Manager's Guide 4th Ed 09v

Company
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Company
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PMBOK Guide
Company
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PE, PMP, PME, MCT, PRINCE2 Practitioner. PE, PMP, PME, MCT, PRINCE2 Practitioner.
About PMP
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PMP Credential
Handbook
CCR Cycle = 3 years
Earn and Report the PDUs in every CCR Cycle
of 3 years
Complete Application for Certification
Renewal
Reaffirm PMI Code of Ethics and Professional
Conduct
Submit Payment of the Renewal Fee (US$60)
Category 1: Formal Academic Education
Category 2: Professional Activities and Self
Directed Learning
Category 3: Courses offered by REPs/PMI
Components
Category 4: Courses offered by other
Education Providers
Category 5: Volunteer Service to Professional
or Community Organizations
1 hour of degree credit of 15-week semester
= 15 PDUs
1 quarter semester hour (10-weeks)
= 10 PDUs
Each course to be applied on separate CCR
Activity Reporting Form
PMI Registered Education Providers
Global R.E.P.
Basic R.E.P.
Component R.E.P.
Charter R.E.P.
PDU Certificates issued to attendees
REP logo

One Contact Hour = One PDU
Can be earned from any education provider
Relevant Project or Program Management
courses

Non-compensated project management
service
With any Professional or Community
Organization
Maximum of 20 PDUs can be earned within
one CCR Cycle
Volunteer service must meet the definition
of project as per PMBOK Guide
Maximum PDUs from Categories possible

PDU Transfer allowed

Only PDUs earned in 3
rd
year of CCR Cycle
can be transferred
Section I
Section I - The Project Management Framework
Section II The Standard for Project Management of a Project
Section III The Project Management Knowledge Areas
Professional Responsibility and PMP Exam Guidelines
Company
LOGO
Introduction
Project Lifecycle and
Organization
Evaluation
1.1 Purpose of the PMBOK Guide
1.2 What is a Project?
1.3 What is Project Management?
1.4 Relationships Among Project
Management, Program Management, and
Portfolio Management
1.5 Project Management and Operations
Management
1.6 Role of a Project Manager
1.7 Project Management Body of Knowledge
1.8 Enterprise Factors

To identify that subset of the Project
Management Body of Knowledge that is
generally recognized as good practice.
Identify means to provide a general overview as
opposed to an exhaustive description.
Generally recognized means that the knowledge
and practices described are applicable to most
projects most of the time, and that there is
widespread consensus about their value and
usefulness.
Topic 1.1
To identify that subset of the Project
Management Body of Knowledge that is
Identify means to provide a general overview as
opposed to an exhaustive description.
Generally recognized means that the knowledge
and practices described are applicable to most
projects most of the time, and that there is
widespread consensus about their value and
usefulness.
Good practice means that there is general
agreement that the correct application of these
skills, tools, and techniques can enhance the
chances of success over a wide range of different
projects.
Good practice does not mean that the knowledge
described should always be applied uniformly on
all projects; the project management team is
responsible for determining what is appropriate
for any given project.
Topic 1.1
A project is a temporary
endeavor undertaken to
create a unique product,
service or result.
Topic 1.2
A product that can be either a component of
another item or an end item in itself.
A capability to perform a service (e.g., a business
function that supports production or distribution).
A result such as an outcome or a document (e.g.,
a research project that develops knowledge that
can be used to determine whether a trend is
present or a new process will benefit society).
Topic 1.2
Developing a new product or service.
Effecting a change in the structure, staffing, or
style of an organization.
Developing or acquiring a new or modified
information system.
Constructing a building or infrastructure.
Implementing a new business process or
procedure.
Topic 1.2
Accomplished through the appropriate
application and integration of 42
logically grouped project
management processes comprising
the 5 process groups.
Topic 1.3
Application of knowledge, skills,
tools, and techniques to project
activities to meet the project
requirements.
Initiating
Planning
Monitoring
and Control
Executing
Closing
Project Management Process Groups
PROJECT
Topic 1.3
Initiating
Process
Group
Planning
Process
Group
Executing
Process
Group
Monitoring
and
Controlling
Process
Group
Closing
Process
Group
Topic 1.3
Topic 1.3
2.0 Planning a Project
1.0 Initiating a Project
3.0 Executing a Project
4.0 Monitoring & Controlling a
Project
5.0 Closing a Project
1.Project scope agreed
2.Project schedule
approved
3.Cost budget approved
4.Project team identified
with roles and
responsibilities agreed
5.Communications activities
agreed
6.Quality management
process established
7.Risk response plan
approved
8.Integrated change control
processes defined
9.Procurement plan
approved
10.Project plan approved
1.Project outcomes
accepted
2.Project resources
released
3.Stakeholder perceptions
measured and analyzed
4.Project formally closed
1.Project scope achieved
2.Project stakeholders
expectations managed
3.Human resources
managed
4.Quality managed against
plan
5.Material resources
managed
1.Project tracked and status
communicated to
stakeholders
2.Project change is
managed
3.Quality is monitored and
controlled
4.Risk is monitored and
controlled
5.Project team is managed
6.Contracts administered
1.Project aligned with
organizational objectives
and customer needs
2.Preliminary scope
statement includes
stakeholder needs and
expectations
3.High-level risks,
assumptions are
understood
4.Stakeholders identified
and their needs
understood
5.Project charter approved
Topic 1.3
Time
Scope
Quality
Integration
Communication
Human
Resource
Risk
Procurement
Cost
Topic 1.3
Identifying requirements
Addressing the various needs, concerns, and
expectations of the stakeholders as the project is
planned and carried out.
Balancing the competing project constraints
including, but not limited to:
Scope
Quality
Schedule
Budget
Resources
Risk
Topic 1.3
Progressive Elaboration involves:
Continuously improving and detailing a plan as
the following becomes available:
More detailed information
More specific information
More accurate estimates
Allows a project management team to manage
to a greater level of detail as the project
evolves.
Topic 1.3
Project management plan is iterative.
Goes through progressive elaboration throughout
project life cycle.
Topic 1.4
Organizational Planning
Impacts projects by means of Project
prioritization
Directs Funding and Support for component
projects on the basis of
Risk categories
Specific lines of business
General types of projects

In mature organizations, project management is
governed by program and portfolio management.
Organizational strategies and priorities
Organizations Strategic Plan
Reference: Figure 1-1.
PMBOK Guide, 4
th
Ed
Figure 1-1
Topic 1.4.1
A portfolio is a collection of projects or
programs and other work that are grouped
together to facilitate effective management of that
work to meet strategic business objectives.
The projects or programs in the portfolio may not
necessarily be interdependent or directly related.
Topic 1.4.1
Portfolio Management refers to the
centralized management of one or more portfolios,
which includes identifying, prioritizing, managing,
and controlling projects, programs, and other
related work, to achieve specific strategic
business objectives.
Portfolio Management focuses on ensuring that
projects and programs are reviewed to prioritize
resource allocation, and that the management of
the portfolio is consistent with and aligned to
organizational strategies.
Topic 1.4.2
A program is a group of related projects
managed in a coordinated way to obtain benefits
and control not available from managing them
individually.
Programs may include elements of related work
outside of the scope of the discrete projects in the
program.
A project may or may not be part of a program but
a program will always have projects.
Topic 1.4.2
Program Management is defined as the
centralized coordinated management of a
program to achieve the programs strategic
objectives and benefits.
Projects within a program are related through the
common outcome and collective capability.
Focuses on project interdependencies and helps
to determine the optimal approach for managing
them.
Following relationships qualify for portfolio
management and not program management:
Shared client, Seller, Technology, and
Resource.
Topic 1.4.2
Actions related to project interdependencies may
include:
Resolving resource constraints and/or
conflicts that affect multiple projects within the
system.
Aligning organizational/strategic direction that
affects project and program goals and
objectives.
Resolving issues and change management
within a shared governance structure.
Topic 1.4.3
Projects are often utilized as a means of achieving
an organizations strategic plan.
Projects are typically authorized as a result of one
or more of the following strategic considerations:
Market demand
Strategic opportunity/business need
Customer request
Technological advancement
Legal requirements
Topic 1.4.3
To maximize the value of the portfolio by careful
examination of its components the constituent
projects, programs and other related work,
for inclusion in the portfolio and
the timely exclusion of projects not meeting or
contributing least to the portfolios strategic
objectives.
Organizations strategic plan becomes the
primary factor guiding investments in the projects.
Senior managers or senior management
teams typically take on the responsibility
of portfolio management for an
organization.

Topic 1.4.4
A Project Management Office (PMO) is
an organizational body or entity assigned various
responsibilities related to the centralized and
coordinated management of those projects under its
domain.
The responsibilities of a PMO can range from
providing project management support functions to
actually being responsible for the direct
management of a project.
The projects supported or administered by the PMO
may not be related other than by being managed
together.
Specific form, function, and structure of a PMO is
dependent upon the supported organizations needs.
Topic 1.4.4
A PMO can be delegated authority to act as an
integral stakeholder and a key decision maker
during the beginning of each project, to make
recommendations, or to terminate projects or take
other actions as required to keep business
objectives consistent.
A PMO may be involved in selection, management,
and deployment of shared or dedicated project
resources.
Topic 1.4.4
A primary function of a PMO is to support project
managers in a variety of way which may include,
but are not limited to:
Managing shared resources across all projects
administered by the PMO.
Identifying and developing project management
methodology, best practices, and standards.
Coaching, mentoring, training, and oversight.
Monitoring compliance with project management
standards, policies, procedures, and templates via
project audits.
Developing and managing project policies, procedures,
templates, and other shared documentation.
Coordinating communication across projects.
Topic 1.5
Operations are an organizational function
performing the ongoing execution of activities that
produce the same product or provide a repetitive
service.
Organizations sometimes change their operations,
products, or systems by creating strategic business
initiatives.

Though temporary in nature, projects can help
achieve the organizational goals when they are
aligned with the organizations strategy.

Topic 1.5
OPERATIONS PROJECTS
Both requires to be performed by people
Both requires to be provided resources
Both are constrained by limited resources
Both requires to be planned, executed ad controlled
Both are aligned with the Organizational Strategic Objectives
Deliverables and Knowledge is transfered between the two

Occurs through transfer of project resource to operations toward
the end of the project
Or
Through a transfer of operational resource to project at the start of
the project
Topic 1.5
OPERATIONS PROJECTS
Operations require Business
Process Management or
Operations Management
Projects require Project
Management
Permanent Endeavors Temporary Undertakings
Ongoing nature of Operations Temporary Assignments
Produce Repetitive Outputs Produce Unique Outputs
Permanent Resource Assignments Temporary Resourcing
Executed as per standards (SOPs)
institutionalized in product life
cycle
Executed according to Project
Management Plan developed for
project life cycle
Sustain the business Attain objective and then terminate
Adopt a new set of objectives and
the work continues.
Concludes when its specific
objectives have been attained
Topic 1.5
Projects can intersect with operations at various
points during the product life cycle:
At each closeout phase
When developing a new product, upgrading a
product, or expanding outputs
Improvement of operations or the product
development process
Until the divestment of the operations at the end
of the product cycle

Topic 1.6
The role of project manager is distinct from a
functional manager or operations manager.
A Project Manager is the person assigned by
the performing organization to achieve the project
objectives.
A Functional Manager is focused on providing
management oversight for a administrative area.
An Operations Manager is responsible for a
facet of the core business.
Project Manager may report to a Functional Manager,
a Portfolio Manager or a Program Manager.
Topic 1.6
Effective project management requires that the
project manager possess the following
characteristics:
Knowledge What PM knows about project
management?
Performance What PM is able to do or
accomplish while applying the Knowledge?
Personal How PM behaves when performing
project?
Topic 1.6
Attitudes
Core personality characteristics
Leadership ability to guide the project
team while achieving project objectives
and balancing the project constraints.
Topic 1.7
PMBOK Guide is the standard for
managing most projects most of the time across
many types of industries.
This standard describes Project Management
Processes, Tools, and Techniques used to
manage a project towards a successful outcome.
This standard is unique to project management
field.
It has interrelationships to other project
management disciplines such as program
management and portfolio management.
Topic 1.7
Does not address all details of every topic.
Limited to single projects.
Limited to project management processes
Other standards may be consulted for additional
information on the broader context in which
projects are accomplished.
Standard for Program Management
Standard for Portfolio Management
Organizational Project Management Maturity
Model (OPM3)
Topic 1.8
Enterprise environmental factors refer
to both internal and external environmental
factors that surround or influence a projects
success.
These factors can come from any or all of the
enterprises involved in the project.
May enhance or constrain project management
options.
May have positive or negative influence on the
outcome.
Considered as inputs to most planning processes.
Topic 1.8
Organizational culture, structure, and processes
Government or industry standards
Infrastructure
Existing human resources
Personnel administration
Company work authorization system
Marketplace conditions
Stakeholder risk tolerance
Political climate
Organizations established communications channels
Commercial databases
Project Management Information System (PMIS)

Chapter 2
2.1 The Project Life Cycle Overview
2.2 Projects vs. Operational Work
2.3 Stakeholders
2.4 Organizational Influences on
Project Management

Chapter 2
Phase 1 Phase 2 Phase 3
Topic 2.1
A Project Life Cycle is a collection of generally
sequential and sometimes overlapping project
phases.
Name and number of these phases is determined by
Management and Control needs of organization(s)
involved in the project.
Nature of the Project itself
Its Area of Application
A life cycle can be documented with a methodology.
Provides the basic framework for managing the
project.

Topic 2.1.1
Projects vary in size and complexity.
No matter how large or small, simple or complex, all
projects can be mapped to the following life cycle
structure:
Starting a project
Organizing and preparing
Carrying out the project work
Closing the project

Figure 2-1.
Topic 2.1.1
The generic life cycle structure generally
displays following characteristics:
Cost and staffing levels
Stakeholder influences, risk, and uncertainty -
Ability to influence the final characteristics of the
projects product, without significantly impacting
cost
Cost of changes and correcting errors

Figure 2-2.
Topic 2.1.2
The product life cycle consists of generally
sequential, non-overlapping product phases for a
product is generally the products retirement.
Generally, a project life cycle is contained
within one or more product life cycles.
Care should be taken to distinguish the project life
cycle from the product life cycle.
All projects have a purpose or objective.
Where objective is a service or result, there may be a
life cycle for the service or result, not a product life
cycle.
Topic 2.1.2
The development of a new product
An existing product might benefit from a project to
add new functions and features
A project might be created to develop a new model.
Many facets of the product life cycle lend themselves
to being run as a project:
Performing a feasibility study
Conducting market research
Running an advertising campaign
Installing a product
Holding focus groups
Conducting a product trial in a test market
Topic 2.1.2
One product may have many projects associated
with it
Additional efficiencies may be gained by managing
all related projects collectively.
A number of separate projects may be related to
the development of a new automobile.
Each project may be distinct, but still contributes
a key deliverable necessary to bring the
automobile to market.
Oversight of all projects by a higher authority
could significantly increase the likelihood of
success.
Topic 2.1.3
Project phases are divisions within a project
where extra control is needed to effectively manage
the completion of a major deliverable.
Project phases are typically completed sequentially,
but can overlap in some project situations.
The high level nature of project phases makes them
an element of the project life cycle.
A project phase is NOT a Project Management
Process Group.
Topic 2.1.3
Phase Structure allows the project to be
segmented into logical subsets for ease of
management, planning and control.
The number of phases, the need for phases, and the
degree of control applied depend on the size,
complexity, and potential impact.
Topic 2.1.3
Regardless of the number of phases comprising a
project, all phases have similar characteristics:
When phases are sequential
the close of a phase ends with some form of
transfer or handoff of the work product
produced as the phase deliverable.
This phase end represents a natural point to
reassess the effort underway and to change or
terminate the project if necessary.
These points are referred to as phase exits,
phase gates, decision gates, stage gates, or
kill points

Topic 2.1.3
Extra Degree of Control
The primary deliverable or objective of the
phase requires extra degree of control
to be successfully achieved.
The repetition of processes across all five
Process Groups, provides that additional
degree of control, and defines the boundaries
of the phase.
Topic 2.1.3
Phase Names and Deliverables
Many projects may have similar phase names
with similar deliverables, but only few are
identical.
Some will have only one phase, and others
may have many.
Different phases typically have a different
duration or length.

Figure 2-3.
Topic 2.1.3
Ideal structure for a project
No single way to define the ideal structure for
a project.
Standardized - single life cycle for all
projects
Preferred structure industry common
practices.
Most Appropriate structure to suite
individual project
Topic 2.1.3
Feasibility Study may be treated in some
organizations
Pre-Project Work
Initial or first phase of a Project
Stand-alone project
Same project can be
Divided in two phases by one project team
Another project team might choose to manage
all the work as a single phase.
Much depend on the nature of the specific project
and style of the project team or organization.
Topic 2.1.3.1
Project Governance provides a comprehensive,
consistent method of controlling the project and
ensuring its success.
The project governance approach should be defined
in the project management plan.
A projects governance must fit within the larger
context of the program or organization sponsoring it.

Topic 2.1.3.1
Determine the most appropriate method of
carrying out the project.
Who will be involved?
What resources are necessary?
The general approach to completing the work?
Number of phases to be involved? Define phase
structure
Topic 2.1.3.1
The phase structure provides a formal basis for
control.
Each phase is formally initiated to specify what is
allowed and expected for that phase.
A management review is often held to reach a
decision to start the activities of a phase.
The beginning of a phase is also a time to
revalidate earlier assumptions, review risks and
define in more detail the processes necessary to
complete the phase deliverables.
Topic 2.1.3.1
The project phase is generally concluded and
formally closed with a review of the deliverables to
determine completeness and acceptance.
A phase-end review can achieve the combined goal of
obtaining authorization to close the current phase and start
the subsequent one.
The end of a phase represents a natural point to reassess
the effort underway and to change or terminate the project if
necessary.
A review of both key deliverables and project performance
to-date to:-
Determine if the project should continue into its next
phase
Detect and correct errors cost effectively should be
regarded as good practice
Topic 2.1.3.2
When projects are multi-phased,
The phases are part of a generally sequential
process designed to ensure proper control of the
project and attain the desired product, service, or
result.
However, there are situations when a project
might benefit from overlapping or concurrent
phases.
Topic 2.1.3.2
There are three basic types of phase-to-phase
relationships,
1. A sequential relationship
where a phase can only start once previous
phase is complete.
Step-by-step nature of this approach reduces
uncertainty, but may eliminate options for
reducing the schedule.
Topic 2.1.3.2
2. An overlapping relationship
Where the phases start prior to completion of
the previous one.
This can sometimes be called fast tracking.
Overlapping phases may increase risk and can
result in rework if a subsequent phase
progresses before accurate information is
available from the previous phase.

Topic 2.1.3.2
3. An iterative relationship
Where only one phase is planned at any given time and
the planning for the next is carried out as work
progresses on the current phase and deliverables.
Approach useful in largely undefined, uncertain, or
rapid changing environments such as research.
Can reduce the ability to provide long term planning.
Scope is managed by continuously delivering
increments of the product.
Prioritizing requirements to minimize project risks and
maximize product business value.
Can also entail having all of the project team members
available throughout the project or, at a minimum, for
two consecutive phases.
Figure 2-4.
Figure 2-5.
Topic 2.1.3.2
More than one phase-to-phase relationship could
occur during the project life cycle.
Considerations such as level of control required,
effectiveness, and degree of uncertainty determine
the relationship to be applied between phases.
Based on those considerations, all three
relationships could occur between different phases
of a single project.
Topic 2.2
Organizations perform work to achieve a set of
objectives.
In many organizations the work performed can be
categorized as either project or operations work.
Topic 1.5
OPERATIONS PROJECTS
Both requires to be performed by individuals
Both requires to be provided resources
Both are constrained by limited resources
Both requires to be planned, executed ad controlled
Both are aligned with the Organizational Strategic Objectives
Deliverables and Knowledge is transfered between the two

Occurs through transfer of project resource to operations toward
the end of the project
Or
Through a transfer of operational resource to project at the start of
the project
Topic 1.5
OPERATIONS PROJECTS
Operations require Business
Process Management or
Operations Management
Projects require Project
Management
Permanent Endeavors Temporary Undertakings
Ongoing nature of Operations Temporary Assignments
Produce Repetitive Outputs Produce Unique Outputs
Permanent Resource Assignments Temporary Resourcing
Executed as per standards (SOPs)
institutionalized in product life
cycle
Executed according to Project
Management Plan developed for
project life cycle
Sustain the business Attain objective and then terminate
Adopt a new set of objectives and
the work continues.
Concludes when its specific
objectives have been attained
Topic 2.3
Stakeholders are persons and organizations, who are
actively involved in the project or whose interests
may be positively or negatively affected by the
performance or completion of the project.
They may also exert influence over the project, its
deliverables, and the project team members.
The project management team must identify both
internal and external stakeholders in order to
determine the project requirements and expectations
of all parties involved.
Project Manager must manage the influence of the
various stakeholders in relation to the requirements
to ensure a successful outcome.
Topic 2.3
Stakeholders have varying levels of responsibility
and authority when participating on a project and
these can change over the course of the project life
cycle.
Their responsibility and authority may range from
occasional contributions in surveys and focus
groups to full project sponsorship, which includes
providing financial and political support.
Stakeholders can have an adverse impact on the
project objectives.
Topic 2.3
Stakeholder identification is a continuous process
and can be difficult.
Identifying stakeholders and understanding their
relative degree of influence on a project is critical.
Failure to do so can extend the timeline and raise
costs substantially.
Topic 2.3
A project can be perceived as having both positive
and negative results by the stakeholders.
Some stakeholders benefit from a successful project,
while other stakeholders perceive negative outcomes
from a projects success.
Interests of positive stakeholders is best served
by helping the project succeed.
Interests of negative stakeholders are served by
impeding the projects progress.
An important part of project managers responsibility
is to manage stakeholder expectations.
This can be difficult as stakeholders often have very
different and conflicting objectives.
Topic 2.3
To manage stakeholder expectations.
To balance positive and negative stakeholder
interests.
Ensure that the project team interacts with
stakeholders in a professional and cooperative
manner.
Project Stakeholders
The Project
Project Lifecycle and Organization
Figure 2-6
PMBOK Guide, 4
th
Ed
Topic 2.3
Customers/Users may be Internal and/or external to
the performing organization.
There may also be multiple layers of customers
In some application areas
Customers and Users may be synonymous.
In other cases
Customers refers to entity acquiring the projects
product.
Users refer to those who will directly utilize the
projects product.

Topic 2.3
Person or group that provides the financial
resources, in cash or in kind.
When a project is first conceived, sponsor
champions the project.
Serves a spokesperson to higher levels of
management to gather support throughout the
organization and promote the benefits that the
project will bring.
Leads the project through the engagement or
selection process until formally authorized.
Plays a significant role in the development of the
initial scope and charter.
Topic 2.3
For the issues that are beyond the control of project
manager, the sponsor serves as an escalation path.
The sponsor may also be involved in other important
issues such as:-
Authorizing changes in scope.
Phase-end reviews.
Go/no-Go decisions, when risks are particularly
high.

Topic 2.3
Portfolio managers/portfolio review board
Portfolio Managers - Responsible for high-end
governance of a collection of projects or
programs, which may or may not be independent.
Portfolio Review Board
Committees usually made up of organizations
executives who act as a project selection
panel.
They review each project for
Its return on investment (ROI)
The value of the project
Risks associated with taking on the project
Other attributes of the project.
Topic 2.3
Program managers are responsible for managing
related projects in a coordinated way to obtain
benefits and control not available from managing
them individually.
Program managers interact with project managers to
provide support and guidance on individual projects.
Topic 2.3
Project Management Office (PMO) is an
organizational body or entity assigned various
responsibilities related to centralized and
coordinated management of those projects under its
domain.
The responsibilities of PMO can range from
providing project management support functions to
actually being responsible for the direct management
of a project.
The PMO can be stakeholder if it has direct or
indirect responsibility for the outcome of the project.
Topic 2.3
The PMO can provide but is not limited to:-
Administrative support services such as policies,
methodologies, and templates.
Training, mentoring, and coaching of project
managers.
Project support, guidance, and training on how to
manage projects and the use of tools.
Resource alignment of project staff.
Centralized communication among project
managers, project sponsors, managers, and other
stakeholders.
Topic 2.3
Project managers are assigned by the performing
organization to achieve project objectives.
This is a challenging, high-profile role with
significant responsibility and shifting priorities.
It requires
flexibility,
good judgment,
strong leadership and negotiation skills, and
a solid knowledge of project management
practices.
A project manager must be able to understand
project detail, but manage from the overall project
perspective.
Topic 2.3
As the person responsible for the success of the
project, a project manager is in charge of all aspects
of the project including, but not limited to:-
Developing the project management plan and all
related component plans.
Keeping the project on track in terms of schedule
and budget.
Identifying, monitoring, and responding to risk.
Providing accurate and timely reporting of project
metrics.
Topic 2.3
The project manager is the lead person responsible
for communicating with all stakeholders, particularly
the project sponsor, project team, and other key
stakeholders.
The project manager occupies the center of the
interaction between stakeholders and the project
itself.
Topic 2.3
A Project Team is comprised of:-
The Project Manager,
Project Management Team, and
Other Team Members who carry out the work but
who are not necessarily involved with
management of the project.
The team is comprised of individuals from different
groups:-
with knowledge of a specific subject matter, or
with a specific set who carry out the work of the
project.
Topic 2.3
Functional Mangers are key individuals who play a
management role within an administrative or
functional area of the business, such as:-
Human resources,
Finance,
Accounting or
Procurement.
They are assigned their own permanent staff to carry
out the ongoing work, and they have a clear directive
to manage all tasks within their functional area of
responsibility.
The functional manager may provide subject matter
expertise or their function may provide services to
the project.
Topic 2.3
Operations Mangers are individuals who have a
management role in a core business area, such as:-
Research and Development ,
Design,
Manufacturing,
Provisioning,
Testing, or
Maintenance.
Topic 2.3
Unlike functional managers, these managers deal
directly with producing and maintaining the saleable
products and services of the enterprise.
Depending on the type of project, a formal handoff
occurs upon completion to pass technical project
documentation and other permanent records into the
hands of appropriate operations management group.
Operations management will then incorporate the
handed off project into normal operations and
provide the long term support.

Topic 2.3
Sellers are also called
vendors,
suppliers, or
contractors.
Sellers are external companies that enter into a
contractual agreement to provide components or
services necessary for the project.

Topic 2.3
Business Partners are also external companies.
But they have a special relationship with the
enterprise, sometimes attained through a
certification process.
Business partners provide specialized expertise or
fill a specified role such as:-
installation,
customization,
training, or
support.

Topic 2.4
The organizational
Culture,
Style, and
Structure
influence how projects are performed.
An organizations degree of
Project Management Maturity, and its
Project Management Systems
can also influence the project.
When a project involves external entities as part of a
joint venture or partnering, the project will be
influenced by more than one exterprise.
Topic 2.4.1
Cultures and Styles may have strong influence on a
projects ability to meet its objectives.
Cultures and Styles are typically known as cultural
norms.
The norms include a common knowledge
regarding
How to approach getting the work done.
What means are considered acceptable for getting
the work done, or
Who is influential in facilitating the work getting
done.

Topic 2.4.1
Most organizations have developed unique cultures
that manifest in numerous ways including, but not
limited to:-
Shared values, norms, beliefs, and expectations,
Policies, methods and procedures,
View of authority relationships, and
Work ethic and work hours.
Topic 2.4.1
The organizational culture is an Enterprise
Environmental Factor as described in Section 1.8.
Therefore a project manager should understand the
different organizational styles and cultures that may
affect a project.
In some cases the person shown at the top of an
organization chart may be a figurehead who is not
truly in charge.
The project manager must know individuals in the
organization are the decision makers and work with
them to influence project success.
Topic 2.4.2
Organizational structure is an Enterprise
Environmental Factor which can
affect the availability of resources, and
influence how projects are conducted.
Organizational structures range from functional to
projectized, with a variety of matrix structures
between them.
Functional Structure
Weak Matrix Structure
Balanced Matrix Structure
Strong Matrix Structure
Projectized Structure
Table 2-1
Reference: Table 2-1.
PMBOK Guide, 4
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Ed
Organization
Structure
Functional
Matrix
Projectized
Project
Characteristics
Weak Matrix
Balanced
Matrix
Strong
Matrix
Project Manager's
Authority
Little or
None
Limited
Low to
Moderate
Moderate to
High
High to
Almost Total
Resource Availability
Little or
None
Limited
Low to
Moderate
Moderate to
High
High to
Almost Total
Who controls the
project budget
Functional
Manager
Functional
Manager
Mixed
Project
Manager
Project
Manager
Project Manager's
Role
Part-Time Part-Time Full-Time Full-Time Full-Time
Project Management
Administrative Staff
Part-Time Part-Time Part-Time Full-Time Full-Time
Topic 2.4.2
The classic functional organization is a hierarchy
where each employee has one clear superior.
Staff members are grouped by specialty, such as
production, marketing, engineering, and accounting
at the top level.
Specialties may be further subdivided into functional
organizations, such as mechanical and electrical
engineering.
Each department in a functional organization will do
its project work independent of other departments.
PMBOK Guide, 4
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Ed
Chief Executive
Functional
Manager
Staff
Staff
Staff
Functional
Manager
Staff
Staff
Staff
Functional
Manager
Staff
Staff
Staff
Project
Coordination
(Green boxes represents staff engaged in
project activities)
Figure 2-7
Topic 2.4.2
Matrix organizations are a blend of functional and
projectized characteristics.
Weak matrices maintain many of the characteristics
of a functional organization.
Project managers role is more of a coordinator or
expeditor than that of a true project manager.

Chief Executive
Functional
Manager
Staff
Staff
Staff
Functional
Manager
Staff
Staff
Staff
Functional
Manager
Staff
Staff
Staff
Project
Coordination
Figure 2-8
PMBOK Guide, 4
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Ed
project activities)
Topic 2.4.2
Balanced matrix organizations recognizes the need
for a project manager.
It does not provide project manager with full
authority over the project and project funding.
Chief Executive
Functional
Manager
Staff
Staff
Project
Manager
Functional
Manager
Staff
Staff
Staff
Functional
Manager
Staff
Staff
Staff
Figure 2-9
Project
Coordination
PMBOK Guide, 4
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Ed
project activities)
Topic 2.4.2
Strong matrices have many of the characteristics of
the projectized organization.
They can have full-time project managers with
considerable authority and full-time project
administrative staff.
Chief Executive
Functional
Manager
Staff
Staff
Staff
Functional
Manager
Staff
Staff
Staff
Functional
Manager
Staff
Staff
Staff
Manager of
Project Managers
Project
Manager
Project
Manager
Project
Manager
Figure 2-10
PMBOK Guide, 4
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Ed
Project
Coordination
project activities)
Topic 2.4.2
At the opposite end of spectrum to the functional
organization is the projectized organization.
In a projectized organization, team members are
often co-located.
Most of the organizations resources are involved in
the project work.
Project managers have great deal of independence
and authority.
Projectized organizations often have organizational
units called departments, but these groups either
report directly to the project manager or provide
support services to the various projects.
Chief Executive
Project
Manager
Staff
Staff
Staff
Project
Manager
Staff
Staff
Staff
Project
Manager
Staff
Staff
Staff
Project
Coordination
Figure 2-11
PMBOK Guide, 4
th
Ed
project activities)
Topic 2.4.2
Many organizations involve all these structures at
various levels in composite organization.
Even a fundamentally functional organization may
create a special project team to handle a critical
project.
Such a team may have many of the characteristics of
a project team in a projectized organization.
The team may include full-time staff from different
functional departments.
It may develop its own set of operating procedures.
May operate outside the standards, formalized
reporting structure.

Chief Executive
Functional
Manager
Staff
Staff
Staff
Functional
Manager
Staff
Staff
Staff
Functional
Manager
Staff
Staff
Staff
Manager of
Project Managers
Project
Manager
Project
Manager
Project
Manager
Figure 2-12. Composite Organization
Project A
Coordination
Project B
Coordination
Figure 2-12
PMBOK Guide, 4
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Ed
project activities)
Topic 2.4.3
Organizational Process Assets include any or all process
related assets, from any or all of the organizations involved in
the project that can be used to influence the projects success.
They include formal and informal plans, policies, procedures,
and guidelines.
They also include the organizations knowledge bases such as
lessons learned and historical information.
May include completed schedules, risk data, and earned value
data.
Updating and adding to the organizational process assets as
necessary throughout the project are generally the
responsibility of the project team members.
Organizational Process Assets may be grouped into two
categories:-
Processes and Procedures
Corporate Knowledge Base

Topic 2.4.3
Organizational Standard Processes such as:-
Standards,
Policies, e.g.,
Safety and health policy
Ethics policy
Project Management policy
Standard project and product life cycles,
Quality policies and procedures
Process audits
Improvement Targets
Checklists
Standard Process Definitions
for use in the organization.

Topic 2.4.3
Standardized Guidelines
Work instructions,
Proposal evaluation criteria
Performance measurement criteria.
Templates
Risk
Work breakdown structure
Project schedule network diagram
Contract templates
Guidelines and criteria for tailoring the organizations set of
standard processes to satisfy the specific needs of the project.
Topic 2.4.3
Organization communication requirements
Specific communication technology available
Allowed communication media
Record retention policies
Security requirements
Project closure guidelines or requirements
Final project audits
Project evaluations
Product validations
Acceptance criteria
Topic 2.4.3
Financial control procedures
Time Reporting
Required Expenditure and Disbursement Reviews
Accounting Codes
Standard Contract Provisions
Issue and Defect management procedures defining
Issue and Defect Controls
Issue and Defect Identification and resolution
Action Item Tracking
Topic 2.4.3
Change Control Procedures
Steps by which official company standards, policies, plans,
and procedures, or any project documents, will be modified.
How any changes will be approved and validated.
Risk Control Procedures including
Risk Categories
Probability definition and impact
Probability and Impact Matrix
Procedures for
Prioritizing
Approving
Issuing Work Authorizations
Topic 2.4.3
Process Management Databases used to collect and make
available measurement data on processes and products
Project Files
Scope baseline
Cost baseline
Schedule baseline
Quality baseline
Performance Measurement baselines
Project Calendars
Project Schedule Network Diagrams
Risk Registers
Planned Response Actions
Defined Risk Impact
Topic 2.4.3
Historical Information and Lessons Learned databases
Project records and documents
All project closure information and documentation
Information about the results of previous projects selection
decisions
Previous project performance information
Information from the Risk Management effort
Issue and Defect Management Databases
Issue and Defect Status
Control Information
Issue and Defect Resolution
Action Item Results
Topic 2.4.3
Configuration Management Knowledge Bases
Versions and Baselines of all official company
standards,
policies,
procedures, and
any project documents.
Financial Databases
Information such as Labor Hours
Incurred Costs
Budgets
Any project costs overruns

Section III
Chapter 2
OVERVIEW
Project Management is the application of
knowledge, skills, tools, and techniques to project
activities to meet project requirements.
This application of knowledge requires the effective
management of appropriate processes.
OVERVIEW
A Process is a set of interrelated actions and
activities performed to achieve a pre-specified
product, result, or service.
Each process is characterized by
its inputs,
the tools and techniques, and
resulting outputs.
OVERVIEW
Project Manager must consider Organizational
Process Assets and Enterprise Environmental
Factors.
These must be taken into account for every process,
even if they are not explicitly listed as inputs in the
process specification.
Organizational Process Assets (OPAs) provide
guidelines and criteria for tailoring the
organizations processes to the specific needs of
the project.
Enterprise Environmental Factors (EEFs) may
constrain the project management options.
OVERVIEW
Select appropriate processes required to meet the
project objectives
Use a defined approach that can be adopted to meet
requirements
Comply with requirements to meet stakeholder needs
and expectations
Balance the competing demands of scope, time, cost,
quality, resources, and risk to produce the specified
product, service, or result.
OVERVIEW
Project Management Processes
Ensures he effective flow of the project
throughout its existence.
Encompass the tools and techniques involved in
applying the skills and capabilities described in
the Knowledge Areas.
Product-oriented Processes
Specify and create the projects product.
Typically defined by the project life cycle and vary
by application area.
The scope of the project cannot be defined
without basic understanding of how to create the
specified product.
OVERVIEW
This standard describes only the project
management processes.
Product-oriented processes are outside the scope of
this standard, but they should not be ignored by the
project manager.
Project management processes and product-oriented
processes overlap and interact throughout the life of
a project.
OVERVIEW
Project management processes apply globally and
across industry groups.
Good Practice means there is a general
agreement that the application of project
management processes has been shown to enhance
the chances of success over a wide range of projects.
OVERVIEW
This does not mean that the knowledge,
skills, and processes described should
always be applied uniformly on all
projects.
For any given project, the project manager,
in collaboration with the project team, is
always responsible for determining which
processes are appropriate, and the
appropriate degree of rigor for each
process.
3.1 Common Project Management Process Interactions
3.2 Project Management Process Groups
3.3 Initiating Process Group
3.4 Planning Process Group
3.5 Executing Process Group
3.6 Monitoring and Controlling Process Group
3.7 Closing Process Group
Chapter 2
OVERVIEW
Project Mangers and their team should carefully
address each process and its constituent inputs and
outputs.
This chapter should be used as a guide for those
processes they must consider in managing their
project.
This effort is known as tailoring.
PMBOK Guide, 4
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Figure 3-1
PMBOK Guide, 4
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Figure 3-2
PMBOK Guide, 4
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PMBOK Guide, 4
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Figure 3-4
Figure 3-5
PMBOK Guide, 4
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Section III
Reference: Figure III-1.
PMBOK Guide, 4
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Figure III-1
Chapter 4
4.1 Develop Project Charter
4.2 Develop Project Management Plan
4.3 Direct and Manage Project Execution
4.4 Monitor and Control Project Work
4.5 Perform Integrated Change Control
4.6 Close Project or Phase

Chapter 4
Figure 4-1
Reference: Figure 4.1.
PMBOK Guide, 4
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Ed
Formally recognizes the existence of a project
Refers to the business need the project is
addressing
Describes the product to be delivered
Gives the project manager the authority to
apply resources to the project

Project
Charter
___________
_

Expert
Judgment
____________

Project
Statement of
Work
Business
Case
Contract
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 4.1
1
Initiating
1
Integration
PMBOK Guide, 4
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Figure 4-3
PMBOK Guide, 4
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Ed
Project
Management
Plan
___________
_

Expert
Judgment
____________

Project
Charter
Outputs from
planning
processes
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 4.2
2
Planning
1
Integration
PMBOK Guide, 4
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Figure 4-5
PMBOK Guide, 4
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Ed
Deliverables
Work
Performance
Information
Change
Request
Project
Management
Plan Updates
Project
Document
Updates
___________
_

Expert
Judgment
Project
Management
Information
System
____________

Project
Management
Plan
Approved
Change
Requests
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 4.3
3
Executing
1
Integration
PMBOK Guide, 4
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Figure 4-7
PMBOK Guide, 4
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Ed
Change
Requests
Project
Management
Plan Updates
Project
Document
Updates
___________
_

Expert
Judgment
____________

Project
Management
Plan
Performance
Reports
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 4.4
4
Monitoring
& Control
1
Integration
PMBOK Guide, 4
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Figure 4-9
PMBOK Guide, 4
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Ed
Change
Request
Status
Updates
Project
Management
Plan Updates
Project
Document
Updates
___________
_

Expert
Judgment
Change
Control
Meetings
____________

Project
Management
Plan
Work
Performance
Information
Change
Requests
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 4.5
4
Monitoring
& Control
1
Integration
PMBOK Guide, 4
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Figure 4-11
PMBOK Guide, 4
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Ed
Final
Product,
Service or
Result
Transition
Organization
al Process
Assets
Updates
___________
_

Expert
Judgment
____________

Project
Management
Plan
Accepted
Deliverables
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 4.6
5
Closing
1
Integration
PMBOK Guide, 4
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Figure 4-14
PMBOK Guide, 4
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Chapter 5
5.1 Collect Requirements
5.2 Define Scope
5.3 Create WBS
5.4 Verify Scope
5.5 Control Scope
Chapter 5
Product scope The features and functions
that are to be included in a product or service
Project scope The work that must be done in
order to deliver a product with the specified
features and functions
Successful completion of product scope is
measured against the requirements; project
scope is measured against the plan

Project Scope Management includes the
processes required to ensure that the project
includes all the work required, and only the
work required, to complete the project
successfully.
Project scope management is primarily
concerned with defining and controlling what
is and is not included in the project.

Guidelines for how scope is to be managed and
how scope changes are to be integrated into
the project

It includes:
An assessment of the stability of the project
scope
A clear description of how scope changes
will be identified and classified

A written statement that includes:
Project justification, the major deliverables,
and the project objectives
Criteria used to determine if the project or
phase has been successfully completed

Figure 5-1
PMBOK Guide, 4
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Ed
Requirement
s
Documentati
on
Requirement
s
Management
Plan
Requirement
s Traceablity
Matrix
___________
_

Interviews
Focus
Groups
Facilitated
Workshops
Group
Creativity
Techniques
Group
Decision
Making
Techniques
Questionnaire
s and
Surveys
Observations
Prototypes
____________

Project
Charter
Stakeholder
Register
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 5.1
2
Scope
PMBOK Guide, 4
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2
Planning
Figure 5-3
PMBOK Guide, 4
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Project
Scope
Statement
Project
Document
Updates
___________
_

Expert
Judgment
Product
Analysis
Alternatives
Identification
Facilitated
Workshops
____________

Project
Charter
Requirement
s
Documentati
on
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 5.2
2
Scope
PMBOK Guide, 4
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2
Planning
Figure 5-5
PMBOK Guide, 4
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WBS
WBS
Dictionary
Scope
Baseline
Project
Document
Updates
___________
_

Decompositio
n
____________

Project
Scope
Statement
Requirement
s
Documentati
on
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 5.3
2
Scope
PMBOK Guide, 4
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2
Planning
Figure 5-7
PMBOK Guide, 4
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Figure 5-8
PMBOK Guide, 4
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Figure 5-9
PMBOK Guide, 4
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Figure 5-10
PMBOK Guide, 4
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Deliverable oriented
grouping of project
elements that organizes
and defines the total
scope of the project
Hardware Services Data
Code of accounts Uniquely identifies each
element of the WBS
Work packages A deliverable at the lowest
level of the WBS
WBS dictionary Includes work-package
descriptions

Project
Planning
1.1.1
Project
Control
1.1.2
Project
Data
1.1.3
Project
Management
1.1
Product
Design
1.2.1
Systems
Integration
1.2.2
Test &
Evaluation
1.2.3
Systems
Engineering
1.2
CPU
Acquisition
1.3.1
Auxiliary
Equipment
1.3.2
Printer
Acquisition
1.3.3
Hardware
Acquisition
1.3
Operating
System
1.4.1
Database
1.4.2
Application
Development
1.4.3
Software
Development
1.4
Facility
Plans
1.5.1
Facility
Modification
1.5.2
Facility
Installation
1.5.3
Facilities
Modifications
1.5
Training
Plans
1.6.1
Training
Courses
1.6.2
Training
Development
1.6
Information
System
1
.
Work Work
Breakdown Breakdown
Work Work
Packages Packages
& &
Planning Planning
Packages Packages
Functional Functional
Organization Organization
Accepted
Deliverables
Change
Requests
Project
Document
Updates
___________
_

Inspection
____________

Project
Management
Plan
Requirement
s
Documentati
on
Requirement
s Traceablity
Matrix
Validated
Deliverables
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 5.4
2
Scope
PMBOK Guide, 4
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4
Monitoring
& Control
Figure 5-12
PMBOK Guide, 4
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Work
Performance
Measuremen
ts
Organization
al Process
Assets
Updates
Change
Requests
Project
Management
Plan Updates
Project
Document
Updates
___________
_

Variance
Analysis
____________

Project
Management
Plan
Work
Performance
Information
Requirement
s
Documentati
on
Requirement
s Traceablity
Matrix
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 5.5
2
Scope
PMBOK Guide, 4
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4
Monitoring
& Control
Figure 5-14
PMBOK Guide, 4
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Chapter 6
6.1 Define Activities
6.2 Sequence Activities
6.3 Estimate Activity Resources
6.4 Estimate Activity Duration
6.5 Develop Schedule
6.6 Control Schedule
Chapter 6
Project Time Management includes the
processes required to accomplish timely
completion of the project.

Figure 6-1
PMBOK Guide, 4
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Figure 6-2
PMBOK Guide, 4
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Activity List
Activity
Attributes
Milestone
List
___________
_

Decompositio
n
Rolling Wave
Planning
Templates
Expert
Judgment
____________

Scope
Baseline
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 6.1
3
Time
PMBOK Guide, 4
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2
Planning
Figure 6-4
PMBOK Guide, 4
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Control Account. A management control point can
be placed at selected management points (specific
components at selected levels) of the work
breakdown structure above the work package level.
These control points are used as a basis for
planning when associated work packages have not
yet been planned. All work and effort performed
within a control account is documented in a control
account plan.
Planning Package. A planning package is a WBS
component below the control account, but above
the work package. This component is used for
planning known work content that does not have
detailed schedule activities.

Project
Schedule
Network
Diagram
Project
Document
Updates
___________
_

Precedence
Diagramming
Method
(PDM)
Dependency
Determination
Applying
Leads and
Lags
Schedule
Network
Diagram
____________

Activity List
Activity
Attributes
Milestone
List
Project
Scope
Statement
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 6.2
3
Time
PMBOK Guide, 4
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2
Planning
Figure 6-6
PMBOK Guide, 4
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Figure 6-7
PMBOK Guide, 4
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Precedence diagramming method (PDM)
Nodes represent activities and arrows show dependencies
Start
Finish
A
C D
E
B
Finish-to-Start Activity A must finish
before Activity B can start
A B
Start-to-Start Activity A must start
before Activity B can start
A
B
Finish-to-Finish Activity A must finish
before Activity B can finish
A
B
Start-to-Finish Activity A must start
before Activity B can finish
A
B
Conditional diagramming methods
Diagramming techniques such as Graphical
Evaluation and Review Technique (GERT) and
System Dynamics models allow the depiction
of non-sequential activities and conditional
branches
Network templates Can include an entire
project or just a portion of it (i.e., subnets and
fragnets)
Activity
Resource
Requirement
s
Resource
Breakdown
Structure
Project
Document
Updates
___________
_

Expert
Judgment
Alternatives
Analysis
Published
Estimating
Data
Bottom-up
Estimating
Project
Management
Software
____________

Activity List
Activity
Attributes
Resource
Calendars
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 6.3
3
Time
PMBOK Guide, 4
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2
Planning
Figure 6-9
PMBOK Guide, 4
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Activity
Duration
Estimates
Project
Document
Updates
___________
_

Expert
Judgment
Analogous
Estimating
Parametric
Estimating
Three-Point
Estimates
Reserve
Analysis
____________

Activity List
Activity
Attributes
Activity
Resource
Requirement
s
Resource
Calendars
Project
Scope
Statement
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 6.4
3
Time
PMBOK Guide, 4
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2
Planning
Figure 6-11
PMBOK Guide, 4
th
Ed
Most likely. The duration of the schedule activity,
given the resources likely to be assigned, their
productivity, realistic expectations of availability for
the schedule activity, dependencies on other
participants, and interruptions.
Optimistic. The activity duration is based on a best-
case scenario of what is described in the most likely
estimate.
Pessimistic. The activity duration is based on a
worst-case scenario of what is described in the most
likely estimate.
Activity duration estimates are quantitative
assessments of the likely number of work periods
that will be required to complete a schedule activity.
Activity duration estimates include some indication
of the range of possible results. For example:
2 weeks 2 days to indicate that the schedule
activity will take at least eight days and no more
than twelve (assuming a five-day workweek).
15 percent probability of exceeding three weeks to
indicate a high probability85 percentthat the
schedule activity will take three weeks or less.
Project
Schedule
Schedule
Baseline
Schedule
Data
Project
Document
Updates
___________
_

Schedule
Network
Analysis
Critical Path
Method
Critical Chain
Method
Resource
Leveling
What-If
Scenario
Analysis
Applying
Leads and
Lags
Schedule
Compression
Scheduling
Tools
____________

Activity List
Activity
Attributes
Project
Schedule
Network
Diagrams
Activity
Resource
Requirements
Resource
Calendars
Activity
Duration
Estimates
Project Scope
Statement
Enterprise
Environmental
Factors
Organizational
Process
Assets
____________

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 6.5
3
Time
PMBOK Guide, 4
th
Ed
2
Planning
Figure 6-13
PMBOK Guide, 4
th
Ed
Crashing. Schedule compression technique in which cost and
schedule tradeoffs are analyzed to determine how to obtain the
greatest amount of compression for the least incremental cost.
Crashing does not always produce a viable alternative and can
result in increased cost.
Fast tracking. A schedule compression technique in which
phases or activities that normally would be done in sequence
are performed in parallel. An example would be to construct the
foundation for a building before all the architectural drawings
are complete. Fast tracking can result in rework and increased
risk. This approach can require work to be performed without
completed detailed information, such as engineering drawings.
It results in trading cost for time, and increases the risk of
achieving the shortened project schedule.
Project schedule network diagrams. These diagrams,
with activity date information, usually show both the
project network logic and the projects critical path
schedule activities.
Bar charts. These charts, with bars representing
activities, show activity start and end dates, as well
as expected durations.
Milestone charts. These charts are similar to bar
charts, but only identify the scheduled start or
completion of major deliverables and key external
interfaces.
Supporting data for the project schedule includes at
least the schedule milestones, schedule activities,
activity attributes and documentation of all identified
assumptions and constraints. The amount of
additional data varies by application area.
Information frequently supplied as supporting detail
includes, but is not limited to:
Resource requirements by time period, often in the form of a
resource histogram
Alternative schedules, such as best-case or worst-case, not
resource leveled, resource leveled, with or without imposed
dates
Schedule contingency reserves.

Figure 6-14
PMBOK Guide, 4
th
Ed
Work
Performance
Measuremen
ts
Organization
al Process
Assets
Updates
Change
Requests
Project
Management
Plan Updates
Project
Document
Updates
___________
_

Performance
Reviews
Variance
Analysis
Project
Management
Software
Resource
Leveling
What-If
Scenario
Analysis
Adjusting
Leads and
Lags
Schedule
Compression
Scheduling
Tool
____________

Project
Management
Plan
Project
Schedule
Work
Performance
Information
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 6.6
3
Time
PMBOK Guide, 4
th
Ed
4
Monitoring
& Control
Figure 6-15
PMBOK Guide, 4
th
Ed
Chapter 7
7.1 Estimate Costs
7.2 Determine Budget
7.3 Control Costs
Chapter 7
Figure 7-1
PMBOK Guide, 4
th
Ed
Strategic Assessment
Technical Assessment
Economic Assessment
Objectives contribution to org stated
objectives
IS Plan fit into existing IS Plan
Organization structure effect on
MIS information and levels of info
Personnel manning levels and existing
employees skill base
Image effect on customer attitudes

Programme a collection of projects contributing
to same overall organization goals.
Well defined programme goals
All projects selected and tuned to meet org goals
Viability, timing, resourcing and final worth of a
project may be affected by the programme
Value of any project is increased by the fact it is
part of a programme
Strategic assessment of proposed project
sponsor
If no programme, proposed project evaluated
within the context of orgs overall business
objectives

Strategic and operational assessment
Consistency with own strategic plan
Part of portfolio of ongoing and planned projects
Possible effects on other projects in th e portfolio
Competition for resources
Overall portfolio profile specialization vs
diversification
Evaluating the required functionality against
hardware and software available.
Existing strategic information systems plan
Limitations on nature of solution
Constraints influencing cost of solution
Most common way of carrying out Economic
Assessment.
Comparing expected costs with benefits of
having it in place.
Whether the estimated costs are exceeded by the
estimated income and other benefits?
Comparison with other projects for priority and
scarce resource allocation
Identifying and estimating all of the costs and
benefits of carrying out the project.
Development costs
Operating costs and benefits accruing
As compared to existing system only
increase due to new system
Expressing costs and benefits in common units.
Net benefit = Total benefit - Total cost
Same units of accounting
Costs
Development Costs salaries and associated costs
Setup Costs hardware, ancillary equipment, file
conversion, recruitment and staff training
Operational Costs cost of operating the new system
Benefits
Direct Benefits reduction in salary, increase in sales
Assessable indirect benefits increased accuracy,
reduction in errors, better quality and lower costs
Intangible benefits enhanced job interest, reduced
staff turnover, lower recruitment costs.
A cash flow forecast will indicate when expenditure and
income will take place
Development stages investment or loan
Income expected
Accurate cash flow forecasting is not easy
Needs to be done early in project life cycle
Benefits might be some years in future
Ignore effects of inflation as it increases
uncertainty
If expenditure increases so does the income
Net Profit
Payback Period
Return on Investment
Net Present Value
Internal Rate of Return
Difference between Total Costs and Total Income

All projects contain an element of risk
Simple net profit takes no account of the timing of
the each cash flows.
Project 1 bulk of the income occurs late in the life
Project 3 Steady income throughout

Time taken to break even or pay back the initial investment.
Normally project with shortest payback period will be
selected if org wants not to remain in debt for long
Simple to calculate
Not particularly sensitive to small forecasting errors
Ignores overall profitability of the project
Also known as Accounting Rate of Return (ARR)
Provides a way of comparing net profit to the investment
required.
Common version of formula is:

10% 2% 10% 12.5%
Simple, easy to
calculate
No account of
timing of cash flow
Tempting to
compare with
interest rates
misleading
Takes into account profitability of project and timing of cash flow
that are produced.
Discounts future cash flows by a %age called discount rate.
Formula:

Discount factor =
_1_
(1+r)
t

r = Discount rate
t = number of years

_1_ = 0.9091
(1+10/100)
1

NPV = PV
1
+ PV
2
+ PV
3
+ + PV
n

PV =

value x _1_
(1+r)
t
r = Discount rate
t = number of years

10,000 x _1_ = 9091
(1+10/100)
1

Selecting an appropriate Discount Rate
Some standard rate or available interest rate
Same discount rate for all projects in portfolio
Where NPV may be used to compare projects, it
might not be to directly comparable with earnings
from other investments or costs of borrowing
capital.
IRR attempts to provide a profitability measure as
a percentage return that is directly comparable
with interest rates.
IRR is that %age discount rate that would produce
an NPV of zero.
Manually calculated by trial and error, computer or
spreadsheet required for exact values.
Internal rate of return (IRR) is a rate of return on an
investment. The IRR of a project is the discount
rate that will give it a net present value of zero.
The IRR is calculated by a trial and error process
Starting with a guess at the IRR, r, the process is
as follows:
The NPV is calculated using discount rate r.
If the NPV is close to zero then r is the IRR.
If the NPV is positive r is increased.
If the NPV is negative r is decreased.
Go back to step 1.

This is more tedious than calculating an NPV, but
the extra work can be automated. It avoids the
need to estimate an appropriate discount rate
which is a considerable simplification this is a
flaw because of the lack of risk adjustment. This
can be done later by demanding risk premia for
higher risk alternatives, but assessing this
reintroduces the complexity.
It is generally preferable to use NPV to IRR to
make investment decisions. A smaller investment
with a better rate of return will have a higher IRR,
but investors' total wealth would be increased
more by making a larger investment with a lower
IRR but a higher total gain.
This is only a problem where investments are limited
in size (not scalable) and mutually exclusive, so it is
not a concern for securities valuation. However, the
only common use of IRR for securities valuation is
that of yield to maturity for bonds.
IRR has even worse failings. If the investment has
negative cash flows following positive cash flows,
then there may be more than one IRR, or even none
at all. While it is possible to use more complex
procedures to work around this, it is better to simply
not use IRR. If used, it should not be used for any
pattern of cash flows that ever changes from positive
to negative.

Convenient and useful measure of the value of project
Single percentage figure that may be directly
compared with rates of return

IRR does not indicate the exact size of the return.
A project with an NPV of 100,000 and IRR of 15% can
be more attractive than one with NPV of 10,000 and IRR
of 18%.
The return of profit is lower but the net benefits are
greater.
Under certain conditions, it is possible to find more
than one rate that will produce a zero NPV. If so take
the lower value and discard the other values.
Activity Cost
Estimates
Basis of
Estimates
Project
Document
Updates
___________
_

Scope
Baseline
Project
Schedule
Human
Resource
Plan
Risk Register
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 7.1
4
Cost
PMBOK Guide, 4
th
Ed
2
Planning
Expert
Judgment
Analogous
Estimating
Parametric
Estimating
Bottom-up
Estimating
Three-Point
Estimates
Resource
Analysis
Cost of
Quality
Project
Management
Estimating
Software
Vendor Bid
Analysis
____________

Figure 7-3
PMBOK Guide, 4
th
Ed
Cost
Performance
Baseline
Project
Funding
Requirement
s
Project
Document
Updates
___________
_

Activity Cost
Estimates
Basis of
Estimates
Scope
Baseline
Project
Schedule
Resource
Calendars
Contracts
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 7.2
4
Cost
PMBOK Guide, 4
th
Ed
2
Planning
Cost
Aggregation
Reserve
Analysis
Expert
Judgment
Historical
Relationships
Funding Limit
Reconciliatio
n
____________

Figure 7-5
PMBOK Guide, 4
th
Ed
Figure 7-6
PMBOK Guide, 4
th
Ed
Work
Performance
Measuremen
ts
Budget
Forecasts
Organization
al Process
Assets
Updates
Project
Management
Plan Updates
Project
Document
Updates
___________
_

Project
Management
Plan
Project
Funding
Requirement
s
Work
Performance
Information
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 7.3
4
Cost
PMBOK Guide, 4
th
Ed
Earned Value
Management
Forecasting
To-Complete
Performance
Index
Performance
Reviews
Variance
Analysis
Project
Management
Software
____________

4
Monitoring
& Control
Figure 7-8
PMBOK Guide, 4
th
Ed
Control account Level of the WBS at which a
budget is assigned and a control account manager
(CAM) is given responsibility for delivering the item
Create control accounts at the level that senior
management wants to track cost and schedule
Use the responsibility assignment matrix (RAM) as
a tool
RAM The integration of the WBS and the OBS of a
project
Proper creation of the RAM results from locating the
intersection of the OBS unit that is assigned
responsibility for the work and the specific WBS
element that defines the work to be performed
A method of measuring project
performance by comparing the amount of
work planned with that actually
accomplished, in order to determine if
cost and schedule performance are as
planned
Data Element Term Acronym
Scheduled Work Budgeted Cost of Work Scheduled BCWS
Earned Value Budgeted Cost of Work Performed BCWP
Actuals Actual Cost of Work Performed ACWP
Authorized Work Budget at Completion BAC
Forecasted Cost Estimate at Completion EAC
Work Variance Schedule Variance SV
Cost Variance Cost Variance CV
Completion
Variance
Variance at Completion VAC
PV
EV
AC
Planned value (PV). PV is the budgeted cost for the work scheduled to
be completed on an activity or WBS component up to a given point in
time.
Earned value (EV). EV is the budgeted amount for the work actually
completed on the schedule activity or WBS component during a given
time period.
Actual cost (AC). AC is the total cost incurred in accomplishing work on
the schedule activity or WBS component during a given time period.
This AC must correspond in definition and coverage to whatever was
budgeted for the PV and the EV (e.g., direct hours only, direct costs
only, or all costs including indirect costs).
Estimate to complete (ETC) and estimate at completion (EAC). See ETC
and EAC development, described in the following technique on
forecasting. The PV, EV, and AC values are used in combination to
provide performance measures of whether or not work is being
accomplished as planned at any given point in time. The most
commonly used measures are cost variance (CV) and schedule
variance (SV). The amount of variance of the CV and SV values tend to
decrease as the project reaches completion due to the compensating
effect of more work being accomplished. Predetermined acceptable
variance values that will decrease over time as the project progresses
towards completion can be established in the cost management plan.
Cost variance (CV). CV equals earned value (EV) minus actual cost (AC).
The cost variance at the end of the project will be the difference
between the budget at completion (BAC) and the actual amount spent.
Formula: CV= EV AC
Schedule variance (SV). SV equals earned value (EV) minus planned
value (PV). Schedule variance will ultimately equal zero when the
project is completed because all of the planned values will have been
earned.
Formula: SV = EV PV
These two values, the CV and SV, can be converted to efficiency
indicators to reflect the cost and schedule performance of any project.
Cost performance index (CPI). A CPI value less than 1.0 indicates a cost
overrun of the estimates. A CPI value greater than 1.0 indicates a cost
under-run of the estimates. CPI equals the ratio of the EV to the AC. The
CPI is the most commonly used cost-efficiency indicator.
Formula: CPI = EV/AC
Cumulative CPI (CPIC). The cumulative CPI is widely used to forecast
project costs at completion. CPIC equals the sum of the periodic
earned values (EVC) divided by the sum of the individual actual costs
(ACC).
Formula: CPIC = EVC/ACC
Schedule performance index (SPI). The SPI is used, in addition to the
schedule status, to predict the completion date and is sometimes used
in conjunction with the CPI to forecast the project completion estimates.
SPI equals the ratio of the EV to the PV.
Formula: SPI = EV/PV
Figure 7-9
PMBOK Guide, 4
th
Ed
CA #1
WBS Element:
OBS Element:
CAM:
Budget:
Schedule:

1.1 Frame
Frame Shop
Mr. I. M. Smart
$ 125,000
Jan - Jun 00
Receive work authorization
Develop work and planning packages
Assign a budget and schedule for each work
and planning package
Build a baseline by summing the budgeted cost
of work scheduled (BCWS) for each reporting
period
Planning Packages
Future work that has not
been planned in detail as
work packages; Always
scheduled to occur in the
future
Task 1
Task 2
Task 4
Task 5
Task 3
Work Packages
Planning Packages
Work Packages
Detailed, short-span
tasks or material items;
Required to accomplish
the CA objectives;
Typically for the near
term
The plan against which actual performance can
be compared
Based on budgets assigned to scheduled
segments of work
Build PMB by summing the BCWS for all control
accounts, by reporting period
Budget at completion (BAC) Equal to the
cumulative BCWS for the total project

Time-Phased Budget
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Jan Feb Mar Apr May Jun
Reporting Period
B
C
W
S

$
K
BAC
Work schedule to be accomplished
Performance Measurement Baseline
0
10000
20000
30000
40000
50000
60000
70000
80000
JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY
C
U
R
R
E
N
T

PV
BA
C
Cost Control
PV
JANUARY 0
FEBRUARY 2500
MARCH 8000
APRIL 13000
MAY 42000
JUNE 62000
JULY 70700
Budgeted value of completed or in-process work

0
10000
20000
30000
40000
50000
60000
70000
80000
C
U
R
R
E
N
T
EV
PV
PV EV
JANUARY 0 0
FEBRUARY 2500 3600
MARCH 8000 8000
APRIL 13000 10000
MAY 42000 38000
JUNE 62000
JULY 70700
Actual value of completed or in-process work
0
10000
20000
30000
40000
50000
60000
70000
80000
C
U
R
R
E
N
T
EV
PV
AC
PV EV AC
JANUARY 0 0 0
FEBRUARY 2500 3600 6000
MARCH 8000 8000 8000
APRIL 13000 10000 8000
MAY 42000 38000 48000
JUNE 62000
JULY 70700
Comparing the EV, the amount originally
budgeted for the work that has been completed
or is in-process, to the PV, the amount
budgeted for the work that was planned to
have been accomplished
SV = EV PV
A negative result means less work has been
performed than was planned
PV = $42,000
EV = $38,000
AC = $48,000

SV = EV PV
= $38,000 $42,000 = - $4,000
SV% = SV / PV
= - $4000 / $42,000 = - 0.095
= - 9.5%

Comparing the amount originally budgeted for
the work completed or in-process, the EV, to
the actual costs of that work, the AC
CV = EV AC
A negative CV means more dollars were spent
to accomplish the work than was planned
PV = $42,000
EV = $38,000
AC = $48,000

CV = EV - AC
= $38,000 $48,000 = - $10,000

CV% = CV / EV
= - $10,000 / $38,000
= - 26%

Dfn: Cost- and schedule-performance efficiency
calculations; expressed in $

Cost Performance Index (CPI)
CPI = BCWP/ACWP

Schedule Performance Index (SPI)
SPI = BCWP/BCWS

PV = $42,000
EV = $38,000
AC = $48,000

CPI = EV / AC
= $38,000 / $48,000 = 0.79

$0.79 worth of work was actually done for
each $1.00 spent

PV = $42,000
EV = $38,000
AC = $48,000

SPI = EV / PV
= $38,000 / $42,000 = 0.90

$0.90 worth of work has been done for each
$1.00 worth of work that was planned to be done

Dfn: The managements assessment of the cost
of the project at completion

After variance analysis, the estimated cost at
completion is determined
One methodology:

EAC = BAC / CPI
BAC = $80,000
CPI = 0.79
EAC = $80,000 / 0.79 = $101,265

BAC = $80,000
EAC = $101,265

VAC = BAC EAC
= $80,000 $101,265
= -$21,265

Based on past performance, project will
exceed planned budget by $21,265

Work Remaining / Cost Remaining

TCPI = (BAC EV) / (EAC AC)

= ($ 80,000 $ 38,000) / ($ 101,265 $48,000)
= $ 42,000 / $ 53,265
= 0.7885
TCPI = Work Remaining / Cost Remaining
TCPI = (BAC EV) / (EAC AC) or
TCPI = (BAC EV) / (BAC AC)

The TCPI formula gives the efficiency at which the
project team should be utilized for the remainder of the
project.
TCPI value above 1 indicates utilization of the project
team for the remainder of the project can be stringent.
TCPI value below 1 indicates utilization of the project
team for the remainder of the project should be lenient.
If TCPI is one (1.0), a somewhat unusual case, then the remaining
project work must be executed at the same cost performance level
as the completed project work. This may or may not be difficult,
depending on the nature of the remaining project work.
TCPI value above 1 indicates utilization of the project team for the
remainder of the project can be stringent. If TCPI is greater than one
(> 1.0), a more normal case, then the remaining project work must
be executed at a better cost performance level than the project
completed work.
TCPI value below 1 indicates utilization of the project team for the
remainder of the project should be lenient. If TCPI is less than one
(<1.0), an unusual case, then the remaining project work can be
executed at a lower cost performance level than the project
completed work. Again, at first glance, this appears easy to do, but
it also depends on the nature of the remaining work.
Figure 7-10
PMBOK Guide, 4
th
Ed
PV EV AC
$1 $1 $1 On schedule On cost
$2 $2 $1 On schedule Under cost
$1 $1 $2 On schedule Over cost
$1 $2 $2 Ahead of schedule On cost
$1 $2 $3 Ahead of schedule Over cost
$1 $2 $1 Ahead of schedule Under cost
$3 $2 $1 Behind schedule Under cost
$2 $1 $3 Behind schedule Over cost
$2 $1 $1 Behind schedule On cost

PV EV AC EAC BAC

100 125 75 600 560
125 100 100 850 800
75 75 75 700 560
100 75 100 570 600

BAC = $ 40k
EV = $ 20k
PV = $ 28k
AC = $ 26k
Calculate
% of Work Scheduled
% of Budget Spent
% of Work Accomplished
Cost Variance
Schedule Variance
Calculate
% of Work Scheduled PV / BAC = $ 28K / $ 40K = 70 %
% of Budget Spent AC / BAC = $ 26K / $ 40K = 65 %
% of Work Accomplished EV /
BAC = $ 20K / $ 40K = 50 %

Cost Variance EV AC = $ 20K $ 26K = - $ 6K
Schedule Variance EV PV = $ 20K $ 28K = - $ 8K

This is the ideal
situation, where
everything goes
according to plan.
PV = $ 1,860
EV = $ 1,860
AC = $ 1,860
In this Case, without
Earned Value
measurements, it
appears were in good
shape. Expenditures
are less than planned.
Spending Variance =
-
$ 200
PV = $ 1,900
AC = $ 1,700
But with EV measurements,
we see...$400 worth of work
is behind schedule in being
completed; i.e., we are 21
percent behind where we
planned to be.
SV = EV PV =
-
$ 400
SV % = (SV / PV) x 100 =
-
21 %
PV = $ 1,900
EV = $ 1,500
AC = $ 1,700
In addition, we can see...
Actuals exceed Value
Earned (EV), i.e., $1,500
worth of work was
accomplished but it cost
$1,700 to do so. We have a
$200 cost overrun (i.e., 13%
over budget) .
CV = EV AC =
-
$ 200
CV % = (CV / EV) x 100 =
-
13 %
PV = $ 1,900
EV = $ 1,500
AC = $ 1,700
This means only 79 cents worth
of work was done for each
$1.00 worth of work planned to
be done.
And, only 88 cents worth of
work was actually done for each
$1.00 spent
SPI = EV / PV = $ 0.79
CPI = EV / AC = $ 0.88
PV = $ 1,900
EV = $ 1,500
AC = $ 1,700
This is the worst kind of
scenario, where all
performance indicators
are negative.
SV =
-
$ 400; SPI = 0.79
CV =
-
$ 200; CPI = 0.88
PV = $ 1,900
EV = $ 1,500
AC = $ 1,700
PV = $ 2,600
EV = $ 2,400
AC = $ 2,200
In this case there is
bad news and good
news.
PV = $ 2,600
EV = $ 2,400
AC = $ 2,200
The bad news is that our
work efficiency is a bit
low; were getting only 92
cents of work done on
the dollar. As a result,
we are behind schedule.
SPI = 0.92
SV =
-
$ 200; SV % =
-
8 %
PV = $ 2,600
EV = $ 2,400
AC = $ 2,200
The good news is that
were under-running our
budget. Were getting
$1.09 worth of work
done for each $1.00
were spending.
CV =
+
$ 200; CV % =
+
8 %
CPI = 1.09
PV = $ 1,700
EV = $ 1,500
AC = $ 1,500
In this case, the
work is not being
accomplished on
schedule...
SV =
-
$ 200; SV % =
-
12 %
SPI = 0.88
PV = $ 1,700
EV = $ 1,500
AC = $ 1,500
...but the cost of
the work
accomplished is
just as we
budgeted.
CV = $ 0.00
CPI = 1.00

PV = $ 1,400
EV = $ 1,600
AC = $ 1,400
A positive scenario;
right? But is it because
we are out-performing
our learning-curve
standards or because
we planned too
pessimistically?
PV = $ 1,400
EV = $ 1,600
AC = $ 1,400
Here in this case,
we are getting
work done at 114
percent
efficiency...
SPI = 1.14
CPI = 1.14

PV = $ 1,400
EV = $ 1,600
AC = $ 1,400
...work is ahead of
schedule by 14
percent and
under-running cost
by 12.5%.
SV =
+
$ 200; SV % =
+
14 %
CV =
+
$ 200; CV % =
+
12.5 %
PV = $ 2,000
EV = $ 2,200
AC = $ 2,400
In Case 6, work is
being done
efficiently, but a
cost overrun is
occurring.
SPI = 1.10
CV =
-
$ 200; CV % =
-
9 %
PV = $ 2,200
EV = $ 2,400
AC = $ 2,400
In Case 7, work is
being done
efficiently, and
costs are right on
target.
SPI = 1.09
CV = $ 0.00
PV = $ 2,000
EV = $ 2,000
AC = $ 2,200
See if you can
analyze this one!!
SV = EV PV
SV % = SV / PV
CV = EV AC
CV % = CV / EV
SPI = EV / PV
CPI = EV / AC
PV = $ 2,000
EV = $ 2,000
AC = $ 2,200
Were on schedule.
But in order to be
on schedule, its
costing us $1.00 to
do each 91-cents
worth of work.
Theres a $200
overrun as a result.
SV = $ 0.00
CV =
-
$ 200; CPI = 0.91
PV = $ 1,700
EV = $ 1,500
AC = $ 1,900
OK, see how you do
with this one!!!
SV = EV PV
SV % = SV / PV
CV = EV AC
CV % = CV / EV
SPI = EV / PV
CPI = EV / AC
PV = $ 1,700
EV = $ 1,500
AC = $ 1,900
Negative scenario:
12% behind
schedule and over-
running cost by
27%
SV =
-
$ 200; SV % =
-
12 %
CV =
-
$ 400; CV% =
-
27 %
PV = $ 1,000
EV = $ 0.00
AC = $ 800
Lets try one
more!!!
SV = EV PV
SV % = SV / PV
CV = EV AC
CV % = CV / EV
SPI = EV / PV
CPI = EV / AC
PV = $ 1,000
EV = $ 0.00
AC = $ 800
A tough one!!!
Of $1,000 worth of
scheduled work, no
measurable milestone has
yet been accomplished.
However, $800 has been
spent just getting
started.
SV =
-
$ 1,000; SV % =
-
100 %
CV =
-
$ 800; CV % = N/A
PV = $ 0.00
EV = $ 700
AC = $ 900
See how you do on
this final one!!!
SV = BCWP BCWS
SV % = SV / BCWS
CV = BCWP ACWP
CV % = CV / BCWP
SPI = BCWP / BCWS
CPI = BCWP / ACWP
PV = $ 0.00
EV = $ 700
AC = $ 900
Work was begun before
it was scheduled to
start. But while $700
worth of work was
completed ahead of
schedule, it cost $900
to do it. (A 29%
overrun.)
SV =
+
$ 700; SV % = N/A
CV =
-
$ 200; CV % =
-
29 %
ETC based on New Estimate
Formula:
BAC = total cumulative PV at completion
ETC based on atypical variances
Formula: ETC = (BAC - EV)
ETC based on typical variances
Formula: ETC = (BAC - EV) / CPIC
EAC using a New Estimate
Formula: EAC = AC + ETC
EAC using remaining budget
Formula: EAC = AC + BAC EV
EAC using CPIC
Formula: EAC = AC + ((BAC EV) / CPIC)
Variance analysis. Variance analysis involves
comparing actual project performance to planned or
expected performance. Cost and schedule variances
are the most frequently analyzed, but variances from
plan in the areas of project scope, resource, quality,
and risk are often of equal or greater importance.
Trend analysis. Trend analysis involves examining
project performance over time to determine if
performance is improving or deteriorating.
Earned value technique. The earned value
technique compares planned performance to actual
performance.
Chapter 8
8.1 Plan Quality
8.2 Perform Quality Assurance
8.3 Perform Quality Control
Chapter 8
Figure 8-1
PMBOK Guide, 4
th
Ed
Addresses both the management of the
project and of the product of the project
Improves project management as well as the
quality of the product
Delivery of both high quality and high grade
of product
Quality is planned in, not inspected in
Investments in product quality improvement
must often be borne by the performing
organization
Deming Leadership, long-term company
position; continuous improvement;
participatory; zero defects
Japanese Similar to Deming
Juran Decrease cost of quality
Crosby Decrease cost of quality;
authoritarian; zero defects
Theory X Workers lazy, motivated by money
Theory Y Workers good and trustworthy

Customer satisfaction Understanding,
managing, and influencing needs so that
customer expectations are met or exceeded
Prevention over inspection The cost of avoiding
mistakes is much less than the cost of correcting
them
Management responsibility Success requires
participation of all members of the team, but it is
the responsibility of management to provide
resources needed
Processes within phases Plan/Do/Check/Act
cycle
Quality
Management
Plan
Quality
Metrics
Quality
Checklists
Process
Improvement
Plan
Project
Document
Updates
___________
_

Scope
Baseline
Stakeholder
Register
Cost
Performance
Baseline
Schedule
Baseline
Risk Register
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 8.1
5
Quality
PMBOK Guide, 4
th
Ed
Cost Benefit
Analysis
Cost of
Quality
Control
Charts
Benchmarkin
g
Design of
Experiments
Statistical
Sampling
Flowcharting
Proprietary
Quality
Management
Methodologie
s
Additional
Quality
Planning
Tools
____________

2
Planning
Organization
al Process
Assets
Updates
Change
Requests
Project
Management
Plan Updates
Project
Document
Updates
___________
_

Project
Management
Plan
Quality
Metrics
Work
Performance
Information
Quality
Control
Measuremen
ts
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 8.2
5
Quality
PMBOK Guide, 4
th
Ed
Plan Quality
and Perform
Quality
Control Tools
and
Techniques
Quality Audits
Process
Analysis
____________

3
Executing
What
Managerial audit function

How
Prepare and implement an organization QA
program
Tailor a practical program to meet
requirements

Why
Quality improvement
Increase effectiveness and efficiency

Project
Management
Plan
Quality
Metrics
Quality
Checklists
Work
Performance
Measuremen
ts
Approved
Change
Requests
Deliverables
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 8.3
5
Quality
PMBOK Guide, 4
th
Ed
Cause and
Effect
Diagrams
Control
Charts
Flowcharting
Histogram
Pareto Chart
Run Chart
Scatter
Diagram
Statistical
Sampling
Inspection
Approved
Change
Requests
Review
____________

4
Monitoring
& Control
Quality
Control
Measuremen
ts
Validated
Changes
Validated
Deliverables
Organization
al Process
Assets
Updates
Change
Requests
Project
Management
Plan Updates
Project
Document
Updates
___________
_

Rule of Seven Run of seven points toward
upper or lower control limit may indicate that
process is out of control
Assignable causes Variations may be caused
by differences in machines, workers overtime,
etc. Identify the root cause.

Graphic displays of the results, over time, of a
process; used to assess whether the process is
in control
Figure 8-7. Example of a Control Chart of Project Schedule Performance
Bills From
Shipper
Verify
OK
Prepare Pay
Authorization
Prepare Letter
of Dispute
Yes
No
Send to
Paying Office
Send to
Shipper
Figure 8-8. Sample Process Flowchart
Histogram, ordered by frequency of
occurrence, that shows how many results
were generated by type or category of
identified cause

Paretos Law A relatively small number of causes will
typically produce a large majority of the problems or defects
(80/20 rule)

F
i
g
u
r
e

8
-
9
.

P
a
r
e
t
o

D
i
a
g
r
a
m

(
C
h
a
r
t
)

Technical performance How many errors or
defects have been identified; how many remain
uncorrected

Cost and schedule performance How many
activities per period were completed with
significant variances
Using mathematical techniques to forecast future
outcomes based on historical results
Prevention Keeping
errors out of the process
Inspection Keeping the
errors out of the hands of
the customer
Attribute sampling The result
conforms or it does not
Variables sampling The result
is rated on a continuous scale
that measures the degree of
conformity
Special causes Unusual events
Random causes Normal process
variation

Tolerances The result is
acceptable if it falls with the
range specified by the tolerance
Control limits The process is in
control if the result falls within
the control limits
Standard deviation Square root of the variance
Mean () Average

Variance Sum of squared differences between mean
and each value, (x- )2, divided by number of samples
less one or (9-1=8)

Upper control limit (UCL) Three standard deviations
0 -1 -2 -3 +1 +2 +3
2 standard deviations (+/- 1) = 68.26 %

Item Weight (x) (x-)2
1 4.9 0.02778
2 5.0 0.00444
3 5.1 0.00111
4 5.2 0.01778
5 5.3 0.05444
6 5.5 0.18778
7 4.7 0.13444
8 4.8 0.07111
9 5.1 0.00111

Total 45.6 0.50000
Mean () = 45.6 / 9 = 5.066; (rounded to 5.07)

Variance Sum of squared differences between mean
and each value, (x- )2, divided by number of samples
less one or (9-1=8); thus 0.5 / 8 = 0.0625

Standard deviation Square root of the variance; thus
0.0625 = 0.25
Upper control limit (UCL) = Three standard deviations;
thus 3(0.25) + (or 5.07) = 5.82.
The lower control limit (LCL) equals 4.32 or 5.07 - 3(0.25).
Chapter 9
9.1 Develop Human Resource Plan
9.2 Acquire Project Team
9.3 Develop Project Team
9.4 Manage Project Team
Chapter 9
Project Human Resource Management includes the
processes that organize and manage the project team.
The project team is comprised of the people who have
assigned roles and responsibilities for completing the
project. While it is common to speak of roles and
responsibilities being assigned, team members should be
involved in much of the projects planning and decision-
making.
Early involvement of team members adds expertise
during the planning process and strengthens
commitment to the project.
The type and number of project team members can often
change as the project progresses. Project team members
can be referred to as the projects staff.
Activity
Resource
Requirement
s
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 9.1
PMBOK Guide, 4
th
Ed
Organizationa
l Charts and
Position
Descriptions
Networking
Organizationa
l Theory
____________
Human
Resource
Plan
___________
_

2
Planning
6
Human
Resource
Select techniques that are appropriate for
personal and organizational relationships that are
temporary and new
The nature and number of project stakeholders
will often change as the project moves from
phase to phase. Choose techniques that are
appropriate to the current needs of the project
Team must be sufficiently aware of HR
administrative requirements to ensure
compliance
Senior Designers
0
25
50
75
100
125
150
175
200
225
250
275
300
9 16 23 30 6 13 20 27 6 13 20 27 3 10 17 24 1 8 15 22
Resource Usage Staff Hours
R
e
s
o
u
r
c
e

U
s
a
g
e

Jan Feb Mar Apr May
Type PM Authority
Functional None
Project Expediter Low
Project Coordinator Low
Weak Matrix Low > Medium
Strong Matrix Medium > High
Projectized High

Specialists grouped by function
Difficult to cross functional lines
Barriers exist on horizontal information flow
Functional emphasis loyalties may impede
completion

Multiple-command system
Individuals from functional areas assigned on
temporary basis to PM
Individuals return to functional organization
Careful plans and procedures needed to minimize
effects of dual reporting

Advantages
Visible objectives
Efficient utilization
of resources
Better co-ordination
Better information
flow
Retention of home
after project
Disadvantages
More than one boss
Complex structure
to control
Differing priorities
of PM and FM
Duplication of effort
Conflict

Emerges from functional when latter impedes
progress
Line of authority is the PM
Uncertainty where to go on completion of project
Tendency to retain assigned personnel too long
FMs feel threatened as people are removed from their
areas

Extrinsic (External)
Salary
Work conditions
Status

Intrinsic (Internal)
Achievement
Responsibility
Advancement

Rewards given timely and in public

Autocratic

Strength
Mature, well defined projects
Quick decisions required

Weakness
Limits staff buy-in leading to low morale
Possible arbitrary decisions
Laissez-Fair

Strength
Innovative projects
High morale of self-motivated staff

Weakness
Confusion about objectives of the project
Inability to make decisions
Physiological Need for biological maintenance
(food, water etc.)
Safety Need for security, protection and
stability
Social Need for love, affection, sense of
belonging
Self-Actualization Need to grow and use
abilities to the fullest and most creative extent
Esteem - Need for respect, prestige, recognition,
sense of competence
Higher Order Needs
Lower Order Needs
Theory X
Traditional view of management; top-down
Managers: Control the people
Workers: Viewed as inherently self-centered,
lazy

Theory Y
Workers: Viewed as willing and eager to
accept responsibility
Managers: Create environment that aids
workers in achieving goals
Hygiene
Pay; working conditions; bosss attitude
Poor hygiene factors negatively impact
motivation
Good hygiene factors increase motivation

Motivators
Positive motivation leads to achievement and
self-actualization
Workers have a sense of personal growth and
responsibility
Staff Acquisition
Timetable
Release Criteria
Training Needs
Recognition and Reward
Compliance
Salary
Project
Management
Plan
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 9.2
Project Staff
Assignments
Resource
Calendars
Project
Management
Plan Updates
___________
_

Pre-
Assignment
Negotiation
Acquisition
Virtual Teams
____________
6
Human
Resource
PMBOK Guide, 4
th
Ed
3
Executing
Project Staff
Assignments
Project
Management
Plan
Resource
Calendars
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 9.3
Team
Performance
Assessments
Enterprise
Environment
al Factors
Updates
___________
_

Interpersonal
Skills
Training
Team-
Building
Activities
Ground Rules
Co-Location
Recognition
and Rewards
____________
6
Human
Resource
PMBOK Guide, 4
th
Ed
3
Executing
Project Staff
Assignments
Project
Management
Plan
Team
Performance
Assessments
Performance
Reports
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 9.4
Enterprise
Environment
al Factors
Updates
Organization
al Process
Assets
Updates
Change
Requests
Project
Management
Plan Updates
___________
_

Observations
and
Conversation
s
Project
Performance
Appraisals
Conflict
Management
Issue Log
Interpersonal
Skills
____________
6
Human
Resource
PMBOK Guide, 4
th
Ed
4
Monitoring
& Control
____________
Chapter 10
10.1 Identify Stakeholders
10.2 Plan Communications
10.3 Distribute Information
10.4 Manage Stakeholder Expectations
10.5 Report Performance
Chapter 10
Communications Management is the Knowledge Area that
employs the processes required to ensure timely and
appropriate generation, collection, distribution, storage,
retrieval, and ultimate disposition of project information.
The Project Communications Management processes
provide the critical links among people and information
that are necessary for successful communications.
Project managers can spend an inordinate amount of time
communicating with the project team, stakeholders,
customer, and sponsor.
Everyone involved in the project should understand how
communications affect the project as a whole.
Project
Charter
Procurement
Documents
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 10.1
Stakeholder
Register
Stakeholder
Management
Strategy
___________
_

Stakeholder
Analysis
Expert
Judgment
____________
7
Human
Resource
PMBOK Guide, 4
th
Ed
1
Initiating
A method for developing a systematic and logical
view of the information needs of the stakeholders
and of the sources for meeting those needs
Stakeholder
Register
Stakeholder
Management
Strategy
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 10.2
Communicati
on
Management
Plan
Project
Document
Updates
___________
_

Communicati
on
Requirements
Analysis
Communicati
on
Technology
Communicati
on Model
Communicati
on Methods
____________
7
Human
Resource
PMBOK Guide, 4
th
Ed
2
Planning
Collection and filing structure Methods used to gather,
update, and store various types of information
Distribution structure Specifies to whom information
will flow and what method will be used to distribute
various types of information.
Description of information to be distributed Includes
format, content, level of detail, and conventions and
definitions to be used
Production schedules Show each type of
communication
Methods for accessing information
Method of updating and refining the communication
management plan as the project progresses
Project
Management
Plan
Performance
Reports
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 10.3
Organization
al Process
Assets
Updates
___________
_

Communicati
on Methods
Information
Distribution
Tools
___________
7
Human
Resource
PMBOK Guide, 4
th
Ed
3
Executing
Stakeholder
Register
Stakeholder
Management
Strategy
Project
Management
Plan
Issue Log
Change Log
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 10.4
Organization
al Process
Assets
Updates
Change
Requests
Project
Management
Plan Updates
Project
Document
Updates
___________
_

Communicati
on Methods
Interpersonal
Skills
Management
Skills
___________
7
Human
Resource
PMBOK Guide, 4
th
Ed
4
Monitoring
& Control
Project
Management
Plan
Work
Performance
Information
Work
Performance
Measuremen
ts
Budget
Forecasts
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 10.5
Performance
Reports
Organization
al Process
Assets
Updates
Change
Requests
___________
_

Variance
Analysis
Forecasting
Methods
Communicati
on Methods
Reporting
Systems
___________
7
Human
Resource
PMBOK Guide, 4
th
Ed
4
Monitoring
& Control
Chapter 11
11.1 Plan Risk Management
11.2 Identify Risks
11.3 Perform Qualitative Analysis
11.4 Perform Quantitative Analysis
11.5 Plan Risk Responses
11.6 Monitor and Control Risks
Chapter 11
Project Risk Management includes the
processes concerned with conducting risk
management planning, identification,
analysis, responses, and monitoring and
control on a project; most of these
processes are updated throughout the
project.
The objectives of Project Risk Management
are to increase the probability and impact of
positive events, and decrease the probability
and impact of events adverse to the project.
Project
Scope
Statement
Cost
Management
Plan
Schedule
Management
Plan
Communicati
ons
Management
Plan
Enterprise
Environment
al Factors
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 11.1
Risk
Management
Plan
___________
_

Planning
Meetings and
Analysis
___________
PMBOK Guide, 4
th
Ed
8
Risk
2
Planning
Risk
Management
Plan
Activity Cost
Estimates
Activity
Duration
Estimates
Scope
Baseline
Stakeholder
Register
Cost
Management
Plan
Schedule
Management
Plan
Quality
Management
Plan
Project
Documents
Enterprise
Environmental
Factors
Organizational
Process
Assets
____________

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 11.2
Risk Register
___________
_

PMBOK Guide, 4
th
Ed
8
Risk
2
Planning
Documentatio
n Reviews
Information
Gathering
Techniques
Checklist
Analysis
Assumptions
Analysis
Diagramming
Techniques
SWOT
Analysis
Expert
Judgment
___________
Risk Events or consequences that have the
probability of occurring during a project and that
are measured by their impacts on the project

Components
Risk event
Risk event probability
Risk outcome or consequence
(Amount at stake)
Risk event status
(Probability x amount at stake)

Methodology defines approaches, tools, and data sources
that might be used to perform risk management on the project
Roles & Responsibilities defines the lead, support, and risk
management team membership for each type of action in the
plan
Budget - $
Timing Describes how often the risk management process
will be performed throughout the project life cycle.
Scoring and interpretation methods used for performing
qualitative and quantitative risk analysis
Thresholds the target against which the project team
measures the effectiveness of the the risk response plan
execution
Reporting formats - defines how the results of the risk
management processes will be documented, analyzed, and
communicated to the project team and stakeholders
Tracking Documents all facets of risk activities and how the
risk process will be audited
Types
Business (profit or loss) and insurable (loss)
Known known Total certainty
Known unknown Degree of uncertainty
Unknown unknown Total uncertainty

Categories
External, unpredictable Regulatory, etc.
External, predictable Market risks
Internal, non-technical Management
Technical Design
Legal Contractual

Risk Register
Risk
Management
Plan
Project
Scope
Statement
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 11.3
Risk Register
Updates
___________
_

PMBOK Guide, 4
th
Ed
8
Risk
2
Planning
Risk
Probability
and Impact
Assessment
Probability
and Impact
Matrix
Risk Data
Quality
Assessment
Risk
Categorizatio
n
Risk Urgency
Assessment
Expert
Judgment
___________
Risk Register
Risk
Management
Plan
Cost
Management
Plan
Schedule
Management
Plan
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 11.4
Risk Register
Updates
___________
_

PMBOK Guide, 4
th
Ed
8
Risk
2
Planning
Data
Gathering
and
Representatio
n Techniques
Quantitative
Risk Analysis
and Modeling
Techniques
Expert
Judgment
___________
Strengths Weaknesses
Opportunities
Threats
Internal
External
Build On
Eliminate or Reduce
Mitigate Exploit
Probability
Likelihood of occurrence. (Number of occurrences of an
event divided by the total number of all possible
occurrences)

Statistics
Mean Average of the values of events
Mode Value which occurs most often
Median Value in middle of the range of ordered values

Variance
Average of the squared deviations from the mean
Standard deviation Square Root of the Variance
Range Values between upper & lower limits

Interviewing project stakeholders and
subject-matter experts to quantify the
probability and consequences of risks on
project objectives
The information needed depends upon the
type of probability distributions that will be
used
Probability distribution (Method of
moments) Calculates project range
estimates
Expected monetary value Probability
times cost
Three values low (a) , most likely (m),
and high (b) with probabilities for each;
used to calculate expected value
Sensitivity Analysis determines which risks
have the most potential impact on the project
Decision Tree Analysis use of a diagram
that describes a decision under consideration
and the implications of choosing one or
another of the available alternatives
Incorporates probabilities of risks and the costs or rewards
of each logical path of events and future decisions
Solving the decision tree indicates which decision yields the
greatest expected value when all the uncertain implications,
costs, rewards, and subsequent decisions are quantified
Three values with probabilities; used to
calculate expected values
Optimistic
Most likely
Pessimistic

e.g. Optimistic 0.2 x $ 100 K = $ 20 K
Most Likely 0.6 x $ 130 K = $ 78 K
Pessimistic 0.2 x $ 180 K = $ 36 K
Expected Value = $ 134 K

Project A
Project B
0.5
0.5
0.6
0.4
0.7
0.3
Success

Failure
Success
Failure
What is the probability that Project B will
be selected and will be successful?
Example
Answer: 0.35

Decide not to pursue
$ 0
Production Successful
Probability = 0.7
High Demand
Probability =0.3
$ 550,000

Production Unsuccessful
Probability = 0.3
Terminate =
-
$ 200,000
Decide to pursue

Low Demand
Probability = 0.7
-
$100,000

Expect Value of Pursuing Project A
0.7 x 0.3 x $ 550,000 = $ 115,500
0.7 x 0.7 x
$ 100,000 =
$ 49,000
0.3 x
$ 200,000 =
$ 60,000
$ 6,500

The expected value of Project A is $6,500. The expected value of
not preceding is $0. Preceding is the lucrative option.
Simulation Uses a model or copy of a system
to analyze the behavior or performance of the
system

Monte Carlo
Perform project many times to provide a
statistical distribution of calculated results
Uses results to quantify the risk of various
schedule alternatives, different project
strategies, different paths through the network,
and individual activities
Can be used to assess the range of possible
cost options

Risk Register
Risk
Management
Plan
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 11.5
Risk Register
Updates
Risk Related
Contract
Decisions
Project
Management
Plan Updates
Project
Document
Updates
___________
_

PMBOK Guide, 4
th
Ed
8
Risk
2
Planning
Strategies for
Negative
Risks or
Threats
Strategies for
Positive
Risks or
Opportunities
Contingent
Response
Strategies
Expert
Judgment
___________
Hazard Prevention
Likelihood Reduction
Risk Avoidance
Risk Transfer
Contingency Planning
Risk Exposure
Confidence of the risk assessment
Compound Risks
The number of Risks
Cost of Action
Risk Reduction Leverage Cost Benefit
Results from a Monte Carlo Simulation of a Project Schedule
Days After Project Start
0
10
20
30
40
50
60
70
80
90
100
110 120 130 140 150 160 170 180 190 200
C
u
m
u
l
a
t
i
v
e

P
r
o
b
a
b
i
l
i
t
y

This S-curve shows the cumulative probability of project completion by a particular date. For example, the
intersection of the dashed ones shows that there is a 50 percent probability that the project will be finished
within 145 days of its start. Project completion dates toward the left have higher risk while those toward the
right have lower risk.
Mitigation
(Corrective action)
Avoidance
(Prevention)
Acceptance
(Accept consequences)
Transference
(Shift Responsibility)
Spectrum of risk
CPPC CPFF CPIF FPI FFP
Cost Plus Fixed
Fee (CPFF)
Cost Plus
Incentive Fee
(CPIF)
Variable Sharing Ratio
Firm Fixed Price
0 100
Cost Plus
Percentage of
Costs (CPPC)
100 0
Fixed Price
Incentive (FPI)
Seller Risk
LOW HIGH
Buyer Risk
HIGH LOW
Direct property damage Insurance of principal
assets, e.g., equipment, materials, property, auto
Indirect consequential loss Indirect loss suffered
by third party, resulting from actions by the
contractor
Legal liability Design errors, public bodily injury,
project-performance failure
Personnel Bodily injury
Wrap-up insurance All the above integrated into
one agreement usually provided by the owner

Risk Register
Risk
Management
Plan
Work
Performance
Information
Performance
Reports
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 11.6
Risk Register
Updates
Organization
al Process
Assets
Updates
Change
Requests
Project
Management
Plan Updates
Project
Document
Updates
___________
_
PMBOK Guide, 4
th
Ed
8
Risk
Risk
Reassessme
nt
Risk Audits
Variance and
Trend
Analysis
Technical
Performance
Measurement
Reserve
Analysis
Status
Meetings
___________
4
Monitoring
& Control
Chapter 12
12.1 Plan Procurements
12.2 Conduct Procurements
12.3 Administer Procurements
12.4 Close Procurements
Chapter 12
Project Procurement Management includes the processes to
purchase or acquire the products, services, or results
needed from outside the project team to perform the work.
This chapter presents two perspectives of procurement. The
organization can be either the buyer or seller of the product,
service, or results under a contract.
Project Procurement Management includes the contract
management and change control processes required to
administer contracts or purchase orders issued by
authorized project team members.
Project Procurement Management also includes
administering any contract issued by an outside
organization (the buyer) that is acquiring the project from
the performing organization (the seller), and administering
contractual obligations placed on the project team by the
contract.
Buyer The customer
Seller Contractor; vendor; supplier external
to the performing organization
The terms and conditions of the contract
become key inputs to many of the sellers
processes
Scope Baseline
Requirements
Documentation
Teaming
Agreements
Risk Register
Risk Related
Contract
Decisions
Activity
Resource
Requirements
Project
Schedule
Activity Cost
Estimates
Cost
Performance
Baseline
Enterprise
Environmental
Factors
Organizational
Process Assets
____________

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 12.1
PMBOK Guide, 4
th
Ed
Make-or-Buy
Analysis
Expert
Judgment
Contract
Types
___________
9
Procurement
2
Planning
Procurement
Management
Plan
Procurement
Statements
of Work
Make-or-Buy
Decisions
Procurement
Documents
Source
Selection
Criteria
Change
Requests
___________
_
Project
Management
Plan
Procurement
Documents
Source
Selection
Criteria
Qualified
Seller List
Seller
Proposals
Project
Documents
Make-or-Buy
Decisions
Teaming
Agreements
Organization
al Process
Assets
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 12.2
PMBOK Guide, 4
th
Ed
Bidder
Conferences
Proposal
Evaluation
Techniques
Independent
Estimates
Expert
Judgment
Advertising
Internet
Search
Procurement
Negotiations
___________
9
Procurement
Selected
Sellers
Procurement
Contract
Award
Resource
Calendars
Change
Requests
Project
Management
Plan Updates
Project
Document
Updates
___________
_
3
Executing
Request for Proposal (RFP)
Request for a price and a proposed
method of meeting requirements
Often used when both price and
technical evaluation determine winners

Request for Quote (RFQ)
Materials or services
Price-driven
Warranty

Implied Warranty
Act of sale implies:
General fitness for use
Fitness for special uses

Express Warranty
Beyond the mere act of the sale
Seller makes specific representations
Procurement
Documents
Project
Management
Plan
Contract
Performance
Reports
Approved
Change
Requests
Work
Performance
Information
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 12.3
PMBOK Guide, 4
th
Ed
Contract
Change
Control
System
Procurement
Performance
Reviews
Inspections
and Audits
Performance
Reporting
Payment
Systems
Claims
Administratio
n
Records
Management
System
___________
9
Procurement
Procurement
Documentati
on
Organization
al Process
Assets
Updates
Change
Requests
Project
Management
Plan Updates
___________
_
4
Monitoring
& Control
Procurement
Management
Plan
Procurement
Documentati
on
___________
_

Inputs
1
Tools and
Techniques
2
Outputs
3
Process 12.4
PMBOK Guide, 4
th
Ed
Procurement
Audits
Negotiated
Settlements
Records
Management
System
___________
9
Procurement
Closed
Procurement
s
Organization
al Process
Assets
Updates
___________
_
5
Closing
Vision and Purpose
Persons to Whom the Code Applies
Structure of the Code 4 Values
Conduct Aspirational and Mandatory

We are committed to do what is right and
honorable.
Describes Expectations and Mandatory
Behaviors.
To instill confidence in project management
profession and help become a better
practitioner.
Advance our profession, individually and
collectively.
Serve as catalyst for others to study, deliberate
and write about ethics and values.

All PMI Members
Non-members meeting any of the following
criteria:
Non-Members holding PMI Certification
Who apply to commence PMI certification process
Who serves PMI in a volunteer capacity
1. Responsibility
2. Respect
3. Fairness
4. Honesty
Aspirational Conduct
Conduct we strive to uphold as practitioners.
Not easily measured
Expectation as professionals
Not an option
Mandatory Conduct
Establish firm requirements
Limit or prohibit practitioner behavior
Non-adherance causes disciplinary action by
PMIs Ethics Review Committee

Responsibility is our duty to take
ownership for the decisions we
make or fail to make, the actions
we take or fail to take, and the
consequences that result.
As practitioners in the global project management community:
2.2.1 We make decisions and take actions based on the best interests
of society, public safety, and the environment.
2.2.2 We accept only those assignments that are consistent with our
background, experience, skills, and qualifications.
2.2.3 We fulfill the commitments that we undertake we do what we
say we will do.
2.2.4 When we make errors or omissions, we take ownership and make
corrections promptly. When we discover errors or omissions caused
by others, we communicate them to the appropriate body as soon they
are discovered. We accept accountability for any issues resulting from
our errors or omissions and any resulting consequences.
2.2.5 We protect proprietary or confidential information that has been
entrusted to us.
2.2.6 We uphold this Code and hold each other accountable to it.
As practitioners in the global project management community, we require
the following of ourselves and our fellow practitioners:
Regulations and Legal Requirements
2.3.1 We inform ourselves and uphold the policies, rules, regulations
and laws that govern our work, professional, and volunteer activities.
2.3.2 We report unethical or illegal conduct to appropriate
management and, if necessary, to those affected by the conduct.
Ethics Complaints
2.3.3 We bring violations of this Code to the attention of the
appropriate body for resolution.
2.3.4 We only file ethics complaints when they are substantiated by
facts.
2.3.5 We pursue disciplinary action against an individual who
retaliates against a person raising ethics concerns.

Respect is our duty to show a high regard for
ourselves, others, and the resources entrusted to us.
Resources entrusted to us may include people,
money, reputation, the safety of others, and natural
or environmental resources.

An environment of respect engenders trust,
confidence, and performance excellence by
fostering mutual cooperation an environment
where diverse perspectives and views are
encouraged and valued.
As practitioners in the global project management
community:
3.2.1 We inform ourselves about the norms and
customs of others and avoid engaging in behaviors
they might consider disrespectful.
3.2.2 We listen to others points of view, seeking to
understand them.
3.2.3 We approach directly those persons with whom
we have a conflict or disagreement.
3.2.4 We conduct ourselves in a professional
manner, even when it is not reciprocated.
community, we require the following of ourselves
and our fellow practitioners:
3.3.1 We negotiate in good faith.
3.3.2 We do not exercise the power of our expertise
or position to influence the decisions or actions of
others in order to benefit personally at their expense.
3.3.3 We do not act in an abusive manner toward
Fairness is our duty to make
decisions and act impartially and
objectively. Our conduct must be
free from competing self interest,
prejudice, and favoritism.
community:
4.2.1 We demonstrate transparency in our decision-
making process.
4.2.2 We constantly reexamine our impartiality and
objectivity, taking corrective action as appropriate.
4.2.3 We provide equal access to information to
those who are authorized to have that information.
4.2.4 We make opportunities equally available to
qualified candidates.
As practitioners in the global project management community, we
require the following of ourselves and our fellow practitioners:
Conflict of Interest Situations
4.3.1 We proactively and fully disclose any real or potential
conflicts of interest to the appropriate stakeholders.
4.3.2 When we realize that we have a real or potential conflict of
interest, we refrain from engaging in the decision-making
process or otherwise attempting to influence outcomes, unless
or until: we have made full disclosure to the affected
stakeholders; we have an approved mitigation plan; and we
have obtained the consent of the stakeholders to proceed.
Favoritism and Discrimination
4.3.3 We do not hire or fire, reward or punish, or award or deny
contracts based on personal considerations, including but not
limited to, favoritism, nepotism, or bribery.
4.3.4 We do not discriminate against others based on, but not
limited to, gender, race, age, religion, disability, nationality, or
sexual orientation.
4.3.5 We apply the rules of the organization (employer, Project
Management Institute, or other group) without favoritism or
prejudice.
Honesty is our duty to understand
the truth and act in a truthful
manner both in our
communications and in our
conduct.
community:
5.2.1 We earnestly seek to understand the truth.
5.2.2 We are truthful in our communications and in
our conduct.
5.2.3 We provide accurate information in a timely
manner.
5.2.4 We make commitments and promises, implied
or explicit, in good faith.
5.2.5 We strive to create an environment in which
others feel safe to tell the truth.
As practitioners in the global project management community, we
require the following of ourselves and our fellow practitioners:
5.3.1 We do not engage in or condone behavior that is designed
to deceive others, including but not limited to, making
misleading or false statements, stating half-truths, providing
information out of context or withholding information that, if
known, would render our statements as misleading or
incomplete.
5.3.2 We do not engage in dishonest behavior with the intention
of personal gain or at the expense of another.
Abusive Manner. Conduct that results in physical harm or
creates intense feelings of fear, humiliation, manipulation, or
exploitation in another person.
Conflict of Interest. A situation that arises when a practitioner
of project management is faced with making a decision or
doing some act that will benefit the practitioner or another
person or organization to which the practitioner owes a duty of
loyalty and at the same time will harm another person or
organization to which the practitioner owes a similar duty of
loyalty. The only way practitioners can resolve conflicting
duties is to disclose the conflict to those affected and allow
them to make the decision about how the practitioner should
proceed.
Duty of Loyalty. A persons responsibility, legal or moral, to
promote the best interest of an organization or other person
with whom they are affiliated.
Project Management Institute [PMI]. The totality of the Project
Management Institute, including its committees, groups, and
chartered components such as chapters, colleges, and specific
interest groups.
PMI Member. A person who has joined the Project Management
Institute as a member.
PMI-Sponsored Activities. Activities that include, but are not
limited to, participation on a PMI Member Advisory Group, PMI
standard development team, or another PMI working group or
committee. This also includes activities engaged in under the
auspices of a chartered PMI component organizationwhether
it is in a leadership role in the component or another type of
component educational activity or event.
Practitioner. A person engaged in an activity that contributes to
the management of a project, portfolio, or program, as part of
the project management profession.
PMI Volunteer. A person who participates in PMI-sponsored
activities, whether a member of the Project Management
Institute or not.
Project Management Institute (PMI)
Registered Education Provider (REP)

SysComp International (Pvt.) Ltd.
House No. 374, Street 13, F-10/2
Islamabad, 44000, Pakistan
TEL: +92-51-2294709 FAX: +92-51-2294911
E-Mail: info@syscompk.com Web:
www.syscompk.com
Project Management Institute

Appendix A
Appendix A
The End
Time
Scope
Quality
Integration
Communication
Human
Resource
Risk
Procurement
Cost
Initiating
Planning
Monitoring
and Control
Executing
Closing
Cycle Name
Monitoring
& Control
Company
LOGO
Step 1
project
date
Step 2
project
date
Step 3
project
date
Block Diagram
TEXT TEXT TEXT TEXT
TEXT TEXT TEXT TEXT
Table
TEXT TEXT TEXT TEXT TEXT
Title A
Title B
Title C
Title D
Title E
Title F
3-D Pie Chart
TEXT
TEXT
TEXT
TEXT
TEXT
TEXT
Marketing Diagram
Title
TEXT TEXT TEXT TEXT
1960 1970 1950
1990 2000 1980
2020 2030 2010
Inputs
Project
Statement of
Work
Business
Case
Contract
Enterprise
Environment
al Factors
Organization
al Process
Assets

Tools &
Technique
s
Expert
Judgment
Outputs
Project
Charter
Develop Project Charter
Figure 4.2.

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