Introduction to Project Management. Welcome Please tell me about you; –Name –Company –Years of...

Introduction to

Project Management

Welcome

• Please tell me about you;– Name– Company– Years of Professional Experience– What you hope to learn this week?– When do you plan to take the test?

Day Subject Projected Time Number

Start Finish of Slides

Monday Introductions to PMP 9:00 9:30 1 thru 13

Framework 9:30 10:15 14 thru 31

Break 10:15 10:30

Framework Exercises 10:30 11:15

Integration 11:15 12:00 234 thru 245

Lunch 12:00 1:00

Integration Exercises 1:00 1:30

Scope 1:30 2:15 32 thru 42

Break 2:15 2:30

Scope Cont 2:30 4:00 42 thru 50

Scope Exercises 4:00 5:00

Tuesday Time 9:00 10:15 51 thru 71

Break 10:15 10:30

Time 10:30 12:00 72 thru 89

Lunch 12:00 1:00

Time Exercise 1:00 2:15

Break 2:15 2:30

Cost 2:30 5:00 90 thru 107

Wednesday Cost 9:00 10:15 107 thru 118

Break 10:15 10:30

Cost Exercises 10:30 12:00

Lunch 12:00 1:00

Quality 1:00 2:15 119 thru 130

Break 2:15 2:30

Quality 2:30 4:00 130 thru 141

Quality Exercise 4:00 5:00

Project Management Framework


• General Concepts and Terminology

• Triple Constraint

• Process Groups

• Roles

• Organizational Structures

• “Must Knows”

• Exercises


What is a Project? 1. It has a specific purpose and will create specific results.2. It has a definite beginning and definite end (temporary).3. It is progressively elaborated.

What is a Project Management?

What is a Project Life Cycle? It is the process of completing work on the project. It is the work process such as the building process of creating a house or developing a computer program. It coexist with the Project Management Life Cycle.

The application of knowledge, skills, tools, and techniques to projectactivities associated with a project in order to meet project needs.

What is a Program? A program encompasses projects of similar work or correlated activities managed in a coordinated way to attain benefits that could not be achieved separately.

What is a Project ManagementLife Cycle?

Project management life cycle involves the processes to manage a project. These are:

Initiation Planning Executing Controlling Closing.

These processes can be performed throughout the entire project, or they may be applied phase-by-phase.

IPECCs

Project Management Framework (1)

What is a Project ManagementOffice (PMO)?

It is an management organization with the following possible configurations:

1. Centralized area for all project management personnel to work and be loaned out to projects as they arise.

2. Centralized area for documentation and process support for project management throughout the organization.

3. Centralized area for project management support and auditing of projects in the organization.

What is Triple Constraint?One of the basic foundations of project management defined by Scope, Time, and Cost. All three constraints are equal in importance. It is represented in the Diagram A.

Scope

Time Cost

Quality

Diagram A

What is Progressive Elaboration?When you work on a project where you might not know all the details, you can plan what you can determine and begin the work. While learning about the future details of a the known work, you learn more about the work of the project.

Project Management vs Operations Management

Project Management is the creation of temporary specific initiatives. Operations Management deals with the ongoing repetitive day-to-day running the business.

Project Management Framework (2)

What is a Standard?

What is a Regulation?

A standard is a specification in place for an item or process that is suggested and typically common. (Ex. Storage capacity of CD-ROM).

Phases verse Process Groups? If a project has multiple components or phases, you could do Initiating, Planning, Executing, Controlling and Closing for each phase. PMI Project Management methodology uses the terms process groups or phases representing initiating, planning, executing, controlling, and closing.

A regulation is a more like a law where compliance is required.

Process Groups

What are the five process groups in the project management processes?

• Initiating processes (Authorizing the project or phase).• Planning processes (Defining and refining objectives and selecting the

best of the alternative courses of action to attain the objectives that the project was undertaken to address).

• Executing processes (Coordinating people and other resources to carry out the plan).

• Controlling processes (Ensuring the project objectives are met by monitoring and measuring progress regularly to identify variances from plan so that corrective action can be taken when necessary).

• Closing processes (Formalizing acceptance of a project or phase and bring it to an orderly end).

InitiatingProcessesInitiating

ProcessesPlanning

ProcessesPlanning

Processes

ExecutingProcessesExecutingProcesses

ControllingProcessesControllingProcesses

ClosingProcesses

ClosingProcesses

Links among Processes Groups in a Phase

Process Groups Definition

Give a high level summary of Initiating?

In the initiation stage, the initial work is put into place on a project. A project could continue or it could be killed at this point. Typically, when a project moves beyond initiation, a project managers will be assigned, a sponsor will be defined, and a high-level scope statement will be put into place. These items should make it possible for a project to move forward to planning. The initiation stage can also be applied to the beginning of every phase of a project.

Give a high level summary of Planning?

The planning stage is perhaps the most important of all the areas. If you plan badly, your project will likely never be better than the plan. Therefore, you need to spend as much time planning as allowed by the sponsor, your company, or anyone else involved. In the area, the Project Manager makes a plan for each of the knowledge areas: Scope, Time, Cost, Quality, Human Resources, Communication, Risk, Procurement, and Integration. The Project Manager also makes a plan for adjusting (controlling) each area as changes occur. The team should be involved in the majority of this planning. After all, they will be doing the work and should have input with regards to their efforts.

Give a high level summary of Executing?

It is in the execution stage that the scope of the project is built. In Planning, we “planned the work”. Now, we “work the plan”. Throughout the process of executing the plan, the project team will discover things they hadn’t planned for or forecasted, and as a result, the controlling process area comes into play where the team experiences variance from the plan.

Process Groups Definition (1)

Give a high level summary of Controlling?

In this process area, the team maintains what it has planned. By putting a plan (Planning) in place, the team executes the plan, and when the team encounters variance (as usually happens), the Controlling stage comes into play as a means to adjust the plan to compensate for new discoveries (dates, resources, cost, scope, etc.).

Give a high level summary of Closing?

In Closing, the project finishes. Assuming that the project has been executed and worked to the point of nearing completion, the bulk of what will be happening in this process area is contract and administrative closure. In the case of contract closure, the main goal is to verify that what should have been specified in the contract was completed, including payment and signoff. The administrative closure involves contract closure as well as archiving any project records, documents, etc.

Phases verse Process Groups? If a project has multiple components or phases, you could do Initiating, Planning, Executing, Controlling and Closing for each phase. PMI Project Management methodology uses the terms process groups or phases representing initiating, planning, executing, controlling, and closing.

Position Descriptions

What is a Project Manager? This is the primary role of our discussions and everything we consider revolves around it. The general viewpoint is that this role involves communication with all others and the integration of activities with all others, as needed. Project managers:• Describe to the team members what tasks need to be done per plan.• Maintain scope control of the project.• Communicate project status as it evolves.They are the bus driver in this scenario (e.g. Person in charge of executing the goals of a charter).

This role is put into place when the organization structure doesn’t support a full-scale project, or it is used to support the project manager. Project coordinators act as communication links to senior management and have some decision making abilities.

Like the project coordinator, this role is put into place where the organization structure doesn’t support a full-scale project or it is used to support the project manager. Project expeditors act as the communications links to senior management. They perform tasks such as verifying if some assignments are complete, checking on status of some undertaking, and communicating the information to a senior level manager.

What is a Project Coordinator?

What is a Project Expeditor?

Position Descriptions (1)What is a Sponsor (Senior Management)?

The sponsor is the key person or group who has secured financing for the project, creates the project charter, and signs off upon project completion. The project manager manages the expectations of the sponsor and secures the signoff signature so the project team can move on to other projects. Typically, the project manager consults the sponsor for approval on changes to the project that could impact the charter. The sponsor could also be referred to as a senior management, but senior management is the management that works for the sponsor and helps accomplish the goals of the company.

This position doesn’t play much role in the process other than dealing with people. Typically, you see this role conflicting with the project manager and direction of the project. This potential conflict stems from the fact that the functional manager has a primary interest in running some business division or department and only secondary – if any – interest in a project that often pulls people away from their regular jobs in that division or department. An example is a manager in the accounting department.

What is a Functional Manager?

What is Senior Management (Sponsor)?

Senior management usually refers to management that supports the sponsor, the charter, and ultimately the project. Some of the tasks that senior management undertakes include helping to prioritize items associated with other projects and helping to coordinate with other groups or projects and helping to coordinate with other groups or activities that can interfere with the project. Do not confuse senior management with the functional manager or functional management. (E.g. Senior management is a director of E-commerce for an E-commerce related project. Senior management could also be referred to as the sponsor, but typically senior management is the management that works for the sponsor and helps accomplish the goals of the company.

Position Descriptions (2)Team members are people who actually do the work that goes toward meeting the scope of the project. They can be analysts, programmers, tech writers, construction personnel, testers, etc. These people perform tasks that generally need to be done by the project manager, who assumes that they know enough to manager their own workload without the need for micromanagement. If team members are unclear about their workload, they can contact the project manager for direction. One main difference between a team member and a stakeholder is that a team member bills (cost) to the project.

What are Team Members?

What is a Stakeholder?Stakeholders can be anyone involved that can be impacted by the project. They are not just people associated with the project’s creation and completion, but they may be impacted by its result and functionality upon project completion. An example is a consumer who depends upon the project, or a person who is subsequently employed as a result of the project completion and deployment.

What are Stakeholder Management?

Stakeholder management involves the following key areas:• Identification and analysis of the stakeholders.• Stakeholders goals and agenda.• Provide appropriate input and contribution as the project evolves.• Stakeholders sign off and formal acceptance during closure.

Differences between or among stakeholders should be resolved in favor of the customer.

Organizational Structures

What are the five key types of organizational structures?

Organizational Structures

FunctionalWeak Matrix

Balanced Matrix

Strong Matrix

Projectized

Functional OrganizationDescribe a Functional Organization?

Functional Organization structure is the established more common structure used in business today. It works more in an operations mindset, where projects typically aren’t a high priority and people of similar skill set are grouped together and managed by someone with that same skill set (production, marketing, engineering, accounting). This is sometimes called a “silo” organizational structure because the people in the individual groups work among themselves more than with other groups (or silos). This structure makes managing resources in relation to project management activities rather difficult because there is little reason for the resources to listen to project management role instead of their functional supervisor.

Project Coordinator or Project Leader

Part-timePart-timeLiterally NoneLittle or NoneFunctional

Typical TitleProject

Management Support Staff

Person’s Role as a Project Manager

% of Company doing Full Time

Project Work

Project Management

Authority

Project

Characteristics

Organization

Structure

CEO

Marketing VP Accounting VP Engineering VP

Marketing Manager 1 Senior Accounting 1 Engineering Manager 1

Marketing Manager 2 Senior Accounting 2 Engineering 1

Matrix Organization

Describe aMatrix Organization?

Many companies use the Matrix Organization to accommodate established Functional Organization structure while being flexible enough to implement projects. A company can retain its functional foundation and use cross-functional teams, letting people from various silos work together on a project. However, under the Matrix Organization, a team member may report to two different supervisors and work under two different sets of priorities.

CEO

Project Management VP Accounting VP Engineering VP

Project Manager A Senior Accounting 1 Engineering Manager 1

Project Manager B Senior Accounting 2 Engineering 1

Marketing VP

Marketing Manager 1

Marketing Manager 2

Project Coordinator or Project Leader

Part-timePart-time0 to 25%LimitedMatrix - Weak

Project Manager or Project Officer

Part-timeFull-time15 to 60%Low to MediumMatrix - Balanced

Project Manager or Program Manager

Full-timeFull-time50 to 95%Medium to HighMatrix - Strong




% of Company doing Full Time Project Work

Project Management

Authority

Project

Characteristics

Organization

Structure

Projectized OrganizationDescribe a Projectized Organization?

The Projectized Organization is a modern structure that has eliminated the silos of specification seen in the functional organization. Although this structure has silos, they focus on the project instead of on the specialization of the individual. This focus greatly increases the team’s ability to optimize focus and performance because the project is the main focus. One key consideration is upon project completion there might not be positions (jobs) for all team members. In a Matrix or Functional environment, team members simply return to their former department or project duties.


Full-timeFull-time85 – 100%High to totalProjectized




% of Company doing Full Time

Project Work

Project Management

Authority

Project

Characteristics

Organization

Structure

CEO

Project Manager A Project Manager B Project Manager C

Team Member A Team Member B Team Member C

Team Member A Team Member B Team Member C

Project Manager D

Team Member D

Team Member D

Organizational StructureDescribe each characteristic of the different Organizational Systems.

Organization

Structure

Project

Characteristics

Functional

Matrix

ProjectizedWeak Matrix Balanced Matrix Strong Matrix

Project Manager’s Authority

% of Performing Organization’s

Personnel Assigned Full Time to Project

Work

Project Manager’s Role

Common Titles for Project Manager’s

Role

Project Management Administrative Staff

Little or None

Virtually None

Part-time

Project Coordinator or Project Lead

Part-time

Limited

0 to 25%

Part-time

Project Coordinator or Project Lead

Part-time

Low to Moderate

15 to 60%

Full-time

Project Manager or Project Officer

Part-time

Moderate to High

50 to 95%

Full-time


Full-time

High to Almost Total

85 to 100%

Full-time


Full-time

Framework “Must Knows”

• Organizational Structure Influences on Projects (PMBOK figure 2-6, page 19)

• The Project Management Life Cycle• The Triple Constraint and how it functions• The Organizational Characteristics• The role of the Stakeholder and management of that

position• The responsibility of and difference between a Project

Coordinator and Project Expeditor• The responsibility and characteristics of the project team • The characteristics of a project and a program• The characteristics and benefits of a PMO

Framework Exercises

• 5.8.2 - Framework Quick Test – together

• 5.8.4 - Testing – individual

• 5.8.3 – Matching – individual

• How did you score?

• Would you like to review any test Q&A?

Scope Management

Scope Management

• Project & Product Scope • Initiation

– Project Selection– Project Charter

• Scope Planning• Scope Terms• Scope Definition• What is a Work Breakdown Structure?• Scope Verification• Scope Change Control• “Must Knows”• Exercises

11.1 Risk Management

Planning

Risk Management Plan

7.2 Cost

Estimating

Scope Management

5.2 Scope

Planning

5.3 Scope Definition

6.1 Activity

Definition

7.1 Resource Planning

6.4

Schedule Development

6.2

Activity Sequencing

6.3 Activity

Duration Estimating

7.3 Cost

Budgeting

1.1

Project Plan Development

Ch

arter

5.1 Initiation

Sco

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tatemen

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Charter

Ris

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anag

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Activity

List Network Diagram

Resou

rce

Req

uirem

ents

Activity Duration

Estimates

Cost EstimatesCost B

aseline

Project Schedule

Sch

edu

le

WBS

Scope Statement

WBS

Resource

Requirements

Activity List

Activ

ity D

urat

ion

Estim

ates

Activity D

uratio

n

Estim

ates

Resource

Requirements

Schedule Mgmt Plan

WBS

WB

SSc

ope

Stat

emen

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Controlling

5.4 Scope Verification

5.4 Scope Control

Initiation

Scope Management

What are the five major Project Scope Management processes?

Processes DescriptionInitiation Authorizing the project or phase.

Scope PlanningDeveloping a written scope statement as the base for future project decisions.

Scope DefinitionSubdividing the major project deliverables into smaller, more manageable components.

Scope Verification Formalizing acceptance of the project scope.

Scope Change Control Controlling changes to project scope.

Scope Initiation

What are the Key Inputs?

Initiation (Initiating Process)Key Inputs Key Tools Key Outputs

Product Description

Project Selection Criteria

What are the Key Tools?

Project Selection Methods

Expert Judgment

What are the Key Outputs?

Charter

Project Manager Assigned

The Product Description defines what the project is to accomplished or create. The strategic plan of any company should allow Management by Objectives to show where the project (and it products) fit into the strategic or enterprise view sometimes known as the “big picture”.Product Selection Criteria are critical and must be sufficient enough to allow only those project with good chances of meeting business goals to pass through. Otherwise, strategic problems can result. Historical information makes it possible for the team to leverage what has worked in the pass and avoid what has not.

Tools include Project Selection Methods, such as Net Present Value (NPV), Internal Rate of Return (IRR), opportunity cost, etc.

Expert Judgment is of great value that can often be more significant and accurate than the best modeling.

The Charter is a document that gives the project existences.

The Project Manager assigned, and any assumptions and constraints are defined. Assumptions can be anything unknown at this point, but with a “best guess” applied to it. Constraints can be factors such as project completion deadline, budget threshold, and limit on number of employees to bring to the project.

Initiation is the area where the project or project phase is authorized. When this area is complete, a project or phase exists

Project Selection

How are projects selected by a company?

• Benefit and costs (Steering committee review, project ranking and prioritization, or financial performance).

Constrained Optimization

This is a Project Selection technique that uses mathematical calculation with factors such as linear programming, complex calculation, and algorithms. It ultimately comes down to trying to forecast as many variables as possible and predict the outcome.

Weighted Scoring Model

This technique could take into account economics, market conditions, resource availability or other items that would be weighted from project to project.

Project Selection

Name the five Project Selections Tools in the Financial Metrics Table.

Project Selection Tool Also Know As Option to Select Example

Return on Investment ROIThe biggest number of the percentage $50,000 or 7%

Internal Rate of Return IRR The biggest percentage

Net Present Value

Benefit Cost Ratio

NPV

BCR

The biggest number(Years are already factored in)

The biggest ratio

The shortest duration 7 months

15.5%

$47,500 US

3.5:1

Payback Period

A project charter gives the project life.

Includes the high level scope of the project plus any constraints or assumptions with time and a cost goals.

Provides the project manager with the authority.

Business need or reason that the project was undertaken to address.

Issues by a manager external to the project at a level appropriated to the needs of the project.

Usually signed by senior management or the sponsor.

Should be a physical document.

Project Charter

Project Charter

What is a Charter?

Scope Planning


Scope Planning (Planning Process)

Key Inputs Key Tools Key Outputs

Product Description

Charter


Product Analysis

Benefit/Cost Analysis


Scope Statement

Scope Management Plan

The Product Description helps with the conformance to requirements and fitness of used (discussed in Quality).

Charter provides the foundation for the project. Any constraints or assumptions are factored into the decision-making process as well.

Product Analysis involves developing a better understanding of the product of the projects.

Expert Judgment is of great value that can often be more significant and accurate than the best modeling.

The Scope Statement helps define the project. Supporting detail provides in-dept research and planning that the Scope Statement rolls into.

The Scope Management Plan helps manage scope-related items or project changes.

Scope Planning emphasis is on creating a written Scope Statement to be used in future decision making.

Expert Judgment

Benefit/Cost Analysis can help define the amount of return (benefit) expected on the project.

Scope TermsWhat is the Scope Statement?

The Scope Statement is a document that develops and helps attain buy-in on common interpretation of the project scope. This can describe what is, as well what is not in the project.

Management by Objectives is used to determine where a project fits in the “big picture” of planning at the company. If your project fails with where the company is headed, you could find it de-prioritized or even cancelled.

Management by Objectives also could be used to address a goal setting technique, which emphasizes setting attainable goals and monitoring for variance and adjusting as needed.

What is Management by Objectives?

What is the Delphi Opinion/Technique?

The Delphi Opinion Technique is the process of using expert opinions, which could come from people already on the project or those outside the project, or the organization. Typically, the technique involves trying to gain consensus of experts by keeping their identities protected and working in iterations.

The Delphi technique helps reduce bias in the data and keeps any person from having undue influence on the outcome.

Scope Definition


Scope Definition (Planning Process)Key Inputs Key Tools Key Outputs

Scope Statement

Other Planning Outputs


WBS Templates

Decomposition


Work Breakdown Structure

The Scope Statement describes what the project is producing. Constraints and assumptions deal with parameters and estimates that the project is attempting to function within.

Other planning outputs can be used to modify the WBS as more is learned about the project and the work involved.

WBS Templates can be derived from previous similar projects or industry standards then potentially modified or adjusted to fit the needs of the project.

The Work Breakdown Structure (WBS) can sometimes point out areas of the Scope that were not sufficiently addressed in the Scope Statement, thereby resulting in Scope Statement updates..

Scope Definition is where the major product deliverables are divided into smaller components that can be easier estimated, managed, and controlled.

Scope Decomposition involves the breaking down of the major work pieces into smaller pieces where they end up in the work breakdown structure (WBS).

Scope WBS

What is the Work Breakdown Structure?

The Work Breakdown Structure (WBS) is one of the most important pieces of the project management planning process. It is:

• The main output of the Scope Definition is the decomposition of the scope statement and scope of the project.

• Generally created by the project manager and team doing the work.

• Describes the breakdown of work and restricts it contents to listing only project work.

• Work not in the WBS is outside the scope of the project.

Once the WBS is complete, a number of key items can start such as network diagram, the schedule, the budget, and risk planning. If you fail to devote time and attention on the WBS, you are likely setting your project up for failure, or best case, a lot of challenges.

How is a Work Breakdown Structure created?

To create a WBS:

1. Define the main pieces of work on the project.2. Decompose each of those pieces to encompass all of the work that would be on the project

down to an appropriate level of detail where each task is defined, traceable, and manageable. Generally, work should be broken down into tasks that are 4 to 80 hours in length.

Scope WBS Example

WAN Project Work Breakdown Structure Example

WAN Project1.0

Planning1.1

Requirements1.2

Implementation1.3

Testing1.3

Closure1.5

Scope1.1.1

Schedule1.1.2

Cost1.1.3

Joint ApplicationRequirements

1.2.1

Joint ApplicationDesigns

1.2.2

RequirementsSignoff1.2.3

Main pieces of the project are:• Planning• Requirements• Implementation• Testing• Closure

WBS Numbering

Work Breakdown Structure (WBS) numbering allows people on the project to know where work fits into the project. Look inside the PMBOK and you will see WBS numbering system in place. For

Cost Chapter

7.0

Resource Planning7.1

Cost Estimating7.2

Cost Budgeting7.3

Cost Control7.4

Inputs7.1.1

Work Breakdown Structure7.1.1.1

Historical Information7.1.1.2

Tools and Techniques

7.1.2

Scope Statement7.1.1.3

Expert Judgment7.1.2.1

Alternative Identification

7.1.2.2

Outputs7.1.3

Resource Requirements

7.1.3.1

Scope Verification


Scope Verification (Controlling Process)Key Inputs Key Tools Key Outputs

Work Results

Work Breakdown Structure (WBS)


Inspection


Formal Acceptance

Work Results are what the Scope Statement and WBS are compared to.

WBS is valuable for detailing exactly what is being done. As this is what the work results are compared to.

Inspection is used to validate that the correct work has been done.

Formal Acceptance is the signoff. It is not “looks good”, but a signature that can mean approval to begin closure of that phase or of the project itself.

Scope Verification is secure signoff of the project scope as milestones or the entire work of the project is completed.

Scope Statement

Scope Statement help with the high level view and verifying that the product has achieved Conformance to the Requirements and Fitness of Use.

Project Plan

Project Plan helps provide supporting detail to what should be created with the project.

Scope Change Control


Scope Change Control (Controlling Process)Key Inputs Key Tools Key Outputs


Performance Reports


Scope Change Control System


Scope Changes

WBS details what work is being done.

Performance Reports help show the variance and provide information on the scope performance.

The Scope Change Control System manages changes that occur to the scope of the project.

Scope Changes are any modifications to the agreed-upon project scope as defined by the approved WBS.

Scope Change Control is the process for handling scope changes on the project.

Change Requests

Change Requests can be issued as a result of variance on the project.

Scope Management Plan

Scope Management Plan is the basic rulebook for addressing scope management issues on the project.

Performance Measurement

Performance Measurement provides a feedback loop to evaluate if the work results are in sync with the scope.

Adjusted Baseline often result when Corrective Action has been taken to accommodate a scope change or to apply lessons learned thus far in the project..

Adjusted Baseline

Scope Mind Map

Scope “Must Knows”

• The Key Inputs, Tools/Processes and Outputs for each process area

• The principles, characteristics and importance of a WBS• The Delphi concept• Familiarity with Project Selection Techniques and their

importance• How to define, decompose and verify Scope• The importance and characteristics of a Scope

Statement• What Management by Objectives (MBO) is and where it

fits in Project Management

Scope Exercises

• 6.9.1 – Quick test – together• 6.9.4 – Practice test – individual• 6.9.3 – Terminology matching #1• 6.9.3 – Terminology matching #2

• How did you score?• Are there any questions you would like to

cover?

Time Management

Time Management• Activity Definition• Activity Sequencing

– Network Diagrams types, creation and analysis– Critical Path, Slack and Float– Backward and Forward pass– Estimating Techniques– Schedule Compression Techniques– Dependencies, Predecessor and Successor tasks

• Activity Duration– Schedule Development– Resource Leveling

• Schedule Control• “Must Knows”• Exercises

7.2 Cost

Estimating

Time Management

5.2 Scope

Planning


6.1 Activity

Definition


6.4


6.2

Activity Sequencing

6.3 Activity

Duration Estimating


Planning

7.3 Cost

Budgeting

1.1


Ch

arter

5.1 Initiation

Sco

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Charter


Ris

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anag

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Activity


Resou

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Req

uirem

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Activity Duration

Estimates


aseline

Project Schedule

Sch

edu

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WBS

Scope Statement

WBS

Resource

Requirements

Activity List

Activ

ity D

urat

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Estim

ates

Activity D

uratio

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Estim

ates

Resource

Requirements

Schedule Mgmt Plan

WBS

WB

SSc

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Stat

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6.5 Schedule Control

Controlling

Time Activity Definition


Activity Definition (Planning Process)


Work Breakdown Structure

Scope Statement


Decomposition


Activity List

Updated WBS

The Work Breakdown Structure is the primary input to activity definition and is the key to what is involved in the project.

Scope Statement helps you determine what the project is going to create. Constraints and assumptions come into play when determining what the needed activities for the project will be. Also helpful is expert judgment, which can guide you in any estimations associated with the project.

Decomposition involves decomposing the work to be done and any templates that provide standards of success from past projects or industry standards..

The Activity List describes what needs to be done (all activities that will be performed on the project).

Other outputs include the Updated WBS and supporting details for both items.

Activity Definition involves the tasks required to create the deliverables of the project.

Time Activity Sequencing


Activity Sequencing (Planning Process)


Activity List

Milestones


Activity on Node Diagramming Method (AON)


Network Diagram

Activity List Updates

The Activity List is the basis for what is being done. The product description provide the big picture view to ensure that sequencing produces the desired results.

Milestones close things out in defining major steps of the project.

Activity on Node Diagramming Method (AON) is the technique most used by modern project scheduling software. It shows the tasks on the blocks or boxes with arrows connecting them.

The Network Diagram shows the logical flow of tasks on the project. It focuses on the sequence in which tasks are connected, not how long each task will take.

Any network diagram Templates are helpful as well..

Activity Sequencing involves the arranging of the tasks in the most efficient and effective order.

Dependencies (External, Mandatory, Discretionary)

Arrow on Arrow Method (AOA)

Templates

Mandatory, discretionary, and external Dependencies are also considered when verifying that the task order is correct.

Arrow on Arrow Method (AOA) is an older more restrictive technique that uses the arrow for the tasks and dots to connect them. Conditional networking technique such as Graphical Evaluation Review Technique (GERT) is used for items such as testing for which a feedback loop is needed.

The Activity List Updates are updates to the Activity List.

DependenciesWhen you create a project schedule, you must consider dependencies for the sequencing. Dependencies might be flexible, causing no real impact on you and your team. They also might be inflexible, giving you no option other than to work around them.

What are the definitions of the following Dependencies?

Type of Dependencies Definition Example

Mandatory

Discretionary

External

.

A constraint that must be completed before the

subsequent items can start. Mandatory dependencies are

also called hard logic.

You must have the roof on before you can begin to apply shingles to

it.

A constraint that should be completed but is not absolutely required to be completed before the subsequent items can start. Discretionary dependencies are

also called preferred logic, preferential logic, or soft logic.

You prefer but do not absolutely have to finish System Testing

before beginning User Acceptance Testing.

A constraint put in place by something external to the project

team or organization

The city inspector must approve any construction before issuing a certification of occupancy so the

tenant can move in.

Time - Network DiagramThe network diagram is a schematic of project activities. It shows how various tasks are connected as a result of activity sequencing. This diagram gives you a picture of how the work of the project will flow. It is also the tool used to evaluation schedule

compression techniques such as crashing and fast tracking.

Start

A

B

C

D

E

F

G

H

Finish

3

3

4

45 2

2 6

Diagramming Methods

As discussed in Activity Sequencing, there are two types diagramming methods that are used in network diagramming. Precedence Diagramming Method uses the activity

on node and Arrow Diagramming Method uses the Activity on Arrow or Line.

Time – Diagramming Type AONThe Activity on Node (AON) diagramming method is what most people use when they

used modern project management scheduling software. In this method, the task or activity is in the box and the arrow connects the tasks.

Start

A

B

C

D

E

F

G Finish

3

3

4

5 2

2

5

Time – Diagramming Type AOAThe Activity on Node (AON) diagramming method is older. In this method, the task or activity is on the arrow or line and the circle or box connects the tasks. A dummy is also used in this diagramming type where needed. A dummy is a dashed line that connects two tasks where a relationship is needed, but the diagram doesn’t otherwise connect the relationship. A dummy is not task and has zero duration. The AOA drawing can display tasks in another format as well. This is the point where the appearance is more like the AON diagram, and the tasks are represent in the format of “Start-A”, “A-C”, and H-Finish”.

A

C

E G

F

B

Start Finish

I

H

Nodes connect the Activities

D

Dumm

y

Diagramming MethodsDescribe two different diagramming methods and their characteristics?

Diagramming Method

Abbreviated Name

Predecessor Type

Maximum # of Relationship

Types

Special Diagram Types &

CharacteristicsApplication

Graphic Appearance

PDMNo Dummies

allowed

Most modern project scheduling software

See Diagramming Type AON

Precedence Diagramming Method

Activity on Node AON

Arrow Diagramming Method

Activity on Line

Activity on Arrow

ADM

AOL

AOA

Finish-Start

Start-Start

Finish-Finish

Start-Finish

Finish-Start

4

1CPMPERT

Dummiesallowed

Outdated manually drawn mostly

See Diagramming Type AOA

Time – Critical Path and Slack

What is the critical path? The critical path is:• The longest path on a project network diagram.• It has no slack, but can change as the project evolves. • It can have multiple critical paths.• It has the greatest project risk. The project end date can be delayed if

anything on the critical path has a problem. The increase or slippage of any task on the critical path can cause the overall finish date to slip.

Slack is the amount of time that a task can slip or be delayed without delaying the finish date of the project (or task, or published project completion date). Slack is calculated using a forward or backward pass technique. If a task has no slack it is on the critical path and if it slips it will push out the finish date. Negative and positive float can also exist. This is a scenario in which the actual finish date extends past a targeted finished date (negative float), or would be completed before the targeted finish date (positive float).

Free slack is the latest that a task can start without delaying the tasks that follow it.Total slack is the latest that a task can start without delaying the project finish dateProject slack is the amount of time something can be start with delaying the published finish date.

What is Slack or Float?

What are the three types of slack?

Time –Network Diagram CreationWhen the project starts, Task A and B can begin. When Task A is done, Task C can begin. When

Task B is done, Task D can begin. Tasks C and D must finish before Task E can begin. Task F can begin when Task D is completed. Task G can begin when Task E and F are completed. When Task G

is completed, the project is complete. The durations are in the table below.

Start

A

B

C

D

E

F

G Finish

4

5

4

2 1

6

5

Task Duration

A 4

B 5

C 4

D 2

Task Duration

E 6

F 1

G 5

Network Diagram

Network Diagram Paths and Durations

Start

A

B

C

D

E

F

G Finish

4

5

4

2 1

6

5

What are the different paths and time?

Path A,C,E,G Duration of 19

Path B,D,E,G Duration of 18

Path B,D,F,G Duration of 18

What is the critical path? Path A,C,E,G Duration of 19

Calculating Critical Path Steps

1. If given a word problem, draw the network diagram and double check that you have connected everything correctly and have labeled the tasks and durations correctly.

2.List out all paths on the network diagram (Example A, C, D, F, G, etc.) then add up the durations path by path so you can see the overall duration of each path. It is recommended that you use a top to bottom approach when listing out the paths. This means that you would list the paths as they start at the top of the diagram and work toward those on the bottom. In this example you would list the paths in the following order: Paths ACEF, BDEG, and BDFG. By working from the top to bottom you can ensure that you don’t accidentally miss a path. Be sure to use the letters of the path, not the durations, as that can get confusing during exams questions. For example use ACEG instead of 4,4,6,5 in listing the paths.

3.Determine the longest (duration) path of all that are listed. This is the critical path.

Start

A

B

C

D

E

F

G Finish

4

5

4

2 1

6

5

Network Diagram

Critical Path Exercise

• 7.9.1 – Exercise A – individual– Draw the Network Diagram– Define the critical path

• 7.9.1 – Exercise B – individual– Draw the Network Diagram– Define the critical path

Forward and Backward Pass Calculation

A Forward and Backward Pass Calculation is a standard calculation:

• Used to determine the Critical Path of the Network Diagram.

• Shows how much Slack (or Float) there is for a task (task Slack), which is the amount of time a task can slip before delaying the next task.

• Shows how much total Slack there is which is how much time a task can slip before it delays the project finish date.

• Tasks are represented by early start date, early finish date, late start date, late finish date, duration, and slack time as shown below:

Early Start (ES) Duration Early Finish (EF)

Task Name

Late Start (LS) Slack Late Finish (LF)

Calculating Forward Pass

1. Set the Early Start (ES) of Task A to 1 because it is the first day of the project.

2. Apply the Forward Pass formula (EF = ES + Duration - 1) to the Network Diagram task-by-task from start to finish. If you encounter a Convergence return to the beginning of the diagram and continue this step for all task leading into the Convergence. As you move from one task to another, increment the Early-Finish (EF) of the current task by one to give you the Early-Start (ES) of the next task. For example, Task A has an Early-Finish (EF) of 3; the Early-Start (ES) of the following task is 4.

3. Whenever you encounter a convergence, select the larger of the Early-Finish (EF) values and continue applying the Forward Pass formula from start to finish of the Network Diagram.

4. Perform steps 2 and 3 until you have applied the Forward Pass formula to all tasks. The Forward Pass is complete at this point.

Forward Pass Provides the early start (ES) and early finish (EF) of each task on the network diagram.

Forward Pass Formula EF = ES + Duration -1

Variables

Early Start (ES) – The earliest a task can start based on the Network Diagram logic.

Early Finish (EF) – The earliest a task can finish based on the Network Diagram logic.

Duration – The length of the task.

Convergence – Where the output of more than one task is the predecessor to a task on the network diagram.

Assumptions A day starts at 8:00 a.m. and finishes at 5:00 p.m.

Starting Point At the left of the Network Diagram, typically the start task

Calculating Forward Pass (2)

Start

Task BDuration 2

Task CDuration 1

Task DDuration 2

Task EDuration 4

Task FDuration 3

Task GDuration 4

Task HDuration 5 FinishTask A

Duration 3

ES Duration EF

Task Name

LS Slack LF

Legend

1 3

A

2

B

1

C

2

D

4

E

3

F

5

H FinishStart

EF = 1+3-1

4

G

3

4

EF = 4+2-1

5

ES=EF+

1

4

EF = 4+1-1

4

6

EF = 6+2-1

7 8

EF = 8+3-1

10

Convergence5

EF = 5+4-1

8 9

EF = 9+4-1

12

13

EF = 13+5-1

17

EF = ES + Duration -1

Convergence

Backward Pass CalculationBackward Pass Provides the late start (LS) and late finish (LF) of each task on the network diagram.

Forward Pass Formula LS = LF – Duration + 1

Variables

Late Start (LS) – The latest a task can start based on the Network Diagram logic.

Late Finish (LF) – The latest a task can finish based on the Network Diagram logic.

Duration – The length of the task.

Burst – Where a task has multiple outputs that are Predecessors to more than one task.

Assumptions A day starts at 8:00 a.m. and finishes at 5:00 p.m.

Starting Point At the right of the Network Diagram, typically the finish or end task.

1. The Late Finish (LF) becomes the same as the Early Finish (EF) on the last task (also the duration of the Critical Path).

2. Apply the Backward Pass formula (LS = LF - Duration + 1) from the finish (right) to the start (left) of the Network Diagram. If you encounter a Burst return to the finish (right) of the diagram and continue this step for all tasks leading (from the right to the left) into the convergence. As you move from one task to another, decrement the Late-Start (LS) of the current task by one to give you the Late-Finish (LF) of the next task. For example, Task H has an Late-Start (LS) of 13; the task that precedes it would have a Late-Finish (LF) of 12.

3. At any burst on the Network Diagram, select the smaller of the Late Finish (LF) values.

4. Perform steps 2 and 3 until you have applied the Backward Pass formula to all tasks.

Calculating Backward Pass (2)

ES Duration EF

Task Name

LS Slack LF

Legend

1 3

A

2

B

1

C

2

D

4

E

3

F

5

H FinishStart

4

G

3

4 5

LF=L

S-1

4 4

6 7 8 10

5 8 9 12

13

LS = 17-5+1Slack = 17-17

17

LS = LF - Duration +1Slack = LF - EF

1713 0

12

LS = 12-4+1Slack = 12-12

0 98

LS = 8-4+1Slack = 8-8

5 0

12

LS = 12-3+1Slack = 12-10

10 29

LS = 9-2+1Slack = 9-7

8 2

4

LS = 4-1+1Slack = 4-4

4 0

7

LS = 7-2+1Slack = 7-5

6 2

3

LS = 3-3+1Slack = 3-3

1 0

Burst

Burst

A

31

B

2

C

1

D

2

E

4

F

3

H

5

FinishStart

G

4

3

4 5

4 4

6 7 8 10

5 8 9 12

13 17

1713 0

120 985 0

1210 298 2

44 0

76 2

31 0 Critical Path

Forward and Backward Pass Substitute Technique

To calculate the slack (float) of a path (or task):

• Calculate the critical path of the network diagram.

• Determine which paths have the task you are calculating slack for (All the paths the have Task B in them, if they are the paths you are calculating the slack for).

• Determine which path is the longest (If it is the critical path, you have zero slack).

• Subtract the total duration of the longest path (with the task for which you are determining slack) from the critical path; the difference is the slack for that path or task.

If the path under review is not at the end of the path, you can still use this method. Other methods show subtracting all the tasks one by one until you have the slack value you are calculating for. You only need to do that method if you must calculate an early start or early finish of a task.

Forward and Backward Pass Substitute Technique(2)

Start

Task BDuration 2

Task CDuration 1

Task DDuration 2

Task EDuration 4

Task FDuration 3

Task GDuration 4

Task HDuration 5 FinishTask A

Duration 3

Path ABDFH 3+2+2+3+5=15

Path ACDFH 3+1+2+3+5=14

Path ACEGH 3+1+4+4+5=17 (Critical Path)

1. Calculate slack for Task F

2. Path ABDFH (15 days) and ACDFH (14 days) contain task F in their paths

3. Path ABDFH is the longest path for Task F of 15 days

4. Subtract the longest path from critical path to calculate the slack time.Path ACEGH – Path ABDFH = 17 – 15 = 2 day slack

Network Diagram Analysis

To calculate the duration or slack from a Network Diagram Analysis:

• The arrows and formula show what you need to calculate the duration or slack.

• The arrows point in the direction that you start the formula from (Late Start or Late Finish for calculating slack).

• Use the formula LF-EF (Late Finish – Early Finish) or LS – ES (Late Start – Early Start) to calculate the slack of a task by using the date provided in the exercise.

• If the difference is zero, the task is on the critical path. If the value is negative, the task has a negative float and could be on the critical path or another task depending on the health of the project.

Duration = LF – LS +1

Late Finish (LF)SlackEarly Finish (EF)

Task Name

Late Start (LS)DurationEarly Start (ES)

Duration = EF – ES + 1

Sla

ck =

LS

- E

S

Sla

ck =

LF

- E

F

(-) (-)

Slack Exercises

• 7.9.1 – Exercise A – individual– Answer Questions 2- 6

• 7.9.1 – Exercise B – individual– Answer Questions 2- 7

Estimating Techniques

What is Monte Carlo Simulation?

It is a computerized tool that simulates the outcome of the project to determine things such as the time and cost outcomes, or the number of resources needed.

What are the three type of mathematical analysisGraphical Evaluation Review Technique (GERT) is a technique in which there is a feedback loop between tasks.

A B

Critical Path Method (CPM) is used with the Activity on Arrow diagramming technique. It uses one estimate per task with the goal of consistency being on cost and flexibility on schedule. Do not confuse this method with the concept of calculating the critical path on a network diagram. Although they have the same name, they are different items. The concept of a critical path being on a network diagram is the case with every network diagram, include AOA and AON diagrams plus PERT estimating.

Program Evaluation Review Technique (PERT) uses three estimates per task. It performs a weight average of the pessimistic, optimistic, and most likely (realistic) estimates. The theory is that having three estimates provides a more accurate PERT estimate. The goal is consistency on time and flexibility on cost. You can use the PERT formula to calculate time or cost. The following are the formulas for PERT calculations.

P - O ²

6

P - O

6

(P + 4R + O)

6

Variance of a Task (PERT)Standard deviation of a task (PERT)Pert Formula

P = Pessimistic

R = Realistic

O = Optimistic

PERT Variables

Estimating Techniques

Name the characteristics for the three estimating techniques?

Estimating TechniqueAbbreviated

NameNumber of Estimates

Characteristics

Graphical Evaluation Review Technique

Critical Path Method

Program Evaluation Review Technique

GERT 1

Has a feedback loop for repetitive type tasks

CPM 1Consistent Cost and Flexible on Schedule

PERT 3Consistent on Time and Flexible on Cost

Schedule Compression Techniques

After the initial schedule has been put together or after the project is in execution, you may have to compress the schedule to achieve a more aggressive time goal. Two main techniques are crashing and fast tracking. To achieve an earlier completion date, you could apply either technique or both to a schedule.

Crashing mainly involves putting more people on the critical path items. This doesn’t include re-sequencing activities.

Fast Tracking involves analyzing the network diagram and sequencing of the tasks to take into consideration benefits from adjusting the sequencing to accelerate the completion of work. Fast tracking does include risk exposure associated with re-sequencing. When schedule compression is needed, you may consider both options at the same time.

Schedule Compression ExampleThe network diagram below shows two paths: Path ABDEF for a total duration of 13 and Path ACDEF with a total duration of 12. Path ABDEF is the critical path with a duration of 13 days.

Start

Task B2 Days

Task C1 Day

Task D2 Days

Task E4 Days

Task F2 Days Finish

Task A3 Days

If you need to compress the overall duration of the Network Diagram and wanted to use the fast tracking technique, you could re-sequence the diagram as shown below.

Start

Task B2 Days

Task C1 Days

Task D2 Days

Task E4 Days

Task F2 Days

FinishTask A3 Days

Path ABEF has a total duration of 11. Path ABDF has a total duration of 8. Path ACDF has a total duration of 8. Path ABEF is the new critical path. Because it is the longest of the three paths. Fast tracking has reduced the critical path from 13 to 11 days.

Schedule Compression Techniques

Characteristics of Crashing and Fast Tracking are listed in the table below

Type of Compression

Technique

Key Characteristic

Cost Characteristic

Quality Characteristic

Additional Characteristic

Crashing

Putting more resources on Critical Path

tasks

Usually increase Cost

Minimal risk exposure

Think of this as a party. You have more people that originally planned.

Fast Tracking

Do activities in parallel that

would normally be in sequence

Flexible, but increase cost from potential

rework

Additional risk exposure

because of possible rework

Can require additional

communication to coordinate

activities

PredecessorWhen you create a project schedule, you can use predecessors to establish the sequencing needed to accomplish work.

What are the definitions of the following Predecessors?

Predecessor Diagram

Finish-Start

Finish-Finish

With the Finish-Start predecessor, Task A must be completed before Task B can begin.

It is usually the default predecessor type for modern project scheduling software and is usable in the Activity on Arrow (AOA) and Activity on Node (AON) diagramming techniques. The other types (start-start, finish-finish, and start-finish) are used only on the Activity on Node (AON) diagram.

With the Finish-Finish predecessor, Task B must finish by the time Task A is finished.You can use this predecessor n situations where two or more teams are developing something, and all activity must finish at the same time to be converged into the total system.

A

B

A

B

Predecessor (2)

What are the definitions of the following Predecessors?

Predecessor Diagram

Start-Start

Start-Finish

Under the Start-Start predecessor, when Task A starts, Task B can start.

You can use this predecessor when multiple tasks can start simultaneously.

Under the Start-Finish predecessor, Task B would start before Task A finishes.You would use Start-Finish predecessor in situations where the new system must start before you could finish (shutdown) the old systems. This is the orphan of predecessors. Think about it: how many of you have used this compared to any of the other predecessors when you create a schedule? One example that seems to be ideal for this type predecessor is a project in which you are creating a new system to replace an existing system.

A

B

A

B

Lag and Lead

Type of Compression Technique

Definition Example

Lag

Lead

A Lag is a delay between tasks. You use it where there is some type of constraint in which something must wait before it can continue.

An example would be if you were building the interior of a house, you would have to wait a day for texturing on the walls to dry before you would paint the walls.

Lead is the acceleration to a successor from the predecessor. A lead would allow you to start ahead of schedule.

An example would be to begin user testing software if the system testing was significantly complete.

Do not confuse Lag and Lead with Slack or Float on the exam.

Time Activity Duration Estimating


Activity Duration Estimating (Planning Process)Key Inputs Key Tools Key Outputs

Activity List



Analogous Estimating


Activity Duration Estimates

Activity List Updates

The Activity List helps you determine what tasks their durations estimated.

Constraints, Assumptions, Resource Requirements and capabilities are factored in as items that can cause adjustments to estimates.

Analogous Estimate (Top-down estimating) requires expert judgment and is created by an expert or group of experts not just an executive pulling a number from the air. It is a high level estimate, not a detail estimate. Quantitatively based duration estimates are used and can include Program Evaluation Review Techniques (PERT) estimations and other math-based models.

The Activity Duration Estimates reveal how long the task will take along with supporting evidence of those estimates and any updates to the Activity List.

Reserve (contingency) time is considered as well in this area.

Activity Duration is the process of estimating the number of work days or hours to complete each task.

Identified Risks

Reserve Time

Historical Information and Identified Risks are factored in to calculating duration.

Constraints

Assumptions



Schedule Development (Planning Process)Key Inputs Key Tools Key Outputs

Network Diagram

Duration Estimates


Duration Compression


Project Schedule

Schedule Management Plan

The Network Diagram helps you establish the sequential flow of project tasks. Remember the key purpose of the network diagram is to show how tasks are connected on the project, not necessary how long tasks should take to complete.

The Activity Duration Estimates tell the length of each task and ultimately the project. However, adding up duration will not give you the project total duration; examining the duration of the critical path does.

Duration Compression techniques such as crashing and fast tracking are used for optimization.

The Project Schedule is a key output with the tasks, start and finish dates, resources, and sequencing (at a minimum) integrated into it. Supporting detail helps provide the logic behind the decisions that created the schedule.

Resource RequirementsSimulation

Calendars

Leads and Lags


Resource Leveling

Software

Resource Requirements help create the schedule and describes the resource pool.

Calendars allow you to factor in work schedules, holidays, etc. You must address constraints and assumptions to determine where the “speed bumps” in the project might occur. Factor any assumptions into the creation of the schedule, with the supporting documentation behind them in case they must be modified later.

The Schedule Management Plan addresses how the schedule is to be maintained throughout the project.

Mathematical analysis and Simulation are the basis for estimates.

Resource Leveling helps you attain a consistent level of hours (usually either daily or weekly) for the resources on the project.

Use project management Software to create Software to create the schedule. Finally, a coding structure such as a Work Breakdown Structure (WBS) numbering system helps you keep track of the tasks and where they fit in the WBS. Addressing Leads and Lags help prevent unnecessary “speed

bumps” form slowing down the project..

The Risk Management Plan help you ensure that adequate risk planning is factored into the schedule creation.

Schedule Development involves reviewing resource needs, activity sequencing, and duration estimates to develop the project schedule.

Resource Leveling

As a schedule is created, you assign resources and when you have your schedule complete, you usually notice a patter of peaks and valleys as depicted in the graphic below. These peaks and valleys represent resources that can be applied for 12 hours one day, but only 4 hours the next. Leveling is the process of adjusting these peaks and valleys to create a level usage of resources, as depicted in the post leveling graphics. Typically, when you apply resource leveling to your schedule, you do so at the sacrifice of the overall finish date, and it’s not uncommon to see your schedule stretch out a little.

Resource Allocation (Pre Leveling)

0

2

4

6

8

10

12

14

Mon Tue Wed Thur Fri Mon Tue Wed Thur Fri

Days

Ho

urs

Pe

r D

ay

Hours Per Day

Resource Allocations (Post Leveling)

0

1

2

3

4

5

6

7

8

9

Days

Ho

urs

Pe

r D

ay

Hours Per Day

Mon

Tue

Wed

Thur

Fri

Mon

Tue

Wed

Thur

Fri

Gantt Chart

The Gantt Chart is the common chart used in project management. It has the table of information (usually tasks, dates, resources, etc.) on the left, and the horizontal bars showing when those tasks are happening on the right. You use the Gantt Chart to track day-to-day details of the project. One key thing to remember about how PMI defines Gantt Chart, compared to the software most of us use, is that the Gantt Chart DOESN’T have lines connecting the Gantt bars. To see the sequencing, you must use the network diagram, not the Gantt Chart.

Dec 2004Nov 2004Oct 2004DurationFinishStartTask NameID

0d12/14/200412/14/2004 Task 56

10d12/20/200412/07/2004 Task 45

5d12/03/200411/29/2004 Task 34

3d11/26/200411/24/2004 Task 23

5d11/17/200411/11/2004 Task 12

28d12/20/200411/11/2004Application Development Project1

Milestone Chart

The Milestone Chart is the typically used in executive reporting. It lacks detail, generally listing only the main project milestones as diamonds instead of the Gantt bars. Like the Gantt Chart, as defined by PMI, the milestones chart does not have lines connecting the milestones diamonds either.

Executives usually don’t want much detail so the milestone chart fits their needs, but because project teams require more detail, they typically use the Gantt Chart.

Dec 2004Nov 2004Oct 2004DurationFinishStartTask NameID

0d12/14/200412/14/2004 Closure6

0d12/07/200412/07/2004 Integration5

0d12/29/200411/29/2004 Integration4

0d11/24/200411/24/2004 Development3

0d11/11/200411/11/2004 Planning2

23d12/14/200411/11/2004Application Development Project1

A common misunderstanding about a milestone is the duration. This is something you should know for the exam. A milestone has 0 (zero) duration.

Schedule Control


Schedule Control (Controlling Process)


Project Schedule

Performance Reports


Schedule Change Control System


Schedule Updates

Corrective Action

The Project Schedule displays the baseline against which activity is measured.

Performance Reports communicate how accurate the plan is being worked and measure any variance.

The Schedule Change Control System addresses proposed changes to the schedule.

Schedule Updates are applied as change control or variance analysis dictates.

Project Management Software is utilized to perform the schedule modification or changes..

Schedule Control is the point where changes to the schedule are managed and controlled.

Change Requests


Software

Change Requests address any adjustments to the schedule.

Performance Measurements and Variance Analysis determine if the variance or required changes exist.

Corrective Action potentially help get the schedule back on track. Lessons learned are helpful for eliminating any bad planning and repeating good planning in the future.

Schedule Management Plan

The Schedule Management Plan communicates specifically how those changes are to be implemented..

Variance Analysis

Time Mind Map

Time “Must Knows”• Key Inputs, Tools/Processes and Outputs for each process area• Schedule development concepts• Characteristics and benefits of Fast Tracking and Crashing• Principles, types and how to draw Network Diagrams• Concepts of PERT, CPM, Monte Carlo and GERT estimating

methods• How to recognize a Critical Path and why it is important• How to do a forward pass and backward pass on a Network

diagram• Four Predecessor types FS, SS, FF, SF for scheduling• Characteristics of Free Slack/Float, Total Slack/Float and Project

Slack/Float• Definition of Lag and Lead• Characteristics of the Mandatory, Discretionary, External

Dependencies

Time Exercises

• 7.9.2 – Quick Test – together

• 7.9.5 – Practice Test – individual

• 7.9.4 – Matching Exercises

• How did you score?

• Do you have any questions?

Cost Management

Cost Management

• Types of Costs• Cost Based Project Selection• Future and Present Value• Cost Terms• Resource Planning• Cost Estimating• Cost Budgeting• Cost Control

– Earned Value• Cost Forecasts• “Must Knows”• Exercises

7.2 Cost

Estimating

Cost Management

5.2 Scope

Planning


6.1 Activity

Definition


6.4


6.2

Activity Sequencing

6.3 Activity

Duration Estimating


Planning

7.3 Cost

Budgeting

1.1


Ch

arter

5.1 Initiation

Sco

pe S

tatemen

t

Charter


Ris

k M

anag

emen

t Pla

n

Activity


Resou

rce

Req

uirem

ents

Activity Duration

Estimates


aseline

Project Schedule

Sch

edu

le

WBS

Scope Statement

WBS

Resource

Requirements

Activity List

Activ

ity D

urat

ion

Estim

ates

Activity D

uratio

n

Estim

ates

Resource

Requirements

Schedule Mgmt Plan

WBS

WB

SSc

ope

Stat

emen

t

7.4 Cost

Control

Controlling

Type of Costs

There are four types of Cost on a project: Direct, Indirect, Fixed, and Variable. You can combine them with Direct and Indirect mixing with Fixed or Variable (such as Fixed Direct Cost).

Type of Cost Description

Direct CostsDirect Costs are directly attributable to the project and spent only on the project work. An example would be computer servers used for a software project.

Indirect Costs

Indirect Costs are those needed for a project, but not restricted to it. They could be used by other projects as well. Such a cost could be rent or electricity for the building where work on the project is performed. There would likely be other groups or activities benefiting from the items such as this, and your project would pay its part as well.

Fixed Costs

Variable Costs

Fixed Costs are those that are consistent on the project regardless of how many are used. Creating a book cover for a large quantity of books would be a good example. In this case, you would pay once to have the cover created, regardless of the number of books you printed it on.

Variable Costs are the costs that fluctuate with what is produced. The more of something produce, the more of this type of costs you incur. An example would be the cost of printing each copy of a book. The more you print, the greater your cost.

Cost Based Project Selection Techniques

Cost based project selection techniques are applied to help ensure that your organizaton makes prudent selection decisions.

Project Selection Technique Name

Also Known As Option to Select Example

Return On Investment ROI

Select the biggest number or percentage. It is a general term that is calculated in a variety of ways.

$50,000 or 7%

Internal Rate of Return IRR

Select the biggest percentage.Often used in capital budgeting, interest rate makes the net present value of all cash flow equal zero.

15.5%

Net Present Value NPVSelect the biggest number (Years are already factored in)

$47,000 US

Benefit Cost Ratio BCR Select the biggest ratio 3.5:1

Opportunity Cost

Choose Project A ($7,000) over Project B ($5000). The opportunity cost is $5000 to select Project A.

The amounts that are not selected

Payback Period Select the shortest duration 7 months

Cost Based Project Selection Discussions

Project Selection Technique

Discussion

Return On Investment(ROI)

Return on Investment (ROI) is a general term, you may calculate it a variety of ways. Typically, you would choose the biggest number or percentage among the projects under consideration.

Internal Rate of Return(IRR)

Net Present Value(NPV)

Often used in capital budgeting, interest rate makes the net present value of all cash flow equal zero. In the case of IRR and project selection, select the larger number.

Net Present Value (NPV) is used in capital budgeting where the present value of cash inflow is subtracted for the present value of cash outflows. NPV compares the value of a dollar today versus the value of that same dollar in the future after taking inflation and return into account.

Although it’s unlikely the exam will ask you to calculate this, you should know how to select a project using it. For example, with Project A have a NPV of $150,000 and 6 months or Project B having a NPV of $295,000 and 1 year, you would select Project B because it has the bigger number AND the years are already factored into the dollar amount.

Cost Based Project Selection Discussions (2)

Project Selection Technique

Discussion

Benefit Cost Ratio(BCR)

Benefit Cost Ration (BCR) is the project selection and analysis technique that involves comparing the benefit to the cost of the initiative. The format is 3.65:1 that means that the benefits of the project outweighs the costs 3.65:1.

Some questions on the exam could ask about profit in this area. That is simply noise; the benefit, cost, and ratio between them are the main components. There could also be a project hat has a BCR of less then one (.75:1) for example. This would mean that the project had a benefit of $.74 for ever $1.00 invested. Typically, you would not approve such a project unless there was some underlying factor such as Y2K issues.

Opportunity Cost

Payback Period

Opportunity Cost is associated with taking another opportunity. It is what you give up or leave on the table to take the other opportunity. For example, if you take a $75,000 a year job over a $60,000 a year job, then the opportunity cost of taking the $75,000 is $60,000.

Payback period is the amount of time needed to earn back the original investment on the project. PMI suggest that you select the project with the shortest payback period.

Future Value

What is Future Value? Future Value is the value of something such as cash or an investment at a specific point in the future. For example, if you had $5,000 now and get 8% interest, what would the future value be?

Don’t expect to calculate this on the exam. Focus on the concept, such as: to get the desired amount in the future, would a future amount at a certain interest rate require more or less money than that amount now:? The exam could present something that looks like a calculation, so be sure all the formula components are there, if not “not enough information” would be the best option.

What is Future Value Formula?FV = PV * (1+r)ⁿ

where:

FV = Future Value

PV = Present Value

r = Interest Rate

n = Number of Periods

Present Value

What is Present Value? Present Value is the value of something today that you need to create a certain amount of investment in the future. Here’s an example: if you wanted to have $10,000 in 3 years, what amount of money would you need today to get this amount if the money was earning 7%?

Don’t expect to calculate this value on the exam. Instead, recognize the concept, such as: Would you need more or less than a future amount now to have that amount in the future? You could also have something that looks like a calculation, but be sure all the components of the formula are there, as if “not enough information” would be the best

What is Present Value Formula? FV ( 1+r)ⁿ

where:

FV = Future Value

PV = Present Value

r = Interest Rate

n = Number of Periods

PV =

Cost Terms

What is the Sunk Costs? Sunk Costs are costs that have already been spent on a project. Do not consider these costs when making future project decision. Here’s an example” If a project has a budget of $175,000 and has already spent $200,000, the $200,000 wouldn’t be considered when deciding whether to continue on the project or not.

Depreciation is the process of devaluing an asset in the tax system. Over a period of time (Schedule), the worth of an asset decreases until it has no value or a predefined value at the end of its depreciation schedule. Generally, calculating depreciation is a complicated process involving tables, formulas, and more. Although you will not be asked to do any complex calculations in this area on the exam, you need to know what standard depreciation and accelerated depreciation are as well as ho to calculate a basic depreciation situation.

Standard Depreciation is performed with basic division. There are 3 variables to know about something before you can depreciate it.

1. What is the start value or purchase price?2. What is the scrap value?3. What is the depreciation time frame?

For an example a $5,000 video editing system has a 5 year depreciation schedule with a scrap value of $0. How much will it depreciate per year?

$5,000 / 5 years = $1,000 / year

What is Depreciation?

What is Standard Depreciation?

Cost Terms (2)

What is the Accelerated Depreciation?

Accelerated Depreciation is a littler more complex and generally requires tables of data to calculate.

For the exam, you must know that there are two main types used:

1. Sum of the year’s digit.2. Double declining balance

Accelerated depreciation does what its name implies. It depreciates faster than standard depreciation.

Life Cycle Costing is the process of examining all the costs associated with a project and its product once it goes into production. Without this focus, you could potentially create an environment that would cause our company to incur additional costs associated with the product after it goes to production. By taking production and the post project life into account, you could determine that you strategy to build the project might differ. Such an approach could result in a increase in project costs, but a savings in operation costs, which would save company money in the long-run.

Here’s an example: A vendor wants to charge your company $50,000 to create a prototype of something, then charge $2,000 per item after that. The $50,000 might be higher than you would prefer or had forecasted. You find another vendor that has a lower upfront coast, but charges $4,000 per item. You can easily calculate that, by selecting the vendor with higher upfront cost, you would actually see a cost saving after the production of only 25 devices.

What is Life Cycle Costing?

Resource Planning


Resource Planning (Planning Process)


WBS

Scope Statement


Expert Judgment



Work Breakdown Structure (WBS) is used to be able to determine what areas of the project need what type of resources.

Scope Statement helps ensure that the correct types of resources are assign per the scope of the project.

Expert Judgment is helpful in determining resources specifics and quantities.

Resource Requirements provides the resource needs for the project. This could include non-people resources such as infrastructure and conference rooms or personnel such as programmers and architects. This could include quantity, start and finish dates, needed skill sets and experience levels of the needed resources.

Resource Planning involves determining all the resources required for the project.

Activity Duration EstimatesSoftware

Activity Duration Estimates is used to ensure that the resources are planned for the appropriate duration of the project.

Software tools such as spreadsheets or scheduling software can help show how resources are utilized on the project.

Resource Pool Description is used to let the project manager and planning team know what the characteristics, skills, and experience are of the available resources.

Resource Pool Description

Cost Estimating SummaryCost Estimating is a key area in time and cost because good estimates can determine projects success or failure as time evolves. In Cost Estimating, you conduct a high level estimate of the project costs. At this point, you should have the schedule significantly completed and know what resources will be performing what tasks (as well as the rates of those resources). You will also know what materials and equipment the projects requires.

What are the four cost-estimating methods?

Analogous Estimate - Compare to a previous project.

Parametric - Parameters around which the estimate is built.

Bottom Up - Individuals items are estimated, then summed for the total cost.

Computerized Tools - Individuals items are estimated, then summed for the total cost.

Cost Estimating


Cost Estimating (Planning Process)Key Inputs Key Tools Key Outputs




Estimating Methods(Analogous, Parametric, Bottom Up, Computerized)


Cost Estimates

Work Breakdown Structure (WBS) provides the breakdown of the project and allows costs to be estimated from it.

Resource Requirements and Rates provides resource parameters that can be applied to create the Cost Estimates. They should describe what is needed, how much of it is needed, and what it should cost/unit.

There are four main Estimating Methods (Analogous, Parametric, Bottom Up, Computerized).

Cost Estimates are your most accurate estimates of project costs to date. Supporting Detail shows how the estimates were developed.

Cost Estimating involves developing a high level estimates of the project cost.

Resource Rates

Activity Duration Estimates provide the durations of the task that the resources are needed for. They can include Analogous, Parametric, Bottom Up, and Computerized estimates.

Activity Duration Estimates

Historical Information provide information about pass project that succeeded or failed.

Historical Information

Cost Management Plan

Cost Management Plan helps you determine how to manage project cost.

Cost Estimating Methods

Method Description Scenarios

Analogous(Top Down)

This estimate is usually a total time or cost estimate that has no significant detail. The main advantage of this estimate is that you can create it quickly. The disadvantage is that it lacks detail or individual piece estimates.

Bottom Up

Parametric

As to compared to the analogous estimate, the main advantage is the detail and accuracy associated with it. The disadvantage is that it can take significant time to create and the team can pad the estimates to compensate for unknowns.

Based on existing parameters, this method is usually created by industry standards or past experience. The advantage is that it can be done quickly and u usually accurate.

An executive or someone who is subject matter expert (SME) creates a high estimates based on experience or past project history with the company.

A project manager and the team work together to create a complete estimate from the bottom (task level) up and roll it up to the total estimate.

A house builder quotes a house for $75.00 per square foot. A carpet installer quotes $2 per square foot for installation.

Computerized / Monte Carlo

This estimate involves using a computerized program to simulate different variables associated with project outcome. The main advantages are the accuracy of the estimate and the “what-if” analysis that can be performed. The main disadvantages are the ramp-up time and costs associated with the setup of the tool.

Variables simulated could include the overall time and cost estimates as well as the confidence levels of the estimates. Variables could also include the number of people needed to achieve project goals.

Cost Budgeting


Cost Budgeting (Planning Process)Key Inputs Key Tools Key Outputs

Cost Estimates



Cost Budgeting Tools


Cost Baseline

Cost Estimates provides the overall cost estimates to the project that can be broken down and later applied to the work packages and tasks.

Work Breakdown Structure (WBS) provides the breakdown of the work of the project to allow the application of cost elements to the work packages defined in the Work Breakdown Structure..

Cost Budgeting Tools can be used to establish the cost budget of the project and position it to be used for establishing the detail of the budget and the tracking of actual expenses against it.

Cost Baseline is the cost estimate for the project planning team puts in place to work the details of the project to. This is the number (or numbers if it’s broken down throughout the project) that the pieces of work are estimated to cost.

Cost Budgeting involves the overall cost estimates to individual activities or work packages to establish a cost baseline for measuring project performance.

Schedule

Schedule allows viewing of the timeline of the project to show when the costs are expected to hit the project.


Risk Management Plan provide the rules as they relate to risk for the project. In this area it potentially lets the project planning team know where to allocate risk reserve, and how to address risk in the cost budgeting area of the planning.

Cost Control


Cost Control (Controlling Process)Key Inputs Key Tools Key Outputs

Cost Baseline

Performance Reports


Cost Change Control System


Revised Cost Estimates

Cost Baseline provides the overall cost standard that the project is trying to achieve. This could be viewed as the budget.

Performance Reports serves as the communication vehicle to show how the project is performing compared to what should be accomplished. The difference between the two is a variance.

Cost Change Control System is the system that is used to evaluate Change Requests as they relate to cost and process the approval of these requests.

Revised Cost Estimates are budget updates (higher or lower) that can happen as a result of reviewing project activities, timelines, and costs

Cost Budgeting involves the overall cost estimates to individual activities or work packages to establish a cost baseline for measuring project performance.

Change Request

Change Requests comes about as performance reports show a variance, or additional changes are needed to the project. Remember this is a request not an approval (yet!).

Cost Management Plan

Cost Management Plan is the rulebook as it relates to cost management on the project. It should address how cost related items are addressed on the project.


Earned Value Management

Estimate at Completion (EAC)

Project Closeout

Performance Measurement is the act of measuring what is happening on the project and comparing it to what should be happening on the project.

Earned Value Management is the three-dimensional (Scope, Time and Cost) tracking system for project management.

Estimate at Completion (EAC) is the overall cost estimated of the project based on budget (BAC) and the current spending efficiency (CPI).

Project Closeout happens when the project is complete and the various cost measurements occur such as evaluation if final payments are ready to be made upon satisfactory completion of work

Fixed Formula Progress Reporting & Earned Value Management

What is the Fixed Formula Progress Reporting?

Fixed Formula Progress Reporting is a technique that creates a consistent status report for project tasks. Instead of having a “gut feel” of percent completion form each person on a project, this type of reporting is essentially binary. The project planning process defines the split of percentages (ex. 25%/75%, 50%/50%).

This process works as follows: When a task starts, it receives the initial percentage (ex. 25%). It receives the remaining percentage (ex. 75%) only when the task is complete, thereby reporting 100% complete to the task.

What is Earn Value Management? Earned Value Management is a technique that integrates time and cost into quantifiable reporting method for project status reporting of actual performance compared to the baseline estimate.

It communicates project status via key metrics, including performance indexes, variance, and estimates associated with completion of the project. It allow a project manager to see how the project is performing in relation to spending (cost) and activity completion (time).

Earned Value Variables

Describe the different Earned Value Data Variables?

Data Variables Description

Actual Cost (AC)What you have spent at a point in time. This is the sum of all the accrued costs to date on the project. This is also known as Actual Cost of Worked Performed (ACWP) from 1996 PMBOK.

Earned Value (EV)

The value of the project at a point in time. What you must show for your effort. This is the percent complete of the tasks multiplied by the planned value of the tasks, the addition of the product of various multiplications. This is also known as Budgeted Cost of Work Performed (BCWP) from the 1996 PMBOK.

Planned Value (PV)What you should have spent at a point in time. This is the sum of the planned value of all tasks. (or relative percentage) through the point in time being measured. This is also known as Budgeted Cost of Work Scheduled (BCWS) from the 1996 PMBOK.

Budget At Completion (BAC) This is the total cost amount expected to be spent on the project.

Actual Cost of Work Schedule

(ACWS)

WARNING: This phrase doesn’t apply to Earned Value. It is used as noise. If you see it on the test, do not select it because it is not a valid answer.

Earned Value Variables (2)

Describe the different Earned Value Variances?

Indices Variables Description Formula

Variance Variables Description Formula

Cost Variance (CV)

The difference between work completed (earned value) and what was spent to complete it (actual cost).

Schedule Variance (SV)The difference between work completed (earned value) and what should have been accomplished (planned value).

Variance At Completion (VAC)

This is the difference between the original or revised budget (BAC) and the anticipated completion costs based on project spending efficiency (EAC).

CV = EV – AC

SV = EV – PV

VAC = BAC – EAC

Cost Performance Index (CPI) Measures how many cents of return on each dollar spent.

Schedule Performance Index

(CPI)Measures progress at percent of the rate originally planned.

CPI = EV / AC

SPI = EV / PV

Describe the different Earned Value Index Variables?

Earned Value Variables (2)The earned value management table is ideal to memorize for the exam because it gives you the answers to any questions dealing with the calculation of (cost or schedule) variances or performance indexes. Here are some of the keys to memorizing it.

• Performance indexes are listed first (vertically).• Variances are listed last (vertically).• Performance indexes are calculated by dividing.• Variances are calculated by subtracting.• The AC (ACWP), EV (BCWP), and PV (BCWS) are listed alphabetically (horizontally).• If a variance is negative, you are either behind schedule or over budget.• If a variance is positive, you are ahead of schedule or under budget.• If a performance index is less than one, you are behind schedule or over budget.• If a performance index is greater than one, you are ahead of schedule or under budget.

Earned Value Management Table

EV

(BCWP)

SV=--=CV

SPI=÷÷=CPI

PV

(BCWS)

AC

(ACWP)

Cost Time

Earned Value CalculationCalculations Steps

Calculate Total Planned Value (PV or BCWS)

1. Determine the date or “Completed through” level.2. Add the planned values of the tasks that should have happened as of the date

or “Completed through” level. Do not add planned value of tasks that have started that are ahead of schedule. (ex. Today is June 6 th and there are two tasks that shouldn’t start until June 8th, but have already started.

3. If a task should be partially complete at the point you are measuring the percent (%) complete will have to be provided or assumed (Ex. A 4 day tasks generally would be 50% done 2 days into the work.

1. Added the all “Actual Cost”.a) Regardless of status (1% to 100%) even if it was started ahead of

schedule.b) Any and all costs related to the project.

Calculate Total Actual Cost (AC or ACWP)

Calculate Total Earned Value (EV or BCWP)

1. List the Planned Value (PV) of all the following type of tasks:a) Tasks that have been completed.b) Tasks that should have started and haven’t started yet.c) Tasks that should have started and have actually started.d) Tasks that shouldn’t have started and have started ahead of schedule.

2. Determine the % complete of each task found in Step 1.3. Multiply the Planned Value (PV) by the % complete fore each task. This will

give you the earned value of each individual task.4. Add all the earned value measurements calculated in Step 3 from each task

to get the total earned value for the project or situation.

Earned Value Management ExampleTask Name Day Actual Cost (AC) ($) Earned Value (EV) ($) % Complete Planned Value (PV) ($)

Task A Day 1 $300 $300 100% $300

Task B Day 2 $200 $150 100% $150

Task C Day 2 $150 $100 100% $100

Task D Day 3 $225 $200 100% $200

Task E Day 3 $100 $100 100% $100

Task F Day 3 $300 $150 60% $250

Task G Day 4 $140 $130 65% $ 200

Task H Day 4 $100 $80 20% $400

Task I Day 5 $0 $0 0% $300

Task J Day 5 $0 $0 0% $200

Budget At Completion

Calculate this figure by totaling the Planned Values for all the tasks. The total Budget at Completion is $2,200

Planned Value To calculate Planned Value add up the Planned Value for each task through Day 3. This total is $1,1,00. This value represents the work that should be complete through Day 3. When looking at Planned Value in this case, even though some work is ahead of schedule, you should look only at the work that should have done through Day 3.

Actual Cost Total what you have actually spent to date. This total includes any and all costs, even if the work was started ahead of schedule. The Actual Cost is $1,515.

Earned Value Earned value is the Planned Value of each task (regardless if it should have started or not) multiplied by the percentage completed (%). This value provides the Earned Value (EV) for each task. The next step is to add the Earned Value (EV) of each of the tasks for the total Earned Value (EV) for the project. The Earned Value is $1,210.

Translation Translation means that through Day 3, you should have spent $1,100 and Task A through F should be complete. You have spent $1,515 but have an Earned Value ( the work to show you have spent) of only $1,210.

. Using the Earned Value Management Table we noticed that the project has the following metrics:CPI: 1210 / 1515 = .8 CV: 1210 – 1515 = -$305 SPI: 1210 / 1100 = 1.1 SV: 1210 – 1100 = $110

The CPI shows that the project is getting 80 cent value for every dollar spent with a CV which shows that it is presently $305 over budget. The SPI shows that the project is only progressing at 110% of that planned and should have accomplished $110 more in work than is scheduled. This project is ahead of schedule but over budget.

$2,100Budget at Completion

$1,100Total Planned

Value$1,210

Total Earned Value

$1,515Total Actual

Cost

Forecasts

Forecasts Description Formula

Estimate at Completion (EAC)

The Estimate at Completion (EAC) represents the current projected final costs based on the current spending efficiency (CPI).

If you have a CPI greater than one (1), the number will be less than the BAC.If you have a CPI of less than (1), the number will be greater that the BAC.EAC = $2200/.8 = $2,750

Estimate to Completion (ETC)

The Estimate to Completion (ETC) represents the amount needed to finish the project based on the current spending efficiency of the project. This figure is the EAC without the Actual Costs to date.ETC = $2,750 - $1,515 = $1,235

Variance at Completion (VAC)

The Variance at Completion (VAC) is the difference between the Budget at Completion (BAC) and the Estimate At Completion (EAC). This difference tells how much over or under budget the project finished. Using the sample data in the example, the following values for EAC, ETC, and VAC are:VAC = $2,200 - $2,750 = -$550

EAC = BAC / CPI

ETC = EAC - AC

VAC = BAC -EAC

Cost RangeThe table below shows the cost range of estimates as well as the names and process area in which they occur.

In the case of Order of Magnitude, this estimate is done at the beginning, still early in the life of the project.

The budget estimate follows, when you must put a budget together and when you move forward with the project.

When you are ready to commit, you create the definitive estimate. It is the definitive estimate that you use to manage the project costs.

It is imperative that you know this table for the exam as you will likely see one or two questions from this table relating to name, process area, or range of error.

Estimate Name Process Area Range

Order of Magnitude Initiation -25% to +75%

Budget Planning -10% to +25%

Definitive Planning -5% to +10%

Describe the different cost ranges?

Cost Range FunnelUse the cost funnel graphics below to get a feel for how these estimates come into the initiating and planning processes. At the top of the funnel, the estimate has the widest tolerance with the order of magnitude estimate. When the budget estimates comes about, the tolerance narrows, and the final definitive estimate has the least tolerance.

If a project had a $100,000 estimate (assuming it didn’t change as it went through the estimating process), the Order of Magnitude tolerance would be $75,000 to $175,000. The budget estimate tolerance would be $90,000 to $125,000. The definitive estimate tolerance would be $95,000 to $110,000.

Definitive Estimate(Planning)-5 to +10%

Budget Estimate(Planning) -10 to +25%

Order of Magnitude Estimate(Initiation) -25 to +75%

Cost Mind Map

Cost “Must Knows”• Key Inputs, Tools/Processes and Outputs for each process area• Characteristics and concepts of Earned Value (EV), Actual Costs

(AV), Planned Value (PL) , Budget at Complete (BAC)• Cost Range – Order of Magnitude, Budget and Definitive• Key characteristics and difference of the estimating methods• How to recognize and differentiate between the Cost types• Understand and know how to calculate the Benefit Cost Ratio (BCR)• Principles of the Payback Period and Sunk Costs• Understanding Straight Line Depreciation and Accelerated

Depreciation • Principles of Life Cycle Costing and Opportunity Cost• Net Present Value (NPV) and Internal Rate of Return (IRR)

Cost Exercises

• Exercises• 8.16.1 – Quick Test – together• 8.16.5 – EV Exercise

– #1&2 together What is the current state of the project?– 3-10 – individual completion

• 8.16.6 - together• 8.16.3 – Project Selection - individual• 8.16.4 - Cost Types - individual• Practice Test – individual• 7.9.4 – Matching Exercises

• How did you score?• Do you have any questions?

Quality

Quality

• Definition of Quality• Quality Planning

– Cost of Quality• Quality Terms• Sigma δ• Quality Responsibility• Quality Assurance• Quality Control

– Pareto Diagram– Control Chart

• “Must Knows”• Exercises

Quality

8.1 Quality

Planning

8.2 Quality

Assurance

8.3 Quality Control

Planning Executing

Quality Management Plan


Checklists

8.1 Quality

Planning

Planning Controlling



Checklists

Definition of Quality

What is the quality? Conformance to requirements - Conformance to requirements as a standard you used to determine whether the project built what it was supposed to build, according to requirements.

Fitness for use – Fitness for use means does the product of the project function as it was intended.

What is Total Quality Management (TQM)?

Total Quality Management is a quantity management philosophy conceived by Dr. Deming. In short, it focuses on a proactive attitude toward quality with a detail toward statistical analysis to document improvement. Dr. Deming felt that quality should be planned, not inspected when the work was complete. This view eliminates the end-of-process activity when people test functionality. Instead, it suggest that those who build the product must also test it as development progresses. Testing while developing provides an immediate feedback loop. Process problems are more likely o be detected early on, instead of at the end. Continuous improvement of the process is a key foundation of his view on TQM.

What is Zero Defects? Zero defects is a concept created by Philip Crosby. Its basic foundation is to do something right initially and you shouldn’t have to repeat it. As with most quality initiatives, if the money is spent upfront, the effort will eliminate the need for rework if the defects occur.

Definition of Quality (2)

What is the Gold Plating?

What is Continuous Improvement? Continuous improvement takes a proactive stance to development, one that makes improvements throughout a process. Corporate culture generally focuses on not accepting that things are as good as they can be, but instead seeks process improvement.

Unless there is a major environment change, the bigger process improvements will likely be at the beginning of the initiative with smaller improvements coming later.

Gold Plating is the practice of providing more than what the customer requested. Per PMI, this practice is unacceptable and professionally irresponsible. The project manager and team should provide only that which was approved. At Crosswind public courses, we are often asked why gold plating is bad. Some ask us: why is it wrong if customers receive something that increases the usage or value of what they have are getting? The answer is straightforward and reflects all the process practices we have been discussing: you give your customers exactly what they ask for and what they approve in the charter, no more or no less.

Here’s an example of gold plating. You go to a car dealership, looking for a new care. The scope of what you want is affordable basic 4-door car. You aren’t interested in “add-ons” like rust proof undercoating or Scotchgard protection on the fabric. You explain to your salesperson what you want. Your find a car you like and begin to discuss the price. Your salesperson explains in the pricing that car has the rust proof undercoating and the Scotchgard protection on the fabric, and that the two items cost $1,100 together. While there might be some perceived value of these products, it’s not what you are after in the product you want.

Quality Planning


Quality Planning (Planning Process)


Quality Policy

Scope Statement


Benefit/Cost Analysis



Checklists

A Quality Policy is vital so that the rules are known as thy relate to quality.

The Scope Statement and Product Description are used so the overall product can be verified against these items.

Standards and regulations come into the equation as well because your product cannot be substandard or violate regulatory standards.

Benefit Cost Analysis focuses on the cost of quality instead of project selection techniques (where benefit cost analysis is also used).

The Quality Management Plan defines the quality standards, processes and procedures to be used on the project.

The Cost of Quality deals with money spent on quality initiatives compared to the benefits received from those initiatives. Benchmarks are also useful in establishing the standard you want the product of the project (or the project for that matter) to perform by.

Quality Planning is involves defining the rules that will define quality and establish them to verify that the product will adhere to Conformance to Requirements and Fitness of Use.

Product Description

Flowcharting

Flowcharting helps in documentation of process for stability and analysis (for quality improvement). The design of experiments deals with using experiments that test multiple criteria or situations simultaneously.

Checklists help define the step-by-step items needed to attain quality standards.

Cost of Quality

Cost of QualityWhat is the Cost of Quality?

Cost of Quality is the cost of conforming or not conforming to a continuous improvement approach to quality. A company pays for quality one way or another. Conformance or nonconformance to quality is the key here.

Conformance to quality typically has a positive effect on the morale and corporate bottom line. Under this approach, a company pays for quality in a proactive way, typically up front in the planning areas of a project. The company take initiatives and makes training available for improved quality. It focuses on the activities for planning quality into the work instead of working the defects out, thereby resulting in lower inventory needed and reduce warranty support.

A nonconformance view to quality means the company pays for quality in a reactive way, on the back end of the project. Nonconformance typically has a negative impact on the morale, customer perception and the bottom line of a company. The cost of nonconformance comes from an organization that is reactive to issues and waits for problems to come up. They end up paying for quality in areas such as excessive inventory, waste, and warranty support.

Cost of Conformance and Cost of Non-Conformance

Cost Item Conformance Non-Conformance

Excessive Inventory

Throwing away defective products

Warranty support

Reacting to problems after the happen

Proactive analysis of process improvement

Company training relating to quality and continuous improvement

Lower inventory needed

Reduced warranty support

Quality Terms

What is the Just in Time? Just in Time is an inventory management process that lets a company have little or no excess inventory in stock other than what they need to build existing orders. Ideally, a company stocks zero inventory with supplies arriving only when needed for products being built. Remember, inventory costs money. So an increase in quality that allow you to use JIT can save money for your company.

What is Flowcharting? Flowcharting is a technique used in quality planning to map out the flow of a process or technique. Flowcharting can help improve quality by increasing the stability and repeatability of a process.

What is Normal Distribution? Normal Distribution means that the project activity met with a typical outcome, nothing abnormal. Normal Distribution is sometimes shown where the curve is tighter or the “hill” is steeper. This depiction is still normal and merely means the data is much closer in the measurement.

Sigma σWhat is the Sigma?

Sigma is also known as standard deviation. The formula of standard deviation is (P-O)/6 where P=Pessimistic and O=Optimistic. PMI doesn’t require you to be statistician to become a PMP, so let’s apply a Crosswind concept called “Realistics®”. Realistics is simply a concept that attempts to apply a realist way to use something like this. If we look at the diagram below, we see that 1 sigma is 68.26%. What that translates to in the workplace is a quality standard. If our quality standard is 1 sigma (68.26%), the minimum acceptable quality standard is 68.26%. If we build 100 of something with a 1 sigma quality standard, we are saying that we have a success as long as 68.26% of whatever we build works. That means that 31.74% (100%-68.26%) of what we build could be expected to fail, potentially leading to high costs of rework or scrap. By increasing the quality standard to 2 sigma (95.46%), we increase the quantity of expected passing product to 95.46 units out of 100, or no more that 4.54 units would fail. This decrease the cost of rework and waste, but there will likely have to be spending on quality training and other proactive activities to achieve this standard.

99.9997%6 sigma

99.75%3 sigma

95.46%2 sigma

68.26%1 sigma

-2σ

-3σ

Mean

68.26%

+1σ

99.75%

95.46%

-1σ

+3σ

+2σ

Normal Distribution

99.9997%

+6σ-6σ

Quality TermsWhat is Probability? A Probability is the likelihood that something will happen. It can be

expressed in a percentage (1%, 75%, 100%) or in a more conventional number format (.01, .75, 1.0). This decimal translates to a percentage. For the exam, it is key for you to know to understand that the sum of all probabilities equal 100% or 1.0.

What is 6 Sigma? 6 Sigma is a modern quality philosophy made popular by Motorola and other companies in the late 80s. It involves setting very high standards of 6 Sigma for products or processes that the company produces. In essence this philosophy states that approximately 99.9997% of everything a company creates or the processes it execute are error-free.

What is ISO 9000? The International Standards Organization (ISO) standard is associated with companies that wish to document their processes and adhere to those processes. While quality improvement is not always a given with this standard, the repeatability associated with it will typically show a positive benefit. This standard can also be used to ensure that partners a company works with have defined repeatable processes.

Quality ResponsibilityWho is responsible for quality is something that will come up on the exam, as it’s an easy way to pass the responsibility and let something slip if you aren’t careful. The table details what you need to know.

Role Level of Responsibility Example

Team member or worker They are responsible for the quality of their own work.

Project Manager They are responsible for the quality standards on the project.

Senior/Executive Management

They are responsible for the quality standards at the company.

The electrician is accountable to ensure that work on the job is satisfactory.

The Project Manager is responsible for the quality on the networking project.

The CEO and senior management is responsible for quality at the company.

Describe the different roles and responsibilities?

Quality Function Table / ChecklistsQuality Function TableThere are a number of functions used in the quality process and address on the exam. Use the table below as a memorization item to help you differentiate in what process you would potentially use the tools. Be sure to focus on when the item is used, not just created!

Quality Function Quality Planning Quality Assurance Quality Control

Flow Charts

Fishbone/Ishikawa/Cause and Effect Diagram

Benchmarking

Kaizen (Design of Experiments)

Inspection

Checklists

Control Charts

Pareto Diagrams

Statistical Sampling

ChecklistsChecklists are good tools you can used to ensure that everything that should be done in a process have been completed as planned. When you follow them, you can eliminate defects thus improving quality. Think about it this way, if you were on a flight, would you want the pilot to complete the startup procedure with a checklist? If the pilot had 20 years experience, would that make you feel more comfortable? It seems it might be less risky to have them use a checklist.

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What is a Flowchart? The Flowchart is a good tool for defining what steps need to be completed and in what order to achieve a particular goal or output. Flowcharts can take a variety of formats. A common format is listed below:

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Fishbone DiagramWhat is the Fishbone (Ishikawa, Cause and Effect) Diagram?

This is a tool that can be used initially in a project to evaluate what could potentially cause defects in a project or process. It could also be used after the project has started to review symptoms occurring to determine what the real problem is. Some people view this similar to work decomposition other than the fact that it involves problems and symptoms instead of tasks needing to be completed.

Requirements Testing

Integration Design

Software Defects

IncompleteScope Change

Misinterpretation

EffectPotential Causes

Quality Assurance


Quality Assurance (Executing Process)



Results of Quality Control Measurements


Quality Planning Tools


Quality Improvement

A Quality Management Plan defines what standards to work to.

Operational Definitions and Results of Quality Control is use to verify what the product should do as well as validate that the product performs as expected at the completion of the creation process.

Quality Planning Tools are cause and effect diagrams and process flowcharts.

Quality Improvement is primarily established by process analysis and improvement in this area.

Quality Assurance verifies or validates the quality standards defined for the project will meet the desired standards.

Quality Audits

Quality Audits is the process of reviewing quality activities that apply to lessons learned (about quality on the project) and can be applied to current and future projects. Quality audits help you verify process and output compliance.

Quality Control


Quality Control (Controlling Process)


Work Results



Inspection


Quality Improvement

Rework

Key inputs include Work Results to be measured.

Use the Quality Management

Plan and operational definition for an accurate definition of what is to be measured and what to do if things don’t meet those standards.

Work Inspection is the process of verifying that the work was built as intended. Inspection and Control Charts help you measure and track output. Pareto diagrams show what areas are causing the most issues. Statistical sampling is used to test an appropriate amount of output to detect defects, but quality tested is not enough that the cost would out weight the benefit. This often a key challenge in quality assurance. Flowcharting help verify that the process is followed accurately.

As items are developed,

key outputs include an improvement in quality, rework of defective product, and completed checklists.

Trend Analysis shows if there is an ongoing problem or if an issue is isolated.

Quality Control measures the output of a process or product against the specification.

Checklists

Control Charts

Trend AnalysisAcceptance Decisions

The Acceptance Decision on completed work products is a key output.

Process Adjustments

Process Adjustments are key also when output is coming up out of specification and requiring excessive rework.

Checklists are use to verify that the process is followed.

Quality Terms (2)What is the testing? Quality control involves testing the process output. There are many items to consider when

testing. Typically, you address these items in quality planning because you would use them in this area. Focus on determining if testing will occur with the population or a sample and what the sample criteria will be. During testing, define the attributes and variables that are important. In addition, gain an understanding of the concept of statistical independence and mutual exclusivity.

What is Sample vs. Population?

In population testing you test the entire particular item (such as every airplane that is built). In sample testing you determine how much of something needs to be tested to ensure that defects would be caught.Sample testing process would then test that many of the items, for example one of every five. You could adjust the sample later if quality assurance showed that it was too aggressive (not showing any failures) or not aggressive enough (catching a lot of failures, leaving you to wonder haw many truly were bad items slipping through). In sample testing, there is a “confidence level”. The more of something you test, the higher the confidence level.

What is a Variable? A Variable is the characteristic that the quality control process is going to measure. It is a generic characteristic or property, such as capacity or height.

What is a Statistical Independence?

Statistical Independence is where the outcome of processes are separate from one another. For example, buying a lottery ticket last week doesn’t increase your odds of winning the lottery this week.

What is a Mutual Exclusivity?

Under mutual exclusivity one choice will not include any other choices. For example, shipping product air overnight does not overlap with shipping the save product ground saver. They are separate options.

What is a Attribute? An Attribute is the specific measurement being recorded. For example, square feet, inches, or meters. To remember the difference between a variable and an attribute, remember that an attribute is a unit of measurement.

Pareto DiagramThe Pareto Diagram is a cumulative histogram you can use to see where the key problems lie. It is not uncommon to have only so much time to spend on issues or problems. If you must “Choose your battles,” this is good radar screen to determine which battles to choose. With it, you can see what is causing the most frequency of problems plus a cumulative percentage of problems. Pareto diagrams do not necessarily dictate priority, unless that priority is by frequency of occurrence. The general rule with a Pareto diagram is the 80/20 rule, meaning that: as a general rule, 80% of the problems come from 20% of the issues. Therefore, if you can eliminate the issues, you eliminate the problems.

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Control ChartThe Control Chart gives you a picture of the process output over time. The upper and lower control limits represent the control points of the process. The process is under control if the data falls between the lower and upper control limits. This applies in all but one case (7 Run Rule). The upper and lower specification limits represent the specification points of the process. The process is within specification if the data falls between the lower and upper specification limits. This applies in all but one case (7 Run Rule). Think of a road. The mean is the middle of the road. The control limits are the stripes near the edge of the road and the specification limits are the actual edges of the road. The following graphic shows a control chart and the number of different pieces of it. The mean represents the middle of the chart and the target measurement.

Upper Specification Limit (USL)

Upper Control Limit (UCL)

Lower Control Limit (LCL)

Lower Specification Limit (LSL)

Mean

Quality Terms (3)What is the Heuristic? Heuristic is a rule of thumb and can apply to a variety of knowledge areas. It

servers as a general rule to use when a rule specific to the situation might be too time-consuming or costly to generate for what is needed.

What is Run of Seven Rule?

In Run of Seven Rule states that if you have seven consecutive data points on either side of the means, without crossing the other side, the process is out of control and need investigation.

What is Assignable Cause?

An Assignable Cause is a measurement on the Control chart that must be researched before you can determine the reason for the failure (out of specification or out of control).

Upper Specification Limit (USL)

Upper Control Limit (UCL)

Lower Control Limit (LCL)

Lower Specification Limit (LSL)

Mean

Out of Control Data Point

Out of Specification Data Point

Problem B

Problem A

Violation of the Run of Seven Rule (out of control)

Problem C

AssignableCause

Quality Mind Map

Quality “Must Knows”• Key Inputs, Tools/Processes and Outputs for each process area• The percentages 1, 2, 3 and 6 Sigma• The principles and components of a Control chart• What specification, control and mean limits represent• Definition of Quality• Pareto diagram• Concept of prevention over inspection as it relates to quality• What is Gold Plating• Continuous improvement concepts• At what point the worker, the Project Manager, and Senior Management are all responsible

for quality• Cost of conformance and non conformance• The basics of probability and that the sum of all possible probabilities must equal 100%• What attributes and variables are as they relate to quality• Statistical independence and mutual exclusivity• What a Fishbone (aka Ishikawa or Cause/effect) diagram is and in what environment it is

used• The basics of Just in Time inventory and the amount of inventory needed is 0%• The principles of measuring a sample compared to the population• The Seven Run Rule

Quality Exercises


• 9.13.4 – Quality Practice test – individual

• 9.13.5 – Control Limit Chart - individual

• 9.13.3 – Matching - individual

Human Resources

Human Resources• Organizational Planning• Motivational Theory• Theory X and Y• Power• Staff Acquisition• Resource Histogram• Responsibility Assignment Matrix• Human Resource Terms• Team Development• Conflict Resolution • Problem Solving and Situational Questions• “Must Knows”• Exercises

Human Resources

9.1 Organizational

Planning

9.2 Staff

Acquisition

Staffing Management Plan

Planning

9.3 Team

Development

Executing


Organizational Planning


Organizational Planning (Planning Process)


Staffing Requirements


Stakeholder Analysis


Role and Responsibility Assignments


Key inputs include any constraints that will potentially limit the project. Constraints could be things such as time frame or total budget amount, or location or cost dependent among other things. Also addressed are project interfaces (examples include handing off between phases, or groups, as well as reporting structures where there is a connection between people or levels on the organizational chart).

In Staffing Requirements you determine what types of skills and experience the project needs plus the number of people in possession of those skills.

Stakeholder Analysis comes into the equation in delivering resources that meet the needs of the stakeholder. Organizational Theory works to provide the layout of the organization related to a matrix, functional or projectized organizational structure. This is key in knowing what form of an environment the project consists of, so that fits and optimization can be utilized.

Role and Responsibility Assignments also aide in allowing personnel to know exactly what their position is on the project, as well as what is expected of that position by those in charge of the project.

Key tools include utilization of the Human Resource Practices of the company as well as any templates that help with the organization and structure of the resources.

Organizational Planning involves determining what roles, what reporting structure, and what relationships the project needs.

Human Resource PracticesOrganization Chart

Key outputs include a Staffing Management Plan to address how staffing needs will be filed on the project.

An Organization Chart (also known as Organizational Breakdown Structure) is used for graphical display of reporting relationships on the project.

Motivational TheoryMaslow’s Hierarchy of Needs

Maslow’s hierarchy of needs is a tool that you can use to determine what can be used to motivate an employee. The key is to finding out where someone is in the triangle and using items from that area to motive. For an example, in the physiological area, the focus is on the basics of existence, such as shelter, food, survival. If someone on your team has a house, expensive car, goes on extravagant vacations every year, you aren't’ going to motivate them with something from the physiological area. Esteem or self actualization will more likely represent things that will motivate that person. Things like the more expensive car, the promotion at work, the extended vacation will be the hot buttons for that person.

Self ActualizationSomeone who is performing a calling, someone with everything going right and feeling like life can’t get much better.

Esteem How we are perceived and feel about ourselves.

Belonging Friends, finding love, existence and association.

Safety Things that make us feel comfortable or protected.

Physiological Basics needed for survival, things such as shelter and food.

Maslow’s Hierarchy

SelfActualization

Esteem

Belonging

Safety

Physiological

One basic assumption of motivational theory is that in most cases, money does not create motivation. Instead things like improving the workplace, showing appreciation toward the worker, and additional responsibility typically motivate workers more than simply throwing money at them.

Motivational TheoryHerzberg’s Motivational Theory

Herzberg had two main factors for workplace success.

Hygiene – This focuses mainly on the areas associated with the workplace. Factors such as a safe work environment, steady pay, and a stable job are examples.

Motivating Agents – This focuses on non-financial characteristics of work. Examples can include the opportunity to improve and do more, education, and responsibility.

One basic assumption of motivational theory is that in most cases, money does not create motivation. Instead things like improving the workplace, showing appreciation toward the worker, and additional responsibility typically motivate workers more than simply throwing money at them.

Herzberg’s Theory

Theory X and YMcGregor’s Theory X and Y

The X and Y theories can apply to management or labor. As you read the tables below, try to imagine a manager from theory X and labor from theory Y or the other way around. Is it a nightmare waiting to happen? The tables below describe the characteristics of both types.

What is Theory X?

Labor does not want work.

Labor is not necessarily motivated to work.

Management feels the need to supervise.

Labor wants to be told what to do.

Theory X

Labor and Management Characteristic

Theory X is more an “old school” mentality when factories produced the majority of the work and people went to work , were told what to do, and didn’t want to have to evaluate what needed to be done, but wanted the boss to tell them.

Theory X and Y

What is Theory Y?

Labor wants to work and enjoy it.

Labor is motivated to do what is necessary for work.

Management can minimize supervision.

Labor can work with an end goal in mind.

Theory Y

Labor and Management Characteristic

Theory Y is more modern perspective on labor and management. It is an environment where management typically lets labor know what needs to be done and when, and direct them toward it. This main difference here stems from motivation. If labor can (and wants to) see the big picture of where work is going, then management can set expectation, and lead instead of only manage.

Management Styles

Style Description

CoachThe Coach brings out the best in the team, coaching members to their potential or where they need to be with regard to a project

What are the six different Management Styles?

There are a number of management styles that could appear on the exam. To a seasoned Project Manager, many are somewhat instinctive, but if you aren’t familiar with their names, situational problems could cause you problems. Remember a Project Manager doesn’t need to have just one of these styles. Styles can vary as the situation dictates.

The Director drives the direction of the team or team members to accomplish specific tasks or goals.Director

Facilitator

Mediator

Mentor

Visionary

The Facilitator helps keep things progressing, making them happen. This style is not super proactive or ownership.

The Mediator tries to find a common goal when there is disagreement. This style is ideal when there are varying technical opinions or disagreement among resource managers.

The Mentor is similar to a Coach but focuses more on showing someone how to improve and be better, helping them take on new skills and roles.

The Visionary sees what can be, where the company or team needs to go, focusing on the big picture of the company, with other focusing on the day-to-day events..

Roles and Responsibilities

Roles Area of Responsibility Example Solution

Sponsor Project sponsorship and money for the project.

SeniorManager

Supporting the sponsor and the project; help resolving disputes between project and functional managers/areas.

FunctionalManager

Functional manager controls the resources on the project and run the functional area of the business.

The implementation company has said they need more money as part of a change control process to create the needed work for the project.

The project needs more resources on it after some key resources were removed from it to focus on operation of the marketing department. The functional manager says they are short staffed as it is, and can spare no more resources.

The project has a potential schedule slippage that will cause the project to be 5 weeks late.

Senior management would work with the project and functional manager to determine priorities between the two areas, thus supporting the project by resolving high level disputes.

Senior management would become involved after the project manager reviewed options and presented them to senior management to approve a solution since the issue violated the triple constraint.

What are the six different roles and their responsibilities?

The following table helps you understand who is ultimately responsible for what type of problem. Typically, the situation questions will reference a matrix environment unless otherwise stated.

While the project manager might present to the sponsor the details of the change, the sponsor would be the ultimate person to approve the change and additional money for it.

The project needs more resources on it after some key resources were removed from it to focus on operation of the marketing department.

If the functional manager can put other resources from this area on the project this should solve the problem on the project.

Roles and Responsibilities(2)

Roles Area of Responsibility Example Solution

ProjectManager

Project manager executes the project plan and completes the project in scope, on time, and within budget.

TeamMember

Team members do work assigned by the project plan and project manager. They are responsible for their own non-project related effort.

Stakeholder

If not defined above, their role would be to know the requirements of their area and voice those to the project manager and ensure those requirements are met on the project.

The project has an item that will not be available as planned, but shouldn’t delay the finish of the project.

According to the schedule, the database development should begin this week.

The team is have an argument about where to go for lunch.

The developer has reviewed the schedule and begun work on the database creation this week as the schedule say the developer should.

The team comes to a resolution on where to go. Remember, it’s not the Project Manager’s job to be the baby sitter of the team..

The project manager would adjust things to complete the project by the due date, as that is their responsibility. If things were to slip past the due date, they would have to get approval from senior management.

The finance department contact has said that they are impacted by the reporting of the new sales tracking project. They are not sure if the project will accommodate their needs..

The finance person contacts the project manager to let them know that they are impacted on the project and should be involved in any requirements gathering. They put together the needed requirements for the project as it effects them and work with the project manger to ensure that the project meets their requirements and needs.

Power

Role Level of Responsibility Example

RewardA reward is usually the best form of power to use. With reward, someone receives a benefit (reward) for doing something that is needed.

ExpertThis form of power is one that project managers must earn on their own. With expert power, the project manager is perceived as an expert on the subject by those on the team or at the company.

FormalThis is legitimate power. This is the type of power that comes from the senior management at a company authorizing you to be the project manager, and whatever authority comes that.

If you complete your work on the project ahead of schedule, we will send you to that training class you have been wanted to attend.

We need to listen to what he says regarding project management. He created PMP Success Series of products.

As you saw at the kickoff meeting, the sponsor said that I am the project manager on this project and the team would take direction from me on matters related to the project.

Describe the five types of Power?

One of the keys to successful project management is the ability top use the power of the project manager to accomplish the challenges of the job. On the exam, you can expect to be quizzed on five different types of power and which is the best, worst, and what type you have to earn on your one. The table that follow displays the five type of power with examples.

Referent

Penalty

This type of power comes from an attitude or “presence” that a person has and the corresponding type of influence this person has on the team. It could also come from someone who would align with other people in powerful position at the company or on the team.

Ex. #1: We need to do what the project manager asks. She has lunch with our VP every week, and they play golf together a lot as well. If we let her down, he will definitely hear about it.Ex. #2: I want to stay late and finish this before the morning like I promised the Project Manager I would. He has always been good to me and the rest of the team and I don’t want to let him down.

A penalty is the work form of power to use. With a penalty, people experience negative impacts if they do not do what is desire.

If you don’t complete the work as planned, I will make sure that you don’t get your bonus like the other people will.

Staff Acquisition


Staff Acquisition (Planning Process)


Staff Management Plan


Negotiations


Project Staff Assigned

The Staffing Management Plan is used to see what type of skill set is needed and can include location and time frames. This requirement is then compared to the staffing pool description for any matches. Next, recruitment comes into the picture to satisfy any remaining gaps.

Techniques utilized can include resource Negotiation, pre-assignment (or pre-allocation) to the project and contacting any outside companies to help with the procurement needs of staff acquisition.

When this process is completed the Project Staff is Assigned to it and know when they will start on the project.

Staff Acquisition involves getting the needed human resources (individuals or groups) assigned to and working on the project.

At this point a Project Team Directory should be able to be available. This would list among other things who is on the project, how to contact them, what they do on the project (title) and where they are located.

Project Team Directory

Resource HistogramThe Resource Histogram is a tool you can use to see quantity of staffing over time. It can be setup to show by month, hours by week, total people on the project over time, or a particular skill set over time. The example below shows total staffing hours by month.

Resource Histogram

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200

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Responsibility Assignment MatrixThis tool lets the project team know who is involved in each area and what they are responsible for in that area. This can eliminate the “I didn’t know” excuse and finger pointing that can come from not utilizing this tool. For the exam, you need to recognize the graphics below and know what the tool is used for.

Task / Resource Sergio Ramya Randy Kanaks Shirley

Planning A I L I I

Design T L

Development L T T

Testing T T I L

Closure L T I

Legend: Team leader = L

Input potentially needed = I

Team member = T

Approval needed = A

HR TermsWhat are the two types of benefits?

What is the Halo Theory?

Halo Theory is the process (in project management) of assuming that someone would make a good project manager because that person is good in his or her technical field. The theory could also be used to imply that if someone was not good in his or here technical field that person wouldn’t be good at project management. This theory often becomes reality when someone is promoted to a project manager from technical or hands on position and hasn’t had the opportunity to receive any project management training.

What is a Expectancy Theory?

This is a theory where the employee works a great deal on the project and assumes that the reward will be relative to the amount of their effort or perceived effort. This can usually be quite a disappointment for those believing they will be greatly rewarded when the project is done.

What is Team Development?

Team Development or team building is an event that will go on throughout the project. In some ways it is the organized activities and communication that pulls people together in other ways it is the unspoken things that occur as people work together which forms a bond of a team. Key to achieve this is the staff and the project plan. This aligns the people of the project with the details of the project so they know what direction they are to work.

From time to time, the exam can cover employee benefits as a motivational tool. There are two main types of benefits: fringe benefits and perks.

These are special benefits offered for being on a certain project or doing certain things. These are not available to everyone, thus the ability to use them for motivation. Examples could be going to a special training class or seminar.

Perks

These are the type of benefits that everyone receives in the company or project. These are typically not a motivator because the person is already getting the benefit. Examples could be health insurance or paid holidays.

Fringe

Team Development


Team Development (Executing Process)


Staff Management Plan


Team Building Activities


Performance Improvements

The Staffing Management Plan comes into play when needed to address managing of the staff.

Team Building Activities are helpful with team development, as there is more to team development than just putting people together in a group. This could be something such as group lunches or evenings away form work in a social environment. Reward and recognition is helpful also as a motivational and appreciation tool for individual work efforts.

Key outputs are Performance Improvements as well as data that can serve as key to performance appraisals.

Team Development includes organized activities and communication pulling people together to form a team bond.

Performance Reports

Project Plan

Performance Reports and external feedback help with the optimization of the team via a communication loop.

Project Plan describes the technical context within which the team operates.

Key tools include general management skills to help you organize and runt things. Training is a key to team development as well. Training focuses on developing of the individual which helps make the team stronger. Co-location can be used to help build an even bigger team. Given today’s global business environment, there is a strong probability that any large project will utilize co-location across the country (or countries).

Cost

Methodology Details

Technical Direction

Resources

Source of Conflict

Source of conflict are an issue that is imperative to understanding conflict. If Project Managers are aware of variables that can cause conflict, they can take a proactive approach to eliminating conflict before it occurs, or know that it is likely to come as the project addresses areas that simply can’t be ignored, such as scheduling and resources.

Most people think that personality is the main reason for conflicts. Studies have shown that this is rarely the case. Traditionally, conflict occurs as planning evolves. Items such as scheduling, priorities, and resource utilization are most likely sources of conflict. Personality is typically the least source of conflict.

Priorities

Personality

Scheduling

Biggest Source of Conflict

Least Source of Conflict

Conflict Resolution

Conflict Resolution Mode

Description Example

Problem Solving(Confrontational)

This is where an attempt is made to solve the actual problem.

Compromise

This is where an attempt is made to get everyone involved to give (concede) a little to find a common ground and resolution. This is sometimes viewed as not that desirable as everyone giving up something up, can cause the solution to (potentially) not meet anyone’s needs..

ForcingThis is where a direct order to resolve something is given. This is typically the worst type of conflict resolution mode.

If you can’t do what is needed with your current computer, get an upgrade that lets you accomplish what’s needed for your job.

If we can get labor to give in on benefits a little and management to increase their raise increase a little I think we can find agreement that both sides can live with.

You will stop using that software and switch to the authorized version or you will not around here for long.

Describe the five methods of conflict resolution?

Given the complexity of projects today conflict is bound to happen. The days of eliminating conflict before it happens are gone. The process of resolving conflict is a key of the project manager.

Smoothing

Withdrawal

This is where the focus is on the positive and trying to distract the focus from the negative.

Look at how good the requirements on the project went. We just have to apply that same view to this phase of the project as well

This is where the Project Manager ignores the problem and hopes it either fixes itself or disappears. This typically is not viewed by PMI as a conflict resolution mode because it’s not a proactive approach to resolving conflict.

I know he is a pain to work with and takes longer to do his work than we like, but maybe if we leave him be, he will just quit and take a new job.

Form, Storm, Norm, Perform (FSNP)

Process Description

FormForm refers to the creation of the team, when the people on the team are put together per the organizational planning needs of the project.

Describe the FSNP?

Team development involves convergence of a group of people into a performing organization. A common evolutional life cycle is characteristic with team development. The team development process includes Form, Storm, Norm, Perform, and is typical when a term is put in place

StormStorm refers to the chaos that occurs as people start to get accustomed to working together.

Norm

Perform

Norm refers to the point in time when team behavior starts to normalize and team members are accustomed to each other. The newness of the group of people has worn out.

Perform refers to the activity that transpires as the team works as a team instead of as a group of people. The group should be working at an optimal level in this phase.

HR Terms (2)

Reward and Recognition

Problem Solving and Situational Questions

The exam uses situational questions to verify your understanding of who is responsible for solving various types of problems. Problem solving and situational questions are challenging areas given that everyone has a different opinion of who is responsible for when studying begins for the exam.

A Reward and Recognition System is needed for team development and for optimizing performance. Such systems need to be defined, but they also need to be adaptable because different things motivate different people. A Reward and Recognition System could provide compensatory time for overtime hours worked or paying for a certification test or training. A successful Reward and Recognition System is possible when management follows through on its promises. Breaking your word to you team not only hurts the reward system, but your creditability as a Project Manager as well.

Human Resource Mind Map

Human Resources “Must Knows”

• The Key Inputs, Tools/Processes and Outputs of each process group

• The roles and responsibilities within the Project• The characteristics and differences of Formal, Reward, Penalty,

Expert and Referent power of the Project Manager • The characteristics and differences of Conflict Resolution

techniques• What each level of Maslow’s hierarchy of needs is and what it

overall represents• The principles of a responsibility chart, a Resource Histogram and

responsibility matrix• What perquisites and fringe benefits are, and the differences• The halo and expectancy theories• The principles of McGregor’s theory X and Y management and labor

HR Exercises


• 10.7.4 – Practice test – individual

• 10.7.3 – Matching - individual

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Introduction to Project Management. Welcome Please tell me about you; –Name –Company –Years of...

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