Manager's Guide 4th Ed 09

Company
LOGO
SysComp International (Pvt.)

Ltd.
anagers
Guide to Project Managem
th
Based
on
PMBOK
Guide,
4
Edition
PMBOK Guide
Company
LOGO
Ref:
Trainer
Company
LOGO
Suhail Iqbal
About PMP
ABOUT
PMP
PMP Credential
Handbook
Company
LOGO
Ref:
PMP Eligibility Requirements
About Questions in PMP

Exam
PMP Exam Fee
CCR Program
CCR Cycle = 3 years
PMP Renewal
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)
PDU Categories
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
Category 1
Formal Academic
1 hour of degree credit
of 15-week semester
Education
= 15 PDUs
1 quarter semester hour (10-weeks)
= 10 PDUs
Each course to be applied on separate CCR
Activity Reporting Form
Category 2A
Professional Activities
Category 2B
Self Directed Learning
Activities
Category 3
REPs/PMI Components
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
Category 4
Other Education Providers
One Contact Hour = One PDU

Can be earned from any education provider
Relevant Project or Program Management
courses
Category 5
Volunteer Service
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
Category 5
Volunteer Service - Examples
Maximum PDUs and

Transfer
Maximum PDUs from Categories possible
PDU Transfer allowed
Only PDUs earned in 3rd year of CCR Cycle

can be transferred
Section I
SECTION I
THE
PROJECT MANAGEMENT
FRAMEWORK
The Structure
Section
SectionII--The
TheProject
ProjectManagement
ManagementFramework
Framework
Section
SectionIIIIThe
TheStandard
Standardfor
forProject
ProjectManagement
Managementof
ofaaProject
Project
Section
SectionIII
IIIThe
TheProject
ProjectManagement
ManagementKnowledge
KnowledgeAreas
Areas
Professional
ProfessionalResponsibility
Responsibilityand
andPMP
PMPExam
ExamGuidelines
Guidelines
Company
LOGO
The PM Framework
Introduction
Project Lifecycle
and Organization
Evaluation
CHAPTER 1
INTRODUCTION
Chapter 1 - Contents
INTRODUCTION
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
Topic 1.1
Purpose of the PMBOK

Guide
PURPOSE
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
Purpose of the PMBOK

Guide
PURPOSE
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.
What is a Project?
Topic 1.2
PROJECT
A project is a temporary
endeavor undertaken to
create a unique product,
service or result.
What is a Project?
Topic 1.2
A PROJECT CAN CREATE:
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).
What is a Project?
Topic 1.2
EXAMPLES OF PROJECTS
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.
What is Project Management?

Topic 1.3
PROJECT MANAGEMENT
Application of knowledge, skills,

tools, and techniques to project
activities to meet the project
requirements.
Accomplished through the appropriate
application and integration of 42
logically grouped project
management processes comprising
the 5 process groups.

Topic 1.3
PROJECT MANAGEMENT PROCESS GROUPS
Project Management Process Groups

Planning
Executing
PROJECT
Initiating
Monitoring
and Control
Closing

Topic 1.3
Initiating
Process
Group
Planning
Process
Group
Executing
Process
Group
Monitoring
and
Controlling
Process
Group
Closing
Process
Group

Topic 1.3
Initiating
Closing
Monitoring
and
Controlling
Planning
Executing

Topic 1.3
PROJECT MANAGEMENT
PROCESS GROUPS
1.0 Initiating a Project

2.0 Planning a Project
3.0 Executing a Project
4.0 Monitoring & Controlling
a Project
5.0 Closing a Project
1.Project
scope
achieved
1.Project
1.Project
1.Project
aligned
scope
tracked
agreed
with
and
1.Project
1.Project
1.Project
1.Project
aligned
scope
scope
tracked
agreed
with
achieved
and status
status
organizational
communicated
objectives
to
2.Project
stakeholders
2.Project
schedule
organizational
communicated
objectives
to
2.Project
2.Project
schedule
stakeholders
and
stakeholders
customer
expectations
managed
approved
and
stakeholders
customer needs
needs
approved
expectations
managed
2.Preliminary
2.Project
change
scope
is
3.Human
resources
3.Cost
budget
approved
2.Preliminary
2.Project
change
scope
is
3.Cost
3.Human
budget
resources
approved
statement
managed
includes
managed
statement
managed
includes
4.Project
team
identified
managed
4.Project
team
identified
stakeholder
needs
and
3.Quality
is
monitored
and
stakeholder
and
4.Quality
against
with
roles
and
3.Quality
isneeds
monitored
and
4.Quality
with
rolesmanaged
managed
and
against
expectations
controlled
expectations
plan
responsibilities
controlled agreed
responsibilities
plan
agreed
3.High-level
risks,
4.Risk
monitored
and
3.High-level
risks,
5.Material
5.Communications
activities
4.Risk is
isresources
monitored
and
5.Communications
5.Material
resources
activities
assumptions
controlled
assumptions
are
managed
agreed
controlledare
agreed
managed
understood
1.Project
outcomes
understood
1.Project
outcomes
5.Project
team
6.Quality
management
5.Project
team is
is managed
managed
6.Quality
management
accepted
4.Stakeholders
identified
accepted
4.Stakeholders
identified
process
6.Contracts
established
administered
process
6.Contracts
established
administered
and
their
needs
2.Project
resources
and
their
needs
2.Project
resources
7.Risk
response
plan
7.Risk
response
plan
understood
released
understood
released
approved
approved
5.Project
charter
approved
3.Stakeholder
perceptions
5.Project
charter
approved
3.Stakeholder
perceptions
8.Integrated
change
control
8.Integrated
change
control
measured
and
analyzed
measured
and analyzed
processes
defined
processes
defined
4.Project
closed
4.Project formally
formally
9.Procurement
plan
9.Procurement
plan closed
approved
approved
10.Project
10.Project plan
plan approved
approved

Topic 1.3
Integration
PROJECT MANAGEMENT
KNOWLEDGE AREAS
Scope
Procurement
Time
Risk
Cost
Quality
Communication
Human
Resource

Topic 1.3
MANAGING A PROJECT TYPICALLY INCLUDES:
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
POTENTIAL FOR CHANGE
Project management plan is iterative.

Goes through progressive elaboration throughout
project life cycle.
PROGRESSIVE ELABORATION
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.
Project, Program and Portfolio

Topic 1.4
RELATIONSHIPS
In mature organizations, project management is

governed by program and portfolio management.
Organizational strategies and priorities
Organizations Strategic Plan
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
Portfolio, Program, and Project

Management Interactions
Figure 1-1
Portfolio, Program, and Project

Management Interactions
Reference:
Reference: Figure
Figure 1-1.
1-1.
th
PMBOK Guide, 4 th Ed
Topic 1.4.1
PORTFOLIO
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
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.
Program Management
Topic 1.4.2
PROGRAM
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.
Program Management
Topic 1.4.2
PROGRAM MANAGEMENT
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.
Program Management
Topic 1.4.2
PROJECT INTERDEPENDENCIES
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 and Strategic

Planning
STRATEGIC
PLANNING
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
Projects and Strategic

Planning
GOALS OF PORTFOLIO
MANAGEMENT
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
Topic 1.4.4
Project Management Office

PMO
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

Topic 1.4.4
PMO
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
PRIMARY FUNCTION OF A PMO
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.
Projects vs. Operations

Topic 1.5
OPERATIONS
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.
PROJECTS
Though temporary in nature, projects can help

achieve the organizational goals when they are
aligned with the organizations strategy.

Topic 1.5
THE SIMILARITIES
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
THE DIFFERENCES
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
INTERSECTIONS
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
Role of a Project Manager

Topic 1.6
PROJECT MANAGER
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
CHARACTERISTICS
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
PERSONAL EFFECTIVENESS
Attitudes
Core personality characteristics
Leadership ability to guide the project
team while achieving project objectives
and balancing the project constraints.
Topic 1.7
Project Management Body of

Knowledge
PMBOK GUIDE
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
Project Management Body of

Knowledge
LIMITATIONS
Does not address all details of every topic.

Limited to single projects.
Limited to project management processes
generally recognized as good practice.
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)
Enterprise Environmental Factors

Topic 1.8
FACTORS
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.
Enterprise Environmental Factors

Topic 1.8
INCLUDES
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
CHAPTER 2
PROJECT LIFE CYCLE
AND ORGANIZATION
Chapter 2
PROJECT LIFE CYCLE

AND ORGANIZATION
2.1 The Project Life Cycle Overview

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

Topic 2.1
OVERVIEW
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)
Phase
Phase 11 Phase
Phase 22 Phase
Phase 33
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
CHARACTERISTICS
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.
GENERIC LIFE CYCLE STRUCTURE

Topic 2.1.1
STRUCTURE CHARACTERISTICS
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.
IMPACT OF VARIABLES
Project vs Product Life Cycle

Topic 2.1.2
RELATIONSHIPS
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
RELATIONSHIP EXAMPLES
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
RELATIONSHIP EXAMPLES
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.
Project Phases
Topic 2.1.3
DEFINITION
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.
Project Phases
Topic 2.1.3
PHASE STRUCTURE
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.
Project Phases
Topic 2.1.3
PHASE CHARACTERISTICS
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
Project Phases
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.
Project Phases
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.
Project Phases
Figure 2-3.
SINGLE-PHASE PROJECT
Project Phases
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
Project Phases
Topic 2.1.3
PHASE EXAMPLE
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.
Project Phases
Topic 2.1.3.1
PROJECT GOVERNANCE
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.
Project Phases
Topic 2.1.3.1
PROJECT GOVERNANCE
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
Project Phases
Topic 2.1.3.1
PROJECT GOVERNANCE
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.
Project Phases
Topic 2.1.3.1
PROJECT GOVERNANCE
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
Project Phases
Topic 2.1.3.2
PHASE-TO-PHASE
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.
Project Phases
Topic 2.1.3.2
RELATIONSHIP TYPES
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.
Project Phases
Topic 2.1.3.2
RELATIONSHIP TYPES
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.
Project Phases
Topic 2.1.3.2
RELATIONSHIP TYPES
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.
Project Phases
Figure 2-4.
THREE-PHASE PROJECT
Project Phases
Figure 2-5.
OVERLAPPING PHASES
Project Phases
Topic 2.1.3.2
FOR MULTI-PHASE PROJECTS
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.
Projects vs. Operational Work

Topic 2.2
PHASE-TO-PHASE
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
THE SIMILARITIES
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
THE DIFFERENCES
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
Stakeholders
Topic 2.3
WHO?
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.
Stakeholders
Topic 2.3
RESPONSIBILITY AND AUTHORITY
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.
Stakeholders
Topic 2.3
IDENTIFICATION
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.
Stakeholders
Topic 2.3
POSITIVE AND NEGATIVE
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.
Stakeholders
Topic 2.3
PROJECT MANAGERS RESPONSIBILITY
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.
The Project Stakeholders

Figure 2-6
Project Lifecycle and Organization
Project Stakeholders
Other
Stakeholders
Operations
Management
Sponsor
Functional
Managers
Portfolio
Manager
PM
Team
Program
Manager
Project Team
Project
Manager
Other
Project
Team
Members
Sellers /
Busniess
Partners
Customer
s / Users
PMO
The Project
Reference:
Reference: Figure
Figure 2-6.
2-6.
th
Stakeholders
Topic 2.3
CUSTOMER / USER
Customer
s / Users
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.
Stakeholders
Topic 2.3
SPONSOR
Sponsor
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.
Stakeholders
Topic 2.3
SPONSOR AND ISSUES
Sponsor
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.
Stakeholders
Topic 2.3
Portfolio
Manager
PORTFOLIO MANAGERS / PORTFOLIO REVIEW BOARD
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.
Stakeholders
Topic 2.3
PROGRAM MANAGERS
Program
Manager
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.
Stakeholders
Topic 2.3
PMO
PMO
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.
Stakeholders
Topic 2.3
PMO PROVIDES
PMO
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.
Stakeholders
Topic 2.3
PROJECT MANAGERS
Project
Manager
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.
Stakeholders
Topic 2.3
Project
Manager
PROJECT MANAGERS RESPONSIBILITIES
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.
Stakeholders
Topic 2.3
Project
Manager
PROJECT MANAGERS IMPORTANCE
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.
Stakeholders
Topic 2.3
PM
Team
PROJECT TEAM
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.
Stakeholders
Topic 2.3
Functional
Managers
FUNCTIONAL MANAGERS
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.
Stakeholders
Topic 2.3
Operations
Management
OPERATIONS MANAGEMENT
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.
Operations
Management
Topic 2.3
Stakeholders
Functional
Managers
OPERATIONS VS. FUNCTIONAL MANAGERS

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.
Stakeholders
Topic 2.3
Sellers /
Busniess
Partners
SELLERS / BUSINESS PARTNERS
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.
Stakeholders
Topic 2.3
Sellers /
Busniess
Partners
SELLERS / BUSINESS PARTNERS
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.
Organizational Influences
Topic 2.4
WHAT IS?
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
ORGANIZATIONAL CULTURE AND STYLES
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
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
ORGANIZATIONAL INFLUENCES ON PROJECTS
Organization
Structure
Project
Characteristics
Functional
Matrix
Weak
Matrix
Balanced
Matrix
Strong
Matrix
Projectized
High to
Almost
Total
High to
Almost
Total
Project Manager's
Authority
Little or
None
Limited
Low to
Moderate to
Moderate
High
Resource
Availability
Little or
None
Limited
Low to
Moderate to
Moderate
High
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
Reference:
Reference: Table
Table 2-1.
2-1.
th
Topic 2.4.2
ORGANIZATIONAL STRUCTURE - FUNCTIONAL

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.
Functional Organization
Figure 2-7
Project
Coordination
Chief Executive
Functional
Manager
Functional
Manager
Functional
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
(Green boxes represents staff engaged in

project activities)
Reference:
Reference: Figure
Figure 2-7.
2-7.
th
Topic 2.4.2
ORGANIZATIONAL STRUCTURE WEAK MATRIX

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.
Weak Matrix Organization

Figure 2-8
Chief Executive
Functional
Manager
Functional
Manager
Functional
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff

project activities)
Project
Coordination
Reference:
Reference: Figure
Figure 2-8.
2-8.
th
Topic 2.4.2
ORGANIZATIONAL STRUCTURE BALANCED MATRIX
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.
Balanced Matrix
Organization
Figure 2-9
Chief Executive
Functional
Manager
Functional
Manager
Functional
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Project
Manager
Staff
Staff

project activities)
Project
Coordination
Reference:
Reference: Figure
Figure 2-9.
2-9.
th
Topic 2.4.2
ORGANIZATIONAL STRUCTURE STRONG MATRIX
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.
Strong Matrix Organization

Figure 2-10
Chief Executive
Functional
Manager
Functional
Manager
Functional
Manager
Manager of
Project
Managers
Staff
Staff
Staff
Project
Manager
Staff
Staff
Staff
Project
Manager
Staff
Staff
Staff
Project
Manager

project activities)
Project
Coordination
Reference:
Reference: Figure
Figure 2-10.
2-10.
th
Topic 2.4.2
ORGANIZATIONAL STRUCTURE PROJECTIZED
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.
Projectized Organization
Figure 2-11
Project
Coordination
Chief Executive
Project
Manager
Project
Manager
Project
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff

project activities)
Reference:
Reference: Figure
Figure 2-11.
2-11.
th
Topic 2.4.2
ORGANIZATIONAL STRUCTURE COMPOSITE
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.
Composite Organization
Figure 2-12
Chief Executive
Functional
Manager
Project B
Coordination
Functional
Manager
Functional
Manager
Manager of
Project Managers
Staff
Staff
Staff
Project
Manager
Staff
Staff
Staff
Project
Manager
Staff
Project Project A
Coordination
Manager
Staff
Staff

project activities)
Reference:
Reference: Figure
Figure 2-12.
2-12.
th
Topic 2.4.3
Organizational Process Assets

WHAT ARE?
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

PROCESSES AND PROCEDURES
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

CORPORATE KNOWLEDGE BASES
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
SECTION II
THE STANDARD FOR
PROJECT MANAGEMENT
OF A PROJECT
Chapter 2
CHAPTER 3
PROJECT MANAGEMENT
PROCESSES
FOR A PROJECT
Chapter 3 - Overview
OVERVIEW
PROJECT MANAGEMENT
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
PROCESS
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
OPA AND EEF
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
PROJECT TEAM MUST:
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 PROCESSES
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
IN-SCOPE PROCESSES
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
GOOD PRACTICE
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
RESPONSIBILITY
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.
Chapter 2
PROJECT MANAGEMENT
PROCESSES
FOR A PROJECT
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
OVERVIEW
ADDRESSING PROCESS
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.
PM Process Groups
Figure 3-1
Reference:
Reference: Figure
Figure 3-1.
3-1.
th
Figure 3-2
Reference:
Reference: Figure
Figure 3-2.
3-2.
th
Reference:
Reference: Figure
Figure 3-3.
3-3.
th
Figure 3-4
Reference:
Reference: Figure
Figure 3-4.
3-4.
th
Initiating Process Group

Figure 3-5
Reference:
Reference: Figure
Figure 3-5.
3-5.
th
Section III
SECTION III
THE
PROJECT MANAGEMENT
KNOWLEDGE AREAS
Figure III-1
Data Flow Diagram

Legend
Reference:
Reference: Figure
Figure III-1.
III-1.
th
Chapter 4
CHAPTER 4
PROJECT INTEGRATION
MANAGEMENT
Chapter 4
INTEGRATION MANAGEMENT
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
Figure 4-1
Reference:
Reference: Figure
Figure 4.1.
4.1.
th
Project Charter
WHAT IS?
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
1 1
Integration Initiating
Process 4.1
Develop Project Charter
PROCESS OF DEVELOPING A DOCUMENT WHICH FORMALLY AUTHORIZES A PROJECT OR A PHASE AND

DOCUMENTING INITIAL REQUIREMENTS THAT SATISFY THE STAKEHOLDERS NEEDS AND EXPECTATIONS.
Tools and
Technique
s
4.1
Inputs
Project
Statement
of Work
Outputs
Expert
Judgment
Project
Charter
____________
____________
Business
Case
Contract
Enterprise
Environmen
tal Factors
Organizatio
nal Process
Assets
Reference:
Reference: Figure
Figure 4.2.
4.2.
th
Figure 4-3
Reference:
Reference: Figure
Figure 4-3.
4-3.
th
1 2
Integration Planning
Process 4.2
Develop Project Management Plan

PROCESS OF DOCUMENTING THE ACTIONS NECESSARY TO DEFINE, PREPARE, INTEGRATE, AND
COORDINATE ALL SUBSIDIARY PLANS.
Tools and
Technique
s
4.2
Inputs
Project
Charter
Expert
Judgment
Outputs
from
planning
processes
____________
Outputs
Project
Manageme
nt Plan
____________
Enterprise
Environmen
tal Factors
Organizatio
nal Process
Assets
Reference:
Reference: Figure
Figure 4.4.
4.4.
th
Figure 4-5
Reference:
Reference: Figure
Figure 4-5.
4-5.
th
1 3
Integration Executing
Process 4.3
Direct & Manage Project Execution
PROCESS OF PERFORMING THE WORK DEFINED IN THE PROJECT MANAGEMENT PLAN TO ACHIEVE THE
PROJECTS OBJECTIVES.
Tools and
Technique
s
4.3
Inputs
Project
Manageme
nt Plan
Approved
Change
Requests
Enterprise
Environmen
tal Factors
Organizatio
nal Process
Assets
Outputs
Expert
Judgment
Deliverable
s
Project
Managemen
t
Information
System
Work
Performanc
e
Information
____________
Change
Request
Project
Manageme
nt Plan
Reference:
4.6.
Reference: Figure
Figure
4.6.
Updates
th
Figure 4-7
Reference:
Reference: Figure
Figure 4-7.
4-7.
th
1 4
Integration Monitoring
& Control
Process 4.4
Monitor & Control Project Work
PROCESS OF TRACKING, REVIEWING, AND REGULATING THE PROGRESS TO MEET THE PERFORMANCE
OBJECTIVES DEFINED IN THE PROJECT MANAGEMENT PLAN.
Tools and
Technique
s
4.4
Inputs
Project
Manageme
nt Plan
Performanc
e Reports
Enterprise
Environmen
tal Factors
Organizatio
nal Process
Assets
____________
Outputs
Expert
Judgment
Change
Requests
____________
Project
Manageme
nt Plan
Updates
Project
Document
Updates
____________
Reference:
Reference: Figure
Figure 4.8.
4.8.
th
Figure 4-9
Reference:
Reference: Figure
Figure 4-9.
4-9.
th
1 4
Integration Monitoring
& Control
Process 4.5
Perform Integrated Change Control
PROCESS OF REVIEWING ALL CHANGE REQUESTS, APPROVING CHANGES, AND MANAGING CHANGES TO
THE DELIVERABLES, ORGANIZATIONAL PROCESS ASSETS, PROJECT DOCUMENTS, AND THE PROJECT
MANAGEMENT PLAN.
Tools and
Technique
s
4.5
Inputs
Project
Manageme
nt Plan
Work
Performanc
e
Information
Change
Requests
Enterprise
Environmen
tal Factors
Expert
Judgment
Change
Control
Meetings
____________
Outputs
Change
Request
Status
Updates
Project
Manageme
nt Plan
Updates
Project
Document
Updates
Reference:
4.10.
Reference: Figure
Figure
4.10.
____________
th
Figure 4-11
Reference:
Reference: Figure
Figure 4-11.
4-11.
th
1 5
Close Project or Phase
Integration Closing
Process 4.6
PROCESS OF FINALIZING ALL ACTIVITIES ACROSS ALL OF THE MANAGEMENT PROCESS GROUPS TO
FORMALLY COMPLETE THE PROJECT OR PHASE.
Tools and
Technique
s
4.6
Inputs
Project
Manageme
nt Plan
Accepted
Deliverable
s
Organizatio
nal Process
Assets
Expert
Judgment
____________
Outputs
Final
Product,
Service or
Result
Transition
Organizatio
nal Process
Assets
Updates
____________
____________
Reference:
Reference: Figure
Figure 4.13.
4.13.
th
Figure 4-14
Reference:
Reference: Figure
Figure 4-14.
4-14.
th
Chapter 5
CHAPTER 5
PROJECT SCOPE
MANAGEMENT
Chapter 5
SCOPE MANAGEMENT
5.1 Collect Requirements

5.2 Define Scope
5.3 Create WBS
5.4 Verify Scope
5.5 Control Scope
Scope
WHAT IS?
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
Scope Management
WHAT IS?
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.
Scope Management
WHAT
PlanIS?
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
Scope Statement
WHAT IS?
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
Reference:
Reference: Figure
Figure 5.1.
5.1.
th
2 2
Scope
Planning
Process 5.1
Collect Requirements
PROCESS OF DEFINING AND DOCUMENTING STAKEHOLDERS NEEDS TO MEET THE PROJECT OBJECTIVES.
Tools and
Technique
s
5.1
Inputs
Project
Charter
Stakeholder
Register
____________
Outputs
Interviews
Requiremen
Focus
ts
Groups
Documenta
Facilitated
tion
Workshops
Requiremen
Group
ts
Creativity
Manageme
Techniques
nt Plan
Group
Requiremen
Decision
Making
ts
Techniques
Traceablity
Questionnai
Matrix
Reference:
5.2.
Reference: Figure
Figure
5.2.
res and PMBOK Guide, 4thth Ed
Figure 5-3
Reference:
Reference: Figure
Figure 5-3.
5-3.
th
2 2
Scope
Process 5.2
Define Scope
Planning
PROCESS OF DEVELOPING A DETAILED DESCRIPTION OF THE PROJECT AND PRODUCT.
Tools and
Technique
s
5.2
Inputs
Project
Charter
Expert
Judgment
Requiremen
ts
Documenta
tion
Product
Analysis
Organizatio
nal Process
Assets
____________
Alternatives
Identificatio
n
Outputs
Project
Scope
Statement
Project
Document
Updates
____________
Facilitated
Workshops
____________
Reference:
Reference: Figure
Figure 5.4.
5.4.
th
Figure 5-5
Reference:
Reference: Figure
Figure 5-5.
5-5.
th
2 2
Scope
Process 5.3
Create WBS
Planning
PROCESS OF SUBDIVIDING PROJECT DELIVERABLES AND PROJECT WORK INTO SMALLER, MORE
MANAGEABLE COMPONENTS.
Tools and
Technique
s
5.3
Inputs
Project
Scope
Statement
Requiremen
ts
Documenta
tion
Organizatio
nal Process
Assets
____________
Decomposit
ion
____________
Outputs
WBS
WBS
Dictionary
Scope
Baseline
Project
Document
Updates
____________
Reference:
Reference: Figure
Figure 5.6.
5.6.
th
Figure 5-7
Reference:
Reference: Figure
Figure 5-7.
5-7.
th
Figure 5-8
Reference:
Reference: Figure
Figure 5-8.
5-8.
th
Figure 5-9
Reference:
Reference: Figure
Figure 5-9.
5-9.
th
Figure 5-10
Reference:
Reference: Figure
Figure 5-10.
5-10.
th
WBS
PRODUCT ORIENTED
Deliverable oriented
grouping of project
elements that organizes
and defines the total
scope of the project
Hardware
Services
Data
WBS
TERMS
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
Typical WBS
WITH CODE OF ACCOUNTS
Information
System
1
.
Project
Managemen
1.1
t
Systems
Engineering
1.2
Hardware
Acquisition
1.3
Software
Development
1.4
Facilities
Modifications
1.5
Training
Development
1.6
Project
Planning
1.1.1
Product
Design
1.2.1
CPU
Acquisition
1.3.1
Operating
System
1.4.1
Facility
Plans
1.5.1
Training
Plans
1.6.1
Project
Control
1.1.2
Systems
Integration
1.2.2
Auxiliary
Equipment
1.3.2
Database
1.4.2
Facility
Modification
1.5.2
Training
Courses
1.6.2
Project
Data
1.1.3
Test &
Evaluation
1.2.3
Printer
Acquisition
1.3.3
Application
Development
1.4.3
Facility
Installation
1.5.3
WBS vs OBS
RESPONSIBILITY ASSIGNMENT MATRIX (RAM)
Work
Breakdown
Functional
Organization
Work
Packages
&
Planning
Packages
2 4
Scope
Process 5.4
Verify Scope
Monitoring
& Control
PROCESS OF FORMALIZING ACCEPTANCE OF THE COMPLETED PROJECT DELIVERABLES.
Tools and
Technique
s
5.4
Inputs
Project
Manageme
nt Plan
Requiremen
ts
Documenta
tion
Requiremen
ts
Traceablity
Matrix
Validated
Inspection
____________
Outputs
Accepted
Deliverable
s
Change
Requests
Project
Document
Updates
____________
Reference:
Reference: Figure
Figure 5.11.
5.11.
th
Figure 5-12
Reference:
Reference: Figure
Figure 5-12.
5-12.
th
2 4
Scope
Monitoring
& Control
Process 5.5
Control Scope
PROCESS OF MONITORING THE STATUS OF THE PROJECT AND PRODUCT SCOPE AND MANAGING
CHANGES TO THE SCOPE BASELINE.
Tools and
Technique
s
5.5
Inputs
Project
Manageme
nt Plan
Work
Performanc
e
Information
Requiremen
ts
Documenta
tion
Requiremen
Variance
Analysis
____________
Outputs
Work
Performanc
e
Measureme
nts
Organizatio
nal Process
Assets
Updates
Change
Requests
Reference:
5.13.
Reference: Figure
Figure
5.13.
Project
th
Figure 5-14
Reference:
Reference: Figure
Figure 5-14.
5-14.
th
Chapter 6
CHAPTER 6
PROJECT TIME
MANAGEMENT
Chapter 6
TIME MANAGEMENT
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
TIME MANAGEMENT
WHAT IS?
Project Time Management includes the

processes required to accomplish timely
completion of the project.
Figure 6-1
Reference:
Reference: Figure
Figure 6.1.
6.1.
th
Figure 6-2
Reference:
Reference: Figure
Figure 6.2.
6.2.
th
3 2
Time
Planning
Process 6.1
Define Activities
PROCESS OF IDENTIFYING THE SPECIFIC ACTIONS TO BE PERFORMED TO PRODUCE THE PROJECT

DELIVERABLES.
Tools and
Technique
s
6.1
Inputs
Scope
Baseline
Decomposit
ion
Enterprise
Environmen
tal Factors
Rolling
Wave
Planning
Organizatio
nal Process
Assets
Templates
____________
Outputs
Activity List
Activity
Attributes
Milestone
List
____________
Expert
Judgment
____________
Reference:
Reference: Figure
Figure 6.3.
6.3.
th
Figure 6-4
Reference:
Reference: Figure
Figure 6.4.
6.4.
th
PLANNING
WHAT IS?
COMPONENTS
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.
3 2
Time
Process 6.2
Sequence Activities
Planning
PROCESS OF IDENTIFYING AND DOCUMENTING RELATIONSHIPS AMONG THE PROJECT ACTIVITIES.
Tools and
Technique
s
6.2
Inputs
Activity List
Activity
Attributes
Milestone
List
Project
Scope
Statement
Organizatio
nal Process
Assets
Outputs
Precedence
Diagrammin
g Method
(PDM)
Project
Schedule
Network
Diagram
Dependenc
y
Determinati
on
Project
Document
Updates
____________
Applying
Leads and
Lags
Reference: Figure
Figure 6.5.
6.5.
ScheduleReference:
th
Figure 6-6
Reference:
Reference: Figure
Figure 6.6.
6.6.
th
Figure 6-7
Reference:
Reference: Figure
Figure 6.7.
6.7.
th
PDM
Precedence diagramming method (PDM)
Nodes represent activities and arrows show dependencies
B
E
Start
C
Finish
Activity Sequencing Process

Finish-to-Start Activity A must finish
before Activity B can start
Start-to-Start Activity A must start

before Activity B can start
Activity Sequencing Process

Finish-to-Finish Activity A must finish
before Activity B can finish
Start-to-Finish Activity A must start

before Activity B can finish
Activity Box
A Precedence Network
Parallel Lagged Activities
More Tools
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)
3 2
Time
Planning
Process 6.3
Estimate Activity Resources
PROCESS OF ESTIMATING THE TYPE AND QUANTITIES OF MATERIAL, PEOPLE, EQUIPMENT, OR SUPPLIES
REQUIRED TO PERFORM EACH ACTIVITY.
Tools and
Technique
s
6.3
Inputs
Activity List
Activity
Attributes
Resource
Calendars
Enterprise
Environmen
tal Factors
Organizatio
nal Process
Assets
Expert
Judgment
Alternatives
Analysis
Published
Estimating
Data
Bottom-up
Estimating
Outputs
Activity
Resource
Requiremen
ts
Resource
Breakdown
Structure
Project
Document
Updates
Project
____________
Managemen
Reference:
Reference: Figure
Figure 6.8.
6.8.
t Software
th
Figure 6-9
Reference:
Reference: Figure
Figure 6.9.
6.9.
th
3 2
Time
Planning
Process 6.4
Estimate Activity Durations
PROCESS OF APPROXIMATING THE NUMBER OF WORK PERIODS NEEDED TO COMPLETE INDIVIDUAL

ACTIVITIES WITH ESTIMATED RESOURCES.
Tools and
Technique
s
6.4
Inputs
Activity List
Activity
Attributes
Activity
Resource
Requiremen
ts
Resource
Calendars
Project
Scope
Statement
Enterprise
Environmen
Expert
Judgment
Analogous
Estimating
Parametric
Estimating
Three-Point
Estimates
Outputs
Activity
Duration
Estimates
Project
Document
Updates
____________
Reserve
Analysis
Reference:
Reference: Figure
Figure 6.10.
6.10.
____________
th
Figure 6-11
Reference:
Reference: Figure
Figure 6.11.
6.11.
th
Three-Point Estimates
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 bestcase 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.
PERT
Activity Duration Estimates
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.
3 2
Time
Planning
Process 6.5
Develop Schedule
PROCESS OF ANALYZING ACTIVITY SEQUENCES, DURATIONS, RESOURCE REQUIREMENTS, AND SCHEDULE

CONSTRAINTS TO CREATE THE PROJECT SCHEDULE.
Tools and
Technique
s
6.5
Inputs
Activity List
Activity
Attributes
Project
Schedule
Network
Diagrams
Activity
Resource
Requirement
s
Resource
Calendars
Activity
Duration
Outputs
Schedule
Project
Network
Schedule
Analysis
Schedule
Critical Path
Baseline
Method
Critical
Schedule
Data
Chain
Method
Project
Resource
Document
Leveling
Updates
What-If
Scenario
____________
Analysis Reference:
Reference: Figure
Figure 6.12.
6.12.
ApplyingPMBOK Guide, 4thth Ed
Figure 6-13
Reference:
Reference: Figure
Figure 6.13.
6.13.
th
Schedule Compression
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
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.
Schedule Model Data

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
Reference:
Reference: Figure
Figure 6.14.
6.14.
th
3 4
Time
Monitoring
& Control
Process 6.6
Control Schedule
PROCESS OF MONITORING THE STATUS OF THE PROJECT TO UPDATE PROJECT PROGRESS AND
MANAGING CHANGES TO THE SCHEDULE BASELINE.
Tools and
Technique
s
6.6
Inputs
Project
Manageme
nt Plan
Project
Schedule
Work
Performanc
e
Information
Organizatio
nal Process
Assets
Outputs
Performanc
Work
e Reviews
Performanc
Variance
e
Analysis
Measureme
Project
nts
Managemen
Organizatio
t Software
nal Process
Resource
Assets
Leveling
Updates
What-If
Change
Scenario
Analysis
Requests
AdjustingReference: Figure 6.15.
Reference: Figure
6.15.
Project
Leads and
th
Figure 6-15
Reference:
Reference: Figure
Figure 6.15.
6.15.
th
Chapter 7
CHAPTER 7
PROJECT COST
MANAGEMENT
Chapter 7
COST MANAGEMENT
7.1 Estimate Costs

7.2 Determine Budget
7.3 Control Costs
Figure 7-1
Reference:
Reference: Figure
Figure 7.1.
7.1.
th
Project Assessment
Types
Strategic Assessment
Technical Assessment
Economic Assessment
Typical Issues
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
Programme aMeasurement
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
Technical Assessment
Evaluating the required functionality against
hardware and software available.
Existing strategic information systems plan
Limitations on nature of solution
Constraints influencing cost of solution
Economic Assessment
Cost Benefit Analysis
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

STEPS
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 & BENEFITS
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.
Cash Flow Forecasting

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

Sample Cash Flows for 4 Projects
Cost-Benefit Evaluation
Techniques
Net Profit
Payback Period
Return on Investment
Net Present Value
Internal Rate of Return
Net Profit
Difference between Total Costs and Total Income
Net Profit
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
Payback Period
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
Return on Investment (ROI)
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
Net Present Value (NPV)
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 = PV1 + PV2 + PV3 + + PVn
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
(IRR)
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.
(IRR)
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.
(IRR)
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.
(IRR)
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.
(IRR)
(IRR)
Convenient and useful measure
of the value of project
(IRR)
Single percentage figure that may be directly

compared with rates of return
(IRR)
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.
4 2
Cost
Planning
Process 7.1
Estimate Costs
PROCESS OF DEVELOPING AN APPROXIMATION OF THE MONETARY RESOURCES NEEDED TO COMPLETE

PROJECT ACTIVITIES.
Tools and
Technique
s
7.1
Inputs
Scope
Baseline
Project
Schedule
Human
Resource
Plan
Risk
Register
Enterprise
Environmen
tal Factors
Outputs
Expert
Activity
Judgment
Cost
Analogous
Estimates
Estimating
Basis of
Parametric
Estimates
Estimating
Bottom-up
Project
Document
Estimating
Three-Point
Updates
Estimates
____________
Resource
Analysis
Cost of Reference: Figure 7.2.
Reference: Figure 7.2.
Quality PMBOK Guide, 4thth Ed
Figure 7-3
Reference:
Reference: Figure
Figure 7.3.
7.3.
th
4 2
Cost
Planning
Process 7.2
Determine Budget
PROCESS OF AGGREGATING THE ESTIMATED COSTS OF INDIVIDUAL ACTIVITIES OR WORK PACKAGES TO

ESTABLISH AN AUTHORIZED COST BASELINE.
Tools and
Technique
s
7.2
Inputs
Activity
Cost
Estimates
Basis of
Estimates
Scope
Baseline
Project
Schedule
Resource
Calendars
Cost
Aggregation
Reserve
Analysis
Expert
Judgment
Historical
Relationship
s
Outputs
Cost
Performanc
e Baseline
Project
Funding
Requiremen
ts
Project
Document
Updates
Funding
____________
Limit
Reference:
Reference: Figure
Figure 7.4.
7.4.
Reconciliati
th
Figure 7-5
Reference:
Reference: Figure
Figure 7.5.
7.5.
th
Figure 7-6
Reference:
Reference: Figure
Figure 7.6.
7.6.
th
4 4
Cost
Monitoring
& Control
Process 7.3
Control Costs
PROCESS OF MONITORING THE STATUS OF THE PROJECT TO UPDATE THE PROJECT BUDGET AND
MANAGING CHANGES TO THE COST BASELINE.
Tools and
Technique
s
7.3
Inputs
Project
Manageme
nt Plan
Project
Funding
Requiremen
ts
Work
Performanc
e
Information
Organizatio
Earned
Value
Managemen
t
Forecasting
ToComplete
Performanc
e Index
Outputs
Work
Performanc
e
Measureme
nts
Budget
Forecasts
Organizatio
nal Process
Assets
Updates
Performanc
e Reviews
Reference:
7.7.
Reference: Figure
Figure
7.7.
Project
VariancePMBOK Guide, 4thth Ed
Figure 7-8
Reference:
Reference: Figure
Figure 7.8.
7.8.
th
Establishing Control Accounts
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
Responsibility Assignment Matrix
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
Earned Value (EV)

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
EV Terms
Data Element
Term
Acronym
Scheduled Work
Budgeted Cost of Work Scheduled
BCWS
PV
PV
Earned Value
Budgeted Cost of Work Performed
BCWP
EV
EV
Actuals
Actual Cost of Work Performed
ACWP
AC
AC
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
Earned Value Technique

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).

ETC
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.

CV & SV
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.

CPI, CPIC & SPI
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
Reference:
Reference: Figure
Figure 7.9.
7.9.
th
Control Account Example

CA #1
WBS Element:
OBS Element:
CAM:
Budget:
Schedule:
1.1 Frame
Frame Shop
Mr. I. M. Smart
$ 125,000
Jan - Jun 00
Control Account Managers

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
Control Account Elements

Work Packages
Planning Packages
Detailed, short-span
Future work that has not
tasks or material items;
been planned in detail as
Required to accomplish
work packages; Always
the CA objectives;
scheduled to occur in the
Typically for the near
future
term
Work Packages
Planning Packages
Task 1
Task 2
Task 3
Task 4
Task 5
Performance Measurement Baseline

(PMB)
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

(PMB)
BCWS $K
Time-Phased Budget
4500
4000
3500
3000
2500
2000
1500
1000
500
0
BAC
Jan
Feb
Mar
Apr
Reporting Period
May
Jun
Cost Control
Budgeted Cost of Work Scheduled

(PV)
Work schedule to be accomplished
80000
BA
C
60000
50000
PV
40000
CURRENT
70000
30000
20000
10000
0
JANUARY
FEBRUARY
MARCH
APRIL
MAY
JUNE
JULY
PV
JANUARY
FEBRUARY
MARCH
APRIL
MAY
JUNE
JULY
0
2500
8000
13000
42000
62000
70700
Budgeted Cost of Work Performed

(EV)
Budgeted value of completed or in-process work
T
N
E
R
R
U
C
80000
70000
PV
60000
EV
50000
40000
30000
20000
10000
0
JANUARY
FEBRUARY
MARCH
APRIL
MAY
JUNE
JULY
Actual Cost of Work Performed

(AC)
Actual value of completed or in-process work
T
N
E
R
R
U
C
80000
70000
AC
PV
60000
EV
50000
40000
30000
20000
10000
0
JANUARY
FEBRUARY
MARCH
APRIL
MAY
JUNE
JULY
Schedule Variance
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
SV Example
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%
Cost Variance
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
Cost Variance Example

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%
Performance Indices
Dfn: Cost- and schedule-performance efficiency
calculations; expressed in $
Cost Performance Index (CPI)
CPI = BCWP/ACWP
Schedule Performance Index (SPI)
SPI = BCWP/BCWS
CPI Example
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
SPI Example
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
Estimate at Completion
(EAC)
Dfn: The managements assessment of the cost

of the project at completion
After variance analysis, the estimated cost at
completion is determined
EAC Example
One methodology:
EAC = BAC / CPI
BAC = $80,000
CPI
= 0.79
EAC
= $80,000 / 0.79 = $101,265
Variance at Completion
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
To Complete Performance Index

(TCPI)
Work Remaining / Cost Remaining

TCPI = (BAC EV) / (EAC AC)
= ($ 80,000 $ 38,000) / ($ 101,265 $48,000)

= $ 42,000 / $ 53,265
= 0.7885

(TCPI)
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.

(TCPI)
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
Reference:
Reference: Figure
Figure 7.10.
7.10.
th
Earned Value Examples

PV
$1
$2
$1
$1
$1
$1
$3
$2
$2
EV
$1
$2
$1
$2
$2
$2
$2
$1
$1
AC
$1 On schedule
On cost
$1 On schedule
Under cost
$2 On schedule
Over cost
$2 Ahead of schedule On cost
$3 Ahead of schedule Over cost
$1 Ahead of schedule Under cost
$1 Behind schedule Under cost
$3 Behind schedule Over cost
$1 Behind schedule On cost
Example
PV
100
125
75
100
EV
125
100
75
75
AC
EAC
BAC
75
600
560
100
850
800
75
700
560
100
570
600
Sample Cost Problem
BAC
BAC== $$40k
40k
EV
EV==$$20k
20k
PV
PV==$$28k
28k
AC
AC== $$26k
26k
Calculate
Calculate
%
%of
of Work
WorkScheduled
Scheduled
%
%of
of Budget
Budget Spent
Spent
%
%of
of Work
WorkAccomplished
Accomplished
Cost
Cost Variance
Variance
Schedule
ScheduleVariance
Variance
Sample Solution
Calculate
% of Work Scheduled
%
% of Budget Spent
%
% of Work Accomplished
EV / BAC = $ 20K / $ 40K = 50 %
Cost Variance
Schedule Variance
EV AC = $ 20K $ 26K = - $ 6K
EV PV = $ 20K $ 28K = - $ 8K
PV / BAC = $ 28K / $ 40K = 70

AC / BAC = $ 26K / $ 40K = 65
Case 1
PV = $ 1,860
EV = $ 1,860
AC = $ 1,860
This is the ideal

situation, where
everything goes
according to plan.
Case 2
PV = $ 1,900
AC = $ 1,700
Spending Variance = - $ 200
In this Case, without

Earned Value
measurements, it
appears were in good
shape. Expenditures
are less than planned.
Case 2
PV = $ 1,900
EV = $ 1,500
AC = $ 1,700
SV
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.
= EV PV = - $ 400
SV % = (SV / PV) x 100 = - 21 %
Case 2In addition, we can see...

PV = $ 1,900
EV = $ 1,500
AC = $ 1,700
CV
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) .
= EV AC = - $ 200
CV % = (CV / EV) x 100 = - 13 %
Case 2
PV = $ 1,900
EV = $ 1,500
AC = $ 1,700
SPI = EV / PV = $ 0.79
CPI = EV / AC = $ 0.88
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
Case 2
PV = $ 1,900
EV = $ 1,500
AC = $ 1,700
SV = - $ 400; SPI = 0.79

CV = - $ 200; CPI = 0.88
This is the worst kind of

scenario, where all
performance indicators
are negative.
Case 3
PV = $ 2,600
EV = $ 2,400
AC = $ 2,200
In this case there is

bad news and good
news.
Case 3
PV = $ 2,600
EV = $ 2,400
AC = $ 2,200
SPI = 0.92
SV = - $ 200; SV % = - 8 %
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.
Case 3
PV = $ 2,600
EV = $ 2,400
AC = $ 2,200
CV = + $ 200; CV % = + 8 %
CPI = 1.09
The good news is that

were under-running our
budget. Were getting
$1.09 worth of work
done for each $1.00
were spending.
Case 4
In this case, the
work is not being
accomplished on
schedule...
PV = $ 1,700
EV = $ 1,500
AC = $ 1,500
SV = - $ 200; SV % = - 12 %
SPI = 0.88
Case
4
...but the cost of
the work
accomplished is
just as we
budgeted.
CV = $ 0.00
CPI = 1.00
PV = $ 1,700
EV = $ 1,500
AC = $ 1,500
Case
5
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
Case 5
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
Case 5
...work is ahead of
schedule by 14
percent and
under-running cost
by 12.5%.
PV = $ 1,400
EV = $ 1,600
AC = $ 1,400
SV = + $ 200; SV % = + 14 %
CV = + $ 200; CV % = + 12.5 %
Case 6
In Case 6, work is
being done
efficiently, but a
cost overrun is
occurring.
PV = $ 2,000
EV = $ 2,200
AC = $ 2,400
SPI = 1.10
CV = - $ 200; CV % = - 9 %
Case 7
In Case 7, work is
being done
efficiently, and
costs are right on
target.
SPI = 1.09
CV = $ 0.00
PV = $ 2,200
EV = $ 2,400
AC = $ 2,400
Case 8
PV = $ 2,000
EV = $ 2,000
AC = $ 2,200
SV = EV PV
SV % = SV / PV
CV = EV AC
CV % = CV / EV
SPI = EV / PV
CPI = EV / AC
See if you can

analyze this one!!
Case 8
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 = $ 2,000
EV = $ 2,000
AC = $ 2,200
Case 9
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
Case 9
Negative scenario:
12% behind
schedule and overrunning cost by
27%
PV = $ 1,700
EV = $ 1,500
AC = $ 1,900
SV = - $ 200; SV % = - 12 %
CV = - $ 400; CV% = - 27 %
Case 10
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
Case
10
A tough one!!!
PV = $ 1,000
EV = $ 0.00
AC = $ 800
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
Case 11
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
Case 11
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 %
PV = $ 0.00
EV = $ 700
AC = $ 900

ETC Based on New
Estimate
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
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)
Project Performance
Reviews
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
CHAPTER 8
PROJECT QUALITY
MANAGEMENT
Chapter 8
QUALITY MANAGEMENT
8.1 Plan Quality

8.2 Perform Quality Assurance
8.3 Perform Quality Control
Figure 8-1
Reference:
Reference: Figure
Figure 8.1.
8.1.
th
Quality Management
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
Philosophies
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
Project Management &

Quality Management
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
5 2
Quality
Process 8.1
Plan Quality
Planning
PROCESS OF IDENTIFYING QUALITY REQUIREMENTS AND/OR STANDARDS FOR THE PROJECT AND
PRODUCT, AND DOCUMENTING HOW THE PROJECT WILL DEMONSTRATE COMPLIANCE.
Tools and
Technique
s
8.1
Inputs
Scope
Baseline
Stakeholder
Register
Cost
Performanc
e Baseline
Schedule
Baseline
Risk
Register
Enterprise
Environmen
Outputs
Cost Benefit
Quality
Analysis
Manageme
Cost of
nt Plan
Quality
Quality
Control
Metrics
Charts
Benchmarki
Quality
Checklists
ng
Design of
Process
Experiment
Improveme
s
nt Plan
Statistical
Project
SamplingReference:
8.2.
Reference: Figure
Figure
8.2.
Flowchartin
Document
th
5 3
Quality
Executing
Process 8.2
Perform Quality Assurance
PROCESS OF AUDITING THE QUALITY REQUIREMENTS AND THE RESULTS FROM QUALITY CONTROL
MEASUREMENTS TO ENSURE APPROPRIATE QUALITY STANDARDS AND OPERATIONAL DEFINITIONS ARE
USED.
Tools and
Technique
s
8.2
Inputs
Project
Manageme
nt Plan
Quality
Metrics
Work
Performanc
e
Information
Quality
Control
Measureme
nts
Plan Quality
and Perform
Quality
Control
Tools and
Techniques
Quality
Audits
Process
Analysis
Outputs
Organizatio
nal Process
Assets
Updates
Change
Requests
Project
Manageme
nt Plan
Updates
Project
____________
Reference:
8.8.
Reference: Figure
Figure
8.8.
Document
th
Quality Assurance
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
5 4
Quality
Monitoring
& Control
Process 8.3
Perform Quality Control
PROCESS OF MONITORING AND RECORDING RESULTS OF EXECUTING THE QUALITY ACTIVITIES TO ASSESS
PERFORMANCE AND RECOMMEND NECESSARY CHANGES.
Tools and
Technique
s
8.3
Inputs
Project
Manageme
nt Plan
Quality
Metrics
Quality
Checklists
Work
Performanc
e
Measureme
nts
Approved
Outputs
Cause and
Quality
Effect
Control
Diagrams
Measureme
Control
nts
Validated
Charts
Flowchartin
Changes
Validated
g
Histogram
Deliverable
Pareto
s
Organizatio
Chart
Run Chart
nal Process
Scatter
Assets
DiagramReference:
Updates
8.10.
Reference: Figure
Figure
8.10.
Statistical
Change
th
Cause and Effect

Diagrams
Cause and Effect

Diagrams
Control Charts
Graphic displays of the results, over time, of a
process; used to assess whether the process is
in control
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.
Control Charts
Figure
Figure 8-7.
8-7. Example
Example of
of aa Control
Control Chart
Chart of
of Project
Project Schedule
Schedule Performance
Performance
Process Flow Chart
Yes
Bills From
Shipper
OK
Prepare Pay
Authorization
Send to
Paying Office
Verify
No
Prepare Letter
of Dispute
Send to
Shipper
Process Flow Chart
Figure
Figure 8-8.
8-8. Sample
Sample Process
Process Flowchart
Flowchart
Pareto Diagram
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)
Pareto Diagram
Figure 8-9.
8-9. Pareto
Pareto Diagram
Diagram (Chart)
(Chart)
Figure
Trend Analysis
Using mathematical techniques to forecast future
outcomes based on historical results
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
Statistical Quality Control

Prevention Keeping
errors out of the process
Inspection Keeping the
errors out of the hands of
the customer
Special causes Unusual events

Random causes Normal process
variation
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
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
Using Standard Deviation

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)
Standard deviation Square root of the variance
Upper control limit (UCL) Three standard deviations
Statistics
-3
2 standard deviations (+/- 1) = 68.26 %

-2
-1
+1
+2
+3
Example of Standard Deviation

Item
1
2
3
4
5
6
7
8
9
Weight (x)
4.9
5.0
5.1
5.2
5.3
5.5
4.7
4.8
5.1
Total 45.6
(x-)2
0.02778
0.00444
0.00111
0.01778
0.05444
0.18778
0.13444
0.07111
0.00111
0.50000
Example of Standard Deviation

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
CHAPTER 9
PROJECT
HUMAN RESOURCE
MANAGEMENT
Chapter 9
HR MANAGEMENT
9.1 Develop Human Resource Plan

9.2 Acquire Project Team
9.3 Develop Project Team
9.4 Manage Project Team
Project Human Resource Management
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 decisionmaking.
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.
6 2
Human
Resource
Planning
Process 9.1
Develop Human Resource Plan
PROCESS OF IDENTIFYING AND DOCUMENTING PROJECT ROLES, RESPONSIBILITIES, AND REQUIRED

SKILLS, REPORTING RELATIONSHIPS, AND CREATING A STAFFING MANAGEMENT PLAN.
Tools and
Technique
s
9.1
Inputs
Activity
Resource
Requiremen
ts
Organizatio
nal Charts
and Position
Descriptions
Enterprise
Environmen
tal Factors
Networking
Organizatio
nal Process
Assets
____________
Outputs
Human
Resource
Plan
____________
Organizatio
nal Theory
____________
Reference:
Reference: Figure
Figure 9.2.
9.2.
th
Managing People on the

Project
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
Resource Usage
Resource Histogram
300
275
250
225
200
175
150
125
100
75
50
25
0
Senior Designers
9 16 23 30 6 13 20 27 6 13 20 27 3 10 17 24 1
Jan
Feb
Mar
Resource Usage Staff Hours
Apr
8 15 22
May
Organizational Structures
Type PM Authority
Functional None
Project Expediter Low
Project Coordinator
Low
Weak Matrix Low > Medium

Strong Matrix
Medium > High
Projectized High
Functional Organization
Specialists grouped by function
Difficult to cross functional lines
Barriers exist on horizontal information flow
Functional emphasis loyalties may impede
completion
Matrix Organization
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
Matrix Organization
Advantages
Disadvantages
Visible objectives
More than one boss
Efficient utilization
of resources
Complex structure
to control
Better co-ordination
Differing priorities
of PM and FM
Better information
flow
Retention of home
after project
Duplication of effort
Conflict
Projectized Organization
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
Reward Systems
Extrinsic (External)
Salary
Work conditions
Status
Intrinsic (Internal)
Achievement
Responsibility
Advancement
Rewards given timely and in public
Management Styles
Autocratic
Strength
Mature, well defined projects
Quick decisions required
Weakness
Limits staff buy-in leading to low morale
Possible arbitrary decisions
Management Styles
Laissez-Fair
Strength
Innovative projects
High morale of self-motivated staff
Weakness
Confusion about objectives of the project
Inability to make decisions
Maslows Hierarchy of Needs
Higher Order Needs
Self-Actualization Need to grow and use

abilities to the fullest and most creative extent
Esteem - Need for respect, prestige, recognition,
sense of competence
Social Need for love, affection, sense of
belonging
Lower Order Needs
Safety Need for security, protection and

stability
Physiological Need for biological maintenance
(food, water etc.)
McGregors Theory
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
Hertzbergs Motivation Theory

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
Staffing Management Plan
Staff Acquisition
Timetable
Release Criteria
Training Needs
Recognition and Reward
Compliance
Salary
6 3
Human Executing
Resource
Process 9.2
Acquire Project Team
PROCESS OF CONFIRMING HUMAN RESOURCE AVAILABILITY AND OBTAINING THE TEAM NECESSARY TO
COMPLETE PROJECT ASSIGNMENTS.
Tools and
Technique
s
9.2
Inputs
Project
Manageme
nt Plan
Enterprise
Environmen
tal Factors
Organizatio
nal Process
Assets
____________
PreAssignment
Negotiation
Acquisition
Virtual
Teams
____________
Outputs
Project Staff
Assignment
s
Resource
Calendars
Project
Manageme
nt Plan
Updates
____________
Reference:
Reference: Figure
Figure 9.8.
9.8.
th
6 3
Human Executing
Resource
Process 9.3
Develop Project Team

PROCESS OF IMPROVING THE COMPETENCIES, TEAM INTERACTION, AND THE OVERALL TEAM
ENVIRONMENT TO ENHANCE PROJECT PERFORMANCE.
Tools and
Technique
s
9.3
Inputs
Project Staff
Assignment
s
Project
Manageme
nt Plan
Resource
Calendars
____________
Interperson
al Skills
Training
TeamBuilding
Activities
Outputs
Team
Performanc
e
Assessment
s
Ground
Rules
Enterprise
Environmen
tal Factors
Updates
Co-Location
____________
Recognition
Reference:
Reference: Figure
Figure 9.9.
9.9.
and
th
6 4
Human Monitoring
Resource & Control
Process 9.4
Manage Project Team
PROCESS OF TRACKING TEAM MEMBER PERFORMANCE, PROVIDING FEEDBACK, RESOLVING ISSUES, AND
MANAGING CHANGES TO OPTIMIZE PROJECT PERFORMANCE.
Tools and
Technique
s
9.4
Inputs
Project Staff
Assignment
s
Project
Manageme
nt Plan
Team
Performanc
e
Assessment
s
Performanc
Outputs
Observation
s and
Conversatio
____________
ns
Enterprise
Environmen
tal Factors
Updates
Project
Performanc
e Appraisals
Organizatio
nal Process
Assets
Updates
Conflict
Managemen
t
Change
Requests
Issue Log
Project
Reference:
9.11.
Reference: Figure
Figure
9.11.
Manageme
Interperson
th
Chapter 10
CHAPTER 10
PROJECT
COMMUNICATIONS
MANAGEMENT
Chapter 10
COMMUNICATIONS MANAGEMENT
10.1 Identify Stakeholders

10.2 Plan Communications
10.3 Distribute Information
10.4 Manage Stakeholder Expectations
10.5 Report Performance
Project Communications Management
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.
7 1
Human
Resource
Initiating
Process 10.1
Identify Stakeholders
PROCESS OF IDENTIFYING ALL PEOPLE OR ORGANIZATIONS IMPACTED BY THE PROJECT, AND

DOCUMENTING RELEVANT INFORMATION REGARDING THEIR INTERESTS, INVOLVEMENT, AND IMPACT ON
PROJECT SUCCESS.
Inputs
Tools and
Technique
s
Outputs
10.1
Project
Charter
Stakeholder
Analysis
Stakeholder
Register
Procuremen
t
Documents
Expert
Judgment
Stakeholder
Manageme
nt Strategy
Enterprise
Environmen
tal Factors
Organizatio
nal Process
Assets
____________
____________
____________
Reference:
Reference: Figure
Figure 10.2.
10.2.
th
Stakeholder Analysis
A method for developing a systematic and logical

view of the information needs of the stakeholders
and of the sources for meeting those needs
7 2
Human
Resource
Process 10.2
Plan Communications
Planning
PROCESS OF DETERMINING PROJECT STAKEHOLDER INFORMATION NEEDS AND DEFINING A

COMMUNICATION APPROACH.
Inputs
Tools and
Technique
s
Outputs
10.2
Stakeholder
Register
Stakeholder
Manageme
nt Strategy
Enterprise
Environmen
tal Factors
Organizatio
nal Process
Assets
____________
Communica
tion
Requiremen
ts Analysis
Communica
tion
Manageme
nt Plan
Communica
tion
Technology
Project
Document
Updates
Communica
tion Model
____________
Communica
tion
Reference: Figure
Figure 10.6.
10.6.
MethodsReference:
th
Communication Management Plan

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
7 3
Human Executing
Resource
Process 10.3
Distribute Information
PROCESS OF MAKING RELEVANT INFORMATION AVAILABLE TO PROJECT STAKEHOLDERS AS PLANNED.
Inputs
Tools and
Technique
s
Outputs
10.3
Project
Manageme
nt Plan
Communica
tion
Methods
Performanc
e Reports
Information
Distribution
Tools
Organizatio
nal Process
Assets
Organizatio
nal Process
Assets
Updates
____________
___________
____________
Reference:
Reference: Figure
Figure 10.9.
10.9.
th
7 4
Human Monitoring
Resource & Control
Process 10.4
Manage Stakeholder Expectations
PROCESS OF COMMUNICATING AND WORKING WITH STAKEHOLDERS TO MEET THEIR NEEDS AND
ADDRESSING ISSUES AS THEY OCCUR.
Inputs
Tools and
Technique
s
Outputs
10.4
Stakeholder
Register
Stakeholder
Manageme
nt Strategy
Project
Manageme
nt Plan
Issue Log
Change Log
Organizatio
Communica
tion
Methods
Interperson
al Skills
Managemen
t Skills
___________
Organizatio
nal Process
Assets
Updates
Change
Requests
Project
Manageme
nt Plan
Updates
Project
Reference:
10.11.
Reference: Figure
Figure
10.11.
Document
PMBOK Guide, 4thth Ed
7 4
Human Monitoring
Resource & Control
Process 10.5
Report Performance
PROCESS OF COLLECTING AND DISTRIBUTING PERFORMANCE INFORMATION INCLUDING STATUS

REPORTS, PROGRESS MEASUREMENTS, AND FORECASTS.
Inputs
Tools and
Technique
s
Outputs
10.5
Project
Manageme
nt Plan
Work
Performanc
e
Information
Work
Performanc
e
Measureme
nts
Variance
Analysis
Performanc
e Reports
Forecasting
Methods
Organizatio
nal Process
Assets
Updates
Communica
tion
Methods
Reporting
Systems
Change
Requests
____________
___________
Reference:
Reference: Figure
Figure 10.13.
10.13.
Performance Report
Chapter 11
CHAPTER 11
PROJECT
RISK
MANAGEMENT
Chapter 11
RISK MANAGEMENT
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
Project Risk Management
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.
8 2
Risk
Process 11.1
Plan Risk Management
Planning
PROCESS OF DEFINING HOW TO CONDUCT RISK MANAGEMENT ACTIVITIES FOR A PROJECT.
Inputs
Tools and
Technique
s
Outputs
11.1
Project
Scope
Statement
Cost
Manageme
nt Plan
Schedule
Manageme
nt Plan
Communica
tions
Manageme
nt Plan
Enterprise
Planning
Meetings
and
Analysis
Risk
Manageme
nt Plan
____________
___________
Reference:
Reference: Figure
Figure 11.2.
11.2.
th
8 2
Risk
Process 11.2
Identify Risks
Planning
PROCESS OF DETERMINING WHICH RISKS MAY AFFECT THE PROJECT AND DOCUMENTING THEIR
CHARACTERISTICS.
Inputs
Tools and
Technique
s
Outputs
11.2
Risk
Management
Plan
Activity Cost
Estimates
Activity
Duration
Estimates
Scope
Baseline
Stakeholder
Register
Cost
Management
Plan
Documentat
Risk
ion Reviews
Register
Information
____________
Gathering
Techniques
Checklist
Analysis
Assumption
s Analysis
Diagrammin
g
Techniques
Reference:
Reference: Figure
Figure 11.6.
11.6.
th
SWOT PMBOK Guide, 4 th Ed
Introduction to Risk
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)
Risk Management Plan

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
Risk Identification
Types
Business (profit or loss) and insurable (loss)

Known known
Total certainty
Known unknown
Degree of uncertainty
Unknown unknown
Total uncertainty
Categories
External, unpredictable
External, predictable
Internal, non-technical
Technical
Legal
Regulatory, etc.
Market risks
Management
Design
Contractual
8 2
Risk
Planning
Process 11.3
Perform Qualitative Risk Analysis
PROCESS OF PRIORITIZING RISKS FOR FURTHER ANALYSIS OR ACTION BY ASSESSING AND COMBINING
THEIR PROBABILITY OF OCCURRENCE AND IMPACT.
Inputs
Tools and
Technique
s
Outputs
11.3
Risk
Register
Risk
Manageme
nt Plan
Project
Scope
Statement
Organizatio
nal Process
Assets
____________
Risk
Risk
Probability
Register
and Impact
Updates
Assessment
____________
Probability
and Impact
Matrix
Risk Data
Quality
Assessment
Risk
Categorizati
Reference:
Reference: Figure
Figure 11.8.
11.8.
on
th
8 2
Risk
Planning
Process 11.4
Perform Quantitative Risk Analysis

PROCESS OF NUMERICALLY ANALYZING THE EFFECT OF IDENTIFIED RISKS ON OVERALL PROJECT
OBJECTIVES.
Inputs
Tools and
Technique
s
Outputs
11.4
Risk
Register
Risk
Manageme
nt Plan
Cost
Manageme
nt Plan
Schedule
Manageme
nt Plan
Organizatio
Data
Risk
Gathering
Register
and
Updates
Representat
____________
ion
Techniques
Quantitative
Risk
Analysis
and
Modeling
Techniques
Reference: Figure
Figure 11.11.
11.11.
Expert Reference:
SWOT
Strengths
Build On
Opportunities
Exploit
Weaknesses
Internal
Eliminate or Reduce
Threats
External
Mitigate
Definitions
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
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
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 & Decision Tree Analysis

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 Point
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
Decision Tree
Example
0.5
0.5
0.6
Project A
Project B
0.4
0.7
0.3
What is the probability that Project B will
be selected and will be successful?
Success
Failure
Success
Failure
Answer: 0.35
Decision Tree
High Demand
Probability =0.3
$ 550,000
Production Successful
Probability = 0.7
Decide to pursue
Low Demand
Probability = 0.7
- $100,000
Production Unsuccessful
Probability = 0.3
Terminate = - $ 200,000
Decide not to pursue

$0
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
The expected value of Project A is $6,500. The expected value of

not preceding is $0. Preceding is the lucrative option.
$ 6,500
Simulations
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
8 2
Risk
Process 11.5
Plan Risk Responses
Planning
PROCESS OF DEVELOPING OPTIONS AND ACTIONS TO ENHANCE OPPORTUNITIES AND TO REDUCE

THREATS TO PROJECT OBJECTIVES.
Inputs
Tools and
Technique
s
Outputs
11.5
Risk
Register
Risk
Manageme
nt Plan
____________
Strategies
Risk
for Negative
Register
Risks or
Updates
Threats
Risk
Strategies
Related
for Positive
Contract
Risks or
Decisions
Opportuniti
Project
es
Manageme
Contingent
nt Plan
Response
Updates
Strategies
Reference: Figure
11.17.
11.17.
Project
Expert Reference: Figure
Reducing the Risk
Hazard Prevention
Likelihood Reduction
Risk Avoidance
Risk Transfer
Contingency Planning
Risk Analysis - Factors
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
100
Cumulative Probability
90
80
70
60
50
40
30
20
10
0
110
120
130
140
150
160
170
180
190
200
This S-curve shows the cumulative probability

of project
by a particular date. For example, the
Days
After completion
Project Start
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.
Risk Response Strategies (-ive)
Mitigation
(Corrective action)
Acceptance
(Accept consequences)
Avoidance
(Prevention)
Transference
(Shift Responsibility)
Classes of Contractual Documents
Seller Risk
LOW
HIGH
HIGH
LOW
CPPC
CPFF
CPIF
100 0
Cost Plus
Percentage of
Costs (CPPC)
FPI
Variable Sharing Ratio
Cost Plus Fixed

Fee (CPFF)
Cost Plus
Incentive Fee
(CPIF)
Buyer Risk
FFP
0 100
Fixed Price
Incentive (FPI)
Spectrum of risk
Firm Fixed Price
Insurable Risk
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
8 4
Risk
Monitoring
& Control
Process 11.6
Monitor and Control Risks
PROCESS OF IMPLEMENTING RISK RESPONSE PLANS, TRACKING IDENTIFIED RISKS, MONITORING

RESIDUAL RISKS, IDENTIFYING NEW RISKS, EVALUATING RISK PROCESS EFFECTIVENESS THROUGHOUT
THE PROJECT.
Inputs
Tools and
Technique
s
Outputs
11.6
Risk
Register
Risk
Manageme
nt Plan
Work
Performanc
e
Information
Performanc
e Reports
____________
Risk
Risk
Reassessme
Register
nt
Updates
Risk Audits
Organizatio
Variance
nal Process
Assets
and Trend
Analysis
Updates
Technical
Change
Performanc
Requests
e
Project
Measureme
Manageme
nt
Reference:
11.19.
Reference: Figure
Figure
11.19.
nt Plan
Reserve PMBOK Guide, 4thth Ed
Chapter 12
CHAPTER 12
PROJECT
PROCUREMENT
MANAGEMENT
Chapter 12
PROCUREMENT MANAGEMENT
12.1 Plan Procurements

12.2 Conduct Procurements
12.3 Administer Procurements
12.4 Close Procurements
Project Procurement Management
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-seller Relationship
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
9 2
Procurement
Planning
Process 12.1
Plan Procurements
PROCESS OF DOCUMENTING PROJECT PURCHASING DECISIONS, SPECIFYING THE APPROACH, AND

IDENTIFYING POTENTIAL SELLERS.
Inputs
Tools and
Technique
s
Outputs
12.1
Scope
Baseline
Requirements
Documentatio
n
Teaming
Agreements
Risk Register
Risk Related
Contract
Decisions
Activity
Resource
Requirements
Project
Schedule
Activity Cost
Make-or-Buy
Analysis
Expert
Judgment
Contract
Types
___________
Procuremen
t
Manageme
nt Plan
Procuremen
t
Statements
of Work
Make-orBuy
Decisions
Procuremen
Reference:
Figure
12.2.
Reference: Figure
t th12.2.
9 3
Procurement
Executing
Process 12.2
Conduct Procurements
PROCESS OF OBTAINING SELLER RESPONSES, SELECTING A SELLER, AND AWARDING A CONTRACT.
Inputs
Tools and
Technique
s
Outputs
12.2
Project
Manageme
nt Plan
Procuremen
t
Documents
Source
Selection
Criteria
Qualified
Seller List
Seller
Proposals
Project
Bidder
Selected
Conference
Sellers
s
Procuremen
Proposal
t Contract
Evaluation
Award
Techniques
Resource
Independen
Calendars
t Estimates
Change
Expert
Requests
Judgment
Project
Advertising
Manageme
nt Plan
Internet Reference:
12.4.
Reference: Figure
Figure
12.4.
Updates
th
Search PMBOK Guide, 4 th Ed
Definitions
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
Definitions
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
9 4
Procurement
Monitoring
& Control
Process 12.3
Administer Procurements
PROCESS OF MANAGING PROCUREMENT RELATIONSHIPS, MONITORING CONTRACT PERFORMANCE, AND

MAKING CHANGES AND CORRECTIONS AS NEEDED.
Inputs
Tools and
Technique
s
Outputs
12.3
Procuremen
t
Documents
Project
Manageme
nt Plan
Contract
Performanc
e Reports
Approved
Change
Requests
Contract
Procuremen
Change
t
Control
Documenta
System
tion
Procuremen
Organizatio
t
nal Process
Performanc
Assets
e Reviews
Updates
Inspections
Change
and Audits
Performanc
Requests
e Reporting
Project
PaymentReference: Figure 12.6.
Reference: Figure
12.6.
Manageme
Systems PMBOK Guide, 4thth Ed
9 5
Procurement
Closing
Process 12.4
Inputs
Close Procurements
PROCESS OF COMPLETING EACH PROJECT PROCUREMENT.
Tools and
Technique
s
Outputs
12.4
Procuremen
t
Manageme
nt Plan
Procuremen
t
Documenta
tion
____________
Procuremen
t Audits
Negotiated
Settlements
Records
Managemen
t System
___________
Closed
Procuremen
ts
Organizatio
nal Process
Assets
Updates
____________
Reference:
Reference: Figure
Figure 12.8.
12.8.
th
PMI CODE OF ETHICS &

PROFESSIONAL CONDUCT
Outline of Lecture
Vision and Purpose

Persons to Whom the Code Applies
Structure of the Code 4 Values
Conduct Aspirational and Mandatory
Vision and Purpose

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.
Persons to Whom the Code Applies

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
Structure of the Code

4 Values
1.
2.
3.
4.
Responsibility
Respect
Fairness
Honesty
Structure of the Code

Conduct
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
Description
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.
RESPONSIBILITY
Aspirational Standards
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.
RESPONSIBILITY
Mandatory Standards
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
Description
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.
RESPECT
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.
RESPECT
Mandatory Standards
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
Description
Fairness is our duty to make

decisions and act impartially and
objectively. Our conduct must be
free from competing self interest,
prejudice, and favoritism.
FAIRNESS
community:
4.2.1 We demonstrate transparency in our decisionmaking 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.
FAIRNESS
Mandatory Standards
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.
FAIRNESS
Mandatory Standards
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
Description
Honesty is our duty to understand

the truth and act in a truthful
manner both in our
communications and in our
conduct.
HONESTY
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.
HONESTY
Mandatory Standards
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.
Code of Ethics
GLOSSARY
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.
Code of Ethics
GLOSSARY
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.
Code of Ethics
GLOSSARY
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.
Review Questions
Proj e ct M anagem ent I n st i t u t e
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
Appendix A
APPENDIX A
CHANGES
Appendix A
APPENDIX C
CONTRIBUTORS
The End
THE END
THANK YOU
The PM Knowledge
Areas
Integration
Scope
Procurement
Time
Risk
Cost
Quality
Human
Resource
Communication
The PM Process Groups

Planning
Executing
Cycle Name
Initiating
Monitoring
and Control
Closing
Monitoring
& Control
5.2
Company
LOGO
Step 2
project
date
Step 1
project
date
Step 3
project
date
bbb
Block Diagram
TEXT
TEXT
TEXT
TEXT
TEXT
TEXT
TEXT
TEXT
Table
TEXT
Title A
Title B
Title C
Title D
Title E
Title F
TEXT
TEXT
TEXT
TEXT
3-D Pie Chart
TEXT
TEXT
TEXT
TEXT
TEXT
TEXT
Marketing Diagram
Title
TEXT
TEXT
TEXT
TEXT
1950
1960
1970
1980
1990
2000
2010
2020
2030
Develop Project Charter

Figure 4.2.
Inputs
Project
Statement
of Work
Business
Case
Contract
Enterprise
Environmen
tal Factors
Tools &
Technique
s
Expert
Judgment
Outputs
Project
Charter

Manager's Guide 4th Ed 09

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PMP Eligibility Requirements

About Questions in PMP

PMP Exam Fee

Earn and Report the PDUs in every CCR Cycle

Category 1: Formal Academic Education

PMI Registered Education Providers

One Contact Hour = One PDU

Non-compensated project management

Maximum PDUs and

Maximum PDUs from Categories possible

PDU Transfer allowed

Only PDUs earned in 3rd year of CCR Cycle

1.1 Purpose of the PMBOK Guide

Purpose of the PMBOK

To identify that subset of the Project

Purpose of the PMBOK

Good practice means that there is general

A PROJECT CAN CREATE:

A product that can be either a component of

Developing a new product or service.

What is Project Management?

Application of knowledge, skills,

What is Project Management?

PROJECT MANAGEMENT PROCESS GROUPS

Project Management Process Groups

What is Project Management?

PROJECT MANAGEMENT PROCESS GROUPS

What is Project Management?

PROJECT MANAGEMENT PROCESS GROUPS

Project Management Process Groups

What is Project Management?

1.0 Initiating a Project

What is Project Management?

What is Project Management?

MANAGING A PROJECT TYPICALLY INCLUDES:

What is Project Management?

POTENTIAL FOR CHANGE

Project management plan is iterative.

Allows a project management team to manage

Project, Program and Portfolio

In mature organizations, project management is

Portfolio, Program, and Project

Portfolio, Program, and Project

A portfolio is a collection of projects or

Portfolio Management refers to the

A program is a group of related projects

Program Management is defined as the

Actions related to project interdependencies may

Projects and Strategic

Projects are often utilized as a means of

Projects and Strategic

To maximize the value of the portfolio by careful

Senior managers or senior management

Project Management Office

A Project Management Office (PMO) is

Project Management Office

A PMO can be delegated authority to act as an

Project Management Office

PRIMARY FUNCTION OF A PMO

A primary function of a PMO is to support project

Projects vs. Operations