Lesson 2 - CAPM - Prep - Framework - V2 PDF

CAPM® Certification
Lesson 2—Project Management Framework
CAPM® & PMBOK® are registered trademarks of the Project Management Institute, Inc. Copyright 2014, Simplilearn, All rights reserved.
Copyright 2014, Simplilearn, All rights reserved.

Objectives
After completing this ● Define project, project management, program management, and portfolio management
lesson, you will be able
to: ● Recognize the roles of project management office
● Identify the project constraints and their impact on projects
● Explain the role of a project manager in stakeholder management
● Describe different organization structure
● Differentiate between a project life cycle and a product life cycle
2 Copyright 2014, Simplilearn, All rights reserved.

Project
The definition of Project is as follows:
A project is a temporary endeavor undertaken to create a unique product, service, or result. [1]
Example:
Developing a new product, service, or result; constructing a building, industrial plant, or infrastructure; and
implementing, improving, or enhancing existing business processes and procedures.

Characteristics of a Project
A project has several distinguishing characteristics.
● The definition of project describes the following two characteristics:
o Project is temporary in nature, but has a definite start and end date.
o Project produces a unique output. The output can be a product, service, or result.
● A project comes to an end when:
o its objectives are met; or
o the sponsor decides to terminate the project as the objectives cannot be met or are no longer required.
● Project work is different from operational work. Operations consists of ongoing, repetitive work.
Developing a new Software System to effectively track customer complaints is an example of a project,
! while using this software to track customer complaints, is a part of operations.

Project Management
The definition of Project Management is as follows:
Project management is comprised of the knowledge, skills, and tools and techniques applied to project activities
to meet project requirements.
Project management is performed by applying and integrating the 47 project management processes, which are
logically grouped into five process groups.

Project Management Activities
Managing a project requires the following three steps:
Identifying project Managing Balancing project

requirements stakeholders constraints
When a project is initiated, it typically starts with the high level understanding of the project requirements. To
meet the project objectives, these high level requirements need to be analyzed and specific project
requirements need to be identified.


Managing a project also requires managing stakeholders. All stakeholders must work towards the single
project objective, for the project to be executed successfully.


Managing a project also requires balancing the project’s triple constraints, scope, cost, and time. Change in
one constraint affects the other and hence the ‘trade-offs’ must be carefully done as it impacts the project
quality.

Program Management
The definition of Program Management is as follows:
The application of knowledge, skills, tools, and techniques to a program to meet the
program requirements and in order to obtain benefits and control not available by managing projects
individually.[2]
A program is defined as a group of related projects, subprograms, and program activities managed in a coordinated
way to obtain benefits not available from managing them individually. [3]

Features of Program Management
Following are the features of program management:
● For a group of projects to be classified as a program, there must be some value added in managing
them together as a program.
● A project need not belong to a program; a program will always have projects.
● A program is designed to deliver some strategic benefits to the organization; the benefits could be
tangible (e.g., growing the operating margin) or intangible (e.g., improving the morale of the
team).
● A program manager focuses on delivery of benefits to the organization, whereas a project

manager focuses on fulfilling the requirements of a project.

Portfolio
The definition of Portfolio is as follows:
A collection of projects, programs, sub-portfolios, and operations managed as a group to achieve strategic
objectives.[4]
● Projects and programs of a portfolio may not be necessarily interdependent or directly related.
● A portfolio can be based on the business objectives.
‘Japanese Projects’ can be a portfolio where an IT company puts all its projects from Japan to give more
focus and attention to its Japanese projects, and grow its Japanese business. Similar projects can be
managed as a program within this portfolio; all banking projects will be managed as a ‘banking program.’

Portfolio Management
The definition of Portfolio Management is as follows:
Portfolio management is the centralized management of one or more portfolios to achieve strategic objectives.
Portfolio management includes identifying, prioritizing, authorizing, managing, and controlling projects, programs, and
other related work to achieve strategic business objectives.

Relationship between Portfolios, Programs, and Projects
The relationship between Portfolios, Programs, and Projects is shown below.
Portfolio
Represents a portion of an
organization’s overall
business strategy Sub-
Programs Projects
portfolios
Strategic goals are

cascaded down to lower Programs Projects
Sub-
Projects Other work
programs
levels through
components
A portfolio may contain

programs, projects, and
also other work Projects Other work Projects Other work

Project Management Office
A Project Management Office (PMO) is a specific type of body, or department, within an organization. The roles of
PMO are as follows:
Primary Roles Other Roles
PMO usually has one or a combination of the PMO may also help in the following areas:
following three primary roles: ● Managing interdependencies between
● It provides the policies, methodologies, and projects.
tools and templates for managing projects ● Selecting, managing, and deploying shared
within the organization. or dedicated project resources.
● It provides support and training in the ● Terminating projects.
organization on how to manage projects. ● Coordinating communication across projects.
● It provides project managers for ongoing
projects in the organization.

Managing the Triple Constraints
Project constraints can be summarized as follows:
Business scenarios based questions on the triple constraints can be expected in the exam.
Exam Tips
Stakeholder
The definition of Stakeholder is as follows:
An individual, group, or organization who may affect, be affected by, or perceive itself to be affected by a decision,
activity, or outcome of a project.[5]
Project managers, customers, sponsors, the PMO, functional managers, the project team, and operations management
are the various stakeholders of a project.

Stakeholder Management
A key responsibility of a project manager is to manage stakeholders. Project manager has to take up specific activities
for stakeholder management.
Understand the practices of stakeholder management to answer scenario based questions.

Exam Tips
Organization Structure
The different organization structures, based on the level of authority vested in the project manager, are as follows:
The term ‘tight matrix’ refers to a ‘co-located’ team, i.e., a team that has been placed in the same location in
! order to enhance their performance.
Functional Organization
Characteristics of a functional organization are as follows:
● Resources are grouped by functions or departments.
● Functions have a definite role and is headed by a

Executive Level
supervisor.
Function Function Function Function
● All the resources report directly into their functions. Head Head Head Head
● Project manager’s role is not explicitly defined. Project Project Project

Resource
Resource Resource Resource
Resources from within the function play the role of a
Project
project manager. Resource Resource Resource
Resource
● Functional organizations provide an opportunity for

specialization.
Projectized Organization
Characteristics of a projectized organization are as follows:
● Resources are aligned to projects.
● Project managers have complete control over the project Executive Level
resources. Project Project Project Project
Manager Manager Manager Manager
● Project execution becomes easier because of the 1 2 3 4
dedicated resources. Project
Resource
● Role of the resources cease once the project is
Project
completed. Resource
● Scope for functional specialization is limited.

Matrix Organization
Characteristics of a matrix organization are as follows:
● Resources report to functional managers and aligned to

project managers.
Executive Level
● In a weak matrix, the authority of the project manager is
Project
Function Head Function Head Function Head
the weakest, and strongest in a strong matrix. Management
● It provides for optimal utilization of resources and Project Project Project Project
Resource Resource Resource Manager
functional specialization.
Resource Resource Resource Resource
● Dual reporting structure increases the communication
cost.

Advantages and Disadvantages of Organizational Structures
Advantages and disadvantages of different organization structures are as follows:
Business scenario based questions to identify the type of organization structure can be expected in
the exam. When the organization type is not mentioned, it can be assumed to be a matrix type of
Exam Tips organization.

Project Lifecycle vs. Product Lifecycle
Project life cycle spans the initiation of a project until the closure, while product life cycle encompasses the operational
and maintenance phases.
● A typical product life cycle starts with the conception of the product and goes until its withdrawal from the market
or when it becomes obsolete.[6]
● Product has a long life cycle; it can require or spawn many projects over its life.
● A project life cycle depends upon the control needs of the performing organization or the organization’s preference
defined in their project execution methodology.
The ability to differentiate between product and project lifecycle may be useful while answering the
exam.
Exam Tips
Project Life Cycles
The phases of a lifecycle represent a discrete unit of work to be completed on the project. There are various
classifications of project lifecycles.
Sequential and Overlapping Phases Predictive Life Cycles (or Plan-Driven)
● In sequential phases, the subsequent phase • Scope, cost, and time are determined in
starts only after the previous phase has been advance or as early as possible.
completed. • The project is executed in a series of
● In overlapping phases, two or more phases sequential or overlapping phases.
may run in parallel for some time. • These are suitable for large projects where
most requirements are known at the
beginning of the project.
• Each phase focuses on different activities and
may require different skill sets.

Project Life Cycles (contd.)
The phases of a lifecycle represent a discrete unit of work to be completed on the project. There are
various classifications of project lifecycles.
Iterative and Incremental Life Cycles Adaptive (or Agile) Life Cycles
• The high-level objective may be defined up- • These are also incremental and iterative, but
front, but the details are defined in each the iterations are very rapid (2 to 4 weeks).
iteration. • They are generally preferred when dealing
• Product is developed through a series of such with a rapidly changing environment.
cycles.
• In iterative and incremental life cycles,
project phases intentionally repeat
themselves.

Quiz

A project manager is working on a project to construct a new bridge. The resources report to the
QUIZ functional manager and are mainly occupied with operational related work. The project manager has
1 no authority to properly assign resources. What type of organizational structure is the project
manager in?
a. Functional
b. Projectized
c. Strong Matrix
d. Weak Matrix

A project manager is working on a project to construct a new bridge. The resources report to the
QUIZ functional manager and are mainly occupied with operational related work. The project manager has
1 no authority to properly assign resources. What type of organizational structure is the project
manager in?
a. Functional
b. Projectized
c. Strong Matrix
d. Weak Matrix
Answer: a.
Explanation: In a functional organization, team members are more concerned with their daily functional
activities than with the project activities.

QUIZ
Which of the following is not a characteristic of a project?
2
a. Repeats every week
b. Temporary
c. Definite beginning and end
d. Interrelated activities

QUIZ
Which of the following is not a characteristic of a project?
2
a. Repeats every week
b. Temporary
c. Definite beginning and end
d. Interrelated activities
Answer: a.
Explanation: Characteristic of a project is based on the project definition. Except for choice A, everything
else is part of the project definition.

QUIZ You just started a new project as a project manager, when several stakeholders raise concerns about
the quality of the new project management software being used and the way project changes would
3 be logged. As a project manager what should you do?
a. Supply them with training material on the new project management software.
b. Inform the Project Management Office about the stakeholders’ concerns.

c. Conduct an informal training session.
d. Assure stakeholders that you will keep them engaged in the project and that the new
software will in no way negatively impact them.

QUIZ You just started a new project as a project manager, when several stakeholders raise concerns about
the quality of the new project management software being used and the way project changes would
3 be logged. As a project manager what should you do?
a. Supply them with training material on the new project management software.
b. Inform the Project Management Office about the stakeholders’ concerns.

c. Conduct an informal training session.
d. Assure stakeholders that you will keep them engaged in the project and that the new
software will in no way negatively impact them.
Answer: b.
Explanation: The best answer is choice b. The PMO controls the project management procedures and tools. PMI
would like to believe that a mature organization would have a dedicated PMO and deferring to the PMO for this
would be the right option.

QUIZ
Who does the project team report to in a projectized organization?
4
a. No one
b. Project manager
c. Functional manager
d. CEO

QUIZ
Who does the project team report to in a projectized organization?
4
a. No one
b. Project manager
c. Functional manager
d. CEO
Answer: b.
Explanation: The project team, in a projectized organization, reports to project manager.

QUIZ
How is a project life cycle different from product life cycle?
5
a. A project life cycle has no methodology
b. A project life cycle depends on the control needs of the performing organization
c. A project life cycle can contain many product life cycles
d. A project life cycle only includes specific project management activities

QUIZ
How is a project life cycle different from product life cycle?
5
a. A project life cycle has no methodology
b. A project life cycle depends on the control needs of the performing organization
c. A project life cycle can contain many product life cycles
d. A project life cycle only includes specific project management activities
Answer: b.
Explanation: A project life cycle depends on the control needs of the performing organization. Choice C is
just the opposite, i.e., a product life cycle can include many projects through its life cycle, not the other way
around.

QUIZ
Identify the least important stakeholder from the given options.
6
a. The project manager who is responsible for building the project
b. A project team member who will work on the project

c. Customer who will use the end product or service
d. Competitor whose organization will be affected by the new product release

QUIZ
Identify the least important stakeholder from the given options
6
a. The project manager who is responsible for building the project
b. A project team member who will work on the project

c. Customer who will use the end product or service
d. Competitor whose organization will be affected by the new product release
Answer: d.
Explanation: Stakeholders are persons or organizations that are actively involved in the project or who may
be positively or negatively affected by the performance or completion of the project. The project manager
has to manage the expectations of the stakeholders.

Summary
Here is a quick recap of ● Project management is the application of knowledge, skills, and tools and techniques
what was covered in applied to project activities to meet the project requirements
this lesson:
● PMO provides the policies, methodologies, and tools and templates for managing
projects within the organization
● Project manager has to integrate various project aspects, like the people, stakeholders,
risks, communication, and procurements with the project constraints (time, scope, cost,
and quality)
● Identifying internal and external stakeholders, determining their requirements, and
communicating with them regularly is an important role of a project manager
● Functional, projectized, and matrix are the three types of organization structures, based
on the level of authority given to the project manager
● Project life cycle spans the initiation of a project until the closure while product life cycle,
also encompasses the operational and maintenance phases

Thank You
CAPM® & PMBOK® are registered trademarks of the Project Management Institute, Inc. Copyright 2014, Simplilearn, All rights reserved.

References
[1] Definition taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body
of Knowledge, (PMBOK® Guide) – Fifth Edition, Project Management Institute, Inc., 2013.
[3] Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) – Fifth
Edition, Project Management Institute, Inc., 2013.
[6] Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) – Fifth
Edition, Project Management Institute, Inc., 2013.

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CAPM® Certification

Lesson 2—Project Management Framework

Copyright 2014, Simplilearn, All rights reserved.

● Identify the project constraints and their impact on projects

● Explain the role of a project manager in stakeholder management

● Describe different organization structure

● Differentiate between a project life cycle and a product life cycle

2 Copyright 2014, Simplilearn, All rights reserved.

The definition of Project is as follows:

3 Copyright 2014, Simplilearn, All rights reserved.

A project has several distinguishing characteristics.

● The definition of project describes the following two characteristics:

● A project comes to an end when:

o its objectives are met; or

4 Copyright 2014, Simplilearn, All rights reserved.

The definition of Project Management is as follows:

5 Copyright 2014, Simplilearn, All rights reserved.

Managing a project requires the following three steps:

Identifying project Managing Balancing project

6 Copyright 2014, Simplilearn, All rights reserved.

Managing a project requires the following three steps:

Identifying project Managing Balancing project

7 Copyright 2014, Simplilearn, All rights reserved.

Managing a project requires the following three steps:

Identifying project Managing Balancing project

8 Copyright 2014, Simplilearn, All rights reserved.

The definition of Program Management is as follows:

9 Copyright 2014, Simplilearn, All rights reserved.

Following are the features of program management:

● A program manager focuses on delivery of benefits to the organization, whereas a project

10 Copyright 2014, Simplilearn, All rights reserved.

The definition of Portfolio is as follows:

● A portfolio can be based on the business objectives.

11 Copyright 2014, Simplilearn, All rights reserved.

The definition of Portfolio Management is as follows:

12 Copyright 2014, Simplilearn, All rights reserved.

The relationship between Portfolios, Programs, and Projects is shown below.

Strategic goals are

A portfolio may contain

13 Copyright 2014, Simplilearn, All rights reserved.

Primary Roles Other Roles

14 Copyright 2014, Simplilearn, All rights reserved.

Project constraints can be summarized as follows:

The definition of Stakeholder is as follows:

16 Copyright 2014, Simplilearn, All rights reserved.

Understand the practices of stakeholder management to answer scenario based questions.

Characteristics of a functional organization are as follows:

● Resources are grouped by functions or departments.

● Functions have a definite role and is headed by a

● Project manager’s role is not explicitly defined. Project Project Project

● Functional organizations provide an opportunity for

Characteristics of a projectized organization are as follows:

● Resources are aligned to projects.

● Scope for functional specialization is limited.

20 Copyright 2014, Simplilearn, All rights reserved.

Characteristics of a matrix organization are as follows:

● Resources report to functional managers and aligned to

21 Copyright 2014, Simplilearn, All rights reserved.

Advantages and disadvantages of different organization structures are as follows:

22 Copyright 2014, Simplilearn, All rights reserved.

Sequential and Overlapping Phases Predictive Life Cycles (or Plan-Driven)

24 Copyright 2014, Simplilearn, All rights reserved.

25 Copyright 2014, Simplilearn, All rights reserved.