Integration Management F 0 & 114 ‘Any change to the project charter should call into question whether the project should continue. ‘Can you see thatthe creation of a project charter is influenced by all the project management knowledge areas (Le. scope, time, cost, quality, human resource, communications, risk, procurement, and stakeholder management)? ‘This is why Develop Project Charter is an integration process. Large Projects As we discussed in earlier chapters, you need to maintain a large-project perspective when answering questions on the exam. To help you understand this critical concept, review the following project charter for a large project, and then complete the exercise. NOTE: "the following charter example refers to attached documents. These documents are not shown as part ofthis example. (eRe Soo Project Charter Project Tile and Description (What is the projec) Upgrade the Payroll System ‘Were a large, multinational organization with more than 20,000 employees, so human resource management is critical to our success. To more efficiently compensate our employees, we want to replace or upgrade the employee payroll systems to better rellet the changing nature of our ‘workforce. Employees now work in various locations (offices and homes) around the world, work ‘simultaneously for multiple business units, and have more varied work schedules than ever before. ‘Current geographically focused payroll systems are not integrated, are inflexible, and require significant manual clerical time to maintain. Consolidated corporate reporting and analysis for the different systems is also very expensive and inefficient. Project Manager Assigned and Authority Level (Who i given authority to lea the project, and can he/she determine, manage, and approve changes to budget, schedule, staffing, etc.?) ‘Whitney Thulin will be the project manager for this project. She may request any team members she sees fit and will work with resource managers to secure the needed resources. She has signature futhority up to $10,000. Tony Korp is assigned as assistant project manager. Business Case (Why is the project being done? On what financial or other basis can we justify doing {this project?) ‘Administering payroll currently costs $2.4 million ennually long with the unmeasured costs of ‘procedural inefficiencies. The industry average payroll-processing costs for a global company our size is $100 per employee per year, which would be $2 million overall per yea. This savings of ‘$400,000 per year (assuming a three-year payback period) justifies the approval of this project. See the detailed business case attached to this charter. Resources Preassigned (How many or which resources willbe provided?) ‘The corporate payroll-processing group will be closely involved in this project along with the ‘payroll specialists who work in our local offices. A senior team of business analysts, enterprise architects, and software designers bas been identified for the initial research and analysis phase. Procurement and legal representatives will be involved in vendor contract processes, including development of RFPs and contracts when deemed necessary. English will be the primary project language; local language experts will be involved to ensure country-specific regulations and laws are understood, Other resources needed must be identified and negotiated for by the project manager. © 2013 AMC Publications, nc « 952.846.4484 « ntrarmeproject.com + winumeprectoomfour Integration Manageme ( stakeholders (Who will affect or be affected by the project [influence the project), as known to date?) Attached is alist of stakeholder classes that will be impacted by this project. t includes all «employees, divided into payees, corporate management, legal, procurement, and payroll administrators. It also includes outside representatives of government taxing authorities, benefit providers, and suppliers of payroll-processing solutions, Stakeholder Requirements As Known (Requirements related o both pre and poe ape) ‘Requirement iris SEE Number | gegest is RI Pay employes based onthe ‘agreed-upon ratesalary on the agreed-upon schedule R2 ‘Adhere to country-specific government requirements related to tax withholding and payment schedules. eee BB ‘Adhere to state, province, county, or other local government requirements related to tax withholding and payment schedules. Re Allow the company to purchase benefits for employees as approved by the Board of Directors. 7 | PRS Allow the company to collect benefit premium payments from employee pay as agreed to by each employee. R6 Keep all employee data confidential, secure, and archived as required by law in each jurisdiction, Product Description/Deliverables (What specific product deliverables are wanted and what will be the end result of the project?) ‘The result ofthis project should be one or more systems that support payroll processing for all employees, ator below the industry average cost. Specific features desired include: ‘The systems should allow direct deposit of employee pay into any financial institution in the world and notification of deposit via e-mail, or text message to any device. ‘+ Workers should be able to change their address, number of dependents, tax-withholding parameters, and benefit characteristics via @ website at any time from any location. * The systems must support consolidated management and reporting of corporate payroll processing, plus government-mandated reporting and payments. Assumptions (What is believe to be true or reliable in the situation? What do we believe to be the case but do not have proefor data for?) ‘There are payroll applications available that support the countries where we have employees. ‘The average cost of $100 per employee per year is accurate for our industry, Each employee reports his or her primary residence in just one country for tax-reporting. purposes. We have internal resources available to evaluate and do the work assigned. Constraints (Wat factors may limit our ability to deliver? What boundaries or parameters will the Project have to function within!) © ‘The system must be able to process all international payroll rules and global direct deposit. * The solution and the supporting systems will be able to maintain organizational information security standards that meet or exceed individual country standards. Year-end tax reporting must be completed by the new system in the year ofthe {___implementation (parol data must be converte) (© 2013 AMC Publication, Inc » 952.846.4484 « ifoearmepojeccom * wwnvmcprject. com 115agration Management F ou & 116 Measurable Project Objectives (How does the project tie into the organization’ strategic goals? ‘What project objectives support those goals? The objectives need to be measurable and will depend on the defined priority of the project constraints.) “The main objective ofthis project is to decrease costs. A second objective, which supports the frst. is to increase productivity for new employees and payroll-processing employees. '¢ Decrease payroll-processing costs by 15 percent in two years by decreasing manual clerical processes. : ‘© Decrease the new worker on-boarding process from an average of 1 week to 2 days within 18 months. ‘© Summary milestone schedule: Due no later than October 6, 20XX Summary budget: US $1,200,000 Project Approval Requirements (Wha tems need to be approved fo the project, and who will have sign-off? What designates success?) “Approvals for this project include: ‘© Decision to purchase application software to support the payroll systems (VP of Operations) © Choice of vendor application package (Director of HR) ‘© High-level design of the new systems (Director of EIR) ‘© Global transition plan for new systems rollout (VP of Operations) High-Level Project Risks (Potential threats and opportunites forthe project) '® Because of the complexity of employee pay calculations and the large number of employees, we ‘may have errors in employee payroll during implementation ofthe new systems (high impact). ‘© Because ofthe number of localities supported and differing regulations, we may have errors in government tax payments and regulatory compliance during imaplementation of the new systems (high impact). ‘© Because of the volatility in the software application marketplace, we may select an unreliable vendor for delivery ofthe payroll-processing application(s) (high impact). Project Sponsors Authorizing This Project: ‘Timothy Mulcahy, Executive Vice President Rick Kolb, Director of Haman Resources (©2013 PME Publications Ine # 952.846.4484 « nformaprojac.com # wanurmeprojac. oomeive Scope Management ‘The project scope statement, along with the WBS and WBS dictionary (described in the next section), comprise the scope baseline, which is part ofthe project management plan. ‘The project scope statement may include Product scope Project scope Deliverables (fr the product and the project) Acceptance criteria ‘What is not part of the project Assumptions and constraints ‘Before you go any further, ask yourself, “What is a WBS2” It is essential o correctly understand this project management tool before taking the exam. 2 Exercise Test yourself! What is a WBS? Answer ‘this question should be easy if you currently use WBSs on your projects. You may have trouble on the exam if you do not create these in the real ‘world, however. Why? The WBS isa required element in project management, This ‘organizational too! shows all the scope on the project, broken down into manageable deliverables, Without a WBS, the project will ake longer, elements will slip through the cracks, and the project will be negatively impacted. So there is no chofce, All ‘projects, even small ones, need a WBS. Read the rest of this section to learn more about what a WBS isand how it adds value to the project. Questions on the exam are designed to identify those who know what WBSS are but who do not use them in the real world. What ifa question described details of « project to you and then asked, “You are in the middle of planning this project and creating a WBS. Which of the following would you most likely need to worry about?” Itis difficult to answer such questions with only academic knowledge. You need to have been there! You need experience using this tool © 2013 AMC Publications, nc © 952.846.4484 « info@rmcproject.com * www.rmepedject.com 173Scope Management *:¥ = Let's work through the topic of the WBS together. Try the following exercise. Exercise Many people simply make a list of things to do as their method of defining the activities on a project. Ths is a mistake; there are enormous advantages to using a WBS instead. Test yourself. Can you explain why the image on the right side (alist) s not as good as the diagram on the left (a WBS)? Vendors ‘Custom Vendor Selection = Agenda for visits + Evaluation criteria ‘Team preparation Visit schedule © Report on visits + Vendor scores Finalist list ‘Vendor Reference Checks © Reference format ‘+ Vendor reference requests [Reference evaluation forms 174 © 2013 NG Publications, ne 952.846.4484 «infotmeprjct. com» wnmoprjeccomei ve Scope Management Answer Here ate usta few answers to why a WBS is Gtter than alist © The way a list, the method on the right, is created and the way it displays information make it easy to overlook some deliverables. In contrast, the construction of the WBS chart on the left provides a structured vision for the project and helps to ensure that nothing slips through the cracks (ue., 20 deliverables are forgotten) + Alist can be cumbersome and does not allow you to clearly break down a large project into small enough pieces. With a WBS, you can easily break down the ‘work into work packages, and the WBS shows how the work packages are derived, ‘+ A\list is usually created by one person, whereas the WBS is created with input from the team and stakeholders, Involving the team and stakeholders helps gain their buy-in, and increased buy-in leads to improved performance. In contrast, a listoften makes people wary of the project because they do not understand the : project by looking atthe list, nox do they know how it was created. | ‘The process of creating a WBS allows the teau» to walk through the project in i their minds and thus improves the project plan. The execution of the project is ! typically easier and less risky asa result. i Being involved ithe cation ofthe WBS hls people better understand the project and makes it feels more achievable. | * AJWBS shows a complete hierarchy of the project, makinigit easier to see how | ‘one deliverable relates to another A list is just alist. So will this be on the exam? Not directly, but you will néed to fully understand a i WBS, and this discussion describes aspects of using a WBS thet many people do not understand, Figure 5.5 is @ sample WBS: Figure 55:4 WBS (on a Summary Level) for a Hardware/Software Creation and Installation Project Most commonly, the project name goes atthe top of the WAS. The next level is typically the same as the project life cyde (for example, forthe IS project shown in figure 5S: requirements documentation, design, installation, testing, training, turnover). The later levels break the project into smaller pieces, Such decomposition continues until reaching the level appropriate to manage the project. © 2013 FIVC Publications, In © 252.846.4484 « Infodarmeproec.com * wawmeproject.com 175Scope Management Five Although the WBS may look like « corporate organizational chart, itis not! It serves a different fanction. The WBS allows you to break down a seemingly overwhelming project into pieces you can plan, organize, manage, and control. The creation of the WBS is an effort to decompose the deliverables into smaller pieces called work packages. Decoraposition can be done using a top-down approach (starting with the high-level pieces of the project), a bottom-up approach (starting at the work package level), or by following organizational and industry guidelines or templates Note that on e WBS, work refers not to an activity, but to the work products or deliverables that result from an activity or group of activities. So for the exam, note that each work package should consist ‘of nouns-~things, rather than actions. A WBS is deliverable-oriented. This does not mean that oaly customer deliverables are included in the WAS. The complete scope of the project, including product scope, project scope, and project management efforts, are included. HRI some project management software) is often called an “activity” on the exam. PMI considers an 1 activity to be a particular piece of work scheduled for the project. Tasks can be smaller components of work that make up that activity but PMI only expects you to manage to the activity level, FETA] Watch out for the word “task” What many people refer to asa “task” in the real world (and in ‘Understand that there are few set rules for creating a WBS. WBSs created by two people for the samme project will look different. That is fine, 2s long 2s these rules are followed: ‘© The WBS is created with the help of the team. © Each level of the WBS is a smaller piece of the previous level. ‘The entire project is included in each of the highest levels ofthe WBS. Eventually some levels will be broken down further than others. x © ‘The WBS includes only deliverables that are reqiaired for the project. ‘* Deliverables not in the WBS are not part of the project. “The team breaks down the WBS until work packages are reached, This occurs when the deliverables: Can be realistically and confidently estimated i Can be completed quickly Can be completed without intercuption (without the need for more information) May be outsourced or contracted out ‘Once they are determined, you might enter the work packages—the items at the lowest level of the WBS-—into project scheduling softwere. You would not try to derive the lst of work packages by using this sofiware, however. That list comes from the creation of the WBS. ‘The levels in the WBS are often numbered for ease of location later, When the WBS is complete, identification numbers are assigned to he}p distinguish where a wérk package.is in the WBS. There are ‘many different numbering systems you can use. Figure 5.6 provides an example: 176 (© 2013 AMC Pubisations, nc» 952.846.4484 « nlogmgpozct.cam wakzmeproject.comrive Scope Management Praject Name 1 2 —S a Lat waa |} rac [] aaa food | | arse} | ana |] aza2 || 22a | | 2s. 2321 i L om tT fea]foro) [eo] Galen] feels] Gao] fal Conti Aconnt {£5 Work Packages . Figure 5.6: Sample WBS Numbering System ‘You may see the term “control account” on the exam, Sometimes depicted at higher levels on the WBS (as shown in figure 5.6), control account isa too! that allows for the aggregation and analysis of work pesformance data regarding costs, schedule, and scope. Control accounts provide ¢ way to manage and control costs, schedule, and scope ata higher level than the work package. Each work package in the “WBS would be assigned to only one control account. ‘As the planning process progresses, the team breaks down the work packages from the WBS into the schedule activities (or “activities” for short) that are required to produce the work packages. Note that this further breakdown of the WBS into an activity list is done as part of the time management process of Define Activities. The team uses the project scope statement, WBS, and WBS dictionary (described later in this chapter) to help define which activities are required to produce the deliverables. (On small projects, the WBS is often broken down into work packages that involve from 4 to 40 hours of work. Medium. size projects may have work packages with anywhere from 8 to 80 hours of work. On large projects, however, the work packages may be much larger than ths; for example, they could involve 300 hours of work. Therefore, the Define Activities process is especially important on large projects. Can you imagine how this effort is different on a large project than on a stall project? If your company works on many similar projects, itis important to realize that the WBS from one project may be used as the basis forthe next. Therefore, the project management ofice should collect ‘WAS examples and encourage the creation of templates. Great project managers do not only sce the value ofthe information provided in the WBS; they also recognize the value that the effort involved in creating the WBS adds to the project. Do you really understand what a WS ist Try the next exercise. If you miss many of the answers, review this section again and rethink your knowledge of WBSs before taking the exam. (© 2013 AMC Publications, Inc * 952.848.4484 «info@maproect.com « ware.;meprject com 177Scope Management Five Exercise Test yourself! What are the benefits of using a WBS? Ee Answer ‘his exercise aay seem similar to the previous exercise, but it is : important to clearly understand the valu of the WBS for the exam, The following are j ‘benefits of using a WHS: | '* Helps prevent work front slipping throtigh the cracks { Provides the project teamt members with an understanding of whter¢ their pieces fit into the overall project management plan and gives thent an indication of the | ‘impact of their workcon the project as a whole | Facilitates comiunication and cooperation betwee and among the project | tears and other stakelioiders i ‘Helps manage stakeholders’ expectations regarding the deliverables a # Helpsidentify risks a ‘+ Helps prevent changes aa «©, Focuses the team’s experience on what needs to be done, resulting in increased ‘quality and a project thats easter to manage | ‘© Provides a basis for estimating resources, cost; and time Provides PROOF of the need for resources, funds, and time 13 Helps with planning the’ control efforts and establishing acceptance criteria for the deliverables © Gets team buy-in and builds the team ‘© Helps people get their minds around the project “The WBS is the foundation of the project. Tais means almost everything that occurs in planning after ; the creation of the WBS is related to the WBS. For example, project costs and time are estimated at the | work package or activity evel, not forthe project as a whole. Risks ae identified by work package, not i justfor the project as a whole, Work packages are assigned to individuals or parts of the performing | ‘rganization, depending onthe size ofthe project. Does figure 5:7 make sense to you? Ae you getting | ‘the full value of the WBS on your projects? | 178 {© 2013 AMC Publican, nc» 952.648.4484 info@rmepojectcom « wm smepoet.cometve Scope Management Project. Contra Procurement ~ ‘Actvy Magnet KR A Lt Risk Was Network: . Diagrara 1+ me a at: toe Budgeting | | ‘Scheduling | | Pstimsting Figiive 5,7: The WBS Is the Foundation of the Project Lets think about the project control element in figure 5.7. Many people forget to use the project ‘management tools from project planning while the work is being done. They may create a WBS as a required activity but then forget about it. As a result, they do not get all the tools benefits. Ifthe exam. asks what you do with the WBS once you have created it, what will you answer? Exercise What do you do with a WBS once you have created it? Ifyou were going to test someone's knowledge, would you test the basics like “What isa WBS?” or would you test knowledge about how a WIS helps better manage a project? The exam strongly weighs toward the latter So take some time to really think about this question. (© 2013 AMG Publications, nc » 952.846.4484 « infotBrmeproject.com + wet moptcect.com 179Scope Management F: ve 180 ‘Answer ‘When completed, the WBS can be used any tinie the scope of the project needs to be reevaluated. For example, you can use a WBS: ‘© When there isa scope-related change request to the project; the WBS, along. swith the project scope statement, can help you see ifthe request is within the planned scope of the project ‘© Aspartof integrated change control to evaluate any impacts of other changes on scope © Asaway to control scope creep (ie. scope increasing of varying from what was planned on the project) by reminding everyone what work is to be done ‘+ Asa communications tool * To help new team mesbers see their roles GETRTEY There can be many references to the WS on the exam. in short, remember the following. A WBS: [MUTA + 1s a graphical picture of the hierarchy of the project PGES « jdentifies all the deliverables to be completed (ifit is not in the WBS, itis not part of the project) ‘© Is the foundation upon which the project is built Is VERY important Should exist for every project Forces you to think through all aspects of the project an be reused for other projects Does NOT show dependencies {would you like to get one more right? Many people confuse the terms “WBS” and “decomposition.” The best way to think of decomposition is that decomposition is what you are doing, and the WBS is the means to do it. In other words, you ean decompose the project using a WBS. ERIN ‘he previous list should help you get a few more tricky questions right on the exam. Now, ais icv GEIOTG The exam may use the term “deconstruction” instead of “decomposition.” Both terms mean [Ail the same thi aid fr WEBS Dictionary PAGE132 Do you want to hear about a zeally great idea? Think about how a work package is identified in a WBS. itis usually described in a few words, such as “casing design” ot “module XYZ code” But giving such a brief description of the deliverable to a team member allows for too much possible variation from what the deliverable was intended to be. In other words, itallows for scope creep. A WBS dictionary is the solution to this problém. This document provides a description of the work to be done for each WBS work package and helps make sure the resulting work better matches, ‘what is needed. Therefore, a project manager can use the WBS dictionary to prevent scope creep before ‘work even starts on the project, rather than dealing with scope creép while the work is being done through the use of management skills and constant inspection. “The WBS dictionary is an output of the Create WBS process. This document may be used as part ‘of work authorization system, which informs tearm members when their work package is going to start, The WBS dictionary describes the schedule milestones, the acceptance criteria, durations, interdependencies, and other information about the work package, You can also use it to control what ‘works done when, to prevent scope creep, and to increase stakeholders’ understanding of the effort required for each work package. The WBS dictionary essentially puts boundaries on what Is included in. the work package (similar to the way the project scope statement puts boundaries on what is included (© 2013 AMC Pablcatons rs 952.848.4484 « ntoGrmepeoject.com + won rmeprojet comeive Scope Management in the project). NOTE: Some of the entries in the WBS dictioriaty are filled in during iterations, rather than when itis first drafted (eg, durations, iterdependencies, et.) A WES dictionary may contain information similar tothe example shown here in figure 58: ‘WAS Dictionary. Eat me . |. [control Account ‘Work Package Name/ | Date of Update | Responsible Organization’ De Number Individual ‘Work Package Deliverable Description ‘Work Involved to Produce Deliverable “ | oe see ee ‘Acceptance Criteria (How to know if the Geliverable/work is acceptable) | [Assumptions and Constraints | [Quality Metrics “Technical Source Document Risks Resources Assigned | [Duration Schedule Milestones Cost Due Date Interdependencies Before this work package After this work package ——_____ Approved By: Project Manager — Figure 5.8: WBS Dictionary Scope Baseline PAGE 131 ‘Think about the word “baseline” We discussed baselines in the Integration Management chapter and will continue to mention baselines throughout this book, Some people who do not currenily use baselines to help control their projects have a hard time understanding this concept. Baselines are simply the final, approved version of certain pieces of the project ‘© 2013 AMC Publications, Inc » 962.846.4484 + info@rmeprojecticom * werw.rmopraject.com 181