PMP Notes Rajesh Thallam v1.0 (1)

7/28/2019 PMP Notes Rajesh Thallam v1.0 (1)

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Version # Changed By

1.0 Rajesh Thallam

Prepared By: Rajesh Thalla

Prepared On: Dec 14th, 201

Version No.: 1.0For any suggestions to improv

Pleas
mailto:%[email protected]:%[email protected]


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Change Details

Initial version

There are multiple spelling mistakes in the notes. This will be fixed in next version of notes

2

this notes, please email to [email protected]

read "HOW TO USE THIS NOTES" tab before you continue


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READ QUESTIO

CAREFULLY


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S & OPTIONS

! TWICE!!


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HOW TO USE THIS NOTES?

1. Before using this notes, please read PMBOK or Rita's or any book to get fair i

2. Before attempting final exam or any mock test, you can use this test for revis

3. In Table of Contents tab, on the left, you will see PMBOK Pg43 which is the m

that process which explains KEY CONCEPTS, INPUTS, TOOLS & TECHNIQUES a4. On each process, there is a HOME button which will bring you back to this p

5. ITTO Consolidated sheet represents ITTO's of all processes in Excel format. T

use variance analysis or which processes have output as Work Performance Me

6. I have referred couple of websites to clear my doubts on confused topics wh

7. Following topics are "not" covered

* Process management framework and types of organization

* Ethics and responsibility

* Interpersonal Skills (Appendix G in PMBOK)

8. Suggested to read PMBOK or this notes Process Group wise in sequence as

SOURCES

1. PMBOK 4th Ed

2. Rita - PMP Exam Prep

3. Andy Crowe - How to pass PMP in First Try

4. Kim Heldman - Book in PMI reads

5. Christopher Scordo - Mock Tests

6. Some topics are copied from Rajesh Nair Notes on PMZilla.com


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dea

ion

ain area of this notes. If you click on any process it will take you to details on

d OUTPUTSge

is will help you to analyze. If you want to ask question like which processes

asurements etc.

och are listed in separate tab.

ell as Knowledge Area wise in sequence


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Process Group (5)

Knowledge Area (9)

Initiating (2) Planning (20)

.2 Collect Requirements

.3 Define Scope

.4 Create WBS

.5 Define Activities

.6 Sequence Activities

.7 Estimate Activity Resources

.8 Estimate Activity Durations

.9 Develop Schedule

.10 Estimate Costs

.11 Determine Budget

Project Quality Management

(3.12 Plan Quality

.15 Plan Risk Management

.16 Identify Risks

.17 Plan Qualitative Risk Analysis

.18 Plan Quanitative Risk Analysis

.19 Plan Risk Responses

Project Procurement

Mana ement (4.20 Plan Procurements

.1 Develop Project Charter

.2 Identify Stakeholders .14 Plan communications

.1 Develop Project Management

Plan

.13 Develop Human Resource Plan

Project Integration

Management (6)

Project Scope Management

(5)

Project Time Management

(6)

Project Cost Management (3)

Project Human Resource

Management (4)

Project Risk Management (6)

Project Communication

Management (5)


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Executing (8) Monitoring & Controlling (10) Closing (2)

.1 Monitor & Control Project Work

.2 Perform Integrated Change

Control

.3 Verify Scope

.2 Perform Quality Assurance .7 Perform Quality Control

.3 Acquire Project Team

.4 Develop Project Team

.5 Manage Project Team

.6 Distribute Information

.7 Manage Stakeholders

Expectations

.8 Conduct procurements .10 Administer Procurements .2 Close procurements

.8 Report Performance

.9 Monitor & Control Risks

.1 Close Project or Phase

.6 Control Costs

.5 Control Schedule

.4 Control Scope

.1 Direct & Manage Project

Execution


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Important

Project & Process framework

Professional Responsibility

There is not much detail about this topic in this notes. Please

refer Rita's or PMBOK. Will update shortly

Not covered

Excel formatted ITTO for easy navigationITTO Consolidated

Topics Usually Confused

Mock Up Exam Details


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Project

- an endeavour to deliver a unique product or service and

are meant to meet strategic goals

- temporary duration

- undergoes progressive eloboration

- driven by market demands, customer requests, org requirements or

Operations/Ongoing work

- Work that is repetitive and does not have a clearly delineated

beginning and end. This type of work supports ongoing activity and is

usually managed within organizational functions. Its purpose is to

enable an organization to continue operating

- repetitive, required for thrive in business smoothly

e.g. writing expense reports every month, preparing metrics reports,

performance appraisals

If youre building cars on an assembly line, thats a process. If youre

designing and building a prototype of a specific car model, thats a

project

Responsibility of project manager- to meet the objects

- update the project plans with changes

- balance changing demands of project, budgets, scope, schedule

and quality

- balance stakeholders expectations

Sponsor

Typically, a senior executive of the organization or a management

group for which a project is carried out. The sponsor provides

financial resources and is the primary risk taker within the project.

Customer

The person or organization that purchases or uses the product or

service that results from a project.

Organizational culture

The unique nuances of how business is conducted and ways that the

organization operates. The shared values, norms, beliefs,

expectations, policies, procedures, and views of authority that

members of an organization have all make up the organizational

culture. How employees' view authority impacts communication

between the team and the project manager.

HOME


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Functional Organizational structure

- org is grouped by areas of specialization within different functional

areas. Authority is with functional managers.

- Advantages - defined roles, simple reporting structures, cohesive

teams

- Disadvantages - lack of communication and colloboration between

functions, slow decision making due to sharing of mgmt role b/w

project mngrs and functional mgrs, high level of bureaucracy,

competetion of resources, limited project scope

Product

Stage Cost and staffing Uncerta

1. Starting the project Low High

2. Organizing and preparing Increases Decrea

3. Carrying out the work Peaks Decrea

4. Closing the project Decreases Low

Product life cycle stages

1.product inception and development

2.product introduction

3.product growth

4.product maturity

Project L


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Portfolio

A collection of lower-level portfolios, programs, projects, and ongoing

work. The work is grouped to facilitate centralized and effective

management, aimed at meeting strategic objectives. The projects

and other work types in the portfolio may not be directly related.

Program

A group of related projects and operational work. It is managed in a

coordinated way to achieve benefits and a level of control not

possible when managing the work components individually.

CompetenciesKnowledge based comptency - knowledge on PM areas like

integration, procurement, cost, scope, time, quality, risk, human

resources, communication

Performance based competency - comes with experience and set of

skills to manage project

Personality based competency - leadership, ability to get things done,

Vendors

External organizations that supply goods or services required by a

project. Vendors, also known as sellers, are typically suppliers or

contractors that provide material or services for the company.

Business partners have a special relationship with the organization,

often acquired through a certification process.

Hidden Stakeholders

that may not be immediately apparent. Examples are stakeholders in

the physical, cultural, or political environment; future generations;

and members of the organization not directly involved in the project

but affected by the organization's structure and culture.

Organizational structure

How positions and departments are defined, and what the reporting

structure is in an organization. An organization may use a functional,

projectized, or matrix structure. A matrix structure blends functional

and projectized organizations. For example, a company could create

a dedicated project team comprised of members from each functional

department. The project manager is responsible for the team and its

work and has control of project resources.

Project Management Essentials

Portfolios, programs, projects and sub-projects

Stakeholder categories

Organizational influencers


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Projectized Organizational structure

- entire company is organised by projects. The PM has control of

projects. Perssonal are assinged and report to a PM. Team members

only complete the project work and when the project is over, they do

not have a department to go back to.

- Advantages - freq. collaboration, rapid decision making via single

authority, increased organizational focus

- Disadvantages - employees working on many projects at a time, idle

time, relocating employes after proj is completed

ife Cycle

inty Cost of changes

Low

es Increases

es Increases

High

ife Cycle


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Sub-project

Smaller portions of an overall project, created to enable easier

management. Sub-projects may be called projects, but they're really

smaller parts of a whole.

- A project may or may not be part of A program, but A

program will always have projects.

- Portfolios are organized around business goals and

Programs are organized around A shared benefit in

managing them together.

Project team

The people responsible for conducting a project. The project

manager is the person who is authorized to manage a project.

Project team members are the people who perform the work of a

project.

Organizational process assets

Project-related documents or data from previous work that can be

used to improve the current project or facilitate project management.

They include the plans, policies, procedures, and guidelines that may

influence a project's success. They also include knowledge assets.

Plans, templates, policies, and "lessons learned" databases can help

the project manager complete tasks quickly and improve quality by

avoiding mistakes made in the past


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Matrix Organizational structure

- Team member reports to two bosses, the Project Mgr and the

Functional Mgr

- Share responsibility and authority between the two.

- As compared to functional org, there would be improved Proj Mgr

control over the resources and better horizontal & vertical

dissemination of information.

- Project life cycle can exist independent of product life cycle

- Project life cycle can run concurrently with product life cycle or form

part of product life cycle

- A single product life cycle can consist of many multiple Project life

cycle

- A product life cycle can completed during A single-phase Project


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INPUTS

.1 Project Statement of Work

.2 Business Case

.3 Contract

.4 Enterprise Environmental Factors

.5 Organizational Process Assets

TOOLS & TECHNIQUES

.1 Expert Judgment

OUTPUTS

.1 Project Charter

Develop Project Charter

(Initiating)

KEY ASPECTS

* Involves developing a document that formally authorizes a project or phase and documenting initial requirements that satisfy

stakeholders needs and expectations

* Approved project charter formally initiates the project

* PM is assigned as early in the project, preferably while project charter is being developed and prior to start of planning

* Recommended - PM to participate in the development of project charter as it provides PM authority to apply resources to

project activities

* Projects are authorized by external to project such as sponsor, PMO, portfolio steering committee

* Project sponsor is responsible for creating project charter and sponsor funds the project

* Project initiator or sponsor will either create the project charter or delegate to PM. The initiator's signature on the charter

authorizes the project. This triggers the creation of needs analysis, business case or situation that the project will address

* Involves meeting with stakeholders, define high level objectives, constraints, assumptions and risks to assess feasibility of

project within the given constraints

* Project Charter does NOT NEED to change as the project progresses. Any change into project charter should raise question

whether it should continue?

INPUTS

.1 Project Statement of Work

* SoW is description of products or services to be delivered by the project. It references business need (market demand,

tech advance, legal), product description (characteristics of product or service to be delivered), strategic plan (org strategic

goals)

* Internal projects - SoW is prepared by project sponsor/initiator

* External projects - SoW is received from customer/buyer in the form of request for proposal (RFP), request for

information (RFI) or as part of contract

.2 Business Case

* A document that provides details on why project is worth the required investment

* Includes cost-benefit analysis to justify the project

* For external projects, requesting organization/customer/buyer will write the business case

* PM should know why the project was selected and project selections are "not" done by PM.

Refer Project Selection methods

.3 Contract

* When the work is done for external org, contract would be input for seller to write project charter with a view to increase

Project Selection

HOME


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TOOLS & TECHNIQUES

.1 Expert Judgment

* Assess the inputs used to develop project charter on technical and management details during the process

OUTPUTS

.1 Project Charter

Input for ---> Develop Project Management Plan;; Collect Requirements;; Define Scope;; Identify

Stakeholders;;

* Project Title/Description

* Project Manager Assigned & Authority Level (who is given authority to lead the project and can PM determine, manage,

and approve changes to budget, schedule, staffing)

* Business Case (why this project is being done? With Justification)* Resources pre-assigned (How many or which resources will be provided)

* Stakeholders (who will affect or affected by the project)

* Stakeholder requirements (req. related to product/project scope)

* Product description/deliverables (end results)

* Measurable project objectives (summary milestone/summary budget)

* Project Approval Requirements (acceptance criteria for project success and who decides success and who signs off the

project)

* High Level project risks

*


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PROJECT SELECTION METHODS

* PM is typically "not" involved in project selection. But the process used by company to select the project will influence how

PM will plan and manage the project

* Two categories of project selection methods -

1. Benefit Measurement Methods (Comparative Approach/ Decision Models) - Murder board, peer review, economic models,

scoring methods

2. Constrained Optimization Methods (Mathematical Methods/Calculation Approach) - Linear programming, non-linear

programming, dynamic programming, multi-objective programming

* Economic Models

* Present Value (PV) -A dollar today is worth more than a dollar tomorrow. e.g. If project is expected to produce $300Kin three yrs then the PV is going to be less than $300K. Reason is you wont get your $300K until 3rd yr but if put $300K in

bank today and after 3 yrs you would end up more than $300K. Bigger PV makes project attractive

PV = FV / (1 + r)n FV= future value, r = interest rate, n = # of time periods

* Net Present Value (NPV) - Same as PV except that costs also factor in. E.g. If you constructed building with PV $500K

and total cost was $350K then NPV is $500K - $350K = $150K. Bigger NPV makes project attractive

* Internal Rate of Return (IRR) - Bigger IRR is better


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INPUTS

.1 Project Charter

.2 Outputs from planning processes



TOOLS & TECHNIQUES

.1 Expert Judgment

OUTPUTS

.1 Project Management Plan

INPUTS

.1 Project Manage

.2 Approved Chang

.3 Organizational P

.4 Enterprise Envir

Develop Project Management Plan

(Planning)

KEY ASPECTS

* Process of documenting the actions necessary to define, prepare, integrate and coordinate all subsidiary plans

* Proj Mgmt Plan (PMP) defines how project is executed, monitored and controlled, and closed. It varies depending on the

application area and complexity of the project.

* PMP is developed through a series of integrated processes until project closure. This results in a PMP that is

progressively elaborated by updates and controlled and approved through the Perform Integrated Change Control process

* It would be approved by * The Project Manager, * The Project Sponsor, * The Functional Manager who are

providing resources for the project. (for the exam we will do much better to think of the Project Management Plan as

always being DETAILED).

* Exam: If the exam asks what to do when a project deviates significantly from established baselines, the correct answer is

likely the one about reviewing the projects risk mgmt process. Deviations from baselines are often due to incomplete

identification of risks and risk management.

* Configuration Management System and Change Control System are part of PMIS i.e. enterprise environmental

factors

* What to do when you encounter a change.

* You always begin dealing with change by consulting the project management plan.*

INPUTS

.1 Project Charter

Input from ---> Develop Project Charter

.2 Outputs from planning processes

* PMP has management plan from every knowledge plan and also following plans

Requirement Management Plan: How to identify, analyze and document the requirements and how req. will be

managed and controlled throughout the project

Change Management Plan: How changes will be managed and controlled, change control procedures, approval levels

for authorizing changes, creation of change control board, org tools to track the changes

Configuration Management Plan: Defines how to manage changes to deliverables and resulting documentation

(version of scope, cost, schedule components) and org tools to used for this effort

Process Improvement Plan: Identify existing processes and may create or improve some processes


* Govt or industry standards, PMIS, org structure and culture, infrastructure, personnel admin (hire/fire/perf reviews)


* Standardized guidelines, work instructions, PMP template, change control procedures, project files past projects

KEY ASPECTS

* Process of perfo

* Activities include

* Create project

* Staff, train an

* Obtain, mana

* Implement pla

* Establish and

* Generate proj

* Issue change

* Manage risks

* Manage seller

* Collect and do

* Work performan

* Anothe impor

* This informat*

INPUTS

.1 Project Manag

Input from ---

.2 Approved Cha

Input from ---

* Perform Integ

* Approved cha

policies, procedure

* Approved cha

* They may req

.3 Enterprise En

* Org structure,

scheduling softewa

other online autom

.4 Organizationa

* Standardized

*

HOME HOME


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TOOLS & TECHNIQUES

.1 Expert Judgment

* Improve current processes to project needs, develop tech/mgmt details, determine resource and skill levels, level of

configuration mgmt, project documents subjected to formal change control process

OUTPUTS


Input for ---> All Executing, Monitoring & Controlling and Closing process groups

* PMP is consolidation of subsidiary management plans and baselines from planning processes

* PMP contains scope, cost, schedule baselines. Scope baseline is Proj scope stmt + WBS + WBS Dictionary

Together these baselines are called Performance Measurement Baseline which are part of PMP and used for keeping

track of them as they change.

* Once a project management plan is baselined, it may only be changed when a change request is generated and approvedthrough Perform Integrated Change Control process

* Performance measurement baseline in PMP is used for eanred value measurements

* The SCOPE mgmt plan, the SCHEDULE mgmt plan, the COST mgmt plan, the CHANGE mgmt plan, and the

CONFIGURATION mgmt plan are created right here.

TOOLS & TECHN

.1 Expert Judgm

* Expertise is pr

* Additional exp

.2 Project Manag

* It can include

Project Manageme

OUTPUTS

.1 Deliverables

* Approved deli

to complete a proc

.2 Work Perform

* Deliverable st

* Your job is to

your team perform.3 Change Reque

* Requests for a

* These can inc

documents)

.4 Project Manag

.5 Project Docum

* Updates to re


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TOOLS & TECHNIQUES

.1 Expert Judgment

.2 Project Management Information

System

OUTPUTS

.1 Deliverables

.2 Work Performance Information

.3 Change Requests

.4 Project Management Plan Updates

.5 Project Document Updates

INPUTS


.2 Performance Reports



TOOLS & TECHN

.1 Expert Judgmen

Monitor & Con

(Monitoring

KEY ASPECTS

* Process of tracking, reviewing and regulating progress to m

* Monitoring is performed throughout the project which inclu

and assessing measurements and trends to effect prcoess im

* Control includes determining corrective or preventive action

actions taken resolved the performance review


* Compare actual performance against PMP

* Assess performance and recommend corrective/preventi

* Identify, track new risks and monitor existing risks

* Provide info to support project status, reporting

* Providing forecasts to update current cost and schedule

* Monitoring implementation of approved changes as they

INPUTS


Input from ---> Develop Project Management Plan

.2 Performance Reports

Input from ---> Report Performance

* Performance reports include current status, milestones/m


* Govt or industry standards, company work authorization


* Organization communication requirements

* Financial procedures (time reporting, expenditure and dis

* Issue and defect management procedures

* Risk control procedures (risk categories, probability defin

* Process measurement database

* Lessons learned database

Direct & Manage Execution

(Executing)

n the project management plan to achieve project objectives

s

aterials, tools, facilities)

dards

channels

hedule, technical and quality progress

oved changes

onses activities

and implement approved process improvement activities

cess apart from deliverables

tatus of the deliverables and what has been accomplished.

nagement Plan

Change Control

ocess updates change request status as approved or rejected

umented, authorized changes to expand or reduce the scope. They can also modify

schedules

led for implementation by project team

ntive or corrective actions

l administration, stakeholder risk tolerances, PMIS (Automated tool suite such as

anagement system, information collection and distribution system, web interfaces to

ructions

HOME


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TOOLS & TECHNIQUES

.1 Expert Judgment

* Project management team provides expertise to interpre

* PM, along with team, determines actions to ensure perfo

OUTPUTS

.1 Change Requests


* Management Plans - Schedule, Cost, Scope, Quality

* Baselines - Scope, Schedule, Cost Performance


* Forecasts, performance reports, issue log

anagement team using specialized knowledge/training

takeholders, professional and technical associations

ystems (PMIS)

ated systems used together, integrate and disseminate the outputs of the Develop

d verifiable product, result or capability to perform a service that must be produced

costs incurred

need to do more than deliver the results. You also need to keep track of how well

ork performance information output is about

ternal, direct/indirect, optional/legally mandated

reventive actions, defect repairs and updates (changes to fomally controlled

takeholder register, risk register, project logs (assumption/issues etc.)


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OUTPUTS

.1 Change Requests



INPUTS



.3 Change Requests



TOOLS & TECHNIQUES

.1 Expert Judgment

.2 Change Control Meetings

OUTPUTS

.1 Change Reques

.2 Project Manage

.3 Project Docume

Perform Integrated Change Control

(Monitoring & Controlling)

KEY ASPECTS

* Process of reviewing all change requests, approving changes and managing changes to deliverables, o

project documents and project management plan

* Conducted from project inception to completion

* PMP, scope statement, other deliverables are maintained by carefully managing changes (approving/re

approved changes are incorporated into the revised baseline


* Influencing factors that bypass integrated change control so that only approved changes are implem

* Reviewing, analyzing, approving change requests promptly

* Managing the approved changes

* Maintain integrity of baselines by releasing only approved changes

* Review, approve, deny recommended corrective and preventive actions

* Coordinating changes across the project

* Documenting complete impact of change requests

* Corrective and Preventive Actions do not normally effect the Project Baselines, only the performance a

* Project Manager is given authority to approve certain types of change requests. Whenever required, C

INPUTS



* Contains subsidiary plans and the baselines against which actual will be compared (i.e. planned deli

from actual, a change request need to be submitted and approved and may lead to updated plan)


Input from ---> Direct & Manage Project Execution

* Project deliverable status/schedule progress/cost-to-date and when they are deviated from planned

corrective action

.3 Change Requests

Input from ---> Verify Scope;; Control Scope;; Control Costs;; Control Schedule;; Perform

Assurance;; Perform Quality Control;; Manage Team;; Monitor & Control Risks;; Administer

Manage Stakeholder Expectations;; Report Performance;; Plan Procurements;; Conduct Pro

and Manage Project Execution;; Monitor & Control Project Work

* Direct and manage project execution - Project team find an efficient way to implement tasks and so

* Manage and control project work process - Corrective action after analyzing work performance info

ctives defined in PMP

an distributing performance information

wing upon action plans to determine if

forecast, issues, scheduled activities

tolerances, PMIS

aility and impact matrix)

HOME


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TOOLS & TECHNIQUES

.1 Expert Judgment

* In addition to project team's expertise, stakeholders may be asked to provide expertise and sit on C

.2 Change control meetings

* Change control board reviews change requests and gives project manager level of authority (high/lo

requests

* Roles & responsibilities of CCB is clearly defined and agreed upon by all stakeholders

* All CCB decisions are documented and communicated to stakeholders for info and follow up

* Control board approves/rejects/on hold changes depending on feasibility of scope and impact to the

* Feasible - When project baseline can be adjusted without affecting projects performance beyond* Within Scope - If change request does not impact project performance baselines

OUTPUTS

.1 Change Request Status Update

* If Change request is not feasible

* Reject the change request and ask for additional info

* Update change control log, change request status

* Change request is feasible and within scope

* Update change control log, change request status, subsidiary plan

* Change request is feasible and out of scope* Update change control log, change request status, project documents, forecast, performance bas

* Change request status - Approved/Rejected/Pending - will be updated in change request log and ap

implemented during Direct & Manage Projet Execution process


* When change effects scope of a project, PM Plan must updated to reflect the changes in performan

subsidiary plans

e.g. Cost overrun due to supplier change will require changes to budget plan and procurement plan

* Changes to baseline should show only changes from current time forward. Past performance may n

y monitor and control processes

ectations


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Configuration Management

* Configuration management is an overall system of which change control system is a part.

* Configuration mgmt provides tools to control project changes.

Features

* Ensure version control

* Product documentation version control

* Project management documentation version control* Only approved changes are version controlled

Why version control required?

* Prevent version related errors

How configuration management is helps to implement change control process? (Principles)

* Identify characteristics of change

* Controllin chan es - Track current status to either a rove or re ect chan e re uest

Involves Review, Approve and Manage changes to project deliverables, plans and processes

How changes be implemented? (Principles of change control process)

* Prevent the root cause for changes

* Identify method to identify changes early

* Daily status from team

* Meeting with customer or stakeholder

* Online sources for environmental, technical or legal changes

* Look at impact of the change

* Change control logs or issue logs

* Create a change request* Perform Integrated Change Control

i. Asess the impact

* Understand what led to change - customer demand, legislation change or technical defect so o

* Impact of change - Scope, cost, schedule and quality

* Should change go ahead? Benefits increase or decrease for project completion?

ii. Create options - are created based on crashing, fast tracking, reestimating..etc


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INPUTS


.2 Accepted Deliverables


TOOLS & TECHNIQUES

.1 Expert Judgment

OUTPUTS

.1 Final Product or Service or Result

Transition

.2 Organizational Process Asset

Updates

Close Project/Phase

(Closing)

KEY CONCEPTS

* Involves finalizing all activities across all of the proj mgmt process groups to formally complete the project or phase

* Since project scope is measured against project mgmt plan, PM will review that document to ensure completion before

project is closed

* This process also establishes procedures to investigate and document the reasons for actions taken if a project is terminated

before completion

* Activities Involved

* Acceptance of deliverables - acceptance criteria laid out as by corporate guidelines

* Transfer of project's products, services, results to the next phase or to production and/or operations

* Administrative closures - Customer sign off, lessons learned (using Expert Judgment technique)

* Assessing project success - Compare actual results with the planned results defined in project mgmt plan

* To answer questions such as Was project delivered on time and budget? Was the quality acceptable? How well project

team performed? How many revisions were there to project?

* Performing audits or project post-mortem

* Written survey

* Closing meetings*INPUTS



* Compares actual results to the performance baselines outlined in the plan -

* Performance baselines - scope, schedule (whether delivered on time), budget (project expenses within limits) & risks

.2 Accepted Deliverables

Input from ---> Verify Scope


* Company guidelines for closure, audits, subcomponent validations

* Historical information and lessons learned database (project records and documents, project closure information, info

about the results of previous project selection decisions, performance information, risk management effort)

HOME


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TOOLS & TECHNIQUES

.1 Expert Judgment

* Experts ensure project/phase closure is performed as per standards

OUTPUTS

.1 Final Product, Service or Result Transition

* Transition of deliverables - Formal sign off, official transfer of product/service to next body/person, notify relevant

stakeholders

* The final product, service, or result is concerned with obtaining formal acceptance; organizational process assets involves

documenting and archiving formal acceptance.

* Another function of signoff is that it kicks off the beginning of the warranty period (if applicable)

.2 Organizational Process Asset Updates* Project Files - e.g. PM plan, scope/cost/schedule baseline, risk registers, planned risk response actions, project calendars,

risk impact assessment

* Project or Phase Closure documents

* Formal acceptance document, sign offs, transfer phase/project deliverables to Operations

* During project/phase closures, PM reviews prior phase documentation, customer acceptance from verify scope process

and contract (if applicable) to ensure that all project requirements are complete prior to finalizing the closure of the project

* Historical information

* Sign off documents

*


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ADDITIONAL NOTES

* Probability of completing the project is highest during closing and risk is lowest. Majority of the work is completed - if not all

of the work - so the probability of not finishing the project is very low.

* Stakeholders have the least amount of influence during the Closing processes, while project managers have the greatest

amount of influence. Costs are significantly lower during this process because the majority of the project work and spending

has already occurred

* Weak matrix organizations tend to experience the least amount of stress during the Closing processes. This is because, the

functional manager assigns all tasks (projectrelated tasks as well) so the team members have a job to return to once the

project is completed and there's no change in reporting structure.

* Projects come to an end for several reasons:* They're completed successfully.

* They're canceled or killed prior to completion.

* They evolve into ongoing operations and no longer exist as projects.

* Four formal types of project endings exist

*Addition: Projects that evolve into ongoing operations are considered projects that end because of addition; in other

words, they become their own ongoing business unit i.e. Operations

* '* Exam:Remember that product verification, which determines whether all of the work of the project was completed correctly

according to the contract or other procurement terms and satisfactory according to stakeholder expectations, is performed

during the Closing processes. Product documentation is verified and accepted during the Verify Scope process. One more note:

when projects end prematurely, the Verify Scope process is where the level of detail concerning the amount of work completed

gets documented.


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Understanding Project Scope

* Scope is work required to complete deliverables

* Scope is like boundary around project - inside boundary is "within scope" and outside boundary is "out

* Project scope is based on product scope and is all of the work that needs to be done to make the prod

* Product scope is defined by components, functions and features

* Scope changes always have cost/quality/schedule implications

* Processes uses to manage scope as well as supporting tools/techniques vary by application area and

as part of the project life cycle

* Scope baseline = Approved project scope statement + WBS + WBS dictionary. This base

monitored, verified and controlled throughout the lifecycle of the project

* Exam: The project scope management plan is a planning tool that documents how the project team w

defining project scope, how the work breakdown structure will be developed, how changes to scope wil

and how the work of the project will be verified and accepted. Scope management plan is a subsidiamanagement plan and created during Develop Project Management Plan process.

* Exam: Scope management involves managing both product and project scope

* Exam: Give priority to the customer

* Scope Creep

* Scope creep is what happens when scope changes are not detected early enough or managed

* Refers to how small, slow and often unpredicted changes can "creep" unnoticed or be ignored becau

project scope is not realized

* This happens when you think you know the impact of a change so you go ahead, but it turns out tha

leads to another one, and since you are already making the first change, you go with the next. Then ano

comes up, and another, and another, until its hard to tell what the scope of the project is.

* Causes of scope creep

* Unexpected scope related issues: Changes project requirements or raise its complexity* Perfectionism: Adding extra features than required causes change in scope and may end up costing

and money

* Placating stakeholders

* Misunderstandings: Especially careful to avoid ambiguity or unclear statements.

* Ramblings from Questions

Project Scope Management Processes

* Collect requirements (Planning Process Group)

* Investigate, define, document stakeholders needs and

* Expectations about project and about products features and functions

* Define Scope

* Involves creating project scope statement that defines work required to deliver product and service

( Elaborates on project deliverables, assumptions, constraints for a project (used throughout the pro

* Create WBS

* WBS subdivides each task into smaller, manageable work packages

* Execution stage of project relies heavily on WBS

* Control scope

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Understanding Time Management Processes

* Where does time management processes fall in the planning activities?

1. Define scope documents

2. Plan resources

3. Plan schedule

4. Plan cost

* Triple constraint model can be used to determine what changes need to be made

* Schedule management plan is created during Develop Project Management Plan, which selects a scheduling methodology,

scheduling tool, sets the format and establishes criteria for developing and controlling the project schedule

Which tool to use?

. Depends on complexity of project, unknowns, potential risks, dependencies among the deliverables

Small to medium project

. Decompose all work packages during planning stage.

. Not required on this type of project.

. Use standardized template based on similar projects.

. No external subject matter experts required. Use project manager and team's own expertise.

Medium to large project

. Decompose known, low-risk work packages during planning stage. Leave unknown work packages and those with

preceding . dependencies to be decomposed later.. Use rolling-wave planning on later-occurring work packages.

. Use standardized template based on similar projects.

. Use judgment from external experts to understand unknowns, dependencies, unfamiliar aspects of the project.

* Define Activities

Decomposing the work packages into activities. First you come up with a list of all of the activities that will need to be

completed.

* Sequence Activities

Determining the order the activities need performed in. Next, you figure out which activities need to come before others

and put them in the right order. The main output here is a network diagram, a picture of how activities are related.

* Estimate Activity Resources

Finding out the quantities and types of resources needed for the activities. Estimate the resources youll need to do the job,

and create a list of them...* Estimate Activity Durations

Determining how long the activities will take. ...and then estimate the time it will take to do each activity.

* Develop Schedule

Creating the project schedule. Then you build a schedule from all of the estimates, and the resource and activity

information youve created.

* Control Schedule

Monitoring the schedule and influencing the factors that can lead to schedule changes. Finally, you monitor and control


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INPUTS

.1 Scope Baseline



TOOLS & TECHNIQUES

.1 Decomposition

.2 Rolling Wave Planning

.3 Templates

.4 Expert Judgment

OUTPUTS

.1 Activity List

.2 Activity Attributes

.3 Milestone List

Define Activities

(Planning)

KEY ASPECTS

* Closely linked to WBS

* It takes work packages defined in WBS and breaks them down to activities so that it is better able to estimate duration,

schedule them and monitor and control their progress

INPUTS

.1 Scope baseline

Input from ---> Define Scope

* consists of project scope statement, WBS and WBS dictionary

* This has following information that helps in defining activities

* Work packages (deliverables) and their activities

* Dependencies and relationships between the packages

* Project assumptions and constraints

.2 Enterprise environmental factors

* PMIS

.3 Organizational process assets

* Formal/Informal activity planning related policies* Lessons learned

TOOLS & TECHNIQUES

.1 Decomposition

* Decompose work packages (defined in WBS) into activities for estimating purposes and list them in activity list

.2 Rolling-wave planning/ progressive elaboration

* Decompose WBS in stages based on information needed or available at the time

* Work packages to be completed in near time are broken into activities, sequenced and added to schedule while work

packages to be completed in future remain temporarily at work package or mile stone level

.3 Templates

* Standard activity list from previous project is often used as a template for new project* Templates can also be used to identify typical schedule milestones

.4 Expert judgment

* Important if you do not have prior experience in handling this kind of project (can be internal or external judgments)

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OUTPUTS

.1 Activity List

Input to ---> Sequence Activities;; Estimate Activity Resources;; Estimate Activity Durations;; Develop

Schedule

* A table that links an activity to work package in WBS and briefly describes work required for the activity

* 2 roles - track activities, describe activities


Input to ---> Sequence Activities;; Estimate Activity Resources;; Estimate Activity Durations;; Develop

Schedule* Similar to activity list but with additional attributes than defined in activity list. These attributes depend on nature of the

project and how project manager feels to describe the activities

* Serves two functions - sequencing activities and help team members to carry out the activities

* Attributes used in sequencing activities are - predecessor activities, successor activities, logical relationships, leads and

lags, imposed dates

* Attributes that help team members to carry out activities are resource req., locations, effort, constraints and assumptions

.3 Milestone List

---


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INPUTS

.1 Activity List

.2 Activity List Attributes

.3 Milestone List

.4 Project Scope Statement


TOOLS & TECHNIQUES

.1 Precedence Diagramming Method

.2 Dependency Determination

.3 Apply Leads and lags

.4 Schedule Network Templates

OUTPUTS

.1 Project Schedule Network Diagram


Sequencing Activities

(Planning)

KEY ASPECTS

* To identify logical relationship between the activities and develop a realistic schedule

* To represent sequence of activities and their dependencies, you create a project schedule network diagram

* Sequencing activities involves determining the dependencies and relationships between activities and applying leads and lags

* There are two types of Network Diagrams:

*Arrow Diagramming Method (ADM) - Creates diagrams known as activity-on-arrow (AOA). This is because ADM

diagrams use activities shown on arrows and connected by nodes, usually shown as circles. ADMs drawback is that it can only

show finish-to-start (FS) relationships. In order to show relationships between tasks on different node branches, ADM diagrams

use dummy activities.

* Precedence Diagramming Method (PDM) - Refer below

INPUTS

.1 Activity list

Input from ---> Define Activities

.2 Activity attribute list


* Activity attributes may describe necessary sequence of events or defined predecessor/successor relationships

.3 Milestone list


.4 Project scope statement


* Product scope description includes product characteristics that may affect activity sequencing

* This info is already captured on activity list but is generally reviewed from project scope statement for accuracy.5 Organizational Process Assets

* Old schedule network diagrams can be helpful in creating good quality diagrams for the current project

* Description of scheduling methodology used and how dependencies were determined

TOOLS & TECHNIQUES

.1 Precedence diagramming method

* Used in critical path methodology (CPM) for constructing project schedule network diagram

* Also called Activity-On-Node (AON) - used by most PM software packages

* PDM has 4 types of logical relationships or types of dependencies

* Start to start - Activity A must start before activity B can start. E.g. without having begun filming on a documentary

(A), you would be unable to start the editing process (B).

* Start to finish - Activity A must start before activity B can finish. E.g. you can't start running a new operating system

on your computer (B) until you stop using your old system (A). This is not commonly used* Finish to start - Activity A must finish before you can begin activity B. E.g. you would have to put together computer

hardware (A) before programming software (B). This is the most common type of relationship.

* Finish to finish - Activity A must finish before activity B can be completed. E.g., the activity of editing a manuscript

can't be finished (B) until all the text has been written (A)

.2 Dependency Determination

* Types of dependency - mandatory, discretionary, external

* Mandatory Predecessors (hard logic) -

* -

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OUTPUTS

.1 Project Schedule Network Diagrams

Input to ---> Develop Schedule

* Allows to create realistic project schedule and monitor this as work proceeds


* Updates to activity list, activity attributes, risk registers based on any new information gathered during the process


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INPUTS

.1 Activity List


.3 Resource Calendars



TOOLS & TECHNIQUES

.1 Expert Judgment

.2 Alternatives analysis

.3 Published Estimating Data

.4 Bottom-up Estimating

.5 Project Management Software

OUTPUTS

.1 Activity Resource Requirements

.2 Resource Breakdown Structure


Estimating Activity Resources

(Planning)

KEY ASPECTS

* Determine resources needed to complete project i.e. material, people, equipment and facilities and gathering information

needed to create a realistic schedule and budget

* Types of resources

* Quantity of resources

* Required skill sets

* Project team roles and availability

* Closely coordinated with Estimate Costs Process

INPUTS

.1 Activity list


* Identifies activities which will need resources

.2 Activity attributes


* Contains input for use in estimating resources required for each activity

.3 Resource calendar

Input from ---> Acquire Project Team;; Conduct Procurements

* Human resources, material resources, skill resources calendars

* The process of estimating the type and quantities of material, people, equipment, or supplies required to perform each

activity. Before you can assign resources to your project, you need to know which ones youre authorized to use on yourproject. Thats an input, and its called Resource Calendars.

* Resource Calendars specify WHEN and HOW LONG identified project resource will be available during the project.

.4 Enterprise environmental factors

* Resource availability and skills

TOOLS & TECHNIQUES

.1 Expert judgment

* Any group/person with specialized knowledge in resource planning and estimating can provide such expertise

.2 Alternatives analysis

* Alternate ways to schedule activities - determine best possible use of resources, different size or type of machines,

different tools (hand vs. automated), make-or-buy decisions regarding resource etc.

* Quantify what resources are required

.3 Published estimated data

* Published updated rates and unit costs of resources* This data can give you frame of reference to work from when resources are being quantified

.4 Bottom-up estimating

* When an activity cannot be estimated with a reasonable degree of confidence the work within the activity is decomposed

into more detail. The resource needs are estimated

* Used when project is new and there are no previous estimated data

* More accurate, slower to carry out, more costly

.5 Project management software

*

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OUTPUTS


Input to ---> Estimate Activity Durations;; Develop Schedule;; Develop Human Resource Plan;; Plan

Procurements

* Describes types and quantities of resources needed for each project activity

* Contains information - Resource description, number required, resource assumptions, resource availability, resource

dependencies, basis of estimates

* Recording resource assumptions is important as they can help during different stages of a project - Monitoring &

controlling performance, closure* Review assumptions is important to determine whether anything in the project or env changed since the estimates were

made

* Record resource requirements

.2 Resource breakdown structure

* Hierarchical representation of resources required in project

* Visually simple, breaks resources into categories and resource type

* Helps to organize a project schedule and report on utilization information


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INPUTS

.1 Activity List







TOOLS & TECHNIQUES

.1 Expert Judgment

.2 Analogous Estimating

.3 Parametric Estimating

.4 Three Point Estimates

.5 Reserves Analysis

OUTPUTS

.1 Activity Duration Estimates


INPUTS

.1 Activity List


* Activities for which duration will be estimated. Activities within scope should appear on this list



* They describe req. or limitations on specific activities, assumptions & constraints on location and timing of activities. These

factors affect duration estimates


Input from ---> Estimate Activity Resources

* Resources assigned to the activity and their availability will significantly influence the duration of estimates

.4 Resource CalendarInput from ---> Conduct Procurements, Acquire Project Team

* Resource availability, capabilities and skills make the difference in estimates



*TOOLS & TECHNIQUES

.1 Expert Judgment

* Expert judgment with historical info can provide duration estimate info or recommended max activity durations from prior

similar project

* Also determines whether to combine methods of estimating and how to reconcile differences b/w them


* Also known as top-down estimating

* Uses parameters such as budget, duration, size, weight and complexity from prev project and relies on actual duration of

previous similar projects for estimating duration of current project* Gross value estimating approach, sometimes adjusted for known differences in complexity

* Frequently used to estimate project duration when there is limited info about the project (like in early phases)

* Less costly and less time consuming and less accurate

* Combines expert judgment with historical info from similar projects completed in past

* Applies to entire project or segment of a project and used in conjunction with other estimating methods


* Statistical relationship between historical data and other variables to calculate estimate for activity parameters

* -

Estimating Activity Durations

(Planning)

KEY ASPECTS

* Process of estimating number of work periods (activity duration) required to complete individual activities with estimated

resources

* Uses activity scope of work, resource types, resource quantities and resource calendars

* The inputs for activity duration originate from person or group on the project team who is most familiar with the nature of

work

* Effort = Amount of labor invested in activity. Usually expressed as staff hours, staff days, or staff weeks

Duration = How long an activity is expected to take with the available labor. Usually expressed as workdays or workweeks

* Activity Durations Estimates show calendar time and not just person-hours

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OUTPUTS


Input to ---> Develop Schedule;; Identify Risks

* Show how much time is required for each activity

* Does not include lags/leads

* May include range of possible results. E.g: 2 weeks +- 2 days or 15% of probability of exceeding 3 weeks


* May require changes to activity attributes or assumptions made in developing activity duration estimate


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INPUTS

.1 Activity List


.3 Project Schedule Network Diagrams







TOOLS & TECHNIQUES

.1 Schedule Network Analysis

.2 Critical Path Method

.3 Critical Chain Method

.4 Resource leveling

.5 What-if Analysis

.6 Applying Leads and Lags

.7 Schedule Compression

.8 Scheduling Tool

INPUTS

.1 Activity List


* List of activities to be performed to complete the project



* Details how and when activities need to be performed


Input from ---> Estimate Activity Resources

. Describes types and quantities of resources required to complete an activity


Input from ---> Define Scope. Develop project schedule process uses assumptions and constraints listed in scope

schedule


Input from ---> Acquire Project Team;; Conduct Procurements

TOOLS & TECHNIQUES

.1 Schedule Network Analysis

* Employs various analytical techniques - CPM, Critical Chain Method, What-If analy

and late start and finish dates for uncompleted portions of project activities

.2 Critical Path Method

* Calculates theoretical Early/Late Start and Finish dates of each activity without reg

* Longest full path linking activities that must be performed in sequence is known a

. Together, estimated durations of activities on this path represent shortest time in

* Critical paths have Zero or negative total float and schedule activities on critical pa* A delay in any one of the critical path activities will cause the entire project to be

.3 Critical Chain Method

* Modifies project schedule to account for limited resources. After critical path is ide

resourced limited schedule result is determined. The resulting schedule often has alter

* This resource constrained critical path is known as critical chain

* This method adds duration buffers - Project buffers added at the end of critical ch

project from slippage. Feeding buffers placed at each point that a chain of dependent t

(Planning)

KEY ASPECTS

* Project schedule co-ordinates activities,

* Helps manager optimize use of resources

* Provides baseline against project progress can be tracked and

* Serves as communication tool

* Project schedule consists of activity identifier, activity description, resources, calenda

(duration bars, data date line, precedence arrows)

HOME

CPM... Click here


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Critical Path method

* Critical Path: Longest duration path through a network diagram and determines sh

project

* Near Critical Path: The closer in length near critical path and critical path, more ris

both the critical paths.* Total Float/Slack: Amount of time an activity can be delayed without delaying the

* Free Float/Slack: Amount of time an activity can be delayed without delaying early

Free float = ESsuccessor - ( ESpredecessor + DURATIONpredecessor )

* Project Float/Slack: Amount of time project cen be delayed without delaying exte

customer/management.

*Activities on critical path have ZERO or negative total float

* Three steps

* Forward pass: Determines early start and early finish dates for all activities

* Backward pass: Determines late start and late finish dates for all activities

* Float: Difference between early start & late start or early finish & late finish is defi

Float = LS - ES or Float = LF - EF

*

OUTPUTS

.1 Project Schedule

* can be represented in below formats

* Milestone charts

* Represents only key events of a project

* Milestones are identified during define activity process which produces mileston

* Each milestone has zero duration and called milestone activity

* Detailed information about milestone - activity id, activity description, duration,

* Milestone chart provides quick way to check project progress in term of signific* Audience for this format is management, customer and project manager for mo

* Bar charts | Gantt Charts

* Activity is represented by duration bar

* Schedule information rolled up to level of main deliverables (level 2) in WBS

* Each activity is represented by a horizontal bar and width of bar represents esti

shows how much activity is completed

* A vertical dotted date line represents as of date for the progress reported in the

* -


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OUTPUTS

.1 Project Schedule

.2 Schedule Baseline

.3 Schedule Data


INPUTS


.2 Project Schedule



TOOLS & TECHNIQUES

.1 Performance Reviews

.2 Variance Analysis

.3 Resource Leveling

.4 What-if Scenario Analysis

.5 Applying Leads and Lags

.6 Scheduling Compression


.8 Scheduling Tools


KEY ASPECTS

* Determine current status of the project schedule

* Influence the factors that cause changes - being proactive and using preventive me

* Having Monitoring system that alerts project manager whenever a change threaten

* Managing changes by putting them through project's change control system

* Control Schedule is component of Perform Integrated Change Control process

* Important: Not all schedule variances will impact the schedule. For example, a dela

the overall schedule and might not need corrective action. Use caution here, though

task or its duration is increased for some reason, that task can actually become part

tasks will always cause delays to the project completion date and require corrective a

INPUTS



* Two areas - schedule baseline and schedule management plan

* Schedule baseline contains baseline start and finish dates and provides basis of

performance

* Schedule mgmt plan describes circumstances in which schedule changes are allo

made. After scheduled change requests are approved, they become another input of

.2 Project Schedule

Input from ---> Develop Schedule

* Latest version of schedule for updates, completed activities and started activities

.3 Work Performance InformationInput from ---> Direct and Manage Project Execution

* How much work has been performed?

* Provides actual dates and durations of the activities

* Compare with baseline dates and durations

TOOLS & TECHNIQUES

* To bring performance back in line with schedule and change schedule to match wit

Monitoring performance


* Measure and analyze schedule performance i.e. actual start and finish dates, per

* Using schedule network diagrams to assess performance allows to determine wh

* SV/SPI from EVM are used to assess magnitude of schedule variations

* If critical chain scheduling method is used, comparing buffer remaining to the bu

can help determine schedule status.2 Variance Analysis

* SV and SPI assess magnitude of variation from original schedule baseline

* Total float variance is also an essential planning component to evaluate project ti

* Based on variance whether corrective or preventive action needs to be taken

Controlling variance

* Requires adjustments to baseline to reflect current project realities

* Many of the techniques used in developing project schedule are used in controlli

statement while developing project

is, resource leveling to calculate early

ard to resource limitations

critical path

hich a project can be completed

th are called critical activitieselayed.

ntified, resource availability is entered and

d critical path

in protecting target finish date of the

asks not on the critical chain feeds into

r unit, project schedule time frame

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Schedule Variance

Schedule variance = Earned Value - Planned Value

SV = EV - PV

Schedule Performance Index

Schedule variance = Earned Value / Planned ValueSV = EV / PV

OUTPUTS

.1 Work Performance Measurements

* Schedule control activities, like monitoring and measuring performance, may res

proj mgmt plan component. To estimate degree of schedule impact and severity of th

These need to be calculated and communicated to stakeholders

.2 Change Requests

* Review of variance analysis, performance measures results in change requests t

using perform integrated change control process

* Type of change requests are - changes to start/finish dates, activity durations, pr* Preventive actions may include recommended changes to reduce the probability


* Schedule management plan: To reflect change in the way schedule is managed

* Schedule baseline: In response to change requests related to scope, activity reso

* Cost baseline: To reflect changes caused by compression or crashing techniques

.4 Project Documents Updates

* Schedule data: New project schedule network diagrams might be developed to d

ortest path it could take to complete the

kier the project is. PM has to manage

project end date or milestones

start date of its successor

nally imposed project completion date by

ned as float

e list an output

whether milestone is mandatory/optional

nt eventsnitoring and reporting purposes

mated activity duration. Shading on bars

chart

Activity name(Float)

ES EF

LFLS


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OUTPUTS

.1 Work Performance Measurements

.2 Change Requests



.5 Organizational Process Asset Updates

asures to avoid schedule slippage

the schedule

to a noncritical path task will not delay

if a delay occurs on a noncritical path

f the critical path. Delays to critical path

tion. Careful watch of the variances in

easuring and reporting schedule

wed and how these changes should be

ontrolling the schedule

as of the indicated data date

actual performance

entage of work unfinished

ether delays effect critical path

ffer needed to protect the delivery date

ime peformance

g variance also


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lt in updating schedule baselines or other

e impact, SPI and SV needs to calculated.

schedule baseline which are reviewed

oject milestonesof negative schedule variances

urces or activity durations

isplay approved remaining durations and


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Understanding Cost Management

Covered in this column

* Contents of Cost Management Plan

* Types of Costs

Planning Process Group

* Estimates Cost

* Process of forecasting what each project activity will cost based on resources required to complete it

* Determine budget

* Process of adding up estimated costs for each activity or work package to get an estimated budget for entire budget

Monitoring & Controlling Process Group

* Control costs

* Process of keeping actual costs and planned budget in line

* Involves influencing factors that cause cost variances and manage changes to the budget

* Project cost management should consider stakeholder requirements for capturing costs.

* Project cost management is primarily concerned with cost of resources needed to complete project activities

* Ability to influence costs is greatestat the early stages of the project, making early scope definition critical

* The work involved in performing Project Cost Management knowledge area is preceded by generating Cost

Management Plan which part of Develop Project Management Plan

* Cost Management Plan sets out format and establishes criteria for planning, structuring, estimating, budgeting and

controlling project costs

* Cost Management processes and their associated tools and techniques are established during project life cycle


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* Cost Management Plan contains

* Level of Accuracy: Rounding of data to a prescribed precision based on scope of the activities and magnitude of the

project and may include amount of contingencies

* Units of Measure: Unit used in measurements is defined for resources (staff hours, days, weeks)

* Organizational Procedure Links: WBS provides framework for cost management plan which allows for consistency

with estimates, budgets and control of costs. The WBS component used for project cost accounting is called control account

which is linked directly to accounting system using unique code identifier

* Control Thresholds: Variance thresholds for monitoring cost performance to indicate amount of variation to be

allowed before action needs to be taken. Expressed as % deviations from baseline plan* Rules of Performance Measurement: Earned Value Management rules are set.

* Define WBS and points at which measurement of control accounts will be performed

* Establish EVM techniques (weighted milestones, fixed formula, % complete)

* Project EAC and other forecasting methodologies

* Reporting formats: frequency and format of cost reports

* Process Descriptions: Descriptions f Estimate, Budget and control costs

* Types of costs

* Direct cost: include dedicated labor, material, supplies, equipment, licenses, fees, training, travel, or professional

service fees

* Indirect cost: Example, if a color printer is shared by several project teams, its difficult to definitively determine what

percentage of costs each should share.*Variable cost: fluctuate and can't be predicted with absolute certainty. For example, travel or transportation costs that

can change depending upon the cost of fuel or certain commodities and types of raw materials.

* Fixed cost: are static throughout the project or have only a small likelihood of fluctuation. Fixed costs are usually for

items such as rents, leases, licenses, salaries, and fixed fees

* Factors affecting costs

* Risks: During early phases, the greatest risk to budget accuracy is usually that the scope, activity, and constraints

arent fully known

* Total Cost of Ownership/Life-Cycle:

* Cost of Quality: Cost that is incurred to achieve required quality

* Marketplace Conditions


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INPUTS

.1 Scope Baseline

.2 Project Schedule

.3 Risk Register

.4 Human Resource Plan



TOOLS & TECHNIQUES

.1 Expert Judgment



.4 Three-point Estimating (PERT)

.5 Reserve Analysis

.6 Bottom Up Estimating

.7 Cost of Quality

.8 Project Management Estimating

Software

OUTPUTS

.1 Activity Cost Estimates

.2 Basis of Estimates


KEY ASPECTS

* Estimating involves developing of approximation of cost needed to complete project activities i.e. costs of resources like

labor, materials, equipments, services, facilities, categories like inflation allowance, contingency costs...

* Estimates are prediction based on information known at that point of time

* Estimates are expressed in units of currency or units of measure (staff hours)

* Accuracy of Estimates:

* Rough order of magnitude estimate ROM: This type of estimate is made during initiating process. Typical range is

+/-50 percent from actual. These are usually top-down estimates made by expert judgment.

* Budget estimate: This type of estimate is made during Planning phase. Typical range is -10 to +25 percent from

actual.

* Definitive estimate: This type is the most accurate estimate. Later during the project estimates will become more

refined, some PMs use the range of-5 to +10 or -/+10.

* Benefits

* Identifies funding requirements

* Establishes cost baseline

INPUTS

.1 Scope Baseline

Input from ---> Create WBS

* Work Breakdown Structure (WBS) - Each work package provides basis for cost estimation. WBS is developed

progressively using rolling-wave planning, and as a result project's cost estimate baseline is also often refined progressively

* WBS Dictionary - this contains work description, milestones, work to be done that are needed to estimate costs likeresource req. and dependencies

* Scope Statement - This document is aimed at stakeholders and while estimating costs it provides product desc,

acceptance criteria, key deliverables, project boundaries, assumptions, constraints. One basic assumption made during

estimation is whete estimates will be limited to direct costs only or includes indirect costs. Common constraints are limited

budget, required delivery dates, available skilled resources etc.

.2 Project Schedule

Input from ---> Develop Schedule

* Contains planned dates for performing schedule activities and info about what resources are needed and for how long

* Helps in estimates costs for staff, material, location, equipment

.3 Human Resource Plan

---

Estimate Costs

(Planning)HOME


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TOOLS & TECHNIQUES

.1 Expert Judgment

* Estimates are influenced by variables such as labor rates, material costs, infaltion risk factors etc. Expert judgment guided

by histroical info provides valuable insight about the env and info from prior similar projects

* Also determines whether to combine methods of estimating and how to reconcile differences b/w them


* Also known as top-down estimating

* When you use costs of previous project to forecast costs for current project (when projects are similar)

* Based on parameters such as scope, cost, budget, duration, size, weight, complexity from previous similar project is usedas basis for estimating for current project

* Gross value estimating approach, sometimes adjusted for known differences in complexity

* Frequently estimate project duration when there is limited info about the project (like in early phases)

* Less costly and less time consuming and less accurate

* Combines expert judgment with historical info from similar projects completed in past

* Applies to entire project or segment of a project and used in conjunction with other estimating methods


*OUTPUTS


Input to ---> Determine budget;; Plan Procurements;; Identify Risks

* Quantitative valuations of how much costs required for carrying out a project

* Depends on direct costs like material, equipment, labor, services and might include indirect costs* Can be in detail or summarized


Input to ---> Determine Budget

* Detailed explanation of factors on which activity cost estimate is based

* Details like activity scope of work, documents how on what basis cost was estimated, assumptions made, constraints,

range of possible estimates


* Like risk registers or any documents impacted because of changes in cost


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INPUTS



.3 Scope Baseline

.4 Project Schedule

.5 Resource Calendar

.6 Contracts


TOOLS & TECHNIQUES

.1 Cost Aggregation

.2 Reserves Analysis

.3 Expert Judgment

.4 Historical Relationship

.5 Funding Limit Reconciliation

OUTPUTS

.1 Cost Performance Baseline

.2 Project Funding Requirements


Determine Budget

(Planning)

KEY ASPECTS

* Aggregating estimated costs of individual activities or work packages to eastablish authorized cost baseline

* Baseline includes all authorized budgets, excludes management reserves

* Estimated costs of each activity is converted to realistic cost performance

* Larger projects may be divided into multiple Cost Baselines.

INPUTS


Input from ---> Estimate Costs

* How much each scheduled activity costs to complete? Includes resource costs like staff, material, equipment

* Aggregate cost estimates for each activity within a work package to obtain cost estimate for work package

.2 Basis of EstimatesInput from ---> Estimate Costs

* Document recorded about how you arrived at the cost estimate? E.g: Any basic assumptions like inclusions or exclusions

of indirect costs

.3 Scope Baseline

Input from ---> Create WBS

* Scope statement identifies budget limitations (mandated by organization or contract or govt policies)

* WBS shows relationship between the project deliverables and components

* WBS dictionary lists work that needs to occur in each component to complete the project

* All these help in estimating budget more accurately

.4 Project Schedule

---

HOME


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TOOLS & TECHNIQUES

.1 Cost Aggregation

* Cost aggregate means adding together activity cost estimates for each component in WBS

Activity Estimates -> Work Package Estimates -> Control Account Estimates -> Project Estimates -> Contingency

Reserves -> Cost Baseline -> Mgmt Reserves -> Cost Budget

.2 Reserve Analysis

* Technique to determine realistic reserves

* Contingency Reserves - account of unplanned changes related to risk events that occur in the project i.e. realized risks.

These are part of cost performance baseline and total budget* Management Reserves - Unplanned changes to scope and cost. They are not included in cost performance baseline but

included in total budget. Project manager has to seek approval before accessing these reserves. These are not included as part

of earned value measurement calculations

.3 Expert Judgment

* Expert knowledge about project activities and associated costs can help to develop accurate budget

.4 Historical Relationships

* Based on historical relationships, project managers can use parametric estimating to develop mathematical models for

OUTPUTS

.1 Cost Performance Baseline

Input to ---> Plan Procurements;; Plan Quality;; Develop Project Management Plan

* Authorized time-phased budget at completion developed as a summation of approved budgets by time period

* Displayed in form of S-curve* In EVM, this is also referred as Performance Measurement Baseline

* Key elements - Work package costs, sub-project costs, total costs, contingency reserves and due dates

* Identifies expected cost of all the work, dates when costs apply


Input to ---> Control Costs

* Periodic funding requirements derived from cost baseline

* Cost Baseline = ( Projected expenditures + Risk Response Cost ) + Contingency reserve (known unknowns)

* Project Funding Requirements/Cost Budget = Cost baseline + Management reserves (unknowns)

* Funding occurs in incremental amounts that are not continuous (appear as steps)


* Risk registers, cost estimates, project schedule


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INPUTS





TOOLS & TECHNIQUES

.1 Earned Vaue Management

.2 Forecasts

.3 To-Complete Performance Index


.5 Variance Analysis


OUTPUTS


.2 Budget Forecasts

.3 Change Requests

.4 Organizational Process Asset Updates



Control Costs


KEY ASPECTS

* Below are the tasks performed in cost control process

* Influencing factors that affect costs

* Ensuring costs expenditures do not exceed authorized funding, by period and in total

* Monitoring work performance againsts funds expended i.e. Actual work (Earned value) vs cost

* Analyzing discrepancies

* Managing changes

* Preventing unapproved changes from being included in the reported costs or resource usage

* Communicating with stakeholders

* Actual cost performance is compared against cost performance baseline. By looking a comparison, project manager can see

how project is performing and when actions may be needed to bring actual and planned costs back in line.

* Project funding requirements are another input which project manager compares. They are funds that needs to have

available at different times throughout the projects in order to finance the work

* Control Costs is component of Perform Integrated Change Control process

* Control costs to assure that the project budget isn't exceeded (resulting in cost overruns)

* All budget changes should be agreed to and approved by the project sponsor where applicable (the criteria for approvals

INPUTS


Input from ---> Develop Project M

Date post:	03-Apr-2018
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