Project Management Essentials Guide V1.0

Project Management Essentials Guide V1.
Project Management Essentials

Program guide V1.0
© Project Management Research Institute | www.pmrinstitute.com

Project Management Essentials Guide V1.0
This program’s goal is to impart the essential, professional project management concepts knowledge to
the participant in a simple and abridged form, so that the learner can quickly pick up the basics of
professional project management and start practicing them within a day. During this course we will be
covering the following key aspects of project management;
No Topic
1 What is a project?
2 Triple constraints of a project
2 Project management life cycle
3 Initiating a project
4 Creating work breakdown structure (WBS)
5 Developing schedule
6 Understanding the critical path
7 Monitoring and controlling using EVM (Earned value management)
8 Closing the project
9 Conclusion
Key Jargons !
Abbreviation Description
PMP Project Management Professional certification provided by the Project
Management Institute, USA www.pmi.org
PMRI Project management research institute www.pmrinstitute.com
PMI Project Management Institute, USA
PMBOK Project management body of knowledge
Project Management Initiation, Planning, Execution, Monitoring & Control, Closing
Life cycle
Knowledge areas Time, Cost, Scope, Integration, Quality, Procurement, Risk, Communications ,
Human resources
Triple constraints Time, Cost and Scope
WBS Work Breakdown Structure
EVM Earned value management
EV (BCWP) Earned value is the budgeted cost of work performed till date
PV (BCWS) Planned value is the budgeted cost of work scheduled till date
AC (ACWP) Actual cost of work performed till date
SV Schedule variance (EV-PV)
CV Cost variance (EV-AC)
SPI Schedule performance index (EV/PV)
CPI Cost performance index (EV/AC)
SV% Schedule variance % = ((EV-PV)/PV)*100
BAC Budget at completion, which is the total budget of the project
EAC Estimate at completion = AC + (BAC-EV)/CPI
USD U.S Dollars
PDCA Plan, Do, Check and Act
PDSA Plan, Do, Study and Act
Stakeholder Anybody who is interested in the project positively or negatively
PM Project Manager

Abbreviation Description
Sponsor The person or group of people or organization, funding the project
Triple constraints We say that a project is successful, if it is completed within time, cost and met it’s
scope
The case study project
PMP® (Project management professional certification) by PMI, USA is well recognized throughout the
world. In order to appear for the PMP certification, one need four years of project experience (for
graduates) and for non-graduates it is 7 years of project experience. Once you qualify this screening
criteria, then you are eligible for writing the PMP® certification exam. To write the PMP certification
exam, it is mandatory that one has to undergo 35 contact hours of instructor led training program.
The investment required
To investment required for this program comprises of;
No Component Duration Investment

1 Attend 35 contact hours of instructor led training 5 days 2000 USD
program
2 Become a PMI member 1 day 130 USD
3 Exam fees 500 USD
4 Self study 30 days 4000 USD
Total 36 days 6630 USD
You have decided to attend the Project Management Research Institute’s 3 day PMdistilled workshop
leading to 35 contact hours of instructor led training program. Let us consider this as your project for
explaining the key project management concepts, when you read further.

What is a project?
These are some of the characteristics of projects;

· Every project has a start date and end date
· Projects deliver unique products or services
· Projects are performed by people
· Projects are temporary in nature
· One of the unique characteristics of projects is progressive (continuous) elaboration. That
means, when we start a project we have very less information about the project and as we get
into the project more and more, we gain more and more insight into the project.
· Projects are constrained by limited resources.
What is an operation?
· Operations are continuous in nature, where as projects are temporary in nature

· They deliver standard outputs where as projects deliver unique outputs
· Both operations and projects are constrained by limited resources
· Both operations and projects are performed by people
What is a program?
A program is a collection of inter related projects, which when done together gives us some added advantage than
doing them one after the other.
What is project portfolio management?
The process of picking up the right projects for execution, which are in true alignment to the
organization’s strategy for growth and then continuously monitoring the continued alignment of the
strategy and the projects selected for execution is known as project portfolio management.
What is project management life cycle?
Every project revolves around PDCA (Plan, Do, Check and Act) concept coined by Shewhart and later on
modified by Deming into PDSA (Plan, Do, Study and Act). All the management activities we perform
within a project are classified into five process groups;

· Initiation
· Planning
· Execution
· Monitoring and controlling
· Closing
Project Activities performed Actors

management life
cycle
Initiation A project charter is created, High level scope of the Sponsor of the project
project is frozen, Business case, High level risks, Major
milestones with dates, assumptions, constraints, roles
and responsibilities of the project manager and
sponsor are documented. Project manager is identified.
Planning A project plan is created, which include the schedule of Project manager,
the project. The detailed scope of the project is frozen. Functional experts,
The detailed scope is decomposed into a work Key team members
breakdown structure. The work packages are further
broken down into activities. Activity resource and
duration estimates are done. Based on the
dependencies of the activities, they are sequenced and
schedule is developed. Team is selected.
Execution The project is executed as per the plan. Project manager,
team
Closing The project is formally closed Project manager,
Customer
Initiating a project
During the initiation of the project, a project charter is developed. A project charter is typically a 3-5
page document comprising of;
· The business case of the project

· The product description (description of the deliverables)
· Major milestones and dates
· Assumptions and constraints
· High level risks
· Project manager’s name, roles and responsibilities
· Project sponsor’s name, roles and responsibilities
· Key stakeholders of the project and their essential details
Project Charter for your PMP certification project

Business case
Total investment = 6630 US dollars (including exam fees, training fees, self study)
Assumptions
Your current salary = 5000 USD
By Becoming a PMP certified project manager you get an additional increment of 2% over your current
salary. Assuming that there is no job change and considering only the 2% increment out of the PMP
certification, the cash flow is as follows;
Additional increment because of

Years Annual salary
PMP certification
0 60,000 0
1 61,200 (60,000 + (60,000*2/100)) 1,200
2 62,424 (61,200 + (61,200*2/100)) 2,424
3 63,672 (62,424 + (62,424*2/100)) 3,672
4 64,945 (63,672 + (63,672*2/100)) 4,945
5 66,243 (64,945 + (64,945*2/100)) 6,243
Total 18,484
By investing 6,630 dollars in your PMP certification (course fee + exam fee + self study) you will make
around 18,484 dollars in five years time without accounting for any promotions, job changes etc. The
pay back period for your investment is 3 years. On the third year you will be able to take your
investment out.
The product description
PMP certification by the Project Management Institute (PMI, USA) and the complete mastery of the best
practices as explained in the project management body of knowledge (PMBOK).
Major milestones
No Milestone Date
1 Identifying the vendor for PMP exam preparation course
2 Completion of the PMP preparatory program
3 Applying for the PMP examination
4 Completion of self study
5 Scheduling the exam
6 Writing the exam
Assumptions
· You will get the leave for attending the preparatory program
· The preparatory program is effective in transferring the PMBOK knowledge
· You will have at least 40 hours of self study time, before writing the exam

Constraints
· The certification should be taken within 3 months from now

· The certification should happen within an expenditure of 6630 USD including both direct and
indirect costs
· The preparatory program should be able to cover the complete PMBOK in 35 hours time
High-level risks
· Lack of time for preparation due to work pressure

· Lack of money to invest, due to job loss
· In effective training
· Organizational politics
Project Manager: Mr.-----------------------------------------------------------
Project manager’s roles and responsibilities
· Preparation of the study plan

· Identifying the key stakeholders and informing them about your project and leave plans
· Evaluation of the training providers
· Quality assurance of the resources
· Execution of the study plan
· Monitoring and controlling the progress
· Stakeholder management (family, boss, team members, peers J )
· Risk management
· Time, cost and scope adherence
Project sponsor: Mr_______________________________________________
Project sponsor’s roles and responsibilities
· Ensure timely funding of the project

· Remove impediments escalated by the project manager
Key stakeholders

· Project management institute (PMI)

· Project Management research Institute (Training organization)
· Trainer
· Batch mates
· Family
· Project team members at work
· Colleagues
· Placement agencies (Naukri, Monster)
· Boss
Project initiation gives a solid start to your project. Only those projects with a solid business case are
allowed to start. Output of project initiation is the project charter. Since the project charter is prepared
by the sponsor, or the senior management representative, and since the project manager’s name, roles
and responsibilities are documented on the project charter, we say that “Project charter gives authority
to the project manager”.

Creating a work breakdown structure
The above diagram is a work break down structure for a software development project.
A work breakdown structure;
· Shows the break up of work involved in the project

· It does not give any time lines
· It does not indicate any sequence of events
· The lowest level in a WBS is known as a work package ( in the above diagram
1.1,1.2,1.3,2.1,2.2,2.3, 3.1.1,3.1.2,3.2,3.3,4.2.4.3,4.1.1,4.1.2,5.1,5.2,5.3 are work packages)
· Work packages should be between 8 hours and 80 hours of work and this is known as the 8-80
rule. For small projects, the work packages will be more towards 8 hours where as for large
projects, the work packages will be towards 80 hours of effort.
· The budgets for the projects are allocated at the work package level
· Project managers stop exercising control at the work package level

· Without a work break down structure, accurate estimates are not possible
· The sum of all work packages indicates the scope of the project
· The process of decomposing the detailed scope of the project into a work breakdown
structure is called ‘decomposition’.
· WBS is a great tool for stakeholder communication of the scope of work.
Can you draw a work breakdown structure for your PMP® certification project?
Here it is…
Once the WBS is frozen, now it is easy to estimate at the work package level. Let us estimate the total
effort required completing this project. Hope you understand the difference between effort and
duration. Effort is the total effort required to complete the work package. If two persons have to work
on a work package for 10 calendar days to complete it, then the effort = 10x2 = 20 person days and the
duration is 10 calendar days. As the next step in planning, let us estimate the effort required for the
work packages.
Effort in person
Activity Work packages
hours
Identify trainer Collect information 4
Finalize 4

Effort in person
Activity Work packages
hours
Attend preparatory program Register 1
Attend 35
Apply for exam Take PMI membership 1

Apply for exam (online) 10
Application processing 80 (by PMI)
Self study Study PMBOK 10

Study course material 10
Take practice tests 20
Write exam Schedule exam 1

Write exam 4
Total 180 hours
Effort bifurcation
Effort by the applicant = 100 hours
Attending the workshop = 35 hours
Application and related formalities = 20 hours
Self study = 40 hours
Effort by PMI = 80 hours (application processing)

Developing the schedule
Once the WBS is frozen and effort estimates are done at the work package level, then it is time for the
following;
· Decomposing the work packages into activities

· Effort and activity duration estimation of the activities
· Sequencing these activities based on their dependencies
· Analyze the critical path
· Optimize the duration of the project
Decomposing the work packages into activities
Effort in
Activity
Activity Work packages person Activities
effort
hours
Identify Collect 4 Search internet 2
trainer information
Prepare a list of training organizations 2
Finalize 4 Prepare an evaluation criteria 1

Apply the evaluation criteria and short list 3
Attend Register 1 Register by making the payment 1
preparatory
program
Attend 35 Attend the 3 day workshop 27
Complete assignments 8
Revision of topics covered 3
Apply for Take PMI 1 Take PMI membership 1

exam membership
Apply for exam 10 Fill up the online application form 6
(online)
Review the application form for accuracy 3
Make payment and Submit 1
Application 80 (by Provide additional information required by 81
processing PMI) PMI
Self study Study PMBOK 10 Read PMBOK 2 times end to end 10

Study course 10 Read course material 2 times end to end 10
material
Take practice 20 Take the knowledge area wise tests 10
tests
Take the simulation tests 10

Effort in
Activity
Activity Work packages person Activities
effort
hours
Write exam Schedule exam 1 Schedule exam 1
Write exam 4 Write exam 4
Total 180 hours 184
Oops! The activity level estimates is 184, where as the work package level estimates are only 180
hours. Estimating at the activity level and then rolling it up to the work package level is known as
bottom up estimation. Bottom up estimation is always more accurate than top down estimates. If
the difference between the top down and the bottom up estimates are very high, then it is certain
that one of it is wrong, and most probably the wrong one will be the top down estimate. In our
example we will accept 184 as the right estimate.
While preparing the activity list you should ensure that all the activities that consumes resources,
irrespective of whether they are management activities or engineering activities are included. The
activities may be related to any of the following knowledge areas;
· Project time management

· Project scope management
· Project cost management
· Project human resource management
· Project quality management
· Project risk management
· Project communications management
· Project integration management
· Project procurement management
All these have to be planned, executed, monitored, controlled and closed.
Once the activities are identified and estimated, now it is time to enter them to a scheduling package,
based on their dependencies to arrive at the schedule.

Schedule development
Schedule is the project team’s plan to start and end activities on specific dates.
Let us consider a project with just two activities, activity ‘A’ with 10 days duration and activity ‘B’ with
just 5 days duration.
If we start activity ‘A’ on day ‘1’, it will get over on day ‘10’. If we start activity ‘B’ on day ‘1’ it will get over
on day ‘5’. In this case, the project will get over on day ‘10’.
Instead of starting activity ‘A’ on day ‘1’, if we start it on day ‘2’, activity ‘A’ will get over on day ‘11’ and
the project will get over on day ‘11’ only. That means, if we delay the start of activity ‘A’ by one day, the
project will slip by ‘1’ day.

Instead of starting activity ‘B’ on day ‘1’, if we start it on day ‘2’, activity ‘B’ will get over only on day ‘6’,
but the project end date will not slip. Even if we start activity ‘B’ on day ‘6’ it will get over on the ‘10th’
day and the project will not slip.
For activity ‘A’ Early start (ES) = 1, Early Finish (EF) = 10, Late start (LS)=1 and Late finish (LF) = 10.
For activity ‘B’ Early Start (ES) = 1, Early Finish (EF) = 5, Late start (LS)=6 and Late Finish (LF)=10
Float or slack = LS-ES or LF-EF. Float is the amount of time an activity can be delayed without affecting
the early start date of the subsequent activity.
For activity ‘A’ float = LS-ES or LF – EF = 1-1 or 10-10 = 0

For activity ‘B’ float = LS-ES or LF-EF = 6-1 or 10-5 = 5
Critical path
The longest path in the network is the critical path. In other words, it is the shortest possible time in
which a project can be completed. In this case ‘A’ is on the critical path. Activities on the critical path will
have zero float. In other words, if you connect all the activities on the network diagram whose float =0,
then you get the critical path of the project.
What is the impact of this on project management?
Let us say, there is a delay in the progress of activity ‘A’. In that case we can always pull out resources
from activity ‘B’ and deploy them on activity ‘A’ for 5 days (float). This is where professional project
management comes in handy.
Without driving a vehicle, you will never learn driving, so please do this exercise J
The following table gives the key activities to be completed for your PMP certification project, along
with their durations and dependencies. Draw an activity on node diagram for it (similar to the one given
above).
Activity No Activity Duration Predecessor

1 Complete PMP preparatory program 4 days
2 Apply for PMP exam 1 day 1
3 Self study 30 days 1
4 Schedule exam 1 day 1,2
5 Write exam 1 day 3,4

Here is the answer!
First we did a forward pass and computed the early start and the early finish.
Then we did a backward pass and computed the late start and late finish
Then we computed the float by subtracting ES from LS
Then we connected all activities whose float =0, to arrive at the critical path.
In this case, the critical path is A, D, E which is the longest, and for all activities on the critical path, float
=0.
In real life, all these will be performed by project management software available in the market. The
next page has the Gantt chart for the same program generated out of MS-Project. We can even print the
network diagrams. The fact is that, without having a concrete understanding of the impact of critical

path, float, slack, ES, EF, LS, LF on project management, no tool under the sun can help you in managing
projects. Now you will be able to appreciate the features in these tools and leverage them better for the
advantage of your projects.
For your reference, a tracking Gantt chart view of the PMP certification project is given in the next
page…..
All the activities in red color are on the critical path. If these activities slip by one day, your project will
slip by one day. As a project manager, you should be checking the status of the activities on the critical
path daily and take appropriate actions if there is a slippage. This is the beginning of professional
project management, and it is easier than ad hoc project management.

Monitoring and controlling using Earned Value Management (EVM)
As a project manager, when do you go home peacefully at the end of the day…with a feeling that,
everything is under control?
Let us consider this fencing project. The scope of the project is to complete 4 kilometers of fencing
within 4 weeks time. Each side has a budget of 100,000 Indian rupees. As the project manager of this
project, you are supposed to complete 1 km of fencing every week. You are doing the review of the
project after 4 weeks and the status of the project is as follows;
Planned Value (PV) = Budgeted cost of work scheduled till the review date (BCWS)
Earned Value (EV) = Budgeted cost of work performed (BCWP) till the review date
Actual cost (AC) = Actual cost of work performed (ACWP) till the review date
Percentage Earned Value Actual cost

Sides Planned Value (BCWS)
complete (BCWP) incurred (ACWP)
A 100,000 100% 100,000 100,000
B 100,000 100% 100,000 100,000
C 100,000 100% 100,000 100,000
D 100,000 50% 50,000 80,000
Total 400,000 350,000 380,000

Schedule Variance (SV) = EV-PV = 350000 – 400000 = - 50,000
Schedule performance index (SPI) = EV/PV = 350,000 / 400,000 = 0.875
Cost variance (CV) = EV-AC = 350,000 – 380,000 = -30,000
Cost performance index (CPI) = EV/AC = 350000/380000 = 0.921
Schedule variance percentage (SV %) = ((EV-PV)/PV) * 100 = (-50,000/400,000)*100 = -12.5%
Impact of these ratios on project management
· If Schedule variance (SV) is Zero, that means, the work is progressing as per the plan
· If Schedule performance index (SPI) =1, that means, work is progressing as per the plan
· If SPI >1, that means work is progressing ahead of schedule
· If SPI < 1, that means work is lagging behind the schedule
· If Cost variance (CV) =0, the completed work is within budget
· A CPI =1 means, completed work is within budget
· A CPI >1 means, completed work got over without consuming the budget available
· A CPI <1 means, completed work consumed more than the allocated budget

· A schedule variance of ‘0’ indicates that there is no schedule variance

· A negative schedule variance indicates that the project is lagging behind
· A positive schedule variance indicates that the project is ahead of schedule
As a project manager, if you are strong in critical path tracking, earned value management and
risk management, your project will sail smoothly. I am fundamentally convinced of the fact that
professional project management is much more easier than ad hoc project management.
Closing a project
On a piece of paper, closing a project is very easy, where as in real life, this is one of the most
difficult. As part of closing a project, we do the following activities;
· Inspect the final deliverables of the project against the frozen requirements and the
documented acceptance criteria.
· Close the contract with the customer
· Close the contract with your sub contractors
· Perform a lessons learned exercise
· Dismantle the team
Author Profile
· Abrachan Pudusserry is a highly acclaimed Speaker, Advisor and Author of project
management, quality management and software engineering. He has his B.E in electrical
engineering from MSRIT, Bangalore and M.S in Quality Management from BITS Pilani. During
his 20 years of professional work, he served organizations such as Novell, HCL, FEC and The

Project Management Research Institute. Abrachan has coached around 2000 + project
managers from leading organizations including IBM Global services, Microsoft, Novell, Sybase,
Lucent, Cisco, NBD, Volvo, DAMAC, Turner, SAP, Societe Generale, Broadcomm, Zerone
Consulting, Birlasoft, Torry Harris, The Wave, Intertech, TCS, L&T, Accenture, HP, Oracle, Tyco,
IBS and Sasken.
· The PMdistilled (www.pmdistilled.com) project management workshops architected by him,
is being delivered successfully in multiple countries including India, Dubai, Bahrain, Abu Dhabi,
Muscat, Malaysia and Singapore.
· Apart from these workshops, he delivers customized programs and consulting services
catering to the specific needs of the organizations and works along with project teams in
implementing project management and quality management best practices covering
Predictive Project management (PMBOK, PRINCE2), Adaptive project management (Agile
methodologies with emphasis on SCRUM) and IT project management. He has conducted
‘Agile project management using SCRUM’ workshops for Oracle, Amdocs, LG CNS, Torry Harris,
Societe Generale, Accenture, Zerone Consulting and Everett.
· He is the product owner of CollabTeam, SAAS – which helps teams to go agile.
· He is a CSM (Certified Scrum Master), PRINCE2 practitioner, PMP certified, Certified quality
analyst.
Contact details
email: abrachan@pmrinstitute.com
blog : www.abrachan.org www.goodscrum.com

Yahoo: pabrachan
Orkut : abrachan Gtalk : abrachan
Phone:
India: +91 9895372115

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Project Management Essentials Guide V1.

Project Management Essentials

© Project Management Research Institute | www.pmrinstitute.com

© Project Management Research Institute | www.pmrinstitute.com

The case study project

The investment required

To investment required for this program comprises of;

No Component Duration Investment

© Project Management Research Institute | www.pmrinstitute.com

These are some of the characteristics of projects;

· Operations are continuous in nature, where as projects are temporary in nature

What is project portfolio management?

What is project management life cycle?

© Project Management Research Institute | www.pmrinstitute.com

Project Activities performed Actors

· The business case of the project

Project Charter for your PMP certification project

© Project Management Research Institute | www.pmrinstitute.com

Your current salary = 5000 USD

Additional increment because of

© Project Management Research Institute | www.pmrinstitute.com

· The certification should be taken within 3 months from now

· Lack of time for preparation due to work pressure

Project Manager: Mr.-----------------------------------------------------------

Project manager’s roles and responsibilities

· Preparation of the study plan

Project sponsor: Mr_______________________________________________

Project sponsor’s roles and responsibilities

· Ensure timely funding of the project

© Project Management Research Institute | www.pmrinstitute.com

· Project management institute (PMI)

© Project Management Research Institute | www.pmrinstitute.com

Creating a work breakdown structure

A work breakdown structure;

· Shows the break up of work involved in the project

© Project Management Research Institute | www.pmrinstitute.com

© Project Management Research Institute | www.pmrinstitute.com

Apply for exam Take PMI membership 1

Self study Study PMBOK 10

Write exam Schedule exam 1

Effort by the applicant = 100 hours

Attending the workshop = 35 hours

Application and related formalities = 20 hours

Self study = 40 hours

Effort by PMI = 80 hours (application processing)

© Project Management Research Institute | www.pmrinstitute.com

Developing the schedule

· Decomposing the work packages into activities

Decomposing the work packages into activities

Finalize 4 Prepare an evaluation criteria 1

Apply for Take PMI 1 Take PMI membership 1

Self study Study PMBOK 10 Read PMBOK 2 times end to end 10

© Project Management Research Institute | www.pmrinstitute.com

· Project time management

All these have to be planned, executed, monitored, controlled and closed.

© Project Management Research Institute | www.pmrinstitute.com

© Project Management Research Institute | www.pmrinstitute.com

For activity ‘A’ float = LS-ES or LF – EF = 1-1 or 10-10 = 0

What is the impact of this on project management?

Activity No Activity Duration Predecessor

© Project Management Research Institute | www.pmrinstitute.com

Here is the answer!

Then we computed the float by subtracting ES from LS