Professional Documents
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Project Management Professional (PMP) : Certification Study Guide
Project Management Professional (PMP) : Certification Study Guide
Professional (PMP)
Certification Study Guide
Recurring Themes
• Historical Records – need to collect and use for
planning, estimating and risk
• Kickoff meetings are important
• Work Breakdown Structures
• Do not introduce benefits that are not stated in
requirements
• Needs of all stakeholders should be taken into account
during all projects
• Team Members must be involved in project planning
• Project Mangers must be pro-active
1
Chapter 1 – Introduction
• Project – temporary endeavor undertaken to
create a unique product or service
• Has a definite beginning and end and
interrelated activities
• Programs adopt new set of objectives and
continue to work; projects cease when declared
objectives have been attained
Chapter 1– Introduction
• Projects are unique – characteristics are
progressively elaborated
– Progressively: proceeding in steps
– Elaborated: worked with care and detail
• Scope of project should remain constant
even as characteristics are “progressively
elaborated”
Chapter 1 - Introduction
• Project Management: the application of
knowledge, skills, tools and techniques to project
activities in order to meet or exceed stakeholder
needs and expectations from a defined project –
balancing the following:
– Scope, time, cost, and quality
– Stakeholders’ expectations
– Requirements (needs) vs. unidentified requirements
(expectations)
2
Chapter 1 - Introduction
• Programs are groups of projects managed in a
coordinated way to obtain benefits not available
from managing the projects individually
• Most programs have elements of ongoing
operations
– Series of repetitive or cyclical undertakings
• Projects are often divided into “subprojects” for
more manageability
– Often contracted out to external organizations
3
Chapter 2 – Project Management
Context
• Stakeholders: individuals and organizations
who are actively involved in the project
– Often have conflicting expectations and objectives
– In general, differences should be resolved in favor of
the customer – individual(s) or organization(s) that will
use the outcome of the project
– Stakeholder management is a proactive task
• Project Mangers must determine all stakeholders and
incorporate their needs into the project
4
Chapter 2 – Project Management
Context
• Organizational Cultures and Styles:
– Entrepreneurial firms more likely to adopt
highly participative Project Manager – accept
higher risk/reward
– Hierarchical firms less likely to adopt
participative Project Manager – take fewer
risks
5
Chapter 2 – Project Management
Context
• Socioeconomic Influences
– Standards – document approved that provides
common, repeated use, rules and guidelines
• Compliance is not mandatory
– Regulations – document that identifies products,
services or characteristics
• Compliance is mandatory
– Standards often become “de facto” regulations
– Internationalization
– Cultural Influences
6
Chapter 3 – Project Management
Processes
• Project Management requires active
management of Project Processes
– Series of actions that achieve a result
– Project Management Processes
• Describing and organizing the work
– Product-Oriented Processes
• Specifying and creating the product
7
Chapter 3 – Project Management
Processes
• Initiating and Planning Processes
• Committing the organization to begin
– Initiation, High-level planning, Charter
• Amount of planning proportional to the scope of
the project – Core Planning
– Scope Planning – written statement
– Scope Definition – subdividing major deliverables
into more manageable units
– Activity Definition – determine specific tasks needed
to produce project deliverables
– Activity Sequencing – plotting dependencies
8
Chapter 3– Project Management
Processes
• Planning/Facilitating Processes (continued)
– Risk Identification – determining what is likely to
affect the project and documenting these risks
– Risk Quantification – evaluating risks and
interactions to access the possible project outcomes
– Risk Response Development – defining
enhancement steps and change control measures
– Procurement Planning – determining what to buy
and when
– Solicitation Planning – documenting product
requirements and identifying possible sources
9
Chapter 3 – Project Management
Processes
• Executing Processes (continued)
– Information Distribution – making project
information available in a timely manner
– Solicitation – obtaining quotes, bids,
proposals as appropriate
– Source Selection – deciding on appropriate
suppliers
– Contract Administration – managing vendor
relationships
10
Chapter 3 – Project Management
Processes
• Closing Processes
– Administrative Closure – generating necessary
information to formally recognize phase or project
completion
– Contract Close-out – completion and delivery of
project deliverables and resolving open issues
• Procurement Audits
• Product Verification
• Formal Acceptance
• Lessons Learned
• Update Records
• Archive Records
• Release Team
11
Chapter 4 – Project Integration
Management
• Project Integration Management
– Ensures that the project processes are properly coordinated
– Tradeoffs between competing objectives and alternatives in
order to meet stakeholder approval
• Project Plan Development
• Project Plan Execution
• Overall Change Control
– These processes may occur repeatedly over the project duration
– Historical Records are needed to perform project management
well, they are inputs to continuous improvement
• Files
• Lessons Learned
• Actual Costs
• Time Estimates
• WBS
• Benchmarks
• Risks
12
Chapter 4 – Project Integration
Management
• Tools & Techniques for Plan Development
– Project Planning Methodology – any structured
approach (software, templates, forms, start-up
meetings
– Stakeholder Skills & Knowledge – tap into plan
development; use expertise for reasonableness
– PMIS – Out of the box approach to support all project
aspects through closure
13
Chapter 4 – Project Integration
Management
• Supporting Details to the Project Plan
– Outputs from planning processes
– Technical documentation
– Business requirements, specifications, and
designs
– Relevant standards
– Additional information not previously known
14
Chapter 4 – Project Integration
Management
• Tools & Techniques for Plan Execution
– General Management Skills
– Product Skills and Knowledge – defined as part of
planning, provided by staffing
– Work Authorization System – formal procedure for
sanctioning work to ensure completion – written or
verbal authorization
– Status review meetings – regular exchanges of
information
– Project Management Information System
– Organizational Procedures
15
Chapter 4 – Project Integration
Management
• Inputs to Change Control
– Project Plan – baseline performance
– Performance Reports – issue tracking, risk
management
– Change Requests – orally or written,
externally or internally initiates, legally
mandated or optional
16
Chapter 4 – Project Integration
Management
• Change Control Outputs
– Project Plan Updates
– Corrective Actions
– Lessons Learned – variance causes and
reasoning documented for historical purposes
17
Chapter 4 – Project Integration
Management
18
Chapter 5 – Project Scope
Management
• Initiation Inputs:
19
Chapter 5 – Project Scope
Management
• Tools & Techniques for Initiation
– Project Selection Methods:
• Decision models – generalized and sophisticated techniques
– Expert judgment
• Business Units with specialized skills
• Consultant
• Professional and Technical Associations
• Industry Groups
• Delphi Technique – obtain expert opinions on technical
issues, scope of work and risks
– Keep expert’s identities anonymous
– Build consensus
20
Chapter 5 – Project Scope
Management
• Scope Planning Tools & Techniques
– Product Analysis - developing a better
understanding of the product of the project
– Cost/Benefit Analysis – estimating
tangible/intangible costs and returns of various project
alternatives and using financial measures (R.O.I.) to
assess desirability
– Alternatives Identification – generate different
approaches to the project; “brainstorming”
– Expert Judgment
21
Chapter 5 – Project Scope
Management
• Scope Definition – subdividing major
deliverables into smaller, manageable
components
– Improve accuracy of cost, time, and resource
estimates
– Define a baseline for performance measurement
– Clear responsibility assignments
– Critical to project success – reduces risk of higher
cost, redundancy, time delays, and poor productivity
– Defines “what” you are doing; WBS is the tool
22
Chapter 5 – Project Scope
Management
• Scope Definition Outputs
– Work Breakdown Structure (WBS) – a deliverable-
oriented grouping of project assignments that
organizes and defines the scope of the project
• Each descending level represents further detail; smaller and more
manageable pieces
• Each item is assigned a unique identifier collectively known as
“code of accounts”
• Work element descriptions included in a WBS dictionary (work,
schedule and planning information)
• Other formats:
– Contractual WBS – seller provides the buyer
– Organizational (OBS) – work elements to specific org. units
– Resource (RBS) – work elements to individuals
– Bill of Materials (BOM) – hierarchical view of physical resources
– Project (PBS) – similar to WBS
23
Chapter 5 – Project Scope
Management
• WBS phrases
– Graphical hierarchy of the project
– Identifies all tasks
– Foundation of the project
– Very important
– Forces thought of all aspects of the project
– Can be re-used for other projects
24
Chapter 5 – Project Scope
Management
• Scope Change Control:
– Influencing factors to ensure that changes are
beneficial
– Determining scope change has occurred
– Managing changes when they occur
– Thoroughly integrated with other control
processes
25
Chapter 5 – Project Scope
Management
• Scope Change Control Outputs:
– Scope Changes – fed back through planning
processes, revised WBS
– Corrective Actions
– Lessons Learned – cause and reasoning for
variances documented for historical purposes
26
Chapter 6 – Project Time
Management
• Activity Definition: identifying and
documenting specific activities to produce
project deliverables identified in the WBS
– Must be defined to meet the project objectives
27
Chapter 6 – Project Time
Management
• Activity Definition Outputs
– Activity List – all to be performed; extension to the
WBS and includes description to ensure team
members understand work to be performed
– Supporting Detail – organized as needed and
include all assumptions and constraints
– WBS Updates – identify missing deliverables and
clarify deliverable descriptions. WBS updates often
called refinements; more likely using new
technologies in project
28
Chapter 6 – Project Time
Management
• Network Diagrams
– Shows how the project tasks will flow from
beginning to end
– Proves how long the project will take to
complete
– Takes project tasks from low levels of WBS
and placing them into their order of
completion (beginning to end)
29
Chapter 6 – Project Time
Management
• Activity Sequencing Tools & Techniques
(continued)
– Conditional diagramming methods
• GERT (Graphical Evaluation and Review
Technique)
• System Dynamic Models
• Allow for non-sequential activities (loops) or
conditional branches – not provided by PDM or
ADM methods
30
Chapter 6 – Project Time
Management
• Activity Duration Estimating
– Involves assessing number of work periods
needed to complete identified activities
– Requires consideration of elapsed time,
calendars, weekends, and day of week work
starts
31
Chapter 6 – Project Time
Management
• Activity Duration Outputs:
– Activity Duration Estimates – quantitative
assessments of work periods to complete an
activity. Should indicate a range +/- of
possible results
– Basis of Estimates – all assumptions should
be documented
– Activity List Updates
32
Chapter 6 – Project Time
Management
• Schedule Development Inputs (continued):
– Constraints
• Imposed Dates – may be required
• Key events or milestones – are initially requested and
become expected during project
– Assumptions
– Lead and Lag Time – dependencies may specify
time in order to satisfy relationship (example – 2
weeks to receive order)
33
Chapter 6 – Project Time
Management
• Schedule Development Tools & Techniques
– Monte Carlo Analysis
• Uses a computer with PERT values and network diagram
• Tells
– Probability of completing a project on any specific day
– Probability of completing a project for any specific amount of
cost
– Probability of any task actually being on the critical path
– Overall Project Risk
• Suggests that Monte Carlo simulation will create a project
duration that is closer to reality than CPM or PERT
34
Chapter 6 – Project Time
Management
• Schedule Development Tools & Techniques
(continued)
– Project Manger’s role
• Provide the team with the necessary information to properly
estimate the task
• Complete a sanity check of the estimate
• Formulate a reserve
– Project Team should be involved; determine task
estimates
• Historical Records
• Guesses
• Actual Costs
• Benchmarks
• CPM and PERT
35
Chapter 6 – Project Time
Management
• Schedule Development Outputs (continued):
– Supporting Detail – all assumptions and constraints.
May also include:
• Resource requirement by time period (resource histogram)
• Alternative schedules (best/worst case)
• Schedule reserve/risk assessments
– Schedule Management Plan – how updates are
managed
– Resource requirement updates – leveling and
activity impact
36
Chapter 6 – Project Time
Management
• Schedule Control Outputs:
– Schedule Updates – any modifications,
stakeholder notification
• Revisions change scheduled start and finish dates
– generally in response to scope changes. “Re-
baselining” may be needed in drastic situations
– Corrective Action – re-align performance
with project plan
– Lessons Learned
37
Chapter 6 – Project Time
Management
• Methods to draw network diagrams
– Activity on Arrow (AOA or Arrow
Diagramming Method (ADM)
• Arrows used to represent tasks
• Only Finish to Start relationships are used
• May use dummy tasks (show dependencies)
• PERT and CPM estimating techniques can only be
drawn using AOA
– CPM (Critical Path Method) – estimating based on one time
estimate per activity (the most likely time estimate)
» Emphasizes controlling cost and allowing schedule flexibility
» Can have dummy tasks
38
Chapter 6 – Project Time
Management
• Monte Carlo Simulation:
– Uses a computer with PERT values (P, M, O) and a
network diagram but does not use the PERT formula
– Indicates
• Probability of completing project on a specific day
• Probability of completing project for any specific amount of
cost
• Probability of any task actually being on critical path
• Overall project risk
39
Chapter 6 – Project Time
Management
• General Comments:
– Projects can have more than 1 critical path (increases
risk) and can involve dummy tasks
– Negative float indicates that you are behind
– Resource Leveling involves possibly letting schedule
and cost slip
– Heuristics – just means “rule of thumb” e.g. 80/20 rule
– Schedules are calendar based – makes this different
than a time estimate
• Bar Chart a.k.a. Gantt chart (track progress, report to entire team
including stakeholders, control tool)
• Network Diagram (to show task inter-dependencies, show project
organization, basis for project control)
• Milestone chart (report to Senior management, shows major events)
40
Chapter 6 – Project Time
Management
• General Comments:
– Free Slack (Float) – amount of time a task can be delayed
without delaying the early start date of its successor
– Total Slack (Float) – amount of time a task can be delayed
without delaying the project completion date
41
Chapter 7 – Project Cost
Management
• Resource Planning:
– Determining what physical resources and quantities
are needed to perform work
• Inputs to Resource Planning:
– Work Breakdown Structure
– Historical Information
– Scope Statement – justification & objectives
– Resource Pool Description – what resources are
potentially available for resource planning
– Organizational Policies – staffing, procurement
42
Chapter 7 – Project Cost
Management
• Cost Estimating:
– Develop approximate costs of resources
– Distinguish estimating from pricing
• Estimating – likely amount
• Pricing – business decision
– Identify alternatives and consider realigning
costs in phases to their expected savings
43
Chapter 7 – Project Cost
Management
• Cost Estimating Tools & Techniques
– Pro’s and Con’s
– Analogous Estimating
• Quick - Less Accurate
• Tasks don’t need to be identified – Estimates prepared
with little detail and understanding of project
• Less costly – Requires considerable experience to do well
• Gives PM idea of management expectations – Infighting at
high levels of organization
• Overall project costs are capped – Difficult for projects with
uncertainty
44
Chapter 7 – Project Cost
Management
• Cost Budgeting
– Involves allocation of total estimate to individual work
to establish a cost baseline to measure performance
• Cost Budgeting Inputs
– Cost Estimate
– Work Breakdown Structure
– Project Schedule – includes planned start and finish
dates for items costs are allocated to
• Needed to assign costs during the time period when the
actual cost will be incurred
45
Chapter 7 – Project Cost
Management
• Inputs to Cost Control
– Cost Baseline
– Performance Reports – meet, exceed budget
• 50/50 Rule – task is considered 50% complete when it begins and gets credit for
remainder 50% only when completed
• 20/80 Rule - task is considered 20% complete when it begins and gets credit for
remainder 80% only when completed
• 0/100 Rule – task only credited when fully completed
– Change Requests
– Cost Management Plan
• Tools & Techniques of Cost Control
– Cost Change Control System – defines the procedures by which the cost
baseline may be changed
– Performance Measurement – assess magnitude of cost variations (Earned
Value Analysis) and what is causing the variance
– Additional Planning – examine alternatives
– Computerized Tools – forecast planned costs, track actual costs, forecast effect
of cost changes
46
Chapter 7 – Project Cost
Management
• Earned Value Analysis
– Terms:
• BAC – Budget at Completion (how much did you
budget for the total job)
• EAC – Estimate at Completion (what do we expect
the total project to cost)
• ETC – Estimate to Completion (how much more do
we expect to spend to finish the job)
• VAC – Variance at Completion (how much
over/under budget do we expect to be)
47
Chapter 7 – Project Cost
Management
• Earned Value Analysis
– BCWP comes first in most formulas
– If it is a variance, BCWP comes first
– If it is an index, BCWP is divided by
– If the formula relates to cost, use AWCP
– If the formula related to schedule, use BWCP
– Negative is bad; positive results are good
– ETC refers to “this point on”; EAC refers to when job
is completed
48
Chapter 7 – Project Cost
Management
• Accounting Standards
– Net Present Value: total benefits (income or revenue) less the
costs. NPV is the sum of each present value of each
income/revenue item
– Internal Rate of Return (IRR): company may select project
based on highest IRR
– Payback Period: number of time periods it takes to recover the
investment in the project before generating revenues
– Benefit Cost Ratio (BCR): compares costs to the benefits of
different projects
• Greater than 1 means benefits are greater than costs
• Less than 1 means costs are greater than benefits
– Opportunity Cost: opportunity given up by selecting one project
over another
49
Chapter 7 – Project Cost
Management
• Accounting Standards
– Project Objectives – are not necessarily needed to fund project
– Project Definition – focus on end product initially; costs and benefits
will be evaluated later
– 25% of project lifecycle expended at end of planning
– No guarantees; only most likely results
– Line of Balance charts are used for manufacturing
– Negative Float – the late start date is earlier than the early start
date
– Value Engineering/analysis – does not trade performance for
cost
– Prospectus – profitability and technical feasibility used to solicit
funding
50
Chapter 8 – Project Quality
Management
• 3 major processes:
– Quality Planning – identifying quality standards that are
relevant to the project (Plan); Project Manager, Project Owner
– Quality Assurance – evaluating overall project performance
to provide confidence that project will satisfy relevant quality
standards (Implement or Execution); Project Team
– Quality Control – monitoring specific results to comply with
quality standards and eliminating unsatisfactory performance
causes (Check or Control); Project Manager, Project Team
• Compatible with ISO 9000 and 10000 series
• Proprietary and non-proprietary approaches (total quality
management
• Must address the management of the project and the product of the
project
51
Chapter 8 – Project Quality
Management
• Tools &Techniques for Quality Planning
– Benefit/Cost Analysis – consider trade-offs, benefit is less
rework; cost is expense of project management activities
– Benchmarking – comparing actual or planned practices to
those of other projects
– Flowcharting
• Cause and effect diagramming (Ishikawa or fishbone diagrams)
illustrate how causes relate to potential problems or effects
• System or Process flowcharts – show how various elements of the
system interrelate
– Helps anticipation of what and where quality problems may occur
– Design of Experiments – analytical technique which defines
what variables have most influence of the overall outcome
• Cost and schedule tradeoffs
52
Chapter 8 – Project Quality
Management
• Quality Control – monitoring specific results to
determine if they comply with quality standards and
identifying ways to eliminate causes of unsatisfactory
results
– Includes project (deliverables) and management (cost and
schedule performance) results
– Awareness of statistical quality control
• Prevention (keep errors out of process) and inspection (keep errors
from customers)
• Attribute sampling (result conforms) and variable sampling
• Special Causes (unusual events) and random causes
• Tolerances (acceptable range) and control limits (result falls within
range)
53
Chapter 8 – Project Quality
Management
• Tips from the Review Guide
– Philosophy: definition of quality, avoidance of “gold plating” –
giving customer extras, prevention over inspection
– “Conformance to requirements, specifications and fitness of use”
– Quality Management – processes required to ensure that the
project will satisfy the needs for which it was undertaken
– Continuous Improvement - small improvements to reduce
costs and ensure consistency
– Marginal Analysis – optimal quality is reached at the point
when revenue from improvement equals the costs to secure it
– Just in Time - decrease amount of inventory/decrease
investment
54
Chapter 8 – Project Quality
Management
• Tips from the Review Guide
– Cost of conformance vs. non-conformance
• Quality Training vs. rework
• Studies vs. Scrap
• Surveys vs. Inventory Costs and warranty costs
– Quality Planning (Plan) – determine what will be
quality on project and how quality will be measured –
done during Planning Phases
• Identifying which standards are relevant to project – how to satisfy
them
• Benchmarking – look at past projects to determine ideas for
improvement
• Cost Benefit Analysis
• Flowcharts (fishbone)
• Design of Experiments
55
Chapter 8 – Project Quality
Management
• Tips from the Review Guide
• Quality Control Tools
– Pareto Diagrams – 80/20 rule – the chart presents the
information being examined in its order of priority and
helps focus attention on the most critical issues
– Fishbone diagram (Cause and Effect)
» A creative way to look at the causes or potential
causes of a problem
» Helps stimulate thinking, organizes thoughts and
generates discussion
» Can be used to explore a desired future outcome
and the factors to which it relates
56
Chapter 8 – Project Quality
Management
• PMI and Deming
– Cost of conformance – 85% of costs of quality are
responsibility of Management
• Quality Training – Rework
• Studies – Scrap
• Surveys – Inventory and Warranty costs
• Crosby – absolutes of quality
– Performance standard is zero defects; measurement
system is cost of non-conformance
• Continuous Improvement
– Japanese (Kaizen)
57
Chapter 8 – Project Quality
Management
• Review Guide Tips
– Marginal Analysis: optimal quality is reached when
incremental revenue from improvement equals the
incremental cost to secure
– Standard Deviation: how far away from mean
– Variable: characteristic you want to measure
– Attribute: measurement (subjective or objective)
– Ultimate Responsibility – Employee
– Overall Responsibility – PM
– Design/Test Specifications - Engineer
58
Chapter 9 – Human Resource
Management
• Project Human Resource Management
– Processes required to make the most efficient use of
people
– 3 major processes:
• Organizational Planning
• Staff Acquisitions
• Team Development
– Keep in mind of transient nature of projects
– Apply techniques that apply to current project needs
– Ensure HR compliance with project management
activities
59
Chapter 9 – Human Resource
Management
• Organizational Planning
– Identifying, documenting and assigning
project roles, responsibilities, and reporting
relationships
• Individual and group assignments
• Internal and external employees
• Linked with communication planning
60
Chapter 9 – Human Resource
Management
• Tools & Techniques for Organizational Planning
– Templates – reuse a similar project’s role and
responsibility definitions
– Human Resource Practices – corporate policies,
guidelines, and practices
– Organizational Theory – how organizations are
structured
– Stakeholder Analysis – needs of stakeholders are
ensured
61
Chapter 9 – Human Resource
Management
• Tools & Techniques for Staff Acquisition
– Negotiations with functional managers and other
teams
• Staff utilization and corporate politics
– Pre-assignment – result of a competitive proposal, or
an internal initiative
– Procurement – outside services are needed (lacking
internal skills or availability can not be met)
• Outputs from Staff Acquisition
– Project staff assigned
– Project Team Directory – contact list
62
Chapter 9 – Human Resource
Management
• Outputs from Team Development
– Performance Improvements
• Individual skills
• Team Behavior
• Identify more efficient methods of work
– Input for performance appraisals
63
Chapter 9 – Human Resource
Management
• Review Guide Tips
– Avoid conflict
• Informing the team
• Clearly assigning tasks without ambiguity
• Challenging and interesting work assignments
– Conflict Sources (in order of frequency)
• Schedules
• Project Priorities
• Resources
• Technical opinions
• Administrative Procedures
• Cost
• Personality
64
Chapter 9 – Human Resource
Management
• Review Guide Tips
– Projectized Organization
• Conflict between PM and Functional Managers
• Dual Allegiance of team members
• Complex prioritization of resources
• Loss of developed procedures on project dissolution
– Compromise – both sides will lose
– Delegation
• Defer the decision
• Interpreted as passive
• Emphasize task vs. personnel
• Can be frequently utilized
Chapter 10 – Project
Communications Management
• Project Communications Management
– Processes to ensure timely and proper generation,
collection, dissemination and disposition of project
information
– General communications management
• Communications Planning – determining informational
needs, who needs what and when; 90% of PM’s time is spent
communicating
• Information Distribution – making information available
• Performance Reporting – collecting and disseminating
project information
• Administrative Closure – formalize project/phase
completion
Chapter 10 – Project
Communications Management
• Communications Planning
– Determining information requirements of stakeholders
– Tightly linked with organizational planning
• Inputs to Communications Planning
– Communication requirements – sum of the information
requirements of the stakeholders
• Define type and format of information with analysis of value of
information
• Project organization and stakeholder responsibility relationships
• Disciplines, departments and specialties involved in project
• Logistics of number of individuals at location
• External communication needs (media)
65
Chapter 10 – Project
Communications Management
– Communication Technology – used to transfer
information
• Immediacy of need for information
• Availability of technology
• Expected project staffing – compatible with personnel
experience
• Length of project – will technology change during duration?
– Constraints – factors that limit project team’s options
– Assumptions
Chapter 10 – Project
Communications Management
• Tools & Techniques for Communication Planning
– Stakeholder analysis – informational needs should be analyzed
to develop methodology suited for the project; eliminate
unnecessary information or technologies
• Outputs from Communications Planning
– Communication Management Plan
• Collection and filing structure to detail the gathering and storage of
information; updating and dissemination
• Distribution structure – who gets info in certain format; compatible
with project organization chart
• Description of information included – format, level of detail,
conventions
• Production schedules of each type of communication
• Methods for accessing information
• Method for updating and refining communications plan
Chapter 10 – Project
Communications Management
• Information Distribution – making information
available in a timely manner by implementing the
communications plan; responding to requests for
information
• Inputs to Information Distribution
– Work Results
– Communication Management Plan
– Project Plan
66
Chapter 10 – Project
Communications Management
• Tools & Techniques for Information
Distribution
– Communication Skills – used to exchange information.
Sender is responsible for clarity; receiver is responsible for
receipt and understanding
– Information retrieval systems – filing systems, software
– Information distribution systems – meetings,
correspondence, networked databases, video/audio
conferencing
• Outputs from Information Distribution
– Project Records – maintained in an organized fashion
Chapter 10 – Project
Communications Management
• Performance Reporting
– Collecting and disseminating performance indicators to provide
stakeholders information how resources are achieving project
objectives
• Status reporting
• Progress reporting
• Forecasting
• Project scope, schedule, cost and quality, risk and procurement
• Inputs to Performance Reporting
– Project Plan
– Work Results – deliverables completed, % completed, costs
incurred
– Other Project records
Chapter 10 – Project
Communications Management
• Tools & Techniques for Performance Reporting
– Performance reviews – meetings to assess status
– Variance Analysis – comparing actual results to planned or
expected results (baseline); cost and schedule most frequent
– Trend Analysis – examining results over time to determine
performance
– Earned Value Analysis – integrates scope, cost and schedule
measures – calculate 3 keys:
• Budgeted Cost of Work (BCWS) – portion of approved cost estimate
planned to be spent on activity during a given period
• Actual Cost of Work Performed (ACWP) – total of direct and indirect cost
incurred in accomplishing work on activity in a given period
• Earned Value (Budgeted Cost of Work Performed – BCWP) – percentage
of total budget equal to percentage of work actually completed
– Cost Variance (CV) = BCWP – ACWP
– Schedule Variance (SV) = BCWP – BCWS
– Cost Performance Index (CPI) = BCWP/ACWP
– Information Distribution Tools & Techniques
67
Chapter 10 – Project
Communications Management
• Outputs from Performance Reporting
– Performance Reports – organize and summarize
information gathered and present results
• Bar charts, Gantt charts, S-curves, etc.
– Change Requests – handled as part of change control
• Administrative Closure
– Projects/phases after achieving results or terminated require
closure
– Verifying and documenting project results to formalize acceptance
– Collection of project records, analysis of effectiveness, reflect final
specifications and archiving of material
Chapter 10 – Project
Communications Management
• Inputs to Administrative Closure
– Performance Measurement Documentation – includes planning
docs; all information that records and analyzes performance
– Documentation of product and project
– Other project records
• Tools & Techniques of Administrative
Closure
– Performance Reporting tools & techniques
• Outputs from Administrative Closure
– Product Archives –complete index of all records, database
updates
– Formal Acceptance – signoffs from client or sponsor
– Lessons Learned
Chapter 10 – Project
Communications Management
• Tips from Review Guide
– Understand all concepts and major points
– Memorize the communications model
– Understand the inputs/outputs of Administrative
Closure
– Understand how administrative closure differs from
contract closeout
• Contract closeout has product verification and administrative
closeout but the contract terms may have special
provisions/procedures for closeout
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Chapter 10 – Project
Communications Management
• Communication Model
– Messages are encoded by sender and decoded by
receiver based on receiver’s education, experience,
language and culture
• Sender should encode message carefully
– Nonverbal
– Paralingual (pitch and tone)
– Active Listening – receiver confirms they are listening, confirms
agreement and ask for clarification
– Effective Listening – watching speaker, think before speaking,
ask questions, repeating and providing feedback
Chapter 10 – Project
Communications Management
• Communication Methods
– Pick the form of communication that is best for
the situation
• Formal Written – complex problems, All Plans,
communicating over long distances
• Formal Verbal – Presentations, speeches
• Informal Written – memos, e-mail, notes
• Informal Verbal – Meetings, conversations
Chapter 10 – Project
Communications Management
• Communication Blockers
– Noise, Distance, Improper en-coding, “bad idea”, Hostility, Language,
Culture
• Performance Reporting
– Status Reports (where project stands)
– Progress Reports (what has been accomplished)
– Trend Report (project results over time)
– Forecasting Report (projecting future status)
– Variance Report (actual results vs. planned)
– Earned Value
• Communication Channels – communications grow at a
linear rate
– N (N-1)/2 where N = the number of people
– Example 4 people equals 6 communication channels
69
Chapter 10 – Project
Communications Management
• To determine if someone understands message feedback must be
obtained
• Unanimous Agreement
– All members committed
– Decisions reached slowly
– Integrity is developed
– Future decision making is enhanced
• Clearly defined group goals
– Motivate team behavior
– Cause tension until completed
– Encourage member identification
• Complex messages need oral, written and non verbal methods
• There are 5 directions of communication
• Façade – when an individual processed needed information but
withholds the information
Chapter 10 – Project
Communications Management
• Least effective form of communication for complex situations is verbal and
formal
• If there are a team of experts, PM decisions will likely promote high
satisfaction
• Functional/Project Mangers likely to exercise
– Power
– Authority
– Influence
• Traditional organization forms have no single point of contact for
clients/sponsors
• To determine if someone understands message, must obtain feedback
• Unanimous Agreement – all members committed, decisions reached slowly,
integrity is developed, future decision making is enhanced
• Clearly defined group goals: motivate team behavior, cause tension until
completed, encourage member interaction
• Complex messages need oral, written and non verbal methods
• Least effective form of communication for complex issues: verbal and formal
70
Chapter 11 – Project Risk
Management
• Risk Identification
– Determining which risks are likely to affect the project
and documenting them
– Performed on a regular basis; address internal and
external risks
• Internal – project team has control/influence over
• External – beyond project team’s control
– Identify cause and effect and effects and causes;
what could happen vs. what outcomes should be
avoided
71
Chapter 11 – Project Risk
Management
• Outputs from Risk Identification
– Sources of Risk – categories of possible risk events, all-inclusive
• Changes in requirements
• Design errors, omissions, misunderstanding
• Poorly defined roles and responsibilities
• Insufficiently skilled staff
– Include estimate of probability, range of possible outcomes, expected timing, anticipated frequency
– Potential Risk Events – discrete occurrences that may affect
project
• Identified when probability/magnitude of loss is high (e.g. turnover)
– New technologies obsolete need of product
– Socio, Political and Economic events
– Include estimate of probability, range of possible outcomes, expected timing, anticipated frequency
– Risk Symptoms – triggers that are indirect manifestations of
actual risk events (e.g. poor morale)
– Inputs to other processes – identify need in another area;
constraints and assumptions
72
Chapter 11 – Project Risk
Management
• Outputs from Risk Quantification
– Opportunities to pursue; threats to respond
– Opportunities to ignore; threats to accept
• Risk Response Development
– Defining enhancement steps for opportunities and
responses to threats
• Avoidance – eliminating threat by eliminating the cause
• Mitigation – reducing expected monetary value of event by
reducing the probability of occurrence
• Acceptance – accept the consequences (active -
contingency plan - or passive response)
73
Chapter 11 – Project Risk
Management
• Risk Response Control
– Involves executing the risk management plan in order
to respond to risk events during the project
• Control and iteration are required; not all risks can be
identified
• Inputs to Risk Response Control
– Risk Management Plan
– Actual Risk Events – recognize occurrence
– Additional Risk Identification – surfacing of potential or
actual risk sources
74
Chapter 11 – Project Risk
Management
• Tips from Review Guide
– Inputs to Risk Management:
• All project background information
• Historical records
• Past Lessons Learned
• Project Charter
• Scope Statement
• Scope of work
• WBS
• Network Diagram
• Cost and Time estimates
• Staffing Plan
75
Chapter 11 – Project Risk
Management
• Tips from Review Guide
– Common Stumbling Blocks
• Risk identification is completed without knowing enough about the
project
• Project Risk evaluated only by questionnaire, interview or Monte
Carlo; does not provided a per task analysis of risk
• Risk identification ends too soon
• Project Risk identification and Evaluation are combined – results in
risks that are evaluated when they appear; decreased total number
of risks and stops identification process
• Risks are identified too generally
• Categories of risks are forgotten (technology, culture)
• Only 1 identification method is used
• First risk response strategy is used without other consideration
• Risks are not devoted enough attention during the Execution phase
76
Chapter 11 – Project Risk
Management
• Tips from Review Guide
– Risk Management Process
• Outputs from Risk Quantification
– Determination of top risks
– Opportunities to pursue
– Opportunities to ignore
– Threats to respond to
– Threats to ignore
77
Chapter 11 – Project Risk
Management
• Tips from Review Guide
– Risk Management Process
• Risk Response Control – executing and updating
the Risk Management Plan
– Workarounds – Unplanned responses to risks;
addressing risks that were unanticipated
– Contingency Plans – planned responses to risks; risk
response development actions
78
Chapter 12 – Project Procurement
Management
• Procurement Planning
– Identify project needs that can best be met by
acquiring resources
– Consideration whether to procure, how to, how much,
when to purchase
– Subcontractor decisions may provide flexibility
• Internal procurement does not involve formal solicitation and
contract
79
Chapter 12 – Project Procurement
Management
• Outputs from Procurement Planning
– Procurement Management Plan – describes how
procurement process will be managed
• Type of contract
• Independent estimates needed?
• Autonomy of project team
• Standardized documents
• Multiple provider management?
• Incorporate with other project aspects (scheduling and performance
reporting)
– Statement of Work (SOW) – describes the procurement
in detail – clear, concise description of services
• Can also be a Statement of Requirements for problem-solving
activities
80
Chapter 12 – Project Procurement
Management
• Solicitation
– Obtaining information from prospective sellers
• Inputs to Solicitation
– Procurement Documents
– Qualified Seller Lists – preferred vendors
• Tools & Techniques for Solicitation
– Bidder Conferences – mutual understanding meetings
– Advertising – primarily with Government projects
• Outputs from Solicitation
– Proposals – seller prepared documents describing willingness
and ability to provide the service
81
Chapter 12 – Project Procurement
Management
• Outputs from Source Selection
– Contract – mutually binding agreement obligates
seller provide goods and services and buyer to make
payment.
• Legal relationship
• Legal review is most often necessary
82
Chapter 12 – Project Procurement
Management
• Tools & Techniques for Contract
Administration
– Contract Change Control System – defines
how a contract may be modified
• Includes paperwork, tracking system, dispute resolution
procedures and approval levels
– Performance Reporting
– Payment System – Accounts Payable
83
Chapter 12 – Project Procurement
Management
• Tips from Review Guide
– Most questions are process oriented
– Most questions are from the buyer’s perspective
– Contracts are formal agreements
– All requirements should be specifically stated in the
contract
– All contract requirements must be met
– Changes must be in writing and formally controlled
– US Government backs all contracts by providing a
court system
84
Chapter 12 – Project Procurement
Management
• Tips from Review Guide
– Make or Buy: consider out of pocket costs and
indirect cost of managing procurement
– Buy – to decrease risk (cost, schedule, performance,
scope of work)
– Make
• Idle plant or workforce
• Retain control
• Proprietary information/procedures
• Buy vs. lease questions (use X = number of days when
purchase and lease costs are equal)
85
Chapter 12 – Project Procurement
Management
• Tips from Review Guide
– Time and Materials; priced on per hour basis,
elements of fixed price contract and cost
reimbursable contracts – buyer has medium risk
– Fixed Price (lump sum, or firm fixed price) - most
common (1 price for all work), risk of costs is upon
seller
• FPIF – Fixed Price Incentive Fee
• FPEPA – Fixed Price Economic Price Adjustment – long
duration projects
– Incentives – help bring seller’s objectives in line with
buyer’s
86
Chapter 12 – Project Procurement
Management
• Tips from Review Guide
– Terminology (Terms and Conditions)
• Force majeure – act of God
• Indemnification – who is liable
• Liquidated damages – estimated damages as a result of
contract breach
• Material breach – a breach so large the project may not
continue
• Special Provisions – provided by the Project Manager to
contracts so that particular needs are addressed
• Privity – contractual relationship
• Single Source – contract directly with preferred seller
• Sole Source – only one supplier available in market
87
Chapter 12 – Project Procurement
Management
• Tips from Review Guide
– Source Selection
• Negotiation Objectives
– Obtain a fair and reasonable price
– Development a good relationship with seller
» Project manager must be involved
– Main Terms to negotiate
» Responsibilities
» Authority
» Applicable Law
» Technical and Business Management approaches
» Contract Financing
» Price
88
Chapter 12 – Project Procurement
Management
• Tips from Review Guide
– Fee = Target Cost – Actual Cost X Seller Ratio ($)
– Total Fee = Fee plus Target Fee
– Final Price = Actual Cost plus Total Fee
– Contractor = seller
– Purchasing Cycle – define need, prepare and issue purchase
order
– Functional Spec – delineates specific end-use capabilities that
are tested in acceptance procedure
– Measurable Capabilities = Performance Specifications
– Requisition Cycle – review of specification completeness
– Requirements Cycle – develops the statement of work
Supplement – Professional
Responsibility
• 6th Process area added
– Insuring Integrity and professionalism
– Contributing to the project management knowledge base
– Enhancing individual competence
– Balancing Stakeholders’ interests
– Interacting with team and stakeholders in a professional and
cooperative manner
• Could be approx. 30 questions in this area
• Understand Project Management Professional Code
of Conduct
– Ethics
– Legal Issues
– Cultural Sensitivity
– Managing conflicts of interest
Supplement – Professional
Responsibility
• Integrity and Professionalism
– Understand the legal requirements surrounding the
practice of projects
– Know ethical standards that should govern the
behavior of project managers
– Comprehend the values of the community and the
various project stakeholders
– Practice proper judgment in the pursuit of successful
project work
– Compliance with all organizational rules and policies
• Upon a reasonable and clear factual basis report violations
• Responsibility to disclose circumstances that could be
construed as a conflict of interest or appearance of
impropriety
89
Supplement – Professional
Responsibility
• Integrity and Professionalism
– Provide accurate and truthful representation to the
public
– Maintain and satisfy the scope and objectives of
professional services
– Maintain the confidentiality of sensitive information
– Ensure a conflict of interest does not compromise
legitimate interests of client/customer or interfere with
professional judgment
– Refrain from accepting gifts, inappropriate payments,
compensation for personal gain unless in conformity
with applicable laws or customs
Supplement – Professional
Responsibility
• Contribute to advancing the project management
profession
– Overall understanding of project management principles
– Understand the community and media surrounding projects
– Knowledge of research strategies available and proper
communication techniques
– Learn to communicate and transfer knowledge effectively as a
coach and mentor and to use available research strategies
– Respect and recognize intellectual property
• Enhance Individual Competence
– Understand the project manager’s strengths and weaknesses and
learning style – become aware of instructional processes and tools
– Know the useful competencies for project managers and possible
training
– Be able to perform self-assessment and competencies development
plan
– Ability to apply lessons learned
Supplement – Professional
Responsibility
• Balance Stakeholder’s Objectives
– Understand the various competing stakeholders’ interests and
needs
– Comprehend the conflict resolution techniques useful in handling
differing objectives
– Be able to resolve conflicts in a fair manner
– Exercise negotiation skills based on proper information
• Interact with team and stakeholders in a professional
and cooperative manner
– Understand cultural diversity, norms and stakeholders’
communication styles
– Show flexibility towards diversity, tolerance and self control
– Becoming empathetic to differences
90