Lecture Ten:

Project Integration Management

Whats Integration


An integrated management system is
a Integration management is a
collection of processes required to
ensure that the various elements of
the projects are properly coordinated.
It involves making trade-offs among
competing objectives and alternatives
to meet or exceed stakeholder needs
and expectations
Integration Processes:

Develop Project Charter-Initiation
Process
Develop Project Management Plan-
Planning
Direct and Manage Project Execution
Monitor and control project work
Perform Integrated change control
Close project-Closing
.
First Process: Develop Project Charter
The process of developing a document that formally authorize a project or a phase and
documenting initial requirements that satisfy the stake holders needs and expectation.
First Process: Develop Project Charter
Project Charter include:
1-Project Title and description
2-Project Manager Assigned and authority Level
3-Buisness case
4-Resources Pre-assigned
5-Product Description
6-Stakeholder requirements
7-Project approval requirements
8-High Level Risk
9-Project Constraints
10-Preliminary Budget
Notes : Project Selection
Present Value:
The value today of future cash flow
PV = FV/(1+r)
n

FV=Future Value
R= Interest rate
N=Number of times period
Assume that you would like to put money in an account today to make sure your child has
enough money in 10 years to buy a car. If you would like to give your child $10,000 in 10
years, and you know you can get 5% interest per year from a savings account during that
time, how much should you put in the account now? The present value formula tells us:

PV = $10,000/ (1 + .05)
10
= $6,139.13

Thus, $6,139.13 will be worth $10,000 in 10 years if you can earn 5% each year. In other
words, the present value of $10,000 in this scenario is $6,139.13.

Notes : Project Selection
Net Present Value:
It is the present value of an investment's expected cash inflows minus the costs of acquiring
the investment.
NPV = (Cash inflows from investment) (cash outflows or costs of investment)
Example:
Let's assume Company XYZ wants to buy Company ABC
Cost to purchase Company ABC today: $1,000,000
Present value (PV) of cash flows from acquiring Company ABC:
Year 1: $200,000 Year 2: $150,000 Year 3: $100,000 Year 4: $75,000 Year 5: $70,000
Year 6: $55,000 Year 7: $50,000 Year 8: $45,000 Year 9: $30,000 Year 10: $10,000
Total: $785,000
Net Present Value (NPV) = $785,000 - $1,000,000 = -$215,000
At this point, management for Company XYZ would use the net present value rule to decide
whether or not to pursue the acquisition of Company ABC. Because the NPV is negative, they
should say, "No."

Notes : Project Selection
Net Present Value:
The present value for year 1,2 etc means that company earn at each year certain
amount for year ,this amount is cash inflow in the future and its translated to its
present value
Cost of purchasing the company is at present this why we transform the cash inflow in
the future to present to substract both value to decide buy or not
Why It Matters:
NPV is used to analyze an investment decision and give company management a clear
way to tell if the investment will add value to the company. Typically, if an investment
has a positive net present value, it will add value to the company and benefit company
shareholders.
Net present value calculations can be used for either acquisitions (as shown in the
example above) or future capital projects. For example, if a company decides to open a
new product line, they can use NPV to find out if the projected future cash inflows cover
the future costs of starting and running the project. If the project has a positive NPV, it
adds value to the company and therefore should be considered.

Notes : Project Selection
Payback Period:
Payback Period
This term refers to the length of time it takes for the organization to recover its
investment in the project before it starts accumulating profit. For example:
Question There are two projects from which to choose: Project A with a payback period of six months
or Project B with a payback period of 18 months. Which one should the organization select?
Answer Project A
This method ignores profitability, time value of money
Benefit Cost Ratio:
A ratio attempt to identify the relation between the cost and benefits
Benefit = Revenue.
Remarque: Profit = Revenue -Expenses .
Ratio greater then 1 means that benefit are greater then cost
Ratio less then 1 means that benefit are less then cost

Notes : Project Selection
Internal Rate of Return (IRR)
To understand this concept, think of a bank account. You put money in a bank account and expect to
get a return of 2 percent. You can think of a project in the same way. If a company has more than one
project in which to invest, the company may look at the returns of the different projects and then select
the project with the highest return.

IRR does get confusing when you give it a formal definition: The rate (read it as "interest rate") at which
the project inflows ("revenues") and project outflows ("costs") are equal. You will not have to perform
any IRR calculations on the exam.
Simply know the higher the IRR number, the better.

Question An organization has two projects from which to choose: Project A with an IRR of 21
percent or Project B with an IRR of 15 percent. Which one is a better option?
Answer Project A
Notes : Project Selection
Exercise Remember, you do not have to be an accountant to pass this exam.
Its just provided as conceptual questions:
For each row on the following chart, enter the letter of the project you would select if the following
information was. provided.
Notes : Project Selection
Opportunity Cost:
This term refers to the opportunity given up by selecting project over another
EX Project A NPV = 45000 Project B NPV= 85000
Selection project B mean that opportunity cost A
Sunk Cost:
A cost already incurred and thus cant be recovered .Sunk cost are independent of any event
could occur in the future or any calculation when deciding to continue the project.
Project A with initial budget 100,000 now we are in the middle of the project where
2,000,000 to decide to continue the over 100,000 is already spend ,cant be taken in
calculation
Working Capital:
A measure of both company effienciy and its short term financial health
Working capital = Current assets- Currents liabilities( =Company debts or obligation to pay)
Positive working capital means that the company is able to pay off its current liabilities
Second Process: Develop Project Management Plan
Management plan are the strategy for managing project and the processes in
each knowledge area
Second Process: Develop Project Management Plan
Kickoff Meeting
Before the Develop Project Management Plan process can really be completed
and project executing can begin, a kickoff meeting should be held. This is a meeting of
the key parties involved in the project (e.g., customers, sellers, the project team, senior
management, functional management, the sponsor). The purpose of this meeting is to
announce the start of the project and to ensure everyone is familiar with its details and
with the people working on it.
Second Process: Develop Project Management Plan
Output: Project Management Plan

The project Management Plan::
It integrates and consolidates all of the
subsidiary management plans and baseline
Like scope management plan,
time,cost,risketc
Output: Project Management Plan
Another subsidiary plan could be included in the project management plan
Change Management Plan:
It describes how changes will be managed and controlled it may include:
1-Change control procedures .
2-The approval level for authorizing changes
3-The creation of change control board to approve changes
4-Who should attend meetings regarding changes

Change Control system: Its a part of organization process assets .This
system includes standardized forms,reports,processes,procedures and
software to track and control changes
Output: Project Management Plan
Another subsidiary plan could be included in the project management plan
Configuration Management system:
It defines how manage changes to deliverables and updating the resulting
documentation to be distributed to project team
One of tools is Project information system.

Remark:
Projects Documents:
Likes project charter, statement of work, risk register, stake holder register, issue log they
are considered as documents not a parts of project management plan.


Third Process: Direct and Manage Project execution
Direct and Manage Project Work is the process of leading and performing the work defined
in the project management plan and implementing approved changes to achieve the
projects objectives. The key benefit of this process is that it provides overall management
of the project work..

Third Process: Direct and Manage Project
execution
The Project manager is responsible to integrate all the executing processes into one
coordinated effort to accomplish the project management plan and produce deliverables

Third Process: Direct and Manage Project
execution
Tool: Project Information System:
Its a part of enterprise environmental factors provides access to an automated tool
,such as scheduling software tool, web interface, information collection and distribution
system

Output: Changes request
Corrective action: It's any action taken to bring expected future performance in line
with project management plan, It involves implementing actions to deal with actual
deviation..
Any corrective actions required a formal change request to be reviewed and approved or
rejected as part of the integrated change control
Output: Changes request
Preventive action:
It deals with anticipated or possible deviations from the performance base line
Example:
Arrange for one of the team member in certain specialized area to be a backup of an
expert one in this field .
Changing resource as he does not meet the acceptance criteria in certain work package

Defect Repair:
This is mean rework, the output didnt meet specification.
Fourth Process: Monitor and Control
project work:

Monitor and control project work is
the process of tracking ,reviewing
and regulating the process to meet
the performance objectives defined
into the project management plan.
Its concern to:
Comparing actual project
performance against the project
management plan
Assessing performance to determine
whether any corrective or
preventative is required
Maintaining an accurate ,timely
information base concerning project
product
Providing forecast to update current
cost and current schedule
information

Fourth Process: Monitor and Control project work
Fourth Process: Monitor and Control project work
Fourth Process: Monitor and Control project work
The Monitor and Control Project Work process is concerned with:
1- Comparing actual project performance against the project
management plan;
2- Assessing performance to determine whether any corrective or
preventive actions are indicated, and then recommending those
actions as necessary;
3- Identifying new risks and analyzing, tracking, and monitoring existing
project risks to make sure the risks are identified, their status is
reported, and that appropriate risk response plans are being
executed;
4- Maintaining an accurate, timely information base concerning the
projects product(s) and their associated documentation through
project completion;
5- Providing information to support status reporting, progress
measurement, and forecasting;
6- Providing forecasts to update current cost and current schedule
information;
7- Monitoring implementation of approved changes as they occur; and
8- Providing appropriate reporting on project progress and status to
program management when the project is part of an overall program.
Fifth Process: Perform integrated change
control

Perform Integrated Change Control is the process of
reviewing all change requests; approving changes and
managing changes to deliverables, organizational
process assets, project documents, and the project
management plan; and communicating their
disposition. It reviews all requests for changes or
modifications to project documents,deliverables,
baselines, or the project management plan and
approves or rejects the changes. The key benefit of
this process is that it allows for documented changes
within the project to be considered in an integrated
fashion
while reducing project risk, which often arises from
changes made without consideration to the overall
project objectives or plans.
Fifth Process: Perform integrated change
control

Fifth Process: Perform integrated change control
Detailed Process for making changes
1-Identify changes
2-Look at the impact of changes
3-Create change request

4-Perform integrated change control:
A-Asses the change does the change fall within project charter
B-Look for an option
C-Change request is approved or Rejected
D-Update the status of the change in change control system

5-Adjust the project management plan, project document and baseline
6-Manage stakeholders expectation by communicating the change to stakeholdrs
affected by the change
Fifth Process: Perform integrated change control
Change Control meetings:

A change control board is responsible for meeting and reviewing the changes request
and approving or rejecting those changes requests.

The roles and responsibilities of these boards are clearly defined and are agreed upon
by appropriate stakeholders.

All change control board decisions are documented and communicated to the stake
holders for information and follow up activities
Sixth Process: Close project or phase
The process of finalizing all activities across all of the project management process
groups or formally complete the project
It includes:
1-Actions and activities necessary to satisfy completion or exit criteria for the phase or
project
2-Actions and activities necessary to transfer the project products, services .
3-Activitiies needed to collect project or phase records ,audit project success or failure
4-Gather lesson learned and archive future information for future use by the
organization

Sixth Process: Close project or phase

Question Review
. Youve just received a change request. This means:
A. The project charter is complete, but the work cannot begin yet because you need to
make a change to the scope baseline
B. You are in the Direct and Manage Execution process, and you can implement the
change now
C. The change needs to be approved before it can be implemented
D. There is a defect in a deliverable that must be repaired


. What is the output of Direct and Manage Execution?
A. Approved change requests
B. Project management processes
C. Deliverables
D. Forecasts

Question Review
Youre managing a graphic design project. One of your team members reports that there is a serious
problem, and you realize that it will cause a delay that could harm the business of the stakeholders.
Even worse, it will take another two days for you to fully assess the impactuntil then, you wont have
the whole story. What is the BEST way to handle this situation?
A. Create a change request document and submit it to the change control meeting
B. Pull out the project charter and show them that you have authority to make decisions
C. Meet with the stakeholders and tell them that theres a problem, but you need two more days to get
them the information they need
D. Update the lessons learned and add it to your organizational process assets

. Youre a project manager on a construction project. The electrician has started laying out the
wiring, when the client comes to you with a change request. He needs additional outlets, and you
think that will increase the cost of the electrical work. What is the first thing you do?
A. Refuse to make the change because it will increase the cost of the project and blow your
budget
B. Refer to the project management plan to see how the change should be handled
C. Consult the contract to see if there is a clause
D. Make the change, since the client requested it
Question Review
The work authorization system:
A. Ensures that every work package is performed at the right time and in the proper sequence
B. Authorizes the project manager to spend money on work
C. Is a set of processes and tools that aids project manager in effectively guiding the project to
completion
D. Is a formalized, written description of how to carry out an activity

NB:
Work Authorization. A permission and direction, typically written, to begin work on a specific schedule
activity or work package or control account.

Work Authorization System. A subsystem of the overall project management system. It is a collection of
formal documented procedures that defines how project work will be authorized (committed) to ensure
that the work is done by the identified organization, at the right time, and in the proper sequence. It
includes the steps, documents, tracking system, and defined approval levels needed to issue work
authorizations.
Question Review

. Youre on the project selection committee. Youre reviewing a document that describes the
strategic value of a potential project and its benefits to the company. Whats this document
called?
A. Project Charter
B. Business Case
C. Benefit measurement method
D. Contract

. Which of the following is included in a project charter?
A. A risk management strategy
B. Work package estimates
C. Detailed resource estimates
D. The business case for the project
Question Review

. You are the project manager for a software project, when the sponsor pulls the plug and cancels
the project. What do you do?
A. Give the team the day off to recuperate from the bad news
B. Create a budget summary for the remaining unspent budget
C. Follow project closure procedures to close the project and update lessons learned
D. Find new assignments for any people previously assigned to your project

. You are managing a software project, when you find out that a programming team who you were
supposed to have access to has been reassigned to another project. What is the first thing that you
should do?
A. Figure out the impact that this will have on your project
B. Bring a copy of your projects charter to the other manager, and explain that you need that team for
your own project
C. Go to your sponsor and demand the team
D. Figure out a way to compress the project schedule so that you can work with the team if they
become available
Question Review
. All of the following occur during the Close Project or Phase process EXCEPT:
A. Creating lessons learned.
B. Formal acceptance.
C. Performance reporting.
D. Performing cost benefit analysis.

. You are asked to prepare a budget for completing a project that was started last year and then
shelved for six months. All the following would be included in the project budget EXCEPT:
A. Fixed costs.
B. Sunk costs.
C. Direct costs.
D. Variable costs.

. You are assigned as the project manager in the middle of the project. The project is within the
baselines, but the customer is not happy with the performance of the project. What is the FIRST
thing you should do?
A. Discuss it with the project team.
B. Recalculate baselines.
C. Renegotiate the contract.
D. Meet with the customer.

Question Review
-All technical work is completed on the project. Which of the following remains to be done?
A. Validate Scope
B. Plan Risk Responses
C. Create a staffing management plan
D. Complete lessons learned
NB: We are here in closing phase as works are completed, validate scope is in control and monitor


. Integration is done by the:
A. Project manager.
B. Team.
C. Sponsor.
D. Stakeholders.



Good Luck