PMP Certification Study Notes 1 - Terms and Concepts - New PMP, PMI-ACP, ITIL & PRINCE2 Exam Tips 2018

4/1/2018 PMP Certification Study Notes 1 - Terms and Concepts - new PMP, PMI-ACP, ITIL & PRINCE2 Exam
amp; PRINCE2 Exam Tips 2018
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BY EDWARD CHUNG, PMP, PMI-ACP, ITIL
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4/1/2018 PMP Certification Study Notes 1 - Terms and Concepts - new PMP, PMI-ACP, ITIL & PRINCE2 Exam Tips 2018
Introduction: This article provides Wing).
Aspirants taking the exam in 2018 with

a list of important terms from the latest
PMP CERTIFICATION EXAM
PMBOK® Guide 6th Edition. The
definitions of the project management Are You PMP Exam Ready? List
terms (often according to PMI’s of Free PMP Mock Exam
Questions w/w Benchmark
definition) are included here for y0ur
easy reference. PMP® aspirants need
to learn these well in order to [Free Download] PMP
Certification Resource: PMP
successfully to understand the latter ITTO Mind Map (PMBOK Guide
sections of the PMBOK® Guide as well 5th Edition)
as to pass the PMP® exam. (Note: The
GreyCampus Offer Code 2018:
most important terms are highlighted in
up to 50% Off ITIL Foundation,
bold.) PMP, PRINCE2 Online Courses

 This series of PMP® study notes is [valid 30 Apr 2018]
impossible without the contribution

PMP Formulas and Calculation
of many Aspirants. Without their for PMP Certification
feedback and input, I cannot Demystified
continually improve and enhance
the study notes to cover the PMP Audit – first-hand
updates in PMBOK® Guide 6th experience of oversea applicant
edition. I am so grateful that my

study notes are useful to Aspirants.
ITIL V3 FOUNDATION EXAM

Article Highlights [hide]
GreyCampus Offer Code 2018:
Important PMP® Terms and Concepts (covering
up to 50% Off ITIL Foundation,
ection 1, 2 and 3 of the PMBOK® Guide 6th Edition) PMP, PRINCE2 Online Courses

1.1 Project [valid 30 Apr 2018]
1.2 Project Management

Firsthand Review: GreyCampus
1.3 Role of the Project Manager
online ITIL Foundation Course +
1.4 Organization System Exam Fee
1.5 Project Life Cycle vs Project Management Life Cycle vs
Product Life Cycle Passing the ITIL v3 Foundation

1.6 Other Important Project Management Terms 2011 Certification Exam
Further PMP® Study Resources
Important PMP®
Terms and Concepts SEARCH FOR CERTIFICATION TIPS
(covering Section 1, 2  To search type and hit enter
and 3 of the PMBOK®
Guide 6th Edition)
Project
Project – a temporary endeavor to
create a unique product, service or
result (or enhancement of existing
services/products (e.g v.2
development is a project) ) — may
be collectively termed as
deliverable — (vs
ongoing operations which manage
processes in transforming
resources into output) sometimes
may involve handing over the
deliverable to the operation teams
for continuous operation
Project drives changes in the
organization and often is a means
to create business values and to
achieve organizational goals —
the net quantifiable benefit derived
from a business endeavour which
can be tangible or intangible.
Projects operate in an environment
that may have favourable or
unfavourable impacts on them. Two

major categories are:
Organization Process Assets is
a major input in all planning
process, which may be kept at
PMO, directly related to project
management, including
Processes and Procedures
(including templates (e.g. WBS,
schedule network diagrams,
etc.), procedures for issuing
work authorizations, guidelines,
performance measurements)
and Organizational Knowledge
Repositories
Enterprise Environment
Factors (often are constraints)
are influences not under control
of the project team that will
affect the project, either intra-
organization and extra-
organization, e.g. organizational
culture, organization structure,
existing human resources, work
authorization system, PMIS,
market conditions, legal
requirements, technology
EEF are inputs for all
initiating, most planning
process, not much in the
executing/controlling
process, none in closing
process
Projects often involve more risks
and uncertainties than operations
and thus require more planning

The following factors influence the
operation of the organization which
may lead to the need for projects:
Regulatory/legal/social
requirements changes
Stakeholders needs/requests
Changes in
technology/business
Improvements, rectification and
enhancements to
processes/products/services
A project can be subdivided into
phases, each phase is a collection
of logically related project activities
that result in the completion of
deliverable(s). Towards the end of
each phase is a “Phase Gate” which
determines whether the project will
go on or not.
Process – a package of inputs,
tools and outputs, there are 49
processes defined by
PMI. Processes are grouped in the
PMBOK® Guide into 5 Process
Groups (NOTE: Process groups are
not the same as project phases).
Portfolio > Program > Project
Program – a group of
coordinated projects, taking
operations into account, maybe
with common goals, achieving
benefits not realized by running
projects individually, if only the
client/technologies/resource
are the same, then the projects

should be managed individually
instead of a program
Portfolio – a group of programs
and/or projects to achieve
organizational strategic goals
within the organization with a
view to maximizing the value to
the organization
Actively coordinating and
managing portfolios, programs
and projects through
organizational project
management (OPM) best
position the organization to
achieve strategic business
goals.
Use of portfolio/program/project
management to bridge the gap
between organizational strategy
and business value realization
Project Management
Project Management – the
application of (all appropriate)
knowledge, skills, tools &
techniques and whatsoever to
manage project activities with a
view to meet the project
requirements and achieve customer
satisfaction
The most important task is to align
stakeholder expectations with the
project requirements, around 90%

of the PM’s work is related to
communication with stakeholders
PMBOK® Guide is a
framework/standard but not
methodology (agile, scrum,
PRINCE3, etc.) — A framework
allows flexibilities while a
methodology would require the use
of a predefined system of practices,
techniques, procedures and rules.
Project management
emphasizes tailoring —
selecting the appropriate
project management
processes, inputs, tools,
techniques, outputs and life
cycle phases according to the
unique nature of each individual
project.
Competing constraints: time, cost,
scope, quality, risk, resources
Project Management Business
Documents
Project Business Case —
documents the economic
feasibility vs benefits of the
project and is used for
authorization of project
management activities.
Project Benefits Management
Plan —describes how and
when the benefits of the
deliverables of the project will
bring and describes how to
measure the benefits (also

including the alignment with
organization strategies,
assumptions and risks)
Project Charter — authorizes
the project and names the
project manager
Project Management Plan
— how the project will be
performed and managed –
documents assumptions &
decisions, helps communication
between stakeholders, goals,
costs & time scheduling
(milestones), project
management system and
subsidiary management plans
and documents
Project Success Measures —
project success is now more
inclined to be measured by
considering the achievement of
project objectives as
documented in this document
Role of the Project

Manager
Project Manager: an
individual assigned by the
organization to lead the team and is
responsible for achieving project
objectives
is the leader of the project

irrespective of the authority
should consider every process
to determine if they are needed
for individual projects (tailoring)
the exact role of project
manager is to be tailored to suit
the needs of individual
organizations and projects
may report to the functional
manager, program manager,
PMO manager, operation
manager, senior management,
etc., maybe part-time or
devoted
identifies and documents
conflicts of project objectives
with organization strategy as
early as possible
Skills required of project managers:
Technical project management
— process tailoring, planning,
managing
schedule/cost/resources/risk
Leadership — communication
(within team and with
stakeholders), team building,
motivation, influencing,
coaching, trust building, conflict
management, negotiation
Strategic and business
management — be aware of
the high-level strategies of the
organization and effectively
implement decisions/actions
that align with strategic goals

(Organization Strategy may be
expressed through mission and
vision)
Project Manager must balance the
constraints and tradeoffs,
effectively communicate the info
(including bad news) to the sponsor
for informed decisions
Project Manager needs to involve
project team members in the
planning process
Project Manager needs to perform
integration at process level,
cognitive level and context level
Project Team includes Project
Manager, project management
staff, project staff, PMO, SME
(subject matter experts can be
outsourced), customer
representative (with authority),
sellers, business partners, etc.,
maybe virtual or collocated
Senior management must be
consulted for changes to high-level
constraints
Leadership vs Management:
Lead: guide through interactive
discussion from one point to
another
Manage: direct a person to
perform a set of expected
behaviour
Leadership styles:
Laissez-faire
Transactional
Servant leader
Transformational
Charismatic
Interactional
Organization System
The organizational system
determines the power, influence,
competence, leadership and
political capabilities of the people
who can act within the system. e.g.
Management Elements —
general management
principles/rules of the
organization, e.g. disciplinary
action, division of skills,
authorization model/practices,
communication channels
Organizational Governance
Frameworks —
framework/processes
describing how authority within
the organization is exercised
Organizational Structure Types
Organic or Simple
Virtual
Projectized (project
manager has the ultimate
authority over the project,
team members are often
collocated)
Matrix (Strong, Balanced,
Week)
Functional
Composite/Hybrid – a
combination of different
types, depending on the
actual need
PMO
Tight Matrix = co-location, nothing
to do with the organization type
(not necessarily a matrix org.)
Functional organizations => the
project manager has little authority,
often called project expeditor (no
authority) or coordinator (little
authority), project coordination
among functional managers
Matrix organization => multiple
bosses and more complex
Project Management Office (PMO)
– standardizes governance,
provides training, shares tools,
templates, resources, etc. across all
projects/programs/portfolios
3 forms: supportive, controlling
and directive (lead the project
as PM)
functions: training, resource
coordination, methodology,
document repository, project
management oversight,
standards, career management
of PMs
may function as a stakeholder /
key decision maker (e.g. to
terminate the projects)

control shared
resources/interdependence
across projects at the
enterprise level
play a decisive role in project
governance
Project Life Cycle vs

Project Management Life
Cycle vs Product Life Cycle
Project Life Cycle:
includes: initiating, planning and
organizing, carrying out/executing
work, closing the project. Project life
cycles are independent of a product
life cycle.
Within a project life cycle, there can
be one or more phases of the
development of the product,
service, or result (a.k.a.
development life cycles) with the
following models:
Predictive [plan
driven/waterfall] – scope, time
and cost determined early in
the lifecycle, may also employ
rolling wave planning
Iterative – repeat the phases as
understanding of the project
increases until the exit criteria
are met, similar to the rolling
wave planning, high-level
objectives, either
sequential/overlapping phase,
scope/time/resources for each
phase may be different
Incremental – features/scope
are added to each incremental
cycle
Adaptive [change driven/agile]
– for projects with high levels
of change, risk and/or
uncertainty, each iterative is
very short (2-4 weeks), work is
decomposed into product
backlog, each with a
production-level product, scrum
is one of the most effective
agile methods, stakeholders are
involved throughout the
process, time and resources are
fixed, allow low change
cost/keep stakeholder influence
high
Hybrid
The life cycle chosen must be
suitable for the intended deliverable
and flexible enough to deal
changes.
each project phase within the
product lifecycle may include all the
five project management process
groups
Product life cycle: development >
production > adoption & growth >
maturity > decline > end of life
Other Important Project

Management Terms
The Configuration Management
Knowledge Bases contain baselines
of all organization standards
Lessons Learned – focus on the
deviances from plan (baseline) to
actual results and how to solve
these discrepancies
The work authorization system
(WAS) is a system used during
project integration management to
make sure that the right work gets
done at the right time
PMIS includes configuration system
and change control system
Never accept a change request to
trim down one element of the triple
constraint without changing the
rest.
Sponsor – provides
resources/support to project, lead
the process through initiation
(charter/scope statement) through
formally authorized, later involved
in authorizing scope/budget
change/review
Customer – NOT necessarily
provide the financial resources, may
be external to the organization, final
acceptance of the product
Business Partners – certification
body, training, support, etc.
Project Statement of Work (SOW):

describes the business need, high-
level scope of deliverables and
strategic plan of the
organization, created by the
sponsor/initiator/buyer
Project Charter is not a contract
Project Management Plan is NOT a
project schedule
Project Management
System: includes a list of project
management processes, level of
implementation (what actions to
take in the management
processes), description of tools and
techniques, resources, procedures,
change control system [forms with
tracking systems, approval levels]
Requirement Traceability Matrix
(RTM) – a matrix connecting
deliverables to requirements and
their sources (for managing scope)
Work Breakdown Structure (WBS) –
a hierarchal chart of decomposing
deliverables into work packages
Activity List – a full list of all
activities with indication of
relationship to the work packages
Activity Attributes – further
information (duration, start date,
end date, etc.) of all the activities in
the list (for scheduling)
Roles and Responsibilities (RAR) – a
document listing all the roles and
description of their responsibilities
in the project (often by category)

Responsibility Assignment Matrix
(RAM) – a matrix connecting people
to work packages/activities, e.g. the
RACI matrix (responsible,
accountable, consult, inform),
usually only one person is
accountable for each activity
Resources Breakdown Structure
(RBS) – a hierarchical chart listing
all the resources by categories, e.g.
marketing, design, etc.
Risk Breakdown Structure (RBS) – a
hierarchical chart listing all risks by
categories
Project Management Data and
Information
Work Performance Data – raw
data collected
Work Performance Info –
analyzed in context and
integrated data, e.g. some
forecasts
Work Performance Reports –
work performance information
compiled in report format
Sunk costs – money already spent,
not to be considered whether to
terminate a project, similar to
committed cost (often through
contracts)
Direct costs, indirect (shared) costs,
Fixed costs, Variable costs
Law of diminishing returns –
beyond a point, the more input, the
less return
Working capital – assets minus
liability, what the company has to
invest in the projects
Payback period – a time to earn
back capital investment
Benefit-cost ratio (BCR) – an
indicator, used in the formal
discipline of cost-benefit analysis,
that attempts to summarize the
overall value for money of a project
Depreciation – straight-line
depreciation vs accelerated
depreciation (the amount of
depreciation taken each year is
higher during the earlier years of an
asset’s life)
Under double declining balance, the
asset is depreciated twice as fast as
under straight line. Using the
example above, 10% of the cost is
depreciated each year using a
straight line. Doubling the rate
would mean that 20% would be
depreciated each year, so the asset
would be fully depreciated in 5
years, rather than 10.
Under sum-of-the-years-digits, the
asset is depreciated faster than the
straight line but not as fast as
declining balance. As an example of
how this method works, let’s say an
asset’s useful life is 5 years. Adding
up the digits would be 5+4+3+2+1
or a total of 15. The first year, 5/15
is expensed; the next year 4/15 is

expensed, and so on. So if the
asset’s cost is $1000, 5/15, or
$333.34 would be expensed the
first year, $266.67 the second year,
and so on.
Economic value added – the value
of the project brought minus the
cost of project (including
opportunity costs) e.g. for a project
cost of $100, the estimated return
for 1st year is $5, assuming the
same money can be invested to
gain 8% per year, then the EVA is $5
– $100 * 8% = -$3
Net present value (NPV) – the sum
of the present values (PVs) of the
individual cash flows of the same
entity
Present value (PV) – or called
present discounted value, is a
future amount of money that has
been discounted to reflect its
current value, as if it existed today
(i.e. with inflation, etc.)
Future value (FV) – is the value of
an asset at a specific date
Internal Rate of Return (IRR) – The
inherent discount rate or
investment yield rate produced by
the project’s deliverables over a
pre-defined period of time.
Forecast (future) vs Status Report
(current status) vs Progress Report
(what have been done/delivered)
Journey to Abilene (Abilene’s
Paradox) – committee decisions
can have a paradox outcome, the
joint decision is not welcome by
either party (because of fear of
raising objections)
when something unusual happens,
always refer to the PM
Plan/Charter for instruction on how
to proceed; if not found, ask for
direction from the management
unresolved issues will lead to
conflicts
Further PMP® Study

Resources
47+ Commonly Confused PMP®
Term Pairs with detailed
explanations (updated for the new
PMP® Exam) — there are many
PMP® term pairs that look very
similar but are quite different in
meaning. The PMP® Exam
questions may test Aspirants’
understanding of these terms and
how to distinguish between them.
Other articles in the series PMP® Exam
Preparation
1. PMP Formulas and Calculation for PMP
Certification Demystified
2. PMP Earned Value Management (EVM)
Calculation Explained in Simple Terms
3. Top Tips for Tackling PMP EVM Questions
(20+ Practice Questions Included)
4. Are You PMP Exam Ready? List of Free PMP
Mock Exam Questions w/w Benchmark
5. An Introduction to PMBOK Guide:
Knowledge Areas, Processes and Process
Groups
6. PMP Certification Study Notes 1 - Terms
and Concepts
7. How to Study for PMI PMP? Learn PMI-ism
First!
8. PMP Certification Study Notes 2/3 -
Project Management Processes and
Knowledge Areas
9. PMP Certification Study Notes 4 -
Project Integration Management
Project Scope Management
Project Schedule Management
12. PMP Certification Study Notes 7 –
Project Cost Management
Project Quality Management
Project Resource Management
Project Communications Management
Project Risk Management
Project Procurement Management
Project Stakeholder Management
19. PMP / PMI-ACP Certification Study Notes
- Professional and Social Responsibility
20. PMP Certification Study Notes 14 - Agile
Practice Guide
Most Popular PMP Certification Exam

Articles
My Exam Prep Tips and Free Resources (I
got 4P and 1 MP)
How to Get 35 Contact Hours Fast and
Easy?
Detailed Comparision of online PMP
Courses
Over 1000+ FREE Quality Mock Exam /
Practice Questions
A FREE Guide to Formulas and
Calculation (with explanation and sample
questions)
47 Commonly Confused Terms with
detailed explanation
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Edward Chung
Edward Chung aspires to

become a full-stack web
developer and project
manager. In the quest to
become a more competent

professional, Edward studied
for and passed the PMP
Certification, ITIL v3
Foundation Certification,
PMI-ACP Certification and
Zend PHP Certification.
Edward shares his
certification experience and
resources here in the hope of
helping others who are
pursuing these certification
exams to achieve exam
success.
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sylvie  April 26, 2017 at 21:25

Dear Edward,
As I was studying for the PMP (started 3
months back), I discovered your website
and I have to say that it is VERY good
and useful and complete. It helped me
greatly in my studies and learning. I read
PMbok twice, Rita book twice (I
recommend to do all the exercises as
they really helped gain deep knowledge

and understanding). I passed my PMP
exam today, Proficient on all process
groups… so happy!! the questions were
95% situational and it was a very dense
focused 4-hour session; I did not have
time to take a break. So thank you for
the great website and all the information
provided. I am thinking of doing other
certification and your website is in my
favorites!
Reply
Edward Chung
  April 27, 2017 at 11:06
Dear Sylvie,
Congratulations on passing the

PMP Exam with all Proficient.
You did much better than me!
Would you mind sharing your
lessons learned which will be
*very* useful for fellow
aspirants!
P.S. Free ways to get PDUs:

https://edward-
designer.com/web/ways-get-
free-pdu-pmp-pmi-acp/
Reply
Aaron  March 31, 2017 at 07:24

Hi Edward,
I will sit for the PMP Exam in 13 days. I

have read Rita twice, went through
PMBOK once. I have done at least 2,000
practice test questions. I presently am
scoring in 50 question lite exams from
PMtraining.com in the 76%-90% range
on each exam, with an average of 80%+
in total (paid exams). I did the PMstudy
200 question exam and scored a 76%
and that was skipping about five
questions regarding drawing network
diagrams as I had no pen and paper with
me while taking the exam. I scored a 77%
on the Simplilearn free exam. I am

nervous about the exam, as it seems
many sites state on internet state one
should be performing in the 80% plus
range on mock exams regularly. Any
thoughts on the matter?
Reply
Edward Chung
  March 31, 2017 at 09:26
Hi Aaron,
Judged from your performance

of the mock exams alone, I
would say that you stand a high
chance of passing the PMP
Exam in your first try. Mock
exams results in the range of
75-80% are already quite good
indeed! Have you tried other
mock exams listed here:
https://edward-
designer.com/web/list-of-free-
pmp-exam-questions/
Remember to be psychologically
prepared for some more difficult
questions at the beginning of
the exam that may adversely
affect your confidence. As you
have already tried your best in
your PMP preparation, have
confidence in yourself!
Wish you PMP success! Do let

me know your success story!
Reply
Kalander  August 4, 2016 at 02:03

Hi Edward, so kind of you to share the
notes to others. This is of great help to
me and am sure its helpful for lots of
others too.
Reply
Das  August 3, 2016 at 12:31

Hi Edward,
would like to hilight that in your project

charter statement it shows project
charter signed by Sponsor, however as
per PMBOK , project charter authorized
by sponsor and commit to the project
and signed done by Senior Management.
Reply
Edward Chung
  March 31, 2017 at 09:26
Thanks for your clarification!
Reply
Mark Campbell  March 31, 2015 at 02:16

Hello Edward,
I think this is great that you are offering

these tips, notes and your perspective
about the ITIL, PMP and Agile for the
masses. I will continue to check your
website. Great Job!
Thank you,
Mark
Reply
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PMP Certification Study Notes 1 - Terms and Concepts - New PMP, PMI-ACP, ITIL &amp; PRINCE2 Exam Tips 2018

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PMP Certification Study Notes 1 - Terms and Concepts - New PMP, PMI-ACP, ITIL &amp; PRINCE2 Exam Tips 2018

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4/1/2018 PMP Certification Study Notes 1 - Terms and Concepts - new PMP, PMI-ACP, ITIL & PRINCE2 Exam

amp; PRINCE2 Exam Tips 2018

PMP EXAM TIPS FOLLOW:  

Study Notes 1 – Chung, PMP®, PMI-

Terms and Foundation. Like most

Concepts professional pursuing

If you have any queries, I am more than happy

onwards. Happy learning! P.S. my PMP® / PMI-ACP® Certification status can

Introduction: This article provides Wing).

Aspirants taking the exam in 2018 with

impossible without the contribution

edition. I am so grateful that my

ITIL V3 FOUNDATION EXAM

1.2 Project Management

Product Life Cycle Passing the ITIL v3 Foundation

Further PMP® Study Resources

unfavourable impacts on them. Two

and thus require more planning

are the same, then the projects

project requirements, around 90%

measure the benefits (also

Role of the Project

is the leader of the project

that align with strategic goals

terminate the projects)

Project Life Cycle vs

Other Important Project

Project Statement of Work (SOW):

in the project (often by category)

is expensed; the next year 4/15 is

Further PMP® Study

Other articles in the series PMP® Exam

1. PMP Formulas and Calculation for PMP

2. PMP Earned Value Management (EVM)

Calculation Explained in Simple Terms

3. Top Tips for Tackling PMP EVM Questions

(20+ Practice Questions Included)

4. Are You PMP Exam Ready? List of Free PMP

Mock Exam Questions w/w Benchmark

5. An Introduction to PMBOK Guide:

Knowledge Areas, Processes and Process

6. PMP Certification Study Notes 1 - Terms

7. How to Study for PMI PMP? Learn PMI-ism

8. PMP Certification Study Notes 2/3 -

Project Management Processes and

9. PMP Certification Study Notes 4 -

Project Integration Management

10. PMP Certification Study Notes 5 -

Project Scope Management

11. PMP Certification Study Notes 6 -

Project Schedule Management

12. PMP Certification Study Notes 7 –

Project Cost Management

13. PMP Certification Study Notes 8 -

Project Quality Management

14. PMP Certification Study Notes 9 -

Project Resource Management

15. PMP Certification Study Notes 10 -

Project Communications Management

16. PMP Certification Study Notes 11 -

Project Risk Management

17. PMP Certification Study Notes 12 -

Project Procurement Management

18. PMP Certification Study Notes 13 -

PMP Certification Study Notes 1 - Terms and Concepts - New PMP, PMI-ACP, ITIL & PRINCE2 Exam Tips 2018

PMP Certification Study Notes 1 - Terms and Concepts - New PMP, PMI-ACP, ITIL & PRINCE2 Exam Tips 2018