Documente Academic
Documente Profesional
Documente Cultură
ACKNOWLEDGMENTS
Project Team
Content Developer: Divya Jose, Pradeep Reddy and Reshma R Content Manager: Adrian Bk Graphic Designer: Karthik PB,
Mohammed Baroda, Vasanth K. and Charles Amalorpavaraj Project Manager: Media Instructional Designer: Divya Jose,
Pradeep Reddy and Reshma R Content Editor: Peter Bauer Materials Editor: Frank Wosnick Business Matter Expert:
Dhananjay M. Gokhale Technical Reviewer: Dhananjay M. Gokhale Project Technical Support: Mike Toscano Project
Lead: Abbas A
NOTICES
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CONTENTS
Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subprojects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Project Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Project Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Organizational Process Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
B. Identify Professional and Social Responsibilities. . . . . . . . . . . . . . . . . . . . . . 23
The PMI Code of Ethics and Professional Conduct . . . . . . . . . . . . . . . . . 23
Upholding Responsibilities to the Profession . . . . . . . . . . . . . . . . . . . . . . . 24
Upholding Responsibilities to the Customer and to the Public . . . . . . . . 25
Adhering to Other Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
C. Identify the Interpersonal Skills Required for a Project Manager . . . . . . . . 28
Interpersonal Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Leadership Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Team Building Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Motivation Skills. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Communication Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Inuencing Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Decision Making Skills. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Six Phases of Decision Making. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Political and Cultural Awareness Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Negotiation Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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B. Examine Project Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Business Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Project Selection Criteria. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Project Selection Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Project Selection Decision Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Capital Budgeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Scoring and Rating Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Feasibility Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Cost-Benet Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
C. Prepare a Project Statement of Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Project Statements of Work (SOW) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
D. Create a Project Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Project Charters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
The Develop Project Charter Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Develop Project Charter Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Develop Project Charter Tools and Techniques . . . . . . . . . . . . . . . . . . . . 55
Develop Project Charter Output . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Business Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Business Case Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
E. Identify Project Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
The Identify Stakeholders Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Identify Stakeholders Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Identify Stakeholders Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . . 61
Identify Stakeholders Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Stakeholder Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Stakeholder Registers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
The Stakeholder Analysis Matrix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Stakeholder Management Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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LESSON 3 - PLANNING PROJECT WORK
A. Identify the Elements of a Project Management Plan . . . . . . . . . . . . . . . . . 72
The Project Management Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
The Develop Project Management Plan Process . . . . . . . . . . . . . . . . . . . 73
Develop Project Management Plan Inputs . . . . . . . . . . . . . . . . . . . . . . . 74
Develop Project Management Plan Tools and Techniques . . . . . . . . . . 74
Develop Project Management Plan Output . . . . . . . . . . . . . . . . . . . . . . 75
B. Document Stakeholder Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
The Collect Requirements Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Collect Requirements Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Collect Requirements Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . 77
Collect Requirements Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Facilitated Workshops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Group Creativity Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Group Decision Making Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Requirements Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Requirements Management Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
The Requirements Traceability Matrix . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
C. Create a Scope Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
The Project Scope Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Components of the Scope Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
The Dene Scope Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Dene Scope Inputs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Dene Scope Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Dene Scope Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Product Analysis Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Techniques for Alternatives Identication . . . . . . . . . . . . . . . . . . . . . . . . . 90
Project Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
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D. Develop a Work Breakdown Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Work Breakdown Structures (WBS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
The Create WBS Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Create WBS Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Create WBS Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Create WBS Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Code of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
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C. Estimate Activity Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Project Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
The Estimate Activity Resources Process . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Estimate Activity Resources Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Estimate Activity Resources Tools and Techniques . . . . . . . . . . . . . . . . . . 129
Estimate Activity Resources Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
Schedule Management Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
D. Estimate Duration for Project Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
The Estimate Activity Durations Process . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Estimate Activity Durations Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Estimate Activity Durations Tools and Techniques . . . . . . . . . . . . . . . . . . 135
Estimate Activity Durations Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
E. Develop a Project Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
Project Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
The Develop Schedule Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
Develop Schedule Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
Develop Schedule Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . . . . 141
Develop Schedule Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Standard Schedule Diagramming Notations . . . . . . . . . . . . . . . . . . . . . . 142
The Critical Path . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Float . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Total Float . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Free Float . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
Schedule Network Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
The Critical Path Method (CPM). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
The Critical Chain Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
The What-If Scenario Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
Resource Leveling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
Schedule Formats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
F. Identify the Critical Path . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Critical Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
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G. Optimize the Project Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
Schedule Compression . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
Fast-Tracking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Crashing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Crash Cost Plotting Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
H. Establish a Schedule Baseline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
Schedule Baselines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
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C. Reconcile Funding and Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
CONTENTS
B. Document the Project Roles, Responsibilities, and Reporting
Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
The Develop Human Resource Plan Process . . . . . . . . . . . . . . . . . . . . . . 213
Develop Human Resource Plan Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
Develop Human Resource Plan Tools and Techniques . . . . . . . . . . . . . . 214
Develop Human Resource Plan Outputs . . . . . . . . . . . . . . . . . . . . . . . . . 215
Organizational Structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
Organizational Structure Types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216
Organization Charts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216
Relative Authority in Organizational Structures . . . . . . . . . . . . . . . . . . . . 218
Project Interfaces. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218
The Responsibility Assignment Matrix (RAM) . . . . . . . . . . . . . . . . . . . . . . . 219
Staffing Management Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
Staffing Management Plan Components . . . . . . . . . . . . . . . . . . . . . . . . . 221
C. Create a Communications Management Plan . . . . . . . . . . . . . . . . . . . . . . 225
Communications Management Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . 225
The Plan Communications Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225
Plan Communications Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
Plan Communications Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . 226
Plan Communications Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
Communications Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
Communications Requirements Analysis . . . . . . . . . . . . . . . . . . . . . . . . . 228
Communications Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
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LESSON 7 - ANALYZING RISKS AND PLANNING RISK RESPONSES
A. Examine a Risk Management Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236
Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236
Project Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236
Business Risk vs. Insurable Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
Types of Business Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
Types of Insurable Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
Risk Management Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
The Plan Risk Management Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
Plan Risk Management Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
Plan Risk Management Tools and Techniques . . . . . . . . . . . . . . . . . . . . . 239
Plan Risk Management Output . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239
Risk Management Plan Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240
Risk Breakdown Structures (RBS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
Effect-Based Risk Classication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
Source-Based Risk Classication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242
Probability Scales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242
Impact Scales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242
Levels of Uncertainty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243
Risk Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243
Risk Tolerance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244
Levels of Risk Tolerance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244
B. Identify Project Risks and Triggers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248
Triggers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248
The Identify Risks Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248
Identify Risks Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249
Identify Risks Tools and Techniques. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250
Identify Risks Output . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250
Information-Gathering Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
Risk Registers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252
Risk Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252
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C. Perform Qualitative Risk Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255
Qualitative Risk Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255
The Perform Qualitative Risk Analysis Process . . . . . . . . . . . . . . . . . . . . . . 256
Perform Qualitative Risk Analysis Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . 256
Perform Qualitative Risk Analysis Tools and Techniques . . . . . . . . . . . . . 257
Perform Qualitative Risk Analysis Output. . . . . . . . . . . . . . . . . . . . . . . . . . 257
Risk Data Quality Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258
Probability and Impact Risk Rating Matrix . . . . . . . . . . . . . . . . . . . . . . . . . 258
Components of Risk Registers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259
The Ongoing Risk Assessment Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260
D. Perform Quantitative Risk Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264
Quantitative Risk Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265
The Perform Quantitative Risk Analysis Process . . . . . . . . . . . . . . . . . . . . 265
Perform Quantitative Risk Analysis Inputs . . . . . . . . . . . . . . . . . . . . . . . . . 265
Perform Quantitative Risk Analysis Tools and Techniques . . . . . . . . . . . . 266
Perform Quantitative Risk Analysis Output . . . . . . . . . . . . . . . . . . . . . . . . 266
Quantitative Risk Analysis Update Components . . . . . . . . . . . . . . . . . . . 267
Project Risk Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267
Basics of Probability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268
Probability Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269
Uniform Distribution PDF. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270
Normal Distribution PDF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270
Triangular Distribution PDF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271
Decision Making Under Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272
Quantitative Analysis Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273
Simulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274
Monte Carlo Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274
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E. Develop a Risk Response Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278
The Plan Risk Responses Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278
Plan Risk Responses Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279
Plan Risk Responses Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . . . 279
Plan Risk Responses Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279
Negative Risk Strategies (Threats) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280
Positive Risk Strategies (Opportunities) . . . . . . . . . . . . . . . . . . . . . . . . . . . 281
Contingency Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281
Contingency Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282
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LESSON 9 - EXECUTING PROJECT WORK
A. Identify the Direct and Manage Project Execution Process . . . . . . . . . . . . 316
The Direct and Manage Project Execution Process . . . . . . . . . . . . . . . . . 316
Direct and Manage Project Execution Inputs. . . . . . . . . . . . . . . . . . . . . . 316
Direct and Manage Project Execution Tools and Techniques . . . . . . . . 317
Direct and Manage Project Execution Outputs . . . . . . . . . . . . . . . . . . . . 317
Project Management Information Systems (PMIS). . . . . . . . . . . . . . . . . . 318
Common PMIS Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318
Work Authorization Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319
Work Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320
Project Execution Direction and Management Techniques. . . . . . . . . . 320
B. Execute a Quality Assurance Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323
Quality Assurance Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323
The Perform Quality Assurance Process . . . . . . . . . . . . . . . . . . . . . . . . . . 323
Perform Quality Assurance Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324
Perform Quality Assurance Tools and Techniques . . . . . . . . . . . . . . . . . . 325
Perform Quality Assurance Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326
Quality Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326
Topics of Quality Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326
C. Acquire the Project Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329
The Acquire Project Team Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329
Acquire Project Team Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330
Acquire Project Team Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . 331
Acquire Project Team Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332
Virtual Teams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332
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D. Develop the Project Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335
The Develop Project Team Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335
Develop Project Team Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336
Develop Project Team Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . 336
Develop Project Team Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337
Team Development Stages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337
Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338
Team-Building Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339
Co-location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339
Reward and Recognition Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339
Rewarding Individual Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340
E. Manage the Project Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343
The Manage Project Team Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343
Manage Project Team Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344
Manage Project Team Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . 344
Manage Project Team Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345
Causes of Conict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346
Conict Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346
Conict Management Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346
Tasks of Performance Appraisals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347
F. Distribute Project Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350
The Distribute Information Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350
Distribute Information Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351
Distribute Information Tools and Techniques. . . . . . . . . . . . . . . . . . . . . . . 352
Distribute Information Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352
G. Manage Stakeholder Relationships and Expectations . . . . . . . . . . . . . . . . 355
The Manage Stakeholder Expectations Process . . . . . . . . . . . . . . . . . . . 355
Manage Stakeholder Expectations Inputs . . . . . . . . . . . . . . . . . . . . . . . . 355
Manage Stakeholder Expectations Tools and Techniques . . . . . . . . . . . 356
Manage Stakeholder Expectations Outputs . . . . . . . . . . . . . . . . . . . . . . 357
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LESSON 10 - MANAGING PROJECT PROCUREMENT
A. Examine the Conduct Procurements Process . . . . . . . . . . . . . . . . . . . . . . . 364
The Conduct Procurements Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364
Conduct Procurements Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364
Conduct Procurements Tools and Techniques . . . . . . . . . . . . . . . . . . . . . 365
Conduct Procurements Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366
Qualied Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367
B. Obtain Responses from Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371
C. Determine Project Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374
Weighting Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374
Procurement Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375
Term vs. Completion Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376
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C. Utilize the Integrated Change Control System . . . . . . . . . . . . . . . . . . . . . . . 393
The Perform Integrated Change Control Process . . . . . . . . . . . . . . . . . . 393
Perform Integrated Change Control Inputs . . . . . . . . . . . . . . . . . . . . . . . 394
Perform Integrated Change Control Tools and Techniques . . . . . . . . . . 395
Perform Integrated Change Control Outputs . . . . . . . . . . . . . . . . . . . . . 395
Change Management Advantages . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396
Formal Acceptance of Project Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396
D. Review Deliverables and Work Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399
The Verify Scope Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399
Verify Scope Inputs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
Verify Scope Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
Verify Scope Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401
Inspection Report Components. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401
E. Control the Project Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403
The Control Scope Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403
Control Scope Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404
Control Scope Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405
Control Scope Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405
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LESSON 12 - MONITORING AND CONTROLLING PROJECT SCHEDULE AND
COSTS
A. Control the Project Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414
The Control Schedule Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414
Control Schedule Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414
Control Schedule Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . 415
Control Schedule Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415
Earned Value Management (EVM) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416
EVM Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416
Planned Value (PV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417
Earned Value (EV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417
Actual Cost (AC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418
EVM Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418
Schedule Performance Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . 418
Schedule Variance (SV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420
Schedule Performance Index (SPI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420
SPI Trend Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421
Working with EVM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421
B. Control Project Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426
The Control Costs Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426
Control Costs Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427
Control Costs Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427
Control Costs Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428
Cost Variance (CV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429
The Cost Performance Index (CPI). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430
Performance Measurement Analysis Techniques . . . . . . . . . . . . . . . . . . 430
Performance Reporting Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 431
Budget at Completion (BAC) Calculations . . . . . . . . . . . . . . . . . . . . . . . 431
Estimate to Complete (ETC) Calculations . . . . . . . . . . . . . . . . . . . . . . . . . 431
Estimate at Completion (EAC) Calculations. . . . . . . . . . . . . . . . . . . . . . . 432
To-Complete Performance Index (TCPI) . . . . . . . . . . . . . . . . . . . . . . . . . . 432
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LESSON 13 - MONITORING AND CONTROLLING PROJECT PERFORMANCE
AND QUALITY
A. Perform Quality Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444
The Perform Quality Control Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444
Perform Quality Control Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444
Perform Quality Control Tools and Techniques . . . . . . . . . . . . . . . . . . . . . 445
Perform Quality Control Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 446
Variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447
Causes of Variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447
The Analyzing Variances Task . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 448
Tolerances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 448
The 6-Sigma Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449
Variability Indications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449
Pareto Diagrams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449
The 80/20 Rule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450
Statistical Sampling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450
The Statistical Sampling Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451
Attribute Sampling Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451
Variable Sampling Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452
B. Report on Project Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 455
The Report Performance Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 455
Report Performance Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 455
Report Performance Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . . 456
Report Performance Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456
Forecasting Methods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 457
Benets of Creating Performance Reports . . . . . . . . . . . . . . . . . . . . . . . . 458
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CONTENTS
LESSON 14 - MONITORING AND CONTROLLING PROJECT RISKS AND
PROCUREMENTS
A. Monitor and Control Project Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466
The Monitor and Control Risks Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466
Monitor and Control Risks Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466
Monitor and Control Risks Tools and Techniques . . . . . . . . . . . . . . . . . . . 467
Monitor and Control Risks Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467
The Project Risk Response Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468
B. Administer Project Procurements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472
The Administer Procurements Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472
Administer Procurements Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472
Administer Procurements Tools and Techniques . . . . . . . . . . . . . . . . . . . 473
Administer Procurements Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 474
The Duties of the Procurements Administrator . . . . . . . . . . . . . . . . . . . . . 475
Changes to Contract Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476
Legal Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476
Types of Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 477
Types of Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 477
Breaches of Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 477
Contents
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CONTENTS
B. Close the Project or Phase Administratively . . . . . . . . . . . . . . . . . . . . . . . . . 493
The Close Project or Phase Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 494
Close Project or Phase Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 494
Close Project or Phase Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . 494
Close Project or Phase Outputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495
Administrative Closure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495
Project Records to Archive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495
Lessons Learned Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496
Considerations of Lessons Learned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496
Closeout Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 497
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INTRODUCTION
Course Description
Target Student
This course is designed for persons who have on the job experience performing project management tasks, whether or not project manager is their formal job role, who are not certied
project management professionals, and who might or might not have received formal project
management training. The course is appropriate for these persons if they wish to develop professionally, increase their project management skills, apply a formalized and standards-based
approach to project management, seek career advancement by moving into a formal project
manager job role, as well as to apply for Project Management Institute, Inc. (PMI) Project
Management Professional (PMP) Certication.
Course Prerequisites
Familiarity with project management concepts and some working experience with project management are required. Experience with a specic project management software tool is not
required.
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INTRODUCTION
As a Review Tool
Any method of instruction is only as effective as the time and effort you are willing to invest
in it. In addition, some of the information that you learn in class may not be important to you
immediately, but it may become important later on. For this reason, we encourage you to
spend some time reviewing the topics and activities after the course.
As a Reference
The organization and layout of the book make it easy to use as a learning tool and as an afterclass reference. You can use this book as a rst source for denitions of terms, background
information on given topics, and summaries of procedures.
Course Objectives
In this course, you will apply the generally recognized practices of project management
acknowledged by the Project Management Institute (PMI) to successfully manage projects.
You will:
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initiate a project.
INTRODUCTION
Introduction
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NOTES
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LESSON 1
LESSON 1
Lesson Time
2 hour(s), 30 minutes
Examining Professional
Project Management
In this lesson, you will describe professional project management.
You will:
LESSON 1
Introduction
Successfully managing your projects requires effective planning up-front, as well as an adherence to the industrys best practices through every step of the process. By identifying the
project management process groups that are considered standards for excellence, you will be
better prepared to initiate a project in your organization and position it for success. In this lesson, you will identify the effective practice of project management and related project
management processes. You will also identify the guidelines for ethical behavior and professional conduct that are outlined in the Project Management Institute Code of Conduct and
understand the interpersonal skills necessary to complement your project management skills, so
that you will be ready to move forward strategically and with condence.
At this point in your professional development, you are ready to further advance your practice
of project management. You can do this by developing a solid understanding of the eld and
its underlying structure and elements, which include stakeholders and project life cycles. You
want to be able to identify the project management process groups that are recognized
industry-wide as good practice. And as a professional project manager striving for excellence,
you want to be sure that you meet the high standards for ethical behavior and professional
conduct for project managers outlined in the PMI Code of Conduct. Also, having a good
knowledge of interpersonal skills is essential for managers to work efficiently with different
kinds of people in the organization.
The following gure shows the mapping of the project management processes to the project
management process groups and the knowledge areas.
LESSON 1
LESSON 1
TOPIC A
Identify Project Management
Processes
Before you can begin planning and managing your project, you need to dene the projects
needs, determine which processes are appropriate, and determine the degree of rigor needed to
meet the project objectives. To do this, you will identify the project management processes that
are generally recognized as good practice on most projects across industry groups and the nine
relevant knowledge areas that the Project Management Institute, or PMI, has identied. In this
topic, you will identify project management processes and the project management process
groups.
Business organizations around the world are using project management as a competitive advantage to achieve corporate strategic objectives. Effective project managers combine their skills
and knowledge with appropriate processes to meet project objectives and deliver results in line
with corporate strategies. By identifying the main elements of effective project management
practice and project management processes, you can enhance the chances of success over a
wide range of projects across application areas and industries.
Projects
Denition:
A project is a temporary work endeavor that creates a unique product, service, or
result. It has a clearly dened beginning and end. The end of a project is reached when
either its objectives are met, the need for the project no longer exists, or it is determined that the objectives cannot be met. Projects can vary widely in terms of budget,
team size, duration, expected outcomes, and industries.
Example: The Intranet Website Creation Project
Consider a project authorized by a rm to create an intranet website that would display
its employee related information. The outcome of the project is the website, and the
duration will depend on the complexity and size of the work involved. The project will
come to an end when the website is posted on the server and is ready for use by
appropriate users.
Subprojects
Denition:
A subproject is an independently manageable component of an existing project. A
project can have multiple subprojects, and they in turn can have even smaller subprojects. Usually, a subproject is given on contract either to an external enterprise or to
another functional unit in an organization.
Example: Subprojects in a Car Project
The project team working on the interior design of a solar powered car decided to subcontract the designing of seats and the air-conditioning system to two individual
external vendors as subprojects.
LESSON 1
Project Management
Denition:
According to the PMI, project management is dened as the application of knowledge, skills, tools, and techniques to project activities to meet project requirements.
Managing projects typically involves scheduling; identifying requirements; establishing
objectives; balancing quality, scope, time, and cost; and addressing the concerns and
expectations of the stakeholders.
Project management is different from the management of routine, ongoing work initiatives. Projects generally involve temporary initiatives, unique circumstances, and crossfunctional teams. Projects may involve new or specially formed teams taking on new
tasks and attempting unfamiliar skills, processes, or work efforts.
Example: Responsibilities of a Project Manager
In any given project, some of the common responsibilities of a project manager would
include communicating cross-functionally, managing the efforts of people who do not
report directly to them, and delivering the work on time, within the allotted budget and
specications for quality.
PMP Certication
For information about the PMP certication process and examination, visit the PMI
website www.pmi.org and review the Career Development page information. The
process for obtaining PMP credentials requires specic professional experience and
formal training, including completing 35 hours of specic project management education; successfully completing this course fullls that educational requirement.
PMBOK Reference
For more information on project management, refer to the PMBOK Guide, Fourth
Edition 2008, p. 6 and 7. The name PMBOK Guide refers to the book, A Guide to
the Project Management Body of Knowledge, published by the Project Management
Institute, Inc. The PMBOK Guide is considered the denitive text for information
about the practice of project management. Element K is a Registered Education Provider (REP) for the PMP certication examination.
Linear Presentation
Although project management is an iterative, cyclical process in real life, it is necessarily presented in a linear manner throughout this course.
Programs
Denition:
A program is a group of related projects that have a common objective. It offers great
control over the constituent projects and delivers benets that the organization can use
to meet its goals. A program is managed by a program manager, and the individual
projects are managed by project managers who work for the program manager. However, all projects need not always be a part of programs. Projects that do not have a
common objective, but still are managed in a group, are generally known as multiple
projects.
LESSON 1
Example: A Retail Chain Expansion Program
A retailing company launched a new program that aims at expanding a retail chain.
This expansion program consists of many projects, such as market research to establish
demand, construction of new stores, franchise selection, designing the marketing campaign, and consolidation of customer base by establishing loyalty programs.
Portfolios
Denition:
A portfolio is a collection of projects, programs, and other operational work to achieve
the strategic business objectives of an organization. The projects in a portfolio may or
may not be interdependent, but they are grouped to give management a broader view
of the organizations projects and their adherence to organizational objectives. For a
project to be part of a portfolio, its attributes such as cost, resource requirements,
timelines, strategic goals, and benets should be in line with other projects in the portfolio. Portfolios are generally managed by a senior manager or senior management
teams.
LESSON 1
Operations
Denition:
Operations are ongoing and repetitive tasks that produce the same outcome every time
they are performed. The purpose of operations is to carry out day-to-day organizational
functions, generate income to sustain the business, and increase the value of organizational assets. Operational processes are aligned with the business requirements of the
organization. Therefore, when organizations update or adopt new objectives based on
organizational needs, customer requirements, or market demand, these processes are
continuously revised to accommodate the changes. Such process revisions can be considered to be an internal project.
Example: Operations in a Petrochemical Industry
One of the major petrochemical companies has set up a new renery to meet its
increasing market demand. The company plans to break-even in three years by achieving the desired volume of output from its new plant. Once the new plant is set up, the
operations to be carried out in the new branch include daily production, routine maintenance of the plant, wages and salary credits to employees, purchase of raw materials,
grievance handling, logistics, and supply of nished products to the market.
LESSON 1
Example: A Newspaper PMO
A regional newspaper chain identied a business need to decrease editorial costs on
special issues and features in all its editions. Every project manager at the chain was
operating independently, developing individual solutions to problems, and hiring writers and photographers to produce local articles that would be published only once. The
project managers came out with new processes and economies of scale, such as buying
inexpensive, generic articles from a wire service and publishing them in all editions
simultaneously. The PMO in this case introduced standardized processes for calculating, leveling, loading, and developing project budgets and also helped the project
managers with updating the project schedules. The PMO also planned for developing
project data references and organized a best practices sharing session every month.
Project Stakeholders
Denition:
A project stakeholder is a person who has a business interest in the outcome of a
project or who is actively involved in its work. Stakeholders take on various roles and
responsibilities; their participation in the project will have an impact on its outcome
and its chances for success.
Stakeholders may have competing interests, needs, priorities, and opinions. They may
have conicting visions for the projects successful outcome. Project managers must
identify the internal as well as external stakeholders as early as possible, learn what
their needs are, and secure their participation in dening the projects parameters and
success criteria. While it may be difficult to negotiate to a consensus early in the
project, it is far less painful and costly than getting to the end of the project only to
learn that someones needs were not met or were misunderstood.
Example: Project Stakeholders Involved in the New Stadium Project
The New York Yankees baseball organization broke ground on a proposed $800 million Bronx stadium in 2006. Stakeholders for this project included the staff,
management, and owners of the New York Yankees; Major League Baseball; local
chambers of commerce; local and statewide elected officials; the engineers, architects,
and construction workers employed by the project; and fans. New York City budgeted
an additional $1 million to train another group of stakeholders, the local residents, to
deal with the effects of the massive construction project.
Project Stakeholder
Description
Customers/users
LESSON 1
Project Stakeholder
Description
Sponsor
Sponsors may be individuals or groups that provide nancial assistance to the project. If the sponsor is outside of the company, such as
a customer, the duties listed here may be the responsibility of the
project manager:
Has the nancial resources for the project.
Signs and publishes the project charter.
Portfolio managers/portfolio
review board
Program managers
Project managers
LESSON 1
Project Stakeholder
Description
Project team
Functional managers
Functional managers are individuals who are a part of the management in the administrative or functional side, such as human
resources, nances, accounting, or even procurement of the business
in the organization. They sometimes act as subject matter experts or
may provide services needed for the project.
Operations managers
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LESSON 1
The Role of a Project Manager
Project managers are responsible for meeting project objectives and their job role is
different from that of a functional or operations manager. Based on the organizational
structure, a project manager may report to a portfolio or program manager. The project
manager works in tandem with his or her manager to meet the project objectives and
ensure that the project plan is in alignment with the overall program plan.
A project manager should have the following characteristics.
Performance: Performing well in projects through the application of the knowledge of project management practices.
11
LESSON 1
will have a project life cycle and not a product life cycle. But if the outcome is a
product, then it may have many possible relationships to the project life cycle. For
example, developing a new product can be a project by itself, or if an existing product
has new functions or features, then developing a new model of the product can be a
project of its own.
There are many facets to a product life cycle that can run as projects. Some of the
examples include conducting market research, performing a feasibility study, running
an ad campaign, and installing a product. In these cases, a product will have many
projects associated with it and the product gains only when they are handled collectively.
Figure 1-4: The variance of project cost and stakeholder influence, risk, and uncertainty based on project time.
Project Governance
Project governance is a comprehensive methodology to control a project and ensure its success. It is carried throughout the life cycle of a project and provides guidance in the form of
project phase reviews to monitor and control the project. Every phase in the project is formally
initiated to decide on the deliverables expected out of that phase. A management review is performed at the start of every phase to decide whether to begin the activities of a particular
phase. This assumes signicance in cases where the activities of the prior phase are not yet
complete.
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LESSON 1
Governance Activities in the Project Life Cycle
At the beginning of each phase, it is a good practice to verify and validate the former assumptions made to the project, analyze risks, and explain in detail the processes required to achieve
a phases deliverables. After the key deliverables of a particular phase are produced, a phaseend review is necessary to ensure completeness and acceptance. Even though this method
signies the start of the subsequent phase, a phase can be closed or the project terminated
when huge risks are involved for the project or when the objectives are no longer required.
Relationship Type
Description
Sequential
Overlapping
Iterative
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LESSON 1
Progressive Elaboration
The phases of the project life cycle are arranged to allow for progressive elaboration, in which
successive layers of detail are added to the plans as the project progresses. Usually, the
sequence of the phases dened by most project life cycles involves some type of handoff or
deliverable. Most often, deliverables from one phase are approved before work begins on the
next phase. For example, design specications are approved and handed off before the design
phase begins. However, a subsequent phase may begin before approval is gained on the
deliverables of a previous phase if the risks are considered acceptable. It helps the project
management team plan work to a greater level of detail as the project progresses.
According to PMI, Progressive detailing of the project management plan is often called rolling wave planning.
14
Factor
Description
Policies
The organizational policies and procedures inuence the projects the company undertakes. For example, the organizational procedures will determine
how to implement new strategies and if the work environs will be formal or
informal.
Values
Management style
The management style of the organization is another factor that affects the
organizational culture. For example, factors, such as managers following a
coaching style of management or controlling style of management, the
employees being allowed to give feedback, and the implementation of their
feedback, are all dependent upon the different styles followed by management.
Work environment
The work ethics followed by the organization also constitute the organizational culture. For example, some organizations may allow employees to
work anytime from 7:00 AM to 7:00 PM, and some others may want them
to work strictly from 8:00 AM to 5:00 PM and work late nights if their
workload is high.
LESSON 1
Organizational Cultures Inuence on Projects
Several aspects of projects are inuenced by the organizational culture.
Project Aspect
Description
The project policies and procedures should reect that of the organizations as they are interdependent.
Project selection
The criteria for the selection of projects are determined by the organizational culture. For example, a competitive, ambitious, and assertive
organization will select projects with high risks while a highly rigid
and authoritarian organization might not take projects with high risks.
The project manager should adapt to the management style of an organization. For example, a project manager cannot follow a permissive
management style in an autocratic organization where all decisions are
made unilaterally.
A project manager should adhere to a companys policies when assessing the performance of a team. For example, an employee should not
be promoted to the next level unless he or she meets all the standards
set by the organization.
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LESSON 1
Project Management Inputs, Tools and
Techniques, and Outputs
Project management processes are implemented through inputs, tools and techniques, and outputs. Inputs are the information and data that project managers draw on, create, or gather to
guide their work for a specic process to achieve project goals; inputs can be new information
or information that has been derived during the course of the project. Tools and techniques are
the methods, templates, or approaches that project managers employ within a particular process, using a combination of inputs, to achieve stated goals. Outputs are the end results and
deliverables achieved during project management processes and can become inputs into subsequent processes.
Figure 1-7: The relationship between project management inputs, tools and techniques, and outputs.
Process Group
Description
Initiating
Initiating processes involve dening the need for a new project or the
new phase of an existing project, and obtaining a commitment to move
forward.
Planning
Planning processes are used to create the project scope, rene objectives,
and develop a strategy to accomplish the work in the project or phase.
Executing
Closing
Closing processes involve nalizing the project activities, handing off the
project or phase output, gaining formal acceptance, tying up administrative and contractual loose ends, and nally closing the project or phase.
16
LESSON 1
Knowledge Areas
Each of the nine knowledge areas is an identied area of project management described in
terms of its component processes and dened by its knowledge requirements.
17
LESSON 1
Figure 1-9: Overview of project management knowledge areas and project management processes.
Knowledge Area
Description
Ensures that the project includes all the work required, and only
the work required, to successfully complete the project.
Ensures that the project will satisfy the needs for which it was
undertaken.
Project communications management Ensures timely and appropriate generation, collection and dissemination, storage, retrieval, and ultimate disposition of project
information.
Project risk management
At this point, this is just an overview of the component processes. As you proceed through this course, you will
examine in detail each of the nine project management knowledge areas and their component processes.
18
LESSON 1
Enterprise Environmental Factors
Enterprise environmental factors are the internal or external factors that can have a positive or
negative inuence on the project outcome. These factors can either support or limit the project
management options and act as inputs for planning processes. Examples of enterprise environmental factors may include organizational culture, the human resources pool, marketplace
conditions, stakeholder risk tolerances, political situations, and project management information
systems.
Category
Description
These are the processes and procedures the organization uses for
performing project related tasks. Examples may include:
Policies, product and project life cycles, and quality policies
and procedures.
Standard guidelines, proposal evaluation criteria, work instructions, and performance measurement criteria.
Templates such as work breakdown structures, project schedule network diagrams, and contract templates.
Tailored guidelines and criteria for organizational processes
that will satisfy specic project needs.
Organizational communication requirements and project closure guidelines.
This is a corporate knowledge repository for storing and retrieving information. Examples may include:
Process measurement databases that provide measurement data
on processes and products.
Project les such as scope, cost, schedule, and quality
baselines; performance measurement baselines; project calendars; and risk registers.
Lessons learned knowledge bases and historical information.
Issue and defect management databases.
Conguration management knowledge bases.
Financial databases.
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LESSON 1
ACTIVITY 1-1
Identifying Project Management Processes
Before You Begin:
From the C:\085042Data\Examining Professional Project Management folder, open the OGC
Business Transformation Scenario Overview document and the Project Management Framework
image.
Scenario:
You are a project manager for Our Global Company (OGC), a large office products provider.
You are one of 10 project managers within your organization that will be involved in implementing a business transformation strategic plan that calls for acquiring large, successful
competitors in the high-growth, high-population-density metropolitan areas of North America.
The competitors that are identied for acquisition must have a unique, creative business model
that can be integrated into a synergistically superior overall OGC model. It is the development
and roll-out of this business model that is the focus of this program. The plan is backed by
venture capital funds and as such has some very high expectations in highly specied time
frames.
Review the OGC Business Transformation Scenario Overview document before answering the
questions in this activity.
You may also nd it helpful to review the Project Management Framework image before
answering the questions in this activity.
1.
Upon review of the document, at which point in the project management process are
you?
a) Initiating
b) Planning
c) Executing
d) Monitoring and controlling
e) Closing
2.
20
Sponsors
a.
Customers/users
b.
Project managers
Project team
c.
d.
Operations managers
e.
The PMO
f.
LESSON 1
3.
Based on the OGC Business Transformation Scenario Overview document, who are the
appropriate stakeholders for the Business Transformation program? Choose all that
apply.
a) Senior executives
b) Venture capital principals
c) CEOs and CFOs
d) Program IT staff
e) OGC travel
4.
Which project management process will you apply to refine program objectives and
the courses of action the project team will take to meet program objectives?
a) Initiating
b) Planning
c) Executing
d) Monitoring and controlling
e) Closing
5.
Which project management process group will you apply to regularly measure progress
and identify variances from the project management plan?
a) Initiating
b) Planning
c) Executing
d) Monitoring and controlling
e) Closing
6.
Which project management process group will you apply to integrate people and other
resources to fulfill the project management plan for the program?
a) Initiating
b) Planning
c) Executing
d) Monitoring and controlling
e) Closing
7.
21
LESSON 1
ACTIVITY 1-2
Identifying Programs, Portfolios, and Operations
Scenario:
In preparation for the Business Transformation, OGC funded and launched an Enterprise
Project Management Office (PMO). Over the past two years, you have managed several successful, high-prole, concurrent projects within OGC and you have been selected along with
several other project managers to be included in the PMO. The PMO charter is to:
Facilitate and manage the many projects that would become necessary for the
Business Transformation to be successful.
Ensure that all of the projects included in the portfolio are aligned with the business strategic objectives and priorities.
Since you have never been involved in a PMO, you have decided to take some time to better
understand what is involved.
1.
2.
Who provides the software, templates, and standardized policies for a project?
a) Stakeholders
b) Human resources
c) Project Management Office (PMO)
d) Project budget
3.
True or False? Based on the scenario, OGC is using specific criteria to determine which
projects will be included in the portfolio.
True
False
22
LESSON 1
4.
5.
Which tasks produce the same outcome every time they are performed?
a) Programs
b) Projects
c) Portfolios
d) Operations
TOPIC B
Identify Professional and Social
Responsibilities
As you advance in your development as a project manager, you need to make sure that you are
familiar with and maintain compliance with the PMI Code of Ethics and Professional Conduct
and its comprehensive guidelines. Developing a sound understanding of the Code of Ethics and
Professional Conduct and using it as the basis for all your interactions will help you move forward with condence, always adhering to the highest standards of excellence, whether you are
interacting with the public, with your customers, or within your own organization. In this
topic, you will identify the elements of the PMI Code of Ethics and Professional Conduct as
well as how the Code relates to the everyday practice of project management.
As a project manager striving to achieve new levels of excellence, you want to build your
reputation as a professional with high standards for ethical behavior. You want to be able to
make appropriate, ethical decisions about interacting with customers, and you want to represent
yourself and your services fairly and accurately. By recognizing and following the guidelines
set forth in the PMI Code of Ethics and Professional Conduct, you will ensure that you are
acting professionally, ethically, and appropriately in all your business dealings.
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LESSON 1
Even though the PMBOK Guide refers to the PMI Code of Ethics and Professional Conduct, it will not receive a
grade as an individual category in the examination.
Take ownership for the decisions we make or fail to make, the actions we take or
fail to take, and the consequences that result.
Accept only those assignments that are consistent with our background, experience, skills, and qualications.
Protect any proprietary or condential information that has been entrusted to us.
Report possible violations of the PMI Code of Ethics and Professional Conduct by
individuals in the eld of project management, and cooperate with PMI concerning ethics violations and the collection of related information.
Behave in a truthful and ethical manner. This includes complying with all applicable laws, regulations, and ethical standards governing professional practice,
respecting the intellectual property developed or owned by others, and providing
truthful advertising concerning your qualications and services.
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LESSON 1
Upholding Responsibilities to the Customer and to
the Public
A project managers responsibilities to customers and to the public relate to the ethics of public representations, condentiality, and conicts of interest.
Guidelines:
To uphold your responsibilities to customers and the public, consider the following
guidelines:
Uphold the policies, rules, regulations, and laws that govern your work, professional, and volunteer activities.
Ensure that a conict of interest does not compromise the legitimate interests of a
client or customer, or inuence your professional judgments.
Advance the eld of project management by contributing ideas and research ndings to the shared body of knowledge. Share professional expertise and experience
to help others increase their skills and competence in the eld.
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LESSON 1
Do not engage in or condone behavior that is designed to deceive others, including but not limited to, making misleading or false statements, stating half-truths,
providing information out of context or withholding information that, if known,
would render your statements as misleading or incomplete.
ACTIVITY 1-3
Identifying Professional and Social Responsibilities
Scenario:
As with most project managers, you have more than one project to manage at OGC. You are
one of eight project managers within OGC managing a large, nationwide IT infrastructure
project. The project involves approximately 200 technical staff, many of whom are subcontractors. You are in the 12th month of the 18 month life of the project. To date labor costs have
been about $22 million program-wide, which is within the projects budget. The roll-out of the
new technology is on schedule and the customer is pleased.
You arrive at the address listed for one of the subcontractors in your area and you discover
that there is not an office. You call the subcontractors telephone number and get a voice mail
indicating you will receive a call back within four hours. You attempt to nd the subcontractors technicians in order to get better contact information, but you cannot nd any actual
technicians. You know that the subcontractor has been listed in the projects accounting for
work completed. The no-show rate on-site for technicians, both employees and subcontractors, is about 10%, a phenomenon that has historically introduced a lot of slip in similar
projects controls.
In summary, there are two technicians that are being paid in your area but no one knows who
they are. Because most of this work is done at night in several cities within a large geographical area, it is unusual for project managers to actually meet with every technician. All
subcontracting, time sheet management, and approval for payments are done at the program
level in the corporate office. Further discreet inquiries show that there appears to be two to
three technicians in each of the top ve busiest geographic areas that cannot be found who
account for 5 percent of the $22 million spent to date.
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LESSON 1
1.
2.
Within the context of your organization, what steps would you take next and within
what time frame?
3.
What would you expect your manager, the overall program manager, to do next and in
what time frame?
4.
In a general fashion, outline what your organization has in place that might facilitate
the resolution of this problem.
5.
What would you change in your organization to prevent the above scenario from
occurring?
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LESSON 1
TOPIC C
Identify the Interpersonal Skills
Required for a Project Manager
You identied the professional and social responsibilities dened in the PMI Code of Ethics
and Professional Conduct. Adhering to the highest standards of excellence and improving on
your capabilities in project management requires knowledge of the interpersonal skills required
to effectively carry out the role of a project manager. In this topic, you will identify the interpersonal skills required by a project manager.
In any team sport, success depends not only on the ability and skill of the team captain, but
also on how effectively the captain is able to lead, motivate, and guide the team. Similarly, a
project is not a simple task that can be executed by the project manager alone; it involves
everyone right from project stakeholders to individual team members. The role of human relations in deciding the outcome of a project cannot be understated. It is, therefore, essential that
aspiring project managers cultivate and enhance their interpersonal skills to carry out their
responsibilities successfully. Project managers with positive interpersonal skills increase productivity in the organization.
Interpersonal Skills
Interpersonal skills are abilities that an individual should possess to work harmoniously and
efficiently with others. Being in the project management profession, it is important that you
develop a balance of conceptual, technical, and interpersonal skills that will enable you to analyze situations and deal with them appropriately. Some of the important interpersonal skills
critical to effectively manage a project are:
Leadership
Team building
Motivation
Communication
Inuencing
Decision making
Negotiation
Leadership Skills
Leadership is the capacity of a person to guide and inspire others to achieve results. The ability to lead can be characterized as learning from ones mistakes, building relationships, taking
initiatives, and inspiring others through positive inuence. Characteristics of effective leadership include self-awareness, personal accountability, and personal integrity. These
characteristics are important for a manager to establish rapport, enhance credibility, and gain
others trust.
Though the leadership capabilities of a manager are important throughout all the phases of a
project, it is critical at the beginning of a project or phase where the emphasis will be to communicate the vision and motivate and inspire team members for higher project performance.
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LESSON 1
Leadership Style
Leadership style indicates how a person prefers to interact with others in various situations. They are based on low or high assertiveness and low or high responsiveness. An
understanding of characteristics of leadership styles will help you, as a leader, to assess
the behaviors, feelings, and tendencies that comprise self-awareness.
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LESSON 1
Team Building Skills
Team building is an ongoing process of helping the project team work collaboratively, rather
than individually, to achieve a common purpose. Good leadership and team building activities
cultivate a work environment that fosters teamwork, creates a sense of ownership across the
team, helps build mutual trust, facilitates the exchange of high quality information, and enables
sound decision making and effective project control. Good team building skills help you to
handle project related issues as a team without making individual team members accountable
for those issues. It is essential for any manager to develop a good team environment that possesses these qualities.
Certain barriers deter good teamwork. It is the prime duty of a manager to help the team overcome these barriers to perform good teamwork.
Barriers to Teamwork
Description
Withholding information
Guarded ideas
If team members feel they will be punished or receive negative reactions from freely sharing their ideas, they will tend
to be very cautious.
Uncontested ideas
Ineffective meetings
Unrealistic goals
Team members sometimes set unreachable targets for themselves. Team members need to continually clarify
expectations and control scope creep, which is the tendency
of projects to expand beyond their original bounds.
Unhealthy competition
Wariness
Motivation Skills
Motivation skills are imperative for managers to get work done from their project team members and improve team performance. Motivation is what makes a team member want to
accomplish goals with a high level of quality rather than just doing the minimum work
required. A manager should understand that all individuals in the team are unique and have
their own expectations, values, and objectives. Some of the motivation factors that individuals
consider necessary and important are job satisfaction; challenging work; a sense of accomplishment, achievement, and growth; nancial compensation; and rewards and recognitions.
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LESSON 1
Motivational Techniques
Consider a variety of methods of recognizing employees contributions:
Give team members a chance to shine. Allow them the opportunity to speak at a
conference or a meeting.
Send employees to seminars or conferences and ask them to report back to the
team.
Communication Skills
Effective communication is where everyone is kept informed, knows exactly what to do, and
has all of the information to do their jobs. It is essential that a manager is able to clearly
express his or her ideas to others, and that the manager understands what other people are trying to say. The ability to motivate, delegate, organize, solve problems, and obtain information
depends on effective communication. Listening is another important aspect of communication.
By using effective listening techniques, a manager can manage conicts, make appropriate
decisions, and provide suitable solutions.
Inuencing Skills
A manager who possesses inuence can get along well with others and prefers to use persuasion, as opposed to coercion, when interacting with others. The ability to inuence someone is
based on credibility, trust, support, and collaboration. A manager can achieve a level of inuence by demonstrating good listening and responding skills, a sense of humor, and the ability
to express oneself. Inuential managers tend to be sociable and optimistic, and they demonstrate an obvious enthusiasm for their work. Managers who can apply inuence get results
because people want to work with them.
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LESSON 1
Phase
Involves
Evaluating how well the problem was solved and project goals
achieved.
Negotiation Skills
Negotiation is an approach used by individuals or organizations with mutual or opposite interests to come together to reach a nal agreement. Negotiation is indispensable to project
management and, when done effectively, will contribute to the success of a project. Some of
the skills or behaviors that managers can adapt to negotiate successfully are:
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Impressing the other party while giving concessions to indicate that you are providing
them something of value.
Ensuring a win-win situation for both parties at the end of the deal.
LESSON 1
ACTIVITY 1-4
Identifying the Interpersonal Skills Required for a Project
Manager
Scenario:
Carl Thompson, a senior manager at OGC, is conducting an interpersonal skills training program for all the managers as part of the management initiative. The training module mainly
focuses on the skills mentioned in the PMBOK Guide. You are one of the project managers
attending the training program. During the training session, the trainer gives you some realtime scenarios and wants you to give an appropriate response based on them.
1.
One of your team members, a shy person, values working quietly on projects and
appreciates an ordered and secure work environment. Which assignment do you think
would be most motivating for this person?
a) An assignment with frequent changes and interruptions.
b) An assignment to lead a new team.
c) An assignment to work on independent research.
d) An assignment to represent the company in the public eye.
2.
You have directed one of your team members to complete a task, and he has tried to
take your directions and work on the project independently. Once the job is completed, you are disappointed to find that it was not done the way you had envisioned
it. As a manager, which response would you consider most appropriate?
a) I guess I did not adequately explain to you what I had in mind. Let me try to explain
it better.
b) I feel very disappointed that you did not do what I specifically asked you to do.
c) If you are not willing to follow my directions exactly, I will find someone who is.
d) I guess if I want something done right, I have to do it myself.
3.
Tom is a manager who maintains an optimistic outlook and lifts employees spirits with
his unique sense of humor. The employees feel that Tom listens to their concerns and
looks out for them in an ever-changing organization. As a result of this, his employees
want to work harder. This results in Toms team having one of the highest productivity
rates in the organization. His employees morale is usually fairly high, and they feel
like they can have fun occasionally on the job. Tom appreciates how much work the
team processes daily. Based on this scenario, what interpersonal skill is Tom displaying?
a) Communications skills
b) Decision making skills
c) Team building skills
d) Influencing skills
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LESSON 1
4.
You are leading a team that is contemplating instituting new work processes to help
improve productivity. Your productivity has fallen off, deadlines are not being met,
and the team members are complaining about a lack of resources as well as being
overworked. The management has blamed the employees work habits and inefficiency, while employees have complained about managements failed leadership and
general myopia. What is the most important decision you will make while tackling your
teams problems?
a) Develop an individual strategy to deal with each problem.
b) Search for an underlying cause of problems.
c) Avoid involving individuals from outside your immediate team.
d) Always assume that the cause of your problem was a major change.
Lesson 1 Follow-up
In this lesson, you discovered that a solid foundation is the essential building block to successfully managing projects. You identied the project management process groups that are
recognized in the trade as good practice on any given project most of the time across industries. You also identied the high standards for ethical behavior and professional conduct that
are outlined in the PMI Code of Conduct, along with the interpersonal skills required for a
project manager. Now you are better prepared to initiate a project in your organization, ensuring that your project starts out right and is positioned for success.
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1.
How do you think that developing the ability to tailor each of the five project management process groups to meet the needs of a specific project or phase will improve your
chances of success?
2.
How do you think that adhering to the guidelines included in the PMI Code of Conduct
will help you navigate difficult interactions within your practice of project management?
LESSON 2
LESSON 2
Lesson Time
3 hour(s), 15 minutes
Initiating a Project
In this lesson, you will initiate a project.
You will:
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LESSON 2
Introduction
Project management is an integrated endeavor composed of ve interlinked process groups and
their component processes. Initiating is the rst of ve process groups that you will perform
on virtually every project you manage. In this lesson, you will initiate a project, a critical rst
step in laying the foundation for your projects success.
Starting a project is like starting a new job; the more you know about the company, your team
members, and what is expected of you, the more likely you are to hit the ground running and
make a good impression. Ensuring that your project starts out right will save you time and
resources. It will also eliminate the need to backtrack once your project is officially underway.
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LESSON 2
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LESSON 2
TOPIC A
Examine the Project Management
Context
Before you can initiate a project, you need to identify how project management functions
within an organization and how each part of project management relates to the whole. In this
topic, you will identify the coordinated and interdependent efforts of program management,
portfolio management, and operations management, and explore the ways in which they serve
the strategic objectives of the business.
You want to work effectively within the hierarchy of centralized project management efforts,
and to do this you need to be conversant with the project management context: the overlapping
ways in which people use project management inside the workplace.
Program Management
Denition:
Program management is the centralized, coordinated process of managing a program in
accordance with the business strategic objectives. It helps realize benets that cannot
be obtained from managing individual projects. The distinguishing characteristic of
program management is that it requires managers to manage related and interdependent
projects by allocating resources, prioritizing efforts, resolving issues, and maintaining
the related projects alignment with business objectives in an integrated manner.
The following is a real-world example.
Portfolio Management
Denition:
Portfolio management is the effective management of programs and independent
projects to achieve strategic goals of an organization. Portfolio management allows
managers a global, top-down view of the health and viability of all the projects in the
group. The projects collected in a portfolio and managed together may or may not be
interdependent, but they are grouped together to give management the long view of the
organizations projects and their adherence to organizational objectives.
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LESSON 2
Example: Managing a Portfolio in an Insurance Company
The senior manager of an insurance companys information management group uses
portfolio management to oversee several unrelated projects, including information technology expenditures, customer relationships, and data warehouse support. Part of this
effort includes making sure that all of the projects included in the portfolio, across the
board, are aligned with the business strategic objectives and priorities.
Levels of Hierarchy
It is unlikely that a project manager would have responsibility for portfolio management, which, in the hierarchy of most organizations, would remain in the hands of the
most senior levels of management. As you strive for greater professional growth and
PMI certication, you should have an understanding that portfolio management
resides at the top level of the organizational hierarchy, and program management
resides between that and individual project management.
Characteristic
Project
Program
Portfolio
Scope
Project objective or
scope is dened
when the project
starts and is progressively
elaborated throughout its life cycle.
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LESSON 2
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Characteristic
Project
Program
Portfolio
Change
Project managers
must identify and
implement processes
to manage and control changes in the
projects.
Planning
Project planning
occurs throughout
the project life
cycle. As a project
progresses, highlevel information is
introduced into the
detailed project
plans.
A program plan is
developed during the
initial stages of the
program. Detailed
high-level plans are
created laterat the
component level.
Portfolio managers
manage the required
processes and communication related to
the portfolio.
Management
Project managers
handle or manage
their respective
project teams.
Program managers
provide vision and
overall leadership for
their constituent
projects and also manage program staff.
Portfolio managers
manage the portfolio
management staff.
Success
Success is measured
by the quality of the
product, compliance
to project timelines,
budget, and degree
of customer satisfaction.
Success is measured
by the degree to which
the program attains the
benets, fullls the
needs for which it was
undertaken, and
achieves business
objectives.
Success is measured
in collective performance of all
components in the
portfolio.
Monitoring
Project managers
monitor the production of products or
services that the
project is intended
to produce.
Program managers
monitor the progress
of a programs constituent projects, and
ensure that the program components meet
the overall goals,
schedules, budget, and
the expected program
benets.
Portfolio managers
monitor collective
performance and
value indicators.
LESSON 2
Operations Management
Denition:
Operations management is the management of resources and processes involved in
producing and delivering products and services. It ensures that business operations are
efficient and effective and that the quality of goods or services produced is optimal.
The operational processes and products are aligned with the business requirements of
the organization. Therefore, the operations manager must ensure that these processes
and products are continuously revised to accommodate the changes made to the business and organizational requirements. Operations management also includes identifying
the best practices and implementing them in the existing processes and systems.
Example: Operations Management in a Petrochemical Company
A petrochemical company has assigned Steven Edwards as the operations manager of
its new renery. Steven has been handling the operations of the new facility since last
month. He has identied the roles and responsibilities required to effectively carry out
the identied operational works and dened the processes and procedures to be followed by each team. He also talked with the operations managers of other plants to
identify the best practices they follow. In addition to this, Steven is also involved in
managing daily production activities; administering routine maintenance of the plant;
handling wage increases; and supervising raw material purchases, grievance-handling,
logistics, and supply of nished products to the market. He also ensures that his work
is in line with the current organizational strategies and procedures.
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LESSON 2
ACTIVITY 2-1
Describing Project Management Context
Scenario:
OGC is a $2 billion company established in the United States. Its annual turnover has been
increasing consistently. There are several programs under the ve portfolios that meet the companys strategy. You are a project manager at OGC and are required to oversee projects from
different programs. Periodically, the senior management reviews the projects and takes action if
it does not meet the strategic goals.
1.
Based on the scenario, who is responsible for portfolio management within the organization?
a) Project managers
b) Project sponsors
c) Stakeholders
d) Senior management
2.
3.
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LESSON 2
TOPIC B
Examine Project Selection
Now that you have a sound understanding of how project management functions within an
organization, you need to identify the ways in which decision makers make critical choices
among competing projects. In this topic, you will identify some of the most signicant components of project selection, which include project selection criteria, project selection methods,
and project selection decision models. You will also explore some of the different approaches
for conducting analyses, such as capital budgeting and feasibility analyses.
In increasingly competitive business environments, there will always be projects competing for
funding, resources, and priority. As a professional project manager, you will typically not be
responsible for selecting the projects that your organization will pursue, but you need to understand the methodologies behind making sound choices about which projects to pursue,
prioritize, and fund, and when. Applying appropriate project management methodology to this
area will increase your chances for success.
Business Requirements
Denition:
Business requirements are the pressing organizational needs or market stimuli that
drive decision-makers to sponsor projects and to prioritize competing projects. They
may also be referred to as problems and opportunities. Business requirements
force management to make critical choices about which projects to authorize, and
when.
Example: Business Forces
Business requirements may include forces such as:
Market demands.
Organizational needs.
Customer requests.
Technological advances.
Legal requirements.
Social needs.
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LESSON 2
As a professional project manager, you will typically not be responsible for selecting the projects that
your organization will pursue, but you need to understand the methodologies that decision makers use
when choosing which projects to pursue, prioritize, and fund.
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Method
Description
Mathematical models
Use different types of mathematical formulas and algorithms to determine the optimal course of action. They may consider variables such
as business constraints, the highest possible prot that could be made
on a project, and the laws and safety regulations that govern business
operations.
LESSON 2
Project Selection Factors
Project selection can be difficult because each project may present a complex array of
seemingly incomparable selection criteria. Economic and technological considerations
often inuence project selections. In many application environments where ecological,
health, and ethical impacts are increasingly important, often the only way to choose
from many different project alternatives is by relying on unsubstantiated professional
judgment or past experience. To improve the efficiency and effectiveness of the assessment, many organizations use formal decision models to select the appropriate project
to initiate.
Capital Budgeting
Capital budgeting helps senior executives make determinations about when and whether to
make signicant investments in capital expenditures such as new equipment, machinery, and
facilities. Capital budgeting is often used if a project is large or if it is likely to involve the
purchase of xed assets. In these cases, the decision makers may use formal methods such as
payback period, discounted cash ow, and Net Present Value (NPV).
Rating System
Description
Decision tree
Criteria proling
Weighted factor
Q-sorting
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LESSON 2
Rating System
Description
Delphi technique
Feasibility Analysis
Denition:
A feasibility analysis gives management the technical and operational data they need to
make a decision about project selection. In many cases, the feasibility analysis is based
on expert judgment about current technological developments, in-house technical capabilities, and historical data relating to previous project phases.
If the feasibility analysis is a formal study, it should include:
Summary and evaluation of available technologies that could be used to solve the
problem, including the potential output quality of each.
Historical data, such as wind data collected over a year, a wind energy assessment, and a wind speed frequency distribution.
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Technical data, including an analysis of the anticipated power quality and stability.
Financial and economic data, including detailed information about projected costs,
capital expenditures, and operational and management costs.
A conclusion, which summarized the analysts ndings and made a recommendation regarding the wind turbines feasibility.
LESSON 2
Cost-Benet Analysis
Denition:
A cost-benet analysis presents a projects estimated costs alongside its predicted benets to help decision makers make informed decisions about project selection. Costbenet analyses may be formal or informal. Although they contain quantitative
information, they are merely forecasted expectations, rather than hard data. It is important to recognize and document any assumptions used to derive the cost and benet
forecasts.
The costs include current operating costs and expected project costs related to the
function under analysis. The benets include quantiable benets, such as increased
sales or reduced costs expected as a result of the project, and intangible benets, such
as enhanced image or brand awareness that can only be described subjectively.
Example: Cost-Benet Analysis for Developing an E-Commerce Capability in a
Retail Firm
The senior management of a large retail rm is considering a proposal for the development and addition of an e-commerce capability on their existing website to increase
revenue. Before committing, management asks each department director to evaluate the
feasibility and provide rough cost estimates. The directors then agree that the project is
indeed feasible given their current capabilities and should cost around $25K.
The VP of Sales and Marketing estimates that the e-commerce site will result in a 5%
increase in sales in the next ve years. Given the companys current threshold of $1
million, the estimated improvement would result in an additional $50K in sales over
the next ve years. With the $25K in upfront costs, the net benet is estimated to be
$25K. The cost-benet analysis results in a rough estimation of the companys net
gain.
Lost Opportunity Costs
Projects 1, 2, and 3 were considered for funding. These projects showed a net prot of
$120K, $350K, and $400K, respectively. The logical decision, with minimal information, is to select project 3. If the project team selects project 3 and does not execute
projects 1 and 2, the team loses the prot that could be gained by executing those
projects. In this example, the team loses $470K because they did not execute those
projects. This is lost opportunity costs.
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LESSON 2
ACTIVITY 2-2
Reviewing Project Selection
Scenario:
So that you can best understand the priorities and focus of the PMO selection process, you are
meeting with OGCs senior management. But before the meeting, you wish to test your knowledge on the standard project selection processes.
1.
2.
Match the rating and scoring system on the left with its description on the right.
Decision tree
a.
Criteria proling
b.
Weighted factor
c.
Q-sorting
d.
Delphi technique
e.
Choose the option to which the OGCs project selection criteria should be linked.
a) Their strategic objectives
b) Their cost-benefit analysis
c) Their feasibility analysis
d) Root cause analysis
3.
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LESSON 2
4.
You have moved into the feasibility analysis and cost-benefit analysis of project selection. One project budgeted for $100,000 came out of the selection process. This is the
company-wide training initiative to be implemented for all project managers to adhere
to PMO project management standards and guidelines. The intent of the training is to
ensure that each member of the project management team understands the scope,
time, and costs in managing competing project requirements. The program will include
specific technology training in the use of a software tool that OGC recently purchased
that totaled $20,000 so that managers can create, manage, and track their projects.
Currently only 10% of the project managers are using the software. One senior manager is questioning the need for the budget to be as high as $100,000. What are your
justifications for the allotted budget? What are the benefits?
TOPIC C
Prepare a Project Statement of Work
As a project manager looking for efficiencies and performance improvement in your projects,
you need to plan how to acquire project resources by crafting effective statements of work,
which provide enough detail that internal resources and potential sellers can evaluate their
capability to perform it. In this topic, youll focus on creating an effective statement of work.
Effective project management requires you to reduce costs, avoid rework, and streamline
efforts when possible. An effective statement of work describes the work being sought in sufficient detail so that potential sellers and internal resources can evaluate their capability to
perform it appropriately. This saves time, effort, and money, and increases your projects
chances for meeting the requirements of the business.
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LESSON 2
Example: A Project Statement of Work
Figure 2-3: Project statement of work for the OGC PM Training Roll-Out
project.
Internal or External SOW
A SOW may be internal, supplied by the projects sponsor in response to an organizational need, or external, supplied by a potential client during a bidding process. An
external project SOW could be included with a request for a proposal or as part of a
contract.
Review the product description to ensure that you fully understand the scope of
the work being procured.
If there is no standard SOW format for your organization, you may be able
to modify a SOW from a previous, similar project.
Determine if any collateral services are required from a seller external to the organization as a part of the contract.
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LESSON 2
List all major identiable results of the work being performed on the
project.
List every person, work group, or material that will perform or be used
to perform actual work on the project.
Estimate the actual hours of work they will devote to the project.
Include any event or activity that has the potential of affecting the
timeline for completion.
Have the SOW reviewed by a knowledgeable third party to ensure that it is complete, correct, and understandable.
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LESSON 2
Without exception, all managers will use the project management scheduling and
tracking software tool. OGC plans to use a local training center to provide training on the standard features of the software. The goal is to locate a training
provider that can accommodate at least 12 individuals at a time; that can offer
basic, intermediate, and advanced training for the software; and that can provide
after-training support.
OGC will also provide internal training on the use of customized reporting features and customized views that stray from standard software training. There are
high expectations that the scheduling and tracking capabilities of this software
will provide senior management with the most up-to-date information on the status of each individual project and its impact on the business transformation.
Only 10 percent of the project managers in OGC have actually used the software
tool to manage their projects. There are approximately 50 managers who will take
the training, and three members of the PMO have been selected to create the
project Statement of Work (SOW).
The format of the Project SOW used in this activity is just an example of how a Project SOW can be
formatted.
1.
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LESSON 2
2.
Based on the scenario, which one or more of the following should be included in the
SOW?
a) A clear description of what is required for the internal and external training.
b) The specifications as to how both the internal and external training will be produced
and methods for ensuring that the specifications have been met.
c) A detailed breakdown of all deliverables that will be required to complete the
project.
d) A list of the human resources or work groups that will perform actual work for the
training project.
e) The estimated date of completion for both the internal and external training classes.
3.
Yes or No? Based on the scenario, do you think that it will be necessary for OGC to create an additional external SOW for this training project?
Yes
No
4.
From the C:\085042Data\Initiating a Project folder, open the List of Deliverables and
Resources document to use as a guide while creating the project statement of work.
5.
From the C:\085042Data\Initiating a Project folder, open the Blank OGC Project Statement
of Work document and, based on the scenario, complete the project statement of work.
6.
Compare your Project Statement of Work document with the Completed OGC Project
Statement of Work document, in the C:\085042Data\Initiating a Project\Solutions folder.
TOPIC D
Create a Project Charter
Determining the appropriate project management processes to apply to your project is an
important step in the initiating process. However, before you can apply organizational
resources to project activities, you need formal authorization to do so. In this topic, you will
create a project charter.
To accomplish project objectives, you need the support of the organization behind you. Without it, you may be unable to convince anyone that your project is valuable to the organization
or obtain the resources you need. An effective project charter ensures that you gain your organizations support for the project and the authority to apply resources to project activities.
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LESSON 2
Project Charters
Denition:
The project charter is a document that provides a clear, concise description of the
business needs that the project is intended to address. It makes a project official; it
authorizes the project manager to lead the project and draw on organizational resources
as needed. The project charter documents initial assumptions about the project, any
known constraints, and the expected results.
Example: A Project Charter
Figure 2-4: Project charter for the OGC PM Training Roll-Out project.
Sample Project Charter
To view a sample project charter, open the C:\085042Data\Initiating a Project\
Solutions\Completed Project Charter document.
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LESSON 2
Input
Description
Business case
A document that justies the investment made on a project and determines the benets expected from the project. The reasons for creating
the business case include market demand, organizational and social
requirements, and customer requests.
Contract
The processes and procedures for accomplishing work and the corporate knowledge base for storing and retrieving information. For project
charter development, organizational process assets include policies,
procedures and guidelines, templates, methods for approving and issuing work authorization, and communication requirements. The
corporate knowledge base may include a process measurement database, project les, conguration management, nancial data, and
historical information.
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LESSON 2
Tools and Techniques
Description
Expert judgment
Output
Description
Project charter
Business Cases
Denition:
A business case is a brief document that justies the investments made for the project
and describes how a particular investment is in accordance with the organizations
policy. It outlines the technical, investment, and regulatory factors that inuence a
project. The business case provides a framework to link an investment proposal to the
achievement of an organizational objective.
Example: Business Case for the Geothermal Energy Project
Senior management at OGC called a meeting to review project selections by the PMO.
As project manager, Barbara Tolliver is required to present a business case that outlines the technical, investment, and regulatory factors inuencing the geothermal
energy project. Barbara used a cost estimate to justify the investments made for the
project.
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Component
Description
Business need
Project contribution
LESSON 2
Component
Description
Stakeholders
Constraints
Strategic risks
Lists the risks that the project may face and the possible risk management measures.
Benets evaluation
Project roles
Lists the members of the project team and their respective job roles in
the project.
Contingency plan
Name, title, and contact information of the initiating authority (usually the
customer or sponsor).
What are the circumstances that generated the need for the project?
How will this project address the business need, opportunity, or threat for
which it is intended?
Are there any known time, cost, scope, quality, or resource issues or factors
that will limit the way you and your project team can approach the project?
Are there any factors or issues that you and your project team will presume
to be true, real, or certain in order to begin planning your project?
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LESSON 2
Ensure the person with the required knowledge and authority signs the project
charter.
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Scenario:
Your project SOW is completed and you have just nished another meeting with Vicky Morris,
who requested that you create the project charter for the training initiative. Vicky will sign the
authorization for the project upon its completion. The project has been given the name OGC
PM Training Roll-Out. The PMO has allocated a budget of $100,000 for this project. The
project must nish no later than September 20th due to the start of phase one of the business
transformation.
Before creating the project charter, you decide to review your notes from previous meetings.
The training will include an overview of the management system that has been
developed for tracking and reporting on multiple, simultaneous projects. One of
the organizational goals is to complete this training before the initiation of all
other business transformation projects.
There are high expectations that by initiating this project, the scheduling and
tracking capabilities of this software will provide senior management with the
most up-to-date information on the status of each individual project and its impact
on the business transformation project.
All managers will be required to use the project management scheduling and
tracking software when managing their future projects.
OGC plans to use a local training center to provide training on the standard software due to classroom and computer limitations within OGC.
The training provider must be able to provide the application training at a basic,
intermediate, and advanced level.
OGC will provide in-house additional training tailored for the business transformation program.
There are approximately 50 managers who will need to complete the training.
The supervisors of these managers would like to know their performance in the
training.
1.
How would you describe the goals and objectives of this project?
2.
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3.
Are there any assumptions that you would include? If so, describe them.
4.
Based on what you know at this point, how would you describe the primary
deliverables for this project?
5.
Yes or No? At this time, are there any real constraints in the project charter?
Yes
No
6.
Open the file C:\085042Data\Initiating a Project\Blank Project Charter and, based on the
scenario, complete the project charter.
7.
Compare your Blank Project Charter document with the C:\085042Data\Initiating a Project\
Solutions\Completed Project Charter.
TOPIC E
Identify Project Stakeholders
You have a project charter providing the formal authorization to apply organizational resources
to project activities. Before you can begin the planning process, it is vital to identify the
groups or individuals who will have a role to play either directly or indirectly in the project. In
this topic, you will identify the stakeholders of your project.
Stakeholders are an integral part of any project and extensively support the success of the
project. It is imperative that you document the relevant information regarding the stakeholders
interests and expectations as they strongly inuence a projects product or service.
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LESSON 2
Input
Description
Project charter
Provides information about internal and external parties who are impacted
by the project, namely project sponsor(s), customers, key team members,
groups and departments participating in the project, and other people and
organizations affected by the project.
Procurement documents
Enterprise environmental
factors
The enterprise environmental factors that can inuence the identify stakeholders process include:
The culture and structure of the organization or company.
Government or industry standards, namely product standards or regulations.
Availability or unavailability of web-based project management systems in the organization.
Extent of complexity and presence of condentiality needs on the
project.
Organizational process
assets
The organizational process assets that can inuence the identify stakeholders process include:
Stakeholder register templates.
Lessons learned from previous projects.
Stakeholder registers from previous projects.
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LESSON 2
Tools and Techniques
Description
Stakeholder analysis
Expert judgment
Identication and listing of stakeholder groups and individuals with specialized training or knowledge on the subject area can be sought from senior
management, other units within the organization, key stakeholders, project
managers who worked on similar projects, Subject Matter Experts (SMEs)
in business or project area, industry groups and consultants, and professional and technical associations. Expert judgment is obtained through
individual consultations, such as one-on-one meetings and interviews.
Expert judgment could also be obtained through a panel format, such as
focus groups and surveys.
Output
Description
Stakeholder register
Stakeholder management
strategy
Stakeholder Analysis
Stakeholder analysis is the formal process of identifying all of the stakeholders of a project by
gathering and analyzing quantitative and qualitative information, and building coalitions at the
onset of a project by identifying their needs, objectives, goals, issues, and impact.
Stakeholder analysis is performed through a series of steps:
1. Identify all potential stakeholders of the project.
2.
3.
Plan for likely stakeholder reaction or response and plan how to enhance their support and
mitigate potential negative impact on the project.
Ideally, project managers will question the stakeholders about their interest in the project, their
desired outcome, their goals, and any lessons learned from prior projects. This increases the
effectiveness of the stakeholder analysis process. As the project progresses, the analysis will be
validated against the current state of project work and stakeholders changing needs.
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Stakeholder Registers
Denition:
A stakeholder register is a document that identies stakeholders of a project with
information that includes their identication, assessment, and stakeholder classication.
Typical stakeholder register entries may include the stakeholder name, organizational
position, location, role in the project, contact information, requirements, expectations,
inuence on the project, specic interest in the project or a phase, whether internal or
external, and whether for, against, or neutral to the project.
Example: A Stakeholder Register
Figure 2-8: Stakeholder register for the OGC PM Training Roll-Out project.
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Example: A Stakeholder Analysis Matrix
Stakeholder Mapa chart showing the interest of different stakeholders and levels
of participation required from each identied stakeholder.
Stakeholder Lista list of various stakeholder groups involved in the project and
their management.
Perform a review of project and related information to ascertain the list of internal
and external parties who may be impacted by the project. The documents or information are a valuable source for stakeholder identication. These may include:
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Project charter
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Procurement documents
Analyze your lists to identify the key stakeholders of the project. These include
anyone in a decision-making or management role who is impacted by the project
outcome, such as the sponsor, the project manager, and the primary customer.
Determine and classify the potential impact or support that each stakeholder could
generate during the project life cycle and dene an approach strategy. You need to
prioritize the key stakeholders to plan for efficient communication and management of their expectations.
Assess how stakeholders would react or respond in various situations during the
project life cycle. You need to plan how to inuence the stakeholders to enhance
their support to the project and also mitigate any potential negative impacts arising from them.
Document stakeholder information to include identication, assessment, and stakeholder classication in the stakeholder register.
Devise a stakeholder management strategy to increase support and minimize negative impacts of stakeholders to the project.
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1.
How would you approach ascertaining the total list of project stakeholders for the OGC
PM Training Roll-Out project?
2.
True or False? Members of the OGC PM Training Roll-Out project team are considered
to be stakeholders.
True
False
3.
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How would you identify the positive and negative stakeholders of the project?
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4.
5.
How would you establish levels of stakeholders based upon their interest in the project
and the impact they can have on the project?
6.
7.
Which documents can you use as a basis for your stakeholder register?
8.
Open the Blank OGC PM Training Roll-Out Stakeholder Register document from the C:\
085042Data\Initiating a Project folder, and based on the scenario, complete the
stakeholder register.
9.
Compare your Blank OGC PM Training Roll-Out Stakeholder Register document with the
Completed OGC PM Training Roll-Out Stakeholder Register document in the C:\085042Data\
Initiating a Project\Solutions folder.
Lesson 2 Follow-up
In this lesson, you explored the signicant elements of initiating a project, which is one of the
ve interlinked process groups and a critical part of every project you will ever manage. By
effectively initiating your project and laying a solid foundation for the work that will follow,
you will signicantly increase your chances for success.
1.
Consider the importance of making sound decisions about project selection. How do
you think this will affect your eventual chances for success?
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2.
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Consider the benefits of identifying project stakeholders. How do you think you can
use this process to your advantage on your next project?
LESSON 3
LESSON 3
Lesson Time
3 hour(s)
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LESSON 3
Introduction
With your project dened at a high level and authorized by the sponsor, youre ready to begin
planning your project. Project planning is the second of ve project management process
groups that you will perform on most projects you manage. In this lesson, youll use the rst
four component processes in the planning process group to plan project work.
As the project manager, its up to you to dene how the project will be carried out. Youll also
be responsible for identifying the stakeholders needs so that you can ensure their satisfaction.
With the project objectives and scope clearly dened and documented, you can lead your
project toward the agreed-upon measures of success.
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TOPIC A
Identify the Elements of a Project
Management Plan
Your project has been authorized and the charter names you project manager. Youre eager to
get started. But before any progress can be made, youll need to plan how your team will manage the project to its successful completion. In this topic, youll identify the elements of a
project management plan.
Developing a realistic, usable, dynamic project management plan helps the project team stay
focused on the objectives and purpose of your project. Continually updating your project management plan as new information becomes available will help you to circumvent problems
before they develop and ensure project work occurs according to the plan.
A list of the project management processes that will be utilized and the level of
implementation for each.
A description of the tools and techniques that will be used to complete those processes.
Project management plans may be very detailed or a simple summary, and might
include any number of subsidiary management plans.
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Subsidiary Plan
Description
Documents how requirements will be analyzed, documented, and managed throughout the project.
LESSON 3
Subsidiary Plan
Description
Describes the format and establishes the criteria for planning, structuring, estimating, budgeting, and controlling
project costs.
Provides details that document the approach to communicate efficiently and effectively with the stakeholders.
Describes how the procurement processes will be managed from developing procurement documents through
contract closure.
The subsidiary plans may be formal or informal, highly detailed, or broadly framed, and are created based on the
requirements of the project.
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Input
Description
Project charter
Outputs from planning processes Baselines and subsidiary management plans that are outputs from
other planning processes are inputs to the develop project management plan process. The baselines and subsidiary management plans
are integrated to create the project management plan and any updates
to these in the respective planning processes would require the
project management plan to be updated.
Enterprise environmental factors
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Tools and Techniques
Description
Expert judgment
Output
Description
ACTIVITY 3-1
Identifying the Elements of a Project Management Plan
Data Files:
1.
As you review the OGC Project Management Plan outline, identify the elements that
your organization requires, if any, for your project management plans.
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2.
Match the project management plan input with the appropriate description.
Project charter
a.
Enterprise environmental
factors
Organizational process
assets
3.
This input uses baselines and subsidiary management plans that are
integrated to create or update the
project management plan.
b. This input uses existing processes
that may impact a projects success
such as policies, guidelines, or
knowledge gained from previous
projects.
c. This input includes factors that inuence the projects success, such as
anything from existing assets to external factors that should always be
considered during plan development.
d. This input authorizes and provides
vital information relating to the
project based on which the project
management plan is built.
Which subsidiary plan of the project management plan deals with closure of contracts?
a) Scope management plan
b) Procurement management plan
c) Process improvement plan
d) Communications management plan
TOPIC B
Document Stakeholder
Requirements
You identied the elements and are integrating the various subsidiary plans into the project
management plan. In the process of nalizing your project management plan, you need to be
aware of the project stakeholder requirements and document them so as to avoid missing critical information. In this topic, you will document stakeholder requirements.
As a project manager, you have to analyze the needs of the project stakeholders. A clear and
authentic documentation of those needs will be critical to the projects success. Identifying and
documenting the stakeholders needs will permit you as a project manager to provide probable
solutions, and to assure the stakeholders that none of their needs are being overlooked.
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The Collect Requirements Process
In the collect requirements process, the project manager denes and documents the stakeholders needs and expectations to meet the project objectives. The requirements need to be
elicited, analyzed, and recorded in sufficient detail from the sponsor, customer, and other stakeholders of the project to enable measurement during project execution.
The collected requirements form the basis for planning the cost, schedule, and quality for the
project.
Input
Description
Project charter
Stakeholder register
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Tools and Techniques
Description
Interviews
Focus groups
A trained moderator guided interactive discussion that includes stakeholders and subject matter experts to elicit their expectations and attitudes
towards the proposed product, service, or result of the project.
Facilitated workshops
Group activities that are organized to identify project and product requirements, and include brainstorming and the Delphi technique.
Observations
Prototypes
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Output
Description
Requirements documentation
Describes how the individual requirements would meet the business need for the project. Its format ranges from a simple
document listing all the requirements categorized by stakeholder
and priority to more elaborate forms containing executive summary, detailed descriptions, and attachments.
Documents how the project requirements will be analyzed, documented, and managed throughout the project life cycle.
A table that links the requirements to their origin and tracks them
throughout the project life cycle.
LESSON 3
Facilitated Workshops
Denition:
Facilitated workshops are group sessions that bring together key multidisciplinary or
cross-functional stakeholders to dene the project or product requirements for the
project. Facilitated workshops are an important technique to quickly dene crossfunctional requirements of the various stakeholders of the project. It helps to build
trust, foster relationships, reconcile differences, and improve communication among the
stakeholders, thereby leading to enhanced stakeholder consensus. Because multiple perspectives are available, the issues or questions related to the requirements are resolved
quickly.
Example: Conducting Facilitated Workshops for OGCs Warehouse Management
Software Project
Vicky Morris, the project sponsor, has approved the project charter for OGCs Warehouse Management Software project. The project charter lists stakeholders from
various departments such as the Process Development and Implementation department
and the key project managers and administration personnel, especially those arranging
the training logistics. It also includes key PMO staff, and the Chief of the Business
Transformation team. To build stakeholder consensus, Mark Anderson, the project
manager of OGCs Warehouse Management Software project, decides to conduct a
facilitated workshop rather than holding one-on-one discussions with the key stakeholders. He invites the key project stakeholders for a Warehouse Management
Essential Requirements workshop.
Mark coordinates discussions with key stakeholders during the workshop to dene the
requirements of this project. Discussions in the workshop highlight the differences
among various stakeholder requirements. Mark is not only able to reconcile the stakeholder differences, but also to obtain a consensus on all the project requirements.
Description
Brainstorming
Used to generate and create multiple ideas related to project and product
requirements.
A voting process is used in this technique to rank the most useful ideas
obtained through brainstorming. This ranking allows for further brainstorming or for prioritization.
Affinity diagram
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LESSON 3
Group Decision Making Techniques
Group decision making techniques are assessment processes that assess multiple alternatives to
arrive at an expected outcome. These techniques are used to generate, classify, and prioritize
project or product requirements. The outcome is the resolution of future action for the project.
Various methods are adopted to reach a group decision.
Method
Description
Unanimity
Majority
Requires support from more than 50% of the members of the group to indicate
the selected decision.
Plurality
The largest batch in the group decides for the group even if a majority is not
achieved.
Dictatorship
Requirements Documentation
Denition:
Requirements documentation describes how individual requirements meet the business
requirements of the project. The requirements that are documented in the requirements
documentation must be unambiguous, traceable, complete, consistent, and acceptable to
key stakeholders of the project.
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Example: Requirements Document
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Example: Requirements Management Plan for OGCs Warehouse Management
Software Project
Mark Anderson, the project manager for OGCs Warehouse Management Software
project, prepares the requirements documentation for the project. Mark documents the
requirements collected during the Warehouse Management Essential Requirements
workshop and through subsequent interviews conducted with each stakeholder. He creates the requirements management plan with information on how these requirements
will be analyzed, documented, and managed throughout the project life cycle.
Figure 3-5: Requirements traceability matrix for the OGC Warehouse Management Software project.
Forward traceability in the gure implies that it is possible to trace a requirement to elements in the
outputs of later phases in the project life cycle.
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LESSON 3
Study the project charter to identify the high-level project requirements and product descriptions.
Examine the stakeholder register to identify stakeholders who can provide information on detailed project and product requirements.
Interviews
Focus groups
Facilitated workshops
Observations
Prototypes
Review and validate the requirements management plan along with the key stakeholders and make sure it:
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The training will include an overview of the management system that has been
developed for tracking and reporting on multiple, simultaneous projects. One of
the organizational goals is to complete this training before the initiation of all
other business transformation projects.
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There are high expectations that by initiating this project, the scheduling and
tracking capabilities of this software will provide senior management with the
most up-to-date information on the status of each individual project and its impact
on the business transformation project.
All managers will be required to use the project management scheduling and
tracking software when managing their future projects.
OGC plans to use a local training center to provide training on the standard software due to classroom and computer limitations within OGC.
The training provider must be able to provide the application training at a basic,
intermediate, and advanced level.
OGC will provide in-house additional training tailored for the business transformation program.
There are approximately 50 managers who will need to complete the training.
The supervisors of these managers would like to know their performance in the
training.
LESSON 3
1.
What would you do to identify the internal stakeholders for the OGC PM Training RollOut project?
2.
Where would you start the process of finding the external stakeholders for the OGC PM
Training Roll-Out project?
3.
Which is the method used to identify requirements by studying the individuals in their
work environment or while using the product?
a) Surveys
b) Facilitated workshops
c) Observations
d) The Delphi technique
4.
For the OGC PM Training Roll-Out project, which one or more of these tools and techniques could you use initially to identify the requirements of the stakeholders?
a) Interviews
b) Focus groups
c) Facilitated workshops
d) Prototypes
5.
6.
Which documents can you use as a basis for your requirements documentation?
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LESSON 3
7.
Open the C:\085042Data\Planning Project Work\WIP OGC Requirements Document document and based on the scenario, complete the requirements documentation.
8.
TOPIC C
Create a Scope Statement
You have the rst of many subsidiary plans incorporated into your project management plan.
Now you can focus on the dene scope process, a critical planning process essential to achieving project success. In this topic, you will create a scope statement.
A clear and concise scope statement will help you dene the success that will guide your
project. Without a strong scope statement, you could end up spending valuable time and
resources on work that isnt even supposed to be part of your project.
It may also include initial project organization, dened risks, schedule milestones, initial work breakdown structure, and approval requirements.
The project management team renes the project scope statement in the dene scope
process.
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Example: A Project Scope Statement
Figure 3-6: Project scope statement for the OGC PM Training Roll-Out project.
Sample Project Scope Statement
To view a sample project scope statement, open the C:\085042Data\Planning Project
Work\Solutions\Completed Project Scope Statement document.
Component
Description
Project objectives
These are the measurable success criteria for the project. Project objectives
are called critical success factors in some organizations.
Product description
Project requirements
Project deliverables
Project boundaries
The process and criteria for accepting nished products or services resulting from a project.
Project constraints
Factors that limit the way that the project can be approached. These limitations may concern time, cost, scope, quality, resources, and others. For
example, you may be given a project deadline or overall budget that your
project must work within.
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Component
Description
Project assumptions
Statements that must be taken to be true in order for the planning to begin.
For example, if your project requires that you incorporate energy costs into
your budget, you may want to make the assumption that the price of oil on
the project start date will remain the same as it is today in order to create
project cost estimates.
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Input
Description
Project charter
The scope statement will be derived from the project charter. Therefore, if a charter is not used in a performing organization, then
comparable information must be generated.
Requirements documentation
Any relevant, existing process assets such as procedures, and templates that are likely to impact the dene scope process.
LESSON 3
Dene Scope Tools and Techniques
A well-dened scope statement can be created using a variety of tools and techniques.
Description
Expert judgment
Product analysis
Alternatives identication
Facilitated workshops
Help to quickly dene the cross-functional project or product requirements of various stakeholders.
Output
Description
Technique
Description
Functional analysis
Identifying and developing the cost versus benets ratio for each
function of a product. A method for controlling costs while maintaining performance and quality standards. Very common in military
and construction contracts.
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Technique
Description
Systems engineering
Technique
Description
Lateral thinking
Brainstorming
A general creativity technique for generating possible alternatives. Brainstorming methods can be structured or unstructured in approach. The goal
is to generate as many ideas as possible from as many team members as
possible.
Delphi technique
Project Objectives
Denition:
Project objectives are the criteria used to measure whether a project is successful or
not. Objectives must be:
Projects may have one or several objectives, and subobjectives may be added to the
project in order to further clarify the project goals.
Example: Project Objectives for the Arithmetic on a Stick Project
The following objective was developed for a project devoted to the development of an
educational product, Arithmetic on a Stick.
Develop a handheld interactive math game for three- to six-year-olds that includes
four levels of instruction, practice, and remediation in early math skills, based on
national math standards, produced by June 1, 2009, for less than $2.5 million.
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LESSON 3
Note how the objective has the characteristics of a quantiable objective:
The objective species the scope: handheld interactive math game for three- to
six-year-olds that includes four levels of instruction, practice, and remediation in
early math skills.
Rene the project objectives, deliverables, and product scope description from the
requirements documentation.
Update the preliminary project constraints, risks, and assumptions. As the project
scope comes more into focus, the constraints, risks, and assumptions will most
likely need to be reconsidered.
Create schedule milestones so that the client and project team have dates for setting goals and measuring progress.
Include a revised overall cost estimate and dene any cost limitations.
Map out the internal organization with regard to personnel, including management, project teams, and stakeholders. Be sure to include the management
requirements, which will dene how the project scope and changes therein are
managed.
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LESSON 3
Hector reviewed the preliminary constraints, risks, and assumptions and made no
changes. He did modify the schedule to include milestones. Those marked the projected completion dates for major project components. Meanwhile, Hectors team
prepared a revised cost estimate.
To keep the project focused, Hector put together a list of management requirements.
This document dened how the project scope would be managed. Hector also drafted a
project team hierarchy, which dened the roles and stature of project team members.
Finally, Hector worked with the team to review and rene the project specications,
approval requirements, and procedure for accepting the completed product.
Once the scope statement was completed, he distributed it to the project team and
stakeholders.
Scenario:
It is now time for you to create the detailed scope statement that will be included in the Scope
Management Plan for the OGC PM Training Roll-Out. Vicky Morris, the PMO director, has
provided you with the PMOs scope statement template.
To create the scope statement, you gather the following information:
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Development of the OGC Project Management Plan reference manual and development and implementation of the internal training content and instruction for all
project managers is required. Project management software training is to be completed by all project managers within the organization.
All training must be completed on or before September 20th. The training provider will provide the pre-and post-assessment for assessing managers at 75% or
higher in their understanding of the project management software. The OGC Internal Training Team will create a pre-and post-assessment for assessing managers at
75% or higher in their understanding of OGC project management methodologies
and best practices.
Development of the OGC Project Management Plan guidelines that will be the
focus of the internal training is required. A project management plan reference
document will be developed to be used by all project managers during the business transformation program.
LESSON 3
You are now ready to create the scope statement.
1.
Which documents can you use as a basis for your scope statement?
2.
From the C:\085042Data\Planning Project Work folder, open the Blank Project Scope
Statement document and based on the scenario, complete the scope statement.
3.
TOPIC D
Develop a Work Breakdown Structure
You developed a scope statement that clearly states the objectives and lists your projects
major deliverables. Now you can break down the major deliverables into smaller, more manageable pieces. In this topic, you will develop a Work Breakdown Structure (WBS).
Its always easier to successfully complete a project by breaking it down into smaller, more
manageable chunks. Creating an effective Work Breakdown Structure (WBS) helps improve
the accuracy of your time, cost, and resource estimates by providing a baseline for performance measurement and project control.
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LESSON 3
Geographical location.
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Input
Description
The deliverables listed in the WBS will all be drawn from the project
scope statement.
Requirements documentation
Description
Decomposition
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LESSON 3
Create WBS Outputs
A well-executed WBS yields several outputs.
Output
Description
WBS
The primary result of the create WBS process that will organize deliverables
and work packages into a manageable hierarchy.
WBS dictionary
Scope baseline
Includes the detailed project scope statement, the WBS, and the WBS dictionary.
Project document
updates
Code of Accounts
Denition:
A code of accounts is any system for numbering the elements in a WBS. A code of
accounts system allows project managers to more easily track individual WBS components, which is especially helpful in the areas of performance, reporting, and cost.
Example: Code of Accounts Specied by a School District
A school district requires its schools to comply with a uniform code of accounts so
that it can easily record, track, and document specic types of revenues and expenditures in every school. The code of accounts could be shown as Function/Category/
Program. If functions include administrative salaries (30), teacher salaries (31), and
consultants fees (32); categories include para-professional expenditures (100) and professional expenditures (101); programs include regular instructional (411), special
education (417), and languages (419), then the fee paid to a consultant leading a
teacher training workshop in special education services would be coded 32/101/417.
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Gather the reference materials and other inputs you will need. Some of the materials needed include:
2.
3.
LESSON 3
Determine how you are going to organize the work of your project. Regardless of
the organization, these elements represent the level directly below the project
name on your WBS. The WBS can be created using various methods.
Subdividing the project into phases as the rst level of decomposition and
then subdividing the phases into product and project deliverables as the second level of decomposition.
The project can be subdivided into major deliverables, which can be the rst
level of decomposition.
Making the subprojects conducted outside the organization the rst level of
decomposition and the supporting contract work the second level of decomposition.
Identify the major deliverables, or subprojects, for the project. The major
deliverables should be listed in the scope statement or contract, but your team
may think of more deliverables that are necessary to achieve the projects objectives.
If you are organizing your project work by major deliverables, this step will represent the level directly below the project name. If you are organizing your work
by some other method, the major deliverables will probably be two levels below
the project name.
The PMI recommends that you include project management as a major deliverable on the WBS.
4.
5.
Break down each WBS element into subdeliverables until you reach the work
package level. For each element, ask yourself, In order to create this deliverable,
what subdeliverables will we have to produce? Repeat Step 4.
6.
Validate your WBS using a bottom-up approach. Starting at the work package
level, ensure that:
The lower-level components are necessary and sufficient for the completion
of each decomposed item.
Each element is described as a deliverable (preferably as a noun), and is distinguishable from all other deliverables.
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7.
OGC WBS
Needs Assessment
Training Development
Review the deliverables in the OGC WBS document and answer the questions in this activity.
1.
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When creating the WBS for the OGC Training Roll-Out, what types of reference materials and other inputs could you use?
LESSON 3
2.
Based on the scenario, which work breakdown structure in Group 1 of the OGC Work
Breakdown document follows PMI recommendations for the OGC Training Roll-Out
project?
a) WBS A
b) WBS B
c) WBS C
d) WBS D
3.
As the project manager, you are asked to decompose the WBS deliverables. Which
activity would you perform during decomposition?
a) Assign unique ID numbers to each deliverable.
b) Break the deliverables down into smaller components.
c) Arrange the deliverables into categories, based on risk.
d) Organize the deliverables, based on which project team is responsible for their
completion.
4.
The scenario shows two deliverables that have been partially decomposed during a
recent meeting. Which of these activities are decomposed? Choose all that apply.
a) Assemble Internal Training
b) Identify Resources
c) Needs Assessment
d) Determine External Training Provider
5.
In Group 2, which WBS would most resemble the inclusion of the decomposed
deliverables?
a) WBS A
b) WBS B
c) WBS C
d) WBS D
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The Project Management work component will involve planning project activities,
managing project schedule, cost, scope, project tasks, project communications,
human resources, space and facilities, risks, procurements, and quality.
The Software Design and Development work component will involve the software
design, software build, and the unit test sub components.
The Software Design subcomponent will involve specifying software requirements, dening the software work package, software prototyping, and
detailed designing of the software unit.
The Software Build subcomponent will involve software unit coding and
debugging.
The Unit Test subcomponent will involve planning for unit test, preparing the
unit test case, conducting the unit test, and maintaining the unit test records.
The System Test work component will involve testing the module and subsystem,
testing system integration, acceptance testing, and classifying the identied
defects, tracking defect resolution, and verifying with the metrics.
The Installation work component will involve planning for software installation,
user support documentation, enabling user communications and providing training,
installation management and coordination, testing and verifying the installation,
and monitoring the installation performance.
LESSON 3
1.
Based on the scenario, develop the second-level work components for the WBS.
2.
Based on the points you recorded from the kick-off meeting and discussions with the
stakeholders, what work packages would you include in the Project Management work
component?
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3.
To the WBS you have created, add the subcomponents for the Software Design and
Development work component and their corresponding work packages.
4.
LESSON 3
Lesson 3 Follow-up
In this lesson, you learned that an effective project management plan will ultimately dene the
execution, monitoring, controlling, and closing of your project. You examined the various components of a successful management plan, including the nalized scope statement. You also
created the requirements document, which records your stakeholder requirements. Using these
components, you developed a work breakdown structure and organized your project management plan accordingly. With this knowledge and these skills, you are better prepared to not
only create a strong project plan, but also to manage it successfully.
1.
What factors of the define scope process are the most important to your organization?
2.
In your experience, what are the most critical inputs to developing a WBS?
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LESSON 4
Lesson Time
4 hour(s), 30 minutes
Developing Project
Schedules
In this lesson, you will develop project schedules.
You will:
Dene activities.
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LESSON 4
Introduction
Now that you have planned your project work, you are poised to begin implementation by
developing project schedules, which will drive and guide all the work in your projects. In this
lesson, you will advance your skills by creating the organizational tools you will use in schedule development: a comprehensive project activity list, a robust project network schedule
diagram, and estimations of activity duration. You will also utilize techniques for adjusting
exibility within schedules.
The project schedule is the guiding light of every project, and as such is an essential component of any project management effort. As you strive to achieve PMP certication and to
advance your skills as a professional project manager, you need to maintain a powerful command of all of its related elements. Developing effective project schedules, as well as
developing the skills to manage schedules in response to organizational constraints on time and
resources, will help you bring your projects in on time and on budget.
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TOPIC A
Create an Activity List
The rst step in developing a project schedule is to accurately dene project activities, so that
you can be sure the activities are tied to the project scope and you can mitigate scope creep. In
this topic, youll gather your WBS and other relevant information to create an activity list.
The activity list is a fundamental building block for an effective project schedule and budget.
Dening the activities helps ensure all project activities remain within the project scope so you
can avoid missing critical activities. If you dene exactly what needs to be done, you can
avoid performing unnecessary work.
Activities
Denition:
An activity is an element of project work that requires action to produce a deliverable.
Activities lay the foundation for estimating, scheduling, executing, and monitoring and
controlling the project work. The characteristics of an activity are:
Each of these items requires action to produce a deliverable. Each has an expected
duration and will consume budget and human resources. Finally, they are all named in
verb-noun format.
Activity Components
Activities can be broken down into smaller components. For example, the activity
reserve conference room, could be broken down in the following way:
Determine budget.
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Activity vs. Task
Although the words activity and task may be interchangeable in common usage
and in many organizations, they are not considered synonyms in the PMBOK Guide.
One of your goals as a professional project manager seeking certication should be to
align your language with the language used in the PMBOK Guide whenever possible.
Use the word activity to refer to the components of work performed during the
course of a project. Use the word task sparingly, typically only in reference to
brands of project-management software.
Work Package
Denition:
Work package refers to the planned work or the deliverables that are contained in the
lowest-level component of the work breakdown structure. The work package can be
described as a manageable work effort, or a level at which the cost and schedule for
the work can be easily estimated. Work packages can be broken down or subdivided
into smaller, even more manageable and executable components, called activities.
Because activity denition is the rst step in the schedule development process, activities are also
referred to as schedule activities.
Note that every single component of work is not typically tracked on the master
project schedule. However, work package ownersthose responsible for the completion of the work packagesmay develop a schedule containing the itemized
components of work necessary to complete the activities in the work package.
Example: Sample Work Packages
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The 8/80 Rule
The 8/80 rule refers to a general guideline regarding work packages: they require more than 8,
but fewer than 80, hours of effort to complete. The 8/80 rule helps project managers create the
work package list by identifying which work components should be considered work packages.
Any work component that can be completed in fewer than 8 hours does not rise to the level of
a work package. Any work component requiring more than 80 hours of work is too monumental to be categorized that way.
Large Projects
While the 8/80 rule may be a useful guideline on small projects, it would be impractical to apply it to large projects, which would necessitate tracking millions of work
packages.
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Input
Description
Scope baseline
Enterprise environmental
factors
Include existing policies or rules for dening activities and the lessonslearned document that provides historical information regarding similar
activities in previous projects.
Description
Decomposition
Breaking down WBS work packages into separate activities. The WBS
and the WBS dictionary serve as a base to create the activities.
Templates
Activity lists from previous projects can be used as a model for new
projects. Templates may also contain related activity attributes information such as resource skills, and the hours of effort required.
Expert judgment
Output
Description
Activity list
Activity attributes
Information describing the activities by listing the different components associated with the activities, which include responsible team members and
manpower required. Activity attributes are used to develop project schedules,
and to select, order, and sort planned activities.
Milestone list
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How to Dene Activities
Accurately dening project activities ensures that all project activities are tied to the project
scope, which will mitigate the potentially damaging effects of scope creep.
Guidelines:
To dene activities and create an activity list, follow these guidelines:
First, gather the inputs and resource materials you will need. These may include:
The WBS.
Analyze and decompose each work package of the WBS into activities that will
be required to produce the deliverable.
Consult the scope statement to ensure that activities will enable you to meet
the project objectives.
Evaluate all constraints and assumptions for their possible impact on activity denition.
Once you have decomposed each work package into activities, evaluate your
activity list:
Verify that the activity descriptions are as specic as possible. For example,
if the desired outcome is a revised user manual, describe the activity as
revise user manual, rather than produce new user manual.
Conrm that the activities listed for each work package are necessary and
sufficient for satisfactory completion of the deliverable.
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All WBS codes for this project start with the prex TRN0002.
From the PMO Steering Committee, identify new project management processes
that should be included in the content.
Review the training content based on the information gathered for deciencies and
get feedback from both the Strategic Planning group and the PMO Steering Committee.
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1.
The first step in creating an activity list is to gather your resource materials. Which
items below will be helpful in creating your list?
a) Cost-benefit analysis
b) The WBS
c) The scope statement
d) Activity lists from similar projects
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2.
In the provided table, list the activities and the appropriate WBS codes that are necessary and sufficient for the successful completion of the Assessing Needs work package.
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TOPIC B
Create a Project Schedule Network
Diagram
You created an activity list for your project. Now you can sequence the project activities and
establish the relationship between them. In this topic, you will delve into the sequence activities process and create a project schedule network diagram. You will also examine the
sequencing process and helpful scheduling tools.
You are the project manager for the launching of a new product line. If you do not understand
the sequence in which the project work must occur, you cannot develop an effective schedule.
You will end up with rework and additional costs. Creating a project schedule network diagram for your project will help you uncover the true nature of the relationship between tasks,
avoiding unnecessary work and expense.
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Input
Description
Activity list
Activity attributes
Milestone list
Description
Dependency determination
Output
Description
Show the sequence of all project activities and the logical relationship that exists between them.
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Activity Dependencies
Denition:
An activity dependency is a logical relationship that exists between two project activities. The relationship indicates whether the start of an activity is contingent upon an
event or input from outside the activity. Activity dependencies shape the sequence
among project activities.
Example: Activity Dependencies for Designing Room Layouts
An architect has designed a residence and has a vision for the room layouts. However,
he will not be able to assess the functionality of the design until the builders have
framed in the structure with walls, windows, and a roof. Once the structure is in place,
he will be able to reassess the plans to determine if modications are necessary.
Dependency
Description
Mandatory
Discretionary
A discretionary dependency is dened by the project and project management team at their discretion. It is dened based on the best practices
followed in a specic application area or on specic requirements. If there
is no mandatory or external dependency between two activities, the team
has some exibility in activity sequencing. Also known as soft logic,
preferential logic, and preferred logic.
Example: The sponsor would like to see the books cover design as soon
as possible, so the team may decide to have the cover artwork done before
the inside illustrations.
External
Precedence Relationships
Denition:
A precedence relationship is the logical relationship between two activities that
describes the sequence in which the activities should be carried out. Each activity has
two open points: Start and Finish points. Precedence relationship considers appropriate
logic while connecting these points. Precedence indicates which of two activities
should come rst (the predecessor activity) and which should come later (the successor
activity). Precedence relationships are always assigned to activities based on the dependencies of each activity.
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Example: Precedence Relationship Between Two Activities
An example of the precedence relationship can be: Drywall installation must nish
before painting can begin.
Finish-to-Start (FS)
Finish-to-Finish (FF)
Start-to-Start (SS)
Start-to-Finish (SF)
Lag
Denition:
A lag is a delay in the start of a successor activity. Some relationships require a lag
before a subsequent activity can begin. Lags are determined by an external or mandatory dependency and may affect activities with any of the four precedence
relationships.
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Example: Effects of Lag in FS Relationship
When lag is introduced into a nish-to-start (FS) relationship, the overall elapsed time
required for the chain of activities increases. The start and nish dates of the successor
activity are delayed when there is a lag.
The adhesive must dry until tacky before the laminate can be installed.
In the rst example, the activity that follows the submission of the permit application
is delayed by six weeks due to an external dependency of the application processing
time. In the second example, the installation of the laminate activity is delayed by the
amount of time the adhesive takes to dry. This is a lag due to a mandatory dependency, because the delay is inherent to the work itself.
Lead
Denition:
A lead is a change in a logical relationship that allows the successor activity to start
before the predecessor activity ends in an FS relationship. A lead is implemented when
you need to accelerate a successor activity in order to shorten the overall project
schedule.
Leads will vary in length, depending on the acceleration required by the amended
schedule. Sometimes, a lead introduces a risk of rework as the successor activity starts
before the completion of the predecessor activity, and the complete, comprehensive
inputs may not be available.
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LESSON 4
Example: Effects of Lead in FS Relationship
Project schedule network diagrams may differ in that they may be:
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LESSON 4
Example: A Project Schedule Network Diagram
This gure shows the project schedule network diagram that was constructed using the
precedence diagramming method.
Figure 4-8: A project schedule network diagram using the precedence diagramming method.
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Summary Activities
Denition:
A summary activity is a group of related activities that, for reporting purposes, is
shown as a single aggregate activity in a bar chart or graph. It may also be called a
hammock activity. Some summary activities have their own internal sequence of
activities, but others include separate activities. A summary normally spans several
activities and encompasses xed resources or costs associated with one type of activity.
Example: A Summary Activity
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Example: GERT Network Diagrams
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How to Create a Project Schedule Network
Diagram
Procedure Reference: Create a Project Schedule Network Diagram
To create a project schedule network diagram using PDM, one of the most commonly
used types, with all the activities having the most common precedence relationship,
Finish-to-Start (FS):
1.
Determine the dependencies among project activities using your activity list and
product descriptions.
2.
In the rst column, list each activity to be sequenced. Identify each with a
letter.
c.
In the second column, write the letter of the predecessor activities for each
activity.
3.
4.
Create nodes for all activities that are successor activities to the nodes already
created.
5.
6.
Continue drawing the network diagram, working from left to right until all activities are included on the diagram and their precedence relationships are indicated
by arrows. Include any known lags or leads.
7.
All precedence relationships are correctly indicated by arrows going from the
predecessor activities to the successor activities.
c.
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1.
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During a recent meeting with your team, a decision was made to add five days
between identifying resources and defining roles and responsibilities due to other
commitments that some members of the team need to address in other projects. Will
this be a lag or lead relationship that you should account for? Please explain.
LESSON 4
2.
Referring to the OGC Activity List document, for the Assessing Needs activity, which of
the following activities are summary activities? Choose all that apply.
a) Training Needs Review with Key Resources
b) Identify High-Level BT PM Needs
c) Training Needs Review with PMO Steering Committee
d) Review Current Documentation for Deficiencies
3.
Referring to the OGC Activity List document, draw your network diagram for WBS
TRN0001, Assembling Internal Training Team. Make sure that all the required activities
are included in your network diagram. Make sure your diagram shows the sequence
constraints from left to right. Check to make sure the activities that are connected by
arrows correctly indicate their precedence relationship. Include inside each node the
WBS Code, duration, and lag or lead time.
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TOPIC C
Estimate Activity Resources
You identied the logical dependencies and precedence relationships between the project
activities and created a project schedule network diagram for your project. Now you can determine the types and quantities of resources needed to accomplish project work. In this topic,
you will estimate activity resources.
If your project team lacks the required skills or materials to perform an activity, your project
may fail to meet milestones along the way. If the missed milestones are for activities on your
projects critical path, your entire project is in serious jeopardy of being late. Costs may skyrocket. Your reputation as a project manager who can meet deadlines to which you have
committed could be damaged. On the other hand, effective activity resource estimating will
help ensure that you have all the resources you need to meet your designated milestones and
ensure project success and stakeholder satisfaction.
Project Resources
Denition:
Project resources refer to any useful material object or any person needed for the
project work to be completed.
Project resources will vary greatly in size, cost, and function. They typically fall into
one of the following categories: labor, materials, facilities, equipment, consultants, services, supplies, or utilities. Project resources are almost always limited in quantity, and
therefore require thoughtful allocation.
Example: Resources Required to Organize a Seminar
A project for a Human Resources team could be to present an annual employee health
and wellness seminar. Resources would include the conference room, which would be
used for the seminar; the tangible information materials, such as brochures and pamphlets that would be given to employees; the visiting consultants, who would be hired
to make presentations and answer employees questions; and the vendors, who would
participate in the seminar and offer their services.
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Input
Description
Activity list
Activity attributes
Resource calendars
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Tools and Techniques
Description
Expert judgment
May be necessary to consult outside experts if resource inputs are outside the project teams knowledge sphere.
Alternatives analysis
Bottom-up estimating
Decomposes work in an activity to the last executable level and generates activity resource estimates by adding the resources required by
each activity. This technique is used when a detailed understanding of
the project or part of the project is available to decompose the activities into more depth. The accuracy of the estimates received using this
technique is generally very high.
Can generate and organize resource information, such as cost estimates and breakdown structures, which helps optimize resource
utilizations.
Output
Description
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The number, types, and purposes of the project schedules to be developed and
maintained.
Project Management Professional (PMP) Certication - Fourth Edition
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LESSON 4
Determine what resources are necessary to complete each activity in the work
packages.
Analyze the scope statement to ensure youve identied all the resources required
to perform the project work.
Consider organizational policies that could affect resource acquisition and usage.
Can you use contract labor to take advantage of lower hourly rates for certain types of work?
Must suppliers be selected only from a list of those approved and qualied?
Are there any resource usages that require authorization from upper management?
Identify and use expert judgment resources. Consider the following sources:
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Does the available in-house staff have the required skills and experience or
will you have to procure some resources?
Will you have access to the materials, facilities, and equipment you need to
perform the work when it is scheduled to be done?
Most project managers use a spreadsheet program to capture the resource requirements
for their projects. This allows exibility in formatting the information and lets you output
the columns you want for a particular purpose.
Training Manager
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One area of concern is based on recent discussions as to whether OGC has the instructional
expertise to design the content for the internal training. This is something that will need to be
determined quickly if the project should meet the deadline.
1.
What are some additional factors that you would consider when identifying the
resources to fill the identified roles?
2.
What are some things that you would consider when determining the software training
vendor?
3.
As the project manager, what factors would you consider to make a decision on
whether to outsource development of the internal training content?
4.
What other types of resources, other than people, would you list for this project?
TOPIC D
Estimate Duration for Project
Activities
You have identied the activity resources that will be needed for each scheduled activity in a
work package. Now it is time for you to determine how long each activity will take. In this
topic, you will estimate activity durations.
Estimating activity durations is important because missing delivery dates almost always results
in cost overruns. Leaping in with a can-do attitude is one thing, but realistic assessments of
what must be done and how long it will take will keep you from making promises you cannot
keep. Without accurate activity duration estimates, you cannot create a meaningful, realistic,
and useful schedule.
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The Estimate Activity Durations Process
The estimate activity durations process involves the act of estimating the duration of work that
will be needed to complete individual project activities using the available resources. It uses
information on factors such as activity scope of work and resource calendars. The inputs for
estimating activity durations are collected from people or groups who are familiar with the
work an activity involves. The resulting activity duration estimates will shape the preliminary
project schedule. They contain assumptions made when making the estimatefor example, the
availability of required resourcesand a range of variance for the provided estimate, such as
plus or minus ten percent, or plus or minus two days.
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Input
Description
Activity list
Activity attributes
Resource calendars
Description
Expert judgment
Helps estimate durations for each activity. It will most often come
from work package owners with relevant experience or from historical information documentation. However, if the activity is outside
the organizations knowledge sphere, it may be necessary to confer
with external contractors or consultants for their expert judgment.
Analogous estimating
Parametric estimating
Three-point estimates
Reserve analysis
PERT Analysis
The three-point estimates technique is based on PERT (Program Evaluation and
Review Technique) analysis, which uses a weighted average of the three estimate types
(most likely, optimistic, and pessimistic) to calculate the expected activity duration.
The formula is as follows: [optimistic time + 4(most likely time) + pessimistic time]/6.
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Estimate Activity Durations Outputs
There are two possible outputs for estimating activity durations.
Output
Description
Approximate number of work units required to complete project activities. Lags are not considered when estimating activity durations.
Involve the work package owners or others who are very familiar with the work
of the activity.
In general, the people responsible for doing the work are the ones who can best
estimate the effort and duration for the activities under their control. The project
manager will, however, be responsible for actually making the estimates, based on
numbers provided by the experts. In some cases, the project manager may take
sole responsibility for making the duration estimates. Some examples are:
Small projects in which the project manager is very familiar with the activities required.
Projects with activities that are well dened, and for which there is good historical information from very similar past projects.
Are there any detailed records from previous, similar projects that you could
use to derive your estimates?
Determine how you want to quantify the work that needs to be done: in terms of
the estimated hours of labor that will be needed, the number of units to be produced, and the number of customers to be served.
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How will the skills of the assigned staff affect the duration estimates?
LESSON 4
If you are using the three-point estimating technique, ask the estimators for
the best-case, most likely, and worst-case estimates.
Modify the constraints and assumptions from the other planning processes.
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Assessing NeedsIdenties potential areas of training that would be most benecial to the Business Transformation Program. Benecial is dened by the
organizational components represented in the team.
You have given the group a list that includes each activitys WBS, name, predecessor relationship, and assigned resource. The goal of the meeting is to determine the durations for these
activities.
1.
For the summary task, Resources Identification, the team members explained that,
based on past experience, they would need a week to complete the interviews, if all
of the managers were available during that week. When asked how many hours they
expected to work during the week, they responded with 10 hours. Based on their
response to this question, what will the elapsed time be for these activities?
a) 10 hours
b) One week
c) 50 hours
d) A day and a half
2.
When the team members determined how long they thought it would take to complete
the manager interviews, what type of duration estimating technique were they probably using?
a) Parametric estimating
b) Analogous estimating
c) Reserve analysis
d) Expert judgment
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LESSON 4
3.
In the Estimating Activity Duration document, what will be the total duration for the
summary activity, Training Needs Review with Key Resources?
a) 1 day
b) 2 days
c) 4 days
d) 11 days
4.
Do you find it helpful in the activity list to have milestones represented with zero
duration? Why or why not?
TOPIC E
Develop a Project Schedule
You identied the necessity of effective activity duration estimating in successful schedule
planning. Now you will put that to good use by moving on to the next stage of schedule
development. In this topic, you will develop a project schedule.
The project schedule is one of the most important tools for keeping upper management and
project stakeholders informed about the projects status and for tracking performance. Given its
importance and high visibility, you want to make sure that the schedule you create is realistic.
If you dont take the time to establish realistic start and nish dates, it is unlikely that your
project will nish on time.
Project Schedules
Denition:
A project schedule is the project teams plan for starting and nishing activities on
specic dates and in a certain sequence. The schedule also species planned dates for
meeting project milestones.
With its supporting detail, the schedule is the main output of the develop schedule process. The purpose of the project schedule is to coordinate activities into a master plan
in order to complete the project objectives on time. It is also used to track schedule
performance and to keep upper management and project stakeholders informed about
project status.
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LESSON 4
Example: A Project Plan Listing the Project Schedule
Figure 4-14: A project schedule for a website design project (deliverable categories in bold).
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LESSON 4
Input
Description
Activity list
Activity attributes
Can affect project schedules depending on how difficult the requirements are to fulll.
Resource calendars
Description
Analysis that calculates early and late start and nish dates for all
activities in the project.
Resource leveling
Assists in making scheduling decisions when there are resource management concerns.
Leads and lags may need to be applied to accommodate other scheduling elements. Improper use may distort the project schedule.
Schedule compression
Scheduling tool
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LESSON 4
Develop Schedule Outputs
In addition to the project schedule and its supporting detail, the develop schedule process can
produce several outputs.
Output
Description
Project schedule
Includes start and nish dates for each activity. Project schedule outputs may include:
A resource histogram, table, or network diagram showing resource
requirements by time period.
Alternative schedules, such as high-level, detailed, best-case or
worst-case, with or without imposed dates.
Contingency reserves.
Optionally, additional items including cash-ow projections and
order and delivery schedules.
Schedule baseline
Schedule data
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Notation
Description
ES
Early start. The earliest time an activity can start. Usually, the ES of the rst
activity in a network diagram is zero. The ES of all other activities is the latest
Early Finish (EF) of any predecessor activities (assuming that any successor
activity starts as soon as all its predecessor activities are nished).
EF
Early nish. The earliest time an activity can nish. The EF for the rst activity
is the same as its duration. For all other activities, EF is the latest EF of all of an
activitys predecessor activities plus its duration.
LF
Late nish. The latest time an activity can nish. The LF for the last activity is
the same as its EF time. The LF for any predecessor activity is the earliest LS of
any of its successor activities.
LS
Late start. The latest time an activity can start. The LS for the last activity is its
EF minus its duration. The LS for any predecessor activity is its LF minus its
duration.
DU
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Float
Denition:
Float is the amount of time an activity can be delayed from its ES without delaying
the project nish date or the consecutive activities. Float occurs only in activities that
are not on the critical path. Float is also called slack. There are two types: total oat
and free oat.
Example: Float in Project Activities
Total Float
Denition:
Total oat is a type of oat where the total amount of time an activity requires can be
delayed without delaying the project nish date. Total oat for an activity can be calculated by subtracting its EF from its LF or its ES from its LS.
When you see the term oat by itself, it generally refers to total oat.
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Free Float
Denition:
Free oat is the amount of time an activity can be delayed without delaying the ES of
any activity that immediately follows it. It allows exibility of the start or nish time
within that activity only. If there is a string of activities with oat, free oat will be
available only for the activity at the end of the string. Free oat on the activity is calculated by subtracting the EF of an activity from the ES of its successor activity.
Example: Free Float in Activities
In the CPM diagram, the free oat for activity E can be calculated by subtracting the
EF from the ES of the successor activity, which in this case is Activity H. The free
oat value is Activity Hs ES (61) Activity Es EF (50), or 61 50. The free oat is
11.
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What-if scenario
Resource leveling
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The Critical Path Method (CPM)
Denition:
The Critical Path Method (CPM) is a schedule network analysis method that uses a
sequential nish-to-start network logic and calculates one early and late start and nish
date for each activity using a single duration estimate. The longest path through the
networkthe critical pathis identied. Then oat is calculated to identify activities
where there is some scheduling exibility. CPM is the mathematical analysis technique
used in most types of project management software.
Example: A Project Schedule Showing the Critical Activities
Figure 4-21: Critical path method involves calculating one early and late start
and finish date for each activity.
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The What-If Scenario Analysis
Denition:
The what-if scenario analysis method allows you to consider different situations that
might occur and inuence the schedule; it assesses the feasibility of the schedule under
various adverse conditions. It allows you to compute different schedules based on
potential delays, or the unplanned events that are a normal part of business life, such
as key employees resigning during a project. The outcomes are also used to mitigate
the impact of unexpected situations when preparing risk response plans. This method
helps in selecting the optimum plan.
Example: What-If Scenario for Planned Move of Corporate Headquarters
A project manager could use the what-if scenario analysis method to compute different
schedules for a planned move of corporate headquarters to a new facility. He would
base his computations on several scenarios, such as: What if the contractor for the new
building brings the goods in late? What if key decision makers are allocated elsewhere
during the planning process? What if there is a union strike affecting the construction
workers?
Resource Leveling
Denition:
Resource leveling is used to analyze the schedule model. It allows you to readjust the
work as appropriate so that people are not overly allocated. It is also used to address
scheduling activities when critical resources are only available at certain times.
Resource leveling is normally done after the critical path has been initially identied.
The critical path frequently changes as a result of resource leveling. Resource leveling
tools are found in many types of project management software.
The most common scheduling conicts are under-allocation of resources to a critical task and overallocation of a critical resource.
Schedule Formats
The project schedule can be presented in several different formats, depending on the circumstances.
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Graphical Format
Characteristics
Bar chart
Shows the start and end dates, expected durations, and the dates and
order of project milestones.
Can show precedence relationships between activities.
Can show the percentage of an activity completed to date and actual
progress in relation to planned progress.
Typically lists activities or work packages vertically on the left. Time
is represented with horizontal bars that correspond to the activities
and show projected start and end dates.
Often used for project status presentations to upper management.
A detailed view is effective in reviewing project status with the
project team.
Milestone chart
Helps assign start and nish dates to activities on the project schedule
network diagram.
Useful when you need to communicate project status in terms of
activity precedence relationships.
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2.
3.
Will you have the staff you need to perform the work when it is scheduled to
be done?
4.
Will you have access to the materials, facilities, and equipment you need to
perform the work when it is scheduled to be done?
Are there any holidays during which your project team will not conduct work
activities?
5.
6.
Are there any regional or national holidays not previously accounted for?
7.
Select project management software that best meets the needs and budget of your
project. If your organization does not require the use of a particular software program, ask yourself the following questions to make the selection:
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How well will the software adapt to projects that vary greatly?
What do other project managers in the eld use and what do they recommend?
8.
Review rough drafts of the schedule with the project team, sponsor, and customer.
You may also need to review the rough drafts with functional managers to ensure
that there are no conicts with functional resources.
9.
If you are reviewing the schedule with your project team, consider publishing
a detailed bar chart or a network diagram with dates.
10. Distribute the preliminary schedule to all program office personnel, functional
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1.
What other inputs will you need to have available before developing the project schedule?
a) Resource calendars
b) Schedule baseline
c) Project scope statement
d) Specific milestone dates that must be met
2.
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Use the supplied table to draft the project schedule for the work package, WBS
TRN0001, Assembling Internal Training Team.
LESSON 4
TOPIC F
Identify the Critical Path
Now that you have drafted a project schedule, you are ready to establish the start and nish
times for each of the activities in your project and determine the duration of the entire project.
That means you will need to know the critical path through your project activities. In this
topic, you will identify the critical path.
Sometimes, the resources you are counting on may not be available when they are scheduled
to be. How do you know when this means your project cannot be successfully completed? The
answer is that you must identify the critical path during the develop schedule process. Identifying the critical path allows you to determine which activities have scheduling exibility before
you complete your project schedule.
Critical Activities
Denition:
Critical activities are the activities that are on the critical path. Generally, for all
activities along the critical path, ES = LS and EF = LF. There can be no exibility in
the start time or the nish time for these activities. Activities that are not on the critical path usually have some exibility in their start and nish times.
Example: Critical Activities in a Project
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The project team determines the near-critical activities for a project based on expert
judgment. For example, the project team, based on past experience with similar
projects, denes that an activity with a total oat of 1 is a near-critical activity for the
project. Therefore, all activities having a total oat of 1 are near-critical activities for
this project.
2.
3.
b.
c.
Calculate the ES for each successor activity using the latest EF from any of
its predecessor activities plus or minus any leads or lags.
d.
Calculate the EF for each successor activity by adding its duration to its ES.
e.
Move through all the activities until you have an ES and EF for each one.
Subtract the last activitys duration from its EF to determine its LS.
c.
Calculate the LF for each predecessor activity using the earliest LS from any
of its successor activities plus or minus any leads or lags.
d.
e.
Move backward through all the activities until you have the LF and LS for
each one.
Calculate oat.
a. For each activity, subtract its EF from its LF to determine total oat.
b.
For each string of activities with oat, calculate the free oat for the last
activity in the string by subtracting its EF from its successor activity ES.
There is software available that will quickly compute these elements, including the critical path,
but you may be expected to perform these calculations yourself, on paper, in order to pass the
PMP certication exam.
4.
Identify the critical path as the path with the longest duration and least amount of
oat.
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The EF for the rst activity is its ES plus its duration (0 + 10 = 10).
The ES for all successor activities is the latest EF of any of its predecessor activities plus or minus any leads or lags between the two activities.
For example, the ES for activity D is the same as the EF for activity C (29), and
the ES for activity G is the EF for activity F (41) plus an 8-hour FS lag, which is
indicated as FS 8 (41 + 8 = 49).
Although the ES of the rst activity can be zero, it can also have the value one. But when the ES
of the rst activity is one, then the duration should be calculated as ES + DU - 1. The ES of the
successor activity will then be the EF of the predecessor activity plus one.
For example, if the ES of the rst activity is one, then its EF would be 1 + 10 - 1 = 10 and the
ES of the second activity would be 11.
The EF for all subsequent activities is its ES plus its duration. For example, the
EF of activity B (25) is its ES (10) plus its duration (15).
The LF for the last activity is the same as its EF time (66).
The LS for the last activity (61) is its EF (66) minus its duration (5).
The LF for any predecessor activity is the same as the earliest LS of any of its
successors plus or minus any leads or lags between the two activities.
For example, the LF of activity E is the same as activity H LS (61), and the LF
for activity F (41) is the LS for activity G (49) minus the 8-hour FS lag (49 - 8 =
41).
The LS for any predecessor activity is its LF minus its duration. For example, the
LS for activity E (48) is its LF (61) minus its duration (13).
Only the three activities that are not on the critical path (C, D, and E) have total
oat (TF = 11).
Only the last activity in that string (activity E) has free oat (FF = 11).
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The critical path is indicated by bold lines with arrows and includes activities A,
B, F, G, and H. It is the path with the longest total duration and zero oat.
158
1.
Perform a forward pass to determine the Early Start (ES) and Early Finish (EF) for each
activity. Enter your answers in the appropriate place in the network diagram. What is
the ES for activity TRN1.1, Identify Team Lead?
2.
3.
4.
5.
Calculate the ES and EF for the remaining activities. Why is the ES for activities
TRN1.2.3 and TRN1.2.4 the same as the ES for TRN1.2.2?
6.
Determine the float for this network. Which activities have total float in this network?
LESSON 4
7.
TOPIC G
Optimize the Project Schedule
Now that you have drafted your project schedule and identied the critical path, you are ready
to begin the hands-on management of the schedule, which involves successfully negotiating
organizational constraints on time and resources. To do so, you must identify the tools that
project managers use to respond to resource uctuations, ordinary setbacks, and delays while
responding to the perennial business need of bringing in the project on time. In this topic, you
will optimize the project schedule.
Setbacks, delays, constraints on time and resources, and competing priorities are all part of
everyday life in business, and they will affect every project you work on. You want to be able
to work effectively in the face of these challenges by optimizing your project schedule, which
means using project management tools to work around these problems so that you can support
the needs of the business.
Schedule Compression
Denition:
Schedule compression is the shortening of the project schedule without affecting the
project scope. Setbacks or revised deadlines can cause production problems, in which
there is little time to do a lot of work. When these issues occur, product quality is
often sacriced. Schedule compression alleviates the pressure of completing too many
activities in too little time without negatively affecting the project scope. Compression
may be achieved in one of two ways: fast-tracking and crashing.
Example: Schedule Compression when Building and Installing Cabinets
A carpenter and his sub-contractor are building and then installing cabinets in a new
housing development. The realty company has a higher demand than expected and asks
the carpenter to move up his nish date by three weeks. In order to meet this deadline,
the carpenter decides to change the order of assignments for the remaining carpentry
work. He tells the sub-contractor to work on the installation of the cabinets while he
nishes building the cabinets. This changes the precedence. Instead of nishing the
building of all the cabinets and then installing them, the installation is able to start
before the building of the cabinets is complete as in the original schedule. Due to the
increase in production, the carpenter nishes a week ahead of schedule, rather than
three weeks behind.
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Fast-Tracking
Denition:
Fast-tracking is the process of compressing total project duration by performing some
activities concurrently that were originally scheduled sequentially.
Typically, fast-tracking involves identifying FS relationships that could be done in parallel, either as FF, SF, or SS relationships, or by simply adding some leads to FS
activities.
Some fast-tracking may entail looking very creatively at the network diagram to see if
some discretionary dependencies could be done completely independently. Usually no
added costs are incurred from fast-tracking; however, it can result in increased risk and
rework.
Example: Fast-Tracking Activities to Produce a New Product
Sponsors are pressuring Carol to bring a new product to market quickly. Carol decides
to fast-track some activities by putting a lead relationship between the development of
the new product and the writing of the associated user manual. The total duration of
the two activities is shortened, since writing the manual can start before the product
development is completed. Consequently, the project duration is shortened, as well.
Crashing
Denition:
Crashing is a schedule compression method that analyzes cost and schedule trade-offs
to determine how to obtain the greatest schedule compression for the least incremental
cost. Crashing typically involves allocating more resources to activities on the critical
path in an effort to shorten their duration and thereby increases project costs.
To crash a schedule, analyze:
The formula for calculating crash costs per week is (crash cost normal cost) / (normal time crash time).
Example: Crashing the Company Website Project
As project manager for the company website project, you are asked to compress the
schedule for the design deliverable. There are 11 activities, ve of which are on the
critical path. Using the formula (crash cost normal cost) / (normal time crash
time), you calculate the crash costs per week for each of the ve activities to determine which activities would provide the greatest duration reduction for the least
incremental cost. Your calculations are:
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Normal
Time (wk)
Crash Time
(wk)
Normal Cost
($)
Crash Cost
($)
Crash Cost/Wk
($)
10
15,000
23,000
4,000
LESSON 4
Normal
Time (wk)
Crash Time
(wk)
Normal Cost
($)
Crash Cost
($)
Crash Cost/Wk
($)
12
11
10,000
14,500
4,500
5,000
8,000
1,500
6,000
7,500
500
12,000
18,000
2,000
Totals
45
34
48,000
71,000
While you havent yet analyzed the effect of crashing the activities, you can determine
from your calculations that:
Activity D has a net gain of three weeks at a cost of just $500 per week.
Activity C reduces the schedule by two weeks at a cost of only $1,500 per
week.
Activity B, which has a crash cost of $4,500 per week and a reduction of only
one week, is the worst candidate for crashing.
The total number of weeks by which the project could be shortened if all of the
activities on the critical path are crashed is 11 (45 34).
The total additional cost if all activities on the critical path are crashed is $23,000
($71,000 $48,000).
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2.
3.
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Can you authorize overtime or comp time to meet your project requirements?
Are there any discretionary dependencies that could be done completely independently?
Analyze activities on the critical path to determine if crashing the schedule will
produce a viable option.
Are there any activities on the critical path that can be shortened if more
resources are added?
Which activities will provide the biggest duration decrease while incurring
the least amount of incremental cost?
What are the resource allocation implications of crashing the activity? Will
some key resources be overextended? Will all resources be available when
needed?
Are there any quality implications associated with crashing the activities?
Project Management Professional (PMP) Certication - Fourth Edition
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LESSON 4
4.
Analyze each activity on the critical path to determine whether reducing scope is
a viable option for reducing duration.
5.
6.
7.
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1.
Which activity has the highest crash cost per week? Which has the lowest?
2.
3.
LESSON 4
4.
Which activities are the best candidates for crashing, and in what sequence?
5.
Plot the slope for crashing each activity on the critical path. Use the graph to make
your plots.
6.
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7.
If you crashed all the activities identified on the original critical path, what would happen to the duration for that network path?
8.
If you crashed all activities identified on the original critical path, what would happen
to the total project cost?
9.
What would happen to the total project cost if you decided to crash every activity in
the project?
10. What other factors would you need to consider when deciding whether to crash this
schedule?
11. What should you do if the normal time and the crash time for an activity are the same?
TOPIC H
Establish a Schedule Baseline
Now that you have optimized the schedule, you need to create a schedule baseline in order to
get management approval for your project schedule. In this topic, you will establish a schedule
baseline.
As a project manager, it is your responsibility to get management approval for your project
schedule so that you can begin your project on the right footing, setting the stage for proper
monitoring and measuring of schedule performance throughout the life cycle of the project.
The schedule baseline is the key mechanism for gaining that approval and so your ability to
generate the appropriate baseline will be critical to project success.
Schedule Baselines
Denition:
A schedule baseline is the management-approved version of the project schedule; it is
drawn from the schedule network analysis and includes baseline start and nish dates.
It provides the basis for measuring and reporting schedule performance. It is a formal
part of the project management plan.
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Example: A Schedule Baseline
Gather your preliminary project schedule, which includes the projects start and
nish dates. Make sure that all of its components are accurate and up-to-date,
including resources, durations, calendars, predecessor dates, task dependencies,
cost estimates, and constraints. Conrm that resources have not been overallocated.
Changes to your schedule baseline may require additional resources or more time;
these changes will affect the project cost and will require you to update your cost
baseline as well.
Revisions made to the schedule baseline after it has been approved will need to
be made through a formal change process approved by management.
Save the original schedule baseline. During the life cycle of the project, changes
will be made as the schedule baseline is updated and revised; you will need to
preserve the historical data included in your original schedule baseline.
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Example: Establishing the Schedule Baseline when Launching a New Line of
Products
A cosmetics company is launching a new line of products. The project manager needs
to establish a schedule baseline and secure approval from both company management
and the group of stakeholders, which includes the companys sales and marketing
teams. The project manager will begin by distributing the preliminary product rollout
schedule along with resource calendars, cost estimates, and any related constraints. He
will distribute the schedule to the appropriate parties for formal approval.
Before the team members give their approval, they will submit changes to the schedule; the project manager will be responsible for incorporating those changes. Making
these changes will impact the cost baselines as well, and the project manager will need
to follow the organizations formal change process and secure approval from management before continuing. Finally, he will save the original schedule baseline and
preserve the historical data related to this product launch.
1.
2.
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How would you describe the difference between the draft schedule and the schedule
baseline?
LESSON 4
3.
Which tasks will you be able to do once the schedule baseline has been established and
project execution has begun?
a) You will be able to determine project or activity slippage.
b) You will be able to determine a variance in the start and finish dates for the project.
c) You will be able to determine if resources are over-allocated.
d) You will be able to determine if the amount of scheduled work for each work package has changed.
4.
True or False? When the schedule baseline is first saved, the schedule variance for
each activity should be equal to zero.
True
False
Lesson 4 Follow-up
In this lesson, you identied the major elements of project schedules, which include activity
lists, project network schedule diagrams, estimates of activity duration, and techniques for
responding to organizational constraints by adjusting exibility within schedules. You will now
be able to develop effective project schedules and manage schedules in response to organizational constraints on time and resources so that you can bring your projects in on time and on
budget.
1.
Consider the importance of creating an activity list. How do you think that creating an
activity list for your projects will help ensure that your project activities are tied to
the project scope?
2.
Reflect on the advantages of creating a project schedule network diagram. How do you
think this will help you organize your project more effectively?
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NOTES
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LESSON 5
Lesson Time
2 hour(s)
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LESSON 5
Introduction
Good project management requires the ability to create accurate estimates regarding the costs
of project completion. It also requires you to have a budgeting process that helps you to monitor progress against expectations and to work with the sponsor to make adjustments to the
schedule or scope as changes arise. In this lesson, you will develop cost estimates and budgets.
The ability to deliver projects on time and on budget is a key element of good project management. You want to be able to create accurate estimates regarding the work that must be done
and the costs that will be incurred, as well as monitor progress against expectations. By identifying methods of creating accurate cost estimates and the budgets that will guide your projects,
you can effectively meet expectations and deliver the desired results.
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TOPIC A
Estimate Project Costs
You have developed your project schedules and determined the activities and resource requirements for your project. But how much will those resources cost? Estimating project costs will
provide the answer. In this topic, you will estimate project costs.
Inappropriately high cost estimates may discourage sponsors from pursuing projects that have
the potential for success. Conversely, estimates that are too low could waste precious resources
on a project that ultimately proves unfeasible. As a project manager, it is your responsibility to
estimate project costs as accurately and realistically as possible. Mastering the tools and techniques for estimating project costs will help you to effectively control project costs.
Software availability.
Time constraints.
Project denition.
Personal preference.
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Example: Cost Estimation for a Software Application Project
Your team is trying to estimate costs of an extensive software application project.
However, some of the functionality has not yet been nalized, leaving only half of the
WBS truly dened. Your team creates denitive estimates for each of the dened work
packages. Then, you use historical information from similar projects to approximate
the costs for each undened work package.
Input
Description
Scope baseline
Project schedule
The project schedule includes start and nish dates for each
activity, and details of resources along with the time needed
for them to complete project work that will incur project cost.
Risk register
Description
Expert judgment
Variables such as labor costs, material costs, ination, and risk factors
can inuence cost estimates. Expert judgment along with historical
information will provide an insight on the information related to prior
similar projects.
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Tools and Techniques
Description
Analogous estimating
Parametric estimating
Relies on the statistical relationship that exists between historical information and variables so as to arrive at an estimate for parameters such
as duration and cost.
Bottom-up estimating
Three-point estimate
Incorporates three types of estimates into a singular cost estimate scenario: most likely, optimistic, and pessimistic.
Reserve analysis
Contingency funds that are built into a cost estimate for as-yet
unknown costs. Reserve analyses run the risk of inating a cost estimate.
Project management cost estimating software simplies the cost estimation process, can accelerate estimation time, and is applicable to
most projects, regardless of scale or scope.
Output
Description
Basis of estimates
Project document updates Updated project documents may include the risk register, human resource
plan, activity list, project schedule, and training plans.
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Type or Level of Accuracy
Budgetary
Range of estimate
Approximate estimate
Based on detailed information about the project work. Developed by estimating the cost for each work package in the
WBS. Accuracy: - 5 percent to + 10 percent.
Analogous Estimating
Denition:
Analogous estimating, or top-down estimating, is a method of cost estimating in which
managers use their experience, historical information from similar projects, and expert
judgment to determine the total project cost or time estimate. The resulting total is then
apportioned across the major categories of project work. Estimates are generated for
the top levels of the WBS and then apportioned downward through the levels of the
WBS.
Analogous cost estimating is used when:
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LESSON 5
Bottom-Up Estimating
Denition:
Bottom-up estimating is a method of estimating the cost for each work package in the
WBS. The estimates are then rolled up or aggregated for progressively higher levels
within the WBS. The project manager reviews the estimate gures and adds the
required overhead estimates to compile the total project cost. Bottom-up estimating is
the most accurate method but it is also the most challenging, costly, and time consuming.
Use bottom-up estimating later in the project life cycle, when:
You should also use bottom-up estimating for work packages with the highest level of
uncertainty associated with cost. Make sure you weigh the additional accuracy provided by bottom-up estimating against the additional cost of making the estimates.
Example: Bottom-Up Estimating for a Complex Project
Bottom-up estimating is best used to reach a very accurate estimate on a complex
project, such as a caterer submitting a bid to a client for a large corporate event. The
caterer would be able to use the bottom-up estimating technique based on a detailed
WBS, which would include dinner (decomposed by the cost of food and drink, rental
costs for the conference room, table and chairs, linens and glassware) and so on. The
estimate for each work package would be rolled up until the caterer reached one accurate cost estimate for the event.
Parametric Estimating
Denition:
Parametric estimating is a technique used to predict total project costs by using the
projects characteristics in a mathematical model. It requires the project manager to do
a statistical analysis using historical information about scope, cost, budget, and duration. The accuracy of a parametric estimate will only be as good as the accuracy of the
data used in it.
Example: Parametric Estimating Technique
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LESSON 5
Estimating Techniques Advantages and
Disadvantages
There are benets and drawbacks to using different estimating techniques.
Technique
Analogous estimating
Bottom-up estimating
Parametric estimating
When possible, the cost gures that go into the cost estimates for individual
work packages should be provided by those who will actually provide the
resources. As always, it is the people who will do the work, provide the service, or supply the material that can best estimate what the associated costs
will be. It is the project managers responsibility to compile these cost gures into realistic estimates.
For some projects, though, the project manager will be solely responsible for
generating the cost estimates. This may be the case for:
Small projects in which the project manager is very familiar with the
activities required.
Projects that are very similar to past projects for which the costs are
well documented.
Even in such cases, the project manager may want to do a quick reality
check with the resource supplier to make sure no incorrect assumptions have
been made.
Gather any relevant input information that may help you prepare the estimates,
such as estimating publications and resource rates.
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Use analogous estimating when you have a limited amount of detailed information about the project, you have a similar project to use for comparison,
and the work package owners preparing the estimates have the requisite
expertise.
Use parametric estimating to estimate work packages when you have reliable
parametric models and the work conforms closely to those models.
Use bottom-up estimating later in the project life cycle, when more detail is
available about the work packages, you need more accurate estimates, and
you have the time to invest in making the estimates. Also use bottom-up estimating for work packages with the highest level of uncertainty or risk
associated with cost. Make sure you weigh the additional accuracy provided
by bottom-up estimating against the additional cost of making the estimates.
Look for alternative costing options. Some options you might explore could
include:
Ensure that all cost estimates are assigned to the appropriate account, according to
the chart of accounts.
Make sure your cost estimates include the following key elements:
Estimated costs for all resources that will be charged to the project. Use the
WBS and resource requirements document to develop the estimates.
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1.
Which estimating technique was used to come up with the $63,000 allocation to the
Media Campaign deliverable? Why?
2.
How would you describe the level of accuracy for the $63,000 estimate?
3.
What was the impact of involving the work package owners in preparing the cost estimates? Why?
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LESSON 5
4.
Which estimating technique was used when you asked the work package owners for
their estimates?
5.
What technique would you use to estimate the Conduct Planning Meetings activity?
Why?
6.
7.
8.
Are there activities in the work package for which you will use more than one estimating technique? Why?
9.
Using the information in Public Meeting Estimate document, estimate the cost of each
of the activities.
10. What is your total cost estimate for the Public Meeting work package?
12. Do you need to take any action regarding your preliminary estimate of $63,000 for the
Media Campaign deliverable? If so, what action should you take?
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TOPIC B
Estimate the Cost Baseline
After estimating project costs, you need to consolidate the costs into a project budget and prepare the project cost baseline. In this topic, you will estimate the cost baseline.
Costs are one of the major constraints of any project, and your ability to manage the projects
costs will directly correlate to its success or defeat. You need to be able to employ sound
methodology when estimating costs and carefully monitor expenditures throughout the project
life cycle. You need to be able to track project costs associated with each work package in the
WBS at the points in the project life cycle when those costs will be incurred. By establishing a
cost baseline, you can track those project costs, set up the cash ow for the project, and measure cost performance.
Cost Baselines
Denition:
A cost baseline is a time-phased budget that will monitor and measure cost performance throughout the project life cycle. It is developed by adding the estimated costs
of project components by period. The cost baseline typically includes a budget contingency to accommodate the risk of incurring unidentiable, but normally occurring
costs, within the dened scope. Cost baselines will vary from project to project,
depending on each projects unique budget and schedule.
Once the baseline is established, the cost becomes a commitment from the project managers perspective. The project manager should try to closely match the projects committed funds to the baseline,
from a timing perspective.
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LESSON 5
The Determine Budget Process
Determine budget is the process of allocating the overall cost estimates to individual activities
or work packages across the project life cycle. The purpose of cost budgeting is to establish a
budget as well as a cost baseline for measuring the projects cost performance.
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Input
Description
Cost estimates for each activity are added together to create an overall
cost estimate for the work package.
Basis of estimates
Scope baseline
The scope baseline includes the approved detailed project scope statement along with its associated WBS and WBS dictionary.
Project scope statement: May contain relevant funding constraints.
WBS: Identies project elements to which costs will be allocated.
WBS dictionary: Identies deliverables and describes the work that
will be required to produce them.
LESSON 5
Input
Description
Project schedule
Has the start and nish dates, which are necessary to assign costs of
project components to the time period when cost is expected to be
incurred.
Resource calendars
Contracts
Description
Cost aggregation
Activity costs are combined into work package costs, which are
then aggregated up the WBS until a single project cost is produced.
Reserve analysis
Expert judgment
Expertise provided by a group or individual who possesses specialized education, knowledge, experience, skill, or training in
cost budgeting, such as people from other departments within
the organization, consultants, stakeholders including customers,
professional and technical associations, and industry groups.
Historical relationships
Involves relationships that result in parametric or analogous estimates, which use project parameters to develop simple or
complex mathematical models to calculate project costs. The
cost and accuracy of the parametric and analogous estimates will
vary widely. They can be relied upon when the historical information used is accurate, parameters used are quantiable, and
when the models are scalable to be used for big or small
projects or even in phases of a project.
Output
Description
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LESSON 5
Output
Description
Created from the cost baseline, these are built-in cost increments
that will allow for overruns and/or rapid progress on the project.
Contingency Allowances
Contingency allowances are additional funds that are sometimes built into cost estimates to
allow for unanticipated events. Planning for contingency allowances for a project ensures that
the project manager is able to manage unforeseen costs and expenditures.
Guidelines:
When considering adding a contingency allowance to your budget:
Avoid contingency on contingency. Based on the WBS input, make sure that the
work packages do not already have a contingency amount tacked onto the basic
estimate.
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Inform the project team. Let them know that the project will be managed against
a point estimate without contingency.
As project manager, you must release contingency funds only through a closely
controlled and well-documented process, which is typically included in the cost
management plan. A contingency allowance is not to be used as a slush fund
without controls.
LESSON 5
Example: Contingency Allowances for the Jazz Festival
The city of Montreal hosts the worlds largest jazz festival every year, with thousands
of performances and more than two million attendees. Contingency allowances for this
event might include funds to cover an unexpected problem, such as a cancellation by a
headlining act. Such a cancellation would force the festival to issue ticket refunds
while incurring overhead costs, including theater rental and advertising. Contingency
allowances would not be used for general operating support; if ticket sales failed to
meet expectations, for example.
Description
Weighted milestones
The total work package value is divided up and assigned to milestone intervals within the work package. Each milestone carries a
budgeted value. The value is earned when the milestone is
achieved. This method works well for long work packages with
multiple activities.
There are certain activities that are not measurable; for example, research-based activities. It becomes difcult to
account for earned values for such activities. So to avoid non-measurability in such cases, the 50/50 rule is used.
The moment activity starts, 50% work completion credit is given to the activity. However, no further credit is
given until the activity is complete.
Gather the inputs you will need to establish the baseline, such as the WBS,
project schedule, cost estimates, and risk management plan.
2.
Use the project schedule to determine when activities will be taking place.
3.
Using one of the methods for assigning costs, allocate funds for each activity or
work package for the time period in which it will be taking place.
4.
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LESSON 5
5.
6.
Plot the costs for each period on a chart to create an S-curve of the baseline.
7.
Publish and distribute the cost baseline to the appropriate project stakeholders.
Media Campaign
PM Cost Estimate
OGC_WBS
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Five weeks before the event, a promotional newspaper ad will be purchased. Subsequent ads will be placed in the nal week before the meeting.
Planning meetings will be scheduled over the 10 weeks. The rst one will happen
right away, another at week four. The remaining meetings will occur at two-week
intervals until the event.
A food budget that covers lunch at the rst meeting and the third meeting must be
set.
1.
2.
During what time period will the Public Meeting activities take place?
LESSON 5
3.
What cost assignment method will you choose to allocate funds? Why?
4.
What are the weekly cost estimates for the activities in the Public Meeting work package? Refer to the Cost Estimates Per Week chart given below to estimate costs per
week and round up to the nearest thousand.
5.
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LESSON 5
6.
190
How would you plot the estimates to create an S-curve? Use the graph to plot your
results. Cost is on the y-axis and time is on the x-axis.
LESSON 5
TOPIC C
Reconcile Funding and Costs
Once costs are estimated, you need to verify that there is no discrepancy between the funding
committed and the costs of the work to be done. You want to be able to reconcile the funding
with the actual costs to make sure that your project stays on track. In this topic, you will identify methods of reconciling funding with costs.
The sponsor has planned to spend a certain amount of funding on your project and is expecting you to deliver the desired results on time and on budget. It is your responsibility to make
sure that the sponsors expectations are in alignment with the reality of the cost of completing
the work, or to nd an acceptable solution to funding constraints by making necessary adjustments to the budget and the schedule. Your ability to reconcile funding and costs will be
critical to meet real-world project challenges like this.
The project scope statement, which may contain information regarding funding constraints.
The cost estimation and activity cost estimates, so that you can monitor
expenditures against estimates.
Contracts, so that you can monitor the commitments and requirements that
must be met.
Map the project budget, scope statement, and schedule to the funding available.
Make sure that the promised work and the promised funding are in alignment.
Review the project scope statement, making sure that the budget accounts for
the funding constraints.
If there is already a clear disconnect between the work that has been promised and the funding that has been allocated, you must alert the sponsor now.
Identify alternatives. If funding deciencies are apparent, look for suggestions of alternatives that the sponsor could agree to, which are typically a
reduction in scope, an increase in the budget, an extension of the schedule,
or some combination of those.
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LESSON 5
Work with the sponsor on an ongoing basis from this point forward to adjust
the projects scope and/or schedule and/or cost to be in line with the funding
that the sponsor is willing to formally commit.
Make sure that the sponsor is apprised of changes in resource allocation that
may affect deliverables.
Discuss the initial project overall cost validation and mapping of nancial
transactions for cash ow reasons.
Reconcile funding with costs on an iterative basis throughout the project. Many
problems can be avoided through careful monitoring and adjusting resources in
response to the changes that will arise.
Actual costs may exceed the estimated costs during different time frames. Keep
the sponsor (and the external customer, if there is one) apprised of any additional
costs that are incurred.
Monitor spending.
As work begins on the project, you will need to monitor expenditures both in
terms of cash and in terms of effort, or hours of labor.
Monitor the schedule. As work begins on the project, it will be your responsibility
to monitor the activities as they are completed or partially completed so that you
can identify and adjust for delays before they derail the project.
Monitor the risks that have been identied for your project. Alert the sponsor if
those risks become reality, so that appropriate changes can be made to the scope
or schedule. Make sure any risks that arise during reconciliation are reected in
an updated risk register.
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LESSON 5
1.
The project scope statement specifies a specific number of ads to be placed in the
newspaper in the weeks leading up to the grand opening. You have researched the
cost of ad space and you know that the sponsors requirements will exceed the funding
commitment. How would you proceed?
2.
Assume that you have no background in advertising or marketing. How could you go
about generating alternative ideas to suggest regarding less expensive advertising
options so that you can deliver the desired results within budget?
3.
You need to partner formally with your companys financial decision makers regarding
the costs of this project. Given the above scenario, what steps would you take to further this goal?
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LESSON 5
4.
The advertising agency that has been contracted to produce the ads for the Seattle
stores grand opening has unexpectedly gone over budget. You receive an invoice that
exceeds their original estimate. How would you proceed?
Lesson 5 Follow-up
In this lesson, you identied methods of creating accurate cost estimates and the budgets that
will guide all of the work done on your projects, so that you can effectively meet expectations
and deliver the desired results. Delivering projects on time and on budget is the cornerstone of
good project management.
194
1.
How do you think the ability to estimate costs effectively will improve your performance on the job?
2.
How do you think incorporating good funding reconciliation practices helps completing
a project within the allocated budget?
LESSON 6
LESSON 6
Lesson Time
2 hour(s)
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LESSON 6
Introduction
You developed project schedule and cost baselines and incorporated these essential planning
documents into your project management plan. In this lesson, you will continue planning your
project by focusing on the quality, human resource, and communications component processes
in the planning process group. In this lesson, you will plan project quality, staffing, and communications.
As you continue your progressive elaboration of your project work, how you handle competing
demands for time, resources, and quality can have a signicant impact on the success of your
project. One of the ways that you can minimize potential resource conicts, communication
issues, and misunderstood quality standards is to enlist the support of your project stakeholders, both internal and external, to help you create effective quality, staffing, and
communications plans.
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LESSON 6
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LESSON 6
TOPIC A
Create a Quality Management Plan
You developed project schedule and cost baselines, two of the three benchmarks for measuring
project success. In this topic, youll focus on quality, the third benchmark for measuring
project success. You will create a quality management plan.
What good is a project that is completed on time and within budget if the quality is inconsistent or even substandard? Clearly dening quality standards for project stakeholders ensures a
common understanding of how project quality will be measured and achieved.
Quality
Quality is dened as the totality of features and characteristics of a product or services that
bear on its ability to satisfy stated or implied needs. In business, quality should be feasible,
modiable, and measurable.
This denition is provided by the International Organization for Standardization, ISO Standard 8402: Terms and
Denitions.
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LESSON 6
Input
Description
Scope baseline
Includes the scope statement, the WBS, and the WBS dictionary.
Stakeholder register
Lists the stakeholders whose decisions can inuence or impact various aspects of the project. It helps the project team to identify the
inuences of stakeholders on quality.
Schedule baseline
Risk register
Includes regulations, rules, standards, guidelines, and operating conditions that may affect the application area.
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LESSON 6
Tools and Techniques
Description
Cost-benet analysis
Considers the tradeoffs and the benet of meeting quality requirements of higher productivity and lower costs while increasing
stakeholder satisfaction. The business case of each activity is used to
compare the cost of each step with its expected benets.
Control charts
Benchmarking
Statistical sampling
Flowcharting
Additional quality planning tools include brainstorming, affinity diagrams, matrix diagrams, prioritization matrices, owcharts, and
others that help dene and plan effective quality management activities.
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Output
Description
Quality metrics
Quality checklists
LESSON 6
Output
Description
Documents that are updated during the process are the stakeholder
register, Responsibility Assignment Matrix (RAM), cost baseline,
and the SOW, among others.
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LESSON 6
202
Theorist
Approach
W. Edwards Deming
Joseph Juran
Philip Crosby
Genichi Taguchi
LESSON 6
Theorist
Approach
This approach to TQM for the manufacturing sector emphasizes responding to customer needs and improving processes
by systematically removing defects. Originally developed by a
Motorola, Inc. engineer named Bill Smith, Six Sigma is now
closely associated with General Electric, Inc. and other major
industrial companies such as Eastman Kodak.
Further Reading
As part of your quest to further your project management skills, you should consider
investigating some of the major motivational and leadership theories that are a key part
of serious project management efforts today. Many organizations are increasingly using
project-based continuous improvement approaches; the work of W. Edwards Deming
provided the foundation for this effort. Demings 14 Points for Management,
included in his book, The New Economics for Industry, Government, Education,
provides a systematic and pragmatic approach to transforming a western style of management in industry, education, or government to one of optimization. For further
reading, see Out of the Crisis by W. Edwards Deming.
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LESSON 6
The ISO 9000 Series
The ISO 9000 Series is a quality system standard that is applicable to any product, service, or
process in the world. It was developed by ISO, which is a consortium of approximately 100 of
the worlds industrial nations. There are limits to the certication, which does not guarantee
that an organization will produce quality products or services; it simply conrms that appropriate systems are in place. Subsections of the standard address particular industries or products.
For more information about the ISO 9000 Series, you may visit the http://www.iso.org/iso/home.htm website.
Cost of Quality
Cost of quality refers to the total cost of effort needed to achieve an acceptable level of quality
in the projects product or service. Those costs include all the work necessary to ensure conformance and all the work performed as a result of non-conformance to requirements.
Prevention costs, appraisal costs, and failure costs combine to form the cost of quality.
Types of Cost
The four types of cost associated with quality are prevention costs, appraisal costs,
internal failure costs, and external failure costs. Prevention and appraisal costs are
called conformance costsamount spent to avoid failures. Internal and external failure
costs are called nonconformance costsamount spent to rectify errors.
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Type of Cost
Description
Example
Prevention costs
Design plans
Quality plans
Employee and customer
training
Process evaluations and
improvements
Vendor surveys
Other related preventive
activities
Appraisal costs
Inspections
Testing
Design reviews
Destructive testing loss
Scrap or rejects
Design aws
Rework or repair
Defect evaluation
LESSON 6
Type of Cost
Description
Example
Product returns
Liabilities
Evaluation of customer
complaints
Maintenance costs
Corrective action
Loss of contract
Checklists
Denition:
A checklist is a job aid that prompts employees to perform activities according to a
consistent quality standard. Items on checklists are phrased as either imperatives, such
as Make sure you save this le correctly, or questions, such as Does this image
match the description in the database?
Checklists can be simple or complex and may range in detail depending on the experience and skill level of the employees and the complexity of the situation.
Example: An Image Quality Checklist
A checklist for printing images is shown. Note that the checklist prompts the graphic
artist to create images to a consistent quality standard. The items on the list are
phrased as interrogatives. If the artist cannot answer all the questions in the affirmative,
the image should not be handed off.
Obtain a printout of the image specications from the graphics database. Use this checklist to
ensure that the images are ready to be handed off to the programmer.
#
Item
Does the style meet the specications set for the course or
lesson?
Y/N
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LESSON 6
9
10
11
12
Flowcharts
Denition:
A owchart is a diagram that shows the relationships of various elements in a system
or process. The two most widely used owcharting techniques are the cause-and-effect
diagram and the process or system owchart. Flowcharting techniques can assist the
teams efforts in identifying potential quality problems and the possible effects of those
problems.
Example: A Flowchart
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LESSON 6
Cause-and-Effect Diagrams
A cause-and-effect diagram, also called the Ishikawa diagram or shbone diagram, is a
type of owchart organized by category. The cause-and-effect diagram provides a
structured method to identify and analyze potential causes of problems in a process or
system. This method organizes potential causes of problems into dened categories.
Using these dened categories promotes the identication of potential causes. Some
common categories include, but are not limited to:
Material
Method
Environment
Personnel
Measurement
Energy
In the diagram below, each category shows potential snags that might lead to the rejection of images.
Control Charts
Denition:
Control charts are graphs used to analyze and communicate the variability of a process
or project activity over time. Control charts help to show the potential capability of the
process and also suggest the range of variability in the process. This range of variability can assist a project manager in determining if the variance is caused by common or
assignable sources. If the process variability uctuates around the average, or statistical
mean, the process shows very little variability and is said to be stable.
The components of a control chart include the process mean, the upper control limit
(UCL), and the lower control limit (LCL). The process mean is determined by taking
samples from the actual process and calculating the statistical mean. As additional
samples are taken and tested, they are evaluated in terms of standard deviations from
the process mean. For most organizations and projects, the UCL will be three standard
deviations above the mean, while the LCL will be three standard deviations below the
mean.
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LESSON 6
Example: Control Charts Indicating Variance Instability
These control charts have measurements that indicate instability because they each
have measurements that exceed the range between the UCL and LCL. Analysis of the
rst chart shows that there are more than seven consecutive points above the mean. On
the second chart, more than seven consecutive points are below the mean. This sevenpoint variance is called the seven-run rule.
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LESSON 6
Benchmarking
Denition:
Benchmarking addresses the evaluation of a groups business or project practices in
comparison to those of other groups. It is used to identify the best practices in order to
meet or exceed them. Benchmarking can be conducted between identical processes in a
variety of ways: in similar industries, in dissimilar industries, and with internal or with
external organizational areas.
Example: Benchmarking the Espresso-Based Beverages
Twenty percent of Americans drink espresso-based beverages every day, and the $12
billion premium coffee market is expected to grow signicantly in the next several
years. Several leading fast-food retailers have benchmarked the performance of Seattlebased Starbucks Corp., the worlds largest chain of coffee houses. McDonalds,
Dunkin Donuts, and Tim Hortons have expanded their menus of premium coffees to
compete in this arena and offer similar, high quality coffee products.
Benchmarking Purpose and Results
Benchmarking is commonly used to determine:
The products or services to offer and the features that should be included.
The metrics or goals used to measure the processes or products that achieve customer satisfaction.
What the relationship is between each variable and the customer-focused quality
specications.
What the best value is for each variable, ensuring optimal quality or value.
When done properly, DOE can result in signicant improvements to products and processes, including shorter development cycles, more robust products, and cost
reductions.
Example: Design of Experiments for Producing a New Style of Jar
A cannery was about to put a new style of jar into production. As development of the
packaging moved forward, questions arose regarding the ability of the in-line capper to
deliver the precise amount of torque when rotating the lid onto the new jar. Early testing demonstrated that lid torque less than three inch pounds would result in a leaky
package. Torque greater than eight inch pounds would mar the nish on the screw-on
lid.
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LESSON 6
The project team given the task of determining the optimum torque requirement for the
new packaging used a DOE software program to generate statistical information about
how torque was affected by other interconnected factors. Two of the factors tested
were spindle speed and conveyor speed. The results indicated that these speeds had the
greatest effect on lid torque.
Armed with this information, it was a simple exercise in determining adjustments to
these settings that would result in consistent optimum torque. The experiment
employed by the project team was successful because it was able to identify the variable that had the greatest effect and its relationship to the quality specication of lid
torque.
Review the organizations quality policy and determine how your project team
will implement the policy.
How will your team identify potential quality problems and their potential
impact on the quality of the projects product, service, systems, or processes?
Will you use particular owcharting methods, benchmarking, design of
experiments, or other techniques?
Are there any standards and regulations that are applicable to your project?
Are there any activities or components that require the development of operational denitions to provide a common understanding of the projects quality
standards? If so, who is responsible for developing them?
Does your organization have any standard checklists that can be modied, or
used as is, to prompt employees to perform certain activities according to a
specic quality standard? If not, should checklists be developed? Who is
responsible for developing them? What are the conditions under which they
should be developed?
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How will your team design in quality to avoid expensive rework to bring
the quality back into conformance?
Are the proposed processes and systems worth the cost of implementing
them?
Describes the project management teams approach to implementing its quality policy (quality assurance, quality control, and quality improvement
approaches).
LESSON 6
Use existing software lters and create new lters to print reports: Project Status,
Resource Allocation, Budget, and Cash Flow.
Conrming that all the project managers will use the project software during the
business transformation program.
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LESSON 6
1.
Based on the scenario, which documents would you have used to identify the primary
project objectives for this project quality plan?
a) OGC quality policies and procedures
b) Project scope statement
c) Process improvement plan
d) Project management plan
2.
True or False? The process improvement plan helps remove activities that do not contribute to producing products of required quality.
True
False
3.
Which tool can be used to monitor repetitive activities and help identify if the project
management processes are under control?
a) Benchmarking
b) Control charts
c) Flowcharting
d) Cost-benefit analysis
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4.
The PMO has identified a list of objectives for all project managers in the use of the
software. What would you include in your quality plan that will address the level of
quality achieved by each project manager?
5.
The PMO has provided a complete list of activities as expected improvements after
training. What could your team use as a way to determine the degree of improvement
after training?
6.
What are some ways that you could identify the level of quality of the vendor instructor?
7.
LESSON 6
TOPIC B
Document the Project Roles,
Responsibilities, and Reporting
Relationships
Now that you have created a quality management plan for your project and put plans into
place to ensure that standards for quality will be met and measured, you are ready to move
forward with the next element of good planning, which is documenting how people on your
project will interact. In this topic, you will document the roles, responsibilities, and reporting
relationships for the people working on your project.
You want to take steps to make sure that everyone working on your project knows what their
roles and duties are and that those responsibilities are clearly articulated and documented. By
carefully orchestrating the roles and responsibilities of everyone involved on your project, and
making sure that those relationships are documented, you will effectively ensure that everyone
on the project has a clear understanding of their duties. This will help eliminate confusion and
misunderstandings throughout the life cycle of the project, and will help everyone feel that
they are part of a smoothly running operation.
Creating a human resource plan that documents the human resource skills required to
complete the project successfully.
Planning for the availability of resources with a rare blend of skills and of those working
on multiple projects.
The develop human resource plan process tries to make the most effective use of people
involved in the project by rst determining project interfaces, staffing requirements, and constraints. Factors such as project costs, schedules, risks, and quality may also be affected when
developing the human resource plan, which should include these issues and a plan for providing appropriate solutions.
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LESSON 6
Input
Description
214
Description
Networking
LESSON 6
Tools and Techniques
Description
Organizational theory
Output
Description
Describes how human resources working on the project must be identied, managed, controlled, and released after the end of the project. The
human resource plan should be reviewed throughout the project life
cycle to ensure applicability and validity. It includes:
Roles and responsibilities: Determined for each element of the
projects scope of work. Typically done with a Responsibility
Assignment Matrix (RAM). Some of the factors that need to be fullled when determining roles and responsibilities include role,
authority, responsibility, and competency.
Project organization charts: Illustrate the projects organizational
structure.
Staffing management plan: Describes the project management
teams approach to managing the increase and decrease of project
staff across the project life cycle.
Organizational Structures
An organizational structure dictates how the various groups and individuals within the organization interrelate. The organizational structure also impacts how the project team is structured.
The type of organizational structure often limits the availability of resources and the terms
under which those resources are available to the project.
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LESSON 6
Organizational Structure Types
There are four types of organizational structures: functional, projectized, matrix, and composite.
Organizational Structure
Characteristics
Functional organization
Each department is responsible for carrying out a specic, similar set of activities.
Multiple people perform each type of activity.
Reporting is hierarchical, with each individual reporting to a
single manager.
The project managers authority is low, relative to the functional
managers authority.
Projectized organization
The project manager and a core project team operate as a completely separate organizational unit within the parent
organization.
Core team members are typically responsible for the work of
extended team members in their functional area.
Team members are often co-located.
The project manager typically reports to a program manager and
has a signicant amount of authority and independence.
Some organizations may contain their own support systems,
such as a separate procurement or personnel department, or
share support systems with the parent organization.
Matrix organization
A blend of functional and projectized structures in which individuals still report upwards in the functional hierarchy, but they
also report horizontally to one or more project managers.
The matrixed reporting scheme may be a permanent one.
May be characterized as weak, balanced, or strong, depending
on the relative authority of the project manager to the functional
manager. An organization is said to have a strong matrix when
the project managers authority is higher than that of the functional manager.
Composite organization
Most modern organizations involve all the above structures at various levels. It is a combination of all the other types of
organizations.
Organization Charts
Denition:
An organization chart is a visual representation of a projects organizational structure.
Its purpose is to show both the reporting relationships within the project and the
projects relationship to the parent organization.
The complexity of the organization chart will vary with the complexity of the project.
Finally, the organization chart must clearly assign project tasks to team members.
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LESSON 6
A traditional functional organization chart is hierarchical and organized by department.
In a projectized organization chart, the functional team members report directly to the
project managers rather than the functional managers. An organization chart for a company using the matrix structure shows that the team members report vertically to a
functional manager and horizontally to a project manager.
Position Descriptions
To effectively create an organization chart, each team member must have a position
description that clearly delineates what his or her responsibilities are. Templates and
checklists, often obtainable from human resources, are good tools for creating position
descriptions.
Example: Different Organization Charts
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LESSON 6
Project Interfaces
Project interfaces are the various reporting relationships that occur within the project as well
as the boundaries of the project.
218
Interface
Description
Organizational
Technical
LESSON 6
Interface
Description
Interpersonal
Logistical
Relationships between project team members who are distributed across different buildings, countries, and time zones.
Political
Goals and expectations of internal and external project stakeholders and their
relationships with the projects.
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LESSON 6
Example: A Responsibility Assignment Matrix
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LESSON 6
PARIS Charts
PARIS charts are similar to RACI charts, where P stands for Participant, A for
Accountable, R for Responsible, I for Information, and S for Signature.
Item
Description
Staff acquisition
When planning resources, consider whether you will use team members
from within the organization or from external sources, the costs associated with the level of expertise required for the project, physical
location of resources, and the amount of assistance that can be provided
by other departments for the project management team.
Resource calendars
The staffing management plan details the time frame required for a
project and for each project team member. Optimizing the use of people
on a project will help nish the project on time and within budget. Use
of human resource charting tools such as resource histograms can help
illustrate the number of hours that a person, department, or entire
project team will be needed for each week or month over the course of
the project.
Training needs
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LESSON 6
Item
Description
Compliance
If the contract requires compliance with government regulation, contracts, or other standards, this should be stipulated in the staffing
management plan.
Safety
222
Review the staffing requirements for your project, which were identied during
resource planning, as well as external relationship requirements with clients, consultants, and/or vendors.
Make sure you have a good understanding of any constraints that may limit your
organizational planning options.
Address the organizational structure of the performing organization and how this
affects the structure of the project team.
If necessary, incorporate required roles and reporting relationships from any contractual agreements with unions or other employee groups.
Consider the competencies of expected staff members and how they affect the
projects reporting relationships or roles and responsibility assignments.
Ensure all key project stakeholders with reporting relationships are indicated in a
hierarchical format on the chart.
Analyze the formal and informal project interfaces that exist among the organizational units, technical disciplines, and individuals working on the project for their
possible impact on your organizational planning.
Create a RAM to document the roles and responsibilities for key project stakeholders.
Ensure the RAM is created as early as possible in the project and is updated as
necessary to reect changes in personnel or project focus.
Assign roles and responsibilities to stakeholders who are directly involved with
the project work rather than to senior managers or customers who have limited
and/or indirect involvement.
LESSON 6
Make sure each element of the projects scope is accounted for in the RAM and
provide a key to describe responsibility codes.
Distribute the organization chart and RAM appropriately, to all project team members and other key project stakeholders.
1.
Which step would be the logical first step in documenting the roles, responsibilities,
and reporting relationships of project team members?
a) Create a RAM to document the roles and responsibilities for key project stakeholders.
b) Create an organization chart to organize the team members into a hierarchy.
c) Consider the competencies of expected staff members and how they affect the
projects reporting relationships or roles and responsibility assignments.
d) Examine the staffing requirements of the project.
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LESSON 6
2.
After examining the staffing requirements of the project, your next step is to list possible constraints that would affect the organizational planning. Which options would
you include as constraints for this project?
a) The project includes resources from several different OGC buildings.
b) The project includes resources from outside the organization.
c) The project requires resources that are assigned to another project that may not be
released.
d) The project includes some resources that are new hires.
3.
Which item would you include in your documentation of the reporting relationships on
this project?
a) The training quality requirements.
b) The number of years of experience of each project manager.
c) The training instructor and manager will not only report to their management but will
also be responsible for several deliverables in your project.
d) The training and assessment costs.
4.
You have reviewed the Staffing Management Plan; to your surprise, it appears that
there are now staffing gaps due to resource reassignments. What could you do to
address this problem?
5.
At the conclusion of documenting project roles and reporting relationships, what key
documents would you create and distribute to project team members?
a) The project charter and a RAM.
b) An organization chart and a RAM.
c) The company quality policy and a RAM.
d) A cost-benefit analysis and a RAM.
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LESSON 6
TOPIC C
Create a Communications
Management Plan
You determined the roles, responsibilities, and reporting relationships for your project. Now
you need to dene how you and your project team will communicate with each other. In this
topic, youll put strategies in place to ensure effective communication by creating a communications management plan.
An effective communications management plan ensures that the right people receive the right
information at the right time. You dont want your people expending unnecessary energy
reporting on every little detail. Nor do you want to spend hours generating unnecessarily long
reports. Mastering the tools and techniques to develop an effective communications management plan will ensure that you deliver the signicant information to your stakeholders when
they need it.
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LESSON 6
Input
Description
Stakeholder register
Denes a strategy to maximize the stakeholder support and mitigate the negative impact of stakeholders on the project.
Assets such as lessons learned from previous projects help to identify communication needs and to plan project communication
activities.
Description
Communication requirements analysis Yields the communication needs of each stakeholder, allowing
the project manager to make informed decisions about communications systems.
The information used to identify communications requirements
of a project are:
Organization charts.
Project organizations.
Disciplines and departments working on a project.
Internal and external information requirements.
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LESSON 6
Tools and Techniques
Description
Communication technology
Communication models
Communication methods
Output
Description
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LESSON 6
Communications Requirements
Denition:
Communications requirements are the project stakeholders documented communications needs. They include relevant information that contributes to the success of a
project, as well as an analysis of cost, time, and logistics. Not all stakeholders will
require the same amount, level, or timeliness of communication. The variances must be
factored into the communications requirements.
Example: Communications Requirements for Meeting Stakeholder Needs
Communications requirements might include weekly meetings with a stakeholder to
summarize the progress of a project and the installation of a software program, such as
Microsoft Outlook, that facilitates the exchange of necessary information.
Communications Technologies
Denition:
Communications technology is any type of technology that is used for communications
planning, including websites, email, instant messaging, phones, and video
conferencing.
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LESSON 6
Some technologies are instantaneous, while others take time; some are interactive,
while others are one-way only. Some provide a historical record of what was communicated, while others are transient.
Example: Different Communications Technologies
What technologies are available for transmitting the given communication? Are
they appropriate to the type and value of the communication?
Are there technical difficulties or learning curve issues with communicating via
the technology?
Are there access issues, such as security-protected sites, which could limit the
number of audience members who could receive the communications?
What is the relative cost of each technology, taking into account the number of
communications and number of audience members who must receive them?
Consider any relevant global communications issues that may affect your project;
how might they inuence your choice of the most appropriate technology?
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LESSON 6
How to Create a Communications Management
Plan
Effective communications management plans ensure that all project team members are aware
of the type and format of information shared with project stakeholders for the success of the
project.
Guidelines:
To create an effective communications management plan, follow these guidelines:
As a rule of thumb, project team members require more detail on a more frequent
basis. Senior management typically requires summary information on a less frequent basis.
230
Evaluate the expected project staff to identify their knowledge of and access
to proposed technology.
Conduct research to determine the likelihood that there will be changes to the
proposed technology before the project is over.
Make sure your communications management plan includes all key elements:
A collection and ling structure that describes the methods the project team
will use to collect and le project information.
The methods that will be used to distribute the various types of information.
Integrate the communications management plan into the overall project plan.
LESSON 6
Example: Creating a Communications Management Plan for a New Project
You are working on a project for a multinational company. Communications for this
project have been particularly difficult, with members missing the vast amount of information being generated or acting on misinformation. These errors have cost thousands
of dollars in lost work hours. Youve discovered that the problem is due to the geographic dispersal of team members and the irregular schedules of several stakeholders.
Based on these considerations, you have determined that the communications management plan will use a web-based template that allows deployed staff to submit their
information into a uniform database. To facilitate information collection and dissemination, you determine that an online form will categorize the data while the online
program organizes the data and automatically prepares reports in email format that are
delivered on a schedule based on the needs of all stakeholders.
You integrate all information into the communications management plan and provide
copies to all project stakeholders.
1.
Which item should you use to determine the communications needs of your project
stakeholders?
a) Research material
b) Stakeholder analysis data
c) Project report deadlines
d) Executive board schedule
2.
Given the scenario, what would be a good technology for enhancing team member
interactions and building relationships through the life of the project?
a) Team building event at project kick-off.
b) Project team threaded discussion board.
c) Use email and databases to collect and store information.
d) High quality virtual teleconferencing on a semi weekly or weekly basis.
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LESSON 6
3.
Given the scenario, what would be a good primary communication technology for
exchanging project information?
a) Phone exchange with email confirmation
b) Weekly face to face meetings
c) Voice mail
d) Video conferencing
4.
After integrating the communications management plan into the overall project plan,
what would be the next logical step?
a) Determining whether there will be changes to the proposed technology before the
project is over.
b) Creating a schedule for the production of each type of communication.
c) Distributing the plan to all the stakeholders.
d) Creating a description of stakeholder communication requirements.
Lesson 6 Follow-up
In this lesson, you identied quality standards and metrics for measuring quality performance.
You also identied project team interactions and addressed the communications needs of the
team and stakeholders and created an effective communications plan. These tools provide you
with the necessary framework to effectively plan project quality, staffing, and communications.
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1.
What specific benefits would enlisting stakeholder support bring to your quality,
resource, and communications planning efforts?
2.
What are some factors you will consider when determining a structure for your organization?
LESSON 7
LESSON 7
Lesson Time
2 hour(s), 45 minutes
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LESSON 7
Introduction
You have gone to considerable effort to construct a sound project management plan, including
plans for managing cost, quality, and communications. In this lesson, you will develop a risk
management plan so that you can identify and mitigate the risks to your project.
Unexpected events can upset your work plan or bring your project to a screeching halt. Experienced project managers take steps to plan how they will manage potential risks to their
projects. Risk analysis and planning allow you to be proactive, identifying and circumventing
potential issues, rather than scrambling to respond to problems. Your risk management plan
will help to identify and neutralize risks before they can affect the project.
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LESSON 7
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LESSON 7
TOPIC A
Examine a Risk Management Plan
All projects carry risk, and as a project manager, it is your responsibility to conduct effective
risk management planning to mitigate any potential issues. In this topic, you will plan and
execute risk management activities and examine a risk management plan.
The nature of project management carries with it inherent risk that things can go differently
than you had hoped or planned. Deciding how to approach and plan for project risk early in
the planning phase can help you to maximize the opportunities in positive risks and minimize
the consequences of adverse risks that may occur during the life of your project.
Risks
Denition:
A risk is an uncertain event that may have either a positive or negative effect on the
project. Its primary components are a measure of probability that a risk will occur and
the impact of the risk on a project. Some common ways to classify risk are effectbased classication, source-based classication, and level of uncertainty. The level of
uncertainty describes how much is known about the risks, which are often described as
knowns, known-unknowns, and unknown-unknowns.
Example: Weather Risks
Due to its relative unpredictability, the weather is a risk common to business. An organization planning an outdoor festival will likely choose a location and day with the
highest probability for agreeable weather. In this scenario, the threat of rain is a risk
that could seriously affect attendance and revenue. Because the weather is known to be
a possible risk, but its impact is yet unknown, this risk would be classied as knownunknown.
Figure 7-2: The project risk management process with the six main processes.
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LESSON 7
Business Risk vs. Insurable Risk
Denition:
Risk can further be classied in two ways: as business risk or insurable risk. A business risk is one that is inherent in a business endeavor, such as when a company
assumes that it will spend money as well as make money, and that any project undertaken carries with it the potential for either success or failure, prot or loss. Insurable
risk is a risk that has only the potential for loss and no potential for prot or gain. An
insurable risk is one for which insurance may be purchased to reduce or offset the possible loss.
Example: Risks in a Retail Store
For a retail store owner, the outlay of money to purchase inventory without a guarantee that it will sell is a business risk. A loss of inventory due to a re is an insurable
risk.
Business Risk
Description
Competitive
Legislative
Risks such as the risk of new laws or changes in regulations governing your
products, goods, or services requiring your company to spend more to maintain compliance.
Monetary
Risks such as the risk of increased prices for raw materials, increased taxes,
increased operating costs, and losses due to nonpayment by customers.
Operational
Risks such as the risk of fraud, theft, employee injury, workplace accidents,
and damage to equipment.
Insurable Risk
Description
Liability risk
Personnel-related risk
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LESSON 7
Risk Management Plan
Denition:
A risk management plan is a document that describes the teams approach to identifying risks. It identies the methodology, approaches, and tools that will be used,
documents the roles and responsibilities of those involved, identies the budgeting and
the scheduling for risk management activities, and identies risk categories.
The risk management plan does not address responses to risks. These are addressed in the risk
response plan.
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LESSON 7
Input
Description
Describes the interactions that happen on the project and determine the right resource to share the available information on
risks and responses at a suitable time and location.
Pre-dened approaches to risk management include risk categories, common denition of concepts and terms, risk statement
formats, standard templates, roles and responsibilities, authority
levels for decision-making, lessons learned, and stakeholder registers.
Management Reserves
Management reserves are budgets withheld by senior management to manage
unplanned changes to project scope and cost. They are not part of the cost baseline but
may be included in a projects total budget. Project managers must obtain approval to
spend management reserves.
Description
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LESSON 7
Output
Description
Made up of methodology, descriptions of roles and responsibilities, budgeting, timing, risk categories, denitions of risk probability and impact,
probability and impact matrix, revised stakeholders tolerances, reporting
formats, and tracking.
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Component
Description
Methodology
Predened matrix with risk priority areas earmarked, which has product of impact value on x
axis and probability value on y axis.
Budgeting
Timing
Risk categories
Reporting formats
Denes how outputs of this process will be documented, analyzed, and communicated.
Tracking
LESSON 7
Risk Breakdown Structures (RBS)
Denition:
A Risk Breakdown Structure (RBS) is a hierarchical arrangement of identied risks that
helps project managers to organize potential sources of risk to the project. Functioning
much like a work breakdown structure, an RBS arranges categories into a hierarchy.
This approach allows the project team to dene risk at very detailed levels.
Example: RBS
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LESSON 7
Source-Based Risk Classication
Denition:
Source-based risk classication is a method of analyzing risk in terms of its origins.
Sources may be internal or external to the project, as well as technical, non-technical,
industry-specic, or generic.
Example: Source-Based Risk Classication for a Project
For a project requiring internal and external resources, such as an advertising campaign, a project manager might classify the risks in terms of where they originate. One
source of risk could be the potential rise in the price of advertising time on network
television, which could affect cost and scope. Another source of risk could be the failure of an external advertising agency to meet its deadlines, which would affect
schedule and scope.
Probability Scales
Denition:
A probability scale is a graph showing the assignment of value to the likelihood of a
risk occurring. Probability scales are designed using a variety of values, such as linear,
non-linear, or an ordinal scale using relative probability values ranging from very
unlikely to almost certain. A risks probability score can range in value from 0.0 (no
probability) to 1.0 (certainty).
Example: A Probability Scale
Figure 7-5: A probability scale with values showing the likelihood of a risk
occurring.
Impact Scales
Denition:
An impact scale is a rating system showing the assignment of a value that reects the
magnitude of the impact of a risk event on project objectives. They can be ordinal
scales using values of very low, low, moderate, high, and very high. They can also be
ordinal scales using linear or non-linear numeric values. Often, impact scales use both
methods. To improve the integrity and quality of the data and make the processes consistent and repeatable, organizations typically develop denitions for each value to help
the risk management team assign each risks impact score consistently.
Example: Impact Rating Scale
The following table shows an organizations impact scale.
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LESSON 7
Impact Rating
Impact Level
Denition
Very low
Low
Moderate
High
If this risk occurs, the impact on the project would be signicant and would create major customer or sponsor
dissatisfaction. The project would be in jeopardy.
Very high
Levels of Uncertainty
Levels of uncertainty describe the risks of a project based on how much is known about the
source and effect of the risk.
Level of Uncertainty
Known
Items that you know could affect you, and for which you can
roughly predict the nature and extent of the effect.
Example: Staff turnover.
Known-unknown
Items that you know could affect you, although you are not able to
predict how or how much they will affect you.
Example: Competition in the marketplace.
Unknown-unknown
Items that are beyond your ability to foresee, predict, or prepare for.
Example: Unexpected budget cuts.
Risk Analysis
Denition:
Risk analysis is the evaluation of the probability and impact of the occurrence of a
risk. Risk analysis is typically conducted through either qualitative or quantitative techniques. The level of risk to the project is the product of the probability of the risk
occurring and the predicted impact that the risk will have on the projects success.
Example: Risk Analysis for a New Venture
A manufacturing company would conduct various kinds of risk analyses before launching a new line of products. They would evaluate the probability and impact of the risks
that would be associated with this new venture, which might include the costs of
research and design, the potential for future sales and revenue from a new product line,
uctuating consumer demand, competition from rivals, and pending consumer-safety
legislation, which might govern the manufacturing of the new products.
Lesson 7: Analyzing Risks and Planning Risk Responses
Copyright Element K Corporation
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LESSON 7
Risk Tolerance
Denition:
Risk tolerance refers to the level of risk acceptable to a project manager or key stakeholder when the investment is compared to the potential payoff.
Example: Risk Tolerance Between Stakeholders
Two stakeholders might perceive risk differently. One stakeholder might be interested
in only conservative, low-risk projects that are similar in nature and scope to many
past successes. Another stakeholder might seek out high-risk ventures in uncharted territory; they might be willing to risk a great amount of capital on a speculative project
with the potential for large returns.
Description
Risk-averter
Risk-seeker
Accepts an uncertain outcome and may be willing to take a high risk regardless of the consequences.
Risk-neutral
Determine how you will organize your projects risk management team.
244
Dene the roles and responsibilities for each person on the risk management
team.
The sponsor may be able to assist in some risk management activities, such
as developing response strategies for all risks classied as high risks.
Consult your organizations risk management policy and make sure your risk
planning complies with the policy. If your organization has a risk management
plan template, use it and make modications to meet the specic needs of your
project.
LESSON 7
Describe the approaches, tools, and data sources that may be used to perform risk
management activities for this project.
How will the risks be identied? Will you conduct brainstorming sessions?
Will you use the Delphi technique? Will you use subject matter experts?
How will the identied risks be scored and analyzed so that effective
response strategies can be developed? Is there organizational policy mandating a specic scoring and prioritization method?
Determine and describe the schedule for performing risk management activities.
Determine and describe how your team will document risk response efforts.
What tools will your team use to store risk information and track responses?
How will the risk response efforts be communicated to the project stakeholders?
Determine and describe how the lessons learned from your risk management
activities will be documented for the benet of future projects.
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LESSON 7
1.
During your project review, you determine that a risk officer is needed to handle risk
management activities. Which activities would you assign to this person?
a) Develop response strategies.
b) Confirm and articulate the risks probability and impact to the business strategy.
c) Coordinate risk identification and analysis activities.
d) Assign roles and responsibilities to each team member.
2.
With your planning meetings started and budget decided, your team begins the task of
determining how to identify risks. Which is the first place to look for risk planning?
a) Other project risk management policies
b) The organizations risk management policy
c) The project scope statement
d) The organizations quality policy
3.
The risk management plan for your OGC PM Training Roll-Out project uses a probability
scale to define the probability of occurrence of a risk listed in the risk register. Which
is the probability scale defined for the project?
a) 1, 3, 5, 7, 9, 11
b) 0.1, 0.3, 0.5, 0.7, 0.9
c) 2, 4, 6, 8, 10, 12
d) 1.1, 1.3, 1.5, 1.7, 1.9
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LESSON 7
4.
Which additional factor should you consider when developing your risk management
plan?
a) Job descriptions
b) Geography of the project team
c) Thresholds
d) Communication technology
5.
You have integrated specific risk related activities and deliverables into the projects
schedule and documented how to track risk response efforts in your risk management
plan. Which task should you perform to complete the risk management plan?
a) Determine how to document lessons learned for future projects.
b) Determine the necessary budget.
c) Make sure that roles and responsibilities are clearly understood by the team and
other stakeholders.
d) Create a payoff matrix.
6.
Which section of the risk management plan highlights the risk priority areas for the
project?
a) Methodology
b) Probability and Impact Matrix
c) Roles and Responsibilities
d) Frequency of Updating Risk Registers
7.
True or False? As per the OGC Risk Management Plan, the OGC PM Training Roll-Out
project requires a quantitative risk analysis to be performed to assess the risk exposure events of your project.
True
False
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LESSON 7
TOPIC B
Identify Project Risks and Triggers
You created a risk management plan. Using the approach outlined in the plan, you can begin
the process of identifying the potential risks that may affect your project. In this topic, you will
delve into the risk identication component process and identify project risks and triggers.
Identifying risks and triggers helps you determine the most effective action to take for each
risk. Mastering the tools and techniques to identify project risks and triggers ensures that you
are prepared to take the appropriate action.
Triggers
Denition:
Triggers are the early warning signs or indications that a risk to your project is about
to occur. Triggers could be external factors that inuence your project, such as changes
in relevant legislation. They could also be internal factors that inuence your project,
such as changes in staffing, governance, or funding within your organization. Triggers
must be examined during regularly scheduled risk review sessions held during the life
of the project.
Example: Trigger Indicators
For a project involving the production of an independent documentary for television,
news of an impending television writers strike would be a trigger. If the writing on
the documentary had not yet been completed, the trigger could indicate the negative
risk that critical external resources would not be available during the strike. If the writing on the documentary had been completed, the trigger could indicate the positive risk
that the networks demand for the product could increase in the absence of other new
programming.
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LESSON 7
Input
Description
Provide a quantitative assessment of the costs involved in completing each scheduled activity, with range of estimates indicating risk
range. They also provide an indication whether the cost estimates
are sufficient or insufficient to complete the activities.
Indicate the time allotted for each activity or for the whole project.
They are reviewed periodically for identifying the risk involved in
the estimated durations.
Scope baseline
Contains the project scope statement that includes project assumptions and their uncertainties, and the detailed WBS of potential
risks.
Stakeholder register
Describes the project management teams approach to implementing the quality policy. It is reviewed to identify risks related to
quality and those might be generated by the quality management
plan.
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LESSON 7
Input
Description
Project documents
External sources of risk information may include commercial databases, academic studies, published checklists, industry studies, risk
attitudes, or benchmarking.
Description
Documentation reviews
Information-gathering techniques
Data collection methods such as brainstorming, the Delphi technique, interviewing, and root cause analysis that the project team
can use to assist in identifying risks.
Checklist analysis
Assumptions analysis
Diagramming techniques
Cause-and-effect diagrams, process owcharts, and inuence diagrams are used to identify risk causes.
SWOT analysis
Expert judgment
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LESSON 7
Output
Description
Risk register
The risk register contains the list of identied risks and the potential responses.
When complete, the risk register will ultimately contain the outcomes of the
other risk management processes, including the results of the qualitative risk
analysis, quantitative risk analysis, and risk response planning.
Information-Gathering Techniques
Information-gathering techniques are methods used to collect data that will assist the project
team in identifying risks to the project.
Technique
Description
Brainstorming
Used to identify overall project risks or may focus in on the risks within
a particular project segment or work package.
Delphi technique
Interviewing
Used to identify problems, discover the root cause, and develop corrective actions.
Diagrammatic
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LESSON 7
Risk Registers
Denition:
The risk register is a document that identies and categorizes risks, potential risk
responses, and their triggers, or warning signs. If risk categories are changed, the risk
register must be updated. Any possible risk responses included in the risk register are
forwarded for use in the risk response planning process. The risk register will be
updated with the results of other risk management processes and provided to any
project team members involved in project risk management.
The risk register will ultimately contain the outcomes of the other risk management processes, including the results of the qualitative risk analysis, quantitative risk analysis, and risk response planning. In
its initial stage, the risk register does not necessarily contain information regarding planned responses
to mitigate the effects of risk.
Risk Categories
Risk categories divide project risks into areas reecting common sources of the risk.
Risk Category
Examples
Organizational risks
Technical changes.
Changes to industry standards during the project.
Reliance on unproven or complex technology.
Unrealistic performance goals.
Union issues.
Change of management in customers organization.
Regional security issues.
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LESSON 7
How to Identify Project Risks and Triggers
It is important to identify and document the characteristics of risks that might affect the project
so that the project team can determine the most effective action to take for each risk.
Guidelines:
The project risks and triggers identied will determine the type of risk analysis to be
performed. To identify project risks and triggers, follow these guidelines:
Project charter
WBS
Product description
Resource plan
Procurement plan
Use one or more risk identication techniques to identify risks and their possible
triggers. Techniques may include:
Risk identication checklists (make every effort to itemize all types of possible risks to the project on the checklist).
Assumptions analysis.
Think outside the box. Apply your method consistently, but be on the lookout for
special circumstances that might arise in any project segment. Those checklists
and templates are in place to help get the risk identication process going, but
they are far from complete. As the project progresses, circumstances change. Be
on the lookout for changed assumptions, new risks, or additional impacts from
previously identied risks.
Consult relevant historical information, such as risk response plans and nal
reports from previous, similar projects that may include lessons learned describing
problems and their resolutions. Another source of historical information for risk
identication is published information, such as commercial databases, academic
studies, and benchmarking results.
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LESSON 7
Once risks have been identied, group them into categories that reect common
sources of risk for your industry or application area. Examine each identied risk
to determine what triggers will indicate that a risk has occurred or is about to
occur.
1.
To identify risks for this project, you and your project team will meet as a group to
identify and examine as many of the strengths and weaknesses within OGC that can
potentially impact the project as you can, as well as any opportunities or threats that
may be imposed by the external training provider. Which information-gathering techniques will you use?
a) Brainstorming
b) Interviewing
c) Delphi technique
d) SWOT analysis
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LESSON 7
2.
3.
What is the trigger for the software upgrade risk that has been identified?
a) The enhancements to the project tracking and communications software.
b) The IT department scheduling the software upgrade.
c) The impact the upgrade will have on the PM Training Roll-Out project by narrowing
the RFPs sent to external training providers.
d) The potential increase to the total costs of training that the upgrade will cause.
TOPIC C
Perform Qualitative Risk Analysis
You identied which risks might affect your project and documented their characteristics. Now
you must assess the impact and likelihood of these identied risks. In this topic, you will
explore the perform qualitative risk analysis process, where you will rank and prioritize project
risks according to their potential effect on project objectives.
Identifying risks is only one part of an effective strategy to minimize work activity disruptions
that could cause your project to go over budget or exceed its promised deadline. Its important
to rank their importance so that precious time isnt wasted trying to mitigate risks with a low
priority. Qualitative risk analysis lays the foundation for effectively quantifying high priority
risks to your project.
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LESSON 7
However, a recent weather bureau announcement has indicated that there is a slight
possibility that the low-pressure area that has developed beside the coastal city can
cause heavy rains on the day of the concert. The organizing committee officials decide
to have a discussion about the weather risk with all the stakeholders involved to evaluate the impact of risk on the project objectives, on the basis of a scale of low, medium,
and high.
The members discuss the issue, list different areas of concern, and rate them. The
members nd that in the worst case scenario, the low-pressure area over the coast may
develop into a tropical storm, accompanied by very heavy rains and wind. But the
chances of that are remote, since the weather bulletin does not project a tropical storm
and indicates that there is only a slight possibility of heavy rains.
Secondly, some of the members were concerned that heavy rains might force people to
stay indoors and reduce the incremental revenue from ticket sales at the box office on
the day of the event, as well as from sales of souvenirs and concessions at the event.
But on the contrary, others felt that since the concert is to be held inside an auditorium, the chance of rain having a big impact on the audience turnout is remote. Also,
even a seat occupancy rate of 50% would ensure that the expenditure involved with
this event can be reclaimed.
Based on the deliberations, the organizing committee nally concludes that the risk
exposure is low or at the worst, is moderate in nature. The event managing company
documents the information in the risk register.
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LESSON 7
Input
Description
Risk register
A project scope that is very complex or unfamiliar to the organization will carry much more risk than project scopes that are more
common. The risks inherent in familiar project scopes are already
documented and more easily anticipated.
Description
Risk categorization
Expert judgment
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LESSON 7
Output
Description
The risk register contains the list of identied risks; it should be updated
with the results of the qualitative analysis.
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LESSON 7
Component
Description
The overall risk ranking for a project can be determined by adding the individual risk factor scores
and dividing by the number of risks.
Risks that are not urgent and do not require nearterm action can be documented on a watchlist for
monitoring.
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LESSON 7
Component
Description
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Analyze the data available for each risk to assign a data precision ranking score.
Are there risks that require further monitoring? Should they be placed in the
risk register for watching?
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LESSON 7
Analyze the probability and impact of each identied risk using well-dened
probability and impact scales.
Determine the risk factor scores using a probability and impact risk matrix.
Prioritize the risks according to the risk management plan. Identify risks that
require further analysis. Determine the overall risk for the project and compare
with the organization risk threshold.
Risk Register
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1.
Based on the OGC Risk Event Impact Scale, which of the risks should receive the highest priority for this project?
Based on OGCs risk event impact scale, the risk event impact is 2.5. How is the risk
impact for this project best described?
a) Between Very Low to Low
b) Between Low to Moderate
c) Between Moderate to High
d) Between High to Very High
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3.
You need to enter the risk factors into the risk register for the work activity, Obtain
External Training Provider. In the Risk Register document, list the risk probability rating for each task.
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4.
For each risk that is identified, provide an impact rating for the work activity, Obtain
External Training Provider. In the Risk Register document, list the risk impact rating
for each task.
TOPIC D
Perform Quantitative Risk Analysis
You performed a qualitative risk analysis for your project. Now you can determine the extent
of the risk exposure to your entire project. In this topic, you will examine the perform quantitative risk analysis process and perform a quantitative risk analysis.
Taking advantage of opportunities can often mean turning a negative outcome into a positive
one. By performing a quantitative risk analysis, you can take steps to maximize the positive
consequences of the opportunities facing your project.
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Quantitative Risk Analysis
Denition:
Quantitative risk analysis is a technique used to assess the risk exposure events to
overall project objectives and determine the condence levels of achieving the project
objectives. Quantifying risk can help you to identify time and cost contingencies of a
project. It further renes and enhances the prioritization and scoring of risks produced
during qualitative analysis.
Example: Quantitative Risk Analysis for the Supply-Chain Management Software
Project
The project team on the Supply-Chain Management Software project identies process
data for a statistical analysis using a Monte Carlo simulation to determine the condence level that the project will be completed on time and within the budget. The team
identies critical project parameters, which affect project schedule. The team further
determines project success rate, and makes decisions about viable project alternatives
taking into account the risks within the project.
Everyday Practicalities
In most everyday project management scenarios, conducting a qualitative risk analysis
is adequate to meet the project managers purposes; only in very sophisticated, mature
project management environments is there much additional value added by conducting
further quantitative risk analysis.
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Input
Description
Risk register
Sets the criteria for developing and controlling the project schedule.
Contains information on completed projects, studies from risk specialists, and risk databases.
Description
Expert judgment
Utilizes subject matter expertise to analyze potential cost, identify schedule impacts, and validate risks. Also, utilized for
interpretation of data and to identify the strength and weakness
of the tools used.
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Output
Description
Component
Description
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The qualitative risk analysis has already suggested the descending order of risks. The
following table displays the total exposure of all the risks for the project as 3.22% and
the exposure of the top four risks as 2.37%. Considering the top four risks, the team
determines the exposure to these risks as 73.6%.
Basics of Probability
When you perform probabilistic analysis, you will need to apply some of the basic principles
of probability.
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Principle of Probability
Description
Sum of probabilities
Mean
Median
The number that separates the higher half of a probability distribution from the lower half. It is not the same as the average,
although the two terms are often confused.
Average
Standard deviation
Probability Distribution
Denition:
Probability distribution is the scattering of values assigned to likelihood in a sample
population. It can be visually depicted in the form of a Probability Density Function
(PDF). In a PDF, the vertical axis refers to the probability of the risk event and the
horizontal axis refers to the impact that the risk event will have on the project objectives.
Example: A Probability Distribution Graph
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Subjective vs. Objective Probability
Probability can be assigned subjectively or objectively. Subjective probability is based
on peoples opinions, which may be shaped by information, experience, and attitude.
Even if they are given the same set of facts, they may make very different determinations of the probability of an event. Objective probability is deduced mathematically.
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Example: A Bell Curve
Figure 7-15: A triangular distribution PDF graph displaying asymmetrical distribution of probabilities.
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Decision Making Under Risk
Denition:
Decision making under risk refers to assigning probabilities to the possibility of each
state of nature occurring. The best choice of strategy is the strategy with the largest
expected value where the expected value is the sum of the payoffs multiplied by the
probability of occurrence for each state of nature.
When assigning probabilities, it is important that they are based on valid information and are not
assigned erroneously.
Strategy
Lots of Snow
Little Snow
Strategy 1: Snow-maker
Lite
$90,000
$55,000
$35,000
Strategy 2: Snow-maker
Deluxe
$75,000
$70,000
$65,000
To analyze each strategy under risk, probabilities must be assigned to the possibility of
each state of nature occurring. Based on weather history in their area, the probability
of lots of snow is considered to be 45%, of little snow 35%, and of a dry but cold season as 20%.
Strategy
Calculation
Snow-maker Lite
Snow-maker Deluxe
We should consider the cost of machines in this calculation. $10,000 should be subtracted from the
prot value of Snow-maker Lite and $25,000 should be subtracted from the prot value of Snow-maker
Deluxe.
The best choice of strategy is the strategy with the largest expected value (Snow-maker
Lite strategy) where the expected value is the sum of the payoffs multiplied by the
probability of occurrence for each state of nature.
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Quantitative Analysis Methods
Quantitative analysis methods allow project managers to consistently determine the probability
and impact of each risk.
Method
Description
Sensitivity analysis
EMV and decision tree analysis are commonly used together to come to a nal decision.
Sensitivity Analysis
Sensitivity analysis is a method of assessing the relative impact of changing a variable
in the project to gain insight into possible outcomes of one or more potential courses
of action. Sensitivity analysis places a value on the effect of changing a single variable
within a project by analyzing that effect on the project plan.
Sensitivity analysis is probably the simplest method of analyzing the impact of a
potential risk and its results are easy for project stakeholders to understand. However,
it does not lend itself well to assessing combinations of risks and how they might
affect a project. Furthermore, the sensitivity diagram does not provide an indication of
anticipated probability of occurrence of the risk event.
Often, sensitivity analysis is performed independently on a number of variables. When
displayed on a single graph or sensitivity diagram, the results allow you to compare
which variables have the highest likely impact on project performance. Typically, it is
only performed for variables that are likely to have a major impact on project performance in terms of cost, time, or economic return.
Decision Tree Analysis
Decision tree analysis is an assessment of the data obtained using the decision tree
method to evaluate various possible outcomes. Decision trees allow decision-makers to
factor in both probability and impact for each branch of every decision under consideration, making it a useful tool for risk analysis. Solving the decision tree indicates the
decision that will provide the greatest expected value when all the uncertain implications, costs, rewards, and subsequent decisions are quantied.
Expected Monetary Value (EMV) Analysis
Expected Monetary Value (EMV) analysis is a method of calculating the average outcome when the future is uncertain. Opportunities will have positive values and risks
will have negative values.
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EMV is found by multiplying the monetary value of a possible outcome by the probability it will occur. This is done for all possible outcomes and their gures are added
together. The sum is the EMV for that scenario.
This technique is used in decision tree analysis; EMV must be calculated in order for
the analysis to nd the best outcome. The best outcome is the lowest combination of
cost and EMV.
Modeling and Simulations
Simulations involve calculating multiple project durations with different sets of activity
assumptions. A project simulation uses a model that translates project uncertainties into
their potential impact on project objectives. The project model is created many times
with different variables to calculate a probability distribution.
Simulations
Denition:
Simulation is a technique that uses computer models and estimates of risk to translate
uncertainties at a detailed level into their potential impact on project objectives. For
schedule development, simulation involves calculating multiple project durations with
varying sets of assumptions regarding project activities.
Example: Simulations
You are planning a multimedia campaign for a client. Your team is divided as to which
printing contractor to use. Printer A has handled similar projects for you in the past.
However, they are poorly staffed and turnaround time can be slow. Printer B is a large
company with modern equipment and fast turnaround time. However, their remote
location will add at least a day for each shipment of the product.
Your team simulates two project activity durations using each of the printers. Your
simulations take into account factors such as previous turnaround times for similar
projects, realistic shipping times, and maximum production capabilities. Based on your
simulation results, you decide to stick with Printer A.
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In more general business terms, Monte Carlo refers to not one single analysis
method but to a wide class of techniques, mostly making use of sophisticated computers and inputs of random numbers, probabilities, and algorithms. It has a wide range of
applications in many elds, including nance and engineering; since it works effectively with large inputs of numbers, it is well suited to complex project management
problems in which more than a few inputs like costs, activity, and durations are
unknown.
Example: Monte Carlo Analysis for a Project
Stakeholders have asked a project manager to estimate how long it will likely take to
produce a project involving three tasks and an inexperienced team. The rst task is
scheduled to take 30 days, the second task is scheduled to take 60 days, and the third
task is scheduled to take 90 days, but with inexperienced resources these activity durations are optimistic and could take more time. Using a software application, the project
manager would run a Monte Carlo simulation analysis using these inputs as well as the
probability that each task will be completed early, on time, and late. After running the
Monte Carlo analysis repeatedly to generate a range of results, he estimates that this
project has a 40% probability of being completed within 170 days, a 60% probability
of being completed within 180 days, and an 80% probability of being completed
within 200 days.
Begin with your original estimate of time or cost. Break out the various components of the estimate into manageable chunks. Determine the variable that you
wish to investigate and identify its likely range of variation.
Calculate and assess the impact of changing the range of results on the overall
project estimate for each value in the range.
Consult historical information, such as similar completed projects, studies of similar projects by risk specialists, and risk databases for information that may be
useful for quantitative risk analysis on your project.
If expertise resides with more than one or two people and the problem does
not lend itself to precise analytical techniques but can benet from subjective
judgments on a collective basis, consider using the Delphi technique.
Consider using the direct method when time or resource constraints do not
allow for more complex, resource-intensive methods and questions can be
phrased clearly and concisely.
If your expert has a solid understanding of probability concepts and is familiar with PDFs, consider using the diagrammatic method.
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Perform a sensitivity analysis to determine which risks have the most potential
impact on the project by examining the extent to which the uncertainty of each
element affects the objective being examined if all other uncertain elements are
held at their baseline values. Use the decision tree analysis technique to examine
the implications of choosing one or two or more alternatives by incorporating the
probabilities of risks and the costs or rewards of each logical path of events and
future decisions.
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1.
Which analysis technique was used in the Analyzing Project Risk image to determine
the most cost-effective choice of a training provider?
a) Delphi
b) Diagrammatic
c) Simulation
d) Decision tree
2.
What is the probability that Vendor 1 will complete the project on time?
a) 70 percent
b) 60 percent
c) 50 percent
d) 40 percent
3.
What is the probability that Vendor 2 will run over the allotted time for the project?
a) 40 percent
b) 50 percent
c) 60 percent
d) 70 percent
4.
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5.
Your team combines the EMV at the end of each vendors network end-points to arrive
at a net proceed for each vendor. You want to choose the vendor bid with the most
economic advantage for OGC. Based on this number, which vendor should your team
choose?
a) Vendor 1
b) Vendor 2
c) Vendor 3
d) Vendor 1 and Vendor 3
TOPIC E
Develop a Risk Response Plan
You performed a quantitative risk analysis for your project. Now you need to decide how you
are going to address these project risks. In this topic, you will perform risk response planning,
the nal risk planning component process, by developing a risk response plan.
Whether you realize it or not, each planned response stems from an identied risk. Developing
a risk response plan provides insurance for your project, because you are taking steps to ensure
that each possible scenario has an action plan.
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Plan Risk Responses Inputs
There are several important risk response planning elements contained in the risk management
plan and the risk register.
Input
Description
Risk register
Description
Expert judgment
Expertise provided by a group or individual with relevant experience and skill to take action on identied risks and establish
risk responses.
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Output
Description
Decisions to transfer risk that include insurance agreements, service agreements, or any risk sharing agreements.
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Strategy
Description
Risk avoidance
Risk transference
Involves shifting the impact of a risk event and ownership of the risk
response to a third party. This strategy typically is used in connection
with nancial risk exposure and most often involves payment of a risk
premium to the party assuming the risk.
Risk mitigation
LESSON 7
Strategy
Description
Risk acceptance
Strategy
Description
Risk exploitation
Often used when a project team wants to make sure that a positive risk is
fully realized. This is often done by hiring the best experts in a eld or
ensuring the most technologically advanced resources are available to the
project team.
Risk sharing
Entails partnering up with another party in an effort to give your team the
best chance of seizing the opportunity. Joint ventures are a common
example of risk sharing.
Risk enhancement
Risk acceptance
Contingency Plans
Denition:
A contingency plan is a risk response strategy developed in advance, before things go
wrong; it is meant to be used if and when identied risks become reality. An effective
contingency plan allows a project manager to react quickly and appropriately to the
risk event, mitigating its negative impact or increasing its potential benets. A contingency plan may include a fallback plan for risks with high impact. The fallback plan is
implemented if the initial contingency plan is ineffective in responding to the risk
event.
Example: Contingency Plan for an Outdoor Event
A rain date is a classic example of a contingency plan. For an outdoor event that could
be spoiled by inclement weather, such as a company picnic, the project manager could
announce in advance the contingency plan: in case of rain, the picnic will be postponed by one week.
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Contingency Reserves
Denition:
A contingency reserve is a predetermined amount of additional time, money, or
resources set aside in advance to be used to further the projects objectives in the event
that unknown risks or accepted known risks become reality. Contingency reserves
cover risk events that are not accounted for in the projects baseline duration and cost
estimates. The amount of the reserve is determined by the potential impact of the risk,
but should include enough to implement any contingency plans as well as a buffer for
dealing with unidentied risks.
Example: Contingency Reserve for a Trade Show
A project manager in charge of company participation at a trade show might solicit
help in the form of employees willing to participate. His contingency reserve would
take the form of human resources; he could solicit more volunteers than he expects he
will need. In the event that some employees are not able to participate at the last
minute, he will have a reserve of other employees to call upon.
Examine each identied risk to determine its causes and how it may affect project
objectives. Brainstorm possible strategies for each risk.
Choose the response strategy that is most likely to be effective for each identied
risk. Ensure that the chosen risk response strategies are:
Cost effective.
If you are unable to bring a risks rating below the organizations risk threshold,
ask your sponsor for help. Develop specic actions for implementing the chosen
strategy.
Identify backup strategies for risks with high risk factor scores.
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How much time will your contingency plans add to the schedule?
Determine how much of a contingency reserve you should set aside for unknown
risks (ones that have not been identied).
Consult the risk management plan for the description of the content and format of
the risk response plan. Include the following elements in your risk response plan:
A description of the identied risks along with the area of the project
affected (that is, the WBS element).
Response strategies selected and the specic actions for implementing the
strategies.
Level of residual risk expected to remain after the response strategies are
implemented.
Contingency plans and fallback plans for all accepted risks with high impact.
Incorporate the risk response plan into the overall project plan so the strategies
can be implemented and monitored. As the project progresses through the life
cycle, examine trends in qualitative and quantitative analysis results that may
guide your response strategies.
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A potential project software upgrade. IT approval may occur during the project
life cycle.
Instructor illness.
1.
The first risk has possible positive outcomes. Which risk response strategy should you
employ?
a) Risk avoidance
b) Risk enhancement
c) Risk mitigation
d) Risk sharing
2.
What response do you have regarding the risk of a potential project software upgrade
during the project life cycle?
3.
The change in organizational requirements due to the resignation of Vicky Morris has
possible negative outcomes to the project, but you have determined there is no way to
avoid the scenario completely. Which risk response strategy should you employ?
a) Risk avoidance
b) Risk enhancement
c) Risk mitigation
d) Risk exploitation
4.
You determine that instructor illness cannot be avoided. Which risk response strategy
should you employ?
a) Risk enhancement
b) Risk exploitation
c) Risk acceptance with a contingency plan
d) Risk acceptance without a contingency plan
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5.
What are some ways you would respond to the potential risk of instructor illness during the training?
Lesson 7 Follow-up
In this lesson, you analyzed risks and planned for risk responses. You created a risk management plan that describes how project risk management activities are structured and performed
throughout the project. By taking a proactive approach during risk planning, you arm yourself
with the necessary information to manage potential risks to your projects and ensure the best
possible environment for success.
1.
2.
What tools and techniques will you use to effectively perform qualitative risk analysis
for future projects you manage?
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LESSON 8
Lesson Time
1 hour(s), 30 minutes
Planning Project
Procurements
In this lesson, you will plan project procurements.
You will:
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LESSON 8
Introduction
You have planned for project risk and you are almost ready to transition your project into the
executing process group. But before you can do that, you need to identify ways of securing
external resources when necessary. In this lesson, you will plan project procurements and create a procurement management plan.
Competitive pressure and increased time-to-market are forcing many companies to look outside
their organizations to ll resource gaps and gain a competitive advantage. By clearly dening
your expectations and requirements, you enhance your chances of nding qualied, responsive
suppliers who can help you achieve a successful outcome for your project.
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LESSON 8
TOPIC A
Plan Project Procurements
Before you transition your project to the executing process group, you need to plan for the
project procurements based on the resource requirements that you have identied. In this topic,
you will plan project procurements.
Before you commence with the execution of a project, the project purchasing requirements and
decisions are to be identied and documented. This requires the identication of resources that
need to be procured from outside the project organization and an approach to identify potential
sellers for the project. A good procurement plan ensures that the risks and changes to the
project schedule are minimal.
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Plan Procurements Inputs
Project managers would require several inputs during the plan procurements process.
Input
Description
Scope baseline
Includes the detailed project scope statement, the WBS, and the
WBS dictionary.
Requirements documentation
Teaming agreements
Risk register
Project schedule
The organizational process assets that inuence the plan procurements process include:
Policies, procedures, and guidelines for formal procurements.
Management systems used by the organization in developing
the procurement management plan and in selecting the contract
types to be used to facilitate procurement.
The established multi-tier supplier system of pre-qualied suppliers based on prior project experience.
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Plan Procurements Tools and Techniques
Project managers use several tools and techniques in conducting the plan procurements process.
Description
Make-or-buy analysis
Expert judgment
Contract types
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Output
Description
Make-or-buy decisions
Procurement documents
The metrics that are used to evaluate each sellers proposal and make
comparisons among different proposals. The criteria can be objective
or subjective and are used to rate or score seller proposals.
Change requests
May apply to the subsidiary management plans in the project management plan, especially in light of new products or services being
acquired.
LESSON 8
Procurement Management Plans
Denition:
The procurement management plan is a document that outlines the specications for
procuring work from outside sources; it species the types of contracts that will be
used, describes the process for obtaining and evaluating bids, mandates the standardized procurement documents that must be used, and describes how multiple providers
will be managed. The plan also states how procurement activities will be coordinated
with other project management activities, such as scheduling and performance reporting. Depending on the needs of the project, the procurement management plan may be
formal or informal; brief or highly detailed.
Example: Planning Procurement Management for an Advertising Agency
A small advertising agency would procure contracts from external sources for some of
the work considered necessary but beyond its core capabilities, such as specialized
printing and professional photography services. The procurement management plan
would outline the companys processes for soliciting and evaluating bids from competing service providers and would specify how management would schedule the contract
work, schedule payments to providers for the work done, and evaluate the quality.
Teaming Agreements
Denition:
A teaming agreement is a legal contractual agreement between two or more parties to
form a joint venture or other arrangement as dened by the parties to meet the requirements of a business opportunity. The parties can be internal or external to the
organization executing the project. When a teaming agreement is created for a project,
it signicantly impacts the planning processes for the project, and predenes issues
such as scope of work and competition requirements.
Example: OGC Corporations Agreement with Janrex Inc.
OGC Corporation and Janrex Inc. have been associated partners for the last four years.
The agreement insists that OGC Corporation will have to procure the hardware from
Janrex Inc. for any implementation-related and/or turn-key projects executed by OGC
in the North American region. However, this arrangement is not obligatory when the
implementation is done in any other area but North America.
Some of the risk-related contract decisions include agreements for insurance, bonding, services,
Letter of Credit (LoC), bank guarantee, and other items as appropriate for the project.
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LESSON 8
How to Create a Procurement Management Plan
Effective planning of project procurements documents the project purchasing decisions, species the approach to be used in project procurements, and identies potential sellers for the
project and documents these in the procurement management plan.
Guidelines:
To generate an effective procurement management plan, follow these guidelines:
Identify the project needs that can be fullled by acquiring products, services, or
results. Determine:
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What is to be acquired.
How to acquire.
When to acquire.
Requirements documentation.
Consult technical experts to dene specications for the project needs clearly,
concisely, and completely.
Determine the contract types to be used for the specic procurement needs of the
project.
Document the plan procurement information you have identied so far in the procurement management plan.
After the procurement management plan is created, you will also generate other
relevant plan procurement outputs, including:
Make-or-buy decisions.
Procurement documents.
Change requests.Some of the information developed in generating these outputs will be used to nalize the procurement management plan.
LESSON 8
Example: Creating a Procurement Management Plan for a Warehouse Management Software Project
Mark Anderson, the project manager of OGCs Warehouse Management Software
project, is creating the procurement management plan for the project. Mark discusses
with stakeholders the various project requirements that include the warehouse management software, related computer hardware, networking, database, and project staffing.
He studies the project scope baseline to determine the scope of the warehouse management software implementation within OGC. He goes through the requirements
documentation for each of the project requirements.
Mark involves Brian Wells, the IT Consultant of OGC, to draw up the technical specications of the project requirements. Further, discussions with Brian indicate that the
warehouse management software and other requirements of this project have to be procured from outside the organization as the current infrastructure at OGC does not
support the requirements of this project.
Based on the procurement information collected, Mark prepares the procurement management plan for OGCs Warehouse Management Software project.
1.
In the OGC Procurement Management Plan, who is authorized by OGC to enter a prescribed contract with the external training provider?
a) Project sponsor
b) Project manager
c) Procurement manager
d) Operations manager
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LESSON 8
2.
In the OGC Procurement Management Plan, which of these job tasks are defined for
the solicitation process of the project?
a) Characteristics of project requirements are to be documented in a procurement
statement of work.
b) A Request for Proposal (RFP) will be sent to prospective sellers.
c) Provide necessary electronic and paper documentation and source files.
d) Evaluation criteria are to be determined to evaluate proposals from sellers.
3.
Which of OGCs plan procurements inputs contains information about the time frame
for each project deliverable?
a) Requirements documentation
b) Scope baseline
c) Project schedule
d) Activity resource requirements
4.
Organizational process
assets
5.
a.
Which section in the OGC Procurement Management Plan refers to the parameters to
choose sellers?
a) Contract Type
b) Procurement Description
c) Procurement Responsibility
d) Source Selection
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TOPIC B
Prepare a Procurement Statement of
Work
As a project manager, you have a responsibility to acquire project resources from outside your
organization at a fair and reasonable cost and in an efficient and dependable manner. In this
topic, youll focus on preparing a procurement statement of work.
Youre the project manager for a new brand of organic pasta sauce. In order to meet the product launch deadline, you purchase tomatoes from a wholesale distributor in South America.
Unfortunately, the tomatoes that arrive are small, green, and hard. In a panic, you call your
seller to let him know that you wanted large, red, juicy tomatoes to meet the recipe requirements. Your seller says, You ordered tomatoes and we sent you tomatoes. Clearly describing
the exact type and specications of the product you want to buy from the supplier in a procurement statement of work ensures you will avoid costly outsourcing errors.
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LESSON 8
Example: A Procurement Statement of Work
Figure 8-3: A procurement statement of work for the OGC PM Training RollOut project.
Specications
Denition:
Specications are descriptions of the work to be done or the service or product to be
provided; they dene the requirements that must be met in exacting detail. These
descriptions can be in the form of words, pictures, or diagrams. Specications may
relate to a products design, performance, or functionality.
Example: Performance Specications for a Childrens Toy
Performance specications identify measurable capabilities that the end product must
achieve in terms of operational characteristics. The performance specications for a
childrens toy, for example, might specify that the lighted elements of the product must
have a mean time between failures rating of 1,000 hours.
Outsourcing
Denition:
Outsourcing refers to moving beyond the organization to secure services and expertise
from an outside source on a contract or short-term basis; it is done for core work that
has traditionally been done within the organization. It is becoming more common as it
allows businesses to focus more on their core competencies. On the other hand, many
businesses are emphasizing that work should be kept in-house whenever possible, in an
effort to maintain stricter quality controls. As a project manager, youll need to work
within the expectations and constraints that result from either situation.
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Example: Outsourcing by a Clothing Manufacturer
A New York clothing manufacturer that has been producing its own buttons for
decades might nd that it is more cost-effective to move this part of its operations to
an outside source. By outsourcing the button production to a company in Mexico, the
company might realize signicant cost savings while focusing on its core operations.
Make-or-Buy Analysis
Denition:
A make-or-buy analysis is a technique used to determine whether it would be more
cost-effective to produce a product or service in-house or to procure it from an outside
seller. Make-or-buy decisions can signicantly impact project time, cost, and quality. In
the case of a buy decision, you must also consider if the product needs to be purchased, leased, or rented.
Example: Make-or-Buy Analysis for Developing Training Materials
A multimedia company was required to deliver several days of training to a client on
the operation of its agship product. The companys project team had to decide
whether to increase staff in order to develop the training materials in-house or to
outsource the work to a seller. The companys budget constraints and relative inexperience made it cost-effective to contract with an experienced outside rm.
Factor
Consideration
Impact
Consider the impact on cost, time, or quality. For instance, if current personnel must be retrained for services requiring a new skill set, it may be
less expensive to outsource those services.
Ongoing need
Learning curve
Cost-effectiveness
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LESSON 8
Example: Lease, Rent, or Buy Decisions for Acquiring a High-speed Copier
A project requires a high-speed copier with collating capabilities. If it is a small, onetime project and the equipment is very expensive and prone to breaking, it might be
most cost-effective to lease the equipment and take advantage of a service agreement.
But if the project will be ongoing over a period of months and service needs are not
anticipated, it might be more cost-effective to rent a copier for the duration of the
project. For a long-term project requiring extensive copying resources, it might be
most cost-effective to purchase the equipment.
Review the product description to ensure that you fully understand the scope of
the work being procured.
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Use consistent terminology and level of detail throughout the procurement SOW.
Determine whether any collateral services will be required of the seller as a part
of the contract:
Will the seller be required to provide any post project operational support?
Make sure your procurement SOW includes the following key elements:
Description of any required collateral services that would support the main
work activities provided for in the contract.
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Any additional instructions the prospective seller will need to bid on the
item.
Contracting expertise.
Negotiating.
Legal services.
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1.
In the OGC Procurement SOW document, which components define the specifics of the
work being procured?
2.
Were there any inconsistencies used in the document that might be confusing?
3.
Does the OGC Procurement SOW include any collateral services to be provided by the
client?
4.
Does the OGC Procurement SOW describe when, where, and how delivery is required?
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5.
Does the OGC Procurement SOW provide specifications on how the assessment must be
produced and methods for ensuring that the specifications have been met?
TOPIC C
Prepare a Procurement Document
You created a procurement SOW for your project. Now you need to incorporate the SOW into
a procurement document to facilitate acquiring responses from prospective sellers. In this topic,
you will prepare a procurement document.
Congratulations! Youre the project manager for an urban redevelopment project thats receiving a lot of positive press coverage. There are numerous sellers eager to provide you with the
outsourcing services the project requires. But these sellers will send you different documents if
you dont specify what information you need and the format for receiving bids. Mastering the
tools and techniques to prepare effective procurement documents ensures that sellers and service providers can respond completely and accurately to your projects contract needs.
Procurement Documents
Denition:
Procurement documents are the documents that are submitted to prospective sellers and
service providers to solicit their proposals for the work needed. There are different
types of procurement documents. The type of document used will depend on the type
of project and the product or service being procured.
Example: An RFP
A request for proposal is a specic type of procurement document. A company seeking
a new advertising agency for a marketing campaign would send out RFPs to several
agencies. The RFP would describe the companys marketing needs and ask for proposals that describe the agencies qualications and past campaigns, the key employees
work history, and their approach to creating a campaign. The RFP would request a
quote for services provided and an outline of a marketing strategy.
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Term
Description
Like an RFB, commonly used when deliverables are commodities for which there are clear specications, and when price will
be the primary determining factor. Unlike an RFB, this solicited
price quote is used for comparison purposes and is not a formal
bid for work. This may allow for some negotiation of price.
Sometimes used interchangeably with RFP, an IFB is most commonly used when deliverables are commodities for which there
are clear specications and when the quantities are very large.
The invitation is usually advertised and any seller may submit a
bid. Negotiation is typically not anticipated.
Contracts
Denition:
Contracts are mutually binding agreements that detail the obligations of both parties;
in terms of procuring work, they relate to both the buyer and the seller. While contracts are customized for each agreement, they tend to fall into a number of standard
patterns, such as xed price, cost-reimbursable, or Time and Material (T&M) contracts.
Example: A Fixed-Price Contract
A project team is procuring the manufacturing unit for its new line of footwear. After
seeking the advice of subject matter experts and reviewing historical records of similar
projects, the team estimates the manufacturing cost at $25,000. Including the manufacturers fee of $10,000, the entire contract will be worth $35,000. Additionally, the
contract states that the manufacturer will receive $5,000 if they complete at least three
of the four project milestones on time.
This is an example of a xed-price contract because it establishes a denitive determined total price for a product or service. In addition, this contract has an incentive for
the seller to meet or exceed schedule objectives.
Components of Contracts
In general, any contract must include these elements, at a minimum:
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Insurance requirements.
Types of Contracts
Three common types of contracts are used in the procurement of goods and services.
Contract Type
Description
Fixed price
Also called a lump sum contract, it establishes a total price for a product or service. The seller agrees to perform the work at the negotiated
contract value. This value is based on anticipated costs and prot, as
well as a premium to cover unforeseen problems. The contract may
include incentives for meeting requirements such as schedule milestones. Fixed-price contracts provide maximum protection to the buyer
but require a long time for preparation and bid evaluation. Since this
type of contract is tied to a xed cost, it is most suited to projects with
a high degree of certainty about their parameters.
Types of xed-price contracts include:
Firm Fixed Price Contracts (FFP): This is a commonly used contract type favored by most buying organizations because the price for
products or services is set at the outset and not subject to change
unless the scope of work changes.
Fixed Price Incentive Fee Contracts (FPIF): This xed-price contract is exible in that it allows for deviation from performance.
Financial incentives are tied to achieving metrics that are agreed to
earlier.
Fixed Price with Economic Price Adjustment Contracts (FPEPA): This is a xed-price contract type with special provision to
allow pre-dened nal adjustments to the contract price due to
changed conditions, such as ination changes, or cost increases or
decreases for specic commodities such as fuel, and for currency
uctuations. An FP-EPA contract protects both buyer and seller from
external conditions beyond their control. It is used whenever the sellers performance period spans a considerable period. The Economic
Price Adjustment (EPA) clause must relate to a reliable nancial
index, which is used to precisely adjust the nal price.
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Contract Type
Description
Cost-reimbursable
This type of contract includes aspects of both xed-price and costreimbursable contracts. The buyer pays the seller a negotiated hourly
rate and full reimbursement for materials used to complete the project.
This contract is used for staff augmentation, acquisition of experts, and
any outside support when a precise statement of work cannot be
quickly prescribed.
Many organizations include not-to-exceed values and time limits in
T&M contracts to prevent unlimited cost growth.
LESSON 8
For example:
Target Cost: $60,000
Target prot: $6,000
Target Price: $63,000
Ceiling Price: $65,000
Share Ratio: 70% buyer and 30% seller
PTA = (($65,000 - $63,000) / 0.7) + $60,000 = $62,857
Objective Criteria
Subjective Criteria
The subjective criteria statements leave room for interpretation as to what is meant by
experienced and strong. Conversely, the requirement of a Ph.D. with ve years
experience is very specic and not open to interpretation, making it an objective criterion.
Sample Source Selection Criteria
Sample source selection criteria include:
Description
Understanding of need
Does the sellers proposal effectively address the procurement statement of work while demonstrating the clear
understanding of the needs?
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Source Selection Criteria
Description
Technical capability
Management approach
Technical approach
Do the sellers proposed technical methodologies, techniques, solutions, and services meet the project
requirements?
Warranty
Does the seller provide warranty for the nal product and
for what duration?
Financial capacity
Does the seller have the capacity and interest to meet the
project requirements?
Does the sellers company meet a specic category of business dened by the buyer, or established by a governmental
agency, and included as a condition in the contract? Categories could include small, women-owned, or disadvantaged
small businesses.
References
Proprietary rights
Are proprietary rights ensured by the seller in the work processes or services to be used for the project?
Develop a strong set of source selection criteria based on the real needs of your
project.
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Objective criteria will probably be required when requesting bids for most
goods and facilities.
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However, you may nd that using objective criteria alone will be too restrictive when it comes to selecting resources such as a video producer, graphic
artist, or central office site.
Leave yourself some room to select from a range of capabilities and experience to
get the best t possible.
Examine the relevant SOW and make any necessary modications that may have
been identied during plan contracting.
Ensure that the procurement document is structured to facilitate consistent, comparable responses from sellers. It should include, at the minimum, the following
key elements:
Reference to (or inclusion of) the relevant SOW. You may also include other
relevant project documents, such as the WBS or network diagram, as appropriate.
Bidders conferences.
Take into account any regulations that may dene the required structure of procurement documents for government contracts.
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The RFQ includes all of the key elements listed in the guidelines, as well as a description of how change requests will be managed. In an effort to drive down costs, the
RFQ also includes a list of sellers expected to bid on the solicitation.
Scenario:
It is OGCs policy that all project managers must get approval from the procurement department for all external procurements. You are meeting with the OGC procurement manager to
discuss the procurement documents that will be created based on the statement of work that
you had previously prepared. The manager has asked you to come to the meeting prepared
with an outline of the SOW that is to be included in the procurement documents. You are now
ready to begin the preparation of the procurement documents with the procurement manager.
1.
Based on the scenario, what would be a logical first step in creating the procurement
document?
a) Determine how you want training sellers to respond.
b) Define the training specifications.
c) Determine the most appropriate procurement document to use.
d) Examine the project SOW and make any necessary changes.
2.
The assessment development, the project software training needs, delivery of the
training, and costs will be the determining factors in your choice of training providers.
What type of procurement document would be most appropriate to use in this situation?
a) Request for quotation
b) Request for proposal
c) Request for bid
d) Invitation for bid
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3.
From the C:\085042Data\Planning Project Procurements folder, open the OGC Procurement SOW and Procurement document. Which criterion for evaluating training
sellers is subjective?
a) Seller must provide an instructor with a minimum 3 years of project management
software training.
b) Seller must be creative and flexible about changes made to the design of the assessment documents, even in late production phases.
c) Seller must have a minimum 20 years of collective training experience on staff.
d) Seller must have produced at least three projects of similar scope in the last 10
years.
Lesson 8 Follow-up
In this lesson, you planned for procuring products or services from external sources. You created a procurement management plan and specied how project procurements should be
handled. You also prepared a procurement SOW that clearly and concisely describes the product or service you intend to acquire, and you incorporated the procurement SOW into a
procurement document. The effective planning and documentation of all project procurements
up-front ensures the successful outcome of your project.
1.
How could your organization benefit from more effective procurement planning?
2.
In the future, what do you plan to use to prepare better SOWs and procurement documents?
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LESSON 9
Lesson Time
3 hour(s), 30 minutes
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LESSON 9
Introduction
You nished your project planning and integrated the outputs from each of the planning processes into a comprehensive project management plan. Now your project transitions from
planning to executing. Project execution is the third of ve project management process groups
that you will perform on most projects you manage. In this lesson, you will execute project
work.
Coordinating the people and other resources you need to carry out your project management
plan is essential to your projects success. The project team members need a coach to guide
them as they undertake the work dened in the scope statement. Executing project work
ensures that your team is on the same page and that your project nishes on time, on budget,
and with the required quality.
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TOPIC A
Identify the Direct and Manage
Project Execution Process
Your project has officially advanced from planning to executing. Now it is nally time to start
leveraging the plan. In this topic, you will identify the components and purpose of the direct
and manage project execution phase of the project.
Coordinating people and other resources to carry out the project plan is like conducting musicians in an orchestra. Effectively directing and managing project execution ensures that the
project team starts and nishes the project work according to the project management plan.
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Input
Description
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Input
Description
Include factors such as organizational culture and structure, infrastructure, personnel administration, stakeholder tolerances, and PMIS that
can inuence the direct and manage project execution process.
Description
Expert judgment
Used to provide direction to effectively execute the project management plan. The expertise provided by the project manager, project
management team, consultants, other departments in the organization, or other stakeholders will be applied to both technical and
management details.
Output
Description
Deliverables
Change requests
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Output
Description
Example: PMIS
One example of a project management information system available for purchase is
Microsoft Project.
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Problem
Description
PMIS reports show problems after-the-fact. Good project management requires proactive problem prevention.
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Problem
Description
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Work Performance Information
Work performance information consists of periodically collected information about project
activities that are performed to accomplish the project work. This data would reside in your
PMIS, if you have one.
This information includes:
Lessons learned that are posted to the lessons learned knowledge base.
Guidelines:
To effectively execute the project plan, follow these guidelines:
Comply with any organizational policies and procedures that the organization has
in place regarding project execution to ensure predictable and consistent results.
Make sure that all contractors are familiar with and comply with the procedures.
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Evaluate and select the work authorization system you will use to formally sanction work to begin on an activity or deliverable. The value of the control your
system provides should be balanced with the cost (money and time) of designing,
implementing, and using the system.
In line with good project management practice, use the artifacts necessary to get
the job done. Use the organizations project management infrastructure. If it is not
there already, then invent it.
If necessary, work with a systems analyst to create a PMIS that is workable for
your project. Make sure the systems analyst understands the following:
LESSON 9
Who will generate the initial information to be incorporated into the system?
Once the system is in place, determine who will be responsible for its day-to-day
operation, whether it will be you or someone else. Specically, you need to determine who will be responsible for:
Analysis of information. Analysis means summarizing the information, drawing conclusions from it, and creating graphical depictions of what the
information is saying. Your task here is to assign people to do the analysis,
and provide specications for how the data is to be analyzed, how it is to be
reported, and what reporting formats will be used.
Systems documentation. Whatever system you choose, it must be documented. Remember that you will be straining your PMIS during project
execution. You may need to adjust it, or even repair it, to improve its performance during this phase of the project. Good documentation will allow
support staff to make the adjustments and repairs efficiently, without losing
data or backing up the project schedule.
Dont rely too much on the PMIS. Be proactive in managing problems rather
than waiting for the PMIS to report a problem before addressing it.
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ACTIVITY 9-1
Identifying the Responsibilities for Directing and
Managing Project Execution
Scenario:
In preparation for the business transformation, the PMO will implement a PMIS that all project
teams will use to gather, analyze, communicate, and store project information. The PM Training Roll-Out project team will be the rst team within the organization to use the system. You
have completed your project planning and the project is ready to begin. You now have to coordinate and direct both the technical and organizational aspects of the project.
1.
You need to assist the systems analyst in the creation of a PMIS that is workable for
your project. In order to design an effective PMIS, what are the inputs that a systems
analyst should know about the project that the PMIS will manage?
a) What people will have access to the information?
b) When will the information be needed?
c) Who will incorporate the information into the system?
d) Who is the customer?
2.
As the project manager, you have made sure all organizational policies and procedures
were followed, and the contract training vendor is familiar with their responsibilities.
What would you do next?
a) Call a meeting with the project sponsor so she can commence work.
b) Issue work authorization.
c) Work with a systems analyst to create a PMIS.
d) Collect work performance information.
3.
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An activity did not start on its scheduled date. The responsible team, Team 1, claimed
that they could not start the activity because its predecessor activity did not show a
completion date in the latest status report. Team 2 claimed that they had completed
the activity on time and had followed the appropriate procedure for updating its
completion status. What are some things you would do to investigate why the status
report was not up to date?
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TOPIC B
Execute a Quality Assurance Plan
Now that you know what is involved in creating a quality assurance plan, you are ready to
move forward with this key element of ensuring that your project meets its stated goals. This
is the action phase of your work, in which you will measure, verify, and quantify the progress
achieved. In this topic, youll execute quality assurance.
You can set quality goals for your project, but how do you know if they are being met on an
ongoing basis? Performing quality assurance ensures the project will meet the identied quality
standards and that stakeholders are condent in the quality of the work being produced.
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Quality Assurance
Quality Control
Focuses on process.
Focuses on product.
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Input
Description
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Input
Description
Quality metrics
Description
Plan quality and perform quality con- All tools and techniques used for the plan quality and perform
trol tools and techniques
quality control processes such as the cause-and-effect diagrams,
control charts, owcharting, histogram, Pareto diagram, run
chart, scatter diagram, statistical sampling, inspection, approved
change requests review, cost-benet analysis, cost of quality,
control charts, benchmarking, design of experiments, proprietary
quality management methodologies, and additional quality planning tools are used to perform the quality assurance process.
Quality audits
Process analysis
Help increase team productivity by providing assistance for process implementation improvements.
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Output
Description
Change requests
Quality Audits
Denition:
A quality audit is an independent evaluation, inspection, or review of a projects quality assurance system to improve quality performance of a project. The audits can take
place at scheduled or random intervals. The auditor may be a trained individual from
within the performing organization or a qualied representative of a third-party organization. During a quality audit, the quality management plan is analyzed to make sure
that it is still reective of what has been learned in the project and to make sure the
operational denitions are still adequate and valid. The results of a quality audit are
important for the current project, as well as for later projects or other parts of the organization.
Example: Quality Audits at a Manufacturing Company
An auditor for a manufacturing company performs quality audits regularly. Every six
months he walks into the factory and reviews the companys quality management plan,
cost of quality, and quality process design to make sure these processes are up-to-date,
being used correctly, and still valid.
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Topic
Description
Collection and use of informa- May be evaluated to determine how well the project team is collecting,
tion
distributing, and using quality data. Items for analysis in this category
might include consistency of data collection processes, speed of information distribution, and use of quality data in decision-making.
Analytical methods
Cost of quality
Ensure that random and/or scheduled quality audits are conducted by qualied
auditors to evaluate the quality management plan, quality testing procedures, and
measurement criteria.
Are the quality parameters set forth in the quality assurance plan valid?
Are the data being interpreted, recorded, and fed back into the system properly?
Use one or more of the quality assurance tools and techniques to determine the
causes of quality problems of the projects product, service, systems, or processes.
Identify and implement the appropriate actions to take to increase the effectiveness and efficiency of the project teams work results to improve quality in the
product or service.
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Example: Execution of Quality Assurance Plan by a Coffee Brewing Equipment
Manufacturer
A leading coffee brewing equipment manufacturer is beginning to produce a new product line, and John Smith has been assigned as the project manager for the project. John
has been given the task of maintaining a satisfactory level of quality while maintaining
the scal goals for the project.
A quality audit was commissioned to determine if in-process monitoring produced the
expected improvements to cost and quality. Following an examination of the testing
procedure outlined in the quality management plan, the audit team analyzed the collected data from the latest series of testing seven days per week.
The analyzed data was compared to projected quality data based on the in-process
monitoring system and showed that the projections matched the actual data. Armed
with this information, the audit team recommended modications to the quality management plan requiring testing only twice each week. At a cost of $100 per test, the
company is now spending $200 per week instead of $700 and therefore saving $500
per week on testing. Through careful review of the quality management plan, analysis
of the use and distribution of collected data, and monitoring the cost of quality, the
company achieved marked improvements in quality while realizing an improved
bottom-line.
1.
The manager of quality assurance has asked you about your quality management plan.
Which feature might he find problematic?
a) Scheduled and random quality inspections will take place, which will be conducted
by an internal quality assurance engineer, as well as by the city.
b) Any corrective actions that a project manager feels will improve the effectiveness or
efficiency.
c) Operational definitions were defined for measuring the quality of the construction
work.
d) Occurrence of scheduled and random quality inspections during the course of the
project.
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2.
3.
The stakeholders are questioning the amount of resources dedicated to quality assurance. How can you demonstrate to them that the benefits of quality assurance
outweigh the cost?
a) Perform benchmarking to compare project practices to other projects to generate
ideas for improvement.
b) Conduct an array of experiments to identify which factors may be influencing specific
variables.
c) Use flowcharts to see how systems relate and how various factors might be linked to
problems or effects.
d) Document the identified corrective actions so that their effect on project quality,
cost, and schedule can be monitored during quality control.
TOPIC C
Acquire the Project Team
During project planning, you paved the way for effectively documenting the roles, responsibilities, and reporting relationships for your project. Now youre ready to begin appointing the
individuals you need to fulll these positions. In this topic, you will acquire your project team.
People make projects happen. You may be well-versed in many aspects of project management, but youre not going to succeed if you cant put the right players on your team.
Naturally, you want the best people in the organization to work on your project, but they may
not all be available all of the time. Mandated team members, projects with higher priorities,
and functional managers with their own agendas can squash your chances of putting together
your dream team. Your chances for success will be much greater if you can negotiate for the
best people possible for your project.
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Project managers must effectively negotiate with the appropriate people for the
needed project resources.
Failure to acquire the appropriate resources may impact project performance and
may ultimately result in the termination of the project.
If human resources with the required skills and capabilities are not available at the
appropriate time, alternate resources with lower competencies may be assigned
without violating legal, regulatory, or other criteria.
Input
Description
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Input
Description
Factors the project management team needs to take into consideration when acquiring their team include:
Information about human resources such as which resources
are free during the required time frame, their experience, and
their cost rate.
Personnel administration policies.
Organizational structure.
Location(s) of the resources.
Any kind of policies, guidelines, or procedures that organizations follow when delegating staff assignments and selecting
resources for the project.
Description
Pre-assignment
Negotiation
Acquisition
When there isnt enough staff to complete the project, outside sources
such as consultants or contractors can be hired.
Virtual teams
Groups of people, hired for the same project, who never or rarely
speak face to face. Using currently available communications technology, such as collaborative software, aids in communication. Virtual
teams make it possible for people to:
Form teams where people live in widespread geographic areas, but
work for the same company.
Add expertise to projects from people who are not in the same geographical area.
Include employees who work from home.
Include employees who work different shifts.
Include employees with disabilities.
Avoid travel expenses.
Planning for effective communication among the virtual team members
is an important consideration that needs to be considered when setting
up a virtual team.
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Acquire Project Team Outputs
Outputs from acquiring a project team include project staff assignments, resource calendars,
and project management plan updates.
Output
Description
Resource calendars
Virtual Teams
Denition:
A virtual team is a team that is distributed across multiple locations. Some virtual
teams have occasional physical meetings, while others may never meet face-to-face.
Virtual team building is more difficult, for a number of reasons.
Bonding and team identity can be hard to create when team members are geographically dispersed, because nding ways to provide a sense of team spirit and
cooperation may be difficult.
Communication and information sharing need to rely on various forms of technology because teams cannot meet face-to-face. However, managing electronic
collaboration so that everyone on the team can reliably transmit and access information from one another can be challenging.
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How to Acquire the Project Team
Acquiring well-formed project teams will result in meeting the resource needs of the project to
fulll project requirements.
Guidelines:
To acquire a project team, follow these guidelines:
Negotiate with the appropriate organizations or parties for critical resources timed
with project need.
Look outside to competent suppliers where in-house resources are not available.
Make sure that roles and responsibilities are clearly understood by the team and
other stakeholders.
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1.
2.
The functional manager of the IT department informs you that, based on the time
frame for your project, two of the resources that are available are new hires who have
not worked earlier in a project on their own at this point. What should you do?
3.
During the first meeting of the new project team, some confusion arises between two
team members about their roles and responsibilities. Since this conversation is not
appropriate in this forum, how might you respond?
LESSON 9
TOPIC D
Develop the Project Team
Now that you have acquired your project team, you need to help them achieve peak performance. Team building ensures that you build an atmosphere of trust and open communication.
In this topic, you will develop the project team.
Project teams comprise individuals, drawn from different disciplines, who must learn to work
together to achieve a common goal in a short period of time. The individuals working on your
team, all of whom have their own communication styles, work habits, motivations, and career
agendas, have to come to trust one another and work together rather than compete against one
another for resources and time. Team building ensures that you build an atmosphere of trust,
collaboration, and open communication.
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LESSON 9
Effective Project Teams
The team members should work in a collaborative way to ensure project success. It is
the responsibility of the project manager to build an effective project team and foster
teamwork. Managers should give opportunities that challenge the team members abilities, provide support and timely feedback, and recognize and reward good
performance. To achieve highest team performance, managers should use effective
communication methods, develop trust among team members, manage conicts, and
promote collaborative decision making and problem solving.
Project managers should seek support from the management or the appropriate stakeholders to effectively build project teams. This will help improve people skills,
advance technical competencies, build good team environment, and increase project
performance.
Input
Description
Resource calendars
Helps identify the schedules of team members and the time when
they can participate in team development tasks.
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Description
Interpersonal skills
Training
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Tools and Techniques
Description
Team-building activities
Exercises that help the team develop into a mature, productive team.
Effective project teams can be realized through factors such as:
Gaining support from top management.
Obtaining commitment from team members.
Encouraging team members through awards and recognition.
Creating a team identity.
Managing conicts effectively.
Building trust among team members.
Promoting effective communication methods.
Providing good team leadership.
Ground rules
Co-location
Output
Description
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Stage
Description
Forming
Team members are wondering whether the decision to join the team was a
wise one. They are making initial judgments about the skills and personal
qualities of their teammates, as well as worrying about how they personally
will be viewed by the rest of the team. During this stage, conversations tend
to be polite and noncommittal, as people hesitate to reveal too much about
their personal views. In addition, team meetings tend to be confusing, as the
team tries to gure out who is in charge.
Storming
Team members begin to assert themselves and control issues as they emerge.
Personality differences begin to arise. Conicts result as team members differ
on the way they want to do the project work, or the way they want to make
decisions.
Norming
Performing
The team is working at optimum productivity. It is collaborating easily, communicating freely, and solving its own conict problems. Team members feel
safe in reporting problems, trusting their fellow team members to help them
create the best solution for the team as a whole.
Adjourning
The team members complete their assigned work and shift to the next
project or assigned task. This phase is sometimes known as mourning.
Lock Step
The process of forming, storming, norming, and performing is not done in a lock
step fashion by the team. Team members keep coming in and going out of the team.
Whenever a new member joins, forming takes place; even if the rest of the team has
already crossed the forming stage. So, these stages are not followed one after the other
but are rather situational.
Training
Denition:
Training is an activity in which team members acquire new or enhanced skills, knowledge, or attitudes. Training may be provided to teams, small groups, or individuals and
can cover management, technical, or administrative topics. It can range from a multiday, formal workshop in a classroom to a ve-minute, informal on-the-job training
demonstration at the employees desk. It may be formulated to provide generic skills
or customized to provide a specic skill set that is unique to the project. Training
should be made available to team members as soon as the need becomes apparent.
Example: Training on a Software Program
Mark is the programmer assigned to the company website project. Recently, Mark was
informed that he would have to create the entire site using a website development software program with which he was unfamiliar because the entire organization was using
the program and maintenance would be easier if the tool was standardized.
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Since Mark was the only programmer available to work on the project, Carrie, the
project manager, arranged for Mark to take a training course to learn the technical program. Not only would Marks training help the project achieve its objectives and abide
by organizational policy, but it would also enhance Marks skills and help position him
to advance within the organization.
Team-Building Activities
Denition:
Team-building activities are the specic functions or actions taken to help the team to
develop into a mature, productive team. They can be formal or informal, brief or
extended, and facilitated by the project manager or a group facilitator.
Example: Team-Building Activity
Robin, a new project manager for a line of youth-oriented sportswear, decided that a
good way to get to know her team was to plan an outdoor team-building activity. Two
of the designers were located on the east coast and would be working very closely
with the manufacturing team at the companys San Diego facility. Robin arranged to
y the two designers to San Diego to participate in the all day, off-site ropes course.
Robin participated in the rope climbing exercise as well, and an experienced teambuilding coach facilitated the activity.
Co-location
Denition:
Co-location refers to positioning most or all key team members in the same physical
location to make communication easier and enhance team performance and team spirit.
Although most commonly used on large projects, smaller project teams may also benet from co-location. There are different degrees of co-location. On some projects,
some of the team may be co-located, while others are not.
Example: Co-location for a National Campaign
A political candidate announcing a run for the presidency of the United States would
establish a national campaign headquarters office, at which the key members of the
campaigns project team would be co-located. The headquarters would serve as a base
for national operations and centralize the efforts of the candidates political machine.
The co-location of the project team would only last for the duration of the campaign.
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Example: Rewards and Recognition
Tim is an art director assigned to the company website. Often, Tim helps new team
members and provides coaching and mentoring. Carrie, the project manager, recognized Tims extra efforts at the weekly project team meeting. She presented Tim with a
gift certicate to a new restaurant as a reward and incentive for his outstanding performance.
Example: Recognition
In an effort to reward individual performance, the managers of a real estate company
decided to offer a 10% salary increase to the sales representatives who exceeded their
sales quota by more than 25% for the year.
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During the forming stage, conduct activities that will help the team get to
know one another and develop a sense of mutual respect. The following is a
list of activities for the forming stage:
Initial social events to allow time to get to know one another on a personal level.
LESSON 9
During the storming stage, use conict management approaches to help the
team work through problems.
If the team is bogged down on certain problems, help to create crossfunctional sub-teams to work on the problems.
In the performing stage, provide recognition for team performance, but stay
out of the way as the team manages its own problems. However, if project
progress is sluggish, this is a good stage in which to challenge the team with
more stringent performance goals.
In the adjourning stage, team members complete project work and shift to
the next project or assigned task.
In this phase, ensure formal closure and completion of the tasks happen.
Also, facilitate the smooth transition of the project team members to the
next project.
Provide appropriate training and coaching to help team members acquire new or
enhanced skills, knowledge, or behaviors.
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1.
2.
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Forming
a.
Storming
b.
Norming
c.
Performing
d.
Adjourning
e.
You notice that Rachel, a team member, has consistently met her deliverable deadlines and is always on time with her status reports. She actively participates in
brainstorming sessions and makes valuable contributions to the discussions. When
required, she has gone beyond her responsibilities and has helped her project manager
facilitate brainstorming meetings and discussion sessions. How should you respond?
LESSON 9
3.
One of your junior team members, who is assigned to gather information from managers through an interview process, has confided in you that he is not comfortable during
the interviews. He feels that the managers seem impatient with the questions he is
asking. The other junior team members assigned to interviews have not had any problems. What are some things you would do to address this issue?
TOPIC E
Manage the Project Team
Your staffing management plan describes when and how you will meet your project team
requirements. Now that your project is well underway, you need to monitor individual and
team performance and provide relevant feedback and appraisals. In this topic, you will manage
your project team.
Virtual teams and matrix organizations make managing project teams more complicated for
project managers. However, when team members are accountable to a functional manager and
a project manager, this dual reporting relationship becomes a critical component for project
success. Effective project managers monitor and track team member performance throughout
the projects life cycle.
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Dual Reporting
Managing the project team can become more complicated when team members are
required to report to both a functional manager and a project manager. Coordination of
this dual reporting relationship can be very important for the success of the project; it
is the project managers responsibility to make sure that team members are reporting
appropriately.
Input
Description
Documentation on the list of project team members, project organization charts, and schedules.
Contains the human resource plan that includes the roles and responsibilities of project team members and the staffing management plan.
During the project, the project management team makes formal and
informal judgments on team performance. Continual assessment can
result in resolving issues, improving communication, recognizing conict, and improving team interaction.
Performance reports
Inputs that can inuence the manage project team process include certicates of appreciation, websites, newsletters, bonus structures,
corporate apparel, and organizational prerequisites.
360-degree Feedback
360-degree feedback is the collection of performance data from several key sources,
including peers, managers, and subordinates. Condentiality is crucial to employing
360-degree feedback as it is implemented in most organizations. Many project practices do not have the sophistication and/or resources to manage employee relations in a
manner that makes implementation of 360-degree feedback practical. Thus, even
though 360-degree is mentioned in the PMBOK Guide, there is consensus within the
human resources eld that 360-degree feedback is best used only for developmental
purposes, and not for performance management.
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Tools and Techniques
Description
Used to stay in constant communication with the work and attitudes of the team. Measurements include progress toward
deliverables, interpersonal issues, and accomplishments resulting
in pride for team members.
Conict management
Issue log
Interpersonal skills
Output
Description
Updates include historical information, lessons learned documents, templates, and organizational standard processes.
Change requests
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Causes of Conict
Conict arises in most groups and working situations. Causes of conict include:
Competition.
Communication breakdowns.
Characteristics of Conicts
Project managers should be aware of certain characteristics of conict that will help
them effectively handle conicts when they arise. Conict is natural and forces the
need for exploring alternatives. It is a team aspect and openness about the situation or
opinions can resolve conicts. While resolving conicts, focus should be on the issues
and not on individuals; on the present situation and not the past.
Conict Management
Denition:
Conict management is the application of one or more strategies for dealing with disagreements that may be detrimental to team performance. Effective conict
management can lead to improved understanding, performance, and productivity. Conversely, ineffective or nonexistent conict management can lead to destructive
behavior, animosity, poor performance, and reduced productivityall of which threaten
successful completion of the projects deliverables. There are certain conict resolution
methods and the need to follow a particular method includes the intensity and importance of conict, the time given to resolve the conict, the positions of the conicting
parties, and the motivation to resolve conicts on a short-term or long-term basis.
Example: Conict Management Between Two Salespeople
Two salespeople accustomed to working independently, on commission, might be
asked to partner together on a project to bring in a major new account. If the two
become embroiled in conicts regarding their commission splits and their differing
sales styles, and they cannot agree to work together amicably for the sake of the
project, the business will suffer. Conict management strategies would be used to help
the team members work through their differences.
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Approach
Description
Confronting/Problem solving
Compromising
LESSON 9
Approach
Description
Smoothing/Accommodating
Forcing
Collaborating
Withdrawing/Avoiding
Different problem-solving business philosophies interpret and categorize compromise and confrontation differently, in terms of their effectiveness and desirability; additionally, different companies may have their own way
of interpreting and implementing these approaches. Also, there cannot be one effective way to resolve a conict
as they are mostly situational.
In the era of electronic mail, use proper etiquette. For example, typing with
all capital letters is synonymous to shouting. Avoid conducting arguments
with people through email. Know when to use the phone or a personal visit
to discuss issues.
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to the point. Eliminate slang, sports terms, or jokes. Many jokes do not translate well in other cultures or may even result in people being offended or
insulted.
Consider additional training for those team members who need to improve
their performance.
Consider having a quality audit to get another perspective on whether the team is
headed in the right direction to meet the projects quality requirements. The quality audit team needs to be independent from the project team to be effective.
Manage conict using the appropriate approach based on the circumstances and
the individuals involved. Regardless of the approach, apply the following principles.
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Allow people to have their say. Make sure you give both sides a chance to
state their case. Demonstrating respect and acknowledging peoples different
positions are necessary to address conicts effectively.
Listen hard to what people are telling you. Paraphrase or ask questions to be
sure everyone understands what is being said.
Focus on the reasons that the group has come together: to nd a resolution to
the problem.
To help avoid unnecessary conict, set expected ground rules in the beginning for the team to operate with based on the communications management
plan.
During the project life cycle, follow established project management practices. Refer to your communications management plan for guidance.
When conict occurs among team members or between the team and other
organizational entities, it may be effective to implement the conict management approach of confrontationfocusing on the problem. It may be
advantageous to try to defuse conicts early to avoid escalation.
As results are being obtained during the implementation phase, establish an issues
log to track and assign project issues. This log is useful for regular follow-up with
the project team. Hold specic team members accountable for resolution of issues.
LESSON 9
Example: Managing the Project Team in an Advertising Company
An advertising company has plans to develop a campaign for a customer over the next
four months, and David is acting as the project manager.
David wanted to make sure that everything got off to a good start, so he called a kickoff meeting. Before the meeting, he developed a set of metrics to measure team
performance, and planned to monitor the progress of his team by meeting with them
individually once a week.
During the kick-off meeting, David asked the team to make weekly status reports using
email and to use instant messaging software to keep in close contact with one another.
He also let the team know how their performances would be monitored, and he set up
a meeting schedule. However, as might be expected, there was some conict on the
team. Two team members disagreed on the direction for their campaign. One wanted to
use a very contemporary, almost edgy approach, while the other wanted to appeal to
traditional, more conservative values. After a series of meetings with the customers
product analyst, the team was able to nd a middle ground that satised both team
members and pleased the customer.
From the earliest days of the project, David instituted the practice of using an issues
log to track all changes in the project. This became extremely valuable as the project
got to the nal stages and prepared for hand off to the customer. Everyone was clear
on exactly what they had committed to, and the customer received the expected
deliverables.
1.
Given the masonry supervisors email about the conflict between the plumbing and tile
contractors, what should you do?
a) Confirm their inability to get along and its probable impact on the team. Responding
to alleged interpersonal conflict from second hand sources is almost always a mistake.
b) Wait for results of the weekly masonry work progress report.
c) Provide constructive feedback to the contractors.
d) Consider offering an online conflict resolution course for the contractors.
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2.
In speaking with the contractors, you discover that the tile contractor feels that the
plumber is spending too much time at lunch and on breaks, which causes him to work
past 6:00 each day. The plumber responds that he takes a normal lunch break. What
can you to do resolve this situation?
3.
The roofing team has been working effectively, meeting all deadlines and experiencing
no personnel problems. What approach should you take when monitoring this team?
TOPIC F
Distribute Project Information
During project planning, you developed a communications management plan describing the
teams approach to project communications. Now that work results are being accomplished,
you need to let project stakeholders know how the project is progressing. In this topic, you
will identify the process involved in distributing project information.
In a project, information provides the critical links for successfully meeting the projects objectives. Distributing project information efficiently and effectively ensures meaningful and
appropriate information is available to project stakeholders. This in turn assists stakeholders in
making appropriate decisions by giving a clear view of the project progress.
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Techniques
Description
Sender-receiver models
Choice of media
Writing style
Presentation techniques
Facilitation techniques
Input
Description
Performance reports
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Input
Description
Description
Communications methods
The communication methods could include video and audio conferences, computer chats, individual group meetings, and other remote
communication methods.
The tools that can be used to provide project information to stakeholders. The tools could include electronic mail, hard-copy
documents, presentations, video conferencing, meetings, and phone
calls.
Output
Description
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Create and distribute requests for project information, such as project records,
reports, and presentations, in accordance with the communications management
plan.
The system has sufficient storage capacity to hold the necessary project information.
The system follows any security protection protocols established in the communications management plan so that sensitive information can be accessed
only by appropriate stakeholders.
The system is organized to meet the needs of the project and the stakeholders.
Monitor the communications system for feedback to make sure that messages are
getting through as planned. If individuals, locations, or organizations are not able
to send or receive messages adequately, identify the problem and adjust the communications management plan, information distribution method, or retrieval
system accordingly.
When unexpected requests for information surface, determine their effect on other
aspects of managing the execution and control of the project, such as risk monitoring and schedule control. Take appropriate action to make changes to the plan
as necessary.
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1.
2.
As people strive to meet their deadlines, reporting the status of activities can become
a low priority. This is a problem when you are trying to distribute up-to-date information on the status of the project. What are some things that you could do to make sure
that people report accurate and timely information to you?
3.
You are asked by your manager to provide the senior executives your projects
progress to date. Which information distribution methods would be most appropriate
in this situation?
a) Send an email announcing that a report is posted on the intranet site.
b) Make a telephone call to schedule one-on-one meetings with each executive.
c) Send an email based on status notes that you took over the phone while communicating with team members.
d) Make a presentation to the senior executives and highlight the important points in
the report.
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TOPIC G
Manage Stakeholder Relationships
and Expectations
Youve informed project stakeholders about how project resources are being used to achieve
project objectives. As project issues arise, you need to address and resolve them with the
appropriate project stakeholders. In this topic, you will identify the process involved in actively
managing stakeholder relationships and work within their expectations.
Managing communications to satisfy the requirements of and resolve issues with project stakeholders can make or break a project. Actively managing relationships with your projects
stakeholders and working with their expectations increases the chances that your project will
remain on track and that issues are resolved right away to avoid disruptions at a later stage in
the project life cycle.
Addresses emerging issues and concerns before they manifest into a serious impediment.
This includes clarifying and resolving issues that have already been identied.
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Input
Description
Stakeholder register
Issue log
Change log
A record of the changes that occur during project execution. Appropriate stakeholders are told of these changes in order to gain their
consent.
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Description
Communications methods
Interpersonal skills
Management skills
LESSON 9
Manage Stakeholder Expectations Outputs
Several outputs result from managing stakeholder expectations.
Output
Description
Updates to the organizational process assets could include reasons for issues, and the motives behind why certain corrective
actions are chosen. The updates could also include lessons
learned from managing stakeholder expectations. Lessons learned
are documented to be part of the historical database for the current project and future projects in the organization.
Change requests
During the planning phase of the project, the communication plan for each stakeholder is developed. In managing stakeholders, the project manager needs to
follow that plan and periodically obtain stakeholder feedback to make any
required adjustments to the plan.
Face-to-face meetings with stakeholders are most effective. Assessing body language provides the project manager with an opportunity to determine if the
stakeholder is pleased or not with the projects progress. For example, if during a
project update the stakeholder is frowning, has arms folded, and is looking at his
shoes, it is essential that the project manager determine the stakeholders concerns. By managing stakeholder expectations, the project will continue to have
their buy-in.
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Use an issue log to assign, track, and resolve open issues that are of interest to
stakeholders. Issues that remain unresolved can lead to project delays.
Take corrective action as needed to bring project performance in line with customer expectations.
Document lessons learned to reect the causes of issues and changes made to rectify them.
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1.
Stakeholders are worried about the current state of the project. How should you
handle their concerns?
a) Follow processes outlined in the communications plan.
b) Take corrective action.
c) Conduct a face-to-face meeting with a clear agenda targeting their specific concerns.
d) Document lessons learned.
2.
Two stakeholders are out of town on a business trip and are available sporadically.
Another has an extremely busy schedule and cant squeeze another lengthy meeting
into his day. You know it is important to have face-to-face interaction with each stakeholder. How can you accommodate their needs? Check all that apply.
a) Use video conferencing.
b) Send a memo via email.
c) Use an instant messaging service.
d) Hold a brief summarization meeting.
3.
During the face-to-face meeting with project stakeholders, you offer a recap of some
contractor changes that occurred. It became necessary to add another electrical contractor to the team, which resulted in changes to the project cost baseline. While you
are talking about this issue, you notice that one of the project stakeholders continually
looks down at the floor and rapidly taps her pen against the table. What does her
behavior indicate?
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Lesson 9 Follow-up
In this lesson, you managed project execution. Executing project work according to your
project management plan ensures that your project team is on the same page and that your
project nishes on time, on budget, and with the required quality.
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1.
What aspects of executing the project plan have you found to be the most challenging?
Why?
2.
What tools and techniques will you use to more effectively execute projects in the
future?
LESSON 10
LESSON 10
Lesson Time
2 hour(s)
Managing Project
Procurement
In this lesson, you will manage project procurement.
You will:
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Introduction
Earlier in the process, you planned project procurement. Now it is time to execute your procurement plan, and so you are ready to manage this phase of work by soliciting bids from
prospective sellers and making effective choices among the bids received. You will do this by
determining which proposal best meets your projects time, cost, and quality commitments. In
this lesson, you will manage project procurement by requesting seller responses and selecting a
seller.
As the project manager, it is your responsibility to make sure that your projects work will be
done well, on time, and at a reasonable cost. Obtaining proposals or bids from sellers provides
you with the condence that work products will meet your project objectives for a fair and
reasonable cost. And once you have those bids in hand, you need to be able to follow established techniques for evaluating them accurately and choosing among them.
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TOPIC A
Examine the Conduct Procurements
Process
Your project is now in the executing process group and you need to procure the external
resources that are required by your project. In this topic, you will conduct project procurements.
Procuring products and services from external suppliers requires identifying suppliers, obtaining bids or proposals from them, and awarding contracts based on their evaluation. All
procurements for the project must be done within the specied parameters of time, cost, and
quality so as to ensure that the project meets the stakeholders requirements.
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Input
Description
LESSON 10
Input
Description
Procurement documents
Can include examples of existing products from the supplier, services, the suppliers history with the organization and other
organizations, or results from the evaluation of the suppliers
capabilities and quality of their products.
Seller proposals
Project documents
Make-or-buy decisions
Teaming agreements
Description
Bidder conferences
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Tools and Techniques
Description
Independent estimates
Usually, youll have at least a general idea of what you expect the
price to be. If a proposal comes in at an unexpectedly high or low
price, you may want to obtain an independent estimate to verify
that the proposed price is reasonable and responsible. The Purchasing Department is a good source for independent estimates. For
large projects, they will usually prepare an independent estimate
before the procurement documents go out, so they will have sound
current data against which to evaluate the proposals received.
Expert judgment
Advertising
Internet search
The Internet is used to quickly search for information on the availability and prices of commodities, components, and off-the-shelf
items that meet the project procurement requirements.
Procurement negotiations
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Output
Description
Selected sellers
Sellers who have been judged based on the outcome of the proposal or bid evaluation. These sellers include those who have
negotiated an outline of a contract, which will turn into the
actual contract when the deal is made.
Resource calendars
Change requests
LESSON 10
Output
Description
Schedule baselines
Period of performance
Performance reporting
Place of delivery
Pricing
Payment terms
Warranty
Product support
Limitation of liability
Penalties
Incentives
Qualied Sellers
Denition:
Qualied sellers are sellers who are approved to deliver the products, services, or
results based on the procurement requirements identied for a project. The list of
qualied sellers can be obtained from historical information about different sellers who
delivered the resources required for prior projects executed in your organization.
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If the resources you require are new to the organization, you may need to do some
research in collaboration with your Purchasing Department to identify qualied sellers
for each resource. This research will generate a list of possible sellers, and you would
need to interview the prospective sellers, visit their work sites, review work samples,
interview their references, check with certication boards, or use other approaches to
validate whether they qualify as sellers for the procurement requirements.
In case further information is required about the prospective sellers, you can send a Request for Information (RFI) to each of them to gather information about their capabilities.
Figure 10-3: A qualified sellers list for the Computer Network Upgrade
project.
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Request for Information (RFI)
A Request for Information (RFI) is a buyer generated document to solicit information
about prospective sellers. The RFI helps gather information from the seller on various
parameters such as the seller organizations history, balance sheets, type of business
(family owned, private, or publicly listed, and so on), family background, directors /
owners background, succession plans, past 3 years bank statements, plant capacity,
and other factors that may assist in determining the sellers qualications.
ACTIVITY 10-1
Examining the Conduct Project Procurements Process
Scenario:
As the project manager for OGC, you are in the process of outsourcing a major software
effort, the OGC Warehouse Management Software project, and the associated testing by the
subcontractors, which will take place prior to the corporate internal testing to verify content
and operational aspects. Included in this contract should be the usability of the resulting
product. The schedule maintenance is as important to you as is the quality of the deliverables.
The details of the product to be delivered are as rm as they can be at the present time, but
are subject to change requests under contract change control. Before you conduct your project
procurements, you would like to check your understanding of the conduct procurements process.
1.
You have a list of 10 potential sellers and have to narrow the list down to a more manageable number of candidates. What will be the process to create a short list of
sellers that you will consider?
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2.
You now have a short list of sellers. Name some of the selection criteria you might use
in finalizing the selection of the seller.
3.
Included in the contract should be performance criteria, on both schedule and costs,
expected of the subcontractor. What is some of the information that you would want
to see in the way of performance reporting by the subcontractor?
4.
LESSON 10
TOPIC B
Obtain Responses from Sellers
During project planning, you prepared a procurement document. Now you are ready to obtain
bids from prospective sellers to meet project purchasing requirements. In this topic, you will
obtain responses from sellers.
Obtaining proposals or bids from sellers provides project stakeholders with the condence that
work products will meet project objectives for a fair and reasonable cost. Mastering the tools
and techniques for requesting seller responses ensures you obtain relevant, accurate, and appropriate responses from prospective sellers.
Gather and review all of your procurement documents for accuracy and completeness.
You may also consider talking to the people in your company who will be
using the resource being sought to nd out more information about their
needs.
If the resource you require is new to your organization, you may need to do
some research in collaboration with your Purchasing Department to identify
qualied sellers for that resource. You could try to search in locations that
include Internet searches, telephone and business directories, library services,
and trade and professional organizations.
This research may only generate lists of possible sellers. You will then need
to go into more depth to learn if these sellers are actually qualied to deliver
what you need. The additional qualication step could involve interviewing
the prospective sellers, visiting their work sites, reviewing work samples,
interviewing their references, checking with any available certication
boards, or other approaches to ensure that they are indeed qualied candidates.
Determine how and from whom you will request seller responses.
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If your list of qualied sellers is sufficient for the work being procured, you
may decide to send your procurement documents to just those prospective
sellers.
If your list is insufficient, you may want to advertise to expand the list of
potential sellers. If your project is a sub-contract to a large government
project, you may be obliged to advertise the request. Check with your legal
consultants or Purchasing Department experts on wording for the advertisement. Most government projects over a specied dollar value require that
bids be publicly advertised to ensure that no supplier has unfair advantage
over others. Such notication may be in formats that include local newspapers, government publications, professional journals, and other appropriate
venues.
If the bidder conference points out serious problems that could cause the
resulting proposals to be in error, you may need to amend the original procurement documents and send the amended versions to all the sellers
originally provided with the documents. If this is done, the sections amended
must be clearly identied, and the areas of difference annotated clearly.
Send the request for seller responses to the identied prospective sellers. The type
of request sent to prospective sellers is dependent on the procurement criteria set
for the project. The types of request sent to obtain responses include:
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1.
What do you think would be the most appropriate method of finding qualified training
providers for the OGC PM Training Roll-Out project?
2.
There are only two local training providers in a 20 mile radius of OGC. You decide to
expand your seller list outside of your local area. What methods would you use to do
this?
3.
Based on the scenario, would you conduct a bidder conference? Why or why not?
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TOPIC C
Determine Project Sellers
As a result of requesting seller responses, you now have proposals, quotes, or bids from prospective sellers. Now you can determine which seller best meets your projects time, cost, and
quality commitments. In this topic, you will determine project sellers.
You received bids from three web designers who would like to work with you on your
website. You have worked with two of them in the past. The third person was recommended to
you by a senior level executive in your company. All three bids are within your price range.
Because rolling out your new website is a high prole project for the business as a whole, you
cant afford to make a mistake by selecting the wrong seller. Using best practices to select the
best seller helps you avoid making critical errors in judgment before signing a contract to purchase products or services.
Weighting Systems
Denition:
A weighting system is a method for quantifying qualitative data to minimize the inuence of personal bias on source selection. By assigning numerical weights to
evaluation criteria, you can objectively prioritize the criteria that best meet the needs
of your project.
Example: Weighted Scorecard
A weighted scorecard is one type of weighting system. In a weighted scorecard, evaluation criteria are grouped in general categories and each category is given a numerical
weight. The seller is rated on a scale of zero to ve for each of the technical criteria.
These numbers are totaled and then multiplied by the weighting factor to determine the
weighted score for that category.
In this example, the company received scores of four, three, and ve in the three technical criteria for a total score for the technical category of 12 out of a possible 15.
When multiplied by the weighting factor, the weighted technical score is 240 out of a
possible 300. The weighted score for each of the other categories is calculated in a
similar manner. Then all the weighted scores are totaled to obtain a grand total score.
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Procurement Negotiations
Procurement negotiation is the process of bargaining to come to a mutual agreement regarding
the terms and conditions of a contract. Before a contract is signed by both parties, a number of
stages of procurement negotiation are conducted between the concerned parties to arrive at a
consensus on the terms and conditions of the contract.
There are ve different stages for contract negotiation.
Stage
Description
Introduction
All parties become acquainted and the overall attitude of the negotiation is
established; this tone is largely set by the buyers team leadernormally, the
person with authority to sign the contract will lead the contract negotiation
team.
Probing
Each side attempts to learn more about the others real position.
Bargaining
Closure
Agreement
The team tries to ensure that all parties clearly understand and agree to all
terms and conditions of the contract.
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Term vs. Completion Contracts
Denition:
A term contract engages the seller to deliver a set amount of servicemeasured in
staff-hours or a similar unitover a set period of time. A completion contract stipulates that the work will not be considered complete until the seller delivers the product
to the buyer and the buyer accepts the product.
Example: Types of Contracts
Salt Lake City, Utah, hosted the 2002 Winter Olympics and needed many contracts for
sellers and service providers. Term contracts would have been appropriate for the independent security rms that were contracted to provide professional security services for
the duration of the Olympic events. Completion contracts would have been appropriate
for the construction companies hired to improve interstate roads and build a new light
rail system to handle the increased area traffic.
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1.
2.
3.
Score each prospective seller on each criterion using the rating scale.
4.
Multiply the sellers score by the weighting factor for each criterion or sum of the
criteria in a category.
5.
6.
7.
If necessary, negotiate with the seller on the terms and conditions of the contract.
8.
It is a good idea to identify the seller who would be your second choice in case
negotiations fall through with your rst choice.
LESSON 10
Scenario:
You are the project manager for the OGC PM Training Roll-Out project. You have received
the proposals from prospective training providers and now it is time to determine which provider has met the criteria outlined in the RFP:
Seller must be creative and exible about assessment design changes, even in late
production phases.
Seller must have produced at least three projects of similar scope in the last 10
years.
Based on discussions that you have had with the procurement manager, you expect the costs
will not exceed $35,000.
1.
To find a qualified seller you decide to use a weighted system. What would be your
first step?
a) Assign a numerical weighting factor to each evaluation criterion.
b) Score each prospective seller based on the rating scale for criteria.
c) Select the seller with the highest score.
d) Develop a rating scale for scoring the criteria.
2.
For each evaluation criterion, you have specified a rating scale. What should you do
next?
a) Add the scores of the scale.
b) Select the highest rated score.
c) Score each prospective seller on each criterion using the rating scale.
d) Multiply the sellers score by the weighting factor for each criterion or sum of the criteria in a category.
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LESSON 10
3.
You have selected a seller. You and the procurement manager are meeting with the
seller to negotiate the contract. The procurement manager asks the seller if they will
use an in-house instructor or outside contractor for the project software training.
Which part of the negotiating phase are they engaged in?
a) The introduction stage
b) The probing stage
c) The bargaining stage
d) The agreement stage
4.
From the C:085042Data\Managing Project Procurement folder, open the OGC Seller
Proposal Notes and Blank OGC Seller Scoring Sheet documents. Based on the scenario
and the seller notes provided, complete the seller scoring sheet.
5.
Compare your Blank OGC Seller Scoring Sheet document with the Completed OGC
Seller Scoring Sheet document in the C:\085042Data\Managing Project Procurement\
Solutions folder.
6.
Based on your quantitative evaluation of the seller proposals, which seller would you
choose for your project?
Lesson 10 Follow-up
In this lesson, you managed project procurement by requesting seller responses and selecting a
seller. You identied sellers who can provide the best quality of work for your project, selected
sellers after conducting procurement negotiations on the contract, and nally awarded the procurement contract to the selected seller at a fair and competitive price. By effectively
conducting project procurements, you ensured that the procurement requirements of your
project were suitably met within the scope of your projects time, cost, and quality commitments.
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LESSON 10
1.
How will you make sure that you are specifying adequate detail when requesting seller
responses?
2.
How do you think it will help you to assign a numerical weighting factor to the evaluation criteria when you are trying to make critical choices about selecting sellers?
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NOTES
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LESSON 11
LESSON 11
Lesson Time
2 hour(s), 30 minutes
Identify best practices for the monitor and control project work process.
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LESSON 11
Introduction
You have begun executing your project. As the project work accelerates, your focus will
advance from execution to monitoring and controlling project work, which is a key element in
your overall goal of controlling the project cost and schedule. In this lesson, you will focus on
the monitoring and controlling process group, the fourth of ve project management process
groups.
Effective project monitoring and controlling is essential to successful project completion. It
allows you to monitor trends that may affect process improvements and it positions you to
ensure that the project will meet expectations. It is also critical to monitor work results so that
you can effectively communicate both good and bad information to project stakeholders.
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LESSON 11
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LESSON 11
TOPIC A
Identify the Monitor and Control
Project Work Process
With your project execution well on its way, you need to control changes to the projects performance baseline so that you can best ensure that it meets expectations for schedule and cost.
Change control and several other tasks are part of the monitor and control project work process. In this topic, you will identify best practices for the monitor and control project work
process.
As a project manager, it is your responsibility to deliver your project on time, on budget, and
to the required specications. By monitoring and controlling the project work, you will be better positioned to ensure that your project meets stakeholders expectations for time, cost, and
quality performance and maintain an efficient and effective ow of work throughout the project
life cycle.
Change Categories
Project changes can be classied into three broad categories.
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LESSON 11
Category
Description
Corrective action
Preventive action
Defect repair
Input
Description
Performance reports
Enterprise environmental
factors
Description
Expert judgment
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LESSON 11
Monitor and Control Project Work Outputs
Monitoring and controlling project work results in several outputs.
Output
Description
Change requests
Compare and evaluate project performance with the project plan. If necessary,
recommend actions.
Analyze, track, and monitor risks to make sure they are being recognized and
reported, and that response plans are being executed.
Maintain the integrity of baselines ensuring that only approved changes are incorporated.
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LESSON 11
Mike realizes this is a risk for the project. If the deliverables are wrong, he will lose
his customer. He decides the documentation department needs a bit more monitoring.
In the companys procedures for documentation, it clearly states that the preliminary
software documentation must be created within three days of development of each
deliverable from the software department. Mike has created a database where the
deliverable turnaround time is recorded. After looking through information on past performance, Mike sees that the accuracy of deliverables was 10 percent better than what
it is now. Mike believes that with this newly implemented database, the performance
and quality will continue to improve.
ACTIVITY 11-1
Monitoring and Controlling Project Work
Scenario:
The OGC PM Training Roll-Out project has been running smoothly, thanks in large part to the
efforts of the instructional designer, Sarah. She has been instrumental in getting all teams to
work together to meet their tight deadlines. During a crucial phase in the project, Sarah falls
ill. A less experienced designer, Kevin, is brought in to replace her. For this project, it is more
important to maintain the schedule than to maintain the cost baseline.
1.
What can you do, as the project manager, to mitigate the negative effects of a staffing
change?
a) Put the project on hold until Sarah returns from sick leave.
b) Rebuild the schedule to include additional time for Kevin to complete his tasks.
c) Closely monitor Kevins work to assess any possible risk.
d) Discuss with the team the impending change and that the team can expect to go
through the team development stages again.
2.
Kevin missed an important deadline. What action can you take to help Kevin get back
on schedule?
3.
After he has been given extra help, Kevin manages to meet his next important deadline. What should be your next action as project manager?
a) Keep a private log for your own reference, detailing changes that have been made to
the project.
b) Update recent cost and schedule changes that have resulted from recent changes.
c) Ask Kevin to closely monitor changes to the projects cost and schedule.
d) Ask Kevin to let you know if he has any further problems as the project progresses.
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LESSON 11
TOPIC B
Develop an Integrated Change
Control System
Now that you have identied the best practices for monitoring and controlling project work,
you understand the important steps you must take towards making sure that your project is
conducted with the appropriate internal integrity and oversight. You will further this goal by
developing an integrated change control system, which formally governs signicant changes to
the project work, schedule baseline, and budget. In this topic, you will develop an integrated
change control system.
You want to make sure that none of the customers, stakeholders, or members of the project
management team are surprised by delays to your schedule or signicant cost overruns. By
developing an integrated change control system for your project, documenting its parameters,
and adhering to its guidelines, you can reduce the risk to your project and maintain its positive
forward movement.
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LESSON 11
Change Control Boards (CCB)
A Change Control Board (CCB) is an internal unit or department charged with not
only monitoring, controlling, coordinating, and implementing changes to all elements
of project work, but also with accepting or rejecting changes that have been requested
by customers. Normally, the CCB operates closely with the projects sponsor, customers, and other key stakeholders. The responsibilities of the CCB will have been
delineated, documented, and agreed to by the stakeholders, customers, and project
team. Decisions made during the change control board meetings are documented and
communicated to the required stakeholders. Stakeholders can use this information to
follow-up on the necessary actions.
Cause
Description
There are many reasons why initial time and cost estimates for completing the project work prove to be inaccurate. These reasons may
range from lack of experience, lack of information, or precedence to
inaccurate data, excessive optimism, technological difficulties, and
unreliable resources. Getting those original estimates to be as realistic
and accurate as possible makes the control process more manageable.
Specication changes
Project work can open up new avenues of development and design that
were not considered during the initial planning of the project work and
scope. As new options for a product or service become apparent, customers, sponsors, or the project manager may broaden the projects
scope to include new specications and deliverables.
New regulations
Missed requirements
Many times the requirements are understood by reviewing the documentation, and interviewing the end users and policy makers. However,
there are times when complete and comprehensive understanding may
not be possible.
The interviewer feels that he/she has understood the point. And the
interviewee feels that he has expressed all that matters. Although a
Requirements Traceability Matrix (RTM) is prepared, the same confusion might arise in a written document. Prototyping is used where a
demonstration of functional and/or technical requirements is done.
Although all these techniques reduce the chances of missing any
requirements, it cannot guarantee that every requirement is captured.
There are always some slippages that surface at different phases in the
project.
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LESSON 11
Conguration Management
Denition:
Conguration management is a tool used to manage changes to a product or service
being produced. These can include changes of a technical nature, and changes in
administrative direction. Conguration management is used to:
Control the steps for reviewing and approving product prototypes, testing standards, and drawings or blueprints.
When dealing with government contracts or other large systems, a conguration management system
is often required.
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LESSON 11
Example: Process Control Structure for Modifying Software Design
A team of software engineers working on a new product would all conform to the
same process control structure when implementing modications to the software
design. They would have a formalized system in place for reviewing proposed modications to the product, controlling product iterations, and carrying out testing and
review cycles. Without a process control structure, the software engineers would be
slowed down by the confusion and unnecessary rework of trying to keep track of various modications and revisions made to the product.
In conversation with stakeholders and the project management team, identify these
responsible parties:
The people who are able to initiate change requests. These may include
stakeholders, project management team members, and customers, among others.
Who has the authority to approve additional funding, overtime costs, and
purchase orders?
The parties who will be responsible for executing the work necessary to satisfy the requested change, as well as evaluating the work for quality
assurance.
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LESSON 11
The person(s) who will be responsible for managing changes. In some organizations, this may be the project manager, but in other organizations, it may
be one or more functional managers.
The parties who are responsible for prioritizing changes and making qualitative decisions about them. Is this change imperative to the success of the
project, or merely nice to have if time and resources allow?
Identify how change requests must be approved. Some organizations might require
written approval from customers before changes to the scope, schedule baseline,
and budget can be implemented.
1.
392
Who will you involve in the change control process for the PM Training Roll-Out project
and what is their role in the change control process?
LESSON 11
2.
The IT department informs you that the project software upgrade will have a significant delay in delivery. In the risk register, you accounted for a delay due to the
software upgrade, but this delay is much longer than originally anticipated. What
action should you take first?
a) Coordinate changes across knowledge areas.
b) Document the change request in a change control system.
c) Update the project plan to reflect changes.
d) Bring the information to the stakeholders for evaluation and approval.
e) Identify corrective action to take to resolve the problem.
3.
The procurement manager contacted the software vendor and was able to secure a
beta version of the project software. The beta version may have some minor bugs, but
it will be available in time for the training. Based on your change control process, what
further action, if any, should you take?
TOPIC C
Utilize the Integrated Change Control
System
By managing changes to performance baselines, you will be able to ensure that your project
stays on course. This is a key element in the overarching process of monitoring and controlling
project work. In this topic, you will manage changes through the integrated change control
system.
A great project manager is an effective manager of change, able to anticipate, respond to, and
deal with the changes that will inevitably arise on any project. As you further your development as a professional project manager, you want to be able to master this key area of your
practice by utilizing the change control process. This is the best way to take control of changes
that arise and minimize their disruptive effect on your projects bottom line.
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LESSON 11
All change requests must be recorded in the change management or conguration management
system. Change requests follow the processes specied in the conguration management system. These processes may need information about the estimated time and cost impacts for
implementing the changes. The change control process also ensures that the appropriate parties
such as stakeholders, project team members, and/or customers are aware of and approve of
changes to the project that will affect time, cost, and quality.
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Input
Description
Change requests
LESSON 11
Input
Description
Include project management information systems that can inuence the integrated change control process. The PMIS includes
automated tools such as scheduling software tools or information
collection and distribution system.
Description
Expert judgment
People with skills to manage and support the technical and management details of all requested changes in the project can be asked to sit
on the change control board. People who can provide expert judgment
include consultants, customers, sponsors, subject matter experts, PMO,
and industry groups.
Output
Description
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LESSON 11
Output
Description
Make sure your change control system is cost-effective. It should not cost more
money to implement than it saves through controlling.
396
Document the effect the changes have on the project performance baseline.
LESSON 11
Obtain approval from the appropriate parties for all change requests before implementing the change.
Use conguration management to document and control changes to original product characteristics.
Use performance reports to measure project performance and assess whether plan
variances require corrective action. Make sure performance reports are timely and
accurate to increase the effectiveness of control decisions.
Identify corrective action necessary to bring expected performance in line with the
project plan.
Consider factors inside and outside the project that may inuence corrective
action decisions.
Choose from among the alternatives by evaluating the impact of each alternative on cost, schedule, and quality.
Update the project plan to reect changes made that affect performance baselines.
Document the causes of variances, the steps taken to correct performance problems, and the rationale behind the decision-making process to avoid similar
problems on future projects.
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LESSON 11
Reject: Indicates disagreement with the proposed change on the request form; it is
rejected and returned to the program manager.
Concur: Indicates agreement with the proposed change on the request form; it is
returned to the program manager for submission to the CCB administrator to set
up a meeting.
Approve: Recommends approval without a meeting of the CCB. Notes the reason
for, and any conditions of, approval on the decision page of the Change Request
form and forwards it to the CCB administrator.
The PMO, upon receipt of change request decisions, records the information in a database to
track all change request patterns.
1.
The internal team responsible for assembling documentation for the training vendor
cannot meet their contracted deliverable of March 25. What actions should you take?
a) Identify required corrective action to resolve the problem.
b) Update the project plan to reflect these changes.
c) Recommend corrective actions to the CCB.
d) Use configuration management to document and control changes to the original vendor contract.
2.
What are the tasks that you should consider when determining appropriate corrective
actions?
a) Record how corrective actions should be tracked.
b) Identify alternative options available.
c) Determine the source of the problem and its severity.
d) Review the project plan and objectives.
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LESSON 11
3.
OGCs change control process states, The PMO, upon receipt of change request decisions, records the information in a database to track all change request patterns.
What benefits do you see in tracking change request patterns?
TOPIC D
Review Deliverables and Work
Results
Your project team has produced deliverables and work results. Before you can gain formal
acceptance of deliverables from your stakeholders, you need to verify that they meet project
requirements and stakeholders expectations. In this topic, youll review deliverables and work
results.
As the project manager, it is your responsibility to prove to stakeholders that you are delivering what you agreed to deliver. While this may sound simple, it is often overlooked by
inexperienced project managers. The last thing that you would want to happen on your project
is your stakeholders nding errors or omissions that you should have found and corrected by
reviewing the deliverables and work results. Therefore, it is important for you to provide a
proper review to ensure quality project results, as well as stakeholder satisfaction.
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LESSON 11
Verify Scope Inputs
Several inputs are used for scope verication.
Input
Description
Requirements documentation
Links the identied requirements with their source and helps track
them throughout the project. This also helps ensure that all approved
requirements are delivered at the end of the project.
Validated deliverables
400
Output
Description
Accepted deliverables
The verify scope process keeps track of all deliverables that are
completed, accepted, and formally signed-off. The deliverables that
have been formally signed-off or acknowledged by the sponsors or
customers are moved to the close phase or project process.
Change requests
LESSON 11
Inspections
Denition:
An inspection is an official examination of work results to verify that requirements are
met. It is sometimes referred to as a review, product review, audit, or walkthrough. The
inspection may be conducted by an internal or external inspection team. During scope
verication, an inspection typically involves:
Comparing the baseline specications and any approved changes to the actual
project results.
Identifying actions that may be needed to ensure that the work results will meet
specications, scope, or schedule and budget goals.
Component
Description
Change recommendations
This section should explain what the audit attempted to prove, how it
went about proving it, what measurements were used to determine
conformance to requirements, and what assumptions or limitations
inuenced the way that data was collected.
Some application areas and organizations have specic expectations for scope verication inspections and will
probably have documented guidelines and procedures for preparing and conducting them.
401
LESSON 11
How to Review Deliverables and Work Results
Procedure Reference: Review Deliverables and Work Results
To ensure that deliverables are complete:
1.
b.
c.
d.
Gather all relevant scope documentation (for example, WBS, scope statement, and requirements documentation).
e.
Communicate with all team members in advance so they can prepare for the
inspection in a timely fashion.
2.
Conduct an inspection to review deliverables and work results to ensure satisfactory completeness.
3.
4.
5.
1.
Your team has been designing a plan that calls for testing and verification of the
assessment questions. The team has determined the criteria for acceptability for each
assessment question. What should be your next step in the inspection process?
a) Establish the scope of the review.
b) Determine the methodology of the review.
c) Conduct the review.
d) Prepare a review report for stakeholders.
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LESSON 11
2.
Your team has decided to use a checklist and job aid in combination for the assessment review. Before beginning the actual review, what else would you consider doing?
3.
The draft assessments have passed the inspection. What should be included in your
review report, and why?
4.
You receive formal approval for the assessments. How will you inform stakeholders?
TOPIC E
Control the Project Scope
You dened your projects scope and developed a WBS as part of your project planning effort.
Now that the project work is moving forward, you need to control changes to project scope
using the control scope inputs and tools. In this topic, youll examine the control scope process
and control the scope of the project.
Because it is the nature of business to get the most products for the lowest price, customers
will sometimes push the edge of the project scope beyond its limits. Since changes to project
scope almost always impact performance baselines, you want to be able to control the project
scope. Controlling project scope changes helps you minimize the impact to project time, cost,
and quality commitments.
Evaluating change requests to determine the need and impact of the change to project
objectives.
Managing the actual changes to ensure that they are implemented correctly and that they
are effective.
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LESSON 11
Scope change control must be integrated with the other controlling processes to prevent unauthorized changes that result in scope creep.
404
Input
Description
Requirements documentation
Documents how each project requirement meets the overall business need of the project. Requirements documentation components
include the projects business needs, functional requirements such
as business processes and information, and non-functional requirements such as performance, safety, and supportability.
LESSON 11
Input
Description
Description
Variance analysis
The analysis of variance from the original scope baseline or the quantication of departure from expected results. Scope control includes
determining the cause of variance relative to the baseline, and deciding if corrective or preventive action is necessary.
Output
Description
Change requests
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LESSON 11
Output
Description
406
Develop and implement a scope change control system. Make sure that your system:
Includes the paperwork, tracking systems, and approval levels necessary for
authorizing scope changes.
Complies with any relevant contractual provisions when the project is done
under contract.
What is the magnitude of the change when compared to the scope statement
and WBS?
What is the impact of the change on project cost, schedule, and quality
objectives?
Identify and document corrective action to take to bring expected future project
performance in line with planned performance.
Make sure that formal agreements are reached and new specications detailed
when project scope is expanded to include either additional work that is clearly
outside the original scope, or else additional work that is required as a result of
scope boundary clarications.
Depending upon the nature of the change, you may need to revise the cost, schedule, or quality performance baselines to reect the changes and to form a new
baseline against which future performance can be measured. Notify project stakeholders of any changes made to project baselines.
LESSON 11
Document lessons learned during scope change control for use on future projects.
The documentation should include:
Causes of variances.
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LESSON 11
1.
You have various inputs available to manage a scope change, such as the one in the
scenario. Match the input with its description.
Requirements documentation
Requirements traceability
matrix
2.
a.
A scope change request recommending additional test documentation has been submitted to the CCB for analysis. This change might impact the project finish date. What
should be done first with this request?
a) Evaluate the request.
b) Ensure that new specifications are detailed.
c) Monitor changes.
d) Identify corrective action to take.
3.
The CCB informs you that the additional costs for the workshop will be adjusted in the
project budget. However, the project finish date must remain the same. As the project
manager, what could you do to ensure that the project finishes on time?
Lesson 11 Follow-up
In this lesson, you monitored and controlled project work. Monitoring and controlling the
project is the only way that you can ensure that your project will meet stakeholders expectations for time, cost, and quality performance.
1.
408
When preparing for a scope verification inspection, what do you think are the steps
required to make your project successful?
LESSON 11
2.
How can you make the change management processes followed in your organization
more effective?
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NOTES
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LESSON 12
LESSON 12
Lesson Time
2 hour(s), 45 minutes
411
LESSON 12
Introduction
Monitoring and controlling project work is only a part of the monitoring and controlling process. As the project progresses, changes are likely to delay the project leading to superuous
cost increases. So tracking project performance and focusing on schedules and budgets are crucial for any project manager. In this lesson, you will monitor and control project schedules and
costs.
Monitoring and controlling project schedules and costs helps your organization maintain its
competitive advantage in the marketplace. Without it, your project may exceed its promised
deadline and go over budget. By making the necessary changes along the way, through effective schedule and budget monitoring and control, you can increase your chances of leading
your project to a successful conclusion.
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LESSON 12
413
LESSON 12
TOPIC A
Control the Project Schedule
When you planned your project, you developed a schedule to serve as a baseline during
project execution, monitoring, and controlling. Now you need to determine how much variance
exists between the actual work completed and the work scheduled. In this topic, you will
examine the control schedule process and control the project schedule.
When was the work scheduled to be completed? Can we change the project end date?
Are we going to nish the project on time? Answering questions like these is what the control schedule process is all about. Effective control over the project schedule ensures that you
complete your project on time according to the project schedule.
414
Input
Description
LESSON 12
Input
Description
Project schedule
Include schedule control related policies, procedures, and guidelines, schedule control tools, and monitoring and reporting methods
that are to be followed.
Description
Performance reviews
Reviews to measure, analyze, and compare schedule performance. This includes comparing the actual start and nish dates,
percent complete, and the time needed to complete the work in
progress.
Variance analysis
Resource leveling
Brings the project activities, which are behind or ahead of schedule, in alignment with the plan. Working out possibilities of
accelerating (adding leads to) or decelerating (adding lags to) the
schedule to meet the demands of the plan.
Schedule compression
Scheduling tool
Uses updated schedule data and the scheduling tool with the
project management software or other methods to perform schedule network analysis and generate an updated project schedule.
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LESSON 12
Output
Description
Change requests
EVM Variables
EVM involves calculating three independent variables to assess and monitor project cost and
schedule performance progress. The variables include:
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LESSON 12
These three variables are used to provide measures of whether or not work is being accomplished as planned and to forecast project cost at completion.
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LESSON 12
EV = $800
Therefore, the calculated EV for the project at the end of day six is $800.
EVM Measures
The most commonly used EVM measures are:
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LESSON 12
Example: Schedule Performance
Consider an example of a software development project. The estimated duration of the
entire project is four months. Dan, the project manager, decides early in the project life
cycle that there will be eight reporting periods and that work package owners will supply schedule performance reports every two weeks.
The Gantt chart is an effective tool for providing up-to-date summary information and
can be extremely helpful for analyzing the projects overall time performance. The
Gantt chart also shows when milestones are scheduled and if those critical dates are
still on track.
Schedule Control Chart
Another tool you can use to illustrate schedule performance is the schedule control
chart. This chart can be used to show trends in schedule performance. The following
graphic is an example of a typical schedule control chart.
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LESSON 12
This chart plots the variance in the schedule for a project. It shows that the project
started behind schedule and that corrective action was probably taken to bring the
project back in line with planned schedule estimates.
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LESSON 12
SPI Trend Analysis
Performance indices can be plotted on a graph to show a trend. An SPI curve for a project
with normal variance would show some uctuations on the graph but tends to remain within
the range of SPI 1.0.
Analyze the data to determine whether the actual cost to perform the work is more or less
than its Earned Value (EV).
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LESSON 12
3.
Determine if the EV is more or less than the Planned Value (PV), which indicates a
Schedule Variance (SV).
EVM
The project manager analyzes the information in the table and graph and determines
that the Actual Cost (AC) to perform the work is more than its Earned Value (EV).
This indicates a negative cost variance and a budget overrun. In addition, the EV is
less than the Planned Value (PV), which indicates a negative schedule variance.
Activity
% Complete
100%
PV
AC
EV
CV
SPI
CPI
$6,000
$0.00
-$4,000
1.00
0.60
50%
-$25,000
-$19,000
0.50
0.57
50%
$12,000
$5,000
$6,000
-$6,000
$1,000
0.50
1.20
25%
$16,000
$6,000
$4,000
-$12,000
-$2,000
0.25
0.67
0%
0%
-$43,000
-$24,000
0.49
TOTAL
$6,000 $10,000
SV
0.63
The combination of both a negative SV and negative CV indicates that the project is
performing over budget and producing less work than scheduled. The project manager
uses this information to nd out the causes of the variances and determine the appropriate corrective action necessary to bring the cost and schedule performance back in
line with the baselines. He repeats the analysis at regular intervals to monitor the
results.
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LESSON 12
Content related to schedule and costs has been dealt with separately as topics in this course. For
detailed information on Cost Variance (CV) and Cost Performance Index (CPI), refer to the Control
Project Costs topic.
Develop and implement a schedule change control system. Make sure your system:
Includes the paperwork, tracking systems, and approval levels necessary for
authorizing schedule changes.
Complies with any relevant contractual provisions when the project is done
under contract.
What is the impact of the change on project cost and quality objectives?
Use performance measurement techniques to compare actual schedule performance to planned performance.
What is the magnitude of the variance? Is the activity that is causing the
variance on the schedules critical path? If so, this will indicate that your
project nish date will be pushed out.
Is it likely that the variance can be made up in the near future without corrective action or is corrective action necessary to bring the schedule
performance back in line with the baseline?
Identify and document corrective action to take to bring expected future project
performance in line with planned performance. Depending on the priorities of
your project, consider one or more of the following alternatives:
Fast-tracking
Crashing
Outsourcing
Resource leveling
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LESSON 12
Depending upon the nature of the change, you may need to revise the cost, schedule, or quality performance baselines to reect the changes and to form a new
baseline against which to measure future performance. Notify project stakeholders
of any changes made to project baselines.
Document lessons learned during schedule control for use on future projects. The
documentation should include:
Causes of variances.
Calculation
SV = EV - PV
CV = EV - AC
CPI = EV / AC
SPI = EV / PV
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LESSON 12
The team agrees that corrective action is necessary to bring the project back in line
with the original schedule baseline. Realizing that they still have to implement the
change to the text-to-speech and that the projects end date cannot be extended, the
team brainstorms other corrective action alternatives. They decide to recommend adding one graphic artist and one programmer to work on the text-to-speech issues for two
months at a total cost of $15,000.
After discussing their recommendation with the project sponsor, the core team submits
a change request to the CCB. The CCB approves the change request and the project
manager informs project stakeholders of the decision. The project manager carefully
monitors the situation and recalculates the SV after one month and two months. Trend
analysis shows that the corrective action was effective in bringing the schedule back in
line with the baseline.
The project manager documents the problem, the causes of the variance, the alternatives considered, the corrective action chosen, and the reason for the decision. In
addition, the project manager documents the results of the corrective action and les
the documentation in the project archives as lessons learned.
1.
Schedule variance
Schedule performance
index
Cost variance
Cost performance index
2.
a. EV / PV
b. EV - PV
c. EV / AC
d. EV - AC
According to your cost baseline for the project, you planned to spend $15,000 by the
end of the eighth week. You collect reporting data for the eighth week and determine
that $12,000 worth of work has actually been completed. What actions should you
take with this information?
a) Bring it to the attention of the CCB with some possible solutions.
b) Use it to identify corrective action to take.
c) Use it to compare actual schedule performance to planned performance.
d) Bring it to the attention of project stakeholders.
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LESSON 12
3.
The SV for the eighth week of your project is -$3,000. The SPI for this reporting period
is .80. What is your analysis of this data and the projects schedule performance to
date?
4.
Using performance measurement techniques, you have determined that the project is
behind schedule. What should you do with this information?
TOPIC B
Control Project Costs
You established a cost baseline for your project. Now that work results are being produced,
you need to monitor project costs as your project progresses. In this topic, you will focus on
the control cost process and use the cost baseline to control project costs.
Controlling cost performance is a lot like watching for smoke from a re tower. The earlier
you see the smoke, the easier it will be to put out the re. Effective cost control will allow you
to spot the warning signs early, measure the cost variance, and make the necessary adjustments
before cost overruns cause the project to go up in ames.
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LESSON 12
Input
Description
Includes cost control related policies, procedures, and guidelines, cost control tools, and monitoring and reporting methods
that are to be followed.
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LESSON 12
Tools and Techniques
Description
Forecasting
Performance reviews
Variance analysis
428
Output
Description
The calculated CV, SV, CPI, and SPI values for certain WBS
components including work packages and control accounts are
documented and communicated.
Budget forecasts
LESSON 12
Output
Description
Change requests
Requested changes can occur from an analysis of project performance. Any changes identied may result in an increase or
decrease to the budget.
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LESSON 12
The Cost Performance Index (CPI)
Denition:
Cost Performance Index (CPI) is a measurement of cost performance used to determine whether the project is over or under budget. To calculate CPI, divide the Earned
Value (EV) by the Actual Cost (AC); the formula is (CPI = EV / AC). A CPI of 1.0
means the project is right on budget. If the CPI is greater than 1.0, the project is performing under budget. If the CPI is less than 1.0, the project is over budget.
Its important to remember that the CV and CPI values do not take time performance into consideration. Therefore, they do not provide a complete picture of overall project performance.
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LESSON 12
Trend analysis
You can calculate ETC for cost using earned value with one of two formulas.
Formula
Description
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LESSON 12
Accuracy
One downfall for using ETC and EAC is that they are not accurate in determining the
remainder of work to be done in a project. The accuracy depends on accuracy of data
of work completed.
EAC Method
Description
EAC = AC + ETC
EAC = AC + BAC - EV
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LESSON 12
The TSPI value can either be greater or less than 1. If the value is less than 1, then it
indicates the required efficiency is less than 100% and therefore the project team can
work at a measured pace in utilizing the remaining project time. But if the TSPI value
happens to be greater than 1, then it indicates the required efficiency is more than
100% and therefore the project team should be careful in utilizing the remaining
project time and will have to work more efficiently.
Develop and implement a cost change control system. Make sure your system:
Includes the paperwork, tracking systems, and approval levels necessary for
authorizing changes to the cost baseline.
Complies with any relevant contractual provisions when the project is done
under contract.
What is the magnitude of the change when compared to the cost baseline?
What is the impact of the change on project schedule and quality objectives?
Use earned value analysis and management to continually measure cost and
schedule performance and to assess the value of work performed to date.
What is the magnitude of the variance? Is the activity causing the variance
on the critical path?
Is it likely that the variance can be made up in the near future without corrective action, or is corrective action necessary to bring the cost performance
back in line with the baseline?
Identify and document corrective action to take to bring expected future cost performance in line with planned performance. Depending on the priorities of your
project, consider one or more of the following alternatives:
Re-check cost estimates to determine whether they are still valid. Avoid the
temptation to reduce estimates simply to make the cost performance look
better.
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LESSON 12
Identify alternate, cheaper sources for materials. For example, consider using
a lower-grade building material to keep the project costs on target.
Reduce project scope. One way to reduce scope is to prioritize the remaining
work and eliminate work with the lowest priority. Another option is to plan
for a Phase 2 project to cover unnished scope items. Reducing the project
scope must be done according to the integrated change control system and
with approval of the customer and the sponsoring organization.
Depending upon the nature of the change, you may need to revise the cost, schedule, or quality performance baselines to reect the changes and to form a new
baseline against which to measure future performance.
Review the cost management plan as you begin to monitor cost performance.
Follow the systematic procedures outlined in the cost management plan as
you identify the need for corrective action and baseline adjustments.
Document lessons learned during cost control for use on future projects. The
documentation should include:
Causes of variances.
434
Cost Formulas
Calculation
CV = EV - AC
CPI = EV / AC
EAC = AC + ETC
LESSON 12
Cost Formulas
Calculation
EAC = AC + BAC - EV
435
LESSON 12
PM_CostPerfRpt
Cost_Baseline
1.
436
Review the PM_CostPerfRpt document. What is the actual cost for the Public Meeting
Work Package in the 6th week reporting period?
LESSON 12
2.
What is the total EV for the Public Meeting Work package in the 6th week reporting
period?
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LESSON 12
3.
According to the cost baseline, the PV up through the sixth reporting period is
$22,000. What is the CV for this work package?
4.
Which formula will allow you to calculate the Estimate at Completion (EAC) for the
work package?
a) EV / AC
b) EV AC
c) AC + [(BAC EV)/CPI]
d) EV PV
5.
438
Based on the formula EV/AC, you determine that the CPI for this work package is 1.11.
When you take the CPI and CV into consideration, how is this work package performing?
LESSON 12
6.
7.
8.
Based on your analysis of the product costs, what courses of action might you take?
a) Find the cause of the variance.
b) Determine the appropriate corrective action to take.
c) Alert project stakeholders that the project is in crisis.
d) Document lessons learned.
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LESSON 12
Lesson 12 Follow-up
In this lesson, you monitored and controlled the project schedule and costs. Without controlling
schedule and costs, your project may exceed its promised deadline and go over budget. Monitoring and controlling project schedules and costs helps your organization maintain its
competitive advantage in the marketplace.
440
1.
What performance measurement techniques will you use in the future to measure
schedule performance?
2.
How could using earned value management help you to control project costs on future
projects?
LESSON 13
LESSON 13
Lesson Time
2 hour(s)
441
LESSON 13
Introduction
As your project work continues, youve monitored the schedule and budget baselines. Other
important aspects of projects that need to be tracked and controlled are project performance
and quality. In this lesson, youll continue tracking project performance and control project
quality.
Meeting customers quality expectations requires a dedication to continuous improvement and
participation by all project team members. Likewise, tracking project performance requires
commitment from the project manager for a successful project outcome.
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LESSON 13
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LESSON 13
TOPIC A
Perform Quality Control
Your quality management plan describes how your project team will move forward. Now that
your project is well underway, you need to monitor the work results to ensure that they meet
the quality standards you dened in your quality management plan. In this topic, you will
focus on the perform quality control process and control project quality.
Companies face erce competition to minimize development time and bring products to market
before the competition. At the same time, organizations are faced with the challenge of staying
competitive by keeping customers costs low. As a result, quality is a component that permeates all aspects of project work. Effective quality control can streamline project work, saving
time and money while continuing to maintain customer and stakeholder satisfaction. Controlling quality ensures that your project meets or exceeds your customers quality requirements.
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LESSON 13
Input
Description
Quality metrics
Quality checklists
In quality control, approved change requests can include modications to work methods and the schedule. All approved
changes need to be veried.
Deliverables
Description
Cause-and-effect diagrams
Control charts
Flowcharting
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LESSON 13
Tools and Techniques
Description
Histogram
Pareto chart
Run chart
Scatter diagram
A diagram showing a relationship between two variables. The diagram plots dependent versus independent variables. The more
closely the points form a diagonal line, the more closely they are
related.
Statistical sampling
Inspection
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Output
Description
The results of quality control activities that are documented in the format determined when planning for project quality. The results are fed
back to the QA process for use in re-evaluating and analyzing quality
standards and processes.
Validated changes
Validated deliverables
Change requests
LESSON 13
Output
Description
Variance
Denition:
Variance is the quantiable deviance, or amount of departure, from the expected results
for any component of product and service being developed, including quality as well
as schedule, and cost. Variance can be extreme or almost undetectable; it may result
from many causes, such as problems with resource availability or from the skills of
personnel assigned to the project. Variance may be obvious the moment a product is
produced or may become obvious over time through use and exposure to environmental conditions. To control quality, you must recognize the difference between quality
variance within a normal range and variance that indicates a quality error.
Example: Schedule Variance in a Daily Flight
A daily ight from Chicago to New York City may typically arrive 10 to 20 minutes
late. Those minor uctuations in arrival time are schedule variances that may result
from different issues: mechanical breakdowns, human error, or weather-related delays.
Addressing the different variances for one ight can be difficult without evaluating the
entire system.
Causes of Variance
Denition:
Causes of variance in a process or item are the sources or reasons for deviations from
the expected standard. There are two main types: random causes and special causes.
Random or common, causes are those everyday occurrences that are always present in
project work; as such, they may be unavoidable. They may be either insignicant and
have little impact on the overall quality performance or they may have a dramatic
effect on quality. The corrective actions taken in response to random causes of variance
are typically long-term and generally involve overall changes to the process.
Special, or assignable, causes are unusual, sporadic occurrences; they are the result of
some unexpected circumstance and are typically not caused by a aw in the overall
production process. Like random causes, special causes of variance can also have a
dramatic effect on performance. By analyzing instances of the occurrences of special
variances, you may be able to isolate the cause and take corrective action to avoid the
negative effects on quality performance. The corrective actions taken in response to
special causes of variance are typically short-term and do not involve overall changes
to the process. Special causes do not occur frequently but it can sometimes be decided
not to act upon them as the cost of action may be much more than the benet.
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LESSON 13
Example: Causes of Variance in the Metropolitan Bus Schedules
A metropolitan bus company is trying to improve customer satisfaction in one key
area: the buses consistently run late. Random causes of the schedule variances include
the weather and traffic conditions: these are unavoidable, everyday occurrences that
will have an impact on how closely the buses can meet their schedules. A special
cause of schedule variance is a minor traffic accident. This is an isolated, unexpected
issue that may have a dramatic effect on the buss schedule that day, but it does not
indicate a process aw.
Example: Random and Special Causes in an E-Learning Project
A language quality controller for an e-learning project identied a considerable number
of structural and grammatical errors in one of the lessons in the course. Generally, the
errors identied during a review are minor, which occur due to fatigue or other disturbances to the writer that are caused by emails and phone calls. These causes are called
random causes. But because the number of errors in this lesson were signicantly high,
the company decided to analyze the cause for this problem. Two major causes were
identied during the analysis: the keyboard of the computer was not functioning properly and the auto spelling correction option in the software was turned off. These are
called special causes.
Example: A Random Cause Generating Regular Defects in a Sheet Metal Developing Company
A sheet metal development company, which creates very thin sheets of aluminum,
observed that two sheets produced every 15 minutes had wave-form patterns on the
surface. After having analyzed the reasons, it was found that the factory was directly
above a subway line, and the train passed over the line every 15 minutes.
Tolerances
Denition:
Tolerances are the measurement values that determine if a product or service is acceptable or unacceptable. They are the standards against which data collected will be
analyzed. Tolerances are typically expressed in ranges. If the result of the test falls
within the range specied by the tolerance, it is acceptable. If not, it is considered
unacceptable. Tolerances are specied in the quality management plan.
Example: Tolerance Level for a Products Weight
The tolerance for a products weight may be 5.8 grams 0.2 grams. If a product
weighs more than 6.0 grams, or less than 5.6 grams, it is considered unacceptable
because it exceeds the tolerance and does not meet specication.
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LESSON 13
The 6-Sigma Limit
Project managers use control charts to measure for instability because processes always have
some uctuation and variability. When measuring deviations, if there are six standard deviations between the process mean and the nearest specication limit dened in the control chart,
then no item will fail to meet the specication. This is termed as the 6-Sigma limit. In terms of
controlling processes, the 6-Sigma limit is signicant because it provides a generally accepted
guideline for monitoring quality and adjusting when necessary.
The 6-Sigma Process
6-Sigma has also evolved into a business management strategy that seeks to improve
the quality of process outputs by identifying and removing the causes of defects and
variability in processes. To achieve 6-Sigma, a process must not produce more than 3.4
defects per million opportunities.
The 3-Sigma Rule
The 3-Sigma rule, an empirical rule, states that for normal distribution almost all values lie within 3 standard deviations of mean.
The values in the normal distribution will exhibit deviation as follows:
About 68% of the values lie within 1 standard deviation of the mean.
About 95% of the values lie within 2 standard deviations of the mean.
About 99.7% of the values lie within 3 standard deviations of the mean.
Variability Indications
Measurements that exceed the range between the upper and lower control limits are considered
to be an indication of instability. The variability expressed is atypical for the process and may
be an indication of a special source of variance.
It is important to remember that, while control charts can effectively show variability, they
cannot indicate the source of the variability or show performance in relation to an expected
performance. The control chart shows only the capability of the process to produce similar
products. It does not show the conformity of that process to a customers specications.
Pareto Diagrams
Denition:
A Pareto diagram is a histogram that is used to rank causes of problems in a hierarchical format. The goal is to narrow down the primary causes of variance on a project,
and focus the energy and efforts into tackling the most signicant sources of variance.
The variables in the diagram are ordered by frequency of occurrence.
Example: An Example of a Pareto Diagram
A typical Pareto diagram is used to represent the data, which is rst organized in the
descending order of occurrence and then plotting the cumulative curve. The bars represent the number of failures for each of the causes (A through E). In this example,
approximately 72 percent of the total number of failures are due to causes A and B
(320 out of 440). The project team can easily see that they should focus most of their
corrective action efforts on those two causes.
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LESSON 13
Statistical Sampling
Denition:
Statistical sampling is a technique used to determine characteristics of an entire population based on actual measurement of a representative sample of that population.
Sampling is a way to determine if large batches of a product should be accepted or
rejected without having to test every single item produced. Its goal is to produce a process that does not require inspection of every item. The size of samples and the
frequency and cost of sampling must be determined when planning for project quality.
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LESSON 13
Example: Statistical Sampling Through Polling
A common example of statistical sampling is polling. Polling organizations ask questions of a small, random sample of participants. The answers given by the sample
group are used to suggest how an entire group may feel regarding an issue.
Determining Sample Size
Sample size can affect the accuracy of results. Generally speaking, the larger the
sample size, the higher the likelihood the sample will truly represent the variability of
the population. In quality terms, the larger the sample size, the more condence you
can have that your measurements reect the quality level of the entire product population.
It is important that members of a team whose focus is quality control have a strong understanding of
statistics. Other members need only have a basic understanding of statistical concepts.
Attribute sampling uses no scale. It simply tells you whether or not a standard has
been met. Implementing an attribute sampling plan is fairly simple. Team members
may be required to count the number of items that do not conform to a quality specication or that show evidence of a quality defect. If the number exceeds a certain limit,
the sample fails to meet quality specications.
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LESSON 13
Example: Attribute Sampling for a Random Sample of Widgets
A project team is given a sampling plan that involves taking a random sample of 500
widgets and counting the number of widgets that do not meet the relevant operational
denition. The plan states that there must be fewer than 10 defective widgets in order
for the sample to pass the inspection. The team inspects each of the widgets, compares
them to the standard specied by the operational denition, and determines that 30 of
the widgets do not meet the standard. The sample did not pass the inspection because
the number of defective widgets exceeded the minimum acceptance level of 10.
This is an example of attribute sampling because no scale is used. The test was a passor-fail inspection to determine whether the sample exceeded a certain acceptance level.
Time
Temperature
Weight
For variable data, the compliance to specications is rated on a continuous scale. Measurements can fall between an upper and lower range. To implement a variable
sampling plan, you would collect a sample of product and take some specic measurement to determine if the sample meets quality specications. Variable samples typically
provide the same level of accuracy as attribute samples with much smaller sample
sizes.
Example: Variable Sampling by an Ice Cream Manufacturing Company
A company manufacturing premium ice cream would use variable sampling data to
ensure quality control. Not every batch of ice cream produced would be tested for
quality measurements, but testers would take measurements of random batches and
measure for avor, consistency, color, texture, visual appeal, and other internal markers
for quality.
452
Consult the quality management plan for the procedures and guidelines to
use during quality control.
LESSON 13
that samples are chosen randomly and that the sample size is large enough to
demonstrate the variability of the entire group.
Use Pareto diagrams to focus corrective actions on the problems having the greatest effect on overall quality performance and to measure and monitor the effect of
corrective actions over time.
Initiate process adjustments by implementing corrective or preventive actions necessary to bring the quality of work results to an acceptable level. Major
adjustments must be made according to the projects change control system.
Continue to monitor, measure, and adjust quality throughout the project life cycle.
453
LESSON 13
1.
Given that there is a significant variation in temperature between the first and second
floor, what should be done?
a) Report this information to the appropriate people, according to the projects change
control system.
b) Because of the potentially high re-work cost, finding a solution should be a top priority.
c) Initiate process adjustments.
d) Continue to monitor quality as the HVAC installation continues.
454
2.
The quality management plan documented acceptability of the installation with a tolerance of a one degree variance between floors. What would you do to determine the
reasons for the variance in quality tests?
3.
After researching the cause of the variance, you discover that the testing was done by
one quality control engineer. You then meet with the contract supervisor to investigate the process. You discover that the duct work on the second floor was installed
over a weekend by a different, less experienced crew. What should your next step be?
LESSON 13
TOPIC B
Report on Project Performance
In order to ensure that your project meets stakeholder needs, you have created quality control
measurements and controlled its quality. Now that the project quality is being monitored, you
need to communicate with your stakeholders about how well your project is performing. In
this topic, youll examine the report performance process and report project performance.
Implementing control processes into your project work can make a tremendous difference in
your ability to communicate project performance to upper management, stakeholders, and customers, and to reassure those with a vested interest in project success that the work is on time
and within budget. Performance reports are really the heart of the entire monitoring and controlling process. Effective performance reporting enables youas well as your team members,
sponsors, stakeholders, and customersto make reasoned, informed, timely decisions regarding
project status.
Input
Description
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LESSON 13
Input
Description
The comparison of actual performance against planned performance. It is used to create the project activity metrics. The
metrics thus generated include planned versus actual schedule
performance, planned versus actual cost performance, and
planned versus actual technical performance.
Budget forecasts
Description
Variance analysis
Forecasting methods
Communication methods
Reporting systems
Identifying variances between the project baseline and the project outcome.
Evaluating the impact of the identied variances on project cost, schedule, performance, and scope.
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LESSON 13
Output
Description
Performance reports
Change requests
Requested changes are generated as analysis of project performance takes place. Changes such as recommended
corrective and preventive actions are processed through the
perform integrated change control process.
Work completed
Work to be completed
Forecasted results
Forecasting Methods
Forecasting methods are classied into various categories.
Category
Description
Forecasting the factors that may inuence the identied variables, by combining economic theories and statistical
information. Some of the methods under this category include
regression analysis and econometrics.
Judgmental methods
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LESSON 13
Benets of Creating Performance Reports
Some of the overall benets of creating performance reports include:
458
Involve the team members who are closest to the work in the data analysis.
They are the people who understand the work and can probably identify
appropriate corrective actions for resolving variances.
Use EVM techniques to assess cost and schedule progress against planned
performance.
Evaluate the results of corrective actions to determine whether they have produced the desired results.
Keep meetings productive and concise by creating meeting rules that everyone clearly understands and agrees to follow.
Make sure the people presenting are ready and understand their role in the
meeting.
Consult your project management plans subsidiary plans for guidelines and procedures for reporting on the various aspects of project performance.
Consult the procurement management plan for guidelines and procedures for
analyzing and reporting contractor cost, schedule, and technical performance.
Consult the cost management plan for guidelines and procedures for analyzing and reporting project cost performance.
Consult the schedule management plan for guidelines and procedures for analyzing and reporting project schedule performance.
Consult the quality management plan for guidelines and procedures for analyzing and reporting project quality performance.
LESSON 13
Determine the type of report needed for the information being reported. Make
sure that the format of the report adequately provides the type of information and
level of detail required by various stakeholders. Refer to the communications
management plan for information regarding stakeholder needs.
Prepare performance reports that provide the required information in a format that
enhances understanding of the material. Formal reports should contain:
A cover page with the project name, project managers name, type of report,
and date of report.
A narrative description of the projects actual accomplishments for the reporting period as compared to the goals established for the period. The
description should include qualitative and quantitative terms if possible. In
addition, any changes implemented or anticipated should be described.
End of project reports should include a brief description of major accomplishments, an evaluation of the projects performance (including in-house
staff and contractor performance), an explanation of any variances in the performance and project objectives, and any future plans for the project.
If available, use standard formats for status, progress, and forecasting reports.
These standard formats should be specied in the communications management plan or as part of the PMIS.
Balance the cost, time, and logistics of preparing performance reports against the
benets gained by the reporting.
Measure and monitor performance the same way throughout the project life cycle
so that meaningful comparisons can be made.
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LESSON 13
1.
You need to provide a progress report to senior management. What should your first
step be in gathering data for your report?
a) Hold performance reviews.
b) Consult subsidiary plans for guidelines on reporting project performance.
c) Prepare a professional performance report.
d) Include in the report EV measurements for SV and CV with appropriate action plans
to remedy any variances.
460
2.
After you completed your analysis of work results, you held project deliverables performance reviews with project team members to assess project status. You have
gathered all relevant data necessary for completing your progress report. Given the
cost and schedule concerns of senior management, what type of report format should
you prepare?
3.
Since project baselines have shifted, one of the team leads for the project suggests
that you should alter the format of the progress report before handing it off to senior
management. She says that extensive enhancements to the graphic elements are necessary to truly express the major points of the report. Should you implement her
suggested changes?
LESSON 13
Lesson 13 Follow-up
In this lesson, you monitored and controlled quality and reported performance of the project.
Managing project quality ensures that the project meets your stakeholders quality requirements. Reporting project performance keeps the stakeholder informed of the project progress
and helps them make appropriate decisions regarding project status.
1.
What quality control methods have you used in the past? Were they effective? Why or
why not?
2.
What steps do you plan to take to ensure that your future performance reports are
effective?
461
NOTES
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LESSON 14
LESSON 14
Lesson Time
1 hour(s), 15 minutes
463
LESSON 14
Introduction
During project planning, you developed a risk management plan that describes how the project
team will respond to identied risks. Now that your project is in full swing, you need to continue to monitor project work and contracts for new and changing risks. In this lesson, youll
continue to monitor and control the project, focusing on project risk and procurements.
Monitoring and controlling project risks may involve choosing alternative strategies, executing
a contingency plan, or taking corrective actions to keep the project on track. If an assessed risk
changes during the projects life cycle, its important to analyze it quickly to determine if a
threat or opportunity may result. As the project manager, your command of the tools and techniques to monitor and control project risks and procurements will enhance your ability to
successfully complete your project.
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LESSON 14
465
LESSON 14
TOPIC A
Monitor and Control Project Risks
In prior process groups, you developed a risk management plan and a risk response plan to
control project risks. During project execution, you will need to implement those plans. In this
topic, you will monitor and control project risks.
Youve identied the project risks, quantied and ranked them, and planned an appropriate
response to each risk. Thats just the beginning. When risk events occur, its up to you, as
project manager, to implement your risk plans in the face of predicted and unforeseen risks.
Effective project risk monitoring and control ensures that you respond in a reasoned manner.
466
Input
Description
Risk register
Identies risks, risk owners, actions to respond to risks, characteristics of risks, and a watch list of risks of low priority.
LESSON 14
Input
Description
Contains the risk management plan, which includes risk tolerances, risk owners, protocols, human resources, time, and
other resources allocated for project risk management.
Items relating to risk monitoring and control such as deliverable status, corrective action, and performance reports.
Performance reports
Description
Risk reassessment
The risk register should be reassessed at project team status meetings. Tasks in risk assessment require the identication of new risks,
reassessment of current risks for their probability and impact, and
the closure of outdated risks. The extent of risk assessment at the
status meetings depends on how the project is owing compared to
its objectives. For example, if an unanticipated risk develops, it may
be necessary to have additional response planning.
Risk audit
Project trends should be reviewed using data collected on performance. Results from trend analysis may forecast a difference of cost
and schedule from their initial targets. Any variation from the plan
may result in threats or lost opportunities on the project.
Reserve analysis
Status meetings
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LESSON 14
Output
Description
Change requests
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LESSON 14
When an event affects the project objectives, consult the risk response plan to
execute actions as mentioned in the risk response plan.
Monitor the environment for any new risks that may arise due to:
Changes in the project objectives. Any change to the overall cost, schedule,
or quality/performance level of your project will change your overall risk
picture.
Monitor the effectiveness of the risk response plan, as well as the contingency and
fallback plans laid out in the risk response plan. Make sure your monitoring is
done in accordance with the policies and procedures dened in the risk management plan.
Conduct project risk response audits to examine and document the effectiveness of the risk response plan and the performance of the risk owner.
Conduct periodic project risk reviews that are part of the project schedule to
communicate risk response effectiveness and to identify new risks or triggers
that may require additional response planning.
If the response plans are not effective in reducing or eliminating risk, consider implementing the fallback plan.
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LESSON 14
Keep the risk response plan up-to-date as risks occur and response plans are
changed or added.
Issue change requests in accordance with the integrated change control system.
Manage the contingency reserve so that the additional time, money, and resources
are utilized as planned.
Example: Monitoring and Controlling Project Risk for a Drivers Safety Video
As the project work for a drivers safety video nears completion, the parent organization announces a restructuring of the department. As part of the restructuring effort,
two of the projects resources, one graphic designer and one video producer, are transferred. The transfer of those resources will signicantly impact the project and may
cause some turbulence in the team.
In addition to their regular risk review meetings, the project manager calls an emergency core team meeting to develop a strategy for dealing with this new risk. The risk
officer and the project sponsor attend the emergency meeting, at which the group
brainstorms alternative strategies in response to the risk.
Since two other projects have been canceled as part of the organizations restructuring
plan, other graphic designers are now available. Those resources will be distributed
among the various other projects that had lost resources. The new team members will
need to be trained.
With the deadline looming, the project manager allocates a portion of the contingency
reserves to cover the additional expenses that will be incurred to complete the video
production, which had to be outsourced. This is a serious setback because four videos
still need to be written and produced.
The multimedia lead takes ownership of this new risk. He hires a seller to edit the videos using the in-house editing equipment. He collaborates on rewriting the scripts to
make use of stock footage rather than having to shoot new footage to produce the four
remaining videos. A risk response audit shows that the teams response plan for dealing with this unforeseen risk was effective in reducing its impact on project objectives.
The team updates the projects risk database to reect the actions taken and the results
of those actions.
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LESSON 14
1.
2.
You have developed a very robust risk response plan in the risk register. Based on the
vendor performance report, you notice that chances of delay have now become very
high (from an earlier rating of high). You now need to decide what would be your next
step.
a) Consult the risk response plan.
b) Follow the risk management process.
c) Implement the fallback plan.
d) Develop a workaround.
3.
The contractor suggests that it might ultimately be more cost-effective to buy materials from another contractor, although the initial cost of materials will be higher. Do
you think this is an effective solution?
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LESSON 14
TOPIC B
Administer Project Procurements
You selected a vendor to fulll your projects procurement requirements. Now you need to
ensure that the vendors performance meets the contract requirements. In this topic, you will
administer project procurements.
Whether or not you were involved in procurement negotiations, you must understand your
rights and responsibilities under the contract so that problems can be worked out with a minimum impact on project goals. Meanwhile, you need to be careful not to take actions that could
undermine your organizations legal position, should litigation be necessary later on.
Project plan execution to formally sanction the sellers work to begin at the appropriate
time.
Quality control to ensure that the quality of the sellers service or product meets contract
objectives.
Change control to ensure that changes to the contract are carefully managed and properly
approved.
Monitor and control the project risks to ensure that the risks are mitigated.
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LESSON 14
Input
Description
Procurement documents
Contract
Performance reports
Any changes to the current contract may include the procurement statement of work, price, and the description of products,
services, or results. All changes need to be in writing and
approved before implementation. However, any verbal, undocumented changes are not required to be processed or
implemented.
Description
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LESSON 14
Tools and Techniques
Description
Performance reporting
Payment systems
Claims administration
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Output
Description
Procurement documentation
LESSON 14
Output
Description
Change requests
Interpreting contract specications and ensuring that its terms are met.
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LESSON 14
Changes to Contract Terms
Either party can propose contract change requests for any of the contract terms, including
scope, cost, delivery date, or quality of goods or services.
Contract Change
Description
Administrative changes
These are non-substantive changes to the way the contract is administered. This is the most common type of contract change.
Administrative changes should be documented and written notication sent to the seller with a clear expectation that the seller will
approve and return the change document. Administrative changes
require no adjustment in payment.
Contract modication
Supplemental agreement
Constructive changes
These are changes that the seller may have caused through action or
inaction. As a result of constructive changes, a seller is required to
change the way the contract is fullled. The seller may claim a payment adjustment as a result of constructive changes.
Termination of contract
Legal Issues
Project managers should be familiar with some of the common legal issues related to procurement administration.
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Legal Issue
Description
Warranty
A promise, explicit or implied, that goods or services will meet a predetermined standard. The standard may cover features such as reliability,
tness for use, and safety.
Waiver
Breach of contract
LESSON 14
Types of Warranties
As a project manager, you may encounter several types of warranties.
Type of Warranty
Description
Express warranty
Implied warranty
Warranties of merchantability
Types of Waivers
It is possible for a party to a contract to explicitly waive a contract right. However, project
managers should be particularly aware of the ways in which they can inadvertently waive their
contract rights. These include:
To protect against losses incurred by an inadvertent waiver of contract rights, some contracts
are written to specically exclude the possibility of waiving a specied right.
Breaches of Contract
Project managers may encounter different types of breaches of contracts.
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LESSON 14
Type of Breach
Description
Anticipatory breach
An unavoidable indication that the other party will not be able to produce
the performance necessary to fulll the contract.
Fundamental breach
Material breach
A serious breach that prevents the injured party from beneting from the
contract. In a material breach, the injured party can claim damages, but is
no longer obligated to fulll any contract commitments.
Immaterial breach
The contract has breached in such a way that there is no resulting damage
to the injured party; since there are no damages, the injured party is not
entitled to receive compensation. This is also called a minor breach.
Legal Expertise
Project managers should have a general understanding of contracts and breaches of
contracts, but they are not expected to be legal experts. The best way to protect yourself, your project, and your organization is to make sure that your legal department has
reviewed and approved any contracts before you sign them. As a general guideline,
you should never sign a contract unless you are sure that you understand all of its
terms.
The Force Majeure Clause
Force majeure, or superior force, is a common clause added to contracts that addresses
the actions from both the parties when an extraordinary circumstance beyond the control of either party occurs. The extraordinary circumstances include war, strike, riot,
crime, or a natural disaster (a so-called Act of God that includes oods, earthquakes,
and storms) that prevent one or both parties from fullling their obligations under the
contract.
However, the force majeure clause is not intended to excuse negligence or other misconduct by the parties and the nonperformance is caused by the usual and natural
consequences.
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Develop and implement an effective contract change control system. The system
should be integrated with the projects overall change control system and should
include these elements:
LESSON 14
Document all contract changes and incorporate any effects of the changes into the
project plan.
Develop and implement an effective performance reporting system for the seller.
The performance reporting system should include these elements:
Make sure the milestones are arranged and agreed upon with the seller ahead
of time.
If work is performed at another site, conduct site visits to determine how the sellers work is progressing.
Be sensitive to the cost of site visits in terms of time and impact on vendor
relationships.
Schedule the visits up-front, set an agenda for each visit, and use only the
time required.
Submit approved invoices for payment in accordance with the contract and the
projects payment system.
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LESSON 14
As the project team gets closer to completing the project, they decide to add another
section to the website. This change to the project goes through the appropriate change
control system set up for the project. After being analyzed for its impact on project
cost, schedule, and quality, the change request is approved.
The additional section requires a modication to the contract for the design and production of the graphics for the new section. Peter negotiates the terms of the change
with the artist and submits a change request for the contract modication using the
change request form specied in the contract change control system.
This change request is also evaluated for its impact on project cost, schedule, and quality before being approved and signed. Peter submits the request for the contract
modication to the Legal Department, who incorporates the change and sends the
modied contract to the artist to sign and return. Peter then les the signed modication with the sellers le.
The sellers work goes smoothly with no legal issues. Eventually, the nal deliverable
is made and accepted and the seller submits her nal invoice for payment. Peter signs
and submits the invoice for payment and thanks the artist for a job well done.
1.
2.
Your contact at InfiniTrain informs you that their primary project software instructor
has given her resignation. They have asked to push the training date out a week to get
another instructor up to speed. What action should you take?
a) Document contract changes.
b) Conduct an on-site visit.
c) Consult the contract change control system.
d) Negotiate a milestone deadline.
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LESSON 14
3.
InfiniTrain has informed you that they have completed the beta verification of the
Assessment documents as specified in the contract. It is your responsibility as project
manager to verify that all feedback was incorporated correctly. Upon your review, you
notice that some of the alpha review feedback was not incorporated. What action
should you take?
Lesson 14 Follow-up
In this lesson, you monitored risks, controlled component processes, analyzed the administer
procurements process, and administered project procurements. As the project manager, you are
responsible for monitoring the risks facing your project, controlling them appropriately, and
executing the project contracts effectively so that you can successfully bring your project to its
conclusion.
1.
How will developing and implementing an effective performance reporting system help
you administer contracts on future projects?
2.
How have changes to the business environment affected your projects risk monitoring
and control efforts?
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NOTES
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LESSON 15
LESSON 15
Lesson Time
1 hour(s), 15 minutes
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LESSON 15
Introduction
You have successfully completed your last project deliverable and approved your last invoice
for payment. You are almost done! But rst, you must properly close out the project. In this
lesson, you will focus on the closing process group, which is the nal project management
process group. You will close a project.
Unnished business, contracts not correctly closed out, and poor documentation can turn into
months of additional work and expenditures. The last thing you do on a project will be the rst
thing people remember about your efforts overall. Mastering the tools and techniques of effective project closure helps ensure that there are no loose ends that could unravel the good work
of your team and the success of your project.
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LESSON 15
TOPIC A
Close Project Procurements
You and your project team have successfully carried out your project plan, produced work
results, and controlled the projects performance baselines. You also need to close any contracts with service providers and sellers who contracted for part of the project. In this topic,
youll examine the close procurements process and close the necessary contracts.
Incomplete or inaccurate project records indicate poor organizational skills. Although you may
never have to go back into your procurement les, other project managers in your organization
may want to use them as historical information for their projects. Properly closing a contract
ensures that contract records will serve as valuable information for future contracts and that
work completed under contract was accomplished completely and correctly.
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Input
Description
LESSON 15
Input
Description
Procurement documentation
Description
Procurement audits
Evaluations of the effectiveness of the seller as well as the procurement process itself.
Negotiated settlements
Part of the project management information system; indexes contract documents and correspondences, as well as assists in project
documentation archiving.
Output
Description
Closed procurements
Usually, the contract spells out the terms for contract acceptance and closure. At minimum, the seller should receive a
written notice of contract completion.
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LESSON 15
Procurement Audits
Denition:
A procurement audit is a formal evaluation of both the sellers performance of the contract, and the effectiveness of the procurement process itself. The goal of the audit is to
establish a record that may be used to shape procurement practices in other contracts
for this project, or for other projects.
Example: Second Grade Phonics Textbook Sellers Evaluation
A project manager asked each of his core team members to evaluate the sellers they
had used during the course of the project for a new second grade phonics textbook. He
gave the team leads a checklist and asked them to answer each of the questions that
were relevant to the type of contract used. Randy, the multimedia lead, used over 50
freelance illustrators, video producers, audio producers, photographers, and animators
throughout the project. Randy developed a template to use for each seller.
This is an example of an effective procurement audit because it provides valuable
information regarding the sellers performance that will be helpful on future projects. It
also provides lessons learned information that will increase the freelance illustrator
database.
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LESSON 15
Were the sellers responses in bids or proposals useful in conducting pre-contract assessments for consistency and compliance with rules and standards?
Were the contract specications completed as specied, and were all terms and conditions
met?
Were the sellers project management, contract management, nancial management, and
communications management practices acceptable?
Were the members of the sellers staff acceptable? Did any individuals merit special recognition?
Was there anyone you would not recommend for future assignments?
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LESSON 15
Ensure that all required products or services were provided by the seller.
2.
Make sure that any buyer-furnished property or information was returned to the
buyer.
3.
Settle any outstanding contracting issues. Are there any claims or investigations
pending on this contract?
4.
5.
6.
7.
Provide the seller with formal written notice that the contract has been completed.
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LESSON 15
Issue
Description
Contracts may be terminated early due to seller nonperformance, or through no fault of the seller
whatsoever.
If a project is shut down prematurely due to issues
within the customer or project organization, how does
that impact contract closeout? In this situation, the contract itself will probably provide guidance as to how to
deal with early termination.
For example, the contract may have a clause that
species that either side may withdraw from the contract with 30-days written notice to the other side.
During the 30-day notice period, the seller may continue working on the project, tying up loose ends,
taking receipt of material ordered for the project, and
so forth. Once the project has been terminated, the
project manager should take whatever steps are necessary to provide the appropriate written notice as
soon as possible, in order to start the termination
clock.
In addition, an explanatory call to the seller in
advance of the written notice is an expected courtesy. If the contract ties payment to specic
deliverables, the procurement audit should verify that
deliverables were received as specied, and that
invoices reect only those deliverables that were
received. Issues of time, cost, and quality are still
relevant.
Be sure to evaluate these issues based on the version
of the deliverable you are paying for, rather than for
the nal deliverable. For example, say the seller was
contracted to supply a beta version of the product in
January, and a nal version in March. The project is
canceled in February.
The product quality audit should be based on
whether it met the specications for a beta product,
not for a nal product.
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Issue
Description
Tri-Mark_SOW
RTL_Quote
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LESSON 15
1.
Based on the information you have, can you close out the contract with the subcontractor?
a) Yes, the contract has been fulfilled.
b) No, the contract has not been fulfilled.
c) You cannot determine this until a procurement audit has been completed.
d) You cannot determine this until the seller completes a staff evaluation.
2.
What would you do to resolve incorrect or unsatisfactory contract work in the situation
described in the scenario?
3.
RTL returned to the work site and resolved the outstanding contract issues and completed the cement work correctly and satisfactorily. Can you close out the contract?
Why or why not?
4.
Would you include a seller evaluation in your procurement audit? Why or why not?
TOPIC B
Close the Project or Phase
Administratively
You and your project team have successfully carried out your project plan, produced work
results, and controlled the projects performance baselines. It is time to tie up all the loose
ends and close your project or phase. In this topic, youll perform the administrative portion of
project or phase closure.
Ending a project or phase requires the same care and attention as starting the project or phase.
As a project manager, the way in which you end your project or phase says a great deal about
you to your stakeholders. Obtaining formal acceptance of your projects or phases nal product, service, or result ensures that the project or phase is properly closed.
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The Close Project or Phase Process
The close project or phase process involves closing out all project activities and formally ending the project or, in the case of multi-phase projects, closing out a specic project phase.
During this process, the project manager reviews all previous documents and the project management plan to ensure that all project work is complete, the objectives are met, and the
project can be considered to be closed. This process also establishes procedures that help validate and document deliverables, formalize acceptance of those deliverables, and document the
reasons for termination and any actions taken if a project has not been successfully completed.
The process includes activities required for closing the project or phase administratively.
Input
Description
Accepted deliverables
Include existing guidelines or policies about project closure, historical information, and the lessons learned from previous
projects.
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Description
Expert judgment
LESSON 15
Close Project or Phase Outputs
There are two main outputs of the close project or phase process.
Output
Description
Final product, service, or result tran- The official delivery and acceptance by the customer or sponsor.
sition
Ideally, this acceptance is documented in writing for storage in
the project archives.
Organizational process assets
updates
Administrative Closure
Administrative closure involves verifying and documenting project results to formalize project
or phase completion. During the administrative closure process, the project team gathers and
updates project documentation and relevant records and reports. Project results are compared
against customer and stakeholder expectations and requirements. A properly completed administrative closure process ensures that the project or phase requirements were met and formal
acceptance was granted.
The project management plan with its subsidiary plans and supporting detail.
Contract documentation.
Copies of all communications, status reports, meeting minutes, and change requests.
Staff evaluations.
Outstanding Items
It may be helpful to construct a checklist of outstanding items that must be resolved,
addressed, or completed before the customer will accept the nal work results. Make
sure to include the actions taken to resolve any outstanding issues and any time frames
associated with completion.
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LESSON 15
Lessons Learned Reports
Denition:
Lessons learned reports are documents that capture salient and helpful information
about the work done in a project or a project phase; they identify both the project
teams strengths and areas for improvement. They can be formal or informal, depending on the organizational norms or requirements. They are compiled for the benet of
future project teams, so that people can capitalize on the organizations knowledge
base about work that has already been done and avoid repeating mistakes and also
benet from ongoing organizational learning.
Example: Lessons Learned When Launching a New Product Line
After a particularly challenging project involving the launch of a new product line, the
project manager compiled a lessons learned report. The information came from several
sources, including a nal meeting with key team members and stakeholders, at which
the participants were asked about what went well on the project and what they would
do differently next time. The project manager documented their responses into a report
for future reference; it captured the challenges that had been overcome, suggestions
that were generated, and other lessons that had been learned.
Consideration
Description
Conict management lessons learned These include any issues that arose within the team or between
the team and customers. They include documentation of the
nature and source of the conict as well as the impact that the
conict had on the project. The documentation should also
specify how management intervened in response to the conict.
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Consideration
Description
Closeout Meetings
Denition:
Closeout meetings are sessions held at the end of a project or phase; they involve discussing the work and capturing lessons learned. Closeout meetings may include
stakeholders, team members, project resources, and customers. They typically follow a
formal agenda and may require official minutes to be recorded. Not all organizations or
projects require closeout meetings. Some organizations require the minutes from closeout meetings to be completed in full, approved by management, and preserved in a
specic manner.
Varieties of Closeout Meetings
Some organizations require official closeout meetings so that they can obtain the customers formal project acceptance, while others use them as an opportunity to discuss
the project with the customers as a prelude to soliciting additional business. Other
organizations use closeout meetings for internal purposes, for the edication of the
staff and improvement of internal processes. From an organizational standpoint, good
endings lead to good beginnings on subsequent projects.
Example: Fire Safety Closeout Meetings
A project manager responsible for re safety equipment and inspections would hold a
closeout meeting at the conclusion of the inspection process. He would invite the
stakeholders, project team members, and representatives from the re marshals office.
They would review inspection documentation records; complete and sign inspection
certicates; review, approve, and sign the plans for evacuation procedures; and document the inspections and testing of re safety equipment. Those signed, official
documents would be led both with the re marshal and at the company in accordance
with re safety procedures.
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LESSON 15
How to Close the Project or Phase
Procedure Reference: Close a Project or Phase
Each phase of the project must be properly closed to ensure that valuable information
is safeguarded for future projects. To properly close a phase or project, follow these
steps:
1.
Some organizations and application areas have a project termination checklist that
may be useful when closing out a project or phase. You may nd it useful to prepare one if there is not one available. This helps to ensure that you are thorough
in your administrative closeout.
2.
Gather and organize performance measurement documentation, product documentation, and other relevant project records for ease of review by stakeholders.
3.
4.
Update records to ensure that they reect nal specications. Be sure to update
the resource pool database to reect new skills and increased levels of prociency.
5.
6.
7.
Obtain project approval and formal project acceptance. Demonstrate to the customer or sponsor that the deliverables meet the dened acceptance criteria to
obtain formal acceptance of the phase or project. This may involve preparing an
end-of-project report or giving a presentation.
8.
9.
Celebrate the success of the project with the team and other stakeholders.
1.
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Are your project records ready for review by the project sponsor? Why or why not?
LESSON 15
2.
What document will you prepare before obtaining formal acceptance from your project
sponsor to officially complete the project?
3.
4.
What types of documentation or computer files should you store in the project
archives?
Lesson 15 Follow-up
In this lesson, you learned how to effectively close a project. Your efforts to create a smooth
and orderly closure will help shape stakeholders perceptions of the overall project. In addition,
effectively closing the project provides valuable lessons learned and input for your organizations future projects.
1.
What steps do you plan to take to improve the project closure process in the future?
2.
How will compiling a formal lessons learned report help you manage future projects
more effectively? Explain your ideas.
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FOLLOW-UP
Follow-up
In this course, you discovered how to manage projects by applying the generally recognized
project management knowledge and processes acknowledged by the PMI. You now have the
skills and knowledge you need to successfully manage projects in your organization by applying a standards-based approach to most projects, most of the time, across industry groups. You
can use these widely recognized tools and techniques on the job to effectively initiate, plan,
execute, control and monitor, and close projects across application areas and industries.
1.
2.
How is the planning process group helpful to you during project execution? What are
the areas that you would concentrate the most when planning for your project?
3.
How do you anticipate using the project management skills learned in this course to
your advantage in your current position?
Whats Next?
This course provided you with a solid foundation in the generally recognized good practices on
most projects, most of the time, across industries including Construction, Manufacturing, Education, Government, Engineering, Health Services, Consulting, and Information Technology. To
expand your breadth of knowledge, consider taking the Project+ course, which delves into the
unique challenges of managing IT projects and may help you to prepare for professional certication in CompTIA Project+.
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APPENDIX A
APPENDIX A
2B
3C
7A, 7B
2E
2D
2D
2D, 3B, 3C
9C
11C
3A
9D
9A
9C
6B
6A, 9B
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APPENDIX A
Map to PMP Certication Objectives
9A
9A
9D
13A, 13B
13A
14A
15B
15A, 15B
15B
15B
15B
15B
15B
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1B
1B
1B
1B
APPENDIX B
APPENDIX B
Deleted two old processes: Develop Preliminary Scope Statement and Plan Scope.
Reorganized six processes as four in the Project Procurement Management knowledge area.
Combined the Plan Purchases and Acquisitions and Plan Contracting processes
as the Plan Procurements process.
Combined the Request Seller Responses and Select Sellers processes as the
Conduct Procurements process.
Moved the Manage Project Team and Manage Stakeholder Expectations processes
from the Monitoring and Controlling process group to the Executing process group.
A differentiation between the project management plan and the project documents has
been provided.
A clear distinction between the elements of the project charter and project scope statement
is accommodated.
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APPENDIX B
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A clear distinction between the enterprise environmental factors and organizational process assets has been made throughout the processes.
A new appendix describing the key interpersonal skills necessary for a project manager is
given.
LESSON
LABS
LESSON LABS
Due to classroom setup constraints, some labs cannot be keyed in sequence immediately following their associated lesson. Your instructor will tell you whether your labs can be practiced
immediately following the lesson or whether they require separate setup from the main lesson
content. Lesson-level lab setup information is listed in the front of this manual in the course
setup section.
LESSON 1 LAB 1
Reviewing Professional Project Management
Activity Time:
10 minutes
Scenario:
In this lab, you will have an opportunity to review the PMP certication exam related information that was presented in this lesson.
1.
What information and data will project managers use to guide their work in a specific
process?
a) Tools
b) Techniques
c) Inputs
d) Outputs
2.
Which process group involves defining the need for the project or phase and obtaining
a commitment to move forward?
a) Planning
b) Executing
c) Controlling
d) Initiating
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LESSON
LABS
3.
4.
Which knowledge area ensures that the project will satisfy the needs for which it was
undertaken?
a) Project integration management
b) Project scope management
c) Project quality management
d) Project communications management
5.
6.
7.
What are the values that are considered most important to the global project management community?
a) Respect, fairness, honesty, and compassion.
b) Fairness, honesty, compassion, and responsibility.
c) Honesty, compassion, responsibility, and respect.
d) Responsibility, respect, fairness, and honesty.
8.
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LESSON 2 LAB 1
LESSON
LABS
1.
Choose the component that should always be included in the project charter.
a) A breakdown of the functions and activities to be performed on the project.
b) A list of the project stakeholders and their areas of responsibilities.
c) A schedule of project activities.
d) A statement of project goals, via a project SOW, and authorization of the project
manager to use organizational resources on the project.
2.
3.
4.
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LABS
5.
Which are reasons that it is important for the project charter to be signed by a highly
placed person in the organization?
a) This indicates the relative importance and priority of the project within the organization.
b) This provides authority for the project manager to cross functional boundaries when
carrying out project plans and activities.
c) This provides a signed document, which indicates that the project team members can
start work on the project.
d) This provides greater credibility with people outside of the project who may be asked
to contribute resources or join the project team.
6.
7.
How will you categorize the use of standard organizational procedures and terminology
by all team members and suppliers?
a) A bad management practice because it stifles creativity.
b) A bad management practice because it dictates practices that may not be industry
standard best practices.
c) A good management practice because it helps establish the foundation and framework for a common project language.
d) A good management practice because it highlights the project managers absolute
authority over the project.
8.
Which approach documents an approach to increase the support and minimize negative impacts of stakeholders throughout the project life cycle?
a) Stakeholder analysis
b) Stakeholder management strategy
c) Stakeholder communications planning
d) Risk management planning
9.
What are the tools and techniques of the identify stakeholders process?
a) Project charter
b) Stakeholder analysis
c) Organizational process assets
d) Expert judgment
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LESSON 3 LAB 1
LESSON
LABS
1.
2.
3.
4.
Lesson Labs
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LABS
5.
What are the reasons that deliverables should be broken down into work packages during the development of the work breakdown structure?
a) In order to define the scope of the project.
b) In order to make the activities easier to manage.
c) In order to make costing easier.
d) In order to create activities that can be assigned to a single organizational unit.
6.
7.
8.
9.
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11. Which process involves defining and documenting the stakeholders needs and expectations to meet the project objectives?
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LESSON 4 LAB 1
Reviewing Schedule Development
Activity Time:
30 minutes
Scenario:
In this lab, you will have an opportunity to review the PMP certication exam related information that was presented in this lesson.
1.
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2.
3.
4.
5.
6.
7.
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8.
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a) 10 days
b) 12 days
c) 6 days
d) 8 days
9.
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14. Choose the most appropriate approach that you would take to shorten a project duration.
a) Change the project scope.
b) Crash as many activities as possible.
c) Crash all activities on the critical path.
d) Fast-track activities on the critical path.
15. What does the Precedence Diagram Method (PDM) show?
a) Resource allocation
b) Significant points in time
c) Task duration
d) Relationships
16. Choose the statements that are true of bottom-up estimating.
a) The most accurate estimating method.
b) The most challenging estimating method.
c) The most costly and time-consuming estimating method.
d) Used when enough historical information is present.
17. What are the disadvantages of bottom-up estimating?
a) Accurate historical data requirement
b) Timeliness
c) Accuracy
d) Cost-effectiveness
18. Choose the option that is true of milestone charts.
a) Display the scheduled start or completion of major deliverables.
b) Show inter-relationships.
c) Are excellent planning and scheduling tools.
d) Provide the project team with detail for decision making.
19. Which is not true for network diagrams?
a) They show dependencies among project activities.
b) They facilitate communications among all project stakeholders.
c) They have nodes that show the deliverables of the WBS.
d) They provide a highly effective visual for project planning and scheduling.
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20. In a PDM network, which formula would you use to calculate the slack for an activity?
a) Total project duration minus total duration on the critical path.
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b) Earliest time when the event can start, minus the latest time when the event can finish.
c) Earliest start date minus the earliest finish date for that activity.
d) Earliest time when the event can start, minus the latest time when the event can
start.
21. When a lead occurs in an activity, what is its effect upon other activities?
a) Delays a successor task.
b) Accelerates a successor task.
c) Delays a predecessor task.
d) Accelerates a predecessor task.
22. Choose the statements that are not true of a hammock activity.
a) Has an estimated duration different than the sum of its interdependent work packages.
b) Includes activities performed by different resources.
c) Includes activities that are non-sequential.
d) Spans across several activities in a work package.
23. When will a project completion date slip?
a) If total float = 0
b) If total float > 0
c) If total float < 0
d) If total float > 1
24. Choose the appropriate task a project manager needs to perform when leveling
resources on a project.
a) Manually determine where to adjust resources.
b) Extend the finish date.
c) Add resources.
d) Discuss a change in the project scope with the stakeholders.
25. When would you perform a forward and backward pass?
a) To determine early start and finish dates for each activity.
b) To identify the start and end dates of each activity on the critical path.
c) To calculate the theoretical time period within which an early refinement of the
schedule can occur.
d) Typically done without considering resource limitations.
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LESSON 5 LAB 1
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1.
Identify the sources from where you can obtain cost estimate information.
a) Trade organizations, vendors, and suppliers.
b) Past project experience and current project team members.
c) Project schedule.
d) Commercial databases.
2.
3.
What step will a project manager take to help prevent cash flow problems?
a) Use the contingency reserves of other projects.
b) Make efforts to engage the finance department to put in place a cash flow forecast.
c) Make sure customers are financially stable.
d) Request additional funding from project sponsors.
4.
Which cost estimating method requires managers to use their experience, historical
information from similar projects, and expert judgment to determine a total project
cost or time estimate?
a) Analogous or top-down estimating
b) Parametric estimating
c) Bottom-up estimating
d) Revenue estimating
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5.
6.
7.
Which guidelines allow you as the project manager to reconcile the costs with the
funding that has been approved by the sponsor?
a) Map the project budget, scope statement, and schedule to the funding available.
b) Involve the project sponsor.
c) Consider adding in a contingency amount to accommodate the risk of incurring extra
expenses.
d) Partner formally with the companys financial decision makers.
LESSON 6 LAB 1
Reviewing Quality, Staffing, and Communications
Planning
Activity Time:
25 minutes
Scenario:
In this lab, you will have an opportunity to review the PMP certication exam related information that was presented in this lesson.
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1.
Which tool is consistently used to document the roles and responsibilities on a project?
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Which document shows the reporting structure within the project, as well as its relationship to the parent organization?
a) Resource staffing histogram
b) Organization chart
c) Responsibility assignment matrix
d) Staffing management plan
3.
When does common experience show that a learning curve becomes apparent?
a) As cumulative production time doubles, time and costs associated with that production increase randomly.
b) As cumulative production time decreases, time and costs associated with that production lower at a constant and predictable rate.
c) As the quantity of items produced increases, costs decrease at a predictable rate.
d) As cumulative production time doubles, time and costs associated with that production increase at a constant and predictable rate.
4.
5.
6.
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7.
The communications management plan is the most important portion of the project
management plan for managing stakeholders. For what reason?
a) It keeps the stakeholder involved with the day-to-day management of the project.
b) It helps the project manager to understand stakeholder expectations for project
communications.
c) It gets stakeholders involved in the planning process.
d) It helps identify all stakeholder needs and objectives for the project.
8.
Which of these project factors is likely to prevent effective performance of the communications plan?
a) The virtual team will use the company intranet to transmit documents.
b) All client company meeting time has been set at no more than 30 minutes a week for
each employee.
c) The customer wants its technical manager to review project data monthly.
d) The team is co-located in a trailer behind the main plant.
9.
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19. Which tool would you use for analyzing and communicating the relationships between
process steps?
a) Scatter diagram
b) Control chart
c) Flowchart
d) Trend analysis
20. Choose the factors to be considered when analyzing project trade-offs among cost,
time, and quality, where cost must be controlled in order to meet the cost baseline.
a) The impact on quality only.
b) The impact on schedule and quality.
c) The impact of additional risk that may be introduced.
d) The impact on schedule and scope.
21. In which organizational structure is an individual assigned to report to a single manager?
a) Weak matrix
b) Strong matrix
c) Functional structure
d) Projectized structure
22. Which project structure typically results in greater levels of technical depth and
breadth within the parent organization?
a) Weak matrix
b) Strong matrix
c) Functional structure
d) Divisional structure
23. Which is true of a matrix structure?
a) In a matrix structure, employees administrative, developmental, and performance
management are typically focused with their functional manager with proportional
performance and developmental input by project managers.
b) In a matrix structure, employees are typically assigned 50% of the time to functional
tasks and 50% of the time to project tasks.
c) In a matrix structure, employees are equally answerable to both functional and
project managers.
d) In a matrix structure, employees are answerable to the project manager, but report
both to the functional and project manager.
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24. Of the various organizational structure alternatives, for managing projects, which ideally has the fastest response time?
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a) Functional structure
b) Projectized structure
c) Weak matrix
d) Strong matrix
LESSON 7 LAB 1
Reviewing Analyzing Risks and Planning Risk Responses
Activity Time:
15 minutes
Scenario:
In this lab, you will have an opportunity to review the PMP certication exam related information that was presented in this lesson.
1.
2.
3.
What are the four main areas that project managers typically consider when discussing
risks?
a) Methods, materials, metrics, and people.
b) Initiation, planning, executing, and closing.
c) Time, cost, quality, and scope.
d) Design, supply chain, production, and marketing.
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4.
What do you call a specific occurrence that may impact the project in the future,
either positively or negatively?
a) Project risk
b) Risk factor
c) Risk-opportunity dichotomy
d) Expected value
5.
6.
7.
For what reasons are the network diagramming method and/or flowcharting used in
risk identification?
a) To determine the root cause of a project risk.
b) To show the effect of a particular risk on a project.
c) To indicate areas of the WBS that should be redrawn as a result of risk identification.
d) To identify all the possible risks for a project.
8.
For what reasons is the Delphi technique often used during risk identification?
a) It emphasizes the potential impact of risk by telling about incidents that illustrate
the consequences of ignoring the risk.
b) It ensures all stakeholder inputs are received and the risk process is not unduly influenced by a small number of persons.
c) It motivates stakeholders to invest in the risk identification process through the use
of anonymous input via questionnaires.
d) It identifies the overall project risks and focuses on a particular project segment or
work package.
9.
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10. Jennifer is a publisher. In order to make sure that her writer delivers on time, she
inserts a penalty clause for late delivery into her writers contract. Which risk
response is Jennifer using?
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a) Risk avoidance
b) Risk mitigation
c) Risk acceptance
d) Risk transference
11. Which risk response can be categorized as either passive or active?
a) Risk avoidance
b) Risk mitigation
c) Risk acceptance
d) Risk transference
12. When is additional response development needed during risk response control?
a) When the organization is restructuring.
b) When the project objectives change.
c) When the contingency reserves are used up.
d) When the original risk response is not working as expected.
LESSON 8 LAB 1
Reviewing Planning Project Procurements
Activity Time:
5 minutes
Scenario:
In this lab, you will have an opportunity to review the PMP certication exam related information that was presented in this lesson.
1.
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2.
In which contract does the buyer reimburse the sellers allowable costs (defined by the
contract) plus a fee?
a) Firm fixed price plus incentive contract.
b) Cost plus incentive fee contract.
c) Time and materials contract.
d) Cost plus fixed fee contract.
3.
In which contract does the buyer reimburse the sellers allowable costs (defined by the
contract) plus a predefined fee?
a) Firm fixed price plus incentive contract.
b) Cost plus incentive fee contract.
c) Time and materials contract.
d) Cost plus fixed fee contract.
4.
Which is used to evaluate each sellers proposal and make comparisons among different proposals?
a) Procurement documents
b) Procurement statements of work
c) Teaming agreements
d) Source selection criteria
5.
6.
Which document includes the invitation for bid and request for proposal?
a) Procurement statements of work
b) Procurement document
c) Requirements documentation
d) Procurement management plan
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1.
When negotiating for resources, the project manager arranged for the loan of a particular technical expert by implicitly promising to raise the functional managers
visibility with executive stakeholders on the project. Which currency was the project
manager using?
a) Inspiration-related currency
b) Position-related currency
c) Relationship-related currency
d) Task-related currency
2.
3.
What would be the important reasons behind the efforts taken by the project manager
to foster motivation?
a) To help the team work through a temporary setback.
b) To help the team to overcome a lack of confidence.
c) To accomplish early wins in the projects life cycle.
d) To ensure that there are no activities that have late start criteria.
4.
Which system notifies the work package owners when to begin work?
a) Project schedule
b) Status review system
c) Work authorization system
d) PMIS
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5.
6.
7.
Which manual or automated tool and technique is used to collect, archive, and distribute project information on a project?
a) Project management information system
b) Communications plan
c) Project management enterprise software
d) Communications and feedback system
8.
9.
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LESSON 10 LAB 1
Reviewing Managing Project Procurement
Activity Time:
10 minutes
Scenario:
In this lab, you will have an opportunity to review the PMP certication exam related information that was presented in this lesson.
1.
2.
Which allows potential sellers to ask questions about the project and its requirements?
a) Advertised bids
b) Bidder conference
c) Sellers conference
d) Annual meeting
3.
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4.
Which provides a pass or fail mechanism for criteria critical to project success?
a) Weighted scorecard
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b) Expert judgment
c) Seller rating system
d) Screening system
5.
6.
Which is a legal contractual agreement signed between the organization and an external entity to form a partnership in a buyer-seller arrangement between them?
a) Procurement contract
b) Teaming agreement
c) Seller proposal
d) Purchase order
7.
Which are tools and techniques for the conduct procurement process?
a) Bidder conferences, SWOT analysis, independent estimates, expert judgment.
b) Procurement negotiations, advertising, contingent response strategies, proposal
evaluation techniques.
c) Independent estimates, make-or-buy decisions, qualified seller lists, source selection
criteria.
d) Bidder conferences, independent estimates, expert judgment, procurement negotiations.
8.
9.
True or False? A procurement contract is a mutually binding agreement that details the
obligations of only the seller.
True
False
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10. Which output of the conduct procurement process lists the quantity, availability, and
utilization of project resources?
a) Project management plan
b) Procurement contract
c) Resource calendar
d) Seller proposal
LESSON 11 LAB 1
Reviewing Monitoring and Controlling Project Work
Activity Time:
15 minutes
Scenario:
In this lab, you will have an opportunity to review the PMP certication exam related information that was presented in this lesson.
1.
2.
3.
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4.
The control processes are repeated throughout the project life cycle. Therefore,
which term can be attributed to the control processes?
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a) Facilitative
b) Integrative
c) Core processes
d) Iterative
5.
6.
7.
8.
What actions should be taken regarding issues relating to the customers installation
and support requirements?
a) Addressed if currently part of the projects scope.
b) Ascertained through a cut-over needs analysis.
c) Addressed as a separate project.
d) Addressed as a change to the current projects scope.
9.
What is the overall process of managing changes that affect the function or characteristics of the deliverable known as?
a) Managing by objective
b) Change control management
c) Managing by exception
d) Configuration management
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10. Which element is a collection of formal, documented procedures that defines the steps
by which the project may be changed?
a) Managing by objective
b) Change control system
c) Managing by exception
d) Configuration management
11. Who is responsible for ensuring that changes are processed through the integrated
change control process?
a) Project sponsor
b) President
c) Project manager
d) Functional manager
12. Which statements are true of change requests?
a) Must be documented.
b) Can come from anyone.
c) Will not affect the project scope.
d) Must be subjected to an integrated change control process.
LESSON 12 LAB 1
Reviewing Monitoring and Controlling Project Schedule
and Costs
Activity Time:
15 minutes
Scenario:
In this lab, you will have an opportunity to review the PMP certication exam related information that was presented in this lesson.
1.
Which analytical tools are used to assess project progress and identify the magnitude
of cost, resource, and production variations?
a) Gantt chart review
b) Monte Carlo analysis
c) Project cost baseline audit
d) Earned value analysis
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2.
What does a Cost Performance Index (CPI) of 0.8 mean to the project?
a) Under-budget to date.
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b) Over-budget to date.
c) On budget.
d) Nothing; CPI values are always above 1.0.
3.
For what reasons are Gantt charts useful for reporting project progress?
a) They display schedule performance trends.
b) They are easy to read.
c) They are available in most project management software packages.
d) They provide detailed analysis for making adjustments.
4.
A project has a negative cost variance and an SPI less than 1.0. What does this mean to
the project?
a) It is over-budget and ahead of schedule.
b) It is under-budget and behind schedule.
c) It is over-budget and behind schedule.
d) It is under-budget and ahead of schedule.
5.
6.
7.
What is the difference between the Earned Value (EV) and the Planned Value (PV)?
a) Cost variance.
b) Schedule variance.
c) Unearned value.
d) Actual cost
8.
What does a Schedule Performance Index (SPI) of 1.2 mean to the project?
a) Ahead of schedule.
b) According to schedule.
c) Behind schedule.
d) Nothing; SPI values are always below 1.0.
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9.
During the control schedule process, the project schedule serves what functions?
a) Schedule baseline.
b) Basis for measuring project performance.
c) Cost baseline.
d) Time management component of the project.
10. What is the Schedule Variance (SV) if the Planned Value (PV) is $275,000 and the
Earned Value (EV) is $300,000?
a) $25,000
b) - $25,000
c) $125,000
d) $575,000
11. What are the changes made to keep project activities on schedule called?
a) Corrective actions.
b) Change requests.
c) Performance measurements.
d) Schedule baselines.
12. How do you calculate the Cost Performance Index (CPI)?
a) Divide the Earned Value (EV) by the Actual Cost (AC).
b) Divide the Earned Value (EV) by the Planned Value (PV).
c) Subtract the Actual Cost (AC) from the Earned Value (EV).
d) Subtract the Planned Value (PV) from the Earned Value (EV).
13. Based on the performance measures indicated in the following table, what is the Cost
Variance (CV) for Case 3?
a) -1,000
b) 1,000
c) 2,000
d) -2,000
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14. Based on the performance measures indicated in the following table, what is the
Schedule Variance (SV) for Case 2?
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a) -1,000
b) 1,000
c) 2,000
d) -2,000
15. In the cost curve shown in the following figure, Height A represents:
a) Cost variance
b) Schedule variance
c) Earned value
d) Budget at Completion (BAC)
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LESSON 13 LAB 1
Reviewing Monitoring and Controlling Project
Performance and Quality
Activity Time:
15 minutes
Scenario:
In this lab, you will have an opportunity to review the PMP certication exam related information that was presented in this lesson.
1.
2.
3.
4.
Which statement is true of the quality problems that are faced by organizations?
a) Originate on the shop floor because of waste and rework.
b) Could be avoided by management taking action on potential quality improvement
ideas.
c) Could be eliminated if supervisors monitored their work more closely.
d) Originate in the QA organization where the ultimate responsibility for quality rests.
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5.
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a) 30.3
b) 80.3
c) 68.5
d) 99.7
6.
7.
a) A control chart
b) A fishbone diagram
c) A Pareto diagram
d) A cause-and-effect diagram
8.
What action is taken to bring a product or service into compliance with customer
specifications?
a) Scrap
b) Audit
c) Recall
d) Rework
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9.
a) A control chart
b) A fishbone diagram
c) A Pareto diagram
d) A decision tree diagram
10. A Pareto diagram is a tool used to determine the relative impact each quality problem
has on project performance. Which statement best describes the philosophy of the
Pareto Principle?
a) In general, 80% of the quality problems can be justified as correctable using a costbenefit analysis. The remaining 20% are not financially worth fixing.
b) To achieve zero defects, all quality problems, including those that do not have a
direct cost, should be corrected.
c) The vast majority of defects are caused by a small percentage of the identifiable
problems. Improvement efforts therefore should be reserved for these vital few problems.
d) To minimize financial loss to the firm from quality problems, all problems that have a
measurable cost should be corrected.
11. Which technique is useful for identifying corrective action alternatives?
a) Changing the project scope.
b) Requesting additional funds immediately.
c) Holding a brainstorming session with the project team.
d) Leaving decision-making to the functional managers.
12. Which document should reflect the updates to project performance and control documents?
a) Project plan
b) Work breakdown structure
c) Change control plan
d) Cost baseline
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1.
When a project is terminated before its scheduled completion date, which of these is
not a correct action?
a) You should halt further expenditures in an orderly way.
b) You should cancel vendor contracts.
c) You should identify and document reasons for termination.
d) You should work with the sponsor to identify status of complete and incomplete
deliverables.
2.
3.
4.
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5.
6.
LESSON 15 LAB 1
Reviewing Project Closure
Activity Time:
15 minutes
Scenario:
In this lab, you will have an opportunity to review the PMP certication exam related information that was presented in this lesson.
1.
2.
Which process is concerned with obtaining formal stakeholder acceptance of completed project deliverables?
a) Project plan execution
b) Scope management
c) Scope verification
d) Quality assurance
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3.
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5.
6.
7.
8.
9.
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10. For what reasons is publishing a project close-out schedule a good idea?
a) It helps keep people motivated by imposing a deadline.
b) It provides a sense of order in a time of fluctuating team membership.
c) It helps team members who are leaving to understand what they must accomplish or
hand off before they can move to a different position.
d) It provides stakeholders with information on the status of the project.
11. Which is the output of the close project or phase process?
a) Project management plan updates.
b) Final product, service, or result transition.
c) Contract closure.
d) Work performance information.
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Lesson 1
Activity 1-1
1.
Upon review of the document, at which point in the project management process are
you?
a) Initiating
b) Planning
c) Executing
d) Monitoring and controlling
e) Closing
2.
3.
Sponsors
a.
Customers/users
b.
d
b
Project managers
Project team
c.
d.
Operations managers
e.
The PMO
f.
Based on the OGC Business Transformation Scenario Overview document, who are the
appropriate stakeholders for the Business Transformation program? Choose all that
apply.
a) Senior executives
b) Venture capital principals
c) CEOs and CFOs
d) Program IT staff
e) OGC travel
4.
Which project management process will you apply to refine program objectives and
the courses of action the project team will take to meet program objectives?
a) Initiating
b) Planning
c) Executing
d) Monitoring and controlling
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e) Closing
5.
Which project management process group will you apply to regularly measure progress
and identify variances from the project management plan?
a) Initiating
b) Planning
c) Executing
d) Monitoring and controlling
e) Closing
6.
Which project management process group will you apply to integrate people and other
resources to fulfill the project management plan for the program?
a) Initiating
b) Planning
c) Executing
d) Monitoring and controlling
e) Closing
7.
Activity 1-2
1.
2.
Who provides the software, templates, and standardized policies for a project?
a) Stakeholders
b) Human resources
c) Project Management Office (PMO)
d) Project budget
3.
True or False? Based on the scenario, OGC is using specific criteria to determine which
projects will be included in the portfolio.
True
False
4.
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SOLUTIONS
c) A collection of projects that are grouped to achieve the strategic business objectives
of an organization.
d) A temporary endeavor that is undertaken to create a unique product, service, or
result.
5.
Which tasks produce the same outcome every time they are performed?
a) Programs
b) Projects
c) Portfolios
d) Operations
Activity 1-3
1.
2.
Within the context of your organization, what steps would you take next and within
what time frame?
Once you are sure of your facts you should inform your manager. You dont want your
manager to be surprised by bad news. Gradually escalate the issue following the projects
organizational structure. Continued escalation should occur if there is no substantive,
timely action at any given step in the process that produces clear observable results.
3.
What would you expect your manager, the overall program manager, to do next and in
what time frame?
Including the next level of management during a two to three week investigation, if a
determination of unethical behavior has been substantiated, the management should be
expected to engage people from the finance and legal departments.
4.
In a general fashion, outline what your organization has in place that might facilitate
the resolution of this problem.
Many organizations have specific financial controls that project managers must follow.
5.
What would you change in your organization to prevent the above scenario from
occurring?
Engage the CFO and CEO to rapidly put in place a set of controls that are highly integrated within the organizations core financial processes and controls. Develop and
deliver the training in how to implement the controls for all current and future projects.
Make it clear to the project management community that this is nonnegotiable. Establish
irregular but frequent audits for the next several quarters until the new processes and
behaviors have been integrated into the organizations operation and culture.
Activity 1-4
1.
One of your team members, a shy person, values working quietly on projects and
appreciates an ordered and secure work environment. Which assignment do you think
would be most motivating for this person?
a) An assignment with frequent changes and interruptions.
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b) An assignment to lead a new team.
c) An assignment to work on independent research.
d) An assignment to represent the company in the public eye.
2.
You have directed one of your team members to complete a task, and he has tried to
take your directions and work on the project independently. Once the job is completed, you are disappointed to find that it was not done the way you had envisioned
it. As a manager, which response would you consider most appropriate?
a) I guess I did not adequately explain to you what I had in mind. Let me try to explain
it better.
b) I feel very disappointed that you did not do what I specifically asked you to do.
c) If you are not willing to follow my directions exactly, I will find someone who is.
d) I guess if I want something done right, I have to do it myself.
3.
Tom is a manager who maintains an optimistic outlook and lifts employees spirits with
his unique sense of humor. The employees feel that Tom listens to their concerns and
looks out for them in an ever-changing organization. As a result of this, his employees
want to work harder. This results in Toms team having one of the highest productivity
rates in the organization. His employees morale is usually fairly high, and they feel
like they can have fun occasionally on the job. Tom appreciates how much work the
team processes daily. Based on this scenario, what interpersonal skill is Tom displaying?
a) Communications skills
b) Decision making skills
c) Team building skills
d) Influencing skills
4.
You are leading a team that is contemplating instituting new work processes to help
improve productivity. Your productivity has fallen off, deadlines are not being met,
and the team members are complaining about a lack of resources as well as being
overworked. The management has blamed the employees work habits and inefficiency, while employees have complained about managements failed leadership and
general myopia. What is the most important decision you will make while tackling your
teams problems?
a) Develop an individual strategy to deal with each problem.
b) Search for an underlying cause of problems.
c) Avoid involving individuals from outside your immediate team.
d) Always assume that the cause of your problem was a major change.
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Lesson 1 Follow-up
Lesson 1 Lab 1
1.
What information and data will project managers use to guide their work in a specific
process?
a) Tools
b) Techniques
c) Inputs
d) Outputs
2.
Which process group involves defining the need for the project or phase and obtaining
a commitment to move forward?
a) Planning
b) Executing
c) Controlling
d) Initiating
3.
4.
Which knowledge area ensures that the project will satisfy the needs for which it was
undertaken?
a) Project integration management
b) Project scope management
c) Project quality management
d) Project communications management
5.
6.
7.
What are the values that are considered most important to the global project management community?
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a) Respect, fairness, honesty, and compassion.
b) Fairness, honesty, compassion, and responsibility.
c) Honesty, compassion, responsibility, and respect.
d) Responsibility, respect, fairness, and honesty.
8.
Lesson 2
Activity 2-1
1.
Based on the scenario, who is responsible for portfolio management within the organization?
a) Project managers
b) Project sponsors
c) Stakeholders
d) Senior management
2.
3.
Activity 2-2
1.
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SOLUTIONS
2.
Decision tree
a.
Criteria proling
b.
Weighted factor
c.
Q-sorting
d.
Delphi technique
e.
Choose the option to which the OGCs project selection criteria should be linked.
a) Their strategic objectives
b) Their cost-benefit analysis
c) Their feasibility analysis
d) Root cause analysis
3.
4.
You have moved into the feasibility analysis and cost-benefit analysis of project selection. One project budgeted for $100,000 came out of the selection process. This is the
company-wide training initiative to be implemented for all project managers to adhere
to PMO project management standards and guidelines. The intent of the training is to
ensure that each member of the project management team understands the scope,
time, and costs in managing competing project requirements. The program will include
specific technology training in the use of a software tool that OGC recently purchased
that totaled $20,000 so that managers can create, manage, and track their projects.
Currently only 10% of the project managers are using the software. One senior manager is questioning the need for the budget to be as high as $100,000. What are your
justifications for the allotted budget? What are the benefits?
The justifications include: 1 There will be a higher return on software investment by
increasing efficiencies in team members use of the tool. 2 Compare the cost of the
software with the current 10% usage of the managers in the company. 3 Knowledge of
this tool will ultimately provide better reporting on the status of each individual subproject to the overall business transformation project.The benefits include: 1
Consistency can be maintained across all projects that are included in the portfolio. 2
Provides an opportunity for all managers at all levels in identifying what is involved in
managing competing project requirements. 3 Provides reinforcement of the companys
strategic objective before project initiation.
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Activity 2-3
1.
2.
Based on the scenario, which one or more of the following should be included in the
SOW?
a) A clear description of what is required for the internal and external training.
b) The specifications as to how both the internal and external training will be produced
and methods for ensuring that the specifications have been met.
c) A detailed breakdown of all deliverables that will be required to complete the
project.
d) A list of the human resources or work groups that will perform actual work for the
training project.
e) The estimated date of completion for both the internal and external training classes.
3.
Yes or No? Based on the scenario, do you think that it will be necessary for OGC to create an additional external SOW for this training project?
Yes
No
Activity 2-4
1.
How would you describe the goals and objectives of this project?
All Business Transformation team members must provide consistency in developing
project schedules in order to efficiently manage the many projects that will fall under
the Business Transformation umbrella. Team members must be able to identify all new
internal processes that are the direct result of the Business Transformation acquisitions.
2.
3.
Are there any assumptions that you would include? If so, describe them.
Since the company cannot provide the software training due to classroom and computer
limitations, it is expected that the company will need outside help from a training provider who has expertise with the project software and can manage the classroom
training. Internal training will be developed by the Business Transformation PMO team.
4.
Based on what you know at this point, how would you describe the primary
deliverables for this project?
Internal Trainingfor all new internal processes that are the direct result of the Business
Transformation acquisitions. External Trainingoutsourced training provider to conduct a
basic, intermediate, and advanced level of training on the project software.
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5.
Yes or No? At this time, are there any real constraints in the project charter?
Yes
No
Activity 2-5
1.
How would you approach ascertaining the total list of project stakeholders for the OGC
PM Training Roll-Out project?
Answers will vary, but may include: study the input documents, namely the project charter and the stakeholder register for the OGC Quality Plans Training project, to identify
the potential stakeholders of the project. The objectives, business need, assumptions,
and project description mentioned in the project charter are understood from the perspective of contributors in the organization. A dialog with the project sponsor will be of
great help. Document this information along with details of impact and support that
these stakeholders would have on the project.
2.
True or False? Members of the OGC PM Training Roll-Out project team are considered
to be stakeholders.
True
False
3.
How would you identify the positive and negative stakeholders of the project?
Answers will vary, but may include: you would perform a stakeholder analysis to identify
all potential stakeholders, analyze their potential impact or support to the project, and
assess how each stakeholder is likely to positively or negatively react or respond to various situations during the project life cycle. This would result in creating and documenting
a stakeholder management strategy for the project.
4.
5.
How would you establish levels of stakeholders based upon their interest in the project
and the impact they can have on the project?
Answers will vary, but may include: you would perform a stakeholder analysis to identify
the various levels of stakeholders, use interviews to gain insight into their interest in the
project, assess their support and impact on the project, and categorize these stakeholders into various levels based on their interest and their impact on the project.
6.
7.
Which documents can you use as a basis for your stakeholder register?
You can use the OGC Project Charter and the OGC Quality Plans Training Stakeholder Register as a basis for identifying stakeholder information.
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Lesson 2 Follow-up
Lesson 2 Lab 1
1.
Choose the component that should always be included in the project charter.
a) A breakdown of the functions and activities to be performed on the project.
b) A list of the project stakeholders and their areas of responsibilities.
c) A schedule of project activities.
d) A statement of project goals, via a project SOW, and authorization of the project
manager to use organizational resources on the project.
2.
3.
4.
5.
Which are reasons that it is important for the project charter to be signed by a highly
placed person in the organization?
a) This indicates the relative importance and priority of the project within the organization.
b) This provides authority for the project manager to cross functional boundaries when
carrying out project plans and activities.
c) This provides a signed document, which indicates that the project team members can
start work on the project.
d) This provides greater credibility with people outside of the project who may be asked
to contribute resources or join the project team.
6.
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d) Capital budgeting system
7.
How will you categorize the use of standard organizational procedures and terminology
by all team members and suppliers?
a) A bad management practice because it stifles creativity.
b) A bad management practice because it dictates practices that may not be industry
standard best practices.
c) A good management practice because it helps establish the foundation and framework for a common project language.
d) A good management practice because it highlights the project managers absolute
authority over the project.
8.
Which approach documents an approach to increase the support and minimize negative impacts of stakeholders throughout the project life cycle?
a) Stakeholder analysis
b) Stakeholder management strategy
c) Stakeholder communications planning
d) Risk management planning
9.
What are the tools and techniques of the identify stakeholders process?
a) Project charter
b) Stakeholder analysis
c) Organizational process assets
d) Expert judgment
Lesson 3
Activity 3-1
1.
As you review the OGC Project Management Plan outline, identify the elements that
your organization requires, if any, for your project management plans.
Answers will vary, but may include: the table of contents, templates for making Revision
History, Deliverable Approval Authority Designations, and Project Team Roles and Responsibilities entries, Glossary, and Definitions.
2.
Match the project management plan input with the appropriate description.
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3.
Project charter
a.
Enterprise environmental
factors
Organizational process
assets
This input uses baselines and subsidiary management plans that are
integrated to create or update the
project management plan.
b. This input uses existing processes
that may impact a projects success
such as policies, guidelines, or
knowledge gained from previous
projects.
c. This input includes factors that inuence the projects success, such as
anything from existing assets to external factors that should always be
considered during plan development.
d. This input authorizes and provides
vital information relating to the
project based on which the project
management plan is built.
Which subsidiary plan of the project management plan deals with closure of contracts?
a) Scope management plan
b) Procurement management plan
c) Process improvement plan
d) Communications management plan
Activity 3-2
1.
What would you do to identify the internal stakeholders for the OGC PM Training RollOut project?
Answers will vary, but may include: you will interview the sponsor, Vicky Morris, to identify the various internal stakeholders for the project. These internal stakeholders will
belong to departments such as Legal, Administration, and IT Infrastructure. You can
interview the supervisors of these departments to know the high level details of approximately 50 managers who will need to complete the training.
2.
Where would you start the process of finding the external stakeholders for the OGC PM
Training Roll-Out project?
Answers will vary, but may include: you will interview the sponsor, Vicky Morris, to identify the various external stakeholders of the project. Further, some of the internal
stakeholders you identify will most likely be in touch with the external stakeholders, and
can be of great help to you as you identify appropriate external stakeholders.
3.
Which is the method used to identify requirements by studying the individuals in their
work environment or while using the product?
a) Surveys
b) Facilitated workshops
c) Observations
d) The Delphi technique
4.
For the OGC PM Training Roll-Out project, which one or more of these tools and techniques could you use initially to identify the requirements of the stakeholders?
a) Interviews
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b) Focus groups
c) Facilitated workshops
d) Prototypes
5.
6.
Which documents can you use as a basis for your requirements documentation?
You can use the project charter and your notes from discussions with stakeholders given
in the scenario as a basis for the requirements documentation.
Activity 3-3
1.
Which documents can you use as a basis for your scope statement?
You can use the Requirements Documentation and the Project Charter as a basis for your
scope statement.
Activity 3-4
1.
When creating the WBS for the OGC Training Roll-Out, what types of reference materials and other inputs could you use?
You can reference the requirements documentation, project charter, project statement
of work, and the project scope statement. You should also determine if there is an existing WBS template that can be used.
2.
Based on the scenario, which work breakdown structure in Group 1 of the OGC Work
Breakdown document follows PMI recommendations for the OGC Training Roll-Out
project?
a) WBS A
b) WBS B
c) WBS C
d) WBS D
3.
As the project manager, you are asked to decompose the WBS deliverables. Which
activity would you perform during decomposition?
a) Assign unique ID numbers to each deliverable.
b) Break the deliverables down into smaller components.
c) Arrange the deliverables into categories, based on risk.
d) Organize the deliverables, based on which project team is responsible for their
completion.
4.
The scenario shows two deliverables that have been partially decomposed during a
recent meeting. Which of these activities are decomposed? Choose all that apply.
a) Assemble Internal Training
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b) Identify Resources
c) Needs Assessment
d) Determine External Training Provider
5.
In Group 2, which WBS would most resemble the inclusion of the decomposed
deliverables?
a) WBS A
b) WBS B
c) WBS C
d) WBS D
Activity 3-5
1.
Based on the scenario, develop the second-level work components for the WBS.
The second-level work components for the Warehouse Management System project will
look like this.
2.
Based on the points you recorded from the kick-off meeting and discussions with the
stakeholders, what work packages would you include in the Project Management work
component?
The work components for the Project Management work component will look like this. It
includes Project Planning, Schedule and Cost Management, Scope Management, Task Management, Project Communications, Human Resource Management, Space and Facilities
Management, Risk Management, Procurement Management, and Quality Management.
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SOLUTIONS
3.
To the WBS you have created, add the subcomponents for the Software Design and
Development work component and their corresponding work packages.
Your WBS would now look like this. Software Design and Development work component
will include the Software Design, Software Build, and Unit Test subcomponents.
4.
The completed work breakdown structure for the Warehouse Management System project
will look like this.
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SOLUTIONS
Lesson 3 Follow-up
Lesson 3 Lab 1
1.
2.
3.
4.
5.
What are the reasons that deliverables should be broken down into work packages during the development of the work breakdown structure?
a) In order to define the scope of the project.
b) In order to make the activities easier to manage.
c) In order to make costing easier.
d) In order to create activities that can be assigned to a single organizational unit.
6.
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7.
8.
9.
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Lesson 4
Activity 4-1
1.
The first step in creating an activity list is to gather your resource materials. Which
items below will be helpful in creating your list?
a) Cost-benefit analysis
b) The WBS
c) The scope statement
d) Activity lists from similar projects
2.
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In the provided table, list the activities and the appropriate WBS codes that are necessary and sufficient for the successful completion of the Assessing Needs work package.
SOLUTIONS
Activity 4-2
1.
During a recent meeting with your team, a decision was made to add five days
between identifying resources and defining roles and responsibilities due to other
commitments that some members of the team need to address in other projects. Will
this be a lag or lead relationship that you should account for? Please explain.
There will be a five day lag between identifying the resources and defining roles and
responsibilities.
2.
Referring to the OGC Activity List document, for the Assessing Needs activity, which of
the following activities are summary activities? Choose all that apply.
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SOLUTIONS
a) Training Needs Review with Key Resources
b) Identify High-Level BT PM Needs
c) Training Needs Review with PMO Steering Committee
d) Review Current Documentation for Deficiencies
3.
Referring to the OGC Activity List document, draw your network diagram for WBS
TRN0001, Assembling Internal Training Team. Make sure that all the required activities
are included in your network diagram. Make sure your diagram shows the sequence
constraints from left to right. Check to make sure the activities that are connected by
arrows correctly indicate their precedence relationship. Include inside each node the
WBS Code, duration, and lag or lead time.
Activity 4-3
1.
What are some additional factors that you would consider when identifying the
resources to fill the identified roles?
Answers will vary, but may include: resource availability, reporting structure, experience, and costs.
2.
What are some things that you would consider when determining the software training
vendor?
Answers will vary, but may include: OGCs organizational policies that could affect
resource acquisition and usage, availability, industry expertise, travel distance, and
costs.
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3.
As the project manager, what factors would you consider to make a decision on
whether to outsource development of the internal training content?
Answers will vary, but may include: verifying the project scope statement and considering
resource availability, resource experience, costs, and time for development.
4.
What other types of resources, other than people, would you list for this project?
Answers will vary, but may include: availability of an internal classroom(s) to accommodate the number of people to be trained, an in-house expert, and IT support. Materials.
Necessary equipment, such as computers, software, and overhead projector and possibly
an external copy center.
Activity 4-4
1.
For the summary task, Resources Identification, the team members explained that,
based on past experience, they would need a week to complete the interviews, if all
of the managers were available during that week. When asked how many hours they
expected to work during the week, they responded with 10 hours. Based on their
response to this question, what will the elapsed time be for these activities?
a) 10 hours
b) One week
c) 50 hours
d) A day and a half
2.
When the team members determined how long they thought it would take to complete
the manager interviews, what type of duration estimating technique were they probably using?
a) Parametric estimating
b) Analogous estimating
c) Reserve analysis
d) Expert judgment
3.
In the Estimating Activity Duration document, what will be the total duration for the
summary activity, Training Needs Review with Key Resources?
a) 1 day
b) 2 days
c) 4 days
d) 11 days
4.
Do you find it helpful in the activity list to have milestones represented with zero
duration? Why or why not?
Answers may vary, but may include: yes, it is helpful, because a zero duration activity
will immediately indicate a milestone. A milestone indicates a significant event that does
not need time for completion, but should be tracked for completion.
Activity 4-5
1.
What other inputs will you need to have available before developing the project schedule?
a) Resource calendars
b) Schedule baseline
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c) Project scope statement
d) Specific milestone dates that must be met
2.
Use the supplied table to draft the project schedule for the work package, WBS
TRN0001, Assembling Internal Training Team.
Activity 4-6
1.
Perform a forward pass to determine the Early Start (ES) and Early Finish (EF) for each
activity. Enter your answers in the appropriate place in the network diagram. What is
the ES for activity TRN1.1, Identify Team Lead?
The ES for the first activity is assumed to be zero.
2.
3.
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4.
5.
Calculate the ES and EF for the remaining activities. Why is the ES for activities
TRN1.2.3 and TRN1.2.4 the same as the ES for TRN1.2.2?
They all have the same relationship with the predecessor activity TRN0001.2.1.
6.
Determine the float for this network. Which activities have total float in this network?
Activity TRN2.1.1.1, Identify High-level BT PM Needs, has 4.25 days of float.
7.
Activity 4-7
1.
Which activity has the highest crash cost per week? Which has the lowest?
Activity A has the highest crash cost per week ($6,000 per week). D has the lowest ($250
per week).
2.
3.
4.
Which activities are the best candidates for crashing, and in what sequence?
Consider crashing in the sequence G, B, F, C, and then A. G or B will compress the schedule by 2 weeks, at a cost of $1,000 per week; F will compress the schedule by 7 weeks at
a cost of $2,000 per week; C will compress the schedule by 1 week at a cost of $2,000 per
week; A will compress the schedule by 3 weeks at a cost of $6,000 per week. Carefully
examine any possible crashing because another network path might emerge as the critical
path.
5.
Plot the slope for crashing each activity on the critical path. Use the graph to make
your plots.
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7.
If you crashed all the activities identified on the original critical path, what would happen to the duration for that network path?
It would go from 50 weeks (normal) to 35 weeks (10 + 4 + 5 + 13 + 3), a net decrease of 15
weeks.
8.
If you crashed all activities identified on the original critical path, what would happen
to the total project cost?
It would increase from $92,000 to $130,000, a net increase of $38,000.
9.
What would happen to the total project cost if you decided to crash every activity in
the project?
Total project cost would increase to $137,000.
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10. What other factors would you need to consider when deciding whether to crash this
schedule?
Answers will vary, but may include: consider resource allocation under normal and crash
conditions. Consider also the possible quality and risk implications of compressing the
duration of each of those activities.
11. What should you do if the normal time and the crash time for an activity are the same?
Nothing. You cant crash that activity.
Activity 4-8
1.
2.
How would you describe the difference between the draft schedule and the schedule
baseline?
Answers will vary, but may include: the draft schedule evolves through the planning
cycle. However, once the draft schedule is committed to by the project stakeholders, the
scheduled activities start and finish dates, durations, and calculated work are set in the
schedule baseline data, which can be used as a comparison once the project is underway.
3.
Which tasks will you be able to do once the schedule baseline has been established and
project execution has begun?
a) You will be able to determine project or activity slippage.
b) You will be able to determine a variance in the start and finish dates for the project.
c) You will be able to determine if resources are over-allocated.
d) You will be able to determine if the amount of scheduled work for each work package has changed.
4.
True or False? When the schedule baseline is first saved, the schedule variance for
each activity should be equal to zero.
True
False
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Lesson 4 Follow-up
Lesson 4 Lab 1
1.
2.
3.
4.
5.
6.
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7.
8.
9.
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14. Choose the most appropriate approach that you would take to shorten a project duration.
a) Change the project scope.
b) Crash as many activities as possible.
c) Crash all activities on the critical path.
d) Fast-track activities on the critical path.
15. What does the Precedence Diagram Method (PDM) show?
a) Resource allocation
b) Significant points in time
c) Task duration
d) Relationships
16. Choose the statements that are true of bottom-up estimating.
a) The most accurate estimating method.
b) The most challenging estimating method.
c) The most costly and time-consuming estimating method.
d) Used when enough historical information is present.
17. What are the disadvantages of bottom-up estimating?
a) Accurate historical data requirement
b) Timeliness
c) Accuracy
d) Cost-effectiveness
18. Choose the option that is true of milestone charts.
a) Display the scheduled start or completion of major deliverables.
b) Show inter-relationships.
c) Are excellent planning and scheduling tools.
d) Provide the project team with detail for decision making.
19. Which is not true for network diagrams?
a) They show dependencies among project activities.
b) They facilitate communications among all project stakeholders.
c) They have nodes that show the deliverables of the WBS.
d) They provide a highly effective visual for project planning and scheduling.
20. In a PDM network, which formula would you use to calculate the slack for an activity?
a) Total project duration minus total duration on the critical path.
b) Earliest time when the event can start, minus the latest time when the event can finish.
c) Earliest start date minus the earliest finish date for that activity.
d) Earliest time when the event can start, minus the latest time when the event can
start.
21. When a lead occurs in an activity, what is its effect upon other activities?
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SOLUTIONS
a) Delays a successor task.
b) Accelerates a successor task.
c) Delays a predecessor task.
d) Accelerates a predecessor task.
22. Choose the statements that are not true of a hammock activity.
a) Has an estimated duration different than the sum of its interdependent work packages.
b) Includes activities performed by different resources.
c) Includes activities that are non-sequential.
d) Spans across several activities in a work package.
23. When will a project completion date slip?
a) If total float = 0
b) If total float > 0
c) If total float < 0
d) If total float > 1
24. Choose the appropriate task a project manager needs to perform when leveling
resources on a project.
a) Manually determine where to adjust resources.
b) Extend the finish date.
c) Add resources.
d) Discuss a change in the project scope with the stakeholders.
25. When would you perform a forward and backward pass?
a) To determine early start and finish dates for each activity.
b) To identify the start and end dates of each activity on the critical path.
c) To calculate the theoretical time period within which an early refinement of the
schedule can occur.
d) Typically done without considering resource limitations.
26. What is total float?
a) The amount of float on any network path.
b) The amount of time that an activity can be delayed without delaying the early start
of any immediately following activities.
c) Calculated by subtracting late start from late finish.
d) The amount of time on a critical network path that an activity can be delayed without delaying the completion date of the project.
27. Which technique involves overlapping project activities to shorten project duration?
a) Risk conversion
b) Fast-tracking
c) Parallel management
d) Synchronous manufacturing
28. When crashing an activity, which task should the project team focus on?
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a) Accelerating performance of those tasks on the critical path.
b) Accelerating performance of as many tasks as possible.
c) Accelerating performance of non-critical tasks.
d) Accelerating performance by minimizing costs.
29. Which activity duration estimation technique uses optimistic, pessimistic, and most
likely calculations?
a) GERT
b) Gantt
c) Three-point estimates
d) CPM
30. Which element is drawn from the schedule network analysis and includes baseline
start and finish dates?
a) Activity list
b) Schedule baseline
c) WBS package
d) Summary activities
Lesson 5
Activity 5-1
1.
Which estimating technique was used to come up with the $63,000 allocation to the
Media Campaign deliverable? Why?
Analogous estimating was used to come up with $63,000 because you used historical information based on similar previous projects to allocate a portion of the $100 million total
project budget (top-down).
2.
How would you describe the level of accuracy for the $63,000 estimate?
Since one OGC store is very much like any other OGC store, it may have originated as an
appropriation, in which case, budgetary estimation may have been used with an accuracy
of -10 percent to +25 percent. It could also have been an approximate estimate, since it
lacks the detail required for high accuracy, with an accuracy of 15 percent.
3.
What was the impact of involving the work package owners in preparing the cost estimates? Why?
The work package owners are closest to the work and have a better understanding of the
work, so their cost estimates can be expected to be more accurate.
4.
Which estimating technique was used when you asked the work package owners for
their estimates?
Bottom-up estimating was used.
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5.
What technique would you use to estimate the Conduct Planning Meetings activity?
Why?
Use parametric modeling because you can use mathematical models to develop the estimate.
6.
7.
8.
Are there activities in the work package for which you will use more than one estimating technique? Why?
The Arrange Staffing activity uses analogous estimating for the air travel and parametric
modeling for the other costs. The Hold Event activity uses analogous estimating for the
labor and equipment that will be provided by the cable station and parametric modeling
for the other costs.
9.
Using the information in Public Meeting Estimate document, estimate the cost of each
of the activities.
The breakdown is: 1.1.4.2.1: $10,050; 1.1.4.2.2: $4,950 to $5,540; 1.1.4.2.3: $6,700;
1.1.4.2.4: $7,800 to $8,300; 1.1.4.2.5: $2,000.
10. What is your total cost estimate for the Public Meeting work package?
The total cost estimate should be $32,500 to $33,590.
11. What is the level of your cost estimate now?
You now have a definitive (control or detailed) estimate that has an accuracy of -5% to
+10%.
12. Do you need to take any action regarding your preliminary estimate of $63,000 for the
Media Campaign deliverable? If so, what action should you take?
Because the more accurate estimate for the public meeting exceeds the initial assumption of $30,000, your overall estimate is $2,500 to $3,590 more than $63,000, so you need
to take some action. You can adjust your earlier estimate and try to reconcile the deficit
with one of the other major deliverables; you can work with the work package owners of
this deliverable to try to get the costs down to below $63,000; or you can go back for
more funding.
Activity 5-2
1.
2.
During what time period will the Public Meeting activities take place?
All activities will take place over a 10-week period.
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3.
What cost assignment method will you choose to allocate funds? Why?
Answers will vary, but might include the Percentage Complete rule, since the milestones
are clearly defined and can be easily reported on; or the 0/100 percent rule, where no
credit is given until the work is complete.
4.
What are the weekly cost estimates for the activities in the Public Meeting work package? Refer to the Cost Estimates Per Week chart given below to estimate costs per
week and round up to the nearest thousand.
6.
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How would you plot the estimates to create an S-curve? Use the graph to plot your
results. Cost is on the y-axis and time is on the x-axis.
SOLUTIONS
Based on how the costs were allocated, the answers will look similar to this graph, which
plots the S-curve based on the previous Estimated Cost Per Week table.
Activity 5-3
1.
The project scope statement specifies a specific number of ads to be placed in the
newspaper in the weeks leading up to the grand opening. You have researched the
cost of ad space and you know that the sponsors requirements will exceed the funding
commitment. How would you proceed?
Answers will vary, but could include: you could approach the sponsor with a cost breakdown for the ad placement and suggest placing fewer ads. Come up with solutions such as
spend less per ad, place smaller ads, purchase black and white ads instead of full color,
and approach the advertising agency about cost savings. You might also consult with a
subject matter expert, such as someone in the marketing department, who can speak
directly to the sponsor in this matter.
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2.
Assume that you have no background in advertising or marketing. How could you go
about generating alternative ideas to suggest regarding less expensive advertising
options so that you can deliver the desired results within budget?
Answers will vary, but could include: you could consult with your companys public relations department for suggestions of cost saving efforts. You might consider implementing
a partnership with a local university by offering a marketing internship program to university students, thereby gaining extra help at little or no additional cost.
3.
You need to partner formally with your companys financial decision makers regarding
the costs of this project. Given the above scenario, what steps would you take to further this goal?
Answers will vary, but could include: you could ask your financial decision makers for a
meeting, bring documentation regarding advertising costs and budget, and ask for their
help in identifying additional sources of revenue. It is possible that they might choose to
increase the funding commitment. However, keep in mind that the forecasted cost variance should be a guideline for how elaborate an escalation should be.
4.
The advertising agency that has been contracted to produce the ads for the Seattle
stores grand opening has unexpectedly gone over budget. You receive an invoice that
exceeds their original estimate. How would you proceed?
Answers will vary, but could include: you could meet with the agency to determine why
they went over budget and whether they did anything that was beyond the scope that had
been agreed to. You could ask the advertising agency to work with you to identify savings
elsewhere, such as a discount on future work so that you can recoup some of your losses.
You could alert the sponsor regarding the cost overrun so that changes could be made to
the scope of the project.
Lesson 5 Follow-up
Lesson 5 Lab 1
1.
Identify the sources from where you can obtain cost estimate information.
a) Trade organizations, vendors, and suppliers.
b) Past project experience and current project team members.
c) Project schedule.
d) Commercial databases.
2.
3.
What step will a project manager take to help prevent cash flow problems?
a) Use the contingency reserves of other projects.
b) Make efforts to engage the finance department to put in place a cash flow forecast.
c) Make sure customers are financially stable.
d) Request additional funding from project sponsors.
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4.
Which cost estimating method requires managers to use their experience, historical
information from similar projects, and expert judgment to determine a total project
cost or time estimate?
a) Analogous or top-down estimating
b) Parametric estimating
c) Bottom-up estimating
d) Revenue estimating
5.
6.
7.
Which guidelines allow you as the project manager to reconcile the costs with the
funding that has been approved by the sponsor?
a) Map the project budget, scope statement, and schedule to the funding available.
b) Involve the project sponsor.
c) Consider adding in a contingency amount to accommodate the risk of incurring extra
expenses.
d) Partner formally with the companys financial decision makers.
Lesson 6
Activity 6-1
1.
Based on the scenario, which documents would you have used to identify the primary
project objectives for this project quality plan?
a) OGC quality policies and procedures
b) Project scope statement
c) Process improvement plan
d) Project management plan
2.
True or False? The process improvement plan helps remove activities that do not contribute to producing products of required quality.
True
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False
3.
Which tool can be used to monitor repetitive activities and help identify if the project
management processes are under control?
a) Benchmarking
b) Control charts
c) Flowcharting
d) Cost-benefit analysis
4.
The PMO has identified a list of objectives for all project managers in the use of the
software. What would you include in your quality plan that will address the level of
quality achieved by each project manager?
Answers will vary, but may include: the assessment is a form of benchmarking. A checklist
could be used as a helpful tool. Knowledge gaps can be identified and the follow-up support from the training provider can address these gaps to get each manager to the
appropriate 75% or above.
5.
The PMO has provided a complete list of activities as expected improvements after
training. What could your team use as a way to determine the degree of improvement
after training?
Answers will vary, but may include: the post-assessment evaluations taken by each
project manager will assess their level of knowledge and the regularly scheduled PMO
conducted project reviews and audits will evaluate whether the managers have incorporated what they have learned.
6.
What are some ways that you could identify the level of quality of the vendor instructor?
Answers will vary, but may include: ask that the training vendor provide evaluations from
previous classes taught by the instructor in the use of the software at all three levels of
training. Ask for a resume from the instructor. If resources were available, you could
observe the instructor in front of a classroom.
7.
Activity 6-2
1.
Which step would be the logical first step in documenting the roles, responsibilities,
and reporting relationships of project team members?
a) Create a RAM to document the roles and responsibilities for key project stakeholders.
b) Create an organization chart to organize the team members into a hierarchy.
c) Consider the competencies of expected staff members and how they affect the
projects reporting relationships or roles and responsibility assignments.
d) Examine the staffing requirements of the project.
2.
After examining the staffing requirements of the project, your next step is to list possible constraints that would affect the organizational planning. Which options would
you include as constraints for this project?
a) The project includes resources from several different OGC buildings.
b) The project includes resources from outside the organization.
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c) The project requires resources that are assigned to another project that may not be
released.
d) The project includes some resources that are new hires.
3.
Which item would you include in your documentation of the reporting relationships on
this project?
a) The training quality requirements.
b) The number of years of experience of each project manager.
c) The training instructor and manager will not only report to their management but will
also be responsible for several deliverables in your project.
d) The training and assessment costs.
4.
You have reviewed the Staffing Management Plan; to your surprise, it appears that
there are now staffing gaps due to resource reassignments. What could you do to
address this problem?
Answers will vary, but may include: one of the first things would be to develop some
rough choices for the project sponsor in terms of acquiring new resources and lead times
to fill these staffing gaps. Typically, this is where the budget and schedule get their first
exercise.
5.
At the conclusion of documenting project roles and reporting relationships, what key
documents would you create and distribute to project team members?
a) The project charter and a RAM.
b) An organization chart and a RAM.
c) The company quality policy and a RAM.
d) A cost-benefit analysis and a RAM.
Activity 6-3
1.
Which item should you use to determine the communications needs of your project
stakeholders?
a) Research material
b) Stakeholder analysis data
c) Project report deadlines
d) Executive board schedule
2.
Given the scenario, what would be a good technology for enhancing team member
interactions and building relationships through the life of the project?
a) Team building event at project kick-off.
b) Project team threaded discussion board.
c) Use email and databases to collect and store information.
d) High quality virtual teleconferencing on a semi weekly or weekly basis.
3.
Given the scenario, what would be a good primary communication technology for
exchanging project information?
a) Phone exchange with email confirmation
b) Weekly face to face meetings
c) Voice mail
d) Video conferencing
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4.
After integrating the communications management plan into the overall project plan,
what would be the next logical step?
a) Determining whether there will be changes to the proposed technology before the
project is over.
b) Creating a schedule for the production of each type of communication.
c) Distributing the plan to all the stakeholders.
d) Creating a description of stakeholder communication requirements.
Lesson 6 Follow-up
Lesson 6 Lab 1
1.
Which tool is consistently used to document the roles and responsibilities on a project?
a) Role administration matrix
b) Responsibility assignment matrix
c) Responsibility and role hierarchy
d) Staffing management plan
2.
Which document shows the reporting structure within the project, as well as its relationship to the parent organization?
a) Resource staffing histogram
b) Organization chart
c) Responsibility assignment matrix
d) Staffing management plan
3.
When does common experience show that a learning curve becomes apparent?
a) As cumulative production time doubles, time and costs associated with that production increase randomly.
b) As cumulative production time decreases, time and costs associated with that production lower at a constant and predictable rate.
c) As the quantity of items produced increases, costs decrease at a predictable rate.
d) As cumulative production time doubles, time and costs associated with that production increase at a constant and predictable rate.
4.
5.
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c) The process of systematically evaluating project quality.
d) The process of establishing a communications plan between stakeholders and work
package owners for quality updates.
6.
7.
The communications management plan is the most important portion of the project
management plan for managing stakeholders. For what reason?
a) It keeps the stakeholder involved with the day-to-day management of the project.
b) It helps the project manager to understand stakeholder expectations for project
communications.
c) It gets stakeholders involved in the planning process.
d) It helps identify all stakeholder needs and objectives for the project.
8.
Which of these project factors is likely to prevent effective performance of the communications plan?
a) The virtual team will use the company intranet to transmit documents.
b) All client company meeting time has been set at no more than 30 minutes a week for
each employee.
c) The customer wants its technical manager to review project data monthly.
d) The team is co-located in a trailer behind the main plant.
9.
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b) When each project activity starts.
c) At random intervals within a process cycle.
d) At random intervals over the course of the project.
13. Why is the cost of quality used during quality assurance?
a) To determine the most effective approach when considering prevention, inspection,
and repair.
b) To determine if the cost of the product will meet budget requirements.
c) To persuade management to invest in quality product methods.
d) To assess the cost of implementing quality improvements.
14. Who is the quality guru associated with breakthrough improvement?
a) Taguchi
b) Deming
c) Juran
d) Crosby
15. A team has 20 people on it. How many potential communication channels exist on this
team?
a) 19
b) 190
c) 20
d) 380
16. Which is true of using project intranets and home pages for communication?
a) Limited because only large organizations have access to these tools.
b) Ineffective as external project stakeholders cannot access them.
c) A security risk because there is no way to restrict access to them.
d) An effective way to provide a lot of information to a variety of users.
17. Which task is an example of a cost of nonconformance?
a) Training
b) Product design
c) Planning
d) Rework
18. Which tool is used to verify if the steps in a process are being followed?
a) Checklist
b) Trend analysis
c) Inspection
d) Performance review
19. Which tool would you use for analyzing and communicating the relationships between
process steps?
a) Scatter diagram
b) Control chart
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c) Flowchart
d) Trend analysis
20. Choose the factors to be considered when analyzing project trade-offs among cost,
time, and quality, where cost must be controlled in order to meet the cost baseline.
a) The impact on quality only.
b) The impact on schedule and quality.
c) The impact of additional risk that may be introduced.
d) The impact on schedule and scope.
21. In which organizational structure is an individual assigned to report to a single manager?
a) Weak matrix
b) Strong matrix
c) Functional structure
d) Projectized structure
22. Which project structure typically results in greater levels of technical depth and
breadth within the parent organization?
a) Weak matrix
b) Strong matrix
c) Functional structure
d) Divisional structure
23. Which is true of a matrix structure?
a) In a matrix structure, employees administrative, developmental, and performance
management are typically focused with their functional manager with proportional
performance and developmental input by project managers.
b) In a matrix structure, employees are typically assigned 50% of the time to functional
tasks and 50% of the time to project tasks.
c) In a matrix structure, employees are equally answerable to both functional and
project managers.
d) In a matrix structure, employees are answerable to the project manager, but report
both to the functional and project manager.
24. Of the various organizational structure alternatives, for managing projects, which ideally has the fastest response time?
a) Functional structure
b) Projectized structure
c) Weak matrix
d) Strong matrix
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Lesson 7
Activity 7-1
1.
During your project review, you determine that a risk officer is needed to handle risk
management activities. Which activities would you assign to this person?
a) Develop response strategies.
b) Confirm and articulate the risks probability and impact to the business strategy.
c) Coordinate risk identification and analysis activities.
d) Assign roles and responsibilities to each team member.
2.
With your planning meetings started and budget decided, your team begins the task of
determining how to identify risks. Which is the first place to look for risk planning?
a) Other project risk management policies
b) The organizations risk management policy
c) The project scope statement
d) The organizations quality policy
3.
The risk management plan for your OGC PM Training Roll-Out project uses a probability
scale to define the probability of occurrence of a risk listed in the risk register. Which
is the probability scale defined for the project?
a) 1, 3, 5, 7, 9, 11
b) 0.1, 0.3, 0.5, 0.7, 0.9
c) 2, 4, 6, 8, 10, 12
d) 1.1, 1.3, 1.5, 1.7, 1.9
4.
Which additional factor should you consider when developing your risk management
plan?
a) Job descriptions
b) Geography of the project team
c) Thresholds
d) Communication technology
5.
You have integrated specific risk related activities and deliverables into the projects
schedule and documented how to track risk response efforts in your risk management
plan. Which task should you perform to complete the risk management plan?
a) Determine how to document lessons learned for future projects.
b) Determine the necessary budget.
c) Make sure that roles and responsibilities are clearly understood by the team and
other stakeholders.
d) Create a payoff matrix.
6.
Which section of the risk management plan highlights the risk priority areas for the
project?
a) Methodology
b) Probability and Impact Matrix
c) Roles and Responsibilities
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d) Frequency of Updating Risk Registers
7.
True or False? As per the OGC Risk Management Plan, the OGC PM Training Roll-Out
project requires a quantitative risk analysis to be performed to assess the risk exposure events of your project.
True
False
Activity 7-2
1.
To identify risks for this project, you and your project team will meet as a group to
identify and examine as many of the strengths and weaknesses within OGC that can
potentially impact the project as you can, as well as any opportunities or threats that
may be imposed by the external training provider. Which information-gathering techniques will you use?
a) Brainstorming
b) Interviewing
c) Delphi technique
d) SWOT analysis
2.
3.
What is the trigger for the software upgrade risk that has been identified?
a) The enhancements to the project tracking and communications software.
b) The IT department scheduling the software upgrade.
c) The impact the upgrade will have on the PM Training Roll-Out project by narrowing
the RFPs sent to external training providers.
d) The potential increase to the total costs of training that the upgrade will cause.
Activity 7-3
1.
Based on the OGC Risk Event Impact Scale, which of the risks should receive the highest priority for this project?
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SOLUTIONS
Based on OGCs risk event impact scale, the risk event impact is 2.5. How is the risk
impact for this project best described?
a) Between Very Low to Low
b) Between Low to Moderate
c) Between Moderate to High
d) Between High to Very High
3.
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You need to enter the risk factors into the risk register for the work activity, Obtain
External Training Provider. In the Risk Register document, list the risk probability rating for each task.
SOLUTIONS
4.
For each risk that is identified, provide an impact rating for the work activity, Obtain
External Training Provider. In the Risk Register document, list the risk impact rating
for each task.
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Activity 7-4
1.
Which analysis technique was used in the Analyzing Project Risk image to determine
the most cost-effective choice of a training provider?
a) Delphi
b) Diagrammatic
c) Simulation
d) Decision tree
2.
What is the probability that Vendor 1 will complete the project on time?
a) 70 percent
b) 60 percent
c) 50 percent
d) 40 percent
3.
What is the probability that Vendor 2 will run over the allotted time for the project?
a) 40 percent
b) 50 percent
c) 60 percent
d) 70 percent
4.
5.
Your team combines the EMV at the end of each vendors network end-points to arrive
at a net proceed for each vendor. You want to choose the vendor bid with the most
economic advantage for OGC. Based on this number, which vendor should your team
choose?
a) Vendor 1
b) Vendor 2
c) Vendor 3
d) Vendor 1 and Vendor 3
Activity 7-5
1.
The first risk has possible positive outcomes. Which risk response strategy should you
employ?
a) Risk avoidance
b) Risk enhancement
c) Risk mitigation
d) Risk sharing
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2.
What response do you have regarding the risk of a potential project software upgrade
during the project life cycle?
If the software meets the approval of the IT department, you may want to include a provision to obtain a beta version of the software. You may choose to add more people who
can be trained on the upgrade and they can train others. You may choose to have a pilot
group work with the software.
3.
The change in organizational requirements due to the resignation of Vicky Morris has
possible negative outcomes to the project, but you have determined there is no way to
avoid the scenario completely. Which risk response strategy should you employ?
a) Risk avoidance
b) Risk enhancement
c) Risk mitigation
d) Risk exploitation
4.
You determine that instructor illness cannot be avoided. Which risk response strategy
should you employ?
a) Risk enhancement
b) Risk exploitation
c) Risk acceptance with a contingency plan
d) Risk acceptance without a contingency plan
5.
What are some ways you would respond to the potential risk of instructor illness during the training?
Answers will vary, but may include: include in the vendor contract the availability of a
backup instructor.
Lesson 7 Follow-up
Lesson 7 Lab 1
1.
2.
3.
What are the four main areas that project managers typically consider when discussing
risks?
a) Methods, materials, metrics, and people.
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b) Initiation, planning, executing, and closing.
c) Time, cost, quality, and scope.
d) Design, supply chain, production, and marketing.
4.
What do you call a specific occurrence that may impact the project in the future,
either positively or negatively?
a) Project risk
b) Risk factor
c) Risk-opportunity dichotomy
d) Expected value
5.
6.
7.
For what reasons are the network diagramming method and/or flowcharting used in
risk identification?
a) To determine the root cause of a project risk.
b) To show the effect of a particular risk on a project.
c) To indicate areas of the WBS that should be redrawn as a result of risk identification.
d) To identify all the possible risks for a project.
8.
For what reasons is the Delphi technique often used during risk identification?
a) It emphasizes the potential impact of risk by telling about incidents that illustrate
the consequences of ignoring the risk.
b) It ensures all stakeholder inputs are received and the risk process is not unduly influenced by a small number of persons.
c) It motivates stakeholders to invest in the risk identification process through the use
of anonymous input via questionnaires.
d) It identifies the overall project risks and focuses on a particular project segment or
work package.
9.
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10. Jennifer is a publisher. In order to make sure that her writer delivers on time, she
inserts a penalty clause for late delivery into her writers contract. Which risk
response is Jennifer using?
a) Risk avoidance
b) Risk mitigation
c) Risk acceptance
d) Risk transference
11. Which risk response can be categorized as either passive or active?
a) Risk avoidance
b) Risk mitigation
c) Risk acceptance
d) Risk transference
12. When is additional response development needed during risk response control?
a) When the organization is restructuring.
b) When the project objectives change.
c) When the contingency reserves are used up.
d) When the original risk response is not working as expected.
Lesson 8
Activity 8-1
1.
In the OGC Procurement Management Plan, who is authorized by OGC to enter a prescribed contract with the external training provider?
a) Project sponsor
b) Project manager
c) Procurement manager
d) Operations manager
2.
In the OGC Procurement Management Plan, which of these job tasks are defined for
the solicitation process of the project?
a) Characteristics of project requirements are to be documented in a procurement
statement of work.
b) A Request for Proposal (RFP) will be sent to prospective sellers.
c) Provide necessary electronic and paper documentation and source files.
d) Evaluation criteria are to be determined to evaluate proposals from sellers.
3.
Which of OGCs plan procurements inputs contains information about the time frame
for each project deliverable?
a) Requirements documentation
b) Scope baseline
c) Project schedule
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d) Activity resource requirements
4.
5.
Teaming agreements
Enterprise environmental
factors
Organizational process
assets
a.
Which section in the OGC Procurement Management Plan refers to the parameters to
choose sellers?
a) Contract Type
b) Procurement Description
c) Procurement Responsibility
d) Source Selection
Activity 8-2
1.
In the OGC Procurement SOW document, which components define the specifics of the
work being procured?
The description of the work, the Seller/Trainer Responsibilities list, and exhibits A and B
define the work being procured.
2.
Were there any inconsistencies used in the document that might be confusing?
Answers will vary, but may include: Seller and Training Provider are being used interchangeably, and using two terms in this way is confusing.
3.
Does the OGC Procurement SOW include any collateral services to be provided by the
client?
The follow-up support would be considered a collateral service in this contract.
4.
Does the OGC Procurement SOW describe when, where, and how delivery is required?
The work schedule describes when the work will be delivered. The Seller/Training responsibilities list that the seller must provide a classroom and instructor to accommodate nine
managers. Exhibits A and B describe in detail how delivery is required for both the assessment and training.
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5.
Does the OGC Procurement SOW provide specifications on how the assessment must be
produced and methods for ensuring that the specifications have been met?
Under OGC Responsibilities, it states: OGC will provide all necessary electronic and paper
documentation, source files, and imagery required or requested by Seller, which is pertinent to the work requested. The Lead Contact will review and validate the pre- and postassessment content prior to supplying it to Seller. Seller will need to receive this prior to
the project kick-off. Also, Exhibit B describes the assessment review process.
Activity 8-3
1.
Based on the scenario, what would be a logical first step in creating the procurement
document?
a) Determine how you want training sellers to respond.
b) Define the training specifications.
c) Determine the most appropriate procurement document to use.
d) Examine the project SOW and make any necessary changes.
2.
The assessment development, the project software training needs, delivery of the
training, and costs will be the determining factors in your choice of training providers.
What type of procurement document would be most appropriate to use in this situation?
a) Request for quotation
b) Request for proposal
c) Request for bid
d) Invitation for bid
3.
From the C:\085042Data\Planning Project Procurements folder, open the OGC Procurement SOW and Procurement document. Which criterion for evaluating training
sellers is subjective?
a) Seller must provide an instructor with a minimum 3 years of project management
software training.
b) Seller must be creative and flexible about changes made to the design of the assessment documents, even in late production phases.
c) Seller must have a minimum 20 years of collective training experience on staff.
d) Seller must have produced at least three projects of similar scope in the last 10
years.
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Lesson 8 Follow-up
Lesson 8 Lab 1
1.
2.
In which contract does the buyer reimburse the sellers allowable costs (defined by the
contract) plus a fee?
a) Firm fixed price plus incentive contract.
b) Cost plus incentive fee contract.
c) Time and materials contract.
d) Cost plus fixed fee contract.
3.
In which contract does the buyer reimburse the sellers allowable costs (defined by the
contract) plus a predefined fee?
a) Firm fixed price plus incentive contract.
b) Cost plus incentive fee contract.
c) Time and materials contract.
d) Cost plus fixed fee contract.
4.
Which is used to evaluate each sellers proposal and make comparisons among different proposals?
a) Procurement documents
b) Procurement statements of work
c) Teaming agreements
d) Source selection criteria
5.
6.
Which document includes the invitation for bid and request for proposal?
a) Procurement statements of work
b) Procurement document
c) Requirements documentation
d) Procurement management plan
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Lesson 9
Activity 9-1
1.
You need to assist the systems analyst in the creation of a PMIS that is workable for
your project. In order to design an effective PMIS, what are the inputs that a systems
analyst should know about the project that the PMIS will manage?
a) What people will have access to the information?
b) When will the information be needed?
c) Who will incorporate the information into the system?
d) Who is the customer?
2.
As the project manager, you have made sure all organizational policies and procedures
were followed, and the contract training vendor is familiar with their responsibilities.
What would you do next?
a) Call a meeting with the project sponsor so she can commence work.
b) Issue work authorization.
c) Work with a systems analyst to create a PMIS.
d) Collect work performance information.
3.
An activity did not start on its scheduled date. The responsible team, Team 1, claimed
that they could not start the activity because its predecessor activity did not show a
completion date in the latest status report. Team 2 claimed that they had completed
the activity on time and had followed the appropriate procedure for updating its
completion status. What are some things you would do to investigate why the status
report was not up to date?
Review the status for the activities in the PMIS since it is the central point of data collection for activity status. If you discover that the completion status for the activity is not
reflected in the system, alert the PMIS technical experts so that the cause can be identified. Along with the current system for activity updates, you may also ask that resources
communicate on a weekly basis their activity progress through a quick email or phone call
until the original system is proven.
Activity 9-2
1.
The manager of quality assurance has asked you about your quality management plan.
Which feature might he find problematic?
a) Scheduled and random quality inspections will take place, which will be conducted
by an internal quality assurance engineer, as well as by the city.
b) Any corrective actions that a project manager feels will improve the effectiveness or
efficiency.
c) Operational definitions were defined for measuring the quality of the construction
work.
d) Occurrence of scheduled and random quality inspections during the course of the
project.
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2.
3.
The stakeholders are questioning the amount of resources dedicated to quality assurance. How can you demonstrate to them that the benefits of quality assurance
outweigh the cost?
a) Perform benchmarking to compare project practices to other projects to generate
ideas for improvement.
b) Conduct an array of experiments to identify which factors may be influencing specific
variables.
c) Use flowcharts to see how systems relate and how various factors might be linked to
problems or effects.
d) Document the identified corrective actions so that their effect on project quality,
cost, and schedule can be monitored during quality control.
Activity 9-3
1.
2.
The functional manager of the IT department informs you that, based on the time
frame for your project, two of the resources that are available are new hires who have
not worked earlier in a project on their own at this point. What should you do?
Ask the functional manager if a senior member of his team can serve as a mentor to the
new hires, at least throughout the beginning phases of the project. Verify that the
assigned resources will be able to perform the work required. Discuss who will be responsible for training the new hires. Learning to negotiate effectively with functional
managers is a crucial part of the team acquisition process.
3.
During the first meeting of the new project team, some confusion arises between two
team members about their roles and responsibilities. Since this conversation is not
appropriate in this forum, how might you respond?
Answers will vary, but may include: as the project manager, you should identify the
issue, table it, and use the human resource plan, which was developed for the project
and clearly documents the roles and responsibilities and organizational structure. The
two resources will be informed and once again be made aware of it. This sets the expectation that working the problem should be the focus, not arguing the problem.
Activity 9-4
1.
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SOLUTIONS
2.
Forming
a.
Storming
b.
Norming
c.
Performing
d.
Adjourning
e.
You notice that Rachel, a team member, has consistently met her deliverable deadlines and is always on time with her status reports. She actively participates in
brainstorming sessions and makes valuable contributions to the discussions. When
required, she has gone beyond her responsibilities and has helped her project manager
facilitate brainstorming meetings and discussion sessions. How should you respond?
Consider publicly recognizing her in a team meeting to reinforce the desirable behaviors.
The team may congratulate her and it may give everyone motivation to go the extra mile
when needed to meet aggressive deadlines.
It is also advisable to provide positive input to her functional manager for her performance appraisal. This will also boost her motivation to go the extra mile, and might lead
to a raise.
3.
One of your junior team members, who is assigned to gather information from managers through an interview process, has confided in you that he is not comfortable during
the interviews. He feels that the managers seem impatient with the questions he is
asking. The other junior team members assigned to interviews have not had any problems. What are some things you would do to address this issue?
Answers will vary, but may include: as a project manager, you can talk to the team member about certain aspects of his voice, such as intonation, and his communication style,
such as nonverbal cues. You need to identify if the team member has a problem in any of
these aspects, which might create a negative impression while interviewing the managers.
Activity 9-5
1.
Given the masonry supervisors email about the conflict between the plumbing and tile
contractors, what should you do?
a) Confirm their inability to get along and its probable impact on the team. Responding
to alleged interpersonal conflict from second hand sources is almost always a mistake.
b) Wait for results of the weekly masonry work progress report.
c) Provide constructive feedback to the contractors.
d) Consider offering an online conflict resolution course for the contractors.
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2.
In speaking with the contractors, you discover that the tile contractor feels that the
plumber is spending too much time at lunch and on breaks, which causes him to work
past 6:00 each day. The plumber responds that he takes a normal lunch break. What
can you to do resolve this situation?
To help resolve this conflict, you can review the expected ground rules that were set at
the beginning of the project based on the communications management plan. Confirm the
amount of time that should be used for lunch and breaks and verify the facts of the
breaks being taken. Remind the plumber of the teams ground rules and schedule expectations, as well as his responsibilities on the project. Document the incident and monitor
the situation as the contractors continue to work together to complete the project.
3.
The roofing team has been working effectively, meeting all deadlines and experiencing
no personnel problems. What approach should you take when monitoring this team?
Give positive feedback. Providing constructive feedback to team members on a frequent
basis enables the team members to know that they are on track. Speaking to team members one-on-one is an excellent way to maintain communication and monitor progress.
Activity 9-6
1.
2.
As people strive to meet their deadlines, reporting the status of activities can become
a low priority. This is a problem when you are trying to distribute up-to-date information on the status of the project. What are some things that you could do to make sure
that people report accurate and timely information to you?
Answers may vary, but may include: schedule weekly project status meetings or meet
with resource groups on an individual basis. If they are using the same document to
report their status, you may consider implementing a date and time stamp for version
control.
3.
You are asked by your manager to provide the senior executives your projects
progress to date. Which information distribution methods would be most appropriate
in this situation?
a) Send an email announcing that a report is posted on the intranet site.
b) Make a telephone call to schedule one-on-one meetings with each executive.
c) Send an email based on status notes that you took over the phone while communicating with team members.
d) Make a presentation to the senior executives and highlight the important points in
the report.
Activity 9-7
1.
600
Stakeholders are worried about the current state of the project. How should you
handle their concerns?
SOLUTIONS
a) Follow processes outlined in the communications plan.
b) Take corrective action.
c) Conduct a face-to-face meeting with a clear agenda targeting their specific concerns.
d) Document lessons learned.
2.
Two stakeholders are out of town on a business trip and are available sporadically.
Another has an extremely busy schedule and cant squeeze another lengthy meeting
into his day. You know it is important to have face-to-face interaction with each stakeholder. How can you accommodate their needs? Check all that apply.
a) Use video conferencing.
b) Send a memo via email.
c) Use an instant messaging service.
d) Hold a brief summarization meeting.
3.
During the face-to-face meeting with project stakeholders, you offer a recap of some
contractor changes that occurred. It became necessary to add another electrical contractor to the team, which resulted in changes to the project cost baseline. While you
are talking about this issue, you notice that one of the project stakeholders continually
looks down at the floor and rapidly taps her pen against the table. What does her
behavior indicate?
Assessing body language provides the project manager with an opportunity to determine
if the stakeholder is pleased or not with the projects progress. Based on her body language, you can determine that the project stakeholder is uncomfortable with the
information you are providing to the group. Draw her into a conversation to determine
what aspect of the information is unsettling to her. Her answer will tell you if there are
outstanding issues to address in regards to project cost baselines, or any other issue that
may be of concern to her.
Lesson 9 Follow-up
Lesson 9 Lab 1
1.
When negotiating for resources, the project manager arranged for the loan of a particular technical expert by implicitly promising to raise the functional managers
visibility with executive stakeholders on the project. Which currency was the project
manager using?
a) Inspiration-related currency
b) Position-related currency
c) Relationship-related currency
d) Task-related currency
2.
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3.
What would be the important reasons behind the efforts taken by the project manager
to foster motivation?
a) To help the team work through a temporary setback.
b) To help the team to overcome a lack of confidence.
c) To accomplish early wins in the projects life cycle.
d) To ensure that there are no activities that have late start criteria.
4.
Which system notifies the work package owners when to begin work?
a) Project schedule
b) Status review system
c) Work authorization system
d) PMIS
5.
6.
7.
Which manual or automated tool and technique is used to collect, archive, and distribute project information on a project?
a) Project management information system
b) Communications plan
c) Project management enterprise software
d) Communications and feedback system
8.
9.
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SOLUTIONS
b) Ensures that efficient or effective processes and procedures are used.
c) Contains future change recommendations.
d) Determines whether the project complies with organizational and project policies,
processes, and procedures.
11. What does co-location mean?
a) That the team members are distributed geographically.
b) That the team is located in one physical location.
c) That the team uses a war room.
d) That the team members work from home.
12. Which statement is true of version control?
a) Required so that team members do not over-write one anothers work.
b) Not a problem for project managers who use adequate backup systems.
c) Required to make sure everyone is working with the same, most recent document.
d) Required to maintain only the latest version of the document.
13. Which of these statements are true of a project management office?
a) A team that manages multiple projects concurrently.
b) The same as the office of the CEO.
c) A unit that centralizes and coordinates the management of projects.
d) An organization that may provide project support functions.
14. Which of these statements are true of quality audits?
a) Are only done at the end of the project.
b) Check the fitness of the projects output or the fitness of the quality plan.
c) Are done only once during the entire project life cycle.
d) Are best done at random intervals over the course of the project.
15. Why are quality audits performed?
a) To evaluate whether the project output is fit for the purpose it was intended.
b) To evaluate if best practices identified in the previous projects have been implemented.
c) To evaluate whether the quality management plan is still appropriate after quality
improvements have been made.
d) To evaluate if the quality assurance team members are qualified
e) To evaluate how statistical process control may be used to improve the capability of
a process.
16. What should you do when the quality assurance team suggests quality improvements in
your project?
a) Assess for risk to project success.
b) Subject them to trade-off analysis.
c) Ensure that the change does not affect the project scope.
d) Determine the cost of quality.
17. On which idea is quality assurance based?
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a) Creating a margin of error for product specifications.
b) Preventing problems, rather than fixing them.
c) Establishing upper and lower specifications for products.
d) Increasing production rates by providing training for quality control inspectors.
Lesson 10
Activity 10-1
1.
You have a list of 10 potential sellers and have to narrow the list down to a more manageable number of candidates. What will be the process to create a short list of
sellers that you will consider?
Based on the qualified sellers list, which lists sellers from previous projects who have
been pre-screened for their qualifications and their track record of performance, you can
narrow down the potential sellers to a more manageable number of candidates and create a short list of the sellers.
2.
You now have a short list of sellers. Name some of the selection criteria you might use
in finalizing the selection of the seller.
Some of the possible selection criteria might be, but are not limited to:
Priceremembering to re-examine the very high or very low responses as the seller may
not have fully understood what was being requested.
Working relationshipsif your company has done business with a seller, are there positive or negative comments recorded regarding the work relationship?
Prohibited bidderdoes your company have a list of sellers that are no longer acceptable for use as a subcontractor? Are there relatives or close friends of executives who
have some association with the bidder? This needs to be examined closely for a potential
conflict of interest and a seller may have to be deemed unsuitable.
Product scalabilitycheck with technical experts in your company on the scalability of
the solution suggested by the seller.
Product maintainabilitycheck on the maintainability of the solution suggested by the
seller.
Product support commitmentevaluate whether the seller provides for adequate operational support for the product.
3.
Included in the contract should be performance criteria, on both schedule and costs,
expected of the subcontractor. What is some of the information that you would want
to see in the way of performance reporting by the subcontractor?
Answers may vary, but may include: milestone or deliverable tracking to show compliance
to requested schedule and cost constraints. You could also include test reports, test data
documentation, and certification requirements to ensure product quality requirements
are met.
4.
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SOLUTIONS
Activity 10-2
1.
What do you think would be the most appropriate method of finding qualified training
providers for the OGC PM Training Roll-Out project?
Answers will vary, but may include: OGC may have a list of training providers that the
company has used in the past.
2.
There are only two local training providers in a 20 mile radius of OGC. You decide to
expand your seller list outside of your local area. What methods would you use to do
this?
Answers will vary, but may include: perform an Internet search, review professional journals, and contact the project software sales representative. Once you compile your short
list, you might consider asking them for references.
3.
Based on the scenario, would you conduct a bidder conference? Why or why not?
Answers will vary, but may include: based on the initial feedback and queries that you
get from various sellers in response to your RFP, you may decide to conduct a bidder conference to allow prospective sellers to ask questions and to get clarification about the
deliverables and the procurement requirements for preparing their responses. However,
if the proposals from various sellers indicate a proper understanding of the requirements,
you would not require a bidder conference, as this incurs additional costs, time, and
effort that need not be expended.
Activity 10-3
1.
To find a qualified seller you decide to use a weighted system. What would be your
first step?
a) Assign a numerical weighting factor to each evaluation criterion.
b) Score each prospective seller based on the rating scale for criteria.
c) Select the seller with the highest score.
d) Develop a rating scale for scoring the criteria.
2.
For each evaluation criterion, you have specified a rating scale. What should you do
next?
a) Add the scores of the scale.
b) Select the highest rated score.
c) Score each prospective seller on each criterion using the rating scale.
d) Multiply the sellers score by the weighting factor for each criterion or sum of the criteria in a category.
3.
You have selected a seller. You and the procurement manager are meeting with the
seller to negotiate the contract. The procurement manager asks the seller if they will
use an in-house instructor or outside contractor for the project software training.
Which part of the negotiating phase are they engaged in?
a) The introduction stage
b) The probing stage
c) The bargaining stage
d) The agreement stage
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4.
From the C:085042Data\Managing Project Procurement folder, open the OGC Seller
Proposal Notes and Blank OGC Seller Scoring Sheet documents. Based on the scenario
and the seller notes provided, complete the seller scoring sheet.
Enter your rating for each sellers selection criteria. Using the Weighting Factor provided,
calculate the Score for each criterion (multiply the Rating by the Weighting Factor). Once
you are done with the calculation of the scores for all sellers, calculate the Total Score
for each seller.
5.
Compare your Blank OGC Seller Scoring Sheet document with the Completed OGC
Seller Scoring Sheet document in the C:\085042Data\Managing Project Procurement\
Solutions folder.
Ratings for each seller are determined by predetermined selection criteria and the evaluation of the seller proposals that were received from different sellers. Scores were
calculated based on the weighting factors and totals for scores were calculated for each
seller. You have performed a quantitative evaluation of the seller proposals.
6.
Based on your quantitative evaluation of the seller proposals, which seller would you
choose for your project?
Answers will vary, but may include: based on the total scores that you calculated using
the weighting system, you now possess a quantitative evaluation of each seller. The final
total scores will serve as an objective parameter in the comparison and selection of the
seller for your project. In this case, based on the total scores, you may select Rudison
Technologies Ltd. as they posted a score of 390, which is the highest score among the
three sellers.
Lesson 10 Follow-up
Lesson 10 Lab 1
1.
2.
Which allows potential sellers to ask questions about the project and its requirements?
a) Advertised bids
b) Bidder conference
c) Sellers conference
d) Annual meeting
3.
4.
606
Which provides a pass or fail mechanism for criteria critical to project success?
SOLUTIONS
a) Weighted scorecard
b) Expert judgment
c) Seller rating system
d) Screening system
5.
6.
Which is a legal contractual agreement signed between the organization and an external entity to form a partnership in a buyer-seller arrangement between them?
a) Procurement contract
b) Teaming agreement
c) Seller proposal
d) Purchase order
7.
Which are tools and techniques for the conduct procurement process?
a) Bidder conferences, SWOT analysis, independent estimates, expert judgment.
b) Procurement negotiations, advertising, contingent response strategies, proposal
evaluation techniques.
c) Independent estimates, make-or-buy decisions, qualified seller lists, source selection
criteria.
d) Bidder conferences, independent estimates, expert judgment, procurement negotiations.
8.
9.
True or False? A procurement contract is a mutually binding agreement that details the
obligations of only the seller.
True
False
10. Which output of the conduct procurement process lists the quantity, availability, and
utilization of project resources?
a) Project management plan
b) Procurement contract
c) Resource calendar
d) Seller proposal
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SOLUTIONS
Lesson 11
Activity 11-1
1.
What can you do, as the project manager, to mitigate the negative effects of a staffing
change?
a) Put the project on hold until Sarah returns from sick leave.
b) Rebuild the schedule to include additional time for Kevin to complete his tasks.
c) Closely monitor Kevins work to assess any possible risk.
d) Discuss with the team the impending change and that the team can expect to go
through the team development stages again.
2.
Kevin missed an important deadline. What action can you take to help Kevin get back
on schedule?
You might recommend that another instructional designer be brought in to assist him.
Once youve determined that project performance is not meeting the project plan, it
becomes necessary to recommend corrective action. A change in head count will have an
impact on cost and scheduling, and will require the monitoring of changes as they occur.
3.
After he has been given extra help, Kevin manages to meet his next important deadline. What should be your next action as project manager?
a) Keep a private log for your own reference, detailing changes that have been made to
the project.
b) Update recent cost and schedule changes that have resulted from recent changes.
c) Ask Kevin to closely monitor changes to the projects cost and schedule.
d) Ask Kevin to let you know if he has any further problems as the project progresses.
Activity 11-2
1.
Who will you involve in the change control process for the PM Training Roll-Out project
and what is their role in the change control process?
The change control process should involve the OGC selected senior executives and strategic planning individuals who are the key stakeholders. Their role will be to identify what
will be considered a significant enough change from each baseline to require management
approval. You should also include the PMO.
2.
The IT department informs you that the project software upgrade will have a significant delay in delivery. In the risk register, you accounted for a delay due to the
software upgrade, but this delay is much longer than originally anticipated. What
action should you take first?
a) Coordinate changes across knowledge areas.
b) Document the change request in a change control system.
c) Update the project plan to reflect changes.
d) Bring the information to the stakeholders for evaluation and approval.
e) Identify corrective action to take to resolve the problem.
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SOLUTIONS
3.
The procurement manager contacted the software vendor and was able to secure a
beta version of the project software. The beta version may have some minor bugs, but
it will be available in time for the training. Based on your change control process, what
further action, if any, should you take?
You should document the problems regarding the beta version and its flaws, the actions
taken to work within these issues, and the reasoning behind your decision to use the beta
version of the software.
Activity 11-3
1.
The internal team responsible for assembling documentation for the training vendor
cannot meet their contracted deliverable of March 25. What actions should you take?
a) Identify required corrective action to resolve the problem.
b) Update the project plan to reflect these changes.
c) Recommend corrective actions to the CCB.
d) Use configuration management to document and control changes to the original vendor contract.
2.
What are the tasks that you should consider when determining appropriate corrective
actions?
a) Record how corrective actions should be tracked.
b) Identify alternative options available.
c) Determine the source of the problem and its severity.
d) Review the project plan and objectives.
3.
OGCs change control process states, The PMO, upon receipt of change request decisions, records the information in a database to track all change request patterns.
What benefits do you see in tracking change request patterns?
Answers will vary, but may include: it may be helpful to see a breakdown as to how many
change requests were due to contractual agreements. They will be able to do research to
find other projects that have had similar change requests and patterns.
Activity 11-4
1.
Your team has been designing a plan that calls for testing and verification of the
assessment questions. The team has determined the criteria for acceptability for each
assessment question. What should be your next step in the inspection process?
a) Establish the scope of the review.
b) Determine the methodology of the review.
c) Conduct the review.
d) Prepare a review report for stakeholders.
2.
Your team has decided to use a checklist and job aid in combination for the assessment review. Before beginning the actual review, what else would you consider doing?
Before you begin the review, you should first gather all relevant scope documentation,
including the WBS, scope statement, and requirements documentation. You should also
communicate with the team members who will participate in the test, so they can prepare for the review.
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3.
The draft assessments have passed the inspection. What should be included in your
review report, and why?
1. The project baseline and status comparison. This part of the report compares baseline
specifications, schedules, and budgets to the actual project results. 2. Overall project
status. This part of the report discusses whether or not the project as a whole is on track
with the project plan. 3. Change recommendations. Recommending changes would be necessary if the review indicated that the product specification, scope, schedule, or budget
goals would not be met. 4. Scope and methodology of the inspection. This part of the
report explains the purpose and details of the review.
4.
You receive formal approval for the assessments. How will you inform stakeholders?
Provide written documentation to project stakeholders indicating formal acceptance in
accordance with the communications management plan.
Activity 11-5
1.
2.
You have various inputs available to manage a scope change, such as the one in the
scenario. Match the input with its description.
Requirements documentation
Requirements traceability
matrix
a.
A scope change request recommending additional test documentation has been submitted to the CCB for analysis. This change might impact the project finish date. What
should be done first with this request?
a) Evaluate the request.
b) Ensure that new specifications are detailed.
c) Monitor changes.
d) Identify corrective action to take.
3.
The CCB informs you that the additional costs for the workshop will be adjusted in the
project budget. However, the project finish date must remain the same. As the project
manager, what could you do to ensure that the project finishes on time?
Consider assigning additional resources to effort-driven activities on the critical path.
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SOLUTIONS
Lesson 11 Follow-up
Lesson 11 Lab 1
1.
2.
3.
4.
The control processes are repeated throughout the project life cycle. Therefore,
which term can be attributed to the control processes?
a) Facilitative
b) Integrative
c) Core processes
d) Iterative
5.
6.
7.
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d) Project charter
8.
What actions should be taken regarding issues relating to the customers installation
and support requirements?
a) Addressed if currently part of the projects scope.
b) Ascertained through a cut-over needs analysis.
c) Addressed as a separate project.
d) Addressed as a change to the current projects scope.
9.
What is the overall process of managing changes that affect the function or characteristics of the deliverable known as?
a) Managing by objective
b) Change control management
c) Managing by exception
d) Configuration management
10. Which element is a collection of formal, documented procedures that defines the steps
by which the project may be changed?
a) Managing by objective
b) Change control system
c) Managing by exception
d) Configuration management
11. Who is responsible for ensuring that changes are processed through the integrated
change control process?
a) Project sponsor
b) President
c) Project manager
d) Functional manager
12. Which statements are true of change requests?
a) Must be documented.
b) Can come from anyone.
c) Will not affect the project scope.
d) Must be subjected to an integrated change control process.
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Lesson 12
Activity 12-1
1.
b
a
Schedule variance
Schedule performance
index
Cost variance
Cost performance index
d
c
2.
a. EV / PV
b. EV - PV
c. EV / AC
d. EV - AC
According to your cost baseline for the project, you planned to spend $15,000 by the
end of the eighth week. You collect reporting data for the eighth week and determine
that $12,000 worth of work has actually been completed. What actions should you
take with this information?
a) Bring it to the attention of the CCB with some possible solutions.
b) Use it to identify corrective action to take.
c) Use it to compare actual schedule performance to planned performance.
d) Bring it to the attention of project stakeholders.
3.
The SV for the eighth week of your project is -$3,000. The SPI for this reporting period
is .80. What is your analysis of this data and the projects schedule performance to
date?
A negative SV indicates that the project is currently behind schedule. An SPI number less
than 1.0 also indicates that the project is behind schedule. You need to determine the
cause of the variance and whether the activity that is behind schedule is on the critical
path. You may consider talking to your resources to identify the source of the problem.
You may have to change the schedule dates as well.
4.
Using performance measurement techniques, you have determined that the project is
behind schedule. What should you do with this information?
Now that you know the project is behind schedule, you need to determine what activity is
causing the problem. Once the activity has been identified, you must then determine
whether it is on the critical path. If it is on the critical path, you most likely will have to
take corrective action, such as fast-tracking, compression, or resource leveling to meet
your milestone dates and your project deliverable deadline. Remember to analyze the
impact of your corrective action on project cost and quality performance baselines. You
should continue to carefully monitor the schedule performance to check the effectiveness
of your corrective action.
Activity 12-2
1.
Review the PM_CostPerfRpt document. What is the actual cost for the Public Meeting
Work Package in the 6th week reporting period?
$16,000 (You can calculate this figure by adding up the amount that has been spent so far
on activities: $4,500 + $7,000 + $4,000 + $500.)
2.
What is the total EV for the Public Meeting Work package in the 6th week reporting
period?
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SOLUTIONS
614
According to the cost baseline, the PV up through the sixth reporting period is
$22,000. What is the CV for this work package?
SOLUTIONS
CV = +$5,600
4.
Which formula will allow you to calculate the Estimate at Completion (EAC) for the
work package?
a) EV / AC
b) EV AC
c) AC + [(BAC EV)/CPI]
d) EV PV
5.
Based on the formula EV/AC, you determine that the CPI for this work package is 1.11.
When you take the CPI and CV into consideration, how is this work package performing?
A CPI greater than 1.0 and a positive CV indicates the work package is performing better
than anticipated when compared against the budget.
6.
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SV = -$400
7.
8.
Based on your analysis of the product costs, what courses of action might you take?
a) Find the cause of the variance.
b) Determine the appropriate corrective action to take.
c) Alert project stakeholders that the project is in crisis.
d) Document lessons learned.
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Lesson 12 Follow-up
Lesson 12 Lab 1
1.
Which analytical tools are used to assess project progress and identify the magnitude
of cost, resource, and production variations?
a) Gantt chart review
b) Monte Carlo analysis
c) Project cost baseline audit
d) Earned value analysis
2.
What does a Cost Performance Index (CPI) of 0.8 mean to the project?
a) Under-budget to date.
b) Over-budget to date.
c) On budget.
d) Nothing; CPI values are always above 1.0.
3.
For what reasons are Gantt charts useful for reporting project progress?
a) They display schedule performance trends.
b) They are easy to read.
c) They are available in most project management software packages.
d) They provide detailed analysis for making adjustments.
4.
A project has a negative cost variance and an SPI less than 1.0. What does this mean to
the project?
a) It is over-budget and ahead of schedule.
b) It is under-budget and behind schedule.
c) It is over-budget and behind schedule.
d) It is under-budget and ahead of schedule.
5.
6.
7.
What is the difference between the Earned Value (EV) and the Planned Value (PV)?
a) Cost variance.
b) Schedule variance.
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SOLUTIONS
c) Unearned value.
d) Actual cost
8.
What does a Schedule Performance Index (SPI) of 1.2 mean to the project?
a) Ahead of schedule.
b) According to schedule.
c) Behind schedule.
d) Nothing; SPI values are always below 1.0.
9.
During the control schedule process, the project schedule serves what functions?
a) Schedule baseline.
b) Basis for measuring project performance.
c) Cost baseline.
d) Time management component of the project.
10. What is the Schedule Variance (SV) if the Planned Value (PV) is $275,000 and the
Earned Value (EV) is $300,000?
a) $25,000
b) - $25,000
c) $125,000
d) $575,000
11. What are the changes made to keep project activities on schedule called?
a) Corrective actions.
b) Change requests.
c) Performance measurements.
d) Schedule baselines.
12. How do you calculate the Cost Performance Index (CPI)?
a) Divide the Earned Value (EV) by the Actual Cost (AC).
b) Divide the Earned Value (EV) by the Planned Value (PV).
c) Subtract the Actual Cost (AC) from the Earned Value (EV).
d) Subtract the Planned Value (PV) from the Earned Value (EV).
13. Based on the performance measures indicated in the following table, what is the Cost
Variance (CV) for Case 3?
a) -1,000
b) 1,000
c) 2,000
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SOLUTIONS
d) -2,000
14. Based on the performance measures indicated in the following table, what is the
Schedule Variance (SV) for Case 2?
a) -1,000
b) 1,000
c) 2,000
d) -2,000
15. In the cost curve shown in the following figure, Height A represents:
a) Cost variance
b) Schedule variance
c) Earned value
d) Budget at Completion (BAC)
Lesson 13
Activity 13-1
1.
Given that there is a significant variation in temperature between the first and second
floor, what should be done?
a) Report this information to the appropriate people, according to the projects change
control system.
b) Because of the potentially high re-work cost, finding a solution should be a top priority.
c) Initiate process adjustments.
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SOLUTIONS
d) Continue to monitor quality as the HVAC installation continues.
2.
The quality management plan documented acceptability of the installation with a tolerance of a one degree variance between floors. What would you do to determine the
reasons for the variance in quality tests?
You will need to determine the source of the variability so that appropriate corrective
action can be taken. Take a closer look at how the HVAC installation is being distributed
among the contractors. Also consider how the quality testing is being done. Is the same
quality control engineer inspecting all of the floors?
3.
After researching the cause of the variance, you discover that the testing was done by
one quality control engineer. You then meet with the contract supervisor to investigate the process. You discover that the duct work on the second floor was installed
over a weekend by a different, less experienced crew. What should your next step be?
Recommend corrective action to the supervisor to bring in the first floor crew to troubleshoot the variance between floors. It is important that you consider the impact any
corrective action may have on the project budget and schedule. Major adjustments must
be made according to the projects change control system.
Activity 13-2
1.
You need to provide a progress report to senior management. What should your first
step be in gathering data for your report?
a) Hold performance reviews.
b) Consult subsidiary plans for guidelines on reporting project performance.
c) Prepare a professional performance report.
d) Include in the report EV measurements for SV and CV with appropriate action plans
to remedy any variances.
2.
After you completed your analysis of work results, you held project deliverables performance reviews with project team members to assess project status. You have
gathered all relevant data necessary for completing your progress report. Given the
cost and schedule concerns of senior management, what type of report format should
you prepare?
The format of the report you prepare should provide the type of information and the
level of detail required by senior management. As a guide, consult your project management plans subsidiary plans for guidelines and procedures for reporting on cost and
scheduling performance, as these represent managements primary concerns.
3.
Since project baselines have shifted, one of the team leads for the project suggests
that you should alter the format of the progress report before handing it off to senior
management. She says that extensive enhancements to the graphic elements are necessary to truly express the major points of the report. Should you implement her
suggested changes?
No. When you create a progress report, it is important to weigh the time, expense, and
effort it would take to produce the report against the benefits of the report. The suggestions of the team lead are primarily cosmetic, and will take additional time, money, and
manpower to implement. It is not in your best interest to change the progress report.
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SOLUTIONS
Lesson 13 Follow-up
Lesson 13 Lab 1
1.
2.
3.
4.
Which statement is true of the quality problems that are faced by organizations?
a) Originate on the shop floor because of waste and rework.
b) Could be avoided by management taking action on potential quality improvement
ideas.
c) Could be eliminated if supervisors monitored their work more closely.
d) Originate in the QA organization where the ultimate responsibility for quality rests.
5.
6.
7.
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SOLUTIONS
a) A control chart
b) A fishbone diagram
c) A Pareto diagram
d) A cause-and-effect diagram
8.
What action is taken to bring a product or service into compliance with customer
specifications?
a) Scrap
b) Audit
c) Recall
d) Rework
9.
a) A control chart
b) A fishbone diagram
c) A Pareto diagram
d) A decision tree diagram
10. A Pareto diagram is a tool used to determine the relative impact each quality problem
has on project performance. Which statement best describes the philosophy of the
Pareto Principle?
a) In general, 80% of the quality problems can be justified as correctable using a costbenefit analysis. The remaining 20% are not financially worth fixing.
b) To achieve zero defects, all quality problems, including those that do not have a
direct cost, should be corrected.
c) The vast majority of defects are caused by a small percentage of the identifiable
problems. Improvement efforts therefore should be reserved for these vital few problems.
d) To minimize financial loss to the firm from quality problems, all problems that have a
measurable cost should be corrected.
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SOLUTIONS
11. Which technique is useful for identifying corrective action alternatives?
a) Changing the project scope.
b) Requesting additional funds immediately.
c) Holding a brainstorming session with the project team.
d) Leaving decision-making to the functional managers.
12. Which document should reflect the updates to project performance and control documents?
a) Project plan
b) Work breakdown structure
c) Change control plan
d) Cost baseline
Lesson 14
Activity 14-1
1.
2.
You have developed a very robust risk response plan in the risk register. Based on the
vendor performance report, you notice that chances of delay have now become very
high (from an earlier rating of high). You now need to decide what would be your next
step.
a) Consult the risk response plan.
b) Follow the risk management process.
c) Implement the fallback plan.
d) Develop a workaround.
3.
The contractor suggests that it might ultimately be more cost-effective to buy materials from another contractor, although the initial cost of materials will be higher. Do
you think this is an effective solution?
Answers will vary, but may include: although the cost of materials will be higher when
purchased in this manner, the cost of the schedule delay might even be more expensive.
By buying materials right away, you will forestall any additional work delays.
Activity 14-2
1.
Solutions
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SOLUTIONS
c) Implement a contract change control system.
d) Index all contract correspondence.
2.
Your contact at InfiniTrain informs you that their primary project software instructor
has given her resignation. They have asked to push the training date out a week to get
another instructor up to speed. What action should you take?
a) Document contract changes.
b) Conduct an on-site visit.
c) Consult the contract change control system.
d) Negotiate a milestone deadline.
3.
InfiniTrain has informed you that they have completed the beta verification of the
Assessment documents as specified in the contract. It is your responsibility as project
manager to verify that all feedback was incorporated correctly. Upon your review, you
notice that some of the alpha review feedback was not incorporated. What action
should you take?
You might review your contract with InfiniTrain for guidance on the timelines and deadlines for completing the various work phases. Consult the performance reporting system
to determine how to handle this problem. The procedure for determining acceptance or
non-acceptance of the assessment documents is documented in the performance reporting
system.
Lesson 14 Follow-up
Lesson 14 Lab 1
1.
When a project is terminated before its scheduled completion date, which of these is
not a correct action?
a) You should halt further expenditures in an orderly way.
b) You should cancel vendor contracts.
c) You should identify and document reasons for termination.
d) You should work with the sponsor to identify status of complete and incomplete
deliverables.
2.
3.
4.
624
SOLUTIONS
a) Is illegal monitoring of a suppliers performance.
b) Is a good way to mitigate risk of supplier non-performance.
c) Is not a suitable acceptance procedure.
d) May include making site visits.
5.
6.
Lesson 15
Activity 15-1
1.
Based on the information you have, can you close out the contract with the subcontractor?
a) Yes, the contract has been fulfilled.
b) No, the contract has not been fulfilled.
c) You cannot determine this until a procurement audit has been completed.
d) You cannot determine this until the seller completes a staff evaluation.
2.
What would you do to resolve incorrect or unsatisfactory contract work in the situation
described in the scenario?
Answers will vary, but may include: make arrangements to meet the subcontractor at the
work site to evaluate what outstanding work is required to finish the job correctly and
satisfactorily; call the subcontractor and direct him to return to the work site, clean up
the debris, and repair the crack in the sidewalk; or conduct a procurement audit to
ensure that the contract work was properly completed.
3.
RTL returned to the work site and resolved the outstanding contract issues and completed the cement work correctly and satisfactorily. Can you close out the contract?
Why or why not?
Yes. This contract can be closed out because the seller resolved the outstanding contract
issues and completed the cement work correctly and satisfactorily.
4.
Would you include a seller evaluation in your procurement audit? Why or why not?
Yes, because it is important to document the sellers performance for use in future similar procurements.
Solutions
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SOLUTIONS
Activity 15-2
1.
Are your project records ready for review by the project sponsor? Why or why not?
Yes, because you have collected performance measurement and product documentation
as well as other relevant project records to archive.
2.
What document will you prepare before obtaining formal acceptance from your project
sponsor to officially complete the project?
You should prepare a final project report. You should also complete a lessons learned
report.
3.
4.
What types of documentation or computer files should you store in the project
archives?
Answers will vary, but may include: the project plan, project performance records, contract records, names of team members, or financial records.
Lesson 15 Follow-up
Lesson 15 Lab 1
1.
2.
Which process is concerned with obtaining formal stakeholder acceptance of completed project deliverables?
a) Project plan execution
b) Scope management
c) Scope verification
d) Quality assurance
3.
626
SOLUTIONS
4.
5.
6.
7.
8.
9.
10. For what reasons is publishing a project close-out schedule a good idea?
a) It helps keep people motivated by imposing a deadline.
b) It provides a sense of order in a time of fluctuating team membership.
c) It helps team members who are leaving to understand what they must accomplish or
hand off before they can move to a different position.
d) It provides stakeholders with information on the status of the project.
11. Which is the output of the close project or phase process?
a) Project management plan updates.
Solutions
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SOLUTIONS
b) Final product, service, or result transition.
c) Contract closure.
d) Work performance information.
628
INDEX
INDEX
6-Sigma limit, 449
8/80 rule, 110
80/20 rule, 450
A
AC, 418, 429
acquire project team process, 329
inputs, 330
outputs, 332
tools and techniques, 331
activities on the critical path
See: critical activities
activity dependencies, 118
common types, 118
activity durations
estimating, 136
activity resources
estimating, 131
Actual Cost
See: AC
administer procurements process, 472
inputs, 472
outputs, 474
tools and techniques, 473
administrative closure, 495
aggregated cost, 184
Agile project management, 41
alternatives identication, 90
analogous estimating, 135, 177
analyzing variances task, 448
anticipatory breach, 478
APT, 7
assumptions, 86
attribute sampling data, 451
audit, 401
Autonomous Project Teams
See: APT
average, 269
B
BAC, 431
baseline
estimating, 187
baselines, 166
establishing, 167
benchmarking, 209
bottom-up estimating, 178
breaches of contracts, 476, 477
Budget at Completion
See: BAC
business cases, 56
components, 56
business requirements, 43
business risks, 237
types, 237
C
capital budgeting, 45
cause-and-effect diagram, 207
CCB, 388
Change Control Board
See: CCB
change control systems, 388, 391
change management
advantages, 396
checklists, 205
close procurements process, 486
inputs, 486
outputs, 487
tools and techniques, 487
close project or phase process, 494
inputs, 494
outputs, 495
tools and techniques, 494
closeout meetings, 497
co-location, 339
code of accounts, 96
collect requirements process, 77
Index
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INDEX
inputs, 77
outputs, 78
tools and techniques, 77
common estimate types, 176
common performance reporting techniques, 431
communication skills, 31
communications management plans, 225
creating, 230
communications requirements, 228
communications requirements analysis, 228
communications technology, 228
conditional branches, 123
conditional diagramming method, 123
conduct procurements process, 364
inputs, 364
outputs, 366
tools and techniques, 365
conguration management, 390
conict
causes, 346
conict management, 346
approaches, 346
constraints, 86
contingency allowances, 186
contingency plans, 281
contingency reserves, 282
contract change requests, 476
contracts, 304
common types of, 305
components of, 304
control charts, 207, 449
control cost process, 426
inputs, 427
outputs, 428
tools and techniques, 427
control schedule process, 414
inputs, 414
outputs, 415
tools and techniques, 415
control scope process, 403
inputs, 404
outputs, 405
tools and techniques, 405
cost assignment methods, 187
cost baseline, 183
cost of quality, 204
Cost Performance Index
See: CPI
630
D
decision making skills, 31
decision making under risk, 272
decision tree analysis, 273
dene activities
how to, 112
dene activities process, 110
inputs, 110
outputs, 111
tools and techniques, 111
dene scope process, 88
inputs, 88
outputs, 89
tools and techniques, 89
deliverables, 108
ensuring completion, 402
Design of Experiments
See: DOE
determine budget process, 184
INDEX
inputs, 184
outputs, 185
tools and techniques, 185
develop human resource plan process, 213
inputs, 214
outputs, 215
tools and techniques, 214
develop project charter, 54
inputs, 55
tools and techniques, 55
develop project charter process
outputs, 56
develop project management plan process, 73
develop project management plans
inputs, 74
outputs, 75
tools and techniques, 74
develop project team process, 335
inputs, 336
outputs, 337
tools and techniques, 336
develop schedule process, 140
inputs, 140
outputs, 142
tools and techniques, 141
direct and manage project execution process,
316
inputs, 316
outputs, 317
tools and techniques, 317
discounted cash ow, 45
distribute information process, 350
inputs, 351
outputs, 352
tools and techniques, 352
DOE, 209
E
EAC, 432
Earned Value
See: EV
Earned Value Management
See: EVM
effect-based risk classication, 241
effort, 134
elapsed time, 134
EMV analysis, 273
enterprise environmental factors, 19
estimate activity durations process, 134
inputs, 134
outputs, 136
tools and techniques, 135
estimate activity resources process, 128
inputs, 129
outputs, 130
tools and techniques, 129
Estimate at Completion
See: EAC
estimate costs process, 174
inputs, 175
outputs, 176
tools and techniques, 175
Estimate to Complete
See: ETC
ETC, 431
EV, 417
EVM, 416
calculating, 421
measures, 418
variables, 416
Expected Monetary Value analysis
See: EMV analysis
expert judgment, 135
express warranty, 477
F
facilitated workshops, 79
fast tracking, 160
feasibility analysis, 46
FF, 119
FFP, 305
Finish-to-Finish
See: FF
Finish-to-Start
See: FS
Firm Fixed Price Contracts
See: FFP
Fixed Price Incentive Fee Contracts
See: FPIF
Fixed Price with Economic Price Adjustment
Contracts
See: FP-EPA
xed-price contracts, 305
oat, 144
owcharts, 206
force majeure, 478
forecasting methods, 457
formal acceptance of project work, 396
Index
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INDEX
FP-EPA, 305
FPIF, 305
free oat, 145
FS, 119
fundamental breach, 478
funding and costs
reconciling, 191
funding limit reconciliation, 186
G
GERT, 123
Graphical Evaluation Review Technique
See: GERT
group creativity techniques, 79
group decision making techniques, 80
group interactions, 16
I
identify risks process, 248
inputs, 249
outputs, 250
tools and techniques, 250
identify stakeholders process, 60
inputs, 61
outputs, 62
tools and techniques, 61
IFB, 304
immaterial breach, 478
impact scale, 242
implied warranty, 477
inuencing skills, 31
information-gathering techniques, 251
inputs, 16
inspection, 401
inspection reports
components, 401
insurable risks, 237
types, 237
integrated change control, 388
interpersonal skills, 28
Invitation for Bid
See: IFB
ISO 9000 Series, 204
M
make-or-buy analysis, 299
what to consider, 299
manage project team process, 343
inputs, 344
outputs, 345
tools and techniques, 344
manage stakeholder expectations process, 355
inputs, 355
outputs, 357
tools and techniques, 356
material breach, 478
mean, 269
median, 269
monitor and control project work process, 384
inputs, 385
outputs, 386
tools and techniques, 385
monitor and control risks process, 466
inputs, 466
outputs, 467
tools and techniques, 467
monitoring and controlling project work, 386
Monte Carlo analysis, 274
motivation skills, 30
motivational techniques, 31
knowledge areas, 17
lags, 119
LCL, 207
632
leadership, 28
leads, 120
lease, rent, or buy decision, 299
legal issues, 476
lessons learned reports, 496
lessons learned considerations, 496
levels of uncertainty, 243
linear presentation, 5
loops, 123
lower control limit
See: LCL
INDEX
operations, 7
operations management, 41
organization charts, 216
organizational culture, 15
organizational process assets, 19
organizational structure, 215
types, 216
organizations
cultures, 14
outputs, 16
outsourcing, 298
P
parametric estimating, 135, 178
Pareto analysis, 450
Pareto diagram, 449
payback period, 45
PDF, 269
normal distribution, 270
triangular distribution, 271
uniform distribution, 270
PDM, 122
creating, 125
perform integrated change control process, 393
inputs, 394
outputs, 395
tools and techniques, 395
perform qualitative risk analysis process, 256
inputs, 256
outputs, 257
tools and techniques, 257
perform quality assurance process, 323
inputs, 324
outputs, 326
tools and techniques, 325
perform quality control process, 444
inputs, 444
outputs, 446
tools and techniques, 445
perform quantitative risk analysis process, 265
inputs, 265
outputs, 266
tools and techniques, 266
performance appraisals, 347
performance measurement analysis techniques,
430
performance reports
creating, 458
plan communications process, 225
inputs, 226
outputs, 227
tools and techniques, 226
plan procurements process, 290
inputs, 291
outputs, 292
tools and techniques, 292
plan quality process, 198
inputs, 199
outputs, 200
tools and techniques, 199
plan risk management process, 238
components, 240
inputs, 238
outputs, 239
tools and techniques, 239
plan risk responses process, 278
inputs, 279
outputs, 279
tools and techniques, 279
Planned Value
See: PV
PMBOK Guide Fourth Edition, 5
PMI Code of Ethics and Professional Conduct,
23
PMIS, 318
problems, 318
PMO, 7
PMP Certication, 5
Point of Total Assumption
See: PTA
political skills, 32
portfolio management, 38
portfolios, 6
positive risk strategies, 281
Precedence Diagramming Method
See: PDM
precedence relationships, 118
types, 119
predecessor activities, 118
probability, 268
probability and impact risk rating matrix, 258
Probability Density Function
See: PDF
probability distribution, 269
probability scales, 242
process control structure, 390
process owcharts, 206
process improvement plan, 201
Index
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INDEX
process improvement planning, 201
process mean, 207
processes, 15
groups of, 16
procurement audits, 488
elements of, 489
lessons learned, 490
procurement documents, 303
preparing, 308
types, 303
procurement management plan, 293
creating, 294
procurement negotiations, 375
procurement SOW, 297
procurement statement of work
preparing, 300
procurements administrator, 475
product analysis, 89
product review, 401
professional responsibilities, 24
social, 25
to customers and the public, 25
program management, 38
programs, 5
progressive elaboration, 14
project changes, 389
project charters, 54
creating, 57
project costs
controlling, 433
estimating, 179
project deliverables, 86
project execution direction and management,
320
project governance, 12
project information
distributing, 352
project interfaces, 218
project life cycle, 11
general characteristics, 12
governance activities, 13
project management, 5
project management and operations management,
41
Project Management Information System
See: PMIS
Project Management Office
See: PMO
project management plans, 72
634
Q
qualied sellers, 367
INDEX
qualitative criteria, 43
qualitative risk analysis, 255
performing, 260
quality assurance plans, 323
executing, 327
quality audits, 326
topics included in, 326
quality control
performing, 452
quality management plans, 198
creating, 210
quantitative analysis methods, 273
quantitative criteria, 43
quantitative risk analysis, 265
performing, 275
R
RAM, 215, 219
random causes, 447
rating systems
criteria proling, 45
decision tree, 45
Delphi technique, 46
Q-sorting, 45
weighted factor, 45
RBS, 241
regulations, 203
relationships, 39
relative authority, 218
report performance process, 455
inputs, 455
outputs, 456
tools and techniques, 456
Request for Bid
RFB, 304
Request for Information
See: RFI
Request for Proposal
See: RFP
Request for Quotation
RFQ, 304
requirements documentation, 80
requirements management plan, 81
requirements traceability matrix, 82
reserve analysis, 135
resource leveling, 148
Responsibility Assignment Matrix
See: RAM
reward and recognition systems, 339
S
schedule compression, 159
schedule control chart, 419
schedule formats, 148
schedule management plans, 130
schedule network analysis, 146
Schedule Performance Index
See: SPI
schedule performance measurement, 418
Schedule Variance
See: SV
scope creep, 30
scope statements, 86
components, 87
creating, 91
sellers
obtaining resources from, 371
sensitivity analysis, 273
sequence activities process, 116
inputs, 116
outputs, 117
tools and techniques, 117
SF, 119
simulations, 274
source selection criteria, 307
source-based risk classication, 242
SOW, 49
Index
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INDEX
how to prepare, 50
special causes, 447
specications, 298
SPI, 420
trend analysis, 421
SS, 119
staffing management plans, 221
components, 221
documenting, 222
stakeholder analysis, 62
stakeholder analysis matrix, 63
stakeholder expectations
managing, 357
stakeholder management strategy, 64
stakeholder registers, 63
stakeholder requirements
documenting, 82
standard deviation, 269
standard schedule diagramming notations, 142
standards, 203
Start-to-Finish
See: SF
Start-to-Start
See: SS
statement of work
See: SOW
statistical sampling, 450
statistical sampling process, 451
subjective probability, 270
subprojects, 4
successor activities, 118
summary activities, 123
SV, 420
system dynamic models, 123
system owcharts, 206
T
tailoring, 15
TCPI, 432
team building, 30
team development stages, 337
team-building activities, 339
teaming agreement, 293
term contract, 376
three-point estimates, 135
Time and Material (T&M) contracts, 306
To-Complete Performance Index
See: TCPI
tolerances, 448
636
U
UCL, 207
upper control limit
See: UCL
V
variable sampling data, 452
variance, 447
causes, 447
verify scope process, 399
inputs, 400
outputs, 400
tools and techniques, 400
virtual teams, 332
W
waivers, 476
types, 477
walkthrough, 401
warranties of tness for purpose, 477
warranties of merchantability, 477
warranty, 476
WBS, 93
developing, 96
WBS dictionary, 96
weighting systems, 374
what-if scenario analysis, 148
work authorization system, 319
Work Breakdown Structure
See: WBS
work packages, 93, 109
work performance information, 320