDEVELOP PROJECT
MANAGEMENT PLANMANAGEMENT PLAN
PMP Prep – Integration Slide 43
Inputs• Project Charter • Output from Planning
processes• Enterprise environmental
factor • Organizational process
assets
Outputs
• Project management
Plan
TOOLS &Techniques
• Expert judgement
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INPUTS
• Project Charter
• Output from Plannning Processes
• Enterprise Environmental Factors
• Organizational Process Assets
PMP Prep - Integration Slide 44
DEVELOP PROJECTDEVELOP PROJECT
MANAGEMENT PLANMANAGEMENT PLAN
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TOOLS & TECHNIQUES
•Expert Judgment
PMP Prep - Integration Slide 45
DEVELOP PROJECTDEVELOP PROJECT
MANAGEMENT PLANMANAGEMENT PLAN
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OUTPUT
PMP Prep - Integration Slide 46
DEVELOP PROJECTDEVELOP PROJECT
MANAGEMENT PLANMANAGEMENT PLAN
Project Management Plan
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INTEGRATION PROCESSESINTEGRATION PROCESSES
PMP Prep – Integration Slide 47
PROCESSES BY PROCESS GROUPInitiating Planning Executing Monitoring
andcontrolling
Closing
4.1 Develop
Project
Charter
4.2 DevelopProject
ManagementPlan
4.3 Directand Manage
ProjectExecution
4.4 Monitorand Control
Project work
4.6 CloseProject
4.5Integrated
ChangeControl
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WHAT HAPPENS DURING PROJECT EXECUTION?
• PM and the project team to perform multiple actions to execute the
project management plan to accomplish the work defined in the
project scope statement.
• Some actions create the project's product, service or result while
other actions manage the whole of the project in an integrated
manner
• Some actions include:
• Perform activities to accomplish project objectives• Expend effort and spend funds to accomplish project objectives• Staff, train & manage project team members
• Obtain quotations, bids, offers, or proposals as appropriate
Select sellers
……continued
PMP Prep - Inte ration Slide 48
DIRECT AND MANAGE PROJECTDIRECT AND MANAGE PROJECT
EXECUTIONEXECUTION
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• Obtain, manage & use resources including materials, tools,
equipments and facilities
• Implement the planned methods and standards
• Create, control, verify & validate project deliverables
• Manage risks & implement risk response activities
• Manage sellers
• Adapt approved changes into project scope, plans & environment
• Establish & manage project communication channels both external
& internal to the project team
• Collect project data and report cost, schedule, technical & quality
• progress, and status information to facilitate forecasting• Collect & document lessons learned, and implement approved
process improvement activities
PMP Prep - Integration Slide 49
DIRECT AND MANAGE PROJECTDIRECT AND MANAGE PROJECT
EXECUTIONEXECUTION
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DIRECT AND MANAGE PROJECTDIRECT AND MANAGE PROJECT
EXECUTIONEXECUTION
PMP Prep – Integration Slide 50
Inputs• Project management plan
• Approved change requests• Enterprise Environmentalfactors•Organisational process Assets
Outputs• Deliverables•Work performance information
•Change requests• Project management planupdates• Project document updates
TOOLS &Techniques
• Expert judgement • Project management
Information system
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INPUTS
• Project Management Plan
Enterprise Environmental factors : The enterprise environmental factors
that can influence the direct and manage project execution process include:•Organizational, company or customer culture/structure,
•Infrastructure (existing facilities and capital equipment)
•Personnel administration(hiring and firing guidelines),
• stakeholder risk tolerances,
•Project management information system•Organizational Process assets: standardized guidelines and workinstructions, communication requirements defining allowed communicationmedia, record retention, and security requirements, project files from prior projects(e.g. scope, cost, schedule etc), issue and defect management databasecontaining historical issues and defect status, its control, resolutions and
actions.
DIRECT AND MANAGE PROJECTDIRECT AND MANAGE PROJECT
EXECUTIONEXECUTION
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• Approved Change Request
They are documented, authorized changes to expand or contractproject scope. They can also modify policies, project managementplans, procedures, costs or budgets, or revise schedules. They arescheduled for implementation by the project team.
PMP Prep - Integration Slide 52
DIRECT AND MANAGE PROJECTDIRECT AND MANAGE PROJECT
EXECUTIONEXECUTION
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TOOLS & TECHNIQUES
•Expert Judgement•Project Management Information System (PMIS)
PMP Prep - Integration Slide 53
DIRECT AND MANAGE PROJECTDIRECT AND MANAGE PROJECTEXECUTION-T&TEXECUTION-T&T
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OUTPUTS• Deliverables
Any unique & verifiable product, result or capability to perform a
service that is identified in the project management planning
documentation, and must be produced and provided to
complete the project
• Change Request
When issues are found while project work is being performed, change requestsare issued which may modify project policies and procedures, project scope,
project cost or budget, project schedule or quality. Other change requests cover needed preventive or corrective actions to forestall negative impacts later in theproject. Request for a change can be direct or indirect, externally or internallyinitiated, can be optional or legally/contractually mandated.
PMP Prep - Integration Slide 54
DIRECT AND MANAGE PROJECT EXECUTION-DIRECT AND MANAGE PROJECT EXECUTION-OUTPUTOUTPUT
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OUTPUTS
Work Performance InformationInformation on status of project activities being performed to accomplish
the project work. Includes:
• Schedule progress showing status information
•Deliverables that have been completed and those not completed• Schedule activities that have started and those that have been
finished
• Extent to which quality standards are being met
• Costs authorized and incurred
• Estimates to complete the schedule activities that have started• Percent physically complete of the in-progress schedule activities
• Documented lessons learned posted to the lessons learned
knowledge base
• Resource utilization detail
PMP Prep - Integration Slide 55
DIRECT AND MANAGE PROJECT EXECUTION-DIRECT AND MANAGE PROJECT EXECUTION-OUTPUTOUTPUT
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Project Management updatesElements of the project management plan that may be updated include:
Requirements(Scope) management plan, Schedule management plan, costmanagement plan, human resource management plan, quality managementplan, communications management plan, risk management plan, procurementsmanagement plan, project baselines
Project Document updatesProject documents that may be updated include but are not limited to:
• Requirements documents
• Projects log (issues, assumptions)
• Risk register and• Stakeholder register
PMP Prep - Integration Slide 56
DIRECT AND MANAGE PROJECT EXECUTION-DIRECT AND MANAGE PROJECT EXECUTION-OUTPUTOUTPUT
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INTEGRATION PROCESSESINTEGRATION PROCESSES
PMP Prep – Integration Slide 57
PROCESSES BY PROCESS GROUPInitiating Planning Executing Monitoring
andcontrolling
Closing
4.1 Develop
Project
Charter
4.2 DevelopProject
ManagementPlan
4.3 Directand Manage
ProjectExecution
4.4 Monitor and Control
Project work
4.6 CloseProject
4.5Integrated
ChangeControl
MONITOR AND CONTROLMONITOR AND CONTROL
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WHAT HAPPENS DURING MONITOR & CONTROL PROJECT WORK?
• Monitor project processes associated with initiating, planning, executing &closing.Corrective or preventive actions are taken to control the project performance.Monitoring is an aspect of project management performed throughout theproject.
• This process is concerned with:• Comparing actual project performance against the project management plan• Assessing performance to determine whether any corrective or preventiveactions are indicated, then recommending those actions as necessary
• Analyzing, tracking, and monitoring project risks to make sure the risks areidentified, their status is reported, and that appropriate risk response plans
are being executed• Maintaining an accurate, timely information base concerning the project’sproduct (s) and their associated documentation through project completion
• Providing information to support status reporting, progress measurement, andforecasting
• Providing forecasts to update current cost and current schedule information• Monitoring implementation of approved changes when and as they occur
-
MONITOR AND CONTROLMONITOR AND CONTROL
PROJECT WORK PROJECT WORK
MONITOR AND CONTROLMONITOR AND CONTROL
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MONITOR AND CONTROLMONITOR AND CONTROL
PROJECT WORK PROJECT WORK
PMP Prep – Integration Slide 59
Inputs
• Project management plan• performance reports•Enterprise environmentalfactors• Organizational process assets
Outputs• Change Requests• Project Management Plan updates• Project documents updates
TOOLS &Techniques
•Expert judgement
MONITOR AND CONTROL PROJECT
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INPUTS • Project Management Plan
• Performance reports
•Enterprise environmental factors
•Organizational process assets
PMP Prep - Integration Slide 60
MONITOR AND CONTROL PROJECTMONITOR AND CONTROL PROJECTWORK - INPUTSWORK - INPUTS
MONITOR AND CONTROL PROJECTMONITOR AND CONTROL PROJECT
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TOOLS & TECHNIQUES
• Expert Judgment
PMP Prep - Integration Slide 61
MONITOR AND CONTROL PROJECTMONITOR AND CONTROL PROJECTWORK – T&TWORK – T&T
O O CO O O C O
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OUTPUTSChange requests
• Recommended Corrective Actions
Corrective actions are recommended to bring expected future project
performance into conformance with the project management plan
• Recommended Preventive Actions Preventive actions are recommended to reduce the probability of
negative consequences associated with project risk
• Recommended Defect Repair
Some defects, which are found during the quality inspection and audit
process, are recommended for correction
Project Management plan updates
Project Documents updates
PMP Prep - Integration Slide 62
MONITOR AND CONTROL PROJECT WORK MONITOR AND CONTROL PROJECT WORK - OUTPUTS- OUTPUTS
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INTEGRATION PROCESSESINTEGRATION PROCESSES
PMP Prep – Integration Slide 63
PROCESSES BY PROCESS GROUPInitiating Planning Executing Monitoring
andcontrolling
Closing
4.1 Develop
Project
Charter
4.2 DevelopProject
ManagementPlan
4.3 Directand Manage
ProjectExecution
4.4 Monitorand Control
Project work
4.6 CloseProject
4.5 IntegratedChangeControl
INTEGRATED CHANGEINTEGRATED CHANGE
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WHAT HAPPENS DURING INTEGRATED CHANGE CONTROL? • During the entire project, this process ensures that the project
management plan, project scope statement, and other deliverablesmust be maintained by carefully and continuously managingchanges, either by rejecting changes or by approving changes so thatthose approved changes are incorporated into a revised baseline.
• ICC process includes the following:• Identify if a change needs to occur or has occurred• Influence the factors that circumvent ICC so that only approved
changes are implemented• Review, approve & then manage change requests• Review and approve all recommended corrective and preventativeactions
• Control & update scope, cost, budget, schedule & qualityrequirements, based on approved changes, by coordinating acrossentire project, i.e. a schedule change may affect risk
PMP Prep - Integration Slide 64
INTEGRATED CHANGEINTEGRATED CHANGECONTROLCONTROL
INTEGRATED CHANGEINTEGRATED CHANGE
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• Document impact of requested changes• Validate defect repairs• Control project quality (in a coordinated fashion)• Some configuration management activities included here are:
• Configuration Identification -product details (to the level needed) are
defined, verified & labeled; changes are managed & accountabilityis maintained
• Configuration Status Accounting -capturing, storing & accessingconfiguration information
• Configuration Verification & Auditing -compare performance &.functional requirements defined in the configuration documentation
with reality• Large organizations have Change Control Boards (CCB) to authorize
changes (their roles & responsibilities should be clearly documentedhere)
PMP Prep – Integration Slide 65
INTEGRATED CHANGEINTEGRATED CHANGECONTROLCONTROL
INTEGRATED CHANGEINTEGRATED CHANGE
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INTEGRATED CHANGEINTEGRATED CHANGECONTROLCONTROL
PMP Prep – Integration Slide 66
Inputs• Project management plan• Requested changes•Work performance information• Recommended preventive actions• Recommended corrective actions• Recommended defect repair • Deliverables
Outputs• Approved change requests• Rejected change requests• Project management plan (updates)• Project scope statement (updates)
• Requested changes• Approved preventive actions• Approved corrective actions• Approved defect repair • Validated defect repair • Deliverables
TOOLS &Techniques• Project management
methodology• Project management
Information system• Expert judgement
INTEGRATED CHANGEINTEGRATED CHANGE
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• Project Management Plan
• Requested Changes Work Performance Information
• Recommended Preventive Actions
• Recommended Corrective Actions
• Recommended Defect Repair
•Deliverables
• Change Approved change Req. Implemented
• Request Project Mgmt. plan updated Change
• Scope statement updated Request
PMP Prep - Integration Slide 67
INTEGRATED CHANGEINTEGRATED CHANGE
CONTROL-T&TCONTROL-T&T
23Differen
tProcess
IntegratedChangeControl
(Monitoring &Controlling
)
Direct &ManageProject
Execution
(Executing)
INTEGRATED CHANGEINTEGRATED CHANGE
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TOOLS & TECHNIQUES
• Project Management Methodology
It defines a process that aids a project management team inimplementing ICC for the project
• Project Management Information System (PMIS)
• Expert Judgment
PMP Prep - Integration Slide 68
INTEGRATED CHANGEINTEGRATED CHANGE
CONTROL-T&TCONTROL-T&T
INTEGRATED CHANGE CONTROLINTEGRATED CHANGE CONTROL
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OUTPUTS
Approved Change Requests
Rejected Change Requests
Project Management Plan (Updates)
Project Scope Statement (Updates)
Approved Corrective Actions
Approved Preventive Actions
Approved Defect Repair
Validated Defect Repair
Deliverables
PMP Prep - Integration Slide 69
INTEGRATED CHANGE CONTROL-INTEGRATED CHANGE CONTROL-
OUTPUTOUTPUT
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INTEGRATION PROCESSESINTEGRATION PROCESSES
PMP Prep – Integration Slide 70
PROCESSES BY PROCESS GROUPInitiating Planning Executing Monitoring
andcontrolling
Closing
4.1 Develop
Project
Charter
4.3 DevelopProject
ManagementPlan
4.4 Directand Manage
ProjectExecution
4.5 Monitorand Control
Project work
4.7 CloseProject
4.2 DevelopPreliminary
Project ScopeStatement
4.6Integrated
ChangeControl
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WHAT HAPPENS DURING PROJECT CLOSURE?
• Finalize all activities completed across all process groups to formallyclose the project or project phase
• Transfer completed or cancelled project as appropriate
• Establish procedures to coordinate activities needed to verify anddocument the project deliverables, to coordinate and interact toformalize acceptance of those deliverables by the customer or sponsor
• Investigate and document the reasons for actions taken if a project isterminated before completion
CLOSE PROJECTCLOSE PROJECT
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PROCEDURES TO PERFORM CLOSURE ACTIVITIES
Administrative Closure Procedures • integrated activities needed to collect project records• analyze project success or failure• gather lessons learned• archive project information for future use by organization
Contract Closure Procedures (from Procurement)• closing all contracts• product verification (confirm if all work is completed correctly and
satisfactorily)• Administrative closure (update & archive contract records)
PMP Prep - Integration Slide 72
CLOSE PROJECTCLOSE PROJECT
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CLOSE PROJECTCLOSE PROJECT
PMP Prep – Integration Slide 73
Inputs
• Project management plan• Contract documentation• Enterprise environmental factors• Organizational process assets• Work performance information• Deliverables
Outputs
• Administrative closure
procedure• Contract closure procedure• Final product, service or result• Organizational process assets
(updates)
Tools &Techniques• Project management
methodology• Project management
Information system• Expert judgement
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INPUTS
• Project Management Plan
• Contract DocumentationIncludes contract itself, as well as changes to the contract andother documentation (such as the technical approach, product
description, acceptance criteria)
• Enterprise Environmental Factors e.g. governmentregulations
•Organizational Process Assets e.g. formal sign off forms
• Work Performance Information e.g. all invoices from procurement
• Deliverables
PMP Prep - Integration Slide 74
CLOSE PROJECTCLOSE PROJECT
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TOOLS & TECHNIQUES
• Project Management Methodology
• Project Management Information System (PMIS)
• Expert Judgment
PMP Prep - Integration Slide 75
CLOSE PROJECT-T&TCLOSE PROJECT-T&T
CLOSE PROJECT -CLOSE PROJECT -
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OUTPUTS
• Administrative Closure Procedure
• Contract Closure Procedure
• Final Product, Service, or ResultFormal acceptance/handover of the final product, service or result
Receipt of formal statement that contract terms have been met
PMP Prep - Integration Slide 76
CLOSE PROJECT CLOSE PROJECT OUTPUTSOUTPUTS
CLOSE PROJECT -CLOSE PROJECT -
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• Organizational Process Assets (updates)• Formal Acceptance Documentation
Formal confirmation from customer/sponsor that requirements &
specifications of product, service or result have been met
• Project Files
Documentation resulting from the project’s activities
• Project Closer Documents
Formal documentation indicating completion of project &
transfer of completed project deliverables to others, such as
an operations group
• Historical Information
Historical information & lesson learned information are
transferred to the lessons learned knowledge base for use by
future projects
PMP Prep – Integration Slide 77
CLOSE PROJECT CLOSE PROJECT OUTPUTSOUTPUTS
S Q S O
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Question
Which of the following describes configuration management?
A. it ensures that the description of a project’s product is correct &complete
B. a set of tools, techniques, methodologies, resources & proceduresused to manage products
C. the set of procedures developed to ensure that the project designcriteria are met
D. a mechanism to record budget & schedule variances
PMP Prep - Integration Slide 78
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
SAMPLE EXAM QUESTION
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B is correct.
Configuration Management System -It's a collection of formal documentedprocedures used to apply technical and administrative direction and surveillanceto: identify and document the functional and physical characteristics of a
product, result, service, or component; control any changes to suchcharacteristics; record and report each change and its implementation status;and support the audit of the products, results or components to verifyconformance to requirements. –
See PMBOK, p.354.
In other words -Procedures to manage (mostly control change)characteristics of something (like a procedure document, user guide)
PMP Prep - Integration Slide 79
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
SAMPLE EXAM QUESTION
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Question
Project A had an initial investment of $4 million, out of which $2 millionhas already been spent.
A new Project B needs $1.5 million to complete and will meet the sameobjectives as Project A.
Which project should you select? You can only pick one.
PMP Prep - Integration Slide 80
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
S Q S OSAMPLE EXAM QUESTION
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Answer
Choose Project B.
Project A has already spent $2 million (sunk cost). To complete, it needs $2million more out of $4 million total.Project B needs $1.5 million to complete, which is less that the $2 millionneeded to complete Project A.
Therefore, selecting Project B is better because $l.5M is less than $2M.
PMP Prep - Integration Slide 81
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
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Question
Three projects are being considered: Project A has a NPV of $5 millionProject B has a NPV of $3 million Project C has a NPV of $2 million
What is the opportunity cost if Project A is selected?
A -$5 millionB -$3 millionC -$2 millionD -$0
PMP Prep - Integration Slide 82
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
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Answer
B - $3 million.
Opportunity cost is the cost of giving up the next best option.
If you choose Project A, you loose the opportunity to make Project B'spotential profit (NPV), which is $3 million.
PMP Prep - Integration Slide 83
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
Q ti ?Q ti ?
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Questions?Questions?
PMP Prep - Integration Slide 84
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DAY 1
PMP Prep – Scope Slide 1
DAY 2
CHAPTER 5
PROJECT SCOPE MANAGEMENT
AGENDAAGENDA
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AGENDAAGENDA
Day 1PMP Exam Prep IntroductionProject Management Framework
*Project Life Cycle & OrganisationProject Management Processes
Project INTEGRATION Management
DAY 2 Project SCOPE ManagementProject TIME ManagementProject COST ManagementProject QUALITY Management DAY 3Project COMMUNICATION Management
Project HUMAN RESOURCE ManagementProject RISK Management
Project PROCUREMENT ManagementDAY 4
Professional & Social ResponsibilityREVISION & QUIZ
PROJECT SCOPEPROJECT SCOPE
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JJMANAGEMENTMANAGEMENT
What does the scope knowledge areado?
• It includes the processes required to ensure that the project
includes all the work required and only the work required tocomplete the project successfully.
• Managing the project scope is primarily concerned with definingand controlling what is and is not included in the project.
•Project Scope Management defines and controls all the of workincluded and not included in the plan.
• It Makes sure that every one agrees with the scope.
PROJECT SCOPEPROJECT SCOPE
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JJMANAGEMENTMANAGEMENT
Project Scope Management includes the following processes:
• Collect Requirements
• Define Scope
• Create WBS• Verify Scope
• Control Scope
PMP Prep – Scope Slide 3
PROJECT SCOPEPROJECT SCOPE
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JJMANAGEMENTMANAGEMENT
In the project context, the term scope can refer to: Product Scope
- Features & functions that characterize a product, service or result,and/or
Project Scope - Work that needs to be accomplished to deliver a product, service or
result with the specified features and functions.
The processes used to manage project scope, as well as the supportingtools and techniques, vary by application area and are usually defined aspart of the project life cycle.
Scope baseline includes 3 things:- Approved Detailed Project Scope statement
- Associated work breakdown structure- WBS dictionary
PMP Prep – Scope Slide 4
SCOPE PROCESSESSCOPE PROCESSES
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SCOPE PROCESSESSCOPE PROCESSES
SCOPE PROCESS DEFINITIONS
5. 1 Collect Requirements- Collect Requirements is the process of defining and
documentingstakeholders’ needs to meet the project objectives.
- The project’s success is directly influenced by the care taken in
capturing and managing project and product requirements.- Requirements include the quantified and documented needs andexpectations of the sponsor, customer, and other stakeholders.
- the requirements need to be elicited, analyzed, and recorded inenough detail to be measured once project execution begins.
- Collecting requirements is defining and managing customer
expectations.- Requirements become the foundation of the WBS.- Cost, schedule, and quality planning are all built upon these
requirements.- The development of requirements begins with an analysis of the
information contained in the project charter and stakeholder register.
–
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SCOPE PROCESSESSCOPE PROCESSES
5.2 Define Scope• It is the process of developing a detailed description of the project and
product.
5.3 Create WBS• Subdivide major project deliverables into smaller, more
manageable components
5.4 Verify Scope• Formal acceptance of completed project deliverables, i.e. a signed
document
5.5 Control Scope• Control changes to the project scope
PMP Prep – Scope Slide 6
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SCOPE PROCESSESSCOPE PROCESSES
Process by process group
–
Planning Monitoring andControlling
5.1Collect
Requirements
5.4Verify Scope
5.2
Define Scope
5.5
Control Scope
5.3
Create WBS
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COLLECT REQUIREMENTSCOLLECT REQUIREMENTS
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COLLECT REQUIREMENTSCOLLECT REQUIREMENTS
PMP Prep – Scope Slide 9
INPUTS• Project charter
• Stakeholder register
OUTPUTS• Requirements
documentation• Requirements
Management Plan• Requirements
traceability matrix
TOOLS &TECHNIQUES
• Interviews• Focus groups
• Facilitated workshops• Group creativity techniques
• Group decision makingtechniques
• Questionnaires and surveys• observations• Prototypes
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- INPUTS- INPUTSINPUTS
1. Project Charter
2. Stakeholder Register It is used to identify stakeholders that can provide information ondetailed project and product requirements (Stakeholder register isdescribed in Sec 10.1)
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-T&T-T&T
COLLECT REQUIREMENTSCOLLECT REQUIREMENTS
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– T&T– T&TTOOLS & TECHNIQUES
1. Interviews
2. Focus groups Focus groups bring together prequalified stakeholders and subjectmatter experts to learn about their expectations and attitudes about a
proposed product, service, or result. A trained moderator guides thegroup through an interactive discussion, designed to be moreconversational than one-on-one interview.
3. Facilitated Workshops
4. Group Creativity Techniques- Brainstorming
- Nominal group technique- The Delhi Technique- Idea/mind mapping- Affinity diagram
PMP Prep – Scope Slide 12
COLLECT REQUIREMENTSCOLLECT REQUIREMENTS
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– T&T– T&T
TOOLS & TECHNIQUES 5. Group Decision Making Techniques - Unanimity- Majority- Plurality (the largest block in a group)- Dictatorship
6. Questionnaires and Surveys
7. Observations
8. Prototypes
Prototyping is a method of obtaining early feedback onrequirements
by providing a working model of the expected product beforeactually building it.
COLLECT REQUIREMENTS -COLLECT REQUIREMENTS -
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OUTPUTSOUTPUTS
OUTPUTS
• Requirements Documentation (Read Sec. 5.1.3.1, page 109)
• Requirements Management Plan(Read Sec. 5.1.3.2, page 110)
PMP Prep – Scope Slide 14
COLLECT REQUIREMENTS -COLLECT REQUIREMENTS -
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OUTPUTSOUTPUTSOUTPUTS
• Requirements Traceability Matrix Traceability matrix is a table that links requirements to their origin and
traces them throughout the project life cycle. It provides a structure for managing changes to the product scope. The process includes, but notlimited to tracing:
- 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
PMP Prep – Scope Slide 15
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SCOPE PROCESSESSCOPE PROCESSES
Process by process group
PMP Prep – Scope Slide 16
Planning Monitoring andControlling
5.1
Collect Requirements
5.4
Verify Scope
5.2
Define Scope
5.5
Control Scope
5.3
Create WBS
DEFINE SCOPEDEFINE SCOPE
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DEFINE SCOPEDEFINE SCOPE
What happens in Define Scope?
• Define Scope is the process of developing a detailed description of the project and product.
• The preparation of a detailed project scope statement is critical toproject success and builds upon the major deliverables, assumptions,
andconstraints that are documented during project initiation.
• During planning, the project scope is defined and described withgreater specificity as more information about the project is known.
• Existing risks, assumptions and constraints are analyzed for completeness
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DEFINE SCOPEDEFINE SCOPE
PMP Prep – Scope Slide 18
INPUTS• Project charter • Requirements documentation• Organizational process assets
OUTPUTS
• Project scope statement• Project document updates
TOOLS & TECHNIQUES
• Expert judgement• Product analysis
• Alternative identification• Facilitated workshops
DEFINE SCOPE - INPUTSDEFINE SCOPE - INPUTS
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DEFINE SCOPE - INPUTSDEFINE SCOPE - INPUTS
INPUTS• Project Charter
High-level project description and product characteristics
• Requirements documentation Described in Sec. 5.1.3.1
• Organizational process Assets
PMP Prep – Scope Slide 19
DEFINE SCOPE – T & TDEFINE SCOPE – T & T
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DEFINE SCOPE – T & TDEFINE SCOPE – T & T
TOOLS & TECHNIQUESExpert Judgment
• Expert judgment is often used to analyze the information needed todevelop the project scope statement.
Product Analysis
• Differs by application area (translates product objectives into tangibledeliverables and requirements).
• Includes techniques such as product breakdown, systems analysis,systems engineering , value engineering, and value analysis.
PMP Prep – Scope Slide 20
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DEFINE SCOPE– T&TDEFINE SCOPE T&T
Alternatives Identification
• Technique used to generate different approaches to execute &perform project work.
• Common techniques are brainstorming (group shares impulseideas & gains ideas from each other) & lateral thinking (consider several points of view)
Facilitated Workshops
• Read Section 5.1.2.3
PMP Prep – Scope Slide 21
DEFINE SCOPE - OUTPUTSDEFINE SCOPE - OUTPUTS
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DEFINE SCOPE - OUTPUTSDEFINE SCOPE OUTPUTS
1) Project Scope Statement
• It describes in detail the project deliverables & work required to createthe deliverables.
• It defines what work will be performed & what work is excluded –determines how well the PM team can control the overall project scope –in turn can determine how well the PM team can plan, manage & controlexecution of the project
• It includes, either directly or by reference to other documents (must readpage 115 of PMBOK thoroughly)
PMP Prep – Scope Slide 22
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DEFINE SCOPE - OUTPUTSDEFINE SCOPE - OUTPUTS
The detailed project scope statement includes, either directly, or by reference toother documents, the following:
• Product scope description
• Progressively elaborated characteristics of project's product, service or resultdescribed in the project charter and requirements documentation.
• Product acceptance criteria
Process and criteria for accepting completed products
• Project deliverables
Product or service of the project, and supplementary results, such asproject management reports & documentation
PMP Prep – Scope Slide 23
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DEFINE SCOPE OUTPUTSDEFINE SCOPE OUTPUTS
• Project exclusionsGenerally identifies what is excluded as from the project (must stateexplicitly)
• Project constraints - Restriction or limitation of the project scope that limit team’s option e.g.
pre-defined budget; imposed dates or schedule milestones etc.- Projects performed under contract generally have contractual provisions
• Project assumptions- Factors, that for planning purposes, are considered true, real or certain. -- Generally involve a degree of risk
PMP Prep – Scope Slide 24
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DEFINE SCOPE OUTPUTSDEFINE SCOPE OUTPUTS
2) Project Document Updates
Documents that may be updated
include, but not limited to :
- Stakeholder register - Requirements documentation
- Requirements traceability matrix
PMP Prep – Scope Slide 25
DEFINE SCOPE - OUTPUTSDEFINE SCOPE - OUTPUTS
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DEFINE SCOPE OUTPUTSDEFINE SCOPE OUTPUTS
Question
My company is researching on “clean energy on cleantransportation”. As the Project Manager, which of thefollowing is a valid assumption?
A. Project scope is to develop an alternative energy source or electric drive for Off-road vehicles.
B. Project has to be completed in 24 monthsC. Cost of the project is $ 17mD. Gas will become a scarce commodity after 20 years
PMP Prep – Scope Slide 26
DEFINE SCOPE - OUTPUTSDEFINE SCOPE - OUTPUTS
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DEFINE SCOPE OUTPUTSDEFINE SCOPE OUTPUTS
Answer : D
Assumptions are factors that are considered true, real or certain(PM needs to make assumptions at every stage of the project)
Constraints are limitations or restrictions. (given in Project Charter)
D is the only assumption; all the others are
constraints.
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SCOPE PROCESSESSCOPE PROCESSES
Process by process group
PMP Prep – Scope Slide 28
Planning Monitoring andControlling
5.1
Collect Requirements
5.4
Verify Scope
5.2
Define Scope
5.5
Control Scope
5.3
Create WBS
CREATE WBSCREATE WBS
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CREATE WBSCREATE WBS
WHAT'S A WORK BREAKDOWN STRUCTURE?
• Deliverable-oriented hierarchy of decomposed work to be done bythe project team.
• Organizes & defines the total scope of the project.
• Subdivides the project work into smaller, more manageable piecesof work.
(refer to figure 5-7 in page117 of PMBOK)
PMP Prep – Scope Slide 29
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CREATE WBSCREATE WBS
PMP Prep – Scope Slide 30
INPUTS• Project scope statement
• Requirementsdocumentation
• Organizational processassets
OUTPUTS• WBS
• WBS dictionary• Scope baseline
• Project document updates
TOOLS & TECHNIQUES• Decomposition
CREATE WBS - INPUTSCREATE WBS - INPUTS
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CREATE WBS INPUTSCREATE WBS INPUTS
INPUTS
• Project Scope Statement
• Requirements Documentation
• Organizational Process Assets
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CREATE WBS T&TTOOLS & TECHNIQUES
Decomposition
• Decomposition is sub-division of project deliverables into smaller, moremanageable components. Decomposition involves the following activities:
• Decomposition may not be possible for a deliverable or sub-project thatwill be accomplished far into the future.
• PM team waits until the deliverable or sub-project is clarified so thedetails of WBS can be developed. This technique is called “ Rolling WavePlanning”.
(Read page 118)
PMP Prep – Scope Slide 32
CREATE WBS – DefinitionsCREATE WBS – Definitions
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• Work Package – a deliverable at lowest level of WBS with a groupof activities, which are used in Activity Definition as schedulabletasks (may be further decomposed)
• Planning package – Future deliverables or subprojects that can’tbe decomposed
PMP Prep – Scope Slide 33
CREATE WBSCREATE WBS
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CREATE WBS
Decomposition process involves:
• Identifying the deliverables and related work
• Structuring and organizing the WBS
• Decomposing the upper WBS levels into lower level detailed
components.• Develop & Assign identification codes to each WBS component
(code of account)
• Verifying that the degree of decomposition of the work is
necessary and sufficient
PMP Prep – Scope Slide 34
APPROACHES TO DEVELOPAPPROACHES TO DEVELOP
SWBS
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WBSWBS
• Using guidelines: Some organizations, like the DOD,provide guidelines for preparing WBSs
• The analogy approach: It often helps to review WBSs of
similar projects
• The top-down approach: Start with the largest items of theproject and keep breaking them down
• The bottoms-up approach: Start with the detailed tasksand roll them up
PMP Prep – Scope Slide 35
CREATE WBSCREATE WBS
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PMP Prep – Scope Slide 36
Sample Intranet WBS Organized by Product
SAMPLE INTRANET WBSSAMPLE INTRANET WBS
ORGANIZED BY PHASEORGANIZED BY PHASE
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ORGANIZED BY PHASEORGANIZED BY PHASE
PMP Prep – Scope Slide 37
CREATE WBSCREATE WBS
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Basic principles for creating a WBS:
1. A unit of work should appear at only one place in the WBS.
2. The work content of a WBS item is the sum of the WBS items below it.
3. A WBS item is the responsibility of only one individual, even thoughmany people may be working on it.
4. The WBS must be consistent with the way in which work is actually going
to be performed; it should serve the project team first and other purposesonly if practical.
5. Project team members should be involved in developing the WBS toensure consistency and buy-in.
6. Each WBS item must be documented to ensure accurate understandingof the scope of work included and not included in that item.
7. The WBS must be a flexible tool to accommodate inevitable changeswhile properly maintaining control of the work content in the projectaccording to the scope statement.
PMP Prep – Scope Slide 38
CREATE WBS - DefinitionsCREATE WBS - Definitions
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Code of Accounts -Uniquely identifies each element (box)of the WBS
MS Project, Visio etc. can generate Code of Accounts.
Chart of Accounts -Coding structure used by the
performing organization to report financial information bycategory, i.e. labour or supplies. It's generally as given inGeneral Ledger.
Control Account -A management control point placed in a
WBS element where scope, cost & schedule can be tracked.Also used for planning when work packages are notplanned yet. Documented in a Control Account Plan.
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OUTPUTS
Work Breakdown StructureThe WBS should not be confused with other break-down structure used topresent project information. Some of them used in other application/knowledge areas include:
• Organizational Breakdown Structure (OBS): depiction of project by
departments, units or teams
• Bill Of Material (BOM): tabulation of physical assemblies, subassemblies
and components
• Risk Breakdown Structure (RBS): depiction of identified project risks
arranged by risk category
• Resource Breakdown Structure (RBS): depiction of project resources bytype
PMP Prep – Scope Slide 40
CREATE WBS- OUTPUTSCREATE WBS- OUTPUTS
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WBS Dictionary
• Document that details each WBS component• It includes:
• Code of account identifier
• a statement of work with defined deliverables• Responsible organization• List of schedule milestone
• It could include:
• Contract information• Quality requirements• Technical references• List of associated activities/interdependencies• Resources required• Cost estimate
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Scope Baseline - The approved detailed “Project ScopeStatement” and its associated WBS & WBS Dictionary.
Project Document Updates
–
SCOPE PROCESSESSCOPE PROCESSES
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Process by process group
PMP Prep – Scope Slide 43
Planning Monitoring andControlling
5.1
Collect Requirements
5.4
Verify Scope
5.2
Define Scope
5.5
Control Scope
5.3
Create WBS
VERIFY SCOPEVERIFY SCOPE
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HOW DO WE VERIFY SCOPE?
• Getting the stakeholders' formal acceptance of completed or updatedscope & deliverables, i.e. the WBS or the software you delivered
• If a project terminates early, project scope verification should be donenext to establish & document the level & extent of completion.
• Scope verification is concerned with acceptance of deliverables, Whilequality control is concerned with quality of deliverables
• Quality control is generally performed before scope verification but canbe performed in parallel as well
• It's unethical to ignore Scope Verification because it adds risk to meetingthe customer's needs (see PMP Code of Conduct)
PMP Prep – Scope Slide 44
VERIFY SCOPEVERIFY SCOPE
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PMP Prep – Scope Slide 45
INPUTS• Project scope
statement• WBS dictionary
• Project scopemanagement plan• Deliverables
OUTPUTS• Accepted
deliverables• Requested
changes
• Recommendedcorrectiveactions
TOOLS &TECHNIQUES
• Inspection
VERIFY SCOPE - INPUTSVERIFY SCOPE - INPUTS
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INPUTSProject Scope Statement -
WBS Dictionary -
Project Scope Management Plan -
Deliverables - partially or fully completed & are an output of the Direct &Manage Project Execution
PMP Prep – Scope Slide 46
VERIFY SCOPE – T&TVERIFY SCOPE – T&T
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TOOLS & TECHNIQUES
Inspection
• Measuring, examining, and verifying to determine whether work or
deliverables meet requirements and product acceptance criteria.
• Inspections are also called reviews, product reviews, audits andwalkthroughs.
–
VERIFY SCOPE - OUTPUTSVERIFY SCOPE - OUTPUTS
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OUTPUTSAccepted Deliverables
• Documents those completed deliverables that have beenaccepted.
• Documents those completed deliverables that have not beenaccepted, along with the reasons for non-acceptance.
• Includes supporting documentation received from customer or sponsor and acknowledging stakeholders acceptance of theproject’s deliverables.
Requested Changes -
Recommended Corrective Actions –
PMP Prep – Scope Slide 48
SCOPE PROCESSESSCOPE PROCESSES
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Process by process group
PMP Prep – Scope Slide 49
Planning Monitoring andControlling
5.1
Collect Requirements
5.4
Verify Scope
5.2
Define Scope
5.5
Control Scope
5.3
Create WBS
CONTROL SCOPECONTROL SCOPE
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WHAT HAPPENS DURING CONTROL SCOPE ?(Change is inevitable)
• Influencing the factor that create project scope changes
• Controlling the impact of those changes
• Assures all requested changes and recommended corrective actionsare processed through the project Integrated Change Controlprocess
• Project scope control is used to manage the actual changes whenthey occur& integrated with other control processes
Note: Uncontrolled changes are often referred to as project scopecreep
PMP Prep – Scope Slide 50
CONTROL SCOPECONTROL SCOPE
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PMP Prep – Scope Slide 51
INPUTS• Project scope statement
• Work breakdown structure• WBS dictionary• Project scope
management plan• Performance reports
• Approved change requests• Work performance
information
OUTPUTS• Project scope statement
(updates)• WBS (updates)
• WBS dictionary (updates)• Scope baseline (updates)
• Requested changes•Recommended corrective action• Organizational process assets
(updates)• Project management Plan
(updates)
TOOLS & TECHNIQUES
• Change control system• Variance analysis
• Replanning• Configurationmanagement
system
CONTROL SCOPE - INPUTSCONTROL SCOPE - INPUTS
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INPUTSProject Scope Statement -
Work Breakdown Structure -
WBS Directory -
Project Scope Management Plan -
Performance Reports -• Performance reports provide information on project work performance,
such as interim deliverables that have been completed
Approved Change Requests -
Work Performance Information –
PMP Prep – Scope Slide 52
CONTROL SCOPE – T&TCONTROL SCOPE – T&T
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TOOLS & TECHNIQUES
Change Control System
Documented in project scope management plan, defines the procedures bywhich the project scope or product scope can be changed.
Variance Analysis
• Project performance measurements are used to assess the magnitude of variation. Important aspects of scope control include determining cause of variance to scope baseline and deciding whether corrective action is
required.• Time & cost areas (to come) use a mathematical technique called earned
value analysis.
PMP Prep – Scope Slide 53
CONTROL SCOPE – T&TCONTROL SCOPE – T&T
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Re-planning –
• Approved change requests can require modifications to the:
• WBS• WBS dictionary
• Project Scope Statement• Project Scope Management Plan• Other components of Project Management Plan
• Configuration Management System
Provides procedures for the status of the deliverables, and assures thatrequested changes to the project scope & product scope are thoroughlyconsidered & documented before being processed through ICC process.
PMP Pre – Sco e Slide 54
CONTROL SCOPE -CONTROL SCOPE -OUTPUTSOUTPUTS
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OUTPUTSOUTPUTSOUTPUTS
Project Scope Statement (updates) -
Work Breakdown Structure (updates) -
WBS Dictionary (Updates) -
Scope Baseline (Updates) -
Requested Changes -
Recommended Corrective Actions -
Organizational Process Assets (Updates) -
Project Management Plan (Updates) -
PMP Prep – Scope Slide 55
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
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Question
You're the project manager for an advertising campaign. Thestakeholders, including the client, approved your completed WBS.Later, after some of the artwork has been printed, the client wantsto add a registered trademark symbol, which will cost a
considerable amount of money. The client says that your company'ssalesperson, prior to signoff on the WBS, promised this featurewould be included. Who should pay for the change?
A. Your company managing the project
B. Both the client and your company should pay part of the costC. The change should not be implemented
D. The client
PMP Prep – Scope Slide 56
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
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Answer - D
Because signing of the WBS constitutes an agreement betweenyour company managing the project and the client, the client shouldpay. Work that is not specified in the WBS is not part of the projectscope.
In reality, this is sometimes not the case. Companies will frequentlydo work that is outside the project scope in order to ensure thegoodwill of the client.
Also note that if the WBS had been done with a milestonedeliverable for signing of the artwork before printing (scopeverification), this could have been avoided.
PMP Prep – Scope Slide 57
Questions?Questions?
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PMP Prep – Scope Slide 58
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PMP Prep – Time Slide 1
DAY 3
CHAPTER 6
PROJECT TIMEMANAGEMENT
AGENDAAGENDA
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Day 1 DAY 4 PMP Exam Prep Introduction Project QUALITY Management
Project Management Framework Project RISK Management
*Introduction Project HUMANRESOURCE Management
*Project Life Cycle & OrganisationProject Management Processes
DAY 2 DAY 5 Project INTEGRATION Management ProjectPROCUREMENT Management
Project SCOPE Management Professional & SocialResponsibility
DAY 3 DAY 6 Project TIME Management REVISION & QUIZ
Project COST Management
PROJECT TIMEPROJECT TIMEMANAGEMENTMANAGEMENT
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MANAGEMENTMANAGEMENT WHAT DOES THE TIME MANAGEMENT AREA ATTAIN?
• Manages the project schedule to ensure timely
completion of the project
• Utilizes the Schedule Management Plan from the
Develop Project Management Plan process
PMP Prep – Time Slide 2
TIME PROCESSESTIME PROCESSES
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DEFINITIONS : TIME PROCESSES
6.1 Define Activities
• Identifying the specific actions to be performed to produce project deliverables
(at the lowest level in the WBS, which is called the work package).
6.2 Sequence Activities
• Identifying & documenting relationships among the project activities.
6.3 Estimate Activity Resources
• Estimate the type & quantities of material, people, equipment, or supplies
required to perform each activity.
PMP Prep – Time Slide 3
TIME PROCESSESTIME PROCESSES
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6.4 Estimate Activity Durations • Estimate the number of work periods needed to complete individual activities
with estimated resources.
6.5 Develop Schedule
• Analyze activity sequences, durations, resource requirements, and scheduleconstraints to create the project schedule.(The five processes above could be viewed as a single process in small projects)
6.6 Control Schedule• Monitor the status of the project to update project progress and managing
changes to the schedule baseline.
PMP Prep – Time Slide 4
TIME PROCESSESTIME PROCESSES
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PMP Prep – Time Slide 5
PLANNING MONITORING & CONTROLLING
6.1 Define Activities 6.6 Control Schedule
6.2 Sequence Activities
6.3 Estimate Activity Resources
6.4 Estimate Activity Durations
6.5 Develop Schedule
DEFINE ACTIVITIESDEFINE ACTIVITIESWHAT HAPPENS IN DEFINE ACTIVITIES?
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WHAT HAPPENS IN DEFINE ACTIVITIES?
• Identifies the specific actions to be performed to produce the project deliverables. TheCreate WBS process identifies the deliverables at the lowest level in the WorkBreakdown Structure (WBS), the work package.
• Decompose the work packages into smaller components called activities that representthe work necessary to complete the work package.
• Differentiate between a work package and an activity?• A work package is a deliverable as a result of work• An activity is an action that produces a deliverable alone or together with other
activities
• Activities provide a basis for estimating, scheduling, executing, and
monitoring & controlling the project work.
• Implicit in this process is defining and planning the schedule activities such that theproject objectives will be met.
PMP Prep – Time Slide 6
DEFINE ACTIVITIESDEFINE ACTIVITIES
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PMP Prep – Time Slide 7
• Scope baseline• Enterprise environmental factors• Organizational process assets
OUTPUTS• Activity list
• Activity
attributes• Milestone list
TOOLS & TECHNIQUES• Decomposition• Rolling wave planning
• Templates• Expert judgement
DEFINE ACTIVITIES -DEFINE ACTIVITIES -INPUTSINPUTS
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INPUTSU S
• Scope Baseline
• Enterprise Environmental Factors
• Organizational Process Assets - Existing formal and informal activity planning-related policies, procedures,
and guidelines, such as scheduling methodology, that are considered indeveloping the activity definitions, and
- Lessons-learned knowledge base containing historical informationregarding activities lists used by previous similar projects.
PMP Prep – Time Slide 8
DEFINE ACTIVITIES – T&TDEFINE ACTIVITIES – T&T
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TOOLS & TECHNIQUES
Decomposition
• Subdivides work packages into smaller, more manageable components calledactivities. Activities represent the effort needed to complete a work package.
Rolling Wave Planning
• Rolling wave planning is a form of progressive elaboration planning, where
• Work in near term is planned in detail• Work in future is planned at a higher level of WBS
Therefore, work can exist at various levels of detail depending on where it is in the project life cycle.For example, during early strategic planning, when information is less defined, work
packages may be decomposed to the milestone level. As more is known about theupcoming events in the near term it can be decomposed into activities.
PMP Prep – Time Slide 9
DEFINE ACTIVITIES– T&TDEFINE ACTIVITIES– T&T
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Templates• A standard activity list or a portion of an activity from a
previous project is often used as a template for a new
project.
• Templates are also used to identify typical schedulemilestones.
Expert Judgment• Experts - experienced and skilled in developing detailed
project scope statements, the WBS, and project schedules
can provide expertise in defining activities
PMP Prep – Time Slide 10
DEFINE ACTIVITIES -DEFINE ACTIVITIES -OUTPUTSOUTPUTS
OUTPUTS
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OU U SOUTPUTS
Activity List
•The activity list is a comprehensive list of all schedule activities required on the project.•The activity list includes the activity identifier and a scope of work description for eachactivity in sufficient detail to ensure that project team members understand what work isrequired to be completed.
Activity Attributes• Multiple components associated with each activity that evolve over time.
During the initial stages of the project they include:- Activity ID, WBS ID, and Activity Name
and when completed may include- Activity codes, activity description- Predecessor activities, successor activities, logical relationships- Leads & lags
- Resource requirements- Imposed dates, constraints & assumptions- Person or company responsible for executing the work- Geographic area or place where the work has to be performed- Activity type such as level of effort, discrete effort, and apportioned effort
PMP Prep – Time Slide 11
DEFINE ACTIVITIES -DEFINE ACTIVITIES -OUTPUTSOUTPUTS
OUTPUTS
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OUTPUTS
Activity Attributes (Contd.)• Activity attributes are used for schedule development and for
selecting, ordering, and sorting the planned schedule activities invarious ways within reports. The number of attributes varies byapplication area.
Milestone List• A milestone is a significant point or event in the project.
Its type that could be either: • Mandatory (required by contract or law)• Optional (based upon project requirements or historicalinformation)
PMP Prep – Time Slide 12
TIME PROCESSESTIME PROCESSES
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PMP Prep – Time Slide 13
PLANNING MONITORING & CONTROLLING
6.1 Define Activities 6.6 Control Schedule
6.2 Sequence Activities
6.3 Estimate Activity Resources
6.4 Estimate Activity Durations
6.5 Develop Schedule
SEQUENCE ACTIVITIESSEQUENCE ACTIVITIES
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WHAT HAPPENS IN SEQUENCE ACTIVITIES?
• Identifies & documents logical relationship among the projectactivities.
• Every activity and milestone except the first and last are connected to
at least one predecessor and one successor.
• Defines precedence relationships and leads & lags to supportdevelopment of a realistic & achievable project schedule.
• Sequencing can be performed by using project management software or byusing manual or automated techniques.
PMP Prep – Time Slide 14
SEQUENCE ACTIVITIESSEQUENCE ACTIVITIES
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PMP Prep – Time Slide 15
INPUTS• Activity list
• Activity attributes
• Milestone list• Project scope statement• Organizational process assets
OUTPUTS• Project schedule
network diagrams
• Project documentupdates
TOOLS & TECHNIQUES• Precedence diagramming
method (PDM)• Dependency determination
• Applying leads & lags• Schedule network
templates
SEQUENCE ACTIVITIESSEQUENCE ACTIVITIES
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INPUTS
• Activity List
• Activity Attributes
• Milestone List
• Project Scope Statement
• Organizational Process Assets
PMP Prep-Time Slide 16
SEQUENCE ACTIVITIESSEQUENCE ACTIVITIESTools &Techniques
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Tools &Techniques
1) Precedence Diagramming Method (PDM)• Method of constructing a Project schedule network diagram that uses
• Rectangles or boxes (called nodes) to represent activities• Arrows show dependencies
This method is also called activity-on-node (AON)
PMP Prep – Time Slide 17
SEQUENCE ACTIVITIES -SEQUENCE ACTIVITIES -T&TT&T
Types of Predecessor
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Types of Predecessor
Finish-to-Start –Successor activity can not start until the predecessor activityis completed
Activity A Predecessor Activity B Successor
e.g. Trouser can not be stitched till the linen is cut.
Finish-to-Finish – Completion of successor activity depends uponcompletion of predecessor activity. Hence two tasks must finish at the sametime
e.g. – ‘Wiring Inspection’ can’t finish until ‘House Wiring” is completed.
Predecessor Activity A
Successor Activity B
PMP Prep – Time Slide 18
SEQUENCE ACTIVITIES -SEQUENCE ACTIVITIES -T&TT&T
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Start-to-Start -Start of successor activity depends upon start of thepredecessor activity
e.g. start canvassing only after candidature is announced by the ElectionCommission.
Predecessor Activity ASuccessor Activity B
Start-to-Finish – Completion of successor activity depends upon start of thepredecessor activity
e.g. – To pass PMP exams, you have to start reading PMBOK
Predecessor Activity ASuccessor Activity B
PMP Prep – Time Slide 19
SEQUENCE ACTIVITIES -SEQUENCE ACTIVITIES -T&TT&T
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Read just for knowledge
Arrow Diagramming Method (ADM) ADM uses arrows to represent activities & connects to nodes to show their dependencies
• Also called activity-on-arrow (AOA)
• Used in teaching ‘Schedule Network Theory’
• Uses only finish-to-start dependencies and is not as
prevalent as PDM
• Can require "dummy" relationships (dummy activities)
(broken lines) that have zero value for duration
• Uses more than one time estimate.
PMP Prep – Time Slide 20
SEQUENCE ACTIVITIES -SEQUENCE ACTIVITIES -T&TT&T
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2) Dependency Determination
Three types of dependencies are used
• Mandatory dependencies (sometimes called hard logic)
• Inherent in the nature of the work e.g. before basement 1st floor
• Discretionary dependencies (preferred, preferential or soft logic)• Sometimes required in unusual aspect of the project
• PM team decides based on knowledge, best practices & exp.
• External dependencies
Relationship between project & non-project activities, i.e. dependent on
delivery of computers before the software development can start
PMP Prep – Time Slide 21
SEQUENCE ACTIVITIES -SEQUENCE ACTIVITIES -T&TT&T
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3) Applying Leads & Lags
A lead allows the following activity start before the previousone
is finished.
• Start painting the bedroom before all the rooms are constructed.• Lead is overlap between activities
A lag allows a delay in the next activity.
• Staff joined but training to commence after 15 days (a lag of 15 days)• Lag is waiting time between activities.
SEQUENCE ACTIVITIES -SEQUENCE ACTIVITIES -T&TT&T
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4) Schedule Network Templates
• Standardized project schedule network diagram templates can be
used to expedite the preparation of networks
• Portions of a project schedule network diagram are often referred as‘sub network’ or ‘fragment network’
• Useful for identical deliverables, as in different floors of a multi-storied
building
PMP Pre – Time Slide 23
SEQUENCE ACTIVITIES -SEQUENCE ACTIVITIES -OUTPUTSOUTPUTS
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OUTPUTS 1) Project Schedule Network Diagrams • Schematic displays of project schedule activities and logical relationships
among dependencies
• A short narrative describing the approach used to sequence the activities. Anyunusual activity sequences within the network are fully described in the
narrative (during schedule updates, you'll need to remember)
2) Project Document UpdatesProject documents that may be updated include, but not limited to:
Activity lists
Activity attributes
Risk register
PMP Prep – Time Slide 24
TIME PROCESSESTIME PROCESSES
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PMP Prep – Time Slide 25
PLANNING MONITORING & CONTROLLING
6.1 Define Activities 6.6 Control Schedule
6.2 Sequence Activities
6.3 Estimate Activity Resources
6.4 Estimate Activity Durations
6.5 Develop Schedule
ESTIMATE ACTIVITY ESTIMATE ACTIVITY RESOURCESRESOURCES
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WHAT IS IN “ESTIMATE ACTIVITY RESOURCES”?
• Estimate Activity Resources is the process of estimating the type and
quantities of material, people, equipment, or supplies required to
perform each activity.
• For example. a construction project team will need to be familiar with
local building codes. Such knowledge is often readily available from local
sellers. However, if the local labor pool lacks experience with unusual or
specialized construction techniques, the additional cost for a consultant might
be the most effective way to secure knowledge of the local building codes.
PMP Prep – Time Slide 26
ESTIMATE ACTIVITY ESTIMATE ACTIVITY RESOURCESRESOURCES
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PMP Prep – Time Slide 27
INPUTS
• Activity list• Activity attributes
• Resource calendars• Enterprise environmental factors
• Organizational process assets
OUTPUTS• Activity resource
requirements
• Resource breakdownstructure
• Project document updates
TOOLS & TECHNIQUES• Expert judgment
• Alternative analysis• Published estimating data
• Bottom-up estimating• Project management software
ESTIMATE ACTIVITY RESOURCESESTIMATE ACTIVITY RESOURCES
- INPUTS- INPUTSINPUTS
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INPUTS• Activity List
• Activity Attributes
• Resource Calendars
The composite resource calendar includes the availability,
capabilities, and skills of human resources
- Which resources (people, equipment, material) are potentially available.- Estimate resource types, i.e. senior vs. junior engineer at different phase of
the project (e.g. during early phases of an Engineering Design Project-Junior
engineer is fine but at later stages experienced engineers will be required).
- Consider geographical location & when they will be available.
• Enterprise Environmental Factors
• Organizational Process Assets
PMP Prep – Time Slide 28
ESTIMATE ACTIVITY RESOURCESESTIMATE ACTIVITY RESOURCES – T&T– T&T
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Expert Judgment Experts access the resource-related inputs in planning & estimating
Alternatives AnalysisMany schedule activities have alternative methods of accomplishment. Theyinclude:• Using various levels of resource capability or skills
• Using different sizes or types of machines or tools, e.g.automated or manual
• Make-or-buy decisions regarding the resources (whether tooutside contracting is cheaper than hiring)
PMP Prep – Time Slide 29
ESTIMATE ACTIVITY ESTIMATE ACTIVITY
RESOURCESRESOURCES – T&T– T&T
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Published Estimating Data
Some companies publish production rate and unit cost of resources for different trades, material & equipment within countries, various info
published by PMI for its members
Bottom-up Estimating
• For accuracy, the work within schedule activity is decomposed into moredetail• Each activity is then totalled into overall project
• Schedule activities may or may not have dependencies betweenthem that can affect the application and use of resources.
Project Management Software Sophisticated software help plan, organize and manage resource pools &
develop resource estimates.
PMP Prep-Time Slide 30
ESTIMATE ACTIVITY RESOURCESESTIMATE ACTIVITY RESOURCES
- OUTPUTS- OUTPUTS
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Activity Resource Requirements
• Identification & description of types & quantities of
resources required for each schedule activity
• Added up to determine estimated resources for eachwork package
• Schedule activity forms basis of estimate & determines
type, availability and quantity of resources used
• Schedule Development process determines when
resources are needed
PMP Prep – Time Slide 31
ESTIMATE ACTIVITY RESOURCESESTIMATE ACTIVITY RESOURCES
- OUTPUTS- OUTPUTS
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Resource Breakdown Structure (RBS)
Is hierarchical structure of identified resources by
(i) Resource category, and (ii) Resource type
Project Document Updates
• Activity list,
• Activity attributes,
• Resource calendars.
PMP Prep – Time Slide 32
TIME PROCESSESTIME PROCESSES
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PMP Prep – Time Slide 33
PLANNING MONITORING & CONTROLLING
6.1 Define Activities 6.6 Control Schedule
6.2 Sequence Activities
6.3 Estimate Activity Resources
6.4 Estimate Activity Durations
6.5 Develop Schedule
ESTIMATE ACTIVITY DURATIONSESTIMATE ACTIVITY DURATIONS
WHAT IS THERE IN ESTIMATE ACTIVITY DURATION?
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WHAT IS THERE IN ESTIMATE ACTIVITY DURATION?
The process of approximating the number of work periods needed to complete individualactivities with estimated resources. The process uses information on:
• Activity scope of work
• Required resource types, estimated resource quantities &
resource calendars.
The duration estimate is:
• progressively elaborated• the process considers the quality & availability of the input data
• All data and assumption that support duration estimating are documented for each
estimate of activity duration.
Most project management software for scheduling will handle this situation by using aproject calendar and alternative work-period resource calendars that are usually identifiedby resources that require specific work-periods. In addition to the sequencing logic, theactivities will be performed according to the project calendar and appropriate resourcecalendars.
PMP Prep – Time Slide 34
ESTIMATE ACTIVITY DURATIONSESTIMATE ACTIVITY DURATIONS
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PMP Prep – Time Slide 35
INPUTS• Activity list
• Activity attributes• Activity resource requirements
• Resource calendars• Project scope statement
• Enterprise environmental factors• Organizational process assets
OUTPUTS• Activity duration estimates
• Project document updates
TOOLS & TECHNIQUES• Expert judgment
• Analogous estimating• Parametric estimating• Three-point estimates
• Reserve analysis
ESTIMATE ACTIVITY DURATIONS - INPUTSESTIMATE ACTIVITY DURATIONS - INPUTS
INPUTS
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INPUTS
Activity List
Activity Attributes
Activity Resource Requirements
Resource Calendars
Project Scope Statement
Enterprise Environmental Factors
Organizational Process Assets
PMP Prep – Time Slide 36
ESTIMATE ACTIVITY DURATIONS – T&TESTIMATE ACTIVITY DURATIONS – T&T
Expert Judgment
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Expert Judgment
Analogous Estimating
• An estimate that's based on the duration of previous, similar schedule activity
as the basis for estimating duration of a future schedule activity.
• It uses historical information & expert judgement.
• It is most reliable when the previous activities are similar in fact and not just in
appearance, and the project team members preparing the estimates have the
needed expertise (A form of a top-down estimate)
PMP Prep – Time Slide 37
ESTIMATE ACTIVITY DURATIONS – T&TESTIMATE ACTIVITY DURATIONS – T&T
Parametric Estimating
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Estimates activity durations quantitatively by multiplying the quantity of work tobe performed by the productivity rate.Basically uses some measurable parameter that changes the same way as costdoes
Three – Point Estimates
The accuracy of the activity estimate can be improved by consideringestimation uncertainty and risk. This concept originated with theProgram Evaluation and Review Technique (PERT). PERT uses threeestimates to define an approximate range for an activity’s duration:
The three estimates are Optimistic, Pessimistic & Most Likely. PERT
analysis calculates an Expected activity duration using a weightedaverage of the these three estimates:
Weighted average = {Optimistic + (4* Most likely) + Pessimistic} / 6
PMP Prep – Time Slide 38
ESTIMATE ACTIVITY DURATIONS – T&TESTIMATE ACTIVITY DURATIONS – T&T
Reserve Analysis (read 6 4 2 5 page 151)
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Reserve Analysis (read 6.4.2.5, page 151)
• Project teams can choose to incorporate additional time referred to as
contingency reserve or time reserves or buffers
• Can be applied to overall project schedule or at a point in the schedule asrecognition of project risk
• They are planned provisions to mitigate the impact of variance in cost or
schedule (takes care of risk in cost & time)
PMP Prep – Time Slide 39
ESTIMATE ACTIVITY DURATIONS – OUTPUTSESTIMATE ACTIVITY DURATIONS – OUTPUTS
OUTPUTS
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OU U S
Activity Duration Estimates
• Quantitative assessments of the likely number of work periods
required to complete a schedule activity
• Estimates should include some indication of the range of
possible results, I.e. 2 weeks +/-2 days to indicate that schedule
activity will take at least eight days and no more than 12 days
(assume 5 day week)
Project Document Updates
PMP Prep – Time Slide 40
TIME PROCESSESTIME PROCESSES
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PMP Prep – Time Slide 41
PLANNING MONITORING & CONTROLLING
6.1 Define Activities 6.6 Control Schedule
6.2 Sequence Activities
6.3 Estimate Activity Resources
6.4 Estimate Activity Durations
6.5 Develop Schedule
DEVELOP SCHEDULEDEVELOP SCHEDULE
HOW DO YOU DEVELOP A SCHEDULE ?
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HOW DO YOU DEVELOP A SCHEDULE ?
• Develop Schedule is the process of analysing activity sequences, durations,resource requirements, and schedule constraints to create the project schedule.
•Determine planned start & finish dates for all project activities
• Schedule development is iterative (repeats in cycles) & continues throughoutthe project to modify duration & resource estimates as the:
• Work progresses• Project Management Plan changes• the nature of risk events evolves
• The schedule baseline (developed at the beginning of the project) is used totrack work progress and variance.
PMP Prep – Time Slide 42
DEVELOP SCHEDULEDEVELOP SCHEDULE
TOOLS & TECHNIQUES• Schedule network analysis
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PMP Prep – Time Slide 43
INPUTS• Activity list
• Activity attributes• Project schedule network
diagrams
• Activity resource requirements• Resource calendars• Activity duration estimates
• Project scope statement• Enterprise environmental factors
• Organizational process assets
OUTPUTS• Project schedule• Schedule baseline
• Schedule data• Project document updates
Schedule network analysis• Critical path method
• Critical chain method• Resource levelling
• What-if scenario analysis• Applying leads and lags• Schedule compression
• Scheduling tool
DEVELOP SCHEDULE - INPUTSDEVELOP SCHEDULE - INPUTS
INPUTS
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Activity List
Activity Attributes
Project Schedule Network Diagrams
Activity Resource Requirements
Resource Calendars
Activity Duration Estimates
Project Scope Statement
Enterprise Environmental Factors
Organizational Process Assets
• e.g. Scheduling methodology, and project calendar
PMP Pre – Time Slide 44
DEVELOP SCHEDULE – T&TDEVELOP SCHEDULE – T&T
TOOLS & TECHNIQUES
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TOOLS & TECHNIQUES
1) Schedule Network Analysis• Generates the project schedule with early and late start and finish dates
using:• Critical path method• Critical chain method
• What-if analysis & resource levelling
• Schedule compression or analysis2) Critical Path Method (CPM ) – Read page 154-155
• Series (or path) of activities through the network diagram thatdetermines the soonest time a project can finish
• Calculates the theoretical early start and finish dates, and late start andfinish dates, for all activities without regard for any resource limitations, by
performing a forward and backward pass analysis through the schedulenetwork.• longest path through the network diagram
• they have either zero or negative total float.• Networks can have multiple near critical paths.
• the schedule activities on critical path are called critical activities
PMP Prep – Time Slide 45
DEVELOP SCHEDULE – T&TDEVELOP SCHEDULE – T&T
TOOLS & TECHNIQUES
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TOOLS & TECHNIQUES
3) Critical Chain Method (Read page 155)
• Critical chain is a schedule network analysis technique that modifies the
project schedule to account for limited resources.
• The critical chain method adds duration buffers that are non-work
schedule activities to manage uncertainty. One buffer, placed at the end of
the critical chain, is known as the project buffer and protects the target
finish date from slippage along the critical chain.
PMP Prep – Time Slide 46
DEVELOP SCHEDULE – T&TDEVELOP SCHEDULE – T&T
TOOLS & TECHNIQUES
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TOOLS & TECHNIQUES
4) Resource Levelling • After using critical path to analyse your schedule, you may need to
address:• Resource usage that needs to be kept at a constant level, e.g. a technician utilized for
120 hours for one week is better utilized at 40 hours a week for 3 weeks• Activities that need to be performed to meet specified delivery dates
• to address the situation where shared or critical required resources are only available atcertain times and in limited quantities
• Resource levelling often results in: • A longer project duration
• Allocating scarce resources to critical path activities• Using overtime or multiple shifts
• Methods to increase resource productivity like different technology or machines
• Can cause the original critical path to change• A cost increase, but staff cost may decrease if overtime is eliminated
• Produces a resource-limited or resource-constrained schedule• Reverse resource allocation scheduling is done from project end.
PMP Prep – Time Slide 47
DEVELOP SCHEDULE – T&TDEVELOP SCHEDULE – T&T
TOOLS & TECHNIQUES
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TOOLS & TECHNIQUES
5) What-If Scenario Analysis• Creates a schedule model, then computes different scenarios (simulations) if X
happens; assess the feasibility of the project schedule under adverse conditions.• The most common technique is Monte Carlo Analysis (read Section 11.4.2.2)
6) Applying Leads and Lags
7) Schedule Compression
• Shortens project schedule without changing the project scope to meet schedule
constraints, imposed dates, or other schedule objectives.
• Crashing –addition of more resources on the critical path to complete the projectearlier (generally increases cost).
• Fast tracking - activities or phases that normally would be done in sequence areperformed in parallel; can require work to be performed without detailed info. & can
increase risk.8) Scheduling Tool• Automated scheduling tools expedite the scheduling process by generating start and finishdates based on the inputs of activities, network diagrams, resources and activity durations. Ascheduling tool can be used in conjunction with other project mgmt. Software applications as
well as manual methods.
PMP Prep – Time Slide 48
DEVELOP SCHEDULE – T&TDEVELOP SCHEDULE – T&T
Consider the following diagram of activities (time is given in days)
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Consider the following diagram of activities (time is given in days)
1. How many paths are on this network diagram?
2. How long is each path in days?
3. Which is the critical path?
4. What is the least amount of time needed to finish this project?
PMP Prep – Time Slide 49
DEVELOP SCHEDULE – T&TDEVELOP SCHEDULE – T&T
PERT (Problem)
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( ob e )
What's the expected time to complete an activity given these
times?
Optimistic = 15 min. Most Likely =30 min. Pessimistic = 60 min.
Weighted Average (Expected) Time using PERT calculations:{Optimistic + ( 4 x Most Likely) + Pessimistic} divided by 6
Answer: (15 + 120 + 60) /6 = 32.5 min
PMP Prep – Time Slide 50
DEVELOP SCHEDULE – T&TDEVELOP SCHEDULE – T&T
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PMP Prep – Time Slide 51
DEVELOP SCHEDULE – T&TDEVELOP SCHEDULE – T&T
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Schedule Exercise -Draw a network diagram based on this information toanswer these questions.
Task A can start immediately & is estimated at 3 weeks
Task B can start after Task A is completed & is estimated at 3 weeks
Task C can start after Task A is completed & is estimated at 6 weeks
Task D can start after Task B is completed & is estimated at 8 weeksTask E can start after Tasks C & 0 are finished & IS estimated at 4 weeks
1. How long is the critical path?
2. What's the float of Task C?_______ and Task B?
3, What's the total float (between all nodes) of the path with the longest float?
PMP Prep – Time Slide 52
DEVELOP SCHEDULE – T&TDEVELOP SCHEDULE – T&T
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PMP Prep – Time Slide 53
DEVELOP SCHEDULE – T&TDEVELOP SCHEDULE – T&T
More Exercise Questions
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More Exercise Questions
4. If Task C changes to 10 weeks, how will the schedule dates be affected?
5. Task F, which is estimated at 11 weeks, has been added to the project. Itmust be completed before Task E & after Task C. The customer is concerned
that this will add an additional 11 weeks to the elapsed time of the project. Howmany weeks will be added?
(Assume question 4 above didn't happen.)
PMP Prep – Time Slide 54
DEVELOP SCHEDULE – T&TDEVELOP SCHEDULE – T&T
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Exercise Answers 4 & 5
4. No effect . Task C is on a path with a 5 week total float so addinganother 4 weeks will still leave 1 week of total float on its path.
5. Task F is added to a path with a 5 week float. Adding this 11week activity will use up all 5 of the float weeks and delay theproject by an additional 6 weeks. The critical path will move to thebottom with a 6 week float on the top path.
PMP Prep – Time Slide 55
DEVELOP SCHEDULE – OUTPUTSDEVELOP SCHEDULE – OUTPUTS
OUTPUTS
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1) Project Schedule• Includes at least a planned start date & planned finish
date for each schedule activity.
• Project Schedule can be presented in summary form,
called master or milestone schedule, or presented in
detail.• More often presented graphically using following
formats:
• Project Schedule Network Diagrams (These diagrams
can be presented in the activity-on-node diagram
format or in a time-scaled schedule network diagram
format (see Figure 6-10, p.150), sometimes called a
logic bar chart.
PMP Prep – Time Slide 56
DEVELOP SCHEDULE – OUTPUTSDEVELOP SCHEDULE – OUTPUTS
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• Milestone Charts• Bar chart with only scheduled start or completion dates of major
deliverables and key external interfaces (see Fig. 6-14, p.158 top
milestone schedule)
• In milestone chart activities have zero duration
• Bar Charts• Gantt Charts with bars representing activities show activity start and end
dates & expected durations
• For control & management communication, more comprehensive
summary activity, (see Fig. 6-14, p.158 middle summary schedule)
sometime referred to as a hammock activity, is used between milestones
or across multiple interdependent work packages
PMP Prep – Time Slide 57
DEVELOP SCHEDULE – OUTPUTSDEVELOP SCHEDULE – OUTPUTS
• Project schedule network diagrams (see Fig. 6-7 and Fig. 6-14)
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2) Schedule Baseline
• Accepted & approved schedule
3) Schedule Data
4) Project Document Updates
- Activity resource requirements
- Activity attributes
- Calendar - Risk register
PMP Prep Time Slide 58
TIME PROCESSESTIME PROCESSES
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PMP Prep – Time Slide 59
PLANNING MONITORING & CONTROLLING
6.1 Define Activities 6.6 Control Schedule
6.2 Sequence Activities
6.3 Estimate Activity Resources
6.4 Estimate Activity Durations
6.5 Develop Schedule
CONTROL SCHEDULECONTROL SCHEDULE
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WHAT HAPPENS IN CONTROL SCHEDULE?
• Schedule control is concerned with:
• Determining the current status of the project schedule
• Influencing the factors that create schedule changes
• Determining that the project schedule has changed• Managing the actual changes as they occur
Schedule Control is a portion of Integrated Change Control process
PMP Prep Time Slide 60
CONTROL SCHEDULECONTROL SCHEDULE
TOOLS & TECHNIQUESP f i
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PMP Prep Time Slide 61
INPUTS
• Project management plan• Project schedule
• Work performance information• Organizational process assets
OUTPUTS
• Work performance measurements• Organizational process assets updates
• Change requests• Project management plan updates
• Project document updates
• Performance reviews
• Variance analysis• Project management software
• Resource levelling• What-if scenario analysis• Adjusting leads and lags• Schedule compression
• Scheduling tool
CONTROL SCHEDULE - INPUTSCONTROL SCHEDULE - INPUTS
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INPUTSProject Management Plan
• It describes how the schedule will be managed and controlled, for example:
• Format of your schedule; rules for use of MS Project
• How and how often is the schedule updated
• Rules for authorizing schedule changes• Mechanisms for detecting schedule changes
• How is time estimating done
• The schedule baseline is used to compare with actual results to determine if a
change, corrective action, or preventive action is necessary.
Project Schedule
Work Performance Information
Organizational Process Assets
PMP Prep – Time Slide 62
CONTROL SCHEDULE – T&TCONTROL SCHEDULE – T&T
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Performance ReviewsPerformance reviews measure, compare, and analyse schedule performancesuch as actual start and finish dates, percent complete, and remaining durationfor work in progress.
If earned value mgmt.(EVM) is utilized the schedule variance (SV) and scheduleperformance index (SPI) are used to assess the magnitude of schedule
variations (read page 162)
Variance Analysis
• Compare target vs. actual/forecast start and finished dates provides useful
information for the detection of deviations and for the implementation of
corrective actions in case of delays.
PMP Prep – Time Slide 63
CONTROL SCHEDULE – T&TCONTROL SCHEDULE – T&T
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Project Management SoftwareResource Leveling
What-If Scenario Analysis
Adjusting Leads and Lags
Schedule Compression
Scheduling Tool
PMP Prep – Time Slide 64
CONTROL SCHEDULE – OUTPUTSCONTROL SCHEDULE – OUTPUTS
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OUTPUTS
• Work Performance Measurements
• Organizational Process Assets Updates
• Change Requests• Project Management Plan Updates
• Project Document Updates
PMP Prep – Time Slide 65
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
Question 1
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Mathematical analysis often produces a preliminary schedule that show peaksand valleys in the resource requirements. Resource levelling can take care of this and may result in all the following except:
A. Increase project duration
B. Increase in productivity by using different technologies and/or machinery
C. Reduction in many project costs, but may not be human resource cost
D. Utilization of weekends, extended hours or multiple shifts
Answer 1
C is the correct answer. See PMBOK, p.147
PMP Prep – Time Slide 66
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
Question 2 TASK PrecedingActivity
Estimate inMonths
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What is the length of thecritical path?
A. 12
B. 10
C. 11
D. 14
PMP Prep – Time Slide 67
Activity Months
Start - 0
A Start 3
B A 4
C Start 2
E C 5
D Start 7
E D 1
END B 3
END E 4
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
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PMP Prep – Time Slide 68
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
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PMP Prep – Time Slide 69
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Questions?Questions?
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PMP Prep – Time Slide 71
DAY 1
DAY
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PMP Prep – Cost Slide 1
3
CHAPTER 7
PROJECT COST MANAGEMENT
AGENDAAGENDA
Day 1 DAY 4
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Day 1 DAY 4
PMP Exam Prep Introduction Project QUALITY Management
Project Management Framework Project RISK Management
*Introduction Project HUMANRESOURCE Management
*Project Life Cycle & OrganisationProject Management Processes
DAY 2 DAY 5 Project INTEGRATION Management ProjectPROCUREMENT Management
Project SCOPE Management Professional & Social
Responsibility
DAY 3 DAY 6 Project TIME Management REVISION & QUIZ
Project COST Management
PROJECT COSTPROJECT COSTMANAGEMENTMANAGEMENT
WHAT DOES THE COST KNOWLEDGE AREA INCLUDE?
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WHAT DOES THE COST KNOWLEDGE AREA INCLUDE?
• Processes involved in estimating, budgeting, and controlling costsso that the project can be completed within the approved budget.
• Primarily concerned with resource costs of schedule activities.
• The work involved in performing the three processes of Project CostMgmt. is preceded by a planning effort of the project mgmt. team.This planning effort is the part of the Develop Project Mgmt. Plan
process, which produces a cost management plan that sets out theformat and establishes the criteria for planning, structuring,
estimating, budgeting, and controlling project costs.
PMP Prep – Cost Slide 2
PROJECT COSTPROJECT COSTMANAGEMENTMANAGEMENT
WHAT DOES THE COST KNOWLEDGE AREA INCLUDE?
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WHAT DOES THE COST KNOWLEDGE AREA INCLUDE?
• The cost management processes and their associated tools andtechniques are usually selected during the project life cycle
definition (read Sec. 2.1), and are documented in the cost mgmt.plan.
Life Cycle Costing• It is defined as the cost of using, maintaining & supporting the
product, service or result of the project, but it's not part of theproject's budget (will get many questions on life cycle costing).
• Uses the Cost Management Plan (which is a part of the ProjectManagement Plan)
PMP Prep – Cost Slide 3
PROJECT COSTPROJECT COSTMANAGEMENTMANAGEMENT
Types of Costs : Let us illustrate using an example: Seminar
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Types of Costs : Let us illustrate using an example: Seminar
• Fixed- rent of the seminar room is a fixed cost
• Variable – cost of food to participants varies with number of participants
• Direct – hiring of PA system for the seminar
• indirect – cost of electricity of the venue is shared by all the other users
PMP Prep – Cost Slide 4
COST PROCESSESCOST PROCESSES
COST PROCESS DEFINITIONS
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7.1 Estimate Costs• Develop cost approximations of all monetary resources needed to
complete project activities.
7.2 Determine Budget
• Aggregating the estimated costs of individual activities or work packagesto establish an authorized cost baseline.
7.3 Control Costs• The process of monitoring the status of the project to update the project
budget and managing changes to the cost baseline.
In smaller projects, Cost Estimating & Cost Budgeting can be one single process
PMP Prep – Cost Slide 5
COST PROCESSESCOST PROCESSES
Processes by process
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groupPlanning Monitoring and
controlling
7.1
Estimate Costs
7.3
Control Costs
7.2
Determine Budget
ESTIMATE COSTSESTIMATE COSTS
HOW DO YOU ESTIMATE COSTS?
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Get a cost approximation of the monetary resources needed tocomplete each schedule activity
Resources should include:
• Labour & services
• Materials, equipment & facilities
• Information technology• Inflation, cost contingency reserves
• Cost estimates are generally expressed in units of currency (or
hours)
• Possible causes of variations should be considered (risk)
• Accuracy should increase as project progresses• Some organizations have formally trained project cost estimators
PMP Prep – Cost Slide 7
ESTIMATE COSTSESTIMATE COSTS
Salient Features:
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• Cost estimating includes identifying and considering various
costing alternatives
• Cost estimates are expressed in units of currency
• Cost estimates are normally refined during the course of the
project. The accuracy of a project estimate will increase asthe project progresses through the project life cycle.
• A project in initial phase could have a rough order of
magnitude (ROM) estimate in the range of -50 to +50%.
• Later in the project, as more info. Is known, estimates could
narrow to a range -10 to +10%.
PMP Prep – Cost Slide 8
ESTIMATE COSTSESTIMATE COSTS
TOOLS &TECHNIQUES
• Expert judgement
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PMP Prep – Cost Slide 9
INPUTSScope baseline
• Project schedule
• Human resource plan• Risk register
• Enterprise environmentalfactors
• Organizational process assets
OUTPUTS• Activity cost
estimates•Basis of estimates
•Projectdocument
updates
pe judge e
• Analogous estimating
• Parametric estimating• Bottom-up estimating• Three-point estimates
• Reserve analysis• Cost of quality
• Project managementestimating software
• Vendor bid analysis
ESTIMATE COSTS -ESTIMATE COSTS -INPUTSINPUTS
INPUTS
Scope Baseline
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Scope Baseline• Scope statement• Work breakdown structure• WBS dictionary
Project Schedule The type and quantity of resources and the amount of time which those resources
are applied to complete the work of the project are major factors in determining theproject cost. Schedule activity resources and their respective durations are used askey inputs to this process.
Human Resource PlanThe following are necessary components for developing the project cost estimates • Project staffing attributes
• Personnel rates• Related rewards/recognition
PMP Prep – Cost Slide 10
ESTIMATE COSTS -ESTIMATE COSTS -INPUTSINPUTS
INPUTS
Risk Register
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Risk Register The risk register should be reviewed to consider risk mitigation costs
Enterprise Environmental FactorsThe cost estimating process considers• Marketplace conditions• Commercial databases
Organizational Process Assets• Cost estimating policies, procedures & guidelines• Cost estimating templates• Historical information• Project files
• Project team knowledge• Lesson learned
PMP Prep – Cost Slide 11
ESTIMATE COSTS – T&TESTIMATE COSTS – T&T
TOOLS & TECHNIQUES
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Expert Judgment
Analogous EstimatingUsing actual cost of previous, similar projects as the basis for costing
current project. This method is less costly than other techniques, but is lessaccurate. Most reliable when previous projects are similar.
PMP Prep – Cost Slide 12
ESTIMATE COSTS – T&TESTIMATE COSTS – T&T
Parametric Estimating
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Uses statistical relationship between historical data and other variables( e.g. required labour hours, square footage in construction etc.)
Bottom-up EstimatingEstimating the cost of individual work packages or schedule activities withthe lowest level of detail. This detailed cost is then summarized or "rolled
up" to higher levels for reporting and tracking purposes. More accurate than Analogous Estimating.
Three-Point EstimatesPERT uses three estimates to define an approximate range for an activity’scost as under:
{Optimistic + (4 * Most Likely) + Pessimistic} / 6
PMP Prep – Cost Slide 13
ESTIMATE COSTS – T&TESTIMATE COSTS – T&TReserve Analysis• Cost estimate may include “Contingency Reserve” (or contingency allowances) to
account for cost uncertainty
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account for cost uncertainty.
• PM's discretion to deal with anticipated, but not certain events ("known
unknowns"). These events are part of the project scope and cost baselines.
• Contingency reserve may be a percentage of the estimated cost.
• A schedule reserve can be a zero duration activity.
Cost of QualityCan also be used to prepare the schedule activity cost estimate (see section 8.1.2.2in PMBOK)
PMP Prep – Cost Slide 14
Cost of Quality“Quality-Costs”
Cost of Good
Quality
Cost of
Poor Quality
Appraisal
Costs
Prevention
Costs
InternalFailureCosts
ExternalFaliureCost
ESTIMATE COSTS – T&TESTIMATE COSTS – T&T
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Project Management Estimating SoftwareCost estimating software applications, computerized spreadsheets,simulation and statistical tools are becoming more widely acceptedto assist with cost estimating.
Vendor Bid Analysis Analyse vendor bids to determine price of individual products.
PMP Prep – Cost Slide 15
ESTIMATE COSTS -ESTIMATE COSTS -OUTPUTSOUTPUTS
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Activity Cost EstimatesQuantitative (numerical) assessment of the likely costs of theresources required to complete schedule activities. This includes,but not limited to, labour, materials, equipment, services, facilities,information technology and special categories such as an inflation
allowance or cost contingency reserve.
PMP Prep – Cost Slide 16
ESTIMATE COSTS -ESTIMATE COSTS -OUTPUTSOUTPUTS
Basis of Estimates- The amount and type of additional details supporting schedule
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activity cost estimate vary by application area.
- Supporting detail for activity cost estimate vary by application area.Supporting detail for activity cost may include:
• Documentation of the basis of the estimate,• Documentation of all assumptions made,
• Documentation of any known constraints,• Range of estimates {e.g.$ 10K (-10% / + 10%) or
between $9K and $11K}• Indication of the confidence level of the final estimate
Project Document UpdatesProject documents that may be updated include, but are not limited to, therisk register.
PMP Prep – Cost Slide 17
COST PROCESSESCOST PROCESSES
Processes by process
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groupPlanning Monitoring and
controlling
7.1
Estimate Costs
7.3
Control Costs
7.2
Determine Budget
DETERMINEDETERMINE BUDGETBUDGET
WHAT HAPPENS IN DETERMINE BUDGET?
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• Aggregating the estimated costs of individual schedule activities or workpackages to establish a total cost baseline for measuring performance.It establishes the Project's funding requirements.
• Remember that the project scope statement provides only the summarybudget.
PMP Prep – Cost Slide 19
DETERMINEDETERMINE BUDGETBUDGET
TOOLS &TECHNIQUES
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PMP Prep – Cost Slide 20
INPUTS• Activity cost estimates
• Basis of estimates• Scope baseline
• Project schedule
• Resource calendars• Contracts
• Organizational processassets
OUTPUTS• Cost Performance baseline
• Project fundingrequirements
• Project document updates
Q• Cost aggregation• Reserve analysis• Expert judgment
• Historical relationship• Funding limit reconciliation
DETERMINEDETERMINE BUDGETBUDGET -- INPUTSINPUTS
INPUTS
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Activity cost estimates
Basis of estimates
Scope baseline
Project Schedule
Resource Calendars
Contracts
Organizational process assets
PMP Prep – Cost Slide 21
DETERMINEDETERMINE BUDGETBUDGET -- T&TT&T
TOOLS & TECHNIQUESCost Aggregation
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• Cost estimates of all activities in each work package are aggregated in accordancewith the WBS.
• Total all work packages for higher component levels of WBS,such as “control accounts” & get the entire project total expectedbudget by period.
Reserve AnalysisEstablishes contingency reserves, such as the management contingencyreserve, that are allowance for “unknown unknowns” risks identified in riskregister. PM needs approval for using such reserves. They are not part of project cost baseline, but are included in the budget for the project.
• Review your reserves through the project to ensure you have the right amount• Contingency reserves (spare funds) allow for unplanned, but potentially required
changes that may result from identified risks (to cost baseline)• Management reserves account for "unknown unknowns":
a) Included in performing organization's management budgetb) Not included in project budget, cost baseline or earned value calculations
PMP Pre – Cost Slide 22
DETERMINEDETERMINE BUDGETBUDGET -- T&TT&T
Expert Judgement
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Historical Relationship
Any historical relationships that result in parametric estimates or analogousestimates involve the use of project characteristics (parameters) to developmathematical models to predict total project costs. Such models can besimple (e.g., residential home construction is based on a certain cost per
square foot of space) or complex (e.g., one model of software developmentcosting uses multiple separate adjustment factors, each of which hasnumerous points within it).
PMP Prep – Cost Slide 23
DETERMINEDETERMINE BUDGETBUDGET – T&T– T&T
Tools & Techniques
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Funding Limit Reconciliation
• The expenditure of funds should be reconciled with any funding
limits on the commitment of funds for the project.
• A variance between funding limits and the planned expenditures
will sometimes necessitate the rescheduling of work to level out
the rate of expenditures. This can be accomplished by placing
imposed date constraints for work into the project schedule.
PMP Prep – Cost Slide 24
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DETERMINEDETERMINE BUDGET – OUTPUTSBUDGET – OUTPUTS
OUTPUTS
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Project Funding Requirements • Get funding requirements, total & by period (e.g. annual or quarterly) and
derived from cost baseline, which can exceed (usually by a margin) toallow for either early progress or cost overruns
• Funding usually occurs in incremental amounts, not continuous, appears
as a step graph (see Figure 7-6, p.178)• Total required funds is cost baseline plus management contingency
reserve
Project Document Plan Updates
• Risk register,• Cost estimates, and• Project schedule
PMP Prep – Cost Slide 26
COST PROCESSESCOST PROCESSES
Processes by process
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groupPlanning Monitoring and
controlling
7.1
Estimate Costs
7.3
Control Costs
7.2
Determine Budget
CONTROL COSTSCONTROL COSTS
WHAT SHOULD YOU DO IN CONTROL COSTS?
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• Influencing the factors that create changes to the cost baseline,• Ensure that all change requests are acted on in a timely manner,• Manage the actual changes when and as they occur,• Make sure that cost expenditures don't exceed authorized funding (by
period & in total) for the project,
• Monitor cost performance to isolate and understand variances fromapproved cost baselines,
• Monitor work performance against funds expended,• Prevent unapproved changes from being included in the reported cost or
resource usage,• Inform appropriate stakeholders of approved changes and associated
cost, and• Act to bring expected cost overruns within acceptable limits
PMP Prep – Cost Slide 28
CONTROL COSTSCONTROL COSTS
TOOLS & TECHNIQUES• Earned value mgmt.
• Forecasting
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PMP Prep – Cost Slide 29
INPUTS• Project management plan
• Project funding requirements• Work performance information
• Organizational process assets
OUTPUTS• Work performance measurements
• Budget forecasts• Organizational process assets updates
• Change requests•
Project management plan updates• Project document updates
• To-complete performanceindex
• Performance reviews• Variance analysis
• Cost change control system• Project management software
CONTROL COSTS - INPUTSCONTROL COSTS - INPUTS
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INPUTS• Project Management Plan
- Cost Performance Baseline- Cost Mgmt. Plan
• Project Funding Requirements
• Work Performance Information
• Organizational Process Assets
PMP Prep – Cost Slide 30
CONTROL COSTS - T&TCONTROL COSTS - T&T
TOOLS & TECHNIQUESCost Change Control System
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Performance Measurement Analysis
• An important part of cost control is to determine:- Cause of variance- Magnitude of a variance
- Decide if variance requires corrective action• Performance measurement techniques (called EVT) help to assess the
magnitude of any variances that will invariably occur.• Earned Value Technique (EVT) compares the value of the budgeted cost
of work performed (earned) at the original allocated budget amount to both- the budgeted cost of work scheduled (planned)
- to the actual cost of work performed (actual)This technique is especially useful for cost control, resource management& production .
PMP Prep – Cost Slide 31
CONTROL COSTS - T&TCONTROL COSTS - T&TEarned Value Management
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• Earned value mgmt. (EVM) in its various forms is a commonlyused method of performance measurements.
• It integrates project scope, cost, and schedule measures to help theproject mgmt. team assess and measure project performance and
progress.
• It is a project mgmt. technique that requires the formation of an integratedbaseline against which performance can be measured for the duration of the project.
• The principles of EVM can be applied to all projects, in any industry.
PMP Prep – Cost Slide 32
CONTROL COSTS - T&TCONTROL COSTS - T&TEarned Value Management (Contd.)
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• EVM) develops and monitors three key dimensions for each workpackage and control account:
- Planned Value (PV): budgeted cost for the work scheduled (inplanned time) to be completed
- Earned Value (EV): budgeted amount for work actuallycompleted
- Actual Cost (AC): actual money spent in finishing the work
(actual cost)
PMP Prep – Cost Slide 33
CONTROL COSTS - T&TCONTROL COSTS - T&T
For example,
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You've hired a man to paint your house. It should take 3 months & you'llpay him $2,700 ($900/mo.). Paint is estimated at $3,600. After, one month,he's completed 20% of the work, but used 40% of the paint, therefore the:
PV = {( $2,700 + $3,600) / 3 } = $2,100
EV = 20% of $6,300 = $1,260
AC = $900 + 40% of $3,600 = $ 900 + $1,440 = $2,340
PMP Prep – Cost Slide 34
CONTROL COSTS - T&TCONTROL COSTS - T&T
EV= 1,260 PV= 2,100 AC=2,340
(S Fi 7 9 183)
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(See Figure 7-9, p.183)
Cost Variance (CV) (sometimes called burn rate)= EV - AC= $1,260 -$2,340 = -$1,080 (over budget)CV%=CV/EV (many a time asked in exam)
Schedule Variance (SV) = EV-PV=$1,260 -$2,100 = -$840 (behind schedule)SV%=SV/PV (many a time asked in exam)
PMP Prep – Cost Slide 35
CONTROL COSTS - T&TCONTROL COSTS - T&TEV= 1,260 PV= 2,100 AC=2,340
C t P f I d (CPI) C t ffi i ti ( t t d l i )
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Cost Performance Index (CPI) -Cost efficiency ratio (cost trend analysis)CPI = EV / AC = $1,260/ $2,340 = 0.54
CPI < 1 -over budget
CPI> 1 -under budget
This is the ratio of what you expected to spend for the work you've earned(done) to what you really spent for it.
Schedule Performance Index (SPI) -Schedule efficiency ratio (schedule
trend)
SPI = EV / PV = $1,260/ $2,100 = 0.6
SPI < 1 -behind scheduleSPI > 1 ahead of schedule This is the ratio of what you planned on doing
to what you really did.
PMP Prep – Cost Slide 36
CONTROL COSTS - T&TCONTROL COSTS - T&T
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PMP Prep – Cost Slide 37
CONTROL COSTS - T&TCONTROL COSTS - T&T
Forecasting: Predicts or estimates future values of Estimate to
Complete (ETC) and Estimate at Completion (EAC)
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The earned value technique parameters are:
Budget At Completion (BAC) : total of all PV's (project's total costbaseline) = PVc (also called Cumulative Planned Value)
Project Cost Variance (CV) - After project is complete, difference
between budget at completion (total project budget) & actualamount spent
CV = BAC- AC
Variance at Completion (VAC) - Before project is complete,difference between budget at completion (total project budget) &
estimate at completion (now that project is underway)VAC = BAC –EAC
PMP Prep – Cost Slide 38
CONTROL COSTS - T&TCONTROL COSTS - T&TEstimate to Complete (ETC) - Expected cost to finish all theremaining work
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ETC based on new estimate – Revised (New) estimate for the workremaining (uses standard estimating techniques) because originalestimate was flawed, e.g. in a project installing the latest version of Primavera on 500 computers, the team though initially had expectedcurrent hardware would be okay, found that 20% of the computers requireupgrading; thus a revised new estimate.
ETC based on atypical variances –PM team expectations are thatsimilar variances will not occur in future.
ETC = BAC-EV
ETC based on typical variances – This approach is used when
current variances are seen as typical of future variances (is expectedto occur in future as well). ETC = (BAC -EV)/ CPI (factors in CPI for trend)
PMP Prep – Cost Slide 39
CONTROL COSTS - T&TCONTROL COSTS - T&TEstimate at Completion (EAC) - Most likely total cost of the project(or activity) based on performance to date (often called latest
revised estimate)
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revised estimate)
EAC using a new estimate - Actual costs to date plus newestimate for the remaining work. Used when original estimate wasflawed or no longer relevant.
EAC = AC + ETC (doesn't rely on original budget BAC)
EAC using remaining budget - Similar variances not expected tooccur in future (atypical)
EAC =AC + BAC -EV
EAC using CPI - Similar variances are expected to occur (istypical)
EAC =AC +(BAC-EV)/CPI
CONTROL COSTS - T&TCONTROL COSTS - T&TTo-complete Performance Index (TCPI) –
The to complete performance index (TCPI) is the calculated
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The to-complete performance index (TCPI) is the calculatedprojection of cost performance that must be achieved on theremaining work to meet a specified management goal, such as theBAC or the EAC. If it becomes obvious that the BAC is no longer viable, the project manager develops a forecasted estimate atcompletion (EAC). Once approved, the EAC effectively supersedesthe BAC as the cost performance goal.Equation for the TCPI based on the BAC:
TCPI = (BAC-EV) / (BAC-AC)
The TCPI is conceptually displayed in Fig 7-10. The equation for theTCPI is shown in the lower left as the work remaining (defined as
the BAC minus EV) divided by the funds remaining (which can beeither the BAC minus the AC, or the EAC minus AC).
PMP Prep – Cost Slide 41
CONTROL COSTS - T&TCONTROL COSTS - T&TTo-complete Performance Index(TCPI) – Contd.
If the cumulative CPI falls below the baseline plan (as shown in Fig 7 6) all
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If the cumulative CPI falls below the baseline plan (as shown in Fig.7-6), allfuture work of the project will need to immediately be performed in therange of the TCPI (BAC) (as reflected in the top line of Fig.7-6) to staywithin the authorized BAC. Whether this level of performance is achievableis a judgment call based on a number of considerations, including risks,schedule, and technical performance.
Once the mgmt. acknowledges that the BAC is no longer attainable, theproject manager will prepare a new estimate at completion (EAC) for thework, and once approved, the project will work to the new EAC value. Thislevel of performance is displayed as the TCPI (EAC) line. The equation for the TCPI based on the EAC:
TCPI = (BAC - EV) / (EAC – AC)
PMP Prep – Cost Slide 42
CONTROL COSTS - T&TCONTROL COSTS - T&T
Performance ReviewsCompare cost performance over time, schedule activities or work packagesoverrunning & under running budget (planned value) and estimated funds
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overrunning & under running budget (planned value), and estimated fundsneeded to complete work in progress.
If EVM is being used, the following information is determined:
• Variance analysis -Compares actual to planned or expected
cost and schedule variances are the most frequently analyzed.
• Trend analysis - Examines performance over time to determine if
performance is improving or deteriorating. Graphical analysis techniques
are valuable for understanding performance to date and for comparison to
future performance goals in the form of BAC versus EAC and completion
dates.
• Earned value performance – EVM compares the baseline plan to actual
schedule and cost performance.
PMP Prep – Cost Slide 43
CONTROL COSTS - T&TCONTROL COSTS - T&T
Variance Analysis
• Cost performance measurements (CV CPI) are used to assess the
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• Cost performance measurements (CV,CPI) are used to assess the
magnitude of variation to the original cost baseline.
• Important aspects of project cost control include determining the
cause and degree of variance relative to the cost performance
baseline (section 7.2.3.1) and deciding whether corrective or
preventive action is required.
•The % range of acceptable variances will tend to decrease as more
work is accomplished. The larger % variances allowed at the start of
the project can decrease as the project nears completion. .
Project Management SoftwarePMS is often used to monitor the three EVM dimensions (PV, EV, and AC),to display graphical trends, and to forecast a range of possible final results.
PMP Prep – Cost Slide 44
CONTROL COSTS -CONTROL COSTS -OUTPUTSOUTPUTSOUTPUTS
• Work Performance Measurements
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• Work Performance Measurements• Budget Forecasts
• Organizational Process Assets Updates -
• Change Requests –
• Project Management Plan Updates -
- Cost performance baseline
• Project document Updates
- Cost estimates
- Basis of estimates
PMP Prep – Cost Slide 45
DEPRECIATIONDEPRECIATION
Straight Line Depreciation (SLD)
• Equal amount of depreciation is taken out each period (year)
Example below shows depreciation for 5 years where:
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Example below shows depreciation for 5 years where:
Depreciable value is $140,000 (purchase price) - $40,000 (salvage Value) = $100,000
Depreciation each year is $100,000 / 5 years = $20,000/year
PMP Prep – Cost Slide 46
Purchase
Price
Salvage
Value
Year Depreciati
on
Depreciated
Balance
$ 140,000 $40,000 0 0 $100,000
1 $20,000 $80,000
2 $20,000 $60,000
3 $20,000 $40,000
4 $20,000 $20,000
5 $20,000 0
DEPRECIATIONDEPRECIATION
Double Declining Balance (DDB)
• Depreciation taken out each period (year) by double straight line depreciation
• Usually applied on the initial purchase price (don’t subtract salvage value)
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• Usually, applied on the initial purchase price (don t subtract salvage value)
Example below shows depreciation for 5 years where:
Depreciation for 1st year is $140,000 / 5 years x 2 = $56,000 (or 40% of $140,000)
Depreciation for 2nd year is $84,000 / 5 years x 2 = $33,600 (or 40% of $84,000)
PMP Prep – Cost Slide 47
Purchase Price Depreciation % Year Depreciation Depreciated Balance
$ 140,000 0 0 $140,000
40% 1 $56,000 $84,000
40% 2 $33,600 $50,400
40% 3 $20,160 $30,240
40% 4 $12,096 $18,144
40% 5 $7,257 $10,886(Salvage)
DEPRECIATIONDEPRECIATION
Sum of Years Digits Depreciation (SYD)• Accelerated depreciation amount taken out each period (year) based on year’s digits
Example below shows depreciation for 5 years where sum of years’ digits = 1+2+3+4+5 = 15
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Example below shows depreciation for 5 years where sum of years digits 1 2 3 4 5 15Depreciation factor for 1st year is 5 (reverse order of years) / 15 (sum of years)
Multiply factor by original balance to get depreciation for that year
Depreciation for 1st year is 5/15 x $100,000 = $33,333, 2nd year is 4/15 x $100,000 = $26,667
–
Purchase
Price
Salvage
Value
Depreciation
Factor
Year Depreciatio
n
Depreciate
d Balance
$140,000 $40,000 0 0 $100,000
5/15 1 $33,333 $66,667
4/15 2 $26,667 $40,000
3/15 3 $20,000 $20,000
2/15 4 $13,000 $6,667
1/15 5 $6,667 0
CONTROL COSTS -CONTROL COSTS -EARNED VALUEEARNED VALUE
Performance Measurement Baseline
Current
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PMP Prep – Cost Slide 49
PV EV AC
January 0 0 0
February 2500 3600 6000
March 8000 8000 8000
April 13000 10000 8000
May 42000 38000 48000
June 62000
July 70000
CONTROL COSTS - COSTCONTROL COSTS - COSTVARIANCEVARIANCE
From the last chart, we have these values and can make thesecalculations:
PV $42 000 EV = $38 000 AC = $48 000
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PV $42,000 EV = $38,000 AC = $48,000
Comparing original amount budgeted for work that's done (EV) tothe amount spent to produce that work (AC), we can get costvariance (CV) as follows:
CV (= EV -AC ) = $38,000 -$48,000 = -$10,000 (> spent thanplanned)
Comparing original amount budgeted for work that's done (EV) to
the amount budgeted for that work In the plan (PV), we can getschedule variance (SV) as follows:
SV (= EV -PV ) = $38,000 -$42,000 = -$4,000 «work than planned)
PMP Prep – Cost Slide 50
CONTROL COSTS - OTHERCONTROL COSTS - OTHERCALCULATIONSCALCULATIONS
CPI ( = EV / AC ) = $38,000/ $48,000 = 0.79
$0 79 worth of work was done for each $1 00 spent
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$0.79 worth of work was done for each $1.00 spent
SPI(= EV/PV) =$38,000/ $42,000 =0.90
$0.90 worth of work was done for each $1.00 worth of work planned
ETC ( = BAC -EV) = $70,700 -$38,000 = $32,700EAC ( = AC+BAC-EV) = $48,000 + $70,700 -$38,000 = $80,700
VAC ( = BAC -EAC) = $70,700-$80,700 =-$10,000
Project will exceed planned budget by $10,000
PMP Prep – Cost Slide 51
CONTROL COSTS - SAMPLE COSTCONTROL COSTS - SAMPLE COSTPROBLEMPROBLEM
More Calculations (slight possibility that these will be on the exam)
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PMP Prep – Cost Slide 52
Given
BAC = $40K EV = $20K PV = $28K AC = $26K
Calculate
% of work Scheduled% of Budget Spent
% of Work AccomplishedTo Complete
Performance Index(TCPI)CV%SV%
CONTROL COSTSCONTROL COSTS - SAMPLE- SAMPLESOLUTIONSOLUTION
More Calculations
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More Calculations
Answers
% of Work Scheduled
% of Budget Spent
% of Work AccomplishedTCPI
CV%SV%
PV/ BAC = $28K/ $40K = 0.7 or 70%
AC/ BAC = $26K / $40K = 0.65 or 65%
EV / BAC =$20K / $40K = 0.5 or 50%(BAC-EV)/( BAC - AC) =
($40K -$20K) / ( $40K -$26K) = 1.43
CV / EV =($20K -$26K ) / $20K =0.3 or 30%SV/ PV =( $20-$28)/$28K =0.28 or 28%
PMP Prep – Cost Slide 53
CONTROL COSTS - EARNED VALUECONTROL COSTS - EARNED VALUEEXAMPLESEXAMPLES
FOR BUDGET
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PMP Prep – Cost Slide 54
If CPI < 1 EV < AC Over Budget
If CPI > 1 EV > AC Under Budget
FOR SCHEDULE
IF SPI < 1 EV < PV Behind Schedule
IF SPI > 1 EV > PV Ahead of Schedule
CONTROL COSTSCONTROL COSTS - CASE 1
PV = $1,860
EV = $1,860
AC = $1 860
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AC = $1,860
PMP Prep – Cost Slide 55
This is the idealsituation,
Where everythinggoes
According to plan
CONTROL COSTSCONTROL COSTS - CASE 2SCHEDULE
CASE 2 SCHEDULE
PV = $1,900 Here we see $400 worth of
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PV $1,900EV = $1,500
AC = $1,700
SV = EV-PV = -$400
SV% = SV/ PV = -0.21 or -21%
PMP Prep – Cost Slide 56
Here we see $400 worth of work is behind schedule inbeing completed. We are
21% behind where weplanned to be.
CONTROL COSTSCONTROL COSTS - CASE 2COST
PV= $1,900
EV= $1,500
AC= $1,700
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AC $1,700
CV = EV-AC = -$200
CV% = CV I EV = -0.13 or -13%
PMP Prep – Cost Slide 57
Also, we see “Actuals” (AC)exceed “Earned” (EV)
$1,500 worth of work wasaccomplished, However; it
cost $1,700 to do so. Wehave a $200 cost overrun(13% over budget)
CONTROL COSTSCONTROL COSTS - CASE 2 INDICES
PV = $1,900
EV = $1,500
AC = $1,700
This means only 79 centsth f k d f
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C $ , 00
SPI = EV I PV = $0.79
CPI= EV I AC = $0.88
Case 2 is the worst case where all
performance indicators are negative.
PMP Prep – Cost Slide 58
s ea s o y 9 ce tsworth of work was done for
each $1.00 of workplanned, and only 88 centsworth of work was actually
done for each $1.00 spent.
CONTROL COSTSCONTROL COSTS - CASE 3 INDICES
PV= $2,600
EV= $2,400
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EV $2,400
AC= $2,200
SV= -$200 SV% = - 8%
SPI= 0.92
PMP Prep – Cost Slide 59
This is bad news. Our work efficiencyis a bit low. We are getting only 92
cents of work done per dollar. We arebehind schedule.
CONTROL COSTS – CASE 3CONTROL COSTS – CASE 3INDICESINDICES
PV = $2,600
EV = $2,400
AC = $2,200
This is good news as we are under
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$ ,
CV = $200
CV% = 8%CPI = 1.09
SPI = EV/PV = 2400/2600 = 0.92
Case 3 is under budget, but behind schedule.
PMP Prep – Cost Slide 60
gbudget. We are getting $1.09 worth of
work done for each $1.00 spent.
Questions?Questions?
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PMP Prep – Cost Slide 61
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DAY 3
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PMP Prep – Communications Slide 1
CHAPTER 10
PROJECTCOMMUNICATIONS
MANAGEMENT
AGENDAAGENDA
Day 1 DAY 4
PMP Exam Prep Introduction Project QUALITY Management
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Project Management Framework Project RISK Management
*Introduction Project HUMANRESOURCE Management
*Project Life Cycle & Organisation
Project Management Processes
DAY 2 DAY 5 Project INTEGRATION Management ProjectPROCUREMENT Management
Project SCOPE Management Professional & SocialResponsibility
DAY 3 DAY 6 Project TIME Management REVISION & QUIZ
Project COST Management
PROJECT COMMUNICATIONSPROJECT COMMUNICATIONS
MANAGEMENTMANAGEMENT WHAT DOES THE COMMUNICATIONS KNOWLEDGE AREA DO?
• It employs the processes required to ensure timely and appropriate
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It employs the processes required to ensure timely and appropriategeneration, collection, distribution, storage retrieval, and ultimate
disposition of project information
• These processes provide the critical links among people & informationthat are necessary for successful communications.
• Project managers spend the majority of their time communicating with teammembers and other project stakeholders, whether they are internal or
external to the organization.
Effectively deals with stakeholders' information needs.
PMP Prep – Communications Slide 2
COMMUNICATION SKILLSCOMMUNICATION SKILLS
COMMUNICATION SKILLS
• Most communication skills are common for general mgmt. and projectmgmt., such as, but not limited to:
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g
• Listening actively and effectively,• Questioning, probing ideas and situations to ensure better
understanding,• Educating to increase team’s knowledge so that they can be more
effective,• Fact-finding to identify or confirm information,• Setting and managing expectations,• Persuading a person or organization to perform an action,• Negotiating to achieve mutually acceptable agreements between
parties,• Resolving conflict to prevent disruptive impacts, and• Summarizing, recaping, and identifying the next steps.
PMP Prep – Communications Slide 3
COMMUNICATION MODELSCOMMUNICATION MODELSCOMMUNICATION MODELS
• See Fig 10-8, p.255 for a basic two-person model of communications (how ideas or information are sent & received between two parties)
• Key components of model include:
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• Encode: translate thoughts or ideas into a language that is understood by
others• Message & feedback-message: the output of encoding• Medium: the method used to convey the message, e.g. email, fax• Noise: anything that interferes with transmission and understanding of
the message (e.g. distance)
• Decode: to translate the message back into meaningful thoughts or ideas
• Inherent in the model is an action to acknowledge a message.• Acknowledgement means that the receiver signals receipt of the message, but notnecessarily in agreement with the message.
• Another action is response to a message, which means that the receiver has
decoded, understands, and is replying to the message.• Sender is responsible for making information clear & complete so that the receiver can receive it correctly & confirming that it is understood properly
• Receiver is responsible for making sure that information is received in itsentirety & correctly understood
PMP Prep – Communications Slide 4
COMMUNICATION METHODSCOMMUNICATION METHODSThere are several communication methods used to share information among projectstakeholders. These methods can be broadly classified into:
• Interactive communication
Between two or more parties performing a multidirectional exchange of
information. It is the most efficient way to ensure a common
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understanding by all participants on specified topics, and includes
meetings, phone calls, video conferencing, etc.
• Push communication
Sent to specific recipients who need to know the information. This
ensures that the information is distributed but does not certify that itactually reached or was understood by the intended audience. Push
communication includes letters, memos, reports, emails, faxes, voice
mails, press releases etc.
• Pull communication
Used for very large volumes of information, or for very large audiences, that
requires the recipients to access the communication content at their own
discretion. These methods include intranet sites, e-learning, and knowledge
repositories, etc.
PMP Prep – Communications Slide 5
COMMUNICATIONSCOMMUNICATIONSPROCESSPROCESS
COMMUNICATIONS PROCESS DEFINITIONS10.1 Identify Stakeholders
• Identify all people or organizations impacted by the project, anddocumenting relevant
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ginformation regarding their interests, involvement, and impact on
project success.10.2 Plan Communications• The process of determining the project stakeholder informationneeds and
defining a communication approach. 10.3 Distribute Information• The process of making relevant information available to projectstakeholders as
planned.10.4 Manage Stakeholders Expectations• The process of communicating and working with stakeholders tomeet their needs and addressing issues as they occur.10.5 Report Performance • The process of collecting and distributing performanceinformation, including status reports, progress measurements, andforecasts.
COMMUNICATIONSCOMMUNICATIONSPROCESSESPROCESSES
PROCESSES BY PROCESS GROUP
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PMP Prep – Communications Slide 7
INITIATING PLANNING EXECUTING MONITORING &CONTROLLING
10.1
IdentifyStakeholders
10.2 Plan
Communications
10.2
DistributeInformation
10.3
ReportPerformance
10.3 ManageStakeholders
Expectations
IDENTIFY STAKEHOLDERSIDENTIFY STAKEHOLDERS
WHAT HAPPENS IN IDENTIFY STAKEHOLDERS?
• It 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
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involvement, and impact on project success
• Project stakeholders are persons and organizations such as customers,sponsors, the performing organization, and the public that are activelyinvolved in the project, or whose interests may be positively or negativelyaffected by the execution or completion of the project. They may also
exertinfluence over the project and its deliverables.
• Stakeholders may be at different levels within the organization and maypossess different authority levels, or may be external to the performingorganization for the project (Section 2.3 identifies various types of projectstakeholders.
IDENTIFY STAKEHOLDERSIDENTIFY STAKEHOLDERS
TOOLS & TECHNIQUES• Stakeholder analysis
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PMP Prep – Communications Slide 9
INPUTS• Project Charter
• Procurement documents• Enterprise environmental factors• Organizational process assets
OUTPUTS• Stakeholder register • Stakeholder mgmt.
strategy
Stakeholder analysis• Expert judgement
IDENTIFY STAKEHOLDERS -IDENTIFY STAKEHOLDERS -INPUTSINPUTS
INPUTS
• Project Charter
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• Procurement Documents • Enterprise Environmental Factors i.e. company culture and structure, and Governmental or industry
standards
• Organizational Process Assetsi.e. stakeholder register templates, lessons learned from previous
projects, and stakeholder registers from previous projects.
PMP Prep – Communications Slide 10
IDENTIFY STAKEHOLDERS –IDENTIFY STAKEHOLDERS –T&TT&T
TOOLS & TECHNIQUES
• Stakeholder Analysis
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Follows a number of steps (read page 248 to 250)
• Expert Judgement
PMP Prep – Communications Slide 11
IDENTIFY STAKEHOLDERS –IDENTIFY STAKEHOLDERS –OUTPUTSOUTPUTS
OUTPUTS
Stakeholder Register
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This contains all details related to the identifiedstakeholders including, but not limited to:• Identification information
(Name, position, location, role in the project , contact info.)
• Assessment information(major requirements., main expectations, potential influence in theproject, phase in the life cycle with the most interest; and
• Stakeholder classification
(internal/external, supporter/neutral/resistor, etc.)
PMP Prep – Communications Slide 12
IDENTIFY STAKEHOLDERS –IDENTIFY STAKEHOLDERS –OUTPUTSOUTPUTS
OUTPUTS
Stakeholder Management StrategyThe stakeholder management strategy defines an approach to
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The stakeholder management strategy defines an approach toincrease the support and minimize negative impacts of stakeholdersthroughout the entire project life cycle. It includes elements such as:• Key stakeholders who can significantly impactthe project,
• Level of participation in the project desired for eachidentified stakeholder, and
• Stakeholder groups and their management (as groups) A common way of representing the stakeholder management strategyis a stakeholder analysis matrix. An example of a blank matrix with
column headers is provided in Fig. 10-5 (page 251)
PMP Prep – Communications Slide 13
COMMUNICATIONCOMMUNICATIONPROCESSESPROCESSES
PROCESSES BY PROCESS GROUP
INITIATING PLANNING EXECUTING MONITORING &
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PMP Prep – Communications Slide 14
INITIATING PLANNING EXECUTING MONITORING &CONTROLLING
10.1
IdentifyStakeholders
10.2 Plan
Communications
10.2
DistributeInformation
10.3
ReportPerformance
10.3 ManageStakeholdersExpectations
PLAN COMMUNICATIONSPLAN COMMUNICATIONS
WHAT HAPPENS IN PLAN COMMUNICATIONS?
• Plan communications is the process of determining the project
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p g p jstakeholder information needs and defining a communicationapproach (see fig. 10-7, the Data Flow diagram)
• Who needs - what, when; how the needs will be fulfilled and by whom
• Identifying the information needs of the stakeholders and determining asuitable means of meeting those needs are important factors for projectsuccess.
• Improper communication planning will lead to problems such as delay in message
delivery, communication of sensitive information to the wrong audience, or lack of communication to some of the required stakeholders.
PMP Prep – Communications Slide 15
PLAN COMMUNICATIONSPLAN COMMUNICATIONS
TOOLS & TECHNIQUES
• Communication requirementanalysis
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PMP Prep – Communications Slide 16
INPUTS
• Stakeholder register • Stakeholder management strategy• Enterprise environmental factors
• Organizational process assets
OUTPUTS
• Communicationsmanagement plan
• Project document
updates
• Communication technology• Communication models• Communication methods
PLAN COMMUNICATIONSPLAN COMMUNICATIONS --INPUTSINPUTS
INPUTS
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• Stakeholder Register Section 10.1.3.1
• Stakeholder Management Strategy Section 10.1.3.2
• Enterprise Environmental Factors
• Organizational Process Assets
PMP Prep – Communications Slide 17
PLAN COMMUNICATIONS –PLAN COMMUNICATIONS –T&TT&T
TOOLS & TECHNIQUESCOMMUNICATION REQUIREMENT S ANALYSIS
• Determine total information needs of project stakeholders
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• Combine the type & format of information needed with an analysis of thevalue of that information (e.g. all information that contributes to projectsuccess or prevents failure)
• Number of communication channels is, n ( n -1 ) / 2 (remember for exam)
where n = number of stakeholders
• How many potential channels of communication are there in a projectwith
21 stakeholders? __________
PMP Pre – Communic tion Slide 18
PLAN COMMUNICATIONS –PLAN COMMUNICATIONS –T&TT&T
COMMUNICATIONS TECHNOLOGYMethodologies used to transfer information among stakeholders can vary significantly, e.g. email,text messaging, etc.
Communications technology factors that can affect the project
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Communications technology factors that can affect the projectinclude:
• Urgency of the need for information – Is project success dependent upon
having frequently updated information available on a moment’s notice, or
would regularly issued written reports suffice?• Availability of technology - Are existing systems appropriate, or do the
project needs warrant change needed?
• Expected project staffing - Are proposed communications systems
compatible with the experience & expertise of project participants, or is
extensive training and learning required?
• Length of the project - Is the available technology likely to change before
the project is over?
• Project environment - Does the team meet and operate on a face-to-face or
in a virtual environment?
–
PLAN COMMUNICATIONS –PLAN COMMUNICATIONS –T&TT&T
• COMMUNICATION MODELS• See Fig 10-8, p.255 for a basic two-person model of communications (how ideas or
information are sent & received between two parties)• Key components of model include:
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Key components of model include:
• Encode: translate thoughts or ideas into a language that is understood byothers
• Message & feedback-message: the output of encoding• Medium: the method used to convey the message, e.g. email, fax
• Noise: anything that interferes with transmission and understanding of the message (e.g. distance)• Decode: to translate the message back into meaningful thoughts or
ideas
• Inherent in the model is an action to acknowledge a message.• Acknowledgement means that the receiver signals receipt of the message, but notnecessarily in agreement with the message.
• Another action is response to a message, which means that the receiver hasdecoded, understands, and is replying to the message.
• Sender is responsible for making information clear & complete so that the receiver can receive it correctly & confirming that it is understood properly
• Receiver is responsible for making sure that information is received in itsentirety & correctly understood
PMP Pre – Communications Slide 20
PLAN COMMUNICATIONS –PLAN COMMUNICATIONS –T&TT&T
COMMUNICATION METHODSThere are several communication methods used to share information among projectstakeholders. These methods can be broadly classified into:
• Interactive communicationBetween two or more parties performing a multidirectional exchange of
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p p g ginformation. It is the most efficient way to ensure a commonunderstanding by all participants on specified topics, and includesmeetings, phone calls, video conferencing, etc.
• Push communication
Sent to specific recipients who need to know the information. Thisensures that the information is distributed but does not certify that itactually reached or was understood by the intended audience. Pushcommunication includes letters, memos, reports, emails, faxes, voicemails, press releases etc.
• Pull communication Used for very large volumes of information, or for very large audiences, that
requires the recipients to access the communication content at their owndiscretion. These methods include intranet sites, e-learning, and knowledgerepositories, etc.
PMP Prep – Communications Slide 21
PLAN COMMUNICATIONS –PLAN COMMUNICATIONS –T&TT&T
COMMUNICATION METHODSThere are several communication methods used to share information among projectstakeholders. These methods can be broadly classified into:
• Interactive communicationBetween two or more parties performing a multidirectional exchange of
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p p g ginformation. It is the most efficient way to ensure a commonunderstanding by all participants on specified topics, and includesmeetings, phone calls, video conferencing, etc.
• Push communication
Sent to specific recipients who need to know the information. Thisensures that the information is distributed but does not certify that itactually reached or was understood by the intended audience. Pushcommunication includes letters, memos, reports, emails, faxes, voicemails, press releases etc.
• Pull communication Used for very large volumes of information, or for very large audiences, that
requires the recipients to access the communication content at their owndiscretion. These methods include intranet sites, e-learning, and knowledgerepositories, etc.
PMP Prep – Communications Slide 22
PLAN COMMUNICATIONS –PLAN COMMUNICATIONS –OUTPUTSOUTPUTS
OUTPUTS
COMMUNICATIONS MANAGEMENT PLAN is a subsidiary plan of theProject Management Plan that provides:
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• Stakeholder communication requirements;• Information to be communicated (includes format, content & 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/groups who will receive the information;• Methods or technologies used to convey the information, such as
memos, email, and/or press releases;
PMP Prep – Communications Slide 23
PLAN COMMUNICATIONS –PLAN COMMUNICATIONS –OUTPUTSOUTPUTS
OUTPUTSCOMMUNICATIONS MANAGEMENT PLAN (contd.)
• Resources allocated for communication activities, including time and budget;
E l ti id tif i ti f & th t h i f
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• Escalation process – identifying time frames & the management chain for escalation of issues;
• Method for updating and refining the communications management plan as projectprogresses and develops;
• Glossary of common terminology;
• Flow charts of the information flow in the project, workflows with possible sequenceof authorization, list of reports, and meeting plans, etc.; and
• Communication constraints, usually derived from specific legislation or regulation,
technology, and organizational policies, etc.
PLAN COMMUNICATIONS -PLAN COMMUNICATIONS -OUTPUTSOUTPUTS
OUTPUTS
Project Document Updates
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Project documents that may be updated include but are not limited to:
• Project schedule• Stakeholder register
• Stakeholder management strategy
–
COMMUNICATIONSCOMMUNICATIONSPROCESSESPROCESSES
PROCESSES BY PROCESS GROUP
INITIATING PLANNING EXECUTING MONITORING &
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PMP Prep – Communications Slide 26
INITIATING PLANNING EXECUTING MONITORING &CONTROLLING
10.1
IdentifyStakeholders
10.2 Plan
Communications
10.2
DistributeInformation
10.3
ReportPerformance
10.3 ManageStakeholdersExpectations
DISTRIBUTEDISTRIBUTEINFORMATIONINFORMATION
WHAT HAPPENS IN DISTRIBUTE INFORMATION?M ki i f ti il bl t j t t k h ld
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• Making information available to project stakeholders asplanned (see Fig. 10-10, page 259, Data Flow Diagram
• It is performed throughout the entire project life cycle and in
all management processes.
• The focus is mainly in the execution process, which includesimplementing the communications management plan, as wellas responding to unexpected requests for information.
PMP Prep – Communications Slide 27
DISTRIBUTEDISTRIBUTEINFORMATIONINFORMATION
TOOLS & TECHNIQUES
•Communications methods
• Information distribution tools
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PMP Prep – Communications Slide 28
INPUTS
• Project management plan• Performance reports
• Organizational process assets
OUTPUTS
• Organizational processassets updates)
• Requested changes
DISTRIBUTEDISTRIBUTEINFORMATIONINFORMATION - INPUTS- INPUTS
INPUTS • Project management plan
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• Project management plan Section 10.2.3.1 contains the communications management plan.
• Performance reportsPerformance reports are used to distribute project performance and status
information, should be made available prior to project meetings, and should be asprecise and current as possible.
• Organizational Process Assets The organizational process assets that can influence the Distribute Information
process include, but are not limited to
- Policies, procedures, and guidelines regarding information distribution - Templates, and- Historical information and lessons learned
PMP Prep – Communications Slide 29
DISTRIBUTEDISTRIBUTEINFORMATION– T&TINFORMATION– T&T
Tools & Techniques
Communications Methods
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Individual and group meetings, video and audio conferences, computer chats, andother remote communications methods are used to distribute information.
Information Distribution Tools
• Hard-copy document distribution, manual filing systems, press releases, andshared-access electronic databases;
• Electronic communication and conferencing tools, such as email, fax, voice mail,telephone, video and web conferencing, websites and web publishing; and
• Electronic tools for project management, such as web interfaces to scheduling andproject mgmt. Software, meeting and virtual office support software, portals, andcollaborative work mgmt. Tools.
PMP Prep – Communications Slide 30
DISTRIBUTE INFORMATION –DISTRIBUTE INFORMATION –OUTPUTSOUTPUTS
Outputs
Organization Process Assets Updates
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• Stakeholder notifications• Project reports• Project presentations
• Project records• Feedback from stakeholders• Lessons learned documentation
Requested Changes
PMP Prep – Communications Slide 31
COMMUNICATIONSCOMMUNICATIONSPROCESSESPROCESSES
PROCESSES BY PROCESS GROUP
INITIATING PLANNING EXECUTING MONITORING &
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PMP Prep – Communications Slide 32
CONTROLLING
10.1Identify Stakeholders
10.2 PlanCommunications
10.2Distribute
Information
10.3Report
Performance
10.3 ManageStakeholdersExpectations
MANAGE STAKEHOLDERSMANAGE STAKEHOLDERSEXPECTATIONSEXPECTATIONS
WHAT HAPPENS IN MANAGE STAKEHOLDERSEXPECTATIONS?
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• It is the process of communicating and working withstakeholders to meet their needs and addressing issues asthey occur ( see Fig. 10-1.20, page 262, Data Flow Diagram)
• It involves communication activities directed towards projectstakeholders to influence their expectations, addressconcerns, and resolve issues (read page 261)
PMP Prep – Communications Slide 33
MANAGE STAKEHOLDERSMANAGE STAKEHOLDERSEXPECTATIONSEXPECTATIONS
TOOLS & TECHNIQUES• Communications methods
• Interpersonal skills• Management skills
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PMP Prep – Communications Slide 34
INPUTS• Stakeholder register
• Stakeholder mgmt. strategy• Project management plan
• Issue log• Change log
• Organizational process assets
OUTPUTS• Organizational process
assets updates• Change requests
• Project mgmt. plan
updates• Project documentupdates
MANAGE STAKEHOLDERS EXPECTATIONS - INPUTSMANAGE STAKEHOLDERS EXPECTATIONS - INPUTS
Inputs
• Stakeholder register
• Stakeholder management strategy
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• Stakeholder management strategy An understanding of stakeholder goals and objectives is used to determine a
strategy to manage stakeholder expectations (see Section 10.1.3.2)
• Project mgmt. plan
• Issue log It is used to document and monitor the resolution of issues.
• Change log
It is used to document changes that occur during a project. These changes andtheir impact to the project in terms of time, cost, and risk,
• Organizational process assets
PMP Prep – Communications Slide 35
MANAGE STAKEHOLDERS EXPECTATIONS - T&TMANAGE STAKEHOLDERS EXPECTATIONS - T&T
Tools & Techniques
• Communication Methods
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• Interpersonal Skills Building trust, resolving conflict, active listening, and public speaking
• Management Skills Issue log Presentation skills, Negotiating, Writing skills, and public speaking
MANAGE STAKEHOLDERS EXPECTATIONS - OUTPUTSMANAGE STAKEHOLDERS EXPECTATIONS - OUTPUTS
Outputs
• Organizational Process Assets Updates
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• Change Requests
• Project Mgmt. Plan Updates
• Project Document Updates
PMP Prep – Communications Slide 37
COMMUNICATIONSCOMMUNICATIONSPROCESSESPROCESSES
PROCESSES BY PROCESS GROUP
INITIATING PLANNING EXECUTING MONITORING &
CONTROLLING
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PMP Prep – Communications Slide 38
CONTROLLING
10.1Identify Stakeholders
10.2 PlanCommunications
10.2Distribute
Information
10.3Report
Performance
10.3 ManageStakeholders
Expectations
REPORT PERFORMANCEREPORT PERFORMANCE
What ‘Report Performance’ process do?
Report performance is the process of collecting and distributing performance
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p p p g g pinformation, including status reports, progress measurements, and forecasts (seeFig, 10-14, Data Flow Diagram) The process involves the periodic collection andanalysis of baseline versus actual data to understand and communicate the projectprogress and performance as well as to forecast the project results.
Performance reports need to provide information at an appropriate level for eachaudience.
PMP Prep – Communications Slide 39
REPORT PERFORMANCEREPORT PERFORMANCE
TOOLS & TECHNIQUES
• Variance analysis• Forecasting methods• Communication methods
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PMP Prep – Communications Slide 40
INPUTS• Project management plan
• Work performance information• Work performance measurements
• Budget forecasts• Quality control measurements
• Organizational processassets
OUTPUTS• Performance reports
• Organizational processassets updates
• Change Requests•
Communication methods• Reporting systems
REPORT PERFORMANCE -REPORT PERFORMANCE -INPUTSINPUTS
INPUTS
• Project Management Plan
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• Work Performance Information
e.g. completion status of the deliverables and what has been accomplished
is collected as part of project execution, and is fed into the PerformanceReporting process
• Work Performance Measurements
• Budget Forecasts
• Organizational Process Assets
REPORT PERFORMANCE -REPORT PERFORMANCE -T&TT&T
TOOLS & TECHNIQUES
• Variance AnalysisIt is an after-the-fact look at what caused a difference between the
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baseline and the actual performance.
• Forecasting Methods
It is the process of predicting future project performance based onactual performance to date. Forecasting methods may be
classified in different categories:
- Time series methods
- Causal/econometric methods
- Judgmental methods- Other methods (include simulation, probabilistic forecasting, and
ensemble forecasting)
PMP Prep – Communications Slide 42
REPORT PERFORMANCE -REPORT PERFORMANCE -T&TT&T
• Communication Methods
Exchange and analyze information about the project progress andperformance. The project manager generally uses a push communication
technique
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technique.
• Reporting Systems
Standard tool for the project manager to capture, store, and distribute
information to stakeholders.
PMP Prep – Communications Slide 43
REPORT PERFORMANCE -REPORT PERFORMANCE -OUTPUTSOUTPUTS
OUTPUTS Performance Reports
- Organize & summarize project performance information from all areas
- Results of any analysis are compared with performance measurementbaseline
- Report should provide the status & progress information and the level of
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- Report should provide the status & progress information, and the level of detail required by various stakeholders, as documented in thecommunications management plan
Common formats for performance reports include: • Bar charts• S-curves• Histograms (bar graph where bar widths are proportional to variable
classes & bar heights proportional to class frequencies)• Tables• Variance analysis
• Earned value analysis data is often included• Forecast data
See Fig. 10-15, page 271- Tabular Performance Report Sample
PMP Prep – Communications Slide 44
REPORT PERFORMANCE -REPORT PERFORMANCE -OUTPUTSOUTPUTS
• Organizational Process Assets Updates
• Change Requests
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Change Requests- Analysis of project performance often generates change requests
PMP Prep – Communications Slide 45
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
Question
Some common formats of performance reports are:
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Some common formats of performance reports are:
A.S-curves, histograms, WBS
B.S-curves, precedence network diagrams, histogramsC.Bar charts, S-curves, histograms
D.Bar charts, earned value analysis, histograms
PMP Prep – Communications Slide 46
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
Answer-C is the correct answer.
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A - WBS does not report performance. It is a deliverable-orientedhierarchical decomposition of the work to be executed by the project teamto accomplish the project objectives and create the required deliverables.
B - A precedence network diagram does not report performance. A networkdiagram presents the project schedule in a format that demonstrates logicalrelationships between project activities.
D - Earned value analysis is a technique, not a report.
PMP Prep – Communications Slide 47
Questions?Questions?
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PMP Prep – Communications Slide 48
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DAY 4
CHAPTER 8
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PMP Prep – Quality Slide 1
CHAPTER 8
PROJECT QUALITY MANAGEMENT
AGENDAAGENDA
Day 1 DAY 4 PMP Exam Prep Introduction Project QUALITY
ManagementProject Management Framework Project RISK
Management
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*Introduction Project HUMANRESOURCE Management
*Project Life Cycle & OrganisationProject Management Processes
DAY 2 DAY 5 Project INTEGRATION Management ProjectPROCUREMENT Management
Project SCOPE Management Professional & SocialResponsibility
DAY 3 DAY 6 Project TIME Management REVISION & QUIZ
Project COST Management
WHAT’S PROJECT QUALITY WHAT’S PROJECT QUALITY MANAGEMENT?MANAGEMENT?
WHAT’S PROJECT QUALITY MANAGEMENT?
Project Quality Management processes include all the activities of the
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performing organization that determine quality policies, objectives, andresponsibilities so that the project satisfy the needs for which it wasundertaken. It implements the quality management system through the
policy, procedures, and processes of quality planning, quality assurance,and quality control, with continuous process improvement activitiesconducted throughout, as appropriate.
PMP Prep – Quality Slide 2
PROJECT QUALITY PROJECT QUALITY MANAGEMENT?MANAGEMENT?
WHAT DO THE QUALITY EXPERTS SAY ABOUTQUALITY?
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• Quality is "the degree to which a set of characteristics fulfil
requirements"
• Quality should be planned, designed & built-in as the integralpart of the process.
QUALITY MANAGEMENTQUALITY MANAGEMENTAPPROACHAPPROACH
PMl's QUALITY MANAGEMENT APPROACH
1. Uses standards established by:a) International Organization for Standardization (ISO)
b) Total Quality Management (TQM)
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PMP Prep - Quality Slide 4
ISO
b) Total Quality Management (TQM)c) Six Sigma Cost of Quality (COQ)
d) Continuous Improvement2. Addresses quality of the project & the product of the project
3. Because projects are temporary, the cost for product quality is oftenborne by the acquiring organization, especially defect prevention &
appraisal.
TQM COQ
Modern quality management complements project management. For example, both disciplines recognize the importance of:
• Customer Satisfaction: understanding, evaluating, defining, andmanaging combination of:• conformance to requirements (the project must produce what it said it
QUALITY MANAGEMENTQUALITY MANAGEMENTAPPROACHAPPROACH
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would produce), and• fitness for use (the product or service must satisfy real needs)
• Prevention Over Inspection: The cost of preventing mistakes is generallymuch less than the cost of correcting them, as revealed by inspection
• Management Responsibility: Management must provide resourcesneeded to meet quality levels and thus succeed
• Continuous Improvement: The plan-do-check-act cycle is the basis for quality improvement (as defined by Shewhart and modified by Deming)
PMP Prep – Quality Slide 5
QUALITY versus GRADE• Quality and Grade are not the same.
• Grade is a category (or rank) that distinguishes items having the samefunctional use but different technical characteristics, e.g. a product with lotsof features and benefits is generally considered a high grade product, but
QUALITY VS GRADEQUALITY VS GRADE
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still can be of poor quality.
• Quality is a degree measuring fitness for use, e.g. a high quality product
will meet the specs and satisfy the real purpose, but may have limitedfeatures (or, grade).
• For example, software of high quality has no bugs, but may be low gradebecause it has limited features (such as Microsoft Calculator).
• Low quality is always a problem, low grade may not be.
• PM and his team are responsible for determining and delivering therequired levels of both quality and grade.
PMP Prep – Quality Slide 6
QUALITY PHILOSOPHIES
W. Edwards Deming • Workers need to be shown “what acceptable Quality is”
QUALITY PHILOSPHIESQUALITY PHILOSPHIES
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p y• Quality is a Management problem• Improve Leadership, drive out fear • Improve constantly and forever (continuous improvement)
• Started the TQM movement
Dr. Joseph Juran• Fitness to Use/Conformance• Quality & Grade• Trilogy: Quality Improvement, Planning & Control
PMP Prep – Quality Slide 7
QUALITY PHILOSPHIESQUALITY PHILOSPHIES
Phillip Crosby • Quality is ‘Free’
• ‘Right’ the First Time• Prevention is the ‘Key’
• Zero Defects
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Zero Defects
Kaizen Method or Technologies• Continuous improvement in small increments (continuous improvement
of people first, then products & services• Overall improvement, in life at work, the well-being
• Kaizen is a Japanese word that means gradual continuousimprovement
PMP Prep – Quality Slide 8
The International Organization for Standardization
• ISO 9001 is a quality standard that checks on the systems used by anorganization
• Quality Management System (QMS) is a systematic approach used
What’s A PMP?What’s A PMP?
ISOISO
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• Quality Management System (QMS) is a systematic approach usedto plan, manage and continually improve the quality of anorganization's products or services. It's a framework that directs and
ensures that controls are in place to achieve success in managementof a business.
• See www.iso.orgISO 14001 defines Environment standardOHSAS 18001 defines Health & Safety standard
PMP Prep – Quality Slide 9
QUALITY PROCESS DEFINITIONS
8.1 Plan Quality
• The process of identifying quality requirements and/or standards for the project & product, and documenting how the project willdemonstrate compliance.
What’s A PMP?What’s A PMP?
QUALITY PROCESSESQUALITY PROCESSES
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p
8.2 Perform Quality Assurance• The process of auditing the quality requirements and the results from
quality control measurements to ensure appropriate quality standardsand operational definitions are used
8.3 Perform Quality Control
• The process of monitoring and recording results of executing the
quality activities to assess performance and recommend necessarychanges.See Figure 8-3, p.193 for plan quality data flow diagram
PMP Prep – Quality Slide 10
PROCESSES BY PROCESS GROUP
QUALITY PROCESSESQUALITY PROCESSES
Planning Executing Monitoring &
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PMP Prep – Quality Slide 11
Controlling
8.1
Plan Quality
8.2
Perform QualityAssurance
8.3
Perform QualityControl
PLAN QUALITY PLAN QUALITY
WHAT YOU DO IN PLAN QUALITY?
• The process of identifying quality requirements and/or standards for the
project & product and documenting how the project will demonstrate
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project & product, and documenting how the project will demonstratecompliance.
• Quality planning should be performed in parallel with the other projectplanning processes. For example, proposed changes in the product to
meet identified quality standards may require cost or scheduleadjustments and a detailed risk analysis of the impact to plans.
• The quality planning techniques discussed here are those mostfrequently used on projects. There are many others that may be usefulon certain projects or in some application areas.
PLAN QUALITY PLAN QUALITY
TOOLS & TECHNIQUES• Cost-benefit analysis
•Cost of Quality• Control charts
• Benchmarking• Design of experiments
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PMP Prep – Quality Slide 13
INPUTS• Scope baseline
• Stakeholder register • Cost performance baseline
• Schedule baseline• Risk register • Enterprise environmental factors
• Organizational process assets
OUTPUTS• Quality management plan
• Quality metrics• Quality checklists
• Process improvement plan• Project document updates
• Statistical sampling• Flowcharting
• Proprietary quality mgmt.methodologies
• Additional quality planning tools
PLAN QUALITY -INPUTSPLAN QUALITY -INPUTS INPUTS1. Scope Baseline
- Scope statement
- WBS
- WBS Dictionary
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2. Stakeholder Register
It identifies stakeholders with a particular interest in, or impact on, quality.
3. Cost Performance Baseline
It documents the accepted schedule performance measures including
start and finish dates.
4. Schedule Baseline
It documents the accepted schedule performance measures includingstart and finish dates
PMP Prep – Quality Slide 14
PLAN QUALITY-INPUTSPLAN QUALITY-INPUTS
INPUTS
5. Risk Register The risk register contains information on threats and
opportunities that may impact quality requirements
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pp y p q y q
6. Enterprise Environmental FactorsGovernmental agency regulations, rules, standards, and guidelines
specific to the application area may affect the project
7. Organizational Process AssetsOrganizational quality policies, procedures and guidelines, historicaldatabases and lessons learned from previous projects specific to theapplication area may affect the project
PMP Prep – Quality Slide 15
PLAN QUALITY – T&TPLAN QUALITY – T&T
TOOLS & TECHNIQUES
• Cost-Benefit Analysis
Q f ff
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• Quality planning must consider cost-benefit tradeoffs.
• The primary benefit of meeting quality requirements is less rework,
which means higher productivity, lower costs, and increasedstakeholder satisfaction.
• The primary cost of meeting quality requirements is the expenseassociated with Project Quality Management activities.
PMP Pre – Qualit Slide 16
PLAN QUALITY – T&TPLAN QUALITY – T&T• Cost of Quality (COQ)
• Quality costs are the total costs incurred by investment in preventing non-conformance to requirements, appraising the product or service
for conformance to requirements, and failing to meet requirements(rework). Failure cost are categorized into internal or external (Failurecosts are also called cost of poor quality).
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y)
• Examples of :Cost of Conformance
Prevention - training, surveys, using a quality system, planning,recruiting quality staff, etc. Appraisal - testing, inspecting, auditing, etc.Cost of non-conformance Internal - rework, rejects, etc.
External - warranty, recall, repairs, handling complaints, legal issues,loss of goodwill, etc.
PMP Prep – Quality Slide 17
PLAN QUALITY – T&TPLAN QUALITY – T&T
Control Charts
• Control charts are used to determine whether or not a process is stable or has predictable performance.
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p p
• They reflect the maximum and minimum values allowed.
• Control charts are used to monitor various types of output variables
• See Fig. 8-5 & Fig. 8-6(Page 196-197) – Read thoroughly
PMP Prep – Quality Slide 18
PLAN QUALITY – T&TPLAN QUALITY – T&T
•Benchmarking• Comparing actual or planned project practices to those of other
projects to generate ideas for improvement and to provide a basisby which to measure performance
• Design of Experiments
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• Design of Experiments• Statistical method that helps identify which factors may influence
specific variables of a product or process under development or
production.• The most important aspect of this technique is that it provides a
statistical framework for systematically changing all of the important factors
• For example, automotive designers use this technique to determinewhich combinations of suspensions and tires will produce the most
desirable ride characteristics at a reasonable cost
PMP Prep – Quality Slide 19
PLAN QUALITY – T&TPLAN QUALITY – T&TStatistical Sampling• Statistical sampling involves choosing part of a population of
interest for inspection• There is a substantial body of knowledge on statistical sampling.
In some application areas it may be necessary for the PM teamto be familiar with a variety of sampling techniques to assure the
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to be familiar with a variety of sampling techniques to assure thesample selected actually represents the population of interest.
Flowcharting• Graphical representation of a process showing the relationships
among process steps. Flowcharts show activities, decisionpoints, and the order of processing
• See Fig. 8-7 in Page 199.
PMP Prep – Quality Slide 20
PLAN QUALITY – T&TPLAN QUALITY – T&T
Proprietary Quality Mgmt. Methodologies
• These include Six Sigma, Lean Six Sigma, Quality FunctionDeployment, CMMI, etc.
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Additional Quality Planning ToolsThese include brainstorming, affinity diagrams, force fieldanalysis*, nominal group techniques, matrix diagrams,and prioritisation matrices.
* Identifies forces and factors, both restraining and driving,effecting the solution of an issue so that the positives canbe reinforced and negatives reduced or eliminated.
PMP Prep – Quality Slide 21
PLAN QUALITY – T&TPLAN QUALITY – T&T
Quality Management Plan
• Describes how the PM team will implement the performing organization'squality policy (Quality management plan is a component or a subsidiaryplan of the project management plan).
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• Provides input to the overall Project Management Plan and mustaddress quality assurance, quality control and continuous processimprovement for the project.
• Quality management plan may be formal or informal, highly detailed or broadly framed, based on the requirement of the project.
• Should include efforts at the front end of the project to ensure thatearlier decisions (e.g. on concepts, designs, and tests) are correctThese efforts should be performed through an independent peer review and not include persons that worked on the material being
reviewed.
PMP Prep – Quality Slide 22
PLAN QUALITY – OUTPUTSPLAN QUALITY – OUTPUTS Quality Metrics
• A metric is an operational definition that describes, in very specific
terms, what something is and how the quality control processmeasures it.• Very specific (actual) measurable values to be met by a process,
activity or work result
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activity or work result.• For example, it is not enough to say that meeting the planned
schedule dates is a measurement of management quality. The PM
team must also indicate whether every activity must start on timeor only finish on time and whether individual activities will bemeasured, or only certain deliverables and if so, which ones.
• Quality metrics are used both in QA & QC processes.
Quality Checklists
• Structured tool used by both QA and QC to verify a set of requiredsteps have been performed (usually component specific)
PMP Prep – Quality Slide 23
PLAN QUALITY – T&TPLAN QUALITY – T&T
Process Improvement Plan
• It is subsidiary of the project management plan.• Details the steps for analysing processes that will facilitate the
identification of waste, error & non-value added activity, thusincreasing customer value
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increasing customer value.
• Examples of such steps are:
• Process boundaries: describes the purpose, start, and end of processes, their inputs & outputs, data required and the owner and stakeholder of the processes.
• Process configuration: a flowchart of processes to facilitateanalysis with interfaces identified
• Process metrics
• Targets for improved performance
PMP Prep – Quality Slide 24
PLAN QUALITY – T&TPLAN QUALITY – T&T
Project Document Updates
Project documents that may be updated include but are not limited to:
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Project documents that may be updated include, but are not limited to:
• Stakeholder register, and
• Responsibility Assignment Matrix (Section 9.1.2.1)
PROCESSES BY PROCESS GROUP
QUALITY PROCESSESQUALITY PROCESSES
Planning Executing Monitoring &Controlling
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PMP Prep – Quality Slide 26
Controlling
8.1
Plan Quality
8.2
Perform QualityAssurance
8.3
Perform QualityControl
PERFORM QUALITY PERFORM QUALITY ASSURANCEASSURANCEHOW SHOULD YOU PERFORM QUALITYASSURANCE?
• Quality assurance (QA) is application of planned, systematic qualityactivities to ensure the project will employ all processes needed tomeet requirements
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q
• QA uses the Process Improvement Plan to make project processes
better
• A quality assurance department, or similar organization, oftenoversees quality assurance activities.
• QA also provides an umbrella for another important quality activity,
continuous process improvement (CPI). CPI provides an iterativemeans for improving the quality of all processes (improves in smallsteps over time)
PMP Prep – Quality Slide 27
PERFORM QUALITY PERFORM QUALITY ASSURANCEASSURANCE
TOOLS &TECHNIQUES
• Plan Quality and Perform &Quality control tools &
techniques• Quality audits
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PMP Prep – Quality Slide 28
INPUTS• Project management plan
• Quality metrics• Work performance information• Quality control measurement
OUTPUTS• Organizational process
assets updates• Change requests
• Project management plan
(updates)• Project document updates
Q y• Process analysis
PERFORM QUALITY ASSURANCE-PERFORM QUALITY ASSURANCE-INPUTSINPUTS
INPUTS • Project Management Plan
• Quality Metrics
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• Quality Metrics
• Work performance information
• Quality Control MeasurementsQC measurements are the results of quality control activities thatis fed back to the QA process for use in re-evaluating andanalysing the quality standards and processes of the performing
organization
PMP Prep – Quality Slide 29
PERFORM QUALITY PERFORM QUALITY ASSURANCE-T&TASSURANCE-T&TTOOLS &TECHNIQUES
• Plan Quality and Perform Quality Control tools and techniquesTools & techniques from Plan Quality and Perform Quality Control, discussed
in Section 8.1.2 and Section 8.3.2 (can also be used for that Quality Assurance activities.
• Quality Audits
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Quality Audits• A structured, independent review to determine whether projectactivities comply with organizational & project policies, processes,
& procedures•The objective of a quality audit is to identify inefficient andineffective policies, processes, and procedures in use on theproject.• May be scheduled or at random• May be carried out by properly trained in-house auditors or thirdparties
• Quality audits confirm that approved change requests, correctiveactions, defect repairs & preventive actions are being implemented
PMP Prep – Quality Slide 30
PERFORM QUALITY PERFORM QUALITY ASSURANCE-T&TASSURANCE-T&T• Process Analysis
• Follows the steps outlined in the Process Improvement Plan toidentify needed improvements from an organizational and technicalstandpoint
• Examines problems & constraints experienced and non value
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• Examines problems & constraints experienced and non-value-added activities identified during process operation
• Uses root cause analysis, a specific technique to analyse a
problem/situation, determine the underlying causes that lead toit, and create preventive actions for similar problems
–
PERFORM QUALITY ASSURANCE-PERFORM QUALITY ASSURANCE-OUTPUTSOUTPUTS OUTPUTS
• Organizational Process Assets Updatese.g. quality standards
• Change Requests
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• Project Management Plan Updates- Quality mgmt. plan
- Schedule mgmt. plan- Cost mgmt. plan
• Project Document Updates- Quality audit reports- Training plans- Process documentation
PMP Prep – Quality Slide 32
PROCESSES BY PROCESS GROUP
QUALITY PROCESSESQUALITY PROCESSES
Planning Executing Monitoring &Controlling
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PMP Prep – Quality Slide 33
Controlling
8.1
Quality Planning
8.2
Perform QualityAssurance
8.3
Perform QualityControl
PERFORM QUALITY CONTROLHOW DO YOU PERFORM QUALITY CONTROL?
• Use the Quality Management Plan to monitor specific project resultsto determine whether they comply with relevant quality standards(metrics) for both project & product quality
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(metrics) for both project & product quality
• Identify ways to eliminate causes of unsatisfactory results.
• It should be performed throughout the project
• QC is performed by a Quality Control Department
•The PM team should have a working knowledge of statistical qualitycontrol, especially sampling & probability
PERFORM QUALITY PERFORM QUALITY CONTROLCONTROL
TOOLS &TECHNIQUES
• Cause and effect diagram• Control charts
• Flowcharting• Histogram• Pareto chart
• Run chart• Scatter diagram
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PMP Prep – Quality Slide 35
INPUTS• Project management plan
• Quality metrics• Quality checklists
• Work performance information• Approved change requests• Deliverables
• Organizational process assets
OUTPUTS• Quality control measurements
• Validated changes• Validated deliverables
• Organization process assets updates
• Change Requests• Project management plan updates
• Project document updates
Scatter diagram• Statistical sampling
• Inspection• Approved change requests review
PERFORM QUALITY CONTROLKnow the difference between:
Prevention (keeping errors out of the process); Inspection (keepingerrors out of the hands of the customer)
Attribute sampling (result conforms, or it doesn't); Variables sampling( the result is rated on a continuous scale that measures the degree of
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( the result is rated on a continuous scale that measures the degree of conformity); Statistical sampling (measures only a percentage of items,e.g. 5 out of every 100)
Special causes (unusual events); Common or random causes (normalprocess variation) Tolerances (the result is acceptable if it falls within range specified bytolerance); Control limits (the process is in control if the result fallswithin the control limits)
PMP Prep – Quality Slide 36
PERFORM QUALITY CONTROL-INPUTS
INPUTS
•Project Management Plan•Quality Metrics•Quality Checklists
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•Work Performance Information•Approved Change Requests
•Deliverables•Organizational Process Assets
PMP Prep – Quality Slide 37
PERFORM QUALITY CONTROL-T&TTOOLS & TECHNIQUES
• Cause and Effect Diagram• Also called Ishikawa (inventor) or fishbone diagrams• Below is an example to show how various factors might be linked
to potential problems or effects
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p p
PMP Prep – Quality Slide 38
PERFORM QUALITY PERFORM QUALITY CONTROL-T&TCONTROL-T&T • Control Charts (See Figure 8-5 & 8-6, p.196-7)
• Shows whether or not a process is stable or has predictable performance over a period of time
• Stable or Predictable – normal (no action required)
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Stable or Predictable – normal (no action required)• Out of control – process is subject to special cause variation
and (needs to be fixed)
• used for repetitive activities like manufacturing
• a graphic display of the interaction of process variables on aprocess ( Are the process variables within acceptable limits?)
PMP Prep – Quality Slide 39
PERFORM QUALITY PERFORM QUALITY CONTROL-T&TCONTROL-T&T
• A process is out of control if the values are:
• widely fluctuating values (outside the control limits set)• suddenly jumps or shifts• gradually increasing variation (trend)
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g y g ( )
‘Rule of Seven' which is when 7 values in a row are all below or all
above the mean or increase/decrease in direction
• For processes outside acceptable limits, the process shouldbe adjusted ( the upper & lower limits are usually set at +/-3sigma, where sigma is standard deviation)
PMP Prep – Quality Slide 40
PERFORM QUALITY PERFORM QUALITY CONTROL-T&TCONTROL-T&T• Flowcharting
• Helps to analyse how problem occur
• A flowchart is a graphical representation of a process
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• There are many styles, but all flowcharts activities,decision points, and the order of processing
• See Figure 8-8, an example of a process flowchart for design reviews
PERFORM QUALITY PERFORM QUALITY CONTROL-T&TCONTROL-T&T • Histogram - A bar chart showing a distribution of variables
- Each column represents an attribute or characteristicso that one can compare two or more things
- Height of each column represents the frequency (or amount) of a
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characteristic
PMP Prep – Quality Slide 42
PERFORM QUALITY PERFORM QUALITY CONTROL-T&TCONTROL-T&T Pareto Chart
• A Pareto chart is a specific type of histogram, ordered byfrequency of occurrence
• The Pareto technique is used primarily to identify and evaluatef i i
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nonconformities• In Pareto diagrams, rank ordering is used to guide corrective action
• The project team should take action to fix that problem first, whichare causing the greatest number of defects
• Pareto diagrams are conceptually related to Pareto’s Law, whichholds that a small number of causes will typically produce a largemajority of the problems or defects
• Pareto's Law is commonly referred as the 80/20 principle, where80 percent of the problems are due to 20 percent of the causes
–
PERFORM QUALITY PERFORM QUALITY CONTROL-T&TCONTROL-T&T
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PMP Prep – Quality Slide 44
PERFORM QUALITY PERFORM QUALITY CONTROL-T&TCONTROL-T&TRun Chart • A run chart shows the history and pattern of variation• A run chart is a line graph that shows data points plotted in order in
which they occur (over time)
• 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 is using mathematical techniques to forecast future
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Trend analysis is using mathematical techniques to forecast futureoutcomes based on historical results
• Trend analysis is often used to monitor technical performance;
project cost & schedule performance.
Scatter Diagram • Shows the pattern of relationship between two variables• This tool allows the quality team to study and identify the possible
relationships between changes observed in two variables• The closer the points are to a diagonal line, the more closely they'rerelated
PMP Prep – Quality Slide 45
PERFORM QUALITY PERFORM QUALITY CONTROL-T&TCONTROL-T&T• Statistical Sampling
• Involves choosing part of a population of interest for inspection(For example, select 10 widgets at random out of 100)
• Inspection• Examination of a work product to determine if it conforms to
standards
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standards• Generally, the results of an inspection include measurements• Inspection can be conducted at any level, for example, the results of
a single activity can be inspected, or final product of the project canbe inspected
• Inspections are also called reviews, peer reviews, audits, andwalkthroughs
• Approved Change Requests Review• All approved change requests should be reviewed to verify that they
were implemented as approved.
PMP Prep – Quality Slide 46
PERFORM QUALITY CONTROL-PERFORM QUALITY CONTROL-
OUTPUTSOUTPUTS
OUTPUTS
• Quality Control Measurements• Quality control measurements are documented results of
lit t l ti iti i th f t ifi d d i lit
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quality control activities in the format specified during qualityplanning.
• Validated Changes • Any changed or repaired items are inspected & will be either accepted or rejected before notification of the decision isprovided. The rejected items may require rework.
PMP Prep – Quality Slide 47
PERFORM QUALITY CONTROL-PERFORM QUALITY CONTROL-OUTPUTSOUTPUTS
• Validated Deliverables
• Organizational Process Assets Updates• Completed checklists• Lessons learned documentation i e causes of variances
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• Lessons learned documentation, i.e. causes of variances,reasoning behind the corrective action chosen
• Change Requests
• Project Mgmt. Plan Updates
• Project Document Updates
PMP Pre – Qualit Slide 48
STANDARD DEVIATION-STANDARD DEVIATION-Slide 1Slide 1Accuracy Measurement
Standard deviations from the mean (or average):+/-1 (on both sides of the mean) = 68.3% : (1sigma)+/-2 =95.5% : (2 sigma)+/-3 =99.7% : (3 sigma)
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+/-6 =99.9% : (6 sigma)
Sigma andStandardDeviationare the same
PMP Prep – Quality Slide 49
STANDARD DEVIATION-STANDARD DEVIATION-Slide2Slide2Formulas:
Mean (u)/Average = (sum the data, and then divide by the number of items)= 31 / 6 = 5.17
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Variance (a 2) - how spread out a distribution of data is (bothsides of mean)
=E ( ( x - u ) 2) -where x is, each sample data, i.e. 4.9 on then -1
next slide and n is the number of samples (6)
= 0.2334 =0.04668
6-1
PMP Prep – Quality Slide 50
STATISTICAL STANDARDSTATISTICAL STANDARDDEVIATIONDEVIATION
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PMP Prep – Quality Slide 51
STATISTICAL STANDARDSTATISTICAL STANDARDDEVIATIONDEVIATION
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PMP Prep – Quality Slide 52
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
Question
All the following are true about 'Quality' and 'Grade' except:
A. A low quality product may be of high gradeB A low grade product may be of high quality
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B. A low grade product may be of high qualityC. It is a problem if either the product is low grade or low quality
D. Grade is a rank given to entities having the same functionalusebut different technical characteristics
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTIONThe answer is C.
Quality is "the degree to which a set of inherent characteristics fulfilrequirements".
Grade is a category assigned to products or services having the same
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functional use but different technical characteristics.
Low quality is always a problem, low grade may not be.PMBOK, p.18D.
PMP Prep – Quality Slide 54
Questions?Questions?
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PMP Prep – Quality Slide 55
DAY 4
CHAPTER 9
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PMP Prep – HR Slide 1
PROJECT HUMAN RESOURCEMANAGEMENT
AGENDAAGENDA
Day 1 DAY 3 PMP Exam Prep Introduction Project TIME Management
Project Management Framework Project COST Management*Introduction Project
COMMUNICATION Management*Project Life Cycle & Organisation
P j t M t P
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Project Management Processes
DAY 2 DAY 4 Project INTEGRATION Management Project QUALITY Management
Project SCOPE Management Project RISK Management
Project HUMANRESOURCE Management
DAY 5 Project
PROCUREMENT ManagementProfessional & Social
PROJECT HUMAN RESOURCEPROJECT HUMAN RESOURCEMANAGEMENTMANAGEMENT WHAT DOES THE HUMAN RESOURCE KNOWLEDGE AREA DO?
Organize & manage the project team (also referred to as project staff)
• The project team comprises of the people who have assigned roles andresponsibilities for completing the project (who report directly or indirectly to the Project Manager and perform the project work).
• Team members should be involved in much of the project’s planning and
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p j p gdecision-making.
• Early involvement of team members adds expertise during the planningprocess and strengthens commitment to the project.
• The Project Management Team is a subset of the project team and isresponsible for project management activities such as planning,controlling, and closing.
• Project sponsor works with project management team , typically
assisting with matters such as project funding , clarifying scopequestions , and influencing other in order to benefit the project.
PMP Prep – HR Slide 2
HUMAN RESOURCEHUMAN RESOURCEPROCESSESPROCESSES
HUMAN RESOURCE PROCESS DEFINITIONS
9.1 Develop Human Resource Plan
• Identifying & documenting project roles, responsibilities & reportingrelationships, as well as creating the Staffing Management Plan
9.2 Acquire Project TeamObt i l d d t l t th j t
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• Obtain people needed to complete the project
9.3 Develop Project Team• Improve competencies & interaction of team members to enhance
project performance
9.4 Manage Project Team• Track team member performance, provide feedback, resolve issues &
coordinate changes to enhance project performance
See Figure 9-3, p.218 for human resource plan data flow diagram
PMP Prep – HR Slide 3
HUMAN RESOURCEHUMAN RESOURCEPROCESSESPROCESSESProcesses by process group
Planning Executing
9.1
Develop Human ResourcePlan
9.2
Acquire Project Team
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PMP Prep – HR Slide 4
9.3
Develop Project Team
9.4
Manage Project Team
DEVELOP HUMANDEVELOP HUMANRESOURCE PLANRESOURCE PLAN
WHAT DOES ‘DEVELOP HUMAN RESOURCE
PLAN’ DO?
• Identifies & documents project roles, responsibilities, and requiredskills reporting relationships and
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skills, reporting relationships, and
• Creates a staffing management plan• can include how & when project team members will be acquired(the persons can be from inside or outside the performing org.)
• criteria for releasing them from the project• Identification of training needs• Plans for recognition & rewards
• Compliance considerations (e.g. labour laws), safety issues (e.g.workman's safety
DEVELOP HUMANDEVELOP HUMANRESOURCE PLANRESOURCE PLAN
TOOLS & TECHNIQUES• Organization charts &
position descriptions• Networking
• Organizational theory
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PMP Prep – HR Slide 6
INPUTS• Activity resource
requirements• Enterprise environmental factors• Organizational process assets
OUTPUTSHuman Resource Plan
DEVELOP HUMAN RESOURCE PLANDEVELOP HUMAN RESOURCE PLAN
- INPUTS- INPUTS
Activity Resource Requirements
The preliminary requirements regarding the required people and
competencies for the project team members are progressivelyelaborated as part of human resource planning process (Section
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elaborated as part of human resource planning process (Section
6.3.3.1 of PMBOK)
PMP Prep – HR Slide 7
DEVELOP HUMAN RESOURCEDEVELOP HUMAN RESOURCEPLAN - INPUTSPLAN - INPUTS
Enterprise Environmental Factors
The enterprise environmental factors (section 1.8) that caninfluence the Develop Human Resource Plan process include, butare not limited to:
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• Organizational culture and structure,
• Existing human resources,• Personnel administration policies, and• Marketplace conditions
PMP Prep – HR Slide 8
DEVELOP HUMAN RESOURCEDEVELOP HUMAN RESOURCEPLAN - INPUTSPLAN - INPUTS
Organizational Process Assets
• Organizational standard processes and policies andstandardized role descriptions,
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p ,
• Templates for organizational charts and positiondescriptions, and
• Historical information on organizational structures
that have worked in previous projects
PMP Prep – HR Slide 9
DEVELOP HUMAN RESOURCEDEVELOP HUMAN RESOURCE
PLAN – T&TPLAN – T&T
TOOLS & TECHNIQUES
Organization Charts & Position DescriptionsUsed to ensure each work package has an unambiguous owner & that allteam members have a clear understanding of their roles & responsibilities(See Figure 9-4, p.205 shows three different types of chart)
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Hierarchical- type charts
Organizational breakdown structure (OBS) - looks similar to WBS,but is broken down by organisation’s existing departments, units or teams
Resource breakdown structure (RBS) – another hierarchical chartbroken down by types of resources, e.g. welders, graphic designers, etc.
RBS can help tracking project costs, and can be aligned with theorganization’s accounting system (RBS can contain resource categoriesother than human resources).
PMP Prep – HR Slide 10
DEVELOP HUMAN RESOURCEDEVELOP HUMAN RESOURCE
PLAN – T&TPLAN – T&T
Matrix-based charts
Responsibility assignment matrix (RAM) is used to shows connectionsbetween work & people. See Figure 9-5, p.206, is a type of RAM called aRACI chart (responsible, accountable, consult, inform)
Text-oriented formats
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Detailed job or position descriptions; documents that provide informationsuch as responsibilities, authority, competencies, and qualifications; etc.
Other sections of the project management planSome responsibilities related to managing the project are listed andexplained in other sections of the project management plan. For example,the risk register lists risk owners, the communication plan lists teammembers responsible for communication activities.
PMP Prep – HR Slide 11
DEVELOP HUMAN RESOURCEDEVELOP HUMAN RESOURCE
PLAN – T&TPLAN – T&T
Networking
•Informal interaction with others is an effective way to understandpolitical & interpersonal factors that will impact the effectiveness of staffing options
• Include proactive correspondence, luncheon meetings, informalconversations, and trade conferences
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conversations, and trade conferences
Organizational Theory
• Provides information regarding the ways people, teams &organizational units behave.
• Helps managing people & groups; includes motivational theories
PMP Prep – HR Slide 12
DEVELOP HUMAN RESOURCE PLAN –DEVELOP HUMAN RESOURCE PLAN –
OUTPUTSOUTPUTSOUTPUTS
Roles & Responsibilities
List include:Role – the label describing the portion of a project for which a person isaccountable; examples of project roles are business analyst, electricalengineer, testing coordinator, etc.
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Authority – The right to apply project resources, make decisions & signapprovals (members work best with authority matching their
responsibility)
Responsibility – The work that a project team member is expected toperform in order to complete the project activitiesCompetency – The skill & capacity needed to complete project activities
Project Organization ChartsGraphic display of project team members & their reporting relationships
PMP Prep – HR Slide 13
DEVELOP HUMAN RESOURCE PLAN –DEVELOP HUMAN RESOURCE PLAN –
OUTPUTSOUTPUTSStaffing Management Plan
• Describes when & how human resource requirements will be met
• May be tied with Procurement processes• Includes:
• Staff acquisition – from internal/external contracted sources; needto work in a central location or can they work from distant locations
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to work in a central location or can they work from distant locations,costs associated with each level of expertise , HR department’s
assistance to project management team, etc.
• Timetable - describes necessary time frames for project teammembers, either individually or collectively, as well as whenacquisition activities such as recruiting should start. One tool for charting human resources is a resource histogram (see Fig 9-6)
PMP Prep – HR Slide 14
RESOURCE HISTOGRAMRESOURCE HISTOGRAM
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PMP Prep – HR Slide 15
DEVELOP HUMAN RESOURCE PLAN –DEVELOP HUMAN RESOURCE PLAN –
OUTPUTSOUTPUTSStaffing Management Plan (contd.)
Staff Release plan - method & timing of releasing team members
Training Needs – If the team members to be assigned are not expectedto have the required competencies, a training plan can be developed aspart of the project. The plan can also include ways to help team membersobtain certifications that would support their ability to benefit the project
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pp y p j
Recognition & rewards - criteria for recognition and rewards areplanned; awarded as part of the Develop Project Team process
Compliance - Government regulations, union contracts & HR policies
Safety – policies & procedures that protect team members from safety
hazards
PMP Prep – HR Slide 16
HUMAN RESOURCEHUMAN RESOURCE
PROCESSESPROCESSESProcesses by process group
Planning Executing
9.1
Develop Human Resource Plan9.2
Acquire Project Team
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PMP Prep – HR Slide 17
9.3
Develop Project Team
9.4
Manage Project Team
ACQUIRE PROJECT TEAMACQUIRE PROJECT TEAM
HOW SHOULD YOU ACQUIRE YOUR PROJECT TEAM?
• A project team can be acquired by :
• Pre-assignment (known in advance)• Negotiation (staff assignments are negotiated on many projects
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inside the performing organization)
• Acquisition (from outside the performing organization)• Virtual Teams (groups of people with a shared goal, placed atdifferent locations)
• Project Manager may or may not have control over whichmembers are selected
PMP Prep – HR Slide 18
ACQUIRE PROJECT TEAMACQUIRE PROJECT TEAM
TOOLS & TECHNIQUES• Pre-assignment
• Negotiation• Acquisition
• Virtual teams
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–
INPUTS• Project mgmt. plan• Enterprise environmental
factors• Organizational process
assets
OUTPUTS• Project Staff assignments
• Resource calendars• Project management plan
(updates)
ACQUIRE PROJECT TEAM-ACQUIRE PROJECT TEAM-
INPUTSINPUTS
INPUTS
Project Management Plan
Enterprise Environmental Factors • Project team members are drawn from all available sources, both
internal & external• When PM team is able to influence or direct staff assignments,
h t i ti t id i l d
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characteristics to consider include:
• Availability (Who is available & when they're available?)• Ability (What competencies do they possess?)• Experience (Do people have similar experience? Have they done
it well? )• Interests (Are people interested in working on this project?)• Cost (How much will each team member be paid?)
PMP Prep – HR Slide 20
ACQUIRE PROJECT TEAM-ACQUIRE PROJECT TEAM-
INPUTSINPUTS Organizational Process Assets
HR department (policies, guidelines, or procedures governingstaff assignments)
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PMP Prep – HR Slide 21
ACQUIRE PROJECT TEAM-ACQUIRE PROJECT TEAM-
T&TT&T
TOOLS & TECHNIQUES
Pre-AssignmentSpecific people may be promised as part of a competitive proposal, if theproject is dependent on expertise of particular persons. Some staff assignments are defined within the Project Charter
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NegotiationPM team uses their influencing skills to obtain staff members from withinthe performing organisation. May need to negotiate with
• Functional managers• Other project management teams
PMP Prep – HR Slide 22
ACQUIRE PROJECT TEAM-ACQUIRE PROJECT TEAM-T&TT&T
Acquisition• Required services can be acquired from outside sources when the
performing organization lacks in-house staff.
Virtual Teams• People with a shared goal who perform with little or no face to face
meetings
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• Benefit from e-mail & video conferencing; must plan communicationscarefully
• Virtual team format makes it possible to:• Form teams from 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 otherwise ignored due to travel
expenses PMP Prep – HR Slide 23
ACQUIRE PROJECT TEAM-ACQUIRE PROJECT TEAM-OUTPUTSOUTPUTS
OUTPUTSProject Staff Assignments• Project is staffed when appropriate people are assigned to work on it• Documentation can include a project team directory, memos to
team members, and names inserted into other parts of projectmanagement plan (such as organization charts & schedules)
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Resource Calendars
• Documents the time periods (or calendar) each project teammember can work on the project
• Creating a reliable final schedule depends on having a goodunderstanding of each person’s schedule conflicts, includingvacation time and commitments to other projects
Project Management Plan (Updates)• Elements of project mgmt. plan that may be updated include, but are
not limited to the human resources plan
PMP Prep – HR Slide 24
HUMAN RESOURCEHUMAN RESOURCEPROCESSESPROCESSES
Processes by process group
Planning Executing
9.1
Develop Human ResourcePlan
9.2
Acquire Project Team
9 3
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PMP Prep – HR Slide 25
9.3
Develop Project Team9.4
Manage Project Team
DEVELOP PROJECT TEAMDEVELOP PROJECT TEAMHOW DO YOU DEVELOP YOUR PROJECT TEAM?
Improve the competencies and interaction of team members to enhanceproject performance. Objectives include:
a) Improve skills of team members in order to increase their ability tocomplete project activities
b) Improve feelings of trust & cohesiveness among team members so as
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b) Improve feelings of trust & cohesiveness among team members so asto raise their productivity through greater team-work
c) Develop the team early to realize greater benefits
Examples of effective teamwork:• Assisting each other when workloads are unbalanced• Communicating in ways that fit individual preferences
• Sharing information & resources
PMP Prep – HR Slide 26
DEVELOP PROJECT TEAMDEVELOP PROJECT TEAM
TOOLS & TECHNIQUES• Interpersonal skills
• Training• Team Building Activities
• Ground Rules• Co-location
• Recognition and rewards
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PMP Prep – HR Slide 27
INPUTS• Project staff assignments• Project management plan
• Resource calendars
OUTPUTS• Team Performance
Assessment • Enterprise environmental
factors updates
DEVELOP PROJECT TEAM-DEVELOP PROJECT TEAM-INPUTSINPUTS
INPUTS
Project Staff Assignments
Project Management Plan
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Resource Calendars
PMP Prep – HR Slide 28
DEVELOP PROJECT TEAM-DEVELOP PROJECT TEAM-T&TT&T
TOOLS & TECHNIQUES
Interpersonal Skills
Interpersonal skills, sometimes known as "soft skills" are particularlyimportant to team development. Understanding the sentiments of teammembers, anticipating their actions, acknowledging their concerns andfollowing up on their issues can greatly reduce problems and increasecooperation.Skills such as: empathy influence creativity group facilitation are
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Skills such as: empathy, influence, creativity, group facilitation arevaluable assets when managing the project team
Training Activities designed to enhance the competencies of the project teammembers. Example of training methods include:Classroom, online, computer-based, on-the-job training from another project team member, mentoring, and coaching from other team
members (Training includes diversity/cultural training as well)
PMP Prep – HR Slide 29
DEVELOP PROJECT TEAM-DEVELOP PROJECT TEAM-T&TT&T
Team-Building Activities• Could be
• a ten minute agenda item in a status review meeting• an off-site, professionally facilitated experience designed to
improve interpersonal relationships• some group activities, although not specifically designed for team
building, like developing a WBS (can increase team cohesiveness)
E i f l i i & i i i
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• Encourage informal communication & activities
• Team building strategies are particularly valuable when teammembers operate from remote locations• Five stages of team development (explained later)
Ground Rules• Establish clear expectations regarding acceptable behaviour by
project team members to decrease misunderstandings & increase
productivity
PMP Prep – HR Slide 30
DEVELOP PROJECT TEAM-DEVELOP PROJECT TEAM-T&TT&T
Co-Location• Placing many or all of the most active team members in the same
physical location enhances their ability to perform as a team
• Can be temporary, only at strategically important times in the project• Co-location strategy can include a meeting room ("war room") with
electronic communication devices and other conveniences thatenhance communication and a sense of community
Recognition and Rewards
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g• The original plans concerning ways to reward people are developed
during Human Resource Planning.• Process involves recognizing & rewarding only desirable behaviour,
e.g. need to work overtime because of poor planning should not berewarded (undesirable behaviour)
• Win-lose (zero sum) rewards that only limited number of project teammembers can achieve, e.g. employee of the month etc. (can hurt team
cohesiveness)• Rewarding win-win behaviour that everyone can achieve tends to
increase support among team members
PMP Prep – HR Slide 31
DEVELOP PROJECT TEAM-DEVELOP PROJECT TEAM-OUTPUTSOUTPUTS
OUTPUTS
Team Performance Assessment
Informal or formal evaluation of a team's effectiveness can includeindicators like:• Improvements in skills that allow a person to perform assigned
activities more effectively
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activities more effectively• Improvement in competencies and sentiments that help team
perform better as a group• Reduced staff turnover rate
Enterprise Environmental Factors Updates
PMP Prep – HR Slide 32
TYPES OF POWERPower is the potential ability to influence behaviour to get peopleto do things they would not normally do.
Types of Power
Legitimate (Formal) -based on actual or perceived position e.g. boss or boss‘s spouse
Coercive based on fear of punishment (normally used as the last resort)
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Coercive-based on fear of punishment (normally used as the last resort)
Reward -based on reward possibility (great to use). To be effective,rewards should be based on activities & performance under a person'scontrol. Must have a clear criteria with a planned system of evaluation.Must be awarded in public.
Expert –Exert power based on your expertise or knowledge (great to
use)
Referent - Ability to influence other through charisma
PMP Prep – HR Slide 33
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TYPE OF ROLES PLAYED BY PROJECT TEAMTYPE OF ROLES PLAYED BY PROJECT TEAMMEMBERSMEMBERS
Supportive Destructive
Initiators Aggressor
Information Seekers Dominator
Information Givers Devil’s Advocate
Encouragers Topic Jumper
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PMP Prep – HR Slide 35
Encouragers Topic Jumper
Clarifiers Recognition Seeker
Harmonizers Withdrawer
Consensus Takers Blocker
Gate Keepers
MANAGEMENT STYLESMANAGEMENT STYLESAutocratic Management by authority vs Consensus
Good For Weakness
Mature, well-defined projects Limits staff bye-in leading to low morale
When quick decisions are needed Possible arbitrary decision
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PMP Prep – HR Slide 36
Laissez-Faire – Meaning “to let do”- Minimal or no interference by authority
Good For Weakness
Innovative projects Confusion about project objectives
Projects with high morale, self-motivated staff – promotes creativity Inability to make decisions
MASLOW’S HIERARCHY OF NEED
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PMP Prep – HR Slide 37
MANAGEMENT THEORIES
MANAGEMENT THEORIES
McGregor's Theory
Theory X• Workers viewed as inherently self-centred, lazy
T diti l i f t t d
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• Traditional view of management; top-down .
• Managers control & micromanage the workers
Theory Y• People will perform their best if they are properly motivated• Workers viewed as willing & eager to accept responsibility• Managers create environment that aids workers in achieving goals
PMP Prep – HR Slide 38
MANAGEMENT THEORIES
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PMP Prep – HR Slide 39
MANAGEMENT THEORIESMANAGEMENT THEORIESHYGIENE FACTORS
• Absence of proper hygiene factors are linked to dissatisfactionat the work-place. Examples of Hygiene factor are:
• company policies & job security• pay, remuneration, salaries• working conditions• supervision
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supervision
MOTIVATING FACTORS
• When they exist, team members have a good time at their place of work. It includes,
• sense of achievement & recognition for things done
• opportunity for growth & advancement• responsibility & stimulating work
PMP Prep – HR Slide 40
HUMAN RESOURCEHUMAN RESOURCEPROCESSESPROCESSES
Processes by process group
Planning Executing
9.1Develop Human Resource
Plan
9.2Acquire Project Team
9.3
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PMP Prep – HR Slide 41
Develop Project Team9.4
Manage ProjectTeam
MANAGE PROJECT TEAMMANAGE PROJECT TEAM
HOW SHOULD YOU MANAGE YOUR PROJECT TEAM?
• Track & appraise team member performance• Provide feedback• Observe team behaviour, manage conflict & resolve issues• Coordinate changes to enhance project performance• As a result of managing the project team, staffing management plan
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is updated, change requests are submitted, issues are resolved, input
is given to organizational performance appraisals, and lessonslearned are added to the organization’s database.
• Management of the project team is complicated when teammembers are accountable to both a functional manager and theproject manager within a matrix organization
• Effective management of this dual reporting is often a critical
success factor for the project, and is generally the responsibility of the project manager
PMP Prep – HR Slide 42
MANAGE PROJECT TEAMMANAGE PROJECT TEAM
TOOLS & TECHNIQUES• Observation & conversation
•Project performanceappraisals
• Conflict management• Issue log
• Interpersonal skills
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–
INPUTS• Project staff assignments• Project management plan
• Team performance assessment• Work performance information
• Performance reports
• Organizational processassets
OUTPUTS• Enterprise environmental
factors updates• Organization process assets
(updates)• Change Requests
• Project management plan(updates)
FORMS OFCOMMUNICATION
Form of Communicati
on
Characteristics
Examples
Written Formal• Precise• Transmitted
throughmedium
of correspondence
• Project charter, Scope statement,
project plan, WBS, project status• Complex issues• Contract related communication
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Written informal • Emails, notes, memos, letters• Regular communication withteam member
Oral Formal • High degree of flexibility
• Personalcontact,
group meetingsortelephone
• Presentations, Speeches• Negotiations, conflict resolution
Oral Informal • Conversation with team members• Pro ect meetin s
MANAGE PROJECT TEAM –INPUTS
• Project staff assignments
• Project Management Plan
• Team performance assessments
• Performance Reports
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• Organizational Process Assets
PMP Prep – HR Slide 45
MANAGE PROJECT TEAM –T&T
Observation and Conversation
• Stay in touch with the work & attitudes of project team members• The PM team members monitors indicators such as :
• progress toward project deliverables• accomplishments that are source of pride for team members• interpersonal issues
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Issue Log
As issues arise in course of managing the project team, a writtenlog can document persons responsible for resolving specificissues by a target date
PMP Prep – HR Slide 46
MANAGE PROJECT TEAM –T&T
TOOLS & TECHNIQUES
Project Performance Appraisals
• Need for formal or informal appraisals depends on length andcomplexity of project, organizational policy, labour contractrequirements, and the amount and quality of regular communication
• Evaluation information can be gathered from people who interactwith project team members using 360-degree feedback principles
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(where feedback is provided to the person being evaluated from many
sources, including superiors, peers & subordinates)
• Objectives for conducting performance appraisals include:• Re-clarification of roles & responsibilities• Structured time for 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 period
PMP Prep – HR Slide 47
MANAGE PROJECT TEAM –T&T
Conflict Management• Successful conflict management results in greater productivity and
positive working relationships
• Common sources of conflict include scarce resources, schedulingpriorities & personal working styles
• Conflict reduction techniques include team ground rules, groupnorms, and solid project management practices, like communicationplanning & role definition
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• Differences of opinion can be healthy, can lead to increased creativity
and better decision-making, if managed properly
When the differences become a negative factor: • project team members are initially responsible for solving their own
conflicts• if escalates, then PM should help facilitate a satisfactory resolution• conflicts should be addressed early, usually in private, using a direct
& collaborative approach
PMP Prep – HR Slide 48
MANAGE PROJECT TEAM –T&T
Conflict Resolution Techniques
• Forcing (Win/lose) - one person forces solution on the other parties
• Smoothing (accommodating) (lose/lose) - attempts are made tomake conflict appear less important than it is
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• Compromise (negotiating) (neutral/neutral) - each party gives up
something to reach a solution
• Withdrawal (avoiding) (lose/lose) - one party gives up & refuses todiscuss the conflict, which is probably the worst technique
• Confrontation (collaboration/problem solving) (win/win) - the onlytrue and best solution -a fact finding mission results in somepossible solutions which are chosen from
PMP Prep – HR Slide 49
MANAGE PROJECT TEAM
– T&TIssue Log
Issues arise in course of managing project team. A written log documents
and helps monitor who is responsible for resolving specific issues by atarget date. Issue resolution addresses obstacles that can block the teamfrom achieving its goals.
I t l Skill
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Interpersonal Skills
Project managers uses combination of technical, human, andconceptual skills to analyze situations and interact appropriatelywith team members. This aids PM capitalizing on the strengths of allteam members (read Appendix F in PMBOK).
PMP Prep – HR Slide 50
MANAGE PROJECT TEAM –OUTPUTS
OUTPUTS
Enterprise Environmental Factors UpdatesEEF that may require updates as a result of the Manage
Project Team process include, but are not limited to:Input to organizational performance appraisals, and
Personnel skill updates
Organizational Process Assets (Updates)
Organizational process assets that may require updates as a
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Organizational process assets that may require updates as a
result of the Manage Project Team process include, but arenot limited to:- Historical information and lessons learned documentation
- Template, and
- Organizational standard processes
PMP Prep – HR Slide 51
MANAGE PROJECT TEAM –OUTPUTS
Change Requests
• Staffing changes, whether by choice or by uncontrollable events
Project Management plan (Updates)
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Project Management plan (Updates)
• Updates to Staffing Management Plan – they include new roles,training, reward decisions
PMP Pre – HR Slide 52
HUMAN RESOURCE QUIZHUMAN RESOURCE QUIZQuiz
You're the Project Manager for a one-year construction project.The project is a quarter done and your team consists of six sellersand 25 company employees. To understand who is responsiblefor what work, you would look at the:
A Resource histograms
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A. Resource histograms
B. Bar chartC. Responsibility assignment matrixD. Project organization chart
PMP Prep – HR Slide 53
HUMAN RESOURCE QUIZHUMAN RESOURCE QUIZ
Answer
C is the answer.
The responsibility assignment matrix maps who will do what work.The resource histogram show the number of resources used in
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geach time period. The bar chart, in its pure form, shows onlyactivity and calendar dates. An organizational chart shows whoreports to whom.
PMP Prep – HR Slide 54
Questions?Questions?
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PMP Prep – HR Slide 55
DAY 4
CHAPTER 11
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PMP Prep – Risk Slide 1
PROJECT RISK MANAGEMENT
AGENDAAGENDA
Day 1 DAY 4 PMP Exam Prep Introduction Project QUALITY Management
Project Management Framework Project RISK Management
*Introduction Project HUMANRESOURCE Management
*Project Life Cycle & OrganisationProject Management Processes
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j g
DAY 2 DAY 5 Project INTEGRATION Management ProjectPROCUREMENT Management
Project SCOPE Management Professional & SocialResponsibility
DAY 3 DAY 6 Project TIME Management REVISION & QUIZ
Project COST Management
PROJECT RISK PROJECT RISK MANAGEMENTMANAGEMENT
WHAT DOES THE RISK KNOWLEDGE AREA DO?
• Risk management planning, identification, analysis,responses, and monitoring & control on a project
• The objectives of Project Risk management are to increasethe probability & impact of positive events (opportunities),
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p y p p ( pp )
and decrease the probability & impact of events adverse tothe project (threats)
PMP Prep – Risk Slide 2
PROJECT RISK PROJECT RISK MANAGEMENTMANAGEMENT
What is project risk? • Uncertain event or condition that, if it occurs, has a positive or a negative
effect on at least one project objective (i.e. time, cost, scope, or quality)
Positive effect is an opportunityNegative effect is a threat
Known risks
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Known risks
• Those that are identified and can be proactively managed & analyzed
Unknown risks (unknown knowns & unknown unknowns)• Cannot be proactively managed
PMP Prep – Risk Slide 3
PROJECT RISK PROJECT RISK MANAGEMENTMANAGEMENT
• Look for risks caused by things like poor project management,dependency on uncontrollable external resources, concurrentmultiple projects, etc.
• Accept risks if they're in balance with a possible reward
• Communicate about risk information openly & honestly
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• Provide risk responses in line with the organization's perceivedbalance between risk-taking &risk-avoidance
• To be successful, an organization should be committed toaddressing the management of risk proactively & consistentlythroughout the project
PMP Prep – Risk Slide 4
RISK PROCESSESRISK PROCESSESRISK PROCESS DEFINITIONS
11.1 Plan Risk Management
• Process of deciding how to approach and conduct (plan & execute) therisk management activities for a project.
11.2 Identify Risks• Determine which threats/opportunities might affect the project &
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document their details
11.3 Perform Qualitative Risk Analysis• Assess each risk's chance of occurring & probable impact to get a
prioritized list of risks requiring more analysis or action
PMP Prep – Risk Slide 5
RISK PROCESSESRISK PROCESSES11.4 Perform Quantitative Risk Analysis• Numerically analyze identified risks' effect on overall project objectives
11.5 Plan Risk Responses• Analyze risks and make a plan of actions & options to enhance
opportunities & reduce threats to project objectives
11 6 Monitor & Control Risks
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11.6 Monitor & Control Risks
• Track identified & residual risks, identify new risks, execute risk responseplans & evaluate their effectiveness
• See Figure 11-20, p.309 for Risks data flow diagram
PMP Prep – Risk Slide 6
RISK PROCESSESRISK PROCESSESProcesses by process group
Planning Monitoring and controlling
11.1
Plan Risk Management
11.6
Monitor and Control Risks
11.2
Identify Risks
11.3
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PMP Prep – Risk Slide 7
Perform Qualitative RiskAnalysis
11.4
Perform Quantitative RiskAnalysis
11.5
Plan Risk Responses
PLAN RISK MANAGEMENTPLAN RISK MANAGEMENTHOW DO YOU PLAN FOR RISK?
• Establish an agreed-upon approach for conducting risk
management activities & evaluating risk
• Ensure that the level, type, and visibility of risk management arecommensurate with both risk and importance of the project to theorganization
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• Provide sufficient resources and time for risk managementactivities
• Planning Risk management should be completed early duringproject planning, since it is crucial to successfully performing theother processes
PMP Prep – Risk Slide 8
PLAN RISK MANAGEMENTPLAN RISK MANAGEMENT
INPUTS• Project scope statement
TOOLS &TECHNIQUES
• Planningmeeting &
analysis
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PMP Prep – Risk Slide 9
• Project scope statement
• Cost mgmt. plan• Schedule mgmt. plan
• Communications mgmt. plan• Enterprise environmental
factors• Organizational process
assets
OUTPUTS
• Risk management plan
PLAN RISK MANAGEMENT-PLAN RISK MANAGEMENT-INPUTSINPUTS
INPUTS
Project Scope Statement (sec 5.2.3.1)
Cost Management Plan (sec 7.0)
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Schedule Management Plan (sec 6.0)
Communications Management Plan (sec 10.2.3.1)
PMP Prep – Risk Slide 10
PLAN RISK MANAGEMENT-PLAN RISK MANAGEMENT-
INPUTSINPUTSEnterprise Environmental Factors• Attitudes towards risk and the risk tolerance of organizations and
people involved in the project will influence the project managementplan.
Organizational Process Assets
O i ti h d fi d h t i k
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• Organizations may have predefined approaches to riskmanagement such as categories, common definitions of concepts &terms, standard templates, roles & responsibilities, and authoritylevels for decision- making.
PMP Prep – Risk Slide 11
PLAN RISK MANAGEMENTPLAN RISK MANAGEMENT-T & T-T & T
TOOLS & TECHNIQUES
Planning Meetings and Analysis
• Project teams hold planning meetings to develop the risk management
plan (attendees may include the project manager, selected project team
members and stakeholders)
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• Develop risk cost elements (e.g. contingency reserves) and scheduleactivities (e.g. risk status meetings or buffer time) for inclusion in the
project budget and schedule
• Assign risk responsibilities
• Develop general organizational templates for risk categories and
definitions (e.g. risk levels, types)
PMP Prep – Risk Slide 12 Powered by POeT Solvers Limited
PLAN RISK MANAGEMENTPLAN RISK MANAGEMENT
-OUTPUTS-OUTPUTSRisk Management Plan
• Describes how risk management will be structured & performedon the project
• It includes:
• Methodology – defines the approaches, tools, & data sources thatmay be used to perform risk management on the project
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• Roles & responsibilities - defines the lead, support, & riskmanagement team membership for each type of activity in the riskmanagement plan, assigns people to these roles, and clarifies their responsibilities
• Budgeting – assigns resources & estimates costs needed for riskmanagement for inclusion in the project cost baseline
PMP Prep – Risk Slide 13 Powered by POeT Solvers Limited
PLAN RISK MANAGEMENT-PLAN RISK MANAGEMENT-
OUTPUTSOUTPUTS• Timing
Defines when & how often the risk management process will beperformed throughout the project life cycle, and establishes riskmanagement activities to be included in the project schedule.
• Risk categories • Provides a structure that ensures a comprehensive process of
systematically identifying risk to a consistent level of detail &contributes to the effectiveness and quality of Risk Identification
• An organization can use a previously prepared categorization of
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• An organization can use a previously prepared categorization of typical risks.
• A Risk Breakdown Structure (RBS) (not a Resource BreakdownStructure, which is also RBS) is one approach to providing such astructure (see fig.11-4, page 244)
• Revised stakeholders' tolerances - Stakeholders tolerances may berevised in risk management planning process
PMP Prep – Risk Slide 14 Powered by POeT Solvers Limited
PLAN RISK MANAGEMENT-PLAN RISK MANAGEMENT-
OUTPUTSOUTPUTS
Definitions of risk probability & impact
• The impact scale reflects significance of impact, either negative for threats or positive for opportunities, on each project objective if arisk occurs.
• Impact scales are specific to the objective potentially impacted, type
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p p j p y p , yp
& size of the project, organization’s strategies and financial state,and the organization’s sensitivity to particular impacts.
• See fig. 11-5 in page 281
PMP Prep – Risk Slide 15 Powered by POeT Solvers Limited
PLAN RISK MANAGEMENT-PLAN RISK MANAGEMENT-
OUTPUTSOUTPUTS• Relative scales (also called ordinal scale) for impact are rankordered descriptors such as low, medium, high, very high reflectingimpact in increasing order.
• Alternatively, numeric scales (also called cardinal scales) assignvalues to these impacts. The values may be
• Linear (e.g. 1, 3, 5, 7, 9) or,• Non-linear (e.g. 1, 2,4, 8) – non-linear scales may represent organization’s
desire to avoid high-impact threats or exploit high impact opportunities, even if theyhave relatively low probability
Risk impact-Proj Objective 1 2 3 4
Linear – Risk Value totalis 40
Risk Impact-P j Obj ti 1 2 4 8
Non-Linear – Risk value is 63
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Note: The figures in the box are probability of a risk impacting an objective
–
Proj. Objective
Time 3 1
Cost 4
Scope 5
Quality
2
3 8 9 20
Proj. Objective 1 2 4 8
Time 3 1
Cost 4
Scope 5
Quality 2
3 8 12 40
PLAN RISK MANAGEMENT-PLAN RISK MANAGEMENT-
OUTPUTSOUTPUTS• Probability & impact matrix
• Risks are prioritized by their potential impact on project multiplied by
their possibility of occurring, e.g. 10% x $800 = $80 risk value
• See Figure 11-5, p.245 for a sample impact scale (relative &numerical)
• See Figure 11-8, p.252 for a Probability & Impact Matrix look-up table
where you can look up your impact (bottom row) multiplied by your
determined probability (left column) and get a rating which can be
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measured against other projects in your companyReporting formats
Describes the content & format of risk register (list of risks with details)
Tracking
Documents how all facets of risk activities will be recorded for the
benefit of current project, future needs, and lessons learned.
PMP Prep – Risk Slide 17 Powered by POeT Solvers Limited
RISK PROCESSESRISK PROCESSESProcesses by process group
Planning Monitoring and controlling
11.1Plan Risk Management
11.6Monitor and Control Risks
11.2
Identify Risks
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–
11.3Perform Qualitative Risk
Analysis
11.4
Perform Quantitative Risk
Analysis
11.5
Plan Risk Responses
IDENTIFY RISKSIDENTIFY RISKS WHAT HAPPENS IN IDENTIFY RISKS?
• Identify Risks determines which risks might affect the project &documents their characteristics
• Participants in identify risk activities can include the following, whereappropriate: project manager, project team members, risk managementteam (if assigned), risk experts from outside, customers, end-users,stakeholders, etc.
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• All project personnel should be encouraged to identify risks.
• Identify risks - is an iterative process because:
– Risk events may happen, which may cause new risks – Status of identified risks may change
– New risks may occur
PMP Prep – Risk Slide 19 Powered by POeT Solvers Limited
IDENTIFY IDENTIFY RISKSRISKS
INPUTS• Risk management plan
• Activity cost estimatesA ti it d ti ti t
TOOLS &TECHNIQUES
• Documentationreviews
• Information gathering
techniques• Checklist analysis• Assumptions analysis
• Diagrammingtechniques
• SWOT analysis
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PMP Prep – Risk Slide 20 Powered by POeT Solvers Limited
• Activity duration estimates• Scope baseline
• Stakeholder register • Cost mgmt. plan
• Schedule mgmt. plan• Quality mgmt. plan• Project documents
• Enterprise environmental
factors• Organizational process
assets
OUTPUTS• Risk register
• Expert judgement
IDENTIFY IDENTIFY RISKS - INPUTSRISKS - INPUTSINPUTS
• Risk Management Plan
• Activity cost estimates
• Activity time estimates
• Activity duration estimates
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• Scope baseline
• Stakeholder register
PMP Prep – Risk Slide 21 Powered by POeT Solvers Limited
IDENTIFY IDENTIFY RISKS - INPUTSRISKS - INPUTS
• Cost mgmt. plan
• Schedule mgmt. plan
• Quality mgmt. plan
• Project documents
• Enterprise Environmental Factors
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• Organizational Process Assets
PMP Prep – Risk Slide 22 Powered by POeT Solvers Limited
IDENTIFY IDENTIFY RISKS – T&TRISKS – T&T
TOOLS & TECHNIQUES
Documentation Reviews
Structured review of project documentation including plans,
assumptions, prior project files, and other information to ensure
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• Quality of the plans
• Consistency between those plans and with the project requirements
and assumptions
PMP Prep – Risk Slide 23 Powered by POeT Solvers Limited
IDENTIFY IDENTIFY RISKS – T&TRISKS – T&TInformation Gathering Techniques
Brainstorming -a group creativity technique to share impulsive ideas & getnew ideas from each other to build on
Delphi technique -experts take part in an anonymous questionnaire so asnot to influence each other, then their ideas are shared for more input
Interviewing -meeting a person to draw out facts & statements
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Root cause identification -examine underlying causes for a risk
PMP Prep – Risk Slide 24
IDENTIFY IDENTIFY RISKS – T&TRISKS – T&TChecklist Analysis
• Checklist are developed based on historical information & knowledge
• Impossible to build an exhaustive one
• Get sample checklists or Questionnaires commercially or from theinternet
Assumptions Analysis
• Are assumptions still valid? It identifies risks to the project from
inaccuracy, inconsistency, or incompleteness of assumptions.
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Diagramming Techniques• Cause-and-effect diagrams (also called Ishikawa or fishbone diagrams)
• System or process flow charts
• Influence diagrams (What affects What) – It is a graphical
representation of situation showing causal influences, time ordering of
events, and other relationships among variables and outcomes.
PMP Prep – Risk Slide 25
IDENTIFY IDENTIFY RISKS – T&TRISKS – T&T
SWOT Analysis
• The technique examines the project from each of the SWOT
(strengths, weaknesses, opportunities, and threats)perspectives to increase the breadth of identified risks byincluding internally generated risks
• SWOT analysis also examines the degree to which
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organizational strengths offset threats and opportunities thatmay serve to overcome weaknesses.
Expert Judgement
PMP Prep – Risk Slide 26
IDENTIFY IDENTIFY RISKS –RISKS –
OUTPUTSOUTPUTS Risk Register
The primary outputs of Identify Risks are the initial entries into the riskregister. The risk register ultimately contains the outcomes of the other risks mgmt. processes as they are conducted, resulting in an increase inthe level and type of information contained in the risk register over time.The preparation of risk register begins with
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• List of identified risks• List of potential responses
PMP Prep – Risk Slide 27
RISK PROCESSESRISK PROCESSESProcesses by process group
Planning Monitoring and controlling
11.1
Plan Risk Management
11.6
Monitor and Control Risks
11.2
Identify Risks
11.3
Perform Qualitative Risk
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PMP Prep – Risk Slide 28
Perform Qualitative Risk Analysis
11.4
Perform Quantitative RiskAnalysis
11.5
Plan Risk Responses
QUALITATIVE RISK QUALITATIVE RISK
ANALYSISANALYSIS HOW DO YOU PERFORM QUALITATIVE RISK ANALYSIS?
• Prioritize identified risks for further action, such as Quantitative Risk Analysis or Risk Response Planning
• Organizations can improve the project’s performance effectively byfocusing on high-priority risks
• Assess the priority of identified risks using their probability of occurring
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Assess the priority of identified risks using their probability of occurring,the corresponding impact on project objectives if the risks do occur
• Also use factors such as time frame & risk tolerance of the projectconstraints of cost, schedule, scope & quality
PMP Prep – Risk Slide 29
PERFORM QUALITATIVE RISK PERFORM QUALITATIVE RISK
ANALYSISANALYSIS
INPUTS
TOOLS &TECHNIQUES
• Risk probability andimpact
assessment• Probability and impact
matrix• Risk data quality
assessment• Risk categorization
• Risk urgency
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PMP Prep – Risk Slide 30
• Risk register• Risk management plan
• Project scope statement• Organizational process
assets
OUTPUTS• Risk register
(updates)
assessment• Expert judgement
PERFORM QUALITATIVE RISK PERFORM QUALITATIVE RISK
ANALYSIS-INPUTSANALYSIS-INPUTSINPUTS
Risk Register
Risk Management Plan
Project Scope Statement
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Organizational Process Assets
PMP Prep – Risk Slide 31
PERFORM QUALITATIVE RISK PERFORM QUALITATIVE RISK
ANALYSIS - T&TANALYSIS - T&T TOOLS & TECHNIQUES
Risk Probability & Impact Assessment
• It 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 negativeeffect for threats and positive effects for opportunities.
• The level of probability for each risk and its impact on each objective isevaluated during the interview or meeting with experts or keystakeholders
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Probability & Impact Matrix
Risk Data Quality Assessment • Risk analysis requires accurate & unbiased data• Examine the degree to which the data about the risk is useful• Examine the degree to which the risk is understood
• Examine the risk data for accuracy, quality, reliability, & integrity
PMP Prep – Risk Slide 32
PERFORM QUALITATIVE RISK PERFORM QUALITATIVE RISK
ANALYSIS – T&TANALYSIS – T&T TOOLS & TECHNIQUES
Risk Categorization
• Risks to the project can be categorized by sources of risk (e.g. using theRBS)
Risk Urgency Assessment
• Risks requiring near-term responses may be considered more urgent to
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address.
Expert Judgement
• Expert judgement is required to assess the probability and impact of each risk to determine itslocation in the matrix shown in Fig. 11-10 (page 293)
PMP Prep – Risk Slide 33
RISK PROCESSESRISK PROCESSESProcesses by process group
Planning Monitoring and controlling
11.1
Plan Risk Management
11.6
Monitor and Control Risks
11.2
Identify Risks
11.3
Perform Qualitative Risk
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PMP Prep – Risk Slide 34
QAnalysis
11.4
Perform Quantitative Risk Analysis
11.5
Plan Risk Responses
PERFORM QUANTITATIVE RISK PERFORM QUANTITATIVE RISK
ANALYSISANALYSIS HOW DO YOU PERFORM QUANTITATIVE RISK ANALYSIS?
• Analyze priority risks (identified in Qualitative Risk Analysis)
• Analyzes the effect of those risk events and assigns a numerical
(quantitative) rating to those risks• It also presents a quantitative approach to making decisions in the
presence of uncertainty
• The process uses techniques such as Monte Carlo simulation & decision
tree analysis to:
•
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Quantify possible outcomes for the project and their probabilities• Assess probability of achieving specific project objectives
• Identify risks requiring the most attention
• Identify cost, schedule & scope targets in the light of risk
• Make best decisions when conditions or outcomes are uncertain
• Experienced risk managers sometime perform it directly after Identify Risk
PMP Prep – Risk Slide 35
PERFORM QUANTITATIVE RISK PERFORM QUANTITATIVE RISK
ANALYSISANALYSIS
INPUTS
TOOLS & TECHNIQUES• Data gathering &
representationtechniques
•Quantitative risk analysis&
modeling techniques• Expert judgment
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PMP Prep – Risk Slide 36
• Risk register• Risk mgmt. plan• Cost mgmt. plan
• Schedule mgmt. plan• Organizationalprocess assets
OUTPUTS• Risk register
(updates)
PERFORM QUANTITATIVE RISK PERFORM QUANTITATIVE RISK
ANALYSIS-INPUTSANALYSIS-INPUTSINPUTS
Risk Register
Risk Management Plan
Cost Management Plan
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Schedule Management Plan
Organizational Process Assets
PMP Prep – Risk Slide 37
PERFORM QUANTITATIVE RISK PERFORM QUANTITATIVE RISK
ANALYSIS – T&TANALYSIS – T&T
TOOLS & TECHNIQUES
Data Gathering & Representation Techniques Interviewing:
- The info. needed depends upon type of probability
distributions that will be used, e.g. three-point estimates for some
commonly used distributions, and the mean & standard deviation
for others
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- Documenting the rationale of the risk ranges is an importantcomponent of risk interview
Probability distributions (beta and triangular) see Figure 11-14, p.298
PMP Prep – Risk Slide 38
PERFORM QUANTITATIVE RISK PERFORM QUANTITATIVE RISK
ANALYSIS -T & TANALYSIS -T & TQuantitative Risk Analysis & Modeling Techniques
Commonly used techniques include:
• Sensitivity Analysis
Which risks have the most potential impact on the project ( tornado diagram is
used- will definitely get question in exam)
• Expected Monetary Value (EMV) Analysis
• Calculates average outcome from a group of conditional values when their
future has events that may or may not occur
(Will definitely get question in exam)
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• Multiply each possible impact by its probability (risk value), uses decision tree• Decision Tree diagram (see Fig. 11-15, page 299)
• Modeling & Simulation
• Models that translate uncertainties at a detailed level into their potential
impact
• Typically uses Monte Carlo technique
• Better for cost or schedule risk than EMV because EMV is subject to misuse
PMP Prep – Risk Slide 39
PERFORM QUANTITATIVE RISK PERFORM QUANTITATIVE RISK
ANALYSIS -T & TANALYSIS -T & TExpert Judgement
• It is required to identify potential cost and schedule impacts, to
evaluate probability, and to define inputs (such as probabilitydistributions) into the tools
• It also comes into play in the interpretation of the data. Expertsshould be able to identify the weaknesses of the tools as well as
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their relative strengths.
• Experts may determine when a specific tool may or may not bemore appropriate given the organization’s capabilities and culture.
PMP Prep – Risk Slide 40
QUANTITATIVE RISK ANALYSIS -QUANTITATIVE RISK ANALYSIS -
OUTPUTOUTPUTOUTPUT
Risk Register (updates)
• Probabilistic analysis of the project
• Probability of achieving cost and time objectives
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• Prioritized list of quantified risks
• Trends in quantitative risk analysis results
PMP Prep – Risk Slide 41
RISK PROCESSESRISK PROCESSESProcesses by process group
Planning Monitoring and controlling
11.1
Plan Risk Management
11.6
Monitor and Control Risks
11.2
Identify Risks
11.3
Perform Qualitative Riskl i
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PMP Prep – Risk Slide 42
Analysis
11.4
Perform Quantitative RiskAnalysis
11.5
Plan Risk Responses
PLAN RISK RESPONSESPLAN RISK RESPONSES
HOW DO YOU PLAN RISK RESPONSES?
• Develop options & determine actions to enhance
opportunities and reduce threats
• Risk responses must be:
• Appropriate to the significance of the risk
C ff
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• Cost effective• Timely
• Realistic
• Within the project context
• Agreed upon by all parties involved
• Owned by a responsible person
PMP Prep – Risk Slide 43
PLAN RISK RESPONSESPLAN RISK RESPONSES
INPUTS
OUTPUTS• Risk register
( d t )
TOOLS & TECHNIQUES• Strategies for negative
risks orthreats
• Strategies for positiverisks or
opportunities• Contingent response
strategies• Expert judgement
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PMP Prep – Risk Slide 44
INPUTS•Risk register
•Risk managementplan
(updates)• Risk-related contract
decisions• Project management
plan
(updates)• Project document
updates
PLAN RISK RESPONSES -PLAN RISK RESPONSES -
INPUTSINPUTS
INPUTS
Risk Register
Risk Management Plan
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PMP Prep – Risk Slide 45
PLAN RISK RESPONSES –PLAN RISK RESPONSES –
T&TT&TTOOLS & TECHNIQUES
Strategies for Negative Risks or Threats
Avoid – Changing the Project Management Plan to eliminate a potential
risk
For example:
• Avoid a scope risk by changing to a less "bleeding edge" technology,
TD b k l t th th j t b f
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e.g. TD bank lost three months on a project because of unprovensoftware
• Avoid a cost risk by properly doing Activity Resource Estimating
• Avoid a resource risk by removing its requirement
PMP Prep – Risk Slide 46
PLAN RISK RESPONSES –PLAN RISK RESPONSES –
T&TT&T• Transfer - To third party
• Generally involves payment to the party taking on the risk e.g.
procurement of a critical item, For example:
• Transfer a scope risk by employing a contractor
T f h d l i k b h i fl d i f N
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• Transfer schedule risk by purchasing flood insurance for a NewOrleans project
• Transfer a resource risk by purchasing on-site warranty
PLAN RISK RESPONSES–PLAN RISK RESPONSES–
T&TT&T• Mitigate -Reduce impact of an adverse risk/or reduction in the
probabilityFor example:
• Mitigate a scope risk by building a prototype
• Mitigate a resource risk by cross-training a team member • Mitigate a schedule risk by using a pool of temporary workers, e.g.
Departmental Stores/Malls use lots of part-time workers
• Accept
U d b it' ld ibl t li i t ll th t f j t
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• Used because it's seldom possible to eliminate all threats from a project• Actively decide not to change project plan to deal with a risk• Passive acceptance requires no action, leaving the project team
to deal with the threats or opportunities as they occur • Active acceptance establishes a contingency reserve or strategy
PMP Prep – Risk Slide 48
PLAN RISK RESPONSES –PLAN RISK RESPONSES –
T&TT&T Strategies for Positive Risks or Opportunities
• Exploit - Eliminates the uncertainty associated with a particular
upside risk by making the opportunity will definitely happen
e.g. hiring more talented resources to the project to reduce the
completion time
"T t k d t f" "T k b t f“
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"To take advantage of" or "To make best use of“
PMP Prep – Risk Slide 49
PLAN RISK RESPONSES–PLAN RISK RESPONSES–
T&TT&T• Share - Share responsibility and accountability to get best chanceof seizing an opportunitye.g. risk sharing partnerships or joint ventures
• Enhance - Modify the "size“ of an opportunity by increasingprobability and/or positive impacts by identifying & maximizing keydrivers.e.g. a sales opportunity may make a higher profit if a volumediscount is offered
Accept
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• Accept
Accepting an opportunity is being willing to take advantage of it if it comes along,butnot actively pursuing it.
PMP Prep – Risk Slide 50
PLAN RISK RESPONSES –PLAN RISK RESPONSES –
T&TT&TContingent Response Strategy
• Respond only if certain event occurs and there's sufficient warning
to implement the plan. Examples of events that trigger contingency
response
• missing intermediate milestones
t f h d
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• cost of resource has gone down• gaining high priority with a supplier
should be defined and tracked
PMP Prep – Risk Slide 51
PLAN RISK RESPONSES –PLAN RISK RESPONSES –
T&TT&TExpert Judgement
Input from knowledgeable parties pertaining to the actionsbe taken on a specific and defined risk.
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PMP Prep – Risk Slide 52
PLAN RISK RESPONSESPLAN RISK RESPONSES --
OUTPUTSOUTPUTS• Risk Register (Updates) The risk register is developed in Identify Risk, and is updated
during Perform Qualitative Risk Analysis & Perform Quantitative
Risk Analysis In Plan risk responses, appropriate responses are chosen,
agreed upon, and included in the risk register Components of risk register (read page 305 & 306)
a) Residual risks - risk that are expected to remain after
planned responses have been taken as well as those that
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planned responses have been taken as well as those thathave been deliberately accepted
b) Secondary risks -new risk that arise as a direct outcome of
implementing a risk response.
PMP Prep – Risk Slide 53
PLAN RISK RESPONSESPLAN RISK RESPONSES --
OUTPUTSOUTPUTS
Risk-Related Contractual Agreements
Such as agreements for insurance, services, and other items asappropriate, can be prepared to specify each party’s responsibilityfor specific risks, should they occur.
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PMP Pre – Risk Slide 54
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RISK PROCESSESRISK PROCESSESProcesses by process group
Planning Monitoring and controlling
11.1
Plan Risk Management
11.6
Monitor and Control Risks
11.2
Identify Risks
11.3
Perform Qualitative Risk
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PMP Prep – Risk Slide 56
Perform Qualitative RiskAnalysis
11.4
Perform Quantitative RiskAnalysis
11.5Plan Risk Responses
MONITOR AND CONTROLMONITOR AND CONTROL
RISK RISK WHAT HAPPENS IN MONITOR AND CONTROL RISK?
• Identify, analyze & plan for new or changed risks
• keep track of the identified risks and those on the watch list• reanalyze existing risks
• Monitor trigger conditions for contingency plan
• Monitor residual & secondary risks
• Review the execution of risk responses while evaluating their
effectiveness
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effectiveness.
• Monitor & Control Risk process applies techniques, such as
variance and trend analysis, which require the use of
performance data generated during project execution
PMP Prep – Risk Slide 57
MONITOR AND CONTROL RISK MONITOR AND CONTROL RISK Other purposes of Monitor & Control Risk are to determine if:
• Mid-course correction needed to handle the risk appropriately Projectassumptions are still valid
• Risk, as assessed, has changed from its prior state, with analysis of trends
• Proper risk management policies & procedures are being followed
• Contingency reserves of cost or schedule should be modified in line withthe risk of the project
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• Monitor & Control Risk can involve choosing alternative strategies,executing a contingency or fallback plan, taking corrective action &modifying the project management plan
• Receive periodic reports from risk response owner on the effectiveness of
the plan, and any unanticipated effects.
PMP Prep – Risk Slide 58
MONITOR AND CONTROLMONITOR AND CONTROL
RISK RISK
INPUTS
• Risk registerOUTPUTS
• Risk register (updates)
TOOLS & TECHNIQUES• Risk reassessment
• Risk audits• Variance and trend
analysis• Technical performancemeasurement
• Reserve analysis• Status meetings
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PMP Prep – Scope Slide 59
• Risk register• Risk
managementplan
• Work performance
information• Performancereports
• Risk register (updates)• Org. process assets
(updates)• Change Requests
• Project management plan
(updates)• Project document updates
MONITOR AND CONTROL RISK -MONITOR AND CONTROL RISK -
INPUTSINPUTSINPUTS
Risk Register
Project Management Plan
Work Performance Information
Performance Reports
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Performance Reports
PMP Prep – Risk Slide 60
MONITOR AND CONTROL RISK MONITOR AND CONTROL RISK
– T&T– T&T TOOLS & TECHNIQUESRisk Reassessment• Risk Monitoring & Control often requires identification of new risks & re-assessment of risks
•Risk reassessment should be regularly scheduled & should be an agendaitem at project team status meetings
Risk Audits• Examine & document the effectiveness of risk responses in dealing with
identified risks and their root causes, as well as the effectiveness of the riskmanagement process
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Variance and Trend Analysis• Earned value analysis & trend analysis may be used to monitor overall projectperformance. Outcomes from these analyses may forecast potential deviation of theproject at completion from cost and schedule targets
• Deviation from baseline plan may indicate the potential impact of threats or opportunities
PMP Prep – Risk Slide 61
MONITOR AND CONTROL RISK MONITOR AND CONTROL RISK
– T&T– T&TTechnical Performance Measurement• Compares technical accomplishment during project execution to the
plan’s schedule of technical achievement
Reserve Analysis• Compares the amount of contingency reserves remaining to the amount of
risk remaining at any time in the project, to determine if the remainingreserve is adequate
Status Meetings
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Status Meetings • Risk management can be an agenda item in periodic status meetings to
proactively manage risk
PMP Prep – Risk Slide 62
MONITOR AND CONTROL RISK -MONITOR AND CONTROL RISK -
OUTPUTSOUTPUTS
Risk Register (Updates)
Organizational Process Assets (Updates)
Change Requests
Project Management Plan (Updates)
Project Document (Updates)
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Project Document (Updates)
(Read page 311 & 312)
PMP Prep – Risk Slide 63
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTIONExercise
Give examples of three risks with a response plan for each.
Schedule - _____________________________________________
______________________________________________________
Cost -
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Cost ________________________________________________________________________________________________________
Scope- _________________________________________________
_______________________________________________________
PMP Prep – Risk Slide 64
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTIONExercise
What’s the difference between:
Passive acceptance & active acceptance?____________________
_______________________________________________________
S d & id l i k ?
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Secondary & residual risks?_______________________________________________________________________________________
Management reserve & contingency reserve?_________________
_______________________________________________________
Questions?Questions?
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PMP Prep – Risk Slide 66
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DAY 1
DAY 5
CHAPTER 12
PROJECT PROCUREMENT
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PMP Prep – Procurement Slide 1
PROJECT PROCUREMENTMANAGEMENT
AGENDAAGENDA
Day 1 DAY 4 PMP Exam Prep Introduction Project QUALITY Management
Project Management Framework Project RISK Management*Introduction Project HUMAN
RESOURCE Management*Project Life Cycle & Organisation
Project Management Processes
DAY 2 DAY 5Project INTEGRATION Management Project
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5 Project INTEGRATION Management ProjectPROCUREMENT Management
Project SCOPE Management Professional & SocialResponsibility
DAY 3 DAY 6 Project TIME Management REVISION & QUIZ
Project COST Management
PROJECT PROCUREMENTPROJECT PROCUREMENT
MANAGEMENTMANAGEMENTWHAT DOES THE PROCUREMENT
KNOWLEDGE AREA DO? • Purchases or acquires products, services or results needed to perform
project work (internal or external to the performing organization)• PMI uses the terms Buyer & Seller very often. Buyer is normally the
performing organization. Sellers can be Contractors, Sub-contractors,
Service providers, Suppliers/Vendors.
• Buyer can also be clients, customers, contractors, or purchasers.
• It is important to understand the situation/context and accordingly
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p g yinterpret – who is a Buyer or Seller.
• A Seller may consider delivering you their own project (which may be a
a subproject to you.
• If required, seek early assistance from Specialists in contracting,
purchasing within the legal framework (so as to be fair to both).
PROJECT PROCUREMENTPROJECT PROCUREMENT
MANAGEMENTMANAGEMENTContracts• Contracts are formal. Also named as Agreements, Subcontracts, or
Purchase orders. Letters of intent are not considered as Contract.
• Contract is defined as an agreement between competent parties, for valid (effective, well-grounded, logical and producing desired results )consideration, to accomplish a lawful purpose with clearly definedterms.
• Contracts are a method of transferring risk for a fees (a strategy used in
Risk Response Planning).
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p g)
• If internal to the Project Team’s organization, a non-contractual formalagreement is prepared in form of an MOU (with other departments).
• PM team should prepare a tailor-made contract based on specific
project needs.
• PM must know the contents of the contract & the purpose.PMP Prep – Procurement Slide 3
PROJECT PROCUREMENTPROJECT PROCUREMENT
MANAGEMENTMANAGEMENT
PROCUREMENT PROCESSDEFINITIONS
12.1 Plan Procurements
• Make a Procurement Management Plan: that defines What, When &
How to buy goods and services for the Project. Then, prepare a SOW
defining the purchase needs.
12.2 Conduct Procurements
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• Document the requirements (for products, services & results from
outside the project organization)
• Identify potential Sellers
12.3 Administer Procurements
• Obtain Information, Quotes, Bids, Offers or Proposals
PROCUREMENT PROCESSESPROCUREMENT PROCESSES
• Review the Offers; Select the best out of the potential Sellers;Negotiate a written Contract.
• Manage the Contract & contract changes; the relationshipsbetween Buyer and Seller.
• Review & document the Seller performance.• Manage contractual relationship with outside Buyer of the
Project.
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12.4 Close Procurements
• Complete & settle each contract
• See the Process flow diagram in page 273.
PMP Prep – Procurement Slide 5
PROCUREMENT PROCESSESPROCUREMENT PROCESSES
Planning Executing Monitoring and
controlling
Closing
12.1
PlanProcurement
s
12.2
ConductProcurement
s
12.3
AdministerProcurement
s
12.4
CloseProcurement
s
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s
PMP Prep – Procurement Slide 6
PLAN PROCUREMENTSHOW DO WE PLAN PROCUREMENTS?
Identify which project needs that can best be:• project needs which can be, must be, met by acquiring products, services or
results outside the Project organization.• accomplished by the project team during project execution.
The process • involves consideration of whether, how, what, how much & when to
acquire.
• includes reviewing the risks involved in each make or buy decision.• includes reviewing the type of contract planned to be used with
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includes reviewing the type of contract planned to be used withrespect to mitigating or transferring risks to the Seller.
PMP Prep – Procurement Slide 7
PLAN PROCUREMENTSPLAN PROCUREMENTS
INPUTS• Scope baseline
• Requirements documentation
• Teaming agreements• Risk register
OUTPUTS
• Procurement
TOOLS & TECHNIQUES
• Make-or-buy analysis
• Expert judgement• Contract types
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PMP Prep – Procurement Slide 8
• Risk register • Risk-related contract decisions• Activity resource requirements
• Project schedule• Activity cost estimates
• Cost performance baseline
• Enterprise environmental factors• Organizational Process assets
management plan• Procurement statements of work
• Make-or-buy decisions• Procurement documents• Source selection criteria
• Change requests
PLAN PROCUREMENTSINPUTS
Enterprise Environmental Factors
• Marketplace conditions: what products, services & results are available,
at what prices, under what terms & conditions.• If the performing organization does not have a purchasing or contracting
group, then project team will have to supply both resources & expertise
to perform all procurement activities.
Organizational Process Assets
• Formal & informal procurement-related policies, procedures, forms,
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guidelines & management systems that are considered in developing
Procurement Management Plan & selecting contract types to be used.
• Existing organisation policies frequently constrain procurement
decisions. Though many a times those policies are devised based on
lessons learned from past projects.
PMP Prep – Procurement Slide 9
PLAN PROCUREMENTS - INPUTS
Scope Baseline
The scope baseline describes the need, justification, requirements,and current boundaries for the project. It consists of the following
components: • Scope statement : It contains the product scope description, service
description, the list of deliverables, and acceptance criteria, as well as
important information regarding technical issues or concerns that could
impact cost estimating. Examples of constraints are required delivery
dates, available skilled resources, and organizational policies.
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, , g p
• Work Breakdown Structure
• WBS Dictionary
PMP Prep – Procurement Slide 10
PLAN PROCUREMENTS -
INPUTSRequirements Documentation
Requirements documentation may include:• Important information about project requirements that is considered
during planning procurements.
• Requirements with contractual and legal implications that may include
health, safety, security, performance, environmental, insurance,
intellectual property rights, equal employment opportunity, licenses,d
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and
permits – all of which are considered when planning for procurements.
–
PLAN PROCUREMENTS -
INPUTS Teaming Agreements:
• Legal contractual agreements between two ormore entities to form a partnership or jointventure, or some other arrangement as defined bythe parties.
• The agreement defines buyer-seller roles for eachparty.
• Whenever the new business opportunity ends, theteaming agreement also ends.
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g g• When teaming agreement is in effect, the planning
process for the project is significantly impacted.• When teaming agreement is in place on a project,
the roles of buyer and seller are predetermined,and such issues as scope of work, competitionrequirements, and other critical issues aregenerally predefined.
PLAN PROCUREMENTS -
INPUTSRisk Register (Section 11.2.3.1)Risk-Related Contract Decisions
• They include agreements including insurance,bonding, services, and other items as appropriate,that are prepared to specify each party’sresponsibility for specific risks.
Activity Resource Requirements (Section
6.3.3.1)P j S h d l
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6.3.3.1)Project Schedule
Activity Cost Estimates• Cost estimates developed by the procuring activity
are used to evaluate the reasonableness of thebids or proposals received from potential sellers
PLAN PROCUREMENTS -
INPUTSCost Performance Baseline (Section 7.2.3.1)
Enterprise Environmental FactorsEEF that can influence the Plan Procurements process include,
but are not limited to:
• Marketplace conditions;
• Products, services, and results that are available in the
marketplace;S ppliers incl ding past performance or rep tation
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• Suppliers, including past performance or reputation;
• Typical terms and conditions for products, services, andresults or for the specific industry; and
• Unique local requirements.
PLAN PROCUREMENTS -
INPUTSOrganizational Process AssetsOPA that influence the Plan Procurement process
include, but
are not limited to:
• Formal Procurement policies, procedures, andguidelines.
• Management systems that are considered in
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Management systems that are considered indeveloping the procurement management planand selecting the contract types to be used.
• An established multi-tier supplier system of pre-qualified sellers based on prior experience.
PLAN PROCUREMENTS -T&T
TOOLS & TECHNIQUESExpert Judgment
Make or Buy Analysis
Price is not the only consideration. Also consider:
• Exposure of proprietary information• Difficulty in defining deliverables and communicating externally• Is this work your core competency?• Work you want to do in parallel
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• Amount of change contemplated• Time to manage several procurement processes/find sellers• Skills available within your team/company and their moral if you
outsource
• Special resource requirement-time duration for training, learning curveetc.
PLAN PROCUREMENTS -T&T
Questions on Make or Buy decisions: can include buy or leasequestions like this.
It costs $300/day to lease an item. It would cost $2000 plus $100/day onmaintenance to buy it. When will lease and purchase costs be equal (inDays)?
Lease cost = $300/day Investment =$2000 + $100/day
D = # of days when purchase & lease costs will be equal
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$300D =$2000 + $100D ( No. of days)
$300D -$100D = $2000 + $100D -$100D (subtract $100D from bothsides)
$200D = $2000
D = 10 i.e. 10 days
PLAN PROCUREMENTS -T&T
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PMP Prep – Procurement Slide 14
CONTRACT TYPESCONTRACT TYPES Contract Types
FIXED-PRICE (FP) CONTRACTS
Firm Fixed Price Contracts (FFP)
• Seller to complete the job within a fixed total price.
• The Product has to be well defined ( both seller & buyer are at risk )
Fixed Price Plus Incentive Fee -FPIF• Seller completes ithin a fi ed total price pl s an e tra incenti e for
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• Seller completes within a fixed total price, plus an extra incentive for
meeting or exceeding certain objectives
e.g. fixed price of $100,000 + $25,000 for completing by a target date
PMP Prep – Procurement Slide 15
CONTRACT TYPESCONTRACT TYPESFixed Price Incentive Fee Contracts (FPIF)
• Incentive is based on sellers performance
tied to achieving agreed to metrics.
• Typically such financial incentives arerelated to cost, schedule, or technical
performance of the seller
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p• In FPIF contracts, a price ceiling is set, and
all costs above the price ceiling are theresponsibility of the seller, who isobligated to complete the work.
CONTRACT TYPESCONTRACT TYPESFixed price with Economic Price AdjustmentContracts (FP-EPA)
• The contract type is used whenever the seller’sperformance period spans a considerable period of years, as is desired with many long-termrelationships.
• It is Fixed price contract, but with a special
provision allowing for pre-defined finaladjustments to the contract price due to changed
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j p gconditions, such as inflation changes, or costincreases (or decreases) for specific commodities.
• The EPA clause must relate to some reliablefinancial index which is used to precisely adjustthe final price. The FP-EPA contract is intended toprotect both buyer and seller from externalconditions beyond their control.
CONTRACT TYPESCONTRACT TYPESCOST-REIMBURSABLE (CR) CONTRACTS • Involves payment (reimbursement) to the seller for seller's actual costs,
plus a fee typically representing seller profit• May also include financial incentive clauses whenever the seller
exceeds, or falls below, defined objectives such as costs, schedule, or technical performance targets.
• Three or more common types in use are as given below:
Cost Plus Fixed Fee –CPFF
• Buyer pays all costs plus a fixed fee• Cost over runs will not increase the fixed fee
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Cost over runs will not increase the fixed fee• e.g. cost of $100,000 + fixed fee of $15,000 (as profit)
PMP Prep – Procurement Slide 16
CONTRACT TYPESCONTRACT TYPESCost Plus Incentive Fee -CPIF
• Buyer pays all costs plus an incentive to beat some criteria• Criteria might be a cost or time target with a certain formula• e.g. cost of $100,000 + a pre-determined fee $5000 as
incentive for early delivery
Cost Plus Award Fee contracts (CPAF)• The seller is reimbursed for all legitimate costs, but the majority
of the fee is only earned based on the satisfaction of certainbroad subjective performance criteria defined and incorporated
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broad subjective performance criteria defined and incorporatedinto the contract.
• The determination of fee is based solely on the subjectivedetermination of seller performance by the buyer, and is
generally not subject to appeals.
PMP Prep – Procurement Slide 17
CONTRACT TYPESCONTRACT TYPESTIME & MATERIAL (T&M) CONTRACTS
• Hybrid type of contractual agreement that contains aspects of both
cost-reimbursable & fixed-price contracts.
• The full value of the agreement and the exact quantity of items to be
delivered is not known when the agreement is made (like a cost
reimbursement contract)
• Based upon unit rates or hourly rates as preset by the Buyer & Seller for a specific resource category (like a fixed-price contract)
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p g y ( p )
PMP Prep – Procurement Slide 18
CONTRACT TYPESCONTRACT TYPES
Question
Contract cost is estimated to be $210,000 and a fee of $10 ,000 is offeredto the supplier for completing the contract on or before time.
If the contractor beats the cost, both the buyer and the seller will sharethe savings at 40:60 ratio.
If the actual cost of the work comes out to $180,000, what will the
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Seller get if the contract is completed before time?
PMP Prep – Procurement Slide 19
CONTRACT TYPESCONTRACT TYPES
ANSWER:
Target cost" $210,000Seller's fee" $10,000
Sharing ratio = 40% buyer / 60% seller
seller Actual cost" $180,000
Cost savings = $210,000 -$180,000 = $30,000Seller's profit = $10,000 + ( $30,000 X 60% ) = $28,000
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p $ , ( $3 , % ) $ ,
Final price to buyer = $180,000 + $28,000 = $208,000
PMP Prep – Procurement Slide 20
CONTRACT TYPESCONTRACT TYPES
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PMP Prep – Procurement Slide 21
CONTRACT TYPESCONTRACT TYPES
Spectrum of Risk• Contract type should be chosen based on the degree of risk (do you
know what will it cost to deliver?)• Risk increases if scope is not well defined. So defining the scope better
will get you a better contract with less risk for all.• Risk can affect any/or all of them - time, cost, quality & scope
Contracts - buyer on high risk• Buyer pays for what it costs to deliver
If costs go up, buyer's price increases, but seller's costs are always
covered.
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Contracts - seller on high risk• Buyer pays for agreed price no matter what it costs to deliver
If costs go up, seller has to absorb them, but buyer has fixed price &isn't affected.
PMP Prep – Procurement Slide 22
PROCUREMENT DOCUMENTSPROCUREMENT DOCUMENTS
Procurement Documents
RFP (Request for Proposal or Request for Tender) - requests a price anddetails on how the work will be carried out, time frame, who will do it,biography of the team, company experience, etc.
IFB (Invitation for Bid or Request for Bid) -requests one price for all thework.
Request for Quote (RFQ) -requests a price quote per item, on hourly or per unit basis
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per unit basis.
PMP Prep – Procurement Slide 23
PLAN PROCUREMENTS -PLAN PROCUREMENTS -
OUTPUTSOUTPUTS
Procurement Management Plan
• Describes how the procurement processes will be managed from
developing procurement documentation through contract closure• The procurement management plan can include guidance for:
• Types of contracts to be used;
• Risk management issues;
• Whether independent estimates will be used and if they are needed
as evaluation criteria;
• Those actions the PM team can take unilaterally if the performing
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• Those actions the PM team can take unilaterally, if the performing
organization has a prescribed procurement, contracting, or
purchasing department;
• Standardized procurement documents, if they are needed;
PMP Prep – Procurement Slide 24
PLAN PROCUREMENTS -PLAN PROCUREMENTS -
OUTPUTSOUTPUTSProcurement Management Plan
(Contd.)
• Managing multiple suppliers;
• Coordinating procurement with other project
aspects, such as scheduling and performancereporting;
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p g;
• Handling the required lead times
• Handling the make-or-buy decisions, etc.
PLAN PROCUREMENTS -PLAN PROCUREMENTS -
OUTPUTSOUTPUTSProcurement Statements of Work• Describes the procurement item in sufficient detail to allow prospective
sellers to determine if they are capable of providing the item.• Written to be clear, complete & concise.• Information included in a contract SOW can include specifications,
quantity desired quality levels, performance data, period of performance,work location & other requirements.
• Include description of any collateral services required, i.e. performancereporting or post-project operational support for the procured item.
• Contract SOW can be revised as required as it moves through theprocurement process until incorporated into signed contract. Seller mayl dif th SOW b ti ffi i t h l
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also modify the SOW by suggesting more efficient approach or a lesscostly product than that originally specified.
Make-or-Buy Decisions
PMP Prep – Procurement Slide 25
PLAN PROCUREMENTS -PLAN PROCUREMENTS -
OUTPUTSOUTPUTSProcurement Documents
• Used to seek proposals from prospective sellers e.g.
RFP/RFQ/IFB etc.• Terms such as bid, tender or quotation are generally used when
the seller selection decision will be based on price;• RFP is used when other considerations such as technical
capability or technical approach are paramount)
• These documents include,- Procurement SOW
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- Any required contractual provisions- With government contracting, some or all of the content andstructure of procurement documents can be defined byregulation.
PLAN PROCUREMENTS -PLAN PROCUREMENTS -
OUTPUTSOUTPUTSSource Selection Criteria• Selection Criteria are often included as a part of the procurement solicitation
documents. Such criteria are developed and used to rate or score seller proposals,and can be objective or subjective (the proposed Project Manager should be a
Certified PMP) or subjective (previous experience on similar projects)• Other selection criteria to support an assessment of a complex products, services, or results may include:
Understanding of need Overall or life-cycle cost Technical capability Risk
Management approach Technical Approach
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Warranty Financial capacity Production capacity and interest Business size & type Past performance of sellers References Intellectual property rights Proprietary rights
PROCUREMENT PROCESSESPROCUREMENT PROCESSES
PROCESSES BY PROCESS GROUP
Planning Executing Monitoring and
controlling
Closing
12.1
PlanProcurement
s
12.2
Conduct
Procurements
12.3
Administer
Procurements
12.4
Close
Procurements
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PMP Prep – Procurement Slide 26
s s s s
CONDUCT PROCUREMENTSCONDUCT PROCUREMENTS
WHAT HAPPENS IN CONDUCT PROCUREMENTS?
• Conduct Procurements is the process of obtaining Seller responses, selecting a seller, andawarding a contract (see Figures 12-4 and 12-5 in page 329 of PMBOK)
• In this process, the team will receive bids or proposals and will apply previously definedselection criteria to select one or more sellers who are qualified to perform the work andacceptable as a seller.
• On major procurement items, overall process of requesting responses from sellers andevaluating those responses can be repeated.
• A short list of qualified sellers can be established based on a preliminary proposal. A moredetailed evaluation can then be conducted based on a more specific and comprehensiverequirements document requested from the sellers on the short list. In addition, tools and
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q qtechniques described here can be used alone or in combination to select sellers. For example, a weighting system can be used to:
- Select a single seller that will be asked to sign a standard contract, and- Establish a negotiating sequence by ranking all proposals by the weighted evaluation
scores assigned to each proposal.
PMP Prep – Procurement Slide 27
CONDUCTCONDUCT
PROCUREMENTSPROCUREMENTS
INPUTS• Project management plan
• Procurement documents• Source selection criteria
Q lifi d ll li t
OUTPUTS• Selected sellers
• Procurement contract award
TOOLS & TECHNIQUES
• Bidder conferences• Proposal evaluation
techniques• Independent estimates
• Expert judgement• Advertising
• Internet Research• Procurement negotiations
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PMP Prep – Procurement Slide 28
• Qualified seller list• Seller proposals
• Project documents• Make-or-buy decisions• Teaming agreements
• Organizational process assets
• Procurement contract award• Resource calendars
• Change requests• Project Mgmt. Plan (updates)• Project document (updates)
CONDUCT PROCUREMENTS -CONDUCT PROCUREMENTS -
INPUTSINPUTSINPUTS
• Project Management Plan• Procurement documents• Source selection criteria• Qualified seller list• Seller proposals
• Project documents• Make or Buy Decisions
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• Make-or-Buy Decisions• Teaming agreements• Organizational process assets
PMP Prep – Procurement Slide 29
CONDUCTCONDUCT
PROCUREMENTS – T&TPROCUREMENTS – T&T1) Bidder Conferences
Meeting with all prospective sellers and buyers
prior to submittal of a bid or proposal (Read page331)
2) Proposal Evaluation Techniques
On complex procurements, where source selectionwill be made based on seller responses to previouslydefined eighted criteria a formal e al ation re ie
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defined weighted criteria, a formal evaluation reviewprocess will be defined by the buyer’s procurementpolicies. The evaluation committee will make their selection for approval by management prior to theaward.
PMP Prep – Procurement Slide 30
CONDUCTCONDUCT
PROCUREMENTS – T&TPROCUREMENTS – T&T
3) Independent Estimates
4) Expert Judgment5) Advertising
6) Internet Search
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PMP Prep – Procurement Slide 31
CONDUCTCONDUCT
PROCUREMENTS – T&TPROCUREMENTS – T&T7) Procurement NegotiationsClarifies the structure & requirements of the contract so that mutualagreement can be reached prior to signing the contract.
Subjects covered include:• Responsibilities & authorities• Applicable terms & law• Technical & business management approaches• Proprietary rights
• Contract financing• Technical solution
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• Overall schedule• Payments• Price
CONDUCT PROCUREMENTS –CONDUCT PROCUREMENTS –
OutputsOutputsSelected Sellers
• Those sellers who have been judged to be
in a competitive range based upon theoutcome of the proposal or bid evaluation,and
• Who have negotiated a draft contract thatwill become the actual contract when an
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award is made.
• Final approval of all high-value, high-risk
procurements will generally requireorganizational senior mgmt. approval prior
CONDUCT PROCUREMENTS –CONDUCT PROCUREMENTS –
OutputsOutputsProcurement Contract Award
• A procurement contract is awarded to eachselected seller.
• The contract can be in the form of simple purchaseorder or a complex document.
• Regardless of the document’s complexity, acontract is a mutually binding legal agreement
that obligates the seller to provide the specifiedproducts, services, or results, and obligates the
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p , , , gbuyer to compensate the seller.
• A contract is a legal relationship subject to remedyin the courts.
CONDUCT PROCUREMENTSCONDUCT PROCUREMENTS
– Outputs– Outputs• The major components in a contract document will
vary, but will sometimes include the following;
- Statement of work or deliverables,
- Schedule baseline,
- Performance reporting,
- Period of performance,
- Roles and responsibilities,
- Seller’s place of performance,
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- Pricing,
- Payment terms,
- Place of delivery
CONDUCT PROCUREMENTSCONDUCT PROCUREMENTS
– Outputs– Outputs- Inspection and acceptance criteria,- Warranty,- Product support,
- Limitation of liability,- Fees and retainage,- Penalties- Incentives,- Insurance and performance bonds,
- Subordinate subcontractor approvals,- Change request handling, andTermination and alternative dispute resolution (ADR)
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- Termination and alternative dispute resolution (ADR)mechanisms. The ADR method can be decided in
advance as a part of the procurement award.
PROCUREMENT PROCESSESPROCUREMENT PROCESSES
PROCESSES BY PROCESS GROUP
Planning Executing Monitoring and
controlling
Closing
12.1
Plan
Procurement
s
12.2
Conduct
Procurements
12.3
Administer
Procurements
12.4
Close
Procurements
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PMP Prep – Procurement Slide 33
s
ADMINISTER PROCUREMENTADMINISTER PROCUREMENT
HOW DO WE ADMINISTERPROCUREMENT?
• It is the process of managing procurement relationships,monitoring contract performance, and making changes andcorrections as needed (see Figures 12-6 and 12-7 in page 336).
• Both the buyer and the seller will administer the procurement
contract for similar purposes.
• Each must ensure that both parties meet their contractual
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• Each must ensure that both parties meet their contractualobligations and that their own legal rights are protected.
PMP Prep – Procurement Slide 34
ADMINISTERADMINISTER
PROCUREMENTPROCUREMENT• The Administer Procurements process ensures that the seller’s performance
meets procurement requirements and that the buyer performs according to theterms of the legal contract.
• The legal nature of the contractual relationship makes it imperative that the projectmanagement team is aware of the legal implications of actions taken whenadministering any procurement.
• Due to varying org. structures, many organizations treat contract administration asan administrative function separate from the project organization. While aprocurement administrator may be on the project team, this individual typicallyreports to a supervisor from a different department. This is usually true if theperforming organization is also the seller of the project to an external customer.
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ADMINISTERADMINISTER
PROCUREMENTPROCUREMENT
INPUTS• Procurementdocuments
OUTPUTS
TOOLS & TECHNIQUES
• Contract change control system
• Procurement performance
reviews• Inspections & audits• Performance reporting
• Payment systems• Claims administration
• Records management system
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PMP Prep – Procurement Slide 35
documents• Project management plan
• Contract• Performance reports
• Approved change requests• Work performance information
• Procurementdocumentation
• Organizational process assets(updates)
• Change requests• Project Mgmt. Plan (updates)
ADMINISTER PROCUREMENT-ADMINISTER PROCUREMENT-
INPUTSINPUTS1) Procurement Documents2) Project mgmt. plan
3) Contract4) Performance reports5) Approved change requests6) Work performance information
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PMP Prep – Procurement Slide 36
ADMINISTER PROCUREMENT-ADMINISTER PROCUREMENT-
T&TT&T TOOLS & TECHNIQUES
Contract change control system
• Defines the process to modify a contract• Includes paperwork, tracking systems, dispute
resolution procedures & approval levels necessaryfor authorizing changes, i.e. work authorization
system
P t f i
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Procurement performance reviews
PMP Prep – Procurement Slide 37
ADMINISTERADMINISTER
PROCUREMENT- T&TPROCUREMENT- T&TInspections and audits
•Required by the buyer & supported bythe seller as specified in contractdocumentation.
• If authorized by contract, someinspections and audit teams can
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include buyer procurement personnel.
ADMINISTERADMINISTER
PROCUREMENT- T&TPROCUREMENT- T&T• Performance Reporting
How effectively the seller is achieving
contractual objectives
• Payment systems
Payments to the seller are typically
processed by the accounts payable systemof the buyer after certification of satisfactory
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of the buyer after certification of satisfactorywork by an authorized person on the projectteam. Strictly as per terms of contract.
ADMINISTERADMINISTER
PROCUREMENT- T&TPROCUREMENT- T&T• Claims administration Contested changes and potential constructive
changes are those requested changes where thebuyer and seller cannot reach an agreement oncompensation for the change, or cannot agree that achange has occurred. These contested changes arevariously called claims, disputes, or appeals.Preferred method of claims/dispute settlement is
through negotiation.• Records management system
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It is used by the PM to manage contract andprocurement documentation and records (it is a partof PMIS, section 4.3.2.2)
ADMINISTER PROCUREMENT-ADMINISTER PROCUREMENT-
OUTPUTSOUTPUTS OUTPUTS
1) Procurement documentation
It includes, but not limited to, the procurement
contract with all supporting schedules, requestedunapproved contract changes, and approved changerequests. It also includes any seller-developedtechnical documentation and other work performanceinformation such as deliverables, seller performance
reports, warranties, financial documents includinginvoices and payment records, and the result of contract-related inspections
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contract related inspections.
PMP Prep – Procurement Slide 38
ADMINISTER PROCUREMENT-ADMINISTER PROCUREMENT-
OUTPUTSOUTPUTS2) Organizational Process Assets
(updates) – Read page 340
3) Change Requests
4) Project Mgmt. Plan (updates)- Procurement mgmt. plan
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Procurement mgmt. plan- Baseline schedule (must be updated to reflectthe current expectations
PROCUREMENT PROCESSESPROCUREMENT PROCESSES
PROCESSES BY PROCESS GROUP
Planning Executing Monitorin
g andcontrolling
Closing
12.1
PlanProcurement
s
12.2
ConductProcurement
s
12.3
AdministerProcurement
s
12.4
CloseProcurement
s
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PMP Prep – Procurement Slide 39
s
CLOSE PROCUREMENTSCLOSE PROCUREMENTS
WHAT HAPPENS IN CLOSEPROCUREMENTS?
• Close procurements process supports the close project process• Verifies that all work and deliverables were acceptable
• Administrative activities, such as update records to reflect final
results and archive them for future use
• In multi-phase projects, the terms of a contract may only apply to a
given phase of the project.• Unresolved claims may be subject to litigation after close procurements.
• Contract terms & conditions can prescribe specific procedures for
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• Contract terms & conditions can prescribe specific procedures for
close procurements.
• Early termination of a contract is a special case of close procurements
& can happen when the buyer & seller mutually agree or when there's
contract default
PMP Prep – Procurement Slide 59
CLOSE PROCUREMENTSCLOSE PROCUREMENTS
INPUTS
• Procurement management plan
OUTPUTS
• Closed procurements
TOOLS & TECHNIQUES• Procurement audits
• Negotiated settlements
• Records management system
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PMP Prep – Procurement Slide 60
g p• Procurement documentation
• Closed procurements• Organizational process assets
(updates)
CLOSE PROCUREMENTS -CLOSE PROCUREMENTS -
INPUTSINPUTS
INPUTS
• Procurement Management Plan• Procurement Documentation
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PMP Prep – Procurement Slide 61
CLOSE PROCUREMENTS – T&TCLOSE PROCUREMENTS – T&T
TOOLS & TECHNIQUES Procurement Audits• Structured review of all the procurementprocess from Plan Procurement processthrough Administer Procurements
• Objective is to identify successes & failures
that warrant recognition in the preparationand administration of other procurement
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contracts on the project, or on other projectwithin the performing organization.
PMP Prep – Procurement Slide 62
CLOSE PROCUREMENTS –CLOSE PROCUREMENTS –
T&TT&TNegotiated Settlements• In all procurement relationships the final equitable settlement
of all outstanding issues, claims, and disputes by negotiation
is a primary goal.
• Whenever settlement cannot be achieved through directnegotiation, some form of alternative dispute resolution (ADR)including mediation or arbitration may be explored.
• When all else fails, litigation in the courts is the least desirableoption.
Records Management System (see section12 3 2 7)
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Records Management System (see section12.3.2.7)
CLOSE PROCUREMENTS -CLOSE PROCUREMENTS -
OUTPUTSOUTPUTSOUTPUTS
Closed Procurements• The buyer, usually through the authorized procurement
administrator, provides the seller with formal written notice that
the contract has been completed
Organizational Process Assets (Updates) • Procurement file -a complete set of indexed records• Deliverable acceptance (or rejection)
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Deliverable acceptance (or rejection)
• Lessons learned documentation
PMP Prep – Procurement Slide 63
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
Question
All the following are true statements about 'Just In Time
Manufacturing' except:
A. It emphasizes waste reduction.B. It eliminates costs related to material handling, storage,
paperwork and inspection.
C. It emphasizes short-term relationships with suppliers that last
until the delivery is received.
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D. It reduces inventory to zero or the re-order level.
PMP Prep – Procurement Slide 64
SAMPLE EXAM QUESTIONSAMPLE EXAM QUESTION
Answer - C
All are true except C. Amongst the true one’s - But the best answer would be D (for exam).
Just-in-time manufacturing is a process where inventory is
delivered to the factory by suppliers only when it's needed.
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PMP Prep – Procurement Slide 65
Questions?Questions?
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PMP Prep – Procurement Slide 66
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DAY 5
PROFESSIONAL & SOCIALRESPONSIBILITY
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PMP Prep – Responsibilities Slide 1
AGENDAAGENDA
Day 1 DAY 4 PMP Exam Prep Introduction Project QUALITY Management
Project Management Framework Project RISK
Management*Introduction Project HUMAN
RESOURCE Management*Project Life Cycle & Organisation
Project Management Processes
DAY 2 DAY 5 Project INTEGRATION Management ProjectPROCUREMENT Management
Project SCOPE Management Professional & Social
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j gResponsibility
DAY 3 DAY 6 Project TIME Management REVISION & QUIZ
Project COST Management
PROFESSIONALPROFESSIONAL
RESPONSIBILITY RESPONSIBILITY Responsibilities to the Profession
Compliance with all organizational (PMI) rules & policies
Candidate/Certificant Professional Practice
Advancement of the Profession
Responsibilities to Customers & the Public
Qualifications, experience & performance of professional services
Conflict of interest situations & other prohibited professional conduct
Administration of Code of Conduct
B b i PMP t bid b thi d f d t
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• By becoming PMP, you agree to abide by this code of conduct.
• PMI reserves the right to suspend or revoke the credentials of any PMP
who is determined to have committed a violation of this code.
PMP Prep – Responsibilities Slide 2
RESPONSIBILITIES TO THERESPONSIBILITIES TO THE
PROFESSIONPROFESSIONCOMPLIANCE WITH ALL ORGANIZATIONAL (PMI) RULES & POLICIES
• Provide accurate and truthful information directly or indirectly related
to all aspects of PMI Certification Program
• Responsibility to report violations of the PMP Code of Professional
Conduct by individuals in the field of project management
• Responsibility to cooperate with PMl concerning ethics violations and
the collection of related information
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• Responsibility to disclose to clients, customers, owners or contractors,
significant circumstances that could be construed as a conflict of
interest or an appearance of impropriety
PMP Prep – Responsibilities Slide 3
RESPONSIBILITIES TO THERESPONSIBILITIES TO THE
PROFESSIONPROFESSIONCANDIDATE/CERTIFICANT PROFESSIONAL PRACTICE Responsibility to provide accurate, truthful advertising and
representations concerning qualifications, experience andperformance of services
Responsibility to comply with applicable laws, regulations and ethicalstandards governing professional practice in the state/province and/or country when interacting with PMI and when providing projectmanagement services
Responsibility to act in an honest & ethical manner when interacting
with PMI and when providing PM services (another word for ethical ismoral & the dictionary description of ethical is 'Being in accordancewith the accepted principles of right & wrong that govern the conduct
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with the accepted principles of right & wrong that govern the conductof a profession')
Responsibility to maintain and respect the confidentiality of the contentsof the PMP credential exam.
PMP Prep – Responsibilities Slide 4
RESPONSIBILITIES TO THERESPONSIBILITIES TO THE
PROFESSIONPROFESSIONADVANCEMENT OF THE PROFESSION
• Responsibility to recognize & respect intellectual property developed
or owned by others, and to otherwise act in an accurate, truthful and
complete manner, including all activities related to professional work
and research.
• Responsibility to support & disseminate the PMP Code of Professional
Conduct to other PMI certificants.
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PMP Prep – Responsibilities Slide 5
RESPONSIBILITIES TO CUSTOMERRESPONSIBILITIES TO CUSTOMER
AND PUBLICAND PUBLICQUALIFICATIONS, EXPERIENCE & PERFORMANCE OFPROFESSIONAL SERVICES
• Provide accurate & truthful representations to the public in
advertising, public statements and in the preparations of estimates,concerning costs, services & expected results
• Maintain & satisfy the scope & objectives of professional services,
unless otherwise directed by the customer
• Maintain & respect the confidentiality of sensitive information
obtained in the course of professional activities or otherwise where a
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obtained in the course of professional activities or otherwise where a
clear obligation exists
PMP Prep – Responsibilities Slide 6
RESPONSIBILITIES TO CUSTOMERRESPONSIBILITIES TO CUSTOMER
AND PUBLICAND PUBLICCONFLICT OF INTEREST SITUATIONS & OTHERPROHIBITED PROFESSIONAL CONDUCT
• Ensure that a conflict of interest does not compromise legitimate
interests of a client or influence/interfere with your professional judgments
• (Don't make/participate in a decision if there's an opportunity to
further your own interests or those of an associate, friend or family
member)
• Refrain from offering or accepting inappropriate payments gifts or
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Refrain from offering or accepting inappropriate payments, gifts or
compensation for personal gain unless in conformity with applicable
laws & customs of the country where PM services are being provided
PMP Prep – Responsibilities Slide 7
ADMINISTRATION OF CODE OFADMINISTRATION OF CODE OF
CONDUCTCONDUCTADMINISTRATION OF CODE OF CONDUCT
• By becoming a PMP, you agree to abide by this Code of Conduct
• PMI reserves the right to suspend or revoke the credential of any
PMP who is determined to have committed a violation of thisCode
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SUMMARY SUMMARY
• Truthfully report information about your PMP status & PM experience.
• You're responsible for the integrity of the PM process, the product &
yourself.
• Avoid putting your own personal gain above project objectives.
• Abide by laws, rules, & regulations of the country you're working in.
• Report instances that might appear to be a conflict of interest. It's
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always better to inform others of an apparent conflict than to have it
discovered later & your methods called into question.
• Deal with problems.
PMP Prep – Responsibilities Slide 9
SUMMARY SUMMARY
• Always strive to maintain honesty in project reporting.
• Respect the use of confidential information and intellectual property &
always verify who has permission to access it & when disclosures are
required.
• Balance the needs & interests of stakeholders with project objectives.
• Respect and understand cultural differences & don't impose your
beliefs on others.
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• Culture shock is when you find yourself in a different cultural
environment than you're familiar with. Diversity training can help
project team members with relationship management techniquesabout cultural & ethnic differences.
PMP Prep – Responsibilities Slide 10
Questions?Questions?