Slides - Project Management Professional (Pmi) Study Guide

Project Management
Professional (PMP)
Recurring Themes
Historical Records need to collect and use for
planning, estimating and risk
Kickoff meetings are important
Work Breakdown Structures
Do not introduce benefits that are not stated in
requirements
Needs of all stakeholders should be taken into account
during all projects
Team Members must be involved in project planning
Project Mangers must be pro-active
Chapter 1 Introduction
Project temporary endeavor undertaken to
create a unique product or service
Has a definite beginning and end and
interrelated activities
Programs adopt new set of objectives and
continue to work; projects cease when declared
objectives have been attained
Chapter 1 Introduction
Projects are unique characteristics are
progressively elaborated
Progressively: proceeding in steps
Elaborated: worked with care and detail
Scope of project should remain constant

even as characteristics are progressively
elaborated
Chapter 1 - Introduction
Project Management: the application of
knowledge, skills, tools and techniques to project
activities in order to meet or exceed stakeholder
needs and expectations from a defined project
balancing the following:
Scope, time, cost, and quality
Stakeholders expectations
Requirements (needs) vs. unidentified requirements
(expectations)
Chapter 1 - Introduction
Programs are groups of projects managed in a
coordinated way to obtain benefits not available
from managing the projects individually
Most programs have elements of ongoing
operations
Series of repetitive or cyclical undertakings
Projects are often divided into subprojects for

more manageability
Often contracted out to external organizations
Chapter 2 Project Management

Context
Project Phases are marked by the
completion of a deliverable
Tangible, verifiable work product
Review of deliverables and approval/denial
are phase exits, stage gates, or kill points
Phases are collected into the Project Life

Cycle
Set of defined work procedures to establish
management control

Context
Project Life Cycle defines:
Technical work performed in each phase
Who is involved in each phase
Project Phases can overlap Fast Tracking
Common Characteristics of Project Life Cycles:
Cost and Staffing levels are low at start and move higher
towards the end
Probability of successfully completing project is low at beginning,
higher towards the end as project continues
Stakeholder influence is high at the beginning and progressively
lowers as project continues

Context
Stakeholders: individuals and organizations
who are actively involved in the project
Often have conflicting expectations and objectives
In general, differences should be resolved in favor of
the customer individual(s) or organization(s) that will
use the outcome of the project
Stakeholder management is a proactive task
Project Mangers must determine all stakeholders and
incorporate their needs into the project

Context
Stakeholders are:
Project Managers
Customers
Performing Organizations, owners
Sponsor
Team
Internal/External
End User
Society, citizens
Others: owner, funders, supplier, contractor

Context
Organizational Systems: Project based vs.
Non-Project Based
Project Based derive revenues from performing
projects for others (consultants,
contractors),management by projects
Non-Project Based seldom have management
systems designed to support project needs
(manufacturing, financial services)

Context
Organizational Cultures and Styles:
Entrepreneurial firms more likely to adopt
highly participative Project Manager accept
higher risk/reward
Hierarchical firms less likely to adopt
participative Project Manager take fewer
risks

Context
Organizational Structures
Functional (classical) marked by identifiable
superiors. Staff grouped by specialty .
Perceived scope of project limited by function
(Engineering, HR). Typically have part-time
Project Manager
Projectized Organization blend functional
and projectized characteristics. Mix crossdepartment personnel with full-time Project
Manger

Context
Project Management Skills
General Business Management (consistently
producing results expected by stakeholders)
Leading (establishing direction, aligning resources,
motivating)
Communicating (clear, unambiguous, and complete)
Negotiating (conferring with others to reach an
agreement)
Problem Solving (definition and decision making)
Distinguish causes and symptoms
Identify viable solutions
Influencing Organization (understanding power and

politics)

Context
Socioeconomic Influences
Standards document approved that provides
common, repeated use, rules and guidelines
Compliance is not mandatory
Regulations document that identifies products,
services or characteristics
Compliance is mandatory
Standards often become de facto regulations
Internationalization
Cultural Influences

Context
Organization Structure Pros and Cons
Projectized
Efficient Organization No home
Loyalty Lack of Professionalism
Effective Communication Duplication of functions, less efficient
resource usage
Matrix
Visible Objectives not cost effective

PM Control More than 1 boss
More support More complex to control
Utilize scarce resources Tough resource allocation
Information distribution Competition of priorities
Coordination Policies & Procedures
Home based Potential for conflict

Context
Functional Organization
Specialists More emphasis on functions
1 supervisor No career path in PM

Processes
Project Management requires active
management of Project Processes
Series of actions that achieve a result
Project Management Processes
Describing and organizing the work
Product-Oriented Processes
Specifying and creating the product

Processes
Process Groups:
Initiating processes: recognizing a project or phase
should begin
Planning processes: devising and maintaining a
workable plan
Executing processes: coordinating resources to
execute the plan
Controlling processes: ensuring project objectives
are met; monitoring, correcting and measuring
progress
Closing processes: formalized acceptance

Processes
Process Groups are linked by the results each
produces
Process Groups are overlapping activities with
various levels of intensity
Process Group interactions cross phases
rolling wave planning
Provides details of work to complete current phase
and provide preliminary description of work for
subsequent phases
Individual processes have inputs, tools and

techniques, and outputs (deliverables)

Processes
Initiating and Planning Processes
Committing the organization to begin
Initiation, High-level planning, Charter
Amount of planning proportional to the scope of

the project Core Planning
Scope Planning written statement
Scope Definition subdividing major deliverables
into more manageable units
Activity Definition determine specific tasks needed
to produce project deliverables
Activity Sequencing plotting dependencies

Processes
Core Planning (continued)
Activity Duration Estimating determine amount of work
needed to complete the activities
Schedule Development analyze activity sequences, duration,
and resource requirements
Resource Planning identify what and how many resources
are needed to perform the activities
Cost Estimating develop resource and total project costs
Cost Budgeting allocating project estimates to individual work
items
Project Plan Development taking results from other planning
processes into a collective document

Processes
Planning/Facilitating Processes manage the
interaction among the planning processes
Quality Planning standards that are relevant to the
project and determining how to meet standards
Organizational Planning identify, document, and
assigning project roles and responsibilities
Staff Acquisition obtaining the human resources
Communications Planning determining rules and
reporting methods to stakeholders

Processes
Planning/Facilitating Processes (continued)
Risk Identification determining what is likely to
affect the project and documenting these risks
Risk Quantification evaluating risks and
interactions to access the possible project outcomes
Risk Response Development defining
enhancement steps and change control measures
Procurement Planning determining what to buy
and when
Solicitation Planning documenting product
requirements and identifying possible sources

Processes
Planning/Facilitating Processes (continued)
Order of events:
Scope Statement
Create Project Team
Work Breakdown Structure
WBS dictionary
Finalize the team
Network Diagram
Estimate Time and Cost
Critical Path
Schedule
Budget
Procurement Plan
Quality Plan
Risk Identification, quantification and response development
Change Control Plan
Communication Plan
Management Plan
Final Project Plan
Project Plan Approval
Kick off

Processes
Executing Processes
Project Plan Execution performing the activities

Complete Tasks/Work Packages
Information Distribution
Scope Verification acceptance of project scope
Quality Assurance evaluating overall project
performance on a regular basis; meeting standards
Team Development developing team and individual
skill sets to enhance the project
Progress Meetings

Processes
Executing Processes (continued)
Information Distribution making project
information available in a timely manner
Solicitation obtaining quotes, bids,
proposals as appropriate
Source Selection deciding on appropriate
suppliers
Contract Administration managing vendor
relationships

Processes
Controlling Processes needed to regularly
measure project performance and to adjust
project plan
Take preventive actions in anticipation of
possible problems
Change Control coordinating changes across the
entire project plan
Scope Change Control controlling scope creep
Schedule Control adjusting time and project
schedule of activities

Processes
Controlling Processes (continued)
Cost Control managing project budget
Quality Control monitoring standards and
specific project results; eliminating causes of
unsatisfactory performance
Performance Reporting status,
forecasting, and progress reporting schedule
Risk Response Control responding to
changes in risk during the duration of the
project

Processes
Closing Processes
Administrative Closure generating necessary
information to formally recognize phase or project
completion
Contract Close-out completion and delivery of
project deliverables and resolving open issues
Procurement Audits
Product Verification
Formal Acceptance
Lessons Learned
Update Records
Archive Records
Release Team

Processes
Overall Processes
Influencing the organization
Leading
Problem Solving
Negotiating
Communicating
Meetings

Processes
Project Selection Techniques
Comparative Approach (similar projects)
Benefit measurement method
Constrained Optimization (mathematical

approach)
Key aspect of scope verification is

customer acceptance
Only 26 % of projects succeed
Chapter 4 Project Integration

Management
Project Integration Management
Ensures that the project processes are properly coordinated
Tradeoffs between competing objectives and alternatives in order
to meet stakeholder approval
Project Plan Development
Project Plan Execution
Overall Change Control
These processes may occur repeatedly over the project duration

Historical Records are needed to perform project management
well, they are inputs to continuous improvement
Files
Lessons Learned
Actual Costs
Time Estimates
WBS
Benchmarks
Risks

Management
Project Plan Development
Uses outputs from other planning processes to create
consistent document to guide project execution and
control
Iterated several times
Documents planning assumptions
Documents planning decisions that are chosen
Facilitates communication
Defines key management reviews
Provides a baseline to track progress measurement
and project control

Management
Project Plan Development Inputs
Other planning outputs: primarily the planning process
outputs (WBS, base documents, application area
inputs)
Historical information verify assumptions, records of
past project performance
Organizational policies quality management,
personnel administration, Financial controls
Constraints factors that limit performance,
contractual provisions, budget
Assumptions risk factors

Management
Tools & Techniques for Plan Development
Project Planning Methodology any structured
approach (software, templates, forms, start-up
meetings
Stakeholder Skills & Knowledge tap into plan
development; use expertise for reasonableness
PMIS Out of the box approach to support all project
aspects through closure

Management
Project Plan Development Outputs
Project Plan is a collection that changes over time as more
information about the project becomes available
Baseline will change only in response to approved scope
change
Project Plan includes some or all of the following:
Project Charter
Project Management approach or strategy
Scope statement
Work Breakdown Structure (WBS)
Budget, schedule, risks
Key Staff, Major Milestones
Change Control Plan, Management and Communications Plan

Management
Project Plan Components (continued)
Cost Estimates, scheduled start dates and responsibility
assignments
Performance measurement baselines
Major milestones and target dates
Required Staff
Risks, constraints and assumptions
Subsidiary management plans (scope, schedule)
Open Issues
Pending Decisions

Management
Supporting Details to the Project Plan
Outputs from planning processes
Technical documentation
Business requirements, specifications, and
designs
Relevant standards
Additional information not previously known

Management
Project Plan Execution
Primary process for carrying out the project
plan
Most costly aspect of project management
Direction of organizational resources and
interfaces

Management
Project Plan Execution Inputs:
Project Plan
Supporting Detail
Organizational Policies
Corrective Action anything to bring expected
performance in line with the project plan

Management
Tools & Techniques for Plan Execution
General Management Skills
Product Skills and Knowledge defined as part of
planning, provided by staffing
Work Authorization System formal procedure for
sanctioning work to ensure completion written or
verbal authorization
Status review meetings regular exchanges of
information
Project Management Information System
Organizational Procedures

Management
Project Plan Execution Outputs
Work results the outcome of activities
performed is fed into the performance
reporting process
Change Requests expand/shrink project
scope, modify costs and schedule estimates

Management
Overall Change Control
Influencing factors that create change to ensure beneficial results;
ensure that change is beneficial
Determining that change has occurred
Managing actual changes as they occur
Evaluate impact of change
Meet with team to discuss alternatives
Meet with management to present decision
Change control requires

Maintaining integrity of performance measurement baselines (project
plan)
Ensuring changes to scope are accurately recorded
Coordinating changes across knowledge areas (scheduling, risk, cost,
quality, etc.)
Determine all factors that control change and pro-actively preventing
the occurrence; evaluate the impact of change

Management
Inputs to Change Control
Project Plan baseline performance
Performance Reports issue tracking, risk
management
Change Requests orally or written,
externally or internally initiates, legally
mandated or optional

Management
Change Control Tools & Techniques
All Changes must be evaluated before a decision can be
reached
Change Control System collection of formal
procedures, paperwork, tracking systems, approval levels
Change Control Board decision making authority
Configuration Management documented procedure to
apply technical and administrative direction
ID and document functional and physical characteristics

Control changes to these characteristics
Record and report change and implementation status
Audit items and system to verify requirements

Management
Change Control Tools & Techniques
Performance Measurement earned value, plan
variance analysis
Additional Planning revised cost estimates, modify
activity sequences, plan adjustments
Project Management Information System
Change Control System may have
Change Control Plan

Change Control Board
Change Control Procedures, Corrective Action plans
Performance Statistics, Reports, Change forms
Specification reviews, Demonstrations, Testing, Meetings
Configuration Management

Management
Change Control Outputs
Project Plan Updates
Corrective Actions
Lessons Learned variance causes and
reasoning documented for historical purposes

Management
Configuration Management
Rigorous Change Management as it relates to scope
Subset of the change control system
Work Authorization System

Controls gold plating; defines what task is/is not
Meetings
Most are inefficient; keep minutes
Status can be determined without meeting

Management
Lessons Learned
Project is not complete until a Lessons Learned is
completed
What have we done, how can we do it better
Technical Aspects of the project

Project Management (WBS, plans, etc.)
Overall Management (communications, leadership)
Best to have whole team complete and made available
Also called Post Mortem

Management
Integration is a result of need for communication
within a project
Primary responsibility to decide what changes
are necessary is Management
Project Managers must pro-actively define and
solve problems before reporting to superiors
Chapter 5 Project Scope

Management
Project Scope Management
Processes required to ensure that the project includes
all, and only, work required
Defining what is/is not included in the project
Project scope work that must be done measured
against project plan
Product scope features and functions included in
the product or service measured against
requirements

Management
Initiation process of formally recognizing that a
new project exists, or an existing project continue
to next phase
Involves feasibility study, preliminary plan, or
equivalent analysis
Authorized as a result of:
Market Demand
Business Need
Customer Request
Technological Advance
Legal Requirement

Management
Initiation Inputs:
Product Description characteristics of the
product/service that the project was to create
Less detail in early phases, more comprehensive in latter

Relationship between product/service and business need
Should support later project planning
Initial product description is usually provided by the buyer
Strategic Plan supportive of the organization's

goals

Management
Initiation Inputs (continued)
Project Selection Criteria defined in terms of the
product and covers range of management concerns
(finance, market)
Historical Information results of previous project
decisions and performance should be considered

Management
Tools & Techniques for Initiation
Project Selection Methods:
Benefit measurement models comparative approaches,
scoring models, economic models
Murder Boards
Peer Review
Scoring Models
Economic Models
Benefits compared to costs
Constrained operation models programming mathematical
Linear Programming
Integer Programming
Dynamic Programming
Multi-objective programming

Management
Tools & Techniques for Initiation
Project Selection Methods:
Decision models generalized and sophisticated techniques
Expert judgment
Business Units with specialized skills

Consultant
Professional and Technical Associations
Industry Groups
Delphi Technique obtain expert opinions on technical
issues, scope of work and risks
Keep experts identities anonymous
Build consensus

Management
Outputs from Initiation:
Project Charter formally recognizes project,
created by senior manager, includes:
Business need/Business Case

Product description & title
Signed contract
Project Manager Identification & Authority level
Senior Management approval
Projects Goals and Objectives Constraints factors that limit project management teams
options
Assumptions factors that are considered true for planning
purposes. Involve a degree of risk

Management
Scope Planning process of developing a
written statement as basis for future decisions
Criteria to determine if the project or phase is
successful
Scope Planning Inputs:
Product description
Project Charter
Constraints
Assumptions

Management
Scope Planning Tools & Techniques
Product Analysis - developing a better
understanding of the product of the project
Cost/Benefit Analysis estimating
tangible/intangible costs and returns of various project
alternatives and using financial measures (R.O.I.) to
assess desirability
Alternatives Identification generate different
approaches to the project; brainstorming
Expert Judgment

Management
Scope Planning Outputs
Scope Statement documented basis for making
project decisions and confirming understanding
among stakeholders. Includes:
Project justification business need, evaluating future
trade-offs
Project Product summary of project description
Project Deliverables list of summary of delivery items
marking completion of the project
Project Objectives quantifiable criteria met for success.
Addresses cost, schedule and metrics unqualified
objectives indicate high risk (customer satisfaction)

Management
Scope Planning Outputs (continued)
Supporting detail includes documentation
of all assumptions and constraints
Scope Management Plan how project
scope is managed, change control procedure,
expected stability, change identification and
classification
Control what is/is not in the project; prevents
delivering extra benefits to the customer that
were not specified/required

Management
Scope Definition subdividing major
deliverables into smaller, manageable
components
Improve accuracy of cost, time, and resource
estimates
Define a baseline for performance measurement
Clear responsibility assignments
Critical to project success reduces risk of higher
cost, redundancy, time delays, and poor productivity
Defines what you are doing; WBS is the tool

Management
Scope Definition Inputs:
Scope Statement
Constraints consider contractual provisions
Assumptions
Other Planning Outputs
Historical Information

Management
Scope Definition Tools & Techniques
Work Breakdown Structure templates from
previous projects
Decomposition subdividing major deliverables into
manageable components:
Major elements project deliverables and project management
approach
Decide cost and duration estimates are appropriate at level of detail
Constituent elements tangible verifiable results to enable
performance management, how the work will be accomplished
Verify correctness of decomposition
All items necessary and sufficient?
Clearly and completely defined?
Appropriately scheduled, budgeted, assigned?

Management
Scope Definition Outputs
Work Breakdown Structure (WBS) a deliverableoriented grouping of project assignments that organizes
and defines the scope of the project
Each descending level represents further detail; smaller and more
manageable pieces
Each item is assigned a unique identifier collectively known as code of
accounts
Work element descriptions included in a WBS dictionary (work, schedule
and planning information)
Other formats:
Contractual WBS seller provides the buyer

Organizational (OBS) work elements to specific org. units
Resource (RBS) work elements to individuals
Bill of Materials (BOM) hierarchical view of physical resources
Project (PBS) similar to WBS

Management
Work Breakdown Structure (WBS)
First Level is commonly the same at the Project Life Cycle
(requirements, design, coding, testing, conversion and operation)
First level is completed before the project is broken down further
Each level of the WBS is a smaller segment of level above
Work toward the project deliverables
Break down project into tasks that
Are realistically and confidently estimable

Cannot be logically divided further
Can be completed quickly (under 80 hours rule of thumb)
Have a meaningful conclusion and deliverable
Can be completed without interruption
Provides foundation for all project planning and control

Management
Work Breakdown Structure (WBS) - Benefits
Prevent work slippage
Project team understands how their tasks fit into the overall project
and their impact upon the project
Facilitates communication and cooperation between project team
and stakeholders
Helps prevent changes
Focuses team experience into what needs to be done results in
higher quality
Basis and proof for estimating staff, cost and time
Gets team buy-in, role identification
Graphical picture of the project hierarchy
Identifies all tasks, project foundation

Management
WBS phrases
Graphical hierarchy of the project

Identifies all tasks
Foundation of the project
Very important
Forces thought of all aspects of the project
Can be re-used for other projects

Management
Work Breakdown Structure (WBS) Dictionary
Designed to control what work is done and when
Also known as a task description
Puts boundary on what is included in a task and what is not included

Management
Scope Verification Inputs
Work results partially/completed deliverables, costs to
date
Product documentation description available for
review (requirements)
Scope Verification Tools & Techniques

Inspection measuring, examining, testing to
determine if results conform to requirements
Scope Verification Outputs

Formal acceptance documentation identifying client
and stakeholder approval, customer acceptance of
efforts

Management
Scope Change Control:
Influencing factors to ensure that changes are
beneficial
Determining scope change has occurred
Managing changes when they occur
Thoroughly integrated with other control
processes

Management
Scope Change Control Inputs:
Performance Reports - issues reported
Change Requests expansion/shrink of
scope derived from :
External events (government regulations)
Scope definition errors of product or project
Value adding change new technology
Scope Management Plan

Management
Scope Change Control Tools & Techniques
Scope Change Control System defines
procedures how scope change can occur
All paperwork, tracking systems, approval levels
Integrated with overall change control procedures
Performance Measurement determine what is

causing variances and corrective actions
Additional Planning

Management
Scope Change Control Outputs:
Scope Changes fed back through planning
processes, revised WBS
Corrective Actions
Lessons Learned cause and reasoning for
variances documented for historical purposes

Management
Management By Objectives (MBO)
Philosophy that has 3 steps:
Establish unambiguous and realistic objectives
Periodically evaluate if objectives are being met
Take corrective action
Project Manager must know that if project is not aligned
or support corporate objectives, the project is likely to
lose resources, assistance and attention.
MBO only works if management supports it
Chapter 6 Project Time

Management
Project Time Management
Processes required to ensure timely
completion of the project
No consensus concerning differences
between activities and tasks
Activities seen as composed of tasks most
common usage
Other disciplines have tasks composed of
activities

Management
Activity Definition: identifying and
documenting specific activities to produce
project deliverables identified in the WBS
Must be defined to meet the project objectives

Management
Activity Definition Inputs
WBS primary input
Scope Statement project justification &
project objectives
Constraints
Assumptions

Management
Activity Definition Tools & Techniques
Decomposition outputs are expressed as
activities rather than deliverables
Templates reuse from previous projects

Management
Activity Definition Outputs
Activity List all to be performed; extension to the
WBS and includes description to ensure team
members understand work to be performed
Supporting Detail organized as needed and
include all assumptions and constraints
WBS Updates identify missing deliverables and
clarify deliverable descriptions. WBS updates often
called refinements; more likely using new
technologies in project

Management
Activity Sequencing identifying and
documenting interactive dependencies
among activities. Support later
development of a realistic schedule
Project Management software often used

Management
Activity Sequencing Inputs:
Activity List
Product Description product characteristics often affect
activity sequencing
Mandatory Sequencing physical limitations, hard logic,
prototypes needed; inherent in nature of work being done
Discretionary Dependencies defined by project management
team; best practices or unusual aspects of project soft logic,
preferred logic, preferential logic
External Dependencies relationship between project activities
and non-project activities (company policies, procurement, etc.)
Constraints
Assumptions

Management
Network Diagrams
Shows how the project tasks will flow from
beginning to end
Proves how long the project will take to
complete
Takes project tasks from low levels of WBS
and placing them into their order of
completion (beginning to end)

Management
Activity Sequencing Tools & Techniques
Precedence Diagramming Method (PDM)
constructing network diagram using nodes to
represent activities and arrows to indicate
dependencies; also called Activity On Node (AON)
Most project management software uses
Includes 4 types of dependencies:
Finish to Start from activity must finish before to activity can begin; most
commonly used
Finish to Finish from activity must finish before the next may finish
Start to Start from activity must start before next to activity can start
Start to Finish task must start before next activity can finish
Use caution with last 3 techniques - logical relationships often not

consistently implemented with project management software

Management
(continued)
Arrow Diagramming Method (ADM) uses
arrows to represent activities and connecting at
nodes to illustrate dependencies
Also called Activity On Arrow (AOA)
Only uses finish to start dependencies
PERT and CPM only can be drawn using AOA

Management
(continued)
Conditional diagramming methods
GERT (Graphical Evaluation and Review
Technique)
System Dynamic Models
Allow for non-sequential activities (loops) or
conditional branches not provided by PDM or
ADM methods

Management
(continued)
Network Templates standardized networks
can be used. Composed of subnets, or fragnets
Subnets are several nearly identical portions of a
network (floors on a building, clinical trials, program
modules)
Useful for several identical processes (clinical trials,
programming modules).

Management
Activity Sequencing Outputs:
Project Network Diagram schematic
display of project activities and relationships
(dependencies). Should be accompanied by a
summary narrative that describes the diagram
approach
Activity List Updates

Management
Activity Duration Estimating
Involves assessing number of work periods
needed to complete identified activities
Requires consideration of elapsed time,
calendars, weekends, and day of week work
starts

Management
Activity Duration Estimating Inputs:
Activity Lists
Constraints
Assumptions
Resource Requirements amount of labor assigned to
activity
Resource Capabilities human and material resources,
expertise
Project Files, or records of previous project results
Commercial Duration Estimates useful when durations are not
driven by actual work (approval periods, material resources)
Project Team Knowledge

Management
Activity Duration Estimating Tools & Techniques
Expert Judgment guided by historical information
should be used whenever possible; high risk without
expertise avail.
Simulation using different sets of assumptions (Monte
Carlo Analysis) to drive multiple durations
Analogous Estimating top down estimating use
actual, similar, previous known durations as basis for future
activity duration. Used when limited knowledge
is
available. Form of expert judgment

Management
Activity Duration Outputs:
Activity Duration Estimates quantitative
assessments of work periods to complete an
activity. Should indicate a range +/- of
possible results
Basis of Estimates all assumptions should
be documented
Activity List Updates

Management
Schedule Development
Determining start and finish dates for project
activities
Without realistic dates, project unlikely to be
finished as scheduled
Schedule development process often iterates
as more information becomes available
(process inputs)

Management
Schedule Development Inputs:
Project Network Diagram
Activity Duration Estimates
Resource Requirements
Resource Pool Description availability
patterns; shared resources are highly variable
Calendars define eligible work periods
Project Calendars affect all resources
Resource Calendars affect specific resource pools or
individuals

Management
Schedule Development Inputs (continued):
Constraints
Imposed Dates may be required
Key events or milestones are initially requested and
become expected during project
Assumptions
Lead and Lag Time dependencies may specify
time in order to satisfy relationship (example 2
weeks to receive order)

Management
Schedule Development Tools & Techniques
Mathematical Analysis calculating theoretical
early/late finish and start dates without regard for
resource pool limitations; indicate time periods which
activity should be scheduled given resource limits and
other constraints:
Critical Path Method (CPM) single early/late start and finish date for all
activities. Based on specified, sequential network and single duration
estimate. Calculates float to determine flexibility
Graphical Evaluation and Review Technique (GERT) probabilistic
treatment of network and activity duration estimates
Program Evaluation and Review Technique (PERT) - sequential network
and weighted average duration to calculate project duration differs from
CPM by using mean (expected value) instead of most-likely estimate in CPM

Management
Critical Path Method: refers to estimating based on one time
estimate per activity
One time estimate per task (Most Likely)

Emphasis on controlling cost and leaving schedule flexible
Drawn using AOA diagrams
Can have dummy task
PERT (Program Review and Estimating Technique)

3 Time estimates per activity
Optimistic
Pessimistic
Most Likely
Emphasis on meeting schedule, flexibility with costs

Drawn on AOA diagrams
Can have dummy tasks

Management
Monte Carlo Analysis
Uses a computer with PERT values and network diagram
Tells
Probability of completing a project on any specific day
Probability of completing a project for any specific amount of
cost
Probability of any task actually being on the critical path
Overall Project Risk
Suggests that Monte Carlo simulation will create a project

duration that is closer to reality than CPM or PERT

Management
(continued)
Duration Compression look to shorten project
schedule without affecting scope
Crashing cost and schedule trade-offs to determine
greatest amount of compression for least incremental cost
often results in higher costs
Fast Tracking performing activities in parallel that normally
would be sequenced often results in re-work and usually
increases risk
Simulation

Management
(continued)
Resource Leveling Heuristics leveling resources
that apply to critical path activities a.k.a. resource
constrained scheduling when limitation on quantity
of available resources; sometimes called Resource
Based Method often increases project duration
Project Management Software

Management
(continued)
Project Mangers role
Provide the team with the necessary information to properly estimate
the task
Complete a sanity check of the estimate
Formulate a reserve
Project Team should be involved; determine task

estimates
Historical Records
Guesses
Actual Costs
Benchmarks
CPM and PERT

Management
Schedule Development Tools &
Techniques
Critical Path Method: longest path through a
network diagram and determines the earliest
completion of the project
Proves how long the project will take
Indicates tasks that need most monitoring
Almost always have no slack

Management
Schedule Development Outputs:
Project Schedule includes planned start and
finish dates for each activity; remains
preliminary until resources assignments are
approved. Usually in following formats:
Project Network Diagrams (with date information
added) show logical and critical path activities
Bar or Gantt charts activity start and end dates,
expected durations
Milestone Charts identifies key deliverables and
interfaces
Time-scaled network diagrams blend of project
network and bar charts

Management
Schedule Development Outputs (continued):
Supporting Detail all assumptions and constraints.
May also include:
Resource requirement by time period (resource histogram)
Alternative schedules (best/worst case)
Schedule reserve/risk assessments
Schedule Management Plan how updates are

managed
Resource requirement updates leveling and
activity impact

Management
Schedule Control:
Influencing factors which create schedule changes to
ensure changes are beneficial
Determining that schedule has changed
Inputs to Schedule Control:

Project Schedule baseline approved, measure
against project performance
Performance Reports planned dates met, issues
Change Requests
Schedule Management Plan

Management
Schedule Control Tools & Techniques
Schedule Change Control System defines
procedures for schedule changes, paperwork,
approval, tracking systems
Performance Measurement assess
magnitude of variations to baseline; determine
if corrective action is needed
Additional Planning
Project Management Software

Management
Schedule Control Outputs:
Schedule Updates any modifications,
stakeholder notification
Revisions change scheduled start and finish dates
generally in response to scope changes. Rebaselining may be needed in drastic situations
Corrective Action re-align performance

with project plan
Lessons Learned

Management
Key knowledge points not in PMBOK
Need to know manual calculations of network
diagrams
Created after project charter and WBS (task
estimates and dependencies are determined)
Mandatory dependencies (Hard Logic) inherent in
nature of work
Discretionary dependencies (Soft Logic) based on
experience, desire or results
External dependencies based on needs and desires
of organizations outside the project

Management
Methods to draw network diagrams
Activity on Node (AON) or Precedence Diagramming
Method (PDM)
Boxes represent tasks
Arrows show task dependencies
4 types of task relationships
Finish to Start (task must finish before next can start)

Finish to Finish (task must finish before next can finish)
Start to Start (task must start before next can start)
Start to Finish (task must start before the next can finish)
No dummy tasks used

Management
Activity on Arrow (AOA or Arrow
Diagramming Method (ADM)
Arrows used to represent tasks

Only Finish to Start relationships are used
May use dummy tasks (show dependencies)
PERT and CPM estimating techniques can only be
drawn using AOA
CPM (Critical Path Method) estimating based on one time
estimate per activity (the most likely time estimate)
Emphasizes controlling cost and allowing schedule flexibility

Management
Activity on Arrow (AOA or Arrow
Diagramming Method (ADM) continued:
PERT (Program Evaluation and Review technique)
3 time estimates per activity: Optimistic (O), Most Likely
(M), Pessimistic (P)
Emphasizes meeting schedule, flexibility with cost

Management
PERT (Program Evaluation and Review technique)
Estimating based on 3 formulas:
PERT Duration: (P + 4M + O)/6
Standard Task Deviation: (P O)/6
Task Variance:
PO 2
[
]
Total project estimate:
6
Add up all Optimistic, Most Likely and Pessimistic values of the critical
path tasks and apply P + 4M + O/6
Total project variance (+/-):

Add up the individual task variances and take the square root of the
value. Use the value as a +/- figure to compute the Optimistic and
Pessimistic values. The total project estimate will serve as the basis.

Management
Monte Carlo Simulation:
Uses a computer with PERT values (P, M, O) and a
network diagram but does not use the PERT formula
Indicates
Probability of completing project on a specific day
Probability of completing project for any specific amount of
cost
Probability of any task actually being on critical path
Overall project risk

Management
Estimating techniques in general:
Should be performed by entire project team
Project manager needs to provide information to allow team
to create estimates; sanity check; formulate reserve
Estimates are:
Guesses, Historical Records, Actual Costs, Benchmarks,
CPM, PERT
Critical paths determines the earliest completion date and
identifies tasks that need monitoring
Can be obtained by CPM, PERT and Monte Carlo estimating
techniques

Management
Key Definitions:
Slack (Float): the amount of time a task can be
delayed without delaying the entire project. Tasks on
critical path have no slack.
Slack is calculated by the difference between Early Start and
Late Start of a task
Free Slack (Float): the amount of time a task can be delayed
without delaying the early start date of its successor
Total Slack (Float): the amount of time a task can be delayed
without delaying the project completion date
Lag: inserted waiting time between tasks

Management
General Comments:
Projects can have more than 1 critical path (increases
risk) and can involve dummy tasks
Negative float indicates that you are behind
Resource Leveling involves possibly letting schedule
and cost slip
Heuristics just means rule of thumb e.g. 80/20 rule
Schedules are calendar based makes this different
than a time estimate
Bar Chart a.k.a. Gantt chart (track progress, report to entire team
including stakeholders, control tool)
Network Diagram (to show task inter-dependencies, show project
organization, basis for project control)
Milestone chart (report to Senior management, shows major events)

Management
General Comments:
To shorten project schedule examine the
critical path
Crashing add more resources to the critical path
tasks
Usually results in increased cost
Fast Tracking performing tasks in parallel

Can result in re-work and increased risk
Best to select method that has least impact on

the project (is the importance on cost, risk or
schedule?)

Management
General Comments:
Bar (Gantt) Charts
Weak Planning Tool, effective progress and reporting tool
Does not show interdependencies of tasks
Does not help organize the project more effectively
Network Diagrams (PERT, CPM, PDM)

Shows task interdependencies
Aids in effectively planning and organizing work
Provides a basis for project control
Milestone Charts
Only shows major events
Good for reporting to management and customer
Flow Charts
Depicts workflow and not commonly used for project management

Management
General Comments:
Free Slack (Float) amount of time a task can be delayed
without delaying the early start date of its successor
Total Slack (Float) amount of time a task can be delayed
without delaying the project completion date
Lag inserted waiting time between tasks

Resource Leveling level peaks of resource usage;
stable number of resources allows schedule and cost
slip in favor of leveling resources
Heuristic rule of thumb (80/20 rule)
Chapter 7 Project Cost

Management
Project Cost Management
Ensure that the project is completed within budget
Concerned with cost of resources needed to complete
activities; consider effect of project decisions on cost
of using product life-cycle costing
Most prospective financial impact of using the product
is outside the project scope
Consider information needs of stakeholders,
controllable and uncontrollable costs (budget
separately for reward and recognition systems)

Management
Project Cost Management
Estimating should be based on WBS to improve
accuracy
Estimating should be done by the person performing the
work
Having historical records is key to improving estimates
Costs (schedule, scope, resources) should be managed
to estimates
A cost (schedule, scope, baseline) should be kept and
not changed
Plans should be revised as necessary during completion
of work
Corrective action should be taken when cost problems
(schedule, scope and resources) occur.

Management
Resource Planning:
Determining what physical resources and quantities
are needed to perform work
Inputs to Resource Planning:

Scope Statement justification & objectives
Resource Pool Description what resources are
potentially available for resource planning
Organizational Policies staffing, procurement

Management
Inputs to Resource Planning:

Network Diagram
Schedule
Risks
Scope Statement justification & objectives
Resource Pool Description what resources are
potentially available for resource planning
Organizational Policies staffing, procurement

Management
Resource Planning Tools & Techniques
Expert Judgment
Alternatives Identification
Resource Planning Outputs:

Resource Requirements what type & how
many resources are needed for each activity
in the Work Breakdown Structure

Management
Cost Estimating:
Develop approximate costs of resources
Distinguish estimating from pricing
Estimating likely amount
Pricing business decision
Identify alternatives and consider realigning

costs in phases to their expected savings

Management
Cost Estimating Inputs:

Resource Requirements
Resource Rates (if known)
Historical Information (project files, commercial
cost databases, team knowledge
Chart Of Accounts coding structure for accounting;
general ledger reporting

Management
Cost Estimating Tools & Techniques
Analogous Estimating top down; using actual costs
from previous project as basis for estimate
Reliable when previous projects are similar and individuals have
expertise form of expert judgment
Parametric Modeling uses project characteristics in

mathematical models to predict costs (e.g.building houses)
Reliable when historical information is accurate, parameters are

quantifiable, and model is scalable
2 types: Regression analysis, Learning Curve
Bottom Up Estimating rolling up individual activities into

project total smaller work activities have more accuracy
Computerized tools spreadsheets, software

Management
Pros and Cons
Analogous Estimating
Quick - Less Accurate
Tasks dont need to be identified Estimates prepared
with little detail and understanding of project
Less costly Requires considerable experience to do well
Gives PM idea of management expectations Infighting at
high levels of organization
Overall project costs are capped Difficult for projects with
uncertainty

Management
Pros and Cons
Bottom Up Estimating
More Accurate Takes time and expense
Gains buy-in from the team Tendency for team to pad
estimates
Based on detailed analysis of project Requires that
project be defined and understood
Provides a basis for monitoring and control Team
infighting to get biggest piece of pie

Management
Outputs from Cost Estimating
Cost estimates quantitative assessments of likely costs of
resources required to complete tasks
For all resources of the project (labor, materials, supplies, inflation
allowance, reserve)
Expressed in units of currency
Supporting Detail
Description of scope (reference to the WBS)

Documentation how estimate was developed
Indication of range of possible results
Assumptions
Cost Management Plan how cost variances will be managed

Cost Risk: associated to seller for Fixed Price; associated to
buyer for Time and Materials budget

Management
Cost Budgeting
Involves allocation of total estimate to individual work
to establish a cost baseline to measure performance
Cost Budgeting Inputs

Cost Estimate
Project Schedule includes planned start and finish
dates for items costs are allocated to
Needed to assign costs during the time period when the
actual cost will be incurred

Management
Cost Budgeting Tools & Techniques
Same as Cost Estimating Tools and Techniques
Outputs from Cost Budgeting

Cost Baseline time phased budget to measure and
monitor cost performance
Developed by summing estimated costs by period (S curve
of values vs. time)
Larger projects have multiple baselines to measure different
aspects of cost performance

Management
Cost Control
Concerned with influencing factors that create
changes to the cost baseline that are beneficial
Determining that the cost baseline has changed
Monitor cost performance to detect variances
Record all appropriate changes accurately in the cost baseline
Preventing incorrect, unauthorized changes being included in the
cost baseline
Informing stakeholders of authorized changes
Determine the whys of positive and negative variances
Integrated will all other control processes (scope, change, schedule,
quality)

Management
Inputs to Cost Control
Cost Baseline
Performance Reports meet, exceed budget
50/50 Rule task is considered 50% complete when it begins and gets credit for
remainder 50% only when completed
20/80 Rule - task is considered 20% complete when it begins and gets credit for
remainder 80% only when completed
0/100 Rule task only credited when fully completed
Change Requests
Cost Management Plan
Tools & Techniques of Cost Control

Cost Change Control System defines the procedures by which the cost
baseline may be changed
Performance Measurement assess magnitude of cost variations (Earned
Value Analysis) and what is causing the variance
Additional Planning examine alternatives
Computerized Tools forecast planned costs, track actual costs, forecast effect
of cost changes

Management
Cost Control Outputs
Revised Cost Estimate
Modifications to cost information; require stakeholder approval and
adjustments to other project areas
Budget Updates changes to approved cost baseline; revised in

response to scope changes
Corrective Action
Estimate at completion (EAC) forecast of total expenditures
Actual to date plus remaining budget modified by a factor (cost performance
index)
Current variances are seen to apply to future variances
Actual to date plus new estimate for remaining work

Original estimates are flawed, or no longer relevant
Actual to date plus remaining budget

Current variances are typical and similar variances will not occur in the future
Lessons Learned

Management
Earned Value Analysis
Integrates cost, schedule and scope
Better that comparing projected vs. actual because
time and cost are analyzed separately
Terms:
BCWS Budgeted Cost of Work Scheduled (how much work
should be done)
BCWP Budgeted Cost of Work Performed a.k.a. Earned
Value (how much work is budgeted, how much did we
budget)
ACWP Actual Cost of Work Performed (how much did the
completed work cost)

Management
Terms:
BAC Budget at Completion (how much did you
budget for the total job)
EAC Estimate at Completion (what do we expect
the total project to cost)
ETC Estimate to Completion (how much more do
we expect to spend to finish the job)
VAC Variance at Completion (how much
over/under budget do we expect to be)

Management
Formulas
Variance (Plan Actual)
Cost Variance (CV): BCWP ACWP; negative is
over budget
Schedule Variance (SV): BCWP BCWS;
negative is behind schedule
Cost Performance Index (CPI): BCWP
BCWP
ACWP
ACWP
I am only getting x out of every $

Management
Formulas
Schedule Performance Index (SPI):
BCWS
BCWP
BCWP
BCWS
I am only progressing x % of the planned rate
BAC
Estimate at Completion (EAC): BAC

CPI
CPI
As of now we expect the total project to cost x$
Estimate to Complete (ETC): EAC ACWP; how much will it

cost from now to completion
Variance at Completion: BAC EAC; when the project is over
how much more or less did we spend (most common way of
calculating EVA

Management
BCWP comes first in most formulas

If it is a variance, BCWP comes first
If it is an index, BCWP is divided by
If the formula relates to cost, use AWCP
If the formula related to schedule, use BWCP
Negative is bad; positive results are good
ETC refers to this point on; EAC refers to when job
is completed

Management
Accuracy of Estimates
Order of Magnitude Estimate: -25% - 75%;
usually made during Initiation Phase
Budget Estimate: -10% - 25%; usually made
during the Planning phase
Definitive Estimate: -5% - 10%; usually
made during the Planning phase

Management
Accounting Standards
Not usually part of the exam
Present Value (value today of future cash
flows):
PV = FV
(1 + r) N
FV = Future Value
R = Interest Rate
N = Number of time periods

Management
Net Present Value: total benefits (income or revenue) less the
costs. NPV is the sum of each present value of each
income/revenue item
Internal Rate of Return (IRR): company may select project
based on highest IRR
Payback Period: number of time periods it takes to recover the
investment in the project before generating revenues
Benefit Cost Ratio (BCR): compares costs to the benefits of
different projects
Greater than 1 means benefits are greater than costs
Less than 1 means costs are greater than benefits
Opportunity Cost: opportunity given up by selecting one project
over another

Management
Sunk Costs: expended costs. Sunk costs should not be
considered when determining to continue with a troubled project
Law of Diminishing Returns: the more that is put in the less of
an outcome is received
Working Capital: current assets current liabilities
Variable Cost: costs that change with the amount of production
or the amount of work (materials, wages)
Fixed Cost: non-recurring costs that do not change
Direct Cost: directly attributable to project work (travel, wages,
materials)
Indirect Cost: overhead items or costs for the benefit of more
than one project (taxes, fringe benefits)

Management
Depreciation: assets lose value over time
Straight Line depreciation: same amount is taken each year
Accelerated Depreciation: 2 forms
Double Declining Balance
Sum of the Years Digits
Life Cycle Costing: includes operations and maintenance

phases
Value Analysis: find a less costly way to do same work

Make or Buy decisions at Development (Planning)
phase, not conceptual phase

Management
Project Objectives are not necessarily needed to fund project
Project Definition focus on end product initially; costs and benefits
will be evaluated later
25% of project lifecycle expended at end of planning

No guarantees; only most likely results
Line of Balance charts are used for manufacturing
Negative Float the late start date is earlier than the early start
date
Value Engineering/analysis does not trade performance for
cost
Prospectus profitability and technical feasibility used to solicit
funding

Management
Definitive Estimate most precise/accurate estimate for
determining project costs
Management Reserve over time PM wants no change to
reserve; customers wants $ back
Cost and Schedule Data predicts future performance
ROI, Nest Present Value and Discounted Cash Flow all can
be used to measure total income vs. total $ expended
Undistributed budget budget that contains approved scope
changes but are not planned yet
Depreciation is not a measurement of profitability
Pay Back Period - # of periods required to recover the initial
investment
Chapter 8 Project Quality

Management
Project Quality Management
Processes required to ensure that the project will
satisfy the needs for which it was designed
Includes all activities of the overall management
function that determine the quality policy, objectives,
and responsibilities. These are implemented by
quality planning, quality control, quality assurance,
and quality improvement.

Management
3 major processes:
Quality Planning identifying quality standards that are
relevant to the project (Plan); Project Manager, Project Owner

Quality Assurance evaluating overall project performance
to provide confidence that project will satisfy relevant quality
standards (Implement or Execution); Project Team
Quality Control monitoring specific results to comply with
quality standards and eliminating unsatisfactory performance
causes (Check or Control); Project Manager, Project Team
Compatible with ISO 9000 and 10000 series
Proprietary and non-proprietary approaches (total quality
management
Must address the management of the project and the product of the
project

Management
Quality the totality of characteristics of an entity that
bear on its ability to satisfy stated or implied needs
Critical aspect is to turn implied needs into stated needs through
project scope management
Do not confuse with grade category or rank given to entities
having the same functional use but different requirements for
quality
Customer satisfaction conformance to specifications (must
produce what is stated) and fitness for use (must satisfy real
needs)
Prevention avoid mistakes vs. cost of correction
Management responsibility requires participation of team;
responsibility of management to provide resources
Processes within phases plan-do-check-act cycle
Recognize that the investment in product quality improvements may be
borne by the performing organization since the project may not last long
enough to reap reward

Management
Quality Planning
Identify quality standards are relevant and how to satisfy
Inputs to Quality Planning

Quality Policy the overall intentions and direction of an
organization with regard to quality as expressed by management
Scope Statement
Product Description
Standards and Regulations
Other Process Outputs processes from other knowledge
areas (procurement planning)

Management
Tools &Techniques for Quality Planning
Benefit/Cost Analysis consider trade-offs, benefit is less
rework; cost is expense of project management activities
Benchmarking comparing actual or planned practices to
those of other projects
Flowcharting
Cause and effect diagramming (Ishikawa or fishbone diagrams)
illustrate how causes relate to potential problems or effects
System or Process flowcharts show how various elements of the
system interrelate
Helps anticipation of what and where quality problems may occur
Design of Experiments analytical technique which defines

what variables have most influence of the overall outcome
Cost and schedule tradeoffs

Management
Outputs from Quality Planning
Quality Management Plan describes how team will

implement its quality policy; describes the project quality system
organizational structures, responsibilities, procedures,
processes and resources needed to implement quality
management
Operational Definitions defines how an item is measured by
the quality control process. Also known as Metrics.
Checklists structured tool used to verify that a set of required
steps has been performed
Inputs to other processes may identify a need for further
activity in another area
Quality Assurance
All planned and systematic activities implemented within the quality
system to provide confidence that the project will satisfy quality
standards

Management
Inputs to Quality Assurance
Quality Management Plan

Results of quality control measurements (testing)
Operational definitions
Tools & Techniques for Quality Assurance
Quality planning tools & techniques
Quality Audits structured review of quality management activities to
identify lessons learned
Outputs from Quality Assurance

Quality improvements taking action to increase the effectiveness
and efficiency of the project to provide added benefits to the
stakeholders
Most likely will involve change control

Management
Quality Control monitoring specific results to
determine if they comply with quality standards and
identifying ways to eliminate causes of unsatisfactory
results
Includes project (deliverables) and management (cost and
schedule performance) results
Awareness of statistical quality control
Prevention (keep errors out of process) and inspection (keep errors
from customers)
Attribute sampling (result conforms) and variable sampling
Special Causes (unusual events) and random causes
Tolerances (acceptable range) and control limits (result falls within
range)

Management
Inputs to Quality Control
Work results include process and product results

Quality Management Plan
Operational Definitions
Checklists
Tools & Techniques for Quality Control

Inspection activities such as testing to determine if results comply
with requirements
Control Charts plot results over time
Pareto diagrams frequency of occurrence that identifies type or
category of result (80/20 rule) guides corrective action
Statistical sampling select population of interest for inspection
Flowcharting
Trend Analysis forecast future outcomes based on historical results
Technical performance (# of errors identified; # of errors that remain)
Cost and Schedule performance (activities per period with significant variances)

Management
Outputs from Quality Control
Quality Improvement
Acceptance Decisions (accept/reject)
Rework action to bring defective item into compliance
Frequent cause of project overruns
Completed checklists
Process Adjustments immediate corrective/preventive
actions
Most likely involves change control

Management
Tips from the Review Guide
Philosophy: definition of quality, avoidance of gold plating
giving customer extras, prevention over inspection
Conformance to requirements, specifications and fitness of use
Quality Management processes required to ensure that the
project will satisfy the needs for which it was undertaken
Continuous Improvement - small improvements to reduce
costs and ensure consistency
Marginal Analysis optimal quality is reached at the point
when revenue from improvement equals the costs to secure it
Just in Time - decrease amount of inventory/decrease
investment

Management
ISO 9000 or 10000 standards to ensure that corporations
follow their own quality procedures
Total Quality Management continuous improvement in

business practices
Normal Distribution most common probability used to

measure variations
Standard deviation (sigma) measure how far away from

the mean (dotted vertical line)
3 or 6 sigma represents level of quality
+/- 1 sigma equal to 68.26%


Management
Responsibility to quality entire organization
Ultimate employee
Overall or Primary Project Manager
Design and Test Specifications engineer
Prevention over inspection quality must be

planned in not inspected in

Management
Cost of conformance vs. non-conformance
Quality Training vs. rework
Studies vs. Scrap
Surveys vs. Inventory Costs and warranty costs
Quality Planning (Plan) determine what will be

quality on project and how quality will be measured
done during Planning Phases
Identifying which standards are relevant to project how to satisfy them
Benchmarking look at past projects to determine ideas for
improvement
Cost Benefit Analysis
Flowcharts (fishbone)
Design of Experiments

Management
Quality Assurance (Implement) determine if
your measurement of quality is appropriate done
during Execution phases
Process of evaluating overall performance on a
regular basis
Quality Audits structured review of quality
activities that identify lessons learned

Management
Quality Control (Check) perform the
measurement and compare to the quality plan done

during Control phases
Process of monitoring specific project results to
determine if they comply with relevant quality
standards and identify ways of eliminating
unsatisfactory performance
Performance of the measurement or process,
using quality control tools checking work

Management
Quality Control Tools
Pareto Diagrams 80/20 rule the chart presents the
information being examined in its order of priority and
helps focus attention on the most critical issues
Fishbone diagram (Cause and Effect)
A creative way to look at the causes or potential
causes of a problem
Helps stimulate thinking, organizes thoughts and
generates discussion
Can be used to explore a desired future outcome
and the factors to which it relates

Management
Checklists list of items to inspect
Control Charts graphic displays of the results over time
used to determine if a process is in control
Upper and Lower Control Limits two dashed lines
show the acceptable range of a variation range
determined by companys quality standard (sigma)
Mean line in the middle shows middle of the range of
acceptable results
Specification Limits 2 solid lines outside the upper and
lower control limits represent the customer's
expectations/requirements of quality

Management
Out of Control process is out of control when:
A data point falls outside of the upper or lower
control limit
Non-random data points are within the upper control
and lower control limits
Rule of 7 non-random points outside the mean process should be investigated
Assignable Cause data point the requires
investigation to determine the cause of the variation

Management
PMI and Deming
Cost of conformance 85% of costs of quality are
responsibility of Management
Quality Training Rework
Studies Scrap
Surveys Inventory and Warranty costs
Crosby absolutes of quality

Performance standard is zero defects; measurement
system is cost of non-conformance
Continuous Improvement
Japanese (Kaizen)

Management
Marginal Analysis optimal quality is reached when
incremental revenue from improvement equals
incremental cost to secure
Variable characteristic to be measured
Attribute measurement (objective or subjective)

Increase quality = increased productivity, increased
cost effectiveness, decreased cost risk

Management
Review Guide Tips
Primary responsibility for quality management is the PM
Results of increase in quality
Increased productivity
Increased cost effectiveness
Decreased cost risk
Quality attributes can be subjective, objective and

are specific characteristics for which a project is
designed and tested
Quality assurance example is team training
Cost of Conformance = team training

Management
Review Guide Tips
Marginal Analysis: optimal quality is reached when
incremental revenue from improvement equals the
incremental cost to secure
Standard Deviation: how far away from mean
Variable: characteristic you want to measure
Attribute: measurement (subjective or objective)
Ultimate Responsibility Employee
Overall Responsibility PM
Design/Test Specifications - Engineer

Management
Review Guide Tips
If quality sample size increases, the quality control
band decreases
Product Cost plus Operations and Maintenance costs
increase perceived value when balanced
Cost of Conformance = training
Crosby Absolutes of Quality performance of
standard is zero defects and the measurement system
is the cost of non-conformance
Deming & Japanese are associated with Quality
Improvement programs
Quality Control performed by operating personnel

Management
Review Guide Tips
Quality objectives are approved in conceptual stage
by project owner
QA auditing function that provides feedback to team
and client about quality of output being produced
If sample size is a constant and acceptance numbers
increase, the producers risk decreases and consumer
risk increases
85% of costs of quality are direct responsibility of
management
Chapter 9 Human Resource

Management
Project Human Resource Management
Processes required to make the most efficient use of
people
3 major processes:
Organizational Planning
Staff Acquisitions
Team Development
Keep in mind of transient nature of projects

Apply techniques that apply to current project needs
Ensure HR compliance with project management
activities

Management
1,9 manager = good relationship with team
Project Organization
Conflict between PM and Functional Managers

Dual allegiance of team members
Complex prioritization of resources
Loss of developed procedures on project dissolution
Compromise = both sides will lose

Delegation
Defer the decision

Interpreted as passive
Emphasize task vs. personnel
Can be frequently used

Management
If there is a team of experts, PM decisions will
promote high satisfaction
Functional/Project Managers likely to exercise:
Power
Authority
Influence
Traditional organization forms have no single point of

contact for client/sponsor

Management
Organizational Planning
Identifying, documenting and assigning
project roles, responsibilities, and reporting
relationships
Individual and group assignments
Internal and external employees
Linked with communication planning

Management
Inputs to Organizational Planning
Project Interfaces
Organizational interfaces formal and informal reporting
relationships among organizational units
Technical interfaces - formal and informal reporting
relationships among technical disciplines
Engineers, manufacturers, electrical, etc.
Interpersonal interfaces formal and informal reporting

relationships among individuals
Staffing Requirements define skill sets from

individual/group in particular time frames

Management
Inputs to Organizational Planning
Constraints factors that limit project teams
options
Organizational structure (strong vs. weak matrix)
Collective bargaining agreements contractual
arrangements
Preferences of project management team
Expected staff assignments

Management
Tools & Techniques for Organizational Planning
Templates reuse a similar projects role and
responsibility definitions
Human Resource Practices corporate policies,
guidelines, and practices
Organizational Theory how organizations are
structured
Stakeholder Analysis needs of stakeholders are
ensured

Management
Outputs from Organizational Planning
Role and Responsibility Assignments can vary over time,
closely linked to scope definition. Utilizes a Responsibility
Assignment Matrix (RAM) to define responsibility for each item in
the Work Breakdown Structure/task list
Staffing Management Plan when and how personnel are
included and removed from the project team
Resource leveling, reduce transition periods, eliminate dead time
between assignments, sensitivity to morale
Organizational Chart display reporting relationships

Supporting Detail
Organizational impact
Job descriptions
Training needs

Management
Staff Acquisition
Ensure resources are available for project work
Inputs to Staff Acquisition

Staffing Management Plan
Staffing Pool Description
Previous experience
Personal interests
Personal characteristics
Availability
Recruitment Practices

Management
Tools & Techniques for Staff Acquisition
Negotiations with functional managers and other
teams
Staff utilization and corporate politics
Pre-assignment result of a competitive proposal, or

an internal initiative
Procurement outside services are needed (lacking
internal skills or availability can not be met)
Outputs from Staff Acquisition

Project staff assigned
Project Team Directory contact list

Management
Team Development enhancing stakeholders to
contribute along with maintaining the project teams
functionality
Personal development is the foundation
Team members often balance responsibilities to a functional
manager and project manager
Critical to success of project
Inputs to Team Development
Project Staff
Project Plan
Staffing Management Plan
Performance Reports
External Feedback
Periodic measurements of performance

Management
Tools & Techniques for Team Development
Team-building activities
General Management Skills
Reward and recognition systems
Promote desired behavior
Must be achievable; apply to the project
Cultural differences recognition
Co-location place members in physical location

Training enhance skills, knowledge, and capabilities of project
team
Must be factored in cost analysis of project

Management
Outputs from Team Development
Performance Improvements
Individual skills
Team Behavior
Identify more efficient methods of work
Input for performance appraisals

Management
Review Guide Tips
Roles and responsibilities
Project Manger plan, estimate and schedule of project
Team help prepare the WBS, Network Diagrams, and estimate
time for tasks, complete tasks
Senior Management approve Overall project plan, budget and
schedule and to approve any changes that are made to those
figures
The person experiencing the problem must try to solve it themselves
as long as means are in their control
Powers:
Formal (legitimate)
Reward
Penalty (coercive)
Expert (earned)
Referent authority of a higher position

Management
Review Guide Tips
Best are Expert and Reward; Penalty is the worst
Formal, Reward and Penalty derived from PMs position within the
company
Conflict
Inevitable consequence of organizational interactions
Can be beneficial
Resolved by identifying the causes and problem solving by people
that are involved & their immediate manager
Nature of project
Limited power of the project manager
Necessity for obtaining resources from functional managers

Management
Review Guide Tips
Avoid conflict
Informing the team
Clearly assigning tasks without ambiguity
Challenging and interesting work assignments
Conflict Sources (in order of frequency)
Schedules
Project Priorities
Resources
Technical opinions
Administrative Procedures
Cost
Personality

Management
Review Guide Tips
Motivational Theories
Maslows Hierarchy of Needs people work to get a chance to
contribute and use their skills
self-actualization
McGregors Theory of X and Y

X people need to be watched every minute
Y people willing to work without supervision
Herzbergs Theory poor hygiene factors destroy motivation but

improving them will not improve motivation
Motivating Agents
Responsibility
Self-actualization
Professional growth
Recognition

Management
Review Guide Tips
Responsibility Charts
Matrix cross references team members with tasks (does
not show time when job is done)
Histogram months vs. number of resources
Gantt Chart shows when staff allocated to tasks
Leadership Skills
Directive
Facilitating
Coaching
Supportive
Team Building Skills

Management
Review Guide Tips
Projectized Organization
Conflict between PM and Functional Managers

Dual Allegiance of team members
Complex prioritization of resources
Loss of developed procedures on project dissolution
Compromise both sides will lose

Delegation
Defer the decision

Interpreted as passive
Emphasize task vs. personnel
Can be frequently utilized
Chapter 10 Project
Communications Management
Project Communications Management
Processes to ensure timely and proper generation,
collection, dissemination and disposition of project
information
General communications management
Communications Planning determining informational
needs, who needs what and when; 90% of PMs time is
spent communicating
Information Distribution making information available
Performance Reporting collecting and disseminating
project information
Administrative Closure formalize project/phase
completion
Chapter 10 Project
Communications Planning
Determining information requirements of stakeholders
Tightly linked with organizational planning
Inputs to Communications Planning

Communication requirements sum of the information
requirements of the stakeholders
Define type and format of information with analysis of value of
information
Project organization and stakeholder responsibility relationships
Disciplines, departments and specialties involved in project
Logistics of number of individuals at location
External communication needs (media)
Chapter 10 Project
Communication Technology used to transfer
information
Immediacy of need for information
Availability of technology
Expected project staffing compatible with personnel
experience
Length of project will technology change during duration?
Constraints factors that limit project teams options

Assumptions
Chapter 10 Project
Tools & Techniques for Communication Planning
Stakeholder analysis informational needs should be analyzed
to develop methodology suited for the project; eliminate
unnecessary information or technologies
Outputs from Communications Planning

Communication Management Plan
Collection and filing structure to detail the gathering and storage of
information; updating and dissemination
Distribution structure who gets info in certain format; compatible
with project organization chart
Description of information included format, level of detail,
conventions
Production schedules of each type of communication
Methods for accessing information
Method for updating and refining communications plan
Chapter 10 Project
Information Distribution making information
available in a timely manner by implementing the
communications plan; responding to requests for
information
Inputs to Information Distribution

Work Results
Communication Management Plan
Project Plan
Chapter 10 Project
Tools & Techniques for Information
Distribution
Communication Skills used to exchange information.
Sender is responsible for clarity; receiver is responsible for
receipt and understanding
Information retrieval systems filing systems, software

Information distribution systems meetings,
correspondence, networked databases, video/audio
conferencing
Outputs from Information Distribution

Project Records maintained in an organized fashion
Chapter 10 Project
Performance Reporting
Collecting and disseminating performance indicators to provide
stakeholders information how resources are achieving project
objectives
Status reporting
Progress reporting
Forecasting
Project scope, schedule, cost and quality, risk and procurement
Inputs to Performance Reporting

Project Plan
Work Results deliverables completed, % completed, costs
incurred
Other Project records
Chapter 10 Project
Tools & Techniques for Performance Reporting
Performance reviews meetings to assess status
Variance Analysis comparing actual results to planned or
expected results (baseline); cost and schedule most frequent
Trend Analysis examining results over time to determine
performance
Earned Value Analysis integrates scope, cost and schedule
measures calculate 3 keys:
Budgeted Cost of Work (BCWS) portion of approved cost estimate
planned to be spent on activity during a given period
Actual Cost of Work Performed (ACWP) total of direct and indirect cost
incurred in accomplishing work on activity in a given period
Earned Value (Budgeted Cost of Work Performed BCWP) percentage
of total budget equal to percentage of work actually completed
Cost Variance (CV) = BCWP ACWP
Schedule Variance (SV) = BCWP BCWS
Cost Performance Index (CPI) = BCWP/ACWP
Information Distribution Tools & Techniques
Chapter 10 Project
Outputs from Performance Reporting
Performance Reports organize and summarize
information gathered and present results
Bar charts, Gantt charts, S-curves, etc.
Change Requests handled as part of change control
Administrative Closure
Projects/phases after achieving results or terminated require
closure
Verifying and documenting project results to formalize acceptance
Collection of project records, analysis of effectiveness, reflect final
specifications and archiving of material
Chapter 10 Project
Inputs to Administrative Closure
Performance Measurement Documentation includes planning
docs; all information that records and analyzes performance
Documentation of product and project
Other project records
Tools & Techniques of Administrative

Closure
Performance Reporting tools & techniques
Outputs from Administrative Closure

Product Archives complete index of all records, database
updates
Formal Acceptance signoffs from client or sponsor
Lessons Learned
Chapter 10 Project
Tips from Review Guide
Understand all concepts and major points
Memorize the communications model
Understand the inputs/outputs of Administrative
Closure
Understand how administrative closure differs from
contract closeout
Contract closeout has product verification and administrative
closeout but the contract terms may have special
provisions/procedures for closeout
Chapter 10 Project
Communication Model
Messages are encoded by sender and decoded by
receiver based on receivers education, experience,
language and culture
Sender should encode message carefully
Nonverbal
Paralingual (pitch and tone)
Active Listening receiver confirms they are listening, confirms
agreement and ask for clarification
Effective Listening watching speaker, think before speaking,
ask questions, repeating and providing feedback
Chapter 10 Project
Communication Methods
Pick the form of communication that is best
for the situation
Formal Written complex problems, All Plans,
communicating over long distances
Formal Verbal Presentations, speeches
Informal Written memos, e-mail, notes
Informal Verbal Meetings, conversations
Chapter 10 Project
Communication Blockers
Noise, Distance, Improper en-coding, bad idea, Hostility, Language, Culture
Status Reports (where project stands)

Progress Reports (what has been accomplished)
Trend Report (project results over time)
Forecasting Report (projecting future status)
Variance Report (actual results vs. planned)
Earned Value
Communication Channels communications grow at a

linear rate
N (N-1)/2 where N = the number of people
Example 4 people equals 6 communication channels
Chapter 10 Project
To determine if someone understands message feedback must be obtained

Unanimous Agreement
All members committed

Decisions reached slowly
Integrity is developed
Future decision making is enhanced
Clearly defined group goals

Motivate team behavior
Cause tension until completed
Encourage member identification
Complex messages need oral, written and non verbal methods

There are 5 directions of communication
Faade when an individual processed needed information but withholds
the information
Chapter 10 Project
Least effective form of communication for complex situations is verbal and

formal
If there are a team of experts, PM decisions will likely promote high
satisfaction
Functional/Project Mangers likely to exercise
Power
Authority
Influence
Traditional organization forms have no single point of contact for

clients/sponsors
To determine if someone understands message, must obtain feedback
Unanimous Agreement all members committed, decisions reached slowly,
integrity is developed, future decision making is enhanced
Clearly defined group goals: motivate team behavior, cause tension until
completed, encourage member interaction
Complex messages need oral, written and non verbal methods
Least effective form of communication for complex issues: verbal and formal
Chapter 11 Project Risk

Management
Project Risk Management
Includes identifying, analyzing, and responding to risk
areas; maximizing results of positive events and
minimizing consequences of adverse events
Risk Identification which are likely to affect the project
Risk Quantification evaluation of risk to assess the range of
possible outcomes
Sometimes treated as single process; risk analysis/assessment
Risk Response Development defining enhancement steps for

opportunities and response
Sometimes called response planning/mitigation
Risk Response Control responding to changes in risk over

course of project
May be combined as risk management

Management
Risk Identification
Determining which risks are likely to affect the project
and documenting them
Performed on a regular basis; address internal and
external risks
Internal project team has control/influence over
External beyond project teams control
Identify cause and effect and effects and causes;

what could happen vs. what outcomes should be
avoided

Management
Inputs to Risk Identification
Product Description more risk associated with unproven
technologies (innovation/invention). Often described in terms of
cost and schedule impact
Other Planning Reports
WBS (any non-traditional approaches)
Cost/Duration Estimates aggressive schedules; limited amount of
information
Staffing Plan hard to replace/source skill sets
Procurement Management Plan market conditions
Historical Information previous projects

Project Files
Commercial Databases
Project Team Knowledge member experiences

Management
Tools & Techniques for Risk Identification
Checklists organized by source of risk, included
project context, process outputs, product and
technology issues, internal sources
Flowcharting understand cause and effect
relationships
Interviewing conversations with stakeholders

Management
Outputs from Risk Identification
Sources of Risk categories of possible risk events, all-inclusive
Changes in requirements
Design errors, omissions, misunderstanding
Poorly defined roles and responsibilities
Insufficiently skilled staff
Include estimate of probability, range of possible outcomes, expected timing, anticipated frequency
Potential Risk Events discrete occurrences that may affect

project
Identified when probability/magnitude of loss is high (e.g. turnover)
New technologies obsolete need of product
Socio, Political and Economic events
Include estimate of probability, range of possible outcomes, expected timing, anticipated frequency
Risk Symptoms triggers that are indirect manifestations of

actual risk events (e.g. poor morale)
Inputs to other processes identify need in another area;
constraints and assumptions

Management
Risk Quantification
Evaluation of possible project outcomes and determining which
events warrant response
Opportunities and threats can provide unanticipated results (e.g.
schedule delay considers a new strategy)
Multiple effects from a single event
Singular Stakeholder opportunities may force suffering in other
areas
Reliance on statistics and forecasting (mathematical errors)
Inputs to Risk Quantification

Stakeholder risk tolerance
More capital to expend; perceptions of severity
Sources of Risk
Potential Risk Events
Cost Estimates

Management
Tools & Techniques for Risk Quantification
Expected Monetary Value product of 2 numbers
Risk Event Probability estimate that event will occur
Risk Event Value estimate of gain or loss
Statistical Sums calculate range of total costs from

cost estimates for individual work items
Simulation representation or model; provide
statistical distribution of calculated results.
Monte Carlo, Critical Path, PERT techniques
Decision Trees depicts key interactions among

decisions and possible outcomes
Expert Judgment

Management
Outputs from Risk Quantification
Opportunities to pursue; threats to respond
Opportunities to ignore; threats to accept
Risk Response Development

Defining enhancement steps for opportunities and
responses to threats
Avoidance eliminating threat by eliminating the cause
Mitigation reducing expected monetary value of event by
reducing the probability of occurrence
Acceptance accept the consequences (active contingency plan - or passive response)

Management
Inputs to Risk Response Development
Opportunities to pursue, threats to respond
Opportunities to ignore, threats to accept
Tools & Techniques for Risk Response

Development
Procurement acquire resources (exchange 1 risk for

another)
Contingency Planning defining action steps should a risk

event occur
Alternative Strategies change planned approach

Insurance

Management
Outputs from Risk Response Development
Risk Management Plan document procedures to manage risk
events. Addresses risk identification and quantification
processes, personnel responsible for managing areas of risk,
maintenance of identification and quantification process,
implementation of contingency plans and allocation of reserve
Inputs to other processes alternative strategies, contingency
plans, anticipated procurements
Contingency Plans
Reserves provision in project plan to mitigate costs and
schedule risks. Used with a modifier (management, schedule,
budget) to provide further detail when type of reserve can be
used
Contractual Agreements insurance, services and other
functions to avoid and mitigate threats.

Management
Risk Response Control
Involves executing the risk management plan in order
to respond to risk events during the project
Control and iteration are required; not all risks can be
identified
Inputs to Risk Response Control

Risk Management Plan
Actual Risk Events recognize occurrence
Additional Risk Identification surfacing of potential or
actual risk sources

Management
Tools & Techniques for Risk Response Control
Workarounds unplanned responses to negative risk events
(response was not defined in advance)
Additional Risk Response Development planned

response may not be adequate
Outputs from Risk Response Control

Corrective Action performing the planned risk response
Updates to Risk Management Plan

Management
Definition of risk: a discrete occurrence that may
affect the project for good or bad
Definition of uncertainty: an uncommon state of
nature, characterized by the absence of any
information related to a desired outcome
Definition of risk management: The processed
involved with identifying, analyzing, and responding to
risk. Maximize results of positive events; minimizing
consequences of negative events

Management
Inputs to Risk Management:
All project background information

Historical records
Past Lessons Learned
Project Charter
Scope Statement
Scope of work
WBS
Network Diagram
Cost and Time estimates
Staffing Plan

Management
Risk Management Process
Risk Identification majority during Planning; onset of
project to close of project
2 Types
Business: Risk of a gain or loss
Pure (insurable): only a risk of loss
Sources:
External: Regulatory, environmental, government
Internal: Schedule, cost, scope change, inexperience,
planning, people, staffing, materials, equipment
Technical: Changes in technology
Unforeseeable: small (only about 10%)

Management
Risk Factors determine:
Probability that it will occur (what)

Range of possible outcomes (impact, amount at stake)
Expected Timing (when)
Anticipated frequency (how often)
Symptoms early warning signs determined by PM

Risk Tolerances amount of risk that is acceptable

Management
Common Stumbling Blocks
Risk identification is completed without knowing enough about the
project
Project Risk evaluated only by questionnaire, interview or Monte
Carlo; does not provided a per task analysis of risk
Risk identification ends too soon
Project Risk identification and Evaluation are combined results in
risks that are evaluated when they appear; decreased total number
of risks and stops identification process
Risks are identified too generally
Categories of risks are forgotten (technology, culture)
Only 1 identification method is used
First risk response strategy is used without other consideration
Risks are not devoted enough attention during the Execution phase

Management
Risk Quantification assess risks to determine range of
possible outcomes; which risk events warrant a response
Probability
Amount at stake (impact)
Develop a ranking (priority) of risks
Qualitative take an educated guess
Quantitative estimation by calculation
Risk Assessment = Risk Identification + Risk Quantification

Management
Monte Carlo simulation simulates cost and schedule
results of project
Indicates risk of a project and each task by providing a percent
probability that each task will be on the critical path
Accounts for path convergence (where tasks in a Network
diagram converge into 1 task more risk)
Expected Monetary Value multiply probability by impact

Helps define and prove what the project reserve should be
Decision Trees
Takes into account future events when making a decision today
Makes use of expected value calculations and mutual exclusivity
Be able to draw one; boxes are decisions, circles are what can
happen as a result of the decision

Management
Outputs from Risk Quantification
Determination of top risks

Opportunities to pursue
Opportunities to ignore
Threats to respond to
Threats to ignore

Management
Risk Response Development (what will be done,
how to make risk smaller or eliminate)
Not all risks can be eliminated
Alternative Strategies (risk mitigation)
Avoidance eliminate the cause
Mitigation effect the probability or impact of risk
Acceptance do nothing
Deflection (transfer, allocate) make another party
responsible, insurance, outsourcing

Management
Outputs from Risk Response Development
Insurance exchange an unknown risk for a known risk
(response to pure risks)
Contracting hire experience to perform work
Contingency Planning specific actions to take if risk event
occurs
Reserves (contingency) recommended total of 10% to
account for known and unknown risks
Risk Management Plan documents risks identified and

how they are addressed; non-critical risks should be
recorded to revisit during the execution phase

Management
Risk Response Control executing and updating
the Risk Management Plan
Workarounds Unplanned responses to risks;
addressing risks that were unanticipated
Contingency Plans planned responses to risks; risk
response development actions

Management
Risk Mitigation does not involve ID of risks (they are
already known)
Self Insurance can lead to failure to ensure funds for low

probability events and confuse business risks with pure risks
Risk mitigation can purchase insurance

Schedule Risk critical path adjusted by High Risk activity
float
Sensitivity Analysis estimate the effect of change of one

project variable on overall project
Standard Deviation of project completion
relationship of uncertainty of critical path activities; indicator of

project end target confidence
Chapter 12 Project Procurement

Management
Project Procurement Management
Processes required to acquire goods and services
from outside the organization
Discussed from the perspective of the buyer
Terms and conditions of the contract is a key input to many
processes
Buyer is the customer, thus a key stakeholder
Sellers project management team must be concerned with
all processes of project management, not just their
knowledge area

Management
Procurement Planning
Identify project needs that can best be met by
acquiring resources
Consideration whether to procure, how to, how much,
when to purchase
Subcontractor decisions may provide flexibility
Internal procurement does not involve formal solicitation and
contract

Management
Inputs to Procurement Planning
Scope Statement boundary for needs and
strategies
Product Description broad technical issues, not to
be confused with a statement of work
Procurement Resources formal contracting group
(RFP)
Market Conditions supply and demand, what
services are available
Other Planning Outputs preliminary cost and
schedule, quality management plans, cash flow,
WBS, risks, staffing
Constraints factors that limit buying options
Assumptions

Management
Tools & Techniques for Procurement
Planning
Make or Buy analysis determine if the service can
be provided from within
Include direct and indirect costs
Factor ongoing need for items vs. 1-time usage
Expert Judgment assess input

Contract type selection
Fixed Price (lump sum) incentives for meeting targets
Cost Reimbursable Contracts Time and Materials basis
Unit Price preset amount per unit of service

Management
Outputs from Procurement Planning
Procurement Management Plan describes how

procurement process will be managed
Type of contract
Independent estimates needed?
Autonomy of project team
Standardized documents
Multiple provider management?
Incorporate with other project aspects (scheduling and performance
reporting)
Statement of Work (SOW) describes the procurement

in detail clear, concise description of services
Can also be a Statement of Requirements for problem-solving

activities

Management
Solicitation Planning
Preparing documents needed
Inputs to Solicitation Planning

Procurement Management Plan
Statement of Work
Other Planning Outputs
Tools & Techniques for Solicitation Planning

Standard Forms and Procedures
Expert Judgment

Management
Outputs from Solicitation Planning
Procurement Documents used to solicit proposals from
prospective sellers
Bids, Request for Proposal, Request for Quotation, Contractor Initial
Response, etc.
Structure to receive complete and accurate responses
Description of desired form of response and any required contractual provisions
(e.g. non-disclosure statements)
May be defined by regulation
Flexible to allow seller suggestions
Evaluation Criteria rate proposals; objective or subjective

(previous experience)
Price
Understanding of need by seller
Overall/Life Cycle cost (purchase plus operating cost)
Technical Capability
Management Approach
Financial Capacity
Statement of Work Updates

Management
Solicitation
Obtaining information from prospective sellers
Inputs to Solicitation
Procurement Documents
Qualified Seller Lists preferred vendors
Tools & Techniques for Solicitation

Bidder Conferences mutual understanding meetings
Advertising primarily with Government projects
Outputs from Solicitation

Proposals seller prepared documents describing willingness
and ability to provide the service

Management
Source Selection
Apply evaluation criteria (seldom straight-forward)
Price (lowest price may not always result in lowest project
cost)
Technical (approach) vs. commercial (price)
Multiple sourcing may be needed for same service
Inputs to Source Selection

Proposals
Evaluation Criteria
Organizational Policies

Management
Tools & Techniques for Source Selection
Contract Negotiation clarification and mutual agreement on
structure and requirements of contract prior to signature
Responsibilities and authorities

Applicable terms and law
Financing
Price
Technical and business management
Weighting quantifying data to minimize personal prejudice of

source selection
Assign numerical weight to evaluation criteria
Rating sellers
Multiply weight by rating and totaling overall score
Screening System establish minimum performance criteria

Independent Estimates should cost estimates

Management
Outputs from Source Selection
Contract mutually binding agreement obligates
seller provide goods and services and buyer to make
payment.
Legal relationship
Legal review is most often necessary

Management
Contract Administration
Ensuring that the sellers performance meets
contractual requirements
Project Team must be aware of legal ramifications of all
actions taken
Apply project management processes to contractual
relationships and integrate outputs within the project
Project Plan Execution (authorize work)

Performance Reporting (monitor cost, schedule)
Quality Control (verify contractors output)
Change Control
Financial Management

Management
Inputs to Contract Administration
Contract
Work Results sellers deliverables, quality
standards, actual costs
Change Requests modify contract, or

description of product/service
May result in disputes, claims, appeals
Seller Invoices

Management
Tools & Techniques for Contract
Administration
Contract Change Control System defines
how a contract may be modified
Includes paperwork, tracking system, dispute resolution
procedures and approval levels
Payment System Accounts Payable

Management
Contract Close Out
Similar to administrative closure; involves product
verification and administrative paperwork
Early termination is a special case
Contract terms and conditions may prescribe procedures
Inputs to Contract Close Out

Contract Documentation supporting schedules,
documentation

Management
Tools & Techniques for Contract Close Out
Procurement Audits structured review of entire
procurement process; identify successes and failures
that warrant transfer to other procurement items
Outputs from Contract Close Out

Contract File complete index of records
Formal Acceptance and Closure contract
administration responsibility to provide a formal notice
that contract has been completed

Management
Most questions are process oriented

Most questions are from the buyers perspective
Contracts are formal agreements
All requirements should be specifically stated in the
contract
All contract requirements must be met
Changes must be in writing and formally controlled
US Government backs all contracts by providing a
court system

Management
What forms a contract
An offer
An acceptance
Consideration - something of value
Legal Capacity separate legal parties, competent parties
Legal Purpose can not perform illegal goods or services

Management
Project Managers role for procurement
Risk identification and evaluation
Work within the procurement process
Procurement Process
Procurement Planning = Make or buy

Solicitation Planning = Request for Proposal
Solicitation = Questions and Answers
Source Selection = Pick vendor
Contract Administration = Admin
Contract Closeout = Finish

Management
Make or Buy: consider out of pocket costs and
indirect cost of managing procurement
Buy to decrease risk (cost, schedule, performance,
scope of work)
Make
Idle plant or workforce

Retain control
Proprietary information/procedures
Buy vs. lease questions (use X = number of days when
purchase and lease costs are equal)

Management
Contract Type Selection reasonable risk between
the buyer and seller and greatest initiative for sellers
efficient and economic performance
Scope well defined?
Amount or frequency of changes expected after start date
Amount of effort and expertise the buyer can devote to
manage the seller
Industry standards

Management
Cost Reimbursable (CR); sellers cost are
reimbursed; buyer bears highest risk (cost increases)
CPFF cost plus fixed fee, buyer pays all costs fee (profit)
established
CPPC cost plus percentage of costs; bad for buyers (seller
not motivated to control costs)
CPIF cost plus Incentive Fee; seller costs + fee + bonus for
meeting/exceeding target (incentive clause)

Management
Time and Materials; priced on per hour basis,
elements of fixed price contract and cost
reimbursable contracts buyer has medium risk
Fixed Price (lump sum, or firm fixed price) - most
common (1 price for all work), risk of costs is upon
seller
FPIF Fixed Price Incentive Fee
FPEPA Fixed Price Economic Price Adjustment long
duration projects
Incentives help bring sellers objectives in line with

buyers

Management
Incentive Fee and Final Price Calculations
Must Have:
Target Cost
Target Fee
Target Price
Sharing Ratio (buyer/seller)
Actual Cost
Fee = (Target Cost Actual Cost) x Seller Ratio (%)

Total Fee = Fee + Target Fee
Final Price = Actual Cost + Total Fee

Management
Procurement Documents, Contract Type and
Scope of Work
Request for Proposal Cost Reimbursable Performance
or Functional Scope (can be somewhat loosely defined)
Invitation for Bid Time & Materials Design Scope
(moderately defined)
Request for Quotation Fixed Price Any Scope (must be
detailed)

Management
Terminology (Terms and Conditions)
Force majeure act of God
Indemnification who is liable
Liquidated damages estimated damages as a result of
contract breach
Material breach a breach so large the project may not
continue
Special Provisions provided by the Project Manager to
contracts so that particular needs are addressed
Privity contractual relationship
Single Source contract directly with preferred seller
Sole Source only one supplier available in market

Management
Evaluation Criteria
Understanding of need
Overall or life-cycle cost
Technical ability
Management Approach
Financial Capacity
Project Management Ability
Invitation for Bids are usually not evaluated with entire criteria
(lowest rate is chosen)

Management
Solicitation
Bidders Conference
Benefit both buyer and seller
Watch out for
Collusion
Sellers not asking questions in front of their competition
Make sure all questions and answers are in writing and
issued to all sellers (respond to same scope in work)

Management
Source Selection
Negotiation Objectives
Obtain a fair and reasonable price
Development a good relationship with seller
Project manager must be involved
Main Terms to negotiate
Responsibilities
Authority
Applicable Law
Technical and Business Management approaches
Contract Financing
Price

Management
Contract Administration assure that sellers

performance meets contractual requirements
Project Managers must understand the contract and manage
its completion
Sometimes contract is in conflict with Scope of Work
Only the contracting officer (CO) can change contract language
Often a source of conflict

Need to deal with a different companys set of procedures
It is not as easy to see problems
Greater reliance on reports to determine if a problem exists
Greater reliance on relationships between buyer and sellers
project managers

Management
Contract Closeout more attention to
documentation and completion of files
All documentation must be preserved and filed
Centralized vs. decentralized contracting
Contract Interpretation
Based on analysis of intent

Management
Fee = Target Cost Actual Cost X Seller Ratio ($)

Total Fee = Fee plus Target Fee
Final Price = Actual Cost plus Total Fee
Contractor = seller
Purchasing Cycle define need, prepare and issue purchase
order
Functional Spec delineates specific end-use capabilities that
are tested in acceptance procedure
Measurable Capabilities = Performance Specifications
Requisition Cycle review of specification completeness
Requirements Cycle develops the statement of work
Supplement Professional
Responsibility
6th Process area added
Insuring Integrity and professionalism

Contributing to the project management knowledge base
Enhancing individual competence
Balancing Stakeholders interests
Interacting with team and stakeholders in a professional and
cooperative manner
Could be approx. 30 questions in this area

Understand Project Management Professional Code
of Conduct
Ethics
Legal Issues
Cultural Sensitivity
Managing conflicts of interest
Responsibility
Integrity and Professionalism
Understand the legal requirements surrounding the
practice of projects
Know ethical standards that should govern the
behavior of project managers
Comprehend the values of the community and the
various project stakeholders
Practice proper judgment in the pursuit of successful
project work
Compliance with all organizational rules and policies
Upon a reasonable and clear factual basis report violations
Responsibility to disclose circumstances that could be
construed as a conflict of interest or appearance of impropriety
Responsibility
Integrity and Professionalism
Provide accurate and truthful representation to the
public
Maintain and satisfy the scope and objectives of
professional services
Maintain the confidentiality of sensitive information
Ensure a conflict of interest does not compromise
legitimate interests of client/customer or interfere with
professional judgment
Refrain from accepting gifts, inappropriate payments,
compensation for personal gain unless in conformity
with applicable laws or customs
Responsibility
Contribute to advancing the project management
profession
Overall understanding of project management principles
Understand the community and media surrounding projects
Knowledge of research strategies available and proper
communication techniques
Learn to communicate and transfer knowledge effectively as a coach
and mentor and to use available research strategies
Respect and recognize intellectual property
Enhance Individual Competence
Understand the project managers strengths and weaknesses and
learning style become aware of instructional processes and tools
Know the useful competencies for project managers and possible
training
Be able to perform self-assessment and competencies development
plan
Ability to apply lessons learned
Responsibility
Balance Stakeholders Objectives
Understand the various competing stakeholders interests and
needs
Comprehend the conflict resolution techniques useful in handling
differing objectives
Be able to resolve conflicts in a fair manner
Exercise negotiation skills based on proper information
Interact with team and stakeholders in a professional

and cooperative manner
Understand cultural diversity, norms and stakeholders
communication styles
Show flexibility towards diversity, tolerance and self control
Becoming empathetic to differences

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Project Management

Scope of project should remain constant

Projects are often divided into subprojects for

Chapter 2 Project Management

Phases are collected into the Project Life

Chapter 2 Project Management

Chapter 2 Project Management

Chapter 2 Project Management

Chapter 2 Project Management

Chapter 2 Project Management

Chapter 2 Project Management

Chapter 2 Project Management

Influencing Organization (understanding power and

Chapter 2 Project Management

Chapter 2 Project Management

Visible Objectives not cost effective

Chapter 2 Project Management

Chapter 3 Project Management

Chapter 3 Project Management

Chapter 3 Project Management

Individual processes have inputs, tools and

Chapter 3 Project Management

Amount of planning proportional to the scope of

Chapter 3 Project Management

Chapter 3 Project Management

Chapter 3 Project Management

Chapter 3 Project Management

Chapter 3 Project Management

Project Plan Execution performing the activities

Chapter 3 Project Management

Chapter 3 Project Management

Chapter 3 Project Management

Chapter 3 Project Management

Chapter 3 Project Management

Chapter 3 Project Management

Constrained Optimization (mathematical

Key aspect of scope verification is

Chapter 4 Project Integration

These processes may occur repeatedly over the project duration

Chapter 4 Project Integration

Chapter 4 Project Integration

Chapter 4 Project Integration

Chapter 4 Project Integration

Chapter 4 Project Integration

Chapter 4 Project Integration

Chapter 4 Project Integration

Chapter 4 Project Integration

Chapter 4 Project Integration

Chapter 4 Project Integration

Chapter 4 Project Integration

Change control requires

Chapter 4 Project Integration

Chapter 4 Project Integration

ID and document functional and physical characteristics

Chapter 4 Project Integration

Change Control Plan

Chapter 4 Project Integration

Chapter 4 Project Integration

Work Authorization System

Chapter 4 Project Integration

Technical Aspects of the project

Chapter 4 Project Integration

Chapter 5 Project Scope