Documente Academic
Documente Profesional
Documente Cultură
P
PMP EXAM GUIDE
Rohith Chilagani
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CONTENTS OVERVIEW
CONTENTS OVERVIEW 4
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Introduction
Introduction to
PMP® Examination
Introduction to
PMP® Examination
▪ Introduction to PMI®
▪ Purpose of Guide to PMBOK® Guide
▪ Why Become a Certified PMP®
▪ PMP® Examination
▪ PMI® Principles
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Introduction to PMI®
Credentials
Constantly evolving
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PMP® Examination
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PMP® Examination
Scenario based
Situational
Definitions
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PMI® Principles
The Project Scope includes all of the work and ONLY the work
Project Management Plan drives how the Project work will be carried out
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Chapter 1
Project Management
Framework
Project Management
Framework
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Project Management
Framework
Learning Objectives
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Project
Guide
All organizations perform work as projects or as operations. There is a thing line between the
two but still both share the following common characteristics:
Temporary
Temporary means that every project has a definite beginning and end. It does not mean that the
duration is short. Some projects can last for years. The projects end when the objectives of the
project have been achieved or it is clear that the project objectives cannot be met.
Unique
Unique means that the product or service or result is different from other product or service or
result. Projects are unique even if the category of the product it creates is a large domain. For
example, buildings are constructed but every such building that is created is unique because of
the difference in location, raw materials, contractors, and so on.
Progressive Elaboration
You learn about the project as it progresses. The specifications of the product become clear as
you move further and requirements become clearer. This is also called proceeding in steps.
Example of Projects
▪ Building a new office
▪ Designing a new product or service
▪ Creating an advertisement campaign
▪ Creating a new process with a business unit
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Project
▪ A temporary endeavor – means that every project has a
definite beginning and end.
▪ Unique means that the product or service or result is different
from other product or service or result.
▪ Progressively elaborated - proceeding in steps
Operations and projects differ in the way that operations are ongoing but projects are
temporary.
Operations are repetitive in nature while projects create a unique product or service.
Operations objective is to sustain business while project closes after the objectives are
achieved.
Examples of Operations
PROJECTS OPERATIONS
Temporary Ongoing
Unique Repetitive
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Project Management
The project team carries out the work needed to complete the project, while the project manager
schedules, monitors, and controls the various project tasks. The project manager requires
knowledge, performance, and personal skills to perform better at their jobs.
Requirements gathering
Managing stakeholder expectations
Managing project constraints including scope, quality, schedule, resources, budget, and
risk.
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The role of a Project Manager is to achieve project objectives. It is different from the role of a
functional or operations manager. The functional manager provides management oversight for an
administrative area. The operations managers are accountable for a facet of the core business.
A project manager should have knowledge and skills in the areas of Project Management,
Specific Application Area, and General Management.
1. Knowledge: This relates to what the project manager knows about project management.
2. Performance: This relates to what the project manager is able to accomplish by using
this knowledge.
3.
Personal Skills: This relates how the project manager behaves when managing the
project (attitudes, core personality characteristics, and leadership. To sum up the ability
to guide the project team while achieving project objectives and balancing the project
constraints.
Project Stakeholders
Project stakeholders are individuals and organizations involved in the project that will be directly
or indirectly impacted by the project. The stakeholders may have positive or negative influence
on the outcome of the project.
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The stakeholders must be identified early in the project. This is often a difficult task. The project
manager needs to manage the expectations of the key stakeholders to successfully complete the
project.
Project Manager
Customer / User
Performing organization
Project team members
Project management team
Sponsor
Influencers
PMO
Apart from the above, there are other categories of stakeholders such as external and internal
stakeholders, team members and their families, government agencies, and so on.
Portfolio :
Guide Program:
Programs
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Portfolios
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Organizational Structure
Functional Weak Matrix Balanced Matrix Strong Matrix Projectized
Organization Organisation Organisation Organisation Organisation
Resource As needed Only 25% will About 50% will About 80% About
Allocation be assigned to be assigned to will be 100% will
the projects the projects assigned to the be assigned
projects to the
projects
After Project Team go Team go back Team go back to Team go back No home –
Completion back to their to their Dept. their Dept. to their Dept. move to
Dept. (home) (home) (home) (home) different
project or
get laid off
Source: A Guide to the Project Management Body of Knowledge, Fourth Edition (PMBOK® Guide) ©2008 Project Management Institute, Inc.
All Rights Reserved.
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Matrix Highly visible project objectives Not cost effective because of extra administrative
personnel
Better Project Manager control over More than ONE boss for project teams
resources
Team members maintain “a home” Higher potential for conflict and duplication of effort
and functional managers have different priorities
Functional Team members report to one supervisor No career path in Project Management
and clearly defined career paths
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All projects, large or small, can be mapped to the following life cycle:
Stakeholder influence and risk are more at the start of the project and decrease as project moves
towards closure.
Cost and staffing levels are low at the start, peak as project moves into execution and finally drop
as project inches towards closure.
The cost of changes increases and correcting errors increases as the project moves towards
closure.
Though the five project management process groups appear as discrete elements, in
reality they overlap with each other.
The application of project management processes is iterative in nature and is repeated
during the project life cycle.
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Source: A Guide to the Project Management Body of Knowledge, Fourth Edition (PMBOK® Guide) ©2008
Project Management Institute, Inc. All Rights Reserved.
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Determine how you will plan and develop the project management plan
Develop the project requirements in detail and agree the final scope
Determine the required project activities and their sequencing
Develop schedule using estimated resources and costs
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Agree what quality standards will be met by the project and how
Define how project staffing will be done
Establish the communication requirements and how it will be fulfilled
Identify what can go wrong and the plans to deal with them
Document what products or services will be acquired from outside the project
Gain formal approval and buy-in from everybody involved in the project
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The 42 Processes within the 5 Process Groups, are mapped into 9 Project Management
Knowledge Areas:
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Areas
Integration Develop Project Develop Project Direct and Manage Monitor and Close Project or
Management Charter Management Plan Project Execution Control Project Phase
Work
Perform Integrated
Change Control
Create WBS
Activity Sequencing
Activity Resource
Estimating
Activity Duration
Estimating
Schedule Development
Manage Project
Team
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Manage
Stakeholders
Expectation
Quantitative Risk
Analysis
Source: A Guide to the Project Management Body of Knowledge, Fourth Edition (PMBOK® Guide) ©2008 Project Management Institute, Inc.
All Rights Reserved.
Ensures project includes all of the work and only the work required
Identifies, defines and controls the project work
Verifies that the deliverables meet the specified criteria
Comprises of the following five processes:
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• Collect Requirements
• Define Scope
• Create WBS
• Verify Scope
• Control Scope
• Define Activities
• Sequence Activities
• Estimate Activity Resources
• Estimate Activity Durations
• Develop Schedule
• Control Schedule
• Estimate Costs
• Determine Budget
• Control Costs
Processes that ensures the project will satisfy the agreed quality standards
Identifies the relevant standards and how they will be met
Assurance activities to ensure the agreed processes are followed
Monitoring project results to determine compliance
Comprises the following three processes:
• Plan Quality
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• Identify Stakeholders
• Plan Communications
• Distribute Information
• Manage Stakeholder Expectations
• Report Performance
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• Plan Procurements
• Conduct Procurements
• Administer Procurements
• Close Procurements
Professional Responsibility
▪ A PMP® must follow the Project Management Institute Code of Ethics and
Professional Conduct
The responsibilities includes:
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Chapter 2
Project Integration
Management
Project Integration
Framework
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Project Integration
Management
Learning Objectives
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Definition Project Integration Management includes the processes and activities needed
as per to identify, define, combine, unify, and coordinate the various processes and
PMBOK® project management activities within the Project management process Groups.
Guide
Project Integration
Framework
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Contract: This is the input if project is being done for an external customer.
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➢ Payback Period
➢ Cost Benefit Analysis
➢ Scoring Models
➢ Net Present Value (NPV)
➢ Internal Rate of Return (IRR)
1. Payback period – the amount of time to recover your cost. It compares the initial
investment to the cash inflows expected over the life of the product.
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o Cash inflows = Rs. 50,000 x 4 (quarters in a year) = Rs. 2, 00,000 per year for
first two years. Hence, year 1 inflow = Rs. 2, 00,000, year 2 inflow = Rs. 2,
00,000. Total Rs. 4, 00,000 in 2 years
2. Benefit Cost Ratio (BCR) or profitability Index: This is the ratio of project benefit and
the project cost.
3. Present Value (PV): is the expected future cash flows expressed in today‟s monetary
value
o PV = FV / (1+r) n
o For example, Calculate the Present Value of $ 100,000 received three years from
now. The interest rate is 10 percent.
4. Net Present value (NPV) is the sum total of the Present Value of Cash Inflows –
Present Value of Cash Outflows
5. Internal Rate of Return: The rate of interest at which the revenues and costs are equal.
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6. Return on Investment (ROI): A return ratio that compares the net benefits of a project/
product, verses its total cost.
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Definition Develop Project Management Plan is the process of documenting the actions
as per necessary to define, prepare, integrate, and coordinate all subsidiary plans.
PMBOK®
Guide
Outputs from planning processes: Outputs from other project management planning
areas are used as an input to the project management plan. These include scope, cost,
time, quality, risk, human resource, communication, and procurement plans.
Note: The Project Management Plan is not the same thing as a project schedule.
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Definition Direct and manage Project Execution is the process of performing the work
as per defined in the project management plan to achieve the project's objectives.
PMBOK ®
Guide
Approved change requests: These are authorized and documented changes to the
project scope.
Change requests: Change requests are issued when there are issues during project.
These can result in change in scope, time, cost, quality and other factors.
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Definition Monitor and Control project Work is the process of tracking, reviewing, and
as per regulating the progress to meet the performance objectives defined in the
PMBOK® project management plan.
Guide
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Definition Perform Integrated Change Control is the process of reviewing all change
as per requests, approving changes and managing changes to the deliverables,
PMBOK® organizational assets, project documents, and the project management plan.
Guide
Configuration Management
Configuration management system provides a standardized, effective, and efficient way to
centrally manage approved changes and baselines within the project.
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Definition Close Project or Phase is the process of finalizing all activities across all of the
as per project Management Process Groups to formally complete the project or
PMBOK® phase.
Guide
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Chapter 3
Project Scope
Management
Project Scope
Management
▪ Collect Requirements
▪ Define Scope
▪ Create WBS
▪ Verify Scope
▪ Control Scope
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Project Scope
Management
Learning Objectives
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Definition Project Scope management includes the processes required to ensure that the
as per project includes all the work required, and only the work required, to complete
PMBOK ® the project successfully.
Guide
Project Scope
Management
▪ Collect Requirements
▪ Define Scope
▪ Create WBS
▪ Verify Scope
▪ Control Scope
The product scope is measured against the requirement and project scope is measured against the
project plan.
The success of the project is dependent on how well the requirements are captured. These
requirements include the product requirements as well as the project requirements. Product
requirements include the technical and other specifications of the product whereas project
requirements include the business and project management requirements.
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Collect Requirements
Stakeholder register: Is the list of all the stakeholders. You need to gather requirements
from the all the stakeholders using different techniques such as interviews,
questionnaires, surveys and so on.
Focus groups: This involves a group of people to discuss their needs with you.
For example, Joint Application Development (JAD) sessions are used in the software
development industry. In manufacturing sector, Quality Function Deployment (QFD) is
used to arrive the critical characteristics of anew product.
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2. Mind maps: This is a excellent technique to visualize how the ideas relate to each
other.
3. Affinity Diagrams: This is a way to group same kind of ideas together in a group.
4. Brainstorming: This is the most common way of collecting the requirements where a
group of people sit down together to think of new ideas.
5. Nominal Group technique: This is a way of brainstorming where you write down
the ideas and then all vote for the best ones.
Group decision making techniques: There are various methods of arriving at a decision.
These include:
Questionnaires and surveys: Use this method to elicit response from a larger set of
people.
Observations: Sometimes just observing the users gives an idea of the needs or how to
solve the problem.
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Define Scope
Definition Define Scope is the process of developing a detailed description of the project
as per and product.
PMBOK ®
Guide
• Project Objectives
• Product Scope Description
• Project Requirements
• Exclusions
• Deliverables
• Acceptance Criteria
• Constraints
• Assumptions
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Progressive elaboration: Adding more details to the already defined scope and
not increasing the project scope.
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Create WBS
Definition The process of subdividing project deliverables and project work into smaller,
as per more manageable components.
PMBOK®
Guide
Work Package: The lowest level WBS components that contain planned work. A work package
can be schedules, cost estimated, monitored and controlled.
▪ Note: Work outside the WBS is outside the scope of the project.
Project
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Control accounts are established at work package level. Control account is used to
integrate scope, cost and schedule. It is also used for earned value measurement.
Scope baseline: An approved version of the detailed scope statement, work breakdown
structure (WBS), and its associated WBS dictionary.
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Verify Scope
Change requests: If the deliverables that are not accepted, a change request is raised.
The change request goes for approvals.
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Control Scope
Definition The process of monitoring the status of the project and product scope and
as per managing changes to the scope baseline.
PMBOK ®
Guide
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Chapter 4
Project Time
Management
Project Time
Management
▪ Define Activities
▪ Sequence Activities
▪ Estimate Activity Resources
▪ Estimate Activity Duration
▪ Develop Schedule
▪ Control Schedule
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Project Time
Management
Learning Objectives
After the completion of this chapter, the learner will be able to:
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Definition Project Time Management includes the processes required to manage timely
as per completion of the project.
PMBOK ®
Guide
Project Time
Management
▪ Define Activities
▪ Sequence Activities
▪ Estimate Activity Resources
▪ Estimate Activity Duration
▪ Develop Schedule
▪ Control Schedule
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Define Activities
▪ Templates: Templates refers to using the WBS of the similar projects that are being
used in the organization.
▪ Expert Judgment: using the opinion of the project managers who have done similar
projects earlier.
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Activity Attributes: Activity attributes comprise of the information required for each
activity. This includes the description of each activity, predecessor activities, successor
activities, and any constraints.
Milestone List: A milestone is an important event in a project. These are important from
the point of tracking the project.
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Sequence Activities
Guide
1. Finish-to-Start. The initiation of the successor activity depends upon the completion
of the predecessor activity.
2. Finish-to-Finish. The completion of the successor activity depends upon the
completion of the predecessor activity.
3. Start-to-Start. The initiation of the successor activity depends upon the initiation of
the predecessor activity.
4. Start-to-Finish. The completion of the successor activity depends upon the initiation
of the predecessor activity.
In PDM, finish-to-start is the most commonly used type of precedence relationship. Start-
to-finish relationships are rarely used.
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Task Relationships
▪ Dependency Determination:
1. Mandatory dependencies are those that are inherent in the nature of the work being
done. They often involve physical limitations. For example, Superstructure after the
foundation.
2. Discretionary dependencies are those that are defined by the project management
team.
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▪ Applying Leads and Lags: A lead allows acceleration of the successor activity
whereas, lag allows a delay in the successor activity.
▪ Schedule Network Templates: Standard schedule network templates can be used for
expediting the creation of schedule network templates.
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Definition Estimate Activity Resources is the process of estimating the type and quantities
as per of material, people, equipment or supplies required to perform each activity.
PMBOK ®
Guide
Published Estimating Data: This includes published data for estimation available for
different industries.
Bottom-up Estimating: Involves subdividing large subset into smaller activities and ity
estimating each activity. Aggregation of all the activity estimates leads to the final
estimate.
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Three - point Estimates: Also called Program Evaluation and Review Technique
(PERT). PERT uses three estimates to arrive at a range for activity time.
o Most Likely - The activity duration based on the realistic effort assessment.
o Optimistic - The activity duration based on the best-case scenario for the
activity.
o Pessimistic - The activity duration based on the worst-case scenario for the
activity.
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Reserve Analysis: Reserve analysis means keeping some reserve time or buffer for time
overruns. This duration is the percentage of overall duration and called contingency
reserve.
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Develop Schedule
Critical Path Method: Critical Path is the path with the longest duration. A delay in any
one of the activities on the critical path activities leads to the delay in the entire project.
Float: The float for an activity is the amount that its duration can slip without causing the
project to be delayed. The float for any activity on the critical path is zero.
Calculate the early start, early finish, late start, and late finish using forward pass and
backward pass.
When two paths intersect, for the forward pass – use the larger value, and for the
backward pass – use the smaller value.
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Critical Chain Method: Critical chain is a schedule network analysis technique that
modifies the project schedule to account for limited resources.
Resource Leveling: Resource leveling is necessary when resources have been over-
allocated, has been assigned two activities at the same time, or a critical resource is
available only during certain times.
What-if Scenario Analysis: What-if analysis involves using various scenarios and
finding their impact on the schedule.
1. Crashing: This is done by adding more resources along the critical path. Crashing
does not always produce a viable alternative and often results in increased cost.
Scheduling Tool: Using scheduling tools and software programs to create network
diagrams.
Schedule Baseline: It is an approved version of the schedule that is used to compare the
planned and actual progress.
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Schedule Data: Schedule data includes the supporting data apart from the milestones,
activities, assumptions and constraints.
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Control Schedule
Definition Control Schedule is the process of monitoring the status of the project to
as per update project progress and managing changes to the schedule baseline.
PMBOK®
Guide
Variance Analysis: This involves comparing the planned versus actual dates. This is
very important. In case of any problems, corrective action can be taken.
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Chapter 5
Project Cost
Management
Project Cost
Management
▪ Estimate Costs
▪ Determine Budget
▪ Control Costs
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Project Cost
Management
Learning Objectives
After the completion of this chapter, the learner will be able to:
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Project Cost
Management
▪ Estimate Costs
▪ Determine Budget
▪ Control Costs
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Estimate Costs
Project schedule: The project schedule provides the information on the duration of the
project, which is another input for cost estimate.
Human resource plan: Information about the cost of various resources adds to the cost
estimate.
Risk register: Keeping track of the risks and hence the costs required to tackling them.
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Bottom-up estimating: This involves adding up the cost of individual activities or work
packages and rolling up to get the total costs. This is a much more accurate estimating
method than analogous estimating.
Three - point estimates: Also called Program Evaluation and Review Technique
(PERT). PERT uses three estimates to arrive at a range for activity cost.
o Most Likely - The cost of activity based on the realistic effort assessment.
o Optimistic - The cost of activity based on the best-case scenario for the activity.
o Pessimistic - The cost of activity based on the worst-case scenario for the activity.
Reserve Analysis: Reserve analysis means keeping some reserve cash for cost overruns.
These costs that are the percentage of overall costs are also called contingency costs.
Cost of Quality: Cost of quality refers to the costs associated with quality related
activities.
PM Estimating Software: Project Mangers also use specialized estimating software like
spreadsheets to calculate costs.
Vendor Bid Analysis: Vendor bid analysis is required when projects are awarded based
on bids under competitive processes. Arriving at a cost estimate for individual modules /
sub-projects becomes important if part of the project is being outsourced to a vendor.
Basis Of Estimates: This lists the rates and reasoning for arriving at various cost
estimates for the resources.
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Project Document Updates: The project plan documents are updated with the cost
estimates.
2. Net Present Value (NPV): NPV takes the “time value of money‟ into account and is
used to decide if it is worth doing the project.
3. Opportunity Cost: When there is a decision to be made between two opportunities, the
opportunity cost is the value / money forgone for the not doing the project.
4. Internal Rate of Return: The amount of money the project will return to the company
funding it.
5. Depreciation: This is the rate at which the project loses value over time.
6. Lifecycle Costing: Life Cycle Costing takes into account not just the cost of
development of a project but also the cost of supporting during the lifecycle.
Rough Order of Magnitude (ROM) – The cost estimation with an accuracy of + 50 %, -50 %.
Types of Cost
Direct Cost- any cost that is identified specifically with a particular final cost objective.
Indirect Cost: any cost not directly identified with a single, final cost objective (more
than one project).
Fixed Cost: A periodic charge that does not vary with business volume.
Variable Cost : Cost that fluctuates based on the business volume
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Determine Budget
Contracts: If the project work is contracted, then contract is an important input to the
budget.
Reserve analysis: Budget reserve analysis can help in arriving at both the management
and the contingency reserve.
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Funding limit reconciliation: Since the funds are limited, the project manager needs to
complete the project within the budget. If this cannot be achieved, a scope change might
be required or funding limit increased.
Project funding requirements: The total funding requirements are the baseline cost and
the management reserve. It is important for the project manager to understand the funding
requirements during different phases of the project and how to secure them as well.
Project document updates: The various documents such as the cost management plan
need to be updated.
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Control Costs
Definition Control Cost is the process of monitoring the status of the project to update
as per project budget and managing changes to the cost baseline.
PMBOK®
Guide
To-complete performance index (TCPI): TCPI calculation is used to figure out how
well the project needs to perform in future to stay within the planned budget.
Performance reviews: These are project team meetings where the various variances are
analyzed. EVM is used to calculate the variances.
Variance analysis: The variance between the planned the actual project performance.
Project management software: There are software available that help the project
manager to keep track of their budgets.
Budget forecasts: Estimate at Completion (EAC) value is calculated for budget forecast.
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EVM is used to measure the performance of the project against the plan.
Important Terms
➢ Planned Value (PV) also called Budgeted Cost of Work Scheduled (BCWS)
➢ Earned Value (EV) also called Budgeted Cost of Work Performed (BCWP)
➢ Actual Cost (AC) also called Actual Cost of Work Performed (ACWP)
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BAC Budget at Completion No formula – it‟s the How much money you‟ll
project budget spend on the project
AC Actual Cost What you‟ve actually spent How much you‟ve actually
on the project spent so far
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Indices
• The project is ahead of schedule, if earned value is more than planned value.
• That means, if SPI > 1, the project is ahead of schedule, and
• If SPI < 1, the project is behind schedule
• The project is under budget, if earned value is more than actual cost.
• That means, if CPI > 1, the project is under budget, and
• If CPI < 1, the project is over budget
Forecasting
4. EAC forecast for ETC work considering both SPI and CPI factors
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Chapter 6
Project Quality
Management
Project Quality
Management
▪ Plan Quality
▪ Perform Quality Assurance
▪ Perform Quality Control
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Project Quality
Management
Learning Objectives
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Definition Project Quality management includes the processes and activities of the
as per performing organization that determine quality policies, objectives, and
PMBOK® responsibilities so that the project will satisfy the needs for which it was
Guide undertaken.
Project Quality
Management
➢ Plan Quality
➢ Perform Quality Assurance
➢ Perform Quality Control
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Customer Satisfaction
The product should not just satisfy the stated needs but also the some of the unstated needs of the
customer. Such requirements are common sense requirements like a product should not be made
from toxic stuff.
Fitness for use is about making sure that the product is fit for the customer needs. This concept
was propagated by Joseph Juran.
Conformance to requirements
This is one of the most important concepts for defining quality. This means that that the product
should meet the customer requirements. This also means that the product is as good as the stated
requirements. This highlights the importance of the requirements gathering.
Quality is concerned with Prevention over Inspection. Inspection is typically used to prove that
the system works (because you‟ve put good quality practices in place), rather than a way to reject
the failures. A good point to remember is, “Quality should be planned in not inspected in”
because the cost of rework can be very high.
Quality is the sum of the characteristics of a product that allow it to meet or exceed the
expectations of the customer. Grade is a category or rank given to entities having the same
functional use but different technical characteristics. High-grade product will typically cost more
than the low-grade product.
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Plan Quality
Stakeholder register: Stakeholders register has the list of stakeholders who are
interested in the quality of the product.
Risk register: Risk register helps to identify risks that might affect quality.
Organizational process assets: This would include the company quality policy.
Cost of Quality (COQ): Cost of quality refers to the costs incurred during the life cycle
of the product. These include the cost of preventing nonconformance to requirements as
well as the cost of appraising the product or service for conformance to requirements.
o Conformance Costs: These include Prevention costs as well as Appraisal Costs
o Nonconformance Costs: These include Internal Failure Costs as well External
Failure Costs.
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➢ Training ➢ Rework
➢ Processes ➢ Fast tracking
➢ Testing and ➢ Warranty
Inspection ➢ Product recalls
➢ Audits
Control Charts: Are used to find out which process is contributing to quality problems.
This is generally used in manufacturing industry for repetitive processes.
There is an upper control limit and a lower control limit. There is also a mean. If the data
points are outside the limits, the process is out of control. This means the process needs
adjusting.
Benchmarking: In this, a reference point from another similar project from within or
outside company is used to compare the results. This is generally done for best practices
and improvement of products.
Proprietary quality management methodologies: these Include Six Sigma, Lean Six
Sigma. CMMI etc.
Additional quality planning tools: These include:
o Brainstorming
o Affinity Diagrams
o Nominal Group Techniques: brainstorming in small groups
o Matrix Diagrams: tables, spreadsheets that help analyze complex relationships
o Prioritization Matrices: diverse sets of issues are analyzed for priority.
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Quality metrics: are the measurements that are taken throughout the project. These
measurements are used to measure the quality. For example, schedule variance or defect
density.
Quality checklists: Checklists are defect prevention tools that use a list of characteristics
/ specifications in a product. Mostly used during inspection.
Process improvement plan: is a plan for improving the process. The process is
monitored and checked for defects to create a improvement plan.
Project document updates: any updates are made to the subsidiary plans of the project
plan.
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Definition Perform Quality Assurance is the process of auditing the quality requirements
as per and the results from quality control measurements to ensure appropriate
PMBOK® quality standards and operational definitions are used.
Guide
Quality control measurements: These include the records of quality testing. These are
used for analysis.
Quality Audits: Quality Audits are conducted for the projects in a company to check
whether the projects are following the companies processes or not. These are structured
reviews with the objective to:
o Improve performances of the project
o Incorporate the best practices
o Identify nonconformance to processes and procedures
Quality audits can be done by internal auditors or third-party agencies.
Process Analysis: This is often utilized to understand and improve the processes.
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Change Requests: Change requests can be used for corrective action / preventive action
/ defect repair.
Project Management Plan Updates: This is would include update to various subsidiary
plans that are part of the project management plan.
Project Document Updates; The documents such as quality audit reports, quality
processes and so on might require updates.
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Definition Perform Quality Control is the process of monitoring and recording results of
as per executing the quality activities to assess performance and recommend
PMBOK® necessary changes.
Guide
Cause and Effect Diagram: Also called Fishbone and Ishikawa diagrams. You list
all the possible causes of a defect.
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Cause B Cause C
Cause A
Defect
Cause D Cause E
Histogram: A histogram is a vertical bar chart showing how often a particular variable
state occurred.
15
10
0
Critical High Medium Low
▪ Pareto Chart: Also called the 80 / 20 Rule – 80% of the defects are because of 20%
causes. Pareto charts help in figuring out the most important causes of the defects.
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Pareto diagram is a histogram, ordered by frequency of occurrence that shows how many
results were generated by type or category of identified cause.
Run Chart: These charts depict the trends in data as a line chart.
16
14
12
10
8
6
4
2
0
Critical High Medium Low
Scatter Diagram: Scatter diagrams show the relationship two different variables. One
variable is plotted on the x-axis and the other is plotted on the y-axis. The pattern of their
intersecting points can graphically show relationship patterns.
3.5
2.5
1.5
0.5
0
0 1 2 3 4
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Approved Change Requests Review: All approved change requests should be reviewed
to verify that they were implemented as approved.
Organizational Process Assets Updates: These include the lessons learned database as
well as the completed checklists.
Project Management Plan Updates: The various plans including the quality
management plan need to be updated.
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Chapter 7
Project Human
Resource Management
▪ Develop HR Plan
▪ Acquire Project Team
▪ Develop Project Team
▪ Manage Project Team
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Project Human
Resource Management
Learning Objectives
After the completion of this chapter, the learner will be able to:
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Definition Project Human Resource Management includes the processes that organize,
as per manage, and lead the project team.
PMBOK ®
Guide
▪ Develop HR Plan
▪ Acquire Project Team
▪ Develop Project Team
▪ Manage Project Team
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Develop HR Plan
Definition Develop Human Resource Plan is the process of identifying and documenting
as per project roles, responsibilities, and required skills, reporting relationships, and
PMBOK® creating a staffing management plan.
Guide
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Person
Tom Peter Sofia Joseph Kelly
Phase
Project Mgt
R R R I R
Analysis
R A A C I
C I C I R
Design
A I R A A
Develop
C A C C R
Testing
R- Responsible, A- Accountable, C- Consult, I - Inform
Networking: Networking refers to the formal and informal interactions within the
company and outside to keep updated.
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o Roles and Responsibilities: Using RACI charts and other templates. (explained
above)
o Project Organization Charts: explained above
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Definition Acquire Project Team is the process of confirming human resource availability
as per and obtaining the team necessary to complete project assignments
PMBOK ®
Guide
Negotiation: Some resources are required from different functional teams and you need
to negotiate with the functional managers for assignment. Negotiation skills are required
for the same.
Acquisition: means getting teams from external vendors outside the company.
Virtual Teams: are teams that do not work at the same locations. The teams might be
located in different countries and time zones.
Resource Calendars: These provide information as to when the team member will be
working on the project.
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Project Management Plan Updates: The various documents related to HR plan need to
be updated based on the project information.
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Definition Develop Project Team is the process of improving the competencies, team
as per interaction, and the overall team environment to enhance project performance
PMBOK®
Guide
Training: Training is very important for building the competencies in the domain /
technology required for the project success.
Team Building Activities: keeping the team together is the key to project success. Team
building can be formal training sessions and status meeting to informal off sites and lunch
together with the team.
Ground Rules: Ground rules are the expectations from team members regarding their
behavior within the team. These can be as simple as being on time in the meetings and
standards on quality and productivity.
Co-location: refers to team being located together in the same location to increase
communication and productivity.
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Definition Manage Project Team is the process of tracking team member performance,
as per providing feedback, resolving issues, and managing changed to optimize
PMBOK® project performance
Guide
Project Performance Appraisals: Project appraisals are important for giving feedback
to the team members, clarifying the role conflicts if any, and also rewarding the good
work. This becomes more important in case of projects which are longer in duration. The
team should be aware of the issues so that they can work towards the common goal of
project success.
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Issues Log: is a document list of issues with the resolution dates and responsibilities.
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Types of Power
Legitimate Power
o Your ability to give award a bonus or another kind of reward in order to motivate
team members.
Expert Power
o You are standing in for someone who has more position or power in the company
o Also comes from the charismatic personality of the project manager
o Can also come when you ally with a powerful person
Punishment Power
o You correct a team member for poor behavior. Always remember to do this one-
on-one and in private.
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Organization Theories
▪ Maslow’s Hierarchy of Needs: People are driven by a hierarchy of their needs. If your
lower level needs are satisfied, you tend to be motivated by higher level needs.
Self
Actualization
Esteem
Social
Safety
Physiological
▪ Herberzberg’s Theory: also called Herzberg‟s Hygiene Theory because it deals with
Hygiene factors and motivating factors.
Hygiene factors
• Salary
• Compensation
• Positive work conditions
• Job security
• Status
• Company policy
Motivating Factors:
• Responsibility
• Work itself
• Recognition
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• Professional growth
• Achievements
• Self-actualization
Theory X - People are incapable and avoid responsibility. So, they need supervision to
do work
Theory Y - People are capable and motivated and ready to work without supervision.
▪ Expectancy Theory
• Affiliation , a strong sense from being a part of a working team and having good
relationships with coworkers
▪ Ouchi’s Theory
• Both Management and Workers need to be involved, and they should trust each
other
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▪ Halo Effect
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Chapter 8
Project Communication
Management
Project Communication
Management
▪ Identify Stakeholders
▪ Plan Communications
▪ Distribute Information
▪ Manage Stakeholder Expectations
▪ Report Performance
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Project Communication
Management
Learning Objectives
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Definition It includes the processes required to ensure timely and appropriate generation,
as per collection, distribution, storage, retrieval, and ultimate disposition of project
PMBOK® information.
Guide
Project Communication
Management
▪ Identify Stakeholders
▪ Plan Communications
▪ Distribute Information
▪ Manage Stakeholder Expectations
▪ Report Performance
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Identify Stakeholders
Stakeholders‟ identification is crucial to the success of the project. The key stakeholders include:
Project manager
Sponsor
Customer
Project team members
Performing organization
Procurement documents: The vendors and suppliers in the contract are the key
stakeholders.
Enterprise environmental factors
Organizational process assets
Expert Judgment: Involves talking to all the experts on the project to identify more
stakeholders
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High
Keep Manage
Satisfied Closely
Power
Monitor Keep
Informed
Low
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Plan Communication
Communications technology: This has impact on how stakeholders are involved in the
project. This includes the factors such as:
1. Urgency of information: How frequently is the reporting required
2. Technology availability: Are the systems in place for the reporting requirements.
For example, are the web-based systems available if the reporting is time critical.
3. Project staffing: Are the team members trained on communication technology
available.
4. Project duration: Will the technology remain same throughout the project.
Communication models: In the basic communication model, the sender sends a message
to the receiver across a medium.
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Decode Modify a message that has been sent so that it can be understood
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Distribute Information
Organizational process assets updates: The updates include project reports and records,
stakeholder notifications, and lesson learned documentation.
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Additional Information
▪ Nonverbal Communication
➢ Is the tone and pitch of your voice when you are telling
people what‟s going on with your project
▪ Feedback
▪ Active listening
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Stakeholder management strategy: The document lists the goals and objectives of the
various stakeholders.
Project management plan: The Project management Plan contains the Communication
Plan. The communication plan lists the expectations of the stakeholders.
Issue log: The list of issues that happen during the project.
Change log: Is the list of changes that happen during the project. These changes and their
impact should be communicated to the right stakeholders.
Organizational process assets: These include various processes such as change control
procedures and historical information from earlier projects.
▪ Interpersonal skills: Also referred as “soft skills” are used to keep the stakeholders
informed and working towards the common goal.
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Change requests: These are any changes to the project plan or other documents that
involve stakeholder communication.
Project management plan updates: Any approved changes need to be updated in the
communication plan, which is part of the project management plan.
Project document updates: Project documents requiring updates can include the
stakeholder register, stakeholder management strategy and issue log.
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Report Performance
Guide
Work performance information: Includes information such as deliverable dates and the
schedules.
Forecasting methods: Use Earned Value and other forecasting methods to check
whether the project is within budget and schedule.
Reporting systems: A system to keep track of time and money spent on the work.
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Organizational process assets updates: Lessons learned are updated so that they
become part of historical database.
Change request: Change requests are generated when you report performance. You need
to recommend Corrective and Preventive actions to the team.
Channels of Communication
Number of Communication Channels
If there are five people on the project, then we have 10 communication channels.
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Chapter 9
Project Risk
Management
Project Risk
Management
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Project Risk
Management
Learning Objectives
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A Risk is any uncertain event or condition that might affect your project. Risk might have a
positive as well as a negative outcome.
The objectives of Project Risk Management are to increase the probability and impact of positive
events, and decrease the probability and impact of negative events in the project.
Project Risk
Management
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Definition Plan Risk Management is the process of defining how to conduct risk
as per management activities for a project.
PMBOK®
Guide
Cost management plan: It includes the processes involved in estimating, budgeting, and
controlling costs so that the project can be completed within the approved budget.
Schedule management plan: This document defines how schedule contingencies will be
reported and assessed.
Communications management plan: This document defines the interactions that will
occur on the project and determines who will be available to share information on various
risks and responses at different times
Enterprise environmental factors: Factors include the company culture and existing
systems that are dealt with and used by the project manager to run the project. The other
factors that can influence this process are risk attitudes and tolerances that describe the
degree of risk that an organization will withstand.
Organizational process asset: that can influence this process include risk categories,
common definitions of concepts and terms, risk statement formats, standard templates,
roles and responsibilities, authority levels for decision making, lessons learned and
stakeholder register.
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Identify Risks
Definition Identify Risks is the process of determining which risks may affect the project
as per and documenting their characteristics.
PMBOK ®
Guide
Quality management plan: contains information related to the quality management plan
which is an important input to Identify risk process as the project specific approach may
generate or alleviate risk by its nature or structure.
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Project documents: that may be useful while identifying risks are assumptions log, work
performance reports, network diagrams, baselines and other project information that may
be useful in identifying risks.
Checklist Analysis: can be based on historical information gathered from earlier similar
projects. The lowest level of Risk Breakdown Structure (RBS) can also be used as a
checklist. Checklists can be updated at the end of the project completion to add new risks,
if any. Checklists are not a very much efficient method of identifying risks.
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Assumptions are tested for their validity. The consequences that might occur if the
assumptions were false are also analyzed. In such cases the assumptions are considered as
risks.
SWOT Analysis: This lets you analyze the Strengths, Weaknesses, Opportunities and
Threats to identify the probable risk events
Risk Register
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Definition Perform Qualitative Risk Analysis is the process of prioritizing risks for
as per further analysis or action by assessing and combining their probability of
PMBOK® occurrence and impact.
Guide
Probability and Impact Matrix: assigns ratings to each risk and classifies them for
either performs quantitative risk analysis or plan risk responses. Ratings are assigned to
risks based on the combination of probability and impact. The risk may guide in
providing risk responses as indicated below:
• Risks that have a negative impact on the project objectives if they occur (threats) and
that are in the high – risk (black zone of the matrix), may require priority action and
aggressive response strategies.
• Threats in low – risk (medium gray zone) may not require proactive management
action beyond being placed on a watch list or adding a contingency reserve.
• For opportunities, those in the high-risk (black zone) that can be obtained most easily
and offer the greatest benefit should, therefore be targeted first Opportunities in the
low-risk (Medium gray zone) should be monitored
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Source: A Guide to the Project Management Body of Knowledge, Fourth Edition (PMBOK® Guide) ©2008 Project Management Institute, Inc.
All Rights Reserved.
Risk Data Quality Assessment: It involves determining the quality or usefulness of the
data collected to evaluate the risk as per the risk management plan. It involves examining
degree to which the risk is understood, and the accuracy, quality, reliability and integrity
of the data about risk. If data quality is unacceptable, it may be necessary to gather
higher-quality data.
Risk Categorization: Project risks can be categorized by the source of risk (e.g., using
the RBS), areas of the project affected (e.g. ,using the WBS) or other useful category
(e.g. , project phase, etc.) to determine areas of the project most exposed to the effects of
uncertainty. Grouping risks by common root causes can lead to developing effective risk
responses.
Risk Urgency Assessment: determines how soon the potential risks may occur, and it
also identifies near- term responses for those risks.
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o Relative ranking or priority list of the project risks. The probability and
impact matrix can be used to classify risks according to their individual
significance. The project manager can then use the prioritized list to focus
attention on those items of high significance to the project, where responses can
lead to better project outcomes. Risk may be listed by priority separately for cost,
time, scope and quality as organizations may value one objective over another. A
description of the basis for the assessed probability and impact should also be
included for the assessed risks.
o Risk grouped by categories can reveal common root cause of the risk or project
areas requiring particular attention.
o Cause of risk or project areas requiring particular attention. Discovering
concentrations of risk may improve the effectiveness of risk.
o List of risks requiring response in the near-term. Those risks that require an
urgent response and those that can be handled at a later date may be put into
different groups.
o List of risks for additional analysis and response. Some risks might warrant
more analysis , including perform qualitative risk analysis as well as response
action
o Watch-lists of low priority risks. Risks that are not assessed as important in the
Qualitative Risk Analysis process can be placed on a watch-list for continued
monitoring
o Trends in qualitative risk analysis results. As the analysis is repeated , a trend
for particular risks may become apparent and can make risk response or further
analysis more or less urgent/important
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Definition Perform Quantitative Risk Analysis is the process of numerically analyzing the
as per effect of identified risks on overall project objectives.
PMBOK®
Guide
o Sensitivity analysis. This aid in determining which risks have the most potential
impact on the project. It examines the extent to which the uncertainty of each project
element affects the objective being examined when all other uncertain elements are
held at their baseline values. Sensitivity analysis can be done by using the Tornado
diagram.
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o Expected monetary value (EMV) analysis is a statistical concept that calculates the
average outcome when the future includes scenarios that may or may not happen (i.e.
analysis under uncertainty). The EMV of opportunities will generally be expressed as
positive values while those of risks will be negative. EMV is calculated by
multiplying the value of each possible outcome by its probability of occurrence and
adding them together.
Source: A Guide to the Project Management Body of Knowledge, Fourth Edition (PMBOK® Guide) ©2008 Project Management
Institute, Inc. All Rights Reserved.
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o Modeling and Simulation: A project simulation uses a model that translates the
uncertainties or potential risks specified at a detailed level of the project into their
potential impact on project objectives.
Simulation techniques compute the project model using the inputs such as cost or
schedule to determine the probability distribution. Simulation techniques should be the
preferred one for predicting schedule or cost risks as compared to other techniques
Simulations are typically performed using the Monte Carlo technique. In a simulation, the
project model is computed many times (iterated) with the input values randomized from a
probability distribution function (e.g. cost of project elements or duration of schedule
activities) chosen for each iteration from the probability distribution of each variable. A
probability distribution is then calculated.
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Definition Plan Risk Responses is the process of developing options & actions to enhance
as per opportunities and to reduce threats to project objectives
PMBOK®
Guide
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o Exploit .This strategy may be selected for risks with positive impacts where the
organization wishes to ensure that the opportunity is realized. This strategy seeks
to eliminate the uncertainty associated with a particular upside risk by making the
opportunity definitely happen. Directly exploiting responses include assigning
more talented resources to the project to reduce time to completion or to provide
better quality than originally planned.
o Share. Sharing a positive risk involves allocating ownership to a third party who
is best able to capture the opportunity for the benefit of the project. E.g. forming
risk-sharing partnerships, teams, special-purpose companies or joint ventures,
which can be established with the express purpose of managing opportunities.
o Enhance . This strategy modifies the size of an opportunity by increasing
probability and /or positive impacts and by identifying and maximizing key
drivers of these positive-impact risks. Seeking to facilitate or strengthen the cause
of the opportunity and proactively targeting and reinforcing its trigger conditions,
might increase the probability
o Accept. Accepting an opportunity is being willing to take advantage of it if it
comes along, but not actively pursuing it.
Contingent Response Strategy: Some responses are designed for use only if certain
events occur. For some risks, it is appropriate for the project team to make a response
plan that will only be executed under certain predefined conditions, if it is believed that
there will be sufficient warning to implement the plan. Events that trigger the
contingency response such as missing intermediate milestones or gaining higher priority
with a supplier, should be defined and tracked.
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o Contingency reserves of time and cost designed to provide for stakeholders risk
tolerance.
o Contingency plans and trigger that call for their execution
o Fallback plans for use as a reaction to a risk that has occurred and the primary
response proves to be inadequate
o Residual Risks that are expected to remain after planned response have been taken as
well as those that have been deliberately accepted
o Secondary risks that arise as a direct outcome of implementing a risk response
o Contingency reserves that are calculated based on the quantitative analysis of the
project and the organization‟s risk thresholds.
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Definition Monitor & Control Risks is the process of implementing risk response plans,
as per tracking identified risks, monitoring residual risks, identifying new risks, and
PMBOK® evaluating risk process effectiveness throughout the project.
Guide
Risks audits are scheduled audits that document the effectiveness of risk responses with
respect to their dealing with identified risks and their associated root causes. This aids in
determining the effectiveness of the risk management process.
Variance and trend analysis Performance data provides the data for variance and trend
analysis. Using this data and applying the earned value analysis and similar methods of
project variance and trend analysis; it is possible to monitor the overall project
performance.
Reserve analysis. During the planning phase, contingency reserves are defines as a part
of risk response plan. During execution some of the reserves get exhausted. This tool
determines if the remaining reserves are sufficient to tackle the remaining risks.
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Chapter 10
Project Procurement
Management
Project Procurement
Management
▪ Plan Procurements
▪ Conduct Procurement
▪ Administer Procurements
▪ Close Procurements
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Project Procurement
Management
Learning Objectives
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Project Procurement
Management
▪ Plan Procurements
▪ Conduct Procurement
▪ Administer Procurements
▪ Close Procurements
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Plan Procurements
▪ Fixed Price (FFP) means that you are going to pay one amount regardless
of how much it costs the contractor to do the work
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▪ Fixed Price Plus Incentive Fees (FPIF) means that you are going to pay
a fixed price for the contract and give a bonus based on some performance
goal
▪ Fixed Price with Economic Price Adjustment (FP – EPA) – This type
of contract is used in case of long term contracts, where pre-defined
adjustments are made every year based on some reliable financial index.
o Cost Reimbursable Contracts
▪ Cost Plus Fixed Fee (CPFF) you pay the seller back for the costs
involved in doing the work, plus you agree to an amount that you will pay
on top of that.
▪ Cost Plus Award Fee (CPAF) you agree to pay the legitimate costs but
the majority of the fee is based on performance of the seller based on the
subjective criteria set in the contract. This cannot be subject to appeals.
▪ Cost plus incentive fee (CPIF) means you will reimburse costs on the
project and pay a pre-determined incentive fee based upon performance
goals set in the contract.
o Time and Materials
▪ Time and Materials (T&M) means that you will pay a rate for each of
people working on your project plus their material costs. The “Time” part
means that the buyers pay a fixed rate for labor.
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o Invitation for Bid (IFB) - A type of procurement document whereby the buyer
requests a potential seller to provide various pieces of information related to a product
or service or seller capability.
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Conduct Procurements
Definition The process of obtaining seller responses, selecting a seller and awarding a
as per contract.
PMBOK ®
Guide
▪ Independent Estimates: In some cases, the buyer would create the estimates themselves
and also by the third-parties. These would be compared with the seller‟s responses for
final selection.
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Advertising: This involves placing an advertisement for getting in touch with sellers. In
government-funded projects, this is a requirement.
Internet Search: Using internet to search for approximate price range of the product is
also a practice. This is not useful in case of complex procurement.
Procurement Negotiations: This involves negotiating with the sellers on the various
terms of the contract. The project managers do not do the negotiations themselves. They
work closely with the legal department of the company for these negotiations.
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Administer Procurements
▪ Inspection and Audits: Inspections and audits are conducted by the buyer to ensure
quality of the procurement as defined in the contract. Nonconformance can be raised
and the supplier can be penalized based on the terms in the contract.
▪ Performance Reporting: This includes the performance reports by the seller which
are used by the buyer to monitor the project work.
▪ Payment Systems: Payment system refers to how the payments are made to the
seller. The Accounts Payable system of the buyer makes the payments after the
payments are validated and authorized.
▪ Claims Administration: Claims arise when there is some dispute between the buyer
and the seller. The contracts have terms and conditions on how the disputes should be
resolved and since the contract is a legal document, the claims need to be settled as
per the terms in the contract.
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Close Procurements
Negotiated Settlements: All the terms of the contract need to be completed. This
includes any claims or disputes arising of the contract.
Organizational Process Assets Updates: This includes updated to the lessons learned
database and procurement file.
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Negotiations Techniques
▪ Fair and Responsible: a negotiator may claim that the price for a
product is equitable because that‟s what another company is paying.
▪ Delay: are useful when tempers are beginning to flare, to divert from
a subject, etc (Ex: arrival of refreshments, request for recess etc)
▪ Fait Accompli: a party may claim that what is being asked for has
already been accomplished and cannot be changed
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Chapter 11
Professional Responsibility
And Ethics
Professional Responsibility
And Ethics
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Professional Responsibility
And Ethics
Learning Objectives
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Introduction
Everyone who is a PMP® must follow the Project Management Institute Code of Ethics and
Professional Conduct.
Ensure Integrity
Contribute To PM Knowledgebase
Respect Diversity
Ensure Integrity
Perform research on the project done within your organization for the purpose of
discovering best practices.
Share lessons learned.
Write articles on Project Management.
Support education of the project team members and other stakeholders.
Coach and mentor team members.
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Gain knowledge of project management best practices and other technical and people
management skills.
Look for new information and practices that help the organization or its projects.
Continue to learn about the industry where you work.
Understand your weaknesses and strengths, plan your own professional development, and
continue to learn.
Respect Diversity
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