Project Management Professional (PMP®) Exam PMBOK® Guide - Fifth Edition Aligned

Project Management Professional (PMP®) Exam
PMBOK® Guide – Fifth Edition Aligned
Chuck Millhollan, MBA, MPM, PMP, PgMP

IIBA Certified Business Analysis Professional (CBAP)
ASQ Certified Six Sigma Black Belt
ASQ Certified Software Quality Engineer
ASQ Certified Manager of Quality / Organizational Excellence
chuck.millhollan@gmail.com
Innovative Management Solutions, LLC
Chuck Millhollan, MBA, MPM, PMP, PgMP 1

Student Copy – Not for Reproduction or Distribution © 2014, Innovative Management Solutions, LLC
Process Group Initiating Planning Executing Monitoring & Controlling Closing
Knowledge Area
Integration Copyrights
Scope
• PMP®: “PMP” and the PMP logo are
Time
certification marks of the Project Management
Institute which are registered in the United
Cost States and other nations
Quality
• PMBOK®: “PMBOK” is a trademark of the
Project Management Institute, Inc. which is
HR registered in the United States and other
nations
Communications
• Note: The PMBOK is the primary source for
Risk this slide deck. When other sources are
references, citations are provided.
Procurement
Stakeholder Student Copy – Not for Reproduction or Chuck Millhollan, MBA, MPM, PMP, PgMP 2
Distribution © 2014, Innovative Management Solutions, LLC
Knowledge Area
Introductions &
Integration
Course Expectations
Scope
• Personal Background
Time – Name
Cost
– Organization, Title
– Formal Education
Quality
• Project Management Experience
HR
• Expectations for this course
Communications
Risk
Procurement
Course Syllabus

Knowledge Area
Integration Workshop Approach

Scope
• Instructor presentation & guided discussion
Time • Student presentation (based on the Rita
Mulcahy PMP® Exam Prep Textbook chapter
Cost
tests)
Quality • Presentations should include:
– The questions with the correct answers highlighted
HR
– A justification for the correct answers
Communications
– An explanation for why the distracters were not the
appropriate choice
Risk – Sources for each question
• In-class exam review and discussion
Procurement
– Random selection 
Knowledge Area
Integration Student Presentations

Scope • Let’s go the syllabus (last page…)
• Student presentations are based on learning
Time
from the following:
Cost – The PMBOK® required reading for the knowledge
area
Quality – Rita Mulcahy PMP® Exam Prep textbook required
reading & practice exams
HR
– Hot Topics flashcards
Communications – Additional research as appropriate
• Candidates are encouraged to provide copies
Risk
of their presentations to all members of the
Procurement class after their presentations (either hard
copy or electronic copy is acceptable)
Knowledge Area
Student Presentations: Assignments
Integration
• Integration Management • Human Resource
Scope – Instructor assigned Management
• Chapter 4 – Instructor assigned
• Chapter 9
Time • Scope Management
• Communications
– Instructor assigned Management
Cost • Chapter 5
– Instructor assigned
• Time Management • Chapter 10
Quality – Instructor assigned • Risk Management
• Cost Management • Chapter 11
HR • Procurement Management
Communications • Chapter 12
• Quality Management
• Stakeholder Management
Risk • Chapter 8
• Chapter 13
• Ethics & Prof Responsibility
Procurement – Instructor assigned
• Chapter 14
Knowledge Area
Integration The Test

Scope • 200 questions
– 25 are “pretest” questions that do not effect score –
Time randomly placed throughout the exam
– Passing rate is 106 of 175 scored questions (~ 61%)
Cost
• 4 hours
Quality – Preceded by a 15 minute tutorial (not part of your time)
• Pass/Fail indication immediately after submission
HR – Diagnostic report will show breakdown of performance
within each domain (5 process + professional
Communications responsibility)
• Cost:
Risk
– PMI Members: $405/$275
– Non-Members: $555/$375
Procurement
Knowledge Area
Integration
Scope
Time
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration
Study Time Commitment (PMPath™)
Source: Dr. Robert Amason, PMP
Scope Total Course Time Calculation (Hours)
Study Element Most Likely Optimistic Pessimistic PERT

Time Integration 17.75 13.31 35.5 20.0
Scope 13.40 10.05 26.8 15.1

Cost
Quality 15.10 11.33 30.2 17.0
Time 16.70 12.53 33.4 18.8

Quality
Cost 16.30 12.23 32.6 18.3
HR HR 25.00 18.75 50 28.1
Communications 13.30 9.98 26.6 15.0
Communications Risk 14.70 11.03 29.4 16.5
Procurement 13.20 9.9 26.4 14.9

Risk Stakeholder 13.30 9.97 26.6 15.0
Professional Responsibility 11.70 8.77 23.4 13.2

Procurement
TOTALS 169.45 127.84 340.9 191.8
Study Groups

Knowledge Area
Integration Application Process

Scope
Time
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Time
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Time
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration Louisville Testing Locations

Scope
Time
Thomson Prometric Test Center U of L Belknap Campus
Cost
7400 New La Grange Road, Suite #110 106 East Brandeis
Louisville, KY 40222 Louisville, KY 40208
Quality
Phone: (502) 423-0478 Phone: (502) 852-6607
HR Site Code: 1101 Site Code: 1102
Communications
Risk
Procurement
Knowledge Area
Integration Our roles…

Scope
• I am here as a facilitator
Time • You are the PMP® exam
Cost candidates!
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration Want the Answers Before the Test?

Scope
• Best practices and lessons learned
Time from experienced faculty members, and
Cost
even more important…
• PMP Exam candidates fresh from the
Quality
fight
HR
Communications
Risk
Procurement
Knowledge Area
Integration Note Taking

Scope
• Purposefully no “slide deck” once we
Time move into the knowledge areas
Cost
– The PMBOK® is your note taking
guide…get into the source!
Quality
HR
Communications
Risk – Note the slide headers; they guide you to

Procurement
the applicable sections of the PMBOK®
PMI-ism Break
Rita Mulcahy, PMP® Exam Prep, 8th

Edition

An Introduction to Project Management


Knowledge Area
Integration 1.2 What is a Project?

Scope • Defined in terms of distinctive characteristics – a project
is a temporary endeavor undertaken to create a
Time unique product or service
– A product (end item or component)
Cost
– A capability to perform a service
Quality – A result (outcome or document)
• Progressive elaboration
HR – Developed in steps and continuing by increments
• Operations and project similarities
Communications
– Performed by people
– Constrained by limited resources
Risk
– Planned, executed, and controlled
Procurement • Program – A group of interrelated projects in which
management is coordinated
Knowledge Area
Integration 1.3 Managing a Project

Scope
• Identify requirements
Time • Assess & address stakeholder needs,
concerns & expectations throughout the
Cost
duration of the project
Quality • Constrained
– Scope
HR
– Quality
Communications
– Schedule
– Budget
Risk – Resources
– Risks
Procurement
Knowledge Area
Integration Definitions
Scope
• Project Management: The application of
Time
management methods (knowledge, skills,
tools, techniques) to project activities
Cost (planning, scheduling and controlling) to
deliver the product of the project
Quality
• Project Management provides process or
HR task focus; it provides specifics of who, what,
when, and how
Communications
Risk
Procurement
Knowledge Area
Integration 1.4 Projects & Programs Defined

Scope
• Project
Time
– Temporary
– Undertaken to create a unique product or service
Cost – Defined starting point
– Defined objectives (determines end point)
Quality
• Program
HR – Group of related projects
– Coordinated management
Communications
– Obtain benefits and/or control not possible if
Risk managed individually
Procurement
Knowledge Area
Integration Project Management

Scope
Project
Time Initiation
Project
(Proposal, CE,
Closure
Approval,
Cost
etc...)
Quality Monitoring
&
HR Control
Communications Project
Planning
Project
Risk Execution
(Charter,
WBS, etc…)
Procurement
Knowledge Area
Integration Program Management

Scope Overall
Portfolio
Time
Program 1 Program 2 Project 5 Portfolio 1
Cost
Quality Project 1 Project 2 Project 3 Project 4
HR
Communications
Risk
Procurement
Knowledge Area
Program vs Project: Important
Integration
Differentiators
Scope
Time
Program Project
Cost Deliver long term business Deliver: T, C, Q, and

benefit Scope
Quality
Focus on ongoing support Ends when deliverables
and full transition are provided
HR
Focus on benefit Goal is to satisfy users
Communications realization
Produce results Produce product or service
Risk
Procurement
Knowledge Area
Program vs Multi-Project: Important
Integration Differentiators
Scope
Program Multi-project
Time Management of a group of Manage several projects
interrelated projects independently
Cost
Program level responsibility Fully accountable for each
Quality
and manages project individual project
managers for component
projects
HR
Optimize resources across Manage resources assigned to
Communications program tasks for projects
Manage multiple stakeholders; Focused on meeting needs for
Risk complex communications different project stakeholders
Procurement
Balanced time across program Balance between concurrent
related activities projects competing for time
Knowledge Area
Integration Portfolio Management

Source: www.projectmasters.com
Scope
Time
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration
Scope
Time Projects focus on delivering a product or

service
Cost
Quality Programs focus on benefit realization

HR
Communications Portfolios demonstrate investment strategy
Risk
Procurement
Knowledge Area
Integration 1.4.4 The “PMO”

Scope
• Management structure that
Time standardizes project governance
Cost
processes
– Coordinate planning
Quality
– Prioritization
HR – Coordination communication
Communications
– Resource sharing
– Methodologies, tools & techniques
Risk
– Responsibilities ranging from support to
Procurement direct management
Knowledge Area
Integration PMO Structures

Scope
• Supportive – Consultative, provide
Time templates, share best practices,
Cost
coordinate training, collect/manage
lessons learned
Quality
• Controlling – Compliance with
HR methodologies, governance (moderate
Communications
control)
• Directive – Directly manage projects
Risk
(high control)
Procurement
Knowledge Area
1.5 Project vs Operations
Integration
Management
Scope • Operations
– On-going activities
Time
– Business process or operations management
– Product life cycle vs project life cycle
Cost
– Intersection points (product enhancements, new product
Quality
development, product close-out or disposal, etc…)
• Similarities
HR – Performed by people
– Limited by constraints
Communications – Planned, executed, monitored & controlled
– Achieve organizational goals & contributes to strategic
Risk plans
Procurement
Knowledge Area
Integration 1.6 Business Value

Scope
• Sum of all tangible & intangible assets
Time • Created through effective ongoing
Cost operations
Quality
• Created through effective use of
portfolio, program and project
HR
management
Communications • Strategic planning
Risk – Portfolios
• Programs
Procurement – Projects
Organizational Influences and Project Life
Cycle


Organizational Structure
Let’s Deep Dive PMBOK Table 2-1

Knowledge Area
Integration 2.1.4 Organizational Process Assets

Scope
• Any and all process related assets
Time
– Plans, policies, procedures, guidelines
– Historical information
Cost – Lessons learned
Quality
• Formal or informal
• Updated throughout the project
HR
• Responsibility primarily rests with project team
Communications members
• Categories
Risk
– Processes & procedures
Procurement – Corporate knowledge base
Knowledge Area
2.1.5 Enterprise Environmental
Integration
Factors
Scope • Internal & external factors that influence a project’s
success
Time
• Not under the project team’s control
Cost • Negative or positive
• Inputs to most processes
Quality • Such as
– Organizational culture, structure, processes
HR
– Industry standards
Communications
– Existing human resources (capabilities)
– Personnel administration (staffing, performance reviews)
Risk – Work authorization systems
– The PMIS
Procurement
Knowledge Area
Integration 2.2 Project Stakeholders

Scope • An individual, group, or organization who may
affect, be affected by, or perceive itself to be
Time affected by a decision, activity, or outcome of
a project
Cost
Quality
• Grouping and naming stakeholders is the
HR primary aid to identifying who views
themselves as stakeholders
Communications
Risk
Procurement
Knowledge Area
Integration Project Stakeholders

Scope • Project Manager: The person responsible for
managing the project
Time
• Customer: The individual or organization who
Cost will use the product
• Sponsor: The individual or group who creates
Quality
and approves the project charter and
(typically) provides the financial resources for
HR
the project
Communications • Expeditor: Simply a communications
coordinator w/o decision making or enforcing
Risk authority
Procurement
Knowledge Area
Integration
2.4 Project Lifecycle
Scope
• Generally defines…
Time
– What
– When
Cost – Who
– How
Quality
• Common Characteristics
HR – Cost & staffing requirements start low and peak
during implementation (intermediate phases)
Communications
– Level of uncertainty is highest at the beginning
Risk – Ability to influence “product” characteristics is
highest at the beginning
Procurement
Let’s Dig Into PMBOK Figure 2-8

Knowledge Area
Integration Project “Phases”

Scope
• Completion of one (or possibly more)
Time deliverables characterizes a phase
Cost
– Logical segmentation for ease of
management, planning, and control
Quality – Aids governance
HR – Sequential or overlapping phases
Communications
• Deliverable = measurable, verifiable
product or service
Risk
• One-size-does-not-fit-all
Procurement
Knowledge Area
Integration Life Cycle Types

Scope
• Predictive
Time
– Waterfall
– Most planning (plan-driven) is completed early in the
Cost lifecycle
• Iterative (incremental)
Quality
– Phases “repeat” as product understanding increases
HR • Adaptive
– Agile, or change-driven
Communications
– Similar to iterative; however, rapid “sprints” with
Risk fixed time and cost
– Scope and requirements difficult to determine in
Procurement advance
Project Management Processes


Knowledge Area
Integration
Project Management Processes Groups
Scope
Initiating Planning
Time Process Process
Cost
Quality
Controlling Executing
HR
Process Process
Communications
Risk Closing
Process
Procurement
Knowledge Area
Integration Process Group Interaction

Scope Process
Groups are
Time
not Phases
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration 3.8 Project Information

Scope
• Work performance data – observations
Time and measurements during work (executing
measurements input into controlling
Cost
processes)
Quality • Work performance information – data
HR
analyzed in context and integrated based
on relationships across areas (status,
Communications forecasts)
Risk • Work performance reports –
Representation of work performance
Procurement
information
Page 60
(Close your PMBOK®)

PMI-ism Break

Edition

Practice Test Time!
Chapters 1 - 3

Project Integration Management


Knowledge Area
Integration
Integration Project Interfaces
Scope • Interface Management is critical during execution
• Interfaces:
Time
– Product
Cost – Infrastructure
– Resources
Quality – People interfaces (cross organization)
– System interfaces (organization, information)
HR • Goal of project integration: coordinate people,
product, infrastructure, system (organization,
Communications
information) together toward accomplishing the project
goals.
Risk
Procurement
Process Group Initiating
Initiating Planning Executing Monitoring & Controlling Closing
Knowledge Area
Integration
Integration 4.1 Develop Project Charter
Scope
Document that formally authorizes the
Time project & provides PM authority to
allocate resources
Cost
Quality 4.1.1 Inputs

HR
.1 Project SOW
.2 Business case
Communications
.3 Agreements
Risk .4 Enterprise environmental factors
.5 Organizational process assets
Procurement
Knowledge Area
Integration
Integration Constraints & Assumptions
Scope
• Constraint – a restriction that well affect
Time the performance of the project
• Assumptions – factors, that for planning
Cost
purposes, are considered to be true,
Quality real, or certain
HR
• Assumptions – affect all aspects of the
project planning, and are part of the
Communications progressive elaboration of the project
Risk
Procurement
Knowledge Area
Integration
Scope
4.1.2 Tools & Techniques
Time .1 Expert Judgment
Cost
Quality
HR
Communications Two broad categories of project selection methods:

1. Benefit measurement
Risk 2. Mathematical models
Procurement
Knowledge Area
Integration
Integration Reasons to Authorize a Project
Scope
• Market Demand
Time • Business Need
Cost • Customer Request
Quality • Technological Advance
HR
• Legal Requirement
• Social Need
Communications
Risk
Procurement
Knowledge Area
Integration
Integration Models
Scope
• Non-numeric • Numeric
Time
– Sacred Cow – Payback Period
– Operating Necessity – Average Rate of
Cost – Competitive Return
Necessity What about TVM?
Quality
– Product Line – DCF or IRR (NPV)
Extension
HR
– Comparative Benefit
Communications
Risk NPV = -(Initial Investment) +  of CF/(1 + r)t

Procurement
Knowledge Area
Integration
Integration Models
Scope
Time
Cost
Quality
HR
Communications
Risk
Procurement
NPV Exercise

NPV Exercise
• Initial cost = $12,500
• ERR = 15%
• Annual project cash flow
– Year 1: Revenue - $4,500, Expenses - $750
– Year 2: Revenue - $7,300, Expenses - $1,400
– Year 3: Revenue - $11,000, Expenses - $3,200
4500 – 750 7300 – 1400 11000 – 3200

NPV (project X) = (-$12,500) + + +
(1 + 0.15)1 (1 + 0.15)2 (1 + 0.15)3
3750 5900 7800
NPV (project X) = (-$12,500) + + +
1.15 1.3225 1.5209
NPV (project X) = (-$12,500) + 3260.87 + 4461.26 + 5128.63
NPV (project X) = (-$12,500) + 12850.75 = 350.75
Student Copy – Not for Reproduction or Distribution

Knowledge Area
Integration
Scope
4.1.3 Outputs (Figure 4-3)
Time .1 Project Charter
• Project purpose of justification
Cost • Objectives (SMART)
• High level
Quality – Requirements
– Project description
HR
– Risks
• Summary milestone schedule
Communications
• Summary budget
Risk • Approval requirements
• Assign PM (responsibility and authority)
Procurement • Charter approval (sponsor)
Process Group Initiating Planning
Planning Executing Monitoring & Controlling Closing
Knowledge Area
4.2 Develop Project Management
Integration
Integration
Plan
Scope
The PM Plan documents the collection of outputs
Time
from each of the processes in the “Planning”
process group
Cost

.1 Project Charter
HR
.2 Outputs from planning processes
Communications
.3 Enterprise Environmental Factors
.4 Organizational Process Assets
Risk
Procurement
Knowledge Area
Integration
Integration
Plan
Scope
Time
.1 Expert Judgment
.2 Facilitation Techniques
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration
Integration
Plan
Scope
Time .1 PM Plan
• Integrates and consolidates all of the subsidiary
Cost
management plans and baselines from planning
processes
Quality
HR
Communications
Risk
Procurement
Process Group Initiating Planning Executing
Executing Monitoring & Controlling Closing
Knowledge Area
4.3 Direct & Manage Project
Integration
Integration
Execution
Scope
4.3.1 Inputs
Time .1 PM Plan
Cost
.2 Approved Change Requests
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration Types of Approved Changes

Scope
• Corrective
Time – Brings expected future performance in line
with the plan
Cost
• Preventative
Quality
– Reduces the probability of negative
HR consequences associated with risk
Communications
• Defect repair
– Documented identification and
Risk recommendation to repair or replace
Procurement
Knowledge Area
Integration
Integration
Execution
Scope
Cost
.2 PMIS
.3 Meetings
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration
Integration Work Authorization System
Scope • Authorizes work to begin
– Commits resources (people, funds, etc.) to the work
Time
– Starts the clock on that portion of the plan and
schedule
Cost
• Large projects
Quality
– Formal written system
– Frequently, organizational form to prepare
HR
• Small projects
Communications
– Verbal, email, etc.
Risk
– Still a ‘formal system’ and emphasis is needed to
retain control of the work
Procurement
Knowledge Area
Integration
Integration
Execution
Scope
Time .1 Deliverables
Cost
Unique…verifiable product, result,
capability…
Quality .2 Work Performance Data
HR .3 Change Requests
.4 Project Management Plan Updates
Communications
.5 Project Document Updates
Risk
Procurement
Knowledge Area
Integration
Integration PM Plan Updates
Scope
• Requirements Management Plan
Time • Schedule Management Plan
• Cost Management Plan
Cost
• Quality Management Plan
Quality
• Human Resource Plan
HR • Communications Management Plan
• Risk Management Plan
Communications
• Procurement Management Plan
Risk
• Project Baselines
Procurement
Knowledge Area
Integration
Integration Product Document Updates
Scope
• Requirements Documents
Time • Project Logs
Cost – Issues log
– Assumptions
Quality
• Risk Register (log)
HR
• Stakeholder Register
Communications
Risk
Procurement
Process Group Initiating Planning Executing Monitoring &&Controlling
Monitoring Controlling Closing
Knowledge Area
Integration
Integration 4.4 Monitor & Control Project Work
Scope
Track, review, regulate…
Time
Cost 4.4.1 Inputs

Quality
.1 PM Plan
.2 Schedule Forecasts
HR
.3 Cost Forecasts
Communications .4 Validated Changes (see 4.4.1.4)
Risk
.5 Work Performance Information
Procurement
Knowledge Area
Integration
Scope
Cost
.2 Analytical Techniques
.3 PMIS
Quality
.4 Meetings
HR
Communications
Risk
Procurement
Knowledge Area
Integration
Integration Track Key Data
Scope • Cost Performance
Time
• Schedule Performance
• Quality
Cost – Conformance to requirements and specifications
(product quality)
Quality – Quality of project reporting and tracking, too (project
quality)
HR
• Plan performance -- maintain the project plan
Communications • Resource utilization -- compare to schedule
and costs
Risk
• Team performance (group and individual)
Procurement • Risk triggers
Knowledge Area
Integration
Scope
Time .1 Change Requests
Cost
.2 Work Performance Reports
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Change Control
Integration
Integration
Outcomes
Scope
• Identify and influence factors that create
Time
change
– e.g., add-on requirement during execution phase of
Cost project
• Drives scope change
Quality • Cost
• Schedule
HR
• Recognize when a change has occurred
Communications
– Taking action to reflect the change in the plan
Risk – Identifying changes in performance baselines
Procurement
• Manage actual changes when they occur
Knowledge Area
Integration
Integration Integrated Change Control
Scope
• Key activity in Execution Phase
Time • Retain control of revisions
– Scope: Schedule, Cost, Staffing
Cost
– Requirements and specifications: Quality
Quality • Important to keep performance baselines
intact
HR
(baselines = the plan)
Communications
• Not necessary to ‘ban’ changes…just identify,
Risk control (and manage) them
– Identify & Influence, Recognize, Manage
Procurement
Knowledge Area
Integration
Integration
4.5 Perform Integrated Change Control
Scope
4.5.1 Inputs
Time .1 PM Plan
Cost
.3 Change Requests
Quality .4 Enterprise Environmental Factors
HR
Communications
Risk
Procurement
Knowledge Area
Integration
Integration Configuration Management
Scope
• Three main objectives:
Time – Establish processes to identify, request,
and assess value of changes
Cost
– Continuously validate and improve through
Quality considering impact of changes
HR
– Processes used to communicate changes
to stakeholders
Communications
Risk
Procurement
Knowledge Area
Integration
Integration
Scope
Cost
.2 Meetings
.2 Change Control Tools
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration
Integration
Scope
Time .1 Approved Change Requests
Cost
.2 Change Log
Quality
HR
Communications If a change request is feasible, approved,

and outside of scope, the approval
Risk
requires a baseline change
Procurement
Closing
Knowledge Area
Integration
Integration 4.6 Close Project or Phase
Scope
4.6.1 Inputs
Time .1 PM Plan
Cost
.2 Accepted Deliverables
Quality
HR
Communications
Risk
Procurement
Closing
Knowledge Area
Integration
Integration Impact of Termination
Scope
• Project transfer
Time • Ongoing operations
Cost • Project personnel
Quality • Equipment/material assets
HR
• Future projects
• PM
Communications
Risk
Procurement
Closing
Knowledge Area
Integration
Integration Termination by...
Scope • Extinction
– Successful or not
Time
– Deliverable is external to or not a fundamental
Cost function of the parent organization
• Addition
Quality – Institutionalized
– New Division
HR
• Integration
Communications – Most Common
– Project assets redistributed
Risk
• Starvation
Procurement – Budget decrement
Closing
Knowledge Area
Integration
Scope
Cost
.3 Meetings
Quality
HR
Communications
Risk
Procurement
Closing
Knowledge Area
Integration
Scope
Time .1 Final Product, Service, or Result Transition
Cost
.2 Organizational Process Asset Updates
Quality
HR
Communications
Risk
Procurement
PMI-ism Break

Edition

Practice Test Time!
Chapter 4 Project Integration Management

Project Scope Management


Knowledge Area
Integration Scope Management

Scope
Scope
“Scope” Defined:
Time The sum of the products and services to
Cost be provided by a project.
Quality
What the project will deliver and …
HR
….what the project will not deliver
Communications
Risk
Procurement
Knowledge Area
Integration 5.1 Plan Scope Management

Scope
Scope
5.1.1 Inputs
Time .1 Project Management Plan
Cost
.2 Project Charter
Quality
HR
Communications Documents how scope will be defined,

validated, and controlled
Risk
Guidance and direction for managing
Procurement
scope
Knowledge Area

Scope
Scope
Cost
.2 Meetings
Quality
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Scope
Time .1 Scope Management Plan
Cost
.2 Requirements Management Plan
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration 5.2 Collect Requirements

Scope
• Active stakeholder involvement during
Time
discover and decomposition
• Foundation for the WBS
Cost
– Business: high-level needs (issues/opportunities)
Quality
– Stakeholder: needs of a group
– Solution: features, functions and characteristics
HR • Functional = behavior
• Nonfunctional = conditions or qualities
Communications
– Transition: temporary (e.g. training)
Risk
– Project: actions, processes, or conditions the project
needs to meet
Procurement – Quality: condition or criteria required to validate
deliverable
Knowledge Area

Scope
Scope
5.2.1 Inputs
Cost
.3 Stakeholder Management Plan
Quality
.4 Project Charter
HR .5 Stakeholder Register
Communications
Risk
Procurement
Knowledge Area

Scope
Scope
Time
.1 Interviews
.2 Focus Groups
Cost .3 Facilitated Workshops
.4 Group Creativity Techniques
Quality
.5 Group Decision Making Techniques
HR .6 Questionnaires and Surveys
.7 Observations
Communications
.8 Prototypes
Risk
.9 Benchmarking
.10 Context Diagram: visual representation
Procurement .11 Document Analysis
Knowledge Area

Scope
Scope
Time .1 Requirements Documentation
Cost
.3 Requirements Traceability Matrix
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration
Requirement Stability
Limited executive
Scope
Scope involvement:
requirements
Number of changes
Time
never stabilize
Cost
Quality
Focused, early
agreement =
HR requirement stability!
Time
Communications
Risk
Source: Tuttle, Q.C., Implementing Concurrent Project Management, Prentice Hall, 1994
Procurement Moral: Agree upon requirements early
Knowledge Area
Integration Scope Management

Scope
Scope The processes required to insure that:
Time – the project includes all of the work
required
Cost
– only the work required
Quality – the project completes successfully
HR – controlling what is and is not included
in the project
Communications
Risk
Procurement
Knowledge Area
Integration Two Types of Scope

Scope
Scope
• Product Scope
Time – Features
Cost
– Functions
– Completion measured against product
Quality requirements
HR • Project Scope
Communications
– Work that must be done to deliver product
– Completion measured against the project
Risk plan
Procurement
Knowledge Area
Integration Scope Definition

Scope
Scope
• Develops a detailed description of the
Time project and product or service (result)
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration 5.3 Define Scope

Scope
Scope
5.3.1 Inputs
Cost
.2 Project Charter
.3 Requirements Documentation
Quality
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Scope
Cost
.2 Product Analysis: Product breakdown,
system analysis, value stream mapping,
Quality etc.
HR
.3 Alternatives Identification
.4 Facilitated Workshops
Communications
Risk
Procurement
Knowledge Area

Scope
Scope
Time .1 Project Scope Statement
Cost
Provides common understanding of scope
and describes major objectives
Quality Enables detailed planning, guides work,
HR
and provides baseline for evaluating
change requests
Communications Acceptance criteria
Risk .2 Project Documentation Updates
Procurement
Knowledge Area
Integration PMBOK 5th Edition Table 5-1

Scope
Time
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration The WBS!

Scope
Scope
• Deliverable oriented hierarchal
Time decomposition
Cost • Organizes and defines “total” scope of
the project
Quality
• WBS subdivides into manageable
HR
components
Communications • Represents current work specified in
Risk
the current approved project scope
statement
Procurement
Knowledge Area
Integration WBS Type Examples

Scope
Scope
• Deliverable-oriented • Process-oriented
Time
– New Bank – Conducting annual
– New Laboratory close out at bank
Cost – New Manufacturing – Converting
Plant chemicals to plastics
Quality
– New Software – Monitoring
– Software Upgrade productivity at
HR outlying site
– New facility design
– Issuing monthly
Communications
payroll checks
Risk
Procurement
Knowledge Area
Integration Four Steps to Creating a WBS

Scope
Scope
• Specify the project objectives (scope)
Time • Identify specific products, services or
Cost results (deliverables)
Quality
• Identify 100 percent of the work
• Subdivide the elements until a level is
HR
achieved that is suitable for planning
Communications and control
Risk
Procurement
Knowledge Area
Integration 5.4 Create WBS

Scope
Scope
5.4.1 Inputs
Cost
.2 Project Scope Statement
Quality
HR .5 Organizational Process Assets
Communications
Know the PMBOK®’s WBS!
Risk
Procurement
Knowledge Area
Integration What is a WBS?

Scope
Scope
• Deliverable-oriented grouping of project
Time elements
Cost • Organizes and defines the total work
scope of the project
Quality
• Each descending level represents
HR
increasing detail
Communications
Risk
Procurement
Source: Practice Standards for Work Breakdown Structures. (2001). PMI.
Knowledge Area
Integration Activity vs. Deliverable

Scope
Scope
• Activity = work to be done
Time – Steps or “how”
Cost
– Defined discrete elements of work on a
project
Quality – Consumes time & resources
HR
• Deliverable = output of work done
Communications – Tangible item or product
Risk
Procurement
Knowledge Area
Integration Why use WBS?

Scope
Scope
• Assists in developing schedule and cost
Time • Primary input to:
– Activity Definition
Cost
– Resource planning
Quality – Cost estimation and budgeting
HR
– Risk Management Planning
• Communicates to stakeholders
Communications
• Assists in reporting progress
Risk
Procurement
Source: Practice Standards for Work Breakdown Structures. (2001). PMI.
Knowledge Area

Scope
Scope
Time .1 Decomposition
Cost
Subdividing the work into smaller, more
manageable “work packages.” Work
Quality packages are the lowest level of detail.
HR
Often referred to as “rolling wave” or
“iterative” planning
Communications .2 Expert Judgment
Risk
Procurement
Knowledge Area

Scope
Scope
Time .1 Scope Baseline
Cost
Project Scope Statement
WBS
Quality
WBS Dictionary
HR .2 Project Documents Updates
Communications
Risk
Procurement
Knowledge Area
Integration 5.5 Validate Scope

Scope
Scope
5.5.1 Inputs
Time
.1 Project Management Plan
Cost .3 Requirements Traceability Matrix
.4 Verified Deliverables
Quality
.5 Work Performance Data (e.g. degree of compliance
HR with requirements, number & severity of
nonconformance, etc.)
Communications
Process of obtaining formal acceptance from stakeholders
Risk
If terminated early, establishes and documents level of
completion
Procurement
Not concerned w/ correctness of work – that’s quality
Stakeholder control
Student Copy – Not for Reproduction or Chuck Millhollan, MBA, MPM, PMP, PgMP 116
Knowledge Area
Integration Validate Scope vs Control Quality

Scope
• Validate Scope: Primarily concerned
Time with acceptance of project deliverables
Cost • Control Quality: Primarily concerned
with correctness of the deliverables
Quality
(requirements)
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Scope
Time .1 Inspection
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Scope
Time .1 Accepted Deliverables
Cost
Document “non-accepted” deliverables with
reasons
Quality .2 Change Requests
HR .3 Work Performance Information
.4 Project Documentation Updates
Communications
Risk
Note this is in the “Monitoring and Control”
Procurement Process Group
Knowledge Area
Integration Scope Creep

Scope
Scope
• Small “enhancements” can screw up
Time major functionality!
Cost • What causes “Scope Creep?”
Quality
• How has scope creep impacted your
job?….projects in your organization?
HR
Communications
Risk
Procurement
Knowledge Area
Integration Scope Relationships

Scope
Scope
• Scope translates into requirements
Time
– Requirements: the stakeholders’ specific needs or
wants
Cost
• Quality is “conformance to requirements”
Quality
HR
Communications
Risk
Procurement
Source: Lewis, J. (2001). Project Planning, Scheduling, and Control. 3rd ed.
Knowledge Area
Integration 5.6 Control Scope

Scope
Scope
5.6.1 Inputs
Cost
.3 Requirements Traceability Matrix
Quality .4 Work Performance Data
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Scope
Time .1 Variance Analysis
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Scope
Time .1 Work Performance Information
Cost
.2 Change Requests
Quality
HR .5 Organizational Process Asset Updates
Communications
Risk
Procurement
Knowledge Area
Scope Change
Integration
Control
Scope
Scope
• Concerned with three things:
Time – “…influencing factors that create scope
changes to ensure changes are agreed
Cost upon,
– determining that a scope change has
Quality
occurred
HR – managing actual changes when and if they
occur.”
Communications
Risk
Procurement
PMI-ism Break

Edition

Practice Test Time!
Chapter 5 Project Scope Management

Project Time Management


Knowledge Area
Integration 6.1 Plan Schedule Management

Scope
6.1.1 Inputs
Time
Cost
.2 Project Charter
Quality
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Time
Time
.1 Expert Judgment
Cost .3 Meetings
Quality
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Time
Time .1 Schedule Management Plan
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration 6.2 Define Activities

Scope
6.2.1 Inputs
Time
Cost
.2 Scope Baseline
.3 Enterprise Environment Factors
Quality
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Time
Time
.1 Decomposition – in the context of activity definition,
decomposition involves subdividing work packages
Cost into smaller, more manageable components (basis
for estimating, scheduling, executing, monitoring and
Quality controlling work)
.2 Rolling Wave Planning
HR Near-term work planned in detail and future work
planned at high level
Communications
.3 Expert Judgment
Risk
Procurement
Knowledge Area

Scope
Time
Time .1 Activity List: Must include all activities that
will be performed on the project
Cost
.2 Activity Attributes: Distinct from milestones
Quality in that they have durations and may have
resources and cost requirements
HR
.3 Milestone List
Communications
Risk
Procurement
Knowledge Area
Integration 6.3 Sequence Activities

Scope
6.3.1 Inputs
Time
Cost
.2 Activity List
.3 Activity Attributes
Quality
.4 Milestone List
HR .5 Project Scope Statement
Communications
Risk
Procurement
Knowledge Area

Scope 6.3.2 Tools & Techniques
.1 Precedence Diagramming Method
Time
Time
.2 Dependency Determinations
Mandatory – Hard logic
Cost
Discretionary – Soft logic, preferred, etc…
Quality External – Relationship with non-project activities
Internal – Relationship between project activities
HR .3 Leads & Lags
Lead allows acceleration of the successor activity
Communications
In PDM, F-S is the most commonly used logical

Risk
relationship
Procurement
Knowledge Area

Scope
Time
Time .1 Project Schedule Network Diagrams
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Network Diagram
Integration
“Facts”
Scope
• All have beginning point and an end point
Time
Time • Represent “predecessor” relationships
– Complex relationships can be represented in AON
Cost • F-S, S-S, S-F, F-F
– All activities have predecessors
Quality
– Exception: first task of network has no predecessor
HR • No “hangers”
– Every task has a “successor”
Communications
– Exception: last task has no “successor”
Risk • No “loops”
Procurement
Knowledge Area
Integration Network Flow Diagram

Scope
Activity TE Predecessor
Time
Time A 20
B 20
Cost C 10
D 15 A
Quality
E 10 B, C
HR F 14 B, C
G 4 B, C
Communications H 11 C
Risk
I 18 G, H
J 8 D, E
Procurement Kerzner, H. (2001). Project Management: A Systems Approach to Planning, Scheduling, and
Controlling. 7th ed.
Knowledge Area
Integration Slack (or Float)

Scope
• Free slack – task delay w/o delaying
Time
Time successor’s early start
Cost • Total slack – task delay w/o delaying
project completion
Quality
• Project slack – project delay w/o
HR
affecting required due date (desired –
Communications actual)
Risk
Procurement
Network Flow Diagram Exercise

Knowledge Area
Integration Resource Planning

Scope
• What
Time
Time • How much
Cost • Output: list of resource requirements
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration Resource Planning Considerations

Scope
• Difficulty of the work
Time
Time • Uniqueness of project scope
Cost • Organization’s history of doing similar
Quality
tasks
• Resource availability
HR
• Outsourcing requirements
Communications
• Organizational policies
Risk
Procurement
Knowledge Area
Integration 6.4 Estimate Activity Resources

Scope
Closely coordinated with Cost Estimating
Time
Time 6.4.1 Inputs
Cost .1 Schedule Management Plan
.2 Activity Lists
Quality
.3 Activity Attributes
HR .4 Resource Calendars
Communications .5 Risk Register
.6 Activity Cost Estimates
Risk
Procurement .8 Organizational Process Assets
Knowledge Area

Scope
Time
Cost
.2 Alternatives Analysis
.3 Published Estimating Data
Quality
.4 Bottom-up Estimating
HR .5 PM Software
Communications
Risk
Procurement
Knowledge Area

Scope
Time
Time .1 Activity Resource Requirements
Cost
Types and quantities of resources required
Note: “When” is determined during
Quality Schedule Development
HR .2 Resource Breakdown Structure
Communications
Risk
Procurement
Knowledge Area
Integration 6.5 Estimate Activity Durations

Scope Note: Overall project duration is determined
during Schedule Development
Time
Time
6.5.1 Inputs
Cost .1 Schedule Management Plan
.2 Activity List
Quality .3 Activity Attributes
.4 Activity Resource Requirements
HR
.5 Resource Calendar
Communications
.7 Risk Register
Risk .8 Resource Breakdown Structure
Knowledge Area

Scope
Time
Time
.1 Expert Judgment
.2 Analogous Estimating
Cost Using actual durations from “experience”
Accurate if previous activities are similar in fact &
Quality
team members have needed expertise
HR .3 Parametric Estimating
Quantitatively determined
Communications .4 Three-point Estimates
Risk
.6 Reserve Analysis
Procurement
Knowledge Area

Scope
Time
Time .1 Activity Duration Estimates
Cost
Quality
Activity duration estimates should always
HR include some indication of range of
Communications possible results (e.g.: +/- time, or %
probability)
Risk
Procurement
Knowledge Area
Integration Concepts for Duration Estimating

Scope
tO + 4tM + tP
• Beta Distribution: tE = 6
Time
Time
• SD = P – O
Cost 6
2
P–O
Quality • Variance = ( 6 )
tO + tM + tP
HR • Triangular distribution: tE = 3
Communications
Risk
Procurement
Knowledge Area
Integration Normal Distribution

Scope
Time
Time
Cost
q=99.7%
Quality
HR
Communications
Risk
Procurement
Pert Exercise
• If P = 24, ML = 12, O = 6
• What is the probability that activity will be

completed within 10 – 16 days?
6 + 4(12) + 24 = 13
6
24 – 6 = 3
• SD: 6
13 – 3 (1SD) = 10, 13 + 3 (1SD) = 16; Roughly 68% chance!
• Variance: 32 = 9
Path Standard Deviation and
Variances
Standard
Variance
Optimistic Most Likely Pessimistic Triangulation PERT Weighted Average Deviation
SD Squared
(P - O)/6
Activity A 12 15 24 17 16 2 4
Activity B 6 8 12 8.67 8.33 1 1
Activity C 15 22 33 23.33 22.67 3 9
Activity D 8 11 20 13 12 2 4
56 62 59 18
Duration if estimates are taken at face value Path SD 4.24

Duration if optimistic, pessimistic & most likely are averaged
Duration, considering optimistic & pessimistic, and weighting the most likely estimates
One Standard Deviation 54.76 63.24

Two Standard Deviations 50.51 67.49
Three Standard Deviations 46.27 71.73

Knowledge Area
Integration 6.6 Develop Schedule

Determine planned start and finish dates
Scope
6.6.1 Inputs
Time
Time
.1 Schedule Management Plan
.2 Activity List
Cost .3 Activity Attributes
.4 Project Schedule Network Diagrams
Quality .5 Activity Resource Requirements
.6 Resource Calendars
HR
.7 Activity Duration Estimates
Communications
.9 Risk Register
Risk .10 Project Staff Assignments
.11 Resource Breakdown Structure
Procurement .12 Enterprise Environmental Factors
Knowledge Area

Scope
Time
Time
.1 Schedule Network Analysis
.2 CPM
Cost .3 Critical Chain Method: Leverages buffers to manage
for limited resources and uncertainties
Quality
.4 Resource Leveling
HR .5 Modeling techniques
.6 Leads/Lags
Communications .7 Schedule Compression
.8 Scheduling Tool
Risk
Procurement
Knowledge Area

Scope
• Tools & Techniques Key Concepts
Time
Time
– CPM: ES, EF, LS, LF calculated w/o resource
limitations
Cost – Crashing: Compressing (reducing) the duration of
activities (CBA)
Quality – Fast Tracking: Completing tasks concurrently that
are normally sequential
HR
– Critical Chain Method: Modifies schedule to account
for limited resources by managing buffer activity
Communications
durations and resource assignments
Risk
Procurement
Knowledge Area
Integration Gantt Chart

Scope
• Horizontal time scale
Time
Time • Easy to read
Cost • Tool for expediting, sequencing and
Quality
reallocation
• Does NOT show technical
HR
dependencies
Communications
Risk
Procurement
Gantt Chart Diagram Exercise

Knowledge Area
Project Crashing
Integration
17
12 days
Scope
Activity
Activity
Predecessors Foundation
Foundation
Prep
Prep Successors
Time
Time
Cost
• Cost implications
Quality
• Resource implications
HR • Advantages?
Communications • Disadvantages?
Risk
Procurement
Knowledge Area
Integration Goldratt’s Critical Chain

Scope
• Use Expected Times vs Estimated
Time
Time Times
• Replace slack with buffers
Cost
– Feeding buffer
Quality – Project buffer
HR
• Theory of Constraints
– Any barrier to successful, on-time, on-
Communications budget completion
Risk
– What resources are in heavy demand?
– What resources have scheduling conflicts?
Procurement
Source: Goldratt, E.M. (2004). The Goal: A Process of Ongoing Improvement. 3rd revised ed.
Knowledge Area

Scope
Time
Time .1 Project Schedule
Cost
.2 Schedule Baseline
Defines baseline start dates and finish
Quality dates
HR .3 Schedule Data
.4 Project Calendars
Communications
Risk .6 Project Document Updates
Procurement
Knowledge Area
Integration Schedule Calculations

Scope
• Overall window of project time defined
Time
Time by:
Cost
– Estimated Start Time
– Required Completion Time
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration 6.7 Control Schedule

Scope
Influencing…, determining…, managing…
Time
Time
Cost 6.7.1 Inputs

Quality
.2 Project Schedule
HR
.3 Work Performance Data
Communications .4 Project Calendars
Risk
.5 Schedule Data
Procurement
Knowledge Area

Scope
Time
Time .1 Performance Reviews
Cost
.2 PM Software
.3 Resource Optimization Techniques
Quality
.4 Modeling Techniques
HR .6 Leads & Lags
Communications
.7 Schedule Compression
.8 Scheduling Tool
Risk
Procurement
Knowledge Area

Scope
Time
Cost
.2 Schedule Forecasts
.3 Change Requests
Quality
HR .5 Project Document Updates
Communications
.6 Organizational Process Assets Updates
Risk
Procurement
PMI-ism Break

Edition

Practice Test Time!
Chapter 6 Project Time Management

Project Cost Management


Knowledge Area
Integration Cost Management Processes

Scope
• Estimate Costs
Time
– Approximation of the cost for the resources needed
• Determine Budget
Cost
Cost
– Allocating the cost estimate to individual work items
Quality
– Output: cost baseline
• Control Costs
HR
– Controlling changes to the budget
Communications
Risk
Procurement
Knowledge Area
Integration Assumption of Finance 101

Scope
• Profits • Tangible Costs
Time • Profit margin (Benefits)
• Life-cycle Costing • Intangible Costs
Cost
Cost
• Cash Flow Analysis (Benefits)
Quality
• Internal Rate of • Direct Costs
Return (IRR) • Indirect Costs
HR
• Sunk Costs
Communications
Risk
Procurement
Knowledge Area
Integration 7.1 Plan Cost Management

Scope
7.2.1 Inputs
Time
.2 Project Charter
Cost
Cost .3 Enterprise Environment Factors
Quality
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Time
.1 Expert Judgment
Cost
Cost .3 Meetings
Quality
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Time .1 Cost Management Plan
Cost
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration 7.2 Estimate Costs

Scope
Developing “approximation” of cost of resources
Time Includes evaluation of different alternatives
Cost
Cost
7.2.1 Inputs
Quality .1 Cost Management Plan
.2 HR Management Plan
HR
.3 Scope Baseline
Communications .4 Project Schedule
.5 Risk Register
Risk
Procurement
Knowledge Area

Scope
Time
.1 Expert Judgment
.2 Analogous estimating
Cost
Cost .3 Parametric Estimating
.4 Bottom-up Estimating
Quality
.5 Three-point Analysis
HR .6 Reserve Analysis
.7 Cost of Quality
Communications
.8 PM Estimating Software
Risk
.9 Vendor Bid Analysis
Procurement
Knowledge Area
Cost Estimation
Integration
Techniques
Scope
• Analogous (Top Down)
Time
– Actual cost of similar project
– Less costly, less accurate
Cost
Cost
• Bottom Up estimating
Quality
– Estimating individual work items and summing
– More Accurate, time consuming
HR – General approach used by software tools
Communications
• Parametric
– Using known rates and quantities
Risk – Accurate
Procurement
Knowledge Area
Integration Types of Cost Estimates

Scope
Type Estimate When Why Accuracy

Time
Rough Order of Very Early Estimate of -25% to +75%
Magnitude costs for project
Cost
Cost selection
Definitive Later Provides detail, -5% to + 10%

Quality estimates
actual cost
HR
Communications
Risk
Procurement
Source: Schwalbe, K. (2001). Information Technology Project Management. 2nd ed.
Knowledge Area
Integration Concepts for Cost Estimating

Scope
cO + 4cM + cP
• Beta Distribution: cE = 6
Time
• SD = P – O
Cost
Cost 6
2
P–O
Quality • Variance = ( 6 )
cO + cM + cP
HR • Triangular distribution: cE = 3
Communications
Risk
Procurement
Knowledge Area

Scope
Time .1 Activity Cost Estimates
Cost
Cost
.2 Basis of Estimates
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration 7.3 Determine Budget

Scope Establishes a cost baseline for measuring project
performance
Time
Cost
Cost 7.3.1 Inputs
.1 Cost Management Plan
Quality .2 Scope Baseline
.3 Activity Cost Estimates
HR .4 Basis of Estimates
.5 Project Schedule
Communications
Risk
.7 Risk Register
.8 Agreements
Knowledge Area

Scope
Time .1 Cost Aggregation
Cost
Cost
Schedule Activity – Work Package – Higher
Components – Entire Project
Quality .2 Reserve Analysis
HR .3 Expert Judgment
.4 Historical Relationships
Communications
.5 Funding Limit Reconciliation
Risk
Procurement
Knowledge Area
Integration Reserves
Scope
• Contingency Reserves
Time
– Can be partially planned for
– Known-unknowns
Cost
Cost – e.g., known rate of personnel turnover
Quality
• Management Reserves
– Unpredictable
HR – Unknown-unknowns
Communications
• Not a part of the baseline, but included in the
project budget (which means not a part of
Risk EVA)
Procurement
Knowledge Area

Scope
Time .1 Cost Performance Baseline
Cost
Cost
Baseline, or time-phased budget used to
measure, monitor, and control cost
Quality performance; excluding management
reserves (including work package estimates
HR
and contingency reserves)
Communications .2 Project Funding Requirements
Risk
Procurement
Knowledge Area
Integration Budget Components

Scope
• Check out figure 7-8 (PMBOK, 2013, p.
Time 213)
Cost
Cost
Quality
HR
Communications
Risk
Procurement
Budget Estimate Question
• Projected cost = $2,200,000

• Estimate SD = $110,000
• Budget (including reserve) = $2,420,000
• Assuming cost estimates are normally distributed, what is the
probability of completing the project over budget?
+/- 1 SD = $2,310,000 ~ $2,090,000

+/- 2 SD = $2,420,000 ~ $1,980,000
Here’s the logic…
• 95% of the results fall within +/- 2 SDs of an “in control” process
• So…5% of the results fall outside of +/- 2 SDs
• We’re only concerned about half of those…over budget…so, we
have a 2.5% chance of going over budget 

Knowledge Area
Integration 7.4 Control Costs

Scope
Influencing, recording, informing
Time
Cost
Cost
7.4.1 Inputs
.1 PM Plan
Quality
.2 Project Funding Requirements
HR .3 Work Performance Data
Communications
Risk
Procurement
Knowledge Area

Scope
Time .1 EVM
Cost
Cost
.2 Forecasting
.3 TCPI
Quality
.4 Performance Reviews
HR .5 PM Software
Communications
.6 Reserve Analysis
Risk
Procurement
Knowledge Area
Earned Value
Integration
Management (EVM)
Scope
• Budgeted Cost of Work Performed (EV):
Time
– Earned Value
– Amount budgeted for the work “as of” a date
Cost
Cost
• Actual Cost of Work Performed (AC):
Quality – Actual Costs for the work ‘as of’ a date
HR • Budgeted Cost of Work Scheduled (PV):

– Planned Value
Communications
– Sometimes called Performance Baseline or
Performance Measurement Baseline
Risk
Procurement
Knowledge Area
Variance
Integration
(Earned Value)
Scope
• Cost Variance (CV) = EV - AC
Time
– Negative indicates over budget
– CPI: Represent as a % by EV/AC
Cost
Cost
• Schedule Variance (SV) = EV - PV
Quality
– Negative indicates behind schedule
– SPI: Represent as a % by EV/PV
HR
• Budget at Completion (BAC = Baseline or
Communications
revised budget)
Risk
Procurement
Knowledge Area
Cost/Schedule Performance Index
Integration (CPI/SPI)
Scope
• Indicates Cost or Schedule Efficiency
Time for accomplished work.
Cost
Cost
> 1.0 - Ahead of Schedule
= 1.0 - On Schedule
Quality
< 1.0 - Behind Schedule
HR
Communications
Risk
Procurement
Knowledge Area
Integration Earned Value

Scope • Estimate at Completion (EAC)
– For ETC work at budgeted rate (optimistic):
Time EAC = AC + (BAC – EV)
Note: BAC – EV = Remaining PV
Cost
Cost
– For ETC work at present CPI (pessimistic):
Quality EAC = AC + [(BAC - EV) / CPI]
EAC = BAC / CPI
HR – For ETC considering both SPI & CPI
EAC = AC + [(BAC - EV) / (CPI x SPI)]
Communications
– Fundamentally flawed estimates:
Risk EAC = AC + ETC
• Estimate to Complete (ETC)
Procurement
ETC = EAC - AC
Knowledge Area
Integration To-Complete Performance Index

Scope
• Performance that must be achieved on
Time remaining work to meet a specified goal
Cost
Cost
(i.e. BAC or EAC)
Quality
TCPI = (BAC – EV)/(BAC – AC)
HR
or
Communications
TCPI = Work Remaining / Funds Remaining
Risk
Procurement
Knowledge Area
Integration EVM in Action

Scope
$70K 70K
Time
$60K
Cost
Cost
50K
$50K
ACWP 45
Quality
$40K 40K
BCWS
SV CV
HR $30K
$20K
20K
Communications BCWP 30
$10K
Risk
Start Month 1 Month 2 Month 3 Finish

Procurement
Date Date
Knowledge Area
Integration Earned Value (Exercise)
IF :
Scope
Time
EV = $6000
Cost
Cost
PV = $7000
Quality
AC = $8000
HR
Communications
Find CV, SV, CPI, SPI
Risk
Procurement
Budget Variance
Today
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8
Activity $1000 $2000 $500 $1000 $6000 $4500 $3500 $2000

A (Garage)
B (Storage) $2000 $1000 $1500 $2000
Total Budget: $27,000

Activity A is 50% complete & AC are $12,000; EV (A) = $10,250
Activity B is 100% complete & AC were $8,000; EV (B) = $6,500
PV(A) = $10,500, PV (B) = $6,500, PV(P) = $17,000
CV (A)? CV (B)? CV = $16,750 – 20,000 = -$3,250
SV (A)? SV (B)? SV = $16,750 – $17,000 = -$250

Knowledge Area

Scope
Time .1 Work Performance Measurements
Cost
Cost
.2 Cost Forecasts
.3 Change Requests
Quality
.4 PM Plan Updates
HR .5 Project Documentation Updates
Communications
.6 Organizational Process Asset Updates
Risk
Procurement
EVM Exercise

PMI-ism Break

Edition

Practice Test Time!
Chapter 7 Project Cost Management

Knowledge Area
Integration Remember…
Scope
• Cost Management should consider
Time effect of decisions on the following
Cost
Cost
costs as related to the project
product/service…
Quality
– Using
HR – Maintaining
– Supporting
Communications
Risk
Procurement
Project Quality Management


What is Quality?

Knowledge Area
Integration Quality Concepts

Scope
• Who defines quality?
Time • How have customer expectations
Cost evolved?
Quality
Quality
• What are the benefits of a quality
program?
HR
Communications
Risk
Procurement
Knowledge Area
Integration Elements of a Quality Focus

Scope
• Quality first – not short-term profit
Time • Consumer orientation – not producer
Cost orientation
Quality
Quality
• The next process is your customer
• Use facts and data to make decisions
HR
• Respect for knowledge base is a
Communications
management philosophy
Risk • Cross-functional management
Procurement
Knowledge Area
Integration Bottom Line...

Scope
• External customers define quality
Time • Internal customers produce quality
Cost
Quality
Quality • Albrecht’s Theory of Service Relativity
– V=R-E
HR
– Determines net gain or loss
Communications
Risk
Procurement Source: Goetsch, D., and Davis, S. (2000). Quality Management: Introduction to Total Quality
Management for Production, Processing, and Services. 3rd ed.
Knowledge Area
Integration Responsibility for Quality

Scope
• The primary responsibility for quality is
Time with the project manager
• Quality is not an assignable task. It
Cost
must be rooted and institutionalized in
Quality
Quality every process
HR
• It is everyone’s responsibility:
– Self inspection
Communications – It’s the system that causes the problems -
and that is management’s responsibility
Risk
Procurement
Knowledge Area
Integration 8.1 Plan Quality Management

Scope Project quality management must address management of
the project and the product of the project
Time
Involves identifying which quality standards are relevant to
Cost project and determining how to satisfy them
Quality
Quality
8.1.1 Inputs
HR
.2 Stakeholder Register
Communications .3 Risk Register
Risk .5 Enterprise Environmental Factors
Procurement
Knowledge Area
Integration Quality Standards

Scope
• Six Sigma
Time • TQL
Cost • ISO (e.g. 14000)
Quality
Quality • MBNQA
HR
• Systems Perspective…
Communications
Risk
Procurement
Knowledge Area
Integration Normal Distribution

Scope
Time
Cost
Quality
Quality q=99.7%
HR
Communications
Risk
Procurement
Knowledge Area
Integration Six Sigma Phases

Scope • DMAIC processes
– Define
Time • Process map, VOC, Stakeholder analysis
– Measure
Cost • Sampling, Data collection, Process Capability
– Analyze
Quality
Quality • Cause analysis, Hypothesis testing, DOE
– Improve
HR • Evaluate, plot, & implement solution
• Verify and measure gains
Communications – Control
• Control charts
Risk • Lessons learned, standardization, train
Procurement
Knowledge Area

Scope
.1 Benefit/Cost Analysis
Time .2 Cost of Quality
Crosby – Cost of conformance vs non-conformance
Cost .3 Seven Basic Quality Tools
.4 Benchmarking
Quality
Quality .5 Design of Experiments
A structured, organized method for determining the
HR relationship between factors (Xs) affecting a process and
the output of that process (Y)
Communications
.6 Statistical Sampling
.7 Additional Quality Planning Tools
Risk
.8 Meetings
Procurement
Knowledge Area
Integration PMBOK 5th Edition Figure 8-5

Scope
Time
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration Deming’s PDCA Cycle

Scope • Plan what to do.
– Could be design features or an improvement in the
Time process itself. Use Pareto analysis to identify the most
important aspects.
Cost • Do the experimentation.
– Explore the problem by experimentation, identify and
Quality
Quality investigate causes.
• Check the solutions.
HR
– To see if the assumptions and ideas were correct.
Communications • Act on the results.
– Implement on a scale appropriate to the problem
Risk
Procurement Source: Goetsch, D., and Davis, S. (2000). Quality Management: Introduction to Total Quality
Management for Production, Processing, and Services. 3rd ed.
The Seven Basic Quality Tools
Know what they’re used for…

Knowledge Area
1. Cause-n-Effect Analysis
Integration
(Fishbone, Ishikawa)
Scope • Visual tool used to logically organize possible causes
for a problem by graphically displaying them in
Time increasing detail
• Helps to identify root causes and ensures common
Cost
understanding of the causes
Quality
Quality People Policies
Mandatory Dept Location
Crowded Hallways
HR
Sign Limitations
No Directions Provided
Communications Patients cannot find

X-ray department
Risk Sign Locations
Training
Hallway Layout
Procurement Procedures Building
Knowledge Area
Integration 2. Flow Charts

Scope
• Show the order or
Time
sequence of activities
• Indicates action items &
Cost
decision points
Quality
Quality • Used to map a process
HR
Communications
Risk
Procurement
Knowledge Area
Integration 3. Checksheets
Scope
• Tally sheet
Time • Use for…
Cost – Gathering data
– Organizing facts
Quality
– Collecting attribute data during inspections
HR
Communications
Risk
Procurement
Knowledge Area
Integration 4. Pareto Chart, 80/20 Rule

Scope
• Distribution arranged in frequency
Time • Graphical picture of the most frequent causes
Cost • Used to determine greatest potential for
improvement
Quality
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration 5. Histograms
• Distribution of variables
Scope
• Summarize data collected over a period of
Time
time
Cost • Helps identify the cause from the shape &
width of the distribution.
Quality
Quality
– Exam scores
HR
Communications
Risk
Procurement
Knowledge Area
Integration 6. Control Charts

• Run chart with control limits
Scope
• Mathematically constructing
Time UCL & LCL at 3 standard
deviations above and below
Cost the average
• Common causes - random
Quality
Quality
events
HR • Special causes - unique
events
Communications
• Goal is to determine variation
source, then eliminate special
Risk
causes & reduce common
causes to improve quality
Procurement
• Rule of “7s”
Knowledge Area
Integration 7. Scatter Diagram

Scope
• Shows relationship between two variables
Time – Joint failures and temperature
Cost
• The closer the points...the more closely the
variables are related
Quality
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration What Should You Benchmark?

Scope
• Systems, Processes, or Practices
Time which…
Cost
• Incur the highest costs
• Major impact on customer satisfaction
Quality
Quality
• Major impact on cycle time
HR • Major impact on quality
Communications
• High impact on competitive position
• Present the most significant area for improvement
Risk
• Have high probability of support and resources if
Procurement selected
Knowledge Area

Scope
Time .1 Quality Management Plan
Cost
Must address QC, QA, and Continuous
Improvement
Quality
Quality .2 Process Improvement Plan
HR .3 Quality Metrics
What is measured, how it is measured
Communications
.4 Quality Checklists
Risk .5 Project Document Updates
Procurement
Knowledge Area
Integration Quality Assurance

Scope
• The process of auditing quality
Time requirements and results from quality
Cost
control to ensure standards and
definitions are used
Quality
Quality
• Primary purpose is to facilitate the
HR improvement of quality processes
Communications
Risk
Procurement
Knowledge Area
Integration 8.2 Perform Quality Assurance

Scope
Ensure project will employ all processes to meet
Time
defined requirements
Cost
8.2.1 Inputs to Quality Assurance
Quality
Quality .1 Quality Management Plan
.2 Process Improvement Plan
HR
.3 Quality Metrics
Communications
.4 Quality Control Measurements
.5 Project Documents
Risk
Procurement
Knowledge Area

Scope
Time
.1 Quality Management and Control Tools
.2 Quality Audits – the objective of a quality audit is to
Cost identify inefficient and ineffective polices, processes,
and procedures
Quality
Quality Audits also confirm implementation of approved
change requests, corrective actions, defect repairs,
HR and preventive actions
.3 Process Analysis
Communications
Risk
Procurement
Knowledge Area

Scope
Cost
.2 PM Plan Updates
Quality
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration Quality Control

Scope
The process of monitoring and recording results
Time
to assess performance and recommend
changes
Cost
Quality
Quality Key benefits
• Identify the causes of poor process or product
HR
quality and recommended and/or taking action
Communications to eliminate the causes
• Validating that deliverables and work meet
Risk
requirements for final acceptance
Procurement
Knowledge Area
Integration 8.3 Perform Quality Control

Scope Involves monitoring specific project results to determine if
they comply w/ relevant standards & identifying ways to
Time eliminate causes of unsatisfactory results
Cost
8.3.1 Inputs to Quality Control
Quality
Quality .1 PM Plan
.2 Quality Metrics
HR .3 Quality Checklists
Communications
.5 Approved Change Requests
.6 Deliverables
Risk
Procurement .8 Organization Process Assets
Knowledge Area

.1 Seven Basic Quality Tools
Time
.2 Statistical Sampling
Cost .3 Inspection
.4 Approved Change Request Review
Quality
Quality
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Gold Plating is adding “scope” that does not add
value or quality to the deliverables
Time
Cost 8.3.3 Outputs (Figure 8-11)

.1 Quality Control Measurements
Quality
Quality
.2 Validated Changes: Accepted or rejected
HR
.3 Verified Deliverables: Correctness of deliverables;
Input to Validate Scope
Communications .4 Work Performance Information
.5 Change Requests
Risk
.6 PM Plan Updates
Procurement .7 Project Document Updates
PMI-ism Break

Edition

Practice Test Time!
Chapter 8 Project Quality Management

Project Human Resource Management


Knowledge Area
9.1 Plan Human Resource
Integration
Management
Scope
9.1.1 Inputs
Time
Cost .2 Enterprise Environmental Factors
Organizational – Working arrangements,
Quality
formal/informal relationships
HR Technical – What disciplines and specialties are
required
Communications Interpersonal – Formal/informal “reporting”
relationships, cultural impacts, language, etc…
Risk .3 Organizational Process Assets
Procurement
Knowledge Area
Integration
Management
Scope
Time
.1 Organizational Charts and Position Descriptions
OBS
Cost Resource Breakdown Structure (RBS) – breaks
down the project by “types” of resources
Quality
Matrix-based – RAM: e.g. RACI (Responsible,
HR
Accountable, Consult, Inform)
.2 Networking
Communications .3 Organizational Theory
.4 Expert Judgment
Risk
.5 Meetings
Procurement
Knowledge Area
Organizational
Integration
Influences
Scope
• Project-based organizations have
Time
management systems that help projects
– Matrix (PM budget authority varies…highest in
Cost “strong”)
– Projectized (PM has almost total authority)
Quality
• Project management is more difficult in non-
HR project-based organizations
– Functional
Communications
• The maturity of an organization with respect to
Risk PM systems, culture, style, structure, and
PMO can influence project work
Procurement
Knowledge Area
Integration Functional, Divisional Organizations

Scope • Hierarchies with many levels of management
Time
• People become relatively confined to their own
area of specialization
Cost • Driven by a top-down approach in which
managers provide considerable direction and
Quality
have considerable control over others
HR • Reduces duplication of activities (single
division)
Communications
• Encourages technical expertise (peer groups)
Risk • Creates narrow perspectives (can foster
rivalry)
Procurement
• Difficult to coordinate across functions
CEO
CEO
Departments VP VP VP
Finance Marketing Manufacturing
Functional
Managers
Manager Manager Manager Manager
Personnel Personnel Personnel Personnel

Resources (SMEs)

Knowledge Area
Integration Matrix Structures

Scope
• Reinforces & broadens technical
Time excellence
• Facilitates efficient use of resources
Cost
• Balances conflicting objectives of the
Quality organization
HR • Increases power conflicts
Communications
• Increases confusion & stress for 2-boss
employees
Risk • Impedes decision making
Procurement
CEO
Program Mgr Finance Marketing R&D Manufacturing
PM
PM
Pers Pers Pers Pers

PM
PM

Knowledge Area
Integration Projectized Structures

Scope
• Project manager is the resource
Time manager
• Project manager has the most authority
Cost
• Can lead to less efficient use of
Quality resources
HR • Can limit access to technical expertise
Communications
Risk
Procurement
CEO
Program VP Marketing VP Finance VP R&D

Manager
Marketing
Manufacturing
Project A R&D
Manager Finance
Personnel
Marketing
Manufacturing
Project B R&D
Manager Finance
Personnel

Knowledge Area
Integration
Management
Scope
Time .1 Human Resource Management Plan
Cost
Roles & responsibilities
Project organizational chart
Quality
Staffing management plan
HR Staff release plan
Communications
Training needs
Recognition and rewards
Risk
Compliance (regulation, unions, etc.)
Procurement Safety
Knowledge Area
Integration 9.2 Acquire Project Team

Scope
9.2.1 Inputs
Time .1 Human Resource Management Plan
Cost
Quality
HR
Communications
Risk
Procurement
Knowledge Area

Scope
Time .1 Pre-assignment
Cost
.2 Negotiations (with both functional
managers to ensure competent/available
Quality resources and with other PMs to procure
scarce/specialized resources)
HR
.3 Acquisition
Communications .4 Virtual Teams (Communications planning
Risk
more important)
.5 Multi-Criteria Decision Analysis:
Procurement Availability, cost, experience, ability, etc.
Knowledge Area
Integration Assign the Project Team

Scope
• “Continuity” is important...
Time – Concept Team
Cost
– Planning Team
– Execution Team
Quality
• Key skills and players
HR
Communications
• May need contract (third-party) help
– Procurement Planning
Risk
Procurement
Knowledge Area

Scope
Time .1 Project Staff Assignments
Cost
.2 Resource Calendars: Time periods
resources are available for work
Quality .3 PM Plan Updates
HR
Communications
Risk
Procurement
Responsibility Assignment
Matrix
• Shows level of responsibility for groups and/or individuals

• Graphically links the work to be done to those doing it
Billing & Applications
Task Sales Product Build
Enrollment Engineering
3.1.1 Primary
4.2.1 Support Primary Support
4.2.5 Support Support Primary
5.4 Primary Support

Knowledge Area
Integration 9.3 Develop Project Team

Scope
Individual development is the foundation
Time
necessary to facilitate team development
Improve team member skills and feelings to trust
Cost
and cohesiveness among team members
Quality
HR 9.3.1 Inputs
.1 Human Resource Management Plan
Communications
.2 Project Staff Assignments
Risk .3 Resource Calendars
Procurement
Knowledge Area

Scope
Time .1 Interpersonal Skills
Cost
.2 Training
.3 Team Building Activities
Quality
.4 Ground Rules
HR .5 Co-location
Communications
.6 Recognition & Rewards
.7 Personnel Assessment Tools: Attitudinal
Risk surveys, structured interviews, ability tests,
Procurement
etc.
Knowledge Area
Integration Stages of Team Development

Scope
• Forming: Independent, not open
Time • Storming: Not collaborative
Cost • Norming: Adjusting work habits and
Quality
behaviors, learning to trust
• Performing: Functioning as a well-
HR
organized unit, working through issues
Communications
• Adjourning: Released from the project
Risk
Procurement
Knowledge Area
Integration SWOTt Analysis

Scope • Strengths Characteristics that allow the business to
take advantage of opportunities or reduce the impact of
Time barriers.
• Weaknesses Characteristics that could stand in the
Cost
way of the business taking advantage of opportunities
Quality
or reducing the impact of barriers.
• Opportunities Factors outside the business that allow it
HR to take action to grow the business.
• Threats Factors outside the business that stands in the
Communications way of its efforts to grow the business.
• Trends Current factors that contribute to the business
Risk
success within its industry.
Procurement
Knowledge Area
Integration Power “Bases”

Scope
• Formal (legitimate)– Invested by the PM
Time role
Cost • Reward – Duh 
Quality
• Penalty (coercive) - consequences
• Expert – PM knowledge
HR
• Referent – team likes the PM, or wants
Communications
to be liked by the PM
Risk
Procurement
Knowledge Area
Integration Theory X
Scope
• People inherently dislike work
Time • People must be coerced or controlled to
Cost do work to achieve objectives
Quality
• People prefer to be directed
HR
Communications
Risk
Procurement
Knowledge Area
Integration Theory Y
Scope
• People view work as being as natural
Time as play and rest
Cost • People will exercise self-direction and -
control towards achieving objectives
Quality
they are committed to
HR
• People learn to accept and seek
Communications responsibility
Risk
Procurement
Maslow’s Hierarchy of Needs
Doing what you’re “fitted for, true to

your “nature”
Respect, fame, recognition, etc…
Belonging, friends, love, etc…
Shelter, security, etc…
Food, water, oxygen, etc…

Knowledge Area
Integration
Motivator vs Hygiene Factors Theory
Scope • Motivator factors increase job satisfaction
– Achievement
Time – Recognition
– Work itself
Cost – Responsibility
– Advancement
Quality
– Growth
HR • Hygiene factors are those whose absence can create
job dissatisfaction
Communications – Supervision
– Company policy
Risk – Working conditions
– Salary
Procurement – Peer relationship
– Security
Knowledge Area
Integration Vroom’s Expectancy Theory

Scope
• An individual will act in a certain way based on
Time
the expectation that the act will be followed by
a given outcome and on the attractiveness of
Cost that outcome to the individual
Quality
• Effort ~ Performance linkage (How hard will I
have to work?)
HR
• Performance ~ Reward linkage
Communications
(What is the reward?)
• Attractiveness (How attractive
Risk
is the reward?)
Procurement
Knowledge Area
Integration Ouchi’s Theory Z

Scope
• Referred to as the “Japanese Management
Time
Style”
• Places a large amount of freedom and trust
Cost
with workers, and assumes that workers have
Quality
a strong loyalty and interest in team-working
and the organization
HR
• Places more reliance on the attitude and
Communications
responsibilities of the workers vice
management perspective (Theories X & Y)
Risk
Procurement
Knowledge Area
Blanchard & Hershey’s Leadership
Integration
Behavior
Scope • D4 Competent / Commitment
– Experienced at the job, and comfortable with their own
Time ability to do it well
• D3 Competent / Variable Commitment
Cost
– Experienced and capable, but may lack the
confidence/motivation to go it alone
Quality
• D2 Some Competence / Low Commitment
HR – May have some relevant skills, but won't be able to do the
job without help
Communications • D1 Low Competence / Low Commitment
– Lacks the specific skills required for the job in hand & and
Risk lacks confidence/motivation
Procurement
Knowledge Area
Integration Situational Leadership

Scope
• Directing - Leaders define the roles and tasks
Time
of the 'follower', and supervise them closely
• Coaching - Leaders still define roles and
Cost
tasks, but seeks ideas and suggestions from
Quality
the follower
• Supporting - Leaders pass day-to-day
HR
decisions, such as task allocation and
Communications
processes, to the follower
• Delegating - Leaders are still involved in
Risk
decisions and problem-solving, but control is
Procurement
with the follower
Knowledge Area
Integration Team Building

Scope
• Necessary to move toward project
Time goals/deliverables
Cost • Symptoms of need for team building:
Quality – Frustration
– Conflict and unhealthy competition
HR
– Unproductive meetings
Communications – Lack of trust or confidence in PM
Risk
Team building is a key integration activity during
Procurement project execution
Source: Verma, V. (1995). Managing the Project Team.
Knowledge Area
Integration
Team Building Ground Rules
Scope • Start early - it takes time
Time
• Don’t stop - it takes effort
• Get the right team and manage toward
Cost success
– Best qualified members
Quality
– People who want to be on the team
HR • Get team agreement on all major points
• Don’t manipulate members, but do review and
Communications evaluate team success/effectiveness
Risk
• Watch for symptoms of team breakdown
• Plan and use a team building process
Procurement
Source: Verma, V. (1995). Managing the Project Team.
Knowledge Area

Scope
Time .1 Team Performance Assessments
Cost
.2 Enterprise Environmental Factors Updates
Quality
HR
Communications
Risk
Procurement
Knowledge Area
Integration 9.4 Manage Project Team

Scope
Tracking team member performance,
Time providing feedback, resolving issues, &
coordinating changes
Cost

HR .1 HR Management Plan
.2 Project Staff Assignments
Communications
.3 Team Performance Assessments
Risk .4 Issue Log
Procurement
Knowledge Area

Scope
Time .1 Observation and Conversation
Cost
.2 Project Performance Appraisals
360 degree feedback: feedback provided
Quality from many sources, including peers and
HR team members
.3 Conflict Management
Communications
.4 Interpersonal Skills
Risk
Procurement
Knowledge Area
Integration Sources of Conflict

Scope
• Schedules
Time • Resource allocation
Cost • Changing, conflicting priorities
Quality • Technical perspectives
HR
• Note: personality conflicts are not
included in this list
Communications
Risk
Procurement
Knowledge Area
Integration Conflict Resolution

Scope
• Withdraw or Avoid
Time • Smooth or Accommodate: Emphasize
Cost agreements or conceding to build
relationships
Quality
• Compromise or Reconcile: Tends to
HR
temporarily or partially resolve the
Communications conflict
Risk
• Force or Direct: Win-lose
• Collaborate or Problem Solve: Pick this
Procurement
one! 
Knowledge Area

Scope
Cost
Remember, staffing issues/changes can
disrupt the project plan and impact both
Quality schedule and budget…Integrated Change
Control processes may be used to
HR
document impacts
Communications .2 PM Plan Updates
Risk
.3 Enterprise Environmental Factor Updates
Procurement
PMI-ism Break

Edition

Practice Test Time!
Chapter 9 Project Human Resources Management

Project Communications Management


Knowledge Area
Integration Communications Importance

Scope
• 78-90% of project manager’s job
Time • Affects every part of a project
Cost • Can make or break a project
Quality • Employed by everyone involved
HR • There is a direct correlation between the ability
to communicate and project performance
Communications
Communications
Risk
Procurement
Knowledge Area
Integration Communications Realities

Scope
• Majority of project communication is
Time done in the early stages of the project.
Cost • Communications Breakdown (23-27%
Quality
lost in upward communications)
HR • Meetings - 50% of project managers’
time
Communications
Communications
Risk
Procurement
Knowledge Area
10.1 Plan Communications
Integration
Management
Scope
The majority of Communications Planning should
Time
be completed in the early phases
Cost
10.1.1 Inputs
Quality .1 Project Management Plan
HR
Communications
Communications
Risk
Procurement
Knowledge Area
Integration
Management
Scope
Time .1 Communications Requirements Analysis
Cost
.2 Communications Technology
.3 Communications Models
Quality
.4 Communications Methods
HR .5 Meetings
Communications
Communications
Risk
Procurement
Knowledge Area
Integration Communications Channels

Scope
• How many communications channels are
Time
there for a team of 9?
• For a team of 6?
Cost
• Remember, about 55% of communication is
Quality non-verbal & a PM spends about 90% of their
time communicating
HR
Communications
Communications
# of Channels = (N2 – N)/2
Risk
Procurement
Knowledge Area
Integration Basic Communications Model

Scope
• Key components:
Time
– Encode: translate thoughts/ideas into language
tailored for audience
Cost – Message: the output of encoding
– Medium: “how” the encoder chooses to transmit the
Quality message
– Noise: barriers to either transmission or receipt of
HR
the message
Communications
Communications – Decode: translation from language in to
thoughts/ideas
Risk
Procurement
Knowledge Area
Integration Communications Models

Scope
Time
Cost
Quality
HR
Communications
Communications
Risk
Procurement
Knowledge Area
Integration Communications Methods

Scope
• Formal
Time – Presentations
Cost
– Letters
– Policies & Procedures
Quality
• Informal
HR – Email
Communications
Communications – Meetings
– Conference calls
Risk
Procurement
Knowledge Area
Integration
Management
Scope
Time .1 Communications Management Plan
Cost
Describes how project communications will
be planned, structured, monitored and
Quality controlled
HR
Communications
Communications
Risk
Procurement
Knowledge Area
Integration Project Communications Plan

Scope
• Stakeholders
Time • Informational Needs
Cost • Medium
Quality • Timing/Frequency
HR
• Responsibility
• Feedback
Communications
Communications
Risk
Procurement
Knowledge Area
Integration 10.2 Manage Communications

Scope
10.2.1 Inputs
Time .1 Communications Management Plan
Cost
Quality
HR
Communications
Communications
Risk
Procurement
Knowledge Area

Scope
Time .1 Communication Technology
Cost
.2 Communications Models
.3 Communications Methods
Quality
.4 Information Management Systems
HR .5 Performance Reporting: Project
performance
Communications
Communications
Risk
Procurement
Knowledge Area

Scope
Time
.1 Project Communications
.2 PM Plan Updates
Cost .3 Project Document Updates
.4 Organizational Process Assets (Updates)
Quality
Lessons Learned, Project Records, Reports,
HR Presentations, etc…
Communications
Communications Status – where the project stands related to schedule &
budget
Risk
Progress – what has been accomplished
Procurement Forecasting – predict future status and progress
Knowledge Area
Integration 10.3 Control Communications

Scope
10.3.1 Inputs
Time .1 PM Plan
Cost
.2 Project Communications
.3 Issue Log
Quality
Communications
Communications
Risk
Procurement
Knowledge Area

Scope
Time .1 Information Management Systems
Cost
.2 Expert Judgment
.3 Meetings
Quality
HR
Communications
Communications
Risk
Procurement
Knowledge Area

Scope
Cost
.2 Change Requests
.3 PM Plan Updates
Quality
Communications
Communications
Risk
Procurement
PMI-ism Break

Edition

Practice Test Time!
Chapter 10 Project Communications Management

Project Risk Management


What is “risk?”

Knowledge Area
Integration Risk Management

Scope
• The objective of Risk Management is to
Time increase the probability/impact of
Cost
positive and decrease the
probability/impact of the negative
Quality
HR
Communications
Risk
Risk
Procurement
Knowledge Area
Integration Themes that Influence Risk Attitudes

Scope
• Risk Appetite: Acceptable degree of
Time uncertainty for anticipated benefit
Cost • Risk Tolerance: Level of risk an
organization, or individual, will
Quality
withstand
HR
• Risk Threshold: Measure of the level of
Communications uncertainty or impact; below = accept,
above = not tolerate
Risk
Procurement
Knowledge Area
Integration 11.1 Plan Risk Management

Scope
11.1.1 Inputs
Time .1 PM Plan
Cost
.2 Project Charter
Quality
Communications
Risk
Risk
Procurement
Knowledge Area

Scope
Time .1 Analytical Techniques
Cost
.2 Expert Judgment
.3 Meetings
Quality
HR
Communications
Risk
Risk
Procurement
Knowledge Area

Scope
Time .1 Risk Management Plan
Cost
Includes definitions of risk probability and
impact
Quality * Tailored for each project for use in
HR
Qualitative Risk Analysis
Communications
Risk
Risk
Procurement
Knowledge Area
Integration Risk Plan

Scope
• Risk: the uncertainty associated with an event
Time • Identify risks to the project
– Both positive and negative
Cost
– Identify threats and opportunities
Quality
• Focus on those most likely to occur
HR
• Develop pre-planned responses to most likely
Communications with big impact
Risk
Risk
Procurement
Knowledge Area
Integration 11.2 Identify Risks

Scope 11.2.1 Inputs
.1 Risk Management Plan
Time .2 Cost Management Plan
Cost .4 Quality Management Plan
.5 HR Management Plan
Quality
.6 Scope Baseline
HR .7 Activity Cost Estimates
.8 Activity Duration Estimates
Communications .9 Stakeholder Register
Risk
Risk .11 Procurement Documents
Procurement
Knowledge Area
Integration Risk Categories

Scope • Technical, Quality or Performance risks: such as
reliability, unproven, unrealistic, changes to technology
Time or industry standards
• Project Management risks: poor allocation of time and
Cost
resources, poor project plan, and poor use of project
Quality
management disciplines
• Organizational risks: cost, time and scope objectives
HR that are inconsistent, lack of prioritization of projects,
funding problems, and resource conflicts
Communications • External risks: shifting legal or regulatory environment,
labor issues, changing owner priorities, country risks,
Risk
Risk weather, Force majeure risks (acts of god) usually
require disaster recovery
Procurement
Knowledge Area

Scope
Time .1 Documentation Reviews
Cost
.2 Information Gathering Techniques
.3 Checklist Analysis
Quality
.4 Assumptions Analysis
HR .5 Diagramming Techniques
Communications
.6 SWOT Analysis
.7 Expert Judgment
Risk
Risk
Procurement
Project
Management
Integration
Information/
Scope Communi-
cations
Life Cycle and
Environment Variables
Expectations
Ideas, Directives,
Feasibility
Data Exchange Accuracy
Quality
Requirements Project Availability Human
Standards Productivity
Risk Resources
Time Objectives, Services, Plant,

Restraints Cost Objectives, Materials: Performance
Restraints
Contract/
Time
Procurement
Cost
Source: Wideman, R.M. (1992). Project and Program Risk Management: A Guide to
Managing Project Risks and Opportunities.
Knowledge Area
Integration Information Gathering Techniques

• Brainstorming - is probably the most frequently used
Scope
technique
Time • Delphi technique - using a questionnaire to solicit
ideas, circulate the responses to anonymous experts on
Cost the subject, until reaching consensus
– Helps reduce bias in the data
Quality – Keeps any one person from influencing the outcome
• Interviewing - the responsible person identifies
HR
appropriate individuals, briefs them on the project,
provides information (WBS & assumptions) and gathers
Communications
information based on their experience
Risk
Risk • Strengths, weakness, opportunities and threats
(SWOT) analysis - ensures examination from each of
Procurement the SWOT perspectives to increase the breadth of the
risk considered
Knowledge Area
Integration Information Gathering Techniques

Scope • Checklists - Risk identification may be gathered from
historical data
Time
– Quick and simple, but may not be comprehensive enough
– Important to update the checklist after each project
Cost
closeout for possible additions
Quality • Diagramming techniques -
– Cause-and-Effect Diagrams- (Ishikawa or fishbone
HR diagrams) are useful in identifying causes of risks
– System or Process Flow Charts- shows how each element
Communications interacts and the mechanism of causation
– Influence Diagrams- A graphical representation of a
Risk
Risk problem showing relationships among variables and
outcomes
Procurement
Knowledge Area

Scope
Time .1 Risks Register
Cost
Document that contains outputs from Risk
Management processes (identified risks,
Quality potential responses, root causes, etc…)
HR
Communications
Risk
Risk
Procurement
Knowledge Area
Integration
11.3 Perform Qualitative Risk Analysis
Scope
Methods for prioritizing risks, improving project
Time
performance, etc…by focusing on high priority
risks
Cost

HR
.2 Scope Baseline
Communications
.3 Risk Register (key item for Qualitative Risk Analysis)
Risk
Risk .5 Organizational Process Assets
Procurement
Knowledge Area
Integration
Scope
Time .1 Risk Probability & Impact Assessment
Cost
.2 Probability & Impact Matrix
.3 Risk Data Quality Assessment
Quality
.4 Risk Categorization
HR .5 Risk Urgency Assessment
Communications
.6 Expert Judgment
Risk
Risk
• Probability, Impact, Timing, Frequency
Procurement
Probability & Impact Matrix (See
PMBOK 5th Edition Figure 11-10)
Quantification
Risk Impact Likelihood (I X L) Response
A High High 25 X
B High Med 15 Y
C Med Med 9 Z
D Low Low 1 N/A
High = 5
Med = 3
Low = 1
Knowledge Area
Integration
Scope
Time .1 Project Document Updates
Cost
Quality
HR
Communications
Risk
Risk
Procurement
Charles F Millhollan, MBA, MPM, PMP, PgMP 311
© 2011, Innovative Management Solutions, LLC
Knowledge Area
Integration
11.4 Perform Quantitative Risk Analysis
Scope
Performed on risks prioritized in Qualitative Risk
Time
Analysis as potentially and substantially
impactful
Cost

HR
.2 Cost Management Plan
Communications
.4 Risk Register
Risk
Risk .5 Enterprise Environmental Factors
Procurement
Knowledge Area
Integration
Scope
Time
.1 Data Gathering and Representation Techniques
.2 Quantitative Risk Analysis and Monitoring
Cost Techniques
Monte Carlo simulation: numerically analyze the
Quality probability of each event and the event’s
consequences
HR
Decision Tree Analysis
Communications Expected Monetary Value (EMV) Analysis:
statistically calculates average outcomes in
Risk
Risk uncertainty
.3 Expert Judgment
Procurement
Knowledge Area
Integration Expected Monetary Value

Scope
• Expected Monetary Value - Is the
Time summation of risk probability and risk
Cost
consequences
• Example: There is 1% probability that I
Quality
will fail the PMP Exam and
HR consequence of doing so cost me $275
Communications
to retake the test
Risk
Risk
Expect Monetary Value = $275 * .01 =
Procurement
$2.75
Expected Monetary Value
Task Probability Impact Expected

(Amount at Value
Stake)
A 10% $41,000
B 30% $50,000
C 68% $20,000

Expected Monetary Value
Task Probability Impact Expected

(Amount at Value
Stake)
A 10% $41,000 $4,100
B 30% $50,000 $15,000
C 68% $20,000 $13,600

$32,700
EMV / Decision Tree Exercise

Knowledge Area
Integration
Scope
Time .1 Project Documents Updates
Cost
Probabilistic analysis, probability of meeting
cost/time objectives, prioritized list of
Quality “quantified” risks, etc…
HR
Communications
Risk
Risk
Procurement
Knowledge Area
Integration 11.5 Plan Risk Responses

Scope
11.5.1 Inputs
Time .1 Risk Management plan
Cost
.2 Risk Register
Quality
HR
Communications
Risk
Risk
Procurement
Knowledge Area

Scope
Time .1 Strategies for Negative Risks or Threats
Avoidance
Cost Transference
Mitigation
Quality
.2 Strategies for Positive Risks or
HR Opportunities
Exploit
Communications Share
Enhance
Risk
Risk
.3 Contingent Response Strategies
Procurement .4 Expert Judgment
Knowledge Area
Integration Risk Responses

Determining HOW to respond to the identified risk
Scope
• Avoidance - Eliminate the specific threat by eliminating
Time the cause
• Mitigation - Reducing the impact by reducing the
Cost probability or reducing the occurrence of the risk
• Transference – Passing the risk on to another
Quality
• Exploit – Ensure opportunity is realized
HR • Share – Allocate ownership to 3rd party to capture
benefit
Communications • Enhance – Modify “size” of opportunity
• Accept – Accepting the risk consequence by:
Risk
Risk
– Developing a contingency plan
Procurement – Accepting the impact
Knowledge Area

Scope
Time .1 PM Plan Updates
Cost
.2 Project Documents Updates
Quality
HR
Communications
Risk
Risk
Procurement
Knowledge Area
Integration 11.6 Control Risks

Scope
11.6.1 Inputs
Time .1 PM Plan
Cost
.2 Risk Register
Quality
HR
Communications
Risk
Risk
Procurement
Knowledge Area

Scope
Time
.1 Risk Reassessment: Remember…living document)
.2 Risk Audits: Document effectiveness of responses
Cost and the risk management processes
.3 Variance and Trend Analysis
Quality
.4 Technical Performance Measurement
HR .5 Reserve Analysis
Compare contingency reserves to amount of
Communications remaining risks (adequate?)
.6 Status Meetings
Risk
Risk
Procurement
Knowledge Area

Scope
Cost
.2 Change Requests
.3 PM Plan Updates
Quality
HR .5 Organizational Process Assets Updates
Communications
Risk
Risk
Procurement
PMI-ism Break

Edition

Practice Test Time!
Chapter 11 Project Risk Management

Project Procurement Management


Knowledge Area
Integration
Procurement Management
Scope
• Includes the processes required to
Time acquire goods and services, to attain
Cost
project scope, from outside the
performing organization
Quality
• Key thought: make or buy
HR
• Note: Project procurement
Communications management is discussed from the
perspective of the buyer in the buyer-
Risk
seller relationship.
Procurement
Procurement
Knowledge Area
Integration Procurement Management

Scope
• Contract
Time – Mutually binding agreement that obligates
seller and buyer
Cost
– Legally binding
Quality – Includes terms and conditions
HR
Communications
Risk
Procurement
Procurement
Knowledge Area
Integration 12.1 Plan Procurement Management

Scope
12.1.1 Inputs
Time
.1 PM Plan
Cost .3 Risk Register
Quality
.5 Project Schedule
HR .6 Activity Cost Estimates
Communications
Risk
Procurement
Procurement
Knowledge Area

Scope
Time .1 Make-or-Buy Analysis
Cost
.2 Expert Judgment
.3 Market Research
Quality
.4 Meetings
HR
Communications
Risk
Procurement
Procurement
Knowledge Area
Integration Make or Buy Analysis

Scope
• Make • Buy
Time
– Cost – Cost
– Integration of – Supplier skills
Cost operations – Small volume
– Idle existing capacity requirements
Quality
– Direct control – Limited capacity
HR – Design secrecy – Augment labor force
– Unreliable suppliers – Maintain multiple
Communications – Stabilize work force sources
– Indirect control
Risk
Procurement
Procurement
Make or Buy Exercise
You are trying to decide whether to buy or lease an item for your project.
The daily lease cost is $120. To purchase the item the investment cost
is $1000 and the daily cost is $20. How long will it take for the lease
cost to be the same as the purchase cost?
Let D = the number of days when the purchase and lease costs are equal.
$120D = $1,000 + 20D
$120D - $20D = $1000
$100D = $1000
D = 10. What does this mean?

Knowledge Area
Integration
Buy vs. Lease vs. Rent
Scope
• Length of use (future projects?)
Time • Cash flow; cost of money; financial
Cost statement
Quality
• Technology life span
• Depreciation and taxes
HR
• Maintenance; cost & expertise
Communications
• Insurance
Risk
Procurement
Procurement
Knowledge Area
Integration Contract Type Selection

Scope
• Goal : To have reasonable distribution
Time of risk between the buyer and seller and
Cost
the greatest incentive for the seller’s
efficient and economical performance
Quality
– Degree of cost and schedule risk
HR – Extent of work definition
– Need for fast-tracking
Communications
– Extent of price competition
Risk
– Marketplace conditions
Procurement
Procurement
Knowledge Area
Integration Contract Types

Scope
• Fixed Price
Time
– Firm fixed price (FFP)
– FFP with economic price adjustment (FPEPA)
Cost – Fixed price incentive fee (FPIF) or FPI
Quality
• Cost Reimbursable
– Cost plus fixed fee (CPFF)
HR – Cost plus incentive fee (CPIF)
– Cost plus award fee (CPAF)
Communications
– Cost plus percentage of cost (illegal in Gov)
Risk • Time and Materials
Procurement
Procurement
• Purchase Order (unilateral agreement)
Knowledge Area
Fixed Price Contract Type
Integration
Comparison
Scope • Advantages • Disadvantages
– Know cost up front – May not get consistent
Time quality
– Risk to seller
– Competition – Not flexible
Cost
– Compare multiple – Can be costly
Quality
vendors bids – Seller may under
– Little experience price the work and try
needed - less work for to make up profits on
HR
buyer to manage change orders
– Seller has strong – Seller may not
Communications
incentive to control complete some of the
costs scope of work if they
Risk
begin to lose money.
Procurement
Procurement
Knowledge Area
Cost Plus Contract Type
Integration
Comparison
Scope
• Advantages • Disadvantages
Time
– More influence & – Level of involvement
flexibility - auditing of seller
Cost – Could be less invoices
expensive – No incentive to finish
Quality – Share risk quickly or control
– Scope definition costs
HR – Harder to evaluate
can be more
flexible proposals
Communications
– Total cost unknown
Risk
Procurement
Procurement
Contracts and Procurement
Risk
High Risk for

Seller/Contractor
High Fixed Firm Price (FFP)
Fixed Price Plus Incentive (FPPI)

Confidence
Cost Plus Fixed Fee (CPIF)
Cost Plus Percentage Fee (CPPF)

Less
Low Risk High High Risk for
Buyer/Owner

Knowledge Area

Scope
Time .1 Procurement Management Plan
.2 Procurement Statements of work –
Cost describes the procurement item in sufficient
detail to allow prospective sellers to
Quality
determine if they are capable of providing
HR the item
.3 Procurement Documents
Communications
.4 Source Selection Criteria
Risk .5 Make or Buy Decision
.6 Change Requests
Procurement
Procurement
Knowledge Area
Integration 12.2 Conduct Procurements

Scope
12.2.1 Inputs
Time .1 PM Plan
Cost
.3 Source Selection Criteria
Quality
.4 Seller Proposals
HR .5 Project Documents
Communications
.6 Make-or-Buy Analysis
.7 Procurement Statement of Work
Risk
Procurement
Procurement
Knowledge Area

Scope
Time
.1 Bidder Conferences
Used to ensure all prospective sellers have a clear
Cost understanding of the requirements…all potential
sellers are given equal standing during this process
Quality .2 Proposal Evaluation Techniques
.3 Independent Estimates
HR
.4 Expert Judgment
Communications .5 Advertising
Used to expand existing list of potential sellers (may
Risk be a requirement)
Procurement
Procurement
.7 Procurement Negotiations
Knowledge Area

Scope
Time .1 Selected Sellers
Cost
.2 Agreements
Quality
.4 Change Requests
HR .5 PM Plan Updates
Communications
Risk
Procurement
Procurement
Knowledge Area
Integration 12.3 Control Procurements

Scope Contracts can be amended any time prior to closure
(mutual consent & associated change control terms)
Time
Cost 12.3.1 Inputs

.1 PM Plan
Quality .2 Procurement Documents
.3 Agreements
HR .4 Approved Change Requests
Communications
Risk
Procurement
Procurement
Knowledge Area

.1 Contract Change Control System
Time
.2 Procurement Performance Reviews
.3 Inspections & Audits
Cost
.4 Performance Reporting
Quality .5 Payment Systems
.6 Claims Administration
HR .7 Records Management System
Communications – Contract Administrator – only person authorized to change

contractual agreements (may not be the PM)
Risk
Procurement
Procurement
Knowledge Area

Scope
Cost
.2 Change Requests
.3 PM Plan Updates
Quality
Communications
Risk
Procurement
Procurement
Closing
Knowledge Area
Integration 12.4 Close Procurements

Scope
12.4.1 Inputs
Time .1 PM Plan
Cost
Quality
HR
Communications
Risk
Procurement
Procurement
Closing
Knowledge Area
Integration Contract Close-out

Scope
• Contract close-out includes
Time
– Product verification (work completed correctly and
satisfactorily)
Cost – Administrative activities (update records to reflect
final results)
Quality – Archiving information for future use
HR • Procurement audits identify lessons-learned

• Contract audits
Communications
– Identify best practices and areas for improvement
Risk
Procurement
Procurement
Closing
Knowledge Area

Scope
Time .1 Procurement Audits
Cost
Structured review of procurement process
from planning through administration
Quality .2 Procurement Negotiations
HR .3 Records Management System
Communications
Risk
Procurement
Procurement
Closing
Knowledge Area

Scope
Time .1 Closed Procurements
Cost
.2 Organizational Process Assets Updates –
requirements for formal acceptance and
Quality closure are usually defined in a contract
HR
Communications
Risk
Procurement
Procurement
Closing
Knowledge Area
Integration Termination by...

Scope • Extinction
– Successful or not
Time
– Deliverable is external to or not a fundamental
Cost function of the parent organization
• Addition
Quality – Institutionalized
– New Division
HR
• Integration
Communications – Most Common
– Project assets redistributed
Risk
• Starvation
Procurement
Procurement – Budget decrement
Incentive Contract
Example
Target Cost $100,000

Target Fee $10,000
Target Price $110,000
Sharing Ratio 80/20
Actual Cost $95,000
Fee = $100,000 - $95,000 = $5,000

$5,000 X 20% = $1,000
$10,000 + $1,000 = $11,000
Final Price = $95,000 + $11,000 = $106,000

Incentive Contract
Exercise
Target Fee $10,000
Sharing Ratio 80/20
Actual Cost $105,000
Fee = $100,000 - $105,000 = -$5,000 (reduction in fee)

$5,000 X 20% = $1,000
$10,000 - $1,000 = $9,000
Final Price = $105,000 + $9,000 = $114,000

Ready for a spin? What if
CPPC?

Fee 10% of Cost
Fee = $130,000 + (10% of $130,000) = $143,000
Remember…most risky contract type for buyer!

Sharing w/ Ceiling Exercise

Target Fee $15,000
Ceiling Price $160,000
Sharing Ratio 80/20
Fee = $130,000 - $150,000 = -$20,000 (reduction in fee)

$20,000 X 20% = $4,000
$15,000 - $4,000 = $11,000
Final Price = $150,000 + $10,000 (not $11,000)= $160,000

Point of Total Assumption (For FPIC with a
Ceiling)
PTA = {(Ceiling Price – Target
Price)/Buyer’s Ratio} + Target Cost

Target Fee $15,000
Ceiling Price $160,000
Sharing Ratio 80/20
PTA = {($160,000 - $145,000)/.80} + $130,000

$15,000/.8 + $130,000
$12,000 + $130,000 = $142,000
What is this? A risk trigger.

PMI-ism Break

Edition

Practice Test Time!
Chapter 12 Project Procurement Management

Project Stakeholder Management


Knowledge Area
Integration Project Stakeholder Management

Scope
• Process used to identify people, groups or
Time
organizations that could impact or be impacted
• Analyze expectations and their impacts
Cost
• Develop appropriate management strategies
Quality • Focus
– Continuous communications
HR
– Understand needs and expectations
Communications – Address issues, conflicts as they occur
– Foster appropriate stakeholder engagement
Risk
Procurement
Knowledge Area
Integration 13.1 Identify Stakeholders

Scope
13.1.1 Inputs
Time .1 Project Charter
Cost
Quality
HR
Communications
Risk
Procurement
Stakeholder
Knowledge Area

Scope
Time .1 Stakeholder Analysis: process of collecting
and evaluating quantitative and qualitative
Cost
information to determine whose interests
Quality should be taken into account during the
project
HR
.2 Expert Judgment
Communications .3 Meetings
Risk
Procurement
Stakeholder
Knowledge Area
Integration Classification Models

Scope
• Power / Interest Grid: level of authority and
Time
level of concern (Figure 13-4)
• Power / Influence Grid: level of authority and
Cost
level of active involvement
Quality • Influence / Impact Grid: level of active
involvement and ability to effect change
HR
• Salience Model: describes classes of
Communications stakeholders based on their power, situational
urgency, and legitimacy/appropriateness in
Risk
their involvement
Procurement
Knowledge Area

Scope
Time .1 Stakeholder Register
Cost
Quality
HR
Communications
Risk
Procurement
Stakeholder
Knowledge Area
Integration 13.2 Plan Stakeholder Management

Scope
13.2.1 Inputs
Time .1 PM Plan
Cost
Quality
HR
Communications
Risk
Procurement
Stakeholder
Knowledge Area

Scope
Cost
.2 Meetings
Quality
HR
Communications
Risk
Procurement
Stakeholder
Knowledge Area
Integration Engagement Levels

Scope • Unaware – of project • Where are they
and/or potential impacts currently?
Time
• Resistant – aware and
resistant to change • What is the desired
Cost
• Neutral – aware and level of
Quality neither supporting nor engagement?
resistant
HR • Supportive – aware and
supportive
Communications
• Leading – aware and
actively engaged
Risk
Procurement
Stakeholder
Knowledge Area

Scope
Time .1 Stakeholder Management Plan
Cost
Quality
HR
Communications
Risk
Procurement
Stakeholder
Knowledge Area
13.3 Manage Stakeholder
Integration
Engagement
Scope
13.3.1 Inputs
Time .1 Stakeholder Management Plan
Cost
.2 Communications Management Plan
.3 Change Log
Quality
HR
Communications
Risk
Procurement
Stakeholder
Knowledge Area
Integration
Engagement
Scope
Time .1 Communications Methods
Cost
.2 Interpersonal Skills: building trust, conflict
resolution, active listening, etc.
Quality .3 Management Skills: facilitation, negotiate
HR
agreements, etc.
Communications
Note the fine line between what the PMI
Risk considers interpersonal and management
skills
Procurement
Stakeholder
Knowledge Area
Integration
Engagement
Scope
Time .1 Issue Log
Cost
.2 Change Requests
.3 PM Plan Updates
Quality
HR .5 Organizational Process Assets Updates
Communications
Risk
Procurement
Stakeholder
Knowledge Area
13.4 Control Stakeholder
Integration
Engagement
Scope
13.4.1 Inputs
Time .1 PM Plan
Cost
.2 Issue Log
Quality
HR
Communications
Risk
Procurement
Stakeholder
Knowledge Area
Integration
Engagement
Scope
Time .1 Information Management Systems
Cost
.2 Expert Judgment
.3 Meetings
Quality
HR
Communications
Risk
Procurement
Stakeholder
Knowledge Area
Integration
Engagement
Scope
Time .1 Work Performance Information:
Remember, work performance data is
Cost
transformed into work performance
Quality information
.2 Change Requests
HR
.3 PM Plan Updates
Communications .4 Project Documents Updates
Risk .5 Organizational Process Assets Updates
Procurement
Stakeholder
PMI-ism Break

Edition

Practice Test Time!
Chapter 13 Project Stakeholder Management

Code of Ethics & Professional Conduct
See the PMP® Handbook


Knowledge Area
Integration Vision & Applicability

Scope
• Committed to doing what is right an
Time honorable
Cost • High standards for ourselves
Quality
• Expect same from fellow practitioners
• Applies to volunteer roles
HR
Communications
Risk
Procurement
Knowledge Area
Integration Persons to Whom the Code Applies

Scope
• All PMI members, regardless of
Time certification status
Cost • Non-PMI members that meet any of the
following criteria:
Quality
– PMI certified
HR – Applicants for PMI certification
Communications – Serve PMI in a volunteer capacity
Risk
Procurement
Knowledge Area
Integration Individual Integrity

Scope
• Common sense approach to
Time conflict/issues
Cost
– Be honest
– Do what you “should” do
Quality
– Follow the right processes
HR – Report violations
Communications
Risk
Procurement
Knowledge Area
Integration Core Values Supporting the Code

Scope
• Responsibility
Time • Respect
Cost • Fairness
Quality • Honesty
HR
Communications
Risk
Procurement
Knowledge Area
Integration Aspirational & Mandatory Conduct

Scope
• Each section includes aspirational
Time standards & mandatory standards
Cost • Aspirational
– Not easily measured, but not optional either
Quality
• Mandatory
HR
– Established firm requirements
Communications – Can limit or prohibit behavior
Risk
– Failure can result in disciplinary action
Procurement
Knowledge Area
Integration Responsibility
• Ownership of decisions we make or fail to make
Scope • Aspirational
– Based on the best interests of society, public safety and
Time environment
– Accept assignments consistent w/ our background, experience,
Cost skills and qualifications
– Fulfill commitments
Quality – Ownership of errors (early communication)
– Protect proprietary or confidential info
HR – Hold others accountable to Code
• Mandatory
Communications – Inform ourselves and uphold policies, rules, regulations and laws
that govern our work and volunteer activities
Risk – Report unethical or illegal conduct
– Bring violations of the Code to attention
Procurement – Only file complaints when substantiated by facts
– Pursue disciplinary action for retaliation
Knowledge Area
Integration Respect
• High regard for self, others and resources entrusted to
Scope us
• Respect fosters trust, confidence, and mutual
Time
cooperation
Cost • Aspirational
– Inform selves of norms and customers of others and avoid
Quality disrespectful behavior
– List to others’ point of view
HR – Approach conflict or disagreement directly
– Professional, even when not reciprocated
Communications
• Mandatory
Risk – Negotiate in good faith
– Do not exercise power for personal benefit
Procurement – Do not act abusively
– Respect others’ property rights
Knowledge Area
Integration Fairness
• Make decisions and act impartially and objectively
Scope • Aspirational
– Transparency in decision making
Time – Constantly reexamine ourselves and make corrective action
– Provide equal access to information to those authorized
Cost – Make opportunities equally available to qualified candidates
• Mandatory
Quality
– Proactively disclose conflicts of interests
– Refrain from decision making process or influencing outcomes if
HR there is a potential conflict of interest
– Do not hire/fire, reward/punish, award/deny contracts based on
Communications personal considerations (favoritism, nepotism, bribery)
– Do not discriminate (gender, race, age, religion, disability, etc…)
Risk – Apply the rules of the organization (employer, PMI or other group)
without favoritism or prejudice
Procurement
Knowledge Area
Integration Honesty
• Duty to understand the truth and act truthfully
Scope
• Aspirational
Time
– Earnestly seek to understand the truth
– Truthful in communications and conduct
Cost – Provide accurate info in a timely manner
– Make commitments or promises in good faith (implied or
Quality explicit)
– Create an environment that others feel safe to tell the truth
HR • Mandatory
– Do not engage in behavior that is designed to deceive
Communications
others (false statements, half-truths, provide info out of
context, etc…)
Risk
– Do not engage in dishonest behavior w/ the intent of
personal gain or expense of others
Procurement
Practice Test Time!
Chapter 13 Professional & Social Responsibility

Course Certificates & Critiques



Project Management Professional (PMP®) Exam PMBOK® Guide - Fifth Edition Aligned

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Project Management Professional (PMP®) Exam

PMBOK® Guide – Fifth Edition Aligned

Chuck Millhollan, MBA, MPM, PMP, PgMP

Chuck Millhollan, MBA, MPM, PMP, PgMP 1

Chuck Millhollan, MBA, MPM, PMP, PgMP 4

Integration Workshop Approach

Integration Student Presentations

Integration The Test

Scope Total Course Time Calculation (Hours)

Study Element Most Likely Optimistic Pessimistic PERT

Scope 13.40 10.05 26.8 15.1

Time 16.70 12.53 33.4 18.8

HR HR 25.00 18.75 50 28.1

Communications 13.30 9.98 26.6 15.0

Communications Risk 14.70 11.03 29.4 16.5

Procurement 13.20 9.9 26.4 14.9

Professional Responsibility 11.70 8.77 23.4 13.2

Chuck Millhollan, MBA, MPM, PMP, PgMP 11

Integration Application Process

Integration Application Process

Integration Application Process

Integration Louisville Testing Locations

Integration Our roles…

Integration Want the Answers Before the Test?

Integration Note Taking

Risk – Note the slide headers; they guide you to

Rita Mulcahy, PMP® Exam Prep, 8th

Chuck Millhollan, MBA, MPM, PMP, PgMP 19

Chuck Millhollan, MBA, MPM, PMP, PgMP

Chuck Millhollan, MBA, MPM, PMP, PgMP 20

Integration 1.2 What is a Project?

Integration 1.3 Managing a Project

Integration 1.4 Projects & Programs Defined

Integration Project Management

Integration Program Management

Quality Project 1 Project 2 Project 3 Project 4

Cost Deliver long term business Deliver: T, C, Q, and

Integration Portfolio Management

Time Projects focus on delivering a product or

Quality Programs focus on benefit realization

Communications Portfolios demonstrate investment strategy

Integration 1.4.4 The “PMO”

Integration PMO Structures

Integration 1.6 Business Value

Chuck Millhollan, MBA, MPM, PMP, PgMP

Chuck Millhollan, MBA, MPM, PMP, PgMP 35

Let’s Deep Dive PMBOK Table 2-1

Chuck Millhollan, MBA, MPM, PMP, PgMP 36

Integration 2.1.4 Organizational Process Assets

Integration 2.2 Project Stakeholders

Integration Project Stakeholders

Chuck Millhollan, MBA, MPM, PMP, PgMP 42

Integration Project “Phases”

Integration Life Cycle Types

Chuck Millhollan, MBA, MPM, PMP, PgMP

Chuck Millhollan, MBA, MPM, PMP, PgMP 45

Integration Process Group Interaction

Integration 3.8 Project Information

Chuck Millhollan, MBA, MPM, PMP, PgMP 49

Rita Mulcahy, PMP® Exam Prep, 8th

Chuck Millhollan, MBA, MPM, PMP, PgMP 50

Chuck Millhollan, MBA, MPM, PMP, PgMP 51

Chuck Millhollan, MBA, MPM, PMP, PgMP