PMP Study Guide

Project Management
Exam Study Guide

Exam PMI-001

PMI-001 Study Guide

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Table of Contents

Chapter I: Basics of Project Management

1. What is a Project? 2
2. What is a Program? 2
3. What is a Portfolio? 2
4. What is a Project Management Office? 2
5. What is Project Management? 2
6. What are the different Project Management Knowledge Areas? 3
7. Discuss the various stages in the Project Life Cycle. 4
8. Who are the Stakeholders in a Project? 7
9. Who is a Project Manager? 9

Chapter II: Project Initiation

10. What is understood by the term Project Initiation? 11
11. What is the importance of the Project Charter? 12
12. What is the role of a Project Initiator? 13
13. Discuss the processes involved in Project Initiation. 13

Chapter III: Project Planning

14. Discuss the importance of the second phase of Life Cycle of a Project. 21
15. What is understood by Project Management Plan? 22
16. Discuss Scope Management. 22
17. What is understood by the term Work Breakdown Structure and 24
Work Breakdown Dictionary?
18. What is Activity Planning? 26
19. Discuss the importance and the different types Network Diagrams. 28
20. Discuss the process of Estimating Activity Resources. 30
21. Discuss the process of Estimating Activity Durations 32
22. Discuss the process of Project Scheduling. 33
23. Discuss the factors playing an important role in Cost Estimations. 35
24. Discuss the Cost Budgeting Process. 35
25. Discuss the process of Risk Management Analysis. 36
26. Discuss the key principles governing Risk Management. 37
27. Discuss the various responses to Negative and Positive Risks 39
28. Discuss the process of Human Resource Planning and the key principles 40
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used in the same.
29. Briefly discuss the process of Quality Management Planning. 41
30. Discuss the main principles concerning Quality Management. 42
31. Discuss the Plan-Do-Check-Act Cycle. 43
32. Discuss the Total Quality Management Philosophy. 44
33. Discuss the six sigma theory as the basis of Quality Management. 45
34. Discuss the Continuous Improvement Theory. 46
35. Discuss Process Improvement Plan as a process in the second phase. 47
36. Discuss the process of Procurement Management. 47
37. Discuss the principles behind Procurement Management. 48
38. Discuss the process of Communication Management as a process of the 50
second phase of project lifecycle.
39. Discuss the process of building a Communication Plan. 51

Chapter IV: Project Execution

40. Discuss the third phase of project lifecycle. 54
41. Discuss Project Control and Monitoring as process of the third 55
phase of project lifecycle.
42. Discuss the process of ensuring quality as a part of execution. 57
43. Discuss Quality Audits, Performance Analysis, Root Cause Analysis 58
as tools for Quality Planning and Control.
44. Discuss the process of acquisition of the team. 59
45. Discuss Team Development and Power. 60
46. Discuss Team Motivation. 62
47. Discuss the process of Distributing Information. 64
48. Discuss Project Procurement as a process. 66

Chapter V: Project Control

49. Discuss what is Project Control? 70
50. Discuss the impact of changes to a project and project control. 71
51. What is Project Feedback Loop? 73
52. What is meant by corrective action for a Project? 73
53. Discuss the role of WBS to control the project scope. 74
54. How can variance be identified with the help of Earned Value Management. 75
55. Discuss the process of measuring quality control. 75
56. Discuss the theories that can be adopted while managing a Project Team 78
57. Discuss Risk Monitoring and Risk Control as a process of the fourth phase. 79
58. Discuss Contract Administration. 80

Chapter VI: Project Closing

59. Discuss the last phase of the project lifecycle. 82
60. Discuss the processes involved in closing of a project. 83
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61. Discuss the process of closing out a contract. 84
62. Discuss the early closure of projects. 84
63. What is the importance of Lessons Learned? 86
64. What is meant by ending a project, ending a contract? 86

Chapter VI: Professional Responsibility

65. Discuss the various responsibilities towards the profession 90
of project management.
66. Discuss the various responsibilities towards the clients or customers. 90

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Chapter I

Basics of Project
Management

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1. What is a Project?

A project is problem for which a solution is sought by working systematically. It includes
defining the task to be achieved, planning how to achieve, undertaking and monitoring
the plan. A project is an endeavor possessing the following characteristics:

o A project is temporary in nature in the sense that it is not repetitive or permanent,
o A project has schedule. This means that a project has a fixed beginning date and an
ending date,
o A project is undertaken to achieve a goal,
o The goal of a project could be producing a product or service that achieves
something specific,
o A project ends when the objectives are met or when it is terminated.

2. What is a Program?

A program is a group of related projects. Projects that share the same characteristics or
are close in some manner are clubbed together and the same is known as a program.
Program includes projects which are designed to achieve a common objective, projects
that require sharing resources or projects that are interdependent. The sole purpose of
clubbing the projects is to make the functioning of the organization more efficient. The
life of program is much more than a project. It subsists till every project that forms a part
of the project is not complete.

3. What is a Portfolio?

Clubbing of related programs and projects further is termed as a Portfolio. A portfolio
achieves to meet specific needs of an organization. Programs or Projects are clubbed as
portfolio primarily for making staffing and budgeting decisions.

4. What is a Project Management Office?

The Project Management Office is also known as the PMO in short. The basic function
performed by a PMO is to coordinate in terms of communication, technical resources,
human resources, financial resources between different projects. It ensures a regular
supply of resources to the team. It facilitates the working of a Project Manager by
assisting in maintaining and delivering up to the management standards and policies of
the organization. Its aim is to increase productivity, cut costs, and improve processes.
PMO is considered an integral part by many organizations today.

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5. What is Project Management?

Project Management is the application of knowledge to achieve the specific project goals.
It is systematically going through the life cycles of a project to achieve the deliverables.
The aim of applying all the knowledge, skills, tools, and techniques is to achieve the
objectives of the project. It involves breaking down of the task into series of tasks which
are required to be fulfilled within a specified time frame and budget.

6. What are the different Project Management Knowledge Areas?

The entire life cycle of a project consists of 44 processes. These processes are essentially
from 9 knowledge areas. These knowledge areas and the functions they cater to are:

Figure 1: Knowledge Areas

Procurement
Management
Risk
Management
Communicati
on
Management
Human
Resource
Management

Quality
Management

Cost
Management

Time
Management

Scope
Management

Integration
Management

Knowledge
Areas

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o Integration Management: As the name suggests it is responsible for integrating the
various elements of a project. These elements are developing project plans, managing the
execution of these plans, monitoring the work and closing the project.

o Defining the Scope: Processes under this knowledge area ensure that all those
functions are performed which are necessary to complete the projects. Defining the scope
of the project, planning, verification and control come under this. Work is broken down a
logical structure is created to accomplish the task.

o Time Management: These processes are implemented to ensure a timely completion
of the project. These processes do logical sequencing and scheduling of the activities and
further ensure that the timeline is adhered to.

o Cost Management: These processes are crucial for the success of a project. It is the
responsibility of these processes to ensure that the budget constraints are adhered to. All
activities catering to cost management are under this knowledge area.

o Quality Management: The aim of these processes is to ensure that the project
delivers to the expected level of quality. The project is expected to fulfill its objectives.

o Human Resource Management: The processes that manage and organize the human
resource or in other words the team involved in the project come under this knowledge
area.

o Communications Management: Communications play an important role in the
success or failure of a project. Processes that define how, when and with whom the team
members are to communicate come under this area.

o Risk Management: This knowledge area includes the processes that conduct risk
management activities. Risk analysis, response, planning and control come under this
category.

o Procurement Management: Processes responsible for procurement of resources
necessary for the completion of the project come under this knowledge area. Vendor
management is included in this.

7. Discuss the various stages in the Project Life Cycle.

The project manager and his team work towards a single goal, that is to work on the
project to meet the project objectives. Every project passes through a logical sequence of
activities to achieve the project goals and the same is termed as the Life Cycle of a
Project. It is a single term used to refer to all the stages through which a project passes.

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The activities at the beginning of the project are different from the activities undertaken
at a later stage. While a project travels from the stage of inception to completion, the
following points should be kept in mind:

o A Project always experiences Progressive Elaboration. This means that as the project
progresses, a clarity with regards to the plans and projections starts to emerge. The plans
become more accurate as work progresses.

o With every step taken towards the objective the risk factor decreases. Knowledge and
risk in project are inversely related. As the knowledge in a project increases, progressive
elaboration is experienced and as a result, the risks involved in same decrease. The figure
given below illustrates the relationship between knowledge and risk.

Figure 2: Project Risk vs. Knowledge of Project

o With every step taken towards completion, the influence of the stakeholders
decreases. As work progresses, it becomes difficult to make adjustments according to the
needs of the stake holders. As the project moves the options available start to decrease.

o Changes are easy and cost effective to implement at the earlier stages. As the project
progresses changes become a costly affair. As only minimal work has been done in the
initial stages, changes are less costly to implement. The figure given below summarizes
the relationship between stakeholders and cost of changes as the project progresses.

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Figure 3: Impact of Stake Holders and Cost Change

o Costs and activity both are low at the beginning of the project, high at the middle and
again reduces towards the completion of the project.

No two projects are the same but projects do have certain activities which are common.
These activities can be clubbed under various phases or stages. These phases are:

o Initiation: The first stage in the life of a project is initiation. This is the stage where
the project takes birth. The desired output and factors responsible for success are defined
at this stage. In this stage the scope along with the approach to be adopted for reaching
the deliverables is set. At this stage itself, the selection of the project manager is done.
The project manager is further responsible for selecting the team members. The
methodologies and tools adopted at this stage are: Project Charter, Business Plan, Project
Framework, Business Case Justification and Milestone Reviews.

o Planning: The second stage is planning. At this stage the project is broken down into
smaller and achievable tasks. It is a very important phase of the lifecycle of a project as
the final outcome of the same depends on it. Each of the tasks leading to the end of the
project is identified. During this phase, the stakeholders are identified along with
agreeing on frequency of reporting and channels. Risk Analysis is a part of this phase.
The better the planning the better are the results in terms of the outcome and resource
consumption. The aim of this phase is to establish:

- Needs of the Business;
- Costs, Schedules and Resource Consumption;
- Set the ground for the next phase.

The basic processes undertaken in this phase are:
- Scope Planning;
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- Preparing the Work Breakdown Structure;
- Resource Planning;
- Project Schedule Development;
- Budget Planning;
- Procurement Planning;
- Communication Planning;
- Quality Planning;
- Risk Management Planning;
- Configuration Management Planning;

o Executing: The third stage is of Execution. The project is carried out at this stage. It is
ensured that the project is carried out as planned. At this stage, the involvement of the
team increases with the aim to reach the deliverables. Testing, production and support go
hand in hand during this phase.

o Controlling: At the fourth stage of project control, processes are undertaken to ensure
resource optimization and risk reduction. It is important to control the project to keep it
on track and reach the deliverables according to the time schedule.

o Project Closure: The fifth and the last stage is that of Closure. This is the finishing point
of the project. The product is a deliverable at this stage. Formal review reports are
prepared, delivery of the project, implementation of the project, team rewards all are
undertaken at this stage. In the end the management is formally informed about the
closure of the project.

Figure 4: Phases of a Project
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As the project travels from one phase to another, technical material and control also
travels from one group to another. The end of a phase is determined when it delivers
work sufficient enough for the other phase to carry out its processes effectively.

8. Who are the Stakeholders in a Project?

A project is undertaken to suffice a need. A need may arise from a single person but the
likelihood of more people being affected by the same in an organization is high. All such
people that are affected or who have a stake or an interest in the project are termed as the
stakeholders. The stakeholders express their needs and expectations from the project.
They mould the final outcome of the project.

The stakeholders may not remain the same from the beginning to the end. At the first
stage itself, stakeholders are identified and a list is prepared. Care has to be taken to
include all key stakeholders as the success of the project finally depends on them. It may
not be possible to tap every single stakeholder, representative stakeholders can be asked
to represent a group holding a common interest. The key stakeholders are:

Figure 5: Stakeholders in a Project

Management

Service
Provider

Customer,
User

Project
Manager

Stakeholder
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o Customer, User or Client: These are key stakeholders. A need arises at this end and the
end project is also delivered at this end. They are directly affected by the success or the
failure of the project.

o Service Provider: The organization that undertakes the project is also a stakeholder in
this.

o Management: The management of the organization that is to provide the service is also a
major stakeholder in the project.

o Project Manager: Project Manager is the person responsible for managing the project
and the team members working on the same.

The other stakeholders are the Project Team, Project Management Office, Project
Sponsors, and Influencers.

9. Who is a Project Manager?

The Project Manager is a major stakeholder in the project. Though, he does not have the e
final authority over the project, he is a visible stakeholder. He represents the project team,
and is also responsible for getting the work done from it.

A project manager may or may not have control over the resources. A project manager
need to be assigned until the first phase of the project life cycle is complete but should
ideally be assigned before the second stage, that is, planning is undertaken. A project
manager who participates in drafting the project charter is able to plan the project in a
better manner.

A project manager performs the project management functions. An effective project
manager is expected to have the following qualities:

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Figure 6: Qualities of a Project Manager

Ability to Deal
with Pressure

Creativity
&
Competence

Knowledge
&
Versatility

Commitment &
Integrity

Enthusiasm,
Empathy &
Discipline

Problem Solving
Abilities

Team Building
Skills
Good
Communication
Skills

Project Manager
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Chapter II

Project Initiation

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10. What is understood by the term Project Initiation?

It is the first phase through which a project passes. The objective of this phase is to
specify what the project is supposed to achieve. It is at this stage that it is determined
whether to begin the project or not. The primary goals, the secondary goals, the time
frame are the basic criterions that are specified in project initiation.

The basic processes that are undertaken at this stage are:

o Creation of a Product: The characteristics of the product or the service that has to be
created are described;

o Creation of a Project Feasibility Document: While preparing this document,
consideration is paid to project constraints, alternatives, and assumptions. In this
document the problem, the solutions to the problem are described in detail. The document
also mentions the approach that will be used while working on the recommended
solutions;

o Creation of Project Concept Document: The business value of the project is
determined while preparing this document. It discusses what, how and the why behind
the project;

o Creation of Project Charter: This document discusses the scope, the authority and the
success factors of a project.

The processes involved in initiation are represented in the figure illustrated below:

Figure 7: Initiating Process Group Processes

It is normally done at the first instance but may be required to be undertaken again at
later stages also during the subsistence of a project. In the case of large projects this
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phase is repeated several times. The progress of a project is always assessed against the
inputs made at the initiation stage. Revaluation of merits, seeking extensions, approvals
all require the team and the management to go back to the documents prepared at this
stage.

Some of the foundation work is done even before the project initiation phase starts.
Project boundaries and initiation dates are not clear for this reason. The need of a project
arises much before the project actually starts and similarly the documentation of the need
of the project occurs much before the actual project starts. The information gathered
during this stage forms the basis of a crucial decision. At the end of this stage, only three
actions can be taken:

Figure 8: Decisions taken at the end of Project Initiation Phase

11. What is the importance of the Project Charter?

There are two processes involved in the project initiation phase. These processes are
development of the Project Charter and development of the Preliminary Project Scope
Statement. The project charter is the first formal document that is created. It contains a
complete description of the project. It is only after the acceptance of the project charter
that a project is considered as authorized. The absence of project charter is something that
should set the project manager thinking.

The project charter is authorized by the stakeholders and is also assigned to a project
manager by the same. With the framework and the deliverables in hand, the project
manager allocates the resources. Once all this is done, the stage to start the work is all set.
The table below illustrates the inputs and the tools and techniques that are adopted for
creating a project charter.

Inputs

Tools & Techniques Output
Contract

Project Selection Methods Project Charter
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Project Statement of Work Project Management
Methodology

Enterprise Environmental
Factors
Project Management
Information Systems

Organizational Process
Assets

Expert Judgment

Table 1: Develop Project Charter Process- Inputs, Tools & Techniques and Output

The project charter contains complete information on the need of the business and how
that need will be fulfilled. It provides information on how the specific project that has
been agreed to be undertaken would address the need of the business. There is no fixed
format that a project charter is expected to follow. It is expected to contain information
on the following:

o The assumptions and constraints governing the project;
o The need or the justification behind the project;
o The stakeholders in the project;
o The deliverables expected from the project;
o The time frame that the project is expected to adhere to;
o The budget constraints;
o The Project Manager.

12. What is the role of a Project Initiator?

Project Initiator: The project initiator is the person who starts the project. He along with
the stakeholders is responsible for assigning a project manager and authorizing him. He is
also responsible for funding the project as the consumption of resources starts even
before the project is formally initiated. The project initiator collects and compiles all the
necessary information into a project charter. It is important that the stakeholders be
involved at this stage. This document also serves as an opportunity to the stakeholders to
give a thought to the project before the actual work starts. A project manager is the
person who actually carries out the plan to achieve the deliverables. He receives all his
authorizations from the project initiator and the stakeholders.

13. Discuss the processes involved in Project Initiation.

Project Initiation consists of two processes. These processes are:

o Developing the Project Charter

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o Developing the Preliminary Project Scope Statement

Developing the Project CharterTools and Techniques: The process of collecting
information starts once the decision to initiate the project is undertaken. The project
boundaries are not clear at this stage. Producing the charter requires certain amount of
resources to be spent and the project initiator does the same.

At this stage, the project is an initiated project and not an authorized project. Once a
charter is crystallized the decision is made whether to carry on with the project or to
discontinue with the same. In case it is decided not to continue, the resources that have
already been spent in preparing the project charter prevent further expending of
resources. This very factor is what makes project initiation such an important phase in the
project life cycle.

Project Selection Methods: While selecting projects formal selection methods are
followed as comparison of the benefits of multiple projects can be done cogently. Formal
selection methods make it easy to set specific standards and measure the benefits of a
particular project against the minimum specified standards. The project selection methods
are:

Figure 9: Different types of Project Selection Methods

o Benefit Measurement Methods: The methods falling under this type make a note of
the benefits that will accrue at the completion of the project. The projects are compared
based on their impacts.

o Mathematical Methods: Using this method the project is rated on a scale from 1 to
100. The rating controls the decision of project selection.

Project Management Methodology: Project Management Methodology is a
combination of an organizations standard practices and project management standards.
The method that is adopted is controlled by the organizations culture and other factors

Project Selection
Methods

Benefit Measurement
Models

Mathematical Models
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controlling the project charter. General standards, guidelines, common practices are
followed in combination to manage projects.

Project Management Information System: Project Management Information System or
PMIS in short is a collection of computerized tools. The purpose of these tools is support
the project while going through its life cycle. These tools are used to collect and store
data, analyze and interpret data into information for the project. The various tools are
represented in the figure given below:

Figure 10: Tools of Project Management Information Systems

Expert Judgment: It is a tool used in project initiation. Expert opinion may be required
for both technical as well as procedural details. Customers, stakeholders, professional
associations, industry groups or even unrelated people can be tapped to offer expert
opinion.

Using Management by Objectives: Management by objectives is an important
technique in management information systems. This technique harmonizes the objectives
within different levels of an organization or within multiple areas. The initiation process
works for providing an understanding of the project, understand the value the project will
provide to the organization and ensure that the project is authorized by the organization.
It is considered an effective management practice for:

o Implementing goal setting;
o It suggests activities similar to the project control process;
o It makes sure that the goals are in consistency with the larger goals of the
organization;
o MBO and sound project management needs the support of management to be
successful.

Accounting
Concepts

MBO

Expert
Judgment

Tools
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MBO can be implemented in three simple steps:

Step I: Establish clear objectives. In addition to being clear, the objectives should also be
achievable.

Step II: Check if the objectives are being met;

Step III: Undertaking corrective measures in case of discrepancies.

Accounting Concepts Used with Project Initiation: For a project manager it is essential
to have an understanding of basic accounting principles. Accounting and valuation are an
integral part of every phase of the project life cycle. Be it any project selection method, it
cannot be done without a basic understanding of the accounting methods. The project
selection accounting concepts and general accounting concepts with which a project
manager needs to be familiar are represented in the tables given below. The table also
mentions the implications of a particular value.

Accounting
Concept
Description Key for Project
Selection

Note
Present
Value (PV)
The current value
of future cash flow
Higher the PV, the
e better it is for the
project.
PV=FV(1+r)n
Net Present
Value
(NPV)
The present value
of cash inflow less
the present value of
cash outflow
A negative NPV is
unfavorable; the
higher
The NPV, the
better.
Accounts for
different
Project durations
Internal
Rate of
Return

The interest rate
that makes the net
present value of all
cash flow equal
Zero
The higher the IRR,
the better.
The return that a
company would
earn if it invested in
the project
Payback
Period

The number of time
periods required
until inflows equal,
or exceed, costs
The lower the
payback period, the
better.

Benefit Cost
Ratio (BCR)
A ratio describing
the relationship
between the cost
and benefits of a
proposed project
A BCR less than 1
is
unfavorable; the
higher
The BCR, the
better.

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Opportunity
Costs

The difference in
benefit received
between a chosen
project and a
project
That was not
chosen

Sunk Costs

Money that has
already been spent
and cannot be
recovered
This should not be
a factor in project
decisions.

Table 2: Project Selection Accounting Concepts

Accounting
Concept
Description Example/ Notes
Variable
Costs
Costs that change
based on an
organizations
activity
Fuel costs an
example of these
costs
Fixed Costs Costs that remain
constant, regardless
of activity
Level
Rent and Lease
Direct Costs Costs that can be
directly associated
with the production
of specific goods or
services
Labor and material
costs
Indirect
Costs
Costs that cannot be
directly associated
with the
production of
specific goods or
services
Legal,
Administration and
insurance costs
Working
Capital
Total assets less
total liabilities

The simplest
method
Straight Line
Depreciation
A depreciation
method that evenly
divides the
Double Declining
Balance (DDB)
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difference between
an assets cost and
its expected
salvage value by
the number of years
it is expected
to be in service
Accumulated
Depreciation
A depreciation
method that allows
greater deductions
in the earlier years
of the life of an
asset

Life Cycle
Costing
Includes costs from
each phase of a
projects life
cycle when total
investment costs
are calculated

Table 3: General Accounting Concepts

Developing the Preliminary Project Scope Statement: This is the second process to be
undertaken at the stage of project initiation. The document clearly states the scope of the
project; that is, what it will accomplish and what it will not accomplish. The aim of this
statement is to provide a statement summarizing the intent of the project. The boundaries
of the project are defined in this statement. At this stage, what is developed is a
preliminary project statement while a detailed statement is developed at the stage of
planning. The preliminary statement should be as informative as possible. The
information is procured from:

o The Initiator;
o Stakeholders and Customers;
o Brainstorming and extensive discussions amongst the team members for
generating maximum information;
o Project Charter and supporting inputs

The document contains information about:

o Approval and acceptance requirements in the organization;
o Budget Considerations
o Industry Standards
o Preliminary work breakdown structure (WBS)
o Project Boundaries
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o Project Constraints and Assumptions
o Project Deliverables
o Project Objectives
o Project Risks
o Quality Constraints
o Time Frame

A scope statement can contain information overlapping with the project charter, but the
two are meant for entirely different audiences. It is directed towards every person who is
interested in knowing what the project aims to achieve. This statement is available to all
internal as well as external.

A scope statement is crucial for the success of a project and should be drafted carefully. It
gives a direction to the entire process. An inadequate statement can mean a project that
will under deliver or a detailed statement will result in widening scope resulting in
attaching unnecessary work with the project. The table given below illustrates the inputs,
the tools and the output for developing a project scope statement.

Inputs

Tools & Techniques Outputs
Project Charter Project Management
Methodology
Preliminary Project Scope
Statement.
Project Statement of Work Project Management
Information Systems

Factors
Expert Judgment
Assets

Table 4: Inputs, Tools & Techniques to
Develop Preliminary Project Scope Statement as Output

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Chapter III

Project Planning

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14. Discuss the importance of the second phase of Life Cycle of a Project.

The second phase of the life cycle of a project is planning. Reaching this stage means that
the project has been authorized. To begin the second phase of the life cycle the first
phase, that is, initiation provides two documents:

o Project Charter;
o Preliminary Project Scope Statement.

Planning as a phase is a combination of multiple processes. The interrelation of these
processes is depicted in the figure given below.

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Figure 11: The Planning Process Group Process Interactions

The processes involved in the planning phase derive answer to how the deliverables will
be achieved. The output resulting form the planning processes explains how the goals
will be achieved by the project.

Planning is a very important phase in the life cycle of a project. Poor planning can be
detrimental to the success of a project. Inadequate planning can result in wasted effort
and time. Good Communication amongst the team members is imperative for planning.
The project manager needs to show his leadership skills and needs to keep the team well
informed for positive results.

15. What is understood by Project Management Plan?

The project Management Plan is also known as Project Framework. The project
Management Plan offers answers to the questions why, what, how, who and when of the
project. It functions as a basic and an important tool in planning, monitoring, and
implementation of the entire project plan. It offers direction to the other processes
forming a part of the planning and harnesses the subsidiary plans. It does so by fitting
them into the major project plan. It provides a complete graph of the progress of the
project from its beginning to the end.
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Looking at the subsidiary plans very well explains the scope and the importance of the
Project Management Plan. The following subsidiary plans are a part of the Project
Management Plan:

o Communication Management Plan;
o Cost Management Plan;
o Process Improvement Plan;
o Procurement Management Plan;
o Project Scope Management Plan;
o Quality Management Plan;
o Risk Management Plan;
o Schedule Management Plan;
o Staffing Management Plan

A project management plan is much more detailed than the project schedule. All known
information about the project is consolidated this management plan. The inputs, tools,
techniques and the output of the plan are illustrated in the table give below.

Inputs

Statement
Project Management
Methodology
Project Management Plan
Project Management
Processes
Project Management
Information System

Factors
Expert Judgment
Assets

Table 5: Develop Project Management Plan Inputs, Tools, Techniques & Outputs

16. Discuss Scope Management.

The scope of a project is the most critical element in a project as all further processes and
resources are dependent on it. Scope Management is a set of processes undertaken to
ensure that the needs of the customer are carefully recorded.

A project has to be guarded against scope creep. It further plays an important role in
keeping the development of the project on track and make sure that it reaches its
destination. It is important to keep the distractions away and resources from being
wasted. The scope of a project needs to be managed and controlled. It defines the exact
work to be undertaken for achieving the deliverables.
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Scope Management can be subdivided into two processes:

Figure 12: Processes involved in Scope Management

o Scope Planning: Scope planning specifies, controls, and verifies the scope. The
bigger the project, more the work required to do the scope planning process. The table
illustrated below shows the inputs, the tools, techniques and the output of this process.

Inputs

Factors
Expert Judgment Project Scope Management
Plan
Assets
Templates, Forms, and
Standards

Statement


Table 6: Scope Planning Inputs, Tools, Techniques, and Outputs
o Scope Definition: The result of this process is that the preliminary scope statement is
refined. At this juncture there is no ambiguity in what the project is to achieve and what
not to achieve. The defined scope is supported by the documents attached along. After
identifying all the necessary processes that need to be done to achieve the deliverables
they are included in the scope definition. It should be detailed as it determines the efforts
that are to put in to achieve the project. It is used by the team to acquire an understanding
of the expectations from the project. It plays a critical role in determining the success or
failure of the project and should be drafted after due consideration.

Scope Management

Scope Planning

Scope Definition
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The table illustrated below shows the inputs, the tools, techniques and the output of this
process.

Inputs

Assets
Product Analysis Project Scope Statement

Project Charter

Alternative Identification Requested Changes
Statement
Expert Judgment Project Scope Management
Plan (Updated)
Project Scope Management
Plan
Stakeholder Analysis
Approved Change Requests

Table 7: Scope Definition Inputs, Tools, Techniques, and Outputs

17. What is understood by the term Work Breakdown Structure and Work
Breakdown Dictionary?

Work Breakdown Structure: It is an important tool and determines the planning for the
rest of the project. It is also known as WBS in short. Work Breakdown Structure is
breaking down of the project into smaller activities and sub activities. It breaks the entire
project into a hierarchal tree structure. This is done for a better definition and control of
the work. The smaller units of work are known as work packages. The result of this
process is a list of work processes that need to be done for successful completion of the
project. The table given below illustrates the inputs, tools, techniques and outputs for
creating a WBS.

Inputs

Assets
Work Breakdown Structure
Templates
Project Scope Statement
(Updated)


Decomposition WBS
Plan
WBS Dictionary

Scope Baseline
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Plan (Updated)
Requested Changes

Table 8: Inputs, Techniques, Tools and Output of WBS.

Preparing a WBS is a time and an energy consuming task. It organizes the work into
manageable and smaller processes. The work packages are the smaller steps that need to
be taken to reach the deliverable. Every work package needs to be completed to achieve
the goals of the project. It is an outline of the entire project and as one keeps going down
the work packages, the work is discussed in a detailed manner. The work packages can be
fitted together to reach a completed project.

The process of breaking down the work into smaller work packages continues until the
work is not broken down into smaller and simpler units. It is hierarchal arrangement of
the tasks with the highest level being the project itself. The figure given below illustrates
the hierarchal arrangement of work packages.

Figure 13: Work Breakdown Structure

Work Breakdown Dictionary: It is a useful resource and tool used in the second phase
of the life cycle. It contains entries for each component or work package. It contains the
scope, the deliverables, the period, and the list of activities that are associated with each
work package. It contains information such as:

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o Name of the package;
o The owner of the package;
o The Description of the work;
o Accounting Control Account;
o Technical and Quality Specifications;
o Resource Requirement;
o Work Schedule

18. What is Activity Planning?

The next step in project planning is working on the schedule of the project. Multiple
automated tools are available for helping the project managers to schedule the work. A
prerequisite of working on an activity plan is the WBS. A well drafted WBS helps
prevention of task redundancy and ensures that the work remains well within the scope of
the project.

Activity planning is broken down further into two processes:

Figure 14: Processes Involved in Activity Planning

o Defining Activities: The first step is to understand the meaning of the term activity. For
the purposes of project management activity is a specific event, or happening. The team
members are expected to participate in an activity. It can also be used to refer to the
project in totality. The process of activity planning starts with the work breakdown
structure. The aim of activity planning is to identify the activities that are required to be
performed to reach the deliverables. It is an answer to the question What activities are to
be performed to meet the requirements of the work package? The information that is
collected in answer to this question is a list of activities which are arranged in a sequence.
This sequence is termed as activity planning in project management. The table given
below illustrates the inputs, tools, techniques, and outputs for the activity definition
process.

Activity Planning

Defining Activities

Sequencing Activities
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o

Inputs

Factors
Decomposition Activity List
Assets

Templates Activity Attributes

Rolling Wave Planning Milestone List
WBS

Expert Judgment Requested Changes
WBS Dictionary

Planning Component

Table 9: Activity Definition Inputs, Tools, Techniques and Outputs

The project normally goes through a process known as progressive elaboration. As the
work of a project progresses, knowledge about it is acquired. Additional knowledge
means altered planning which further requires the details to be reworked. Progressive
elaboration is the process where as the project progresses the details are worked upon.
Project plans need to be visited again as the project progresses. This ensures that the
project stays up to the mark and detailed plans are available for change. The phenomenon
of continuing the planning as the project moves ahead is termed as rolling wave planning.

o Sequencing Activities: Once the activities have been defined, they are logically
sequenced. The sequencing of activities is done based on factors like the time required
for completion, the resource input, activities that need to be performed prior to a certain
activity. In this process the relationship between various activities is formed and noted.
The table given below illustrates the inputs, tools, techniques, and outputs for the activity
definition process.

Inputs

Project Scope Statement Precedence Diagramming
Method (PDM)
Project schedule network
diagrams

Activity List Arrow Diagramming
Method (ADM)
Activity List (Update)
Activity Attributes

Schedule Network
Templates
Attribute List (Update)
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Dependency Determination Requested Changes
Applying Leads and Lags

Table 10: Activity Sequencing Inputs, Tools, Techniques and Outputs
19. Discuss the importance and the different types Network Diagrams.

It is very important to know how to create and interpret network diagrams. These
diagrams are graphical representation of activities and their interrelationship. They are an
important management tool. There are two methods to draw Networking Diagrams:

Figure 15: Network Diagram Methods

o Precedence Diagramming Method: These diagrams are also known as Activity on
Node Diagrams (AON) as the activity along with other information is listed on the node.
It is a tool used for scheduling of activities in a project. The method uses boxes (known
as nodes) to represent the activities. The interrelationship between the activities is shown
with the help of arrows. The figure given below illustrates a Network Diagram made
following the Precedence Diagramming Method. The information that is represented on
the nodes is:
- Start Date: This is the earliest date when the project can start;
- Duration: The duration for which the activity will last;
- Finish Date: The earliest date by which the activity can finish;
- Late Start: This is the latest date by which the project can start;
- Late Finish: The latest date by which the project can finish.
- Slack Period: This is the difference between the early start date and the late
start date.

Networking Diagram
Methods

Precedence Diagram
Method

Arrow Diagram
Method
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Figure 16: The Precedence Diagramming Method

Figure 17: A Completed PDM Diagram

A PDM diagram is used to represent four types of dependencies:

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- Finish to Start: This is the most common dependency type. The start of the
successor activity is dependent on the completion of the successor activity.

- Finish to Finish: The completion of the predecessor activity controls the
completion of the successor activity.

- Start to Start: The start of the successor activity depends on the start of the
predecessor activity.

- Start to Finish: The completion of the successor activity is controlled by the start
of the predecessor activity.

o Arrow Diagramming Method: The method followed in this diagram is similar to that of
the PDM. The difference between the two is that in ADM all dependencies are finish to
start. The duration of the activity is indicated on the arrow rather than being indicated in
the node. These diagrams are also known as Activity on Arrow (AOA) diagrams. The
figure given below illustrates an example of an ADM. In these diagrams, the dotted lines
denote dummy activities. Dummy activities are activities which do not have a specified
duration.

Figure 18: The Arrow Diagramming Method

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20. Discuss the process of Estimating Activity Resources.

The next process that forms a part of the planning phase of the life cycle of project is
working on the estimates of the resources that are required for the completion of the
project. Once again it is a process that has to be done with due care and caution. The
project team prepares a complete list of estimated resources. A resource estimate list
revolves around:

o The Activity List;
o The Activity Attributes;
o The Organizational Process Assets;
o The Enterprise Environmental Factors;
o The Project Management Plan;
o The Resource Availability

For every activity, resources are needed. The various resources that an activity can need
are:

o Equipment;
o Materials and Supply
o Funds
o Human Resource

The table given below illustrates the inputs, tools, techniques and outputs of Activity
Resource Estimation.

Inputs

Factors
Expert Judgment Activity Resource
Requirements
Assets

Alternatives Analysis Activity Attributes
(Updated)
Activity list Published Estimating Data Resource Breakdown
Structure
Activity attributes Project Management
Software
Resource Calendar
(Update)
Resource availability Bottom-up Estimating Requested Changes

Table 11: Activity Resource Estimation-Inputs, Tools & Techniques and Outputs.
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For estimating activity resources, two methods can be followed:

Figure 19: Activity Resource Estimation Methods

o Alternative Analysis: This method involves analyzing the alternative resources available
to achieve a particular result. Alternatives could be a better option for reasons of lower
costs, better quality, early completions etc. This is also resorted to when a primary
resource is unavailable.

o Bottom up Estimating: The WBS is created so that the entire work can be broken down
into smaller work packages. This not only facilitates accomplishing the tasks but also
helps for resource and duration estimation. Working on the estimates following this
method, estimates are calculated bottom up, that is, estimates are made for the lowest
level to the top level. This method allows for accurate estimates as these are made by the
people who are to actually perform the task.

21. Discuss the process of Estimating Activity Durations

Once the resource estimates have been worked out it is time to determine the work
periods that are required for achieving the activities that have been scheduled. For
calculating the activity durations it is assumed that the resources would be available as
and when required by a work package. The table given below shows the inputs, tools,
techniques, and outputs for this process.

Inputs

Factors
Expert Judgment Activity Duration Estimates

Activity Resource Estimation

Alternative Analysis

Bottom Up Estimating
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Assets
Analogous Estimating

Activity Attributes
(Updated)
Project Scope Statement Parametric Estimating

Activity List Three Point Estimates

Activity Attributes Reserve Analysis

Activity Resource
Requirements

Resource Calendar


Table 12: Activity Duration Estimates-Inputs, Tools, Techniques, and Outputs

The techniques followed for determining the activity duration estimates are depicted in
the figure given below. In some organizations multiple methods are used for better
estimates.

Figure 20: Activity Duration Estimation

o Analogous Estimation: While using analogous estimation, the actual time spent in a
similar activity is noted. The similar activity could be of the same project or a different
project.

Activity Duration
Estimation

Expert Judgment

Analogous Estimation

Parametric Estimation

Three Point Estimation
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o Parametric Estimation: While using parametric estimation, the quantity of work to be
done is multiplied by the productivity rate. This technique works best for activities that
been standardized and are repetitive in nature.

o Three Point Estimates: This technique uses three estimate values for each activity.
These values are:
- Most Likely: The most likely duration that the activity will take;
- Optimistic: The duration of the activity if everything goes as planned, or better;
- Pessimistic: The duration of the activity in a worst-case scenario.

22. Discuss the process of Project Scheduling.

After the process of estimating activity duration is over, the process of developing project
schedule starts. For this process, all activity information serves as the input and the result
is an initial schedule. This schedule is dynamic in nature which means that as the work
progresses through the life cycle, changes are reflected in the schedule. This is one
document and process which demands recurrent attention of the project manager. The
table given below illustrates the inputs, tools, techniques and outputs for this process.

Inputs

Assets

Schedule Network Analysis Project Schedule
Project Scope Statement Critical Path Method Schedule Model Data

Activity List Schedule Compression Schedule Baseline

Activity Attributes What if Scenario Analysis Resource Requirements
(Updates)
Project Schedule Network
Diagrams
Resource Leveling Activity Activity Attributes
(Updates)
Activity Resource
Requirements
Critical Chain Method Project Calendar (Updates)
Resource Calendar Project Management
Software

Requested Changes
Activity Duration Estimates Applying Calendars

(Updates)
Project Management Plan Adjusting Leads and Lags

Schedule Model

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Table 13: Schedule Development- Inputs, Tools, Techniques, and Outputs

Critical Path: Critical path is the longest path from start to finish. A delay or increase in
the duration of the activity for any reason reflects a consequent delay in the project. It is
critical for the project that all activities on this path be completed as per the schedule.

Figure 21: Critical Path

In the figure given above, the path ABDFG takes 17 days to reach completion and path
ACEG takes 14 days. The path ABDFG is critical path as it the longest path to reach
completion. A delay in any of the activity on the path will cause a consequent delay in the
project.

23. Discuss the factors playing an important role in Cost Estimations.

The process of cost estimating is working on the expected cost or performing each
activity. For calculating the costs the following are taken into consideration:

o Cost of Labor;
o Cost of Material;
o Cost of Equipment;
o Other Direct Costs.

The costs are calculated in monetary terms. Any unexpected event can result in
consequent rise or fall in the cost estimates. The table given below illustrates the inputs,
tools, techniques and outputs for this process.

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Inputs

Factors
Analogous Estimating Activity Cost Estimates
Assets
Determine Resource Cost
Rates
Activity Cost Estimates
supporting detail

Parametric Estimating Requested Changes
Work Breakdown Structure Parametric Estimating Cost Management Plan
(Updates)
WBS Dictionary

Project Management
Software


Vendor Bid Analysis

Reserve Analysis
Cost of Quality

Table 14: Cost Estimations- Inputs, Tools, Techniques, and Outputs

24. Discuss the Cost Budgeting Process.

Cost estimates are an integral part while calculating the project budget. The cost
budgeting process is a culmination of the activity cost estimates into a single document.
The table given below illustrates the inputs, tools, techniques, and outputs for the cost
budgeting process.

Inputs

Project Scope Statement Cost Aggregation

Cost Baseline
WBS Reserve Analysis

Project Funding
Requirements
WBS Dictionary

Parametric Estimating Cost Management Plan
(Updates)

Funding Limit
Reconciliation
Requested Changes
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supporting detail
Project Schedule

Resource Calendars

Contract

Cost Management Plans

Table 15: cost Estimation- Inputs, Tools, Techniques and Outputs

25. Discuss the process of Risk Management Analysis.

No project is independent of risks. Risks can be planned, predicted, and regulated. Risk
analysis is meant to set the team thinking whether the project is moving in the right
direction or not. Risk Management Analysis is the process that describes how risk
management activities will be undertaken. The first step in this is risk management
planning. In this the project manager plans for contingencies and how to deal with the
risks that may be posed during the development of the project. This is an important
process. Any shortcoming in this process can have a direct impact on the success of the
project. Planning meetings are undertaken to identify the risks and the plans. Some
organizations may appoint special risk managers to plan and deal with the process.

It is essential that the risks be clearly identified, adequately monitored and effectively
mitigated. Care has to be taken not to let the project be hijacked by risk management. The
risk has to be accepted as it and additional burdens should not be attached to it. This is
important as over apprehension about the risks will not let the project breathe. Higher is
the number of risks that are recorded higher, the longer is the project going to take to
complete. Identifying the risks at an early stage helps the project team and manager to
streamline the work and the resources. This helps to avoid difficulties arising at a later
stage.

A situation may be a risk for a particular project or an organization and an opportunity for
another project or organization. Every situation has to be interpreted in its own
circumstances. Risk Management requires that there be effective and regular
communication between the staff members, managers and stakeholders. It is also
essential that roles and responsibilities of fixed. Accountability and transparency should
be an integral part of project development to mitigate risks.

26. Discuss the key principles governing Risk Management.

Managing risks is an essential part of any project. Risk Management forms an integral
part of project management. Risk methodology is a combination of tools and techniques
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that are used to mitigate the risks to a project. It contains in detail the steps to be taken to
deal with risks. The tools that are used for this process are the risk register, the risk
breakdown structure, the probability and impact matrix and checklists. The basic
principles governing risk management are:

Risk Identification: Risk identification is the process of identifying the risks involved in
a project or a particular process. It is a process that carries on throughout the life of the
project. Before a risk can be dealt with or a strategy be made to deal with a risk, it is
imperative that it be identified. This should be done after a thorough analysis. In this all
potential and likely risks should be identified and carefully documented. The inputs
required for identifying risks are:
o Commercial Databases
o Industry/academic/Benchmarking studies
o Information from Internal Database
o Scope Statement;
o Project Management Plan.

Nature of Risk: Risks can be of two types, Positive and Negative. The response of the
project manager, team, the management, and the other stakeholders is different to both.
Positive Risks are opportunities and hence an effort is made to increase the same.
Negative Risks can be detrimental to the success of a project and hence the team and the
manager work to reduce these risks. Care has to be taken not to go overboard when it
comes to managing risks as it may slow or even stagnate the development of the project.

Assessment of Risks: A risk is assessed on the basis of probability of its occurrence and
the impact that it will have on the project.

Risk Probability and Impact: Risk Probability is an analysis of what is the probability
of the risk to occur. This probability can be expressed in two ways:
o Mathematically
o High, Low or Medium

Impact Analysis is a study of the impact of a risk. It is also expressed on a mathematical
scale or as high, low and medium. The details of both the analysis are documented at the
time of planning. A probability and impact matrix can also be used for this analysis.

Risk Category: Risk Categories is classification of risks depending on various factors.
Risks can be classified as technical risks, organizational risks, internal risks, external
risks, group risks, or even environmental risks. A category can be broken into a sub
category. It helps to classify risks in these categories as the response to a risk, the
importance to be attached to a risk, the impact of a risk all would depend on the type of
risk.

Risk Breakdown Structure: A Risk Breakdown Structure is a tool used to organize
risks in a hierarchal structure. As the project moves ahead there will be many situations
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which will be considered as a risk for its success or development. Risk Management
involves organizing these risks before they are actually encountered and working on a
contingency plan. For organizing the risks with RBS serves as a helpful tool. It contains
details of the risks and is classified in categories. The basis of the classification could be
the nature of risk, the cause of risk, the remedy of the risk to specify a few. The tool can
be easily customized depending on the type of project. The risks can be classified in the
following categories:

o Technical Risks;
o Organizational Risks;
o Costs;
o Schedules;
o Resources

Risk Register: It serves as an important tool for recording and tracking the risks. It
records the qualitative as well as the quantitative risks. It allows their descriptions,
categories to be recorded in a risk register. Broadly speaking it will be record information
under the following heads:
o Risk description
o Date on which Risk was Identified
o Category of Risk
o Potential Responses to the Risk
o Current Status

Monte Carlo Analysis: Monte Carlo Analysis is a technique that works by using
simulated situations and probability. It is used for determining quantitative risk analysis.
The project manager and the team calculate the value of the entire project and project
schedule with different randomly selected input values. These values are selected by
carefully working out the probabilities based on costs and time frame. This analysis is
used to calculate a scenario where total costs can be distributed. These are also calculated
over possible completion dates.

Decision Tree Analysis: Decision Tree analysis is a technique that uses a tree like
diagram to help in decision making. It is a structured approach towards the decision. The
branches of the tree represent the various options and their consequences available. It is
often used as a tool for brainstorming. The advantage of using this tool is that it ensures
that all factors probabilities, costs, and rewards are taken into consideration.

Risk Management Planning Vs. Risk Response Planning: It is important to remember
that risk management plan and response management plan are entirely different
processes.

o Risk Management Planning: After risks have been organized and categorized the
project manager and the team determines the best method to deal with these risks. This
can be done by having an effective risk plan. The help of a risk management plan is taken
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work out the strategy. A risk management plan is a device that records the inputs and the
outputs for dealing with risks. This plan could be in the form a formal or an informal
document. Working on this plan is known as Risk Management Planning.

o Risk Response Planning: Once the risks have been identified, categorized risk response
planning comes into picture. It is the act of developing a list that contains the options that
are available while responding to a risk. The aim of response planning is to reduce the
risk and the response time for a risk.

Qualitative Risks Vs. Quantitative Risks:

o Qualitative Analysis: This involves conducting a complete and a thorough analysis. This
analysis may be done prior or during planning of the project. It is undertaken to ascertain
the proportion of probability and impact of a particular risk. A high probability risk
requires to be dealt with proactively than a low probability risk. The same goes for a high
impact and low impact risks. It prioritizes the risks facilitating the process of planning,
monitoring and control.

o Quantitative Risk Analysis: Quantitative Risk Analysis is important for a project
manager and his team. It helps them to understand the potential level of the risks to the
project. It takes into consideration only those risks that are considered to be of high
priority while conducting qualitative analysis. This analysis is undertaken with the aim of
quantifying the probabilities of outcomes and work on realistic scopes.

27. Discuss the various responses to Negative and Positive Risks

The responses to a risk are recorded in risk register. The responses to a negative risk can
be:
o Avoiding the risk;
o Transferring the risk;
o Mitigating the risk;
o Accepting the risk

The responses to a positive risk can be the following:
o Exploiting the risk;
o Sharing the risk;
o Enhancing the risk
o Accepting the risk

The responses can be summarized as illustrated in the table below:

Response Description

Risk Type
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Accept Taking no steps in the project because of
the risk.
Positive & Negative
Avoid Eliminating the threat by incorporating
changes in the Project Management Plan
Negative
Enhance Increasing the positive impact of the
risk.

Positive
Exploit Taking steps to make the opportunity
happen.

Positive
Mitigate Reducing either the probability or
impact of the risk.
Negative
Share Using a third party to help capture the
opportunity.
Positive
Transfer Shifting the risk to a third party

Negative

Table 16: Risk Type and Response to it.

28. Discuss the process of Human Resource Planning and the key principles used in
the same.

Human Resource planning is the process that determines the type and the quantum of
human resource that are required to complete the project within the stipulated time.
Procurement of necessary human resource also falls under the purview of this process.
Once the human resource that is required is determined, the next step is to determine the
roles and responsibilities of the team members. Organization charts and staff
management plans are prepared.

The project manager is the leader of the team. The team is his responsibility. The human
resource functions of a Project Manager are:
o Ascertain the HR need of the project;
o Negotiate with line managers for procuring internal resources;
o Acquisition of external resources through the procurement process;
o Determine the training needs of team members;
o Determine the performance review approach for a projects human resource;
o Responsible for rewards and recognition of team members;
o Document the team structure and ascertain responsibilities of team members;
o Create a organization charts and
o Develop staffing management plan.

The key human resource principles used in this are:

o Human Resource Management is a process used for managing the project staff;
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o The project manager, sponsor and other people responsible for planning, controlling and
closing the project are classified as project team;
o HR planning is undertaken to deliver organization charts, staffing management plan and
deciding on the roles and duties of each team member.

The tools used for Human Resource Planning are illustrated in the table given below:

Name

Description Use
Organizational Breakdown
Structure (OBS)
Displays work packages
graphically according to
departments
Easy identification of work
assigned to it.
Resource Breakdown
Structure (RBS)
A graphic representation of
resources by type.
Effective in tracking costs.
Groups resources even if
they are working on
different deliverables.
Responsibility assignment
Matrix (RAM)
Resources and assignments
for which they are to be
used are displayed in a
chart.
Allows identification of all
responsibilities for a given
resource.
RACI Matrix A special matrix showing
the resources that are
responsible, accountable,
consulted, and informed in
project activities
Provides additional detail
than provided in the RAM
Position Description Text-based description of
responsibilities.
Provides high level of detail
for a given position.

Table 17: Human Resource Planning- Tools and Description.

29. Briefly discuss the process of Quality Management Planning.

Quality Management process is a set of procedures and techniques that are followed so
that the project deliverables meet the prescribed standards by the client and the industry.
It is a critical process for the success of the project. To begin with quality targets are
determined. The determination of these standards is done after consultation with the
client and other stakeholders.

Quality Management Process helps to identify and resolve issues regarding quality.
Quality Management processes are incorporated in two forms:

o Quality Assurance Process: This process refers to the processes that are used for
creating the deliverables. These are performed by the stakeholders like the project
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manager or the client. Checklists and project audits are the two methods adopted to
determine the quality assurance

o Quality Control Process: This process includes activities that are associated with
the creation of the result of the project. These are undertaken to ensure that the end
product is of an acceptable quality, it is complete and accurate.

The aims are:

o To deliver to the prescribed quality standards by the client;
o To deliver to the prescribed quality standards as per the industry norms;
o To improve the quality of deliverables;
o To enhance the teams output

The first step in quality management process is quality planning. It is a subsidiary
management process falling under the planning phase. It is the duty of the project
manager to identify the quality standards that apply to a project. The project manager is
required to document not only the quality standards but also the procedures and plans to
meet with the quality standards.

30. Discuss the main principles concerning Quality Management.

The primary responsibility of ensuring the quality of the deliverables in the entire project
rests on the project manager but it is important to understand that a project manager alone
cannot ensure the quality standards to be adhered to. It is the entire team that has to
ensure that deliverables qualify all the prescribed quality standards. For this the attitude
of the team members is a great influencing factor. It is important for every team member
to understand the importance of his or her contribution and feel a sense of ownership for
the project. Monitoring and open discussions of issues are important for ensuring quality
standards to be met. In the quality management plan an overall approach to quality is to
be decided but the following general principles apply:

o Preventing a mistake is better than rectifying it in terms of cost, time and effort,
o Quality programs need a strong support from the management to be successful.
o Quality is considered important and the fourth factor to scope, cost and time,
o The cost of quality means cost of implementing a quality program,
o It is important to understand the needs and expectations of the client for delivering a
project that meets the quality standards,
o The quality program should revolve around continuous improvement,

The different quality theories and standards accepted in the industry are:
o International Organization for Standardization (ISO)
o Total Quality Management (TQM)
o Six Sigma
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o Continuous Improvement (Kaizen) Theory
o The Deming Cycle or Plan-Do-Check-Act
o Capability Maturity Model (CMM)

The basic features of the theories can be summarized as given in the table below:

Theory Name

Pioneers Description
Continuous Improvement or
Kaizen
Masaaki Imai, F.W. Taylor,
and others
Processes are improved,
mastered, and then further
improvement is identified.
Includes quality
circles as a group oriented
means of developing ideas
.
The Deming Cycle or
Plan-Do-Check-Act
Dr. W. Edward Deming Similar to Kaizen, an
improvement is planned,
completed, measured, and
then further improvement
acted upon
Six Sigma

Based on statistical work by
Joseph Juran
A statistical measure of
quality equating to 3.4
defects per million items.
If defects can be measured,
a process can be put into
place to eliminate them.
Total Quality Management
(TQM)
Dr. W. Edward Deming Fourteen points of
management that call for
awareness of quality in all
processes.
CMM (capability maturity
model)
Software Engineering
Institute (SEI)
Five levels of capability
exist: initial, repeatable,
defined, managed, and
optimized.

Table 18: Theories on Quality

31. Discuss the Plan-Do-Check-Act Cycle.

The Plan Do Check Act or PDCA is also known as the Deming Cycle deriving its name
from its pioneer Dr. W. Edward Deming. It is a theory that is followed for ensuring
quality and interaction between various project management processes. It is considered to
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be scientific method. This plan allows not only planning but also testing and
incorporating a feedback
The advantages of this theory are:

o Plans: It plans improvement. It sets the objectives and processes that are necessary to be
incorporated for a delivery that is up to the expectations of the client. It makes the output
the center point and works towards the same.

o Do: It carries out the planned improvement: Implementing the process forms a part of this
plan. The improvement plan is implemented on a small scale.

o Check: It measures the improvement. The results from the new plan are compared to the
expected results.

o Act: In case there are differences, an analysis is done to understand the reasons behind
these differences. The entire process is repeated from planning improvements till the
results do not match the expectations.

Once the results are measured and checked the action is taken. The action could be in the
nature of:
o Improving on a standard
o Modifying the improvement;
o Abandoning the improvement.

The figure given below illustrates the PDCA Cycle.

Figure 22: The Plan-Do-Check Act Cycle

32. Discuss the Total Quality Management Philosophy.
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Total Quality Management: Total Quality Management or TQM in short is a
management technique undertaken to ensure that the considerations are a part of all
phases of the project lifecycle. It aims to achieve the highest quality standards by
involving all the people responsible for the development of the project. It is adopted as a
management technique in all industries from manufacturing to software. It works on the
principle of standardization to achieve success.

The three paradigms on which Total Quality Management is based are:

o Planning encompassing all phases of the project lifecycle;
o Educating and Training the team on quality standards and expectations;
o Managing the process of quality assurance.

To integrate total quality it becomes essential that planning be integrated around the
entire lifecycle of the project. Total quality cannot be ensured till planning is not done
keeping the entire project in mind. It is essential that threats to the success of the project
be identified and measures be designed to deal with the same. It becomes essential to
have the techniques and tools to inspect, evaluate, report and amend whenever necessary.

The entire team has to be educated with the process for ensuring total quality.
Empowering the team with the quality process knowledge and training them on the same
will not only ensure quality but also bring a greater amount of commitment from them.

Nothing can be achieved without proper management of the process. To ensure total
quality the quality planning and implementation has to be a cohesive process. Corrective
measures, training, and reporting of deficiencies; all need to be managed and for best
results.

33. Discuss the six sigma theory as the basis of Quality Management.

Six Sigma theory was developed by Motorola in the year 1981 and currently it enjoys a
wide application in all industries. The theory is based on the philosophy of mitigation of
defects and consequently improving the quality of deliverables. It works on the principle
of minimizing variability to ensure quality. It uses a combination of quality management
and statistical tools to create a system within the organization. Based on this theory steps
are defined to reach specific targets. These targets can anything that is critical for the
client or the project that is being developed. It could be anything related to costs, time
frame, safety measures. The pillars of this theory are:
o For definite results, continuous effort is important;
o Every business has characteristics that can be quantified, analyzed, and improved;
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o For sustaining and attaining quality a commitment form the entire organization is but
essential.

What makes this theory different from the others is:
o The focus is set and is clearly defined. The focus is set on a target which can be measured
in monetary terms;
o It places stress rigorous and effective management and leadership;
o It creates a infrastructure wherein people are designated as Champions, Black Belts,
Master Black Belts to lead, implement and supervise the implementation of the six sigma
approach;
o The basis of all decisions is data which can be verified rather than working on
assumptions.

The Six sigma follows two methods in projects. Both the methods are based on Demings
Cycle. These methods are:
o DMAIC
o DMADV

Figure 23: Six Sigma Methods
DMAIC: The acronym stands for Define, Measure, Analyze, Improve and Control. As
the expansion of the name suggests the methodology is divided into five steps. These
steps are:
- Defining the problem;
- Measuring the key aspects for collecting relevant data;
- Analyzing the data collected to understand the cause and effects;

Six Sigma

DMAIC

DMADV

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- Improve the existing process and set up a test run to establish its results;
- Controlling the future processes to deal with deviations before hand.
DMADV: The acronym stands for Define, Measure, Analyze, Design and Verify. This
method is also known as DFSS, that is, Design for Six Sigma. New products and process
designs are created using this methodology. This method also approaches quality
planning through five steps. These steps are:
- Defining goals which are consistent with the needs of the customer;
- Measuring the key aspects that are critical for the success of the project. These
characteristics are- capabilities of the products and production processes, risks involved;
- Analyzing the data collected to work for alternative designs; understand the cause
and effects;
- Designing details of the design selected and work for optimizing it;
- Verify the design and set up test runs and give to the process owner.

The most common tools used in implementing the six sigma theory are:

o 5 Whys
o Analysis of Variance
o Business Process Mapping
o Cause & Effects Diagram (also known as fishbone or Ishikawa diagram)
o Cost-Benefit Analysis
o Regression Analysis
o Root cause analysis
o SIPOC Analysis (Suppliers, Inputs, Process, Outputs, Customers)

34. Discuss the Continuous Improvement Theory.

The theory is also known as the Kaizen Theory. It is a Japanese theory concentrating on a
philosophy that revolves around continuous improvement in industries, business
processes, and management. The theory is widely applicable. For the purposes of project
management it refers to activities that improve the functions that are performed while
developing a project.

It is incorporated as a daily process and is said to make the work environment more
human. It allows people to experiment to eliminate waste of effort and resources and
increase productivity. It works on achieving quality through the human resource of an
organization. It brings small but continued improvements. Changes are incorporated and
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results monitored and then processes adjusted. The advantages of following this theory
are that smaller changes are incorporated and expected to lead to bigger ones. The team
members find it easy to adapt and upscale.

The elements of Kaizen theory are:

Figure 24: Elements of Kaizen

35. Discuss Process Improvement Plan as a process in the second phase.

Process Improvement Plan: Process Improvement plan is a secondary process forming
a part of the second phase of the lifecycle. This plan works to determine process
boundaries, configuration, and improvement targets.

36. Discuss the process of Procurement Management.

Procurement Management Plan: Procurement Management Planning is also a
secondary process forming a part of the second phase of the project life cycle. This part
of planning revolves around incorporating external resources as per the requirement. The
plan involves working on the decision whether to make the resource in house or procure
it from an external agency. Once it is decided to go in for an external agency the next
decision that has to be taken is whether the resource is to be bought or taken on rent or
High
Employee
Morale

Quality
Circle

Suggestion
s

Personal
Discipline

Team Work

Kaizen
Theory
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lease. A procurement plan is prepared listing how the procurement process will be carried
out. While preparing this plan the following are considered:

o Costs of Resources;
o Quality of goods to be procured;
o Technical, Financial capabilities of the vendors;
o Technical approach to the project.
37. Discuss the principles behind Procurement Management.

Procurement Management regulates the interrelation between the buyer and the seller
while procurement or hiring of services, products and other resources required by the
project team is done. Procurement Management Plan is a set of basic rules that the
organization expects to be followed while making purchases. Purchases done without
planning can result in wastage of resources like time, money, and efforts. When
procurement management is done it is not only the normal course of functioning that is
considered but also contingent and urgent situations are duly considered. Every
organization has different rules prescribed for managing procurements. It is best for the
project manager to follow these rules. A project manager needs to consider the following
while procuring products and services for the project:

o Costs of Resources;
o Quality of goods to be procured;
o Technical, Financial capabilities of the vendors;
o Technical approach to the project.

The above mentioned factors are further controlled by the availability of the seller or the
provider. In case more than one vendor supplies the goods, the costs, the quality, the
conditions of supply can be negotiated. In case of a single source or a sole source the
conditions may not be favorable for the buyer. The fact that Law of Diminishing Returns
is applicable to technology also cannot be ignored. Hardware or even software that is
loaded with features is going to be demanding on time (for running it), effort (for learning
it) and money (for buying it). It is important to remember to stick to the most important
and basic features while making procurements.

The key principles governing procurement management are:

Preparation of SOW: The first step is to prepare a statement of work or SOW in short. It
is a statement that is prepared at the beginning of the project and serves as an input and
an output device. It contains a detailed description of the products and the services that
are to be delivered at the end of a contract. It is prepared in addition to the make or buy
decision. The project scope statement and WBS are relied while preparing the SOW. A
project can have multiple Statements of Work.

The purpose that this statement serves is:
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o It puts the expectations of the buyer and the deliverables by the seller on a single
platform;
o It serves a crucial role in case of discrepancy between the demand and supply.

Types of Contract: A contract is a formal document that is written to record the terms
and conditions governing the dealing between the seller and buyer. There are three types
of contracts that can be made. The different kinds of contracts are:

o Fixed Price Contract: In this type of contract, the seller is paid a fixed amount for the
products or services provided by it. The pre-decided amount does not change due to any
contingency. This kind of contract allows the suppliers to charge a higher amount and
keeps the buyer relaxed as nothing will trigger a change in the price.

o Time and Material: In these kinds of contracts, the prices between the seller and the
buyer are agreed on unit basis. These contracts do not have a fixed end. These contracts
are more flexible and attractive than fixed price contracts.

o Cost Reimbursement: In this type of contracts the seller is reimbursed for the actual
costs incurred. Along with the actual costs the seller is paid a fee as a profit. The costs are
categorized into two-

- Direct Costs: These costs are those costs which have been actually incurred for
the project. Salaries of fulltime staff and equipment are examples of direct costs.

- Indirect Costs: These costs cater to much wider provisions and are general in
nature. Incentives and bonuses are examples of these contracts.

The types of contracts and their features can be summarized as given in the table below:

Name Description Benefits/ Shortcomings

Firm Fixed Price (FFP)
Lump Sum
The work is completed for a
predetermined price
Beneficial for the buyer.
Seller at risk if item isnt
clearly defined.
Seller must manage changes
closely.
Fixed Price Incentive (FPI) Similar to fixed price but an
incentive is offered for early
completion.
More administrative effort
for buyer and seller
Purchase Order A form of fixed price,
usually for off-the-shelf
items.
Optimal for both parties
when item is a commodity
(such as computers).
Cost reimbursement,
includes CPF, CPPC, CPFF,
The seller is reimbursed for
his costs, plus an additional
Benefits the seller because
his cost is covered. Risk to
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and CPIF fee. buyer if costs are higher
than anticipated; the budget
is affected.
Time and Material (T&M) Hybrid arrangement
between fixed price and
cost reimbursement where
elements of both are used; a
fixed unit rate can be set for
certain elements of work
while other components are
completely reimbursable.
Seller benefits if amount of
work is extended, which
affects the buyers budget.
Table 19: Kinds of Contracts and their Features

Make or Buy Decision: The first step in procurement management is if the products or
services are to be purchased or made in-house. This decision is made at the time of
making purchases and acquisitions. This is a very crucial that needs to be taken very
often. There can be multiple reasons behind deciding either way. The primary reasons
governing this decision are:

o The costs involved,
o The time and effort required to produce,
o The technology required to produce

The cost factor plays a very important role in this decision.

It is a contract that finally governs and answers the decisions of what to buy, from whom
to buy and at what price and other conditions to buy. It is important to discuss and specify
in the contracts the effects of default in conditions if made by both ends. The figure given
below illustrates the risk to buyer and seller for different contract types.

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Figure 25: The Buyer and Seller Risk for Contract Types

38. Discuss the process of Communication Management as a process of the second
phase of project lifecycle.

Communication Management Plan is an essential part of a project. The importance of this
plan is derived from the fact that communication is a very important activity in the
development of a project. The plan differentiates between mandatory and discretionary
communication. Lack of communication can be fatal for the project and effective
communication can ensure the success of a project. It is the responsibility of the project
manager to ensure that effective and regular communication. Communication from a
project manager can be classified as:

o Communication that is given out;
o Communication that is received.

A project manager ensures communication takes place amongst the various stakeholders
like team members, management, and client to specify a few. If the team members are not
informed about what they are meant to achieve, the project will come to a stand still. This
works the other way round too. If the team members do not keep the project manager on
what they are doing and have done, it would be nearly impossible to monitor the progress
of the project and keep a control on the same. The project manager not only specifies
what the team members are supposed to perform, but also conveys the quality
specifications, the budget constraints and the time period available for accomplishing a
specific task.

Communication is essential for the life of the project. It is necessary that communication
be open, regular, and unambiguous. Communication has to be maintained from the very
first phase of the lifecycle. An early start in communicating helps build relationships.
Both formal and informal meetings can be used for communicating. It is also important to
communicate in the right direction for effective communication.

39. Discuss the process of building a Communication Plan.

The importance of effective and regular communication cannot be undermined. It is
essential for ensuring the success of a project and delivering to the expectations of the
client. Preparing a communication plan is an important activity in communication
planning. Communication starts at the very stage of the project when the project initiator
communicates the need of the business. It is important that the stakeholders communicate
their needs to the project manager and the team. It is also essential that the project
manager communicates the achievable deliverables to the client as well as the
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management. A two way communication between the project manager and team
members is further very important.

While working on a communication plan, the following should be included:

o Who is the communication to be addressed to?
o When and how often to communicate?
o What will be the mode of communication?
o What details have to be communicated and what details are to be omitted?
o What will the frequency of team meetings and meetings with the stakeholders?
o What will the scope and flow of communication?

The table given below illustrates the inputs, techniques, tools and outputs of
communication planning.

Inputs

Factors
Communication
Requirement
Analysis
Communication
Management Plan
Assets
Communication
Technology



Table 20: Communication Management- Inputs, Tools, Techniques and Output

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Chapter IV

Project Execution
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40. Discuss the third phase of project lifecycle.

The third phase of project lifecycle is executing a project management plan. In this
process group, the actual work of the project takes place. A pre requisite to enter this
phase is to have all resources required to carry out the project in place. For this
coordinating amongst the resources acquires critical importance. The project manager
shifts his attention from planning to implementing the plans, observing the development
of the project and analyzing the work done.

Processes that are required to complete the work undertaken and accomplishing the
deliverables fall under this phase. It involves implementing the plans that have been made
at the second phase. The results expected from this phase are deliverables and
achievement of defined objectives. The entire scope of the work to be performed is
controlled by the scope statement. The actual consumption of resources starts during this
phase.

The project manager becomes more concerned with the daily activities that are required
to be performed to accomplish the project. The duties of a project manager during this
phase are:

o Conduct, coordinate and manage the activities leading towards the project
deliverables;

o Ensure quality by performing quality assurance activities;

o Implement the plans;

o Manage change;

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o Risk Monitoring and taking preventive and corrective measures.

To put it briefly, execution of the plan, performing the actual tasks, efficient completion
of the tasks, coordinating and managing the project resources all fall under this phase. A
number of activities need to be performed to achieve this phase. The specific activities
that fall in this phase are:

Figure 26: Execution- Activities

The output that is to be achieved at the end of this phase is a set of deliverables according
to the project scope statement. The execution of the project is carried out by using the
organizations:

o Project Management Methodology

o Project Management Information System.

41. Discuss Project Control and Monitoring as process of the third phase of project
lifecycle.

Information
Distribution

Develop the
Project Team

Team
Formation
Direct &
Manage Project
Execution
Quality
Assurance

Vendor
Selection

Request Vendor
Responses

Execution

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Project Monitoring and Control process refers to the complete process and activities that
are undertaken for monitoring and controlling the entire processes done by the project
manager and his team during execution. The objective is to ensure:

o That the processes adhere to the scope of the project. Continuous monitoring ensures that
the project stays on the track.
o That an efficient workflow is maintained. The progress of the project is measured against
the time and the resource schedules.
o Quality standards are adhered to. This not only ensures quality of the deliverables but
also works by reducing the need to rework and modify.
o Corrective and preventive actions taken when ever necessary. This keeps a check on the
risks and further becomes the cause of success or failure of a project.

However, project control and monitoring spells additional work for the project manager
and his team but it is a key function playing an important role towards the success of the
project. The documents made during the stage of initiation and planning serve as the base
for the project manager to conduct monitoring and control of the project. The table given
below illustrates the controlling activities, potential impacts and the resultant work.

Monitoring/
Controlling Process
Output

Resulting Work
Monitor/Control Project
Work
Corrective action to align
actual results and planned
activities.
Implementation of
corrective action

Integrated Change Control

Change request Implementation of approved
change request
Scope Verification

change request
Scope/Schedule/Cost
Control

change request
Perform Quality Control

Identification of
deliverables not according
to prescribed quality.

Rework with the objective
of bringing deliverable up
to quality standards,
preventive action to
eliminate
cause of problem
Manage Project Team

Team member not
completing work activities
per project management
plan
Corrective or preventive
action to align team
member performance with
plans
Performance Reporting Forecast indicating project Corrective action to bring
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is behind schedule

performance in line with
plans
Manage Stakeholders

Issue raised by stakeholder

Corrective action to resolve
issue
Risk
Monitoring/Controlling

Planned risk emerges

Application of risk response
& risk reassessment
Contract Administration

Sellers deliverables
completed
Payment to seller

Table 21: Impact of Monitoring/Controlling Activities on Project Execution

42. Discuss the process of ensuring quality as a part of execution.

Until the stage of planning, what have been developed are plans to ensure the quality
standards with respect to the standards prescribed by the client, by the management and
the industry. In the phase of execution the actual work is being done and one of the
important tasks facing the project team and the members is to ensure quality in the
deliverables.

Improvement is seen as a continuous process for improving quality. Continuous
improvement is an ongoing cycle of process analysis leading to process improvements at
which point further process analysis is undertaken. Continuous improvement leads to
reduction in wastes and cutting out of that do not add value. Process analysis is an in-
depth analysis of what processes and related processes are carried out, how these
processes are carried out, by whom these processes are carried out.

It is important to appreciate the difference between quality assurance and quality control.
Quality Assurance is considered integral to project management methodology. The
project management methodology is developed, managed, controlled, and monitored by
quality assurance. The inputs to process analysis are:

o Approved Change Requests: Approved Change Requests are requests that have been
made and approved after passing through the change management process. These
changes have been approved by the authorized authority.

o Quality Control Measurements

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o Work Performance Information: Work Performance Information serves the purpose of
a primary input to quality assurance. Work Performance Information is data that has been
compiled on the status of activities included in the project schedule. This information is
used for conducting quality audits, quality reviews and process analysis.

Quality control is dependant on the project team. Quality control is achieved by
performing quality control activities. The important tools used for performing quality
control and monitoring are:

o Performance Analysis
o Quality Audits,
o Root Cause Analysis,

Figure 27: QCM Tools

43. Discuss Quality Audits, Performance Analysis, Root Cause Analysis as tools for
Quality Planning and Control.
Quality Audits: Quality management has to be approached as a continuous process
rather a solitary event. To ensure that a product or service delivers to the quality
standards it is imperative that the process be faultless. Quality control and monitoring,
updating processes and records need to be done recurrently for best results. Ensuring
quality is the responsibility of the entire team, management and other stakeholders not of
the project manager alone.
Quality Audit is a systematic analysis of the quality system. A quality audit may be
performed by an external or an internal agency. A project audit is expected to achieve the
following objectives:
o Identification of existing problems in the project and the processes;
o Identifying the areas that are likely to experience problems if changes are incorporated;
Tools for Quality
Control and
Monitoring

Quality
Audits

Root Cause
Analysis

Performance
Analysis
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o To work for and support problem resolution by recommending necessary changes.
Projects face problems when development processes are inadequate or when processes
fail. Quality Audits and action that follows helps to improve business processes within
the organization.
Performance Analysis: Performance Analysis simply answers the question How is the
work being done or how the project is progressing? The purpose of this analysis is to
make the stakeholders understand how the project is performing and what can be done to
enhance performance. An effective analysis bases its report on the following:
o The Project Scope Statement;
o Performance measures to ascertain the current state of goals and objectives;
o Baselines in terms of resources, objectives and quality;
o Feedback for continuous improvement
Performance Analysis is undertaken with respect to:
o Qualitative Attributes of a project;
o Qualitative Attributes of a project.
Performance analysis is also a process that in undertaken repeatedly. Performance
Analysis Reports are referred to at all critical decision making points. These are used for:
o External Dealings.
o Internal Dealings
Root Cause Analysis: Root Cause Analysis is again an important tool to ensure quality
planning and control. It addresses issues that exist as the hidden cause of a risk or
variance or defect. It is an analysis of the latent cause behind a situation demanding or
likely to demand attention. It is an analysis of the cause that is putting the project in an
uncomfortable position. It is also likely that one root cause may be leading to multiple
effects in the shape of risks, variance or defects.

44. Discuss the process of acquisition of the team.

It is the human resource which is responsible for planning, executing and completing a
project. Assignment of particular resources may not in all situations fall under the
purview of the project manager but he is responsible for acquiring the resources. When it
comes to acquiring the human resources, the project manager should pay attention to the
following:
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Figure 28: Factors to be considered for acquiring Human Resource

o Availability of the resource: In this, it is very important to answer the question -
Does the schedule of the person allow him to be available for the project?

o Ability: Availability is just one factor for closing down on a particular resource. It is
important to know and understand the abilities of the resource and the specific demands
of the project.

o Experience: While closing down on a resource it is important to answer the question
The resource is expected to have what kind of and how much experience?

o Interest: Interest of a resource plays an important role in deciding whether he would
like to work on the project or not.

o Cost: The cost of acquiring a resource plays an important role in deciding the need.

The team is expected to have all necessary abilities and qualifications to deal with the
workload and the need of the project. The aim is to arm the team with all the necessary
and diverse talent required to deal with the objectives of the project. Multiple tools can be
used to acquire the team. The tools and their descriptions are summarized in the table
given below.

Experience

Ability

Interest

Cost

Availability

Acquisition
of Human
Resource
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Tool

Description
Pre-assignment Assignments are made prior to beginning of execution.
The reason for pre assigning resources could be a special
skill.
Negotiation Negotiations are carried out with functional managers
for acquisition of resources.

Acquisition Acquisition of external resources is done.

Virtual Team A team that is not located together and relies on
electronic tools like email and conference calls for
communicating is termed.

Table 22: Human Resource Acquisition Tools

45. Discuss Team Development and Power.
Team Development: A team comprises of team members. It is a primary objective to
ensure that each member performs and achieves his maximum level for the efficient
functioning of the project process. Team Development can be interpreted to mean two
things:

o Enhance competency of each team member;
o Enhance interaction and communication between team members which further increases
the efficiency of the team as a whole.

A number of tools are available for team development. These tools are:

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Figure 29: Team Development Tools
o General Management Skills: General Management Skills are also termed as soft
skills. These are responsible for making the work atmosphere more humane and
congenial. These skills include empathy, creativity, influence, and group facilitation
skills.

o Training: This is used for increasing competency of the team members. Training
sessions may be formal or informal. Training may be delivered in the form of classroom
training, computer-based training, or mentoring.

o Team Building: Team building includes activities performed to increase team
cohesiveness. The activities could be onsite or off site activities. These could be related to
the project like risk identification or adventure tours, which approach team building
indirectly.

o Ground Rules: These are the basic rules of behavior that have been decided between
the team.

o Co-location: This is the opposite of virtual teams. The entire team is placed in one
location facilitating interaction and communication.

o Recognition and Rewards: These are often used to motivate the team members to
perform. Rewards are used to encourage positive behavior.

Power: Power is an important determinant of the team environment. The project manager
cannot enjoy arbitrary power over the team members. The other members need some
amount of power and flexibility to be able to perform their functions efficiently. There
can be different types of power in a team or a member. The main power types are
illustrated in the figure given below:

Tools for
Team
Development

Management
Skills

Training

Team Building

Ground Rules

Co-location

Recognition &
Awards
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Figure 30: Types of Power

o Legitimate Power: This power originates from a legitimate source like
position or title.

o Referent Power: This type of power is enjoyed because it transferred from a
source which possesses legitimate power. The management signing the project charter
authorizes the project manager to carry out the functions necessary for project completion
is an example of referent power.

o Expert Power: This power originates from knowledge. The power in a person
is recognized for reason of expert knowledge.

o Reward Power: This kind of power is based on the ability to award or hold
back a reward.

o Coercive Power: This is not a healthy form of power as its basis is force or
intimidation

46. Discuss Team Motivation.

Team Motivation: Team motivation is an important factor controlling the attitude of the
team towards the project and their productivity. A project manager is expected to keep
his team motivated. Recognition and rewards are important tools used for project
motivation. There are various theories governing motivation of the team. Motivation can
be ensured in three simple steps:

o Accountability
o Provide ownership of the task;
Types
of
Power

Legitimate

Referent

Expert

Reward

Coercive
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o Timely feedback;

The leading theories of motivation are illustrated in the table given below along with their
developers and description.

Figure 31: Theories of Motivation

o Hierarchy of Needs Theory: The theory was developed by Abraham
Maslow. According to this theory, the needs of people can be arranged in a pyramid.
These needs are satisfied according to the level. After needs at one level are fulfilled
people move to the next and a higher level in the pyramid. The lowest level of the
pyramid comprises of needs like food and shelter, moving up to safety, security etc. Self
esteem is considered to be a major motivating factor by this theory.

o Motivation-Hygiene Theory: This is also known as the two factor theory. It
was developed by Fredrick Herzberg. The theory revolves around factors considered as
motivators and hygiene. Example of hygiene factors are adequate pay and supplies. These

Motivation-
Hygiene
Theory

Achievement
Theory

Contingency
Theory

Situational
Leadership

X and Y
Theories

Expectancy
Theory

Hierarchy
of
Needs

Theories
Of
Motivation

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prevent a feeling of dissatisfaction. Example of motivation factors are learning
environment, acquisition of new skills.

o Expectancy Theory: The theory was propounded by Victor Vroom. This
theory is simple and based on rewards. According to this theory a team performs well
when it is told that they are high performing, starts to expect rewards which motivate it to
perform.

o Achievement Theory: The theory was given by David McClelland.
According to this theory the three motivating factors are -power, affiliation, and
achievement. Deficiency of even one factor results in low performance of the team.

o X and Y Theories: The theories were propounded by Douglas McGregor
William and Ouchi. According to Theory X people are lazy and need autocratic
leadership and Theory Y states that people are generally hard workers and do not require
constant supervision.

o Contingency Theory: The theory was given by Fred Fiedler. This theory is
based on situational leadership. According to this theory it depends on the relationship
between the team and its members, the task to be completed, and the positional power of
the leader.

o Situational Leadership: The theory was propounded by Ken Blanchard.
According to this theory people move through four stages of development. It is upto the
leaders to apply the appropriate leadership style. The leader may choose directing,
coaching, supporting, delegating or more than one.

47. Discuss the process of Distributing Information.

Information distribution is a process falling under the second phase. It ensures that all the
stakeholders be kept informed. It is done according to the communication plan. Response
to ad-hoc requests is included in this. It is imperative for the information to be timely and
accurate. It falls under the job profile of a project manager to communicate with the
stakeholders.

The number of channels can be calculated by using the formula n(n-1)/2. In case a team
has three members, according to the formula the number of communication channels will
be 3 (3 1)/2 = 3

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Figure 32: Communication Channels

Various tools and techniques are available for carrying out information distribution.
Some of these tools are:

Figure 33: Information Distribution Tools

o Communication Skills: Communication Skills are a general management tool.
Communication is a two way process wherein there is a sender and a receiver. The via
media is known as the communication channel. It is important that the communication be
sent at the right time, to the right person, using the right medium. Communication can be
in any of the following forms.

- Formal and Informal Communication
- Internal and External Communication
- Vertical and Horizontal Communication
- Written and Oral Communication;
Tools
for Information Distribution

Communication
Skills

Information
Gathering
Systems

Information
Retrieval
Systems

Information
Distribution
Systems

Lessons
Learned
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o Information Gathering and Retrieval Systems: Special needs of information
retrieval and gathering are recognized at the stage of planning. There are multiple tools
that are used for this purpose. Some of these tools are:

- Document Repository
- Electronic Databases
- Manual Filing System
- Project Management Tools

o Information Distribution Systems: It is the responsibility of the project manager
error free collection and distribution of information to the stakeholders. The tools that are
used for this are:
- Distribution and Filing of printed documents
- Electronic media (Email and fax)
- Meetings (face to face as well as virtual)
- Shared access in case of electronic documents
- Telephone and Voice Mail

o Lessons Learned: Lessons learned is a term that is used to refer to specific
situations recorded during the project. These lessons may be referred to for the current
project or even a future project. Lessons learned serve as a tool for continuous
improvement. At the end of the project a lessons learnt meeting is held to review and
discuss the lessons learnt. The aim of these meetings is not to fix the blame rather to
interpret the events in a manner that facilitates learning and sharing from such instances.

It is important that everything that went right in the project be clearly and accurately
documented. It is equally important that everything that did not go right be also recorded.
The aim of recording all this is to convert the lessons learnt into best practices and
making the same mistakes can be avoided.

48. Discuss Project Procurement as a process.

A procurement management plan is made at the stage of planning. In the third phase that
is the execution phase; two steps are undertaken under this process:

o Request Seller Responses: During the process of project management, for procurement
of resources the project team or the project manager may seek multiple vendors. The
process of soliciting the vendors is termed as requesting seller responses. The entire
process of soliciting the vendors is known as request seller responses process. The
process is divided into two functions:

- Issuing Requests
- Obtaining information from the vendor.
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The information may be received in the form of proposals, estimates, quotations, bids,
offers etc.

o Selecting Sellers: Once the information has been received the process of selection of
vendor starts. The vendor is selected after careful evaluation. Evaluation is done on the
basis of the following criteria:

- Capabilities (technical, financial, production) of the vendor;
- History of the Vendor;
- Life Cycle Cost;
- Price at which the commodities or services are being offered;
- References;
- Understanding of the need by the vendor.

Various tools are available for selecting a vendor. Some of these tools are:

Figure 34: Tools for Seller Selection

Proposal
Evaluation
Techniques

Weighting
Systems

Independent
Estimates

Screening
Systems

Contract
Negotiations

Seller Rating
System

Expert
Judgment

Tools for
Seller
Selection
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- Contract Negotiation: In this method contract negotiations are used to provide
clarification on the proposals. Negotiations are conducted on technical details, financial
constraints, payment schedules etc.

- Expert Judgment: A team of experts evaluate the proposals forwarded by various
vendors. The selection is based on the judgment of these experts.

- Independent Estimates: For preparing independent estimates external agencies are
involved. The pricing is compared with these independent estimates.

- Screening System: In this a minimum level of performance is pre determined.
Vendors not meeting these minimum standards are left out in the screening process.

- Seller Rating System: In this technique a vendor performance track is maintained. In
this technique the past record of the vendor plays an important role.

- Weighting System: A value is attached to each criterion depending on the
importance, and a vendor with a higher value for those criteria is selected.

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Chapter V

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Project Control

49. Discuss what is Project Control?

Project Control is a term used to refer to a collection of activities and processes that are
undertaken for managing project risks. These activities are undertaken with the objective
of optimizing project performance and resource utilization. These activities are conducted
frequently depending on the need of the project in terms of size and importance. The
essential elements of project control are:

o Defining Baselines & Milestones;
o Risk definition for proposed corrective or preventive actions
o Tracking of project activities and resource utilization;

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Figure 35: Elements of Project Control

Project Control acquires importance from the fact that ineffective control can lead to the
failure of a project. Lack of control in any of the areas:

o Cost;
o Quality;
o Risk can be detrimental to the success of the project;
o Scope.

The figure given below depicts the phases of a project lifecycle, and all must be
monitored and controlled for the project to meet its objectives successfully.

Tracking
Project
Activities &
Resources

Defining
Baselines &
Milestones

Risk Definition

Elements of
Project
Control
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Figure 36: The Project Control Framework

Project control is an iterative process. Milestones tend to have a compilation of work
packages and deliverables under them, so if you only do project control activities at their
completion, you might learn of problems late in the project. Like the autopilot in an
airplane, the main function of project control is to make frequent minor course
corrections instead of waiting until you are several degrees and miles off the flight plan.

50. Discuss the impact of changes to a project and project control.

Unwarranted change to the project and the environment in which the project is being
developed is not always welcome. Change is different from response. Unwarranted
change means that the project is not immune to external elements for its normal
development. These changes can be prompted by people, environment or may even be
strategic. The project manager has to ensure organizational processes to be in place to
guard against such changes. These organizational processes are depicted in the diagram
given below:

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Figure 37: Processes for Project Control

Approved Changes vs. Unapproved Changes: Once an opportunity of change is
recognized, it has to acknowledged, evaluated for risks, the potential in terms of scope,
resources, quality, and communications. This ensures that a thorough analysis of the
change is done keeping the deliverables in view. This process in project management
parlance is termed as identifying whether the change is gold plating? A Gold Plating
change is one which has not undergone adequate change control process.

A change that has been analyzed and is realized to have merits with the objectives and
deliverables in view is submitted to the project change control team for final
determinations.

Project Change Control Board: Project Control board also known as the CCB, is a
decision body entrusted with the task of approving changes to projects and their impacts.
It performs its job in two phases. The first phase is analysis of the proposed change and
second is to either approve or reject the proposed change. It is also at liberty to request
for more information regarding the proposed change or postpone the decision regarding
the change. Every approved change will reflect in the baselines.

Corporate
Strategy

Forecast
Reports

Risk Trigger
Management

Execution
Trend Analysis

Work Package
Progress

Lessons
Learnt

Best Practices

Processes for
Project Control

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51. What is Project Feedback Loop?

The entire life cycle of a project is divided in five phases: Initiation, Planning, Execution,
Controlling and Closing. The project cannot be considered completely immune and
having no impact on external factors. Information gathering and dissemination acquires
importance at this stage. The processes undertaken for collecting and disseminating
information serve the purpose of information feedback loops.

A project that does not incorporate feedback loops is working on the presumption that no
changes will be required throughout the life of the project, which further means that not
requirements will change. It is a project that has been frozen and is stiff in structure and
leaves no chances of incorporating changes. There can be events that can have a direct
impact on the viability of a project and a stiff structure in that situation is a sure shot
remedy of failure. Examples of such events are - a hostile takeover, resource reduction, a
relocation and so forth.

52. What is meant by corrective action for a Project?

Corrective action is the altered action that is decided to be taken after evaluating work
progress packages and earned value analysis. The objective is to provide a new direction
to a process or a project that may have lost its objective, or has deviated from its path.
This new path should be documented and the aim is to align the process better with the
ultimate aim and the deliverables expected.

The scope of corrective action can be the entire project or a specific task or a process.
The earlier corrective action is taken the better are the changes of recovery. The minor
the corrective action that is required the better it is for the entire set of deliverables.
Corrective action which requiring significant alterations can result in expending of
additional resources which would further be required to reflect in the baselines. Some of
the actions that can be taken as corrective action are:

o Updating of baselines with respect to current scenario;
o Add resources to deal with a project that is behind schedule;
o Rearrange activities to be able to conduct parallel activities;
o Outsourcing of the project;
o Scope reduction

The whole aim of corrective action is to rescue the project with a minimum impact. It is
important to measure and control the schedule and cost variances for this. The tools that
can be used for the same are listed in the table given below.

Item Description

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Planned value or budgeted cost of work
scheduled (BCWS)
The budgeted cost of the work according to
the schedule.
Budgeted at completion

The project baseline cost.
Earned value The value of the work performed to date
against the project schedule obtained by
using the formula % completed budgeted
at completion.
Actual cost or actual cost of work
performed (ACWP)
Cost of the work performed to date.
Scheduled variance

The difference between the earned value
less the planned value.

Cost variance

The difference between the earned value
less the actual cost.
Cost performance index

This is obtained by dividing the earned
value by the actual cost. A result less than
one is interpreted to mean that the project is
at budget risk.
Scheduled performance index

This is obtained by dividing the earned
value by the planned value. A result less
than one means that the project is at
schedule risk.

Estimate at completion

It is obtained by dividing the budget at
completion into the cost performance
index.

Estimated to completion

It is obtained by subtracting the estimate at
completion from the actual cost.

Variance at completion

It is obtained by subtracting the estimated
at completion from the budget at
completion.

Table 23: Items Used to Measure and Keep Control of Schedule and Cost Variances

53. Discuss the role of WBS to control the project scope.

The scope control process is responsible for controlling the scope of the project and the
deliverables. The scope baseline plays an important role in controlling the scope as in the
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scope baseline contains the details of the project scope and the deliverables. It provides
guidelines for all details that have been left in to be determined mode at the initiation
phase. The work breakdown structure and work package progress reports.

The aim of a WBS is to charter a path defining the activities that are to be performed to
reach the deliverables. It is a dynamic document, in the sense that with every change in
the resource utilization or any other change it will also change. It is not a document that
can be drafted carelessly.

54. How can variance be identified with the help of Earned Value Management.

Earned Value assessment is a process undertaken to ascertain the performance of a team
and the exact place where the project up in. The analysis is done in comparison to the
project plan. It is based on three factors. These factors are:

Figure 38: Earned Value Factors

o Actual cost for work performed (ACWP): This factor is also referred to as AC
or the actual cost of the project. It represents the true total and final costs that have been
accrued during the entire process of the project. It is best to record the actual costs in an
itemized manner for each of the resource.

o Budgeted cost for work performed (BCWP): It is also referred to as the earned
value or EV. It is precise and a specific value of the entire project. These values are
expressed in relation to a budget that was prepared, approved.

Factors for
Earned Value

BCWS

BBCWP

ACWP

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o Budgeted cost for work scheduled (BCWS): This is also known as the planned
value or PV. The planned value of a project is a term used to describe the budget of the
project expected at the stage of completion. It is a crucial factor as has to be kept in sight
always.
55. Discuss the process of measuring quality control.

It is important that quality control be measured at regular intervals. Quality control
includes making sure that the right thing is delivered at the right time and within the right
budget. Along with this it is expected to match the expectations of the client. Measuring
quality falls under the purview of a project manager. It is the project manager who makes
sure that the necessary reports and checklists are in place. The tools that are available for
assisting the project manager are:

Figure 39: Quality Control Tool Chart

o Control charts: Control charts are again an important tool for measuring quality
control. It is a statistical tool that is used for identifying process points, which fall outside
the scope of the normal flow of a specific process. They display process execution
boundaries, the trending and overall performance over a period of time.

Tools for
Quality
Control

Ishikawa

Control Charts

Six Sigma

Three Sigma

Pareto Chart

Statistical
Sampling

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Figure 40: A trending and performance control chart.

o Pareto Chart: It is also known as the 80/20 rule. The theory was propounded by
Vilfredo Pareto. Pareto chart is a histogram. It records the occurrences and the
frequencies. It is a graphical representation of the various occurrences and serves as an
important tool for the project team and its members. The figure given below illustrates a
Pareto Chart.

Figure 41: A Pareto Chart

o The Ishikawa: It is also called the Fishbone or Cause and Effect diagram. The
diagram resembles a fish bone and hence the name. An example of the diagram is
illustrated below. It is an important technique to understand as it is often used by project
managers to understand both the latent as well as the patent issues jeopardizing the
quality of the project. It involves conducting an analysis of the variances, risks that may
exist in the project or the environment. It helps to derive to the actual cause leading to an
unfavorable result. The impact of a root cause may be far fetched than what it may just
seem.

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Figure 42: A root cause diagram.

o Six Sigma;
o Three Sigma;
o Statistical sampling.

56. Discuss the theories that can be adopted while managing a Project Team

In team management, it is essential that team performance be measured to keep a track on
the work being done and managing the expectations of the client. Project resources are
organized in a sequential order and information shared by managers. For being able to do
this, it is necessary that the project manager have information about the following:

o Negotiation Techniques;
o Participation in a team.
o Process followed while acquiring staff;
o Response to conflicts and conflict resolution by the team;
o Response to power by team members;

It is important that the project manager monitor the attitude and tone of the team
members in individual as well as member capacity. For studying individual behavior, the
following theories can be used:
.
o MacGregors Theory Y and X: The theory was developed by Douglas McGregor.
Both the theories X and Y describe human behavior from different perceptions.
Companies follow either of the approach to manage their workforce.

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- Theory X: According to this theory, the management works on the
assumption that employees are lazy and avoid work. For this reason the workers need to
be closely supervised and sufficient control systems be designed. It is incentive that
encourages the employees to work. This theory heavily relies on coercion and threats.
According to the managers the only motivation behind an employee working is money.

- Theory Y: According to this theory, employees are ambitious, self motivated
and self controlled. It says that employees enjoy their work as much as play. The
employees are able people with creative thinking. It is the management of companies that
are not able to utilize these inherent talents of employees. It is satisfaction achieved from
accomplishing a task that is the motivation behind an employee working. This theory
aims at a comfortable environment where communication channels are effective.

o Maslows Hierarchy of Needs: The theory was propounded by Abraham Maslow.
According to this theory, individuals derive motivation from a set of basic needs. These
needs have to be satisfied before employees perform their job. These needs are organized
in a pyramid and one level has to be satisfied to move to the next. The figure given below
illustrates the hierarchal arrangement of needs. The physiological needs come at the
lowest level and move up to self-actualization.

Figure 43: Maslows Theory of Needs

o Ouchis Theory Z: The theory was propounded by Dr. William Ouchi. The theory is
popularly known as Theory Z. The theory revolves around enhancing the employees
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loyalty towards the company. According to this theory employees can be more
participative and can perform a variety of tasks. Practices like job rotation, succession
planning and continuous training should be the guiding principles in human resource
management.

57. Discuss Risk Monitoring and Risk Control as a process of the fourth phase.

Risk monitoring and control is a process wherein the project team and the members
continuously monitor risk responses against the risk management plan. It also includes
keeping a tab on places where new risks to the project are managed. The impact of a risk
may not finish with the obvious and may be far reaching. A risk can have an impact on
the project, or the enterprise or both. Once the risks and their impacts have been
identified the project team has to devise means to deal with the risks. In case of a risk to
the enterprise, alternate paths for communication must be allowed. This is done so that
timely alerts to the enterprise risk management function can be issued. The process refers
to detailing and tracking of already identified as well as new risks.

To explain with the help of an example, a road which is expected to be traversed by
20,000 cars daily, due to a contingency has to take double the traffic in a day. Though,
the contingency has nothing to do with the contractor responsible for the building the
road, he is expected to address issues on how to deal with the problem.

To calculate the quantum of the risk, the probability is to be multiplied with its material
impact. As the probability of the risk increases, so should the quantum of resources
allocated to deal with the same. This resource allocation has to be done prior to the
arising of the risk. The risk management plan should also include the means to replenish
the resources as and when the same are depleted.

Risk control is done with the objective of:

o Attaching a weight (qualitative & quantitative) to the risk after analyzing the
probability and the consequences;
o Continuously identifying, measuring, and responding to new risks.
o Identify alternate paths in case of contingencies which cannot be managed;
o Identifying events having a direct impact on the project deliverables;

While using the utility theory subjective value is attached to a management decision
while designing a mitigation strategy for risks. Risks are recognized as negative and
positive risks. The strategy to deal with each category is different as the project responds
to both in a different manner.

Risk Triggers: While identifying risks, certain factors or indicators are recognized that
will indicate towards the risks becoming a reality are termed as Risk Triggers. These are
also known as warning signs or symptoms of risk. These are conditions based on which a
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risk can be anticipated. During the process of risk monitoring and control, these triggers
are recognized. The activity of recognizing them is done at an early stage. The
management watches the risks and the triggers closely. Keeping a watch on these triggers
is incorporating quality assurance and control in risk management. This is done to
facilitate risk management and bring efficiency in operations.

For every risk that is identified, a response plan has to be provided. If an alternate path or
an emergency fall back plan is not designed the entire process of risk management will
become meaningless and a wasteful activity. Risks can also be classified as:

o Business Risks: Business Risks includes risks that have an impact on the position
of a company. It can make a company lose business from its investors.
o Pure Risks: These risks do not have impacts like that of a business risk. These
result in loss of money to the organization.

58. Discuss Contract Administration.

Contract administration is the process that refers to the activity of managing contracts
which have already been developed and initiated. In this process the performance of
vendor is compared to service level agreements (SLA). It is necessary that all team
members be kept informed of legal consequences of changes in the relationship based on
such a contract.

It is a part of the management process to deal with the progress of the seller against the
milestones decided in the contract. In case of any deviations modifying the contract or
dealing with the issue causing or resulting in deviation if possible. Contract
Administration takes care of the relationship between the vendor and the organization not
only in relation to a specific contract but the relationship in entirety.

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Chapter VI

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Project Closing

59. Discuss the last phase of the project lifecycle.

Project Closing is the last phase of the project life cycle. The result of this phase is that
all resources attached or allocated to the project are released; a reference material is
created for the projects to come. In this phase, the processes groups involved organize
and document what was planned against what has actually been performed. At this stage,
the project is wrapped up and all loose ends are secured.

One of the results expected of project closing is archives of the current project to be used
for better understanding and performance of projects to come in the future. For an
effective closing of the project, it is but essential that the closing be done in a systematic
manner. Documentation plays an important role in this phase for the learning and
reference objective to be achieved. The figure given below illustrates the process flow
during the last phase of the life cycle.

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Figure 44: The project closure process flow.

In this phase everything that has been done is finalized. This phase symbolizes the
closing down of all activities under all process groups. The closing of a project can take
place:

o After the deliverables are submitted and accepted.
o Before the deliverables are submitted;

The second option is considered to be ideal as it is possible to reexamine the deliverables
and incorporate any modifications on a request by the client.

The main factors recognized for project closing are:

o Contracts involved in the project;
o The agreed deliverables;
o The Plan of the Project;
o Trends and performance analysis

These are regarded as the key inputs for the simple reason that they allow verification of
deliverables as per the need of the client. In case any tasks are unfinished or untested,
provisions have to be made for their termination and their risks have to be measured in
relation to the efficacy of the project services or products, the deadlines and profitability
of the project. A project does not reach its completion the moment the end is in sight or
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deliverables have been submitted. There can be many ancillary tasks requiring the
attention of the project manager. Some of these tasks are:

o Arrange a release from the project sponsor;
o Ensuring final acceptance;
o Release or project resources;
o Update all the required documentation.

60. Discuss the processes involved in closing of a project.

The processes involved in closing down of a project are:

Figure 45: Project Closing

o Administrative Closure Procedure: This is a closure procedure taking care of the
formalities required to close a project. Documentary acceptances, documentation of
project files, closure documents, recording and updating historical information falls under
this process.
o Contract Closure Procedure
o Final Deliverable
o Organizational Process Updates.

Organizational
Process
Updates

Final
Deliverables

Contract
Closure

Administrative
Closure

Processes
involved in
Closing
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61. Discuss the process of closing out a contract.

Closing out a contract is a process that applies to both internal as well as external
contracts. It is a process in which delivery of the products or services called during the
project build up is taken and corresponding contracts closed. Internal contracts may be
covering any utility, services or product supplied by a sister concern. For example a
construction unit may be fulfilling it need of steel from a sister unit that manufactures
steel.

The difference in closing an internal contract and an external contract would be in the
human factor involved and there could be a different set of instructions for each type. The
term human factor used above refers to the difference of culture between the vendor
organization and the set up in taking the resource. The nature of contracts, clauses
regarding expenses and revenue sharing may be on different footing.

While closing a contract, the following will be taken a note of:
o Any review or modifications the original contract was subjected to;
o Early Termination clauses, remedy clauses in a contract and the reasons for invoking the
same;
o Performance metrics of the vendor;
o Quality Control Metrics of goods or services that were delivered;
o Schedule Performance of the vendor;
o The accurate deliverables;
o Work packages assigned to a vendor;
o Work Performance Reports in accordance with the SLA.

To understand and evaluate the efficacy of a contract towards the project the following
should be considered:

o Analyzing the designated activities performed in a project process;
o Analyzing the supporting schedules with reference to time, cost and deliverables;
o Management Plan and issue registers;
o Payment Registers
o Project Delivery Metrics

Once all these are analyzed and the provider execution report delivered, the necessary
documents are executed.

62. Discuss the early closure of projects.

The project manager, the project team and all the other stakeholders hope and work for a
successful completion of the project but this may not always be the case. Projects may
need to be terminated at an early stage for any of the following reasons:

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Figure 46: Reasons for Early Project Closure

o Prevailing Market Conditions: When the project is discontinued for the reason that it is
not in consonance with the long-term objectives of the organization.

o Needs of the Customer requirements: The client is introducing changes which are
beyond the current project in terms of initiative, costs or time.

o Insufficient Resources: A deficiency of resources could also be a reason for calling of a
project early.

o Technical Constraints: Technical problems can mar a project to eth extent of calling it
off early. Computers, quality of raw materials etc. come in this category.

o Culture of the Organization: The project that has been initiated is not in consonance
with culture of the company.

o Financial Constraints: Financial constraints play an important role in deciding on the
future of a project. A project may not be seen as getting some additional market share or
cash for the company. It may be called off in these circumstances.

Customer
Needs
Prevailing
Market
Conditions

Financial
Constraints

Culture of the
Organization

Technical
Constraints

Insufficiency
of Resources

Early Project
Closure

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Even when a project is being called off early, all the criteria should be considered while
winding up. The criteria that be considered are:

o A formal acceptance of the results by the client;
o Budget
o Cost metrics and actual expenditures made.
o Lessons Learnt
o Necessary documentation for organizational purposes;
o Performance metrics;
o Performance reports;

Before a project can be called off, the participation of the following is sought:
o Project Manager;
o Quality Assurance Team
o Sponsor of the Project;
o Team Members.

63. What is the importance of Lessons Learned?

As already discussed above lessons learned refers to specific situations recorded during
the project. Lessons leaned should be recorded throughout the life cycle of the project
and as and when they occur. This is done all along the project for the simple reason to
record the lessons as accurately as possible. Lessons learned serve as the database that is
resorted to understand the decisions, the risks and the basis on the same. Lessons learned
records might be set off by the following events:

o Major corrections have been implemented;
o Corrective or preventive actions;
o The scope has been altered;
o Variance between planned and actual events.

64. What is meant by ending a project, ending a contract?

Ending a project and ending a contract may not essentially mean the same thing. Many a
times they can coincide but one cannot be replaced by the other. Contracts may end due
to:

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Figure 47: Modes of ending a contract

o Successful Completion of the contract which means that what has been desired has been
delivered. This leads to acceptance of the deliverables and payment.

o An agreement between the parties may be responsible for bringing the contract to an
end. There is mutual consent that governs the ending of a contract.

o In case of breach of contract by either or both the parties a contract may come to an
end. A breach is a default situation requiring legal recourse. The support of the legal
processes is taken as the last resort. While deciding on the legal action to be taken, the
remedy clauses provided in the contract are paid special attention.

A project may end in any of the following manner:

By
Successful
Completion

By Breach

By
Agreement

Contract
Ending
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Figure 48: Different Modes of ending a project

o Integration: When the project resources are assigned to other areas and the normal
running of the business it is termed as integration. Generally the resources are merged
back from where they were lifted.

o Extinction or Collapsed Mode: A project that meets its end before it meets its final
objectives is termed as an ending in the collapsed or extinction mode.

o Inclusion, Absorption or Addition: A project that is accepted and is transitioned into
the organization is said to be included, absorbed or added.

o Deterioration, Starvation: A project whose resources have been cut is said to be in
deterioration or starvation mode.

Final Review Meeting: This is the last step that is taken for closing a project. Once the
deliverables are sent, resources released, documentation done, the project manager is
supposed to meet the project sponsor and get a release for himself.

Extinction/
Collapse

Integration

Starvation/
Deterioration
Inclusion/
Absorption/
Addition

Project
Ending
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Chapter VI

Professional Responsibility

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65. Discuss the various responsibilities towards the profession of project
management.

The entire project team is bound by the responsibilities mentioned under this head but it
is up to the project manager to set high ethical standards by his exemplary behavior. The
more transparent a project manager is in his decisions the less are the chances of facing
allegations of impropriety. The responsibilities towards the profession of project
management can be discussed under the following headings:

o Advancement of the profession: Under advancement of profession, one of the pressing
issues that rise is the use of information that has been developed by the others. This
information recognized under the head intellectual property. In the short term, it may
look lucrative and convenient not to recognize some one elses right to his work, but in
the long term there can be spiral effects. Usually business processes, techniques, are
copyright and patented. Due respect should be paid to this factor.

o Candidates Professional Competency: It is considered obligatory that all
representations regarding professional qualification and experience may made accurately
and correct. Certifications, compliances, associations true representations should be made
by both the individuals as well as companies offering services in project management.

o Compliance with Organizational Rules, Policies, and Standards: This responsibility
entails that compliances with the certification process be made. Any violations ethical
or professional should be duly informed to the Project Management Investigators. It is
also suggested that cooperative behavior be maintained towards any such investigations
being conducted. To discuss in detail:
Accurate and True Representations: It is suggested that only true, accurate and complete
representations regarding certification and work experience be made to the PMI. All
information regarding application for membership and certification, tests, candidate,
continuing professional education should be made.

- Cooperating with Investigations: It is important that in case of investigation in
case of professional misconduct full cooperation be extended to PMI.

- Disclosure of Conflict of Interest: It is always considered necessary that any
interest, actual or perceived be duly communicated to all stakeholders. A relation with
one of the vendors is an interest. Such an interest should be declared at the earliest of
opportunities available.

- Violations of Professional Conduct: It is the duty of every project management
professional to report any violations of professional conduct.

66. Discuss the various responsibilities towards the clients or customers.
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When it comes to responsibilities of a project management professional towards his
client, the responsibilities are primarily two fold. The responsibilities can be discussed
under the following heads:

o Claims regarding qualification, experience, and performance: It is mandatory that all
claims regarding professional qualification and experience be stated with accuracy.
Regarding certifications, compliances, associations, true representations should be made
by both the individuals as well as companies offering services in project management.
Solicitation of customers by making wrong claims is not appreciated. In addition it is
suggested that while making the estimates, the same be done with due diligence, as it is
on this information provided that the client relies. Any changes or deviation should be
duly informed and discussed with the client before incorporating. It is the responsibility
of every single team member to move the project on the scope decided in consultation
with the client. Communication channels should be open and frequent communication be
made with the client.

o Situations like conflict of interest and other prohibited conducts: Conflict of interest
has already been discussed above. A conflict of interest cannot be allowed to jeopardize a
genuine interest of the client. The project manager interacts with the outside world on
behalf of the team. Some of the examples of prohibited conducts are:

- Not being upfront with the client;
- Indulging in kickbacks;
- Inflating hours of work;
- Inflating consumption of resources;
- Manipulating progress reports;
- Not communicating sufficiently;
- Communications are not true and genuine

End of Guide

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